Why Is This Hill So Steep?

by Steve Jordan

  So, Big Pub told everyone else how to think; agents acted as Big Pub’s gatekeepers, telling authors what to say and do if they wanted to get their audience; and authors bought into it, especially if it meant getting into the inner circle and getting the ultimate payout, fame and fortune. The Castle mentality was especially strong, within and without the industry—even those who were not directly involved in the industry had the clear feeling that Big Pub and their agents thought of consumers, and the writers on the outside, as worthy only of their contempt. But somehow, that elitist attitude was seen by many as being beneficial, because those “elite” publishers were screening out the trash, separating the wheat from the chaff, polishing the coal into diamonds, and all that, and bringing Good Books to the masses. And authors wanted to be a part of that elitist world, because of the financial benefits it promised. So, publishers and their agents were largely allowed to get away with treating outsiders, even potential collaborators, authors and artists… as peasants. How revolting.

  ~

  Despite the self-perpetuating name-calling and class separation going on in the Big Pub world, a few more forward-thinking publishers were willing to stand up early and say, “E-books aren’t crap for peasants. Let’s prove it.”

  Harlequin Books had been a successful publisher long before anyone had ever heard of e-books. They had an international following of dedicated fans, and even though their romance literature was not considered High Art, it was a popular, well-known and respected brand in the market, and considered one of the most successful publishers in the world.

  When e-books began to develop, Harlequin saw an opportunity to expand its audience into all the PDAs beginning to float around the marketplace. It was an ironic fact that, for all of Harlequin’s success and popularity, the titillation factor and “chick-lit” image inherent in their many titles and imprints meant that many readers felt embarrassed to be caught reading a Harlequin book in public, not unlike the image issues faced by fanfic and pornography readers. But as mentioned earlier, the PDA had largely removed that image stigma and provided a private way to enjoy your literature of choice… and Harlequin picked up on that fact quickly.

  Harlequin soon began to publish its printed works in e-book formats as well, and quickly set up an online sales site. It did not take long before they began to enjoy significantly increased sales thanks to their e-book formats, and especially in their older books that were fairly hit-and-miss to find in the used bookstores, but much easier to find on Harlequin’s web site (and they had, to put it appropriately, an attractive and desirable catalog). For Harlequin, e-books were a runaway success.

  This fact was surely galling to other Big Pubs, because whatever they may have thought about Harlequin Books, publishers are essentially about making a profit, and they couldn’t deny the significant profit Harlequin was making off of those peasants—excuse me, paying customers—who didn’t seem to mind e-books at all. But instead of trying to replicate Harlequin’s success, Big Pub seemed adamant in maintaining its position, sure that their perseverance would be vindicated someday. And it continued to look down upon “pop” publishers like Harlequin… even if Harlequin profits over them many times over.

  Harlequin, in the meantime, is taking its “pop” image and laughing all the way to the bank. And its customers, glad they are being treated as people and not peasants, are happy to carry them there. It’s an odd tableau: Harlequin and a few similar publishers are being carried triumphantly into the future by their happy customers; while Big Pub sits in its castle, pretending not to notice the commotion, wondering why no one is carrying them along, and demanding more tribute from their peasants in thanks for another wonderful day.

  While some publishers are showing the foresight to follow after Harlequin, to see what they are doing so right, there is no telling how long, or if ever, the other major publishers will take to respond to the obvious success of the proven e-book business models available to them. They remain the boat anchor on e-book’s journey to success, continuing to drag behind until either the anchor is withdrawn, removing the resistance… or the cable breaks, and leaves the anchor behind.

  9: The anarchists—We will bury you.

  As described in Chapter 5, the open and relatively lawless beginnings of the Web, combined with the early business models of online services like AOL and CompuServe, introduced the public to the idea of getting content from the web for free.

  The idea of giving away free content to justify charging for something else (in their case, an e-mail account and use of the online companies’ servers) was certainly not invented by the likes of AOL and CompuServe. It’s an ages-old and psychologically-sound marketing gesture designed to put the vendor in the customers’ good graces, thereby making them more sympathetic to the vendor and their desire to make an honest buck, and by extension more willing to pay for the vendor’s product. It is a balancing act for the vendor, who has to gauge how much and what type of merchandise it can give away without hurting profit, which can be further influenced by customer reaction to the free merchandise itself. As a business tactic, it also tends to work better with vendors that have a very public and human face, such as a local grocer or baker, who sell partially on their personality and therefore want to present the nicest personality possible to their customers.

  This marketing method has one drawback, however: It almost always hurts business if you discontinue the practice. Customers tend to feel cheated, ironically, and resentful. This is why the marketing tool works best with storefronts with a very human face, because that human face will have the chance to explain their situation to customers, and are more likely to appease them through direct human contact. When corporations do this, however, there is no approachable face to confront, only a spokesperson seen on a TV or website, and who very often is simply an actor playing the front-man for the sake of appearances. Customers cannot approach the corporation, so they cannot be appeased, and they react by withholding their money or buying elsewhere. Or, in some cases, they will resort to stealing the vendors’ content, more out of spite than of genuine need, and cost the vendor some of their profits.

  The online services thought they could take advantage of a wealth of web-based and customer-based content that they themselves did not have to create, and offer it all free to customers. But when those same services began to cost money, the online services had no human face to present to the customers, and so they felt a backlash from their customers. Instead of being sympathetic to the online services’ plight, the customers left in droves, and often used their new Web connections to verbally abuse their former vendors and urge others to avoid them. The online services had themselves created the beginnings of an anarchist movement that would sweep across the Web and hang like a shadow over all Web-based content providers.

  ~

  The Anarchists were not simply people who wanted more free stuff. Well… actually, they did just want more free stuff. But they made an honest effort to argue that they were not just demanding free because they were greedy bastards; No, they reasoned that they were both inspired by the potential of the World Wide Web, and mindful of a reality of digital documents that made them unique among all the products in the world, which justified demanding stuff for free.

  The potential benefits involved the Web’s global nature, and the fact that information could be shared with someone on the other side of the world in seconds. Digital data could cross the old boundaries of space and time seemingly effortlessly… and they could cross political boundaries, too. The Web represented a communications tool that might transcend culture and politics, finance and disadvantage, and finally unite the citizens of the world directly to each other, across geographical boundaries and over political proxies. Web users saw this as nothing short of evolutionary, and indeed, many new and existing legitimate social, cultural, political, environmental and personal movements quickly moved online to create international identities and further their agendas.

  The reality inv
olved the nature of digital documents. Most other products in the world were tied to what was traditionally considered a tangible physical object. Before the Web and computers, most products were grown or manufactured, and one product was one product, period. An apple was an apple. Five automobiles were five automobiles. Since Mankind had begun to trade, transactions were based on objects, and the effort it took to create those objects. Materials costs, manufacturing costs, labor costs, transportation costs, and expected profit were all broken down to a cost per item, based on the number of items the listed costs produced.

  Digital documents were different. To begin with, digital documents were essentially organized data, a series of ones and zeroes in a storage medium. When the ones and zeroes were called forth, they became a series of electrons in a circuit that were expressed on display screens or through speakers. Although it took a physical object to actually store and display a digital document, the document itself was not a physical object in the traditional sense. (Or even in a non-traditional sense: You couldn’t even call a digital document a “cloud of electrons” or somesuch, since the storage of the data did not depend on a specific medium, but could be stored in any number of mediums, and would be in a different medium when it was called for.) Digital documents were stored ideas, without physical substance, in the truest sense of the word.

  A major aspect of these stored ideas was that, since they were physically insubstantial, they could be replicated ad infinitum by the miracle of electronics without the requisite increase in physical mass that would be involved with the replication of, say, a book. A single memory file, an e-book, could quite literally be replicated and sent to every person on the planet, and it would essentially be the same file for every single person as it was for the original holder of the file. The specifics involved will probably keep physicists and philosophers in deathmatch-style debates for decades, but the upshot is that the cost of all that replication only amounts to the relatively small amount of electricity used, and no other physical cost.

  (In point of fact, it is possible to establish a physical measurement of digital documents… you only have to delve into quantum physics to do it. I’m not sure if that means accountants would need to learn quantum physics, or if physicists will be working in accounting offices in the future, but either way, the very idea of accountants and quantum physicists in the same room together frightens me. And I suspect I’m not alone.)

  Digital documents broke the established molds for physical products to pieces. With digital documents, one document could create an infinite number of replications at virtually no cost and in virtually no time, shattering the manufacturing costs and time-to-shelf paradigms. The cost of communicating the document was so miniscule as to be laughable, and the amount per document only shrank as more documents were sent out, thereby destroying the transportation paradigms. Digital documents required no appreciable physical space to store, rendering moot the warehousing and storage paradigms.

  And all of those paradigms had formerly been the ones used to establish the cost of an object. At once, digital documents had reduced the required replication costs to—virtually—zero. The only thing left was the desired profit asked for by the author or vendor—and consumers had their own ideas about that, too.

  First, was the logic about attaching a specific cost to an item that could be endlessly replicated at virtually zero cost. Some consumers reasoned that an author who charged a dollar for a book, could somehow (and this part was never considered by some as theoretical, but assumed as given) sell millions-to-billions of his zero-cost-to-replicate book, and become a millionaire or even a billionaire overnight. This idea did not sit well with some consumers, who expressed concern about it being so easy for one lucky person to earn a fortune… presumably, when children were starving in Africa, Indians were living in cardboard boxes, etc, etc. They demanded limits be placed on the amount a single person had a “right” to earn, to prevent the riches of the world ending up in the hands of a few greedy Capitalist authors. This faction was never able to describe how such a Utopian system would manage to produce any profit to the authors at all, but they insisted that it was the only fair way to sell books to the masses, that the money that might be made by the author was completely incidental, and that profit should not in any way impact the author’s desire to write and contribute to the world’s literary riches. The opinion of non-creators was that the ability to simply create should be enough to satisfy all creators.

  Though the logic of this approach was flawed, it nonetheless won the support of many consumers who, beyond their altruistic trappings, were simply looking for more cheap-to-free goods. Authors, understandably, were less than impressed, considering it a double insult to be told that they had no right to have a say in their earning a wage for their work, and that they should just be grateful for the opportunity to get their writings out. Other proposed compensation methods were suggested, possibly the most popular being an endowment to the creators given through taxes, and based on the popularity of a work. The other proposals have run the gamut from questionable to crazy, and so far, no one has developed a concrete plan for these far-reaching proposals, nor have any corporations or governments indicated a willingness to even study the matter.

  So it was left to the creators and consumers to argue the details, but neither side was willing enough to actually listen to the other side for any discussions to be considered arguments… more accurately, they were unilateral demands thrown back and forth, and it seemed only laryngitis would ever stop them. An incredibly adversarial rift was developing between the authors and the consumers, and with no publishing middleman to mitigate the issues.

  ~

  Another consumer idea about profit had to do with… ideas themselves. This was an extension of a practice that had begun in the 1700s, but was becoming increasingly contentious in recent years… the concept of copyright. (Chapter 14 describes the history of copyright, in relation to e-books, in further detail.)

  Prior to the 1700s, the average person was usually too busy working the fields or the store to do something as energy-intensive as writing. Thanks to the Gutenberg press, most writing could quickly be copied by others, so there was little profit in such a venture. The concept of copyright was designed to allow the creator of a written work an exclusive right to profit from that work, for a set period of time. The intent was to encourage creators to create, at a time when Europe and the Americas wanted new ideas to develop and flourish.

  The copyright concept accomplished exactly what it was designed for, encouraging creation of new literary works, promoting those works, and earning a due compensation for their authors. The laws also helped to correct a number of irregularities that countries took advantage of, to reproduce the work of another country’s author without compensation to them (a popular example is the work of Charles Dickens, who was reprinted and sold widely in the United States for years without due compensation to him or his estate).

  Until the late nineteen-hundreds, there was little reason for complaint or grievance against this concept, amongst creators or consumers. But the events surrounding a cartoon mouse soon began to change the atmosphere of copyright, and its status and value in the eyes of consumers.

  The world had grown up enjoying the antics of Walt Disney’s Mickey Mouse for two generations, and although the trappings of the multiple amusement parks were often considered ostentatious (or simply strange) to many visitors, Disney’s many creations were beloved worldwide. So it was with considerable shock and disdain that the public discovered the Disney Corporation’s lawyers had been working successfully to have copyright law altered, to allow the corporation to maintain absolute control of Mickey Mouse beyond the point at which copyright law would have placed the character into public domain.

  It was accurately realized that it had been due to the sheer financial might of the Disney Corporation that such an alteration to a government law had been enacted, and purely to serve their financial interests, in what
should have been a clear violation of copyright. Not only was Disney damned for such an act, but the United States government was implicated in that damnation for accepting Disney’s money and changing the laws. And it didn’t stop there: Other Disney creations, and the characters they had borrowed from public-domain fairy tales and European authors to make their animated features, would also have the same protections, allowing Disney to profit from their sales in perpetuity. Other smaller but similar acts in other countries suggested that this was a global problem that needed addressing, before the corporations managed to collect and keep all intellectual property, and keep the public under its stranglehold as it meted out its wares.

  Thanks to a loud public backlash against copyright law caused by the Disney actions, the groups who were aware (actually not a large group, but very vocal) wanted to scrap copyright, claiming that it was completely corrupt and useless. They took advantage of the freer socialist movements in Northern and Eastern Europe to proclaim that “Ideas should be FREE for all,” and held up Disney and Capitalism as example of what would happen when ideas were not free.

  This came at just the wrong time for e-books, which, because of their easily-duplicated nature, could use the protection of law to help protect the interests of their authors. The concept of copyright law was about the only thing that offered a guarantee of profit for a set period for their works. Without copyright law, creators would be back in the situation of the pre-1700s, where they would be too busy working other jobs to make a living than to focus on creating new works, because they could not expect to make any profit from their creation.