Kindle Review – Kindle Fire Review, Kindle 4 Review

Taking a break from the Kindle 3 to talk about a really interesting example of what the new middle-men in Publishing might look like.

First, let’s jump into what we mean by middle-men and how they’re different from enablers.

Enablers vs Middle-men (aka Stealers)

Let’s start with a rather simplistic model -

1. Author. 
2. Enablers or Middle-men. 
3. Reader.

Anything that comes between the author and reader is an enabler if it provides a valuable service for a reasonable or low price. It’s a middle-man if it provides a service but overcharges or if it creates the illusion that a service it provides is necessary and inserts it in between the author and the reader.

Here are a few examples -

1. Publisher asking for 20% to 25% – Enabler.
2. Publisher giving 25% – Middle-man/Stealer.
3. Platform asking for 10% to 30% – Enabler.
4. Platform asking for 50% – Stealer/middle-man.
5. Agent asking for 10% to 15% and handling ebooks – Enabler.

Any company that is an enabler is tempted to become a stealer. The more its power, the less the competition, the more naive the customers (readers and authors) – the higher the temptation for an enabler to paint itself as an ‘infinitely valuable’ middle-man that is more important than readers and more important than authors.

Scribd’s latest move shows it’s got a middle-man mentality

Initially Scribd was trying to make money by showing ads next to free documents. This is a bit of a middle-man thing to do – what differentiates it as a middle-man strategy is that the people creating and putting up documents weren’t getting any share of the money.

The argument/justification was that it was paying for server costs. That’s a nonsense argument since the company exists to make profit and trying to pretend it’s ‘just covering the costs’ and not trying to make money from other people’s free documents is hypocrisy. It’s fine to make money as long as the enabler/middle-man makes sure authors make money too - It shouldn’t try to steal their work under the guise of giving them publicity or covering server costs.

Now, Scribd has gone even further into middle-man/stealer territory by asking readers to start a paid subscription to download free documents - a paid subscription whose proceeds are not shared with the authors and other people who have put up their documents.

At Teleread Paul Biba covers author Lynn Viehl’s unmasking of this rather creepy move -

It’s been brought to my attention that Scribd.com has begun charging people to download my free e-books hosted on their site.

To get around my copyright and the free distribution notice I’ve placed in each e-book, they are using an archive subscription scam to make their money (this also neatly avoids them having to pay me any royalties on the profits they make).

Evidently all the money they’ve been raking in from the Google ads they’ve posted on my e-book pages hasn’t been enough for them.

Sites like Hacker News have also discussed this and a lot of people think it’s a rather scammy move.

There’s an opt-out – However, it’s rather wrong to claim that an opt-out is enough. If the default behavior is to enroll authors’ documents into the subscription service and not pay authors anything then it’s stealing.

Hiding behind ‘it covers server costs’ or ‘there’s an opt out’ is weak. This is so bad and dishonest that won’t compare it with anything Publishers do – Publishers are only guilty of over-charging plus they share book revenue with authors. Scribd’s move is a revoltingly scummy move – authors get zero percent of the money they help generate.

This is the perfect example of how middle-men will try to steal from Authors and Readers

Scribd is doing us all a service by using such a weak argument and being so bad at being evil. If a company were very efficient they would make enough money from ads against free books, not pay authors whose books were generating the money, and enjoy the profits.

Scribd isn’t competent enough so it has to resort to a ‘subscription’ service. It’s also not smart enough to offer authors a small 15% cut by default with the option to opt-out if they don’t like the cut. By not giving authors anything they’re exposing the fact that they’re stealing from authors.

It’s an important lesson for authors – If someone can profit from your work and exploit you they will.

There are always middle-men or people trying to be middle-men

There is a continuum of approaches - Starting from people who will help others selflessly to those who will exploit others heartlessly. We aren’t making any judgements here since they are all strategies – We’re simply pointing out that there will always be people who try to steal value.

Authors and Readers have to be aware that there will always be people like Scribd – that charge readers for stuff that is free under the guise of ‘server costs’ and don’t share the money generated with authors. It’s the latter part that is particularly painful since Scribd is doing nothing except providing hosting for the authors’ work and instead of a 10% or 30% cut it wants to keep all 100%.

Add on the fact that Scribd hosts a lot of pirated books and things look even worse. There, again, they have an ‘opt-out’ of sorts – They’ll remove any pirated works you report but don’t really proactively fight piracy.

It’s up to us to not let middle-men steal from us. They’ll always hide under excuses and try to trick us if we let them.

How can Readers and Authors avoid the middle-men?

We’re at a stage with ebooks where we have three working models -

1. Authors self-publish and get 70% while the platform (also the device creator) gets 30%. 
2. Authors publish via an agent or via a new Publishing upstart and get 55% while platform gets 30% and agent/upstart gets 15%.
3. Authors publish via Publishers and get 25% to 50% while Platform gets 30% and Publishers gets rest.

The first two are ideal models and the third is ideal if Authors get 50%.

• Any model that offers Authors less than 50% is likely to be a scam.
• If a model doesn’t provide the value a platform does (including a device to read on) and still wants 30% then it’s likely to be a scam.
• If a model doesn’t provide the value a platform does and doesn’t help authors like Publishers/Agents do and still wants 50% then it’s likely to be a scam too.

As long as we avoid new middle-men like Scribd that pretend server costs take up 100% (or even 25%) of book revenues we will be fine. We also need to be wary of free models that claim they’ll make enough money from ads to sustain books and authors.

The Myth of Sustainable Free Books supported by Advertising

As readers we’re tempted to believe that we can magically pay nothing, click a few ads once in a while, and get books for free – it’s an illusion. Advertising isn’t enough to sustain books and it’s going to affect authors and books in the long run. That, in turn, will affect us readers.

Scribd has shown that free doesn’t work – It pays nothing for all the documents that are uploaded and it pays nothing to authors. Still it can’t make a profit.

If a company comes in and claims that not only can it make a profit from books it can also pay authors you have to wonder what magical potion it has - How can it generate so much profit when Scribd can’t even be profitable?

If you look under its marketing/PR cover you’ll notice that its model doesn’t guarantee authors anything but guarantees the company itself profits and power. Then you know it’s just our good old middle-man/stealer in a new guise. Publishing is in flux and we have the inefficient Publishers that want 75% of ebook revenue, the efficient Platforms that want 30%, and all the stealers that either want 100% or want a share disproportionate to the value they provide.

Filed under: publishing Tagged: | future of publishing, the pipeline