It was the night before SXSW 2008 kicked off, and Kassia Krozser, Erik Hersman, and I were hanging out at the pre-party at the Six Lounge in Austin. Erik was explaining that the guy in the corner who looked remarkably like Jeff Bezos, actually was Jeff Bezos.

The truth is, there are a lot of guys at SXSW who look like Jeff Bezos. That might be why Bezos wasn’t attracting much attention. He blended seamlessly with the crowd of Web 2.0 geeks, and he looked absolutely in his element.

Eventually, word got out and a small but disorganized receiving line began to form around Bezos. Partygoers were eager to approach him for an autograph or photo op, but everyone seemed to be cautions about making too big a deal about it.

At some point, I realized that we were being sucked into the Bezos Vortex and were actually in line to meet the man. I remember thinking that it was not unlike waiting in line to meet Santa Claus, but better, because Amazon already has my wish list on file. I was certain that when I introduced myself, Bezos would shake my hand and say, “Yes Kirk, you’ll be getting that plasma TV for Christmas. As long as you remember to take out the trash and clean your room.”

Eventually the crowd in front of us dwindled and it was our turn. Bezos Jeff looked at us expectantly.

Kassia went first. She asked about the availability of the Kindle (it was sold out at the time). Jeff, excited by the prospect of meeting a future Kindle owner, promised that more Kindles were on the way and that Kassia would be able to buy one soon.

Then Kassia decided to push her luck and asked about the possibility of a free Kindle — a review copy, so to speak. Jeff suddenly became animated and began shouting, “you have to buy a kindle,” except, it came out more like “You HAVE to buy a Kindle” — think Seinfeld, “You HAVE to see the baby”. It was almost like he was pleading with her to buy a Kindle.

With that settled, there was a brief lull in the conversation, at which point Jeff turned to me.

In that instant I knew exactly what you talk about when you meet a billionaire in a bar. DRM, of course.

A few weeks earlier I had delivered my DRM presentation at O’Reilly’s TOC conference. I explained to Jeff that some people are concerned the Kindle could become an iTunes-like monopoly that locks consumers into a single platform and causes publishers to lose control of their own industry.

Jeff listened attentively, nodding the whole time, and then he said something that shocked me.

“Kindle is DRM agnostic,” he explained.

He went on to explain that publishers have the option of selling DRM-free eBooks for the Kindle and that he believes publishers might do just that once they become comfortable with the idea of digital content distribution. He noted that it took several years for the music industry to become comfortable with DRM-free content, and that he expects it will take a while for publishers to come around to the idea.

Around this time, Erik moved in to ask Jeff about Amazon shipping products to Africa. I think he might have actually been agitating for an African version of Amazon Prime. At any rate, the moment was over and my time with Jeff Bezos was up.

I’ve been pondering Jeff’s claims of DRM agnosticism ever since. The statement can mean a couple of different things. It could mean, “We’ll sell DRM-free eBooks once we’ve gained sufficient market share to convince publishers that we have an iTunes-like monopoly on the eBook market.”

Or, it could mean that Amazon is open to supporting third party DRM on the Kindle. That’s the thought that came to mind when I read about the deal between Fictionwise and Lexcycle, makers of the Stanza eBook reader for the iPhone. By licensing Fictionwise’s DRM, Lexcycle gives Stanza users access to a marketplace of 40,000 eBooks. The deal involves a fraction of the number of titles available on the Kindle, but represents a huge leap forward for the iPhone as an eBook reading device.

In commenting on the deal, Sara Lloyd of Pan Macmillan (another recent Lexcycle partner) hoped that Amazon might learn a lesson about the advantages of open formats (or at least licensed formats, since the Fictionwise format isn’t technically open).

In light of the claims of Kindle’s DRM agnosticism, the Fictionwise/Lexcycle deal raises some interesting questions:

  • Would Amazon make a similar agreement with Lexcycle, allowing Kindle books to be purchased from, and read on, an iPhone via the Stanza software?
  • Would Amazon support third party DRM (non-mobipocket) on the Kindle?
  • Just how DRM agnostic is the Kindle?

I can’t fathom any scenario where Amazon would license the Kindle format for use on another device. Unless I’m seriously misreading Amazon’s strategy, Kindle is intended to be an end-to-end content distribution system. Kindle without the physical reader isn’t Kindle at all.

As for third party DRM on the Kindle device, that too seems unlikely. What would Amazon stand to gain? It certainly wouldn’t gain access to anymore content. Amazon currently has the largest selection of DRM’d eBook titles available, and there are more on the way. At this point, everyone else is trying to catch up with Amazon.

So, that leaves just the DRM-free interpretation of DRM agnostic. Which is likely to raise a few more questions in the very near future.

Are publishers DRM agnostic? If not, why? If so, when?