Why Authors & Publishers need to beware geeks bearing gifts

If there’s a single rule that authors and Publishers need to keep in mind, it’s – Beware Geeks bearing Gifts.

Actually, they should beware Greeks bearing Gifts too, especially if they are Horse shaped.

Please Note: If you prefer, replace ‘geeks’ with – Really intelligent and really delusional technology companies that would gladly destroy a market so that they can make a little money. Companies that would also want credit for destroying the market because they are so delusional that they truly believe they were trying to save the market.

Beware Geeks Bearing Gifts

That’s the golden rule.

It doesn’t matter how decent or altruistic or polite or considerate the company seems to be. That company is just trying to use the chaos in Publishing and your struggles to weasel its way in and make some money.

Evolution is cruel. Nature is cruel. The strong prey on the weak.

People who are forthright about their intention to compete are OK – they are a known quantity. The known devil, you can prepare for. People who pretend to be helping you, but are secretly waiting for the right moment to pull a Brutus, are infinitely dangerous.

Authors and Publishers would be well-served by keeping in mind that any person/company always acts in self-interest. Publishers and Platforms are fine – Because they are clearly outlining what their cut is. However, anyone who’s offering you a free ride is going to end up stealing your lunch.

In the chaos there will be lots of companies that will offer opportunities that seem too good to be true – Guess what, they are too good to be true.

Here are some typical promises -

  1. All your problems, mostly due to legacy systems and inefficient ways of doing business, will magically go away if you give us all your books for free. 
  2. We will make you so much money you won’t be able to count it – Except first you have to give us X, Y, and Z.
  3. You can make far more money from advertising than from selling. 
  4. All these people, who don’t read and don’t want to read, will start reading if you do X (which benefits us and hurts you).
  5. Transfer over all your brand power to us.
  6. Let us set up a store for you. See how well it worked for Borders when it let Amazon run its store.
  7. Give away your content for free and make money from other things. Look how much money newspapers are making from this approach.

It’s all trickery. Super intelligent technology companies are tricking you (and sometimes even themselves) and pretending that they want to help you – their true motivation is to steal your market’s profits.

The rule is very simple – Beware anyone who claims that their main motive is to help you. Most of all – Beware geeks bearing gifts.

Why Technology Companies are the Unknown Devil

We have had a big shift from the time when companies wanted to create products and sell them. Now companies want to get users and other companies to work for free and create content/a product/a service, claim ownership of that content/product/service, and profit from it.

Look at YouTube and Social Networks. They are doing nothing other than getting people to work for them for free.

Other, newer sites are going a step beyond. They are selling people virtual goods and are simulataneously selling users’ private information to advertisers.

In this environment, where all we have are looters and arbitrage experts, if a company is telling you – Let us help you, for free. Perhaps it’s a good idea to be very wary.

An Example – Scribd

Here are two things Scribd was, intentionally or unintentionally, doing – making money by running advertisements against pirated material, making money by selling subscriptions for books/content written by other people.

Notice that in their minds this is perfectly justified because they are providing a service.

Publishers partnered up with Scribd to sell books. What part of ‘this site makes money by letting people access pirated material’ did Publishers not understand?

Technology Companies are masters at fooling everyone

Including themselves.

Here’s what actually happens -

  1. Company X sees an opportunity to come in and eat up 50% of the profit in books.
  2. It deludes itself into believing that its real motivation is helping Publishers. Note that this step is critical for it to be successful.
  3. It talks to Publishers as if the spirit of Mother Teresa has suddenly entered its corporate culture and the $23.8 billion in annual revenue books generate in the US never crossed its mind.
  4. It convinces Publishers to trust it and place one or more strategic elements/assets under its command – the starting point, the decision point, the branding, the actual books, the purchase point.
  5. It gradually takes over power. Then it takes over profit.

Publishers won’t realize what’s hit them until they find themselves marginalized.

They should look very carefully at what happened with newspapers. Everyone on the Internet talked newspaper publishers into giving away all their news content for free. Lots of people made money from blogs and advertising. Newspapers got destroyed.

Book Publishers would be well served by looking at everyone who ‘helped’ newspapers and avoiding every single one of them. They would also be well served by reviewing all the arguments newspaper publishers fell for – being on the Internet is necessary, advertising is the future, go for volume rather than good customers, give away your main product for free, you must be on the Internet to survive.

Amazon and Apple and B&N are honest. They are not the enemy

All the companies that Publishers are upset with – Amazon (because it is becoming powerful), Apple (because it won’t share user information), B&N (because it is a big player in both physical books and ebooks) – are not the enemy.

They are forthright about wanting a cut, and about wanting a cut that’s painfully inconvenient to Publishers. Publishers have to understand that they will have to hand out a large cut – one that pains them inordinately.

However, they are still in the thrall of a greed that says they could have everything they desire. And companies are more than willing to exploit that greed.

These companies offer solutions that seem too good to be true. These companies intend to leave publishers and authors with nothing.

Authors and Publishers should run away when they see technology companies with ‘gifts’

Here’s a rough translation of the language the ‘saviors of Publishers’ use -

  1. There’s lots of money in advertising. For us. 
  2. No one reads any more. You should give away your books for free to us. 
  3. You don’t need to change your processes. We plan to take over your customers so being efficient won’t matter. 
  4. Look at how well the music business did. Perhaps you’re stupid enough to believe us. 
  5. You let us do the tough part. That’s the part where all the power and control lies. 
  6. Let’s do subscriptions and make more money. Let us control the customers, the product package, and the content delivery. 
  7.  We really want to help you. Help us get rich.
  8. You could make more money. We could make more money.
  9. There’s an easy solution. This is how you can die quicker. 
  10. Converting eBook Formats is going to cost $5,000 per book.You really are gullible.

It’s tough.

Technology companies see the fear and desperation of Publishers and Authors and promise them a way out. They see the greed and hubris of Authors and Publishers and they promise them ways to make more money.

It’s like a bunch of vultures circling a man in the desert. The man is desperate and fools himself into thinking the vultures are friendly and directing him to the nearest oasis. We all know how the story ends.

6 Responses

  1. One might say the same sorts of things about publishers and authors: give us the lion’s share of revenue because we have magic that can make your book successful, when in fact, for all but a tiny percentage of writers, the publisher does virtually nothing to make a book successful.

    A better way to think about this is that the market is made up of a number of participants, each of whom has individual motives and goals, some of which are congruent and many of which are not. Successful incumbents always criticize new modes.

    • Yes, that’s very true. However, the new devils are much craftier and much more dangerous than the older ones. At least Publishers were giving writers advances and royalties. Ask the people working with the new tech companies what they are getting.

  2. You’re right in saying that the companies who are forthright about turning a profit aren’t the enemy. Apple/B&N/Amazon WANT books to be realisitcally priced, or else there’s no cut, no profit for them. $0-$1 books make them nothing.

    The real enemy in my mind is Google, the biggest one of the new crop of pied-piper, come-hither companies that promise fatness while they slowly starve you to death.

    Their goal is to sell advertising, as that’s the main way they make money. Not sure how licensing for Android enters in the equation. They’ll give away the farm to sell their advertising, all the while telling publishers and authors that they’re doing them a favor, garnering customers for them.

    In the end, they’re like a colony of termites devouring the publishing industry from the inside. Sooner or later the whole structure will come crashing down.

  3. You forgot to mention:

    * You need to use our DRM to stop your sales plummeting (and incidentally, pay us $0.22 for every book you sell. And tens of thousands in set-up costs)

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