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e-Book Article

In honor of Presidents' Day (and the fact that I actually have it off), I'm posting one of my SFWA Bulletin articles, as I've promised to do once their exclusivity period is up.  Since it was done a year ago, it's a little dated.  (For instance, e-books now form more like 20% of total book sales.)  However, discussions of DRM and pricing are still relevant today.  I hope you find it informative.

What is the Deal with e-books? (from the December 09-January 2010 SFWA Bulletin)

I feel like I want to channel Jerry Seinfeld here: “What is the deal with e-books?”  Only I do terrible impressions and it’s hard to channel someone who’s still alive and kicking.  Well, the deal, my friends, is that there are so many things to think about that I struggled hugely with this article – where to start, what to say and how much before you hit information overload and run screaming into the night. 

I decided to take my cue from the marvelous Lewis Carroll, “Begin at the beginning and go on till you come to the end: then stop.”  Him I can channel.  So, let us begin.   Electronic books are self-explanatory – books available in electronic form.  This is not to be mistaken for electronic versions, which involve the inclusion of other media and which I’ll get to in a bit. 


Probably the best place to start is with the hot-button issue of Digital Rights Management (aka DRM). 

DRM is the use of encryption or proprietary formats to limit access of material, either to a particular reader or end user.  This is partially to encourage the purchase of and loyalty to one type of e-reader (and there are a ton from which to choose - Amazon’s Kindle, the Astak EZ Reader, BeBook, COOL-ER and the Sony Reader just to name a few), but it also reduces the chance for piracy so that proprietary text isn’t given away free, cutting off a company or an author’s revenue stream.  (Starvation tends to have a negative effect on the creative process.) 

While this sounds good, the cons are that you have to buy the e-reader or, if you’re using your iPhone, Blackberry or similar devise, download software in order to access the books you want.  This means that you have to count on a) your technology working, b) continuous access to the material, c) tech support for the foreseeable future.  With third parties controlling access, problems may arise, like Amazon’s removal of George Orwell’s 1984 and Amazon Farm from not only their server, but customers’ personal devices when they discovered a problem with the rights.   

As I’m sure you’ve guessed by now, the alternative is DRM-free e-books.  This means easier and greater access but also potential for abuse.  Already, some DRM-free sites have come under legal fire for not doing enough to protect against piracy and, as all of you as published authors have no doubt already discovered, piracy is rampant on the internet. 

The most recent figures I’ve seen place e-books as only about 2% - 5% of the market, but they audience is growing and will no doubt one day gain on print readers as the technology grows on us.  E-books are certainly greener, more space-conscious and, in many cases, more cost-conscious than their paper counterparts….  And therein lies part of the problem for authors, publishers and, you know, us agents, because we all want to make money.  Our mortgage holders and bill collectors really appreciate it when we do. 

We’ve entered into a time where the tail seems to be wagging the dog.  Companies that control the technology want to control pricing.  And here’s a news flash that will surprise no one: people still expect the internet and everything that comes through it to be free or at least very, very inexpensive.  So, whoever is doing the pricing can’t charge as much for an e-book or a digital audio download as for a hardcopy of text or audio editions.  The problem here is that because the publishers aren’t necessarily in charge of the pricing, the paradigm is shifting so that authors (or content providers or whatever lingo we want to use in our practically cyberpunk world) get paid based on monies received and not on retail price.  What does this mean for books given away free or nearly so in bundles or content on which money is made based on advertising rather than sales?  Yes, this is a business model that has worked for television and radio semi-successfully, but the issue here is that the publishing contracts currently in force did not envision and are not set up to deal with profit sharing of advertising based revenue.  Even language currently being negotiated doesn’t necessarily cover all the future permutations of the publishing business and we really need to get into our time machines and think about this yesterday before we get into messes like the Google settlement where we try to solve things in retrospect.  (Time paradoxes always hurt my brain, so I will quickly move on.)

Something else to think about – the new trend of “enhanced e-books.”  These assuredly fall under the category of “electronic or multimedia versions,” which agents generally reserve to the authors, because they involve the addition of other media—sound, photos, external links, etc. which  may interfere with film, television and allied rights.   I’m not against enhanced e-books per se.  In fact, I find the idea fascinating, even if I’m concerned that we’re becoming a society that has trouble with intense and linear focus due to our proclivity for sounds bites, texting and quicklinks. 

Some interesting things are being done.  Witness the Vook (website: http://www.vook.com/), by its definition, “a new innovation in reading that blends a well-written book, high-quality video and the power of the Internet into a single, complete story.”  There are two ways to experience the Vook – on your computer via your web browser (no programs to install) or via mobile applications downloaded straight to your  phone/pda.  Vook has already partnered with Atria, Simon & Schuster, HarperStudio and others for content.  Other companies producing enhanced e-books with video and audio components, links, etc. are former HarperCollins CEO Jane Friedman’s start-up OpenRoad Integrated Media and Random House UK’s Book and Beyond list (http://www.bookandbeyond.com/).  Sourcebooks, which now publishes fiction as well as non-fiction, has also set about creating e-books with additional content which are available through Smashwords, a DRM-free site. 

From a rights and contracts perspective, I have to consider the future if enhanced e-books become the norm.  Will authors be expected to share their royalties with artists and designers as in comics or will those payments come from the publishers share as they do now for cover art and lay-out design?   Will there be product placement?  If so, how will that or other advertising money be accounted? 

We’ve definitely been blessed or cursed, depending on your perspective, with living in interesting times.  It’ll be intriguing to watch (and for those within the industry to help shape) the future as it unfurls. 


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