Agree to Disagree

I made the point yesterday that if people, whatever their opinions or beliefs, just come with a considered point of view, they may get arguments but not as much disrespect. Obviously, the world is full of trolls, and some people, as Michael Caine put it, just want to watch the world burn. But I think it’s generally pretty easy to tell who’s thinking things past the top layer or two and who’s just got an ax to grind or a bill of goods to sell. Everybody runs the risk of crossing those lines sometimes, particularly in contentious circumstances like publishing where there’s a different opinion for as many people as can formulate a sentence on the matter. But, for myself, I respond better when I feel like the person speaking has an understanding deeper than everyone’s base rhetoric.

As you may have already seen, Lee Child, author of the popular Jack Reacher books, and a signer of the Authors United efforts, exchanged views with Joe Konrath on the state of things. Read all the way through, the discussion continues into the comments, as well. I found myself alternating between agreeing and disagreeing with Child, but in the end, I was left thinking that, even though I’m generally opposed to their stated efforts, AU would be so much better off with someone like Child and his pragmatism at the helm rather than Preston and his, shall we say, questionable thinking.

“…as a guy entirely unafraid of the future, whatever it may bring – after all, I kicked your ass under the old system, and I’ll kick it under the new system, and the new-new, and the new-new-new, until I retire, or the lung cancer gets me, whichever comes first. I’m completely confident of that, and you’d be an idiot to bet against me.”

I like it! There’s no cowering in corners there, worrying about what tomorrow may bring. Maybe he’s right, maybe he’s wrong, maybe he’s just arrogant, but so what? Publishing is a difficult, often cut throat business. You’ve got to be confident in yourself or you’ll get chewed up and spit out. I’m a basketball fan; talking shit then backing it up on the court is the game’s purest form, in my opinion. Or shutting up the guy talking shit by taking it right to him. And if you can’t shut him up, then he’s earned the right to run his mouth. I love the psychological game as much as the on court action. Child is showing no fear and that wins points with me from the get go.

“Almost every sale Amazon makes happens without a contract with the supplier or manufacturer. It used to be that way with Hachette. Hachette sold to wholesalers, at a certain discount, and the wholesalers sold on to Amazon, at a slight markup. Soon Amazon wanted to avoid that markup, so it went to Hachette and asked, “Please will you sell to us direct?”  And Hachette said, “OK.”  And that’s the so-called contract, right there.”

Ok, now we disagree. Yes, Amazon could just go through a distributor and pay the wholesaler price for Hachette’s print books and then do whatever the hell they’d like with them. But it’s not unheard of for large retailers to have direct contracts with large suppliers to remove the distributor middleman cut. The one thing about Amazon everyone seems to agree on is that they are not fond of middlemen. Barnes & Noble has contracts directly with these publishers, so does Walmart and pretty much every sizable retailer of books out there. It’s been that way for quite a while. It’s not something Amazon started and, in fact, it’s good business on their part to cut out the unnecessary distributor cut if they can.

However, ebooks are a different story. They do need an agreement directly with Hachette in order to sell their ebooks. The act of replicating the files to sell them would constitute copyright infringement without an agreement directly with the publisher. There are no first sale rights on ebooks. Amazon, or anyone else, can’t just buy one, even from a distributor, then turn around and resell it legally. Ebooks, in their present form, require a contract with the publisher, be it Hachette or me as an independent. Amazon couldn’t sell ebooks from me unless I specifically give them the right to do so. There is no circumstance where an agreement with a publisher isn’t necessary for a retailer to sell ebooks.

“Amazon larded on “fees”… in street terms, protection money, to keep the playing field level with other publishers also paying protection money. Equal visibility and honest rankings – which are the best kind of visibility – were at stake. In plain English, Amazon was saying, “Give us cash under the table or we’ll lie in public about the relative merit and appeal of your products.” Publishers were, of course, accustomed to that – B&N pioneered a junior version long ago – so it was business as usual.”

Again, I’m going to have to disagree. Co-op is a form of advertising, and it’s been around forever. Every magazine I ever worked for did a nice business in co-op fees for premium placement of ads within the publication, and that was well established long before Amazon was anything more than a river in South America. Amazon does have a much more diverse mechanism for selling things, so naturally, that likely produces more opportunities to add fees and such. A brick-and-mortar store has, basically, some tables and upfront displays. Amazon has dozens of ways to increase the visibility of books. I’m not surprised at all that they make some extra coin on that. Further, they should. It’s not protection money, it’s advertising, nothing more. And Amazon, or B&N for that matter, didn’t innovate any of it.

“If Hachette walked away, Amazon would lose… unless it was prepared not to carry Hachette titles ever again. Which it isn’t, because Amazon’s whole theory is to be the go-to, first-stop, everything store. Hachette’s best play would be to walk away and suffer a few lean years before an alternative presented itself.”

First, if Hachette walked, Amazon could still sell their print books by getting them through a distributor. Or through their vast network of third party sellers. Unless, of course, Hachette were willing to pull their books from distributors, which isn’t going to happen. The only thing Amazon couldn’t sell if Hachette walked is their ebooks, which they clearly want or they would have bailed on Hachette long ago.

As for a few lean years, I think you’re underestimating how much revenue Amazon generates for Hachette. Far from a few lean years, it would likely be a couple catastrophic years followed by their corporate parent dropping them like a bad habit, either shuffling them off to someone else, likely after massive, destructive rounds of cost-cutting, or spinning them off, a la B&N’s Nook business, to while away the time without dragging down the rest of the company, until straight up bankruptcy. Amazon walking away from Hachette would be inconvenient. Hachette walking away from Amazon would be suicide. You may be right, though, it could be Hachette’s best play. How many different ways can I say the word “screwed”?

“It’s staggeringly naïve to think the current KDP landscape is anything other than a short-term tactic. Note well – I am NOT saying don’t get into it now just because it will get worse in the future… instead I say, hell yes, make hay while the sun shines. Exploit Amazon’s game plan for all you can get, as long as it lasts, and more power to you. But understand that today’s KDP is a pressure point, designed to suck authors out of the established system.”

Indeed, I think we’re in agreement on this. My only question is who thinks it’s not a short-term tactic? In fact, KDP and the offerings associated with it seem to be constantly shifting. And it’s clearly designed to pull authors out of the established system. Specifically, though, it’s authors who have either been tossed aside from that system or those on the outside who couldn’t find a way through the gates. I do think they’d like to attract some name authors but I suspect they’d rather have them under one of their imprints, if at all possible, rather than strictly in KDP. KDP is more like a third party seller program than acting as a publisher itself.

And I am in full agreement with your make hay while the sun shines. That’s a good plan for whatever you do. Large corporations use people for their own ends. Amazon does it, Hachette does it, they all do it. The key, I’ve always found, is to use them for your own ends first. Absolutely take full advantage of any opportunities you can find. That’s not a piece of publishing advice, it’s a mantra for life. Opportunities never last forever.

“I am NOT talking about nurturing or culture or curating or any of that kind of non-existent crap. I’m talking about money.”

Sir, let me say thank you for saying this! If you could get Preston to quit with that nonsense in his AU missives, that’d be really great, too. Might get some people off his back.

“Storytellers will be working for whatever few pennies they choose to hand out. (Or some will. I’ll be doing something else by then. I don’t work for pennies.) And don’t tell me some alternate savior will ride to the rescue. There won’t be one. Publishing makes no sense to any other player. Certainly there won’t be a publishing-only player. Not enough margin in it.”

I don’t work for pennies, either. That’s why I got out of newspapers. There are many who will, though, and many over time who have. These publishers have been the ones principally handing out those pennies over the decades. I don’t agree that there won’t be other competitors. Amazon, no matter how powerful it looks today, is not infinite. And if they actually engaged in many of the things AU is afraid they will, that will only expedite their fall.

I’m not sure where this notion that publishing isn’t profitable enough to attract other competitors comes from, particularly now that the massive barrier for entry that print used to constitute is no more. I also think it’s odd that line of reasoning so often comes from people like yourself (no offense), Doug Preston, Stephen King and James Patterson, people who get paid by publishers in fat stacks of cash. If they truly weren’t profitable, your cut would be infinitesimally smaller.

“So really we should all be equally concerned. We should make common cause. Behind the noise and the bullshit we’re all trying to do the same thing – sell our stories to the same people, for a living wage. And it’s those last four words that made me sign the letter. Not my living wage – that’s already in the bank – but yours, and the people that come after us.”

I agree, to a point, but that’s why I wouldn’t sign a letter like AU puts out there. I’ve seen from the inside how much concern publishers have for a living wage for their creative talent. It’s akin to my concern for the sport of soccer, that is, just slightly above none whatsoever. This is an industry that has long needed its ass handed to it. Change and reform is difficult. Say what you want about Amazon but they ask for my support and offers incentives for me to give it to them. Hachette and the like demand it as a toll for getting to market. Will it always be the case? Probably not, but if the publisher hierarchy isn’t disrupted in a big way, it’s pretty clear to me that they will never change.

“I don’t believe the established publishing industry is good. I believe it is what it is, i.e. reasonably satisfactory for most, and likely better for most than a projected Amazon-only future.
I understand that Amazon is tremendously enabling for writers – at the moment. My advice is make the most of it while it lasts.”

I don’t believe the established industry is good, either. But I would change it to reasonably satisfactory for some instead of most. Amazon is enabling and I’m right with you on taking full advantage of that while we can. The one key area we differ is that I don’t believe such an Amazon-only future will ever come to pass. I’m not even convinced they want it to be that way.

“Re: standard contract terms being shitty: They’re the result of many decades of back-and-forth between agents and publishers, in good times and bad, and as such were completely acceptable to most. Now they look very bad compared to KDP… and one’s feelings on that depend on how one sees KDP.”

I was thrilled when I landed my first gig in publishing. A few years later, I got away from the large corporate publisher I was thrilled to be working for as quickly as I could, moving on to an independent start up publication (which turned out to be very successful until we sold out to another large corporate publisher who ran us right into the ground, reminding me why I hauled ass away from their kind in the first place.) Things always look brighter from the outside. I had no expectation that I would grow anywhere near as disillusioned as I got so quickly when I landed that first gig. What it taught me was that promises are cheap, even if made in a contract, and the perception of what it was far outstripped the reality. Besides, things always look brighter than they should when there are no equivalent alternatives, which has been the case until recently for nearly all writers. The one thing I learned about big publishers is that the glow comes off the rose pretty damn quickly.

“My contracts are exactly the same as they always were, apart from larger advances to reflect larger anticipated sales. Call me a jerk, but I don’t take higher royalty rates or preferential treatment, as a matter of principle. I was effectively subsidized early on (as all new authors are) and I won’t pull up the drawbridge now. I want to earn my corn the old-fashioned way, by selling books, not by using leverage.”

Good for you! One of the criticisms I made of Preston is that his gang could be doing a lot more to help early-career and midlist writers. I’m glad to hear someone out there in your position is actually doing it rather than cashing their checks and complaining that someone else needs to. That being said, I’m not sure your leaving money on the table is actually helping any other writers. I doubt it led to higher advances or better royalties or even more contracts than they would have issued in the first place. Very likely, all it’s doing is enriching some already enriched executive or other, likely after being siphoned off to the parent company as “management fees” or some other mythical line item on an imperceptible budget sheet.

I once worked for a publisher who, like many, failed to pay men and women equivalently. On one occasion, I got a raise (it was my second one within eight months) but I knew there were other people I worked with that hadn’t gotten even one in nearly two years. So I said, how about instead of giving this to me, you give it to my coworker who needs the money far more than I do, especially since I had just gotten one a few months earlier. I was told it couldn’t be done. They had procedures and such, even though they were fully prepared to pay that money out to me, they in no way would even consider giving it to someone else. I argued, as is my wont to do, and I was eventually told either you accept it or no one gets it.

I applaud your efforts in this regard but, if I may make a suggestion, there may be a better way to achieve that end than leaving money on the table and trusting it will trickle down to where you’d like it to go. I can almost guarantee you that it’s not.

Anyway, I see someone here who’s got a much clearer-headed view of the industry than AU in general comes off as having. There’s still some consternation about Amazon’s size and market power, which isn’t irrational, I share some of that myself. But I prefer a world where I have freedom and flexibility and the ability to do just as he suggests, make hay while the sun shines. I don’t see the value in acting to prop up a system that’s more myth than reality, more faith than fact these days. That system needs to be broken down.

As for Amazon, only time will tell who’s right about their intentions. The only difference being, if Amazon does turn sour, it then becomes just another system that needs breaking down. They’re not there yet, or even close, in my opinion. I have no fear that it can and will be done, should it be necessary. It’s the 21st century now. Entrenched systems break down faster than ever these days. I see no reason to believe Amazon is any kind of exception to that. I don’t believe they think they are, either.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Published in: on September 28, 2014 at 11:56 am  Comments (5)  
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Conflicting Notions of the Value of Conflict

Typically in this space, I go to great, rambling lengths to point out and discuss matters I thoroughly disagree with. I’m a confirmed cynic, and on top of that, I tend to hold opinions that aren’t necessarily popular. In some circles, certainly, but not always. I believe we should have first sale rights including resale on digital goods. That’s not a particularly popular opinion in any circles. I couldn’t possibly care less about piracy and, in fact, I’ve said many times that I don’t even think it is piracy nor do I think it’s harmful in the slightest. Another not particularly popular opinion. I’ve openly defended publishing pundits like Mike Shatzkin, and caught some hell for it. Doesn’t change my mind. I don’t always agree with him, even with most of what he says, but I do usually get something to consider out of it. I also think he’s one of the more vocal critics of traditional publishing, one from the inside, and I think those voices are important to consider. Nobody knows everything. Your perspectives may vary and that can color any beliefs. You don’t have to swear allegiance to them, just try to understand where they’re coming from.

But what I absolutely can’t stand is naiveté. It’s why I was so bluntly mean to Doug Preston last week. He’s got name recognition, a large platform and the support of some sizable names amongst authors. To me, that makes it all the more disappointing that he’s using it on nonsensical arguments, pointless shaming actions and industry fairytales of nurturing publishers and literature exempt from commercial pressures (particularly galling to me coming a guy who’s made bank simply because publishing is a commercial entity).

I read this piece on the value of conflict by Barry Eisler yesterday. In it, he talks about an interaction he recently had with someone who doesn’t care for the tone some vocal self publishing supporters take. Here’s a quote from that person:

“Instead of being a force for change, self-publishing appears to be a force that creates conflict, makes people feel defensive or unwilling to speak publicly, and is, I believe, getting in the way of change.”

First, change doesn’t happen without conflict of some form or another. There’s also the matter of the frequently dismissive tone toward self publishers that turns up in many of these pieces, such as the Bush League reference by author Janet Fitch I talked about yesterday. Those kinds of things necessarily set people like me on edge. And we react. We aren’t out here serving any masters other than ourselves, and we are free to speak our minds. I don’t believe many traditionally published authors feel they are free to criticize their publishers. Whether they actually are or not is debatable, but I don’t believe they think they are. Otherwise, wouldn’t there be more of them out here raising hell? Where’s the Hachette authors throwing a fit at them for dragging their feet and not negotiating in good faith while their writers’ careers burn? Don’t tell me they don’t exist. They do, but the industry, with implied and often self-inflicted pressures, keeps them silent.

So when someone comes into what’s essentially a discussion of business models and commercial approaches with some nonsense about books not being products, that gouging readers with higher prices is crucial for the furtherance of literature and all kinds of ridiculous, unsupportable accusations about Amazon’s conduct while totally ignoring or whitewashing the conduct of their own publushers, in this environment, you’re going to get a smack down. And, in my opinion, you’ll deserve it.

Bring logic, facts and rational arguments based on the immutable reality that we’re all discussing a many-billions of dollars commercial enterprise here populated by various multi-billion dollar profit-seeking conglomerates and not some mythical philanthropic exercise and you’ll be okay. I may not agree with you, and I’ll probably argue if I do disagree, but I won’t ridicule you like I did Preston. If you want to discuss literature in the cultural sense detached from commercial concerns (and to be clear, I do believe that’s a worthy discussion) don’t frame it in the context of a business negotiation between the largest retailer going and one of a small handful of the largest publishers in the world. There’s a place for that discussion, just not in the middle of a purely commercial dispute amongst purely commercial enterprises.

The attacks you see come about because, when someone does that, they come off as naive. Worse yet, in not reflecting their lens of criticism at the publishers as well as Amazon, to many of us out here, they can come off as ignorant and a bit clueless. There are more opportunities for writers to get their work, and their ideas, out there to the public today, completely irrespective of commercial concerns than ever before in human history. If that weren’t the case, you wouldn’t be reading this right now. In fact, you wouldn’t be reading 99% of the criticisms of the traditional industry that exist today because mainstream media outlets are inbred with the media conglomerates and don’t often take them properly to task. Just ask Bill Simmons of ESPN how willing these supposedly independent media companies are to brook serious criticisms of their corporate fellow travelers. The voices of opposition have been silent too long, in my opinion, and the megaphones we use to shout our concerns to the masses is an extraordinarily valuable development and it is directly and indirectly responsible for the much-needed reform that’s currently gripping the industry.

So educate yourself before you speak. Bring a thoughtful point of view to the table, wherever on the spectrum your opinions lie, and you’ll be all right. You might even learn something. Better still, some of the people reading you might learn something, too. Everyone has their own perspective and there is clear value is seeing and understanding perspectives different from your own. There is also value in engaging with your critics, as well as your supporters. But you can’t just spout nonsense that flies in the face of the reality many of us see every day and not expect to be called on it. It’s not 1988 anymore. Everyone has a voice. Use them wisely.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

A Closer Look at Janet Fitch’s Letter to Jeff Bezos

Author’s Note: Earlier today, I referenced a quote from author Janet Fitch. I read her Open Letter to Jeff Bezos a couple weeks ago and pulled some choice quotes from the missive to opine on, like I usually do. Fitch is a signer of Doug Preston’s Authors United publisher front group grassroots organization. There’s nothing particularly compelling in her letter and I had initially only left a comment inquiring why she wasn’t directing her anger at the company she’s under contract to rather than a retailer only associated to her tangentially through her publisher. She did graciously reply (although without actually answering the question). I hadn’t really planned on giving it any more attention until I saw this quote from Preston himself in a letter to his group leading up to the hilariously inept and ill fated letter to Amazon’s board of directors:

“In the meantime, it might be a good idea to do what we can through social media, blogs, opinion pieces, and other means to counter Amazon’s disinformation campaign. The writer Janet Fitch, for example, publicly released her letter to Jeff Bezos, which generated (an) excellent story in the Los Angeles Times.”

There’s no point linking to the Times article. Follow the link in the Publishers Weekly piece that quote came from if you must, but it’s basically just saying what she wrote. Nothing new there under the sun. Mainstream journalism at its laziest! Preston’s call to counter Amazon’s supposed disinformation through social media made up my mind to counter their actual disinformation. So I started writing this piece. Before I finished, though, that Amazon BOD letter came out and it was so absurd that I simply had to direct my attention to giving his cluelessness the what for. Now that it’s settled down a bit, and Authors United astroturfing group has moved on to writing the DOJ in an attempt to spur antitrust action against Amazon, an attempt I sincerely hopes results in a closer look at Hachette and other publishers’ recent actions through the law of unintended consequences, I thought I’d return and finish this up.

Another day, another writer attacking Amazon. This time, it’s Janet Fitch, author of the bestseller of a few years ago, White Oleander. I understand the consternation over what’s going on with Amazon but the more of these I see, the more I find myself questioning how many of these writers have the slightest clue how this business really works. I always think it’s odd when I see someone who should know better espousing virtues to businesses that may or may not have even existed in their mystical golden days and certainly don’t anymore in today’s cut-throat, overly conglomerated publishing world.

Fitch was pseudo-complimentary to self publishing and Amazon, so I suspect the seeds of realization are planted there, she’s just too stuck on what she thinks she knows rather than the preponderance of the evidence. Despite the Doug Preston talking point nonsense right from the jump of her “Letter to Mr. Bezos”, I was willing to give her the benefit of the doubt. Writers, after all, have been intentionally sheltered from the business operations of publishers for long time now, so it’s not surprising that some misconceptions would fester from within the publisher/author infantalization feedback loop. I was looking for sound arguments in her underlying reason. Unfortunately, what I saw was condescending backhanded compliments to indies and adherence to the special snowflake, won’t-somebody-think-about-the-art, blind to business ethic that some seem to think is the author’s proper place in the food chain.

Let’s start with this this from the preamble of her letter to Bezos:

“The magic number which Amazon is holding out for, $9.99, is not based upon the actual cost of publishing books, which includes paying author advances, editor salaries, publicity and all the other costs of creating books for us to read. The publishers well know how much it costs to run their businesses. It’s simply an aesthetic decision, how that number looks to a consumer.”

First off, $9.99 isn’t a magic number Amazon is holding out for, it’s a number they have already been selling books at or below for years now. Years that, up until your publisher and others broke antitrust law to fix retail prices above that number, was generating a booming new ebook market. The market is still booming for some, those who saw the higher price push for what it is, an attempt to choke out the golden goose because she’s spitting out solid gold eggs too damn fast for their taste. Meanwhile, on the traditional side, the side your publisher represents, all signs point to ebook sales having plateaued. Do you think that’s a coincidence?

Secondly, you’re wrong about it not being based on the cost of producing the book. The traditional world is still very much a print-first environment in many respects. Everything is based upon that premise, even the higher cost of ebooks is often cited as a means of protecting print rather than fully exploiting the digital format. Advances and royalty rates for print haven’t appreciably changed in the past 10 years, other than widespread reports of both shrinking advances and increased use of discount clauses that keeps the publisher cut intact while slashing the author’s take. Those rates are well established as the means of paying for the costs of producing the book. Once the print version is already produced and paid for (through those royalty rates on print) the cost of producing an ebook from it is minimal to virtually nonexistent. Plus, once that’s done, the marginal cost of producing every other ebook copy sold is statistically insignificant from zero. Ebooks are as close to pure profit as is possible. Your publisher and their accountants know this, and yet, even with the production costs for the book already accounted for in the print royalty rates, they still pay out only between 12% to 17.5% of the ebook proceeds to the author. Why are the rates so low?

Expenses are covered, there’s only the one time charge for creating the first ebook strictly dedicated to that upfront. That money from the increased margins can go three places, to you in the form of higher royalties, to the reader in the form of lower prices or into the publisher’s pocket, ostensibly paying for expenses that are already covered elsewhere. The third option is the worst one for the long term health and growth of the industry as a whole, specifically readers and writers. It’s also the one your publisher prefers and is trying to permanently stick us with.

As for how that number looks to the customer, that’s a pretty important dynamic. Whether you realize it or not, there are a sizable number of customers who see $9.99 for an ebook as still too high and rightly so, in my opinion. The only justification for both high ebook prices and low royalty rates is an open admission that print is flagging and not producing the returns they need. But the response to that is to handicap the infinitely more margin friendly ebook? This strategy is making the publishers’ bottom lines bright and shiny today but it’s not doing a single thing to protect or encourage new growth in print long term. In fact, this path is putting at risk the ability of everyone signed on with one of these publishers’ to even have an outside chance of getting a decent return on that contract past the next few years.

I’d recommend you read up on the newspaper industry and how their strategy of print-first and digital as supplemental revenue lost them half their print business in just 5 years as well as doing irreparable harm to their emerging digital business. Might be some parallels there you’d like to think about.

Here’s one directly from her letter to Bezos (by the way, calling someone a parasite isn’t generally the best way to win them over to your side.):

“The difference between a symbiotic and a parasitic relationship is that in symbiosis, the host is not harmed in any way. The two organisms work together for mutual benefit. In a parasitic relationship, the growth of the secondary organism outstrips the ability of the host to sustain itself. Unlike symbiosis, a parasite kills its host, and eventually, itself.”

Who are you talking about here? You seem to imply it’s Amazon, but maybe you’d like to point that parasite lens at your own publisher. Very few writers inside or out of the traditional industry would consider the large publisher/writer relationship as symbiotic. Very few writers who’ve worked with or taken advantage of opportunities from Amazon would consider them parasitic. You may have this one backwards. Attacking Amazon is like killing off the beneficial bacteria that helps you digest your food so the tape worm infesting your bowels has more to eat.

Down in the comments after her letter, I found these next few quotes. I do give ger kudos for showing up and engaging her detractors directly. So many of the people defending publishers and demonizing Amazon refuse to (I’m looking at you, Preston. You too, David Streitfeld and the NY Times.) Here’s the first snippet:

“I disagree that more people buy based on price. I think the people who are going to buy Paint it Black are going to buy it at $12 as at $8. All dropping the price to $8 will do is take money out of my pocket. And to think that the publisher’s overall plan for the book doesn’t include all forms–to see the ebook is sort of a toss-off after the “book” is published, is mistaken. The cost of producing a book–editing, acquisition (ie paying the writer and his or her agent), design, marketing, overhead–is spread out over all the forms, the hardbound, the paperback, the ebook, the audiobook, large print, etc.”

Two things; one, you’re not taking money out of your pocket, you’re putting it back into the pockets of your fans and customers. And you are leaving something on the table; the zero dollars from all the people who would pay $8 but not $12. It’s nice to think the people buying our work are all strongly committed and willing to pay whatever we charge, but that’s not realistic. Price is an extremely fickle creature, especially when you’re pricing in a range that includes a psychological barrier like $10. The difference between $9.99 and $10 may be small in truth but it’s much larger in perception.

Amazon’s research shows an extra 3/4 of a sale for ebooks priced at 9.99 as opposed to 14.99. As a rough estimate looking at your pricing argument, you wouldn’t be losing $4, you’d be gaining $6 and two readers instead of just one. It’s a fairly well accepted idea that lower prices lead to higher volume sales. It’s not an exact science, of course, but to assume you gain nothing from lower prices isn’t really accurate. Besides that, you are indirectly advocating for intentionally charging higher prices to your most fervent and loyal customers, and for shrinking your audience. I, for one, prefer lower prices, rewarding the best readers and generating a wider audience. Makes for happier customers and more opportunities in the long run.

Secondly, you’re right, they are trying to spread out the total costs across all formats of the book and that’s the problem. If the differential in cost structure wasn’t so great, it may not be an issue. But ebooks are so much more inexpensive and efficient to produce and distribute that there’s no way to spread those costs that doesn’t artificially inflate the prices of ebooks and hinder their growth in order to carry formats that aren’t or soon will be no longer pulling their own weight. You’re just not going to win an argument with readers who know several dollars on the purchase price is just padding or worse still, paying for a version of the product they don’t even want. Like it or not, readers are far more informed about the business dynamics that set prices than ever before. The one-sided conversation of the past is no more.

It’s my opinion that combining expenses like this won’t have any tangible impact on improving the long-term fortunes of print, and may well handicap the long term fortunes of the publisher’s digital business as well. It’s happened before (CDs, newspapers) and it will happen again (movies). It may look like print and ebooks are the same business but they’re not. You have to careful tying them together in such a way. Rather than digital revenue being a raft to raise the total business, it could just as easily be the rest of the total business dragging down digital revenue like an anchor. There is clear precedent for this happening in other media.

“I think the world of self-publishing, where everyone can publish his or her work is amazing, and I think sooner or later, conventional publishers will develop self-publishing arms, which will be cash cows for them, and also serve as ‘bush-league’ teams from which they can cherry-pick for the majors.”

Bush league? Cherry pick for the majors? This is a bit insulting. Actually, take out the word “bit.” It’s 31 flavors of insulting. They’ve already tried to cherry pick from successful indies and it’s not working. There were some a couple years ago who fully signed up with publishers, but what have we heard from them lately? Today, most of what I hear in this regard is about indies turning down offers from publishers. There’s a simple reason for that, once an indie is successful enough to attract their attention, they have to come to the table with a sizable enough offer to compensate for their success and the things they have to give up. I see very little indication that publishers are willing to up the ante on their offers to actually attract successful indies.

As for publishers creating self-publishing arms, it’s been tried once or twice, the most notable of which being Author Solutions, which is about the scammiest of scams going. It also speaks volumes to the lack of general respect publishers have for indies. If they truly want to partner with them, then don’t behave as a predator toward them, and Author Solutions is a far bigger and more devious predator upon writers than Amazon’s been, if they’ve ever been one at all. On top of that, I’ve read quite a lot if these kinds of missives from writers like you or in your position. As for understanding the business of publishing, there certainly are more than a few Bush Leaguers around, and it’s usually not the indies.

“But for the writer who devotes three, four, five, eight years putting his or her all into a book, who aspires to greatness, who doesn’t have a readymade following, a different kind of structure is appreciated, one where agents negotiate contracts and editors refine work, where his or her book is published with some presence. This writer, this kind of literature, generally requires a conventional publisher.”

See, here’s the thing I don’t believe; nobody takes 8 years to write a book. They may take 6 months to write a book stretched out over 8 years, but they certainly didn’t slave away full time, week after week, for 8 solid years to write one book. Don’t get me wrong, I see value in the downtime between bursts of writing on a particular piece of material. I don’t necessarily believe straight through, start to finish, is always the best way to produce the best material. But when you’re dragging one piece out over years with long patches of nothing in between, I can’t help but think that’s a bit lazy. But to each their own. I just don’t buy the romanticized ideal of the writer slaving away for years on a novel when they’re really slaving away for a week then sitting it in a drawer for two months before the next slaving away for another week, but then it’s the holidays, so a few more months off, then another few days of work in January but winter is rolling in now, so you’ll pick up where you left off when spring sets in.

I’ve been as guilty of this as anybody. Sometimes, life gets in the way. But here’s where indie publishing helps, motivation to produce. It helps that you can almost instantly reap the rewards of that production, too, even if it’s not on the scale of a publisher advance (and especially if it meets or exceeds those levels). The industry still runs at a near-glacial pace and it’s going to be a problem in the long run. Many would say it already is. I doubt publishers of the future will be thrilled to invest in too many writers who they may get one book a decade from.

“All I’d like to see is that creators of literature still have the conventional publishers to turn to, and have a chance at a literary career which will pay them a living wage. I know many fine, fine musicians—on the order of our great writers—who no longer can make a living, because the cheapening of the product has broken the music business.”

Those aren’t mutually exclusive. It is entirely possible to have a chance at a career that pays a living wage without turning to a publisher. And it’s entirely possible, likely even, that turning to a publisher isn’t going to produce that living wage either. This is fairly new, admittedly, but that’s what has changed; the single path to success has been split off into as many possible paths are there are people to walk them. Certainly, publishers will hopefully find a way to adapt enough to stick around, but if they don’t, it will be because they lost relevance to what readers and writers want and need. Stay relevant and they’ll be fine.

You and I have very different views of the music industry. I know many excellent musicians myself who couldn’t earn a living prior to cheap digital music and open distribution. Now, they can. The music business was much like books, only those who got that label contract really had a chance to earn. Given the horrid nature of those labels and their contract structures, it’s difficult to say if many of them actually did. The music business isn’t broken, the old label system is. Look at those musicians who you know having trouble. Have they adapted? Are they doing anything differently than they were 15 or 20 years ago? Or are they just hoping the same path that worked then will suddenly start working again?

There are many authors who will soon be in this boat, as well. Hachette authors caught up in this mess may well be some of the first. Signing that publishing contract is only worth it if the publisher has sufficient efficacy within the market to support what you give up. It’s questionable to me, at this point, if Hachette (without Amazon) still possesses that efficacy at a necessary level. It’s a question that will only get louder and louder the longer this dispute drones on.

As I mentioned earlier, I asked a question in the comments section of her article, one I have asked repeatedly of others making similar critiques of Amazon. Have you written to Hachette to express your concerns about this dispute and what they’re doing to rectify things? Here is what she said:

“The thing to remember is that it’s not just my publisher–all the publishers are going to have to go through this. Believe me, at Hachette they keenly feel the loss to their writers–also their own loss–in the revenue that’s vanished during this dispute. But all of the publishers will find themselves in the same boat.”

I hope you’re right about Hachette caring about the loss to its writers. I have my doubts, though. And I agree, all publishers will be in the same boat sooner or later. It’ll be interesting to see if the ones coming later learn anything from the early ones. I have a hard time believing any publisher is looking at how Hachette has handled this negotiation and said, “let’s use those tactics! ” Just the fact that they made no effort at negotiation and simply let their contract expire would infuriate me if I were a Hachette author. I’m at a loss for why it hasn’t infuriated more of them. I can only conclude that many either don’t feel free to be openly critical of Hachette (notice she didn’t answer the actual question and no one else I’ve seen has, either) or they don’t truly understand who dropped the ball here. It looks to me like Hachette actually wanted an impasse, which, if true, doesn’t speak well for any concern for their writers. Also, refusing to kick in on a pool to compensate their writers during this negotiation isn’t worthy of much praise either.

I’m not sure how this ends, but I am certainly glad I’m not under contract and helpless to do anything about it. I feel for writers who find themselves in that kind of personal hell. But they need to ask themselves who put them in that position? The answer isn’t likely going to be one they want to hear; a generous contribution from their publisher with a heaping helping of their own choices.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Assumptions and Disintermediation

“To think that the publisher’s plan for the book doesn’t include all forms is mistaken. The cost of producing a book–editing, acquisition (ie paying the writer and his or her agent), design, marketing, overhead–is spread out over all the forms, the hardbound, the paperback, the ebook, the audiobook, large print, etc.”
– Author Janet Fitch

“You also have to take into consideration the price of the hardcover. Yes, it’s cheap to make a digital book but it’s expensive to present a book in hardcover.”
– Roxana Robinson, Authors Guild President

“Their “total pie” is really just a piece of the pie. “Total revenue” on an ebook is only part of the “total revenue” for a new release book.”
– Michael Cader

Here are three quotes framing the industry’s treatment of digital as but one part of an overall picture. The statement is true but (and here’s the kicker) it’s only true for the author, not the publisher unless the author allows it. The assumption that a book is one product with varying delivery mechanisms is wrong. It’s actually three products. I know this because the only way a publisher can have those full range of offerings to spread costs across is if the author sells them those rights. Separately.

There are three basic sets of rights involved (many more if you get all granular down into translations, overseas markets, what have you. I think it was Lee Child who said Amazon represents something like 11 of the 97 markets he sells his books in). At its root, there are three basic products the author is selling as a bundle: print rights, digital rights and audio rights. Everything else, for the most part, stems from these three forms. The question I have is why do so many writers feel it’s not only necessary to sell them as a bundle to the same entity, but to operate under some illusion that it’s not even a bundle at all? There is no reason whatsoever (other than publisher obstinance) why you can’t sell the print rights to one place, digital rights to another and audio rights to a third. Not one.

My take on this has been pretty clear; I do not believe inextricably tying print and digital together is the correct course of action. Further, I absolutely do not want the same entity handling both my print and digital products. That will inevitably result in handicapping one format to benefit the other, as many publishers are doing right now by trying to stifle ebooks to some degree in order to support their print infrastructure. It doesn’t support print because it doesn’t address the online commerce issue which is what’s really hurting bookstores. And it damages the growth potential of your digital business by anchoring it within the far-more-expensive print cost structure. Newspapers cut their own throats by trying to do this exact thing.

I understand why publishers would want the full range of rights for a book, and that made some sense when print was dominant to the point of largely being all there was. What I don’t understand anymore is why writers would still want one entity to have all those rights? Sell the print rights alone and say this is your one job, focus on generating sales for print only. Do the same with digital (or handle them yourself).

Publishers won’t willingly go along with this but tough. Don’t give them the option unless they’re paying a premium for the full bundle. But to accept contracts that are tangibly identical to what they’ve always been with potentially extremely lucrative ebook rights thrown in at largely no additional cost is just not smart. Writers need to quit assuming that a “book” is one product in multiple formats and see it for what it is; multiple products, each needing a different cost structure and level of expertise to properly exploit. Stop just tossing digital rights in with a deal from a company with print expertise. Likewise, don’t toss print rights into a deal with a company with digital expertise. Find the best party for each specific product (or do it yourself).

The buzzword of the 21st century is disintermediation. Bundled arrangements produce inefficiency now. You’re willingly undercutting yourself by selling all your rights to one entity. There’s also the matter of rights reversions. If a publisher is producing print sales for me but their digital sales are lagging, why should my digital rights not have its own separate threshold for reversions? If this were the case, a publisher couldn’t effectively hamstring one format to help another without risking losing the rights to that format. And vice versa, if digital is booming but print isn’t producing, those print rights should revert on their own merits without regard to the performance of other formats. Publishers will hate, hate, hate this, which is all the more reason why we should demand disintermediation of different categories of rights within any publishing contract.

The next writer who so easily spouts the line that the publishers’ plan is spread across all formats should stop and think how that can even come about. They can only do it if you willingly sell them all those rights as a bundle. Your choice to sign a contract like that is what creates an environment where these divergent products are intertwined. It’s not a foregone conclusion out of necessity but a willful business decision by you. And it’s very likely not even in your best interest or the interest of maximizing revenue across all formats. Stop assuming and start looking at what’s actually possible. I think you’ll find things are no longer as the industry at large would like them to appear to be.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Published in: on September 25, 2014 at 11:58 am  Comments (5)  
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A Hazy Future Can Make For Strange Bedfellows

Let me start by saying I like Mike Shatzkin. I see his work as a view from the other side. He’s very much entrenched in the traditional worldview but, unlike some, that doesn’t mean his thoughts are ignorant and should be discounted. Certainly, he falls into some of the same traps of assumption and false narratives that others do, but who involved in following any of this and voicing opinions on it doesn’t occasionally, in some form or another, including myself. I find Shatzkin to be a fairly vocal critic of publishers. Certainly, his point of view can sometimes be very Inside Baseball, as it were, but there’s value in seeing and understanding that point of view. Everyone on all sides have reasons for what they believe, and I’ve always thought the underlying reasons for those beliefs are more important than the beliefs themselves. That’s why I tend to be far more harsh on people voicing opinions based on faith rather than fact, assumption over analytics. You can’t argue with someone who has no sound basis for what they believe. Logic doesn’t work on people whose beliefs are formed without it.

Anyway, here’s an article by Shatzkin from back in May where I think he asks four very pointed and cogent questions, not only about the future of publishing, but what the nature of that future will be. I’ll first state the question he presented, then a short quote from Shatzkin on each point before expounding in my own rambling way…

1. How persistent an activity is immersive long-form reading?

“As my generation is replaced with digital natives, a decline in the market for novels would seem to be a very likely consequence. Or, at least, novels as we know them now.”

I agree to a point. The novel, perhaps more than other types of writing, fit the form of the printed book extremely well. But if it was the pinnacle of the form for fiction, digital “books” open up new channels of possibility with the potential for new forms to emerge. I am confident the novel in its traditional form has legs, be it digital or print. But I’m not as convinced it will remain the dominant form for fiction in the long run. What it will be ursurped by, now that’s a question I’m not sure any of us can answer at this point.

2. How persistent is the demand for printed books for long-form reading?

“My hunch is that ebooks will continue to take share from print for long-form reading, in fits and starts, but inexorably.”

I’m not going to call it a hunch, I’m absolutely certain digital will take share from print over time. I think hardcovers will transition into a boutique market, likely a larger one than what has developed for vinyl albums, but a much smaller niche than it maintains today. I think trade paperbacks have a niche of their own, largely because of the efficiencies and portability of POD technology. This niche will be larger than the hardcover one, cheaper and less ornamental but, however limiting it may be, paper is a great form for static work. And I suspect the conceit of books used basically as furniture and/or expressions of your personality may hold on longer than widespread numbers of people actually reading on paper. At the end of the day, though, I think digital is going to account for 85-90% of the industry’s sales in the not too distant future.

I have one caveat to this, it’s dependent on attracting younger readers and that’s dependent on being available when, where and for how much they want. The only way I can see print maintaining anything close to even 50/50 market share is if we all fail to bring in younger readers, print sustains through the older audience and the industry as a whole contracts greatly as that audience dies off (see: newspapers). But for this to happen, it would constitute an epic failure of the big houses as well as the smaller ones, the indies and retailers both large and small. Possible buy not likely.

3. How well do informational illustrated books compete with alternatives?

“My candidate for a Black Swan here is some industrial-strength attempt to curate the vast amount of video and other Internet-based content into ‘packaged’ competition for books that teach skills.”

I can’t say as I disagree with this either. I think it’s only natural that the vast amount of information available at our fingertips will be packaged in such a way as to maximize it’s use and, ultimately, revolutionize the way we approach education. Anybody looking at the mind blowing costs of college these days can’t help but think of it as an area in dire need of revolution. This will not be good for publishers of textbooks, however, who control a vast, extremely lucrative, captive market of students. But as time goes on, it will become more and more apparent that they no longer control any kind of monopoly on information. What’s available to all of us instantly will end up as the death knell of their exploitative business model. Couldn’t happen to more deserving group, either, in my opinion.

Some forms of book haven’t yet translated in any kind of peak form to digital alternatives. But it’s only a matter of time before they all do. The technology isn’t just going to stop progressing at today’s level. It will keep getting better and better.

4. How much of the creation and selling of books spreads beyond the book business?

“I’m sure that in less than five years every multi-million dollar marketing plan will have an ebook component: sometimes free, sometimes freemium, sometimes paid. Over time the businesses that do this work will learn, probably faster than many book publishers, how to use the online discovery mechanisms to drive the attention of relevant consumers.”

Why this isn’t happening more already is a bit of a surprise to me. Despite what publishers may tell you, it’s not that expensive to bring a book to market. Much of their expense comes from the model they developed to do so in the conditions that it developed. Things have changed, barriers for entry are little piles of rubble in most places now. Individual people can and do access this market regularly and to good success. If you’re a company of any size or bankroll, the cost of diving into this type of product is miniscule.

But more than just using them as a marketing add on, I can see all sorts of businesses using digital writings to supplement their brands. You see a business like Chipotle already experimenting with things like short stories on cups and their own miniseries television show released directly to Hulu. Producing entertainment or informational media and distributing that to an audience is no longer the sole purview of media companies. Everyone can be a publisher now and over time, everyone will.

So there’s Shatzkin, a person whose opinions I often disagree with yet I find I’m in near total agreement (to some extent) on these four questions, all of which forward-looking beyond the present day conditions of the publishing industry and it’s nascent battles with Amazon and the digital revolution. Just because someone seems to be on the other side of the fence today doesn’t mean they’ll always be there. Look at the underlying reasoning for why people believe what they do and you may find more commonalities than you expect.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Published in: on August 28, 2014 at 2:51 pm  Leave a Comment  
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Revisiting Paywalls Revisited

(Note: this is an unfinished piece from April of 2012 that’s been sitting as a draft in my WordPress que of posts since then. I never did get around to answering the question I asked at the end, but it increasingly looks like there’s no real reason to. The answer seems even more clear now than it did then, so much so, that the question itself even seems rhetorical now…)

Earlier this week, I received a message from a friend of mine asking if I’d heard about the latest round of layoffs at our local newspaper.  Since I moved from Cecil County to Chestertown nearly two years ago now (wow, time flies) I’ve found that I’ve lost interest in the comings and goings in that particular neck of the woods.

The state of printed media in my hometown was a popular topic of discussion on this site for the first couple of years, primarily because it was close at hand, their struggles echoed the newspaper industry at large in a lot of ways, and I still had connections with many folks in and out of the company. As I mentioned in the past, I worked there myself on two separate occasions in various capacities.  Before I received that message the other day, however, I hadn’t experienced a stray thought in their direction for months. 

Professionally speaking, I’ve moved on from any hope of getting back into the newsprint business.  It’s not just the derth of jobs (layoffs, buyouts, downsizing still abounds industry-wide as the revenue sinkhole just keeps getting deeper year after year) it’s that I simply don’t see a future in that area as it presently exists and I have yet to find a digital alternative that looks truly sustainable. Better to look in other directions, I figured.

Ebooks have been my focus for the past year, and, to this point, I see all the possibilities for revenue generation and sustainability within that area that are lacking in the digital-alternative newspaper segment. I’ve been writing, publishing, experimenting, expanding my skills and, most encouraging of all, actually selling my work at a level I’m not scoffing at (nor are the folks whose bills I’m paying with that money)*.  The gist of it is that, to my way of thinking, the struggles of newspapers are yesterday’s problems, ones that I’ve left, rather properly, in the past.  They had ample opportunity to innovate and adapt but didn’t, and the slow crawl to oblivion may be irreversible at this point. 

(* Note: Since then, I’ve since rethought my approach to ebooks and digital publishing. I did bring in a decent chunk of change at the time but I grew dissatisfied with my own efforts, so I’ve been cranking out new material, reworking old material and developing a different, much more expansive approach to this that I’ll be kicking off likely early next year, if not sooner. Try doing that when you’re locked into a publishing contract.)

So, when I read this message about further layoffs, it was a bit like hearing that an old girlfriend you were serious about a decade ago just got married. You hadn’t thought about her in years, she played no part in your day to day life for as long as you could remember, and news that would have seemed enormously important not that long ago ends up met with a shrug. It’s not that it doesn’t sadden me a bit to see the continued decline of my hometown newspaper, it does. But at this point, there’s really nothing that can be done about it. The point of no return for many newspapers passed by a while ago.

In today’s atmosphere, resources have eroded to such a level that genuine full-scale innovation really isn’t possible any longer. If it had been undertaken 3 or 4 years ago, it might have made a difference. Even scrapping the enterprise and starting over isn’t really feasible at this point simply because so many skilled people have been let go, particularly on the content side. You can’t really launch a new direction in an increasingly content-driven market when saddled with a money losing print albatross and a sparse skelton crew of leftovers. It saddens me to see it but, again, all of this at least could have been avoided with a bit of vision and foresight a few years ago when it mattered. But you can’t cry over spilt milk now that the carton’s down to the last few dregs of backwash.

All of which got me thinking about the last stand of newspapers, the paywall. Much like those famed 300 Spartans fending off the Persians, paywalls may hold off the onslaught for a short time, but in the end, the Spartans all ended up dead. For the Greeks, however, that stand provided the necessary time to execute a larger strategy that ultimately stopped a Persian takeover. Do newspapers even have a larger strategy to survive beyond simply fending off immediate annihilation? Or are paywalls their final stand?

Update

So, here we are two and a half years later, and I think this question answers itself. There was obviously no deeper plan going on at most papers, and the renewed push for paywalls then did little if anything to stem the hemmoraging of revenue. Here’s a piece by Clay Shirky essentially penning the obituary on the print newspaper business. As you can see, not only did this strategy not work to stifle print declines, it may well have instigated digital ad declines for them as well. They killed their future trying to protect a past that, at best, was on life support.

As for the company I mentioned, there have been more layoffs since these and the company was eventually sold to a venture capitalist known for slice and dice acquisitions. Doomed isn’t a strong enough word for their prospects at this point. Book publishers and their writers should take note of this. Following a print protectionist strategy did great harm to their emerging digital business. Ask questions, loudly and in no uncertain terms, anytime someone from the industry tries to tell you that restricting digital to protect print is a sound idea and in your best interest. It didn’t work here and I don’t hesitate to say it won’t work there, either.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Breaking the Scale: Bigger is not always better

A couple weeks or so ago, I left a comment on The Passive Voice under an article about Hachette’s CEO and his response to Amazon’s late night call to give him hell…er, politely inform him of your desire that they think critically about their pricing decisions, and seriously consider dropping the push for higher prices. Anyway, I got into a little bit of my experiences in dealing with large consolidated corporate accounting departments and the thinking I’ve run into about higher prices in days gone by. It got me thinking about a couple things and how this might relate to further understanding Hachette’s position and what the possible consequences could be, even if they get what they want.

Here’s the first comment I left:

“It may even be simpler than that. It reminds me of something I called the bean counter effect at a couple of magazines I worked for. They just couldn’t conceive of the notion that a higher price didn’t automatically mean more money. They wouldn’t recognize any kind of multiplier effect of more for less, no matter how many times we showed it to them on paper. It was a risk, unquantifiable (at the time) and all they knew was the difference between what we were selling at and the increase they wanted. We were selling print ads but it’s the same principle.

“Amazon could have said each sale at $9.99 generates a thousand extra sales and they wouldn’t have recognized it. They simply can’t see past “If I sell this for $13, I make $3 more than if I sell it for $10.” What I could never get across is that it’s not the difference between $13 and $10 that’s at issue, it’s the difference between $10 and the $0 that a not-insignificant number of people will choose instead $13. In this case, it’s the difference between $17.50 and $0 with Amazon’s multiplier data, which makes it an even dumber choice, I think. You’re not gaining anything at $13, you’re losing all the people who would have bought at $10. Essentially what you’re doing is making your customer base smaller and milking your best customers for extra money.”

Later on in the thread, I related a second instance of what I considered overly simplistic thinking involving money we paid out in this case. Here’s that second comment:

“At the same time though, you can’t always trust what they’re telling you about marginal cost. I was the managing editor of a free distribution magazine several years ago for a publisher who’s name would be instantly recognizable (not any of these folks). We were strictly ad supported and we operated on a 60/40 ad to editorial ratio, meaning we basically added up paid ad space and that number would represent 60% of our page count.

“Now I was a huge proponent of trading out ad space for various kinds of work we needed whenever possible. These trades were not counted as paid space so that added no cost outside the simple real price of what we paid to produce that space. Say I needed a delivery route run, something that would take a couple hours. I might pay someone $100 to handle it. Or I would offer them an 1/8 page ad for their business or whatever that’s listed at $150. They always took the ad, every time. Our real-world cost for that space across the entire print run was something like $20. And coming from non paid space, that $20 was a total sunk cost. So I traded $20 worth of sunk cost in exchange for not laying out $100 in real cash, effectively adding $80 to our bottom line. (You could argue it was adding the full $100 to the bottom line considering that $20 was being paid no matter what.) I was saving us somewhere between $2,000-$3,000 an issue with this stuff, if not more.

“Well our accounting department threw a fit. They insisted that we were actually losing $50 on this transaction. (Actually, they started out saying we were losing the full $150 price of the ad but I did manage to convince them the $100 was going to be outlayed in any case.) No matter how many times or how simply I laid it out for them, they would not move off the position that we were losing $50. It turns out their accounting systems had no mechanism for quantifying this because there was no revenue coming in but when they audited the paper, they recorded these ads as paid space, so we showed a deficit between the revenue they said we should have and what we actually produced.

“Eventually, they forbid me from making any more trades rather than adjust their accounting systems to record these gains. To make matters worse, our bottom line actually looked better on paper after they banned trades despite the fact that we were now spending a few thousand more per issue than we had been. That’s when the light bulb went fully on for me. If their standard accounting practices can make a real world $80 gain look like a $50 loss, and do it in such a way that it’s actually defensible and looks like it makes sense, can any of the figures they produce be trusted? How many other gains are showing up on the budgets looking like losses?

“Now this is a little simplified. There are tax issues and time a designer spends getting the ad together and such. But generally, we would get about 4 times the value back on a trade than we would paying out for it, and they banned me from doing so.”

I’ve found myself recently re-asking the two part question I wondered about back then, why in the world would you throw away essentially free money (in the instance of trades) and how do they not see that a much broader customer base at lower prices makes a far more stable longer-term revenue stream than a smaller base with higher prices? I also spent a not-inconsiderable amount of time worrying about the fact that I knew absolutely that the budget sheets we were getting from them were showing an artificially better bottom line than what actually existed. The disconnect between reality on the ground and the faux reality of their accounting systems was an insoluble issue simply because they wouldn’t even admit there was a problem.

I’m watching book publishers and their supporters today making arguments that are just as inexplicable to me as those were then. Do they not understand what’s really going on out here? Can they really be deluded enough to believe that readers will be supportive, even in the short term, of a strategy that gives them less choice, more restrictions and a higher price? Were they being taken in by comments from some readers supporting such a position? What I knew, from lots of experience, is that there’s often a hell of a difference between people speaking in high minded pronouncements about paying a premium to support their “culture” or what have you, and the choices they actually make when it comes time to break out the wallet.

I’m starting to believe the problem here is scale. Larger and larger companies require higher and higher outlays of resources just to keep the lights on, meaning the proportion of price needed for simple infrastructure that has nothing to do with actual production expenses grows near exponentially with the size of the entity. We’ve had it drummed into our heads that scale is beneficial because it provides greater negotiating leverage and greater purchasing power at lower prices from larger levels of bulk buying. This may have made sense at some pre-internet point, but does it still make sense in the current atmosphere? Does it even apply to something like ebooks that requires no physical materials to produce or distribute, making the notion of bulk buying power completely irrelevant? Certainly, Amazon is a large and growing company, their scale does have decided advantages, but is there a similar advantage from scale for publishers in dealing with them? It certainly doesn’t appear that Hachette’s size is any kind of advantage. If it were, there’d be no dispute going on.

Penguin Random House is often pointed to as the direction of things to come, but should it be? Consolidation in the periodical sector, looking back now, clearly did considerable harm to those publications siphoned up in it. It looks like efficiency on the surface but in practice turned out to be just the opposite. The question I have now is does the counter effect of increased infrastructure costs of consolidation counteract any bulk savings? I say yes, and then some.

Hachette’s not arguing for profit so much as arguing for maintaining revenue to cover sizable infrastructure costs. The obvious counter of why aren’t you decreasing your infrastructure costs to support those margins doesn’t seem to be a very popular one. It is, however, a needed question to ask and answer. There’s a line of thought going around that the lower production costs for ebooks and POD should have no bearing on the end retail price. I find that as inexplicable as not understanding a multiplier effect from lower prices or the savings from trades based on actual out of pocket expenses. Of course those lower production costs are a factor in price. Not only that, they must be.

Smaller entities are currently taking full advantage of these lessened costs. The problem for large publishers is their sheer size changes the equation. For an independent, the lower costs are directly tied to both lower prices to readers and a higher margins to themselves. For the larger entities, the lower price is threatening because of the sizable portion of the cut must go to the infrastructure costs associated with such scale. They can’t risk the multiplier effect not taking place because they need the raw revenue stream to be somewhat constant to keep meeting payroll and keep the lights on. The conventional wisdom that bigger is better is increasingly looking to be just flat wrong in this atmosphere. And if you’re doing it as a publisher to “compete” with Amazon, you’re making an even bigger mistake, as well as displaying a fundamental misunderstanding of the word compete.

There are numerous reasons to believe that, in the current environment, it’s better to be a smaller entity. One is that your accounting doesn’t have to be so complex and standardized as to be inflexible. Really, the problem I had with trades was that what I was doing didn’t fit into the parameters of their accounting software, so instead of adapting the software they just stopped me from doing it. Admittedly, changing that software is a pain in the ass on a much smaller scale. On a giant corporate one, I can understand why it wouldn’t be your first choice. But that’s stupid! I was one magazine adding an extra $50 grand a year or so to our bottom line doing what I was doing. This company had dozens and dozens of publications. They chose to throw that away because of inertia. It was a big enough amount to be a pain but not a big enough amount to force any accomodations. And they somehow managed to make the budget sheets look better than they had when they were in reality, worse.

Another is that the costs of the bundle of services publishers offer are inflated well beyond what those same (or better) services cost in an open market. That’s why you see some trad writers, when discussing the costs of publishing on their own, will cite numbers anywhere from $15k to as high as $40k for those services. It’s what they’ve been told these things cost. The knowledge of the reality that this work actually can cost at least 10 times less outside the gated publisher world isn’t even available to them. My lower prices/higher margin sales can relatively quickly cover those costs where your lower royalties require many, many times the number of sales just to cover the overly-inflated expense figures. Publishers costs in this regard are inflated for the same reason they want to maintain higher prices on the books themselves, their huge infrastructure costs have to be paid from somewhere.

In the present environment, scale isn’t some kind of competitive panacea for suppliers to retailers. It’s an albatross of expense and inefficiency hanging about their necks that necessarily limit their ability to fully exploit emerging markets and bring costs down in flattening if not outright declining markets. Scale, which may have been useful in the past, is increasingly suffocating now.

It’s really a matter of intetests. Is it in a writer’s interest to sign on with one of these increasingly consolidating publishers? How much does their sheer size, and the need to pay for that, change the dynamic between their interests and yours? How much longer will it be before a critical mass of writers realize that they’re bearing much of the weight of paying for many of elements of the publisher that have nothing whatsoever to do with producing, marketing and selling their books? They’re paying their expenses using you for pennies on the dollar, while pocketing the gains from the diminished to near nonexistent ebook production costs. Just on a simple dollar for dollar examination, the publisher’s interests run almost completely counter to my own and that’s moving more into the publishers favor as each day passes.

When the print ad revenue collapse hit newspapers, the companies with the largest scale responded the only way they could, tens of thousands of people losing jobs in round after round of layoffs. This not only hurt their ability to handle the size they had become, it further handcuffed their digital growth, which is now evident in the fact that their digital revenues are also declining and managing little to no separation in the rate of loss as the decimated print sector. Their scale forced the cutbacks which in turn left them understaffed to handle the essential tasks and woefully short on money for experimentation and growth in digital or keeping forward-thinking folks in their employ. Their scale became a self-defeating necessity to maintain itself rather than the advantage it had initially appeared to be.

What happens if we have a bad holiday season in print books sales this year? Can Barnes & Noble even sustain through another massive hit? Publishers are already squeezing writers both with deep discount clauses on print books and low ebook royalties (not to mention shrinking advances). If a round of layoffs or two end up a reality, the value of their bundle of services declines even more than the over-inflated costs we’re already experiencing. In turn, these companies become even less efficient, and less productive as they become understaffed to handle their sheer size. And raising prices to recoup print declines simply is not going to possible.

In the future, bigger is better may no longer be true, even for Amazon. People seem to be under some impression that it takes a giant to slay a giant. But that’s not altogether accurate. As Amazon continues to grow and expand, it’s own scale is adding massive infrastructure costs by the day. It’s not going to be one big company that gets them (certainly not one big consolidated publisher). They’ll suffer the death of a thousand cuts as many small, nimble entities target various bits and pieces of what they do, undermining the whole by eroding key components of it wherever possible. And Amazon is in a position where it simply cannot raise prices to compensate. Trying to do so will drive customers away in droves which will, in turn, further exacerbate the infrastructure cost problem. It can try to further squeeze suppliers but there are limits to how far that kind of strategy can take you, too. If they get complacent and anything is going to get them, it will be their scale that’s they’re undoing.

Smaller Is Better appears to me to be the approaching mantra of the 21st century. As huge consolidated corporations fall by the wayside under the weight of their own infrastructure, the only question I have left is how long it will take for Wall Street and business schools to catch on. Consolidation and ever larger entities may seem like something beneficial to those businesses today but, ultimately, they might only be serving to break the scale.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

This Week In Plagiarism: thieving across social media platforms

I spend a decent amount of time on Twitter.  It’s where I get most of my news and cultivate people to follow on the various subjects that interest me.  Well, the other day, I watched this next scenario play out and it’s one that I, frankly, never even considered.  Plagiarism is a significant problem online, particularly with people and sites swiping content from blogs pretty much wholesale, many times with no citation or links.  What hadn’t occurred to me was the possibility that some unscrupulous people would be swiping tweets from Twitter then passing off those words as their own in another social media platform like Facebook. Now I use Facebook as well, but I’ve never really considered it as a platform so much as a great way to avoid talking to people on the phone. But as you’ll see, some others don’t quite have that approach.

It all started when a twitter user handled Black Girl Dangerous (BGD) caught wind of the fact that someone had swiped one of her tweets and passed it off as their own on their Facebook page.

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The “writer” in question, Mindy Fischer, also going by the Twitter handle @Buczchic, claims to be a freelance writer and a self professed bleeding heart liberal.  She also suggests we should proceed with caution.  You’ll soon find out why.  Meanwhile, BGD wasn’t taking this slight laying down, so she called out Fischer…

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Notice how the time stamps show Fischer’s Facebook post came in over an hour after BGD’s original. Fishy, certainly. But maybe Fischer would have some excuse like, “I’m sorry, I accidentally deleted the credit for your work.” But then three hours go by without a peep of an explanation…

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Finally, after close to another hour, Fischer responded on her Twitter feed. But rather than clear things up, she made things worse…

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Well, that is a textbook example of how not to respond when someone catches you basically red-handed stealing their stuff. Needless to say, BDG didn’t respond well to her characterization of this “mishap.” As you’ll see, Fischer not only took the tweet word for word, she took the punctuation choices right along with it…

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That was met with dead silence from Fischer. (That’s still the case two days later, per the check I just made on Fischer’s Twitter account).  Well, that and she took down the Facebook post in question. BGD was not satisfied, however, and did a little digging into some of Fischer’s other posts, starting with a joke about Ghandi…

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Notice from the comments that it appears the citation to “unknown” was added only after someone started to question if it was her own work. But it goes on…

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Well, at least she added an extra line at the beginning before clicking paste…

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Here, she plainly shows a willingness to add some extra punctuation. But Jesus wasn’t high enough up the ladder for her. Fischer had a more divine source of inspiration in mind, too…

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Getting a little closer here, more rearranging words than direct cut and paste, and she added a hashtag. I would also suggest she could possibly follow the advice in her hashtag. It certainly is time for someone to have a reality check. Here’s one more BGD dug up for good measure…

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I suppose there could be explanations for any of these. The time stamps don’t seem to support Fischer, where they are available.  But she could actually be one of those unnamed twitter parody accounts, I guess, though I doubt she’s God or Republican Jesus given her self description. She’s a writer, so maybe she penned these tweets for them, or she got permission to use them somehow, although I’m not sure who would give her permission to pass them off as her own work or use them herself if she sold them to someone else.  What we know for sure is that she most definitely swiped BGD’s tweeet precisely as it appeared in the laziest way possible then gave a totally implausible and insulting explanation before signing off completely.  So whatever explanation she may have isn’t ringing particularly true.

As for BGD, this one last tweet sums things up nicely and, in my opinion, gives a great path forward for how real writers can deal with this kind of stuff…

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Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Print Protectionism Rules The Day…For Now

So Amazon came out with a statement a week ago detailing its position on ebook prices and, not insignificantly, it’s belief that authors are being short changed on royalties by publishers. Not surprisingly, it was met with a collective shrug by the mainstream industry, if not outright contempt. One thing this has done, however, is bring the belief that publishers’ actions on ebooks are all about protecting print out of the implied shadows. Here’s a variety of quotes from various sources critical of Amazon in response to their statement. Read on:

“Amazon doesn’t quantify what lower e-book prices would mean for sales of physical copies of the same books. Authors who work with traditional publishers like Hachette tend to make more, per copy, from hardcover sales than from e-books. If cheaper e-books draw people away from hardcovers, that could hurt these authors financially.”

“If lower e-book prices were to eventually destroy the market for physical books entirely—or even shrink it enough so that it wouldn’t make financial sense for traditional booksellers to publish them—that would help Amazon consolidate its power, which would ultimately be dangerous for authors.”

Literary agent Brian DeFiore in The New Yorker

“Lower e-book prices aren’t necessarily the best thing for writers. We get a percentage of the price as a royalty. You also have to take into consideration the price of the hardcover. Yes, it’s cheap to make a digital book but it’s expensive to present a book in hardcover.”

Roxana Robinson, Authors Guild President in Wall Street Journal

“Amazon’s assumptions don’t include, for example, that publishers and authors might have a legitimate reason for not wanting the gulf between eBook and physical hardcover pricing to be so large that brick and mortar retailers suffer, narrowing the number of venues into which books can sell.”

John Scalzi from his blog

“It is true that ebooks live in a world where they compete with other media. It is also true that the they live in a world which includes print, also an important component of a publisher’s and an author’s economic world. This analysis is very short on measurements of the impact on print sales of lower ebook prices.”

Michael Shatzkin from his blog

“Their figures consider a world of ebooks only. Their “total pie” is really just a piece of the pie. But publishers and authors are looking to maximize revenue across all formats. “Total revenue” on an ebook is only part of the “total revenue” for a new release book, and the hardcover edition still generates substantially more revenue per unit.”

Michael Cader from Publishers Lunch via Joe Konrath

“Even if ebook prices are the focal point of the dispute, that does not mean (Hachette) should not be looking at the effect across their total business, and their total account base.”

Michael Cader from Joe Konrath’s blog

What do all these have in common? The belief that the ebook is not only inextricably tied to print, but must, in some way, be handicapped to shield the older, more expensive and inefficient model. So what we’ve got here is the key issue in modern publishing, do you believe that digital must necessarily be hamstrung in some way to the benefit of print?

If you’re a Patterson or King or someone who gets the benefits of large numbers of hardcover sales in physical bookstores, that answer seems to be a resounding yes. But if you’re not one of those very select few, the question becomes much more difficult to answer. How does it benefit the midlist author or the debut author to have your ebook prices placed higher to support brick and mortar hardcover sales that benefit a much smaller number of superstar writers almost exclusively, and very likely, not you? As for the indie authors, it clearly doesn’t seem to benefit you to link print and digital in this way at all.

There appears to be two schools of thought on this. One is that print must be protected from lower priced ebooks because they will hurt physical stores, shelf space will decline and Amazon will reign hellfire over the industry forever and ever, which will result in damage to all authors in the long run. This is a call for all but the publishers and most fortunate authors to sacrifice in order to preserve an ecosystem that doesn’t really help them. You must sacrifice now in order to prop up a network where, unless you’re extremely fortunate, you must sacrifice in perpetuity, essentially.

The second school of thought is that ebook prices must necessarily be higher (and royalties lower) because the revenue generated pays for the totality of the book. This line of thought is that profits from ebooks aren’t really profits at all but a portion of the total revenue of a book that includes high print expenses that must be paid. This is a call for authors to sacrifice on ebooks to pay for the publishers’ print expenses even though they’re already being paid for that with a royalty structure on print that was designed and implemented to cover all the costs of bringing the book to market. You’re basically donating 75% or so of your digital proceeds after the retailer’s cut to your publisher for generating and uploading an epub file.

Either way, the presumption is that ebooks can’t be allowed to grow independently of print. They must either be restricted to prevent the erosion of print sales or a large portion of their revenue must be siphoned off to pay for the print infrastructure. There is also the assumption baked into this that the future of bookstores depends on the continued furtherance of $25 or $30 hardcovers. Also that any contraction in the print market (and conversely any unchecked growth in ebooks) will lead to Amazon consolidating even more power. Both assumptions rest on the belief that ebook and print revenue exist in the same continuum as hardcover and paperback revenue did in the past.

Here’s the thing about that, paperbacks didn’t undercut hardcovers because they were windowed. Windowing doesn’t work with digital. So the only means they see to prevent hardcover sales erosions is to actively lessen the sales of ebooks. Presumably, I would think, once the hardcover cycle runs it’s course, the high ebook price should come down to old mass market paperback levels, if not less, but that’s not really what we’re seeing.

All of this rests on the belief that digital sales can be essentially capped at 30-35% of the industry. And further, that print, particularly pricey hardcovers, won’t erode anyway due to other factors irrespective of ebooks or that the large and growing segment of the industry that simply doesn’t care about the hardcover/bookstore ecosystem they’re essentially locked out of won’t undermine the higher ebook prices to the point that publishers lose out on both print and digital sales.

Protecting physical bookstores is also a tenuous ideal from this two-pronged perspective. One, ecommerce is not going away. In fact, same day delivery is being rolled out by multiple players, not just Amazon. That has nothing to do with the price of ebooks but a more existential question on the nature of consumer shopping choices. Two, print on demand technology will become better, cheaper and more pervasive, possibly even resulting in kiosks that have the potential to do some of the same things Redbox did to video stores. When was the last time you visited one of those?

Are publishers going to withhold books from these kiosks? Will they demand near-hardcover prices for the trade paperback products they produce? Are they also going to demand higher prices for print books sold online? All of these elements will eventually erode bookstore sales and if publishers’ interests rely on protecting those stores, then these acts would be totally consistent with the higher ebook price strategy. It also means that publishers would be intentionally harming virtually every new publishing technology that increases efficiency, lowers prices to readers and increases sales in favor of their one preferred sales channel and format. One that, it can’t be understated, makes books more expensive, more inconvenient for readers to buy and less lucrative for writers overall.

If you’re James Patterson, Stephen King or Douglas Preston, these strategies may make some sort of sense in the immediate term. If you’re any of Hachette or any other large publisher’s thousands of non superstar authors, however, this doesn’t make a whole lot of long-term sense. Remember, you’re not just making less money on a contracting print market, you’re covering the publishers’ revenue declines in that respect through lower ebook royalties. The only way declining hardcover sales and rising ebook sales harms these authors is if the publishers are saddling you with a much-too-small cut of ebook proceeds. Amazon is right in this respect. If publishers were paying writers fairly on ebooks, then you stand to make more money on more sales at cheaper prices for readers. Their strategy is going to make you less money on fewer sales at higher prices to readers. The fact that there’s one single non-superstar writer who signed on to that Authors United letter is another illustration that, much like politics, dogma can and does lead some people to make choices that run counter to their own economic self interest.

Also consider, much like ebooks, independent authors will jump all over POD kiosks and the opportunities they bring. After all, when you’re looking at a physical store ecosystem that actively discriminates against you, protecting their margins or even their very existence is likely a non-factor in your choices if not a potential negative to you to do so. This is something bookstores would do well to keep in mind. Continuing to block, ignore or alienate indies is creating an entire giant class of increasingly successful writers who are ambivalent to your problems if not outright hostile to you. You might want to knock that off.

Basically, this strategy that the big publishing houses are engaging in is not in the best interests of readers or the vast majority of authors. The concern that Amazon will dominate everything is a very real one, but this isn’t a particularly practical way of dealing with that. I want a diverse ecosystem as well but asking me to sacrifice to the benefit of organizations that aren’t willing to do so in return isn’t going to work for me. Amazon’s market force is a different problem in need of a solution as innovative as the ones Amazon has used to gain that position. I think it’s fairly safe to say any such innovative competition is not going to be any more friendly to the publishers’ 20th century business strategy.

Let’s say I self publish a few books and my sales take off. A publisher comes to me with an offer. Ignore for a moment that the advances being offered barely cover a few weeks worth of sales in some cases, let alone life of the book. Let’s say I sign it anyway. That offer would require me to pull currently good selling material from the market for months in some cases. When they do return, my ebooks are now two or three times the price, the share of which I receive is less that what I was making per book on my own. I’m locked out of doing anything about it. I’m also hoping that bookstores stock my books in a way that generates sales rather than just another title on just another shelf and that declining physical sales doesn’t cost me even more money. I can’t get my books into libraries without the crazy high prices and restrictive terms publishers impose on them. I can’t take advantage of POD opportunities without my publisher’s approval and even then only on terms they set. On top of that, I have little means of having a viable route to rights reversions should everything go south. I have to hope I get lucky enough to generate hardcover sales (if I even get a hardcover print run) at a high enough volume that my next contract can get more favorable terms or a bigger advance, if there’s a next contract at all. The icing on this particular cake is that my material that was finding a foothold on my own may now be stagnant and trapped with that publisher for at least 35 years unless I can afford a good lawyer and a drawn out legal battle to get my rights back. And all because my publisher chose to emphasize its most difficult, expensive and inefficient product line for a litany of reasons that have little to nothing to do with benefitting me. Why would I sign that? Why would anyone?

I’m of the opinion that, if I were to sign on with a publisher to handle my print business, I absolutely do not want that same entity to also be in control of my digital business. They will almost inevitably do just as these publishers are, handicapping the digital to prop up the print. What should be happening here is another round of disintermediation, this time separating the print and digital products entirely. Focus on finding a way to maximize print that doesn’t involve sacrificing digital. That could mean exploiting POD technology and finding ways to actually cut the cost of physical books to readers (and bookstores), not raise the cost of ebooks. Can it be done? Maybe, maybe not. But what you won’t be doing is handicapping the emerging market that customers’ dollars are flowing toward. $30 hardcovers of mainstream genre fiction is not a long-term growth market, just as $20 compact discs weren’t for the music industry and multi-thousand dollar print ads weren’t for the newspaper industry. Their respective businesses may have been dependent on those things at one point, and they may have seemed reasonable at the time, but they weren’t a strength, instead a major weakness making them extremely vulnerable to technological change and shifting consumer habits.

The music business lost nearly half of its CD sales revenue in a just few years. Newspapers lost near half of their print ad revenue in just a few years. Sometime in 2025, will this paragraph be finished off by saying book publishers lost nearly half of their print revenue in just a few years? Those other two businesses refused to adapt, engaging in protectionist strategies under the mistaken belief that digital alternatives would top out at a lesser market share and the physical product would still retain primacy. Sound familiar?

Ask yourself this: if I sign on with a publisher whose entire strategy is to use digital to support the furtherance of print, what happens to me if print drops precipitously anyway, as there is clear precedent for? How you answer that question may well determine which writers still have a career a decade from now.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Sharing stifles creativity? Why this guy is just flat-out wrong

So I read this article today with this guy whining about piracy, file sharing and the music business and I’m compelled to make a few points. No sense in beating around the bush, let’s get started at the beginning, with the headline.

“How a generation’s freeloading has starved creativity”

Starved creativity? The last I checked, there is more music being produced today from a wider range of artists with a more diverse sound than ever before, and that’s expanding. There’s more books being written and available by a wider range of authors with more diverse styles than ever before, and that’s expanding. Creativity hasn’t been stifled at all. It’s been unleashed in a major way. The studio system (and the traditional publishing industry among others) is what stifled creativity. If you want to argue that the changes have stifled these old school media conglomerates’ ability to dominate their respective industries, I can get behind that. But it has in no way stifled creativity. Just the opposite, in fact. It’s generally a bad sign when the headline of your piece kicks off with unsubstantiated bullshit. You’re basing your argument on a false assumption right off the bat, and an easily refuted one at that.

“Things changed for me when I got a job in a Brooklyn café in the late 2000s. Many of the most respected and critically-praised bands of the day were customers there, but my excitement at getting to know them was dimmed when I realized that rather than enjoying the fruits of their success, they were, well, just as broke as I was.”

And if you’d gotten that job in the pre – Internet ’90s, they’d still be just as broke as you were. Same goes for the ’80s, ’70s, ’60s etc, etc. Conflating that with the coincidental emergence of file sharing is a mistake. He goes on:

“Apologists for digital piracy advanced one fantastic new rationalization after another—that artists would actually be helped by their rights getting trampled; that old-timey models like touring and merchandise would magically become a cash cow; that you could solve the whole problem by just letting fans “pay what they want.”

If you retain control of your rights, you have the choice to allow sharing of your music or not. Unless you’re signed on with a big label, in which case you have no choice in how you’re music is distributed or shared. That’s evidenced by this guy, the musician Kaskade, who is directly opposed to his label suing for copyright infringement but he has no legal right to stop them or to determine what he considers an acceptable use of his own music. In that sense, you’re correct that artists’ rights are being trampled, by their own labels.

Touring and merchandise are old timey? How much do you know about the music industry? Touring and merchandise were where artists made their money in the past. The labels made their money from album sales (whatever format) with contracts structured so that even some of the most successful bands ended up owing money to the label when all was said and done. If touring and merchandising aren’t cash cows, then why are record company contracts increasingly demanding large cuts of any revenue bands earn from both of those areas? Bands are broke because of the labels and their exploitative advance structure, their accounting practices and increasingly grabbing revenue from touring and merchandise that bands themselves generally controlled in the past. These aren’t problems the internet or file sharing created, this is the result of the standard operating procedure of the labels.

The book industry isn’t quite as exploitative as music, but they’re not far behind. They, too, use an advance system and accounting practices that virtually guarantee the majority of books never get to the point of earning royalties above the advance (and not because advances are high or because the books themselves aren’t largely profitable). They, too, try to lock up other rights so authors can’t generate any other income streams on the material, even when they have no intention of exploiting them.

Did you see the recent UK report that showed writers’ incomes shrinking? Most of those writers were longtime traditional writers. Publishers have been establishing a low rate for ebook royalties that pay them more but authors less than on a regular print edition. They focus their sales efforts on ebooks and high discount print books, both of which cut authors’ compensation per book dramatically. The internet isn’t causing these authors’ incomes to shrink, their own publishers’ actions are. And not coincidentally, the publishers are reaping sometimes record profits.

And fans have always paid what they want. If they want it new, they’ll buy it. If they don’t, they’ll get a copy from someone or they’ll buy a used cd for a few dollars. Today, they may download it. They used to record it from the radio or television. But if you only offer one full price option, and somehow magically eliminate any possibility of obtaining any other copy, you won’t see more sales. You’ll see significantly fewer. Not to mention a whole lot of pissed off people with money in their pocket that might have decided to spend it with you now and in the future.

“The people who fought against copyright in this battle would have to confront the fact that they were never carrying the flag for freedom or “openness”, but for aggression, entitlement and selfishness.”

Like it or not, we live in an increasingly on demand world. You can call it entitled and selfish all you want. It’s not going to change it. The people you’re trying to sell to want what they want when they want it. The technology exists to give them exactly that. And everybody knows damn well digital distribution is far cheaper than physical, so prices must reflect that. There’s a huge stream of people looking for music and books 24 hours a day, 7 days a week. Not providing what they’re looking for in the price range they’re looking for, that they can access in the way they want to is their failing, not the internet.

Even then, people will still seek out free alternatives. I downloaded my first song in 1998 on AOL dialup. I had been a huge music collector for a full decade prior to that. At no point in those 10 years pre-internet, was I ever not able to get a copy of any damn thing I wanted for free. The internet didn’t invent this behavior, it’s been with us for a long, long time. What happened to the music industry as technology proliferated to allow people to make and acquire copies of music on their own? It grew exponentially. When did it shrink? At the precise time they chose a strategy that openly attacked the sharing of music. That’s not a coincidence.

“Don’t make the mistake of thinking the torrent-indexing websites that popped up in my search results are just rambunctious, boundary-challenging adolescents swapping files with their friends, as Napster disingenuously spun themselves.”

That’s precisely what most of the people using Napster (and later Limewire) were. The music and film industry stomped on them, leading to the development of torrents that let little pieces of files be downloaded to and from multiple sources so no one except the few souls who seed ever actually made a full file available for download. It drove them from their own communities into the arms of the profiteers like Megaupload. The persecution of which, by the way, regardless of what you think of them, is a disgusting abuse of law and power. Read up on it.

It’s a bit like the gateway drug problem, I think. These sites make millions precisely because the actions of industry drove sharing amongst individuals underground. Without those acts, people would be openly sharing within their own communities now instead of enriching parasites. If there’s any gateway effect to marijuana ( and I don’t think there is) it’s caused by the prohibition. The only place you can get pot is from that sketchy guy on the corner who’s also got meth, heroin and some blow. Take out the prohibition and exposure to genuine bad elements drops dramatically if not altogether.

Black markets come about when there’s a gap between what a sizable portion of the public wants and what’s available to them. Drive off the safe alternatives and you’re left creating many more problems than you solve. I don’t get down with media companies decrying the black market when their own actions created the problem and made it exponentially worse.

“The big question is: how would things look if the illegal free option weren’t as convenient? Would Hollywood not be quite as dependent upon comic book blockbusters and take a few more chances on new stories? With stable promotional budgets for record labels and studios, a few more daring artistic voices might find an audience, and charge their way onto the pop culture radar, and even change the way some of us think about the world.”

Hahaha! No. I’ll tell you what it will look like, exactly like it looked in the late ’80s, stagnant and repetitive. The only time new voices got through was after an independent movement somewhere built the momentum for it. And then, the labels would descend, sign up every band that remotely sounded like the new in-thing, saturate the world and squeeze every last dollar out of it before moving on to the next hot movement (see: Seattle in the ’90s).

On top of that, with increasing digital sales yet no free option, discoverability, which largely happens word of mouth from sharing, would take a huge hit. Sales of all but the biggest names would plummet and we’d be left with far fewer risks being taken and far less unique voices ever getting a chance. You know, precisely what was happening before the internet came along.

“Forging an internet that takes individual rights (including privacy), cultural diversity and sustainable progress seriously also requires that consumers get on board.”

Ah, yes. Please pay considerably higher prices so we don’t actually have to adapt or alter our ridiculously outdated and inefficient corporate structure, or even pay lip service to giving you what you actually want for those higher prices. Get on board, already!

“We are all entitled to fair compensation for our work.”

I see, customers are entitled in a bad way for wanting what they want for their money (or not) but labels and artists are entitled in a good way for wanting what they want for your money. Nobody is entitled to make one red cent. You have to convince people to want to pay you willingly. That means convenience, price, format, restrictions on use; everything must be done to appeal to the guy holding a credit card and deciding if he wants to use it. “Hey you! You’re gonna pay more and we’re gonna tell you what you’re allowed to do with it and you’re gonna thank us for it” is a bad strategy.

I do agree in one way with being entitled to fair compensation. But that argument isn’t directed at the internet or consumers. It goes to the media companies. Stop ripping off your artists! You think artists aren’t being paid fairly? Changing conditions so media companies make more money isn’t going to change that. It’s just another version of trickle down nonsense. The labels make more money and those musicians in your coffee shop, they’ll still be just as broke. The copyright argument with file sharing has nothing to do with rewarding artists, it’s all about further enriching large media conglomerates.

“Just as US Supreme Court Justice Oliver Wendell Holmes Jr said of taxes, consider it ‘the price we pay for civilization.'”

The price consumers pay, you mean, in high prices that have no bearing on production costs or market value? Or the price artists pay in exploitative contracts and shriveling compensation from their corporate “partners”? The media conglomerates here don’t pay any price, for civilization or otherwise. They simply reap the rewards of squeezing the only two irreplaceable cogs in the industry machine, consumers and creators.

Why should we as artists have to accept pittance payouts? Why should consumers have to pay more for less? Why shouldn’t these corporations have to alter their business models, ones that developed in a different time and a different set of conditions, to meet the new realities? Why should we have to severely restrict the conduct of people that has far pre-dated the internet and file sharing?

You are conflating the business difficulties of large, once dominant corporations that are becoming increasingly obsolete with a decline in the industry and creativity itself. That’s a mistake. We don’t need record labels. We don’t need publishers. Before much longer, we won’t need film studios either. What we need are artists willing and able to create and customers willing and able to buy. Restrictions and higher price points to support corporate bottom lines achieve neither of those ends.

Piracy and file sharing isn’t the problem. The old industry titans who choose to stand in the way of what artists want, what consumers want and what civilization in general wants; they’re the problem. Advocating for a system that enriches them by taking money out of the pockets of both artists and consumers achieves nothing.

As a final point, there seems to be a thread to the piece that assumes people getting music for free is not good for commerce. Well, take a look at The Live Music Archive. There are over 6,000 bands and 130,000 separate concerts available for download or streaming absolutely free and totally legal. Concerts range from 40 years or more ago right up to yesterday. Many of the artists in here are very well known, many are unheard of independents. But they all allow fans to bring equipment, record their live shows and freely distribute them however they choose. In fact, the one thing they are prohibited from doing is selling them. And the community itself polices that kind of conduct very nicely. There’s a huge sub-industry in music totally outside of the major label system that not only encourages the free sharing of their music, but thrives on it. The most famous band to take this track is the Grateful Dead, who pioneered much of this and parlayed the touring and merchandising you dismiss into being one the highest grossing bands of all time, almost totally outside the label system. Their big label studio albums were almost an afterthought to their career accomplishments.

And as for bit torrent, which you sited as a particularly egregious tool for piracy, look at this. Etree.org has a huge, ever changing list of torrent files for concerts totally free and legally available for download. Bit torrent is far from simply an elicit tool for piracy. It’s used here to great effect to freely distribute music from bands who aren’t cowering in fear of consumers or sharing, bands that are building careers one fan at a time, without so much as a dime of support from the label system. I’ll guarantee you’ll find a wider array of music styles and talent here than any label-driven alternative. Giant media companies, as more of us are learning every day, aren’t the only way to pursue a career in the arts. They’re likely not even the best way.

There are problems with the internet, legitimate problems with piracy, too. But what you advocate benefits a portion of the industry, who also happen to be the richest, most entrenched, afraid to adapt element of it and does nothing to further anyone’s ends but theirs. Take a wider view of things. Track the problems you site deeper than simply, “Oh, Napster caused this” and you may find issues like artist compensation and stifled creativity far predate the internet itself. And who was running the show back then? These same giant media conglomerates. Huh.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

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