Prediction for 2011 from Smashwords Founder

[Daithi]

Originally Posted by Steven Lyle Jordan

Displaying your book in a big chain bookstore... these days, that's about the only thing the "professional" publisher can do that the small or amateur writer/publisher cannot. Every other marketing technique--media ads, recommendations, lists, social media, TV and library appearances--can be accomplished by anyone with enough time, influence and/or money.

And that's why the big pubs are holding onto the physical bookstores: It's the only area in which they can isolate themselves from other products.

I agree, and I also think that it is a pretty BIG advantage the big publishers still have over the indies.

It's not just the physical bookstores either -- the big publishers also get their chosen few books into Walmart, Target, Sam's Club, airports, supermarkets, etc. You can't go anywhere without seeing the Twilight books for example. This is a form of marketing the Indies can't touch. If your an author and want to sell tens of millions of books then you need to get your book into these physical outlets, and you need one of the big publishers to make this happen.

However, there are only a few authors a year that get the all out blitz treatment of a book. Most authors are lucky if they sell tens of thousands of books, but it is this pool of authors where the blockbuster authors are found. It is also this pool of authors that the big publishers will be trying to retain while Amazon, et. al. will be enticing them with 70% commissions/royalties.

As more people start owning ereaders this draw will only become stronger and stronger. In the coming years I'm not sure how the publishers are going to hold onto their midlist authors. However, I can envision the publishers mining new ebook authors in hopes of finding the next blockbuster book.

My question is how long will paper based books still continue to sell? What happens when the cost of an ereader makes it down to, say, $25? Will Walmart, Sam's Club, supermarkets, etc. even bother selling physical books anymore? I certainly don't have all the answers, but one thing I can tell you is that I'm not going to be buying any stock in MacMillan, Hatchett, Simon and Schuster, etc.

[screwballl]

VHS replaced previous technology...
8 track replaced records for the most part
cassettes replaced 8 track
CDs replaced cassettes
mp3s replaced CDs for the most part
DVDs replaced VHS for the most part
Bluray is slowly moving into DVD territory...

As digital media expands, other things are partially or completely replaced.


Oh and as a side note, Daithi, that 1001books site in your sig has been down for some time.

[Steven Lyle Jordan]

Originally Posted by Daithi

I agree, and I also think that it is a pretty BIG advantage the big publishers still have over the indies.

True... there is still an "impulse buy" effect that books can take advantage of in the stores. Even if printed books went away, the big publishers have the cash to put out advertisements at those stores, which could lure shoppers through online networks and wifi to buy their books... still retaining eyeballs that small pubs can't manage to attract. They also sell "gift cards," which lock a user into purchasing with a specific store (or not, in which case, they still keep the money).

It's a huge advantage that the indies simply can't match alone. But if indies can get into the new outlets that advertise in the big stores and sell gift cards (Amazon, B&N, etc), they can at least partially compete with the big pubs on their level.

[bhartman36]

Of all the things on the list, the only one I have a strong opinion on is #10. I think he's dead on that DRM will still be with us at the end of 2011. I think he's wrong on the way the DRM problem will end, though.

I'm not a supporter of DRM. I wish it could go away. I'm just getting started with selling my writing, but nothing I've ever offered up for sale has had DRM on it. But my profits at this point can be measured in sacks of White Castle hamburgers -- and not those fancy large sacks, either. But if I had real money riding on my writing -- say, I was hoping that my writing could help pay the mortgage (or in my case, rent) each month -- I'm not sure I'd be so eager to have my stuff out there DRM-free. Even in the small circles I roll in, I've heard of two authors (one a family member) who've been blindsided by having their books appear on multiple pirate websites. I have no faith in my fellow man's ability to abide by the eighth commandment.

Publishers and authors will feel better about releasing DRM-free material when piracy subsides, not just when e-book sales pick up. Why? Because it's hard to be excited that 500 more of your books than last month were sold when 5,000 more of your books than last month were stolen. It only makes sense to be excited if sales go up without a similar rise in piracy. It's also not a fair comparison unless you track the same book DRM'ed and non-DRM'ed.

I don't know what the solution is, but I don't think immediately removing all DRM and calling piracy a boogeyman is it.

[Elfwreck]

Originally Posted by bhartman36

Even in the small circles I roll in, I've heard of two authors (one a family member) who've been blindsided by having their books appear on multiple pirate websites.

Do they have any evidence that those books cut into their sales numbers? Have they compared sales of books that they found pirated vs those they didn't, and found the ones that weren't pirated were selling better?

Publishers and authors will feel better about releasing DRM-free material when piracy subsides,

It's not going to happen. Just not. Files are *never* going to be harder to copy than they are right now. Never going to be harder to share. Everyone who wants to make a living producing digitizable creative content (whether or not they release a legit digital version) is going to need to figure out how to deal with unauthorized copies.

The top "pirates" of digital music are *also* the top buyers of it. The number of people buying used paperbacks and scanning them to release them as ebooks is very, very tiny ... most unauthorized ebooks are cracked commercial versions--which means *someone* bought that file.

If authors & publishers really want to cut down on piracy, they need to figure out a way for that buyer to legitimately share the book with several friends, instead of saying that "sharing with 5 random friends is the same, legally, as sharing with 500 strangers."

I don't know what the solution is, but I don't think immediately removing all DRM and calling piracy a boogeyman is it.

Neither is insisting that every file downloaded is a lost sale.

[nashira]

Originally Posted by bhartman36

Of all the things on the list, the only one I have a strong opinion on is #10. I think he's dead on that DRM will still be with us at the end of 2011. I think he's wrong on the way the DRM problem will end, though.

I'm not a supporter of DRM. I wish it could go away. I'm just getting started with selling my writing, but nothing I've ever offered up for sale has had DRM on it. But my profits at this point can be measured in sacks of White Castle hamburgers -- and not those fancy large sacks, either. But if I had real money riding on my writing -- say, I was hoping that my writing could help pay the mortgage (or in my case, rent) each month -- I'm not sure I'd be so eager to have my stuff out there DRM-free. Even in the small circles I roll in, I've heard of two authors (one a family member) who've been blindsided by having their books appear on multiple pirate websites. I have no faith in my fellow man's ability to abide by the eighth commandment.

Publishers and authors will feel better about releasing DRM-free material when piracy subsides, not just when e-book sales pick up. Why? Because it's hard to be excited that 500 more of your books than last month were sold when 5,000 more of your books than last month were stolen. It only makes sense to be excited if sales go up without a similar rise in piracy. It's also not a fair comparison unless you track the same book DRM'ed and non-DRM'ed.

I don't know what the solution is, but I don't think immediately removing all DRM and calling piracy a boogeyman is it.

Authors/Publishers who use DRM are loosing sales by default with those of us who don't want to fuss with it. Yet I've brought a fair few Smashwords titles and even though I know how, I haven't passed them around, uploaded them anywhere or done anything remotely close to pirating.

DRM treats everyone like a criminal, and for better or worse the culture of books most people are used too doesn't equal a sale for every reader. In my family, my aunts, myself, my grandmother, my mother, we have enough books to start our own library branch. But a lot of them are second, third or even sixth hand. I've been a member of the local library since I was four. In HS the school library was so frequented by me that they started buying books I'd like because I ran out (I love those librarians) and I'm sure dozens of kids have read them since.

You're just not going to get a sale for everyone who wants to read it. You might even loose out as people become more aware of the downsides of DRM, and if they don't want to deal with the fuss of it especially if they decide to change devices down the track. Also, for those who do buy the book - plenty of information is easily found about cracking the locks and some of them you don't need to crack, there are other methods of getting the text out of a locked up book.

[Steven Lyle Jordan]

Originally Posted by Elfwreck

Do they have any evidence that those books cut into their sales numbers? Have they compared sales of books that they found pirated vs those they didn't, and found the ones that weren't pirated were selling better?...
Neither is insisting that every file downloaded is a lost sale.

Lack of specific data doesn't prove that it's not happening... this, like so many other DRM-related quotes that circulate about on a regular basis, is a disingenuous way of attacking the issue, and it's time we moved on from it. There will be no specific data. Get over it, and accept that piracy is an issue.

Originally Posted by nashira

DRM treats everyone like a criminal...

No, it doesn't, any more than a lock on a door treats every person as a criminal. Security is designed to deter real criminals. It's an extra burden on the honest (you think I like carrying around a pocketful of keys, and keeping track of over 50 individual passwords for various websites and accounts?), but it's the price honest people have to accept when they live in a world that has criminals.

Like all of you, I agree that DRM as it exists today doesn't work, and might as well be trashed tomorrow (which is why I don't apply it to my books... ever). But the big pubs aren't going to do that, because they presently have no other alternative to protect their property. Any businessperson understands the need to protect their goods from theft... it's the only way they will be profitable, hence, the only reason to be in business.

Unauthorized copying and dissemination of ebooks is a problem. It costs companies and indies profits. This cannot be denied, even if no specific numbers exist. Big Pubs are having a hard enough time trying to budget out their transition to digital, without having any way to calculate losses. Product security will always be an issue, the way it is with every other product sold on this planet.

And the problem won't be solved until the people involved stop hurling rhetoric around, and logically deal with the problem. Like Mark, I don't see any sign of that happening in the next year. And in the meantime, any publishers that go the no-DRM route will probably do it to officially assume a measurable amount of loss, and apply that to raising pricing and fees to mitigate that loss.

[bhartman36]

Originally Posted by Elfwreck

Do they have any evidence that those books cut into their sales numbers? Have they compared sales of books that they found pirated vs those they didn't, and found the ones that weren't pirated were selling better?

As I said, I don't think it's realistic to compare one book to another, necessarily. The only thing you can say for sure is that someone who downloads from a pirate site didn't buy that given book in that given format. (I'm willing to concede that they may have bought the book in EPUB format rather than MOBI, for example, but there's no way to know for sure.) It might be interesting to do a survey and discover which books don't overlap between formats. I would suspect that those would be at the highest risk of being pirated, but someone could be pirating even with access to the format they need, if they just don't want to pay the price asked.

Originally Posted by Elfwreck

It's not going to happen. Just not. Files are *never* going to be harder to copy than they are right now. Never going to be harder to share. Everyone who wants to make a living producing digitizable creative content (whether or not they release a legit digital version) is going to need to figure out how to deal with unauthorized copies.

The bar is fairly high for books that are not digital to begin with. One way the publishers could decide to deal with piracy is a simple scorched earth policy, where they stop releasing digital books. There will certainly always be some people willing to make digital copies of popular works, but the ebook market as we now know it (which, let's face it, isn't that old) would dry up eventually.

Originally Posted by Elfwreck

The top "pirates" of digital music are *also* the top buyers of it. The number of people buying used paperbacks and scanning them to release them as ebooks is very, very tiny ... most unauthorized ebooks are cracked commercial versions--which means *someone* bought that file.

As has been talked about here before, people who read are becoming fewer and farther between. That means that publishers are fighting for a portion of an ever smaller pie. If the ebook industry gets Napstered, professional authorship will die. Who'll be able to afford to write for a living when even their modest royalties are stolen?

Originally Posted by Elfwreck

If authors & publishers really want to cut down on piracy, they need to figure out a way for that buyer to legitimately share the book with several friends, instead of saying that "sharing with 5 random friends is the same, legally, as sharing with 500 strangers."

It shouldn't be too difficult to have a list of people that a reader designates as "book buddies". But that still leaves us with DRM. I just don't see any way of eliminating DRM entirely, because books aren't like music. With the exception of reference books (and maybe some others that I can't think of at 2AM ), people read a book, and they're done with it. It's not like a song or album you want to play over and over (although of course there are exceptions). That's why publishers want a time limit on lending. If you give someone all the time in the world to read a book, you just lost a sale. I expect the lending scheme to be improved to allow lending of a book more than once, but I wouldn't expect the time allotted for the lending to change a great deal.

Originally Posted by Elfwreck

Neither is insisting that every file downloaded is a lost sale.

How is it not? You can make a reasonable argument that a person who downloads one song wouldn't necessarily have bought the album, but you can't make that argument with an ebook, because they're not sold by chapter. Someone who downloads a book wants it for all the content.

The most you'd be able to say in the pirate's favor is that maybe the book never came out in a format their reader could use. But that's definitely not a slam dunk. And it's still a lost sale, because the buyer could've had the book in paper format.

That's the real risk here: that publishers will simply go back to paper because digital is too unmanageable. At least with paper, they'd know their margins, and they'd have less risk of piracy, plus the security of knowing that analog books can only be shared one at a time.

[nashira]

Originally Posted by Steven Lyle Jordan

No, it doesn't, any more than a lock on a door treats every person as a criminal. Security is designed to deter real criminals. It's an extra burden on the honest (you think I like carrying around a pocketful of keys, and keeping track of over 50 individual passwords for various websites and accounts?), but it's the price honest people have to accept when they live in a world that has criminals.

DRM automatically presumes people are going to share, pirate. Maybe locks presume people are going to want to break in, but then I sleep happily with my window open and the only thing likely to try to break in is one of my cats.

Treating a whole populace like convicts because of a minor group who pirate is dubious practice. Especially when the DRM can make it far more irritating than finding an illegal copy. I buy my books, but I choose not to buy books I would otherwise read because of the DRM hassle (and Geographical Restrictions, which is another PITA) and not wanting to let them think it's a good idea to put it on in the first place. Plenty of people don't share their stuff, and yes some people do - but I say it again. Not everyone who reads a book would have ever brought it - library users don't, nor do people who borrow amongst friends or family or any of that. Simply putting a book out there were more than one person can lay eyes on it is "a lost sale". One of my Aunts can't stand used books, so maybe if everyone was like her it'd be a lost sale... but most readers just want to read.

I'm not saying you think everyone is a crook, but do you honestly think that the big houses who love DRM aren't thinking that somewhere in their logic? That they don't want to crimialise Sally giving a copy of an ebook she loves to her best friend, despite that Sally's friend may well go on to buy the whole series thereafter? Word of mouth is one of the few things that get knowledge of books around these days. It's a good thing. Sharing is part of it.

Originally Posted by bhartman36

How is it not? You can make a reasonable argument that a person who downloads one song wouldn't necessarily have bought the album, but you can't make that argument with an ebook, because they're not sold by chapter. Someone who downloads a book wants it for all the content.

Libraries, used book stores, borrowing from friends and family, finding a book on the side of the road, at a yard sale, etc... None of these things generates profit for the publishers so far as I am aware. They all exist, in abundance. I sincerely doubt there has ever been a case where one sale = one reader across the entire publication of the book. Digital files are a bit different in that they can be copied infinitely with little issue, but it still doesn't mean the person who downloads it would have ever bought it new if it weren't available online. If they really wanted to read it maybe but they'd probably try the library or ask their friends or look up second hand copies on Ebay first. Or something like BetterWorldBooks. People share books. One way or the other.

[Soldim]

Originally Posted by Steven Lyle Jordan

Lack of specific data doesn't prove that it's not happening... this, like so many other DRM-related quotes that circulate about on a regular basis, is a disingenuous way of attacking the issue, and it's time we moved on from it. There will be no specific data. Get over it, and accept that piracy is an issue.

Funny that you mention 'disengenuous' and then without any supporting data want us to accept piracy is an issue.

If I were an author, I would be way more worried about the continuous increase in competition. In the dead-tree days, the shelf time of the average book was rather short and hence competition limited. Even books that were in the public domain had to be printed, had a price-tag associated and had to compete for the shelf space (and with lower margins, that was an uphill battle). eBooks can and will remain on the shelf forever -- that has some advantages for authors, but at the same time the choice for potential buyers will increase tremendously. Add to those the large amount of absolutely free public domain works (I guess Project Gutenberg alone will have over 50 million downloads in 2011, and their works are now available in the Apple library and will be available on Amazon.com for free shortly) and competition seems rather stiff.

The upside is, that if you produce a high quality work it will be around and get read forever. Less high quality books run the risks of disappearing in the background.

[Soldim]

Originally Posted by nashira

Libraries, used book stores, borrowing from friends and family, finding a book on the side of the road, at a yard sale, etc... None of these things generates profit for the publishers so far as I am aware. They all exist, in abundance. I sincerely doubt there has ever been a case where one sale = one reader across the entire publication of the book. Digital files are a bit different in that they can be copied infinitely with little issue, but it still doesn't mean the person who downloads it would have ever bought it new if it weren't available online. If they really wanted to read it maybe but they'd probably try the library or ask their friends or look up second hand copies on Ebay first. Or something like BetterWorldBooks. People share books. One way or the other.

Adding to that, I would guess that most downloaded books from the more obvious pirate sites don't get read -- they tend to come in packages of 10, 60, 500 or even over 3000. Just like the fanatics that download tens of thousands of songs and listen only to a fraction of those I thing it is rather likely that those downloading a package of 500 books do not read every single one of them.

Furthermore, I know from personal experience that when I look at what's available at Mobileread here, at PG or at ebooksgratuits I can easily download 30 of 40 interesting titles each day. It is tempting, it doesn't cost me a thing so why not. Regrettably, not all of those books get read.

Hence, arguing that one download equals one lost sale seems, to me, rather far fetched and unrealistic.

[Lemurion]

Most of what DRM does in the ebook market is force vendor lock-in and add an additional cost that's passed on to the consumer. It can't stop piracy because the pirates can and will just OCR dead tree editions. All it really does is inconvenience paying customers.

The suggestion has been made that publishers just go back to paper. The only thing that will do is guarantee they don't make any money from ebook sales. All the Harry Potter books are available electronically, none have ever been released as ebooks. Going backwards won't work unless you criminalize scanners and OCR software. Bad idea.

While I'm sure some downloads are lost sales, I'm also sure that others aren't and that NO ONE can or will ever know the exact proportion.

However the idea that every download is a lost sale is ludicrous. It may be a potential lost sale by some metrics, but the idea that every person who downloads a book would have bought it if they had not downloaded it simply staggers belief.

There's no way that Peter Pirate who downloads a torrent of ten thousand books would have bought every one of those books. He might have bought one or two - but not ten thousand, he probably couldn't afford it even if they were available.

Or maybe he's a bit more selective, and just downloads a series that looks interesting. He reads the first couple of books and dislikes them, so he deletes the rest. If it's a six book series the first volume might be a lost sale, and possibly the second, but the rest of them aren't. He never would have bought them because he didn't like the first two.

I'm not denying that there are lost sales due to illegal downloads. Some are the obvious ones of the person reading the book without buying it, others may be the result of the downloader telling their friend at the bookstore - "Don't buy that, I've read it and it's crap."

Yes it costs sales. DRM also costs sales, as do high prices and geographic restrictions.

Piracy is only a lost sale if the person who downloads the book would have bought it otherwise. If they weren't going to buy it anyway it's no more a lost sale than the guy walking past the romance aisle on his way to science fiction is a lost sale for Nora Roberts or any other romance author.

Now Peter Pirate may download Nora's complete works in his massive torrent - but he's not a lost sale for her because he would never buy one. He's not a lost sale for Danielle Steel either.

Piracy is a problem.

DRM is not the solution.

[bhartman36]

Originally Posted by nashira

Libraries, used book stores, borrowing from friends and family, finding a book on the side of the road, at a yard sale, etc... None of these things generates profit for the publishers so far as I am aware. They all exist, in abundance. I sincerely doubt there has ever been a case where one sale = one reader across the entire publication of the book. Digital files are a bit different in that they can be copied infinitely with little issue, but it still doesn't mean the person who downloads it would have ever bought it new if it weren't available online. If they really wanted to read it maybe but they'd probably try the library or ask their friends or look up second hand copies on Ebay first. Or something like BetterWorldBooks. People share books. One way or the other.

Digital files are a lot different, because they can be copied indefinitely and distributed much more widely. This differs from libraries in that a) libraries only lend out one book to one person at a time, and b) you make a deal to bring the book back after your designated time. You're absolutely right that with a paper book, you have the right of resale, and I think an e-book should be no different. But that still involves DRM to make sure that you don't retain a copy after you sell it.

E-books are also different in that, as I said, they're not sold piecemeal. If someone downloads an e-book, they're downloading the whole e-book, unless the supplier offers free samples. Thus, there's no such thing as a person downloading an e-book that wouldn't have had to either buy it outright in digital form or borrow it from a library as paper (and libraries, in case you're wondering, already pay premiums specifically designed to compensate publishers for the lost income).

E-books are in a rather precarious position right now. They don't want what happened to the music industry because of piracy to happen to them. Luckily, e-readers today are better designed than the MP3 players were in the Napster age. The distribution is more sophisticated. But the industry needs to settle on a format so that one format can be read across devices. If I had to guess today, I'd say that format would probably be AZW/Topaz, because Amazon seems to be dominating the market (at least, here in the U.S.).

[Andrew H.]

Originally Posted by nashira

Treating a whole populace like convicts because of a minor group who pirate is dubious practice. Especially when the DRM can make it far more irritating than finding an illegal copy. I buy my books, but I choose not to buy books I would otherwise read because of the DRM hassle (and Geographical Restrictions, which is another PITA) and not wanting to let them think it's a good idea to put it on in the first place.

DRM doesn't treat everyone like convicts anymore than locks on houses or cars do so, or security tags in libraries and stores do so. If *you* feel treated like a convict, I think that's your issue.

And your decision not to buy books with DRM is a political decision. It's fine as it is, but 99% of the book buyers select books that they *want to read* and don't really care about DRM. Most people stay within their infrastructure and buy books from B&N or Amazon or Kobo and aren't really bothered by DRM at all - to the extent that they even think about it, they tend to just accept it.

My mostly non-techie sister has a Kindle. It would make no practical difference to her if all of her books were drm'd or if none of them were.

[Soldim]

Originally Posted by Andrew H.

DRM doesn't treat everyone like convicts anymore than locks on houses or cars do so, or security tags in libraries and stores do so.

Your analogy would hold true only if when I would buy a car the dealer would keep the main key, and lock me out when they would go out of business or consider the car suddenly unethical. They tread me like a potential thief by refusing to give me full access to the products I buy from them, that's rather different than me preventing access of others to products I buy.

And your decision not to buy books with DRM is a political decision. It's fine as it is, but 99% of the book buyers select books that they *want to read* and don't really care about DRM.

Since you state it that definitive, I am sure you have a source that supports the number you mention. Annocdotical, only one of the persons I know that has an eReader buys DRMed material without a blink; the others either don't buy or strip as soon as they have the file.