Wednesday, January 27, 2010

Booty Call

Digital Book World is a two day digital publishing conference recently held in NY. One hot topic at the event was ebook piracy. The conclusions drawn were:

1. People are stealing a lot of ebooks. (surprise surprise!)

2. Publishers need to fight this with lawsuits, better DRM, takedown pressure, anti-piracy legislation, targeting upload sites, and ultimately fighting the pirates themselves.

Apparently, publishing has paid close attention to the music and film industries, who have been successful at stopping pirates with the above tactics.

Oh, wait a second... The RIAA and MPAA have NOT been successful at stopping piracy. In fact, they've done nothing but irritate paying consumers.

It's good to know that the smart folks in publishing are ready to spend millions of dollars to make the same mistakes, no doubt with a similar outcome.

Of course, no one invited me to speak at the conference, which is a shame, because perhaps I could have saved the publishing industry the heartache and financial trouble they're about to embrace with one simple sentence.

The Only Way To Fight Piracy Is With Cost And Convenience.

How do I know this?

Because I've done extensive experiments with ebooks. The cheaper the ebook, the more you sell. And if the ebook is free, the downloads are off the charts.

I also know how pirates think, because I'm a pirate. Yes, I admit to being one of the billion people on the planet who download copyrighted material.

In fact, I've downloaded all of my own ebooks and audiobooks for free from various bit torrent and file locker sites. I'm able to do this because I too am being pirated. A lot.

Google konrath torrent and you get over 14,000 hits. These are all sites where my work is being stolen.

Does it bother me that people are sharing my books online?

No, it doesn't. Because piracy hasn't hurt me financially.

Why is that? Especially since I can account for thousands of illegal downloads of my own material?

Because I'm still making money. I don't think piracy has hurt my sales. In fact, I think it helps my sales by giving me a wider distribution network and greater brand recognition.

My self-pubbed Kindle titles are $1.99 or less. Since last April, I've sold over 20,000 books on Amazon.

Want to hear the funny thing? These same ebooks are available for free on my website. For FREE.

Does free hurt sales? Apparently not.

I've already blogged that if I had the rights to my in-print books, I could make a bigger profit selling them for $1.99 on Kindle than I'm making with the prices my publishers have set.

Cheap sells. Free sells even more. And if you make it easy for people to get your product (like pressing a button on a Kindle or an iPhone) they won't bother going to Pirate Bay or Rapidshare or Limewire or Megaupload or Isohunt.

File sharing is a pain. It can take a long time to download a file. The files can get corrupted. Sometimes they're tough to search. Often you can't find what you want. There are viruses. Seeding files takes up bandwith and harddrive space, and there's always a fear that The Man will send you a letter saying they'll sue you.

How much easier would it be if the large publishers, instead of adding extra copyright protection and hiring a team of lawyers and tech guys and lobbyists to fight piracy, just made their downloads cheaper?

Malls are dying. Main streets are dying. What's taking their place? Wal-Mart.

Wal-Mart has shown that if you offer customers inexpensive one-stop shopping, they'll spend money.

iTunes has shown the same thing.

Amazon hasn't been able to do that yet, because publishers insist on DRM (which consumers hate) and high prices for ebooks. $9.99 for a bunch of ones and zeros is overpriced. But if it were up to the publishers, they'd charge $14.99 and more for their ebooks.

Amazon is fighting back, though. In June, they'll begin paying ebook authors a 70% royalty rate.

Let's play the numbers game. Let's say a midlist author, like, oh, JA Konrath, uploads a new Jack Daniels book on Amazon and sells it at $2.99. A coffee at Starbucks costs more than that.

Let's assume JA Konrath can sell 10,000 copies per year of an Amazon title--something he's proven he can do. The 70% royalty rate will mean he earns 20k. PER YEAR. For just the erights.

This is more than most fiction writers earn on a single book for all rights: hard, soft, audio, ebook, movie, and foreign.

Shouldn't publishers try to follow Amazon's example, rather than continuing to charge hardcover prices for ebooks, which have no shipping or production cost?

That's what I'd do. But no one is asking me. No one invited me to speak at Digital Book World.

It's impossible to stop piracy. The whole reason the internet was invented was so people could share and trade information and media.

But it is possible to co-exist with pirates, and make a good living doing so, by making sure ebooks are easily and cheaply available.

Instead, it looks like we're going to see the publishing industry make the same mistakes the music and movie industries have made.

Copyright cannot be successfully defended in a digital world. Period.

Human beings are genetically wired to share information. And the internet has made it easy.

Publishers should be taking advantage of both human nature and the internet. Instead, they're gearing up for a fight they can't win.

Oh, and since I anticipate the comments saying, "If books are free, how can we make money?" I want to restate that authors will be able to make money on free downloads someday.

Let's say a well-known author releases a free ebook. But there's a catch. In the ebook, there are fifteen print ads, like you'd see in a magazine. Each ad costs the advertiser 2 cents per impression, which is comparable to other internet advertising.

That means each free download will earn the author 30 cents.

More than 100,000 people have downloaded my free ebook, SERIAL.

If I'd sold ad space for 2 cents an impression, I'd have earned 30k in less than a year. Even more money than I'd earn selling 10,000 ebooks for $2.99 each.

Of course, I've been saying this for a few years now. And I'll keep saying it until someone finally listens.

I just hope, by the time this is over, there will still be some publishers around to listen.