The Word-Cartel

I want to take one more stab at explaining how the publishing business works, primarily because an insight came to me this morning. In the past I’ve pointed out that because publishers had the means of creating product at a reasonable price (economy of scale in printing) and they had the distribution network (that allowed them to get so many copies out there) that they had a lock on the market. While small presses could enter the arena, they would have a tougher time simply because their books would cost more and would be more difficult to find. And self-published books had even more trouble because they didn’t have distribution and had tiny print runs. Fairly often, if you didn’t buy from the author, you had no realistic chance of finding the book.

The problem with this explanation is not that it’s wrong, but it fails to explain why publishers haven’t created a more efficient business model. It also fails to explain why they don’t see the threat to their business model posed by the ease of distribution in the digital age. Easy distribution—electronic distribution—shatters their cycle. It destroys their practical monopoly on the market.

It occurred to me that publishers have believed, deep down, that they have a word-cartel. They’re the deBeers of literature. Diamonds are made out of carbon, one of the most common elements on the planet. Heck, they’re not even terribly rare. Diamonds outside the deBeers cartel are rare, however. And a readily available supply of diamonds from outside the cartel would crash its prices.

Since I’ve gotten my Sony Ereader, I’ve pulled down and devoured a couple of mystery novels set around 1906. Two of them were focused specifically on the rise of artificial diamonds destroying the cartel. Turns out that right around that time some experimentation proved that one could produce artificial diamonds. I’ll bet that a lot of diamond merchants—like their counterparts in these novels—were sweating the logical consequences of their cartel falling apart.

Publishers have, likewise, had a cartel that has determined the prices of books—often regardless of the story’s length or quality. Granted that quality is like beauty—highly subjective—but for every book that becomes a classic, there are dozens if not hundreds that sink without a trace. And without addressing whether or not all of those books deserved to vanish, the fact is that all of them have been priced exactly the same.

Publishers seem to be missing the fact that, unlike deBeers, they don’t control the word-mines. Unlike making artificial diamonds, piling words up into a novel isn’t an expensive activity. Authors can produce their own work and release it over the net. Authors don’t require the same scale of production as publishers do in order to produce a profit. We can do quite well, feeding off the long-tail sales that, once upon a time, made science fiction publishing houses so profitable. We don’t have to worry about returns or warehousing or significant delivery costs.

One other point: many folks have criticized publishers for not discounting transportation costs when it comes to digital books. But digital not only cuts the physical cost of delivery, it cuts the time cost of delivery. We have become a society which wants things when we want them. Digital delivery results in immediate gratification, whenever we want gratification. If I finish a book at 2 AM and I want to read the next one in the series, I can get it right then. And, very importantly, my impetus to buy is highest right then. Give me some time to think about the purchase, and I might not go for it.

Ultimately the people who control the words are the author. And authors are controlled by our patrons. Under the current model, the publishers are our patrons. They have the money. But as more and more readers buy directly, they begin to call the tune. If people start buying copies of The Silver Knife (the story with Mycroft Holmes, Jack-the-Ripper, a proto-Nazi sorcerer and much more), I will turn out more stories with those characters. I’ll continue to do that as long as I’m able to do good stories, and readers are showing me they want more.

This direct connection between authors and their audiences—which publishers encourage by their failure to publicize our works, forcing us to find ways to do it ourselves—gives authors the distribution system that we never have had before. It also gives us feedback that lets us know what our readers are interested in. This includes not only what stories you want to see, but what format you want them in, and whether or not you’ll be interested, say, in paying an extra dollar to get an MP3 of the author reading the book. And because publishers can’t survive without new words, the cartel is broken and, like Humpty Dumpty, isn’t something that will ever go back together again.

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3 Responses to “The Word-Cartel”

  1. Like the diamond cartel, publishers limit product. If an author has a hc one year, the pb reprint and a new hc the next, this keeps the name out there. When the publisher spaces out the releases to 2 or 3 years, this makes every title a “first novel” as far as the reading public goes. This forces the writer to find new ways of publishing to keep from being a first time author with every title. E-publishing is the way to do it.

  2. Directly connecting the author to his or her primary audience is incredibly important. You can’t put a price on a loyal fanbase that will consistently support your work and provide free promotion.

  3. Timothy Fitzgerald 23. Feb, 2010 at 5:55 pm

    Have you seen Blood Diamond Mike?

    Your analogy made me think of that movie. Did you know it is the ONLY movie in the past decade (that I am aware of, I looked for quite a while, so may have missed one) that had a budget over $100 Million that was NOT released on more than 2,000 screens?

    This a movie starring Leonardo DiCaprio, a mere 2 1/2 months after The Departed came out, so he was big (before Shutter Island, The Departed was his last hit).

    It also came out the same week as Apocalypto, and this was just mere months after Mel Gibson’s drunken fiasco, and Apocalypto was released (at half the budget) on 500 more screens than Blood Diamond (even then, if you add their screens together it is about what a Harry Potter or Twilight get on their opening weekends).

    Blood Diamond also bucked the modern movie trends, it made a mere $8 Million of its $57 M total in its opening weekend, which almost never happens anymore with so many front-loaded movies. For a movie to make $50M after a poor opening like that (and a peak of 1900 screens) shows how good the word of mouth was for the film.

    You talking about diamond cartels made me think of that, since I feel it is VERY fishy that a huge actor like DiCaprio, fresh off a big hit like The Departed, could make a movie that cost $100 Million with a director who has made an Oscar winning film (Glory) and coming directly off of a big hit (The Last Samurai, which was released on 1,000 more screens than BD), and the film get such a limited release, as if the studio did not care to make money!

    I loved Blood Diamond, considered it one of the best films of 2006, and have yet to actually meet someone who did not enjoy the film. Hard for me to accept that the subject matter did not have something to do with its rather limited release.