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Can Authors Copy the Digital Music Model?

Friday, July 31st, 2009

Like most questions in this business, the right answer is “It depends.”

And, since ebooks and digital reading are still embryonic, at less than 1/2 of 1% of the total industry, I’m sure that the answer will change.

In the music world, an enormous amount of the digital music is freeware — legitimately given away by the rightsholders, with the hope that it will be passed on to others. Some people think that the book world should follow suit. I have some thoughts on the issue. (Surprised? I thought not!)

What models are there, so far?

1. Advertising. (This includes sponsorships, product placement and overt ads.) This hasn’t worked even for magazines and newspapers on the Web, and it’s a lot less likely to work for books. Books aren’t timely, there aren’t circulation figures that you can reliably pitch to sponsors, and so on and so forth. I’m not even going to class this as an “It depends” unless you’re selling the umpteenth installment in a successful series.

2. Selling ancillary products. Musicians do shows. Authors? Not so much. There are consultants who use books as expensive calling cards, and high-profile speakers who are able to follow this model, but there aren’t many of them. If you are among them, grand. Giving away copies of a book virally in order to add energy to another career is a great idea, but it’s not going to work for most of us.

3. Electronic ARCs or galleys. This really does work for most of us. The model is the same as the ARC on paper: give away some copies in order to build buzz for the rest. It could be that you’re giving away your current book, or it could be something from the deep backlist, but make sure that you help people understand the limits on the permitted sharing. That can be accomplished by DRM (as in the giveaways on the Kindle) or by actually asking recipients to limit their sharing, but it needs to be made overt in some way.

4. Giving up on compensation entirely. Many musicians and other artists create for the emotional rewards, knowing that they’re highly unlikely to ever make a living at it. This does work for many authors, but most of us want to make a living. And books tend to take longer to create than songs, or most other artforms.

So, what models did I miss?

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Plagiarism, Piracy and You

Thursday, July 16th, 2009

Most people misunderstand the limits on their rights to use someone else’s work. I’m not talking about hardcore pirates here, but ordinary folks who wouldn’t dream of taking something belonging to someone else — and who do it unintentionally.

Copyright and plagiarism
Many people believe that if you give credit to the original author, you can use whatever you want from someone else’s book, photography or music. If you give credit, you’re not a plagiarist, but you may be violating copyright or a trademark.

You can’t use someone else’s world, characters or other major elements of their creative work without permission (which usually costs money), unless the work is no longer under copyright. Fortunately, it’s usually extremely easy to get permission, especially if the work isn’t going to be sold commercially. (It may take some time, though, so start early.)

Works published before 1923 are usually in the public domain, as are those created by people who died before 1939. (Life plus 70 years is the term in US law.)

Accidental Plagiarism
It’s actually quite easy to use someone else’s words, or the way they structured their work, without meaning to do so. For example, consider the author in the library doing research and taking notes. The cell phone rings, and our author hurries out to answer it, forgetting to jot down whether the note is a copy of someone else’s work, or their own summation of an important thought. A year later, going through those notes, the unattributed words make their way into the book, and a scandal is born.

When you’re doing research, it might be a good idea to save copies of the pages you’re quoting, and make sure that the bibliographic info is on them.

It’s on the Web
The Web may make it easy to use someone’s work without permission, but that doesn’t make it right. It is emphatically not true that everyone who puts their words on the web will be thrilled that you’re sending them to other users. Not even if you give credit for it.

Some people put their work out here, and make it freely available, because they want fame. Some do it because they want to help the world. Some are trying to show potential customers what they have to offer, and some are trying to hunt up potential clients, and get them to register in order to get the free stuff.

Whatever their motivation, the work is theirs, and the decision about whether or not you can use it belongs to them. As does the right to make the judgment about whether your use will bring them more business, or not.

Fair Use
This is a defense, should you be sued, not a term clearly defined in the law. Basically, you can use small parts of another person’s work, if it fits the fair use criteria.

There are four:
1. Why are you using it? If you will be using it in a classroom, it may be fair use (although copying worksheets, or language tapes, or what all, usually is NOT). If you’re selling it for profit, that’s usually not fair use.

If you’re altering the work substantially, that also tends to lend legitimacy to your use.

2. The type of work you’re using
If it’s just for fun, you have less latitude than if it’s designed to save lives.

3. The amount and centrality of the portion you use.
If it’s a song or a poem, a tiny snippet can be a violation — unless you’re using only the title, and you use it as a title.

If you take the most important bits, it’s not fair use. And, yes, that’s a very fuzzy line, isn’t it? It’s a whole lot cheaper to get permission than to pay a lawyer if the owner of the work thinks you’ve crossed it.

4. Impact on profitability
If your use will reduce the rightsholder’s ability to profit from the work, you’re probably in trouble. And you’re not the one who gets to make that call. The rightsholder gets to decide if they want to sue you, and the judge and/or jury get to make the final call. Oh, and if it’s a registered copyright, there are statutory minimum penalties that make suing worthwhile, even if the damage is hard to establish, or small.

What examples have all of you found of these phenomena?

Is there anything here I got wrong? I’m neither a lawyer nor a writer, so I’m not invested in my own words. Go ahead and suggest something.

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Friday at BEA 2009

Friday, May 29th, 2009

This was my first day at BEA instead of the Publishing University seminar series. I expected your basic gloom and doom, but was again pleasantly surprised by the positive energy.

One innovation is the Blog Signing sponsored by the people who brought you Net Galleys. I was able to attend the blog signing of Kassia Krozier of Booksquare. I promised to tell you that she does indeed have a glowing smile. It’s always fun to meet someone in person that you’ve been reading on-line for a while.

The Espresso Book Machine was in operation on the floor. It’s an interesting gadget, but I still think it’s a so-so solution to a problem we won’t have for much longer. And their numbers still don’t work for most of the situations being bruited about — in my never humble opinion. That much vaunted 1 cent per page cost doesn’t include labor (non-trivial) or worse, the amortization of the $90,000 required to pay for the machine. There may be other charges that aren’t included, too.

I just don’t see this as something that’s going to beat the prices of LSI and the other digital printers, and I don’t see customers being willing to stand around that long to get their books printed.

As for news, well, I attended the BISG Trends event. It was informative (as it always is). I’m sure you’ve heard by now that sales for the industry are up by 1%, but that trade sales are down by 4. But, since adult and juvenile trade sales were only about 36% of the total, the solid years turned in by other segments overwhelmed that bad performance.

Outsell and BISG are actively recruiting small presses for their survey next year. I urge all of you to sign up for it at the BISG site. I doubt that there’s a link, but send an email to their contact address. (Consider also downloading a copy of the slides from the presentation next week. There more than a few interesting numbers.)

On a less important note, I also saw a Cool-er at their booth, and it is indeed lighter, but the controls aren’t as intuitive for me as the Kindle. I’m not in love.

The number of galleys given away seemed to be much smaller than last year, and very muc smaller than prior years. And the floor was a lot smaller. I don’t know if that was a blip, or a sign of things to come, but it saddened me.

Oh, and last but not least, I found the stage where I’m speaking tomorrow. It’s at the edge of the main floor, on the 34th Street side. The African Pavilion and the Indie Press section share it. The whole speaker series is being arranged by Victoria Sutherland (of Foreword, etc.) and Leah Schnelbach of the NY Center for Independent Publishing.

I’ll be there at 2 pm, and the topic is Healthy Businesses in Tough Times.

If you happen to wander by, do grab a chair and tune in for a bit. I’ll try to make my topics interesting enough to woo you away from the siren calls on the floor.

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Healthy Businesses in Tough Times

Thursday, May 28th, 2009

I’m doing a talk with that title on Saturday, at 2, at BEA in the Independent’s Lounge. It’s on the third floor, on the 34th street side of the Javits, or so I’m told.

I’ll also be on the floor of the conference for most of Friday, Saturday and Sunday. If you see me, stop me and say hi!

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The Publishing University 2009

Thursday, May 28th, 2009

For the last two days, I have been at the Publishing University, a seminar series that happens every year right before BEA. You may have heard it called PMA-U, or this year, IBPA-U.

I expected that this year attendance and the quality of the presentations would be worse than they have been in the past. After all the gloom and doom about BEA and the industry’s changes it seemed logical.

I’m happy to report that it was, instead, busy and productive, with a lot of positive energy surging around.

I started Wednesday by giving an Ask the Expert session from 7 a.m. to 8:15. Given that a lot of the people attending had traveled from the West Coast, and felt like it was 4 a.m., I was stunned at the number of people in the room. And none of them appeared to be zombies. The free coffee may have helped.

By 10:30, I had launched into one of my favorite courses: Building a Better Budget. It is part of my mission in life to help people understand exactly what that mass of numbers means, and how to USE one as the powerful strategic tool it is, rather than the dusty and intimidating mass of numbers that ends up sitting in a file somewhere. Again, the energy was wonderful (people were even laughing at my jokes! Without being paid to do so!)

Lunch brought a presentation by one of Google’s minions executives. Obviously, questions about the Settlement were not allowed, as it’s still in litigation, but he did lay out quite clearly how Google wants publishers to see its plans for our part of the information ecology.

I was more than a little skeptical of the frequent protestations that Google’s headlong rush to secure the ability to index all of our content was likely to be the best thing ever to happen to us, and the assertion that Google wants all of its revenue to be from ads, and isn’t interested in ever selling our books in any format.

Today, I attended a marketing course where the presenters were all senior folks who emphasized evaluating your efforts for profit potential, including the COGS for any sales generated, before you decide to engage in that kind of promotion. Loved it — 3 guys all speaking my language. I also had the marvelous experience of hearing someone lavish praise upon the list moderators of the Yahoo Self-Publishing group, and upon the group as a whole. That’s wonderful because I’m one of those moderators, and she had no idea I was in the back of the room at the time. Always nice to be appreciated! (Thanks Norma!)

The lunch time presentation on ebooks had the potential to be exciting, but I’m afraid I thought it to be a bit of a re-hash of stuff we’re all already well aware of.

What else was notable there? What did you like, if you were there?

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BEA

Wednesday, May 20th, 2009

How many of you will be at BEA next week? And how many will be going to IBPA-U, the big seminar series before it? (Remember, PMA changed its name last year to IBPA.)

For those who are interested in the things I say:

–I’ll be teaching a class at IBPA-U called Building A Better Budget (Wed. morning) and an Ask The Expert table at 7 am. (Much coffee will be consumed. Also tea.)

–I’ll be doing a brief seminar on profitability in tough times on the floor of BEA Saturday afternoon, in the Independents’ Lounge run by Foreword Magazine and the NY Center for Independent Publishing.

–I’m open to having my brains picked almost any time you catch me — buy me a cup of coffee and my mind is yours for a good long time!

I hope to see some of you there. If you see my name on a tag — introduce yourself!

I’ve been doing more speaking lately (Denver and Sacramento in April, NYCIP in March, and these). I must admit, I’ve always enjoyed teaching and speaking. (Shameless promo: if your group is looking for a speaker on my type of topic, I’m very inexpensive!)

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Starting Up

Tuesday, April 21st, 2009

The old “I’m just publishing my book, not starting a business” fallacy has reared its head again. So, if you already know all there is to know about founding your press, go away. You’re going to be seriously bored by this post. Or, better, stay, and tell me what I omitted in the comments!

First, any time you’re getting money for anything, it’s a business. And no matter whether profit is your primary goal or not, if you don’t at least break even, you won’t be accomplishing any goals for long. Money does matter.

Now that we have that settled: you need to decide what type of company you should have. If you don’t choose at all, you have chosen a sole proprietorship. This is the default, but it’s not necessarily a good choice for you. Your other choices are partnerships (general or limited), LLCs and corporations (S-corps or general). My personal preference for most publishing companies is an S-Corp. Why? Because it has the most upside potential, and I’m an incurable optimist. If you become successful, converting an S-corp to a general corporation, and even eventually selling stock to the public is less of a seismic shift.

Corporations offer about as much protection of your personal assets as you’re going to get, assuming that you actually do the annual paperwork, and treat the company as a “real business.”

Digression: If liability is a concern, you should also get media and general umbrella liability policies, at a minimum. I am aware of exactly two agents in the U.S. who know media liability policies inside and out. Toddle on over to the Reference Desk’s web directory to find them.

With an S-Corp, you do have to file corporate tax forms, but the profits get passed straight through to stockholders’ personal income, so you’re not double taxed. In fact, if you pay yourself a reasonable salary, there’s a very nice little effect. The profits aren’t generally subject to employment taxes such as Social Security and Medicare. Just play it straight, and this can work out well.

You should probably do more research on this subject. Depending upon the size of your effort, you might want to consult a tax attorney, buy one of the many good books on the subject, or just do an Internet search.

Whatever form you choose, you will need an Employer Identification Number (EIN), whether or not you contemplate hiring employees. After all, you really don’t want to hand your Social Security number to anyone who asks, but you will have to supply some tax identification number, on request, to anyone who pays your company more than a few hundred dollars per year.

Next, look up the licensing requirements for your city, county and state. Remember to get a sales tax collection or vendor’s license and identification number. If you’re not setting up a formal business entity, such as a corporation of some kind or an LLC, then you will probably need to file DBA notices (Doing Business As) in some public record. Google is your friend when you are searching for the latest local regulations on such things.

Digression: Remember to file Use Tax on anything you buy without paying some state’s sales tax, if it’s not to be resold. Individuals are supposed to pay this, but rarely get caught if they fail. Companies are routinely caught, and the fines and penalties are quite painful.

Set up an accounting system, and one for handling your orders and your contact database. There will be other needs for information handling systems, policies and procedures, and you’ll need to adjust the ones you begin with as things grow, but you must have something in place before you launch, or you’ll be overwhelmed.

And, no, a check book and and a shoe box are not enough!

The rest of the drill involves actually publishing the books and selling them. Those are fodder for other posts and for other people. I do hope, however, that this gives you a basic rundown on the launch of your business.

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Google and the Big Publishers

Monday, April 20th, 2009

Why did the larger publishers settle with Google? It’s pretty simple, I think.

Google has a lot more money to fight on this issue than even large publishers can spare.

More, the precedent set when Google was sued for scanning and indexing web sites might seem to apply to books and book scanning. After all, judges aren’t usually from an intellectual property background. Even IP lawyers often don’t really understand all of the ramifications of an event in our complicated industry, and this infringement takes us deep into complex territory.

So, the publishers looked at those two pieces of information, and decided to settle for something rather than take the chance of spending unbelievable amounts for legal fees and in the end, losing an enormous amount.

Is this settlement better for them than for us? Of course it is. Is it better for all the parties who crafted it than it is for us? Naturally.

Is it the best deal we’re likely to get? Yes. Even if you pull your books out of the settlement, all you end up with is the right to sue. Google can, and probably will, still infringe your rights. If you sue, you will face the same Hobson’s choice that the larger publishers did.

Is this just? No. Is it right? No. Has Google failed in its pledge not to be “evil.” According to their lights, no. They see the action of rights holders as evil in preventing Google from accomplishing something that they feel is a great social good, when we’re (again, in Google’s view) acting only for our own gain.

This is one of those quasi-religious arguments where every side is convinced that it’s right. And it’s one where you may have to settle for what you can get, in order to avoid a Pyrrhic victory or an annihilating defeat.

Or so I see it.

Oh, and if you’re not a US author or US publisher, should you care? Oh, yes. Your books will be scanned just like ours, if they’re in a library here. And they probably are in one library or another.

Posted in For Authors, Publishing Answers | 10 Comments »

Pitch Party

Sunday, March 29th, 2009

Upon my return, I was scanning through my RSS feeds, and saw this post on How Publishing Works. I think that it’s such a good idea, that I’m copying it!

So: please feel free to pitch your blog in the comments section. Caveats: There’s a 25 word limit, and you have to post comments on at least 3 of the other blogs that pitch here.

(Oh, and if you’re one of the spammers that keep trying to flood my comments section? Forget it. The comment won’t be approved!)

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Update

Sunday, March 29th, 2009

Just back from CIPA College (Colorado Independent Publishers’ Association seminar series) in Denver. Had a wonderful time. There was a terrible blizzard, so I only had about 20 people in my class (which was one of the first few), but I think we all felt that it might even have been more useful than usual because of the intimate size!

I want to praise the organizers, including the Dean Dr. Judith Briles, for doing such a splendid job. The classes were all extremely interesting, even for an old hand like me.

What did I teach? Basic Financial Techniques for Publishers — including how to estimate sales, how to set the most profitable price for your books, how to evaluate a marketing campaign and how to approach many other common decisions.

If you don’t know yet, many of the larger regional associations have such events. The biggest national association, IBPA (PMA that was), has a 3 days set right before BEA. Usually there are about 70 seminars in the series. If you’re interested in the latest techniques for marketing books, all of those series have tons of classes. (And yes, I teach at them whenever I can possibly fit it in.)

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