From Pete’s Desk is a blog series by Peter Hudson, co-founder and CEO at BitLit.
Ever since we started BitLit two years ago, we’ve been hustling publishers to offer ebooks for free or at a significant discount to you – readers who already own a paper copy. But you’re probably smart enough to realize that nothing in life is really ever free, so what’s the catch? Well, let’s start with a bit of background…
There’s a company in Seattle called Amazon which has achieved near monopoly status in digital book retail. Amazon’s brand promise is: sell cheap books and ebooks online. Of course, there’s nothing wrong with being a successful online retailer that sells books and ebooks at discount prices. The problem is that there’s something called Digital Rights Management (DRM) that means you can’t take an ebook you bought from one retailer and read it using anything other than that retailer’s devices or apps. In fact, the Digital Millennium Copyright Act (DMCA) makes it illegal for you to take ebooks you bought from Amazon and read them on your Nook, Kobo, etc. To illustrate how crazy this is, if the law treated paper books the way it treats ebooks it would be illegal for you to put books you bought from Borders on anything other than a Borders brand bookshelf, and you’d be breaking the law if you tried to put those books on an IKEA shelf. Seriously.
You might say: “who cares? I like my Kindle. And Amazon sells ebooks at the lowest prices”… Well, that’s fine, but the problem is when it’s illegal for you to move your ebooks to another service, you’ll probably never buy an ebook from anybody else. Amazon basically “owns” you as a customer. Forever.
Being owned by a retailer starts to become a problem when that retailer has greater than 60% market share and is under pressure from its shareholders to start turning a profit . You wouldn’t be surprised to learn that Amazon started squeezing its suppliers (authors and publishers) for a bigger margin. This is happening now… If you’re curious, about just how ugly this battle is getting Google the phrase “Hachette Amazon ebook dispute 2014“.
Now you might think that Amazon represents the future and that book publishers are dinosaurs fighting to preserve a dying business model. I used to think this, but since co-founding BitLit and learning more about books and publishing, I realized I was wrong for three reasons:
First, a publisher and editor have a a huge impact on the creative process. Some would argue that editors have as much creative impact as a movie director has on a film. Manuscripts are not the same things as books. Authors create manuscripts, publishers and editors create books.
Second, publishers are aggregators of risk — a publisher might invest in 100 author advances, which turn into 80 manuscripts, which get edited into 50 finished books, of which 5 might have a positive return on investment. So 5 books have to pay for the advances given to 100 authors plus the marketing and editorial costs of 45 books that didn’t make any money. Author advances are a really important part of writing (especially for non-fiction books) because they allow an author to do research and write full time.
Third, nobody gets into publishing because they think it’s a good way to get rich. Over the last few years it’s become clear to me that every publisher I’ve ever met is in the book business for one (and only one) reason: they love books. I’m a physicist by training, so it took me a while to understand why, but one publisher explained it as: “reading is magically hallucinating while you stare at slivers of cut down trees”.
So what does all that have to do with free bundled ebooks? Well, one of the reasons that Amazon can throw its weight around is because authors and publishers don’t know who buys their books. Basically, if an author or a publisher wanted to sell ebooks directly from their own website, or even just send you an email to let you know that a new book is coming out, they can’t. They don’t know who you are. In business terms “the retailer (Amazon) owns the customer (you)”.
Giving away a free or discounted bundled ebook is a way for publishers and authors to offer you something in return for you letting them know who you are and agreeing that they can send you the odd email (with all the usual caveats that they have to let you unsubscribe and can’t resell/lend/rent/blah-blah-blah your info etc…). To me that feels like a fair trade.
You might be the kind of person that doesn’t want to get an email from a publisher or author about new books. Fair play. No harm, no foul — Amazon has a service called Kindle Matchbook that lets you get discounted Kindle ebooks for the paper books you bought through Amazon.com. But BitLit’s model works for all books regardless of where you bought them. So if you agree with me that this is a fair trade, then get the app, take a shelfie, and download your ebooks.