Amazon Licenses Non-Transferable Ebooks

I wanted to find the answer to a very simple question: if I spend, say, $10,000 on an ebook library over a span of years, can I will that library to another party upon my death, as I can will my collection of printed books? For Amazon, the answer is no.

Here’s what the Amazon Kindle: License Agreement and Terms of Use has to say:

Use of Digital Content. Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use. Digital Content will be deemed licensed to you by Amazon under this Agreement unless otherwise expressly provided by Amazon.

Restrictions. Unless specifically indicated otherwise, you may not sell, rent, lease, distribute, broadcast, sublicense or otherwise assign any rights to the Digital Content or any portion of it to any third party, and you may not remove any proprietary notices or labels on the Digital Content. In addition, you may not, and you will not encourage, assist or authorize any other person to, bypass, modify, defeat or circumvent security features that protect the Digital Content.

In other words, Amazon does not sell ebooks. It licenses them. That means if you spend $10,000 on a library of printed books, that collection becomes an asset that can be resold or willed. If you spend $10,000 on a Kindle library, the value of that expenditure is utterly destroyed upon your death, and the library cannot be transferred to any other party.

And that completely sucks. Offers Online Book Viewing

I’ve been looking into the ebook industry, and generally I don’t like what I see at present. The essential problem is that the major ebook sellers, notably Amazon and Barnes and Noble, sell ebooks that read only with proprietary readers. This raises two problems. First, I want to be able to integrate all my ebooks into a single library, much as I can integrate all my music into iTunes now (made possible with the standardized mp3 format). Second, I don’t want to invest money in a platform that’s going to end up failing in the market place. I don’t want a library’s worth of the ebook equivalent of Beta or HD DVD.

At the same time, I don’t want to buy ink-and-paper books anymore, because my shelf space is limited and I want the flexibility and portability that comes with ebooks. So, for right now, my solution is to simply stop buying books, except for used copies that save a bit of money, books unavailable in digital format, and books that I absolutely want to read right away. The book industry is a mess. When publishers and retailers decide to straighten it out, I will resume doing business with them.

Previously I’ve made a couple of interrelated suggestions: HTML seems like the natural standard for ebook publishing, and ebook sellers should make the ebooks readable online, via a standard web browser. Now I’ve found a bit more information about this.

As Jedi Saber points out,“The .epub is a standard for eBooks created by the International Digital Publishing Forum. It consists of basic XHTML for the book content, XML for descriptions, and a re-named zip file to hold it all in. Anyone can make these eBooks, and since they’re essentially just XHTML, anyone can read them.” (Adobe says basically the same thing.)

Indeed, Jedi Saber proceeds to explain how to generate the epub format. While Jedi complains about the high cost of Adobe’s InDesign, which apparently can generate the epub format, I am fortunate to be married to a graphic designer, so this may well be a viable option for me. (I am working on an upgraded ebook version of Values of Harry Potter; an earlier version had been straight HTML.)

I noticed another tidbit from some of the company’s ebooks “can also read books online, from any computer, anywhere, without downloading or installing anything.” Now THAT is sweet.

For instance, offers the Twilight books “online in eb20.)” An explanatory note explains: has just released eb20, a web-based ebook reader application. This means that, in addition to downloading an ebook to your computer or device, you can now read the book online from any computer with a supported web browser that’s connected to the internet. eb20 requires no software installation and enables you to just start reading a work, seconds after buying it.

In the coming months you’ll see more and more of our books available through this simple online reading interface. As books are converted to eb20 format, you’ll see a little Read Online link next to the book in your account. Just click on that link and start reading. When buying a book, if you see Available to read online in eb20, it means that, once you’ve paid for it, you’ll be able to download the ebook and read it online anywhere, anytime.

There’s just one teensie problem with (aside from its limited selection): many of its ebooks are insanely expensive. Let’s take the example of Karen Armstrong’s The Case for God, which I recently downloaded as a trial run from Barnes and Noble for $9.99. The Amazon Kindle price is also $9.99. The Amazon hardcover price is $18.45. Random House will sell you the ebook directly for $27.95, the price for which also sells the book.

Memo to publishers: if you’re going to whine about Amazon’s ebook selling prices, you might think about not trying to jack customers with your own ebook prices. Publishers try to sell overpriced goods that are a hassle to use and then wonder why their industry is flailing.

Perhaps one of these years book publishers will catch up to the 21st Century.

E-Books: Amazon Versus Barnes and Noble

I’ve been complaining quite a lot about Amazon’s e-book service. My basic complaint is that, because of Amazon’s proprietary software, Amazon e-books will only play on devices supported by Amazon’s reader software. Presently that excludes my Mac, which means that the only way I could buy Amazon e-books was to also buy Amazon’s Kindle (or an iPhone or Touch, which runs the software).

I don’t want to buy a Kindle because it does way more than what I want it to do, and as a result it is quite overpriced for my budget and needs.

Thankfully, I have friends who tend to be early adopters of new technology. One of these friends (Diana Hsieh) lent me her Kindle for a few days so that I could check it out. This was quite helpful, because, as Amazon has no physical store front, it is otherwise impossible to pick up and play around with the Kindle before buying it.

I also purchased Karen Armstrong’s The Case for God from Barnes and Noble (BN), because it will read on my computer (with the BN reader) and I wanted to try it out. I’m contemplating buying several more books through BN but I worry that they won’t read on the e-reader I may ultimately buy and that I won’t be able to integrate my purchases from different suppliers. (The word is that Apple is also getting into the e-book game, which could change the industry dramatically.)

BN’s Nook is not yet available for purchase, so I cannot directly compare the two services. I’m reading the God book on my Mac screen and comparing that with text on the Kindle. But that’s what I have to work with.

I’ll begin with the BN e-book. It was easy to buy (once I set up my account), and the BN e-reading software installed and functioned flawlessly. The text looks fabulous on my great Mac screen, and it is easy to increase the font size and resize the window for a narrower column of text.

There is a huge disadvantage with the BN e-book and a minor one. The huge disadvantage is that the e-book will only read with the BN e-reader software, which bugs the living hell out of me. What is the point of having universal formats like pdf and HTML if e-book sellers refuse to use those formats? By contrast, an mp3 song you buy from any vendor will play on any device on the standard software. You don’t buy mp3s from Amazon that play only on the Amazon music reader. (Apple-formatted songs will only play on iTunes, but, as I’ve noted, Apple can get away with this because the company is so great at making players.)

Incidentally, today I spent $63.10 at the Cato Institute’s store to purchase seven e-books. These were straight pdf downloads, so I don’t have to worry about the compatibility issues of DRM. I do think that publishers should sell both pdf and HTML formats so that users can select the format best adapted to the reading device.

The minor disadvantage is that the BN e-book has no standardized page numbers. Instead, the pagination adjusts to the window and text. The problem is that BN e-books are useless for citation purposes, unless we’ve gotten to the point where nobody cares about page references because books are so easily searchable. If I do a review of the book, I’ll look up the page numbers, ironically, with Amazon’s “look inside” feature. Perhaps that should give Amazon the idea that its business model in this area sucks.

There are some advantages to reading an e-book on a computer screen that I did not anticipate. For note-taking, I can easily open a text window next door. The BN e-book allows the reader to cut-and-paste short passages, which is awesome. I also love the way the endnotes work. Click on the endnote to move to that note at the end of the document; click the number again to go back to that point in the text. That beats the hell out of flipping back and forth in a paper copy.

What about the Kindle? Previously I had indicated that I didn’t much like the Kindle’s design, whereas the Sony e-reader looked more appealing. I have since visited a Sony e-reader in a Target store, and I now think it completely sucks. What I didn’t notice before is that the Sony device features ten menu buttons on the right-hand side, which screams poor design. The Target model didn’t even work right, which didn’t fill me with confidence. It seemed a lot more like a toy than a serious reader.

The Kindle, by contrast, is an elegant machine. The screen looks marvelous, and, while I have not yet spent hours reading from it, I have no doubt that will prove no problem. The Kindle’s controls are a lot more intuitive than I thought they would be. One key control is a miniature joystick, which works fabulously. (I’m used to operating a similar control on my Canon video camera.)

The Kindle, then, is great at what it does. The problem is that it does way too much for my needs, and therefore costs way too much for my budget. The Kindle is like a Hummer, when all I’m looking for is an economical and reliable little Honda. Because I don’t want to buy a Kindle, and because Amazon e-books will not yet read on my Mac, I am simply not going to buy any Amazon e-books. (Again Amazon might consider the fact that its business model is completely stupid, though at least the company is working on more readers.)

The main thing that the Kindle has that I absolutely do not want in an e-reader (for the money) is wireless technology. What I want is a cheap little USB cable through which I can load e-books from my computer library onto my reader. The ability to buy books on the road is of practically no value to me.

I didn’t realize you can browse the internet on a Kindle, which is cool, but again the coolness is not nearly worth the money. Of course I loaded up my own web page. The browser was tracking the loading progress — I kid you not — in kilobytes, with a “k.” I finally got irritated by the wait and hit the stop button, at which point (at least part of) my web page displayed, and quite nicely. But, seriously, who wants to browse the internet s-l-o-w-l-y in black and white? If I want to browse the internet on the go, I’ll buy an iPhone or Touch. I’d much rather carry two devices that do what they’re supposed to do than one device that sucks at most of its functions.

Speaking of suckage, I tried the Kindle’s audio reader software. Painful. If I were blind, I imagine I could get used to it. But it would be a real struggle. Think of the challenge of getting past Keanu’s acting to enjoy the Matrix, then multiply that by a thousand.

The Kindle has a built-in speaker and audio-processing software, so it will play mp3s and audio books. That’s cool, but I’d much rather buy a less-expensive e-reader plus a $59 iShuffle. Just sell me the reader. That’s all I want it to do.

As an e-reader, the Kindle works great. If I could just buy the e-reader part of the Kindle at a lower price, I’m pretty sure I’d do it. The dictionary is very cool. You just push the joystick until the cursor is in front of the word of interest, and the definition pops up at the bottom.

It is possible to take notes and record them with a Kindle document. Again push the joystick until the cursor is where you want it, then start “typing” your note. The keyboard, as I anticipated, is horrible. I mean, if you were a sentient ferret or something, it would probably be the perfect size. Maybe it’s okay for the “texting” generation. But I absolutely hate it. I’d much rather scribble down a few notes on a piece of paper. So, Kindle minus wireless minus the keyboard minus the high price is a device I’d love to buy.

At least the Kindle has standardized “locations” (rather than “pages”), but these don’t match the paper version. They are also listed as ranges (such as “locations 14-19”), which is strange. Will publications allow Kindle-specific citations, or will Kindle buyers need to check the page references against the paper versions? I don’t know why publishers don’t simply insert a page counter into the text itself matching the hard-copy page counts. This is trivially easy to do, though it would be a minor distraction while reading the text. Granted, some older books already have many different paginations. But there’s no reason for new books not to feature the same page references for the hardback, softcover, and e-book versions.

The Kindle will run pdf files fine. You can even upload them via USB. But to run files like Word and HTML, a user must send the file to a Kindle-specific e-mail, then Amazon “will convert the document to Kindle format.” So, in other words, to get an HTML file from my computer to my Kindle sitting right next to it, I need to send the HTML file half-way around the world to wherever Amazon keeps its computers, where Amazon will convert this already-standard-format file to the completely-non-standard Amazon format, then send the file back to my Kindle wirelessly. Did I mention that Amazon’s business model for the Kindle is completely ridiculous? I mean, God forbid that I’m able to send an HTML file via a USB cable and read it with my $259 e-reader. I mean, Amazon can install software that will (sort of) read the text out loud, but it can’t figure out how to let me read HTML files directly?

I only had one minor problem while using the Kindle: at one point, when I was trying to jump to a linked table-of-contents entry, the Kindle thought I was trying to highlight some vast portion of the document. But I soon figured out how to cancel out of that mode, and with a little jiggling got the joystick to do what I wanted it to do. (Much of this tinkering I was doing while reading Amazon’s tutorial, which is a pretty good document.)

If my income were more upper-middle-class than lower-middle-class, I’d gladly buy the Kindle, despite the risk of betting on an e-book reader that turns out to be the equivalent of Beta or HD DVD. But, given that the Kindle does way too much and therefore costs a lot, I’ll wait to buy a reader until the market has settled down a bit, the formatting issues have been resolved, and I can buy a nice low-end reader for $150 or less. At this point I will either wait to buy e-books or buy BN e-books that at least will read on my Mac.

It was a fun date, but the Kindle is not yet marriage material.

December 23 Update: I just had a thought: why doesn’t Amazon allow e-book purchasers to view the books in a web browser with password protection? Then Amazon wouldn’t even need to release additional readers. Any device with a browser would suffice. Also, I sincerely hope that Apple makes an economy-model reader, as I imagine the Tablet will be priced well outside my budget.

Going Digital

What is extraordinary about my lifetime is that I will have witnessed the birth of the home computer industry and (if things go well) the complete conversion of all relevant media forms to digital formats separate from any particular physical “carrier” medium.

In recent days I have written about the still-problematic e-book industry as well as the move toward online video content. Fittingly, today I found an article by Matt Buchanan covering both these stories in the context of Apple’s business innovations. Before getting to that story, though, I thought this is a good time to step back and gaze at the landscape.

The basic art forms are these: music, painting, sculpture, literature, dance, theater, film, and architecture. There are certain hybrids, like opera (musical theater) and illustrated fiction.

Art presented as a structure (sculpture, architecture) may be photographed and filmed, and only in these derivative forms digitized. (One may view a photograph of the Parthenon, but obviously viewing the photo is not at all the same experience as visiting the place.) Performance art may be recorded in audio or on film, and the recorded presentations may be digitized. Going to hear a symphony is a different experience than listening to a recording of a symphony, though the audio quality might be very similar.

Paintings obviously may be digitized, and the similarity of the digitized piece to the original, while generally fairly close, varies significantly by art work. The School of Athens is fantastic on a modern computer screen, but it simply does not compare with the real thing, whereas the Mona Lisa is nearly as impressive digitally (I write as I duck the stones).

Literature is readily digitized, for the same reasons that literature can be translated and read aloud. Literature is the most purely conceptual form of art, and its mode is language, and language is inherently separable from any particular medium (which is not to discount the qualities of a musty old book).

Film inherently converts a performance to a two-dimensional image, so the digitization process is perfectly natural. Some modern “films” may begin with hand drawings but develop primarily digital animation.

For our purposes, the upshot is that film, music, and literature are the most-easily digitized art forms, with paintings following behind. Regardless of how we categorize photography in terms of art, obviously it has joined film in making the natural jump to digital formats. (General retail outlets don’t even sell film cameras any more.)

The basic modes of mass communication are text, photographs, speaking, and video (I’ll say rather than film, which is now mostly outdated).

The above facts indicate that the modes of digitizing the fine arts match up pretty will with the modes of digitizing mass communication. Whether we are talking about fine arts or mass communication, in the digital world we are basically talking about text, still images, audio, and video. Any digital content basically combines those four sorts of presentation. Basically, if you can see it or hear it, where the seeing or hearing is the point of the thing, it can be digitized. (Whether the sense of touch can be effectively digitized remains to be seen, but a world where more than a few would want such a thing would be a very different world from our own.)

Music has essentially gone digital now. My first album was a record, as in a disc of plastic etched to stimulate a needle. (Genesis, baby, as in the band.) Interestingly, I’ve never actually looked up the term “analog” until just now: “of or pertaining to a mechanism that represents data by measurement of a continuous physical variable, as voltage or pressure.” Anyway, within my lifetime music has gone from entirely analog to almost entirely digital.

Moreover, music has largely made the break from a particular, dedicated medium. While the music CD remains popular, increasingly people buy music online and save it to a hard drive or flash drive.

Video similarly has largely gone digital. Due to its increased file size it remains more tied to the DVD, though this is rapidly changing. My step-dad had one of those VHS video recorders you had to rest on your shoulder to operate. I own a digital video camera that records directly to flash memory. YouTube allows pretty much anybody to upload any video that’s under ten minutes, while a variety of services display movies and “television” shows online.

Obviously photography has gone digital. While 35 millimeter film was the standard consumer-grade film in my childhood, today I can’t name anybody I know who owns a film camera.

Strangely, text, while far more easily digitized than audio, photos, or video, remains largely bound to ink and pulp. They still print newspapers and books in large quantities. The stickiness in converting text to digital formats is funny given that the analog formats are created from digital source files. Word processors were among the first computer applications.

My mother used a real typewriter in college. I mean, you hit the key, and it caused a metal arm to strike the paper through an inked ribbon. No electricity! When I was in high school, I learned how to type on an electric typewriter; the metal arms were replaced by a rotating ball, but the mark was still made by a metal form striking the paper. Now I don’t know anybody who uses anything other than a computer to generate polished text. (Well, I’ve met two people who still write by hand, a novelist and a philosopher, but they lie well outside the norm. Of course somebody then transforms their scribbles to digital text.)

So why is it that practically everyone generates text digitally but then many still convert it to ink on pulp? There are two main reasons, one involving technology and the other business organization. The technological problem is that reading text on computer screens tends to create eye strain (as I am already experiencing in the writing of this post). It’s a lot easier to sit down for several hours and read an ink-on-paper book than it is to read a digital display of the same text. But the new eye-friendly e-readers seem to be on the road to solving this problem.

The second problem is that nobody has yet figured out a great way to sell e-books or profitably publish news online. I think it extremely likely that some combination of business leaders will solve all of these problems within the next few years. I think that, within the next decade or so, printed newspapers will be mostly gone and that the paper-on-ink book industry will look a lot like today’s record industry.

Whether we look at video, audio, still images, or text, the trend is the same: people will no longer buy a physical good, they will buy a digital file online and store it on some sort of data drive.

Today I went to Target and spent just over $15 to purchase a four gigabyte “thumb” drive. I loaded it with videos, photos, audio files, database files, and text files, then dropped the device into my pocket. We no longer need dedicated physical objects to store these things. We buy them via an energy stream, then we store them on a universal storage device and enjoy them via some software program running on a gizmo.

I know that techies have already rolled their eyes and closed this page in annoyance, but I stand in awe of the digital revolution that has occurred in just a few years. These simple, obvious, and mundane facts all around us mark a turning point for our species.

As for Buchanan, he reports that Apple appears to be gearing up to expand its online video market and its small-sized computer market. As Philip Elmer-DeWitt indicates for Money, Apple’s “Tablet” and associated deals may revolutionize the e-book industry.

Very soon digital content via the internet will be the norm, and records, tapes, CDs, DVDs, newsprint, and pulp books will become quaint (and even eccentric) throwbacks to an earlier age.

Update: I was just poking around at the Cato Institute’s web page, and I noticed that the outfit is selling Tom Palmer’s new book as an e-book for $14. This is available through Kindle for $9.99. However, I called Cato and was assured their digital books are straight pdfs, and to me that is well worth the extra four bucks.)

How Stupid DRM Is Killing E-Books

I will defend the political rights of publishers and resellers to use digital rights management (DRM) for electronic books if they wish. I’m not convinced the practice makes for good business. As it stands, DRM is preventing me from buying an e-reader and e-books.

Meanwhile, with my shelves mostly full and without much room to expand my collection of printed books, I’m planning to be selective in buying paper-and-ink books. We live in a mobile society. People frequently change jobs and move. In some parts of the country lots of people spend considerable time on busses, subways, or trains. The market is ripe for e-books, yet the production and distribution of e-books sucks.

This is not a problem of technology. With modern software it is trivially easy to convert a book to an electronic format. (Indeed, practically all books are printed from a digital file.) While I have not used one of the e-readers, I am convinced that the technology makes the text look quite nice and readable. The good Doctors Hsieh have debated various aspects of the Kindle, but they agree the text looks nice. I imagine that new generations of e-readers will be easier to use and more versatile. (By the way, feel free to peruse my Disclosures Unjustly Compelled by the FTC.)

But compatibility issues are hell on consumers. If I buy a Kindle, I cannot even read Amazon’s e-books on my Mac, though Amazon has released a PC reader and claims a Mac version is on the way. More importantly, if I buy Amazon e-books, I cannot read them on any competing e-reader (except the iPhone or iTouch, which uses the standard backlit screen rather than the cool text-friendly, low-power screen).

I love Amazon, but forbidding customers from reading Amazon e-books on other readers strikes me as pathetically stupid and short-sighted.

Contrast the situation with e-books to digital music. True, iTunes uses unique encoding, and its songs do not work with other players. But it is trivially easy to convert iTunes music to the standard mp3 format. Amazon might consider the fact that I’ve purchased mp3 files from Amazon to play on my iShuffle, but I have purchased exactly zero e-books from Amazon because of the compatibility problem.

Meanwhile, Barnes&Noble’s e-books will only read with that company’s exclusive software. Nook, with an “expected ship date” of February 1, is priced at $259, which is, surprise surprise, exactly what the Kindle is selling for. They are both ridiculously overpriced. The Sony Pocket e-reader costs only $199. It doesn’t have wireless, but I don’t want wireless! [December 19 Update: I changed “wi-fi” to “wireless” for accuracy. The Kindle is wireless but not wi-fi, while the Nook is both.] I would be perfectly content with a USB cable. The problem is that Sony doesn’t sell the e-books I want to buy. So I can get a more-economical reader that won’t read the books I want, or I can get a clunky, overpriced Kindle. My solution is to buy neither.

While Amazon is great at selling books, it sucks at producing e-book readers. So why not sell me e-books that I can read on an inexpensive reader made by somebody else? With a standardized format, I suspect that a number of producers would make a good, inexpensive reader.

I understand that some publishers are whining about e-books. Get over it. Publishers have two options: they can adapt their products to the digital revolution, or they can die. Publishers should insist on a standardized format, or at least sell reasonably priced, DRM-free e-books themselves.

Let’s take an example. I’m interested in buying Karen Armstrong’s The Case for God. Both Amazon and Barnes&Noble sell the e-book for $9.99. But both of those versions have sucky DRM that makes them far less valuable to me. What is the solution of Random House, the publisher (via Knopf)? They will sell you an e-book! The hardback costs $27.95. And the e-book, which does not have to be printed, bound, stored, or shipped, costs… $27.95. Gee, thanks, Random House.

And publishers wonder why people aren’t buying as many books? Do you seriously think I’m going to pay $27.95 for an e-book that has a marginal production cost approaching zero and that I can buy hard-copy elsewhere for $16.34? If Random House sold DRM-free e-books at a reasonable price, I’d be happy to buy them, and the publisher would get a much higher profit margin relative to selling through Amazon or Barnes&Noble.

Some readers may have noticed that my own book, Values of Harry Potter, currently sells only in soft cover. But it will become available in DRM-free digital format soon. (Whether it will sell through Amazon’s Kindle system or other e-systems remains to be seen.)

Standard text formats already exist. They’re called HTML and pdf; you may have heard of them. But God forbid that publishers sell books in a format that consumers can easily read.

Update: After reading several comments, I thought I’d further contrast Apple and Amazon.

Apple started life as a computer company that excelled at making great hardware that works seamlessly with good software. On this platform Apple built iTunes, a retail store.

Amazon started life as a book retailer and tried to build an integrated digital book program on top of this. The problem is that the iShuffle and other Apple players work great, while the Kindle is an overpriced technological piece of gossa. I mean, it’s relatively cool, but it’s nothing like the e-reader I’d like to buy. (I certainly don’t want wireless or a tiny keyboard built in.) If Amazon produced the e-reader equivalent of an iShuffle, that would be one thing, but it doesn’t.

Another difference is that, when I buy a song from iTunes, I own that file. I can copy it to disk, back it up, and control the way I use it. If I were to buy a digital book from one of the major sellers, my “library” would be established by the selling company. The seller can alter my library. Thus, it feels a lot more like renting books than buying them, and I don’t like that. If I buy a book, I want to buy it and be in control of the file. Screw online “libraries.” Just send me the file that I pay for. I neither need nor want Amazon or Barnes&Noble to “manage” my library.

The standardized mp3 format works great for music. Practically any modern digital device will play an mp3. I will buy e-books when they are similarly portable and convenient.

December 16 Update: Another obvious difference between iTunes and e-book “libraries” is that I can import all of my music into iTunes. It will import standard CDs as well as mp3s. Try importing a Barnes&Noble e-book into your Amazon library or vice versa. This is forbidden, which again creates a major barrier to buying e-books in the first place.

Dear Dean Singleton, Please Charge Me

Westword’s Michael Roberts reports that “Dean Singleton… plans to start charging readers for lotsa online content at select MediaNews papers in California and Pennsylvania beginning in 2010.” This is relevant to us in Colorado because Singleton also publishes the Denver Post. Are fees for the online Post in our future?

God, I hope so.

Good journalism is hard work. Good investigative journalism is especially hard and time-consuming work. People tend not do do a lot of hard work without compensation. (I imagine Roberts would confirm this.) Thus, journalism needs to pay.

Journalism can pay in one of three general ways: advertising, philanthropic contributions, and reader payments. Advertising can be direct or indirect; for example, Michelle Malkin runs direct advertising, and her entire blog serves to advertise her books. (You’ll notice that I advertise my own book, Values of Harry Potter, on my web page. And it makes a fine addition to the tree or stocking!) I would be interested in learning how much of the Incredible Shrinking Westword’s revenues come from print versus online advertising. (While the weekly’s print edition has gotten noticeably smaller, its online content has expanded dramatically.)

I doubt anybody is going to make a generous gift to the Post.

That leaves reader contributions to supplement advertising revenues. These payments can be by the piece or via subscriptions.

As I suggested earlier, I think papers (and it’s funny even to still call them “papers”) should give readers a choice: watch an annoying ad, pay a monthly or annual subscription, or pay to read a single article at a time.

How is that not the best of all worlds? Cheapskates can still read content for free, except they have to pay with their time by watching a real advertisement. Regular readers can subscribe, preferably for a low annual rate (I would seriously consider paying, say, $50 per year to read the Post online). And occasional readers who value their time can pay some token amount — perhaps an amount that varies with the ambition of the piece — to read a single article. As I also mentioned before, the key to this is to figure out a very-fast way to make micropayments (else there is no time savings).

The fact is that readers who value good content and don’t want to waste time looking at ads will be prepared to pay to read that content. I absolutely hate the Post’s online ads that pop up, block text, push text down the page, and otherwise annoy the living hell out of me when all I’m trying to do is read a spot of news. I would much rather pay a little than deal with those sorts of ads.

I think it’s worth revisiting what Post editor Greg Moore said in September:

In terms of advertising being a means of supporting original [journalism]… right now advertising provides like 85 percent of our revenue. It’s still a huge, huge, huge driver. It’s a huge source of revenue. It’s going to be probably for a while. But I think our survival — and when I say survival I’m not talking about the newspaper, I’m talking about our ability to do journalism — I think we’ll have to shift to a different model. And I think that model is that the user will have to pay for the content that he or she consumes.

I don’t think that the cat is out of the bag. I think that the record industry sort of proved that, the music industry sort of proved that you can change people’s behavior. Napster, in the mid-1990s, everyone thought that would just sort of kill everything, and they put those people in jail, put them out of business, and now people pay for music. They do it differently — they don’t buy albums anymore, they buy singles, but they still pay a lot of money for music.

So I think there’s still hope for us, that we can sort of reverse this trend. As somebody said, I think the worst decision that was made by the owners of newspapers was to sort of be stampeded into giving away their content for free. But it doesn’t mean that it’s over.

Unfortunately, rather than quote somebody who knows what he’s talking about, such as Moore, Roberts quotes some clueless blog post by Rob Burgess.

Burgess quotes survey results from NewFiction:

80 percent of consumers recently surveyed by Forrester Research say they would discontinue their favorite free print content if they were asked to pay for it. Less than 10 percent of respondents would agree to subscription models; only three percent would opt for micropayments.

Steven Levitt and Stephen Dubner nicely summarize the problem with this in their new book SuperFreakonomics: “There is good reason to be skeptical of data from personal surveys. There is often a vast gulf between how people say they behave and how they actually behave” (page 7).

If you ask people if they want to pay for something they now get for free, what do you expect them to say? They’re going to give you some variant of “no.”

But if a person actually has a choice of reading a great article and paying, versus not reading that article, in at least some cases the person is going to pay up and ask for more. (Again, I think newspapers would be smart to offer a third option of spending time watching an ad, probably in the form of a short video. These sorts of ads are already common on a variety of web pages.)

So Burgess’s first argument is bunk. Let us turn to his second argument:

You ruined everything in the beginning by starting with giving everything away for free. It has now been almost 15 years since the Internet broke wide and you’re just NOW getting around to asking people to pay for your content? I don’t blame people for not wanting to pay for it anymore, why should they? Who would pay for something they can get for free?

The options are not “get free content” versus “pay for content.” The other option is “get no content,” at least as far as investigative journalism is concerned. With that as the alternative, paying doesn’t look so bad after all. People “should” pay, and they should be willing to, if that’s the only way to get hard-to-produce content they want to read. (Again, easy-to-produce content will remain free, and ads can help pay for hard-to-produce content.)

What Burgess seems to think ridiculous is Singleton’s comment, “We have to condition readers that everything is not free.” But Singleton’s comment is perfectly sensible. Moore uses the example of paying for music online. Today many people pay to receive television stations that they could otherwise get for free, because the reception is better and the broadcast stations are packaged with cable-only stations. Consumers change their behavior all the time, even (or especially) after they say they won’t.

There ain’t no such thing as free journalism. If journalists aren’t willing to work without compensation, philanthropists don’t pay, and advertising doesn’t pay enough, the only alternative is for readers to pay, if they want the benefit of the product.

Really advertising is a way of extracting a payment of time from readers. Again, I think papers should offer that alternative. I would much rather pay in dollars, as for me that would be the far less costly alternative.

Outlawing Low-Priced Books Robs Your Wallet and Freedom

The following article was originally published online by the Denver Post under the title, “Why we should keep selling low-priced books.”

Outlawing low-priced books robs your wallet and freedom

by Ari Armstrong

Some stores sell popular books to willing customers at low prices, and they must be stopped! At least that’s what the American Booksellers Association (ABA) argued in an October 22 letter to the Antitrust Division of the Department of Justice.*

The letter, signed by the ABA Board of Directors, including Cathy Langer of Denver’s Tattered Cover, complains that Amazon, Wal-Mart, and Target sell some “hardcover bestsellers,” including books by John Grisham and Sarah Palin, for only around $9. Moreover — horror of horrors — Amazon sells digital books for only $9.99.

The letter argues that selling low-priced books to people who want to buy them constitutes “illegal predatory pricing that is damaging to the book industry and harmful to consumers.”

You might think that “lower prices will encourage more reading and a greater sharing of ideas in the culture,” but you would be wrong, the ABA claims. Low-priced books will drive out “many independent bookstores,” put book buying “in very few hands,” and eventually allow “mega booksellers to raise prices,” the ABA asserts.

The ABA’s position ultimately is self-destructive. Free speech, and freedom of conscience more broadly, depends on property rights and voluntary association, liberties the ABA undermines.

Writers, publishers, sellers, and buyers have the right to agree to terms they find mutually beneficial. A publisher that wishes to prevent a retailer from selling a book below a certain price may properly set that as a condition of the transaction.

Once a retailer purchases books from a willing publisher without pricing restrictions, the retailer properly has the right to sell the book for any amount it deems proper. If the retailer wants to sell books below cost as a loss leader, give them away, or pay people to take them, that’s between them and their customers.

When politicians control the physical conveyance of ideas, they can control the ideas themselves. As a villain in Ayn Rand’s Atlas Shrugged explains, “If you breathe the word ‘censorship’ now, they’ll all scream bloody murder… But if you leave the spirit alone and make it a simple material issue — not a matter of ideas, but just a matter of paper, ink and printing presses — you accomplish your purpose much more smoothly.”

The ABA helps establish the principle that people with guns — for ultimately brute force is what imposes Department of Justice rulings — can invalidate people’s independent decisions. This same principle opens the door to outright censorship.

The ABA’s position also rests on economic myths. Part of the cost savings of large retailers comes from publishers selling books in large orders. The ABA would force publishers and readers to eat the costs of more tiny orders.

Independent bookstores that cannot compete on price should find other ways to attract willing customers if they wish to stay in business. For example, Tattered Cover hosts many public events featuring authors and other speakers. (I spoke at a media panel hosted by the store on September 24.) Tattered Cover also carries a large selection of books that customers can physically look at and buy instantly.**

The ABA’s suggestion that “mega booksellers” would eventually “raise prices” higher than what independent stores now charge is laughable. Not only will many competing booksellers remain in business despite low-priced books, but attempts to raise prices inevitably attract new competitors.

The ABA absurdly argues that low-priced books will cut off writers’ ability to get published. As a book author, I can attest that writers today have unprecedented opportunities to publish their works. Amazon is particularly friendly to writers and publishers.

Tattered Cover does not carry my book, and if I had to rely on independent bookstores my book never would have been published. Yet I did not seek government action to force Tattered Cover’s decisions. Tattered Cover has the right to stock the books it wants at the prices it wants, and it should respect the rights of others to do likewise.

We should expect better from the ABA and from Tattered Cover, often a champion of free speech in Colorado. Ultimately the business of ideas depends upon the integrity of the unforced mind.

Ari Armstrong is the author of Values of Harry Potter and publisher of He lives in Westminster.

* See some of the resulting media coverage.

** November 13 update: As somebody noted in the comments, Tattered Cover now plans to sell used books as well. The Denver Post has the story. Offhand this strikes me as a good idea. The standard fee for shipping and handling for used books at Amazon is $3.99, sometimes more than the price of the book. Tattered Cover can’t offer as wide a selection of used books, but the customer can physically examine the used book and get it right away with no additional transport costs.

Could Micropayments Save Newspapers?

At last month’s media panel, somebody (I believe Adrienne Russell) mentioned the idea of micropayments for online media content. Such payments might help save the newspaper industry as well as help fund better bloggers.

The idea is that readers would pay a small fee — say a quarter or fifty cents — to read an article online. A popular story that drew a hundred thousand readers could do quite well for a publication.

Consider how the Wall Street Journal presents its news stories. It gives you the headline and the opening sentences, then asks you to subscribe. But I don’t subscribe to that paper, because I rarely want to read one of its news stories (and its opinions are available for free). But, if I could pay a small, one-time fee to read the occasional story, I’d probably pay that paper a few dollars per year. That’s not a lot, but multiplied by a few hundred thousand extra readers it could add up. Indeed, newspapers could offer monthly subscriptions for regular readers as well as micropayments for occasional readers.

At the media panel, Greg Moore of the Denver Post said a couple of things of particular interest to this issue. First, he said that newspapers might have to print less frequently. Second, readers would have to pay for online content, eventually, for newspapers to survive and thrive. I can envision a newspaper that goes to press, say, Wednesday, Friday, and Sunday. The print edition would be stuffed with ads, comics, classifieds, crosswords — stuff people like to touch and feel. They would be big, perhaps nearly as many pages as seven days runs now, so subscription rates could at least stay even while production and distribution costs dropped dramatically. This would be the answer to traditionalists, who actually enjoy getting their hands dirty reading the paper. (I would as soon eat dinosaur eggs for breakfast.)

Under such a scheme, the Post would raise revenue from print and online ads, print and online subscriptions, online only subscriptions, and micropayments for individual stories. Publications that used micropayments would probably want to make some significant portion of its content available for free.

Bloggers (the kind with actual readers) and strictly online publications might also be able to employ micropayments for more ambitious stories.

The key to micropayments, of course, is to make them easy. A PayPal account might get the job done, or perhaps PayPal could adapt its existing program to make micropayments easier. Most people aren’t going to pay a small fee to read an article unless it’s as easy as clicking a button or maybe two.

One publication that has already combined ads, micropayments, and subscriptions is The Objective Standard. The publication shows the first part of an article online for no cost. To read the entire article, one must subscribe or “Purchase a PDF of this article” for, in this case, $4.95. (Micropayments for journal articles or specialty articles can be higher than for regular newspaper stories.)

The more I think about it, the more I love the idea of micropayments. Don’t saddle me with a long-term commitment. I have enough of those. Don’t litter my screen with pop ups and flashing lights trying to sell me crap. (That said, a third option to a subscription or a micropayment might be to watch, say, a thirty second video advertising some product before reading the article. I notice that Fox already does this for online video.) Just give me the option of paying a small fee to read something that interests me.

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