If you have a new Kindle or an iPad, then you are probably still grinning at the ease with which you can buy an electronic book (ebook) and glowing with the prospect of owning a whole new library. But you won’t be buying and owning those ebooks so much as renting them.

Put another way, your rights to most ebooks are “managed”, and in most cases you buy the right to read an ebook rather than ownership of the work.

Local online retailer kalahari.net, which rolled out sales of ebooks in March, says as much on its website, under the terms and conditions (T&Cs). “All ebooks are the exclusive property of the publisher or its licensors. ... When purchasing an ebook from kalahari, you will be purchasing the right to download such ebook from the relevant publisher’s website ...”

By quoting kalahari.net, I don’t mean to single it out for criticism. It is done only to make the point about what has quickly become the standard in selling ebooks and how different that is from the norms of the ink-and-paper world, where you own a book in the sense that you can bequeath it, lend it out, give it away or sell it once you have finished with it.

But first a step back. You can read an ebook – a shorthand word for any electronic, book-like document, including emagazines – on a PC, laptop, netbook or smartphone. But converts swear there is nothing to compare to the experience of the Apple iPad or a dedicated ebook reader (or e-reader for short), such as the Kindle from Amazon.

In July 2009, Amazon deleted from the Kindles of its customers paid-for copies of George Orwell’s 1984. And just to prove that no book is more equal than another to Big Brother, it deleted paid-for copies of Animal Farm, too. The reason was that the company that had supplied the ebooks to Amazon was not authorised to do so under copyright law.

“Digital books bought for the Kindle are sent to it over a wireless network. Amazon can also use that network ... apparently to make them vanish,” The New York Times wrote on July 17, 2009.

It went on: “Amazon appears to have deleted other purchased ebooks from Kindles recently. Customers commenting on web forums reported the disappearance of digital editions of the Harry Potter books and the novels of Ayn Rand over similar issues.”

All the affected customers were refunded the money they had paid for the Orwell books, and Amazon chief executive Jeff Bezos gave a fulsome public apology and promised never to do it again, but the incident powerfully brought home the point that the world has changed. The meaning of “to buy” and “to own” is more fluid now that a company can auto-delete something for which you have paid. The notion of privacy has also become more elastic.

“It’s like Barnes & Noble sneaking into our homes in the middle of the night, taking some books that we’ve been reading off our nightstands, and leaving us a cheque on the coffee table,” wrote technology blogger David Pogue of The New York Times.

Amazon had the means to do this because content is downloaded wirelessly to a Kindle via Amazon’s 3G Whispernet network. There is Whispernet coverage in South Africa, too. It keeps the e-reader linked to Amazon and allows Amazon, if it is so inclined, to peep at what page you last read, at what notes you have made on your ebook, and so on, which obviously raises privacy eyebrows.

And Amazon had the ability to delete the Orwell ebooks because of digital rights management (DRM).

DRM can be described as “any technological measure that restricts what you can do with a file”, says Arthur Attwell, the chief executive of EBW, a digital publishing and consulting company.

There are three different DRM schemes for ebooks: Amazon’s Kindle DRM; Apple’s FairPlay; and Adobe (which is used by most other e-readers). These three systems are incompatible.

“There is no way to move books across systems,” Attwell says. “When you buy an ebook that uses one of these systems, you are locked out of the other systems [when you want to access that book].”

You can read titles bought from Amazon only on a Kindle and Kindle applications. Titles bought from the Apple bookstore are restricted to the iBooks app on iPads, iPhones and iPods. In this way, these two DRM systems keep you, the consumer, in a tight triangle of DRM system-device-bookstore.

In Attwell’s view, DRM is not about copyright protection, as is claimed by device manufacturers and publishers.

“Don’t think of DRM as protecting intellectual property,” he says. “DRM is the main tool for securing market share.”

(To underline the point about market share, there are current, mainstream DRM-free books aimed at a market that has a low tolerance for DRM, such as readers of the science fiction and fantasy genres, Attwell says. Ebooks that are no longer under copyright are also available free of DRM.)

Most other e-readers – such as Barnes & Noble’s Nook, iRiver and Elonex – use Adobe DRM. If you opt to play in this eco-system, you have a significantly bigger choice, because you can buy from all those ebookstores out there that are not either Amazon or Apple iBook stores. You can also move titles from one Adobe DRM-enabled device to another.

This is the way to avoid obsolescence, Gerjo Hoffman, the senior category manager for e-content at kalahari.net, says. He calls it “going agnostic”.

He says kalahari.net is agnostic as regards device and format, so you can read your ebook downloads from the retailer on any Adobe DRM-enabled device.

Judge an ebook by its format

There is another level of compatibility to which you have to pay attention. The DRM system wraps around the format in which a title is published. The two important formats to be aware of are epub and PDF. “These have implications for which software you need in order to read the ebook and whether you can print, or copy and paste,” Attwell says.

“Compatibility is very confusing for consumers. My feeling is that retailers don’t tell consumers enough before they buy a book. I know few retailers that tell you if a book is epub or PDF, or whether it is encrypted with DRM.”

Since your access to your ebook is managed, this raises three questions: can you download a paid-for ebook again if you have lost your download or the device; can you lend copies of your ebooks to other people (other than lending the whole device); and what about privacy?

Downloads. You can download the same title more than once, although (you will hear this often) how and how often you can do this depends on the publisher.

Hoffman says that if you buy from kalahari.net, you can download your ebook three times. This can be to the same device or to three different devices, as long as you authenticate each device with Adobe. The T&Cs specify three downloads, but Hoffman says the number varies among publishers, and some allow up to six downloads per purchase.

The trouble is that the DRM information does not display when you buy any particular title, and kalahari.net does not keep track of the number of downloads per title, so you know that you have exceeded your number only when the title's download link disappears.

Lending. Barnes & Noble was the pioneer, and Nook users are able to lend a title to other people for a maximum of three times, for 14 days at a time. Now Amazon has joined the club, and Kindle users can lend a title once, to one person, for two weeks.

Hoffman says kalahari.net expects that buyers will be able to lend their ebooks sometime in 2011, although it depends on the publishers. In the meantime, kalahari.net’s T&Cs are quite clear: “[You] will not print, copy, or ‘lend’ ebooks to any other person. By downloading any ebook, you hereby acknowledge and agree to these terms.”

Privacy. It is the constant connection offered by 3G that gives Kindle pervasive reach into your life, and currently Amazon is alone in offering look-over-your-shoulder connectivity.

Attwell says Amazon can even see which paragraphs you highlight, and by identifying which passages most readers highlight in a popular book, for example, Amazon can be guided in its marketing efforts.

Attwell says that if you choose the Adobe DRM route, your connection with the retailer and publisher and everyone else in the chain occurs only at the point of download. As a result, the amount of data that can be collected about you and your reading habits is extremely limited.

Hoffman confirms that kalahari.net does not track consumption patterns.

“The thing is,” Attwell says, “the Kindle has done e-reading so well that this connectivity has become the benchmark for a great consumer experience.”

The future does not have to be a trade-off between features and privacy.

“It’s very likely that other e-reading applications will use always-on connectivity to collect information about your reading habits, but consumers will be able to opt out,” he says.

This article was first published in the 1st quarter 2011 edition of Personal Finance magazine.