Monthly Archives: February 2012

Victors’ Remorse over SOPA Defeat?

Stampeded?

Did opponents of SOPA throw the baby out with the bathwater? Cary H. Sherman, CEO of the Recording Industry Association of America, says yes in a recent New York Times op-ed piece.

Sherman asserts that Google, Wikipedia and other Web heavy-hitters cried “Censorship!” like shouting “Fire!” in a crowded theater, and stampeded a gullible public and its government servants into reversing legislation that would have afforded some measure of protection to the victims of copyright piracy.

“Policy makers had recognized a constitutional (and economic) imperative to protect American property from theft, to shield consumers from counterfeit products and fraud, and to combat foreign criminals who exploit technology to steal American ingenuity and jobs,” writes Sherman. “But at the 11th hour, a flood of e-mails and phone calls to Congress stopped the legislation in its tracks. Was this the result of democracy, or demagoguery?”

“Since when is it censorship to shut down an operation that an American court, upon a thorough review of evidence, has determined to be illegal?” the editorialist asks. “When the police close down a store fencing stolen goods, it isn’t censorship, but when those stolen goods are fenced online, it is?”

Now there is no legislation in place except the joke known as the Digital Millennium Copyright Act, piracy is out of control, and legitimate copyright owners are being stripped of their hard-earned livings by brazen thieves operating in broad daylight (See A Bootleg E-Book Bazaar Operates in Plain Sight)

Sherman urges the Web minions who lead the charge against SOPA to do the right thing and listen to the voices of the victims. “Perhaps this is naïve, but I’d like to believe that the companies that opposed SOPA and PIPA will now feel some responsibility to help come up with constructive alternatives. Virtually every opponent acknowledged that the problem of counterfeiting and piracy is real and damaging. It is no longer acceptable just to say no.”

That’s a motion we’re ready to second.

Details in What Wikipedia Won’t Tell You by Cary H. Sherman.  And a complete archive of E-Reads postings about piracy, visit Pirate Central.

Richard Curtis

Note to readers: Digital Book World has invited me to post my blogs initially on its website before releasing them on E-Reads, and this content is re-published with DBW’s permission. Click here to view the original posting.

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Animated Film About Books Charms the Oscar Judges

Fresh from its Oscar victory as Best Animated Short Film, here is The Fantastic Flying Books of Mr. Morris Lessmore:

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The New YouTube: IT Meets TV

Back in June 2010 we gave our opinion of what we called the westcoastification of YouTube: “Hollywood, there are millions of us who don’t want YouTube to mature,” we wrote. “We like it just the way it is — embarrassingly sophomoric, amateurish, LOL hilarious, pathetic, dopey, dirty, funky, and utterly counterculture. It belongs to We the People. Can’t you go co-opt some other industry? We can think of a lot of them that could use your genius, your money and your values.” (See Do We Want YouTube to Grow Up?)

We might as well have spit in the wind. YouTube is on the way to becoming as slick as television, as highly monetized as a currency printing plant, and as tightly controlled as a high-security prison. A superb analysis in the New Yorker by John Seabrook tracks the evolution of YouTube from”the home of grainy cell-phone videos and skateboarding dogs” to YouTube Original Channels, dedicated to giving viewers 24/7 online coverage of the subjects in which they are particularly interested.

Once these channels are in place, writes Seabrook, “the niches will get nichier, and the audiences smaller still. But those audiences will be even more engaged, and much more quantifiable. Advertisers have to rely on ratings and market research to get even a rough approximation of who’s watching which show. Because YouTube is delivered over the Internet, the company will know exactly who is watching—not their names but their viewing histories, their searches, their purchases, their rough location, and their online social connections.”

For anyone interested in media – and who is not? –  Streaming Dreams: YouTube turns pro  is required reading.

Richard Curtis

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Stephen Colbert Referees Little Indie Bookstore Parnassus v. Amazon

The Colbert Report Mon – Thurs 11:30pm / 10:30c
Ann Patchett
www.colbertnation.com
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Espresso POD Gaining Mo

Book by book, author by author, venue by venue and investor by investor, the Espresso print on demand machine is picking up momentum as the paper book publishing mode of the future.

Just how close is that future? The machine needs to get smaller, faster and cheaper, the investors more open-handed and the installations more abundant. Above all, the concept needs to sink into the mentality of a publishing industry that lives in denial that the distribution system that prospered in the 20th century is going to survive in the 21st. With the erosion of traditional bookselling through store chains and independent shops, the handwriting is on the wall for a system built around trucks – trucks that not only deliver books from printers to distribution depots to stores, but carry the unsold books back to their doom in a pulping vat. The number of copies returned can exceed 50% of the number distributed.

With the alternative distribution system of e-books in place, the idea of returnable books, or at least books returnable in stomach-turning numbers (e-books are actually returnable, but the percentage of return is miniscule), has become a preposterous anachronism. The “handwriting on the wall” is actually eInk.

Print on demand on demand is another form of digital publishing, except that the end product is tangible. That publishers do not yet embrace this simple truth is part of the tunnel vision endemic on the part of book industry leaders.  It’s easy to understand why it is so obdurate: distributing books into stores via fossil-fueled vehicles generates most of the cash that flows through the publishing industry. But the unprofitability of that system, compared to one in which printed books are manufactured at the point of purchase, is appalling.

The paradigmatic shift of the book business from the current distribution model to a POD-based one is inevitable. What is delaying it is a lack of imagination on the part of industry leaders. Though they have dipped a toe in the water by issuing backlist books in POD, none has yet dared to abandon the long print run and the returnable distribution model.

All this is preface to an article by John Tozzi in bloomberg.com about progress in the installation of Espresso print on demand machines, On Demand Books Bets on Self-Publishing, which we urge you to read. It describes the efforts of On Demand chairman Jason Epstein and his investment partners to gain acceptance for the Espresso throughout the land.

At the dawn of the digital book industry, a trade publication named Jason Epstein one of three “Grumpy Old Visionaries”.  Over a decade later his original vision seems a lot fresher than that of many book industry executives half his age (he summed it up compellingly in an article published in 2010).  We wish him the gift of time to see his vision achieved and profit handsomely from it.

(And if you’re curious to know who the other grumpy old visionaries were, you may click here).

Richard Curtis

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Bundles Want to Be Free

As digital technology evolves, the practice of bundling – packaging physical books with their e-book counterparts – is now coming into focus as a commercial option for publishers.  Though the goal of one-click delivery is far harder than advocates wish – as Rachel Deahl makes clear in a recent Publishers Weekly article Is the Time Right for Bundling?, the technical and commercial challenges will eventually be overcome.  When they are, we will be faced with the question, How much to charge for a print/e-book bundle?  In an effort to start the dialogue, one industry leader, Bloomsbury USA’s Evan Schnittman (describing the bundle as an “enhanced hardcover”), suggests a price of 25% over the price of the hardcover.  “The consumer wins,” he says.

We’re far from sure about that, and we also wonder if anyone else wins, either. In the summer of 2010 we raised the question in Bundling: Publishing’s Next Battleground.  We re-post it here to push the dialogue where publishers may not want to go.

Richard Curtis

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The following question is deceptively simple, and we urge you to take your time responding. How much time? Three or four months. You’ll need that much. A lot rides on your answer.

Here’s the question:

When you purchase a print book you should be able to get the e-book for…

  • a) the full combined retail prices of print and e-book editions
  • b) an additional 50% of the retail price of the print edition
  • c) an additional 25% of the retail price of the print edition
  • d) $1.00 more than the retail price of the print edition
  • e) free

The subject of this little quiz is bundling, a common marketing tactic in which two or more products are packaged and sold at a single price. In this case the package is a printed book plus its e-book iteration.

As simple as it sounds, bundling is shaping up to be the battleground for clashing publishing philosophies, and the time will soon come when publishers will have to choose one of the above strategies and put it into effect. Misjudging consumer attitudes could prove to be a big mistake and possibly a ruinous one.

The essence of bundling is to offer customers a discount for selecting the combo instead of the individually priced components, so choice a) above is a non-starter. But choices b), c) and d) reflect just how aggressive a discounter wants to be and the various thresholds at which consumer resistance is expected to melt. A good argument can be made for each and as the bundling issue warms up you can expect to hear them all endlessly debated.

Yet even the cheapest package – a dollar or even less than a dollar over the cost of the print edition – may not suffice to capture the consumer’s fancy. Why? Because many people believe they’re entitled to get the e-book free with purchase of the print book. How large is public support for that position? We need to take a poll to find out, but if anecdotal reports are any indication, they may be in the overwhelming majority and they are unquestionably the most vocal. You will certainly hear their outpouring of joy when one publisher steps up to offer a print and e-book combo for the price of the print edition alone. Our own prediction? Free will become the standard, and even ten cents above free will be a competitive disadvantage.

Economic factors aside, consumer negativity toward double-charging is a contributor to piracy. Comments sent to us in response to postings about piracy strongly suggest that the public expects digital versions of books to be tossed in for nothing when a printed book is sold, and if it isn’t tossed in, many of those customers will feel no compunctions about downloading an unauthorized copy. They simply feel entitled to it. Libertarian spokespeople like Cory Doctorow have articulated this sense of entitlement, and though some feel that their arguments go too far, there is a solid core of realism in their position. We can condemn the immorality of consumer attitudes ’til the cows come home; and we can (quite reasonably) complain that if people were willing to wait for the paperback reprint they should be willing to wait for the e-book reprint. It makes no difference: the public’s sense of entitlement creates an environment susceptible to the allure of piracy.

With so many sound arguments in support of heavily discounted bundles, why have we seen so little of it in book marketing? The answer is that it is harder to assemble print/e-book packages than it looks. Publishers that control both formats are in the best position to do it but the technology is not yet in place. Customers purchasing the latest James Patterson or Nora Roberts novel in a bookstore have no simple way to download the e-book in the same transaction. The publisher might offer a discount coupon but that requires a number of steps and clicks that discourage a quick and easy procedure.

What is wanted is a one-click experience: “Click here to order the print and e-book.” Such a deal might best be offered by a publisher on its website. However, the price of that bundle might undercut the prices offered by retailers or e-tailers for the individual components, and for publishers to compete with their own retailers is to cut their own throats.

Amazon is in a good position to offer print/e-book bundles but hasn’t done so yet, probably because it recognizes the complexity of the issues. Book pricing is already fraught with so much angst that adding bundling to the debate will undoubtedly induce cardiac infarction among book people already near apoplectic with worry.

For the record, we at E-Reads strongly support the position that the e-book version should be included free of charge with the purchase of one of our print editions and are working to overcome the technical obstacles to implementing our conviction.

We invite your comments and look forward to seeing the debate over bundling heat up on the next stretch of road to the future of books.

Richard Curtis

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Romance Readers Poll Votes Jessica Scott “Best Debut Author of 2011”

An All About Romance readers poll named Jessica Scott the Best Debut Author of 2011.  Here’s why…

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When Random House decided to relaunch its Loveswept romance line it sought authors whose gifts matched the company’s ambitious vision. And one of the first authors snapped up by publisher Sue Grimshaw for Loveswept’s list of original e-books was Jessica Scott. Today Jessica debuts with Because of You, an unflinching portrayal of two wounded souls struggling with self-doubt and self-loathing to find companionship, trust and, finally, love. Scott knows her military: she’s a career army officer. Read her unique bio here.

The advance raves for Because of You read like a Hall of Fame roster of romance greats.

# “Jessica Scott is an exciting new voice in romantic fiction who bursts upon the scene with an unputdownable debut novel! ”
New York Times Bestselling Author Robyn Carr

# “Edgy and current—and a truly satisfying love story. Put this book, Jessica Scott’s, BECAUSE OF YOU, on your “must read” list.”
New York Times Bestselling Author Suzanne Brockmann

# “Jessica Scott writes with a soldier’s heart. Because Of You is touching, authentic and a fantastic read.”
New York Times Bestselling Author Cindy Gerard

# “Crackling with realism, sizzling with sexual tension, and pulsing with emotion, Jessica Scott has penned an unforgettable military romance that delivers heartache and hope on every page.”
New York Times Bestselling Author Roxanne St. Claire

# “Authentic, emotional, and edgy, Jessica Scott’s sweeping military romance is a vivid snapshot of love, war, grief and–above all–hope.” –
Allison Brennan, NYT Bestselling Author of If I Should Die

# “Because of You is a powerful debut – emotional, heartbreaking and uplifting all at once, it’s a romance not to be missed!”
New York Times Bestselling Author Stephanie Tyler

# “Jessica Scott has written a beautiful love story filled with heart, tender emotion, unflinching honesty and gritty realism. Because of You is a military romance you will never forget!”
New York Times Bestselling Author Christy Reece

Jessica Scott

# “Jessica Scott writes an intense story, packed with realism and emotion. BECAUSE OF YOU will tug at your heartstrings.”
New York Times Bestselling Author
Laura Griffin

# “In BECAUSE OF YOU, Jessica Scott presents a realistic and emotionally gripping tale of life in and around the military. A wonderful debut, and I can’t wait to read the next in this compelling series.”
USA Today Bestselling Author Julie Kenner

# “Watch out Navy SEALS, there’s a new hero in town and he’s wearing Army gray! Because of You is a beautifully crafted, wonderfully emotional debut.”
New York Times Bestselling Author JoAnn Ross

# “BECAUSE OF YOU is a tough and tender romance that proves the one thing worth fighting for will always be true love. Jessica Scott is a vibrant new voice in contemporary romance!”
New York Times Bestselling author of GOODNIGHT TWEETHEART Teresa Medeiros

# “BECAUSE OF YOU is powerful, timely and wonderfully executed. Jessica Scott should be on every reader’s list.”
New York Times and USA Today Bestselling Author Brenda Novak

# Because of You is emotionally heart-wrenching and makes you smile as the characters triumph.
Mandi Schreiner, Happy Ever After – Blog Reviewer, USA Today

# “Military romance just got a whole lot better — Because of You — by Jessica Scott, who has created something sumptuous.”
Anne Woodall, Romance At Random Reviewer

# “I am eagerly awaiting the next installment in her trilogy. I give BECAUSE OF YOU an A.”
E -The BookPushers

Below, a trailer for the book, and an interview with the scintillating author.

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Is Self-Publishing a Ponzi Scheme?

Throughout history speculative bubbles have whipped people into such a state of euphoria that they lose all prudence and set themselves up for the collapse of their dreams and fortunes. It happened with investment as disparate as tulips in Holland, England’s South Sea Company, dotcom madness and American mortgage derivatives.

Ewan Morrison, describing the self-publishing craze in The Guardian, thinks this phenomenon perfectly fits the classic signposts of an incipient bubble.  He even suggests it smacks of a Ponzi scheme. “There is now,” he writes, “a boom industry in ‘How to get rich writing ebooks’ manuals, as well as a multitude of blogs offering tips and services, and a new breed of specialists who’ll charge you anything from $37 to $149 to get your ebook into shape. This all seems like a repeat of the boom in get-rich-quick manuals and ‘specialists’ that appeared around blogs and etrading.”

Drawing on the economic theorizing by twentieth century economist Hyman Minsky, Morrison develops parallels between such bubbles as the US stock market of the 1920s and the one shaping up in self-publishing. The following are direct quotations from Morrison’s article The self-epublishing bubble

Stage One – Disturbance.  Every financial bubble begins with a disturbance. The creation of Kindle led to a new generation of ereaders which, with Apple, launched an economic boom in a previously non-existent market.

Stage Two – Expansion/Prices Start to Increase. The ebook explosion is coupled with the rise of the e-reader… A brand new market of consumers for these products has appeared from nowhere. The change to cheap ebooks and self-published ebooks is a “change in underlying fundamentals”.

Stage Three – Euphoria/Easy Credit. Every financial bubble needs fuel; cheap and easy credit is that fuel. Without it, there can be no speculation… “Easy credit” in this case relates to the plummeting costs of digital content… The whole point of self-epublishing is that the market “brings in people who would not normally be there”. Like the promise that we can all have an affordable home with a cheap mortgage, we are being told constantly by digital businesses and the media that we can all be writers and even be successful as writers.

Stage Four – Over-trading/Prices Reach a Peak. As the effects of cheap and easy credit dig deeper, the market begins to accelerate. Overtrading lifts up volumes and spot shortages emerge. Prices start to zoom, and easy profits are made. This brings in more outsiders, and prices run out of control.  This is the point that amateurs – the foolish, the greedy, and the desperate – enter the market.”

Blogs now give advice to start-up writers, telling them to give their work away for free to gain audience share and get reviews, and only then attempt to raise their prices. The zooming prices here refers to the zooming down of prices. For example self-epublishers are now giving books away for free – see the Kindle Top 100 Free books. Furthermore, in this ecstatic push to self-epublish, there are hundreds of thousands of new ebooks for which there are almost no readers at all because they have zero visibility.

Stage Five – Market Reversal/Insider Profit Taking. Warnings sound that the boom will turn to bust; that the models on which success is based are unrealistic and overblown…The models of Doctorow or Hocking are misleading to say the least. For the hundreds of thousands of newcomers to self-epublishing to believe that they can become as successful as [Doctorow and Hocking] is a dangerous delusion, and one capitalised on by companies who have an interest in maximizing internet traffic and selling e-readers and internet advertising.

Stage Six – Financial Crisis. Just as the euphoria consumes the outsiders, the insiders see the warning signs, lose their faith and begin to sneak out the exit. Whether the outsiders see the insiders leave or not, insider profit-taking signals the beginning of the end. Already the stars of self-epublishing are leaving the system that launched them. Hocking signed a deal with Macmillan that gave her a $500,000 advance on four separate books in a series – a total reversal from the way self publishing is done (with zero advances being paid and all work being done on “spec”)… And then comes the collapse – if you work for free and have to slash your costs to be competitive – to, say, undercut the vast 99-cent market…, then your chances of ever seeing a return on all the free labor you’ve put in diminish accordingly. Add to this the fact that hundreds of thousands of others are competing with you in this pricing race to the bottom and the possibility of any newcomers making any money from self-epublishing vanishes. The bubble bursts.

Stage seven – Revulsion/Lender of Last Resort. Panic starts and euphoria is replaced with revulsion. Outsiders start to sell, but there are no buyers. Panic sets in, prices start to tumble downwards, credit dries up, and losses start to accumulate. After a long year of trying to sell self-epublished books, attempting to self-promote on all available networking sites, and realising that they have been in competition with hundreds of thousands of newcomers just like them, the vast majority of the newly self-epublished authors discover that they have sold less than 100 books each… They come to see self-epublishing as a kind of Ponzi scheme – one created by digital companies to prey on the desires of an expanding mass of consumers who also wanted to be believe they could be “creative”. The “Lender in the Last Resort” cannot really step in to save the “investors”, as these are the hundreds of thousands of hopeful and now-disappointed first-time epublishers.

Richard Curtis

 

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Dave Duncan’s “Against the Light” Ranked #1 SF Novel on Kindle

Dave Duncan’s extraordinary new novel Against the Light, just released by47North, Amazon’s science fiction imprint, has soared to the Number One ranking in Science Fiction on the Kindle bestseller list. Amazon is cross-promoting Duncan’s other books, most of which are published by E-Reads.

In Against the Light the Hierarchy, high priests of the religious order the Light, has installed King Ethan as the monarchical figurehead, ruling both the magical kingdom of Albi and its predominant religion. Scattered throughout the land, worshipers in the old ways of the Earth Mother are persecuted as heretics. And when young missionary student Rollo Woodbridge returns home to Albi, he is immediately arrested for heresy and treason, setting off a chain of events that plunges the land into utter chaos.

The Hierarchy has more treacherous motives, however, and when Rollo is rescued from jail, his family’s home is destroyed—but Rollo and his siblings are left alive. While Rollo tries diplomacy to end the religious and political conflict, his brother and sister swear vengeance. With the hours to deliverance counting down and their lives hanging in the balance, they must decide whether to stay and fight or leave Albi forever in the suspenseful, action-packed Against the Light.

If you like Against the Light as much as we think you are going to, you’ll find lots more Dave Duncan fiction on his author page on the E-Reads website.

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Grim Reality for Americans: Some Outsourced Jobs Aren’t Coming Back

“We don’t have an obligation to solve America’s problems.” an Apple executive recently told a reporter. “Our only obligation is making the best product possible.”

That says in a nutshell what many American corporate leaders are privately saying if not publicly admitting.  One leader who said it out loud was Apple’s Steve Jobs, and the person he said it to was Barack Obama. “Those jobs aren’t coming back,” Jobs reportedly said to the president at a Silicon Valley dinner in February 2011.

“The president’s question touched upon a central conviction at Apple,” write Charles Duhigg and Keith Bradsher in a penetrating New York Times analysis. “It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that ‘Made in the U.S.A.’ is no longer a viable option for most Apple products.”

The reason why is illustrated in a telling anecdote. “Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul,” Duhigg and Bradsher report. ” New screens began arriving at the plant near midnight.A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.”

Though the human price for such ant-like efficiency is dear – Apple’s Asian workers live in conditions close to indentured servitude – the moral downside of manufacturing success does not seem to tip the scales for American corporate leaders. “Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” a Labor Department economist told the reporters. “That’s disappeared. Profits and efficiency have trumped generosity.”

Rather than wring their hands, American business and government leaders need to focus on the kinds of jobs that Americans can perform profitably – and with dignity – inside their national boundaries. If some domestic industries need subsidization by the government to be competitive, our lawmakers must channel support to them and even erect some tariff barriers. If that tilts our economy towards state socialism, so be it. It will balance the unfair advantage that many foreign governments have taken of America.

Details in How U.S. Lost Out on iPhone Work

Richard Curtis

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