…probably introduced movable type to Europe, and is likely to have developed the earliest European printing press.

He is sometimes said to have started the Printing Revolution, regarded as the most important event of the modern period.

It played a key role in the development of the Renaissance, Reformation and the Scientific Revolution and laid the material basis for the modern knowledge-based economy and the spread of learning to the masses.

So we have a pretty intimidating frame of reference to compare eReaders and eBooks to – The Gutenberg Press played a key role in the development of the Renaissance, Reformation and the Scientific Revolution. The Gutenberg Press laid the basis for the knowledge economy and brought learning to the masses.

Here’s a quote talking about the impact of Gutenberg’s Printing Press  -

As early as 1620, the English statesman and philosopher Francis Bacon could write that typographical printing has “changed the whole face and state of things throughout the world” 

The first question that comes up is – Will eReaders and eBooks have similar impact?

eReaders & eBooks are unlikely to have the scale of impact of the Printing Press

The primary reason is that books already exist and they aren’t really very expensive. We aren’t going through a big jump from ‘books only being affordable to the top few percent of the population’ to ‘books being available to a huge percentage of the population’.

That opportunity doesn’t exist because Gutenberg and his Press already took it.

The secondary reason (and this is a really big one too) is that the Internet already exists and it’s already done a lot of what ebooks possibly could have. The barriers are already gone. Information is already spreading wildly and freely.

There might not be a big, huge oppportunity for ebooks to make pivotal impact. Because they arrive after Gutenberg and after the Internet.

Which brings us to our second question – What big positive impact are eReaders and eBooks having?

Are eReaders & eBooks making books more accessible?

Yes. We can definitely point to a few things here -

1. Anyone can read all public domain books for free now.
2. Books are available instantly.
3. Books are slowly becoming cheaper.
4. People who had limited access to books earlier - now have more access.
5. More people are able to offer books so the choice available is increasing.

There is, however, a twist.

When absolutely anyone can publish books, and lots of people are, we run into a signal versus noise problem.

Have eReaders & eBooks made it too easy to publish and spread books?

You have to wonder.

1. If there is no barrier to publishing a book – Is that really a good thing?
2. If the amount of noise keeps increasing – Is that going to scare people away from books?
3. If there is no real barrier to the spread of a book - Are there any dangers?
4. Since the lack of barriers also applies to things like stealing books – Is this going to reduce money earned by authors and publishers to the point that it starts affecting quality?
5. Are we getting too much of a good thing?

I think the Law of Unintended Consequences is going to do a real number on everyone in books (including readers and authors).

The Law of Unintended Consequences & Books

There are two separate things:

1. Letting anyone who wants to publish, publish.
2. Making it easy to publish – even if you shouldn’t be publishing.

These are intertwined and have opposing effects. 

1. The first is good. It’s about freedom and the democratization of publishing.
2. The second is bad. It’s about a lack of quality control and about terrible books drowning out the good ones.

Kindle and Nook and eBooks were supposed to allow people to publish. To let deserving authors bypass the Gatekeepers and go straight to readers. To let authors take 90% of the earnings instead of 10%.

The Law of Unintended Consequences says:

1. In parallel with X deserving authors, we’ll have 10X undeserving authors who will also publish. ‘Undeserving’ is a very loaded term – interpret it as people who haven’t worked on the craft of writing enough to be worth readers’ time.
2. Authors will get a larger share of earnings. At the same time the amount of earnings will start to plummet.
3. There will be so much competition and such little defensibility that books as an industry will begin to disappear.

You can’t stop people from having free access to your books. You can’t stop authors and semi-authors and pretend-authors from publishing books. Readers can’t handle the sheer volume of published books. It’s spinning out of control.

eReaders and eBooks might mark the ‘Public Domain’ization of ALL books (new or old)

What has happened is that the minute you release an eBook, or for that matter a printed book, you leave it up to readers to decide what they will pay for it.

Readers don’t fully understand this. Authors don’t understand that readers have the option to pay zero. No one is willing to admit that sooner or later people will choose to buy a $4 cup of coffee and read the latest bestseller for free (as opposed to paying for the bestseller).

As soon as readers get a reason that satisfies their need to ‘not be the bad person’, they will gladly switch over to reading books without paying for them. They just need a reason – ads, price too high, restrictions, anything – and they will gladly switch to a model where they don’t pay or where they pay a ridiculously low amount.

In effect, your book is ‘public domain’ the minute it gets converted into ebook format. You can come up with ways to try to get people to pay for them. However, it’s going to be difficult – particularly as more and more kids trained to get everything (music, movies, games) free online grow up and expect the same from books. What makes books and authors special? Why aren’t books free like everything else?

The Legacy of eReaders and eBooks might be the conversion of books to works of charity

Think back to the ‘value perception of books’ in 2007. Now consider what the current value perception of books is. It’s changed a lot.

Can you imagine someone walking into a bookstore in 2007 and asking for the latest bestseller to be $3 or even $1? Yet, that is routinely what people are now asking for ebooks to be priced at. These are the same people who have all the power – they can just download the book for free.

eReaders and eBooks are building up two legacies -

1. Anyone can get a book without paying the author of the book anything.
2. Anyone can publish and dilute the average quality of books.

Both of these play into each other. More books = more competition = lower prices. Lower prices = lower quality = less differentiation. The net result is that eReaders and eBooks might end up doing a lot more bad than good.

Perhaps it isn’t the best thing in the world to remove all barriers and let people do whatever they want. Pay whatever they want. Publish whatever they want.

My prediction is that people will look back at the Kindle & Nook era in 100 years as the ‘dark age of books’. That what happens in books in the next 10 to 30 years due to eReaders and eBooks and human nature being left unchecked is going to be very damaging for books. This is no Guternberg’s Press. This is more like a storm that uproots the very foundation of a business model that, despite its faults, has some redeeming qualities. A storm that leaves behind a world where books are everyone’s property and the incentive and resources for crafting great books are diminished significantly.

Jonathan Strange and Mr Norrell by Susanna Clark. Price: $2.99. This, the 2005 Hugo award winner for Best Novel and a Nebula nominee, is a book full of the fantastic that embodies Sci-Fi. Rife with period-related witticisms and magic, this novel is perfect for grown-up fans of the Harry Potter series.

“Coraline” by Neil Gaiman. Price: $6.99. This short and fabulous piece of short fiction won the Hugo award for Best Novella in 2003. Fanciful, yet dark occurrences haunt the life of a young girl who finds a different world through a small door in her home. Like all Gaiman work, this piece will delight all readers with an ensnaring plot and engaging characters.

To Say Nothing of the Dog by Connie Willis. Price: $7.99. The 1999 winner of the Hugo award for Best Novel and a Nebula nominee, this novel is an epic of epochs. With romance, comedy, and time travel all interwoven within the plot, this is truly an amazing and intriguing story.

The Diamond Age by Neal Stephenson. Price: $11.99. This novel won the 1996 Hugo award for Best Novel and was also a Nebula award nominee. It is the story of a device derived from nano-technology that was intended to free one young girls thinking and ends up in the hands of another girl. Despite its high-tech feel, this novel is appropriate for all readers who enjoy a well-told story.

Hyperion by Dan Simmons. Price: $7.99. This winner of the 1990 Best Novel Hugo award is a tale of Armageddon. In another time, there is a galactic war raging. A pilgrimage to Hyperion is humanity’s last hope. This is a fantastic read for lovers of classic Science Fiction.

Cosmos by Carl Sagan. Price: $6.39. The winner of the Best Non-Fiction Hugo award in 1981 spawned a television show which was the inspiration for nearly every related TV show that followed. This is a great book to start or end your space education.

The Forever War by Joe Haldeman. Price: $4.95. The 1976 winner of both a Nebula and a Hugo award was mildly controversial. It was published with parts omitted by the publisher, but those parts have been included in this version. It is the story of a soldier in a galactic war. The soldier faces difficulties re-adjusting to life on Earth after years away and returns to war. This book is ideal for fans of classic war stories.

The Dispossessed by Ursula K. Le Guin. Price: $7.99. This story won both the Nebula and Hugo awards in 1975. Like many Sci-Fi stories, it deeply explores the nature of humanity. Le Guin addresses issues involving choice, segregation, socialization, and so on. This is both an entertaining and important read for all Sci-Fi fans.

The Gods Themselves by Isaac Asimov. Price: $7.99. Asimov is a definitive name amongst Science Fiction readers and this 1973 Hugo and Nebula award winner shows just cause for his popularity. It is a story of fear and truth and paranoia. Like all work by Asimov, it will make the reader ponder about his own reactions to the proposed situations.

Stranger in a Strange Land by Robert A. Heinlein. Price: $7.99. The winner of 1962′s Best Novel Hugo and Nebula awards is a great example of Sci-Fi standing the test of time. It explores the nature of humanity through interaction with Martians and is relevant to today as well. This is a great eBook for any fan of explorative fiction.

The Long Goodbye by Raymond Chandler. Price: $8.99. This 1955 winner of the Edgar for best novel focuses on Chandler’s famous character, Philip Marlowe. While criticisms are split, Chandler considered this his own best work. It is a thrilling novel that is perfect for fans of film noir.

In the Heat of the Night by John Ball. Price: $4.49. This book won the best first novel by an American author category in 1966. This book inspired a film and television spin-off because of its potent civil rights commentary.

Black Cherry Blues by James Lee Burke. Price: $7.99. This 1990 best novel Edgar award winner takes the detective novel to new heights with exciting twists and gruesome turns. Like In the Heat of the Night, it explores racial issues in a mystery format.

The Chatham School Affair by Thomas H. Cook. Price: $6.39. The 1997 winner of the Edgar’s best novel is a 1920′s period piece. This novel is an exciting tale full of murder, mystery, and madness. Readers will find this work equally exciting and disturbing.

Los Alamos by Joseph Kanon. Price: $6.39. The 1998 winner of the Edgar for best first novel by an American author is a classic thriller. Centred around the atomic bomb and its creation, this story brings the murder mystery to a topical and intriguing place.

Mr White’s Confession by Robert Clark. Price: $4.95. This 1999 winner of the Edgar for best novel is Clark’s second work. After the murder of several people, the seemingly open and shut case becomes much more complicated than expected. The expected murderer has a memory disorder and is incapable of remembering or confessing to the murder. This unique story is as engulfing as a mystery novel can be.

Bones by Jan Burke. Price: $9.99. The 2000 winner of best novel is one of a number of novels written by Burke about her crime-writing character, Irene Kelly. Kelly becomes involved in the life of a serial killer who targets women just like her, leading her on a shocking adventure.

Winter and Night by S.J. Rozan. Price: $8.96. This book won the 2003 best novel Edgar award and is another on this list that is a part of a detective series. It focuses on the lives of two New York City detectives and the mystery that surrounds one detective’s sister and her son. Unexpected and tragic events unfold as the mystery is explored.

Resurrection Men by Ian Rankin. Price: $7.59. The 2004 best novel winner explores the experiences of several police officers sent back to school for re-training. The lead character, John Rebus, discovers corruption in the ranks. A fantastic story for those who prefer less gruesome and more mysterious work.

Death of a Nationalist by Rebecca Pawel. Price: $9.49. The 2004 winner for best first novel by an American author takes place in Madrid in the 1930′s. This novel takes a more stoic approach to mystery, incorporating emotion and tragedy in a way that the other books on this list may have missed. A great read for history buffs who enjoy the occasional mystery novel.

We take the story the author has laid down for us, and the context and framework she has created, and fill it out with our imaginations.

This is one of the key differentiators – why even a ‘frivolous’ thriller or ‘flaky’ romance novel is better than nearly any other type of entertainment. We are actively constructing the world in our heads. It’s our creation, our masterpiece – built on the framework and story the author provides.

The author might paint an exquisite framework – a lonely alley in 1865 London with a Vampire possibly hiding in the shadows. However, it’s just a framework. It’s we the readers who fill it out. What the alley looks like. What it feels like. The sights and sounds and smells. The feeling of fear. The Vampire.

This is why no movie based on a book ever measures up to our expectation of the book. The best director in the world can’t compare to the worlds we have created for ourselves. All the limitations he faces – just don’t exist in our imaginations.

********

Which brings us to why full-length novels are much better than short stories and novellas.

A full-length novel does three things – it gives us enough time to fully flesh out the story in our heads, it allows us to fully connect with and feel for the characters (to develop an attachment to them), it allows us to step fully into the world of the book.

The first is all about submodalities and the fineness of the story-painting in our heads. With a short story we have ended before we have formed the images fully in our heads. The protagonist is a paper cutout instead of a person, the city is a movie-set instead of a living, breathing city. A full-length book allows us to create the world fully and fill it with the submodalities we like and imagine.

The second is about the characters. Over the course of a full-length novel we develop an attachment to the main characters. We understand them better. We think about their motivations and worry about them or hope they get their just desserts. They start morphing into people – people we wonder about and people we want to read more about.

The third is the experience of stepping out of our world and stepping into the world of the book. With a short story, by the time you begin to step from the cold, foggy street into the warm comfort of the house – the house has vanished. You’re left in the void between your own world and the beautiful, compelling world you were creating while reading. A full-length book lets you go further and further into the world. This is why we don’t want to leave a good book in the middle. It’s a world and a story that we are creating/building - one that literally draws us in.

This act of creating worlds in our heads. The passion and skill and actual effort involved in fleshing out all the details and creating something of our own. It’s Participation. Life is a Participation sport.

*****************************

Project Gutenberg is a really amazing website/resource and here are some of the things I’m very thankful for -

1. Lots and lots of great books – for free.
2. Very readable versions with relatively few mistakes. Which is more than can be said of books built via Optical Image Misrecognition and even of most published ebooks.
3. They are free. Actual Free. Not ‘if you use it, whatever you make from it has to be free’ free. Not ‘we will show you ads’ free. Not ‘you have to subscribe to our particular Internet religion’ free. Just plain free.
4. They cover the most often read books. 36,000 free books seems to be dwarfed by the millions that various sites claim. However, 80% of the public domain books you will want to read are probably at Project Gutenberg, and they are in excellent shape.
5. Project Gutenberg and other similar sites like ManyBooks have played a huge role in the rise of ebooks and eReaders. The benefit of being able to get all the classics for free on an eReader is huge.

Here’s one interesting snippet from the obituary -

Hart was inspired by his parents, both professors at the University of Illinois, to seek truth and to question authority. One of his favorite recent quotes, credited to George Bernard Shaw, is characteristic of his approach to life:

 "Reasonable people adapt themselves to the world.  Unreasonable
 people attempt to adapt the world to themselves.  All progress,
 therefore, depends on unreasonable people."

And here’s another -

In July 2011, Michael wrote these words, which summarize his goals and his lasting legacy: “One thing about eBooks that most people haven’t thought much is that eBooks are the very first thing that we’re all able to have as much as we want other than air. Think about that for a moment and you realize we are in the right job.” He had this advice for those seeking to make literature available to all people, especially children:

 "Learning is its own reward.  Nothing I can
 say is better than that."

Project Gutenberg has played, and continues to play, a huge role in a lot of important areas. It’s hard to understate just how important it is for books and reading and for the future of books and ebooks. Mr. Michael Hart has done something absolutely incredible with Project Gutenberg. Hopefully people continue to do amazing things like this.

1. Simon Wood – Accidents Waiting to Happen is $1 and at #3, The Fall Guy is $1 and at #52. 
2. Pat Gragg – The Rose Killer is $1 and at #6,
3. Courtney Milan – Unlocked is $1 and at #9.
4. J Carson Black – Darkness on the Edge of Town is $1 and at #10, Dark Side of the Moon is $1 and at #97. 
5. Erin Kern – Looking for Trouble is $1 and at #15,
6. Michael Prescott – Shiver is $1 and at #18, Mortal Pursuit is $1 and at #28, Stealing Faces is $1 and at #55, Riptide is $1 and at #92. These books seem to be ebook versions of previously published books. However, they are published by the author and should count as self-published.
7. Emma Jay – Eye of the Beholder is $1 and at #23.
8. Carol Grace – Lonely Millionaire is $1 and at #32. This is rated only 3.5 stars.
9. Peggy A. Edelheit – The Puzzle is $1 and at #35, Without Any Warning is $1 and at #91.
10. Joan Reeves - Jane ‘I’m Still Single’ Jones is $1 and at #52, Just One Look is $1 and at #82.. 
11. Cathy Wiley – Dead to Writes is $1 and #57.
12. Christian Cantrell – Containment is $1 and at #78. This one’s really worth checking out.
13. Kelly McClymer – The Fairy Tale Bride is $1 and at #94.

Some highlights – Each of the books is at $1. There are 13 indie authors in the Top 100. There are 20 books by indie authors in the Top 100.

What’s really interesting is that except for Simon Wood and J Carson Black and Christian Cantrell these aren’t the usual suspects. Very few of these indie authors have made it to the Top 100 before or have shown the usual signs of indie superstardom. Amazon has made them the chosen few for some reason that escapes me.

With Sunshine Deals earlier in the month, and this huge boost to indie titles now, Amazon is sending the Big 6 a message.

Could it be anything to do with a possible July announcement of the new Kindle Tablet and/or the new Kindle 4?

Why is Amazon suddenly making a huge push with these particular indie authors? There are so many indie authors who worked hard and clawed their way to the Top 100 or the Top 200 – Why not focus on them first?

How do you review a John Locke novel?

Read Saving Rachel and thought of writing a review but don’t really know how to write one. I really liked it. It was a quick read – perhaps just 1.5 to 2 hours. It was fun. It was likable. However, it’s not something that’s going to make it to the Top 100 list of best books you’ve ever read.

It was like watching a movie with one actor you really like and then realizing that the movie wasn’t all that good but it was fun because of that one actor (both Larry the Cable Guy and Dwayne ‘The Rock’ Johnson seem to specialize in this – making totally unmemorable movies that are quite a lot of fun to watch).

At the end of the novel it was abundantly clear why so many people love John Locke (his novels are fun and are a good read and are full of twists and turns and some genuinely funny moments) and why so many people dislike him (it’s hard to imagine his books winning any literary prizes, plus some of the things are beyond unbelievable).

If it’s possible (and it probably is) to give a novel 5 stars on fun and value for money and 1 star on lasting significance – Saving Rachel fits the bill perfectly. It’s like The Hangover in book form. It’s not going to help you understand the meaning of life (or the meaning of anything) but it’s still fun enough for you to feel the time is well-spent.

1. You can make a lot more money.
2. You make readers feel its worth their time. If it’s $15, then it must be good and readers’ time is worth $X per hour anyways – might as well spend $15 on something that is ‘vetted’.
3. You get readers invested – If they paid $15 they must read it, they must like it a little more than if they paid less, they must buy future books.
4. You can provide higher quality. Spend 20% of the price on quality and you get $3 per copy sold.
5. You set the book apart as a book for discerning readers.
6. You can position the book as a luxury – indulge yourself; because you deserve it; you get what you pay for.
7. Some Authors feel a high-priced book is like Viagra for their self-esteem.
8. Scarcity. Readers feel not everyone can get it.
9. Readers have to ‘sacrifice’ for the book and they are more open to appreciating it.

The main benefits revolve around earning more profits, having more money to put back into the business, and getting your customers much more invested in your book.

Here are some reasons why selling $1 books is better business -

1. There is very little friction. It becomes an impulse buy for nearly everyone.
2. You minimize regret – If the user doesn’t like your book, she has only lost $1.
3. Your book isn’t a budget buster. No calculations required. No wondering whether the budget will be exceeded. 
4. You can convert people who are ‘somewhat interested’.
5. You get much better sales volume, which translates into higher sales rank and better visibility.
6. You can convert people who don’t normally read that particular genre.
7. You are providing more value for money so reviews are better and ratings are a bit higher.
8. You make it easy for users and they appreciate it. On the flip side, the anticipation is gone.
9. There are entire countries (India, China, most of Africa, some of South America) where $1 is like $4 and $10 is like $40. By going with $1 you double or triple the size of your potential market.
10. If you have multiple $1 books, often people will impulse buy all or most of them.
11. You increase the pleasure per dollar spent.
12. You have a chance of making greater total profit due to much higher sales volume. You also risk the possibility that you will make very little profit despite higher sales.
13. You increase the number of people who have access to your book. The actual number who read it may or may not increase.

The main benefits revolve around – massively increasing the size of your potential market, greatly reducing friction, providing a lot more value for money (minimizing regret, maximizing pleasure).

There are significant disadvantages – people are less likely to actually read your book, you lose ‘prestige’ and ‘exclusivity’, you lose some readers who think a low price must mean low quality, you run the risk of ending up with far less profit.

It’s not an easy decision. The one really interesting thing is that the $1 book and the $15 book set off each other – they make each other’s strengths more obvious and each other’s weaknesses more apparent.

There might even come a time when $15 books (via ‘quality’) or $1 books (via ‘value for money’) destroy the prospects of the other. For the moment, it’s a very interesting juxtaposition – Publishers pricing ebooks at $12.99 and $14.99, indie authors going with $1 and $2.99. At some point of time, things will break in one direction or perhaps two separate classes of books will be created. The risk for Publishers is that if indie books can improve quality (or if Kindle owners and Nook owners can do effective ‘curation’ via reviews) their offerings will get slaughtered.

The most controversial Book Settlement ever proposed was rejected. Judge Chin has made a marvellous decision and he’s a hero – if it’s not clear now, it will be clear to future generations.

First, some documents and links -

1. Judge Chin’s Statement (PDF). 
2. Caroline McCarthy’s Article on Judge Chin rejecting the Book Settlement. 

Next, my take – which is admittedly biased by the fact that I feel every creator should have a right to decide how his work will be used, and who can profit from it.

Key Parts of Judge Chin’s Statement

These paint a very good picture of why the Settlement was rejected.

The question presented is whether the ASA is fair, adequate, and reasonable. I conclude that it is not.

… would grant Google significant rights to exploit entire books, without permission of the copyright owners.

would give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission.

Seriously, Judge Chin is my hero for looking past all the ‘Let’s Save the Penguins’ rhetoric. He recognized that this was basically Publishers etc. ’stealing other people’s work’ with the added bonus that it would create a monopoly for a company that already controls Search.

Would dead authors and people who have forgotten about their work want their work to benefit readers? Or would they rather that their work makes money for corporations?

The corporations are trying to have us believe that they are doing it to save baby seals who will be clubbed to death if the corporations don’t make money from other people’s work. What nonsense - We aren’t the TV generation, and we aren’t going to fall for infantile trickery.

Judge Chin points out that there are lots of benefits of the Settlement and then points out the objections from people opposed to the Settlement. He also gives his take on each (Judge Chin’s take in italics).

1. Adequacy of Class Notice. The Class Settlement has a ridiculously huge ‘class’ – Pretty much anyone who owns a US copyright interest in one or more books and their heirs and successors. A lot of these class holders were not given adequate notice. Judge Chin rejected this argument.
2. Adequacy of Class Representation. Interests of some class members, such as foreign rights holders, are at odds with interests of Publishers and Google. Judge Chin agreed with this -
   

   I conclude that there is a substantial question as to the existence of antagonistic interests between named plaintiffs and certain members of the class.

3. Scope of Relief. The Settlement would create a ‘forward-looking’ business arrangement. Judge Chin agreed with this objection, i.e. the Settlement doesn’t just address Google’s copyright violations, it also transfers certain rights to Google.
   

   As articulated by the United States, the ASA “is an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the Court in this litigation.” (DOJ Statement)

   Judge Chin goes on to say that this is a matter for Congress, that the Settlement would release claims well beyond those currently being contemplated, and that interests of certain rights holders (like academic authors) have not been considered.

4. Copyright Concerns. Violations of the Copyright Act because the Settlement pretty much runs roughshod over existing copyright laws. Judge Chin pointed out that the ‘opt-out’ nature would allow Google to exploit rights of authors who have not agreed to give up their copyright, that copyright is better suited to Congress, etc. The strongest point was that a copyright holder would have to take action to prevent losing rights – which you have to admit is pretty absurd. This is one snippet that is interesting -
   

   it is incongruous with the purpose of the copyright laws to place the onus on copyright owners to come forward to protect their rights when Google copied their works without first seeking their permission.

5. Anti-Trust Concerns. Google can sell subscriptions, sell books, sell advertising in books, and make other uses. While this is non-exclusive, it does, in effect, give Google a monopoly over orphan books and perhaps even digital books. A monopoly over orphan works and the Settlement would further strengthen Google’s dominant position in search. Basically, and these are my thoughts, it would give Google an almost unlimited supply of high quality content to use – content which other search engines would not have. Judge Chin is clearly concerned about the anti-trust aspects and about the advantage this would give Google in search.
6. Privacy Concerns. Google would collect all this information about people who read books. Judge Chin says the privacy concerns are real but not enough in themselves to reject the settlement.
7. International Law Concerns. The Settlement would, according to some foreign authors, violate International Law. Also, it would favor rightsholders from certain nations. Judge Chin sums up his concern here succinctly -
   

   The fact that other nations object to the ASA, contending that it would violate international principles and treaties, is yet another reason why the matter is best left to Congress.

So Judge Chin considers 5 out of the 7 concerns to be valid.

Judge Chin’s Conclusion

Here it is -

In the end, I conclude that the ASA is not fair, adequate, and reasonable.

As the United States and other objectors have noted, many of the concerns raised in the objections would be ameliorated if the ASA were converted from an “opt-out” settlement to an “opt-in” settlement. I urge the parties to consider revising the ASA accordingly.

There couldn’t be a harder slap in the face for the looters. If you want to steal other people’s work – first, you have to get them to opt-in. It’s absolutely delicious – Google thinks everyone’s an idiot and doesn’t understand the huge difference between opt-in and opt-out – Judge Chin just smacked them right across the face.

My take on Judge Chin rejecting the Settlement

Google and Publishers were trying to build a nice little monopoly for themselves. Which would lock out any other companies interested in ebooks and would take advantage of authors. Unfortunately, for them, Authors and Rival companies didn’t fall for the ‘Saving Penguins’ nonsense and objected and opted out and destroyed any chance of Publishers+Google getting away with this monopoly creating Agreement.

Judge Chin made an amazing decision. Notice his recommendation – Change it to an ‘opt-in’ instead of an ‘opt-out’. That’s brilliant. That ensures that only authors who actually know what the settlement is, and agree voluntarily to participate, are included.

The Huge Ramifications of the Book Settlement Rejection

Judge Chin’s rejection of the Settlement deals a heavy blow to Publishers and Google -

1. It kills Publishers hopes of a Divide and Conquer strategy. Without something like exclusive rights to all orphan works they have no way to slow down Amazon and B&N.
2. It significantly weakens Google’s dual hopes of a subscription based approach and of books supported by advertising. Both approaches depend heavily on having access to books other companies don’t have access to. They also depend heavily on offering orphan works as cheap throw-ins. No one ever considered the possibility that Google might just throw in these for free or very cheap to gain an advantage – that Google might have no interest at all in making rights holders any money.
3. It means that Amazon and Apple and B&N are safe. Publishers & Google do not get a permanent monopoly on orphan works – an advantage which no other company would ever be able to match.

Publishers intended to use the Settlement as a way to empower Google and turn the eBook Wars into a three-way tussle between Amazon and Apple and Google.

Google intended to use the Settlement as a way to introduce the virus of advertising-supported Free into the world of books. Note that 96% of Google’s revenue is advertising - it’s naive to assume that Google intended to focus on generating viable revenue for authors. It just wanted YouTube Part 2.

Google was extremely interested in giving away books and orphan works for free and very cheap (as part of subscriptions). It had little interest in maintaining the value of books. Why? Because enough pennies and they add up to something that even Google finds sizeable. Of course, authors would have their work devalued – But Google doesn’t care because pennies added up across all authors’ books leads to a lot. Who cares if authors starve?

A Win for Readers and Authors

Middle-men always have big promises – we are preserving books for future generations, we are letting authors make money from books that are out of print.

The truth is that middle-men are always leeches and parasites trying to take advantage of naive readers and gullible authors. Why try for an ‘opt-out’ agreement? Why try to make money from orphan works when the rights holders can’t be found? Shouldn’t those works be given away free?

Publishers and Google were creating a huge monopoly for themselves. Judge Chin saw through all the lies and hypocrisy and suggested exactly what the Settlement should have been – Valid only for authors who agree to participate.

All the layers between Authors and Readers are being stripped away. Platforms are useful and Apple and Amazon are earning their 30% cut. However, leeches that try to forcibly take the works of others and sell them for profit have no place in the New Publishing World.

End 2009 – eReader sales were assumed to be less than a million, eBook availability was limited, eReader prices were pretty high (around $299), eBook market share was only around 3% to 4%. For all practical purposes, there was absolutely no threat from eReaders and eBooks.

Now (Early 2011) – eReader sales are supposed to be over 10 million, eBook availability has more than doubled in the last 12-16 months, eReader prices are down to $139, eBook market share is 10% or higher. There seems to be little doubt that eReaders and eBooks are here to stay.

Just as End 2009 seemed dreary and harmless to Publishers, the current period seems to be bright and shiny and full of promise for eReaders and eBooks.

However, we only have to look back to what happened in end 2009 to see how dangerous complacency can be.

The End of 2009 Inflection Point

A few things happened at the end of 2009 that dramatically changed things -

1. B&N announced the Nook. Nook’s feature-list looked like a prioritized list of Kindle customer pain points with PDF support, library book support, and a lot more. It even came in at a lower price.
2. Amazon matched the price and some of the features.
3. Amazon ended up selling perhaps a million Kindles in the holiday 2009 stretch. B&N sold perhaps half a million Nooks.

That holiday season was the foundation for everything that has happened since. The shift was so huge that by early 2010 Publishers were jolted out of their complacency and introduced the Agency Model. They even partnered up with Apple to weaken eReaders.

Basically, Publishers’ complacency through most of 2009 came back to haunt them.

End 2009 became one of the most important inflection points in the rise of eBooks and eReaders.

Are we at a 2011 Publisher-created Inflection Point?

There are three interesting things happening -

1. The Big 6 Publishers are finally putting up a united front. All of them are now on The Agency Model – which becomes significant since they do have access to the majority of the literary talent.
2. By using $15 and $13, Publishers have, in effect, bifurcated readers into ‘people who can’t wait/people who don’t mind spending more’ and ‘people who boycott higher prices’. They might not have shifted everyone to $13, but they’ve shifted enough people to be able to stick with the Agency Model for the short term.
3. eReader and eBook companies are creating problems for each other. Apple is attacking eReader apps through its 30% tax, Publishers are forming partnerships with smaller retailers like Diesel Books and Scribd, Google is throwing its hat into the ring. Each new competitor is giving Publishers an opportunity to create one more Divide and Conquer crack. Each new competitor is confusing readers.

It’s an interesting theme – Publishers are uniting and they’re helping create divisions amongst everyone else.

Will eBooks be able to make it across the big divide?

Now, the Big 6 Publishers are all on the Agency Model. That means 60% of the ebooks sold, and perhaps a similar percentage of the best titles, will all be $13 at launch. It also means they will stay at $13 for 3 to 9 months after release.

A lot of people were buying eReaders because of cheap $9.99 books. If eBooks are almost as expensive as hardcovers the main reason to buy a Kindle or a Nook Color is gone?

Most of the advantages of the Kindle and the Nook Color aren’t obvious until you start using them. 60 second downloads doesn’t fully register until you actually get a book you want within a minute. No one’s been able to explain the benefits of eInk in language users understand – You have to read on it to get it. The list goes on.

For the rest of 2011, and perhaps for all of 2012, potential eReader owners will have to decide between -

1. Buying an eReader and getting Indie titles for $1 and published novels for $13.
2. Sticking with physical books and getting hardcovers for $14 and $15.

60% to 70% of the time the books people will want, will hear about, and will be waiting for – will be the $13 ebooks. Those can’t really compete effectively with $14 hardcovers.

Will indie authors be able to make up the difference? Will the FTC or some European Government strike down the Agency Model? Will published authors start leaving Publishers?

Something has to happen for eReaders and eBooks to regain their huge value for money advantage. The Agency Model has completely destroyed it.

We tend to underestimate inertia

The 10% of readers who have tasted freedom, who own eReaders, and who know all about lower prices and indie authors are not going to quit ebooks.

However, what about the 90% who don’t realize all the benefits?

Any reader who is new to ebooks needs a huge impetus to push her past her inertia. It’s only then that she makes the switch to eBooks. That impetus has mostly been provided by low-priced books. The belief/reality that you would save a lot on books was a big reason so many people jumped fearlessly into eReaders and eBooks.

If eBooks are $13 at launch, the ‘cheaper books’ motivator is gone.

eReader companies will have to find some huge benefit that replaces the value/motivation ‘books at $9.99 or less’ used to provide. It can’t be something you only understand after owning an eReader. It has to be something potential eReader owners instantly see the value of.

It’s hard to imagine what the answer could be - Perhaps a free collection of back list titles and public domain titles. Perhaps some completely new feature. Perhaps a $79 eReader. Perhaps a $10 per month all-you-can-read subscription plan.

We are at another crucial inflection point - Random House joining the Agency Model has triggered it. How eReader companies and readers react will determine whether this is the inflection point that will take eBooks to 50% or whether this is the inflection point that stalls eBooks at 20% of the market.

What price should books be? Is the Agency Model justified? Is it winning?

There are so many differing opinions on this that it seems like a possibility sword – everyone seems to believe and see a different possibility.

1. A few people firmly believe the Agency Model has won out. That’s hard to agree with when the #1 book in the Kindle Store is an indie book at $1.
2. A few people feel the Agency Model is a failure. That too is questionable since the #2 book in the Kindle Store is an Agency Model book at $13.
3. Some people seem to feel that prices between $5 and $10 are reasonable. It sounds perfect and very reasonable – except there are lots of books below $5 and lots of books above $10.
4. Other people feel that everyone should stop complaining about prices and not buy books they think are too expensive. It’s an interesting perspective – However, protesting is a way of bringing down prices and also a way of banding together. It is unrealistic to assume people will ever stop protesting about prices they don’t like.
5. A few people feel ebooks should be $1 or $2. That seems unsustainable but indie authors are pulling it off.

You could take absolutely any possible outcome of the eBook Pricing Wars and piece together enough evidence to make that particular outcome seem the one and only true outcome. Take the Top 100 Bestsellers list for example -

• 4 $1 books in the Top 10. That’s proof ebook prices are going to zero.
• 3 books above $10 in the Top 10. That’s proof the Agency Model has worked.
• 25 indie books in the Top 100. That must mean indie authors are taking over.
• 10 Publisher published books over $10, and another 13 between $3 and $10, in the Top 40. Publishers must be growing stronger than ever.

Which is it? What’s going on with ebook prices? Who’s winning?

At the moment no one knows.

The Ideal Price for eBooks might not exist

People assume there is a rational price for ebooks – one which makes sense to all involved parties. That once we arrive at this price, ebook prices will stabilize.

There is no such ‘magic price’.

Prices for ebooks can never stabilize because we have some very emotional factors and some very unexpected things coming into play -

1. Readers’ inability to wait for prices to drop. Why are $15 books still selling? Because some readers just can’t wait a few months.
2. Readers’ refusal to pay more than what paper books cost. Lots of readers absolutely refuse to pay more for an ebook than what the paperback costs. This makes it very difficult to settle on any price that lies between the paperback price and the hardcover price.
3. Publishers’ need to prop up their physical book business. Publishers’ attachment to their existing book business, and the fact that it’s 9 times bigger than ebooks, means that for the next few years ebooks will continue to pay for the sins of physical book publishing.
4. Publishers are trying to maximize profits. That means they are constantly trying to tweak prices. If we arrive at a stable price, Publishers will soon try to get 10% more. Of course, it cuts both ways – as soon as a stable price is arrived at, readers will ask for 10% less.
5. Readers have rationalized away any possible floor for ebook prices. We have begun to feel that there’s no reason ebooks couldn’t keep going lower and lower.
6. Authors are competing ruthlessly against each other. You arrive at a balanced, sustainable price on Monday, and on Tuesday some author is going to try to get an advantage by going 10% cheaper.
7. For new Authors it’s all upside. They have nothing to lose. Whether they sell a book for $10 or for $1, it doesn’t make much of a difference since their sales are so low.

There is no ideal price for ebooks. You could argue that the ideal price for Publishers is $100 per book, for readers is $0 per book, and for indie authors its any price that gets readers to read their books. However, all of these are competing against and coexisting with each other.

Boycotts do work – but not quite in the way people expect them to

The $9.99 boycott did some interesting things – it led to the rise of indie authors, it made Random House very successful in ebooks, it helped spread eReaders, it showed the power of readers.

There are some things it didn’t do -

1. It didn’t get Publishers to lower prices to $10. This is because a segment of readers aren’t willing to wait months or even weeks for the books they want. Nothing wrong with that. It just means that Agency Model Publishers were weakened but not killed when it came to ebook sales.
2. The actual impact of the $9.99 boycott is partially hidden. This is because ‘new releases’ always sell more in the first few weeks. So new releases at $13 still make it to the Top 10 and the Top 100. We don’t get to see all the $13 books that miss out because of the higher price – We do get to see the $13 books that make it to the Top 100 despite the higher price.
3. It didn’t get Publishers to kill the Agency Model. This is because 90% of their sales are still physical books. Their aim with the Agency Model is mostly to slow down and kill eBooks and eReaders. If they don’t manage to do that, and so far they haven’t, they will pretend that all along their aim was to preserve prices.

We can look at the 20% of books in the Top 100 that are at $1, and the 40% that are below $5, and call the $9.99 boycott a victory. We can look at the 25% of books in the Top 100 that are over $10 and call the $9.99 boycott a failure. It’s whatever you want it to be.

One thing we do know, is that prices are lower than they were two years ago. 

Group Buying is certainly worth trying

What if we set up a site where 10 million Kindle and Nook owners got together and said -

1. Mr. King, set your next book at $5, and 1 million of us will sign up for a preorder.
2. Harper Collins, release Book X from your backlist and 200,000 of us will sign up for a $3 preorder.
3. Bundle the Harry Potter Series at $40, and 2 million of us will pledge the money up-front.

No publisher or author in their right mind would refuse. At some level, this ‘power of the group’ is what’s really needed – readers have to get every single reader of ebooks on the same team. It’s pointless to discuss Kindle vs Nook when owners of both devices are looking for the same thing – a much better range of ebooks at much better prices.

The only way for eReader owners to make their 10% share of the market more impactful is to get better organized. This applies to the boycotts too – more important than whether $3 over $10 is stealing or not, is whether eReader owners can band together or not. There are a variety of benefits that will accrue if eReader owners work together – more range, better editing, better graphics and covers, lower prices, earlier availability.

If, on the other hand, eReader owners start arguing with each other, over things like which devices they use or what they think the ideal price for ebooks should be, then it’ll slow down the rise of eReaders and readers.