WSJ Article on Darcie Chan

This Wall Street Journal article on Darcie Chan’s experience publishing The Mill River Recluse as an indie ebook is pretty dated (December 2011), but it’s new to me. Back at the time of the article, Chan had sold 413,000 copies at the $.99 price point, earning about $130,000. This on a book that had been rejected by a hundred agents, and then, under representation, by a dozen publishers. And six months later, the book’s still selling: it’s ranked 787 in the Kindle store, as of this morning.

What strikes me about the article is that Chan is portrayed as still very much wanting a traditional publishing deal for the The Mill River Recluse:

Multiple audio-book publishers have made offers. Six film studios have inquired about movie rights. Two foreign publishers bid on the book. Ms. Chan is holding off on such deals, for fear they might sabotage a potential contract with a domestic publisher.

Ms. Chan still wants to see her book in print. Several librarians have contacted her seeking print copies after patrons requested her book. “I have people writing me begging me for a hard copy, book clubs and libraries calling me, and I don’t have a hard copy to provide for them,” she says.  (accessed 6/1/12)

So, it’s not that she hopes to use The Mill River Recluse as a springboard to getting a contract for future books. It’s this book she wants under contract. But why?

I doubt it’s about money — the article points out that Chan has already made quite a bit more than first-time traditionally published authors usually get in the way of advance. Plus, she says writing is “more of a hobby” for her, since she works full-time as a lawyer (accessed 6/1/12). It’s hard to see a simple desire for a hard copy as the motivator, either. After all, she could use print on demand to produce such a book, but hasn’t.

So what is it, exactly? Why isn’t it enough to be providing a very well received novel to readers at an incredibly affordable price, while making a nice chunk of change?

I wonder if Chan still feels the same way and, if so, whether she’s any closer to getting what she wants.

 

Lipskar and Konrath on the Agency Model

A few days ago, Digital Book World published an open letter from literary agent Simon Lipskar to the Department of Justice. In the letter, Lipskar takes issue with the government’s reasoning and data in the anti-trust case against Apple and five of the Big Six publishing houses. Lipskar’s letter is lengthy and detailed. It’s definitely worth a read.

A couple days later, J. A. Konrath took on Lipskar’s reasoning and data in a blog entry. This piece, too, is worth a careful reading. It’s pretty convincing (admittedly, I’m one of those folks who finds Konrath convincing on just about everything).

What I want to take issue with is Konrath’s desire to prove the agency model is A Bad Thing. I’m not so sure that it is — at least not for him and for me and for other indie authors.

Konrath has illustrated clearly that authors sell fewer books and make less on each sale under the agency model. But that doesn’t mean that the agency model is bad “for authors.” It means it’s bad for authors whose work is being distributed under that model. For indie authors, the agency model — and anything else that keeps traditionally published books overpriced — may be A Good Thing. Maybe even A Very Good Thing.

Here’s my thinking:

Put on your fantasy hat, and imagine that things had gone very differently when Amazon first brought out the Kindle in 2007. Imagine that the big publishing had realized a game-changing event had occurred. Imagine that the head honchos at these companies had gotten together with their top executives and explained that things were going to change, and that there wasn’t a damn thing they could do to stop it. Imagine that they had set about reforming their businesses to prepare for the coming world — a world in which publishing would become predominantly digital within ten or fifteen years.

They would’ve started cutting their workforces through attrition and early retirements. They would’ve made all their authors’ backlists available, and they would’ve offered ebooks at prices far, far below those of paper books. Maybe they would’ve invented ereaders and POD systems of their own. That is, instead of being dragged kicking and screaming into the digital age, imagine that they chose race into it, competing with one another to see who could arrive first and best.

In such a world, would indie authors be seeing the success they are now? In a world where every novel that’s ever been traditionally published, including current best-sellers, was available on Amazon for between $.99 and $4.99?

I don’t think so. Some indie authors would be successful, sure, but I don’t think the explosion of indie success we’ve witnessed would’ve happened. I think the justifiably high cost of paper books and, more importantly, the consistent over-pricing of traditionally published ebooks have opened the door to the proliferation of financially successful indie authors.

Here’s why: there are a lot of people out there who love to read but don’t have much money. I’m one of them. Once I realized that there were tons of indie books out there that were just as good as traditionally published books but cost way less, my buying habits shifted. Big time. That kind of shift, writ large, explains why indie authors are doing so well.

Konrath’s blog entry quotes an anonymous letter from a publishing-industry insider who skewers Lipskar for implicitly asserting that books are “fungible.” Here’s one place where I’ll disagree with Konrath and his anonymous letter-writer: books are indeed fungible in certain situations.

The italicized qualifier is important. This is one of those issues where it’s easy to make someone sound stupid by putting extreme words in his mouth, an argumentative technique known as building a straw man. If you say, “books are fungible,” you sound like an idiot. Obviously, books differ from one another radically; there are many books out there I would love to read, and probably quite a few more I’d abandon after the first page. Such books are not interchangeable. Furthermore, I follow several fantasy authors and series quite avidly. When Jim Butcher brings out a new Dresden novel, nothing else will substitute. I must read that book immediately, and I would pay quite a bit for the privilege of doing so. A novel in one of the series I follow is not interchangeable with something else.

That said, if you give me a mass of 1,000 books I’ve never heard of before, by authors I’ve never heard of before, the books in that mass start out, in my mind, as fungible. Each one might turn out to be one of the best things I’ve ever read; each one might also turn out to suck. Are they fungible in a real sense? No, of course not. They’re all different from one another. But as an uninformed buyer, I don’t know about those differences, yet. I won’t know about them until I read the books.

So I take the 1,000 books and I start looking at their covers, titles, reviews, and descriptions. I begin downloading Kindle samples to see what I might like. Now I have more information to work with, and I’m able to weed out a lot of books that just don’t interest me. Let’s say I’m left with fifty books that I really want to read. I’ve gathered all the info I can about these books, and they all sound terrific.

Now, if I’m in Barnes & Noble, I can’t buy fifty books. Even at mass-market-paperback prices, I couldn’t afford it, not even spread out across a whole year. But let’s say I’m shopping on Amazon, and twenty of the fifty books are reasonably priced indies. I could buy three of the fifty that are traditionally published ebooks, pay my $35. Or I could buy one traditionally published book and ten indie books. I really enjoy reading, so I go with the latter option.

That’s the kind of situation in which books are fungible — you’re browsing, you have limited funds, and you’re looking for new things. You find a bunch of things that look promising, based on limited information. Then you have to decide which you’re going to buy. In such a situation, price is an enormous factor for many readers. Once you choose your books, buy them, and read them, they won’t be fungible in your mind any longer. In your mind, they’ll become the differentiated individuals they always, in fact, were. But before you read them, the situation was much more fluid.

That’s where the agency model — and the Big 6’s broader recalcitrance on pricing — may have helped the indie movement. When readers go shopping without a particular book or author in mind, there’s a window into which a new book or author can slip. If traditionally published books cost many times more than indies, there’s more chance the book that slips in will be an indie. This is what Lipskar is talking about when he asserts that “new publishers, self-publishers and retailer-owned publishers [are] providing consumers ebooks at lower prices than the agency publishers and taking significant market share from them in the process” (accessed 5/13/12).

Lipskar doesn’t seem to think the huge pricing advantage traditional publishers are handing to indies threatens his livelihood, along with that of everyone else involved in traditional publishing. If I were him, I’d be worried. What happens when “significant market share” becomes “majority market share”?

At any rate, I ask you this: why are we fighting the agency model? Sure it’s bad for the authors who are trapped in it, but that’s not us. Maybe someone can explain to me why I’m wrong. Until then, I’m thinking anything that pushes up the cost of traditionally published books and ebooks is A Good Thing for indies. Let the Big Six keep losing their market share. We know where those readers are going.

Make Your Offer: A New eBook Sales Site

At UK-based Make Your Offer, indie authors can sell their ebooks in multiple formats. What’s new, here? At MYO, the author stipulates a sale price and then either permits or does not permit lower bids from interested readers. For instance, you might list your book for sale at $2.99, receive a bid from a reader of $1.99, then counter-offer at $2.29, whereupon the reader accepts and you make the sale. You can either set things up to run automatically by inputting a minimum acceptable price, or you can entertain any offer. You can also offer books for free.

Books enrolled in Amazon’s KDP Select program can still be listed on MYO for promotional purposes, though readers will not be able to purchase the book through MYO.

From what I can tell, authors will generally keep a markedly higher percentage of the book’s selling price than the percentages offer by Amazon:

14. The Distributor will pay the Owner the full selling price of the Work for all copies sold through the MakeYourOffer Internet website, always subject to the following:

(i) The deduction of the payment processing fee at cost from the payment processing agent;

(ii) The deduction of a sales fee of five [5] per cent. of the total full selling price of the work. (http://make-your-offer.com/book_upload_terms.php, accessed 5/4/12)

Sounds to me like an exciting innovation in indie ebook sales. Cool.

**Edited 5/6/12: MYO’s administrator posted more specifics about royalty structure in the comments to this post. Looks like a 61% royalty is as low as it gets, at this time — quite a bit better than Amazon’s lowest threshold of 35% — and it could get quite a bit higher than 70% for more expensive books.

Nook + Microsoft = Big Six Love

The New York Times is reporting on a deal between Microsoft and Barnes & Noble: the former is buying 17.6% of the Nook unit of B&N for $300 million. Though the Nook part of B&N’s business has been growing fast, apparently the tech investment it requires has been a financial drain on the company, which has been looking for just this kind of partnership.

What interested me about the Times‘s report was the bit at the end:

Publishers appeared to be cheered by the news. [B&N CEO William] Lynch said that he had received encouraging e-mails Monday morning from chief executives from five of the six major publishers in the business.

“These publishers are completely aligned with Barnes & Noble,” Mr. Lynch said. “Publishers are going to like this deal a lot.” (accessed 4/30/12)

I can see why. A decade ago, Borders and B&N came along and wiped out most of the country’s small, independent sellers of new books. Now ebooks and internet retailing of paper books are putting the pressure on the mega-stores. The publishers’ eggs are mostly in two baskets, now, for paper sales: Amazon and B&N. The last thing publishers need is B&N going the way of Borders.

Here’s an example. I’m living right now in a town of 70,000 people. It had a Borders. Now it doesn’t have any dedicated outlets for new books. You can buy a best-seller at Wal-Mart or a supermarket, but that’s about it. There are certainly people here who might browse in a book store and find some paper books they like, but now their options for that are mighty limited. So instead they’ll go to Amazon. And what’s a really, really good deal on Amazon, compared to those paper books at Wal-Mart? You got it: ebooks.

So anything that keeps B&N healthier is going to make the big publishers feel a bit better about things, eh?

$2.80 to $4.00

This article  is a bit old, but still very much worth noting. Blogger and Brilliant Math Guy Dave Slusher used J. A. Konrath’s sales figures to determine the ideal price point for ebooks. His conclusions? Between $2.80 and $4.00. Perhaps things have changed, now, since the market has grown so much, but it’s still good food for thought.

Indie Networks

When I first began considering independent authorhood, I worried I’d feel isolated. Yes, there are lots of other indie authors out there, but I didn’t know any of them personally. And even if I did, would knowing other authors make a difference when I faced that long  publishing to-do list? How would I get it all done, and done well?

As it turns out, being indie doesn’t mean having to go it alone. The more I investigate other indie authors’ experiences, the more I see something like networking going on: an indie author contracts with a professional editor, with a graphic artist, with an ebook formatter. Then she reaches out to bloggers to help market her book. And so forth. Everyone involved is independent. They may come together temporarily to provide all or most of the services provided by the traditional publishing industry, but afterwards they separate and are free to recombine in new networks.

Right now, networking provides the best way of getting good indie product to market, and bringing to product to market is essential — otherwise we’ll be stuck forever with the old stigma of self-published novels as poorly written, poorly edited, and unappealingly designed. And not only is networking good for authors, but it’s also good for all the other people out there trying to make independent livings. So, that money you spend on your editor? It supports the indie movement in a larger sense, and that’s a good thing.

Indie Authorship + PayPal = Scary Vulnerability

What PayPal Did

In February of this year, as part of an effort to “aggressively enforc[e] a prohibition against online retailers selling certain types of ‘obscene’ content,” PayPal tried to force Smashwords to stop selling books containing incest, bestiality, or rape (accessed 4/17/12). PayPal finally ended up backing down, but the story is worth pondering because it highlights the vulnerability of indie authors and their platforms.

First, keep in mind that PayPal’s threat to Smashwords didn’t say that its service couldn’t be used to pay for “obscene” content; rather, they said they won’t do any business at all with a retailer that sells such content. That’s bringing out the big stick, and Smashwords, which apparently would’ve had a hard time separating itself from PayPal’s payment services, was justifiably spooked. Founder Mark Coker emailed all Smashwords erotica authors on February 24 saying that incest, bestiality, and rape were no longer permitted under its Terms of Service. Books with such content would have to be removed immediately.

After an uproar from the blogosphere, petitions, anti-censorship advocacy, and so forth, PayPal rewrote its Acceptable Use Policy. From now on it will

focus this policy only on e-books that contain potentially illegal images, not e-books that are limited to just text. The policy will prohibit use of PayPal for the sale of e-books that contain child pornography, or e-books with text and obscene images of rape, bestiality or incest. . . . In addition, the policy will be focused on individual books, not on entire “classes” of books. Instead of demanding that e-book publishers remove all books in a category, we will provide notice to the seller of the specific e-books, if any, that we believe violate our policy.  (accessed 4/17/12)

This position strikes me as much more reasonable, if still potentially subject to abuse. Whatever — it’s a huge improvement, and Coker and the others at Smashwords are to be commended for negotiating for the change. And all those whose outcry strengthened Smashwords’s position are to be commended as well.

Visa Made Me Do It

Why did PayPal pursue its initial assault on Smashwords? According to another publicly posted email from Coker, PayPal was forced into it by credit-card companies. At first, I found this awfully hard to believe. If credit-card companies wanted to target “obscene” material, why on earth would they begin with independent authors publishing low-cost or free erotica on Smashwords? What about looking to the porn industry? No one really knows how big it is, but Forbes.com conservatively estimates it at $2.6 billion to $3.9 billion a year. Even these low numbers are enormous compared to the amounts being spent on Smashwords erotica. Furthermore, credit-card companies as arbiters of public morality? Really? If you asked me to name an outfit whose No. 1 concern was making money, whatever the social cost, I might well answer, “a credit-card company.” It’s hard to believe that American Express is all upset about Jane-Doe-40-something-working-mother purchasing the occasional rape-fantasy erotic novel for $1.99 on Smashwords.

Dollars and Sense

Erotica author Selena Kitt blogged about PayPal’s actions early on (before it started in on Smashwords, PayPal hit several other sites with the same threats), explaining that it really does come down to money. Kitt discovered that retailers specializing in pornography, sex products, and so forth are charged higher fees by credit-card companies because it’s more common for the charges to be contested. You know, your husband notices the $49.99 charge to Extra-Large Dildos, Inc., and instead of fessing up, you say, “I don’t know how that got on there! It must be a mistake.” Hubby calls MasterCard, and MasterCard has to eat the $49.99. That’s why credit-card companies might conceivably be interested in whether retailers are selling naughty-but-legal merchandise. It’s not a question of morality; it’s a question of dollars and cents.

Keeping that in mind, it makes perfect sense that at least one credit-card company, Visa, denied putting any pressure on PayPal, saying that “Visa is not in the business of censoring cultural product” and pointing to “PayPal’s recent blog post where it states that its own policies drove the decision” (accessed 4/17/12). According to Visa, you can use its cards to pay for anything that’s legal in the country in which the purchase is being made. They recognize that obscenity is hard to define, legally (accessed 4/17/12), but they don’t seem too worried about it.

This attitude is exactly the one I’d expect from a credit-card company. After all, if some state government thinks Joe Schmoe Cartoonist’s work is obscene and would like to see it banned, it goes after Joe Schmoe, not the issuers of the credit cards consumers have been using to buy Joe Schmoe’s graphic novels. So long as they don’t lose money accepting charges from the shops that sell Joe’s work, they don’t have any reason to worry.

So, if credit-card companies really did motivate PayPal’s actions, I’m guessing the link was quite indirect — much more related to PayPal’s in-house fear of being charged the higher fees credit-card companies extract from sex-merchandise retailers, and much less related to moral qualms or legal fears about obscenity.

Vulnerability

But here’s what’s really disturbing about this whole thing: setting aside the question of PayPal’s motives, what’s clear is that the providers of sexual content being targeted — indie authors — were highly vulnerable. Smashwords’s independent authors have no major publishing company standing behind them. Jane Schmoe, an indie author putting her erotica up on Smashwords, probably can’t afford a big legal team and doesn’t have a PR department.

Furthermore, Jane Schmoe Indie Author is vulnerable because she’s not really “independent.” None of us are truly independent. A truism, I know. But indie authors are really in quite a difficult position — we’re trying to be independent, but inevitably we have to partner with retail sites, such as Amazon (which has already banned the content PayPal went after), and those sites have power over us. Even those who stick to sites like Smashwords (as non-corporate a platform as you’ll find, I think) can find themselves at the receiving end because Smashwords isn’t a stand-alone entity, either. It has to — or has chosen to — partner with sites like PayPal.

Indie authors’ vulnerability may be exacerbated by their edginess. After all, major publishers aren’t going to publish your erotica if it’s likely to get them sued for obscenity. There are no such restraints on indie publishers. No one is vetting our work to ensure it passes legal muster. That’s a good thing, I believe, but it creates challenges. Mark Coker gets to the heart of it:

Indie authors are the biggest publishers of erotica. Already, one retailer/distributor, Bookstrand, decided to drop all indies from their store. I can only assume they decided the angry authors were more trouble than they were worth. … The campaign at hand goes beyond erotica authors. It’s an indie issue. Indies are breaking the boundaries previously set by large traditional publishers. This boundary-breaking scares people. (accessed 4/17/12, ¶13)

If not for the internet uproar, would PayPal have backed down? Maybe not. The story got some coverage in the mainstream media, but perhaps not enough. Targeting one indie ebook platform at a time, they might very well have gotten away with it.

(FYI, Bookstrand had actually been subjected to the same PayPal threats as Smashwords — here’s one author’s account. So had All Romance Ebooks, according to Kitt.)

Indie Authorship + Savvy = A Way Forward

Perhaps some lessons can be learned from this whole mess. First of all, it’s important to try to understand what motivates a company like PayPal. Personally, I think the motivation in this case was money — specifically, fear of potential high fees being imposed by the credit-card companies for which PayPal serves as middleman. If it all comes down to money, we need to know it. If bad PR and moral arguments about the evils of censorship and the importance of free-speech don’t work, we can move to a brass-tacks approach: how much bigger do we need to make your slice of the pie in order to convince you to shut up and leave us alone?

It’s also to our benefit, I think, not to hold exaggerated ideas about how independent we actually are. We’re more independent than traditionally published authors in some ways, yes, but we still have dependencies. We need to know what those dependencies are and be able to assess the risks they pose.

Lastly, we need established mechanisms of resistance that can be kicked into gear as needed, ones that will function well in the leaderless, chaotic environment we inhabit (the web). When something like this happens, blogs need to get the news ASAP, we need to get the word out to mainstream media, a petition needs to be started, and so forth. In other words, exactly what happened this time needs to happen every time.

So thanks, PayPal: lesson learned? Maybe.

Amazon & Libaries

Several ebook-related articles, here, from the New York Times. The first reports that Amazon, in the wake of the Justice Department’s recent antitrust action, is bringing ebook prices back down to $9.99. The second examines the difficulties libraries face in serving patrons who would like to borrow ebooks. According to the Times,

Five of the six major publishers of trade books either refuse to make new e-books available to libraries or have pulled back significantly over the last year on how easily or how often those books can be circulated. And complaints are rampant about lengthy waiting lists for best sellers and other popular e-books from the publishers that are willing to sell to libraries. (accessed 4/14/12)

Apparently, most major publishers will not distribute ebooks to libraries because they think borrowing an ebook, which you can do from the comfort of your own home, is much easier than trucking down to the library and picking up a hard copy. The article includes advice on ebook borrowing for various devices. It also includes this interesting statistic:

Three years ago, 2 percent of American adults owned an e-reader, according to the Pew Internet and American Life Project, and only a few had a tablet. By January, in the latest Pew survey, 28 percent of adults said they owned an e-reader or a tablet, or both. (accessed 4/14/12)

Twenty-eight percent. That’s something like 80 million people, right?