The marginal-cost-is-all argument also fails to take into account copyright law, which essentially grants each new work a sort of miniature monopoly. If I write a book about something, you can’t republish it unless I give the okay, or unless it’s 70 years after I kick the bucket and the copyright expires. You can argue about whether copyrights are too long or too restrictive, but we grant them so creators and investors do the creating and investing they otherwise would do much less of if anyone could profit off their work. Just because a product is digital doesn’t mean it’s infinitely abundant—as long as the law is enforced.

via Whats the right price for ebooks? updated : CJR.

I often get annoyed at people ruing that the Internet has destroyed book culture, because this tends to clump blogs, online magazine and journals, and independent or DIY presses alongside content farms, auto-aggregated “reviews” and recommendations, and corporations intent on selling your data to other corporations. But that’s not to say that there isn’t a threat from the Internet, it’s just that the threat to book culture is not from digital, per se. It’s from corporate entities really, really interested in finding ways of exploiting book culture, sucking it dry and leaving its bloated corpse behind when it’s finished.

via Binaries Aren’t Going to Work « Wordisms.

So when digital evangelists prognosticate about the future of publishing, as they love to do, and about what “needs” to go away, serious nonfiction is now one of the first things I think about. Maybe it’s because I’m getting older and want to read more of it and notice twentysomethings have little perceived patience for weighty tomes. Maybe it’s because I’d rather have pragmatic conversations about what categories are best suited to digital — genre fiction obviously, certain commercial strains of literary fiction, basically any book that needs to have a completed manuscript done before it’s shopped around, or can be finished very quickly post-proposal — and which ones won’t be. Maybe it’s because the very institutions that support serious nonfiction are themselves in more financial trouble than they used to be.

via Serious Nonfiction in the Digital Age.

1) Microsoft & NewCo. = Content, Device, Apps + possible future Mobile play via Nokia & Windows 8

2) Apple = Content+ Device, Apps + Mobile play

3) Amazon = Content, Device, Apps + Whispersync making Mobile already a significant play in my book but an actual partnership not yet to hand

4) Google = Content (-ish), Apps + Mobile (with Motorola) and a Device neutral stance

Leaving Sony and Kobo somewhat on the sidelines missing some element of the game. Of course those two, like the previous four also have a crucial component in the forthcoming game, lots of cash. And, seeing as folks seem to be tooling up for a platform war, I reckon they are gonna need that.

Of course we know already that all the players in the top league have some fashion of a flaw.

For Amazon the very success of the company’s ebook strategy has created a huge problem in that they are now the team to beat. Apple has a locked down and locked in strategy as closed as the rest of its walled gardens and there’s little chance of it opening voluntarily. B&N and Nook well they as yet have little international footprint (what does this move mean for Waterstones digital strategy?) Google, well where to start with Google? Its execution in the ebook space has been poor and right now does not inspire confidence, though it does have what I think is the better long-term concept.

The biggest problem for everyone though is that a platform war is pretty pointless in anything longer than a medium term horizon (by which I mean 5-10 years). Just as Google is failing to maintain its grip on attention and Facebook is growing stronger every day, someone will rise to take Facebook’s place and then another will rise to take theirs. This impermanence of pre-dominance is, for me, a defining characteristic of the web, and it is driven by the incredibly low to non-existent barriers to entry online because the WEB IS THE PLATFORM, which fosters competition, innovation and experimentation.

That is not to say that those who succeed will inevitably meet a doom, Google is doing quite handsomely thank you, and no doubt Facebook will do well for some time too. Which means that in the medium term a successful ebook platform will milk the system just as Amazon appears to be doing right now. I just believe that their platform has no long-term, sustainable foundation. Moving against Amazon is mostly pointless, rather the focus should be on finding a way around Amazon using the web as a platform and not relying on another closed platform.

Where does that put publishers? In a familiar spot I would argue. I wrote a piece two years ago about ebooks and how it was important that publishers focus on:

developing an expertise in how to sell content in many different forms and at many different prices to different audiences. Publishers should be platform agnostic, selling wherever readers are willing to buy and not focusing on if it is an e-book, an app, online access, segments, chapters, quotes, mash-ups, readings, conferences, or anything else (a point made Friday on Publishing Perspectives by Clive Rich).

Strangely I don’t think I would change a word of that paragraph today. Nor would I shy away from the other recommendation I made:

publishers need to focus on two long-term objectives: audience development and content curation. Neither of these are specific to digital activities, meaning that they will only serve to bolster the print side of the business as well, whether it declines rapidly or gradually.

I just wish I could recall them when I make my day-to-day decisions!
Eoin

___________
PS: Worth reading all these pieces:

1) The Window Is Closing

2) Why Ebooks Will Soon be Obsolete

3) Microsoft Looking To be Third Time Luck In Its Bid For Ebooks

For the record, the legacy establishment is almost duty bound to protect its position and I  don’t resent the position it held. In many ways I have been a beneficiary of the legacy publishing system. Legacy publishers are in the position they are in because they were successful in an age that valued their corporate skills and in which scale was important and profitable.  Agency was about protecting that model, that profit.  It was couched in language that suggested it was about protecting the value of writing and the incomes of authors (and to be fair, many of those offering those lines do honestly believe them), but really it was about protecting company revenues and shareholders profits. I’m fine with those goals, I’m not fine with pretending or convincing myself I’m being noble when I’m not and I’m also not fine with the reader paying the price for that protection.

Readers were by far the biggest losers in the Agency world. Thus the actions of the big six ran directly counter to their most important stakeholders. The big six hadn’t yet realised that readers had become their biggest stakeholders. They still answered to other management.

The problem is that the publishing system as it stands is being ripped to shreds by digital change.  We do need a publishing industry, we don’t necessarily need THIS publishing industry, the legacy one. There is no reason why any individual publisher MUST survive or that quality publishing won’t happen if the legacy publishers do fail.

The Agency battle was and is not really one over the creation or publishing of quality works nor even one over the price we might charge for those quality works or who sets that price, it is over the allocation of profit/revenue within the system that allows for the creation and publishing of quality works.

Authors will get paid if the big six fail, books will get published if the big six fall, books will get written, published and read if everyone currently in the industry somehow stopped being in the industry tomorrow. Sometimes publishers forget that.

The shame of it all is that if the big six publishers accepted the inevitability of change and directed their efforts towards the new opportunities and the radical restructuring that’s required rather than trying to fight, what I believe is a hopeless and misplaced rearguard action, they would have achieved more AND kept the audience with them.

That’s the key, because resisting puts them on the wrong side of the fight. Resisting the shift towards digital distribution and the attendant earthquake in industry structure makes publishers the bad guys. After Agency, suddenly publishers are not the nurturers of talent but the maintainers of high prices, not the finders of new voices but the conniving capitalists, the slick backroom dealers, not the men and women who live for the written word. Their companies are known worldwide for being sued by the US Government and for alleged collusion rather than for being companies with iconic brands and valuable legacies.

There IS a danger that an non-agency world might (though I think the possibility unlikely) have resulted in an Amazon monopoly, but even if it had and even if the changes being imposed DO lead to some form of monopoly, then at least publishers would have been on the RIGHT side of that monopoly, calling for action, on the side of the readers, the writers and the general wave of opinion rather than falling, as the record labels did before them, into the arms of fear and foolish resistance to change that they cannot control.

So the legacy system made a calculation that Agency could be gotten away with, and they were wrong. It might have boosted their revenues, given them a huge sense of control and power (attractive in a publishing world that has been so buffeted by change recently)  but now, as the tide of blood rushes back out of the head and calmer times (populated by longer more reflective periods of courtroom drama and negative headlines) lie ahead perhaps the big six and those who favoured Agency might reflect not on the loss of Agency and it’s ‘possible’ negative consequences for their business models but on the loss of the moral ground, the real loss of the audience’s goodwill and the battle, not to maintain not just profitability, but, more importantly, legitimacy and to rebuild their image among readers the world over.

It has been a long week!
Weekend Abú!

Eoin

The Justice Department has at last filed an anti-trust complaint in New York against Apple and five publishers over an alleged price fixing conspiracy. (Update: Three publishers to settle)

The decision to sue comes after weeks of media leaks that suggested the government was trying to pressure the parties into a settlement.

The issue turns on whether five publishers illegally colluded with Apple to implement “agency pricing” in which the publishers set a price and the retailer takes a commission. (see here for more details)

The lawsuit has yet to be posted on the Justice Department’s website but Bloomberg News says Apple and five of the “Big 6″ publishers are named as defendants. The named publishers are Macmillan, Penguin, Hachette SA, HarperCollins, and Simon & Schuster. (Update: a Bloomberg report says the latter three will settle. This is consistent with a leak earlier this month).

via It’s on — US sues Apple, publishers over e-book prices — paidContent.

Without DRM, as Berlucchi explained, anybody can sell ebooks that can be read on a Kindle. Once Pottermore decided they could live without DRM, they faced Amazon with a very difficult choice. The ebooks were going to go on Kindle devices whether Amazon wanted them there or not. Either they could ignore them or they could play along. I am sure the “play along” deal includes compensation to Amazon for the sales they refer (as it does B&N and, according to a quote from Redmayne, other distribution relations and affiliations will be enabled going forward.)

In other words, in a refreshing change from recent history, the content owner was able to present Amazon with a “take it or leave it” proposition. They decided to “take it”. They were wise. The game was changing either way.

I’ve long felt that the power balance between authors and publishers has shifted and will shift further as digital change drives home a point I made most clearly in my essay No New Normal: The Value Web (and reiterated here on Futurebook):

All of this will happen despite, or perhaps because of the fact that, the actual slice of value captured by each player changes in size and shape. Publishers will be forced to cede more revenue to authors, the idea that 25% Net is a defensible long-term ebook royalty rate is a farce best forgotten about quickly.

And even earlier (2006) when I wrote about Authors Driving Change:

E-books will push this change even more. There is no reason why authors’ royalties should be the same on e-books as they are for paper books and in many ways there is no reason why the authors cannot sell e-books themselves rather than through a publisher. Why should you sell a paper publisher your digital rights when there is no need?

I think Mike is right to say that Pottermore marks a decisive point of change. It is the point at which owning the brand becomes essential, the point at which the 25% slice for the author stops being enough and the changed power balance between author and publisher begins to bite really hard.

If publishers hope to use author brand and scale to attract readers direct then they need to persuade the authors to work with them. That’s gonna take money and a whole new approach to working with the author. I expect we’ll see more of that.

The other change I believe it will drive even further is that of Niche or community driven content publishing. If selling without DRM enables big  publishers to flourish as retailers (or for that matter niche publishers with scale in a single niche), then there is even more incentive for them to pull readers together in communities of interest (or rather to build stores that appeal to those existing communities of interest) and sell content to them directly rather than spending all their marketing on pulling them to a mass appeal site that only offers them content that works for that reader by chance event or a well placed cookie!

So I see Niche coming back with a vengeance, and community at its side, perhaps even a third horseman in the shape of an industry newly engaged in open standards, weak DRM and a willingness to innovate. That’s rather exciting if you ask me.

When we juxtapose an ebook with a movie, Instagram or pigs that attack turtles, the ebook often loses.

One of the very real truths of our culture is being hidden in the dramatic shift from paper to ebook–lots of people are moving from paper to ‘no ebook’. For now, this is being concealed by the superreaders, ebook readers who are on a binge and buying more books than ever before.

via The null set – The Domino Project.

Amazon says that in the 14 months the program has been running, it has sold over two million Kindle Singles. Seventy percent of each sale goes to the author or publisher, and Amazon keeps 30 percent. Amazon wouldn’t disclose its total revenues from those two million singles, but the minimum price of a Single is $0.99 and most are $1.99 (the author or publisher sets the price). So with an average price of $1.87 multiplied by two million, a rough estimate of Amazon’s 30-percent cut is $1.12 million. (How much are some authors making? See our post later this morning.)

via Exclusive: Amazon Has Sold Over Two Million Kindle Singles | paidContent.

When I got my first royalty check from Amazon, I went to my boss at the bar and was like, “Mike, I quit, dude,” and he was like why, and I was like “Look at this check, man,” and he said, “I’d quit too.”

This is what I’m doing now. My three stories that are out have now sold in excess of 93,000 copies, and I have another Kindle Single that I’m working on for later this year, and hopefully working on a book.

via Exclusive: How Much Do Kindle Singles Authors Make? | paidContent.

There’s so much here but I think it warrants a bit of thought before I blog about it properly!

Eoin