Giving it away for free. Why?

I am inundated by new writers offering me free e•content these days. “Download my book for free!” And this has led me to realize why the traditional world of publishing, that is, those who try to make a living out of this business, have circled the wagons on their industry.

It is almost a given these days that a new writer has to self•publish his book and give away the e•book version for free. Some say that you have to give away three free for every one sold at $0.99. That is less than 25 cents per copy. How long will that take before you amass the minimum required to receive your first royalty check from the online retailers who are notoriously lax at paying? Perhaps many fall by the way before accumulating that minimum, to the benefit of the online retailer. And why do we have to do this? Where is the value exchange? Where is the token of respect for all the hours socked away into learning the craft and then producing the book? Where is the sense of self•respect that this labourer is worthy of his hire?

Sure, I give a certain amount of content away for free – like this blog article, for example. But my value exchange here is received in the engagement by the many that read and provide feedback to me on the issues I raise – that is my compensation. But to give away a whole book, something taken years to create, to some faceless person, seems a bit excessive to me. Yes, I have given away books for free too, but again, only when the reader engages with me one•on•one and agrees to discuss the book’s pros and cons. Most of these “freebies” have paid off, for the readers have gone on to post online reviews of my book, good, bad or indifferent.

I am told that free downloads can amount to thousands of curious, “anything for free” collectors, but not many of these freeloaders actually get down to reading the book. So, all that one has achieved is to have moved the book of your own hard drive to the hard drives of many others where it sits in storage. I believe that the online retailers also count free downloads as “books sold” (I recently received a $0 invoice for a free download that I tested) so this permeates the myth that the free book is now a best seller. Of course, try telling this to a new writer and it’s like water falling on a duck’s back.

I developed a principle some time ago: I will not give away my e•books for free unless in a limited promotion (and I haven’t engaged in one yet for I am still studying the implications). My e•books (and trade books) will have market competitive prices to the faceless multitudes. And “market competitive” does not mean “free” for then there is no market for one’s work. And if my restraint ends up in fewer copies sold, well, so be it. At least that will give me an indication of my true value as a writer. J.D. Salinger was the master of this restraint principle – the more he tried to hide his work, the more the world wanted of him.

I do not know if this stubborn “last stand” of mine is going to drive me into a hole in this new publishing world. I am sure those who practice the “give three free, expect one to be bought for $0.99” approach will dismiss me (and Salinger) as a Luddite. But if the new publishing world means working for free, it sounds worse than working in the times of slavery, and I thought that we had evolved past that dark stage of our lives. And as for the guy who sends me that ubiquitous tweet, “Thanks for the follow, please download my debut novel Blah, Blah & Blah for free,” he, or she, will be coming off my “following” list pretty damn quick.

So Amazon and Kobo want to be Publishers, eh?

The recent announcement by these players to advance up the book industry value chain from retailing to publishing comes as no surprise. In an industry which has many handoffs in its delivery process, and many players, each player muzzles for maximum turf over time. The ones upstream (i.e. the creators) try to advance down the chain like oil companies muzzling into retail gas stations. Those at the tail, retailers like Amazon and Kobo, try to move into the middle currently occupied by publishers, and those in the middle try to go both ways like departments stores that create loyalty programs at one end and private label merchandise at the other.

Success will depend on what value is provided. In the case of Amazon and Kobo, their original value proposition lay in their ability to provide the largest selection of books, globally, without the shopper having to leave the comfort of his home. In becoming a publisher, one has to be selective (also known by that dreaded term “editorial integrity”) and promote only “the selected.” This is a different stance from the presently held “come one, come all” position of these online retailers. So what would Amazon and Kobo do in their new roles as publishers? Provide two•tier distribution: a premium level for authors who self publish through them and a more basic level for all books coming from other publishers? Start a separate branded line for their own publishing streams of books? Cherry•pick the best•selling authors and offer lucrative one•shot deals? Or hire an army of interns to wade through miles of slush piles should every unpublished author want to self•publish through them? This new move is surely going to raise questions about the altered value propositions that these two players now bring to the reader, and to the author.

The danger when two or more bed mates jostle for elbow room on the same bed, especially if one has a lot of muscle, is that the muscular one gains at the expense of the others. The ones with less and less room, risk falling off the bed altogether and may leave to sleep elsewhere with other bedfellows. And there is no fun in sleeping in a bed with one big elephant – be that a major publisher, a retailer•turned publisher or a distributor turned one•stop•shop. In this incestuous game, many bed mates, each having equal space, is good – it’s also called competition, in case I was stirring orgiastic imagery in you!

The wild card for everyone is the technology that is making these moves possible. And technology, while enabling bigger and newer entrants to muzzle in for space, can also scuttle the best made plans plans. In this case, the new technology also allows the story•teller, (aka – the author) to reach his audience directly, for it is no big deal to publish a book these days, be it in trade book format or e•book format, if one is reasonably adept at word processing and has access to some conversion software. And it’s no bigger deal to distribute it directly from one’s website with no intermediary hand•offs. All the author needs is a facilitator who can help his audience find, sample and endorse him. The reader needs the facilitator too, to point him to good reading material. This facilitator role is the one going to be prized both by readers and writers in the future – not a big bully who keeps the lion’s share and offers poor quality in exchange, but a big brother who makes it happen for the writer and the reader.

I am keen to see whether Amazon and Kobo will truly transform into Big Brothers or lose both authors and readers because they ended up being Big Bullies.

Caught between Fear and Greed

It seems that fear and greed have taken firm hold of the world. Aided by instant communications that keep us up•to•the minute on everyone else’s fear and greed, we are able to spread this contagion everywhere. In good times, we want more: greed (or in stock market parlance “buy, buy, buy, borrow and buy some more”), in bad times we want to hang on to what we have: fear (or in stock market lingo, “sell, sell, sell, bail me out and sell more”). The Herd mentality takes over. I thought that bulls moved in droves and bears in litters but their owners seem to move in herds.

Now we are heading into the double•dip recession that everyone dreaded. But this is more than that roller coaster. Henceforth, there is going to be a rapid dipping and bobbing that will come with every byte on the news ticker now that we have got everyone psyched for flight. Need a “sell” reaction? Just drop some bad news from the Street, fact or fiction. Need a “buy”? Publish an optimistic financial outlook, fact or fiction. It is as if someone with the right read on people’s panic buttons could become the next Public Enemy #1; and you don’t have to kill anyone to get there, just drop those poison news snippets like droplets from the Chinese water torture machine and watch everyone squirm.

My financial advisers recently advised me to sell or “de•risk”. I replied, “Man, life itself is a risk. A guy wakes up in the morning, coughing, and finds blood in his phlegm and is told that he has lung cancer – what can you de•risk here? A woman crosses the road, is hit by a car, and is history – de•risk?” I told my financial advisor to not waste his time on me. I have other, better, things to do than waste my time following the herd.

What my investment strategy boils down to is this: do I find the world still a good place to be in, is the majority of its enterprises honest and therefore would I want to remain invested in this world? And my answer today is “Yes,” the world is still a good place, despite a bunch of panic ridden people in positions of influence running around like chickens with their proverbial dicks (or was it necks) cut off. They would be better off taking a deep breath and asking themselves some deep questions:
a) Why do you have to keep continuously growing exponentially, and then punish yourself when you don’t?
b) How can you expect to live off other people’s money (e.g. bailouts and borrowings)?
c) Can you gear your lifestyle to be a net producer than a consumer? If we all did that the world will be left with more when we leave it than when we came into it.
d) Why does winning at all costs for oneself matter more than winning for mankind? This question is especially aimed at those deadlocked politicians who cannot see the bigger picture and are out to pummel each other like punch drunk opponents in an Ultimate Fighting Championship final
e) If value is inflated, it will to be taken out. If value is depressed it will rise to its true worth. This will happen whether markets panic or not, through a rapid process or gradually. Let buyers decide. Your excitement only clouds this decision making – so shut up and step aside, or go on holiday if you cannot take the pressure.

So having said my piece, I returned to my day job, grateful that I still had one.

Can a government run like a corporation?

The global shift to the right has resulted in governments of countries trying to run themselves like corporations; Dubai and Singapore are examples that come to mind. Privatization, less government, less taxes, and less social benefits are in fashion. And yet some governments are on the verge of bankruptcy, if not broke already. Is this due to the cause of “more government” or the effect of “less government”? Let’s look at these two entities a bit closer…

A corporation is organized to run an economic activity that provides a return to its shareholders. Beyond this important but narrow focus, a corporation need not exist. And in the process of increasing shareholder value, the corporation provides a product or service to its customer base and pays wages to its employees. In today’s globalized environment, a corporation does not have to respect national borders and could source its capital, labour and supplies from almost anywhere. Corporations are also ruled by fear and could shut down operations or move them across borders at the first sign of national instability. Oh yes, there are new roles within its community being ascribed to the corporation today such as Corporate Social Responsibility and Shared Value, but these appear to be more like checkmarks on a corporate scorecard, or the latest hook in a lecture that a professor at B•school has come up with to bolster his flagging class attendance; they are not yet intrinsic components of corporate culture that flow into society at large to enrich the whole rather than just some of the privileged parts.

A country’s government, on the other hand, has a larger role: it is circumscribed by national borders and lays down the rules by which corporations operate within; it collects and deploys taxes towards important activities that do not always provide an economic return on investment (how can everything in life be valued in $$$?), it ensures the re•distribution of wealth that leads to social stability and fairness within its borders, and it upholds the national brand that embodies the collective aspirations and behaviours of the nation, some not always rational or pleasant.

In terms of perception, corporations are able to manipulate public opinion by resorting to spin and positioning (“smoke more cigarettes!”), something come to be expected of them by an advertizing•addicted society. Can governments resort to this strategy without coming across as insincere, and thus undeserving of the next vote? They have tried rather ineptly with the dreaded “attack ads” in recent times, but these have now paled, trailing the mid•day soaps. Hopefully, in time, voters will forgive their governments this transgression into an area “they know not of.”

Despite their differing missions however, governments need corporations, and vice versa, but at arm’s length. Corporations drive the economic engine of society while governments lay down track for that engine to run along. Governments also make sure that the tracks are clear, that the engine does not jump tracks and barrel over people and their rights. Therefore, when governments start to act like corporations they blur the lines and abdicate their larger role. Yes, they may end up balancing their budgets and streamlining their service offering by playing Big C (a.k.a. reduce their offering) but they will fall short of their extended purpose.

Perhaps, corporations and governments should respect their differences and not try to imitate each other. Perhaps a huge sign on Parliament Hill should read, “Dear Corporations, please keep out of the hallways of Government. We will try our best to keep out of yours.”