Ebooks For Libraries

Joe sez: I recently got an interesting email from a library in Texas.

In short, they're setting up their own internal check-out system for ebooks, and are seeking to buy ebooks directly from authors and publishers.

I asked if they wouldn't mind doing a guest blog discussing some of the issues libraries are now facing with the rising popularity of ebooks. They graciously replied, and here it is...


Mike and Linda: Thanks to Joe for giving us a chance to talk to you about libraries and eBooks!  We’re Michael Saperstein and Linda Stevens, librarians from Harris County Public Library, a large public library system in Houston, Texas.  Please grab the beverage of your choice and find a comfy chair, because we’ve tried to summarize, but this might take a minute.

First, if you haven’t been to the public library in a while, it has changed quite a bit.  Rather than being on shush patrol, you’ll find librarians teaching eReader classes, performing storytimes and early literacy activities, helping jobseekers, playing video games with teens…you get the picture.  Then there’s the books – paper, audio or electronic, we buy them, we promote them, and we connect them with readers, in person and online.

Now for the issues:


Accessibility

Libraries are not able to purchase all of the eBooks we would like to purchase due to publisher and author concerns about copyright protection in the digital format.  Only two of the big six publishers will sell eBooks to libraries, and those pricing models either limit us to a low number of checkouts or charge us more than twice the retail price for a book.  Very few picture books are available for us to purchase, even though small children are a large part of our customer base and we often use digital books in storytimes.  With adult fiction titles, we can’t always offer complete series because of format availability or publisher restrictions.  Some publishers would even like to implement a plan that would force people to come to the library to check out eBooks, rather than being able to do it online, which kind of defeats the purpose.  Librarians are also making the adjustment to focus on providing access for our customers through leasing or subscription, rather than only owning items to be a permanent part of a collection.


Better Public Experience 

Because of the way we have to purchase electronic content, our customers often have to jump back and forth online through multiple access points, instead of simply finding a book and clicking to check it out.  This can make the borrowing experience quite confusing and complex.  Then add the confusion about which formats match which devices.  We’re not just providing materials for one type of device, our customers use Kindles and Nooks and iPads and cell phones and devices we probably haven’t heard of yet.  We are constantly learning about all of these devices because we are now free tech support for the public.  Our customers show up with their new eReader in a box, and we teach them how to use it.


Collection Decisions

Public libraries have always selected print books based on professional reviews and public demand.  This doesn’t always work with eBooks.  With eBooks, we have to focus on availability and public interest.  We are also rethinking our relationship with self-publishing.  Many libraries, such as ours, are now looking for ways to purchase eBooks directly from authors and independent publishers.  Keep in mind that this is all in a time of reduced funding and we’re trying to build a huge, new, popular digital collection while maintaining a popular and relevant print collection.


Library Benefits 

So what does the library have to offer?  Book borrowing habits are changing, mainly because of eBooks.  People are more open to impulse browsing and discovery of new authors and titles and the library provides the collection and staff to aid them in this discovery.  Once they’ve discovered a new favorite, the quest for reading gratification leads to backlist purchases.  (We speak from personal experience on this.)  Libraries can never afford to purchase in sufficient quantities to discourage sales.  We don’t just house a collection in our buildings or on our websites; we actively promote reading and books, no matter the format.
We’ve probably told you more than you ever wanted to know about libraries and eBooks, but please feel free to contact either of us for more information. We can be reached at http://www.hcpl.net/.


Joe sez: I like libraries. I like librarians. I like innovation.

So I sat down and had a think, and then called up my frequent collaborator Blake Crouch and bounced some ideas off of him.

This is what we came up with.

Blake and I are willing to sell our entire ebook catalog to the Harris County Public Library, and to any other libraries that are interested, under these terms:


1. Ebooks are $3.99

2. No DRM.

3. The library only needs to buy one ebook of a title, and then they can make as many copies as they need for all of their patrons and all of their branches.

4. The library owns the rights to use that ebook forever.

5. The library can use it an any format they need; mobi, epub, pdf, lit, etc. And when new formats arise, they're’re free to convert it to the new format.

In short, the library buys one copy, and never has to buy it again.

Now I'll take questions. I'm sure they'll be a few.

Q: Joe, that's insane! You're only charging $3.99 an ebook? That ebook can be read thousands of times!

A: Good. I hope it is.

Q: And they can make copies!? Shouldn't you at least make them buy multiple copies of each ebook?

A: Why? Ebooks cost nothing to copy and distribute. Once a library purchases a copy, it should be able to make as many copies as its branches and partons need. How cool would it be if you never had to wait for a book at the library because had already been checked out? My ebooks will always be available, all the time.

Q: But you're losing sales!

A: No I'm not. They bought a copy. They can do what they want with it. And my hope is because I don't have restrictions, and keep my costs low, the library will continue to buy my new ebooks as I release them. There are a lot of libraries in the US, and a lot more globally. If I sell every library one of my ebooks for $3.99, that's a nice amount of money.

Q: Don't you think your sales will suffer if readers can get all of your ebooks at the library, for free?

A: No. Readers can already get my paper books at the library, and that hasn't seemed to hurt my paper sales.

Q: But ebooks are different! People can check-out one of your ebooks online! They don't even have to visit the library to do it!

A: Though there is overlap, it's my guess that library patrons and people browsing Amazon for ebooks are two different types of readers. In a global marketplace, I don't expect to ever run out of readers. In fact, if a lot of libraries purchase my ebooks, I may become more well-known with readers, which could increase sales.

Q: But what about piracy!

A: As I've said many times, I'm okay with file sharing. That's why none of my self-pubbed ebooks have DRM. There's no fighting piracy. But you can still make a nice living by making your work easily available and affordable.

Q: But what happens when some new ebook device comes out with a new format? You're missing your chance to sell your books to the same library.

A: If they already bought one of my ebooks, they should be able to do what they want with it, including converting it to new formats.

Personally, I find it reprehensible that publishers put restrictions on ebooks, especially for libraries.

Q: But no one else is doing this! If you do this, you'll drag everyone else down with you! You'll ruin the library market for publishers and their authors!

A: Actually, what I'm doing is forcing publishers to be competitive. Why should libraries be punished with high prices and restrictions? Why should people who can't afford books be punished?

I like libraries. I like librarians. They deserve a break.

Q: I'm a librarian, and we want to do something similar. How do we get started?

A: It is my understanding that Harris County is one of the first libraries doing this. Get in touch with them, and  I'm sure they can offer advice.

Then email me for instructions on how to buy my ebooks and Blake's. We're working on creating a simple contract and purchase order.

Also, please spread the word and tell other libraries what we're doing. The more libraries that do this, the more authors who will join in and do the same thing Blake and I are doing.

I'd love to be the first author to sell directly to libraries. And I have a feeling I won't be the last.

Independence

Joe sez: Before I begin a major rant about why I'm quitting the legacy publishing industry, I'm handing the blog over to my friend, Melinda DuChamp, who has something interesting to say. Here's Melinda...

Melinda: I've written more than fifty novels in my career, most of them romances, and have been published by just about every major publisher. While I'm not a bestselling author, I have several million books in print, and I've had multi-book deals where I've gotten six figure advances.

Fifty Shades of Alice in Wonderland was the first erotic book I've written. While I've done graphic love scenes many times, they were always there to provide characterization and further the plot. In Fifty Shades of Alice, the love scenes were the plot. To be honest, I didn't know if I could pull it off. But, like many of my peers who have watched the sales of EL James with awe and more than a little envy, I thought I'd give it a try.

Joe suggested this guest blog when I told him how much I've earned on this book, because he thinks his readers might benefit from the knowledge. I've benefited often from the things Joe has disclosed on this blog (Joe is the reason I began self-publishing) so who am I to say no?

On July 23rd, I self-pubbed Alice on Amazon KDP, and enrolled it in the Select program. After two days, I'd only sold two copies, one to me (to check to see if it downloaded okay) and one to some stranger. Then I made it free for five days, from the 25th to the 30th of July.

The only promotion I did was the interview on Joe's blog. NYT bestseller Ruth Cardello was also kind enough to include Alice in a contest for her fans. Joe also was sweet enough to mention it on the Facebook page "What to Read After Fifty Shades of Grey" because I'm not on Facebook yet (I know! I know! I need to get on Facebook. I'm trying to become more like Joe and Ruth and get into social media, but I'm a Luddite and I was on a deadline for another book.)

Other than that, I didn't do anything to promote Alice. I figured it would sink or swim on its own merit.

So how did it do?

During the free period, I gave away 22,740 copies in the US and 10,255 in the UK and hit the Top 10 free list in each. That surprised me, because I'd done free promotions before but had never given away that many.

Did that translate to sales?

Alice has sold 3560 copies in the UK, and 2540 in the US (plus 1275 loans in the Kindle Owner's Lending Library) priced at $2.99.

Assuming the loans are $2 each, Alice has made close to $15,000 in the last 20 days. That's more than many of my advances. How did this happen? Was it Joe's blog? Ruth's contest? The Kindle Select free program? Carl Graves's amazing cover art? Piggybacking on EL James? All the good reviews it has gotten? All or some of the above?

Alice peaked at #194 in the US, and #56 in the UK. It is currently #643 and #208. At its peak, it was earning over $1,000 a day. Things have slowed down, but it is still outselling all of my other novels on Amazon.

So, naturally, I did what any smart writer would do. I wrote a sequel.

Fifty Shades of Alice Through the Looking Glass is now available in the US and the UK for $2.99.

At the height of Alice's sales, I was fantasizing about money. What if I had twenty ebooks doing well instead of just one? Making $20,000 a day is almost impossible to comprehend. But is it really impossible?

I'm working on the third book in the Alice trilogy. When finished, I'll release it as a stand alone, and also package the trilogy as a set. So I'll have four ebooks (each individual title, and the combined collection.)  If I did this four more times with four more trilogies, I'd have twenty ebooks for sale. With twenty for sale, I could have one ebook always free on KDP Select. Twenty ebooks at five days per free promo is one hundred days of free promo. KDP Select resets every three months, and then you can use the free promo again.

Writing twenty ebooks might seem like a daunting task. But remember, five of those are box sets, and each ebook is only around 30,000 words.

So in order to have 20 erotica ebooks, and one title always free, I only need to write 450,000 words. That's less than five full length-novels. Writing 2500 words per day, that's only six months of writing.

Half a year to write twenty ebooks? It sounds crazy, but it is entirely possible, even though I really believe $20k a day is a fantasy that can never happen. It's just too big a number. And who knows when the mommy porn bubble will burst?

Anyhoo, thank you everyone who has read the first Alice, and I hope you give the sequel a try! Also, thanks to Joe for the blog, and to Ruth Cardello for her unprecedented kindness to a complete stranger. BTW, Ruth is self-published, and recently hit the NYT Bestseller List with Bedding the Billionaire. Pick it up, it's fantastic!

Joe sez: First of all, congrats to Melinda on her success. I know how she's had some tough knocks during her long, legacy publishing career, and it's nice to see her make money.

(Also, congrats to Ruth Cardello, who just turned down a seven figure offer to stay indie. I'm sure that decision didn't come lightly. It took a lot of guts, and a lot of smarts, and Ruth has my highest respect. If my blog readers haven't bought her ebooks yet, they should.)

While I don't agree with Melinda that the mommy porn bubble will burst (because ebooks aren't a bubble) I do think it is unrealistic to plan on any ebook earning $1000 a day for an extended period of time. But I have made many times that amount per day, as has Ruth and many others, so I think Melinda might be onto something.

If she wrote 20 ebooks (15 titles and 5 collections) and each one earns only $150 a day, that's a million dollars a year. That's just 75 ebook sales and loans a day per title, and I've hit that number many times and for extended periods.

What I haven't done is hit that number on an ebook that is only 30k words long. My bestselling ebooks are full length novels. Readers don't buy my novellas nearly as frequently. But after studying erotica on Amazon (reviews, rankings, prices) for a few hours, I'm shocked by how many of these titles ebooks are doing well while still being short.

If I switched to erotica, I could put out four ebooks in the same time it would take me to write one thriller novel. I could do one 90k word thriller novel, priced at $2.99, which takes two months to write. Or in that same two months, I could write three 30k word erotica novellas, priced at $2.99 each, and price the collection at $7.99.

It seems like a no brainer, doesn't it? Same time to write, but I could more than quadruple my profits by writing mommy porn.

Now, I'm not suggesting everyone chase the erotica trend and start writing smut, especially since it isn't easy. I say this as a man who wrote sex scenes in many of my books, but those don't come close to what Melinda did. Chasing trends doesn't usually work, because readers can tell when the writer's heart isn't in it.

But if you think you can write erotica, now seems to be the time to give it a shot. I've written in many different genres, and each time I try something new it's a learning experience. It's always worthwhile to experiment, even if it is just to learn your limitations.

Something else seems to be happening in this business that I find interesting. In the recent past, no legacy publisher would ever touch a self-published book, claiming it had already burned through its audience. But more and more indie authors are getting legacy offers. In the past, writers would spend months querying agents and publishers, hoping to get a book picked up. These days, agents and publishers are trolling the bestseller lists, looking for indie books to buy.

While it is tempting to take a seven figure deal a legacy publisher might offer, think long and hard about what your goals are before taking the money and running. A million bucks seems nice, but if it is for three books, and your agent gets 15%, you're only taking home $283k per title. Sure, that's a lot of money. But then that legacy publisher owns those books forever, while only giving you 14.9% royalties. Instead you could own those books, forever, making 70%.

If you  average selling 57 copies of an ebook, per day, you'll make $250k in six years. In a global market, that's entirely possible. And if you somehow managed to get on the bestseller lists as an indie, a hot title can make $50k a month.

Let's break it down another way. To make $250k on your own, you need to sell 125k ebooks at $2.99. To make $250k as a legacy pubbed author, you need to sell 500k ebooks at $6.99 (that's making 14.9% royalties, or 17.5% of the list price minus agent's commission.) Guess which is easier to do?

But Joe! Legacy publishers also print books!

Yes, they do. But print sales continue to fall each year, while ebook sales rise. Legacy publishers have begun "ebook only" publishing lines. As more bookstores close, fewer and fewer print books will sell, both the number of titles and number of copies per title. If Barnes & Noble goes under in the next 5 years, do you want your book held hostage by a legacy deal that will never earn out?

For that nice advance, you're giving up control over your title, your cover, and your price, forever. And it will be much more difficult to earn out that advance when you're making 1/4 of what you would self-publishing, especially when your ebook is priced too high.

Know your goals, know the risks, and act appropriately. I've been turning down foreign deals because I realize I'll lose money in the long run. It makes more sense for me to translate those titles myself.

So would I ever take a legacy deal? Let me put it this way. If a legacy publisher made me a giant offer, it would only be because I had a huge hit self-pubbing. There is no way in hell I'd ever sign over the rights of a hit book to a publisher. I've worked with three legacy publishers. I'd rather get my teeth drilled out than work with those folks again, because that would be less painful, even with a million dollar check.

Bullshit Joe! You'd take the money and run!

No, I wouldn't. In fact, if I haven't burned all of those potential bridges already, allow me to do so right now:

When in the Course of publishing events, it becomes necessary for writers to sever their ties with the industry that is supposed to have "nurtured" them, a decent respect to the opinions of mankind requires that we should declare the causes which impel those writers to the separation.

We hold these truths to be self-evident, that all writers should have an equal chance to find readers. That their successes or failures should be dependent upon their own actions and their own choices. That they should be paid fairly for their work. That they should have control over the works they produce. That they should have immediate and accurate access to their sales data. That they should be paid promptly. That they should not be restricted from reaching those who may enjoy their work. That whenever a publisher becomes destructive of these ends, it is the Right of Authors to abolish all connections with the offending parties.

The history of the legacy publishing industry is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over writers. To prove this, let Facts be submitted to a candid world.

They have given us take-it-or-leave-it, one-sided, unconscionable contracts.
They have failed to adequately market works they have acquired.
They have artificially inflated the price of ebooks.
They have refused to negotiate better ebook royalties for authors.
They have forced unnecessary editing changes on authors.
They have forced unnecessary title changes on authors.
They have forced crappy covers on authors.
They have refused to exploit rights they own.
They have refused to return rights they aren't properly exploiting.
They take far too long to bring acquired works to market.
They take far too long to pay writers advances and royalties.
Their royalty statements are opaque, out-of-date, and inaccurate.
They orphan authors.
They orphan books.
They refuse to treat authors as equals, let alone with a reasonable measure of fairness.
They make mistakes and take no responsibility for those mistakes.
For every hope they nurture, they unnecessarily neglect and destroy countless others.
They have made accessories of the authors' ostensible representative organization, the quisling Authors Guild, and are served, too, by the misleadingly named Association of Authors' Representatives.
They have failed to honor promises made.
They have failed to honor their own onerous contract terms.
They've failed the vast majority of authors, period.

This blog has documented nearly every stage of these Oppressions, and in many cases offered solutions to publishers, and has been answered with only silence and derision.

But that's okay. Because now authors have a choice.

I don't need legacy publishing, and I will never be taken advantage of again. I declare myself independent of the entire archaic, broken, corrupt system.

And I won't be the last to do so.

Harlequin Fail Revisit

Two weeks ago I blogged about the class action suit writers have brought against Harlequin.

Harlequin should be afraid. They should be very afraid. 

Why should a big corporation with the money to hire a squad of lawyers be afraid?

As always, the devil is in the details. To get a better understanding of what the suit means, you need to look at the seven claims in the suit. It also helps to be a lawyer.

I am not a lawyer, nor do I claim understanding of legalese. But I spoke with someone who seems to have some idea what the claims mean, and can translate them into readily understandable English. Feel free to follow along by reading the complaint at http://www.harlequinlawsuit.com/The_Complaint.php.

Let's start with the pronouncement that the Swiss entity of Harlequin Enterprises (let's call them Harlequin Swiss) is the actual Publisher. In actuality, they're not. Harlequin Enterprises, Ltd. is. But the contracts list Harlequin Swiss as the Publisher. Now look at the claims, which start on Paragraph 52 of the Complaint.

Claim 1: Assignment. It means that rather than licensing the rights from the Swiss entity, Harlequin Enterprises was in actual fact assigned the rights. And I believe various earlier Paragraphs of the Complaint give factual information supporting this.

Assignment means transferring the rights held by one party to another. If you recall the problem here, Harlequin Swiss avoided paying authors 50% for licensing ebooks by licensing the rights to Harlequin Enterprises Limited for 6%, giving the authors 3%. But this claim states that Harlequin Swiss assigned the rights. Meaning Harlequin Swiss essentially let Harlequin Enterprises do everything involved in the publishing process. 

In other words, Harlequin Swiss gave Harlequin Enterprises full authority over the book rights. If the rights were assigned, then Harlequin Enterprises licensed those rights, for instance to Amazon, the authors should have been paid in those amounts. Harlequin Swiss "assigned" the rights to Harlequin Enterprises, making Harlequin Enterprises the Publisher. Whatever Harlequin Enterprises received, the authors should have gotten 50% of that, not 50% of the artificial license

Claim 2: Agent. Harlequin Swiss is the agent of Harlequin Enterprises. So Harlequin Enterprises is actually the one in control.

Claim 3: Harlequin Enterprises Limited (hereafter called "HEL") acted as the Publisher, assuming all of its obligations, and therefore must also assume the liabilities. Meaning this lawsuit.

Claim 4: Estoppel. From what I gather, this means that because HEL is acting as if it were the Publisher it can't continue to deny it is the Publisher. It can't represent itself as the Publisher on one hand, but when it becomes legally convenient, suddenly deny it's the actual Publisher on the other. So it gets “estopped” from denying the truth. It is the Publisher.

Claim 5: Alter Ego. Harlequin Swiss is under the control of HEL. Usually the courts keep separate corporate identities distinct or discrete. You can't blame the wrongs of one on the wrongs of the other, even if they're related entities. But when one is directing the other to commit a wrong, the courts may permit the two identities to be treated as one. That's the best I can explain it given these particular circumstances.  There are many factors in piercing the veil; there is no definitive set of rules. Basically, it's in the judge's hands to determine whether this meets the level of alter ego or not.

Those first five are all Breach of Contract issues that assert that HEL is the actual Publisher. It's sort of a giant step back from the narrower focus of the All Other Rights (AOR) clause itself.

Claim 6:  Narrows the focus to a specific clause, the AOR clause. It's the one I focused on in Harlequin Fail Part 2, namely that 6% isn't equivalent to the amount reasonably attainable by an unrelated third party. In fact, it is 50%, which is what authors should have gotten. 

Claim 7: Unjust Enrichment. If the AOR clause only covers the licensing of the right to sell ebooks (as HQ contends) and not the right to sell the individual ebooks, then HQ can only license the right to others, not sell the ebooks themselves. The Complaint actually says it clearer in Paragraph 88.

But guess what Harlequin is doing on its own website? That's right! It's selling ebooks!

So on top of everything, Harlequin may not even have the rights to sell ebooks under these contract terms. Can you say copyright violation?

Recap in layman's terms: Harlequin assigned rights to itself, which I'm pretty sure is a no-no legally, and it licensed those rights below fair market value, which is another no-no, and then it sold ebooks on its website without having the rights to them, yet another no-no.

Ouch.

So here are my questions for Donna Hayes, CEO of Harlequin, assuming she understands the claims as I have laid them out. (If you don't understand them, Donna, I plan on doing an update soon with crayon drawings and smaller words.)

Donna, do you still believe Harlequin authors have been recompensed fairly and properly?

Do you deny Harlequin Enterprises Limited acted as the Publisher? That Harlequin Swiss is an agent of HEL and under its control? That HEL was assigned the rights in question?

Did you know about this all along? If so, how were you able to sleep at night?

Have you brushed up your resume? If so, maybe you don't want to include the part about screwing hundreds of authors and boldly leading your company into a high-profile class action suit.

I don't expect answers, Donna. But maybe discovery will get those answers, and then the rest of us will know the truth.

And, as I said before, shame on you. And shame on Harlequin.

But guess what? You can make this right. You can pay what you owe, and by doing so lead the whole publishing industry into a future where authors are treated fairly. You can be a symbol of reform, and restructure so that those who have made your company rich and powerful--the writers you have exploited--are given their due and just rewards.

And then, after you do that and can finally sleep soundly knowing your wrongs have been righted, if there is any money left over you can hire a good accountant and file Chapter 11, just like the Big 6 are going to wind up doing.

Screwing authors isn't a smart way to conduct your business when the only reason you have a business in the first place is because of authors.

That's a lesson you're going to learn the hard way.