What is Cory Doing Right?

In my last post I deconstructed with Cory Doctorow’s “experiment”—my friend Allen Varney commented on Twitter that I deconstructed it the way the “US Air Force deconstructed Baghdad.” This was to say that I pointed out his experiment had nothing to do with his thesis and that without independent accounting of the numbers, any data would be useless. The experiment, therefore, was destined to prove nothing that Cory claimed it would.

In the experiment, however, Cory put forth a plan of action which hit on many points that use new media well and use its promotional power to his benefit. He starts with nearly $16,000 in the bank, has very low production costs, isn’t going to have to sink very much money into inventory and has most all of his production and fulfillment being done out of house, so his personal labor cost (in time anyway) is negligible. In fact, his whole project seems to be based on a close reading of The 4-Hour Workweek by Timothy Ferriss. (The Ferriss book is great and promotes a business model in which you outsource your work, keep inventory low, have others do your fulfillment for you, so all you need to do is cash checks.)

Cory’s experiment does offer some things which he hits spot on. I’ll discuss them below, and offer some of my own insights into ways he could be doing these things a bit better.

E-books

Cory is one of the poster-children for the “information wants to be free” movement; though as my partner Kat Klaybourne and author Raymond Feist are fond of replying to that statement, “Yes, but entertainment wants to be paid.” For some reason folks think it’s okay to say to a creator of intellectual property that the product of our labors should be free; yet they never convincingly press that argument at a farmer’s market. This is perhaps because more farmers carry shotguns than do writers.

I’ve been big a proponent of e-books and reading on electronic devices for over two decades. In 1988 I distributed my novel Talion: Revenant free on the Genie Information Network. Heck, I had two different models of the Apple Newton, and prepped books to go on both of them. (That would have been back in the days when Cory was still in short pants.) I’ve since owned a couple of Palm devices and have put books on them, I sell e-books from my website, on the Kindle and in Second Life, and I was the first author to have e-books selling through Apple Appstore. (How Cory missed getting his stuff out for that, I don’t know.) For years I’ve spoken on this subject in public and private, extolling the virtues of POD and electronic publishing to anyone who didn’t run away fast enough.

It’s pretty clear that the digital revolution is at hand. Reading devices proliferate, becoming better and better with each generation. Two formats are moving to the fore because of their ease of use and transportability: PDF and ePub. If you have enough of a computer to be able to get online, you have enough of a machine to be able to read either format—and the readers are free. Authors can publish works at a fraction of the cost of a physical copy since there are no printing, warehousing or transportation costs, nor is there the Manhattan overhead that many publishers pay for office space. Authors selling direct can offer the consumer more value for less money because they cut out the middleman.

Cory believes that giving away content promotes sales of physical product. He’s half right. Folks will accept free product. They will even use it. We are subjected to that very tactic day in and day out. It’s called sampling, and is a very well know and successful marketing tool. This is why we have previews for movies and television shows, why stores give out tasty samples of food, or free spritzes of colognes. They give you a small portion of something, building up an interest, a desire, awareness and demand (to use the technical term); and then they sell you more of it later.

But this only works if it is a sample. If you give the whole thing away, there is no impetus to purchase a second version of the product, save in the case of someone who becomes fanatically enamored of that product. Hit the collector gene somehow, and people will buy. Hitting that gene, however, is not easy and more products have failed to do that than ever have succeeded. Baen Books with it’s free digital library and Suvudu.com with monthly free book selections are two examples of publishers using free digital distribution for sampling purposes, with good results, and Orbit reported positive results when they sold e-books for $1.

I believe wholeheartedly in sampling. On my website I provide samples of my work. In fact, I use the very successful web-comic model in this regard. Web comics have for years put out strips on a daily or weekly basis. When a story-arc is finished, the artists collect the work and publish it as a book. The old strips may or may not go away, but in the case where they do, buying the physical book is the only way to get caught up with the story. This takes content that was once free and capitalizes it. Artists further generate income by selling original strips, drawings, doing commissions and selling ancillary material like t-shirts, mugs and bumperstickers.

In my case I’ve written a number of stories which I serialize to the web. If folks stay current, they get to read original fiction for free. If they like the characters and want to get more of the backstory, they have to buy stories at $2 and $3 a pop—a bargain price for an hour or more of entertainment. Moreover, with the last two stories, I started to offer the entire story for sale when I was halfway through the serialization—and I had buyers—folks who didn’t want to wait another two weeks to see how it was all going to turn out.

Cory’s business plan could have easily adopted that same model. He could have serialized any of those stories—especially the one he was commissioned to write for $10,000. He could have then sold it, or the entire collection for $2-$5 as an e-book, bringing in added income. As it is now he’s just left money on the table.

Alternate e-book markets

In talking with companies that produce and sell e-books—especially in the gaming industry—one fact emerges. Consumers buy products online from trusted retail sources. What this means is simple: if they like a merchant, they go there for product first and might not go elsewhere. This is why, in this day and age of digital publishing, signing an exclusive contract with any e-book publisher/fulfillment house is stupid. Treat each format as if it were a different language, and get them into as many markets as you can. If you don’t, consumers who shop in only one place will never see your work.

Cory’s made a decision to give his work away for free in PDF, text and HTML formats. Epub is being added to that list soon. At least two of those formats won’t work on the Kindle without modification and the Kindle is the bestselling, dedicated book reading device in the world. Depending on the numbers you read, there are 350,000 to 500,000 units in place. Amazon also produced an app for the iPhone/iPod Touch, which adds another 20,000,000 units that can handle their content. Curiously enough, however, even though Amazon allows and invites free content, Cory didn’t mention distributing his work via the Kindle store. (Nor the Appstore, which will allow you to put it up for free, too.) He’s ignoring two of the largest marketplaces for people who have laid out hard cash for the express purpose of reading—talk about your target market!

Part of the reason he didn’t do that is because it only takes a minor amount of file processing to make the work available on the Kindle. Anyone can do it. The problem is that he’s a bit of a techhead, and techheads forget that not everyone is as savvy as they are.

Most folks who read books on these devices have one sole source for content: Amazon or whichever other store their reader is slaved to. They don’t want to have to worry about pulling a file into their computer, running it through a program and dumping it into their device. Doing that is not reading, it’s computing, and they didn’t buy their dedicated reader to do computing. (And since the Kindle features wifi delivery of titles, there are readers who use them religiously and don’t even have a computer.)

Ultimately, from the standpoint of readers who’ve bought one of these devices and don’t want to do computing, his free e-books don’t exist.

Audiobooks

As I noted in my previous article, I hosted an MP3 file of me reading the first chapter of my novel The Grand Crusade back in December of 2003. This was back in the dawn of the iPod era. I put it up a month before the novel came out. By the end of that month I’d had 1500 downloads (determined by bandwidth usage divided by file size, then taking 80% of that to account for failed and canceled downloads). That book, which was the conclusion of a series, hit the Amazon listing higher and stayed high longer than any of the previous books. I don’t know if the audiofile compelled anyone to buy the book, but at least 1500 people knew the book was hitting the shelves very soon.

Podcasting is a brilliant, low-cost way of hooking an audience. Not only is there something special about an author reading his own work to build a bond with readers, but podcasting makes delivery simple. Moreover, there is a very active, generous and welcoming community of podcasters out there. Shows regularly trade promos and have other podcasters on as guests to talk about their work. Podcasters often work together on projects, bartering voice talent duties. And links between podcaster websites provide some of the tightest networks on the web.

Authors like Scott Sigler and J. C. Hutchins have proved that podcasting novels can lead to publishing success, but it’s more than just free content=sales. Scott and Hutch are tireless networkers who use podcasts as a marketing tool. Their serious work goes into building community. Both of them—and they are not alone—have succeeded in welding together a very loyal fan-base which supports them both online and in the physical world by purchasing product and attending events. It is their interaction with their fans which has taken a group of people first attracted by the value of free entertainment, and turned it into a revolutionary army which supports them and recruits new members to grow that fan-base.

Cory has done this with Boing Boing. It is in community in which the seeds of the future have are planted. It works out that if an author has a group of 3,000 individuals who are willing to pay him $2 a month for content, after Paypal frees, he’ll gross over $60,000. And since a short story would run only $2, his model works if the author only grinds out 5-7000 words a month. (Realistically he’d need a pool of 10,000 individuals, and be turning out 2-3 stories in different storylines to hit his quota of sales.) Each new story would help spur the sales of older stories, and as new readers come in, they’ll buy to get caught up. The community will be entertained, and the author will make a living wage.

Cory being Cory

One other thing that Cory does probably better than anyone else on the scene is promote himself being a celebrity. In this day and age of folks being famous for simply being famous, and being famous simply because they say they’re famous, Cory is a rockstar. His tireless self promotion has him showing up in all sorts of odd places. In the middle of October he garnered lots media attention when he weighed in on the controversy over Ralph Lauren photoshopping the body of a model to be so thin it made Kate Moss look like a right tackle in the NFL. Heck, the first mention I ever heard about him was his public statement claiming that he didn’t know if he was related to E. L. Doctorow or not. Pure brilliance at turning a coincidence into a reason to shine someone else’s spotlight on himself.

Nothing succeeds like success. This goes more deeply than just in manufacturing celebrity. One of the criticisms others have offered of Cory is that he’s not taking into account that he’s established, and that Joe Average trying to do something with his first novel would never get a Publisher’s Weekly gig to publicize it. Heck, with a self-published novel, PW wouldn’t give the author the time of day, much less pay him to promote it in their pages for a year.

But believing in the myth of “establishment” is not a good thing in this digital age. If an author doesn’t have a presence online, if his work isn’t available from multiple online retailers, he flat doesn’t exist. More importantly, the image any author projects on the net will determine how readers react. If a writer believes in himself and his work, and promotes himself and his work through sampling, he can be successful. If she backs up her initial successes with more work, and this means writing better stories and promoting them, the work itself will draw more readers in.

It’s critical to remember what a writer’s primary task is: to entertain. As much as the literary elite would love to deny it, writers and storytellers are entertainers. The digital age allows us to entertain a highly diverse audience because they can find us whenever they want from anywhere in the world. And they will keep seeking us out as long as we fulfill our part of the bargain and entertain them. This means turning out good stories and making sure our focus is on creating good stories.

Divert your energies into creating a cult of personality, and you’ll have definitely have a modicum of success. But those cults burn out fast in this digital age. When the only arrow in your quiver is your celebrity, you find that the audience is rather fickle—unless you do something scandalous to keep the frenzy going, you fade away.

But write good stories that entertain folks, and you’ll be around forever. And people will actually pay you for your labors.

Print on Demand

Cory has a great thing going with his print on demand set-up. Lulu.com is a fine company which turns out very good work. Consumers go to them, buy the book, they print and ship it, and when enough money has accrued in Cory’s account, he gets a check. It’s a perfect way to get physical copies to customers who want the book without his having to carry any inventory.

I’ve just begun experimenting with POD myself in a very small way. The image at the right links to a store at Blurb.com. Blurb has its own proprietary software that lets you print up small books, including low cost, black and white books designed to be text-heavy. As an experiment, I put one of my short stories, Wildest Dreams, into their format and filled it out with an essay about how I wrote the story. Given their pricing and discount structure, I can print up books a dozen at a time and take them to conventions. Given sales at conventions, a dozen is what I can expect to sell. They’re a specialty item. The softback will sell for $10 and I’ll sign it. (The story is really good and worth the money.)

But, if you want a copy and aren’t sure you’ll see me at a convention, you can go ahead and hit the link and buy one for yourself. Blurb.com will print it, ship it to you, and I’ll eventually get a check. While the pricing on small print runs is not low enough yet for POD to be a solution for authors to distribute their books to bookstores (since you’d need a retail price to cost ratio of at least 3-to-1, with freight paid by the store, to make any money), but the prices will continue to fall as the ability to create books proliferates. This is a trend to watch in the future.

Collectible Editions

The idea of doing a short-run, high-end, boutique edition of his book is brilliant. When he sells all 250, he will have earned $46, 250. That’s on an investment of $16, 250, which is roughly a 3-to-1 ratio. Nice return on investment, even if it has to be spread out over a number of years. It will be fascinating to learn how long it does take to sell all of those books.

My approach to collectible editions would slightly different. It strikes me that after a book has sold a sufficient amount, say 50,000 units in mass market paperback, there’s likely a sufficient audience of fans and book collectors to support a run of 1,000 nicely-bound keepsake-edition books for $100 each, signed and numbered, with illustrations. Using Cory’s production cost of $65 a book (leaving out the flashdrives, putting illustrations in, and including a coupon code for my website that would allow purchasers of the book to download the electronic version free), I’d clear $40K on an investment of $65K.

Two things would change that picture. The first is tying into a distributor who knows the collectible market. I might be able to move a considerably larger number of units. Second, because of the larger print run, it might be conceivable to offshore the printing, driving the price per unit down. While the distributor would want (and deserve) a cut, it would speed the sale of the inventory, bringing the ROI more quickly, rather than stretching it out. This would make me more profitable faster, which means the return is actually more valuable (money now being more valuable than money someday.)

All-in-all Cory seems to have his business plan in place. Granted, having the $10,000 for a story plunked on him is kind of a windfall, but even absent that, his Publisher’s Weekly money would more than cover the startup costs for his experiment. Without a doubt, if his goal is simply to make money, he’s going to succeed.

Of course, this business plan is something that will work for him, but it’s not a viable business model. A business model is something that anyone could use as a means to succeed. And in these days of the digital revolution, there are business models that work, and can work for everyone. And there’s a lot more that can be done with new media to effectively and efficiently to get you message out, and to profit from your projects. And that’s the topic for tomorrow.