Monday, January 24th, 2011

The downward spiral of ownership and value

This is one in a series of posts on the challenges of ebooks. Conversation about the topic is hosted by the Books in 2025 group. See the discussion topic there.



opinion by Tim

A recent blog post at Dear Author raised the issue of ebooks and ownership rights. Ebooks are redefining ownership toward access rights. New models are emerging, like advertisements in books. Jane concludes:

“I’m sure that there are other possibilities but with the amelioration of ownership and comparable media prices, digital books will come down from their current position and this, in turn, will create new business models and new pricing models. Could publishers resist the downward pressure of ebook pricing by coming up with a business model which would result in increased sense of ownership and thus value to the consumer? Is cloud access that model? What other ways could publishers and authors increase the value of ebooks to consumers?”

I suspect the answer is nothing. The loss of ownership creates a downward spiral in value, and erodes the very notion of paying for books at all.

Defining ownership down. We used to own our books. With most ebooks we own them in name, but effectively we lease them. As Jane documents, the slide toward more and more attenuated concepts of ownership continues.

The process is gradual. Mental models change slower than technology. If the Kindle had debuted with an access-based “faucet” model, it would have failed. Consumers would not have traded true ownership for a tethered, metered and monitored product. But we’ll get there soon enough, as each step away from ownership makes the next step more acceptable. Once you realize your Kindle book is not fully yours, you’ll accept it being mostly not yours. Google Ebooks are a further step away from ownership. Eventually you get to a faucet model, as music has done, either low-price (Netflix) or free (Pandora, YouTube).

By itself, such changes might be culturally and economically neutral. Ownership of paper books wasn’t so much a consumer preference as a side effect of their physical nature, and law followed and solemnized that state of affairs. Maybe the faucet model will produce more readers, more reading, more good books, more paid authors, etc. Or maybe it will produce less. Who knows?

The role of piracy. I think we know. And the trends are negative, for both readers and authors.

Unfortunately, digitization and the faucet model tends to encourage a third option–piracy. Digitization makes it possible, but the faucet model encourages it. This happens in two ways.

First, people who love autonomy and personal freedom rebel against metered and monitored access to reading. They don’t want inconvenient DRM, monstrous and opaque licenses, transfer limitations, constant access requirements or icky, opaque monitoring. These people will turn to piracy to avoid it. (Or at least that’s what they’ll say they’re doing.)

Second, the more ownership is devalued, the less people care about the rights of the seller. When someone sells you something they made, or through a small number of simple intermediaries, it’s easy to see what’s wrong about cheating them. When authors’ work is reduced to a limitless soup, available through shiny digital spigots at cheap, but limited, rates, it’s hard to see where problem with piracy really lies, and easier to rationalize cheating authors.

As devalued ownership feeds piracy, rising piracy in turn devalues ownership. Anyone with an internet connection can rapidly assemble a “library” of books it would have once taken years to build–so why bother building one?

As the logic churns, content sellers will increasingly seek other ways of “monetizing.” Authors will charge for readings, or merchandise. They’ll try advertisements. They’ll start leveraging all the user data they’re collecting to create even better ads. None of this will replace more than a fraction of the book economy, but they will definitely send a message to consumers: You’re being screwed enough to pay for the privilege.


from “Music’s lost decade by David Goldman, CNN Money

Look elsewhere. Does impaired, devalued digital access encourage piracy? Many ebook pundits dismiss ebook piracy. “New models” will emerge. Piracy is better than obscurity. People will pay once everything is available for a “fair” price. The arguments are familiar, and have an air of ritual now. Hip conferences urge publishers to do a swan dive into an empty swimming pool.

Don’t need to take my word for it. Just look at all the other industries that have gone digital. Take music. Physical music sales have been declining steadily for more than a decade, and while digital sales rise, they make up only a fraction of the loss. (They’re not even rising much anymore either.) Revenue from Pandora, Spotify, YouTube ads and the like are loose change next to CD sales declines.

What’s the shortfall? All told, the United States recorded music industry is worth less than half of what it was a decade ago, and the downward slope is only getting steeper. Outside of the big markets, the declines are greater. The Spanish music industry fell 55% in the last five years alone. In China rampant CD copying and file sharing have left a nation of 1.3 billion people with a $75 million recorded-music industry. As a recent Economist report put it, the “worst-case scenario has already come to pass.”

Music has it easy compared to writing. Musicians have always relied on other revenue sources. Performance is the big one, but merchandise and licensing matter too. Authors don’t have the same options. Dickens engineered a profitable reading tour of the United States, as new-model enthusiasts always point out. But how many authors could do that today? How many could fund themselves on t-shirt sales. And will anyone pay authors to read sentences from their novels over an Audi advertisement? The ringtone market holds limited prospects.

The unashamed future. As William Gibson said, “The future is already here; it’s just not very evenly distributed.” I saw that future at a recent technology conference, hosted by NYU. Of course, the participants were all well down the digital road. All read digital books, and many had given up paper entirely. (In certain circles announcing that you haven’t read a physical book in X months is a boast, and people compete to have the highest number.)

But one individual stood out. In a mixed crowd of peers and professors this brave futurist shared her decision to stop buying book altogether. She loved books. She read a lot. But she could find everything she wanted to read on BitTorrent. Nobody objected. It may have been my imagination, but I thought I saw a mystical crown settle squarely on her head. She was the coolest person in the room. She was the future.

Publishers and authors, meet that future. And know that with every move away from ownership you are hastening its arrival.

Labels: ebooks

50 Comments:

  1. elenchus says:

    This analysis troubles me, precisely because I’m persuaded it’s valid, or at least predominantly so.

    I wonder about the emphasis, understandable in itself, upon the market value of book culture. What will reading, writing, and sharing of literature look like independently of its commercial side? I don’t mean: can it survive without a commercial side. Rather, which aspect(s) of book culture are separate from the commercial side of book culture, and how are they going to change due to other trends and pressures? Logically, I know there are such aspects (the sheer love of book and reading, sharing of that with others), but the dynamics are not clear to me at all. The best I can do is muse on the social networking aspects here on LT, but there must be others.

  2. Eric Hellman says:

    Comparing the book industry to the music industry is rife with rabbit-holes. If you want a long-term view of trends in the music industry it’s worth looking at all the data. Here is a graph of inflation adjusted total music sales since 1961. Total revenue is THE SAME as it was two decades ago. It’s gone up and down, up and down, through multiple technology transitions. The book industry, on the other hand, is going through its first major technology transition in centuries. Change happens. Nothing gives book publishing immunity.

    I think these discussions neglect to consider competition with the public domain and free-licensed works. The $10 ebook has competition for readers from the greatest literary works of all time, and that’s stiff competition- very high quality at a price of zero. It also has competition from the unwashed masses. I see my kids voraciously reading stuff that other kids are writing, and giving away for free. Why bother pirating stuff when you can read what your friends are writing? So “professional” literature is squeezed from both above and below.

    As one “pundit” who’s written on piracy, I would note that its biggest impact appears to me to be in developing countries. These markets could be huge growth areas for publishers.

  3. Rob E. says:

    This is an interesting question/problem. I love digital media. It would take a lot to push me back to paper and CDs when I can carry 100 CDs and 100 books on a device smaller than a single physical CD or book. But the ownership issue vexes me. I didn’t switch to digital music until I could buy it without restrictions on what players could play it. When I buy an ebook, I search for an “open” version: no DRM ; easily readable/convertible format. I can get a Kindle version and convert it, but is it legal? Is it moral? Strange questions to ask yourself about something you’ve just paid for. I can use my CDs for coasters, my books balance a wobbly table (heaven forbid), and, while I might question the wisdom of those decisions, I never ask if I have a /right/ to do it. I can even pass on my physical items to someone who might enjoy them more. Digital doesn’t work that way.

    But to me the question is what, if anything, can be done? I really like Jane’s quote. I don’t know if it’s a solution, but I do know it’s something I’d like to see. Because I can’t see the world turning itself collectively away from digital. Even if the industries did, it would only serve to drive up piracy. The music industry has suffered, but looking at the path to their current position, I see what I would consider several missteps along the way. Consumers were resorting to piracy long before the industry offered a comparable, digital product. Even when the music industry came on to the digital scene, they started with DRM-heavy options that often had compatibility issues. We’ve finally moved beyond that, but what hurt the music industry more, very existence of “piratable” digital media, or the fact that the music industry didn’t offer their own products in a comparable, digital format until several years after digital music became popular? It’s hard to say, but it does seem somewhat telling that the industry eventually dropped its attempts to control the access to the files you buy from them. I wonder if we’ll see a similar move towards open and accessible ebooks, and I wonder if that would affect the sense of ownership. I know it would in my case.

    Also, while it seems hard to argue that piracy has a strong effect on the profitability of digital enterprises, it also seems like it might be difficult to determine the extent to which piracy is responsible loss of profits when other factors also certainly play a role. The economy hasn’t been great for many business, virtual and physical. And the increasing role of the internet in purchasing has taken some of the control and profits away from publishers and producers. Several of my own recent music and ebook purchases were initiated right from the creator’s web site. There was likely no publisher or producer involved in that transaction, and when someone is compiling statistics about how “the industry” is doing, they are likely looking at the big intermediary companies, and some money may be going from consumer to creator without involvement of those intermediaries.

    So, yes, some people need to feel that they own their media so that they will pay for it. But at the same time, when looking at industry trends, I feel like we need to define our goals as preserving revenue streams between consumers and creators. A failing publisher or “record” company may not signal the death knell of the industry. It may just represent a shift in how the industry works. Like, for instance, I still think of it as a “record” company in spite of the fact that I no longer have a record player, so clearly there’s some forward thinking needed in my own mind as well as elsewhere. But ultimately I don’t think even piracy can succeed without successful business to leech off of. If creators make no money, they can’t afford to create, and without creations, there’s nothing to pirate. So it’s impossible for me to feel that the situation is entirely dire. I have to believe that solutions will be found. I’m just not certain solutions will be found by the business that were built selling physical items.

  4. gous says:

    Tim Spalding as Thomas Hobbes? ‘And the life of [the] writer, solitary, poor, nasty, brutish, and short.’

    A gloomy vision of the future but it has the ring of truth about it. My young friends find the idea of paying for downloaded music as simply preposterous, ethical considerations does not come into the picture for them. They will certainly not pay for ebooks as the habit of piracy once acquired is very hard to break.

    Since hard figures are impossible to get, or trust, let me offer a first hand view of pirate sites. The very largest ones are enormous aggregators of movies, music, software – and ebooks. They are first class examples of social networking with requests for goods, discussions of favourites and so forth. Service is generally of the highest standards, ebooks being presented in any format asked and frequently works not available elsewhere offered. Pricing is not an issue.

    The wearisome cant that is offered elsewhere to justify filesharing is refreshingly absent. Most here indulge themselves because they can, no other justification needed.

    Nor would I trust Google as to the prevalence of piracy as many of these sites deliberately cut themselves of from its search engine.

  5. I agree with this assessment. I have frequently wondered at the willingness that people buy ebooks for the iPad and Kindle. It was clear after the instances of Amazon wiping out a book copy and, I think on one occasion discontinuing someone’s account which rendered the books unreadable, that DRM’d books are a rental scheme.

    Although I know people who don’t care that the books are $10 and exist in files that will probably be useless within a decade, because they look on them like paperbacks: items they don’t keep and will give away, sell, or throw out eventually.

    However, iPad and Kindle and other DRM’d books will not be able to be given away, lent, or sold. I think the true test of Apple, Google and Amazon’s neutrality over providing books as pieces of information has not yet come to pass. None of those companies have shown that they are above censorship, either by government pressure or for profit. This will be very bad for citizens of both the USA and developing countries.

    That said, I think the textbook industry is going to crash far worse and sooner than the popular press industry. The print and electronic version prices rise above inflation and cost far more than non-textbooks. I suspect that as college costs continue to rise, students will find them more and more on torrents and warez sites. The publisher expectations seem to be far more out of alignment with consumers than in the popular book industry. And for the most part, the under-30 population does not seem to feel any remorse or guilt from torrenting, whether music, video or books. Textbooks tend to average $100-150 for print, and $50-$90 for electronic. I spoke to one textbook sales person who wonders why students don’t snap those “bargains” up. I suggested they lower the price to $9 (for electronic).

    For me personally, I don’t think I will buy an e-reader soon. I can read lots of good DRM-free books on my computer and my phone. I don’t think that a $10 ebook that is really just rented is a good value when I can get the used copy of the print for the same cost.

  6. Ryk E. Spoor says:

    The problem with this discussion is that it combines waaaaaaaayyy too many things into a single omnibus, and those things should not, and cannot, be combined properly. The largest single error is combining the “not really owned” portion of the electronic age with the “pirates” issue.

    The fact is that the pirates are pretty much irrelevant. Note here that I am a published author, whose books are (I know for a fact) torrented by pirates, and who was once part of one of the ill-fated filesharing companies (not my original choice, the company transformed itself before my very eyes, rather like a werewolf in the full moon). I’m also a long-time anime fan who’s watched THAT industry striking the digital storm as well. So I’m well versed in how this stuff works out.

    And the pirates aren’t your customers; the only time this is not true is if your industry is so unnaturally controlled and constrained that you have been able to charge unreasonable amounts for your product in unreasonable ways — which was what smacked the music industry, hard. People began to understand that those $20.00 CDs actually cost a few pennies to make, and that a big seller could amortize its cost out to make the whole thing five bucks and still make a profit. Moreover, they had for a LONG time been wondering why only certain songs were available as singles.

    The pirates showed that it did not HAVE to be that way. (And I’d written to three different record companies warning them of this coming storm in 1991; not one of them answered, even with a point-and-laugh). Eventually iTunes came along and demonstrated that people WOULD pay voluntarily for what they could get for free; all you had to do was offer the stuff conveniently, in the format desired, and at a reasonable price. Make it UNREASONABLE or put too many restrictions on it, you’d fail.

    The pirates in other industries often aren’t even reading or watching the stuff they get. Otaku No Video shows a “fan” with a similar mindset from before the digital age. It becomes about getting the stuff, rather than about the stuff itself.

    DRM and other restrictions are viewed as unreasonable limitations by the market, and thus the piracy of THOSE items shows a fair effect from the actual potential customers. Non-DRM, much less. Basically, the customer resents being treated as a criminal from the get-go, and BECOMES a criminal in response.

    The real kicker, though, is the fact that even if every pirate WOULD have been a sale (and the vast majority would never have purchased anyway), the author or performer’s real enemy still isn’t the pirate. It’s obscurity. Aside from J.K. Rowling (possibly), the vast majority of your potential customers HAVE NOT HEARD OF YOU. The pirates at least spread your name somewhere, and if a few buy your book or music, hey, it’s a few more than you were going to have otherwise.

  7. Abigail says:

    Some interesting thoughts, but this

    Musicians have always relied on other revenue sources. Performance is the big one, but merchandise and licensing matter too. Authors don’t have the same options.

    Is a false equivalence. The number of published, successful authors who makes a living off their writing is a tiny fraction of the population, in no way comparable to the number of working musicians who live off music sales. Most writers teach, review, or have jobs completely unrelated to writing even well into their writing careers. These options were being exercised long before the digital book revolution, and will continue to be even as it grows.

  8. gwern says:

    > ‘Every time I write about the impossibility of effectively protecting digital files on a general-purpose computer, I get responses from people decrying the death of copyright.
    > “How will authors and artists get paid for their work?” they ask me.
    > Truth be told, I don’t know. I feel rather like the physicist who just explained relativity to a group of would-be interstellar travelers, only to be asked: “How do you expect us to get to the stars, then?”
    > I’m sorry, but I don’t know that, either.’

    –”Protecting Copyright in the Digital World”, Bruce Schneier http://www.schneier.com/crypto-gram-0108.html#7

  9. Scot says:

    I don’t believe that you can look at the nose dive in music sales and claim that it’s all (or even mostly) due to piracy. In 1999 the music industry primarily sold expensive shiny discs where if someone wanted only one or two tracks off that disc they’d still have to buy the expensive disc. Now people can buy tracks individually, often for a cost less than cost-of-shiny-disc/number-of-tracks-on-disc. If anything, I’m surprised they’re still making as much money as they are.

    I really doubt that piracy is one of the music industry’s biggest problems – selling new products that are just not as profitable as old products is their biggest problem. I think their second biggest problem is that most new music sounds much the same as all the other music produced in the last 60 years (bored listeners do not make for happy purchasers).

    So, is what happened to music industry the shape of things to come for the book publishing industry? I’m certain that book publishers won’t be able to charge anywhere near as much for ebooks as pbooks for very long. I’m also certain that ebooks lower the barrier to entry into the book market, so I would expect competitive pressure to drive down revenue from book sales. Fortunately for book publishers a book is still a book and no one is going to buy “chapters 3 and 5 of Ringworld and chapter 8 of Inferno”, so I doubt the slope of the decline will be anywhere near as steep (though anthologies as we know them now are probably not going to be with us for much longer).

  10. David B. Wildgoose says:

    The publishers are also quite deliberately forcing people to pirate books as well.

    Allow me to give an example.

    First, let me explain that I have a voracious appetite for books and we have nearly 4000 books in our house. So many indeed, that my wife has now banned me from buying physical books for the whole of this year.

    Fortunately, I now have a Kindle, but I also use Stanza on my iPod Touch which is very convenient when you are stuck in a queue or generally have 5 minutes to kill. However the kind of text you read in these circumstances is “light”, entertaining and not requiring deep concentration. A good Space Opera (a sub-genre of SF) for example.

    So having bought such a book on Stanza I naturally expected to be able to purchase subsequent novels in the series – only to be rejected because as an Englishman I don’t have a North American credit card. I contacted Penguin USA to complain only to be told that I could order a physical book to be shipped to me via international mail – they just weren’t interested.

    So I went online and grabbed the book from a Torrent, incidentally picking up a large number of other books in the same Torrent which I now won’t bother buying either. After all, why should I? I have them sat on my hard drive.

    So there we have an example of a good customer wanting to hand over cash for the format I wanted and being rejected.

    It’s attitudes like these that are damaging the industry.

    Personally, I would prefer to go direct to the author. I bought an album in FLAC format from Australia yesterday direct from the musicians on the strength of a track they had made freely available on AllAboutJazz.com – if publishers don’t care about readers then I am sure similar sites will be set up for authors, and the publishers will have killed their own industry.

  11. Wes says:

    In response to Ryk (and to some of the ones above): I’m a bit of a combination case. I read voraciously, so much so that I can’t afford my habit. I spend money when I can afford it, I hit the library weekly, and … I download ebooks and read them too.

    Am I a pirate? Yes. I don’t pay authors for their books, on occasion.

    But I’m also a reader, and I *do* give money to the authors when I can. I’ve sent at least $300 in the last year to Baen via WebScriptions (some to Ryk, even, although I’m not sure how much given I don’t know how the Baen contracts are negotiated).

    So where do I lie on the grand spectrum? I pay authors for new works. I buy hardcovers of certain authors when I just can’t wait for paperback or e-edition. I buy ebooks monthly. And I also torrent/download at least a dozen books a month.

    My suspicion is that if you make the ownership of an ebook easy enough, with no DRM, and respect your consumer (i.e. me), they will give you money happily. Baen has succeeded in this in my opinion, and I wish more publishers were willing to follow suit.

  12. Tom Crowl says:

    It may be possible to connect the author (creator of content) directly to the reader. And I agree… the faucet model isn’t the way to go!

    Its all about the model. The technology is easy. (While the model described below arose as a response to both the Citizens United decision and issues in the monetization of Internet news/journalism seeing your post made me wonder if it could have application here as well. It’s just a thought.)

    The Commons-dedicated Account System:

    A self-supporting , Commons-owned neutral network of accounts for both political, charitable and speech-related monetary contribution… which for fundamental reasons of scale must also allow a viable micro-transaction. Such a network ideally should maintain its own cloud and bank. Accounts may be created and/or maintained with zero balances and/or only momentary balances during a pass-through transfer (monetization model requires no burden on the actual transaction.)

    Demo & FAQ Chagora (dot)com

    A very abbreviated logic chain:

    1. There’s potential in the political and speech-related microtransaction for networked citizen lobbying, candidate support, journalism, etc. if it can be harnessed.
    2. Problem is the cost and hassle of the microtransaction.
    3. This problem is solved by system similar to x-box points (which is how they handle microtransaction issue for certain system content).
    4. Additional problem is catalyzing the network
    5. Addition of charitable potentials solves this for a variety of reasons related to system monetization and a more general user-utility
    6. Patent has just been granted for this mechanism: Patent #7,870,067
    7. Establishment of useful network opens up new fields for empowered association
    8. There are theoretical reasons for need for such a system but points 1-7 above are about a PRAGMATIC implementation.
    9. Should any of the points above be in doubt (which is reasonable) ask a question.

    LinkedIn http://www.linkedin.com/in/culturalengineer

    Social Networks & The Social Organism: Healing the Breach
    http://culturalengineer.blogspot.com/2009/05/social-networks-social-organism-healing.html

    Finding Roots in a Shifting Landscape: Facebook and the Future of Social Networks
    http://culturalengineer.blogspot.com/2011/01/finding-roots-in-shifting-landscape.html

    Catalyze the Network!

  13. mark says:

    Couple of points:

    First off – as Billy Bragg pointed out there is a lively music industry – it’s just not the one everyone is measuring. I still buy loads of music, more than half now comes directly from the people who make it – from niche artists like Richard Skelton and Matt Stevens to well known names like Neubauten (who still flirt with the industry)

    “hey don’t want inconvenient DRM, monstrous and opaque licenses, transfer limitations, constant access requirements or icky, opaque monitoring. These people will turn to piracy to avoid it” – Yes, yes and thrice yes! and in fact I have downloaded stuff I already have legally paid for in order to get rid of DRM. What is more I will pay more for things that don’t have DRM on them.

    The music industry has encouraged piracy – if they had started off with DRM free itunes and wide availability in the first place then less people would have bothered trawling the nether regions of the net in the first place. Of course there will alway be piracy – my (very large) music collection started off with shared tapes with mates when I was a teenager.

    DRM, region locking (why the hell do I have to trick amazon into thinking I’ve moved country to buy some books) and false scarcity are what is increasing piracy. If it was all available, easily and without all the crap most people wouldn’t go near pirate sites with their soft porn adverts and malware.

  14. euicho says:

    While the author has made a very good point with the figures from the music industry, you must keep in mind that music is very different, in that whether you get music from a CD or digital, it is always consumed the same–listened to with headphones or speakers. Books, on the other hand, were always read until recently. E-paper has reduced the differences between the printed word and e-paper, but reading, holding, and displaying paper books is still vastly different from doing so on an e-reader.

    Perhaps I’m oversimplifying, but I think one way to combat this downward spiral is to put much more emphasis on the value and worth that physical books have over ebooks. Sure one can build a digital library of thousands of books, and have them all accessible on one’s kindle, but where is the beauty of that? The individuality of trade paperbacks and hardcovers? The beautiful rows of shelves lined with dusty tomes? This is what needs to be emphasized when battling ebook piracy. The other aspect to battling it is to keep ebook prices low enough that someone who does only prefer ebooks will buy rather than steal. Dropping the price also sends the message that ebooks are worth less than their print counterparts.

  15. Terry says:

    I have to agree with your analysis, but I am a little more hopeful of the future. Firstly, the music industry still has not learned anything from piracy. There is still no easy way to purchase music and have it DRM free and without your email address embedded in the song. I don’t buy music anymore, but I also don’t steal it. I wish there was a way to reward the artists for creating something I like, but the problem is similar to wanting to help cause X in Africa, but having a feeling that most of the money is going to the administrators/organization rather than the people who need it.

    Books might not have as difficult a time as music because I think they have a slightly different place in pop culture. Books, and this is just my opinion, have a much higher value than a song does. For one, the time difference you invest with each is huge, and someone’s favorite book I would argue offers more value than the latest top 40 song.

    I have a lot more to say on this subject, but my final point is this: The more we can mimic physical books or cds, for example, that is the buyer of the electronic versions has rights equal to what we have with them, the more honest people will feel the product has value and will be worth something to them and will be willing to buy it.

  16. Nicholas says:

    I just wonder how the library fits into this argument. Books have always (or at least for every living person’s lifetime) been available free of charge from public libraries. Music and video, too. Has this had any impact on sales of the physical or digital versions of these media? I don’t know the answer, but I think this point illustrates some of the potential flaws of this author’s argument.

    There’s nothing natural about profiting from creativity. These are socially constructed relationships that we’ve created to reward creativity in the context of our social-economic system (i.e. capitalism). The new models of compensation (or non-compensation) are challenging the old models, but we need to remember that the old models are not perfect or sacred and strive to make the new models, at least in my opinion, more equitable to _all_ involved (consumers, publishers, creators, etc).

  17. Jeff Langenderfer says:

    There is certainly some support for the proposition that pirating can help artists and authors, at least under some circumstances. If you doubt it, check out this persuasive piece by Janis Ian . . .

    http://www.janisian.com/reading/internet.php

    But it is also true that an entire generation has been trained that content must be free. The consequence is that for those industries where renown is not easily monetized except through tangible article sales–such as book publishing–the incentive structure for authors is almost certainly going to be radically transformed in the next ten years or so, perhaps to the detriment of authors and almost certainly to the detriment of publishing companies.

    In industries such as music where it is possible to capitalize on fame in ways other than selling more things, piracy and digitization (the two really do go hand-in-hand) have wrought a massive power shift from corporate intermediaries to the artists themselves as well as an overall decline in industry profits. But it is not necessarily clear that this has resulted in a commensurate decline in payments to artists, as the weakening of the music companies has perhaps simply enabled artists to capture a greater share of what music patrons have spent.

    It will be interesting to see how this plays out in the book publishing world as piracy grows and authors have to discover new means of compensation. Maybe there will be many fewer books written. Or maybe new methods for getting paid will be discovered. One thing is certain, the world will be very different ten or fifteen years hence as a result of this upheaval.

  18. T Polyphilus says:

    “Liberality! we want not Liberality. We want a Fair Price & Proportionate Value & a General Demand for Art.” –Wm. Blake

  19. David Starner says:

    I don’t know; my music buying has gone way up since Amazon has made it easy to buy MP3s. Of course, in a world without digital music, I would probably buy a negligible number of physical music storage units; I’ve bought maybe 20 CDs in my life.

    I think gous’s pirate sites are irrelevant. If it’s not on Google, it doesn’t exist to most users. A hidden community will never be major enough to threaten the publishers. It’s the mainstream you need to worry about.

    I have to agree with LisatheLibrarian; when Springer-Verlag wants to sell me a math book for $75, when I know that a RPG company will sell me a book with a comparable print run with twice the number of pages and in color for $35, it rankles. The only reason they can get away with that is the person choosing the book isn’t the one buying the book.

    I try and support authors; I try and buy books from living authors new when possible. It’s hard to feel real bad about pirating a book that’s permanently out of print.

  20. Alex says:

    I think no matter how many will pirate, there will always be enough people that will buy stuff. There may be a decline in sales in the future, but a market will stay.

    For example take the PC gaming community, all games are pirated, still many are sold and I dare even say there have been am increase in games sold due to digital distribution. Look into steam.

  21. gous says:

    @Starner

    The sites can be found easily enough. Many of the goods can only be ‘seen’ though once you register so as to prevent take downs. As to not being a threat, well, many boast millions of active members and given the frenetic activity on them there is no reason to disbelieve such figures.

    I live in what was in what was once called the third world and here piracy is a way of life. Many of those connected to the net deal with or use pirated goods. Amongst the youth it is overwhelmingly dominant for those who are digitally literate. Good luck to content creators with getting them to pay in the future.

  22. Alex says:

    I don’t thing a US or UK author would worry too much if some somalian pirate would read a pirated book. For e-books at the moment the main target audience would be the USA.

  23. David B. Wildgoose says:

    I see my comment wasn’t approved.

    I wonder why? /sarcasm

  24. Opally says:

    I like Ryk’s comments above. This essay bemoans the devaluation of books as they evolve into digital information systems, and anticipating additional devaluation as a result of increased piracy, which will squeeze the narrow profitability of the publishing business, and reduce the livelihood of authors.

    Are books information or artifacts? Some books are delivery systems, and some are intended to be experienced and savored. In most cases, ownership is overrated. The vast majority of what’s published today isn’t worth reading. Filling up the shelves of one’s house with such works isn’t worth the expense of the shelving, much less the cost of such books.

    Many books are consumable commodities: one reads them once. For such purposes, our public libraries try to strike a balance between what’s worthy and what’s popular, but they cannot meet the needs of all users.

    The business model of publishing will change, inexorably, to reflect the quality of the products and the way they are consumed. The music industry, if we recall, was until recently a vast middle-man, a monster of advertising and domination, whose interest was to make money for the business owners, not for the artists. For an older example, look to the Hollywood film industry, and how it changed.

    Hasn’t there always been piracy of printed books, too? I recall visiting shady operations where remaindered paperbacks, covers torn off in advance of pulping, were sold for pennies. But there’s no argument that digital products are more easily pirated than physical ones. On the other hand, isn’t it the nature of readers to be more law-abiding? It’s hard for me to imagine that many thousands of readers will use bittorrent to download books (except where books are banned or censored.) I’d want to see some figures and research on that.

  25. Tim says:

    “I see my comment wasn’t approved.”

    It was approved, you twit. Do you really think I’m approving or denying views because they disagree with me? Good grief, I don’t do most of the approving—an employee does—and all we’re doing is screening out obvious spam, of which we get a huge amount. Get over yourself!

  26. David Starner says:

    @gous: What would a million users look like? I can’t imagine forums that were actually frequented by a million people. Personal interaction doesn’t scale at that level; just the clueless n00bs would make the forums unusable, not to mention 10,000 requests a day=3 a second. LT is a site that claims 1,269,870 members. In terms of how many distinct members actually visited last month, I’m betting it’s more on the order of 50,000. When accounts are free, people get them and don’t come back, or give up after a short while.

    If they really did have a million users, they’d be one of the biggest sites on the web, and hardly out of the copyright groups notice.

  27. Ethan C. says:

    As a librarian, it’s kind of an odd subject for me to think about.

    My profession is built upon an access-based model of book use. A library patron doesn’t own their borrowed books any more than a Kindle-user owns theirs. There’s actually something very similar between a library that loans books to its patrons and an Amazon or Google server full of books that rents out access to subscribers.

    But these two models, though they may be similar in form, arise out of very opposite values. The digital book-rental model comes from the desire to preserve ownership rights as much as possible in a context of extremely easy digital access. The library model, on the other hand, originally comes out of a desire to expand access capabilities as much as possible in the context of the inherent ownership limits of physical objects.

    So it’s kinda like Amazon and libraries are arriving at the same point from opposite sides. Like I said, it’s a little odd.

  28. Nick Luft says:

    That said, I think the textbook industry is going to crash far worse and sooner than the popular press industry. The print and electronic version prices rise above inflation and cost far more than non-textbooks. I suspect that as college costs continue to rise, students will find them more and more on torrents and warez sites. The publisher expectations seem to be far more out of alignment with consumers than in the popular book industry.

    I would like to talk about how the ebooks are changing libraries, with reference to text-books.

    I work for a commercial library.

    We no longer provide a loans service and our members access our books and journals as digital copies bought from various aggregatiing services. This suits us and most of our members very well. We have a global membership and only two libraries, London and Edinburgh, UK.

    Recently we bought an ebook for GBP 95.00 from our aggregator. This same ebook is available from the publisher for GBP 29.99.

    We queried this difference with the aggregator. They replied and explained that the text book publisher is worried that a library copy of their ebook means we will no longer buy multiple copies to safisfy projected loan demand.

    I am not happy with this. But I can understand the publishers worry.

    My suggestion to both publisher and aggregator is if we are moving to a world where we hire or rent ebooks, rather than own them, why not introduce a model whereby libraries pay per loan.

    This strikes me as very transparent. And also will deliver very good usage statistics to the publishers and authors.

    Do you think this is a good idea?

  29. revelshade says:

    This quote seems relevant:

    When it comes to the economics of online publishing, poets are way ahead of the curve, having not been paid for our writing these last several centuries. To all those prose writers and journalists bemoaning their lost paychecks I say, welcome to Poetry Land, Comrades!
    - Campbell McGrath

    My own gut instinct, based on no expertise whatsoever, is that in the future everyone will be a writer and (almost) no one will get paid for it. We will all write blogs and survive on paypal donations made to each other, like the residents of the little village who made a precarious living taking in each others’ washing.

  30. Andromeda says:

    Do you know much about how webcomic economics work? I don’t, but it persistently seems to me that, one, they’re been doing much more sophisticated work on micropayments and alternative models than anyone else, for longer; and two, they’re generally entirely left out of analyses for other media. I’d love to see them brought in, but I don’t have the understanding to do so.

  31. drmike says:

    Tim, if this is so important to you, why are direct download links for works allowed here at LT and reports of them ignored by staff?

  32. As piracy becomes acceptable and the marginal value of information drops to $0, creators of high-value content will simply do something else with their time and skills. My guess is that those with the best marketing skills will survive, which is a shame, because I doubt there’s a strong correlation between good marketing skills and good content creation skills. I suspect we’ll end up in a world of mediocre content, with a consumer base that largely isn’t capable of telling the difference between high and low quality.

  33. jlabeatnik says:

    I just think that books when bought in hard copy… should come with a code for an electronic version. The electronic copy can be “owned” in the various stages of leasing or what have you.. but you can still have a fully owned copy.

  34. Tim says:

    They aren’t allowed. Point me to the report?

  35. drmike says:

    Already did, Tim. Thanks for dropped the ball yet again.

    And thanks for the rude email.

  36. Tim says:

    I’m sorry if you think the email was rude. I saw your comment and immediately wanted to know where the link was, so I could remove it. I wrote:

    “Where is the link? It should definitely be removed. (However, where is
    it that YOU can’t remove it?)

    Tim”

    You can put a please, thank you, and everything else around that if that’s what floats your boat. I figured your intention was to get quick action.

  37. Tim says:

    After crawling through your messages I finally found that back in July you wrote on “Talk about LibraryThing” a message about one link in a review.

    I’m sorry, but that’s:

    1. not a group we necessarily look in
    2. a personal review
    3. obviously not a spammy link
    4. something you could flag
    5. from a member who participates a lot on the site, and whom you could have discussed this with
    6. Not even a working link!

    I’m sorry you regard this as a “dropped ball.” I regard it as a single questionable broken link in a personal review.

  38. rckoegel says:

    i prefer free access to information, pirated if it must be; though unfortunatly as i have great respect for the authors.

    we have business models in use today in the US that have the ability to allow free access to all information while still providing livable income to those artists responsible for creating the information and those institutions responsible for distribution, or providing the databases and access thereto.

    free doesn’t have to mean that no money trades hands, many non-profits still take dues or user fees to stay afloat, but this cost is in turn a simple trade of a ratio generally resembling 1:1 (all true costs considered). whereas the sale of CDs for profit has in the past resembled ratios closer to 10:1 in the sellers favor; and perhaps only 2:1 in the sellers favor for paperback books (i couldn’t find any clear information of printing costs on the fly).

    point is, capitalism doesn’t work forever, it can’t work indefinitely. mathematically the economic system is missing functions necessary for it to ever be sustainable. and sustainability is the most anyone can hope for realistically.

    trade systems designed to allow for swaps of equal value are the only systems capable of allowing wealth to be evenly distributed. evenly distributed wealth equates to even distributed buying power, et cetera.

    organizations designed to allow for, promote, and possibly guarantee trades of equal value are the only organizations capable of allowing for economic power to be shared equally by any community. for profit organizations can not profit from this activity so the simple answer is to use non profit organizations in their stead.

    to put it simply, co-operate.

    as far as books are concerned there are already non-profit databases in existence capable of hosting and providing free access to free reading material, all that needs to be created is a venue for the creators of the included material to be paid for their work. ‘national book writers co-operative’ perhaps? with a charter that actually limits the maximum income produced for any single piece of work, despite it’s popularity?

    as long as the max was decent enough to survive (comfortably) i don’t see how anyone could complain… “oh no, i only made 1 mil off each best seller, shucks. and each sold 200 million copies; at near cost to produce and distribute.”

    perhaps cost to produce and distribute could account for the cost of the entire life of the writer. say it costs 200k for a writer to live comfortably in the US. each book still within ten years of age since inception could sell for say 1 dollar over cost of distributing until the authors made the equivalent of 200k a year max, for a max of 10 years. this would make a 2 mil cap per book, as long as it sold 200k copies per year, after that it would be free (or traded at a 1:1 ratio without any payment made to the author).

    physical libraries could still exist for the purpose of sharing hard copies; which could actually be printed on site with small printing presses using the same system as above for cost. but all digital copies would have to be purchased one per person (lifetime access would be granted, no digital sharing).

    sure, some piracy would still occur, but at a cost to whom exactly? if it’s a good book, it’ll sell, and all those involved will be able to make ends meet. the piracy would be trivial; as i believe it is today.

    oh crap, wait, this would also put all major publishers and book sellers out of business…. and those jobs… oh my. right? wrong? it opens up more jobs, provides honest work to honest people, promotes honest and ethical action, and provides a strong sense of inclusion, equality, and community to everyone involved.

    stands to reason that when a community openly promotes greed and selfishness, the level of happiness and satisfaction enjoyed by that communities members will only continue to decrease over time. while doing the opposite will have the opposite effect.

    governments have proven their inability to do this in the name of the public, so perhaps it’s time the public starts doing this for themselves?

  39. David Starner says:

    My major hobby is roleplaying games; frankly, since around 1980, no one has ever got rich off roleplaying games. Even in hardcopy, we’ve had a situation where there’s a few people (working for a few major companies) that can make a living off the field, with good people constantly being lost to other fields. I can’t imagine ebooks helping the sales of the biggest players, but there’s a lot of people who are willing to pay for the PDF, a lot of older works seeing the light of day again because of PDF, and a lot of new work that’s only getting published because ebooks are so much cheaper and more profitable than print books. (One publisher is unhappy that sales of PDF are so small, but even so they make more money then they could have physically printing and selling a print run that was 3 or 4 times as large.)

    And yes, there’s lots of good, free stuff out there. But usually the published stuff is better because they have the money, people and motive to polish it. I don’t see that changing. Part-time publishers employing part-time people can still turn out a good product, and I suspect even if all writing goes this way, they still will.

  40. Betty says:

    People will always have this argument in their heads just before they buy something: Can I find it cheaper or free?If so, way should I pay now?
    Considering this thought, most of us will prefer to get something online, free of charge, then spend precious money on it.
    I for one, am a firm believer in ownership rights and I believe that if you love a movie, or a book – you should pay for it.This way you will help the author survive and write or make more things that you will enjoy.

  41. Chuck Gilbert says:

    I prefer the 100 percent ownership model: a tangible,palpable 3-Dimentional book!

  42. John says:

    This article puts forth a view that is, in my opinion, misguided. Instead of focusing on how much money authors are losing, lets focus on how much more affordable reading has become. Let’s face it – the percentage of writers who “make it” under the old model was very small and by no means an accurate sample of the cream of the crop. As e-books become more accepted the barriers to entry are reduced and lesser known fringe authors can get their work out there.

    That said, many people (myself included) truly value physical books – both for the experience and, as mentioned in this article, the sense of true ownership accompanying their purchase. While the demand may go down, it will never fade away to nothing. I envision the future of physical books will be print-on-demand. This favors the author as most of the cost will go directly to their pocket. It also favors the reader as they will be able to order the specific edition the desire (hardback, paperback, large format, luxury leather bound?)

    In the end, the only ones to really be negatively affected by the new model are the middle men and their chosen few. Readers get more variety, greater choice, and lower cost. Authors will enjoy lower barriers to entry and a larger cut of sales.

    This is a complex issue with many other factors which are very significant. I think the comments in the article are telling with regards to the music industry. It has done everything in its power to resist progress and it is suffering for it. When artists (such as NIN) embrace the future the succeed wildly.

  43. Sean says:

    Tim,

    Years ago in college I attended a lecture by the chairman of our department on ethical behavior. In his speech he said that the copying of textbooks was unethical. At the end of his lecture he asked for questions and I asked if I had understood correctly. He told me I had and so I asked if it was ethical to charge $100 for a textbook that cost maybe $10 to make, just because they could. I got a standing ovation.

    The error the music industry made was to charge ridiculous amounts for a music CD. They are close to $20 each now. As the price rose so did they incidence of unauthorized duplication.

    I see the same thing happening with books. I just bought two copies of a book I have been waiting 5 years to come out, $26 – each. That is too much money. It is why I buy most of my books used, off Amazon. If they were priced reasonably I would be happy to buy them new, but really $7-$9 for a paperback. When you corner the market, monopolize it, the supply/demand curve breaks down. That is, people do other things besides buy or not buy.

    They are currently charging too much for books I can only use on a Kendal. If they product breaks and I decide not to replace it all my books are gone. I can’t transfer them to a computer or back them up on a disk. Until I actually own my copy I will not use electronic media for my reading material, until I have no choice.

  44. As an aspiring writer I see this “wave of the future” as a depressing devaluing of the writer’s work. If you have never sat at a desk and spent hours working to create a world, a character, a story worthy of a reader’s time and emotional investment you don’t understand the insulting slap in the face it is to have the technocrats tell you that your work is not worth any payment and it is so easy to steal they will never pay for it.

    How many wonderful world-changing stories will never see the light of day because the writers have read about this “brave new world” and decided if what they write is not worth printing in a physical book, is not worth payment for the pleasure it brings, then why bother writing it at all?

  45. Robert says:

    Supply, demand.

    I haven’t seen any of that here. Supply is going up, because out-of-print books being made available as eBooks. Demand stays the same (I guess). Simple economics tell us that, yes, books will be worth less, economically.

    The author above me: I hear you! I always try to support authors I like. That is why I don’t mind paying for books, because I see it as an investment. You get me money and hopefully feel motivated to keep writing great stories.

    But my patience is tried when for the countless time I’m told I can’t buy an eBook because of geographical restriction, or the eBook has an insanely high price compared to the paperback version.

    So yes, I do occasionally download an eBook. But I try to support the creator by buying the paper version if I liked it. Or if I can donate directly to the creator if it is possible. This gives me the greatest pleasure, knowing I’m directly supporting the author. Unfortunately this option is often unavailable.

    More authors should think about directly binding their readers to them, by making clear that they can only keep writing if they are financially supported. I would do this gladly and I have done this. But, there will of course always be writers who won’t make it, because they write books nobody likes. Keep in mind, that.

    I don’t see to future of books (or music or film or tv) as gloomy as Tim. I think as long as there are people who value these things and their creators we (together) will find a way to make sure creators can make these things. It may take time, a lot of time, history is long and getting longer. Things don’t always workout in just a few decades. This is the uncomfortable truth of life.

  46. teeeeevo says:

    I was just thinking about the fact that although I own many hundreds of paper books, the author has in many, if not the majority, of cases not received a penny, as most of my books are bought in charity shops or second hand on the internet. Maybe while this revolution to digital is going on and authors potentially losing a great amount of income, charity shops, second hand book dealers, internet sellers etc could give small royalty to authors or publishers, especially considering they will likely be getting a massive influx of second hand books from people switching over to digital which they can sell to diehard paper book lovers like myself.

  47. Soliony says:

    The whole concept of “ownership” of a book is a sad chimera. In what sense do I “own” “The Brothers Karamazov”, other than the existence of a squat little pile of paper sitting on my bookshelf? The notion that I have some sort of proprietary rights over it and that this somehow enhances my sense of self worth is a pathetic delusion. Poor old Dostoevsky doesn’t fare much better. Worse, in fact: he’s dead. If people (including me) have been deluding themselves in such a manner for hundreds of years, there’s nothing going to stop us from fantasizing similar “ownership” rights over ebooks or any other virtual commodity. I notice I can pay $19.95 for a “priceless copy” of Kate Middleton’s engagement ring and thereby “own” a piece of British history. I can also buy a piece of styrofoam cheese, stick in on my head and “own” a Super-Bowl victory. Frankly, the sooner and more completely the value of this kind of ownership spiral down to nothing, the better for me. But it won’t happen, because I’m totally demented.

  48. Marie says:

    I admit to not reading every comment, so if this has been said already – my apologies.

    I had a physical hard back copy of Harry Potter and the Sorcerer’s Stone. This was a well loved book by myself and each of my 6 children. It had been lugged to so many places and activities that by halfway through my son’s 3rd reading of it, it just gave up and fell apart.
    *Now, here’s my point – I could not just go and pick up another copy of the book from B&N just because I bought it once. You own that individual copy. On the other hand, I bought an e-book for my nook. It was fine when I bought it, but the file became corrupted somehow. This time, I had every right to go to B&N online and download the book again, because I bought the e-book.

  49. Jean-Louis says:

    It is absolutely certain that the book as we know it will disappear. If not in the near future, certainly in the long run.
    There are two reasons why many of us deplore this perspective:
    -we are used to handle books and like to be surrounded by them,
    -we think that if the authors are not paid for their work they will stop writing.
    But clay tablets and papyrus rolls have disappeared and we don’t even think of them when we hold a book in hand.
    And until the 17th century almost no author was paid for his work.
    As the multiplication of blogs and web sites demonstrates, many people who want to communicate their thoughts do it for the intellectual pleasure it gives them, not expecting anything else in return. That most of it had better remained unpublished is not to the point. What is, is that the very tiny part deserving to survive might very well get lost because of the uncertainties of digital storage.
    I own several thousands books and I shall most certainly die before them.
    The future as I see it is an iPad, or the equivalent, holding thousands of “books”, and then manuscripts which their owner will have copied him/herself. One shall take pleasure in calligraphing the most important texts, the most beautiful poems, to keep or to give to friends. As William Blake did !
    And while we are at it, why not imagine a book, a “real” book made of some hundreds of pages of e-paper on which the selected work would appear at will. We would have the best of both technologies.

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