DRM stands for Digital Rights Management and is the name for any mechanism intended to stop the pirating and redistribution of digital files. The methods vary depending on the type of file, but all DRM systems have one thing in common – they don’t really do the job for which they’re intended!
A typical ebook DRM system provides the purchaser with the ebook file in an encrypted form that can only be decrypted if they have the (electronic) evidence that they are entitled to do so. Sometimes this happens in the background so they are hardly aware of it but sometimes they have to jump through hoops before they can read the book they have paid for. One online retailer I looked at expected me to download and install special software provided by a different company and set up an ID with that company before I could read the books they were selling. Needless to say, I decided it wasn’t worth the effort.
For honest people who aren’t intending to pirate the book, DRM is a real nuisance that makes it hard to move the ebook file between devices they own. But for pirates, it’s a gnat bite. A quick search on the internet shows dozens of different ways to remove DRM from ebooks so any pirate worthy of the name will be able to create a DRM-free version of a book in minutes.
Most traditional publishers are still determined to have DRM on their ebooks. However, Tor Books removed DRM from all its ebook in 2012 to the delight of its customers and, one year on, had noticed no discernible increase in piracy.
So what should self-publishers do about DRM? On some sites, you have no choice: the retailer adds it for you whether you want it or not. But Amazon KDP and Kobo both offer you the option of publishing your book without DRM and it makes sense to take advantage of it. If you want to sell e-books, you need to make it as easy as possible for people to read them.