Monday, December 27, 2010

On ‘Piracy', Pricing and Twelve Days of Christmas

Yo ho ho and a bottle of rum!
Merry Christmas! Sorry, a faulty translator...

In my blundering about the web, I was reading about Feast of Fools and the Lord of Misrule. It's a pity, in my usual lunatic opinion, that it has died away (or been put down). Society needs a time when the normal order is inverted. It gives those who are at the top a reason to make sure the people don't prefer the fool's rule. It was easier to outlaw it than to rule well, I suppose. Ah well. Perhaps I am the only paranoid who thinks the lunatics have been running the asylum for far too long, and the ones who are merely insane as a comparison to the new norm, are almost beginning to believe they're the mad ones.

I think there is an element of this desire for an overturn of the existing order spread throughout humans -- and of course it runs thicker in some of us -- but it's why we like to read of the underdog winning. Yes, there is a market for self-congratulatory camp-follower books, but I like to imagine that there is just as large a mob who like things that overturn the established order, or at least question it. Ok, so I am one of the intrinsic rebels, I suppose, albeit one who has made the unusual leap of logic that you cannot be both the victor and become authority... and still be sticking it to the man, when you are the man (a problem as prevalent in politics as publishing).

Anyway, to meander on, what brought me to wander into the Lord of Misrule and the twelve days of Christmas, and piracy, was this blog by Paul Cornell. Now I don't know Paul Cornell, and he might be nicest fellow and most brilliant writer that ever breathed. But just as surely as the Twelve days of Christmas follow after Christmas (and not before which was what I was looking up), I found a few things in this back-to-front and I wanted to ask your opinion of them (and uh, give you mine!).

Now to quote Mr Cornell, as the fundamental point from which he starts his take on piracy and e-books:

1: Publishers have always thought that when you buy a hardback, what you're paying more for is the chance to own it on the day of publication. Paperbacks are cheaper because they come out a year later. The reading public, on the other hand, always thought what they were paying more for was the extra physical mass and quality. (Actually, a hardback costs, one publisher told me, only from 50p to a couple of pounds more to make.) So obviously publishers think an e-book, out on the day of publication, should cost the same as a hardback. And obviously the reading public think it should cost less than a paperback. From this difference in perception stem all subsequent horrors.

Really? Am I the only person in the universe who read this, fell about in helpless laughter, and abused ‘Casablanca' to say "I'm shocked, shocked to find that gambling is going on in Rick's Casino!" It's possible, I suppose, that some of the reading public really were unaware of any early release premium -- the ones who continue to buy hardcovers of books of mine which are available in paperback, even books which have been out for nine years. But, well, hands up anyone who thought publishers really had no idea why the public thought they had to buy the hardback at that price?

Ah, you at the back. Did you bring enough of that stuff for everyone?

Look, if publishers were of the opinion that the public believed they were only paying for an early release, and not the materials of the format.... well, why on earth would they waste that 50p to couple of pounds pure profit, when printing "EARLY RELEASE" on a cheap paperback would entitle them to sell it for the same price? And why do books that only come out in paperback not get marked up for that first year? I am sorry, it won't wash. There was always full knowledge of what the public thought. Historically excuses like a rise in paper prices and printing costs have been used as reasons to raise prices. Either those were lies, or this is, or maybe both are. But this statement is true for no possible scenario.

Which then brings us back to well, why are prices so eye-watering for electrons (from everyone but Baen and a few independents) instead of hardbacks? Especially as there are no returns (50% saving right there), no paper, printing, warehousing or distribution costs (well microscopic costs). The answer may lie in any of a dozen real reasons, none of which they're prepared to share. Which of course brings us all to believe they are really good reasons and without malice or guile. My own guess is a reluctance or inability (or both) to change their business model and lose many historical overheads -- most of which do neither writers nor readers an iota of good. Does a book read better if it was edited in New York? Does a book read better if the publisher rents offices in Manhattan or St Paul? You couldn't get the staff to live in St Paul? Really? Being unable to find work in your field in NY must be more attractive than I had guessed. And why do they have to work in an office anyway? There is a great deal of cross-subsidy in publishing (and I suspect not all of it in ways one would expect. For instance I think you'd find the midlist subsidises the best-seller list - or the best-seller list would not be profitable). Is an advance (which puts up costs hugely) even necessary, if you can pay monthly and not years later? Of course, if there is a real reason which benefits readers and writers, there'd be nothing like a whiff of public scrutiny to show that yes, e-books need to cost $25 and garner support for that. Haven't seen any sudden outbreaks of transparency have you?

Speaking for myself: I think 6 dollars would cover a reasonably professional job, as long as you can sell at least 2400 copies - and as long as you weren't carrying the overheads.

Anyway - just to have a dip at the piracy issue - to quote Paul Cornell again.

4: People just like stealing stuff. As a recent Wired magazine article pointed out, every utopian excuse for illegally downloading music, from the presence of Digital Rights Management on tracks to the inability to move tracks between systems, has now been swept away by a market desperate to sell more music. There's literally no excuse any more. But this year illegal music downloading continued to grow, with 1.2 billion tracks being stolen in the UK alone.

I think he is conflating two issues - people like to pay as little as possible, and if possible, nothing. That's actually not the same as ‘like stealing'. Yep. There are those too. But not the human race in general. Given the social stigma attached to theft, and the elegant scientific work showing that at least in Western Liberal Democracies a sense of fairness is ingrained, virtually from birth, no, it is not true. People will rationalise theft, but they don't in general LIKE to steal. If you let them have grounds to self-justify their actions, more of them will do it (and that includes the utopian reason he didn't mention, overpricing and the artists getting a tiny fraction - which have not changed). The baseline rationalisation for most piracy IMO is Robin Hood: You're stealing from a greedy (especially if the price for an e-book matches the price of a hardback), rich (and faceless) megacorporation who robs everyone blind, and giving to the poor: ergo yourself. The fact that this is quite an accurate assessment of relative wealth does make it easier. So does the fact that it's ‘victimless' crime, in that the property remains available, and the victim (and there is one, really) is anonymous.

Now, you can get on your high horse and shout ‘piracy is theft and theft is illegal' and quote lawyers at me and stand on your legal rights. By law you're right.

Unfortunately, someone forgot to explain to those who make the law (and those who believe it will work for them) that law exists and works only at the will of the people. You can -- and lawyers and governments do -- pervert this to serve your ends... but there is a limit, and people break and evade laws as much as possible... if they do not have popular support. For example: There are speeding laws just about everywhere. And although they have logic behind them, they're enormously frequently broken. Constant policing is required to keep them at all, and if they weren't a major revenue stream with, actually, substantial support for the law in principle, the authorities would have given up long ago. On the other hand: There are places where public nudity is illegal... it's a lot less serious or risky(okay, mostly) than speeding. Yet it requires almost no policing. Why? Because really, in areas where it is illegal, you'll find most people support the law. If not: it is ignored or changed. The "it is illegal and I hate you for doing it" attitude leaves ‘piracy' about where the prohibition was, or banning Christmas for ‘elf-an-safety' reasons would. It's not going to work, just as it has not worked too well in music.

To box clever, to shift it to the probability of illegal copying to that of a nudist offending shoppers in rural Pennsylvania in mid-winter... you need to get the public to support the law. To believe it is fair.

And to do that the steps are IMO simple. Do away with the Robin Hood syndrome and the anonymity. The real victim needs to be - and to be seen to be - the author. And I think honesty on our part comes into this too. Writers are not rich (and if you are robbing the handful that are, shrug. JK Rowling or Dan Brown can fight you on their own dime and time). The paperback you paid Aus$20 for (or US $7.99)... I got 64 cents. My advances are typically around $10 000. The latest one was $6 000, thanks to the DRAGON'S RING hardback debacle. That means I need to write a lot (working 14-16 hour days, more or less 320 days a year) and live frugally, just to survive. For the record I get 50% of my e-book cover price from Naked Reader, and Amazon gets 30%. I specifically requested (ok insisted) that the price be LOW. Knowing all this: I have extreme doubt that most of my readers would want to rip me off on the Robin Hood principle (and if they did, go for it guys, you must be in dire, dire straits, and I hope the book lifts your spirits)!

The only reason for not making this information public is it makes the rest of the chain look like they might be gouging both the reader and the writer. Of course this is not possible. Could not be true. Now if retail, distribution and publishing would care to do the same as I have, we could see that publishing really needs to charge x for books, and that theft was crippling.

Or so declareth the Lord of Misrule.

No wonder they used to put him to death!


Frederick Paul Kiesche III said...

The Cornell posting seems to have changed its URL. I found it here:

Good posting, Dave. I buy your books in hardcover or paperback (sometimes both) and the eBooks. I just must be weird or something. ;)

Kate Paulk said...

So just what is Mr Cornell on and where can I get some? I need a good laugh!

I'm going to quote from the SFWA handbook here - and I should add that similar sentiments were expressed by most of the authors who contributed articles.

From Royalty Statements by Richard Curtis:
"Every company has its own idea of what and how information should appear, or not appear, on its statements.
"Just about the only thing they all have in common - and I state this categorically - is that they do not adequately report what the author needs to know. None of them. Not a single publisher."

Mr Curtis goes on to list the information that should be present on a royalty statement (some of these, obviously, don't apply to ebooks):
"Number of copies printed.
"Number of copies shipped or distributed.
"Number of copies sold.
"Type of royalty: regular, special discount, Canadian, foreign export, etc.
"Royalty rate, in terms of a percentage and/or a dollars-and-cents amount.
"Number of copies returned.
"Reserve against returns, usually expressed in dollars.
"Details of subsidiary sales, contracts, and subsidiary income."

The principle is that the author should be able to check the numbers and calculations from the statement. Funnily enough, publishers are extremely reluctant to provide authors with this information. (What Mr Curtis has to say about the publisher practices regarding reserve against returns is rather less flattering.)

So... gee. Methinks I smell apologist.

MataPam said...

Pity SFWA can't propose a standard contract and the authors stand up for it. Unfortunately it is clear that publishers consider writers to be easily replaceable.

From my slush reading days, I can say that some are, but not the good ones.

Unknown said...

Thanks Fred. I fixed the URL. Should have checked it. Hardbacks: I might buy (or more frequently, be given for Christmas or a birthday) a hardback of an author's latest work that I can't wait for. But I do buy hardback to keep and re-read.

Unknown said...

Kate, actually these would be a start point.

To posit that it's the poor author being robbed - you need to show that there are costs (legit ones, not ones you say were minor when they vanish) to justify the fact that the rest of the chain gets 94%- 85% of the income. And if there is one thing that irritates me beyond measure it is the chorus of 'we on'y make 4/6/8/10% profit. Publishing's not profitable. Them greedy authors git 8%!' Authors* share is GROSS. Theirs is NETT. If I made 4% nett... I'd be delighted.

*Typical Royalty rates paperback 6% newbies, 8% midlist, 10-15% on hardbacks, 10-15% e-books. Baen pay 20% on e-books, and various e-book pubs around 50%

Synova said...

Blogger ate my post.

Let me just say that St. Paul is a spectacular idea.

Unknown said...

Matapam, it's pretty plain that authors are considered an infinite and relatively cheap resource, unless they are the 1% of bestsellers. The trouble is the bestseller system parasitises the rest of the writers. It's not good for anyone in the long term in reality.

The simple truth is that writers are no different to any other professional. You survive a fairly arbitary but generally hard entry exam. There are, it is true, a large number of people willing to take that exam, directly proportional to the number of readers (so as that falls your entry falls). But if you are going to retain the skills acquired in that exam, and work experience, and recover the expense of getting them to that point, you need to see that they can afford and be motivated to work full-time. Diverting the advance and promotion budget entirely into your bestsellers... means basically those who don't need the extra income to work fulltime are given extra, and to recover that money, books that didn't need promotion and distribution help to sell, get given it at the expense of the rest. And lo, they sell better. Ergo, they want bigger advances... and so on. Until you reach the point where Ms. Besteseller is, by the figures, writing a book which has 100 000 times the customer appeal of Mr Midlist.

Kate Paulk said...


Since publishing seems to have run through its babies and is starting the suicidal course of eating midlisters (by - at least according to rumor - dropping standard advances even more, which is guaranteed to push out anyone who doesn't have a secure non-writing source of income - I rather doubt we'll see much more than hysterical denial from the mega-corps.

The math isn't pretty. When organizations like SFWA (which have a lot of reasons to avoid airing the dirty laundry, courtesy the publisher memberships) start using the word "fraud" in official publications to describe standard industry practice... I don't think I want to be in the middle when that bomb goes off.

Synova said...

That's SFWA's job, isn't it?

Synova said...

Hey, my son finished reading Rats, Bats and Vats, and wanted you to know that he really liked it.

I got him the Rats, the Bats and the Ugly for Christmas as well so he's going to read that next.

Kate Paulk said...


Never underestimate the power of the Dark Side... Oh, sorry, wrong cliche. SFWA's membership includes publishers, agents, and publisher representatives as well as authors.

The problem there is that as soon as a problem arises between authors and a member publisher, there's a rather hefty conflict of interest - and since enough of the membership are currently published and publishing authors, they're understandably reluctant to be seen to upset the applecart.

Not that I blame them - not upsetting the guys who pay your living expenses is one of those things most people consider important.

Unknown said...

Synova, SFWA tries, but it has a few intrinsic problems - 1)a very very large percentage of the writer members haven't published for many years. There is no 'currently active' criteria. This makes votes and activism hard to achieve. 2)The organisation and its various arms tend to be run by people who like to play politics (naturally) and these are often people whose time-demands are not dominated by making a living writing. Some of them are good guys, but they aren't career writers. Some heroes of course are somehow stretching to successful careers and SFWA, but let's face it being a good writer takes a vastly different skill set from being good at playing organisation politics, and a lot of time. So for instance an author so irrelevant no one ever heard of her, who had barely managed to sell a couple of thousand books... ended up as one of the main office bearers - and using SFWA for her private vendettas (one against Baen, and one against Eric Flint) and agendas, and being ignorant of the real problems.
3)Allowing editors, agents and those employed in publishing membership was as catastrophic error, as it means a)they can block things, b)it's hard to talk about things without endangering your livelihood.

If SFWA is stirring, things are very bad indeed.

Unknown said...

And Synova, thank you for telling me about RBV. The prequel novella is in something called cosmic Adventures. I hope one day to extend that to a novel and do a final book in that world. But maybe only as an e-book.

Unknown said...

Kate I hadn't read about the fraud bit. Got a reference for me by any off chance (don't bother hunting it, and you could just e-mail it to me, if you have a link)

Kate Paulk said...


It's in the article I quoted earlier. There may be a copy online, but I got the handbook as a physical book.

The quote is: "Yet publishers carry high reserves against returns on their ledgers for years, and, when the book goes out of print, quietly pocket the unclaimed royalties. Having no hard industry-wide figures to go by, but estimating from my own and other agents' experiences, I would say that this is what happens to the majority of paperback books. Some authors and agents consider it to be fraud. I keep racking my brain for a gentler word, but so far I haven't come up with one."

And later, quoting another agent, Mr Curtis says: "As one agent said to me recently, 'I know longer call them 'books sold', I call them 'books admitted to being sold.''"

Later in the same article, he describes publishing accounting as following the same principles as movie accounting - where nothing ever makes a profit, on paper.