(exclamation points, on the other hand…)

There’s a conversation I’ve had before. In terms of authors I fall on the weak end of the “Boo, Piracy!” side, and I especially fall on the extremely strong end of “Boo, DRM!” The basic gist of the conversation was something like this: “Well, you might not think it’s a big deal now, but wait until you see your book on the piracy sites, with all those downloads listed.” Well. Okay. I’ve waited. Now here I am. I am officially a published author. I officially have to worry about whether my sales numbers will be good enough, and whether they’ll justify another contract. I have, in fact, lost sleep over this.

You know what makes my head hurt when I worry about sales numbers and contract renewals? The fact that one of my local Borders didn’t get their shipment of my books in for two weeks, and worrying that this might be more than just a local error. You know what will make people buy my books, faster and with greater likelihood, than if I spent 20 hours a week filing takedown notices? Their finding my book in Target where they stopped by to get lightbulbs.

My guess is that maybe, maybe, 1% of the people who download my book will actually read it, and maybe, maybe, 1% of the ones who actually read it would have purchased it. I absolutely despise these “estimates” of the cost of piracy that just take the number of downloads and multiply it by the cost of the book, because that has no basis in reality.

The most recent such estimate has hit the twitter/authorosphere by means of Publisher’s Weekly, in which Attributor estimates that piracy costs the industry “as much as” $3 billion in lost sales. Already, this has been turned into “pirates cost the industry $3 billion!” Sugar plums dance in heads, as people imagine what their sales would be like with another 6 zeroes attached to the end.

But the study (you can read the whole thing here) isn’t worth the paper it isn’t printed on, and its findings have been lied about by the very people who ran the study. It is so egregious, that I am angry just thinking about it.

So let’s start with first things first: Note the source. Attributor is not a scientific outfit. They are not economists who have been trained to determine this sort of thing. What “Attributor” is, is a fee-charging service that tries to stamp out piracy for you. This means that Attributor has an incentive–a financial one–to convince authors and publishers that there is money to be made in stamping out piracy. Beware anyone with murky motivations.

Now let’s move on to the methodology.

Attributor estimated the cost of piracy at $3 billion dollars using the following methodology:

1. It used the titles that it was tracking–that is, the titles where people had paid it money to hunt down and remove illegal copies. These titles are not listed in its methodology, but Publisher’s Weekly listed them as titles like, “Girl with the Dragon Tattoo” and “Angels and Demons.” Not precisely representative of book downloads in general.
2. Somehow, it figured out what “market share” each potential hosting site represented. The methodology does not explain how it figured that.
3. Four of those sites show how many “downloads” a title has. Using the estimated market share in part 2, Attributor stated that these sites represented 36.4% of all downloads. So it figured out the number of downloads by taking the number of downloads from those four sites, and dividing that number by 0.364. This gave them 9 million copies of books sold.
4. Attributor looked up prices for these books, and multiplied price by downloads. This gave them a figure of $380 million.
5. It then estimated that the 913 titles it was tracking represented 13.5% of the book publishing market. Again, no explanation is given as to how they measured this. By number of titles? (not possible; there are more than 10,000 books available for purchase). By percentage of books sold, per BookScan? I don’t really know where they get this number, but it’s pretty clear that the titles listed by Publisher’s Weekly represent very, very popular titles, and I’m not sure it’s fair to extrapolate from one set of books to the other, especially since their own findings demonstrated that there was variability in download rate for different types of books. In any event, they took $380 million and divided it by 0.135, which gave them $2.8 billion.
6. They added $200,000,000 to the number to make it nice and round. No, I’m not joking. That gives you an idea about precisely how scientifically accurate this study is.

These numbers are useless. In the study’s methodology, it acknowledges that these numbers cannot even attempt to estimate financial loss:

(study here; page 5).

Which, of course, is why, Attributor, in announcing its findings, announced it thusly:

You know what I call that?

I call that dishonesty. The numbers themselves are drawn from nowhere, are unexplained, and use estimates that the survey methodology itself acknowledges render it useless for the determination of loss. But Attributor–who makes its money from publishers scared of piracy–has itself used those numbers to claim something that they can’t actually claim, and those numbers are now being disseminated around the web by people who call this fact.

Piracy is bad. But you know what? So is a dishonest representation of those findings, especially when those findings then become part of the debate about what should be done about piracy.

I am firmly opposed to piracy. But I am also firmly opposed to lies about piracy, and this is a lie, both in the “damned statistics” meaning of the word, and in the “knowing misstatement of the truth” sense of the word.

Shame on you, Attributor, for your misleading press release, and for your blog post stating in certain terms what you, yourself, internally said you hadn’t even attempted to estimate.

The first thing I saw this morning on Twitter was a link to an article about e-book sales in the New York Times.

This link, oft-retweeted, was usually mentioned alongside an admonishment to a Kindle owner named Ms. Englin.  Ms. Englin’s offense?

Exploiting a loophole in Amazon’s system, Ms. Englin has linked her Kindle to the Amazon account of some nearby friends, allowing all of them to read books like “The Lost Symbol” at the same time — while paying for them only once. “I read much more, I tend to read faster for some reason, and I read a greater variety of things,” said Ms. Englin, adding that this is nearly the same as lending a physical book to friends. “We haven’t really looked closely at Amazon’s terms of service. But I do suspect we are breaking the rules.”

This is not called stealing.  It is not even in violation of Amazon’s terms of service.  Let’s go take a look at a book that I love–Eloisa James’s A Duke of Her Own–on Kindle.  (For some reason, Amazon seems to believe that this book was written by Lorraine Heath.  Not the case, Amazon.)  Scroll down to the product details, where you’ll see this lovely line:

Simultaneous Device Usage: Up to 5 simultaneous devices, per publisher limits.

See that?  What that means is that you can download this book five times.  So if you had a Kindle 1, and downloaded it there; and then you got a Kindle 2, and downloaded the book there, and then got a Kindle DX, and downloaded it again, and then used the Kindle for iPhone app, and downloaded it again, and then replaced your iPhone with the iPhone 3GS–you, as a consumer, would not be able to re-download the content for a sixth time, simply by virtue of your being an early, regular adopter of content.  If you wanted it again, you would have to purchase a second copy.

It also means, though, that if I purchased two Kindles–one for me, and one for my husband–we could read the same books while only paying for them once.  Check your horror quotient there: How do you feel about that?  Feel like we’ve done anything wrong?  I hope not, because it would be silly to say that me and my husband couldn’t share digital books.

In order to link a Kindle to an account, you need to share an Amazon account.  That doesn’t just give someone the right to download the books you’ve purchased; it gives them the right to buy books on your credit card.  Linking someone to your Amazon account is in no way like putting a file on a file-sharing site.  It gives them the right to purchase Selected Nuclear Materials and Engineering Systems (Part 4) for $6270.42, and stick you with the bill. In other words, linking accounts is an act of trust, limited by good sense (and the digital rights restrictions the publishers place on their products) to good friends and close family.

This is not stealing. It is not cheating.  It is not piracy.  It is the time-honored, all-important act of sharing books with a few trusted friends.

As authors, I think it is easy to jump on top of people for not paying for a book.  But keep in mind that the value a book has is not just in the act of reading it.  It’s also–hugely so–in the act of sharing it.  In giving a book to a friend and waiting breathlessly to see if she loves it as much as you do.  In reading a book someone else has recommended, and figuring out why it does (or doesn’t) work for you.  Books are about building community, and if we undercut that community as authors, we take value away from our books.

In a world where the price of books appears to be in free-fall, that’s not an outcome that anyone desires.  So authors, please, before calling your readers thieves, think carefully: is it really theft, or is it just part of the natural and inherent value of a book?  And if you insist that that value be taken away, what price do you think your books will support?

(I edited this post in tiny part to clear up an antecedent.)

So far, the main argument I’ve heard in favor of the position that text-to-speech rights infringes on audio recordings and performances is that if you had a really good text-to-speech engine, people would no longer buy audio rights.  Personally, I find that very sad–people who read books aloud are artists of immense caliber, capable of communicating nuance with very small variations in tone.  I’d hate to think we value them so little that they could be so easily replaced.  But even assuming that’s true, the fact that text-to-speech might cut into audio sales is not an argument that convinces me copyright infringement has taken place.

For those of you who care to follow me–which, based on my past copyright posts, is nobody–a brief explanation of why I think that is below the jump.  WARNING:  This post makes use of my execrable artistic skillz.

(more…)

Reminder: One more day to enter the Miranda Neville giveaway!

Apparently, there is a big kerfuffle originating from Author’s Guild about whether the Kindle 2.0’s “read aloud” feature is an infringement of an author’s right to dramatize a performance.  A few days ago, Roy Blount, the president of Author’s Guild, even wrote an editorial in the New York Times bewailing the Kindle for precisely that reason.

I think Blount’s facts are right, but his conclusion is wrong.  I agree with Blount that in a decade or two computer-generated voices will be pretty good.  (I doubt they’ll ever be as good as a human-read voice, at least not in my lifetime–and the fact that IBM can generate a reasonable replica of a speaking voice today bothers me not at all.  Yes, maybe–the applicability of IBM’s voice is perhaps to mimic a human reading a tech-support script, not to read with any sort of dramatic flair).  I don’t doubt that computer-generated voices will improve substantially in the years to come.

But let’s suppose that everything Blount says is true: computer-generated voices will one day totally replace audio recordings.  Okay, I’m thinking about that.  And I think  . . . well, that’s too bad.  But I still don’t think that a computer reading aloud, to a private person, is any different than a computer showing words on a screen, or a person reading aloud in a private setting.  It’s just a different kind of screen, or a different kind of reader.

More importantly, I think this is just one of the breaks of technology.  Technology isn’t bad or good, but it does sometimes render revenue streams obsolete.  Conversely, it sometimes creates markets that did not exist (or deletes competitive markets).  A person with a Kindle 2.0 can have a file read aloud–something they wouldn’t be able to do with a regular book.  But a person with a regular book has the right to resell their book to a third party, no matter what the original seller of the book may desire.  And you can resell a book that you buy for your Kindle . . . oh wait.  You can’t.  You can’t even lend your to a friend.  Score one for the mass-market paperback.

I don’t see Author’s Guild getting upset about the disappearance of the doctrine of first sale.  I didn’t see them getting angry about eBook technology so restrictive that it did not allow people to even copy and paste minute sections, consistent with the terms of fair use.  I don’t see them caring, not one bit, about the fact that the vast majority of eBook formats eradicate a user’s right to space- and sometimes even time-shift copyrighted works.

Now, it is not the Author’s Guild responsiblity to advocate for readers.  But technology, including the Kindle, has taken rights away from the reader, and has put money in the pocket of the author by so doing.  I don’t like to think that authors love technology everytime it takes something from readers that they already had, but hate it when it gives something to readers that they didn’t have.

Of all the things that worry me about the future of publishing, and about my future in publishing particularly–diminishing distribution for new and midlist authors; the possibility that an entire retail outlet could disappear by the time my debut novel hits shelves;  a returns system that leaves royalties in a state of unsettlement for years; the capacity for widespread and unchecked copyright infringement through offshore servers–the fact that the Kindle now does what computers have been doing for over a decade is an item of nonexistent priority on my list of things to angst about.

Over on Dear Author, Jane posted about how different industries had responded to the notion of “free content” and adapted to monetize different revenue streams.  It’s an extremely thoughtful contribution that is part of a very interesting conversation in the digital world.

I think this discussion is fascinating because I think the book industry  has already come up with clever monetization strategies.  I don’t think they have to do all that much switching around to get something to work.

Take for instance, the phenomenon of hard cover/trade release followed by a mass market release somewhat later.  This isn’t really much more than an attempt to capitalize on different revenue streams.  There’s a higher margin on hard cover, so you release that first–and the fans, the people who cannot conceive of waiting even one week, let alone one year, to purchase rush out and buy.  But there’s a group of people who sit in the wings, shaking their heads, unwilling to pay $25 for the privilege of reading Big Name Author in hardcover.  A year later, you push out the mass market release, and you capture the revenue from people that pay $7 standing in line.  In other words, I think that the fundamental reason that different formats exist is not because some people have a preference for hard cover over mass market (although this is certainly true) or because people “value” hard covers over mass market (although some people do).  The format difference exists because publishers want to practice price discrimination.

Price discrimination is not a bad thing.  Price discrimination is why airline flights cost more if you don’t stay over a Saturday (the airline assumes that if you are not staying over on Saturday, you may be a business traveler and thus may have more money to expend on the flight).  It’s an attempt to get people who want an item enough to pay more money for it to choke up the extra bucks that they had in mind.

As a new author–at least, as a new author in genre fiction–you’re unlikely to get slotted into the hardcover market, simply because you don’t have enough fans willing to pay the premium.  So what do they do?  They use the mass market release to seed the market.  Enough of those, and maybe, 10 or 20 books down the line, they’ll start pushing you into hardcover.  Or you can see the same thing with the anthology/mass market release–they release a new author in an anthology with a few big names.  The price of buying that new author is thus reduced (the purchaser may, mentally, be willing to pay $4.99 for the short story from the Big Name Author; in her mind, she allocates the extra $2 to the authors that are new to her), with the hopes that this will bring in fans willing to pay the full price for a mass market release.

Price discrimination through different formats, and using lower prices to hook fans, is not anything new to the industry.

Now, this is all germane to the question of free.  The question that I think we have to answer as authors is not “how do we avoid free?” or “how will free change the industry?”  I think that the experiences of Napster and bittorrent, and the eventual dominance of iTunes, all point in one direction.

1. Most people like convenience.
2. Most people are happy to pay for content, at least in reasonable amounts.
3. If the most convenient way to find content in a usable format is to access a forum run by pirates, convenience will trump people’s willingness to pay.  In other words, you have to make it easy for people to pay.

That’s the brilliance of iTunes (and, in a sense, of the Kindle).  You have to make it easy for people to pay.  In fact, you have to make it darned near seamless.

But there’s a second lesson to be learned.  Pirates are not going away.  No matter how hard I try or how much effort I expend, my book is going to be up on bittorrent.

And so this brings me to part 2:  I think authors need to own free content.  The model of “owning free” in my mind is the Baen Free Library, where Baen posts books, for free.  There’s no reason for anyone to pirate the books, because they’ll always be there, in that one spot.  There’s no reason for anyone to pirate the books, because they’re available in easy-to-read formats.   I don’t have to worry about a particular torrent closing down or a pirate site moving.  I always know where the free content is.

And what is the Baen Free Library?  It is a form of price discrimination–just like releasing in hard cover and then mass market.  If you want to read the author’s book as soon as it comes out, you pay the mass market price.  If you’re not so enthusiastic, wait a year . . . and it’ll show up for free.  Just like hard cover/mass market price discrimination, this means that the rabid fans get what they want, as soon as they want it, and they pay for it.

And this strategy starves the pirates.  Why would a regular schmoe bother to figure out the complexities of bittorrent when he knows he can get the real deal eventually, free, lawfully, from a source that never changes?

For most authors, a book makes the majority of its income in the first few years of its life.  For some authors, it makes all of its income within the first few months of its life.  (In fact, Harlequin is very savvy to give away books in its lines after they’re off the shelves–the revenue stream is essentially exhausted at that point, and the more people read, the more converts they have to their lines.)  Now, I understand that a backlist is still a tremendously valuable thing.  But what about out-of-print books?  If you’re an author and you have an out-of-print book sitting on your hard drive, there are reasons you might not want to release it for free–reasons like, you want people to place a value on your output, or you want to retain control.  I understand those reasons; I’m not sure I agree with them.  Why not put them up on your website for free?

I hear of authors who are willing to pay hundreds of dollars to enter their published books in contest after contest, on the theory that at least someone will be reading the book and they might reach readers that way.  Why be afraid of paying nothing to reach five hundred?  Ask people not to make copies–promise that it’ll stay on your website.  The worst thing that can happen is that people will read your book, and will want to read more of them.  And the truth is, I am just not sure that people see “available for free on the web” as synonymous with “not of value.”  After all, Pride and Prejudice is still in print, and you can find it everywhere.

In any event, at this point, I feel as if I have done enough talking about copyright and free stuff and haven’t done much doing.  Truth is, I’m still thinking about what to do.  Keep watching, and hopefully you’ll see more action from me.