For those of you who are still skeptical concerning my claim that Macaulay said everything important there is to say on the issue of "digital publication" a century and a half before anyone ever heard of it, I invite you to consider the fact that—way back in 1841—he was able to predict what would happen in any society that made copyright protection too burdensome for the society as a whole.
Those who forget history are condemned to repeat it. A century and a half ago, Macaulay predicted—with perfect accuracy—exactly what would happen if the music recording industry in the late 20th century reacted to new technological developments by getting their stooges in Congress to pass ever-more-burdensome laws forcing—or trying to force—their customers to accept their Royal Monopoly.
Read it and weep:
I will only say this, that if the measure before us should pass, and should produce one-tenth part of the evil which it is calculated to produce, and which I fully expect it to produce, there will soon be a remedy, though of a very objectionable kind. Just as the absurd acts which prohibited the sale of game were virtually repealed by the poacher, just as many absurd revenue acts have been virtually repealed by the smuggler, so will this law be virtually repealed by piratical booksellers. At present the holder of copyright has the public feeling on his side. Those who invade copyright are regarded as knaves who take the bread out of the mouths of deserving men. Everybody is well pleased to see them restrained by the law, and compelled to refund their ill-gotten gains. No tradesman of good repute will have anything to do with such disgraceful transactions. Pass this law: and that feeling is at an end. Men very different from the present race of piratical booksellers will soon infringe this intolerable monopoly. Great masses of capital will be constantly employed in the violation of the law. Every art will be employed to evade legal pursuit; and the whole nation will be in the plot . . .
Remember too that, when once it ceases to be considered as wrong and discreditable to invade literary property, no person can say where the invasion will stop. The public seldom makes nice distinctions. The wholesome copyright which now exists will share in the disgrace and danger of the new copyright which you are about to create. And you will find that, in attempting to impose unreasonable restraints on the reprinting of the works of the dead, you have, to a great extent, annulled those restraints which now prevent men from pillaging and defrauding the living.
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The Editor's Page: October 2006 by Eric Flint
The Prospects for Jim Baen's Universe
Jim Baen, the founder of this magazine, died three months ago. Between that and the fact that we've now had enough initial experience with Universe to have a much better sense of the prospects for the magazine than we did when we launched it at the end of last year, I think it would be appropriate for me to use this issue's Editor's Page to let our readers know what our current plans are.
Jim was replaced as publisher of Baen Books by Toni Weisskopf. I met with Toni at the recent Worldcon in Los Angeles to discuss the prospects for the magazine and, most importantly, to decide whether we'd continue with Jim Baen's Universe after the first year was over. When we launched the magazine, Jim didn't want to commit to more than one year's publication. Six issues, in other words. Given that there were so many as-yet-unknown variables involved in publishing an electronic magazine based on the business model we're using, I completely agreed with him. We simply had no way of knowing ahead of time, without any experience, whether a magazine like this could make it commercially.
We had a lot of theories, when we started, but theory is a treacherous beast if it's not muzzled by facts—and we had no facts. True, we could use Baen Books' experience with Webscriptions, selling e-ARCs and distributing the e-magazine The Grantville Gazette as something of a guide. But none of those really served that well as a model for a magazine like Universe.
That's the reason, if anyone has ever wondered, that we've been selling subscriptions only in the form of a fixed one-year package. Regardless of what month you start your subscription, what you're going to get is the first six issues, starting with the June 2006 issue—as opposed to a standard subscription system, where your subscription starts with the current issue and runs one year from that time.
We couldn't use that standard method, because that had the potential of opening a huge black hole of financial obligations for us, in the event we had to close down the magazine because it was commercially unviable. We were sure we could manage one year's publication, but beyond that . . .
We simply didn't know. Jim was willing to lose money to find out whether a magazine like this would work. What he wasn't willing to do—this was the one and only unilateral instruction he ever gave me concerning the magazine—was come to the end of that first year and discover that in addition to having lost his initial investment, he was now looking at tens of thousands of dollars he had to repay his customers to cover the subscriptions they'd never be getting because we had to shut down the magazine.
Launching Universe was a dicey proposition, to be blunt about it. An electronic magazine has one great advantage over a paper magazine. Unfortunately, it also has two great disadvantages. Whether the advantage would outweigh the two disadvantages was an open question, when we started.
The advantage is obvious. Electrons are not molecules. In the nature of things—this is quite literally a direct result of the laws of thermodynamics—an electronic magazine doesn't have to haul around behind it the huge dinosaur tail of distribution costs that a paper magazine does. Our production costs are no worse than those of a paper magazine—leaving aside the fact that we pay better rates for stories than other F&SF magazines—and once we get past the production stage, all the other expenses are a small fraction of what they are for traditional publishing.
True, we have some costs for maintaining and upgrading the web site that a paper magazine wouldn't have, or at least wouldn't have to the same degree. But that's a pittance compared to the costs of printing, warehousing and distribution.
I don't know the exact figures—I'm not actually sure if anyone does, on an industry-wide basis—but the cost of distribution for even a book publisher is about 50% of the gross income generated by commercial publishing. For magazines, it's even worse. The lowest estimate of the distribution cost I've ever heard is 60%, and it goes up from there.
Of the two disadvantages, the first and biggest is just as obvious. At least, to anyone who isn't living in a fantasy world. The market for electronic publications is tiny, compared to the market for paper books and magazines.
Despite all the sky-is-falling rhetoric you'll often hear about the "death of literacy" and the inevitable (and fast approaching) doom of traditional paper publishing, the truth is quite different. Traditional, old-fashioned paper publishing is and remains a huge section of the market for art and entertainment, which is a very big market. The fact is that the income generated by paper publishing exceeds the income generated by the much more glamorous motion picture industry.
In that context, the market for electronic publishing is miniscule. Far less than 1% of the total, overall. Even in science fiction, which has a disproportionately large share of the electronic publishing market, I doubt if it's more than one percent.
That poses an obvious and major challenge for an electronic magazine. You've automatically eliminated at least 99% of your potential market, before you've even published your first issue.
Of course, that's a very one-sided portrayal of the problem, since the publishing market is so gigantic that even 1% of it—if you could get that one percent—is plenty to make a publishing project viable. In fact, you can get by with much less than one percent. To put things in perspective, even authors as wildly popular as J.K. Rowling and Dan Brown don't tap into more than, at most, five percent of the total market.
So, that first disadvantage is not as bad as it seems, taken by itself. When we started this project, Jim asked me to come up with some estimates of ho
w many regular subscribers we'd need to put the magazine on a stable financial basis. I crunched the numbers several different ways, and the figure I always kept coming up with was six thousand, give or take a little.
That figure is still accurate, by the way, in the light of the experience we've now gotten—except that it has to be modified by the experience we've had with the Universe Club. The Club has been very successful, much more so than we ever expected when we started. (Well . . . giving credit where credit is due, with the exception of Walt Boyes. Walt is the magazine's staff member who proposed the Club in the first place, and he predicted from the beginning that it would do extremely well.)
The Club generates about half of the magazine's gross income, over and above the money we'd collect from simple subscriptions. Granted, there are some expenses for us involved with the Club. But the Club is still a major source of net income for the magazine. It's fair to say, I think, that it's become the financial anchor for Universe.
That means, in turn, that we don't actually need six thousand steady customers. Instead, we need somewhere between three and five thousand. The reason for that wide range is that we still don't know one major variable in the equation:
How many people who joined the Club will keep renewing their membership each year?
We can make educated guesses, but until we get the experience of another year or two under our belts—or three or four years, better still—we simply won't know.
If you look at the matter from that perspective, it doesn't seem so bad. Even as small as the electronic publishing market is compared to the overall publishing market, it isn't that small. By now, several hundred thousand people are reading fiction electronically on a regular basis, perhaps even a million or two. And—one very bright spot in the equation—a disproportionate number of them are science fiction fans.
Unfortunately, we now run into the second of the two big disadvantages of electronic publication. To wit:
How do you make people aware that your product even exists in the first place?
For all the costs and burdens that the distribution system places on paper publishing, it automatically brings with it one great and beneficial result:
The books are there, on the shelves in bookstores all over the world, where customers can see them. Tom Doherty, who runs science fiction's largest publishing house Tor Books, puts it this way: "Every book on the shelves is a billboard."
Electronic publishing has no such equivalent. We don't get saddled with the costs of paper distribution, true enough, but we don't get the benefits either. And trying to come up with a substitute is difficult.
Yeah, sure, we've got our own web site, which is publicly accessible through the internet. So what? There are gazillions of web sites on the internet. Having a web site, from the standpoint of promotion and advertising, is equivalent to an author or publisher having onebook on the shelves—one copy, I'm talking about, not one title—in the entire world. All other things being equal, the number of people who will notice it is simply too small.
What's the solution to that problem?
Well, we don't know yet, really. We've been grappling with it since the beginning of the magazine, we're still grappling with it, and I'm quite sure we will be grappling with it so long as the magazine is in existence.
Which, finally, brings me to the basic point of this editorial.
The guesses, estimates and theories with which we began this project, last year, turned out to be . . .
In the ballpark. Not exactly what we expected, but close enough that we can keep going. Our subscriber base is growing somewhat more slowly than we hoped, true enough. We now have about 2400 customers, still short of the three thousand that is our rock bottom minimum to keep the magazine going perpetually, and less than half of the six thousand that I initially told Jim we'd need. On the flip side, though, the big success of the Universe Club took most of the sting out of that.
And—the subscriptions keep coming in. More slowly than we'd like, right now, granted. After a big surge in June, when the first issue came out, we've been getting about a hundred new customers a month. But even at that pace, we'll reach three thousand by the time we complete our first year of publication.
That's good enough that Toni made the decision that we'd keep the magazine going. For at least a second year, until we see what happens to the Universe Club. That's now the big imponderable factor in the financial equation. In a nutshell: What percentage of people joined the Club the first year purely as a one-time gesture of support? And what percentage will "re-up" at the beginning of the next year?
We simply don't know the answer to that yet. But we're definitely going to find out.
In the meantime, every new subscription or Club membership makes it that much more likely that we'll be able to make Universe a permanent feature of the science fiction and fantasy landscape. We could abandon the Universe Club entirely—not that we have any intention of doing such a stupid thing—if and when we reached a steady subscription base of about six thousand customers.
I am and always have been, by temperament, one of those people who figures the glass is half full. So the way I look at, as of today—with only our third issue appearing, and having 2400 customers—the glass is already almost half full.
Fine. 40% full, if you insist on being morose about it. As far as I'm concerned, the operative word is still full. Filling, for sure. Not even a dyed-in-the-wool pessimist can deny that.
I will add this, also:
Of all the methods the human race has ever devised to promote and advertise a publication—be it book or magazine, paper or electronic—the best and surest was, is and will always be simple word-of-mouth. So we'd much appreciate it if those of you who are already readers of this magazine—assuming you like it, anyway—would do what you can to let your friends and relatives know about it.
And anyone else. If you're planning to attend a science fiction convention, for instance, and would be willing to do a bit of promotional work—it can be something as simple and quick as putting some free handouts on the free literature table—let us know and we'll send you whatever material you'd need. If you have a website of your own or a blogsite, please consider letting your viewers know about the magazine.
I'd say that the fate of science fiction magazines—indeed, electronic publishing itself—is in your hands, but . . .
That's not actually true, although there's a grain of truth in it. And I'm not quite that shameless.
Not . . . quite.
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I'll end by giving people some specific details of our plans.
First, because the glass is still only half full, we're going to have to make some adjustments in the magazine itself. The main one is that we've got no choice but to tighten our budget, and the way we're going to do that is the simplest:
We're going to start shrinking the size of the issues. The first two issues were a whopping 200,000 words in length, which is about two and half times the size of an average digest magazine like Analog or Asimov's except when they do their annual double issues. We're going to scale the size of each issue of Universe down to about 120,000 words. That'll still be 50% longer than an average science fiction and fantasy magazine. We're also going to have to cut back on the amount of art we buy for each story, from our current average of three illustrations per story to one or two. The cost of the art work is a big part of the budget. Not as big as the cost of the stories themselves, no, but it's still significant and we need to trim it down, at least for a while.
We will not be cutting our pay rates to authors and artists, however. It was my opinion, and Toni fully agreed, that cutting the rates would simply undermine one of the main purposes of the magazine to begin with. That said, I will be somewhat more conservative about commissioning stories than I was in the beginning. In this first year of the magazine, in terms of costs, the ratio of money spent on commissioned stories compared to unsolicited stories coming in across the transom was 6:5. I'm goin
g to have to cut that ratio down to about 4:6 in order to meet our budget for the second year. In short, I'll be cutting back on the number of stories I commission or pay at commission rate, but it's not going to be a drastic cut.
Because of existing commitments, of course, we can't suddenly cut the magazine from 200,000 words to 120,000. What we're doing instead is tapering down the size as we go along, with the goal of being at 120,000 word length by the time we start the second year in June 2007. We will not be eliminating any of the existing features of the magazine, we'll simply be trimming everything down proportionately. The end result is that, starting with the second year of the magazine, the "standard" slots for stories and articles for each issue will be:
Five science fiction stories;
Four fantasy stories;
Two serials (down from the existing three);
Three introducing slots, down from five—and we'll shrink it down to only two if one of the stories is especially long;
One classic story, down from two;
One fact article, down from two;
Three columns, two by me and one "open" slot. Alternatively, we might run two classic stories or two fact articles.
The SF/fantasy ratio just reflects what's actually happened. We've always run more heavily with science fiction as opposed to fantasy, just because that's how it works out. It's not due to any pre-conceived schema on our part. We simply don't get as many good fantasy stories as we get good science fiction ones.
The two ongoing serials will be "Fish Story" and David Brin's "The Ancient Ones." We'll add a new short serial if a good opportunity comes up at any point, as it did with John Ringo's "Travails With Momma" and Kevin Anderson's Slan Hunter. (This short novel is Kevin's sequel to A. E. Van Vogt's famous novel Slan. We will be serializing it across three issues beginning with the next issue, coming out in December.)
The above framework is more in the way of a guideline than any sort of rigid scheme. The key is simply that we can't allow any given issue to exceed the budget. With an electronic publication, it's really the cost that determines "length." Words by themselves are meaningless any other way, because we don't have the physical constraints of a paper edition and the limitations of paper distribution.
Jim Baen's Universe Volume 1 Number 3 October 2006 Page 43
