Tag Archives: ebooks

Articles I Like: The long and winding road to DRM-free ebooks in academic libraries

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I have surprisingly strong views about the efficacy, effectiveness, utility, and appropriateness of digital rights management on files, including both music and ebooks. Generally speaking, I do not agree with the powers that be (publishers) that there is a difference in “ownership” between buying something digitally and buying it in hard copy, particularly exemplified by a book. I do agree that there are different risks to the publisher, but that doesn’t mean in one I have bought it and the other I have merely paid to borrow it. I believe I have the same rights and obligations I had previously. Which means in its most basic terms that I have bought it for me and I can’t reproduce it for others, but the digital element puts two other limitations — I can’t loan it nor can I resell it. I am willing to accept those caveats, but it doesn’t mean I don’t own it. Or does it? If it is ownership in one case but modified terms of ownership in another, does that change? Of course, but as the courts are apt to rule, only insofar as it accomplishes the original goal. Of course all of that is about appropriateness. It says nothing about the utility, etc.

So when I saw an article cross-posted to The Passive Voice about libraries and DRM, I had to click through to the original piece by Mirela Roncevic on No Shelf Required. Some highlights are below but for anyone interested in how libraries are dealing with it, including links to EBSCO’s approach, etc., the whole article is awesome. There are even some decent follow-on citations at the bottom of it.

But DRM isn’t copyright. It refers to actual technology—a code or a set of codes—applied to restrict the digital use of copyrighted materials. In the publishing world, it is a way of ‘protecting’ digital books against copyright infringement and piracy, which have been a major concern to publishers since the advent of the Internet. By using protection—usually via three DRM types, Amazon for Kindle, Apple’s FairPlay for iBookstore and Adobe’s Digital Editions Protection Technology—publishers (or copyright holders) are able to control what users can and cannot do with digital content.

This means that people buying ebooks, whether for personal or institutional use, are paying for usage, not possession (as has been the case for centuries with print books). When encrypted with DRM, ebooks cannot be easily (if at all) copied or printed, viewed on multiple devices, or moved from one device to another. Further, they can only be downloaded a certain number of times (even when legally bought online) and, if necessary, blocked in certain territories around the world (or made invisible to users in certain countries). Such restrictions have given publishers and authors some peace of mind over the past two decades, but they have resulted in many inconveniences for legitimate users, including lay readers who purchase digital content on sites like Amazon and researchers who access digital content through libraries.

[…]

Not until recently have publishers started to pay closer attention to the feedback provided to librarians by end users, including students and faculty. A survey published this spring by Library Journal—whose goal was to investigate academic student ebook experience in four-year colleges, universities, graduate programs, as well as two-year or community colleges—found that 74 percent of students accessing ebooks through libraries believe there should be no restrictions placed on ebooks; 66 percent prefer to use ebooks with no restrictions; and 37 percent have taken a principled stand and only use ebooks that have no restrictions when conducting research.

[…]

Academic librarians do not shy away from expressing their concerns over the adverse effects of DRM, questioning whether it successfully combats piracy in the first place and pointing to the difficult ‘middleman’ role libraries must play in their efforts to meet the demands of their patrons on the one end and remain respectful of the publishers’ ‘rights’ on the other.

Further, libraries oppose the uses of DRM that lock readers to specific ebook formats, arguing that any institution that lawfully acquires content should be able to allow its patrons to read that content on any device and on any technology platform. Libraries also oppose DRM used to track reading patterns, giving insight into what people read, when, how and where, which jeopardizes patrons’ privacy.

[…]

A white paper published by Springer Nature in November 2017 (The OA effect: How does open access affect the usage of scholarly books?), revealed, among other findings, that Open Access books enjoy, on average, seven times more downloads, 50 percent more citations, and ten times more online mentions than paywalled titles.

Source: The long and winding road to DRM-free ebooks in academic libraries | N S R

One of the citations is to the American Library Association’s one-pager on DRM, and it does a great job of not only listing different types of DRM, but also some of the issues for libraries:

  • Challenges balancing traditional first sale doctrine against potential liability for digital resources;
  • Potential expiry dates on content can limit preservation and archival purposes, particularly for culturally and historically significant works; and,
  • DRM approaches tend to limit well-established fair use, library or educational exceptions to copyright law.

I know, I know, I’m a library geek. But kudos go to ThePassiveVoice for sharing in the first place.

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Calculating the scope of my ebook addiction

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My first e-reading device was a Palm Pilot. I had an early Palm III for a short while, a cast-off as I recall, and then I got one through work and it was the Tungsten. A beautiful device, and I tried everything on it, including reading an ebook. Something old, free, likely from the Gutenberg Project. It was neat, but not something to write home about. I killed my Tungsten in a freak accident at a hockey game involving a folding guest chair, a coat pocket, and a crunching sound as I sat back down after cheering for a goal. I still remember the feeling later that night when I went to put the Tungsten on charge and saw the destroyed screen. I eventually moved on somewhat reluctantly to a combined Palm Pilot / phone (a rudimentary smart phone) called the Treo, but it was far too small to read on and I never tried.

I was still a purist. I liked paper and I have the basement full of books to prove it. Successive moves in 1997 and 1998 didn’t kill that purity but three more in 2004, 2007, and 2011 did put a damper on my paper enthusiasm. I love my books, and if I had a place to put them out all on nice shelves, I would. But I don’t have a library like that, and honestly, I don’t want to use up the space in the house to do that. It’s just not worth it considering many tend to be “read once, shelve forever”. They are on storage shelves in the basement now, and my wife was mildly concerned about the previous rate of accumulation, but the real motivator for me to change showed up around the time of the last move.

I bought a Kindle 3 — not touchscreen, just side buttons and a keyboard, and only monochrome. Very much like the early Palm III if I’m honest. But the e-ink is glorious to read. I boost the font size a bit, not quite “large print”, but I’m getting older and I quite like the reduced strain. I confess that some print books have had such small type, I tossed them quickly back on the shelf and bought an e-version instead.

Since the K3, I have become a device-agnostic e-whore. I’ll read on anything, anywhere, anytime. A couple of times when I’ve wondered if I would like a series or not, I’ve even downloaded the first volume onto my desktop, particularly when there are sales or promos, and then read the entire thing on my main computer just because I got engrossed or my other devices were charging. Not often, but 2 or 3 times. I’ve read on the Tungsten, the K3, three different tablets, at least three different phones, a laptop and a netbook.

I know, I know, many of you might say, “Never! Paper or die!”. But that’s not the test for me, because I am all about the content. I like to lose myself in the story, and if the story is good, I don’t care what format it is. Podcast, TV show, movie, animated, live theatre, magazines, I don’t care. I want to get lost in the story.

In my most arrogant days, I think the e-book partially appeals to me because it is faster. I don’t just mean that I can order a book and download in seconds, which is a factor, but that I also can read faster. I can turn pages faster. You might not think that is significant, physically, but mentally for me it seems a lot like experiences with old typewriters and early word processors. The QWERTY layout that is popular for typing was designed to prevent people from going too fast — the keys would hit each other. So it had to be fast enough to make it worthwhile, but not too fast and crash. Early wordprocessing had the opposite challenge. If it took longer than about half a second (can’t remember the actual threshold now) for the character to appear on the screen after the key was pressed, typists would stop to see if it had gone through. Their brain processed the key press and needed to see the character appear right afterward or it would stop and wait for it to appear. For me, the K3 was perfect…I could turn the page fast enough that there was no chance of me “leaving the story”.

I have left a story many times with books, particularly at the end of chapters, simply from the time it takes to manually turn the page, complete with all the sensory input that goes with it. I can feel myself stopping even for a split-second and pulling myself briefly out of the story. With the e-ink, the refresh is almost instantaneous. I am a very fast reader, and that matters to me because I read so fast.

For example, one time I was reading the novelization of one of the Spiderman movies. I finished it in just under 2 hours, about the same length of time as the movie runs. It was like watching it spool on the screen before me, just like a movie, only it was just my imagination. A totally immersive experience. Oddly enough though, that one was on paper.

But I’ve had it happen while reading e-books a lot more often — I just zip along at lightning speed. Which makes up for an odd fact — I can’t skim read on my Kindle. If I’m trying to digest some non-fiction stuff really fast for work, for example, I know how to skim read / almost-speed-read to get through the salient facts. Relax my eyes, focus on the top half of the text line, skip words that are often long adjectives, focus on verbs and nouns. I can’t do it for long texts, maybe a few pages before I start to gloss over.

But sometimes when I’m reading a novel in paper, and the author for some reason decides to drop two pages of exposition or description into an active scene, my brain goes on auto-pilot skimming forward a paragraph or two until the action starts again. It happens, particularly with new release debut authors. Yet I can’t do it on the e-ink devices or even tablets or phones. Just not the right font, I think, or maybe I just don’t see enough of the text before I have to skip to the next screen. Either way, it doesn’t work. But the speed of screen refreshes is way faster than turning pages in a paper book and keeps me reading.

The last six years with the Kindle match the statistical profile of many an e-book reader with a new device. It starts off hot and heavy — one of Amazon’s busiest download days in recent years has been Christmas day itself or Boxing Day…people with new Kindles or other devices have them all charged and ready to go, and they start downloading books for the first time.

In 2011, one of the biggest “unique features” of Amazon was the daily deals on e-books. Lots of authors putting books on promo for four or five days at a time, often for 99 cents, or just as often, many giving away book 1 of a series for free. Kind of like drug dealers giving samples to hook clients. And there was a cottage industry that was born with it…e-zines that advertised the deals. Now the market is flooded, which might sound like a good thing, but really is just info overload.

Yet myself, like many an avid reader, couldn’t say no to free books. A free guidebook for Web HTML? Sure, I’ll take that. I do webpages. A new mystery novel with a librarian as the detective? Sign me up and I’ll download right now. Cool. A new series of basic guides to a variety of topics from property law to biology, from world history to a Korean cookbook? Sure, it’s free, I’ll DL it. And I did. Over the last five years, about 850 books from Amazon. I estimate I probably bought maybe 50-75 of those, almost all except 2 or 3 were deeply discounted, and the rest were freebies. Why did I download them? Cuz they were free, and it was like crack to a reader. And they don’t take up space in my house. If I don’t want it, I’ll delete it. Maybe it will be good, and I am a voracious reader for any subject matter.

I also made the mistake of reading about the Gutenberg Project. For those who haven’t heard of it, it is basically an old book preservation project run as crowd-sourcing for books that are past their copyright period and long out of print. Lots of countries have different copyright periods, so one country might have 25 years, another 50, another 75, etc. Beyond that period, except where copyrights have been extended by other legal means, the books are now in the public domain. Of course, they didn’t have e-books 50 years ago, which means someone scans the old book and uploads it. Often they have sophisticated scanners that can scan whole books at once, even turning pages, and save as a PDF-like file.

Then the crowdsourcing comes in — anyone can join, read a page of some book, and “fix” the optical character recognition. Because of font issues, the computer might read a “the” as “be”…so you see on your screen the JPG or PDF version side-by-side with a raw text box that shows what the computer thinks is the right text. You read the image, adjust any of the text that needs to be adjusted (like a copy-editor or proofer) and say “save”. That puts that page into a larger quality control process where a Level 2 editor looks at the page and reads your text and approves it or not. Once you have “proven” reliable in your edits, you too can become a Level 2 editor or be given a harder book or your edits might even bypass Level 2 and go straight to Level 3. Level 3 looks at things like a compiled text where your page 1 and someone else’s page 2, and someone else’s page 3 are all merged together into pages 1-3. Depending on the project in each country, there may be one person at the end who reads the whole book and makes sure there are no obvious errors. Just reading it, not comparing it to the original text. Some of the edits are consistency issues…for example, did you capitalize a word that the book didn’t because you think it should be capitalized whereas someone else was literal? And when it is done and added to the inventory, any user who finds an error can flag it for an update. 

You don’t have to be an editor to look at completed books though, it was just how I got sucked in. I loved the idea, partly as I worked in a library when I was in university, and the idea of books being lost to the ages is somewhat horrifying, matched with the beautiful, low-cost, crowd-sourcing of preservation by simple readers instead of a large bureaucracy. Even if you do get involved, it isn’t necessarily time-consuming. Sure, like any “hobby”, there are dedicated nutjobs where it becomes their life. But you can edit for a few minutes any time you have free space in your calendar.

And then the unthinkable happened. I discovered that they had their ENTIRE collection downloadable as DVD copies. 1000s of books on disk with a simple download. I resisted for awhile. Browsing. Being selective. There’s a lot of stuff in there I’ll never read. And then one day, for no apparent trigger, I cracked. I just downloaded the whole collection and put it in Calibre.

You would think that was enough. And it generally has been. An e-book overdose to scare me straight. But it’s been made worse by bad cyber management on my desktop. Because of some computer problems over the years, a lot of files that I have on my machine have gotten duplicated into multiple directories. For example, a collection of photos from a trip might have been saved as 2012 – Newfoundland and another copy, backed up on another disk, said Newfoundland – 2012. Not knowing which was the “good” set, I saved both for future “clean-up” and rationalization.

E-book files suffered the same fate. Multiple times. Plus I didn’t exactly know how to organize my library very well in Calibre (an e-book library management program). So I would import collection X into one library with a separate library in another. But I’d only get so far and then get sidetracked with other priorities. Which would mean I had a partially sorted library, often with 2 or 3 copies of the same file. Add in multiple e-book formats one time where I stupidly told it to create a PDF, EPUB and a MOBI copy of everything, and my library went crazy. Keeping them all as separate entries in the library.

As part of my goals for the year, I decided I wanted to read more and part of that required me to create a better set-up for Calibre with my libraries. And I discovered the clean-up problem was far worse than I imagined:

  • 67,293 files
  • 53.5 GB of space
  • 25,469 titles

Ook.

I suspect that at least 75% of the 25K titles are actually duplicates or format variations under separate listings, so that leaves me with 6000 or so actual titles. Deleting Gutenberg stuff takes me down at least two thirds of that, so 2000 or so titles of itnerest, with about 1200 being non-fiction titles that are possibly throw-aways. Call it 800 titles to actually process, of which about half are ones that are basically free replacements for titles I have in paper.

So I have about 400 titles to be read that are half-way decent, possibly in three formats – EPUB, Mobi, PDF, and possibly, AZW (Amazon format).

Okay, that’s still quite the addiction. Not rehab country just yet, but still. 🙂 My goal is to have the library vastly cleaned up by June. I just have to find ways within Calibre to better eliminate duplicate titles that just happen to have separate formats or even the same file.

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Another reader`s preference for paper format

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I find most of the articles on the net about ebooks vs. paper to be wrong-headed and mostly silly. Passionate paper people who claim that anyone using an e-reader to be woefully uninformed, of low culture, and possibly impotent vs. all digital, all the time people who claim anyone reading paper is clearly a Luddite. Personally, I don’t care the format. Paper, ink, e-ink, pixels, back of a napkin, side of a serial box, pamphlet, newspaper, ceiling of a dentist’s office…I’ll read anything anywhere anytime. And usually it doesn’t take much time before I disconnect from the physical format and immerse myself in the story. So when I saw yet another “I’m going to read paper” post, I just about blew past it with a yawn. However, I didn’t, I clicked, and I find Michael Hyatt’s take kind of interesting (Why I’m Putting Ebooks on the Shelf for 2016 – Michael Hyatt).

One thing he notes that for him, “e-books are out of sight and out of mind” whereas the paper books loom in front of him on the shelf waiting to be read, and reminding him to read. Kind of an interesting idea, I think, partly because I have found the same at times. I carry my e-reader with me, but if I don’t physically “see” it, I often grab my tablet or something else first. He also finds the physical stack comforting when he’s done reading them…I see his point, but the concern with a library overwhelming the house negates that pleasure pretty quick for me.

A second item I like is that he finds the bookmarking and taking of notes less effective for him, something he enjoys doing easily with physical books. I certainly find that for non-fiction, less concerned with it for fiction.

The third item that resonated with me was about how he doesn’t get the same sense of accomplishment when he finishes an e-book as a paper book. I have found that too…in paper, I close the book. I might literally feel a sense of closure, but it’s also a moment to reflect for a second or two on what I have read, to savour the ending, to digest the story arc. On my e-book reader, particularly if I’m reading a series, I will go on to the next one almost immediately and be well into Chapter 1 without taking the time to really savour the flavour of the previous meal. That’s not really about the e-book though, that’s about my personal reading style with e-books. Nothing would stop me from savouring it the way a closing of a book does.

Sure, he also argues that e-books don’t engage the senses, there’s lower retention and comprehension, etc., and most of the science around it is complete crap, so I’m ignoring those points. I also find no resonance with arguments about more easily distracted by e-mail or games on tablets, etc. — when I’m reading, I’m reading. Earthquakes don’t distract me. I don’t even pretend to understand his complaints about more difficulty navigating though.

Yet, as I said, I`m glad I clicked. Those three points were interesting, and quite different from what most people write on the subject.

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Article about self-publishing disrupting the industry

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I admit that I have developed an almost unhealthy fascination with the publishing industry’s changes over the last five years. Separate from my own vested interest, I am also interested from an analytical perpective. People argue that “self-publishing” or “ebooks” are the changes that are sweeping their way through the publishing world, but I personally feel that it is more about the disentanglement of a previously integrated and controlled business model.

In the past, you had authors who produced content as a raw product, agents who marketed those raw materials to publisher after publisher, or editor by editor at each publisher, and publishers who took the raw product, massaged it, processed it, turned it into a final product, and took the sellable version to market. And there were huge barriers to entry into the market — agents wouldn’t take just anyone, publishers often wanted only agent-repped products, stores and libraries would mainly take books only from the Big Six publishers or their subsidiaries. Breaking into those areas would give you huge leverage, but they were jealously guarded corridors of power.

However, in recent years, the whole business model has been disrupted end to end…authors can get their books on Amazon and in ebook form without an agent or a publisher. They can get their own ISBN numbers, they can form small publishers to hide their “self” status if they want. They can hire copy editors, substantive editors, cover artists, publicists, anybody that the Big Six used to hire for big names. And, shhh, don’t tell anyone, but a lot of those editors and artists and publicists are the same ones the Big Six use, just selling their wares as freelance.

It’s a fascinating time for disruptions in the industry, so I was excited to see what the Guardian published on “Ten Ways Self-Publishing Has Changed the Books World”:

After a boom year in self-publishing the headlines are getting a little predictable. Most feature a doughty author who quickly builds demand for her work and is rewarded with a large contract from the traditional industry.

<snip>

1. There is now a wider understanding of what publishing is…

<snip>

5. The role of the author is changing…

<snip>

7. New business models and opportunities are springing up,

via Ten ways self-publishing has changed the books world | Books | guardian.co.uk.

I don’t agree with most of the conclusions of the author of the article, or at least not the nuances, but I do agree with the general trend. I was surprised though that they didn’t hammer home more on the issue of “time to market”. Overall, that is the largest single change that is disrupting the industry. Within days of the selection of the new Pope, authors were putting up books on Amazon. Some of them quite substantial and high-quality. In traditional publishing, the window would have been 18-24 months normally or super high rush could do it in 6 perhaps. I think too that Indie bookstores who are excited about getting in on Kobo sales should look instead at the POD market — there are printers that you can have in your shop, giant photo copier/printers essentially, that can print and blue-bind a book with a glossy cover in about an hour. Any book, any time, hard copy. That’s disruption.

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DW Smith on publishing, early decisions

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Dean Wesley Smith is one of my favorite bloggers. As another blogger described him, Dean is an ex-midlister who has drunk the self-publishing Koolaid, is happy with his success in multiple worlds, and is happy to share his approach and results with others. He has a couple of blog-based ebooks going, where he writes a chapter at a time and posts it for digestion and comment. Then he cobbles them all together into an actual book. His latest endeavour, the second edition of “Think Like a Publisher”, is being “reposted” with updates in close sequential order. Here are some excerpts from Chapter 1:

 

Some of the earliest decisions a publisher has to make can be changed down the road easily. Some are difficult to change. So, I’m going to break down some of these early decisions into basic groups. And keep in mind, there are no correct answers on any of these decisions. Just what you want to do.

…

Get the business set up, do the chores, look at your start-up inventory, and then look hard and fast at what kind of publisher you want to be.

See the full post at Dean Wesley Smith » Think Like a Publisher 2012. Chapter 1: The Early Decisions.

As I said, Dean’s one of my favorite bloggers but sometimes I think his approach to publishing is a bit, umm, influenced by his past lives. Almost like he’s willing to go self-publishing, but then tries to pull back in some of the things he misses from the traditional world. For example, near the end of the chapter, he talks about High-End publishers vs. Discount Publishers vs. Traditional Publishers. It’s a useful comparison, and he expands on this in more chapters, but it does heavily lean towards a division based on a “paper-based” view of publishing.

For me, and I am not Dean’s direct target audience, that division is a bit skewed to the paper world, and thinks in “paper” terms. Instead, as an aspiring author, I’m more interested in the author’s perspective of “choosing a publisher” than “becoming a publisher” for others. In this case, I think a more likely perspective for aspiring authors is between “Traditional Publishing” (Large press and small press) or “Self-publishing” (through third parties or as a full-fledged DIYer).

The difference, for me, is that some of the “discount” publisher categories are only applicable if you think of it in paper terms. Someone who publishes ebooks only and sells them at 99 cents is not discounting them if they’ve never sold at a different rate. Nor are they choosing to consign themselves to a bargain bin, one of Dean’s frequent suggestions on his blog.

It’s just a price point, and while I have a bunch of upcoming posts regarding “pricing” paradigms, I will satisfy my urge to be a gadfly towards the “discount” label to say that it is a point of view, but not one I share (nor do much more experienced and famous authors than me like Konrath and Eisler).

Good first chapter, though, and I look forward to the future updates…like all published items, you take from it what you can, and mileage may vary!

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Consumers vs. Publishers

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Jeremy Greenfield had an interesting post on Digital Book World about e-book pricing — but focused on the costs. The article tries to basically explain both why consumers think costs (and the price) should be a lot less, and publishers saying, “No, wait, costs are not that far off”.

Here are some excerpts from Greenfield’s post:

 

 

 

 

Publishers are making a killing on e-books because they cost nothing to produce, distribute and sell and are almost 100% pure profit. At least, that’s what many consumers think.

…

While consumers understand the basic costs involved in the bricks-and-mortar retail world, they don’t understand the costs involved in selling something that is, well, much, much smaller than a bread box.

…

“We still pay for the author advance, the editing, the copy-editing, the proofreading, the cover and interior design, the illustrations, the sales kit, the marketing efforts, the publicity, and the staff that needs to coordinate all of the details that make books possible,” said Bob Miller in February 2009 on the HarperStudio blog (which has been defunct since April 2010 when the publishing start-up folded) when he was president and publisher of that company; he is now president and publisher of Workman Publishing. “The costs are primarily in these previous stages; the difference between physical and electronic production is minimal.”

E-book production “costs 10% less” than print book production, said Molly Barton, Penguin’s global digital director. Hardly the vast savings that many consumers imagine. “But the largest expense is author payment and always has been.”

You can find the full post at Consumers Upset and Confused Over E-Book Pricing. [Edit: The original page has been removed]

Kris Rusch summed it up pretty well — she described it as all bullshit. But as I love to be a gadfly (not in the simple irritating sense, but rather the provocative sense for discussion), let me pull apart the original article. Because there is a hidden truth behind it, or rather, two versions of the truth.

Let’s start in reverse order, and begin with the publisher. They approach books in the modern world, at least from an accounting perspective, as “essentially” one entity. So all the costs that the publisher quoted above is charged to both items — it’s all overhead that has to be paid — regardless of the format of the final book. So they charge front-end editing costs, regardless of format out the back-end. They charge the combined formatting. They charge all marketing costs, etc. etc. etc. to the cost. All of these are considered a “book’s cost”, regardless of the final two sets of costs that diverge — when it is all ready at the end, you press “PRINT” in one business model or “UPLOAD” in the other. Except the publisher adds all those costs in both business models back into the original costs and amortizes it over both. Following that model, it wouldn’t matter whether you went Print or Ebook, the costs would come out the same. In fact, if you compare it to the old process where they only had print costs, the book costs are actually higher now — because they are doing an extra version that they charge to the total as well. It’s a completely wonky way to price what are essentially two separate products, but if your business model doesn’t like ebook transformation, it’s a good way to hide costs and embed them in your ebook world so that the transformation goes slow.

By contrast, let’s look at the consumer perspective. Editing? They know you already did that for the print book. Formatting? Already done. A cover? They don’t care, reuse the same one. Dozens of people to “manage the relationship”? Also don’t care. Nope, they know you already paid those costs which is why publishers are charging so high for print books (hard cover and paperback). Sooooo, ebooks aren’t incurring all those costs again — they are only incurring a small amount of “incidental” additional costs. In other words, once you have the “content”, ebooks only incur marginal costs. And like any good business model, you sell the ebook for the marginal cost of producing that extra format, plus a small profit.

In one vein, the publishers are saying, “Oh, you want an eformat TOO? That raises the overall price of everything” and consumers are responding, “No, unless you’re giving me both formats, I’m only willing to pay the incremental cost for doing an ebook”. And like all other industries where the internet is reducing production costs of virtual goods, publishers can continue to block innovation at their own peril.

The most laughable part is the argument that the biggest expense is for the author. Considering an author gets less than 25% of overall price (and often much less), that’s a pretty good argument for consumers to say “Hey, big publisher? I don’t think you add enough value. I prefer to give more money to authors and so I’ll buy the self-published books they do. And you’ll get zip on the deal.”

After all, in the end, consumers vote with their wallets, and if it puts more money in the hands of the content creator, that starts to look a lot like another economic movement.

Anyone want to try labelling their self-pubbed books as “Fair Trade Reading”?

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E-book lawsuit in Canada

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Marsha Lederman had an interesting article in the Globe and Mail on April 18th trying to put a Canadian spin on the charges in the U.S. of collusion and price-fixing by the Big Six publishers (Harper Collins, MacMillan, Penguin, Random House, Hachette, and Simon & Schuster) with Apple. Just to be clear, there are TWO lawsuits in the U.S. — a class-action civil suit launched by “consumers” against this group for trying to raise ebook prices above Amazon’s preferred ceiling of $9.99 (targeting all six plus Apple) and a completely separate Department of Justice civil suit that targets everyone in that list except Random House. I’m not including separate state plans in that list.

Here’s an excerpt from Lederman:

A proposed class-action lawsuit filed in B.C. Supreme Court by the Vancouver firm Camp Fiorante Matthews Mogerman alleges that Apple Inc. and a number of publishers engaged in a “conspiracy” to lessen competition and “fix, maintain, increase or control the prices of e-books.” It is the most recent of at least five such suits filed recently in courts in Ontario, Quebec and B.C.

It also alleges that the defendants or their representatives communicated secretly, in person and by phone, to discuss and fix e-book prices, in the lead-up to the introduction of Apple’s iPad, which can function as an eReader, in April of 2010.In addition it alleges that the growing Canadian eBook market is highly concentrated, making it more susceptible to collusion.

“The U.S. case isn’t going to cover Canadian consumers. So it’s the same underlying facts, it’s the same consumer protection agenda, but it is for different consumers in a different country,” said lawyer Reidar Mogerman, who filed the suit in B.C. Supreme Court last week on behalf of plaintiff Denise E. McCabe, a non-practising Kamloops lawyer who has purchased a “significant” number of e-books.

See the whole article at Allegations of e-book price fixing hit Canada (link at Globe and Mail has expired).

So, you’ve seen the U.S. case, this “seems” like a simple matching by Canadian lawyers, should have same outcome, right? Not so fast. There is an underlying premise in law that one act can’t result in two actions for damages — even if Canadian consumers are not included in a U.S. judgement, a Canadian judge is going to look to see if Canadian consumers were either explicitly targeted by U.S. actions (i.e. the American individuals involved in the decision were negotiating in ways that were inherently or explicitly including the Canadian market rather than simply a knock-on effect of American actions) and/or there were additional negotiations / decisions by Canadian actors that create an additional claim of action. In other words, where’s the “Canadian content”-equivalent component of the decision-making? If there isn’t any, and to date there has been no proof offered in any court-room or media story, then the Canadian lawsuits are going to have to fight a much bigger uphill battle. Particularly as there is no “Amazon.CA” ebook store — we all buy from the U.S. site. Which means publishers could get punished “twice” for sale adjustments in one store. I’m a bit skeptical of the outcome, partly as Canada doesn’t have the same class-action lawsuit mentality of our American cousins, including less of a “reward” culture when it comes to judgements, often limiting outcomes to “actual damages” (a couple of dollars if you can prove you bought a book at a price higher than $9.99).

I do, however, find the notation that the Canadian market is more prone to collusion since it is more highly concentrated of interest. It could mean that certain companies might take a larger hit than the others, and with completely different dynamics than in the U.S.

Personally, I think the lawyers missed the boat on the filing. They should have included a NAFTA element where they could show that Canadian consumers writ large were being squeezed by the Canadian publishers as a larger pattern of behaviour. I’ll confess upfront that I have a really strong aversion to HarperCollinsCanada. They don’t price match HarperCollins (U.S.) and invariably when I find a book that is priced way higher in Canada, the publisher is HarperCollins. I’ve even reduced myself to arguing with them on their Facebook page about their prices…I don’t know why I’m even still getting their feeds as it only raises my bloodpressure.

Awhile back, I got very excited about Lawrence Block’s ebooks being available, went to get one of the Scudder series and thought, “What the ????”. It was $13. For a book that had been out for 10 years. Since I’m on his FB feed, I mentioned it to him…to which he replied, “Huh? They’re $7,99 in ebook form”. Of course, if you’re in the U.S., Harper Collins (U.S) was selling it for $7.99. But the Canadian price was $13.99 or so on Amazon. I could find it for $12 something on Kobo and I think I could find it for slightly less than that on Nook (or vica versa). But bottom-line was that Canadians would have to pay more than $11 to get the ebook, a greater than 35% markup. Oh, and just to add insult to injury, the paperback version was available for less than the U.S. Kindle version.

While I normally see this with HCC, it isn’t unique to them. There’s something wonky in the state of publishing when (a) the ebook version is more expensive than the paperback (I don’t care how many times a publisher dances on the head of the pin arguing that ebook costs are not much lower than paper production, nowhere could you ever convince me it was MORE expensive!) and (b) the price you set to sell to a consumer virtually (across the internet, from the same store, with the same process, with the same technology, and the exact same E-version original!) depends on which country they are in and, ignoring currency exchanges particularly when dollars are trading almost equally, there’s a 35% markup!

If that isn’t a pattern of behaviour that gets you slapped by a Canadian court for price-gouging and collusion, it certainly does at least colour your evidence a bit more strongly in your favour in your court filing. Ah, it will be fun to be a spectator.

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The Threat of Free Riders

The Writing Life of a Tadpole Posted on by  

The Harvard Business Review has a great website, combining not only the articles from their magazine, but daily summaries of key articles, interesting statistics and a number of cool blogs ranging from “soft” HR issues to “hard” business articles. Frances Frei and Anne Morriss wrote a blog entry called, “Target and the Threat of Free Riders” that is pretty good. I know what you’re thinking — umm, doesn’t the heading for this blog entry say it’s about “publishing”? Yes, yes, it does. Because while Frei and Morriss are primarily talking about Target, the hidden subtext behind it is Amazon.

You might remember the big kerfuffle at Christmas time…Amazon released a new App that could scan bar codes, and they encouraged you while shopping in bricks and mortar stores to do some price comparisons. And then, *gasp*, buy from Amazon if the price was cheaper. They even had the audacity to offer initial discount coupons to those using the apps. The blogs exploded with stories of how Amazon was evil, how dare they do this, it was destroying the local infrastructure. They were essentially complaining that Amazon was being a “free rider” — the store chains have physical locations with large overhead costs they have to pay, and here Amazon was saying “go visit them, touch and feel your items in person, exploit their overhead, and then buy from us.” See what Frei and Morriss have lots to say about it from the perspective of Target, and guess what? They argue that OTHERS should be free-riding on Amazon’s investments:

Target is getting nervous, for the first time in a while. Some Target shoppers are browsing comfortably in the company’s high-design stores, then closing the deal online with lower-priced vendors. It’s enough of a phenomenon that CEO Gregg Steinhafel recently penned a letter to his suppliers with a competitive battle cry: “we aren’t willing…to let online-only retailers use our brick-and-mortar stores as a showroom.”

…

When there’s high utility of information pre-purchase and ease of substitution among products — as there is with big box retail — you run the risk that your well-educated customers will give their money to a competitor, sometimes without even leaving your store (not every customer huddled over a smartphone is playing Angry Birds). Customers won’t stick around out of gratitude.

Steinhafel’s letter hints at some of the ways that Target’s planning to fight back, including membership and subscription-based pricing models. The company might also look to one of its biggest free-riding threats — Amazon — for inspiration. Amazon should be facing an onslaught of customer free riding. Its products are often not the lowest-priced option, and they’re easy to substitute.

But the Amazon pre-purchase experience — a robust catalogue of customer and expert reviews for each product — gives you a reason to start the process there. Most important, Amazon then makes the pivot to purchase as seamless and lovely as possible, even from a cell phone. The retailer’s patented one-click technology makes it irresistibly easy, once you’ve found what you’re looking for, to point and click and be done with it. Amazon combats free-riding with ease of use.

(see full entry at Target and the Threat of Free Riders).

My only quibble with the article is that it didn’t really pick up on the emotional backlash against free-riding that was generated with the Amazon app. People blogged, campaigned, boycotted, etc. Lots of people got really snippy, having no real idea what free-riding means but they could understand Amazon trying to steal sales from live stores.

Yet nowhere in all of the feeds did I see anyone, not even the timidest or bravest of souls, stick up their hand and say, “Umm, excuse me. How is this different from a store that price-matches?”. Because that too is complete free-ridership. So you go to the box store, find out everything you want to know, get whatever form of customer service you can get, get a quote on a price, and then go to another store that you would prefer to deal with, and ask them to match. Your drycleaners will do it. Your box stores like Zellers, Walmart, Sears, The Bay, Target, etc all have price-matching and “low price guarantees”. Mattress stores do it CONSTANTLY — they’ll price match anyone. Car sales. Pharmacies. Bookstores (gasp!).

In other words, another store goes to the trouble of deciding to have a sale, researching costs, deciding on a sale price, organizing their store with discount tags, new pricing, letting all their staff know about the promotion, etc. Then they advertise, generating big costs to do so. And their neighbour simply puts out a sign that says “bring us their ad, and we’ll match it.”

That’s basically what Amazon did, except they did it with an app and made it possible to not only price match a sale, but also to simply scan a barcode to see what the price is at Amazon (usually not as good for many items, as the article makes out). But the anti-Amazoners went berzerk anyway.

Never let the facts of a situation get in the way of a good rant against a big evil company like Amazon. After all, you wouldn’t want to take away sales from a local “good corporate citizen” like Walmart, now would you?

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Critics of E-Books Lawsuit

The Writing Life of a Tadpole Posted on by  

The Wall Street Journal has a pretty good article by Thomas Catan entitled Critics of E-Books Lawsuit Miss the Mark, Experts Say (link may expire). In it, Catan gives a pretty good overview of the Ebook “collusion” lawsuit and has some outstanding points about those who think the Department of Justice “got it wrong” (i.e. they went after the wrong company) and are really just puppets of Amazon:

 

 

 

U.S. antitrust law doesn’t seek to protect little companies against big ones, or even struggling ones against successful ones. Companies can grow as large as they want, as long as they do it through lower prices, better service or niftier innovations. Companies can even become monopolies, as long as they don’t get there illegally or try to extend their power by unlawfully stifling competition.

…

“Price fixing is kind of the first-degree murder of antitrust violations,” Prof. Hovenkamp says. “They don’t have discretion to just walk away from what appears to be a strong set of facts that, if true, are one of the most central of antitrust violations.”

…

The government might already have shown some leniency. For one, the Justice Department brought a civil, rather than a criminal, case, so no executives will go to prison. Also, the publishers that settled agreed that for two years they wouldn’t stop booksellers like Amazon from discounting. That is a relatively short period; restrictions in such consent decrees typically run as long as five or 10 years.

…

“The goal of antitrust policy is to protect consumer prices”, Prof. Hovenkamp says. “It’s not to protect inefficient firms from having to exit the market.”

 

I really like the article because it is one of the few that gets the law right, including the economic rationale. While every blog in the country it seems is decrying Amazon, the bloggers totally ignore that the publishers BROKE THE LAW whereas Amazon did nothing illegal. Amazon is guilty of being a strong competitor, maybe even coming close to predatory pricing on some items. But they aren’t breaking the law.

Yet, apparently, the publishers who have screwed the pooch over the last 10 years and avoided any uptake on e-books wherever possible, can now take the law into their own hands, change the basic rules of commerce, and stick it to the consumer who pays more under the Agency model than they did under the old system. And for all of this, they only get prosecuted civilly and might have to undergo supervision for two years. That’s the business equivalent of being released on your own recognizance after assaulting a police officer. A slap on the wrist in the long run.

And the blogger conspiracy see this as missing an opportunity to slap Amazon for being “too” competitive. But a great article by the WSJ in the midst of lots of naysayers who wouldn’t know an anti-trust statute if it reached out and bit their publisher. Oh, wait, it did…

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A different perspective on e-returns…

The Writing Life of a Tadpole Posted on by  

I am an active follower of a lot of blogs, but very few discussion groups. For me, I often find that the discussion groups are too general with high volume (Dorothy-L), or too technical (some web-focused ones), or too narrowly focused (single app approaches, for example). I do however follow the “Murder Must Advertise” discussion group regularly as it seems the right mix of volume, topics, and valuable content. This past week, one of the hot topics has been Amazon allowing readers to return e-books for refund, and it got me looking at it a bit more broadly.

Not surprisingly, the people who are in favour of allowing returns are mainly readers, those against are mainly writers. Those in favour argue that of course returns should be allowed, since sometimes you buy the book with high hopes and confidence and it turns out that the thing is a steaming pile of armadillo dung. This happens despite reading previews, other reader’s reviews, etc. Those against allowing returns tend to follow one of four threads of thought:

  1. E-books don’t cost a lot of money, and for those less than $2.99 on Amazon, we’re talking extremely small profit margins. So authors aren’t getting rich here. As a result, they argue that it is too burdensome on the bottom-line for authors to have returns taking away their meagre profits.
  2. On a related note, some would also argue that it is offensive or embarrassing for someone to return something that costs so little.
  3. Some argue that writers are creating content, not the book — and you can’t return content. It is both priceless and worthless, so returns are not appropriate for that type of product.
  4. The final argument is usually that there is a danger of people doing the literary equivalent of a “dine and dash” — returning it after they already have read it.

I understand those arguments, even if I don’t agree with them. First of all, the size of the profit margin doesn’t determine whether a customer (i.e. the reader) feels they should have the right to return something. Equally, for the second argument about the cost, a $2 purchase might be a significant luxury for one person, while the other considers it pocket change. It’s a slippery slope to offending customers to say its too small an amount to worry about, if the customer is telling you they are worried about it enough to want to return the book. Some people are even returning FREE books, just because they want to signal that the book was so badly written or formatted that it shouldn’t even be given away! Price isn’t a determining factor. For the last two threads, neither are particularly compelling — one is semantics that matter to a writer, but not a reader, and the other is just a straw man. People return the books for legitimate reasons (in their mind at least), not because they are trying to rip off the writer. In fact, the reasons for returns of any product, outside of food, are long and varied — ranging from the three inter-related biggies (simple buyer’s remorse, product defect, or price cheaper elsewhere) to a laundry list of unrelated areas (error, gift return, poor pre-purchase research, aesthetics, or the ever popular strawman mentioned above).

I leave it to others to argue about the merits of the above, or other reasons for and against. Instead, I want to share four other perspectives on e-returns.

  • Friction — The goal of any sales environment is to have “frictionless purchases”, to use the business vernacular. This is what Amazon has been trying to patent with their “one-click” purchase methodology. Don’t make people re-enter their info or even confirm — one click, and they’re done. Same with the fact the Kindle books appear directly on your ereader device. Frictionless. It’s also the same rationale, by the way, for people offering pricing at $0 or $.99 — it reduces the buyer’s friction in trying you out. If you remove returns, you have shifted all potential “sales” risk from the seller to the buyer. In other words, people will pause before clicking “BUY”. And not just the people likely to do returns. The evidence from other environments is quite high — regardless of price, a no return policy can reduce sales by as much as 30-50% on clothing (much higher if you don’t have change rooms), and if I recall the numbers, 80-90% on electronics. Not surprisingly Nook’s lacklustre market penetration is compounded by poor website design, no-returns, and higher prices (three big frictions). One way to overcome “no return” friction is name-brand recognition, but unless you’re Stephen King or James Patterson, the buyer perceives new authors as risks. Previews help, but are far from perfect, as mentioned above. And don’t get me started on a recent read, where the competence demonstrated by the first 7 chapters of the book disappeared in Chapter 8 with no warning.
  • Success — To paraphrase a high-ranking and extremely successful Japanese businessman I had the pleasure of meeting back in 1997, there are only five areas where a no return policy is appropriate:
    • food (obvious, although people return spoiled food quite regularly);
    • penny stocks and ponzi schemes (since you’re probably scamming in both worlds);
    • garage / tag sales / used stores (I didn’t even know they had tag sales in Japan?);
    • going-out-of-business sales; and,
    • any business run by amateurs who don’t know what they’re doing.

In fact, for those who read the lovely historical approaches to “sales” (like aggressive sales tactics like “don’t take no for an answer”, etc.), one of the marks of knowing when you have reached the right degree of sales and marketing is when you are generating returns. It means you’ve sold to all the people who were “right” for your product, and you are now getting returns from the people who were “near-right” for your product. Returns at that point are not signs of personal failure, or even market failure, but a sign of success.

  • Pies — Many of the proponents of the “no return” policy are also offended by low prices on ebooks or disbelieving of the successful anecdotes offered by people regarding Kindle Select. For those looking for more “data” / “evidence”, check out Sourcebooks Casablanca website — they had a Q from a reader asking why they, as a publisher, would give away books. Not a small indie, not a self-published author. Their response was limited to focusing on 7 adult fiction titles (in romance and in general fiction) for free within the past 6 months and they found “On average, full-price sales for the 4 weeks after the promotion were 46 times greater than the 4 weeks before the promotion.” In other words, they sold four year’s worth of books in the month after the promotion. Now that varied — some were as “little” as 7-12 times increase…but the average was a 46-fold sales increase. Not conclusive, but a nice validation of others experiences. For those who claim that it must just hurt future sales, giveaways for promotion are the same logic as going from selling locally (small market) to selling national (large market) — you gave it away, sure, but you are now known to a MUCH LARGER market than before. If you had time to go door-to-door, sure, you might have reached those people through other means. But unless you’re repeating John Locke’s previous car tour approach (which sounds almost like door-to-door sales! ), this is a pretty efficient means (at least at present) to reaching greater awareness…building sales by enlarging the pie. And returns are just a small piece of that pie.
  • Negative but hidden feedback — Another concern a lot of people have out there are negative reviews. If you take away the option for returns, the number of negative reviews will greatly increase — the vast majority of those who do returns are then satisfied, they have their money back. They move on. But if they can’t return the product, they vent another way — in message boards, and reviews. Right now, an author sees returns and is therefore getting feedback of a sort, but it is hidden. Take away returns, and any negativity will start to show up in the reviews pretty fast. And in some cases, magnified because the reader feels like they got “taken”.

Just some alternate ways to look at returns as perhaps helping your sales, rather than hurting them…

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