Pirates of the Cyberspace: How to Thwart them or Make them Work for You Part 1 - Pricing.

Any of us who do digital publishing know that real pirates are not Johnny Depp or Gilbert and Sullivan's lovable rogues. They are people who have no respect for the property rights of others. They are, in fact, thieves, who frequently pose as  free speech advocates, but, in reality, just enjoy getting something for nothing and  steal money mostly from writers who are often living from hand to mouth already.

Unfortunately, they are also an inevitable part of the digital literary landscape.

Photo Credit: StrangeInterlude

Eventually, the law and new business models will reduce the impact on authors. We see part of this in the music industry as music producers and performers, in spite of high profile file-sharing cases, have incorporated piracy into new business models.

In the meantime, what are some things indie authors and small publishers can do to deal with these not so lovable rogues?

First, let's deal with something NOT to do. Avoid DRM encoding. What is DRM? DRM (digital rights managemen) is a type of encoding that attempts to prevent any copying or sharing of the ebook. That's a good thing, though. Right?

Not really. First, let's say you buy a book and DRM is turned on. You download it to your ereader. Your ereader is unavailable, though, so you say, "I'll just read it on my iPad." Depending on how its configured, you will not be able to download it on your iPad. It's like saying you bought this book, but you can only read it in your house. You can't take it to the beach with you. Some people don't even know how to unlock a DRM protected file.

Increasingly, for practical reasons alone, publishers and indie authors are avoiding DRM. However, there is another piracy prevention factor in avoiding DRM. Many pirates view DRM as "The Enemy." It's "The Man" trying to tell them how they can read their books and they use a lot of convoluted logic to convince everyone that basically putting a lock on your front door violates everyone else's civil rights to use your property.

DRM is flawed technologically, but the idea is philosophically sound. Nevertheless, literature pirates use it's restrictions and their own twisted view of property rights as a rationale to stick it to those rich publishers making all that money. The fact that it is usually the poorly compensated author that gets hurt the most never seems to connect. Nevertheless, DRM encoding is easily broken by using software readily available on the web. Between the philosophy that the author/publisher is overreacting and the general ineffectiveness of the software, it is better to not install it.

So, what can be effective?

Pricing 

People know that it costs next to nothing to publish a digital version of a book. Yes, there is the work that goes into it, the hours of pouring over your plot outline, the tears you shed when a character you loved died. But that didn't take any money out of your pocket. That's all the customer cares about. If you charge the same price (or higher) as a print book, you are putting up a sign saying, "Okay, pirates, you can steal this book and feel justified doing so."

There are three types of pirates: The Inadvertent Pirate, The Opportunistic Pirate and the Self-Justifying Pirate. High cover prices attract all three. The Inadvertent Pirate is someone who doesn't even know what they are doing is wrong. They download an ebook, like it and share it with a friend. They don't see it as any different than sharing a physical book, even though it is quite a bit different in that you are actually making copies of the book. However, if a friend asks about the book and it is pricey, the person is likely to say, "Hey, I've finished with the book, I'll email you the file." On the other hand if they thought they got a bargain, they are more likely to say, "Oh, it's just 99 cents on Amazon, a great buy."

The Opportunistic Pirate has no political agenda or philosophical justification, s/he is only interested in profit. These people set up web sites (many of which look like legitimate online book stores) and advertise "discount" ebooks. They take a $12.95 ebook and sell it for $5.95. Often, the buyer has no idea that they are, in essence, receiving stolen property. However, taking a book that sold originally online for $3.99 for $2.00 is not going to be a large enough discount to attract customers, nor will it provide the profit margin they need for defending against the inevitable copyright infringement lawsuits.

Perhaps, the most difficult pirate is The Self-Justifying Pirate. This person considers himself or herself basically ethical. However, they see a product that doesn't have any actual physical presence, which can be duplicated thousands or even millions of times essentially for free, that is selling for the same price as a book that costs $3 - 4.00 to produce, and which is also being sold at a substantial markup.

They latch on to that sense of inappropriate pricing as a justification to stick it to "The Man" who is ripping off the reader. These are the sort that might not even sell the books they pirate. They simply share them on peer-to-peer websites. They see themselves doing a public service.

This, of course, is not a legitimate justification. Apple products have the same basic components under the hood as any other computer and on a technical basis perform pretty much the same as Dell, HP or other computers. Their distinction is their Operating system and some cosmetic styling. Yet, they charge almost twice that of many non-apple products for a computer with the same equipment specifications. However, I don't see anyone saying it is justifiable to go down to your Apple store and start stealing Macbooks. Overpricing is not a justification for theft.

However, we are dealing with perception, and many of the Self-Justifying Pirates feel it is an excuse. The solution: Price like a pirate. Set your price in such a way that it recognizes that your cost of production (aside from personal time) is extremely low. You can make a decent profit on most books charging under five dollars and at that price, it is nearly as economical to buy legally as it is to buy from a pirate.

So, the first way to thwart a pirate is to set a price that makes a profit for you, but won't make one for the pirate.