Quote:
Originally Posted by Elfwreck
Baen started with the premise, "let's believe our customers are decent people, and smart, and will therefore want to pay money to support the people who bring them what they want to read."
Instead of "let's believe our customers are borderline-criminals, waiting for the chance to screw us over."
The "customers are cool" approach works. It works *tremendously* well for Baen, which is a big player in a niche market; it's working tolerably well for smaller companies like Loose Id and Samhain Press, who are in a niche that doesn't get discussed much in public.
The "customers are bandits from whom we must seize our rightful pay" approach is not working so well. The customers don't care if the publishers are flailing under economic shifts; they don't tell their friends to buy more of that publisher's books; they don't forgive mistakes; they don't buy a copy of something they already had as a freebie.
I'm not saying, "all the major publishers should adopt Baen's methods." A lot of Baen's methods work precisely because they're small and niche-focused. But all the major publishers should look at Baen's methods, and figure out how many of them they could steal or adapt, because those methods *work*, and what Macmillan and Random House are doing... isn't working so well. The "free promo ebook--laden with DRM and don't you dare share it with anyone else" gets downloads, but not referrals.
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I agree with all of the above. But the last paragraph, in particular, is key. Any major publisher who blindly adopted Baen's methods would be failing to do right by their stockholders. They might well wind up better off than with their current mess, but they'd have failed to consider how to best make money by serving their markets well.
That said, Baen's approach remains the most successful of any mainstream* fiction publisher. (*"Mainstream" in the sense of: long successful history; books in every US bookstore that has any SF or Fantasy at all; isn't a "small press.") So any publisher who is thinking about eBooks should be studying Baen's success
very carefully indeed. One important path to success, after all, is to study what works for those who are already succeeding. My recommendation for the majors would be to start their thinking with "do what Baen is doing" and then diverge from that position
only when there is a
truly compelling reason to do so. I'd also remind them that "we're afraid of piracy" isn't a truly compelling reason unless it comes with enough hard data to outweigh the hard data from Baen that says "piracy ain't a problem if your business model is right."
On a slightly different front, I'd also like to remind the head honchos at the major publishers "Oh-so-carefully-and-politely" of a few bits of "Business-101," since they appear to have forgotten the basics. A few samples:
- Maximising shareholder value and maximizing per-item profit margin are not necessarily the same thing.
- Worrying about the number of sales that are (??may arguably be??) lost to "piracy" is a mug's game. It's far more important to worry about maximising the total return on sales made to happy customers who are eager to purchase your product. (Big Hint: low prices, convenience, and value-for-money fight "piracy" waaay better than DRM, draconian laws, and expensive lawsuits.) More sales with little-to-no added cost (extra bits are really cheap!) means HIGHER PROFITS. Business 101 says that this is good.
- DRM increases your costs without reducing "piracy" or leading to additional sales. It pisses-off your customers too. So let's review the equation: Higher costs, with no increase in sales means LOWER PROFITS. (Hello? That's bad, right? See business-101.
) Pissed-off customers give bad publicity, bad word-of-mouth, and generally lead to reduced sales. Higher costs plus reduced sales is even worse. Or it was when last I read up on business issues.
- DRM adds hassles to your customer's experience with your electronic product. That means that DRM both increases your costs directly (you have to pay the DRM vendor) AND increases your costs indirectly (customer support and added I.T. costs—and if you think that retailers will assume this burden without passing the cost back to you, you're smoking crack!). Then—to top it all off—it makes the product worth less to the end user. Which means you sell still less of that product. Remind me again why it is that you wanted to be squeezed by both higher costs and a less-attractive product all at the same time? (Business-101 again: Higher costs + less-attractive product = LOWER PROFITS = BAD. )
- Reverse-auction-style reduction of price points over time is a fine idea. Go right ahead and make the people who want early access (or even prompt access) to new books pay more to get the books sooner. But never, ever, EVER forget to actually reduce the price of the product over time!!! (BIG HINT: That means "no more eBooks with $15.99 list price, when the paperback edition has been out for over a decade and has a list price of $7.99. The customers really do notice that kind of <self-censored>... and they quite reasonably conclude that your claims of "Reverse-auction-style reduction of price points over time" are not to be trusted. People who buy a lot of books are not stupid.)
There's more, but my "semi-polite-application-of-clue-bat-to-so-called-businessmen" well has run dry.
Xenophon
(who is feeling just a bit curmudgeonly this evening)