Prime Palaver #7

Eric Flint

April 26, 2002

 

In the short time since the last Prime Palaver came out (#6), I've gotten a lot of letters. More than usual, because that Prime Palaver was cited on slashdot and was then spread widely across the internet.

A number of questions were raised in those letters, which I thought I should answer. But rather than answering them individually, I decided to take a number of them as the basis for a new Prime Palaver.

In what follows, the material in italics are excerpts from recent letters, followed by my response.

Much as you have stated in your letter (Prime Palaver #6), I find myself taking books for a test drive via the Free Library or Webscriptions. I will often just read the first couple of chapters and see if the book grabs me. If it does, then I go out and buy the printed book. I buy the printed book because I like to be able to read in various locations as opposed to sitting in front of the computer and hitting the page down key.

However, I wonder how the advent of better electronic reader hardware will affect your argument. Once a reader is produced that is as easy for me to use as turning the page of a book, I will probably quit buying print versions and only buy electronic editions (I have only so much space in my house).

When we get to that point, we can worry about it then. I'm not worrying about it now for two reasons:

1. I think we're a lot further away from an electronic reader which is really equivalent to a book than a lot of people seem to be. I could be wrong about that. But the fact remains that the introduction of e-books was not caused by any great consumer dissatisfaction with paper books. In a very real sense, this new technology is a supply looking for a demand -- and, so far at least, not finding much of one.

It remains to seen whether e-books will be analogous to CDs, which did replace vinyl records -- largely because the recording industry conspired to force them on everyone, by the way -- or to things like automatic transmissions and home food processors. In the case of the first, automatic transmissions crowded aside manual transmissions but did not eliminate them; and, in the case of the second, food processors are now found in some homes but have never replaced kitchen knives.

There's a lot to be said for the sheer simplicity of a paper book, when you get right down to it. To this day, I still find it much easier and quicker to look up a word in a paper dictionary or thesaurus than screwing around with the versions available on my computer.

2. But let us assume for the moment that e-book readers do eventually replace paper books altogether. Even in that case, I think all we'd have to do -- at most -- is adjust the way the Library works somewhat. I'm not even sure we'd have to make any changes at all.

One thing you have to understand about this whole controversy is how much of it is sheer hot air. Many authors and most publishers, when they address this issue, give people the impression they're at risk of losing their shirt through electronic "piracy."

That's pure hogwash. Here is the reality:

Every professional in the industry knows perfectly well that, with a small number of exceptions, 80% of the sales of a book are going to happen in the first three months after the book appears on the shelves. And once a book is more than two or three years old, as a rule, it will sell very few copies. By "very few," I'm talking about a few hundred copies a year. That's true even for paper editions today, much less electronic editions -- which today sell maybe 5 or 10 copies a year of that same book.

Granted, some books do better than that. On the other hand, lots of books do worse than that. In fact, it is not at all uncommon to see books going out of print within a year or two after they come out.

So let's examine the math. For the sake of argument, let's say 500 copies of an older title are sold per year at $6.99 each, which is now the most common price for a mass market paperback. That's probably a fairly reasonable average. Rounding off slightly, that's a gross sales of $3500 -- TOTAL. That money then gets split all over the place. The bookstores and distributors will take about half of it (roughly), leaving $1750 for the publisher and author. The author will usually get 8% of the retail price, i.e., out of that total income of $3500 he or she will get $280.

These figures are all derived from paper editions, but I think it's fair to assume that the numbers involved would stay roughly the same even if all books started being produced electronically. Not even the wildest enthusiast for electronic publishing has ever tried to argue that it would produce a major increase in the income of authors.

(The main argument they advance is that it would make it possible for more authors to "get a place in the sun," by removing the bottleneck which they believe paper publishers create in the pipeline from writers to readers. Personally, I'm highly skeptical of the claim, for reasons explained below in response to the different question regarding print-on-demand. But, even if true, no-one is really trying to claim that authors will suddenly see their incomes climb rapidly.)

So. Can we all puh-leese "get real" here for a minute? Granted, $280 is not small change. But it's also hardly the kind of sum which is going to make or break any author's budget, is it? So, in the real world, how much would it REALLY hurt an author to have one -- or even five -- older titles up in the Library for free? When, on the other side of the ledger, that very modest lost income (assuming nobody bought those books, which is highly unlikely) generated sales of new books coming out -- which are NOT available in the Library -- because they enabled lots of potential new readers to sample the writer? Keeping in mind that it's new book sales which keep authors afloat financially, 99.9% of the time.

We do not put brand new books up in the Library, with a few exceptions. My general rule of thumb is that I put a title up in the Library three months after it has come out in paperback and three months after it has cycled through for the last time in Webscriptions. That means, for lead titles, that the reader is given no less than three chances to buy the book before they can get it for free: 1) the hardcover edition; 2) Webscriptions (usually twice, here, because the same title is typically recycled through when the paperback edition comes out); and, 3) the paperback edition.

Furthermore, we don't put all the books in a series up in the Library. For instance, a reader can look at the first three volumes of the Belisarius series in the Library. But if you want to keep following the series, you'll have to pay money for the rest.

(I wouldn't have put up the third book in the series in the Library, by the way, except that Destiny's Shield happened to fall through the cracks in terms of timing and so there was no electronic copy available for sale. After a number of our fans complained to us that they wanted to be able to get the entire series in electronic format, Dave Drake and I agreed to put Destiny's Shield in the Library, since there was no immediate prospect of it being available for sale electronically. Normally, we'll only put up the first two books in a series.)

In short, we've struck what I think is a reasonable compromise with our readers -- and, judging from the results, our readers feel the same way about it. Most people are not squalling brats demanding to have their cake and eat it too, and they're well aware that authors need to make a living and commercial publishers need to turn a profit. As long as readers think that a publisher is selling books in a reasonable and fair-minded way, they'll be satisfied.

Baen Books provides its readers with several ways to "check out" an author before they have to spend any money. They can read sample chapters of almost every book -- usually the first 25% or so of the novel, which is enough to find out if someone is interested in the story. Then, for a number of authors, they can read complete novels in the Library. Finally, for those who get really interested in an author or series, they can either read the snippets posted in Baen's Bar or see them collected in the Dahak site -- before the novel even appears in print.

(Dahak is a web site which collects, with Baen's permission, the snippets of upcoming novels posted in Baen's Bar by various authors. You can find it at: http://jiltanith.thefifthimperium.com/)

Then -- this is the ultimate key to the whole thing -- when the time comes for them to plunk down some money, and they want an electronic edition, they can get it CHEAPLY (for less than a paperback) and in a format which is TROUBLE-FREE. They can download an unencrypted copy in whatever format suits them, and they can then modify or adapt that any way they find convenient to fit their personal needs.

In short, even if we assume that all sales were electronic, there is simply no incentive for anyone -- with a few exceptions, which I'll get to in a moment -- to "steal" an electronic edition.

The key is the cheapness and simplicity of the edition which people buy. It's the combination of the Library and the way Webscriptions works that does the trick.

Why? Because almost everyone understands, on at least a subconscious level, that "time is money." For the great majority of people, "saving" $4 or $5 is simply not worth the time and trouble they would have to go through to find a pirated edition -- even leaving aside the fact that most pirated editions are very poor-quality texts. I am utterly confident that, given the manifestly fair and reasonable way that my publisher sells electronic editions, that 99% of my potential customers will not hesitate to buy whichever of my books they might find of interest. And, what's far more important, the size of that "99%" grows because of the way my publisher sells books.

My income is determined by the absolute number of sales of my books. I get a certain percentage of the retail price of a book in the form of royalties. (Which ranges from 8% for a paperback to my share of the 20% which the authors get for a given month's Webscriptions.) So figure out the math. Let's say that, as a result of the free and easy way Baen combines sales with free copies, my "99%" drops to "98%" -- but the absolute number of sales increases.

What do I care? And why -- talk about ironies -- does an industry which routinely accepts the fact that at least 50% of the books it produces will never get sold work itself into a lather over the possibility that it's losing (at most!) 0.1% due to online "piracy"?

I might mention, as well, that my approach has the additional advantage that at least some of the people who wouldn't like my books get to find out before they've spent any money. That's valuable to me also, as an author, because word-of-mouth works both ways. Someone who has spent money on something they're unhappy with is a lot more likely to denigrate it publicly than someone who was able to check it out for free. In the latter case, there's no hard feelings involved. Someone who bought a book of mine and didn't like it may well to go out of their way to tell their friends it's a lousy book. Whereas, if they read it for free, they're far more likely to say something like: "Well, I didn't care for it -- but, what the hell, check it out for yourself. It doesn't cost anything."

Will there be exceptions? Sure. There are basically four categories of people who will take free copies but won't spend money on them, even on cheap editions. But in three out of four of those categories, the reasons are completely legitimate. As follows:

1. The first category are the only crooks involved. These are the types -- we've all met people like this -- who just get some kind of weird kick out of cheating. They basically steal for the sake of it, not because they're really forced to by any monetary concerns.

But this problem -- which is really what ALL the fuss is about -- is in my opinion picayune. I'm absolutely convinced of two things:

a) Almost all "online pirates" fall into this category -- except for those who are just enthusiastic fans of a given writer and don't realize that they may be annoying the author by e-publishing their stuff. An author can easily deal with such fans by simply sending them an email asking them to cease and desist. It does NOT require rewriting the Bill of Rights or declaring virtual martial law.

b) Leaving aside the fans -- who are typically avid book-buyers -- I doubt very seriously if 95% of these so-called "online pirates" ever READ the book once they've swiped it. And 99% of them never would have bought it anyway, so there's no real material loss involved.

2. The second category are young people. Teenagers, basically, whose income is so low than even $4 or $5 is an obstacle for them. My attitude here is that giving such kids free copies will only benefit me in the long run, in the same way that libraries have traditionally been the way that authors develop a following among young readers. (That's how I became a fan of such writers as Heinlein, for instance.) And, again, they wouldn't have bought a copy ANYWAY -- so where's the harm?

An aside here. I find it amazing how many people involved in this dispute can't seem to understand that, outside of the abstract world of mathematics, you can't subtract anything from zero. The concept of "-1" does not apply here. If an author would not have sold a book ANYWAY, then "losing that sale" is just a meaningless noise.

Being charitable, I will assume that perhaps these authors are confusing the difference between a paper copy and an electronic copy. As peculiar as it seems, some science fiction authors seem unable to grasp the distinction between molecules and electrons. So let me try to walk them through it:

If somebody steals a molecular book -- i.e., shoplifts a paper edition from a walk-in bookstore -- then someone has suffered a loss. The bookstore, directly; and the author, indirectly. That's because molecules take up a lot of space, and require a considerable expenditure of time and effort to move from one place to another. Most bookstores do not carry more than one copy of most titles. So if a shoplifter steals a copy, then NO-ONE ELSE can buy it -- for a period of, usually, several weeks if not months. (Which is how long it would take most bookstores to notice the loss in inventory and order and receive a replacement copy -- assuming they did so at all.) Thus, during the intervening period of time, it is at least possible that the author suffered a lost sale from a potential customer.

But it ought to be blindingly obvious that none of this applies to electronic "shoplifting." Electrons are not molecules. Someone who downloads a pirated edition is not simultaneously preventing someone else from downloading a legitimate copy. So the only possible loss involved comes IF the "pirate" would have paid money for it in the first place.

I submit that, 99% of the time (at least), that is simply not true. 99% of the so-called "online piracy" is, quite literally, meaningless to an author in financial terms. In fact, it probably works to their advantage in the long run simply by increasing their public profile -- what writers often call "audience recognition."

3. The third category are people who, though not young, suffer from basically the same kind of "disability" as teenagers. Only in their case, the disability is a medical one. The biggest category here is probably people who are blind or suffer severe vision problems. As a rule, though not always, these people are also living on a very tight budget.

My attitude toward them is twofold. First, I think you really have to be a complete jackass to begrudge a free copy of your books to people whose lives are already hard enough as it is. As far as I'm concerned, making free copies available to people with such medical disabilities is just part and parcel of being a civilized human being.

Take the book with my compliments. Please. (I might mention, by the way, that my opinion is also that of society at large. The copyright laws exempt, for instance, Braille editions.)

Secondly -- to be completely cold-blooded about it -- even in money terms I probably gain. First, because they would most likely not have bought the book anyway. And, secondly, because this is also word of mouth advertising. Does anyone think blind people don't talk about the books they've read with their family and friends? And, to boot, give it word-of-mouth advertising which is probably even more positive than usual. One of the real problem which blind readers face -- I've gotten a number of letters from them on this subject -- is the very limited availability of popular modern titles in a format which they can use.

4. The final category are people who are "handicapped" in geographic terms. Basically, people who live in areas of the world or have occupations which (for a variety of possible reasons) make it essentially impossible for them to obtain a copy for sale. Either because their income is too low and/or the exchange rate is too steep, or shipping costs are astronomical, or -- simplest of all -- there are neither bookstores nor a reliable distribution network.

Again, my attitude is: Take the free copy with my compliments. To begin with, they wouldn't have bought anything anyway. (Let all of us learn the mantra: zero from zero... is zero.) Secondly...

Who knows? Exchange rates fluctuate, economies improve as well as decline, transportation and distribution networks develop, people change jobs, etc., etc. The day might come when being relaxed about free copies produces a fan base in some part of the world an author never would have expected.

A concrete example, here:

I personally know of at least one group of sailors in the US Navy who have become fans of my writing, over the past couple of years. (And fans of several other Baen authors, as well.) Most of that is NOT the result of sales. The middle of the Pacific Ocean is not the best place in the world to buy a book, for reasons which are obvious. But the advantages of online communication have made it possible for them to read a lot of my stuff. Some of it through Webscriptions, a lot of it for free.

Most if not all of those sailors are young, and they will not spend the rest of their lives in the middle of the Pacific Ocean. And, given the kind of training they will have received, will presumably enjoy a solid income in the years to come. I feel confident that a certain percentage of that income will get spent on some of my books -- a lot more than would have been, had I conducted myself like a stupid dog in a manger, snarling at the world because I didn't understand that:

Zero from zero... is ZERO.

The truth is that there is nothing involved in electronic publishing that really presents any qualitatively new problems, when it comes to the issue of the role of free copies in affecting an author's income. (And let me take the time here, once again, to urge everyone to read the brilliant speeches on copyright given by Macaulay before Parliament back in 1841 -- over a century and a half ago -- which said all that really needs to be said on that issue. You'll find them in the Library as "Prime Palaver #4".)

To illustrate my point, I will use another real-life example:

Until recently, my wife Lucille worked in a steel mill. There are quite a few steelworkers who read a lot, but as a rule they do not read science fiction. If they're male, they're far more likely to read mysteries or techno-thrillers; if female, romance novels.

However, a number of them became curious when they discovered that one of their co-workers was married to a science fiction author. Since I get a certain number of free copies from my publisher, I told Lucille to feel free to hand out some of them to her co-workers.

She did so. Within about a year, those free copies circulated quite a bit through the mill, which, being one of the largest in the United States, had a work force of several thousand people. I wound up being one of the few SF authors in existence with an informal fan club among steelworkers -- many of whom then proceeded to BUY copies of my books. (I'm not guessing, by the way. Several of these steelworkers organized a signing for me at the local Barnes & Noble, as a result of which the B&N staff told me they sold out almost all the titles of mine they had in stock at the time.)

Recently, that steel company went bankrupt. (LTV Steel, and if you think the music recording industry is run by a pack of greedy scoundrels, you oughta take a look at those sweethearts. LTV top management, of course, walked away with millions of dollars in bonuses -- presumably for the good job they did in driving the company under.)

So that informal Eric Flint fan club no longer exists.

No... not there. But those steelworkers did not vanish into thin air. They've been getting jobs elsewhere, and the word of mouth they spread about my writing continues to unfold. Two of them, a married couple, got jobs working in the gambling industry. (He in security, she as a dealer.) They're also friends of ours, and when my wife and I met them for a dinner a couple of months ago, they mentioned that some of their co-workers in the casino had gotten interested in my work -- and, again, because of a free copy which these ex-steelworkers had lent to them.

That's how it works. Authors and publishers, instead of obsessing over "lost sales," would do far better to concentrate on figuring out ways to maximize their audience exposure. And there, if anything, electronic publishing provides even more and better avenues than traditional publishing.

You suggest your physical sales increase even though a book is available online for free. I am curious if people are reading the entire book online and then purchasing the physical copy? If so why? I know that I've borrowed the first couple of books of a series, then read the series and bought the first books just to have the whole set, is that what they're doing? Are they buying the physical one as they like to hold it? Is it that they figure they should pay and buying the book is how?

I've found that the pattern varies widely. People all have different preferences in how they read, and, obviously, feel differently about whatever their "obligations" might be.

What I find most interesting, however, is what seems to be the most common pattern emerging -- judging, at least, from the 1200 or so letters I've gotten. More and more people seem to want a copy of a book they like in both formats: paper as well as electronic.

That's not at all surprising, when you stop and think about it. Each format has its advantages. Most people find paper books easier and more comfortable to read. At the same time, even those people run across situations where having an electronic version is handy. The most common reason mentioned in the letters are the exigencies of travel. Sometimes the travel involved is long-distance, such a vacations; but, often enough, it's simply commuting travel or on-the-job travel. Hauling around a lot of paper books is obviously a pain in the neck. And so people find it convenient to have a number of the books they're currently reading also available to them in a format they can read on an e-book.

Provided, of course, that the e-book wasn't so loaded down with encryption and restrictions as to make it more of a nuisance than it was worth.

I strongly suspect that's the real future we're going to be seeing in publishing, in the decades to come. I don't think electronic books will replace paper books so much as they will become a complementary, parallel format. And I suspect the closest historical analogy will be the way vinyl records and tapes co-existed for decades in music recording. Each had its advantages. Some people listened only to vinyl; some, only to tapes. But most people mixed-and-matched in whatever proportion suited their own preferences and lifestyle.

I enjoyed "Introducing the Baen Free Library" and hope the experiment works out well for all concerned. I'd like to suggest a complimentary experiment: demand publishing of out-of-print titles. My experience as a small-scale publisher of technical works is that the economies of scale in offset printing require print runs of thousands of copies. My guess is that, in the arena where Baen Books sells, the minimum is more like tens or even hundreds of thousands of copies.

[Note from Eric: No, it's not that high. Jim Baen has told me that 15,000 copies is about the minimum print run for a mass market paperback.]

As a result, many fine works go out of print and are only available on the used marketplace (if at all). Demand publishing, which uses print runs of hundreds (or even dozens) of copies, may be able to make some of these works available.

I think the advocates of print-on-demand tend to overstate its advantages -- and rather drastically. No matter how good technology gets, there are just some basic realities -- which ultimately go back to the laws of thermodynamics, when you get right down to it -- which will always make "one-off" production more expensive than mass production. So, while I think print-on-demand will prove a blessing for a lot of "niche" markets, I doubt it will ever play much of a role in mass market publishing.

Out-of-print popular fiction titles are not, I suspect, one of those "niches." The reason is because the cost of producing a book is primarily the start-up cost, not the actual production costs. This is something a lot of people don't understand about publishing, and it's the reason they have such wildly unrealistic expectations for what electronic publishing or print-on-demand might be capable of.

A lot of people seem to think the big cost in producing a book is the cost of the paper, ink, and binding.

Nope. That only becomes true with really major print runs -- i.e., best selling titles which have print runs measured in the hundreds of thousands. And those are precisely the titles which would be the least suitable for print-on-demand.

The major costs, for the great majority of popular fiction titles, basically fall into two broad categories:

1) Money to the writer and the artist who does the cover art. (And don't think cover art doesn't apply to electronic books. It'll be needed for advertising and promotion, if nothing else -- and I'm already getting letters from people asking us to put up better resolution versions of the cover art than Baen's web site currently has available. I won't be surprised if we eventually wind up doing it. People like cover art -- which means, first, they'll get it; and, second, it'll have to be paid for.)

That expense, the money paid to the author and artist, has to be covered regardless of the format: mass-run paper, print-on-demand paper, or electronic. And while it is affected by the size of the print run, in the sense that an author who isn't going to get a big print run won't get a large advance, so what? Relative to the production cost, it's still a significant chunk of the expense.

Nor, by the way, does this change simply because a book is out-of-print. Out-of-print is not the same thing as being in the public domain. Almost all the out-of-print titles which people would like to see reissued in science fiction are still under copyright. That means that a publisher has to advance the money to get the rights, either to the author or to the author's estate.

Yes, the amount of money involved is usually lower than it is with a currently active writer's new titles. So what? The reason the book is out-of-print in the first place is because it stopped selling very well. That means the projected income is going to be relatively low also.

The other major category of costs is what you can call the publisher's overhead. That includes everything that a publisher has to do to stay in business: cover his payroll, his office expenses, mortgage or lease on his building, etc., etc. And, although this is not usually considered an "overhead" expense, you have to include in this an average profit rate which allows him to keep going.

This is the category that I find so many people who are advocates of the wonders of e-publishing or print-on-demand tend to get absolutely pie-in-the-sky about. Ultimately, a lot of them seem to think that the publishing/editing side of this industry is basically the equivalent of medieval robber barons demanding tolls from innocent passers-by -- so they can all be gotten rid of.

Sorry, that's nonsense. I don't care what format books get published in -- traditional paper, print-on-demand, or electronic -- you simply can't eliminate the costs of publishing and editing as such. That's because these costs are necessary, not optional.

What a publishing company does, in essence, is this: They do all the work for the public of finding the writers who are worth publishing and making sure that the product is up to snuff by the time it appears for public consumption. That's putting it crudely, but pretty accurately.

People who think you can bypass this process are, frankly, living in a dream world. I'll be blunt. There is so much lousy writing being produced out there that SOMEBODY has to weed through it. What a publisher does is provide that service for the public. That means that the average reader does not, time after time, have to wade through the "slush pile" to find the books worth reading.

But that's just the start of it. Because there is no sharp line between "good stuff" and "bad stuff." When you get to the "gray area" -- which, by the way, includes almost all books written -- you start entering the editing/prepping stage of the business.

I'll use myself as an example. Compared to most authors, I write very clean and polished final manuscripts. (I'm not guessing. I've been told that by editors and production managers with lots of experience.) But no manuscript of mine -- not one -- has ever gone through the production process without getting a fair amount of "prep work."

The first stage of it is editing, as such. When I was a less experienced author, this involved a lot more work from my publisher and editor than it usually does today. But it still involves a fair amount.

Again, I'll be concrete. My latest novel, The Tyrant, is the 13th novel of mine which has come out in print. In addition, I've written a number of shorter-length pieces -- ranging from short stories to short novels -- which have appeared in several anthologies. My editor, Toni Weisskopf, read through the manuscript of The Tyrant carefully. This takes many hours of work -- which has to be paid for, and at the salary scale this level of professional experience is going to get. Toni Weisskopf cannot eat air nor pay her mortgage with virtual money.

Based on Toni's editing, we made a number of changes in the text. Then the book had to be prepared for publication. That meant, first, that another skilled professional -- Nancy Hanger -- had to translate my simple word processing manuscript file into a format suitable for publication -- in either an electronic or paper format. (Actually, what happens nowadays is that everything gets put into an electronic format first, and is then modified for the specific needs of Webscriptions and the printer.)

Nancy Hanger cannot eat air. She cannot pay her bills with virtual money. Note, furthermore, that the cost of her labor -- as with Toni's -- is fixed. Whether the manuscript Toni and Nancy work on winds up being produced in a mass print run or -- theoretically, if Baen did it, which they don't -- for a print-on-demand edition, or for a purely electronic edition, it DOESN'T MAKE ANY DIFFERENCE. The cost is essentially the same.

That's also true for the next stage in the process, which is the proof-reading and correction of errors. Once Nancy has a good "final" publisher-ready text, Baen prints up copies of it and it is distributed to professional proof-readers. (The author gets sent a copy also -- these are called "page proofs," by the way -- and smart authors always proof-read. An author is likely to catch some continuity lapses which a proof-reader might miss because they're focusing on the actual text.)

Again -- it all costs money. And -- again -- the expense involved is basically fixed. It doesn't matter if those hours are spent proof-reading the latest Tom Clancy or J.K. Rowling title, or a title which is going to have very modest sales. The cost is FIXED. Nor can the publisher stint on it, either, because this is part of what the public is paying for. The public will insist -- with its pocketbook -- that any professionally-produced title meets at least minimal level professional production standards.

All right. I'll stop there, because I think I've made my point. There are a lot of other costs which I haven't even mentioned, and those costs are also basically fixed. Just to name two, my publisher can't live on air or pay his mortgage with virtual money either, so his income and expenses have to be covered. And to run a publishing house, he needs a staff which does more than simply the production work. He needs a business manager, for starters. That's Marla Ainspan. She can't eat air either.

And that's the whole problem with most of the expectations people have about print-on-demand. They either never think about this, or they blithely dismiss it. Sorry, you have to think about it -- and you can't dismiss it at all.

A print-on-demand book is still going to cost a publisher quite a bit of money to prepare. And he's not going to do it unless he has reason to believe the income will cover (at a minimum) his expenses. The problem, for a mass market popular fiction publisher, is that -- unlike, say, a textbook or encyclopedia publisher -- he can't charge that high a price per unit. Thus, the level of expenses, most of them fixed, is such that in order to cover it... he pretty much has to have sales numbered in the thousands of copies. How many thousands? That depends on the format. A few thousand, for hardcovers, which have a higher profit margin per unit; probably at least ten thousand for a mass market paperback.

But, if that's true, then what's the point of print-on-demand? If you have to sell 10,000 copies of a book anyway... then why not do a mass print run of 15,000 copies -- which is quite a bit cheaper, per unit, than printing them one at a time? And allows you to use the existing and well-established distribution network instead of creating one?

Which also costs money. Sorry, but there really ain't no such thing as a free lunch. I'm not sure, because I've never examined the question closely, but I suspect the costs of running a print-on-demand establishment would be a lot higher on the distribution end of the business also. Because you'd have to replace a small number of generally low-skilled employees, who are basically just keeping the shelves stocked and collecting money -- a book supermarket, essentially -- with a larger number of better-trained employees providing customers with one-on-one service.

That's the basic reason I'm skeptical that print-on-demand is ever going to amount to much, at least when it comes to mass market commercial fiction. I can see where the economics might make sense for titles which, individually, have a high enough profit margin. But, pretty much by definition, that rules out the "mass market."

To your opponents, used books are the worst crime. The author gets no money, yet money changed hands! I do feel a bit guilty buying used books. But, those authors I like get sales as I rapidly purchase the author's other books or buy their new books as they are released. I'm sure this behavior is no surprise to you.

I am an enthusiastic supporter of the used book industry. I also think those authors -- led, sadly, by the Writer's Guild -- who are currently raising a fuss because Amazon is advertising used copies alongside new ones are... um. I'm trying to be polite about this, which ain't easy. The words which immediately come to my mind are "cretins" and "imbeciles."

Again, the problem is that a lot of people just can't understand the difference between a real loss and a virtual one. Or, as I've put it elsewhere, they really think you can subtract from zero.

An author only suffers a loss from a sale of a used book if two conditions are true:

First, the used copy was bought instead of a new copy.

Second, the used copy leads to no further sales of that author's books.

In the vast majority of instances, these two conditions do not apply. Let's go through this, systematically.

First, why do people buy used copies in the first place? Simply because they're cheaper? As a rule, no -- and the reason is because the "cheapness" is highly relative. That's especially true with used copies bought online, which (at least for paperbacks) are usually as expensive or even more expensive than new copies.

I know whereof I speak, by the way, because in addition to my writing I also do a lot of work as an editor reissuing old science fiction authors. The stories I'm reissuing were written long before the advent of modern computer technology, and are almost never available in electronic format. That means I have to track down a paper copy of the title and get it turned into electronic format. (Either by using a typist or scanning-and-proofing.)

I can only find a copy of these titles used. They simply aren't available in a current edition. (Which is self-evident. If they were still in print, I wouldn't be RE-issuing them in the first place.)

As a result, I've used Amazon's used book service quite often. And, with almost no exceptions, found that the cost of a used book purchased online is higher than what it would have cost me in a new edition.

Why? Because of the same basic laws of thermodynamics I referred to earlier with regard to print-on-demand. A new title, distributed through Amazon, is able to take advantage of all the benefits of mass scale production and distribution. Amazon has that title immediately available, and if you simply add it to other titles you purchased simultaneously, you can drastically reduce the shipping and handling cost. Which, for a single paperback, is a very hefty percentage of the total price. In the case of used books purchased online, more often than not, the shipping and handling charge is higher than the cost of the book itself.

What's the advantage of buying a used copy for $3 instead of $7 -- when you're then going to have to pay $4 in shipping and handling costs? Sure, you have to pay S&H on new titles also. But, because they are new, you can use Amazon's existing distribution network and, at least most of the time, cut the cost a great deal.

You usually can't do that with used books. Not, at least, unless you order all of them at once through the same used bookstore. But in my experience, typically, that's not what happens. I find Title X is being sold by Book Dealer 1, Title Y by Book Dealer 2, etc. So I wind up spending twice as much on shipping as I do on the books themselves. (On average, I'd say the used books I've purchased through Amazon cost somewhere around $8 apiece -- just about the same as if I'd walked into a bookstore and bought a new copy.)

And then... you get a USED copy. Even copies which are in good condition are still thirty or forty years old. Which means you're losing that much in the way of "shelf life" in your own book collection.

So why do I do it? Simple. I have no other option, that's why. And that, right off, is what accounts for a lot of used book sales.

But let's take the case where a book is available in both a new and a used format. Why do people buy the used one?

Simply because it's cheaper?

As a rule -- no. They don't buy the used copy simply because it's cheaper. They buy it because it's cheap enough that they're willing to pay the money -- but WOULD NOT pay the money needed to get that book in a new edition.

Again: Zero from zero... is zero. If someone would not have bought a new copy ANYWAY, the author has lost nothing. In fact, the author is like to have gained -- because if the buyers discover the book is to their liking, they are far more prone to buy a new copy of something else written by that same author.

Duh.

I swear to God, the sheer stupidity of the Writer's Guild's position is mind-boggling. AMAZON IS DOING NOTHING NEW. Used books have been around for centuries. And they have always provided authors with the same very valuable function: much like libraries, in a different way, they provide people with a comparatively painless "entry level" way of experimenting with different authors. They are one of the principal means by which an author expands his or her audience. Any author who doesn't understand that is incapable of seeing beyond their nose.

Again, I will speak from personal experience. NOT ONE of the science fiction authors who became my favorites when I was a teenager arrived at that position because I bought a new book of theirs. I COULDN'T AFFORD IT. So I read library copies... and I haunted the used book stores.

As the years went by, of course, I started buying new editions of their writings. Often enough, over the years, I bought several different copies of the same book. So, in the long run, those authors made money over and over again from the fact that various versions of their writings were available to me at "entry level."

You want what is perhaps the ultimate example of how this can pay off in the long run?

Consider one of those authors: James H. Schmitz. Beginning in the early 60s, a teenager named Eric Flint became acquainted with his writings -- entirely through library and used copies. Thus began what proved to be a lifelong devotion on my part to that particular author.

Beginning in the late 60s, I began buying James H. Schmitz in new editions -- any time I could find them. I did continue to buy used copies of titles which were not available any other way. I didn't even consider used copies, however, if a new one was available. Why? Because I knew by then that I wanted maximum shelf life -- so I could read the book again and again, as the years passed.

I still have, in my library, a copy of a book of his I bought back then: the 1973 Berkley Medallion paperback edition of his novel The Eternal Frontiers. It's... in sad shape. Today, the pages are all yellow, the glue long ago disintegrated, and the book is held together with a rubber band.

But, it doesn't matter. I won't ever have to read that copy of it again -- because, as of September this year, a brand new edition is coming out. A big fancy trade paperback published by Baen Books called Eternal Frontier, which contains that novel along with many other stories written by Schmitz -- most of which have not been reissued in decades.

I edited that book, along with Guy Gordon. Forty-some-odd years ago, a teenager bought a few used copies of Schmitz's writings. Decades later -- directly as a result -- that same person edited the reissue of everything James H. Schmitz ever wrote. (Something which never happened during his own lifetime, by the way.)

"Lost sales." Yeah, right. Forty years ago, James H. Schmitz "lost" a handful of sales to Eric Flint, which might have brought him... maybe a dollar's worth of income. (Actually, more like a quarter. Books in those days sold for 35 to 50 cents. Schmitz would have gotten 3-4 cents for every new copy sold, and I couldn't have "cheated" him out of more than five or six sales because that was as many books as he had in print.)

I don't know the exact figures, but I'm quite certain that as of now -- with five volumes of the reissue in print and two more to come -- the heirs of James Schmitz have received somewhere in the vicinity of $20,000 in royalties. Even allowing for inflation...

"Lost sales," my ass.

Yes, granted, that's an extreme example. But it illustrates graphically my whole point. Used books, like free library copies, are simply an investment in the future for authors. That's all. They are not lost sales. They are really sales stored up for the future -- and earning the equivalent of compound interest.

Do you think other authors in the library would be willing to come forward with similar statistics? I realize this might be unlikely (since many consider money quite private), but people could try to explain away your success with the library as the fluke of a single author whose popularity is on the rise. They'd have a much harder time explaining away multiple authors from the library all showing the same increase in sales (if, indeed, everyone else's sales have also increased).

There are at least two who will -- David Drake and Mercedes Lackey. I just got a letter from Misty telling me that her royalty income for a number of her older titles climbed dramatically after she put a few of her books in the Library. As soon as she gets a chance, she'll send me the raw data and I'll put it up in analytical form in the Library as I did with my own titles. (This will probably take a few weeks, though. Both Misty and I are busy.)

Perhaps the most interesting thing about Misty's experience is that the titles involved are not in the Library -- in fact, they're issued by a different publisher than Baen altogether. So what seems to be happening here is pure "cross-over." People read some of her Baen titles in the Library -- people whom, Misty suspects, probably never read anything of hers before -- and then started buying a number of her books. And now the results are starting to show up in a different publisher's royalty statements. (Baen's haven't been issued yet for the equivalent period, so we don't know if the same will be true for Baen titles. Probably, but we won't know for a while.)

And, as I said, Dave Drake's agreed to do so also. He sent Baen Books an email yesterday telling them to send me whatever royalty figures on his Baen titles I need to do a comparative study.

It remains to be seen how generalized my experience will prove to be. But if it does prove to be approximately the same -- with at least three different authors, all of them at different stages in their careers and with a different audience base -- then...

Yes. It will become increasingly difficult for people to argue that my results were simply a "fluke."

Mind you, this still wouldn't constitute a genuinely rigorous scientific survey, complete with control sample. It would still be essentially "anecdotal." But the idea that "anecdotal reasoning" is automatically "flawed" is quite false. Decisions based on anecdotal evidence are what people do all the time. Just to name one instance of a decision which is far more important than any book purchase:

It's how everyone chooses their spouse.

Yup, it is, when you stop and think about it. How many people decide to marry someone after conducting a rigorous scientific study of the problem, complete with "control spouse?"

Nobody who ever got married, I can tell you that. Much less happily.

There is a well-known principle in logic which applies to problems being analyzed by anecdotal evidence. It's called "Ockham's Razor." Given two explanations, all other things being equal, the simplest is likely to be the right one.

If several authors start showing a rise in sales of older titles after putting some of their books up online for free... the simplest explanation is obviously that the increased visibility led to those sales. Sure, my opponents can claim "it's all anecdotal" -- conveniently ignoring the fact that their arguments are based on a few very flimsy anecdotes -- but in order to explain those facts they would have to start concocting some pretty complicated and tortuous explanations.

And they would, too. Old titles do not, all other things being equal, suddenly start showing increased sales. Believe me, they don't. Something had to have caused that very atypical phenomenon -- either something simple, common to all the authors involved; or some very complex and accidental concatenation of disconnected circumstances, which all "just happened" to come together at just the right time.

I don't think it's too hard to see which way Ockham's Razor cuts, now is it?

I'm going to end this Prime Palaver, not with a question, but with a statement. Not a statement by me, but by one of the Library's users.

This letter summarizes and puts together in one place what almost all of them say.

I'm writing to thank you for your efforts in maintaining the library, and to add my experience to what is undoubtedly a long and growing list of testimonials. I stumbled across the library about 7 months ago when I was searching the web for the titles of other books in the world of Path of the Fury, which had been one of my favorite books. Although I loved Fury, I had not read any of David Weber's other books. After coming across the library and reading On Basilisk Station though, I've gone out and bought the entire Honor Harrington series, along with the Dahak series and the Bahzell series (even though both books are free in the library!). The library also introduced me to other authors whom I'd never read (including yourself) and I've bought some of the other series that I've sampled in the library as well (such as Mercedes Lackey's Bardic Voices books).

Aside from providing a look at authors and series that I'd otherwise not have read, the library has also been important in another way, as an introduction to books in electronic format (Mobipocket in my case). I had never thought that I would enjoy reading books in electronic format. However, when reading 1632 on my palm pilot, I was pleasantly surprised at how easy and enjoyable it actually is. Because of this, I am now a subscribing to Webscriptions, which I would never have done under my previous impressions.

So, once again thank you (and Jim Baen) for providing this service. It has served to greatly expand my reading enjoyment.

Eric Flint