The Harry Potter franchise has been the major digital holdout in trade publishing, the analog (until recently) of the Beatles in music. No more: the Pottermore Shop features all of the Harry Potter titles in e-book and digital audiobook formats. The e-books are available in the standard EPUB as well as Amazon Kindle formats, and the audiobooks are in MP3. The EPUB and MP3 files are DRM-free.
Some major-publisher audiobooks are already DRM-free. But does this mean the end of DRM for major-publisher e-books?
No.
First of all, it’s possible to buy Harry Potter e-books on all of the major e-book retail sites (or through them via affiliate links). At least the Kindle and Nook format e-books use DRM. Only the EPUB-format files are DRM-free.
Furthermore, Harry Potter is highly anomalous in the world of book publishing: it’s a goldmine of revenue from many sources, far beyond the books themselves. Harry Potter has more in common with Disney cartoon movies than with most other books or book series. The animated features that Disney has released in recent years are all part of vast orchestrated campaigns of ancillary revenue sources: books, toys, theme park rides, ad-revenue-bearing TV shows, Broadway musicals, and on and on. Think The Lion King, Cars, or Toy Story. In fact, Harry Potter ancillary revenue streams have more than doubled book revenues already.
In other words, J.K. Rowling doesn’t need to maximize revenue from selling e-books, especially since she does not plan to write any more Harry Potter titles. Instead, her strategy is surely to use e-books — and print books, for that matter — for their marketing value, to induce her vast audience (and their parents) to purchase the stream of Potter-themed products that her organization will release for years to come. When viewed that way, DRM becomes a liability.
Instead, Rowling is launching an entire site devoted to All Things Harry: Pottermore Shop is part of the overall Pottermore site, which is currently in beta. This will enable the Rowling team to establish relationships with their customers that are far richer and more lucrative than if the e-books were available only on Amazon, Barnes & Noble, or other retail sites. Pottermore will add new content and features on a regular basis and, of course, include lots of social features for Harry fans.
Pottermore is likely to be a popular destination site; Harry Potter is perhaps the only publishing property that doesn’t need Amazon or B&N. The trade publishing industry would love to have more blockbuster franchises like Harry Potter, but given the way the industry and authors work, such properties are likely to be fewer in number than those found in the movie industry. (Incidentally, Scholastic, Rowling’s publisher, may have its hands on the next blockbuster franchise: Suzanne Collins’s The Hunger Games.) Those rare mega-properties don’t need DRM, but that has nothing to do with the question of whether the rest of the publishing industry does.
In addition, publishers have much more limited ability to monetize big franchise properties than movie studios do, for the simple reason that authors own the copyrights to most trade books. Of course, publishers can negotiate rights that go beyond print books or e-books. But it’s instructive to note that the word “Scholastic” appears exactly nowhere on the Pottermore site.
Copyright and Technology 
“First of all, it’s possible to buy Harry Potter e-books on all of the major e-book retail sites (or through them via affiliate links). ”
No, this isn’t accurate. You have to buy the books on the Pottermore website and then you get the ePubs. You also get the ability to *link* your account to any of the major e-book retail sites (Sony, B&N, Amazon, Google Play), so that you can easily access the book from there. (http://shop.pottermore.com/en_US/Help/faq_compatibledevices)
You aren’t buying the books on Amazon, B&N, etc. You always get the ePub file, the ability to download through the other sites is an additional way to access your books. I think this is great because it will gives you more flexibility and I wish that in the future other authors will consider this as an option.
I think that if JKR was really aiming to push the various Potter related products, then she would also be selling them through Pottermore (but she isn’t!)
Sorry, my wording was awkward and you are correct. It would have been more accurate to say “(or, more accurately, through them via affiliate links).”
However, the ability to download from multiple sites is not what gives you flexibility, because you can do that with other e-books anyway. The flexibility is being able to buy a DRM-free EPUB file and convert it to other formats for other devices via free tools such as Calibre.
Yes, the DRM-free ePub is the main reason for the flexibility.
I also meant that, while right now I own a Kindle, if the ebooks I purchase could be linked to different services (and in this case you can link the book to both KIndle and Nook if you want to), in the future I would be more open to switching devices and platforms.
In the end DRM keeps me somewhat loyal to getting my ebooks from Amazon, and I think that publishers would want to discourage this type of loyalty (and they definitely would by selling more DRM-free ebooks).
Linking accounts is trivial. Saves a few clicks – big deal. The more interesting thing here is that Pottermore lets you download in multiple formats without making you pay for each one separately.
There has been some speculation about how much of a sales commission Amazon, B&N, and the other retailers receive on each sale referred from their sites. This leads me to suspect that the amount is zero or very little.
By the way, this has little to do with selling DRM-free books. It has to do with interoperability. This scheme achieves interoperability without giving up DRM entirely — e.g. they could have gone DRM-free for the Kindle version but didn’t. Given the amount of security elsewhere on Pottermore (such as one of the most stringent password strength requirements I’ve ever seen), it’s likely that if there were a standard DRM for EPUB then Pottermore would have used it. Instead, Pottermore is using a “watermarking” scheme on EPUBs that, as I will argue in my next article, is essentially useless.
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