Jay Lake: Writer

[publishing] More on ebooks, pricing and licensing

As I observed recently [ jlake.com | LiveJournal ], The perennial “ebooks should be free, charging for them is theft” argument is now playing out at io9.com.

There is a fair amount of supportive commentary there, but also quite a bit of the usual arrogance, ignorance and acrimony about why ebooks should be free. It seems to boil down to the idea that the author/publisher is greedy and doesn’t deserve to be paid twice for the same content. This is closely coupled to the misconception that ebooks obviously don’t cost anything, and therefore charging for them is theft.

As I said before:

When you buy a print book, you aren’t buying the content, you’re buying the edition. Otherwise everybody who bought a hard cover would be entitled to a free paperback, a free audiobook and a free movie ticket if the book were filmed.

This is driving me more and more toward my nascent view that a book (in any format — print, audio, ebook, what have you) is a license, not a product. The story is the product. The format is a delivery channel. The ebook “debate” gets obscured by the long-running and rather sordid experience of the music industry, as well as the whole bit torrent culture of pirate video. I’m also increasingly coming to view “information wants to be free” as a pernicious meme, as it completely devalues the content Producer to the short-term benefit of the content Consumer.

In the long run, would I write even if I weren’t paid? Sure. I did for years before I was paid. But why should my writing, if it has value to readers, be free? The thing I always want to ask ebook activists is whether they’re comfortable with their work product being free, simply because I don’t think I should have to pay for it? Tom Tomorrow touches on this in his cartoon this week.

And you know what? I’m not going to sell t-shirts or something. I’m not even interested in doing format conversions to sell my backlist online. I’m a writer, damn it. My best and highest value is writing.

It’s insulting and demeaning to be called a liar and a thief by readers who don’t know anything about the processes of publishing, copyright law or professional ebook production, and yet are certain of both their facts and their moral high ground. It’s the Dunning-Kruger effect in full deployment.

I’ve always said the story belongs to the reader. I believe that in the bottom of my heart. Story is not an economic right, however. Buying a hardback then paying for an ebook is no different from buying a hardback then paying for a paperback or an audiobook. But there’s a growing culture online deeply invested in denying that, and they’re very happy to demonize authors as part of their denial.

Note, please, before you comment, that I am not making an argument for any particular price point on ebooks. I am also increasingly coming to favor the idea of bundle pricing, which is in line with my view of books as licenses rather than products. I think ebooks should be cheap, and possibly free if promotional considerations indicate. But that’s a decision for my publishers to make as part of their marketing process, not a natural law of information, nor an entitlement of the reader.

I think the hardest part of this discussion for me personally is getting people, especially the activists, to see how caught in the middle authors are. I can’t even tell you how many times I’ve been told I should just switch publishers, or force them to change my pricing. That kind of thinking is another example of the profound disinformation and ignorance about the process of publishing, and how it colors the passions of readers.

People want to read. I want them to read. Writing is work, just like plumbing, law, medicine, retail, bus driving, teaching or anything else. Like any work, it should be compensated according to its value. When you want your ebook for free, you’re devaluing writing to nothing.

Tags: ebooks, Process, Publishing, Writing

Posted: 3:58 am Tue April 13 2010 | Comments(9) |

[publishing] The value of ebooks; or contents vs container

The perennial “ebooks should be free, charging for them is theft” argument is now playing out at io9.com. Still thinking through the licensing issue I raised recently, I said the following:

When you buy a print book, you aren’t buying the content, you’re buying the edition. Otherwise everybody who bought a hard cover would be entitled to a free paperback, a free audiobook and a free movie ticket if the book were filmed. It would unethical for you to steal the paperback, pirate the audiobook and sneak into the movie. Why is it ethical for you to pirate the ebook?

Tags: Books, Publishing

Posted: 12:18 pm Sat April 10 2010 | Comments(2) |

[publishing] Hello? Amazon? Is this thing on?

No new wisdom on Amazon, Macmillan or ebooks today, but I still haven’t seen any public statements from Amazon beyond the original, laughable unsigned note on the Kindle boards. The media lovefeast for them goes on of course, albeit tapering off now, with the Amazon-biased “price increase” narrative almost completely dominant.

Did I miss something? I still wonder if this round is over.

Tags: amazonfail, Publishing

Posted: 5:37 am Wed February 10 2010 | Comments(4) |

[publishing] Books as licenses – print and ebooks both

One thread of the ongoing ebook discussion on the Internet has been the perception of a lot of readers (including, possibly, reporters at Wired) that ebooks have no incremental cost, and therefore should tend to be free. This assumption ignores sunk costs in book acquisition and production, as well as ongoing royalties to authors. It’s also based on misperceptions about the value of physical objects versus virtual objects.

I am still chewing on notion that ebooks are a service, and print books are a product, but I’m thinking I’ve still got it wrong. Yes, ebooks under DRM behave like like a service, but even DRM-free ebooks are presented under a EULA. (Please note, this is not a defense of DRM, just an acknowlegement it exists.) Print books behave like a product in the sense that you purchase a physical object that is yours to use or dispose of largely as you see fit, much as an automobile or a frying pan or an action figure may be used or disposed of largely as you see fit.

The true, underlying product is story. Every delivery mechanism — print books, ebooks, audio — are licenses to that story. Copyright and ultimate ownership still vest with the author (or in the case of work-for-hire, the license holder).

When you purchase a print book, you purchase a single-use, transferable license to that story in the form of the author’s copyright. With limited exceptions for Fair Use, you don’t have permission to copy or reproduce the print book. You can pass it along to other readers, resell it, or otherwise dispose of the print book, but all that is in terms of the license embedded in the print book itself. License and artefact are difficult to separate, though not impossible. For example, scanning, photocopying or rekeying beyond the bounds of Fair Use would serve to sever license from artefact, and all three are illegal.

When you purchase an ebook, depending on the DRM wrappers on the book, your rights of transferability may vary. Likewise back up copying, resale and so forth can be influenced by both DRM and the EULA associated with your ebook reader and the software compilation that represents the ebook publication itself. But you still don’t own the copyright, again, you have only purchased a license to that story in the from of an author’s copyright.

Because fundamentally, that’s what the author sells to the publisher. A license to reproduce the copyright.

What I’m getting at here is that the whole question of ebooks versus print books is a bit of a red herring. You don’t own the book, any more that you own the performance of a song you buy on CD or mp3. I think this differs from purchasing visual art, where you can own the painting, but even then, the artist can reserve reproduction rights.

It all comes down to concepts of intellectual property, which are frankly a bit abstruse for most people who don’t need to spend their time worrying about such things. Even if you buy a Braun coffee maker, you don’t buy the rights to recreate it in your workshop and sell copies of the coffee maker. Except the process of copying a coffee maker is so tedious, that unless you own a Third World knockoff factory, you’re not going to bother.

Copying or scanning a print book is a possible behavior. Copying an ebook is a trivial behavior, at least technically.

But you, the reader, never take full title to the story underneath. You have taken a license to that story, a contract ultimately between you and the author, embedded in the copyright statement in the front matter of the book. And that license has value, whether it’s delivered on cellulose and ink, or via an organized compilation of electrons.

If this were more widely understood, would it shift the terms of the ebook debate?

Tags: amazonfail, Publishing

Posted: 3:58 pm Mon February 08 2010 | Comments(16) |

[publishing] Reader feedback, more thoughts on ebook pricing & marketing

This post mostly rises up from an active comments thread here trimmed and edited by me, with special thanks to commentors Kelly, Ashavan Doyan, and CharlesP, as well as everyone else hanging in there.

Kelly said (in part): I think you may be missing the biggest price point issue for consumers — the price of the mass market paperback. Publishers need to give readers a reason to pay more for an e-book

Bear in mind that most print books don’t start out at mass market paperback prices. They start out at hardback prices. That’s where the book makes most of its money. To sell an ebook at day one at mass market prices undercuts the business model of making your profit lead off the hardback. That’s the whole point of dynamic pricing — to have ebook prices fall in parallel with print book prices over time, as demand softens and widens. That kind of dynamic pricing has been successfully in play on the print side for decades. Publishers understand it, booksellers understand it, book buyers understand it.

There may be a perfectly good argument to be made about not using dynamic pricing, but simply “lower prices” isn’t enough, unless a revised model can ensure publishers sufficient profit for books to earn out. Otherwise we get what’s already been happening — fewer titles, more low-performing authors dropped, increasing focus on bestsellers without the midlist to back them up. Where do future bestsellers come from? Often as not, the midlist, which serves as a ‘farm team’ for the book line.

If you want to pay paperback pricing for ebooks, waiting for paperback availability isn’t unreasonable. The market’s worked that way since before I was born. Amazon has skewed consumer perceptions with the $9.99 promise, but that’s my underlying point. $9.99 makes it much harder for publishers to sell hardbacks against ebooks priced there, which undercuts their margins, which is slowly strangling the supply side of the book industry.

Ashavan Doyan said (in part): I want the authors to make money. But I also want reasonable consumer prices as a reader of books. For instance… The Great Hunt (book 2 of the wheel of time, published by Tor) – paperback $7.99. Ebook – $9.99 WHY??? This book was published what? 15-20 years ago?

I’m not even remotely prepared to defend current ebook pricing practices. I think the whole point of the agency model is to rationalize that, and lower backlist prices toward the $5.99 price point. Can I prove that? No, not at all. But it just doesn’t pass the smell test to make this much fuss, then not deliver.

And yes, the agency model may be anti-competitive, but if you look at Amazon’s model from a publisher’s perspective, it is far more anti-competitive. Check out the discussion of this on Making Light for a far more intelligent analysis than I can offer. My opinion is once Amazon’s lock is broken, the models will continue to shift under market pressure, and the competitiveness issue will come into play.

CharlesP said (in part): I’m curious as to what your take is on how it seems we’re going from one fixed price structure (Amazon setting new/best sellers at $9.99) to another (the publishers setting the price for all retailers). We’ve gone from no market competition in pricing (because Amazon owns so much of the market) to no market competition in pricing (because the publishers are setting the price no matter where the consumer goes).

First, understand I don’t speak for the publishers in an official or unofficial capacity. I have common interests, as a Macmillan author, and a view of the industry from that side, which is frankly pretty opaque even from within the sausage factory, and in many ways deeply counterintuitive to outside observers.

I’m not convinced that the agency model an improvement in and of itself, but it’s definitely a step in the right direction. Right now we have a single player (Amazon) at 75+% marketshare setting terms for the entire ebook industry. Under the new model we have six players (the big six publishers) setting terms to at least two outlets (Amazon and Apple iBooks). That produces a lot more opportunity for flexibility and innovation in models when no single player is holding all the reins. Amazon has no trouble remaining in lockstep with itself as a single-source chokepoint, but you won’t see consistent solidarity from the big six over time as they have different ideas or entertain different proposals.

Likewise Apple, which, for example, has changed business models within iTunes several times. So I see this move as not a final fix, or even necessarily much of an interim improvement, but as a breaking of a logjam which will now allow multiple players and market factors to participate in setting price points and retail terms, instead of leaving everything in Amazon’s hands. By definition that is more competitive.

CharlesP: I have trouble understanding what the publishers are hoping to accomplish by making sure everybody is paying them the same amount, which happens to be less per book than they were currently getting from Amazon. The only semi-plausible explanation I’ve thought of is that they’re hoping to (or at least OK with) hurting eBook penetration to protect hardcover sales.

You’re on the right track here, but you’re putting a very different spin on it than the publishers would. Consider how critical dynamic pricing is to their business model, that is to say, $28 print hardcover -> $8 mass market paperback.

“Hurting ebook penetration” isn’t the issue. It’s preserving the business model, which enables profitability and continued operations. Whether that business model should be preserved is a different and legitimate issue, but it’s how they work today. What they’re after is maintaining the value perception of initial high-demand releases, which the $9.99 price point is threatening to destroy, especially with the ongoing growth of ebook market share. Publishers don’t “hate ebooks”, they’re desperate to understand them, but they’re even more desperate not to lose money on ebooks.

CharlesP: The future with an enforced “everybody selling at our selected price” future

I don’t actually buy this. The pricing war is far from over. What we’re doing right now is moving from “Amazon sets all terms” to “multiple players set terms”, which is far more competitive than the current model as it exists today. The big six will jockey for position over time, Amazon and Apple will jockey for position over time, Sony will get their head out of their collective heiney and become a player… Lots of options once a single player is no longer in control of the vast majority of the market terms.

I do recommend following the give and take on the original post, but these strike me as some of the high points worth emphasizing. There’s also some pretty interesting stuff in comments on the LiveJournal mirror, including a long exchange with about future revenue models for authors.

I’m terribly pleased to have such an thoughtful, patient set of commentors on my blog. Thank you all.

Tags:

Posted: 3:13 pm Mon February 08 2010 | Comments(9) |

[publishing] Amazon vs Macmillan, the $9.99 price point, and market forces

The chemo fog is mostly clearing from my brain. Some things happened in Amazon vs Macmillan while I was checked out, most notably that the buy buttons were restored on Amazon’s site for Macmillan print and Kindle titles.

I’m not convinced this is over. Amazon has still not made any sort of public statement other than the original, laughably incompetent unsigned “capitulation” note on the Kindle boards over a week ago. This compared to two formal public statements from Macmillan USA CEO John Sargent. I am very disappointed that the popular and business news cycle has focused almost exclusively on this as a “price increase” narrative, apparently single-sourcing from the Amazon note. I guess that makes better copy, but it ignores the much larger underlying story about a potentially seismic shift in the business models of publishing forced by the growth in ebooks. A shift which has benefits to consumers, as well as the exciting narrative of overturning Amazon’s $9.99 pricing model.

As for my own part, I’m finally coming around to thinking Macmillan has the right of this. ‘s explanation of the “agency model”, combined with earlier squibs from Charlie Stross, have largely convinced me. I will lay out my own thoughts on this in the next day or two as the chemo fog continues to clear my brain, but I want to make one point here.

The $9.99 ebook price point was not set by market forces. It was a fiat promise from Amazon to Kindle buyers as a driver to promote the Kindle platform. There’s nothing magical about the number (beyond the obvious buying psychology of $9.99), and it had nothing to do with either publisher costs or publisher business models. For the media to be treating this as all about a price increase from $9.99 ignores both the history of the price point and the current business reality of publishing. It may well be that $9.99 is an eventual ‘market making’ price point, but that’s not yet been proven. And for all that Amazon lost the boardroom PR war by not even showing up to the fight they picked, they’ve sure won the popular PR war so far, given the prevalence of the “price increase” narrative.

That’s probably enough out of me this morning, but I’m curious. What’s your take on the “agency model”? Am I right about the $9.99 price point? Am I right about the strong pro-Amazon bias in media coverage?

Tags: amazonfail, chemo, health, Personal, Publishing

Posted: 5:49 am Mon February 08 2010 | Comments(41) |

[publishing] Amazon, Gillette, cross-subsidies and supply chain integration

Reuters continues with the lazy reporting about the actuality of Macmillan’s pricing proposal.

at Making Light with a very cogent analysis of the agency model, and why it’s critical to the continued health of publishing. As usual, that woman makes a hell of a lot of sense.

I asked on Twitter this morning, “Trying to figure out why the price of ebook readers (sold by tech cos) should be linked to the price of ebooks (sold by publishing cos.)” @philipbrewer responded, “Cross-subsidies are an old trick, as in “give away the razor sell the blades.”

He’s got a great point, but I think he’s wrong. Gillette owned the razors and the blades, controlled the whole supply chain. Likewise HP with printers and ink, another example of this. That integration allows them to set the dial on profit and loss in different lines to maximize overall profit.

[ ETA: @philipbrewer responds thoughtfully to my point and counterpoint here. ]

Amazon with the Kindle does not control the supply of content. As explains (and has been explained elsewhere), they’ve been inserting themselves as a publisher with the rights play embedded in the up-til-now Kindle contract. That’s still not supply chain integration. So where Gillette can take a loss on razors to sell blades within one larger profit-and-loss calculation, Amazon has been pushing publishers into a position of taking a loss on hardcover sales to elevate Amazon’s Kindle profits. They’re killing their own supply chain, unless they plan to go into originating content on Kindle in a big way. Which would be an unsurprising next step for Amazon, but still provides the publishers with no incentive to continue down Amazon’s path.

I probably have a lot more to say next week, when I’m out from under this chemo infusion session. Currently on the 5FU pump, and rather hard of thinking. I do suspect the razors-and-blades issue also ties into my recent observation that ebooks (at least the DRM variety) are a service and not a product. More to come, when I have brainpower to pursue it. In the mean time, feel free to be intelligent about these question in comments.

Tags: amazonfail, Cancer, health, pubishing

Posted: 9:46 am Sat February 06 2010 | Comments(2) |

[publishing] Macmillan print titles back on Amazon as of Friday afternoon

Gizmodo is reporting Macmillan titles back on Amazon.

I’ve checked, my print titles are up. I seem to be absent from Kindle. Chemo brain is too goofy to do any analysis on this, or hunt down more sources right now, but this is interesting.

Tags: amazonfail, Books, Cancer, Personal, Publishing

Posted: 4:12 pm Fri February 05 2010 | Comments(1) |

[publishing] The agency model explained, maybe

I’ve run down a couple of posts that have gotten me a lot closer to understanding the ins and outs of the “agency model”, which of course lies at the heart of the Amazon-Macmillan dispute. I’m prepping for my chemo infusion, and don’t have time for analysis or commentary, but here’s the links that may be useful to others.

Apple pitching its agency model to book publishers — From ZDNet.

Apple’s disruption of the ebook market has nothing to do with the tablet — From the Idea Logical Blog.

Note both of these slightly predate the current kerfuffle, so it’s interesting to read their analyses without the filter of the side-taking going on right now.

Tags: amazonfail, Publishing

Posted: 5:59 am Fri February 05 2010 | Comments(1) |

[publishing] A bit more on Amazon and Macmillan, and a temporary hiatus on my part

A new letter from Macmillan USA CEO John Sargent — Ebooks, royalties, and Amazon. Some very interesting reading between the lines there.

Hachette Book Group to Transition to Agency Model — Another leap into the fray. From Galleycat.

I’m back into chemotherapy in the morning, through Sunday afternoon, so I’ll be silent on Amazon and Macmillan until Monday. My brain is very strange on chemo, and I’d prefer to wait until I can trust my thinking again before entering into this complex, difficult topic.

So for now, talk amongst yourselves.

Tags: amazonfail, Cancer, health, Personal, Publishing

Posted: 7:04 pm Thu February 04 2010 | Comments(0) |