Charlie Stross' Lament

Tim Bray referred me to a meandering essay by Charlie Stross about the future of professional writing. Stross winds through several industries (news, magazines, books), lamenting the fact that his income is going to evaporate.

Only there’s a problem. Two of them. Firstly, he hasn’t run the numbers through his calculator. Secondly, while he ends the essay on a plaintive note, he’s already identified the solution.

Let’s deal with the numbers first

Stross says that $25 hardcover and $13 mass market paperbacks are being supplanted by $9.99 Kindle editions. He states that he receives between 7% and 10% for a hardcover. So, he’s used to receiving $2.50 per book.

$25.00 * 10% = $2.50

When he wrote his essay, Amazon was paying out 30% of retail.

$9.99 * 30% = $2.99

With impending competition from Apple, Amazon have now opted to offer 70% of retail price minus delivery costs.

$9.99 * 70% - $0.65 = $6.34

More than double the value delivered to authors! With this arrangement, the author wins twice: the Kindle edition pays more money than the sale of a hardcover; and all the mass market paperback sales are sold at the more-than-hardcover rates.

Were I Charlie Stross, I would be rejoicing! Not bemoaning. Strangely, Stross wants his publisher’s marketing department to continue to take its cut too.

Who is likely to be hurt

Stross believes that authors will bear the brunt of the market change. But I’m guessing it’s going to be certain categories of publishers who are damaged by the digitisation of books. Early in the essay, Stross makes the observation:

The internet … cuts out the middlemen — if a supplier can make their existence known to a consumer, there’s no need for wholesaler warehouses, distributors, and a pavement-pounding sales force.

While history has not unequivocally demonstrated that the internet universally disintermediates businesses—disintermediation, neo-intermediation (think affiliate marketers, affiliate marketing networks) and power shifts (CD sales shifting to Apple; local advertising to Craigslist and Google) have all occurred—I think it is fairly clear that disintermediation for certain types of publishing activity is highly likely. See: Why digital books will disintermediate book publishers.

Craft focus

Stross argues publishers are necessary to allow him to focus on his craft. He doesn’t want to be an entrepreneur or a marketer. But the fact is, publishing companies are adding less and less value all the time. 

• How hard is it to format and upload your latest novel to Amazon, Borders and Apple?
• How hard is it to hire a decent editor?
• How hard is it to hire a cover designer?
• How hard is it to hire a decent publicist (if you feel you need one)?

By writing his blog, Stross is already adding more effective marketing than his publisher. After all, his posts attract around 200 comments, implying he has a regular readership numbering 2,000. Together with his estimated 3,000 hard-core fans, he has the basis for a successful ongoing business.

Stross is lamenting because the situation he knows is changing. Change happens.

The late-20th century fiction writing business model is changing. Successful fiction writers of the future are going to build community (GRRM, DAD), are going to be entrepreneurial (GRRM, Sam Landstrom), are going to experiment with pricing models (Seth Godin).

Authors who adapt to the new situation are going to win.

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