Digital Watermarks or Social DRM is starting to catch on in Europe in a very big way. This new system of encryption makes loading eBooks on other devices or loaning them how to friends quick and intuitive. There are not special programs or tools needed to do any of this, which makes it quite attractive to publishers and online bookstores looking to sell books and still maintain a degree of security.
BooXtream is one of the largest companies who are involved in watermark technology and CEO Huub van de Pol sat down with Good e-Reader to talk how it all fundamentally works and provides an eye opening introspective into the world of digital watermarks and social DRM.
When did you guys seriously start to focus on digital watermarks as a viable business model?
Since 1993, Icontact develops bespoke software solutions for the book and library industry in The Netherlands and Belgium.
The very first start with digital watermarks was in 2006, when Icontact developed a custom digital distribution and fulfilment platform for audio books to be used by a Dutch audio book web shop and distributor.
The music industry was still using DRM at that time, and we all knew the problems with DRM. So to be customer friendly we decided that the shop needed to deliver MP3 audio files instead of one (or more) platform specific audio formats with DRM. As you know, MP3 cannot be copy protected and doesn’t support DRM. Instead, we developed a simple but effective way to personalize each MP3 file with info about the transaction, the name of the end user and the web shop that sold the audio book. This enabled us to locate the end user when an audio book is found on an illegal site or CD-ROM. The end users knew it worked like this and had no problem with it, so it worked like a reasonable deterrent.
We used all available tricks to add extra data in the mp3 file while keeping it compatible with the standard. Some data was visible (when you checked the file properties), but most were invisible to the end user. All personalisation took place dynamically after a valid order was registered. All mp3 files where then stored in a single ZIP container and a download link to this ZIP was presented to the end user. So essentially, every end user received a unique file with a personalized audio book. We registered the brand name BooXtream for this concept and technology.
After a couple of years, only very few of these audio books were found ‘in the wild’. 99.9% of all pirated content was ripped from CD’s. We presented this experience on a national eBook conference in 2010. After our keynote “Lessons learned with Social DRM”, several publishers not only liked the idea, they also asked us if we could do the same with eBooks instead of audio books.
At that time there were only a few ‘serious’ eBook shops in The Netherlands, but we saw the potential. We were excited by the possibilities and opportunities of the market. We decided to create an SDK to watermark ePub eBooks, which evolved into the web service as we are now offering. We built BooXtream for eBooks based on the idea (concept) of adding as much ‘invisible’ data as possible to the files in an ePub, tightly integrated with a digital distribution and fulfillment platform, an easy to integrate web service (RESTful) and an attractive and simple price model (no upfront costs, only pay by use).
BooXtream for eBooks 1.0 was released in fall 2010 and was offered as a web service based standard solution. (FYI: Icontact still develops custom software solutions. The BooXtream brand and product was bootstrapped, like an internally funded start-up.) Our launching customer was a small forward looking publisher in the Netherlands, but eBook watermarking really took off when UK based Pottermore decided to use it for the Harry Potter eBooks in 2012. This really created headlines all over the industry.
How does the essence of your technology work?
The essence is that we add ‘hidden’ data to all files in an ePub eBook file while keeping the eBook 100% valid, using several different proprietary algorithms. Our technology offers two basic features: adding invisible watermarks and adding visible extra’s like a personalized ex libris page, a personalized footer text at the end of every chapter or a personalized chapter at the end of the eBook. The invisible part is essentially a transactional watermark, creating unique files for every eBook and every end user..
Everything is configurable by our customers. BooXtream operates in real time, on transaction level, so our technology has to be integrated at the point of sale (where the actual distribution to the end user takes place).
There is no need to update any ‘client software’ when we update and improve our algorithms (as with Adobe DRM), which is possible because the eBooks are 100% valid and ePub compliant. In a technical sense, they are DRM free so they can be read by every e-reader and e-reading device out there.
One of the essential characteristics of eBooks with watermarks is that there is no need to remove watermarks to make a backup, read it on multiple devices or share it with someone you trust (casual sharing). This isn’t the case with DRM, which is one of the reasons a lot of people that have no intention to pirate or hack do use DRM removal tools.
Who would you say are your largest clients right now?
Our technology is used worldwide by 2 of the Big 5 publishers, some very large independent D2C publishers, several hundreds of medium sized publishers selling D2C, quite a few independent eBook web shops and also numerous web shops of smaller publishers, self publishing authors and systems integration.
Some publishers like to keep their name under the radar, but to name a few: Verso Books (US, UK), Cappelen Damm (largest publisher in Norway), Elly’s Choice (largest eBook subscription service in The Netherlands), Firsty Group (large solutions provider for the publishing industry in the UK), Profile Books (UK); web shops from Finland to Spain and from Peru to Colombia.
I saw you guys are a member of the IDPF, we sponsor many of their events, such as the main conference at Book Expo America. How has being a member affected your business?
We are big fan of Bill McCoy. He is doing a marvelous job with IDPF, creating and maintaining the ePub standards, Readium, EduPub and basically uniting the eBook publishing world. I think it was Bill who coined the term ‘Social DRM’ which we adopted for our original BooXtream tagline. Being a member gives us insight in the working groups and future developments, but it also helps us to be found by potential customers.
What are the main benefits as you see it, between watermarks and ADOBE DRM.
The only benefit of Adobe DRM is that it can be used for library lending purposes. You cannot use watermarking for this, as watermarking is not able to disable an eBook after a certain amount of time. The few libraries that are using watermarking do this as a ‘second line of defense in a closed ecosystems with apps.
There are quite a few benefits of watermarking:
With watermarked eBooks there is no need to use a specific (proprietary) e-reading client. Watermarked eBooks can be read on any device, with any software, as long as they are ePub compatible. This is a huge advantage, because it’s both user friendly and support desk friendly.
An eBook with watermarks can be read on different devices simultaneously. There is no need to remove DRM to do this. As an aside, there are plenty of DRM removal tools out there, but quite a few are Trojans or might contain a virus. The computer illiterate end user is far better off when he doesn’t need these tools, apart from the question if it’s legal or not to use them.
An eBook with watermarks can be backed-up using standard backup software. Again, there is no need to remove DRM to do this. This is very important because eBooks with DRM might get inaccessible when the web shop is getting out of business. This happened more than once.
Our watermarking tools also offers visible personalisation, which creates new business possibilities and makes the eBook really personal. It is being used to personalize review copies, it is used to personalize course guides and business reports (even those that are distributed for free). One of our customers allow their end users to customer the ex libris in their own eBooks, like the personal stamp from earlier times. Others insert personalized messages or dynamically add some banner links in the eBook.
If people started to pirate books via BooXtream, what do you guys do about it, if anything?
Tracking and tracing illegal uploads is not our primary business. Sometimes pirated eBooks are discovered by our customers (publishers) when they search for their own titles. Part of our standard service is to help them decode the watermarks (if any, because the bulk of all pirated books are titles with DRM removed, not watermarked titles), so they can decide what to do. For larger-scale and automated discovery and enforcement we offer tools to anti-piracy third parties like MarkMonitor and Muso that are specialised in tracing copyright infringements, crawling the web, sending notice-and-take-down letters etc. Our tools enable them to look for the hidden watermarks within eBooks, decode them and take appropriate measures. They can use these tools as part of our and their arrangement with a publisher.