Slashdot Mirror

Five months ago, in the name of authorial independence and technological empowerment (not to mention money), Stephen King decided to bypass his publisher and sell his serial novel The Plant directly to readers over the Net. The story is about a predatory vine that terrorizes a small publishing house. Last week, the experiment was suspended. Whether or not he scared his e-readers, King instantly traumatized the publishing industry, which suddenly had to confront its worst nightmare -- technologically-empowered writers end-running Stone Age marketing notions to tell their own stories and sell them to readers without middlemen. An analysis.

The Plant drew the massive media hype associated with anything new involving media and the Net. Then the hype quieted -- and the sales fell. King and the publishing industry both got some valuable lessons about the Net and how it does or doesn't work to sell books. Last week King abandoned the experiment.

What King's adventure demonstrates is that the Net is a powerful new tool for selling books rather than a technology that replaces them.

King's "Plant" Web site is worth a look. As talented as King is, here is a lesson in how not to sell and market a novel. On the page where a visitor could download The Plant, there are answers to more than 20 frequently asked questions and difficulties, more than on the Netscape FAQ.

Peddling content online is a consistently misunderstood endeavor for information marketers, as conventional media's numerous online headaches have repeatedly shown. Online, people interested in movies, sex, dogs, open source, flowers, travel (or books, for that matter), gather in identifiable communities. They know exactly where to go to seek and discuss information they want, including, links to books,bookstores and publishing and author sites.

Generally, publishers have not only failed to commission books that cover the ascendant culture of technology well, they make little use of the Net's organic hyperlinking capabilities. Their Net marketing notions are superficial. They almost never take the time or spend the money to penetrate the network to find massive audiences like those on giant (or small) private and commercial Web sites, instant messaging systems or mailing lists.

That's too bad. Interactive Net consumers are independent minded and experienced when it comes to buying information like books. They are often obsessive readers. Publishers forget that it's impossible to go online for any length of time without doing some reading and writing. Many of these new content consumers have been making information choices their whole lives. They are more apt than traditional media consumers to make up their own minds about what to buy and read and depend less on gatekeepers like reviewers and journalists. They also grasp the limitations of the Net.

Lost in the Net hysteria is the fact that non-virtual books are a powerful technology themselves. They are easy to buy, and don't require tech support, batteries or upgrades. You can read them in toto, anywhere you want, even when the power goes out, and they are impervious to viruses and other tech bugs. They can be passed along to others and last a long time. Those are strong selling points.

But the publishing industry -- panicked by the growth of the Net -- doesn't seem to grasp the value of its own products, certainly not in its marketing approaches. The publishing industry has a passive, dependent ethic when it comes to selling books -- they mail them to skeptical and overwhelmed reviewers, producers, reporters and editors and beg, relying on the media's diminishing good will and shortening attention spans to call attention to their creative offerings.

Needless to say, this approach fails much more often than not. The Net offers a miraculous alternative to this medieval system, a great potential boon to writers and publishes alike, but so far, most publishers are stymied by the network, using it to undermine their most valuable asset, the form of the book itself.

Hyperlinks and search engines make it possible for information entities like books to find their own audiences, and for writers and publishers both to by-pass expensive and ineffective media systems to pinpoint the readers they need to reach and skip the others.

The digital mediasphere has fundamental rules -- more information at at less cost, and the information system that meets the information needs of humans will always prevail. The most successful information vendors aren't those that create information, but those that connect people with the information they want and need. The competition isn't just tough, it's literally incalculable.

According to the New York Times, about 40,000 copies of The Plant were downloaded in the first week after the most recent installment became available, sharply down from the more than 120,000 copies ordered in the week after the first installment appeared.(King was charging relative payments per download. You pay once but can download both the PDf (Adobe Acrobat format) and Palm versions. The site counts that as two downloads when in the real world of book sales, it would be counted as one.)

Even worse, fewer and fewer of those downloaders were willing to keep paying. King issued the installments under an honor-system payment model, asking readers to pay for $l for each chapter downloaded and promising to keep writing only if at least 75% of the readers complied. "If you pay, the story rolls. If you don't, the story folds," he wrote on his Web site. But this week, King staffers said that only 46% of the downloads of the most recent chapter were paid for, and the experiment was suspended.

King still managed to far outsell almost all electronic books published by the major publishers. According to the Times, publishers say typical e-books sell far fewer than 10,000 copies. One publishing analyst says the actual number is closer to 3,000. When Simon & Schuster published King's electronic novella Riding the Bullet, more than 500,000 copies were downloaded, although many people got the novella for free as overloaded sites like Amazon started giving it away. Hardly the long-awaited new model for writers or for publishing.

But really, folks, why would people want to buy or read a story this way, no matter how low the cost?

Direct digital publishing makes sense in some contexts. Textbooks seem to have a natural niche for selling on the Net. There is an enormous market for almost universally-wired students and educators to pay for downloads of textbook revisions rather than shell out a fortune for updated hardcover versions (or for software, for that matter). Scientific, academic and other research could be published on the Net, shared and peer-reviewed and sold instantly. Each Spring, gardeners might love e-books on climate, bulbs and the tools to plant and take care of them. Same with technical manuals and dictionaries, or home repair guides and store catalogues, or print-on-demand books, especially out-of-stock books and editions. Topical pamphlets, afterwords, updates and reference material also could work well online, along with e-updates of non-fiction books like biographies.

Publishers now also have to compete with the growing number of open media sites -- Web logs, Web sites, mailing lists. Many are centered around communities of interest. Because they are not mass-marketed, increasingly popular open media sites are freer in voice and diversity as well as cost. These sites are much more in tune with the culture of the Net -- open, raucous, smart and informational, traits not always associated with giant publishes. Invariably, they share a common utility with their consumers -- free music, open source, archived materials -- and they give their readers and browsers work to do and a role to play: contributing, moderating, commenting and arguing, reviewing, sharing information, linking.

On a bookstore shelf, King is a lethal competitor against other books and writers, even many movies and TV shows. Online, he and commercial publishers are competing with narrative in every form, from sex to programming to e-trading to tech exchanges to videostreaming. It's difficult to get attention, harder yet to get people to reach for those credit cards.

Even though many publishers appear to be giving up on them, books don't appear to be doomed. New technologies aren't all consuming. They change some things, and leave others unscathed. Books (the same may be true of movies) may be one of those narrative forms that work best in the form in which they are currently being presented. Technologies tend to create elites -- the people that make and use them -- who often lose touch with the un-hip hordes. The vast majority of Americans -- 95%, according to Business Week -- don't yet have broadband and aren't going to get any anytime soon. That means time is a major factor in decisions like downloading book and movie-buying online, especially when the audience is away from college T-3 lines.

Publishers are already drawing the wrong conclusion from the demise of The Plant.

"Whether in print or electronic form, a publisher brings quite a lot to the table," a Harper Collins executive told the New York Times, "starting with the editing process and including marketing and publicity and and all the advice and wherewithal."

Maybe so. But it's a given in the book business that editors don't edit much anymore. And most marketing departments are a mess, still in shock over the advent of the Digital Age. It's almost conventional wisdom among writers and editors that book campaigns and publicity tours are inefficient and ineffective. Mostly what publishers bring to the table is lots of books.

The wiser conclusion to draw from King's experiment is that the Net is a powerful and still much under-utilized new tool for selling books, not replacing them.

What will They think of next? Easier to start with what They've thought of previously. For instance: How is Steven King's online book experiment going? And speaking of Them, where lies the trend in The War Between The Pitiful RIAA and the Splendid Universities? And when will They realize that I don't want to talk into my address book, even if that's a PDA? Those people have a lot to answer for.

Allegedly U.S. $299, allegedly end-of-year, allege, allege. Good news for those of us equipped with the quaint alternative to Palm Computing's organizers, even if less than impressed by most combination PDA / phone attempts -- InaneBoy writes: "Handspring's got a bunch of pictures and details of their new 'Visor Phone' Check it out! Super-keen!"

Of course, hemos is right -- there's a reason that most phones aren't as wide as your average PDA. This one looks like a reasonable -- if expensive -- way to combine the two items, especially if it will work with the combination mic / speaker earbud things. (But shouldn't the people making Springboard modules be a little busier with my GPS reciever?)

Plus, many colleges have declined to ban copying machines, tape recorders and ethernet. carlocius writes: "It appears that my college, Michigan State University, just handed Metallica and Dr. Dre another loss in their attempt to get Napster blocked on large Universities. MSU's administators stated that the Acceptable Use Policy of the university already covers copyright issues and there is no reason for Napster to be banned before a trial. GO STATE!!!"

Likewise, jellings writes: "The University of Pennsylvania joined the ranks of leading universities who are refusing to shut down access to the Napster on their campus, according to an article from the university press. U Pres. Judith Rodin said that "banning the Internet service would go against the University's educational mission by denying students freedom of inquiry and expression" and pointed to the Digital Millenium Act for further justification, saying that limiting access is not her responsibility ("Internet service providers cannot be held accountable for illegal activity on their networks if they are unaware of the activity"). Although the awareness of the activity of the issue may be questionable, it is certainly good to see a big U not yielding to the demands of Dr. Dre & Metallica ..."

The list of schools refusing to buckle under keeps growing; campus admins and sysadmins seem justifiably adamant about letting their policies be dictated by corporate vulture groups. Bandwidth reasons may be another story entirely, though.

Of course, not everyone has the awesome power of ResNet behind them ... ca1v1n writes: "The awesome power of the record labels has come through again. The Offspring have cancelled their plans to distribute their next album for free, after legal action and the threat of a lawsuit from Sony music. Yahoo! news has the scoop. So much for protecting the artists' interests."

An enquiry into establishing a curve of electronic book sales ... Triumphant former astronomy student jamie points out this CNN story on the continuing book experiment by Stephen King, who is still selling his novel online. Here's a telling snippet:

...since the first installment's release July 24, the percentage of readers paying for their downloads has dropped from 76 percent to less than 70 percent for the second installment. Part three goes up on Monday.

jamie points out that 70 "but he's giving us part 3 anyway. The more telling figures: 172,004 people had paid for part one and 74,373 people had paid for part two."

maomoondog pipes in: "Apparently, King's company is upset that too few of the downloads are being paid for. Stephen King comments on the progress here. Personally, I'm impressed that 70% of the downloads are being paid for. With as low a per-item cost as a text download is, the author should really clean up in this sort of arrangement."

If you're one of the 172,004, liked the story, but are not part of the 74,373, please consider joining the second group on jamie's behalf, because as he says: "It's actually not a bad story and I want to see how it ends :)"

Imagine a novelist, trapped in a nightmarish world of credit cards and micropayments, facing devilish odds and the belligerent stares of publishers everywhere ... picture a team of hackers brazen enough to break into dozens of secure government sites without incurring a single lawsuit ... scream in terror at the thought of mutant penguin-kangaroo hybrids swimming deviously onto our shores ...

Revenge of the naysayers' naysayers: Just yesterday, jamie sallied forth with the theory that Stephen King was setting himself up for disappointment by expecting enough paying customers for his new online book to justify the experiment.

jheinen writes, though, "According to MSNBC, of the 41,000 downloads for the first installment so far, 32,000 (~78%) have already paid via credit card. Kinda shoots to hell the theory that people won't pay."

[Jamie adds: I stand by my prediction that "Stephen King is never going to have to publish the end of his novel." I'd love to see him succeed, but I just don't think so this time around. We'll see in September!]

Red Five, I'm going in. You may recall the story a little while ago about a distributed anti-cracking bot at Sandia National Laboratory. Rest assured, those clever folks don't confine themselves to practicing only one side of the ol' thrust-and-feint.

In fact, leb writes: "Over the past two years, a group at Sandia National Laboratories known informally as the Red Team has, at customer invitation, either successfully invaded or devised successful mock attacks on 35 out of 35 information systems at various sites, along with their associated security technologies. Their work - challenged only by a new style of defense, also developed at Sandia, called an "intelligent agent" - demonstrates that competent outsiders can hack into almost all networked computers as presently conformed no matter how well guarded, say spokespeople for the group, formally known as the Information Design Assurance Red Team or IDART. Check out their site here."

Stir, leave plot overnight to thicken. vjlen writes: "Now it sounds like corinthians.com is just another cybersquatting case. From an article in USA Today: 'But the case is not as black-and-white as it seems, says Dave Fogelson, a spokesman for the team, which recently put up its own site in Brazil. Fogelson says the arbitrator had to consider several factors, including the fact that Sallen did not use the site for Bible quotes until after he contacted the team to talk about selling the name, which suggests his main motive was profit.'"

Or ... or ... or ... we'll strike! stattouk writes "The BBC has a story on a court case currently happening in France over whether Yahoo France can be held responsible for people being able to access auctions of Nazi memorabilia. The courts say that even though fr.yahoo.com has blocked access, the fact that www.yahoo.com can still be used to get them amounts to no action by Yahoo." Asking Yahoo! to block Internet auctions in the first place seemed rather stretchy; now it seems that Yahoo! is supposed to police the entire world.

Penguins do come from that hemisphere, after all ... Tsujigiri writes "To follow up a previous story on Slashdot about the Australian InstallFest 2000, Fairfax IT is running this story about the recently held (well, July the 15th) Adelaide InstallFest 2000 and its "unexpected surge in interest". Quite successfull all round. Congratulations to all involved, and good luck to the rest of the Australian Install Season. (For anyone who'd like to see some pictures, go here)"

If there's an "install season" down there, one questions leaps to mind: Is there a limit on those things?

Stephen King is conducting a fiendish experiment. He - not his publisher - is putting the first installment of a novel online today, and then waiting to see how many people will pay a dollar for the download. The second part goes online next month, and then when it comes time to upload the third part, King will only release it if enough people have paid for the first two. This is the first high-profile test of a promising artistic compensation algorithm in the post-copyright world -- and when it fails, don't give up on it.

"The average writer is really more interested in writing than the transaction part of the process."
-- Jack Romanos, President/COO of Simon & Schuster, quoted in NYT

"We're confident that publishers add enough value to the process that authors are still going to want to use them."
-- Carolyn Reidy, CEO of Simon & Schuster, quoted by AP

"My friends, we have a chance to become Big Publishing's worst nightmare."
-- Stephen King

"Looks like the future of publishing to me."
-- Bruce Schneier

We've had a few people submit this news item, describing it as "shareware." It's not. This is shareware with a bite attached, something else entirely. What King is doing is a real-world test of the Street Performer's Protocol.

The SPP is a proposal for artists to make money without retaining any control over their work (since, on the net, copyright is rapidly being rendered irrelevant). Here's the paper by Kelsey and Schneier if you'd like to get all the technical details.

But the bottom line is that Stephen King is never going to have to publish the end of his novel.

Readers aren't going to send in a flood of cash and money orders (!) -- that's a given -- envelopes and addresses are a hassle. Luckily for him, he's brokered a deal with Amazon to accept credit cards, which is pretty sweet considering that most places won't even look at $1 credit card charges -- too much overhead. (My guess would be that Amazon is doing this as a loss leader to get the attention and signups. That won't work forever. Amazon PR didn't return my phone call by press time.)

But the real problem is that King demands that 75% of his readers be honest. That'll never happen.

Kelsey and Schneier's original SPP proposed thoughtfully that authors ask for a flat fee: say, $100,000 for a novel. If the majority of an author's readers never pay, that's fine: as long as the remaining minority is large enough (or rich enough) to collectively make the payment. (If not enough pay, the money stays in escrow and then reverts to its owners.)

King's terms make the question one of relative loyalty, not absolute popularity. He's not offering a transaction with his readers -- he's testing them. And the test is guaranteed to fail.

What he's proposing is a Prisoner's Dilemma played between thousands of people. Because of the large nature of the game, the actual statistical "profit" returned by sending in your dollar is a tiny fraction of the enjoyment you'd get from reading the third installment that King would post. Your payoff matrix looks like:

Novel Released Novel Not Released Cooperate
(pay $1) Get $10 reading enjoyment for $1, profit: $9 $-1 Defect
(pay $0) Get $10 reading enjoyment for free, profit: $10 $0

No matter what happens, you do better by not sending in your dollar. (It's fair to ignore the infinitesimal chance that your single dollar will be the one to hit the 75% mark.)

Of course there are other considerations (can you sleep at night knowing you cheated Stephen King out of a dollar?) but for the most part, people will weigh these options and decide they're not going to pay.

And once you start thinking that you're not going to pay, you realize that many others won't either, and it starts to look even more like throwing money down a drain. Vicious cycle.

The Prisoner's Dilemma is only interesting if the same players play together over and over. What we have here is a "one-shot" game, and in such a game the only rational strategy is to defect. Unfortunately, if everyone behaves rationally, we all merely break even (and the novel never comes out); if only we were a little more irrational we'd all make a profit of nine dollars - or however much King's story was worth to us.

Douglas Hofstadter ran an experiment for Scientific American in June 1983, asking twenty friends to play a similar one-shot Dilemma. Even though Hofstadter's was profit-only, no chance of losing money, and even though participants knew their choices would be reported in a national magazine, his cooperation rate was only 30%.

I predict King's return rate will be something like 15%. Maybe it will go as much as twice as high, thanks to his deal with Amazon to let people use credit cards -- much more convenient.

The disappointing thing is that two months from now he's going to announce that the experiment has failed and then either drop the novel, or keep writing it out of the kindness of his heart. Either way, the press is going to report that this new distribution method is a crock. Which is a shame because it only needs to be done right.

First of all, the percentage thing needs to go. King doesn't write for the satisfaction of knowing that he has honest readers. He writes to make money.

I suspect King is too used to thinking in terms of royalties, hoping for a good-sized slice of those unpredictably large pies he bakes. He might not know which novel will be the runaway best-seller that will make ten times the money he'd hoped for.

My advice to him would be to relax; don't try to look for the gravy train. You're on the internet now, that won't work. Set a price for your time -- an obscenely high price, to be sure, you're one of the world's most popular writers -- and be content with what you get. When contributions hit that number, release the book.

Second, invite readers to contribute as much as they like toward the novel. For some, a dollar; for real fans, ten dollars or more. Let us decide how much it's worth to us.

Third, hold contributions in escrow until the novel is released, and if the limit is not reached by a certain time, give us our money back. As a contributor, this makes my cost negligible, and changes my payoff matrix to, let's say...

Price Reached Price Not Reached Cooperate
(pay $3) Get $10 reading enjoyment for $3, profit: $7 Get my $3 back: $0 Defect
(pay $0) Get $10 reading enjoyment for free, profit: $10 $0

This way, there's no risk; the worst-case scenario is that I lose some time and energy at the mailbox. It's a win-win situation, and I'm much more likely to play.

If Stephen King wants to craft a real nightmare for Big Publishing, that's the plot he needs to use.

(P.S. If you're interested in reading more about the Prisoner's Dilemma, I've assembled a few references -- and thoughts -- at thedilemma.org. See in particular Hofstadter, pp. 740ff., re the one-shot PD.)

(P.P.S. Updated 90 minutes later. I had this link to "the download" up in the top paragraph, but took it out because some people didn't realize it led straight to the pay-me-a-dollar PDF file. Sorry; that's why the link is down here now. If you read it and want to pay your dollar, you can probably figure out to visit stephenking.com, eh?)

Stephen King is conducting a fiendish experiment. He - not his publisher - is putting the first installment of a novel online today, and then waiting to see how many people will pay a dollar for the download. The second part goes online next month, and then when it comes time to upload the third part, King will only release it if enough people have paid for the first two. This is the first high-profile test of a promising artistic compensation algorithm in the post-copyright world -- and when it fails, don't give up on it.

"The average writer is really more interested in writing than the transaction part of the process."
-- Jack Romanos, President/COO of Simon & Schuster, quoted in NYT

"We're confident that publishers add enough value to the process that authors are still going to want to use them."
-- Carolyn Reidy, CEO of Simon & Schuster, quoted by AP

"My friends, we have a chance to become Big Publishing's worst nightmare."
-- Stephen King

"Looks like the future of publishing to me."
-- Bruce Schneier

We've had a few people submit this news item, describing it as "shareware." It's not. This is shareware with a bite attached, something else entirely. What King is doing is a real-world test of the Street Performer's Protocol.

The SPP is a proposal for artists to make money without retaining any control over their work (since, on the net, copyright is rapidly being rendered irrelevant). Here's the paper by Kelsey and Schneier if you'd like to get all the technical details.

But the bottom line is that Stephen King is never going to have to publish the end of his novel.

Readers aren't going to send in a flood of cash and money orders (!) -- that's a given -- envelopes and addresses are a hassle. Luckily for him, he's brokered a deal with Amazon to accept credit cards, which is pretty sweet considering that most places won't even look at $1 credit card charges -- too much overhead. (My guess would be that Amazon is doing this as a loss leader to get the attention and signups. That won't work forever. Amazon PR didn't return my phone call by press time.)

But the real problem is that King demands that 75% of his readers be honest. That'll never happen.

Kelsey and Schneier's original SPP proposed thoughtfully that authors ask for a flat fee: say, $100,000 for a novel. If the majority of an author's readers never pay, that's fine: as long as the remaining minority is large enough (or rich enough) to collectively make the payment. (If not enough pay, the money stays in escrow and then reverts to its owners.)

King's terms make the question one of relative loyalty, not absolute popularity. He's not offering a transaction with his readers -- he's testing them. And the test is guaranteed to fail.

What he's proposing is a Prisoner's Dilemma played between thousands of people. Because of the large nature of the game, the actual statistical "profit" returned by sending in your dollar is a tiny fraction of the enjoyment you'd get from reading the third installment that King would post. Your payoff matrix looks like:

Novel Released Novel Not Released Cooperate
(pay $1) Get $10 reading enjoyment for $1, profit: $9 $-1 Defect
(pay $0) Get $10 reading enjoyment for free, profit: $10 $0

No matter what happens, you do better by not sending in your dollar. (It's fair to ignore the infinitesimal chance that your single dollar will be the one to hit the 75% mark.)

Of course there are other considerations (can you sleep at night knowing you cheated Stephen King out of a dollar?) but for the most part, people will weigh these options and decide they're not going to pay.

And once you start thinking that you're not going to pay, you realize that many others won't either, and it starts to look even more like throwing money down a drain. Vicious cycle.

The Prisoner's Dilemma is only interesting if the same players play together over and over. What we have here is a "one-shot" game, and in such a game the only rational strategy is to defect. Unfortunately, if everyone behaves rationally, we all merely break even (and the novel never comes out); if only we were a little more irrational we'd all make a profit of nine dollars - or however much King's story was worth to us.

Douglas Hofstadter ran an experiment for Scientific American in June 1983, asking twenty friends to play a similar one-shot Dilemma. Even though Hofstadter's was profit-only, no chance of losing money, and even though participants knew their choices would be reported in a national magazine, his cooperation rate was only 30%.

I predict King's return rate will be something like 15%. Maybe it will go as much as twice as high, thanks to his deal with Amazon to let people use credit cards -- much more convenient.

The disappointing thing is that two months from now he's going to announce that the experiment has failed and then either drop the novel, or keep writing it out of the kindness of his heart. Either way, the press is going to report that this new distribution method is a crock. Which is a shame because it only needs to be done right.

First of all, the percentage thing needs to go. King doesn't write for the satisfaction of knowing that he has honest readers. He writes to make money.

I suspect King is too used to thinking in terms of royalties, hoping for a good-sized slice of those unpredictably large pies he bakes. He might not know which novel will be the runaway best-seller that will make ten times the money he'd hoped for.

My advice to him would be to relax; don't try to look for the gravy train. You're on the internet now, that won't work. Set a price for your time -- an obscenely high price, to be sure, you're one of the world's most popular writers -- and be content with what you get. When contributions hit that number, release the book.

Second, invite readers to contribute as much as they like toward the novel. For some, a dollar; for real fans, ten dollars or more. Let us decide how much it's worth to us.

Third, hold contributions in escrow until the novel is released, and if the limit is not reached by a certain time, give us our money back. As a contributor, this makes my cost negligible, and changes my payoff matrix to, let's say...

Price Reached Price Not Reached Cooperate
(pay $3) Get $10 reading enjoyment for $3, profit: $7 Get my $3 back: $0 Defect
(pay $0) Get $10 reading enjoyment for free, profit: $10 $0

This way, there's no risk; the worst-case scenario is that I lose some time and energy at the mailbox. It's a win-win situation, and I'm much more likely to play.

If Stephen King wants to craft a real nightmare for Big Publishing, that's the plot he needs to use.

(P.S. If you're interested in reading more about the Prisoner's Dilemma, I've assembled a few references -- and thoughts -- at thedilemma.org. See in particular Hofstadter, pp. 740ff., re the one-shot PD.)

(P.P.S. Updated 90 minutes later. I had this link to "the download" up in the top paragraph, but took it out because some people didn't realize it led straight to the pay-me-a-dollar PDF file. Sorry; that's why the link is down here now. If you read it and want to pay your dollar, you can probably figure out to visit stephenking.com, eh?)

Stephen King is conducting a fiendish experiment. He - not his publisher - is putting the first installment of a novel online today, and then waiting to see how many people will pay a dollar for the download. The second part goes online next month, and then when it comes time to upload the third part, King will only release it if enough people have paid for the first two. This is the first high-profile test of a promising artistic compensation algorithm in the post-copyright world -- and when it fails, don't give up on it.

"The average writer is really more interested in writing than the transaction part of the process."
-- Jack Romanos, President/COO of Simon & Schuster, quoted in NYT

"We're confident that publishers add enough value to the process that authors are still going to want to use them."
-- Carolyn Reidy, CEO of Simon & Schuster, quoted by AP

"My friends, we have a chance to become Big Publishing's worst nightmare."
-- Stephen King

"Looks like the future of publishing to me."
-- Bruce Schneier

We've had a few people submit this news item, describing it as "shareware." It's not. This is shareware with a bite attached, something else entirely. What King is doing is a real-world test of the Street Performer's Protocol.

The SPP is a proposal for artists to make money without retaining any control over their work (since, on the net, copyright is rapidly being rendered irrelevant). Here's the paper by Kelsey and Schneier if you'd like to get all the technical details.

But the bottom line is that Stephen King is never going to have to publish the end of his novel.

Readers aren't going to send in a flood of cash and money orders (!) -- that's a given -- envelopes and addresses are a hassle. Luckily for him, he's brokered a deal with Amazon to accept credit cards, which is pretty sweet considering that most places won't even look at $1 credit card charges -- too much overhead. (My guess would be that Amazon is doing this as a loss leader to get the attention and signups. That won't work forever. Amazon PR didn't return my phone call by press time.)

But the real problem is that King demands that 75% of his readers be honest. That'll never happen.

Kelsey and Schneier's original SPP proposed thoughtfully that authors ask for a flat fee: say, $100,000 for a novel. If the majority of an author's readers never pay, that's fine: as long as the remaining minority is large enough (or rich enough) to collectively make the payment. (If not enough pay, the money stays in escrow and then reverts to its owners.)

King's terms make the question one of relative loyalty, not absolute popularity. He's not offering a transaction with his readers -- he's testing them. And the test is guaranteed to fail.

What he's proposing is a Prisoner's Dilemma played between thousands of people. Because of the large nature of the game, the actual statistical "profit" returned by sending in your dollar is a tiny fraction of the enjoyment you'd get from reading the third installment that King would post. Your payoff matrix looks like:

Novel Released Novel Not Released Cooperate
(pay $1) Get $10 reading enjoyment for $1, profit: $9 $-1 Defect
(pay $0) Get $10 reading enjoyment for free, profit: $10 $0

No matter what happens, you do better by not sending in your dollar. (It's fair to ignore the infinitesimal chance that your single dollar will be the one to hit the 75% mark.)

Of course there are other considerations (can you sleep at night knowing you cheated Stephen King out of a dollar?) but for the most part, people will weigh these options and decide they're not going to pay.

And once you start thinking that you're not going to pay, you realize that many others won't either, and it starts to look even more like throwing money down a drain. Vicious cycle.

The Prisoner's Dilemma is only interesting if the same players play together over and over. What we have here is a "one-shot" game, and in such a game the only rational strategy is to defect. Unfortunately, if everyone behaves rationally, we all merely break even (and the novel never comes out); if only we were a little more irrational we'd all make a profit of nine dollars - or however much King's story was worth to us.

Douglas Hofstadter ran an experiment for Scientific American in June 1983, asking twenty friends to play a similar one-shot Dilemma. Even though Hofstadter's was profit-only, no chance of losing money, and even though participants knew their choices would be reported in a national magazine, his cooperation rate was only 30%.

I predict King's return rate will be something like 15%. Maybe it will go as much as twice as high, thanks to his deal with Amazon to let people use credit cards -- much more convenient.

The disappointing thing is that two months from now he's going to announce that the experiment has failed and then either drop the novel, or keep writing it out of the kindness of his heart. Either way, the press is going to report that this new distribution method is a crock. Which is a shame because it only needs to be done right.

First of all, the percentage thing needs to go. King doesn't write for the satisfaction of knowing that he has honest readers. He writes to make money.

I suspect King is too used to thinking in terms of royalties, hoping for a good-sized slice of those unpredictably large pies he bakes. He might not know which novel will be the runaway best-seller that will make ten times the money he'd hoped for.

My advice to him would be to relax; don't try to look for the gravy train. You're on the internet now, that won't work. Set a price for your time -- an obscenely high price, to be sure, you're one of the world's most popular writers -- and be content with what you get. When contributions hit that number, release the book.

Second, invite readers to contribute as much as they like toward the novel. For some, a dollar; for real fans, ten dollars or more. Let us decide how much it's worth to us.

Third, hold contributions in escrow until the novel is released, and if the limit is not reached by a certain time, give us our money back. As a contributor, this makes my cost negligible, and changes my payoff matrix to, let's say...

Price Reached Price Not Reached Cooperate
(pay $3) Get $10 reading enjoyment for $3, profit: $7 Get my $3 back: $0 Defect
(pay $0) Get $10 reading enjoyment for free, profit: $10 $0

This way, there's no risk; the worst-case scenario is that I lose some time and energy at the mailbox. It's a win-win situation, and I'm much more likely to play.

If Stephen King wants to craft a real nightmare for Big Publishing, that's the plot he needs to use.

(P.S. If you're interested in reading more about the Prisoner's Dilemma, I've assembled a few references -- and thoughts -- at thedilemma.org. See in particular Hofstadter, pp. 740ff., re the one-shot PD.)

(P.P.S. Updated 90 minutes later. I had this link to "the download" up in the top paragraph, but took it out because some people didn't realize it led straight to the pay-me-a-dollar PDF file. Sorry; that's why the link is down here now. If you read it and want to pay your dollar, you can probably figure out to visit stephenking.com, eh?)

Stephen King is conducting a fiendish experiment. He - not his publisher - is putting the first installment of a novel online today, and then waiting to see how many people will pay a dollar for the download. The second part goes online next month, and then when it comes time to upload the third part, King will only release it if enough people have paid for the first two. This is the first high-profile test of a promising artistic compensation algorithm in the post-copyright world -- and when it fails, don't give up on it.

"The average writer is really more interested in writing than the transaction part of the process."
-- Jack Romanos, President/COO of Simon & Schuster, quoted in NYT

"We're confident that publishers add enough value to the process that authors are still going to want to use them."
-- Carolyn Reidy, CEO of Simon & Schuster, quoted by AP

"My friends, we have a chance to become Big Publishing's worst nightmare."
-- Stephen King

"Looks like the future of publishing to me."
-- Bruce Schneier

We've had a few people submit this news item, describing it as "shareware." It's not. This is shareware with a bite attached, something else entirely. What King is doing is a real-world test of the Street Performer's Protocol.

The SPP is a proposal for artists to make money without retaining any control over their work (since, on the net, copyright is rapidly being rendered irrelevant). Here's the paper by Kelsey and Schneier if you'd like to get all the technical details.

But the bottom line is that Stephen King is never going to have to publish the end of his novel.

Readers aren't going to send in a flood of cash and money orders (!) -- that's a given -- envelopes and addresses are a hassle. Luckily for him, he's brokered a deal with Amazon to accept credit cards, which is pretty sweet considering that most places won't even look at $1 credit card charges -- too much overhead. (My guess would be that Amazon is doing this as a loss leader to get the attention and signups. That won't work forever. Amazon PR didn't return my phone call by press time.)

But the real problem is that King demands that 75% of his readers be honest. That'll never happen.

Kelsey and Schneier's original SPP proposed thoughtfully that authors ask for a flat fee: say, $100,000 for a novel. If the majority of an author's readers never pay, that's fine: as long as the remaining minority is large enough (or rich enough) to collectively make the payment. (If not enough pay, the money stays in escrow and then reverts to its owners.)

King's terms make the question one of relative loyalty, not absolute popularity. He's not offering a transaction with his readers -- he's testing them. And the test is guaranteed to fail.

What he's proposing is a Prisoner's Dilemma played between thousands of people. Because of the large nature of the game, the actual statistical "profit" returned by sending in your dollar is a tiny fraction of the enjoyment you'd get from reading the third installment that King would post. Your payoff matrix looks like:

Novel Released Novel Not Released Cooperate
(pay $1) Get $10 reading enjoyment for $1, profit: $9 $-1 Defect
(pay $0) Get $10 reading enjoyment for free, profit: $10 $0

No matter what happens, you do better by not sending in your dollar. (It's fair to ignore the infinitesimal chance that your single dollar will be the one to hit the 75% mark.)

Of course there are other considerations (can you sleep at night knowing you cheated Stephen King out of a dollar?) but for the most part, people will weigh these options and decide they're not going to pay.

And once you start thinking that you're not going to pay, you realize that many others won't either, and it starts to look even more like throwing money down a drain. Vicious cycle.

The Prisoner's Dilemma is only interesting if the same players play together over and over. What we have here is a "one-shot" game, and in such a game the only rational strategy is to defect. Unfortunately, if everyone behaves rationally, we all merely break even (and the novel never comes out); if only we were a little more irrational we'd all make a profit of nine dollars - or however much King's story was worth to us.

Douglas Hofstadter ran an experiment for Scientific American in June 1983, asking twenty friends to play a similar one-shot Dilemma. Even though Hofstadter's was profit-only, no chance of losing money, and even though participants knew their choices would be reported in a national magazine, his cooperation rate was only 30%.

I predict King's return rate will be something like 15%. Maybe it will go as much as twice as high, thanks to his deal with Amazon to let people use credit cards -- much more convenient.

The disappointing thing is that two months from now he's going to announce that the experiment has failed and then either drop the novel, or keep writing it out of the kindness of his heart. Either way, the press is going to report that this new distribution method is a crock. Which is a shame because it only needs to be done right.

First of all, the percentage thing needs to go. King doesn't write for the satisfaction of knowing that he has honest readers. He writes to make money.

I suspect King is too used to thinking in terms of royalties, hoping for a good-sized slice of those unpredictably large pies he bakes. He might not know which novel will be the runaway best-seller that will make ten times the money he'd hoped for.

My advice to him would be to relax; don't try to look for the gravy train. You're on the internet now, that won't work. Set a price for your time -- an obscenely high price, to be sure, you're one of the world's most popular writers -- and be content with what you get. When contributions hit that number, release the book.

Second, invite readers to contribute as much as they like toward the novel. For some, a dollar; for real fans, ten dollars or more. Let us decide how much it's worth to us.

Third, hold contributions in escrow until the novel is released, and if the limit is not reached by a certain time, give us our money back. As a contributor, this makes my cost negligible, and changes my payoff matrix to, let's say...

Price Reached Price Not Reached Cooperate
(pay $3) Get $10 reading enjoyment for $3, profit: $7 Get my $3 back: $0 Defect
(pay $0) Get $10 reading enjoyment for free, profit: $10 $0

This way, there's no risk; the worst-case scenario is that I lose some time and energy at the mailbox. It's a win-win situation, and I'm much more likely to play.

If Stephen King wants to craft a real nightmare for Big Publishing, that's the plot he needs to use.

(P.S. If you're interested in reading more about the Prisoner's Dilemma, I've assembled a few references -- and thoughts -- at thedilemma.org. See in particular Hofstadter, pp. 740ff., re the one-shot PD.)

(P.P.S. Updated 90 minutes later. I had this link to "the download" up in the top paragraph, but took it out because some people didn't realize it led straight to the pay-me-a-dollar PDF file. Sorry; that's why the link is down here now. If you read it and want to pay your dollar, you can probably figure out to visit stephenking.com, eh?)