economy

Do we need $4.00 Books

Lith Print: Ghost Forest
Image by Matt Callow via Flickr

Mark Coker over at the Huffington Post wrote an interesting post calling for Publishers and Authors to move to a $4.00 eBook.

Here in the U.S., most consumers already think twice before shelling out $7.50, $15.00 or $30.00 for a good read. If a book at the current prices represents a big purchase for citizens of the world's most affluent economy, imagine the cost burden for the vast majority of the world's literate people (Mark Coker).

It is not hard to agree with the idea that books cost too much.  $5-$10 seems to be the sweet spot for books.  When Liquid Sky first came out, the book cost $20, and it was not easy to sell.

Imagine how hard it is to walk up to people and say, "Hi, you don't know me, but could you give me $20 to know me better?"  Try it some time and be prepared for rejection.

After we split the book up, each volume is now around $8, and they sold well.  The lower price point really helped sell the book.  I am curious about the idea of $4 books, but I think that price point is more of a macguffin than a real price.

Affordable Access = Smaller Books

By offering customers a cheaper, smaller and less expensive format, publishers expanded the available market for their books and enabled a larger number of readers to gain access to affordable reads (Mark Coker).

That is the key.  Smaller and cheaper formats.  Lower the cost of a book would require shrinking the size of the book.

The industry started looking for smaller books a little while ago.  Personally, I have focused on serializing my work so I can still tell the complex stories I love and still keep the word count down.  I am not sure there is another way to lower costs.

eBooks require readers

amazon-kindle-ebook-readerEbooks also hold the promise to expand the worldwide market for books. Hundreds of millions of new middle class and literate consumers have come online outside the US, especially in developing countries.

...

Since it costs the author or publisher next to nil to "print" each copy of an ebook, ebooks are extremely profitable on a per-unit basis, even at a low selling price (Mark Coker).

I agree that ebooks are cheaper to make, but the cost to the average reader is just too high for now.

Most people do not like read books on their laptop or desktop computer, so to sell to they need to get an ebook reader.  The Kindle costs between $300 and $490, while the Sony ebook reader costs $300.  For $300, you get the reader... that's it... books are extra

Books are not music

The industry needs to realize that books are not music.  We were used to spending money for a discman to listen to our cds, so when Apple introduced the iPod and iTunes, it was natural for us to buy an iPod instead of a discman.  It was easier to use, and so we bought it.

We are use to just buying books and using them.  The psychological barrier to purchasing an ebook reader is much harder to get over.

For $300 ebook reader, we could buy:

  • 40 books for $7.50
  • 20 books for $15.00
  • 10 books for $30.00

Lets just take the average of 23 books.  The reader asks themselves: "Should I buy 1 ebook reader or 23 books?"  Which would you do as a reader?

For ebooks to catch on, Amazon and Sony need to offer book credits with the purchase of their readers.  It is easier to spend $300 on an ebook reader if you get 20 free books.  The reader would be a loss leader, and they would make up the difference on the sales of books through the device.  If they implemented this solution, readers would go mainstream.

Until something like that happens, the iPhone, Courier Pad, and Android devices are the only hope for ebooks long term survival.

Range of Formats

Not all books should be priced at $4.00. Publishers should segment their markets to ensure they're delivering a range of products and formats that offer the target customer value that exceeds each price point (Mark Coker).

Agreed.  For now, the best model appears to be:

State of the industry

Some might argue book publishing isn't in trouble, as evidenced by the industry's continued growth. True, the industry has grown in recent years at 1.6 percent annually between 2002 and 2008, according the Association of American Publishers. Yet this growth is a mirage. Publishers are maintaining the illusion of growth by increasing prices. If we adjust for inflation, unit book sales have been in decline for many years (Mark Coker).

Writers, like myself, need to look to the future, and find a way to keep our industry alive.

(via Personanondata)

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Do we need $4.00 Books

Image by Matt Callow via Flickr

Mark Coker over at the Huffington Post wrote an interesting post calling for Publishers and Authors to move to a $4.00 eBook.

Here in the U.S., most consumers already think twice before shelling out $7.50, $15.00 or $30.00 for a good read. If a book at the current prices represents a big purchase for citizens of the world’s most affluent economy, imagine the cost burden for the vast majority of the world’s literate people.

Mark Coker

It is not hard to agree with the idea that books cost too much.  $5-$10 seems to be the sweet spot for books.  When Liquid Sky first came out, the book cost $20, and it was not easy to sell.

Imagine how hard it is to walk up to people and say, "Hi, you don't know me, but could you give me $20 to know me better?"  Try it some time and be prepared for rejection.

After we split the book up, each volume is now around $8, and they sold well.  The lower price point really helped sell the book.  I am curious about the idea of $4 books, but I think that price point is more of a macguffin than a real price.

Affordable Access = Smaller Books

By offering customers a cheaper, smaller and less expensive format, publishers expanded the available market for their books and enabled a larger number of readers to gain access to affordable reads (Mark Coker).

Mark Coker

That is the key.  Smaller and cheaper formats.  Lower the cost of a book would require shrinking the size of the book.

looking for smaller books

eBooks require readers

Ebooks also hold the promise to expand the worldwide market for books. Hundreds of millions of new middle class and literate consumers have come online outside the US, especially in developing countries.
...
Since it costs the author or publisher next to nil to “print” each copy of an ebook, ebooks are extremely profitable on a per-unit basis, even at a low selling price.

Mark Coker

The industry started a little while ago.  Personally, I have focused on serializing my work so I can still tell the complex stories I love and still keep the word count down.  I am not sure there is another way to lower costs.I agree that ebooks are cheaper to make, but the cost to the average reader is just too high for now.Most people do not like read books on their laptop or desktop computer, so to sell to they need to get an ebook reader.  The Kindle costs between $300 and $490, while the Sony ebook reader costs $300.  For $300, you get the reader... that's it... books are extra

Books are not music


The industry needs to realize that books are not music.  We were used to spending money for a discman to listen to our cds, so when Apple introduced the iPod and iTunes, it was natural for us to buy an iPod instead of a discman.  It was easier to use, and so we bought it.

We are use to just buying books and using them.  The psychological barrier to purchasing an ebook reader is much harder to get over.

For $300 ebook reader, we could buy:


  • 40 books for $7.50

  • 20 books for $15.00

  • 10 books for $30.00


Lets just take the average of 23 books.  The reader asks themselves: "Should I buy 1 ebook reader or 23 books?"  Which would you do as a reader?

For ebooks to catch on, Amazon and Sony need to offer book credits with the purchase of their readers.  It is easier to spend $300 on an ebook reader if you get 20 free books.  The reader would be a loss leader, and they would make up the difference on the sales of books through the device.  If they implemented this solution, readers would go mainstream.

Until something like that happens, the iPhone, Courier Pad, and Android devices are the only hope for ebooks long term survival.

Range of Formats


Not all books should be priced at $4.00. Publishers should segment their markets to ensure they're delivering a range of products and formats that offer the target customer value that exceeds each price point (Mark Coker).


Agreed.  For now, the best model appears to be:


State of the industry


Some might argue book publishing isn't in trouble, as evidenced by the industry's continued growth. True, the industry has grown in recent years at 1.6 percent annually between 2002 and 2008, according the Association of American Publishers. Yet this growth is a mirage. Publishers are maintaining the illusion of growth by increasing prices. If we adjust for inflation, unit book sales have been in decline for many years (Mark Coker).


Writers, like myself, need to look to the future, and find a way to keep our industry alive.

(via Personanondata)

Vision of a Fan Works Economy

Last time we talked about the Studio/Publisher side of the new marketplace.  Last year, Clive from Fan Cinema Today and I went back and forth about the merits and flaws of Creative Commons system in Dream of a Fandom Economy and Fan Works and Creative Commons.

The Importance of Fan Works

The Studios/Publishers have to understand that they do not own the media franchises like they used to.  If they allow their fans to have a sense of ownership over franchises under their care, we will feel a greater sense of responsibility for the future of the franchise.  Fan works are the strongest way fans connect with the franchises they love.

The amount of time it takes to produce a fan work ties the fan to the franchise.  Lately, the best trailers for many films have been fan made, not to mention the T-shirts, posters, and desktops.  The problem is the studios/publishers have not found a way to bring in the fan works in a way that benefits them and the fans.

The studios/publishers need to license their works in such a way that fans understand what they can do and how.

Licensing Fan Works

A license like this is important for both the studio/publishers and the fans.  What would this offer the studio/publishers?

  • They empower their fans to give them free promotion through derivative fan works.
  • They allow their fan base to become more involved with their franchises which will allow them to become more involved and deeper connected to the original work.
  • By allowing their fans to produce derivative works, they are able to fill in the gaps between releases at no cost to them.
  • They increase their footprint which will help them to convert more casual readers/viewers into fans.  An increased fan base will increase sales.
  • With fans providing them free advertising, they will be able to focus their efforts more on content than marketing.

Fans would benefit from this approach nearly as much as the copyright holder.

A Fan Works Economy

Towards a Fan Works License

I approached the Creative Commons Foundation with a proposal for a Fan Works License:

Some of the rights holders I have talked to are reluctant to use the CC because they are concerned they are giving up too many rights to their works.  A Fan Works License would allow rights holders to clearly state what they will allow others to do with their characters, content, and settings.

It would be a bit more complicated than a standard CC, stating whether others may make original text, video, music, or art projects based on their works.  It would also allow them to set the content rating they would allow fan works to have.  This could be aligned with the MPAA ratings or the ESRB ratings system or an original system.  The reason for this is so a young adult novelist could set a max rating of PG-13, allowing others to know what standards they would apply to determine whether a fan work is legitimate or not.

The other terms would be the same as in the standard CC.

You may not think something like this is necessary, but the current state of fan works is hazy.  While few have been sued in the last couple years, at any time, rights holders could decide to start suing again.  By creating a license that covers works with the same characters and settings rather than a particular book or movie, I believe we could get more rights holders to use the license to allow for the creation of fan works, which is a step on the road to open up works to the commons.

They responded with a simple, “CC probably isn’t going to be expanding the license offerings, and in fact, over the past few years CC has been reducing the number of licenses.”

This type of license may not be the best, and it is by no means the only way to move forward, but it is the best way to end the tyranny of copyright and by showing the fans that they are a part of the franchise.

The d20 Model

One alternative is for the studio/publishers to institute something like the d20 License.  The d20 License allowed registered participants who followed the strict rules to produce for profit tie-ins to Wizards of the Coasts' games.  Rights, responsibilities, and penalties were clearly laid out.

Wizards made money by requiring that the licensed works refer back to their works and not retell certain aspects of the setting and system.

This is not the best solution, but it is one that has already been tried.

An Improved Music Licensing Model

The music industry allows for music to be licensed through an overly expensive but easy to use system.  The studios/publishers could attach a licensing fee and rules for each possible use of the material, then they could earn a royalty and the fan work can be made.

The Best Solution

The best solution is probably one that has not been developed yet, but it won't if we don't start the conversation now and keep it going until the answer is found.

The market in all forms of media will not be restored until the studios/publishers and the fans are brought back into balance in a way that is mutually beneficial and forward looking.

Next on the agenda, Fandom Strikes Back!

Vision of a Fan Based Economy

Ira Rubenstein is the Executive Vice President of Marvel Comics' Global Digital Media Group.  Dave Roman is associate editor of Nickelodeon Magazine and a cartoonist.  Stuart Levy is the chief executive of Tokyopop.

This is a conversation they had at ICv2 Graphic Novel Conference:

Rubenstein: But Dave, I think there’s a difference. No one can write about Spider-Man or X-Men except for us.

Roman: I disagree.

Levy: Totally.

Rubenstein: Those are our characters. How could someone else write another Spider-Man story?

Roman: Because fan fiction is becoming so powerful. I’ve seen the power of fan fiction. Working at Nickelodeon, there are people out there doing ‘Avatar’ comics that are soooooo much better…

Rubenstein: But that’s like saying YouTube is a real entertainment channel. It’s not.

Roman/Levy/like five people in the audience: It is (THE BEAT).

They just don't get it.

Caretakers of Legends

As I said in What makes a fan a fan, studios and publishers have to stop thinking of themselves as copyright holders and more as caretakers of the franchises we love.  The good and the bad of the dialogue above is that Dave Roman and Stuart Levy seem to understand, but Ira Rubenstein still doesn't.

I have a feeling that many companies will go out of business before their leaders who do not understand the changes in the marketplace are replaced by people who do understand.  If there is a future, then we have to change the economic model from the owner/consumer model to a new fan based model.  Here are some of suggestions for a possible way forward.

Studio/Publisher Side

Producers of media have to come to terms with the fact the days of closely controlled monopolies they once held over the franchises in their care are over, and that they have to open up to accept new methods of distribution and a new relationship with their fans.

National Borders are meaningless

The first lesson may be the hardest.  We have believed for so long that National Borders were meant to limit trade.  Where media is concerned this is a recipe for piracy.

With the advent of digital downloads, online streaming, and print on demand, it is easier than ever for any and every release to be global.  Distribution models have to built that will allow for a studio/publisher to monetize their work in every country simultaneously.

Ads, Subscriptions, Purchases and Give-aways

Studios and Publishers have to realize that they will never again be able to rely on a single method to monetize their works.  There are four main ways businesses make money on the net:

  1. Ads: Not too many or it turns people off, but the opportunity to direct targeted ads to reader and viewers.
  1. Subscriptions: Allow readers/viewers access to ad free versions of your content that they pay a regular recurring fee.  There are two major subscription models:
      1. All you can eat:  Allow your subscribers to full access to your content library so long as they pay the subscription fee.
      2. Ala carte:  Allow your subscribers the right to own so many files a month based on subscription level.
      3. Purchases:  Allow your readers/viewer to purchase copies of your work.
      4. Give-aways:  Sometimes you have to give your work away to find an audience and make your money some other way.  For example: give away the streaming, but sell the file.

      Platform Independence

      Don't tie your work to one platform.  Give your readers/viewers options.

      Let us stream with ads or subscribe by the season or purchase outright.  You offer every method, we chose the one we want.

      Don't tie our purchases to a single player or device.  If I want to watch my DVD on my AppleTV, let me.  If I want to watch my digital files at a friend's house, let me.  If I want to watch my iTunes purchases through Boxee, let me.

      The more restrictions you place on your files, the more you encourage piracy.  The more freedom you allow you readers/viewers, the more money you will make.  You cannot expect to be respected by your reader/viewers, if you do not treat them with respect.  If you treat them like pirates, don't be surprised when they act like pirates.

      Our Media

      You have to understand that you do not own this media.  If you allow your fans to have a sense of ownership over franchises under your care, they will feel a greater sense of responsibility for the future of the franchise.

      Next time we will discuss the Fan Side of the new marketplace.

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      Blogging in Rough Times

      On Friday, Gawker Media, which runs 12 blogs, announced it was laying off 19 staffers. The New York Times called the layoffs "an early indicator" of a Web advertising slowdown. In a memo to employees, Gawker founder Nick Denton (pictured in a photo montage at right) said that 2009 was going to be "exceptionally difficult" as advertising declines, and said "we have to prepare for the worst, now, rather than when the worst comes upon us (Los Angeles Times)."

      This is no time for Shadenfreud.  Times are tough, and we need to be thinking about the future.  I wondered what would happen to the oversized blogs on the net who have forgotten how to be blogs and thought they were magazines with an infinite pool of advertisers.  The answer was inevitable.  They started firing people.

      Now is the moment for mid- and small-sized blogs to shine.  We have managed on a low overhead tight budget workflow for quite some time.  Whie the big boys have noticed there access to advertisers dropping off, we have not so far.  This is probably because we have never relied on Sponcerships.

      Readers will be the ones to layout the future of the web over the next few months.  We will have to decide which sites we want to support, and how we can support them best.  For example, Cali Lewis gets credit every time I register a domain... which is far too often, but that is not the point.

      Many blogs like ours rely on Affiliate deals like this to survive.  Using the Fandango, Netflix, Gamefly, and Amazon links that you find on these sites is a way to give money directly to the site, while only spending the money you would have and no more.

      I think it is also incumbunt on sites like ours to help you all stay entertained in a way that will not break the bank.  An the flow of money gets tighter, we have to work together to help each other out.