Publishers, e-books, and why the Baen Free Library Exists (UPDATED).

The e-book is here to stay.  So the question now is, how should publishers deal with e-books?  More importantly, how much in royalties should be paid to authors?

My friend Jason Cordova wrote a very interesting blog tonight about publishers and e-books and these questions exactly, available here:

http://warpcordova.wordpress.com/2010/08/03/publishers-and-e-books-round-ii/

What set Cordova off was an article by Michael Bhaskar at BookBrunch (written on 7/29/2010).  There is a long-standing fight going on with regards to e-books, Amazon.com and its Kindle device, and MacMillan, which may be why Michael Bhaskar wrote his article; at any rate, that article is available here:

http://mailserver.bookbrunch.co.uk/index.php?option=com_content&view=article&id=6257:the-real-costs-of-digital&catid=926:digital&Itemid=117

The Bhaskar article attempts to frame the narrative in such a way as to make authors look greedy for wishing to have more than 25% of net royalties.  Yet this is only one part of the entire narrative, as Cordova ably points out in his blog.

Random House, according to Bhaskar, believes 25% of net receipts is fair.  Whereas to many authors, including Cordova, that simply isn’t enough considering the lesser overhead of an e-book compared to a “dead tree” version.

The second question has to do with the fight between Digital Rights Media (DRM) and open source coding being used in order to sell e-books.  Cordova’s points need to be read in their entirety, but the upshot is that many publishers put out e-books in a way that is intended to keep people who haven’t paid for an e-book to read an e-book.   I know that sounds clunky, but the idea behind it is clunkier still — DRM, or to use a less fancy term, encoding or encryption, is to blame for any real long-term costs to the publisher, because it’s the cost of keeping a book encrypted and making sure no one has cracked the encryption that tends to cause long-term problems for publishers.

Yet several publishers, including Baen, Tor, Pyr, Twilight Times Books, Paladin Press and the new MuseItUp Publishing, have not chosen the way of DRM.   These companies believe it is far more important to be friendly to the customer and make it as easy and as rewarding as possible for the customer than to encrypt their books using DRM.

Baen in particular has made it as easy as possible to buy e-books through something they call WebScriptions — they come in as many formats as need be, using non-encrypted materials.  This has been a big marketing draw for Baen.

Better still, there’s something called the Baen Free Library, where many of Baen’s authors have chosen to allow one or more of his/her books to be put up so anyone, anywhere, can read it free of charge.  This has not hurt Baen’s business model; it’s actually helped instead.  Because most people want a dead-tree version of their favorite book; it’s still the easiest way to read a book, and will almost certainly continue to be so until and unless the Kindle, Nook and other electronic book devices become more user friendly.  (I know there’s been progress in this regard.  But I can still read a regular book far faster than an e-book, partly because it takes me less time to flip an actual page than it does to hit a mouse key or toggle downward.)

Not every publisher can put out their e-books in multiple formats; it’s almost certainly time-consuming to set up such a system, and I know Baen requires at least one full-time Webmaster to keep things running along smoothly.  But there must be some “wiggle room” between a publisher that puts out everything using DRM and those who don’t; customers like it when a company like Baen or MuseItUp Publishing offers several different, easy ways to buy an e-book, which tends to drive customer loyalty and satisfaction over time.

I wish I were more of a computer “geek,” because the esoteric points being made by those who swear by DRM (many of the publishers, including MacMillan and Random House to the best of my knowledge) tend to get lost in the aether.  That’s one reason I can’t explain them in more than general terms, though many of my friends are computer specialists and do completely understand all sides of this taxing and frustrating issue.

I do know that I very much appreciate what Baen Books is doing with its Webscriptions and the Baen Free Library, and that I’m very pleased to update this post by adding Tor, Pyr, Twilight Times Books, Paladin Press and MuseItUp Publishing to the list of smart publishers that want to please their customers and their writers.  Because it’s a simple equation for readers: if a publisher puts out books that are high quality and well-edited — Heck, puts some of them out for free! — that aren’t encrypted, this leads to higher sales, better royalty payments overall, and far higher customer and writer satisfaction.

That, my friends, is a win-win.  Which is why it puzzles me so much that the other heavy hitters in the industry haven’t followed the Baen model — which works — rather than continue to swim stubbornly upstream.

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** Note: Jason Cordova’s comment about other publishers that do not use DRM have been incorporated into this blog post.   In addition, I heard from Lea Schizas, the publisher of MuseItUp Publishing, and she assured me that MuseItUp plans to offer several user-friendly options with regards to e-books, and that absolutely, positively, MuseItUp will not be using DRM.