BROOKE GLADSTONE: Now publishing consultant Mike Shatzkin – you heard him about 20 minutes ago – offers us a tale about an author so wise and so powerful that she somehow retained the digital rights for her books, standing up to Voldem – I mean, Amazon. J.K. Rowling dubbed it Pottermore.
MIKE SHATZKIN: What she did was she said, we are perfectly happy to sell our e-books without any digital locks, but what we will do is watermark it, so if that copy ends up on a pirate site, we’re gonna know it was your copy that ended up there. It’s called social digital rights management or social DRM, which is to say, I’m going to threaten you with shame, or maybe litigation, but I’m gonna know it was your copy that went to a pirate site.
By doing that, unless Amazon played ball with Pottermore, Pottermore would just sell Kindle-compatible e-books off their own site, which is essentially what they’re doing. And what it forced Amazon to do is to turn the Potter customers over to Pottermore, so that Pottermore gets to register them and know who they are.
BROOKE GLADSTONE: So what did Amazon give up in this – equation?
MIKE SHATZKIN: The monopoly on the customer information. As a matter of fact, I don’t know what information Amazon gets about the customer. That’s a negotiation between Pottermore and Amazon. But the customer, rather than buying from Amazon, buys from Pottermore. And as a result, Pottermore captures all the data on that customer and the ability to s – to solicit them for other things in the future. It’s a very, very powerful change.
BROOKE GLADSTONE: So there’s the valuable commodity of customer information and also doesn’t J.K. Rowling get to set the price?
MIKE SHATZKIN: Yes.
BROOKE GLADSTONE: Okay, so why don’t other publishers go this route?
MIKE SHATZKIN: If a medium size publisher said, we’re gonna do what Pottermore’s done, I think Amazon would just take their books off the site, rather than collaborate with them. But Amazon couldn’t be put in a position where a Harry Potter book was out and you couldn’t find it on their website. They just couldn’t do that without hurting themselves more than they hurt anybody else. So they’re not doing that.
If the big publishers went to a Pottermore solution, I think we’d see a very, very interesting battle in the industry.
BROOKE GLADSTONE: Mike Shatzkin, head of The Idea Logical Company.
