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

A Letter to the New York Times Public Editor

So I just sent off a letter to Margaret Sullivan, the public editor of the New York Times, asking some very pointed questions about their journalistic standards and the ethics involved in yesterday’s piece on Douglas Preston, especially with regard to its one-sided nature, the timing of its appearance and the sizable ad buy from Preston set to appear tomorrow. I did get an automated reply from them, so they have received it. Hopefully, some answers to my questions will be forthcoming. Here is the letter in its entirety:

Hello,

I’m writing in reference to the article that appeared in yesterday’s Tech section of your paper featuring author Douglas Preston and his Authors United effort by writer David Streitfeld. I have to say I’m extremely concerned and disappointed. The article itself was very one-sided and dismissive of a great number of authors who have differing opinions on the matter. When the subject in question is also reportedly paying your paper over $100,000 for an ad in tomorrow’s paper, this not only is unseemly but gives the appearance of a quid pro quo arrangement.

You are the New York Times, The Grey Lady, what should be a well-respected voice in journalism. I believe we deserve some answers to how this article came about. Here are several points I believe you have an obligation to explain:

1. Who initially pitched this article? Was it Preston himself?  Was it Streitfeld? Was it someone else within the Times staff assigning it? What was the thinking behind it?

2. Who was responsible for the timing in which it appeared? Was that timing in any way connected to the very expensive advertisement taken out by Preston in your pages? If so, what is your justification for that? And if not, how do you excuse the ignorance of how this would appear, especially considering the article itself specifically references the ad and when it would run?

3. At one point, Preston makes reference to asking Hachette for his recent sales numbers and apparently received accurate, up to date figures very promptly. Did this not raise any eyebrows with either the author of the piece or any editors at the times? Did anyone think to question the validity of those figures or why a company such as Hachette was so quick to respond in a manner totally inconsistent with their history?

4. What editor approved this article and what justification was used to allow the clear bias within to appear in your pages essentially unchecked? Was this editor aware of the large ad buy connected to the subject of this piece and did that play any role in its treatment?

5. What is your standard policy for editorial coverage of people or organizations who also happen to be advertisers?  Do you have one?  Are you or anyone at the Times concerned with the appearance that this was simply a value add in exchange for the ad buy?

6. Why was there no effort to present the opposing point of view, one which is clearly supported by a large number of people both inside and out of the publishing industry? Did the editor who green-lighted the piece show any concern that it was offering only one side of the debate, in a completely uncritical manner while being openly dismissive of the other? Did the ad buy play any part in the tone of the piece or its content?

7. Did the editor in question voice any concern about the reference to the whale meat petition to dismiss a petition opposing Authors United on this specific matter that has collected 9 or 10 times the number of signatories? Did no one see this as disingenuous?

I believe it is important that you explain to your readership exactly what thinking and actions went into the article in question. The Times should be above simple pandering for ad dollars, and given the fact that Preston and Authors United have already had significant coverage within your pages, an explanation should be required as to why this latest piece was needed at this specific time given the large ad buy connected to the subject. The position you hold within the journalistic world demands it. Many people look to the Times for important news and information every day and expect that you will apply a high standard of journalistic ethics to your coverage. This is crucial, I believe, not just to the state of journalism in this country but to your continued reputation as a trusted news source.

Thank you for your time and I look forward to your prompt response.

Dan Meadows

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

Publishing Industry Action…It’s Fan-tastic! Three-team deal falls through

First off, everything that follows here is idle speculation. I don’t know anything that wasn’t reported in the coverage of this attempted merger. But since this is America, and our media was built on unfounded speculation, I’m going to engage in a bit of that age-old tradition.

The deal the publisher Hachette was trying to consummate for Perseus Books with the involvement of the distributor Ingram fell apart yesterday. No specifics were given but a few subtle hints were dropped. Now I’m going to use the parlance of the NBA to describe how I think these conversations went down because this looks very similar to a failed attempt at a three-team trade to me. Keep in mind, while I’m speaking in terms of players, just consider the dollar figures as straight cash except for the two Perseus assets (their catalog and distribution business). Also, there is no correlation between the amounts I’m using and what was actually discussed. I just picked some nice even numbers to illustrate my point. Here we go…

Hachette, a capped out team with no space to take on any extra salary, approaches Perseus about one of their players (their catalog of titles), and makes them an offer.

“We really like that guy. We’ll give you this $3 million guy here for him.”

“Well, we don’t really want to move that guy,” Perseus responds, “we like him, so we’ll have to say no.”

“What about if we gave you this $5 million guy over here?” Hachette comes back.

“We do like him a bit better but, really, we’re not inclined to move him. No thanks.”

“Is there any way we can reach a deal?” Hachette asks.

“If you really want him, we’ll take the $5 million guy but you also have to give us $10 million in assets for this other guy here (distribution business). It’s the only way we’ll make a deal.”

To which Hachette responds, “We’ll get back to you.”

Hachette does have an $8 million guy to pair with the $5 million guy but they’d still have to come up with $2 million more in assets to meet Perseus’ price and there’s nobody on their roster that meets that description. Not doing so would leave them $2 million over the cap. And they don’t really want the other guy anyway. So Hachette calls up another team they think would want him, Ingram.

“So we’re working on a deal with Perseus and we’re going to take on this guy here. We know how much you’d like a player like that on your team. We can send him to you for in exchange for that $8 million guy and this other $2 million guy you have.”

“We do really covet that guy,” Ingram replies, “but we think that’s a little steep. Plus, you need us to finish this deal or you wouldn’t be calling so we’ll give you the $8 million guy only.”

Now this wouldn’t work for Hatchette either because it would still leave them a $2 million asset short and still that far over the cap. So they go back to Perseus.

“Ok, we’ll take that other guy back but we’ve only got this $8 million guy here we can give you for him.”

“No,” Perseus replies. “We want $15 million coming to us for those two guys or nothing. We’re happy with where we are. We don’t have to make a trade.”

To which Hachette finally says “Fuck.”

Basically, Hachette was in a position with limited resources and no leverage trying to pry a guy away from a team that didn’t want to move him and trying to convince a second team to take on the part of the trade they didn’t want at full cost. The problem here is the approach. Hachette needs to understand that in order to pry something loose from an unmotivated seller, you’ve got to make a Godfather offer. Overpaying in a situation like that is simply a necessity. If they weren’t prepared to go there, don’t make that phone call in the first place. Both Ingram and Perseus seemed to understand that, and understand that Hachette had to pay the freight if they wanted their assets and cooperation. Hachette didn’t seem to.

This makes me wonder if they’re doing the same thing with Amazon, over playing their hand. Their leverage with Amazon isn’t very overwhelming, and shrinking by the day, and they seem to be asking for a return on a deal Amazon is neither motivated to nor terribly interested in acquiescing. This failed acquisition smacks of a company that thought it was going to quick and easy add a big catalog of new titles, simply flip the distribution biz out at full cost to someone else and position itself better to fight Amazon, all while talking other companies into doing what it wanted without having to sweeten the deal for them.

What kind of return you get on a deal like either of these, or if you can even make one at all, depends on the leverage and/or money you have at your disposal. Hachette doesn’t appear to have much of either but they’re negotiating like they have the whole world in their corner.

If I had to make a guess right now, we’ll see one of two things happen in the immediate future. Either Hachette will quickly and quietly cut a deal with Amazon and put out a press release pretending like they won or the struggling publisher will be split off from its parent and sold to someone else before a deal with Amazon ever gets made. Hey, maybe Amazon will buy them. They do like low prices and Hachette’s value is sinking like a stone.

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

Hatchette accidentally reveals concern for authors is bulls*&t

Hatchette released a statement today in response to an Amazon statement about their protracted and increasingly ugly contract negotiation. Here it is, with inappropriate commentary added by yours truly. And, yes, I’ve been so inspired by all the anti-Amazon hit pieces lately that I chose an intentionally inflammatory headline. Hyperbole for fun and profit!

“It is good to see Amazon acknowledge that its business decisions significantly affect authors’ lives.”

Yes it is. Now let’s continue on to see how Hatchette acknowledges its business decisions significantly affect authors’ lives. (Hint: you’ll be disappointed.)

“For reasons of their own, Amazon has limited its customers’ ability to buy more than 5,000 Hachette titles.”

From Amazon’s own statement: “These changes are related to the contract and terms between Hachette and Amazon.” Reasons of their own in a contract you signed. Reasons that you know damn good and well. Is Hatchette in the habit of not enforcing provisions in its contracts when it’s in their interest to do so? I didn’t think so.

“Authors, with whom we at Hachette have been partners for nearly two centuries, engage in a complex and difficult mission to communicate with readers.”

A complex and difficult mission to communicate with readers made so by publishers because it served their interests at the time. Or do you have some other explanation for why you’d create a system that essentially locked writers out of distribution unless they paid a toll of lifetime copyrights to a publisher to even reach the marketplace? If there’s a barrier between readers and writers, it’s because publishers put it there to better collect their pound of flesh.

“In addition to royalties, they are concerned with audience, career, culture, education, art, entertainment, and connection. By preventing its customers from connecting with these authors’ books, Amazon indicates that it considers books to be like any other consumer good. They are not.”

Oh, Jesus, more special snowflake nonsense. Weren’t you listening when the judge who reamed your ass for price fixing told you, precisely and in no uncertain terms, that publishers are not special snowflakes? Of course books are commodities like any other. You know who made them commodities? You did, and publishers like you when you priced them according to the format instead of the content inside. You seemed perfectly cool with that for the past 200 years. What’s changed now? Oh, that’s right, you’ve lost control of this particular commodity market.

“We will spare no effort to resume normal business relations with Amazon—which has been a great partner for years”

Of course they have been, they’ve made you a metric ton of money. Particularly on those 25% of net ebook deals that make writers a little bit and you a shitload more that you all totally didn’t collude to make industry standard almost simultaneously.

“but under terms that value appropriately for the years ahead the author’s unique role in creating books, and the publisher’s role in editing, marketing, and distributing them, at the same time that it recognizes Amazon’s importance as a retailer and innovator.”

Herein lies the rub. What, exactly, is the appropriate value of the publisher’s role now? Even Hatchette’s own phrasing admits the writer’s role is unique. We’ve all got a pretty good idea how valuable Amazon’s role as an innovator is. Who’s the weak link here? Nothing unique or innovative about the editing, marketing and distribution most publishers provide. Anybody can do that or find someone who can to affordably contract out. I suspect the root problem here is they don’t yet realize that the appropriate value of the publisher’s role has declined, perhaps dramatically. You know what happens in a negotiation when you come to the table with declining leverage? You don’t get as good of terms. Ask your writers about that, I’m sure some would have a few pertinent things to say on the subject.

“Once we have reached such an agreement, we will be happy to discuss with Amazon its ideas about compensating authors for the damage its demand for improved terms may have done them, and to pass along any payments it considers appropriate.”

“It’s ideas” because we sure as hell know it wasn’t Hatchette’s idea to compensate authors during this fight. If you didn’t know, Amazon, in its statement, offered to form a fund to help authors hurt by this situation and volunteered to kick in 50% if Hatchette kicked in the other half. This was their response, a big ol’ “fuck you” to their own authors who they just claimed to care so much about. Not only did they refuse, they attached any assistance to Hatchette getting what it wants first, making author assistance a negotiating tactic, and guaranteeing they will continue to suffer for as long as this lasts with no help forthcoming. Also guaranteeing that they’ll readily trot out and use that suffering to engender support and more Amazon hatred. More than that, “we’ll discuss it later” and “we’ll pass on any payments it considers appropriate” is just, “you can pay them if you want, but only after we finish our business, and we won’t be kicking in” just with different words.

Being that this is a near-explicit refusal to establish such a fund or contribute anything to it, the line about “the damage Amazon’s demands may have done them” looks like a total false denial of responsibility as they’re doing them damage right now. Seems to me like the discussion that needs to happen is between Hatchette and it’s authors about what the appropriate value of the author’s unique role is. Here’s an instance where they could have backed up their earlier glowing praise and concern for authors by putting their money where their mouth is but instead they pissed all over them trying some half-assed attempt at a clever quip at Amazon’s expense. They should leave the half-assed quipping to bored writers looking for big corporate hypocrites to bitch about. Just sayin’…

“In the meantime, we are extremely grateful for the spontaneous outpouring of support we have received both privately and publicly from authors and agents.”

Spontaneous, sure. Nothing at all to do with the coordinated astroturfing effort you all were talking about not too long ago.

“We will continue to communicate with them promptly as this situation develops.”

Yup, just like you communicated promptly with them the seven months this bullshit’s already been going on, right?

So, Hatchette accepts no responsibility for this at all, refuses to lift a finger to help their own authors this is hurting, and seems to be under some impression that their negotiating power hasn’t atrophied some over the past few years. So, for emphasis:

“It is good to see Amazon acknowledge that its business decisions significantly affect authors’ lives.”

When can we expect to see the same acknowledgement from Hatchette, because this sure as hell ain’t it. This is you intentionally putting authors in the middle of your fight and purposely extending and exploiting their suffering to suit your ends first and foremost, right there in your own words. Strange that Amazon’s statement was far more subtle in its implications than Hatchette’s. Maybe you should of hired a better writer.

Look, nobody wants to see Amazon get to be a dominant beast that lords over everyone. But these folks are not the right horse to back. They’re deluded, have an over-developed notion of their own value and readily blow smoke up writers’ asses while profiting in different ways from both their success and struggles. Even some of their own writers fully expect they’ll use the decline in sales against them in their next book deal. Amazon may be big and powerful, but these folks are just opportunistic scumbags.

Amazon broke the hold these publishers had on the industry, and it’s created more opportunities for more writers to make more money than publishers like Hatchette have in, well, pretty much ever. We need to move forward on the gains writers have made of late, and publishers like Hatchette are firmly entrenched in the past. Yesterday’s exploiters aren’t going to be tomorrow’s liberators no matter how many New York Times anti-Amazon hit pieces they encite.

We do need to have a very serious conversation about competition and diversification and what direction things need to go in the future, but Hatchette and those like them have repeatedly shown that they have absolutely nothing to add to that conversation. Or are you one of the three people who don’t think every other major publisher is going to follow lock step down the path Hatchette’s setting right now? What I really want to know, though, is after they’re all done cutting their noses off to spite their faces, which body parts are next?

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

Amazon the Great and Terrible

So I’m sitting here this fine Sunday morning patiently waiting for David Gaughran’s promised blog piece on the PR campaign Hatchette may be running in its now six-month contract dispute with Amazon. (Warning: profanity ahead because some of this shit just pisses me off.) I, for one, am not buying the “poor helpless little Hatchette being bullied by big, bad Amazon” meme that’s so popular these days. It’s making the rounds everywhere, which I find fascinating due largely to the fact that nobody outside the negotiating wing of those two companies has any knowledge whatsoever about the dispute, and they’re not talking. Well, Amazon, per usual, isn’t talking. Hatchette isn’t talking about any of the issues at hand either, but they are going through great pains to play the wounded party, and igniting the entrenched Amazon hatred out there to do the rest of the heavy lifting.

I’d think people would be more suspicious of things like that. In my experience, when someone in a position like Hatchette is playing the victim card, without clearly backing it up, odds are, they’re conveniently leaving out the parts where they are anything but victimized. So my opinion, knowing nothing about the specifics of their negotiation but strictly looking at the outward actions of the participants, Amazon is going about its business and Hatchette is playing a totally different game. Are they justified? Possibly but I get a strong sense of Hatchette trying to control the narrative and I don’t much care for being manipulated.

“Scott Turow said that Amazon recently raised the price of his most recent book, “Identical,” a move that he said would depress sales.”
–From Washington Post, May 16

Ok, what? First off, that quote’s from the Washington Post, you know, the newspaper Jeff Bezos owns. So much for slanted coverage huh? The difference I see between the Post’s coverage and most other coverage is that the Post consistently uses phrases like “could be”, “might be”, “industry insiders suspect” and things like that when discussing the negotiation. They’ve presented the argument without validating it, which is exactly what all these papers should be doing, unless they actually have hard evidence to support it, then they should print that. But they don’t. It’s rumor and conjecture presented as fact when the people writing can’t possibly know if it’s true.

Secondly, WTF Scott Turow!?! You’re actually bitching that Amazon isn’t discounting your book? Didn’t you just spend two years telling us Amazon was destroying the industry by discounting books? Is there any coherence in your argument at all? Are you just going to complain no matter what Amazon does? Or are you, as is the case with many political pundits, just going to spout the party line regardless of whether it contradicts what you just said. “Amazon’s discounting is killing us” is so last month, I guess.

So here’s my assumption about you based on your own comments. You’re a writer and a lawyer, for God’s sake, so it defies credulity to me that you don’t see the obvious contradiction in your own statements. So I must conclude that you do see it, and just don’t care. You likely never gave a shit about other writers, the industry at large or Amazon’s discounting. You were playing a mouthpiece for your publisher because you thought it was in your best interest at the time. And you did it in defense of a criminal conspiracy by your own publisher and others to violate antitrust law. But now, Amazon’s not discounting and that may hit you in the wallet, so discounting suddenly is no longer destroying the industry but necessary, and you’re statements have shifted accordingly. Credibility all day long, I tell ya. My conclusion is that you’re full of shit, and acting out of your and only your own self interest. Let me ask you, what’s your statement going to be if we find out Hatchette’s trying to reinstitute Agency in some form, limiting or eliminating Amazon’s ability to discount? Actually, I don’t even need to ask, I already know. Assumptions are a bitch, aren’t they?

“Amazon has begun discouraging customers from buying books by Malcolm Gladwell, Stephen Colbert, J. D. Salinger and other popular writers, a flexing of its muscle as a battle with a publisher spills into the open.”
–From the New York Times

“Hachette has continually assured us all orders were shipping “in a timely manner” and Amazon was to blame for placing small orders. We’ve asked for copies of the purchase orders and confirmation of the shipment dates from my publisher but have been told, ‘It is not information we would like to be shared with any third party at the current time.'”
–From Digital Book World

The first quote, from the New York Times, contains no “could be”, “reportedly”, or “may be”. It’s “Amazon is”. They don’t know that, only that Hatchette is telling them that. Mightn’t they have an agenda? So does the Times, of course, but that’s a different article. The second quote is from an actual Hatchette author trying to get his publisher to prove what they’re saying. Look at the response again: “It is not information we would like to be shared with any third party at the current time.” No shit. Wonder why?

Here comes some assumptions again. Say I’m in a business arrangement with someone and they get involved in a dispute that negatively affects me, and they’re telling me “It’s not our fault. Those bastards over there are doing it to you.” My reaction is going to be exactly like this guy, “then you’ll have no problem proving to me you’re doing what you say?” If they come back with a response like he got, I can only conclude that they’re lying to me about something.

And are you telling me the writer is a third party in the distribution of his own fucking book? He’s not entitled to see proof that you’re not lying right to his face and actively harming what he contracted you for in the service of your interests elsewhere? Sales that, in the traditional world, operate in a very short time window and can have disastrous consequences on any future career? Fuck off with that noise. Whatever the negotiating battle is being fought over, this little tidbit of information may be the most important of all for writers. Hatchette doesn’t respect this guy, and they certainly aren’t treating him like a business equal. And their refusal to back up their attempt to escape responsibility for something that’s hurting their own authors even to those authors themselves, should be unacceptable. But writers, please remember, you all signed the contracts that made it this way. This Hatchette writer certainly does and is factoring that in to his future choices. So should we all.

What saddens me about this is that there are all these writers out there who see Amazon as a rival of sorts but don’t see the publishers that way. The Hatchette/Amazon dispute, and the ones like it certain to come, is a fight between billion dollar enterprises over staggering sums of money and that’s all it is. The Amazon haters are right about one thing, Amazon is not your friend. But neither are publishers. And if you’re looking for friends in a contract, anyway, you’ve got bigger problems. The best you can hope for in a business arrangement is that your interests and the interests of the other party align and flow in the same direction. You get into one where your interests diverge at some point, you may well find yourself screwed by your own signature.

I can cut off all business dealings with Amazon in the half hour it takes me pull my stuff offline. If I was signed with Hatchette or some other publisher, that type of action is simply unthinkable. I’m stuck with that contract maybe for the rest of my life, or 35 years at the least. And I don’t even have the right to verify they’re living up to their end of it. If the New York Times or Salon or the Wall Street Journal or Scott Turow want to talk about power imbalances, how about we address that one first? Who, exactly, is that man behind the curtain we shouldn’t be paying attention to?

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

Was Chesapeake Publishing just bought by a private equity billionaire?

I just found out that my former employer twice over, Chesapeake Publishing, has had yet another sale to yet another new owner. This time, the buyer is an Adams Publishing Group from Minnesota. How do I know this? The press release thinly veiled as a news story says so. Good thing, too, because otherwise, there’s no record of an Adams Publishing Group of Minnesota even existing prior to this acquisition.

Here’s the rundown that appeared on the Cecil Whig website. According to the Whig, APG bought three newspaper divisions from American Consolidated Media, the Chesapeake papers as well as papers in Wisconsin, Minnesota and Ohio. Not knowing anything of them, I was naturally curious about Adams Publishing, and what else they might happen to own, so I read on. Unfortunately, there was no mention of anything Adams owns by name, and no comment from anyone at Adams, other than the heads of the divisions they just purchased. And, boy, are they happy!

After not finding anything to my liking, I did a little googling only to discover zilch anywhere on the internet for an Adams Publishing Group other than the various announcements of this string of buys. There’s not even one listed in any phone book or address database for the entire state of Minnesota. Odd, I thought. Here’s the description the Whig gave of Adams Publishing Group’s resume:

“Adams Publishing Group LLC…has holdings in radio broadcasting, magazines, outdoor advertising, consumer and trades shows, commercial printing and production, and other sectors…”

Holdings? An interesting way of putting that, no? So, a little more digging and I turn up this description from Wikipedia:

“current holdings include…a national publishing, retail stores and member-based direct marketing organization directed toward owners of recreational vehicles…an operator of outdoor advertising structures in the Midwest, Southeast, and Mid-Atlantic regions…previous holdings have included operators of television and radio stations, print publishers, cola bottlers and community banks.”

Pretty similar, huh? The second description belongs to billionaire private equity investor Stephen Adams who was born and raised in, you guessed it, Minnesota. This is the same Stephen Adams whose holding company, The Affinity Group, changed its name a couple years ago to Good Sam Enterprises after losing tens of millions of dollars with its investments and having Standard & Poore’s drop its credit rating to D for “the company’s highly leveraged financial profile, weak operating outlook, and limited liquidity.” One of the more interesting holdings of Adams was Affinity Bank, which Federal regulators shut down in 2009 because of depleted capital reserves. Are we still happy to be a part of this exciting new opportunity? More from the Whig:

““We are thrilled to be joining Adams Publishing Group and to be moving back to a family-owned company,” said David Fike, president and publisher of the Chesapeake group.”

Family owned, right. Just like the Koch Brothers companies are family owned. Just like the Mitt Romney’s very vulturey Bain Capital was family owned. But I guess when you’re in an industry where bad to worse has been the modus operandi for the better part of a decade now, you tell yourself whatever you have to to keep from crying to sleep at night.

Keep in mind, this is pure speculation on my part based on what little information was provided about the buyer, but it makes sense to me. How coincidental would it have to be to just happen to have a filthy-rich private equity investor from the same location with holdings in the identical areas, whose last name is the same as this seeming-previously nonexistent publishing company? I tend not to believe too much in coincidence.

My only question: if this is actually Stephen Adams behind this purchase, why not just say so? It’s not like old, billionaire white guys buying up newspapers is some kinda rarity these days. In fact, it’s increasingly looking like they may be the only people interested in buying newspapers, including the folks who used to read them.

UPDATE: After unsuccessfully looking high and low for any information on Adams Publishing Group and any connection to Stephen Adams, wouldn’t you know a kind soul took the time to email me a link to exactly that. Here’s a piece from Business North, a business news site for northern Minnesota and northwestern Wisconsin, that makes the explicit link between Adams Publishing Group and Stephen Adams.

UPDATE PART 2: Here’s a piece from Nancy Schwerzler at the Cecil Times that sheds a bit more light on the subject. She did some legwork through SEC filings to find that APG does, in fact, track back to Stephen Adams. Also, the four LLCs that will house these papers, Minnesota, Wisconsin, Ohio and Chesapeake, were incorporated in Delaware about two weeks ago.

Perhaps most interestingly, according to the Cecil Times, Stephen Adams’ son Mark is set to oversee the operation of these newspapers. Schwerzler also mentions Mark Adams as the head of an EPG Media, a company founded last year to, essentially, spin off the outdoor motorsports magazines then owned by Good Sam Enterprises.

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

Free The eBooks! New petition calls for supporting consumer ownership of ebooks…I think

Yesterday, I saw a link to a new petition on the U.S. government’s website to allow the “unlocking” of ebooks and reaffirmation of ownership rights by consumers for these digital goods. This comes on the heels of the Obama administration coming out strongly in favor of fully legalizing the jailbreaking or unlocking of cell phones. I agree with both sentiments, but the new petition has some issues. Here is the text: 

Protect Readers’ Rights by Unlocking Ebooks

The White House recently came out in favor of allowing consumers to unlock their own cellular telephones. We are asking the White House to apply the same laws and provisions to ebooks.

The purchase of a book, whether online or not, is a purchase, not a license. Digital books should be legal to read on any device that supports standard text files. Legally purchased digital books should not self-destruct, expire or disapper, except under conditions of damage or obsalescence. Within reasonable limits, book purchasers have the right to lend or give books to friends, charitable organizations and libraries. Finally, libraries should be permitted to lend ebooks under the same rules as physical books.

We ask the Obama Administration to champion the rights of readers to own their ebooks.

So, typos notwithstanding, let’s discuss. And by the way, if you’re going to post a petition concerning important issues like literature and consumer rights, you really should spellcheck the damn thing, otherwise your credibility could “disapper.”

For starters, the White House didn’t apply any laws or provisions regarding unlocked cell phones, they only expressed support for the notion going forward. The relevant laws concerning this, specifically in the DMCA, clearly ban the activity. Their opinion on this is all it is, just an opinion. For cell phone unlocking to actually be legal, it’ll take a legislative fix. Good luck with that. Not to mention, they stopped short of showing support for similar unlocking of ereaders and video game consoles, etc (they did mention tablets but only in the limited sense that they were becoming more like smart phones which dedicated ereaders are definitely not). A logical view would follow that if jailbreaking phones is okay, then doing so with all devices should be as well. But the White House doesn’t stretch that far, with their stated position directed at preventing lock-in by telecomm service providers and has nothing at all to do with content providers. In fact, the White House specifically called for “narrow legislative fixes in the telecommunications space.” That’s a far cry from rallying around customer rights for content they purchase. It’s certainly a step in the right direction, but there is no law or provision in this that’s even applicable to content rights for consumers.

I completely agree with the statement that buying an ebook is a purchase not a license, but that’s far from a popular position to hold. Over the past couple months, in arguing in favor of resale rights to digital goods, I found myself in many places arguing just that point of view. Content providers, including many independent writers, are clinging to the license scheme, and with some solid justification. There have been a few conflicting court decisions, but it’s far from decided that the sale referred to here is, legally speaking, actually a sale. I believe it is, and I think the licensing regime we’ve got going on here is potentionally the greatest threat to consumer rights in any of our lifetimes, but I’m definitely on the minority side of that point of view. It’s going to take a favorable SCOTUS ruling to affirm such rights, as a legislative fix simply isn’t happening in this atmosphere, and I wouldn’t hold my breath for it, even if I absolutely believe it’s what needs to happen to retain balance between producers and consumers in the stream of commerce.

I’m somewhat confused by the statement that says digital books should be legal to read on devices that support standard text files. Ebooks aren’t standard text files and, as formats improve (epub3, html5, etc) they’re even less comparable to simple text. Unless the petitioner is advocating for stripping off the bells and whistles to bare bones text, I don’t understand the point of this statement. Seems naive and, much like the recent lawsuit from bookstores against Amazon and the Big 6 calling for “open-source DRM,” whatever the hell that is, it comes off as very tech-ignorant.

As for libraries being able to loan ebooks under the same rules as print, I have two questions. One, ebooks aren’t print so why would you want to limit libraries to a physical standard that doesn’t necessarily apply? Secondly, and most importantly, the petition plays fast and loose with the first sale provision of copyright law. The ability of libraries to lend physical books as they have comes from first sale. The petitioner’s opening statement that an ebook buy is a purchase not a license supports a first sale position, but it also seems to go out of its way to avoid even mentioning consumer’s rights under the same provision, notably resale. Is the suggestion here that libraries should be granted a waiver to exploit first sale rights customers shouldn’t have, even though it opens with a strong statement supporting a first sale argument? I don’t get it. If the point here is to free ebooks from lockdown control of content providers, why skip the most important tool to achieve that, a true ownership stake in the ebook for the purchaser?

What I see as the big flaw in the argument here is the warping of the concept of first sale rights. Libraries can have them, apparently, the license scheme used to block them is dismissed, yet for some reason, consumers should still be left wanting for their full rights under copyright law? Why? And what, exactly, are reasonable limits to purchasers lending ebooks? Why should libraries get more rights to lend books than consumers? How is it that I can give away or donate said ebook, a library can then use first sale to lend it, but I can’t use the exact same provision of copyright to resell it? I thought this was about freeing ebooks for consumers, but it seems more like exempting libraries than truly benefitting paying readers.

The petition ends with a call for the Obama administration to champion the rights of readers to own their ebooks. I agree, but that’s not what they’re calling for here. This petition still ignores first sale rights for consumers while championing them for libraries and even accepting restrictions on consumers to lend or give away said ebooks. This isn’t ownership at all, but simply a desire to read a Kindle ebook on a Nook or similar type of arrangement. If all you really want is to prevent content provider lock-in to specific devices, then say that. Don’t muddle the issue with notions of first sale or ownership that you’re not even advocating. The wording of the petition also allows for ebooks to be deleted or removed due to obsolescence (misspelled obsalescence, which is a fascinating freudian slip, as license schemes are already limiting the very idea of what constitutes a sale).

I think this is a nice thought, preventing vendor lock-in has some definite merits, but ultimately this petition is poorly executed and unnecessarily convoluted. And again, spellcheck, dammit!

Amazon and The Mystery of the Great Used eBooks

I am finding the notion of first sale rights and used ebooks pretty fascinating these days. I wrote a bit yesterday about how I suspect that taking away first sale rights from consumers has damaged the book business. Today, I read this piece by Marcus Wohlsen for Wired, completely wrapped in consternation over Amazon’s patent filing for a digital goods resale scheme. There’s a few points in the article I’d like to discuss. I’m not a lawyer, so these are simply my opinions on how copyright law, particularly first sale, might affect Amazon’s actions with regards to used digital stuff.

“Digital content is infinitely reproducible. No technological limit exists to how many times a single digital original can be copied and resold.”

No technological limit exists because nobody’s bothered to implement an effective one. And maybe I’m wrong, but isn’t all that fancy DRM we’ve had shoved down our throats a technological limitation to copying? Pretty sure that exists. It may not work very well, or might be crazy-easy to circumvent, but it exists. The entire ebook market has grown under the assumption that consumers had no right of resale, therefore no screaming need to invent one. But look, ReDigi is getting sued for its used digital business and they have a method to limit copying. Amazon’s patent here is another. If second hand digital goods becomes a reality, you can bet there’ll be numerous technical methods to deal with this post haste.

As for copying infinitely for resale, that doesn’t even apply in this case. What Amazon’s talking about here seems to be totally in-house. They already know who bought what and how many times. They’re suggesting a scheme to resell the licenses not so much the actual ebooks. There’s no way somebody copying an ebook bought from Amazon is going to be selling it over and over again without Amazon being willfully complicit. They have zero motivation to engage in something so risky and outright stupid. There is no chance anyone will be selling multiple copies of the same ebook in the system Amazon’s trying to patent.

“Just as with physical books, publishers would only have a say — or get a cut — the first time a customer buys a copy of an e-book. The second, third and fourth sales of that “same” e-book would be purely under Amazon’s control.”

That would totally depend on how this was executed. If a first sale use is exerted to allow the resale, then it’s actually the customer who has control of the resale. Amazon would, theoretically, either expedite a sale between two customers and take a small cut, or create a system where they buy the ebooks from the customers, then they would gain those resale rights. The alternative is if the resale was a product of a licensing agreement with the publisher, in which case, no first sale rights were exerted and Amazon would have as much control as the licensing agreement allows and no more. Publishers would have to be nigh-on-braindead to license resale rights to Amazon, though. They’d be better off just releasing first sale rights to everybody altogether and letting the chips fall where they may than giving Amazon more power to lock customers into their world. In fact, I think they’d be better off doing that than what they’re doing now, even if they maintain the good sense not to license away the second hand market.

Wohlsen then quotes Bill Rosenblatt, who he describes as “a consultant and expert witness in digital content patent cases”:

“If Amazon is allowed to get away with doing resale transactions without compensating publishers, then what they can do is say, ‘hey authors, sign with us and we’ll give you a piece of the resale.'”

If Amazon is allowed to resell without compensating publishers, then that means buyers would have regained first sale rights. That would mean Amazon, or anybody else for that matter, wouldn’t be able to control the resale of these goods. You can’t just say “Kindle owners have first sale rights but Nook owners don’t.” Amazon could certainly cut writers in on the resale of their books on their site, but in this hypothetical, they’d be far from the only place selling second hand digital goods. As a,writer, if would definitely be something I’d listen to, though.

There is no circumstance where Amazon totally controls the resale market and doesn’t pay publishers. Either they license the content for resale, in which case publishers get paid, or they invoke first sale, publishers don’t get paid, but the real control and resale rights would belong to consumers. (Unless, of course, a court somewhere warps copyright law to create such a circumstance. Not exactly an unheard of occurrence.) Amazon might build a nice little business with used ebooks, but it would largely have to do so by offering buyers enough incentive to exert their first sale rights with Amazon. Hardly a dominating position.

“Buried in the patent is language spelling out that the technology Amazon intends to use will have the ability to limit the number of times a digital good could be resold or loaned out. Amazon could use that constraint to strike bargains with publishers and authors to cut them in on used digital sales, which doesn’t happen with used physical media.”

And would only happen here if it were a product of a licensing deal. If they invoke first sale, Amazon couldn’t uninvoke it later. They wouldn’t have the right to put any limits on resale. They could buy the license, then willingly retire it, but they couldn’t prohibit a buyer from selling it. If it were licensed for resale, however, Amazon could do just that, per terms of the licensing agreement. But again, publishers…resale licensing with Amazon…braindead stupid.

I do believe we need to return first sale rights of digital goods to consumers. I believe there will be a technological means developed that is simple enough to make this happen without unduly encouraging piracy. Even so, no matter what you do, somebody somewhere is gonna rip you off. Publishers are just gonna have to accept that reality. Taking away first sale rights devalues the product in a very real monetary sense to the buyer. That is simply bad business.

What Amazon’s patenting here sounds to me like an attempt to strengthen its walled garden. I’m not sure this method would hold up or work in an atmosphere where first sale rights are truly implemented by consumers. So it seems as though licensing resale from publishers is the point of this. But what publisher in their right mind would give Amazon this ability? On second thought, don’t answer that. Like with most things, some idiot(s) will.

The Benefits of Globalization Don’t Apply to the Little People

The U.S. Supreme Court is set to rule on a case that has profound implications for the concept of ownership, (See SCOTUS blog here and read up. It’s fascinating) and could conceivably eliminate the last lingering vestiges of the notion that copyright law has any limits.  If the court rules the wrong way on this, copyright ceases to have any pretense of societal good. And why is it that we’re faced with the possibility from SCOTUS? To defend a publishers’ right to segment the world into territories.

In the past, I’ve argued that the idea of territoriality is already outdated and should be done away with. This case illustrates pretty clearly why that’s the case. Given the technological realities we have today, there is simply no easy way to defend this practice in statute that doesn’t have the unintended consequence of severely undermining first sale, fair use and ownership and resale rights for nearly everything we buy. The benefit to society for allowing territoriality to stand is negligible. In fact, it’s the consequences of doing so that are severe and destructive.

First, let’s look at the publisher, John Wiley & Sons. They are textbook publishers who, as many do, routinely use the concept of territoriality to both exploit poorer markets and maintain the ability to overcharge more affluent ones. The key issue in this case is that an individual, Thai national Supap Kirtsaeng, purchased textbooks sold by Wiley at lower prices in Thailand, brought them to the American market and sold them on eBay to help pay for his education at USC, where the exact same textbooks are priced much, much higher. My first response to this was, “good for him!” This guy identified a seam in the sales channels and exploited the price variance for the same product in different markets to make a buck. That’s market-based globalized free enterprise at its best.

But Wiley was having none of it, suing (in my opinion, inexplicably) for copyright infringement. The guy in question didn’t copy anything. He legally purchased said textbooks at full price offered by the publisher, then used his first sale rights to turn around and sell them for whatever the hell he wanted. There’s no copyright infringement here at all. (Note: I’m speaking in practical terms. Yes, I’m aware that there are portions of copyright law dealing with importation of foreign goods, but those parts were written long before globalization and free trade took hold, before the internet was even a thing and back when importation was a little more complicated than a few mouse clicks and a week’s wait for shipping. Those rules have about as much relevance to modern life as the use of grindstones to make bread). But the 2nd District Court disagreed, invalidating his defense through first sale, declaring his actions as infringing and fining him a substantial amount of money. The key problem lies not just in the decision, which I believe is catastrophically wrongheaded, but in the justification used. The court ruled that first sale rights don’t apply to any goods manufactured outside of the U.S.

Apparently, the judges of the 2nd District missed the memo about the new global economy we’re all supposed to be giddy about. They seem to have not noticed American corporations offshoring jobs and manufacturing at economy-gutting levels to save on labor costs and such. They’ve obviously never set foot in a Walmart or any other retail outlet and taken a few minutes to check the “made in” labels or they would have realized that a plurality of goods we buy every day aren’t manufactured in this country. If first sale doesn’t apply, then this court just swiped ownership rights to the majority of our possessions.

To make matters worse, how many foreign manufactured components do you think are present in our homes and cars? If I own a home that has a central heating system installed that was put together from any amount of foreign made components, do I even have the right to sell my home without first buying licenses for every non-U.S. element it contains? What if I want to sell my home complete with appliances, also made from foreign manufactured components? Do I need separate licenses for my refrigerator, washer, dryer, dish washer, etc? What will the costs of acquiring these licenses do to the overall value of my home. If you said “plummet” you hit the jackpot.

I can no longer legally even sell the smartphone I’m currently typing on. And what about the licenses HTC acquired for the plethora of foreign-made components that make up the phone itself? Does those licenses transfer? Is it enough to get resale permission from HTC or do I also have to get permission from every component manufacturer too? The same applies to cars. Can an ok from Toyota allow me to sell my car, or do I also need an okay from the stereo manufacturer, the maker of the chips in the car’s computer, and whoever made the tires, brake pads, oil filter and anything else in the vehicle that wasn’t American made. What does this do the value of your car? Again, “plummet” is the correct answer.

Yet, this value loss is totally on the consumer side. When the resale market gets gutshot in this way, there is no logical reason to expect car makers to do anything except up their prices. Really, all they have to do is refuse permission for resale and the used car market ends instantly. No more competition on that front.

There’s two key problems I see here. One, this kind of ruling creates a massive incentive for businesses to continue and actually speed up offshoring jobs and manufacturing. If first sale doesn’t apply to foreign goods, companies that trade in foreign made goods will control not only the primary market, but any secondary markets would only be allowed to exist on their terms at their discretion. The entire point of first sale was to prevent this very thing.

In a global economy where much if not most of what we buy isn’t made in America, how long would it be before companies still producing goods in the U.S. argue that first sale prevents them from competing and must be done away with here as well? I put the over/under on three hours.

Then there’s the legal illogic of somehow claiming one part of copyright doesn’t apply to foreign goods (first sale) yet other parts will (fair use). Supporters of Wiley have almost all claimed that the above concerns I’ve mentioned are scare tactics because consumers will retain fair use rights to defend their actions. But why should fair use be any more applicable to foreign goods than first sale? This is a flat-out lie by those who want Wiley to win. If the District Court decision on first sale stands, it’ll be roughly a half an hour before someone tries to invalidate fair use for foreign goods as well. And they’ll win because they’re right, logically and legally. If first sale doesn’t apply, then neither does fair use.

Get it yet? Think for a second, how many people in this country just bought, wrapped up and gave away foreign made goods as presents this past Christmas. If this ruling stands, every one of those gifts was an incident of infringement. I’m pretty sure we just rang up a $100 trillion worth of infringement penalities last month. Don’t think businesses will try to exploit this fully? Take a look at how publishers have been extorting exorbitant fees from libraries on ebooks. First sale doesn’t apply to digital goods (I believe strongly that it absolutely should, by the way) and fair use rights for the same have been willfully undermined as a consequence, resulting in absurdly, indefensibly high prices. And these are goods made in this country supposedly subject to the fullness of copyright law. Take away even those limited protections, and I think we can all see where this is heading.

All of these possibilities only exist because the courts are trying to carve a legal protection out of copyright that allows publishers to gouge rich markets while also simultaneously charging more reasonable prices in poorer ones. We could all effectively lose our right to resell virtually anything because a publisher wants the law to protect them from their own pricing strategies.

We’ve all had “the benefits of globalization” crammed down our throats the past few decades, and this case puts the lie to those notions. Corporations will readily tell you how great the global economy is as they ship manufacturing to third world countries with no worker protections, minimum wage laws or safety standards, but here, a regular guy finds a way to profit from globalization, and those same corporations are screaming that hellfire, brimstone and economic ruin will descend upon us all if its allowed to stand. If the District Court decision is held, that will be a clear sign that globalization belongs only to corporations and the wealthy. They get all the benefits and profits, while we get all the sacrifices and consequences.

There are two big societal problems made worse by an upholding of Wiley’s case: offshoring jobs and the cost of higher education. I’ve already mentioned how this decision creates a massive financial incentive for businesses to stop trading in American made goods, making a serious problem exponentially worse. The cost of education is, in part, too high thanks to textbook publishers. Territoriality is one way in which they keep textbook prices in the American market artificially high. This decision would also make that problem significantly worse as well. Textbook makers already undermine resale value by routinely producing new editions with little or no substantive changes specifically to prevent students from selling their books for any tangible return. This decision provides a clear path for them to further erode consumer rights; simply print the books overseas and now students lose all rights to resell (or give away) those books at any price.

The potential damage to the public and the overall economy from upholding the District Court decision outweighs the damage done to publishers by striking down the infringement claim defending territoriality by so many levels that even considering it scares the hell out of me.

What better case can be made that copyright is irretrievably broken than this one? The District Court ruling essentially makes copyright unlimited in scope, with manufacturers retaining not only primary sale rights, but also grabbing total control of any secondary markets as well. Considering that expansion of copyright terms has essentially made copyright length infinite (Life of creator plus 70 years. It is certainly infinite for the creator as my copyright wouldn’t expire until several generations after I’ve been dead and buried. And that’s only presuming it doesn’t get expanded again, which only an outright fool would believe won’t happen when Mickey Mouse next approaches public domain) where exactly are the statutory limits on copyright that were the principle element of the protection in the first place?

If the possible consequences weren’t so severe–as in instantly stealing at least half of the value of the goods we’ve paid for, eliminating secondary resale markets, and extorting copyright monopoly rents with additional licenses on products we’ve already paid for, not to mention possibly gutting fair use which could well have serious deleterious effects on free speech–I’d say maybe a decision this inordinately stupid needs to happen so regular people can see clearly how distorted and unfair copyright law has actually become and demand much needed change. But then, I’m opposed to further destroying what little productive economy we have left to make a point about copyright. Unfortunately, our corporate leaders and government don’t seem to agree.

The only logical choice here is to strike down the copyright infringement defense of territoriality. The alternatives do a hell of a lot more damage. I wish I was more confident that SCOTUS will get it right. We can all dream, can’t we? Unless, of course, your dream includes an infringing appearance by a copyrighted character, in which case that nap’ll cost you $150,000.

The Fraudulent Society: A world of bogus book reviews, statistics & cyclists

We live in a fraudulent world. Everything around us every day is fake. The economy is in the dumps because of financial sector fraud on a scale so large that it can hardly seem possible. This November, we’ll be asked to select which major political party’s dishonest, pandering, self serving pack of lies gets to run the country for the next four years. Hell, even Lance Armstrong has stopped defending himself from doping charges. I know, it doesn’t make him guilty. But it doesn’t make him innocent, either. Given the track record for honesty and integrity I’ve seen around me in my lifetime, you’ll excuse me if I’m a wee bit cynical of the guy who used steroids to return from a virtual cancer death sentence, then goes on to pull off probably the most far fetched athletic feat in my lifetime, going from an also-ran to winning seven Tour de France titles in a row. Sure it’s possible his brush with death motivated him to develop the drive to push himself to never before seen athletic accomplishments. It’s just as likely he discovered the wonders of drugs, or most likely, some combination therein. Either way, the guy who should be the most inspiring athlete in the world doesn’t exactly scream legitimacy. But then, what does anymore?

Certainly not the validity of the customer review system that much of the retail web works under. Read this piece from the New York Times and try not to throw up in your mouth. Now I’m reasonably sure most of us know some kind of questionable practices have been going on in terms of reviews. But the scale this suggests is frightening. This is one guy, subcontracting out “reviewers.” If he made $28,000 a day, as he claimed, that’s a ton of bogus reviews scattered out there. In fact, at that rate, this guy would’ve disseminated a half a million fake, rose-colored reviews in a year’s time. One guy. How many more review services are there out there? How many private groups trading quid pro quo positive reviews amongst their memberships? And what’s the percentage of “sockpuppets” that sellers are using to contribute glowing reviews of their own stuff clandestinely?

The short answer: a royal shitload! Certainly enough that it calls into question the validity of any customer review system. How exactly are reviews weighted in Amazon’s discoverability algorithm? If they’re counted at all, doesn’t this disclosure seem to indicate their removal may be called for? I mean, the information is tainted. Worse yet, so long as reviews directly count toward helping products be seen and possibly drive sales, there’s virtually no reasonable means of stopping it from becoming that way.

So who availed themselves of this “service”? Well, John Locke, for one, reportedly bought 300 reviews from this guy. Somewhat less to Locke’s discredit, he didn’t seem to actually care if the reviews were good, bad or indifferent, just that they existed. Maybe he legitimately thought he was getting people who were going to actually read his book and give an honest critique. Of course, that would mean a man that’s been held up for his business acumen for rising from unknown to self publishing icon would be dangerously naive. What was I saying about cynicism earlier?

But at least Locke didn’t stoop to the level of UK best seller Stephen Leather. Leather, rather incredibly, openly admitted to having a network of fake online identities he used to promote his books, or sockpuppets, as it were. Further, he implied that he also has a group of friends and associates all engaging in the same sham marketing. Here’s a breakdown of his situation.

As appalling as these instances are, really they’re just ham handed attempts to replicate conduct the corporate world has already perfected. Does anyone really think the Big Six don’t have someone posting glowing five star reviews on their books everywhere they’re available? Realistically, they’ve been paying for reviews for a long time, either directly or through back scratching deals with review publishers along the lines of buying ads in said publication with the expectation that your offerings get reviews. At least this new payola actually goes to the people writing the fake reviews and not just the newspaper or magazine printing them. Making the world of review fraud more democratic! That’s something, I suppose. Nauseating, but something.

Then there’s the simple case of the Digital Book World ebook bestseller list. Purported to be an accurate depiction of ebook sales, closer inspection reveals something that smells worse than a suddenly-abandoned fish market three days after the ice has melted. Is it a fraud? I don’t know for sure but my internal bullshit detector goes haywire whenever something produces generally surprising results that would be exactly what you’d expect if the fix was in. First, the somewhat contemptuous tone toward the lower price points in the promotional material for the new list seemed prejudicial to indies and immediately set me to awares. Then, the initial list had publishers prominently displayed but no authors. Hmmm…who would put a greater priority on the publishers being referenced rather than the actual authors? I wonder…Third, the results came out not only unpredictably but almost irrationally anti-indie and pro Big Six. One of the big tells in statistical fraud is when they overreach and results come out far stronger on one side than is actually reasonable. Last, the guy who developed the secret algorithm we know nothing about turned out to be employed as a VP at a Big Six publisher. Not only that, it was kept hidden from all materials until he was outed by a blogger and had to fess up. Hiding possibly pertinent information is usually a big tell in fraud, too. So is it a fraud? If it walks like a duck and quacks like a duck, well, sometimes it turns out to be a goose, but mostly, it’ll be a duck. And I’m sure you’ll excuse me if I’m fresh outta benefit of the doubt these days.

So, with all this obvious review fraud going on everywhere, will Amazon or someone else yank review data from any meaningful purpose? Nope. One other thing about our fraudulent society is that, far more often than not, the perpetrators of the fraud suffer no consequences from it. No bankers have been called to task, lying politicians are such a cliche now that we don’t even bother to call them on their bullshit anymore, lest we get buried by an even bigger pile of bullshit defending the first load. This review-pimping guy will be back to slinging bogus five-stars before you know it, and in the meantime, the ones who haven’t been outed yet will keep plying along unfazed. John Locke and Stephen Leather will be momentary blips, and very likely won’t suffer a bit from their questionable ethics (or naivete, if you’re feeling the Locke apologist vibe).

Lance Armstrong is getting his Tour de France titles stripped, though. That’s something, right? It would be if it weren’t being done by an agency that 1) has pretty questionable authority to strip them in the first place and 2) has no real evidence of doping at all and the somewhat inconvenient fact that Lance never once failed a drug test. See, when someone does get even the slightest comuppance, it, too, ends up done fraudulently.

But, oh well. I hear Roger Clemens is making a comeback.

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