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Sharing Doesn't Hurt
Freeptop writes "Here's a fun followup to an old slashdot article: Eric Flint just posted another Prime Palaver article on the Baen Free Library. In this article of his, he talks about the effects of posting his books for free on the library. Specifically, he uses his own royalty statements to show that sales for his books have gone up whenever he has made them available for free. As usual, Mr. Flint writes a well thought out article demonstrating the pointlessness of encrypting e-books, and this time, he has proof to back up his assumptions."
I have been a subsriber at Baen for almost two years now. It's great to get books before they are published, cheaper than for paper, and I always have something to read (with my PDA).
They need more press, I can't think of any other publisher that has done as much to promote unencrypted and even free ebooks.
Astralwerks figured this out a long time ago . Matador seems to have figured it out a little more recently.
.. hm.. i don't remember how long exactly, but it's at *least* five or six years now... even if the number reached for that estimate was totally baseless, it would be really fun if the number started showing up in news articles about "mp3 is ruining record companies profits!" or "software piracy, which is no more prevalent than it was in 1983, is ruining software companies profits!" or whatever, as a little side note "Astralwerks records estimates that their yearly profits are x percent higher as a result of the fact they give some amount approaching half of everything they publish away for free.."
I really wish there were some sorts of vague estimates on the level of record sales that can be attributed directly to the "here are some URLs where you can download full realaudio tracks and/or music videos from albums we just released" mailing list that Astralwerks has been running for
Yes, it is very easy to draw conclusions, by looking to the music industry. A couple of years ago, while Metallica was busy crying a river over Napster, a couple of other bands decided to capitalize instead. Limp Bizkit and Cypress Hill both put on free concerts in support of Napster. Also, they decided that it was OK it their music was available on file-sharing services. Result: increased sales.
I read "On Basilisk Station" by David Weber (also in the free library). I was immediately hooked, and ended up buying the rest of the series. That's 7 books purchased, when I got one for free.
I think Weber did pretty well by me, and now I keep an eye out for other books of his. This is an author I had never even heard of, before I ran across the Baen Free Library.
I'm slowly working through the rest of the free library. I haven't seen anything else that really grabbed yet, but no doubt I will end up spending some more cold, hard, cash.
I'll purchase the electronic versions where available, because they are cheaper and in a non-proprietary format. I have a Rocket e-book reader, but never purchased books for that because I didn't want to be locked into a single reader device.
Rock on Baen!
Saying that this experience proves that ebooks don't work is adding insult to injury.
Do you believe in death after life?
As a counter-point, I'd bring up Stephen King's experiment, where he allowed free download of his book and asked for a tiny donation in return. Very few of the people who downloaded the book paid for it and the project was scrapped.
In the final reckoning, King had somewhere in the ballpark of 71% payemnt (i.e. 71% of those who downloaded kicked him a buck, as per agreement), and made something like a $400,000 *profit.* The projected wasn't "scrapped" at all, but rather back-burnered in favor of other projects (which he is contractually obligated to complete.)
Your major point-- that big names hardly need to benefit from the name-building power of distributing freebies-- still stands, but the King facts were wrong.
Much Love,
"S"HM
*****
(I refuse to spellcheck out of contempt for your belief system)
It seems that "old media" (ie: books publishers) is recognizing this fact a lot faster than newer media (ie: movie and music publishers). I recently finished my first book for New Riders (see www.brendonwilson.com/projects/jxta), and they not only allowed me to post the draft chapters when I asked, but even suggested posting the final version!
This has apparently been accepted by New Riders lately for a few books. My acquisition editor, Stephanie Wall, has done this for about a dozen books, including the Zope book. According to her, New Riders has also come to the same conclusion: offering free online versions of books doesn't hurt the publisher's physical book sales. After all, if someone is crazy enough to read the entire thing off a monitor or print it off, it's doubtful they would have bought the book anyway.
O'Reilly has also taken to doing something similar with its Open Books Project.
Of course, the question is how long this phenomenon will last once we have display technology that allows us to take these electronic books with us in a form indistinguishable from a normal paper book...
This is the only one that he gave information on
If you look at the library itself (www.baen.com/library) you'll see lots of authors have agreed to this, including Larry Niven / Jerry Pournelle, David Weber (The Honor Harrington books are one of Baen's main lines), David Drake. Also as part of their free samples I've seen sections from Spider Robinson and a few other people where they give you the first 6 or so chapters of the book
Also, Stephen King's case used encryption, which is commented on in the article as being a flat-out bad idea. Never make it hard for the public to use your product if you can help it.
The Baen Library is an excellent experiment - it involves giving away free books, and also a $10/month subscription service where you preview rough drafts and new books up to 3 months before they are published.
It's not just one guy putting his books online and giving them away because he can't get published, it's an attempt to work with the public, rather then assume we are all criminals
e take advantage of this and use B&N as a personal library. I
People do this. It came up on the "Living below your means" board on the Motley Fool. There was a huge debate (flamefest) over whether it was ethical.
I've had enough abrasive sigs. Kittens are cute and fuzzy.
They are. Bookwarez is a huge phenomenon with literally 1000s of works of fiction available for grabs. You might not be aware of it, but perhaps you don't read many books. I read a book a week on average and I'm well aware of how easy it is to get illegal copies of books.
I personally prefer e-book format over paper format. I can carry a dozen books around with me on my Palm Pilot. I don't have to remember my page or carry a bookmark. At nighttime I can read by the backlight which is more considerate than using the bedside lamp. I can hold the Palm in one hand: even the thinnest paper book requires two hands.
It's not all peaches and cream. As Eric says in his essay, the quality of the average bookwarez is awful. OCR technology is not good enough and the scans have obviously never been proofread. It's very hard to find sites, and when you do it's uncommon to find what you want. Yet these are all shortcomings with bookwarez, not with e-books. I have no love for the paper book and no desire to read one if I can read an e-book instead.
I still feel obligated to buy all my books in paper format, if only because I know that the authors won't get paid otherwise. It's also comforting to have a physical library instead of bits on a disc. But after buying my books I put them on my bookshelf and spend an agonising hour or two trying to find a badly OCRd "pirate" copy on the web so I can read it in a comfortable format. I really hate doing that: it wastes my time and detracts from the enjoyment of the book. I wish the publishers would wisen up and include with the paper book a CD containing an e-book version (preferably ASCII text).
I think the article does have a credible argument, because I can strongly relate to it. I've bought more books now than ever before. This is partly is due to me having a greater disposable income than I used to, but I don't think that's the whole answer. I believe that bookwarez have increased my spending on books by introducing me to new authors. I'm an honest person and if I like a bookwarez I'll pay for a legal copy. Money isn't the issue. It's all about convenience. The book publishers are going out of their way to make my life inconvenient, and I'm the one who wants to buy their product!
You, sir, are married to my wife, the biandrous bitch.
--
E_NOSIG
And you're forgetting that the radio stations are now required to pay back the RIAA and record labels for every song played, per listener . The streaming radio stations are required to pay double the rate. Trust me, the RIAA is well into the black on their outlay for payola to the radio stations.
Very interesting point, which I'd failed to consider. Actually it is perhaps for that very reason that the record labels don't actually pay the radio stations directly for song placement, but instead pay brokers millions and millions of dollars which they then use to pay the radio stations off.
The reason I know that is that it comes from a truly fascinating Wall Street Journal article (unfortunatly not available online to the general public; I'm gonna see if I can't scare up a copy through Lexis-Nexis) about the millions of dollars poured down the drain by one of the big 5 in an effort to make some chick by the name of Carly Hennessy the next Britney Spears. I think in the end they spent something like $4 or $5 million on her and ended up with roughly 1,000 CD sales and a Wall Street Journal article to show for it. (It may go without saying, but her music SUCKED and I mean was AWFUL; here's a link to her album on CDNow where you, like me, can get a taste of how terrible it is. And I actually LIKE Britney Spears, or at least can appreciate what's well crafted about her good songs.)
Ah; OK, so apparently L-N (or at least the academic version) doesn't get the full text of the Journal, but the piece was syndicated out to the Houston Chronicle in abbreviated form. Although...they don't offer free access to archives either, so I'll just exercise that fair use thing and give some excerpts.
First off, I was wrong; they only wasted $2 mil on her, but then again it was only 378 copies of Ultimate High that got sold. Here's the opening of the story (as excerpted by the Chronicle):
MARINA DEL REY, Calif. - Eighteen-year-old recording artist Carly Hennessy is packing up her small apartment. Her promotional posters will go into storage, and the beige rental couch will be returned. A weight-control message that the slender teen scrawled in marker on the refrigerator - "NO, U R FAT" - will be wiped clean.
For two years, Vivendi Universal SA's MCA Records paid the rent while Hennessy prepared for pop stardom. And that's not all: The label so far has spent about $ 2.2 million to make and market her new album, an upbeat pop recording called Ultimate High. "Some people just struggle," she says. "I was very, very lucky."
Not lucky enough. Ultimate High was released in stores nationwide three months ago. So far, it has sold only 378 copies - amounting to about $ 4,900 at its suggested retail price. In many other industries, this would be considered an extraordinary bomb. But in today's troubled music business, it's routine. Of the thousands of albums released in the United States each year by the five major record companies, fewer than 5 percent become profitable, music executives say.
I mostly included that because the "U R FAT" part is funny. Here's the music industry's sob story (notice how it's more sophisticated than the "Napster and CD burning are eating our sales" PR crap that is trotted out for consumer-oriented press):
Music executives also say it is more difficult to launch new acts. Among the reasons: Deregulation of the radio industry in 1996 has led station owners to consolidate into a few big companies, which are under pressure to maximize profits and pull songs off the air that aren't instant nationwide hits.
Superstores such as Wal-Mart, which stock fewer titles than traditional music stores, are the fastest-growing segment of music retailing, making it costlier and more competitive for record companies to secure prime shelf space.
As a result, industry executives estimate that major-label releases must on average sell about 500,000 copies just to break even. Last year, of the 6,455 new albums distributed in the United States by major labels, only 112 have sold at least that many, according to SoundScan, which monitors music sales.
Golly, if only there were some way for those poor big 5 to break the stranglehold on music distribution caused by the Wall-Mart/radio syndicate oligopoly! If only there were a way to reach customers directly, or to encourage the development of new radio stations, or to allow individuals access to more promotional music I'm sure the record labels would jump all over it.
Overall music sales were down 5 percent last year - the steepest decline in a decade.
After the largest yearly increase in a decade the previous year. What happened last year? Napster was shut down. What happened the previous year? Napster ramped from almost 0 users to 80 million registered users. Hmm.
Hennessy, a native of Dublin, Ireland, released her debut musical effort, Carly's Christmas Album, in Ireland at age 10, after performing in Europe as Little Cosette in Les Miserables...
"The most beautiful voice you'd ever heard - and she would have ended up singing in the bath," says her father, Luke Hennessy, a real estate investor.
More local color.
The executives offered her a six-album contract, under which Hennessy would get a $ 100,000 advance for her first album, plus $ 5,000 a month in living expenses while the album was being made. The label would own the recorded music and would front the cost of recording and promotion.
For Hennessy to make any more money, the label would first have to recoup its advance, its recording costs and half the cost of any music videos, as well as her living expenses - meaning the album would have to sell between 500,000 and 700,000 copies, MCA says.
At that point, Hennessy could collect royalties amounting to 15 percent of sales. But she would still owe a cut to a phalanx of producers and managers, as well as other record-company fees - leaving her with at best about 80 cents to $ 1 per album, MCA says.
Such contracts have drawbacks for both sides. Artists can be unceremoniously dropped if they don't live up to expectations. But if they blossom into superstars, they can use their new leverage to demand that their contracts be rewritten to pay them much more.
Hennessy says she let her managers, including her father, worry about the financial details. "Pretty much I was like, 'Is this a good contract, or a bad contract? OK, it's a good contract,' " she recalls. She was not even sure how many albums she owed MCA.
Interesting details.
Ok, let's track that $2.2 million, shall we:
Hennessy and her producer, Dorff, spent about three months recording eight songs, including several he had written. The total tab, including studio time, musicians' salaries, producers' fees and Hennessy's living expenses, was about $ 350,000 - typical for a first pop record, MCA says...
In April 2001, MCA decided to try to get Hennessy notice by releasing her first single, a bouncy tune called I'm Gonna Blow Your Mind. Its opening lines:
"I really really, I really really, I really really, I really really, I really really want to kiss you/
But much more than that/
Boy, I'm gonna blow your mind."
It was a risky choice. MCA realized the song's subject matter - oral sex - made it unlikely to get much exposure on youth-oriented outlets deemed important in launching young artists, such as the Radio Disney network of stations.
Tee hee hee.
But executives felt it was Hennessy's catchiest song. MCA spent $ 250,000 on a video that showed Hennessy dancing in a disco and jumping around with pals in their sleepwear...
The label also earmarked about $ 200,000 to hire independent promoters - middlemen who use their influence with radio program directors to secure airplay.
In addition, MCA spent about $ 100,000 on "imaging" for Hennessy, including photos, clothes and makeup artists. It sent Hennessy on a $ 150,000, four-week promotional tour, where she sang at malls over recorded tapes, backed by two dancers, and at station-sponsored concerts.
Um, so so far we're at $1.05 million. Unfortunately, the Chronicle version skips how the other $1.15 mil was wasted. Essentially what happened was they decided to scrap the first cut of the album and bring in all new writers and producers to write and produce her a new one, and that added another $300,000...and the other $800,000, IIRC, were mostly more payoffs for radio brokers (they tried floating a couple different singles) and the like, although a promotional trip to Europe might have been thrown in there too.
Oh wait: the article was also picked up by the Ottawa Citizen, which has a bit more detail. Re-recording the album actually cost another $600,000, meaning almost a million was spend on recording. And $500,000 more was spent trying to buy radio time for the second single, "Beautiful You".
Grand totals:
$1 mil. for recording, throwing away, and re-recording + living expenses
$700,000 to promoters who try to buy radio time (unsuccessfully in this case; the album really sucks)
$500,000 on various promotional tours.
And what's even more amazing than this tremendous tale of industry stupidity and obvious waste is that MCA actually *shared* all this information with the Journal *voluntarily* because they thought it proved their point about how they need to overcharge for CDs and rip off established musicians in order to pay for their flops. The shocking truth is that while the Carly Hennessy story has a few extra funny details, fully 19 out of 20 big 5 releases are complete flops just like hers.
And a huge huge proportion of that lost money, according to record execs, is the lost money they throw at radio stations to play their new single. Except that, as you point out, the record labels actually *make* money from radio, because of licensing on the songs radio *does* play. And, as there's only 5 record labels, it's not like there's any competition for this royalty money. Indeed you might almost think there's something slightly dishonest about spinning this money as losses when it is automatically going to be made up for by royalty gains on other songs.
Ugh. What a sad, sad story, and a sad, sad industry. And the real tragedy is, the way things are going it looks as if the labels will have just enough time before they put themselves out of business to buy laws that will prevent any sustainable models for distributing and creating music in the Internet age from being possible, even after the labels are gone. The end result may just be less music available, *and* the creation of a copyright police state.