[Legal] FC: Eric Flint on copyright, ePublishing, and the Baen Free Library (fwd)

[Fedor Zuev]

---------- Forwarded message ----------
Date: Thu, 18 Apr 2002 10:50:01 -0700
From: Declan McCullagh <declan на well.com>
To: politech на politechbot.com
Subject: FC: Eric Flint on copyright, ePublishing, and the Baen Free Library


---

Date: Wed, 17 Apr 2002 11:44:49 -0400
From: Dean Sutherland <dfsuther на cs.cmu.edu>
To: declan на well.com
Subject: Eric Flint on copyright, ePublishing, and the Baen Free Library

Declan:


The essay below was written by Eric Flint, a well-respected Science Fiction
author.  He's been sponsoring, along with Jim Baen of Baen Books, the Baen
Free Library, a collection of complete novels freely available on the Web
(see http://www.baen.com/library/ ) for details.  Eric writes periodic
essays about issues having to do with the Free Library.  This is his
latest.  He's given permission to post it far and wide, subject only to
noting that it is copyright Eric Flint.


Please feel free to contact me if you have any questions.  You can reach
Eric Flint through Baen Books (www.baen.com) if you have any questions
about the propriety of posting his essay.

Dean F. Sutherland
dfsuther на cs.cmu.edu


===================================

Prime Palaver #6

Eric Flint

April 13, 2002


	The Free Library was set up about a year and half ago, with the
co-operation of Baen Books. Leaving aside the various political and
philosophical issues, which I've addressed elsewhere, the premise behind
the Library had a practical component as well. In brief, that in relative
terms an author will gain, not lose, by having titles in the Library.

	What I mean by "relative" is simply this: overall, an author is far more
likely to increase sales than to lose them. Or, to put it more accurately,
exposure in the Library will generate more sales than it will lose.

	As a practical proposition, the theory behind the Free Library is that,
certainly in the long run, it benefits an author to have a certain number
of free or cheap titles of theirs readily available to the public. By far
the main enemy any author faces, except a handful of ones who are famous to
the public at large, is simply obscurity. Even well-known SF authors are
only read by a small percentage of the potential SF audience. Most readers,
even ones who have heard of the author, simply pass them up.

	Why? In most cases, simply because they don't really know anything about
the writer and aren't willing to spend $7 to $28 just to experiment. So,
they keep buying those authors they are familiar with.

	What the Free Library provides--as do traditional libraries, or simply the
old familiar phenomenon of friends lending each other books--is a way for
people to investigate a new author for free, before they plunk down any money.

	That was the premise behind the Free Library, when I first set it up. At
the time, since I had no experience to go by, I was basing that on common
sense as well as Jim Baen's experienced judgement as a longtime publisher.

	Now, with a year and a half's experience with the Library actually
established and running, I feel confident that our original assessment has
been demonstrated in practice. The Library's track record shows clearly
that the traditional "encryption/enforcement" policy which has been
followed thus far by most of the publishing industry is just plain stupid,
as well as unconscionable from the viewpoint of infringing on personal
liberties.

	And the stupidity seems bottomless. I just discovered, for instance, that
one of the main e-book reader manufacturers (Gemstar) has now decided, in
its new software, to make it impossible for its customers to read any
unencrypted material--even material from something like Project Gutenberg.
Gemstar customers will now only be able to read software purchased from
Gemstar itself. So, once again, an industry which has been a failure from
the outset because of its obsession with encryption is simply deepening its
commitment to that obsession.

***

	Let me ask a simple question. Does anyone have any real evidence that
having material available for free online--whether legitimately or through
piracy--has actually caused any financial harm to any author?

	The entire argument for encryption rests precisely upon this PRESUMPTION.
A presumption which has never once been documented or demonstrated--and
which, to the contrary, has been cast into question any number of times.

	I am about to cast it into question again. Here are a number of facts
which you should consider:

	1) The first title to go up into the Library was my own novel, Mother of
Demons. That was my first published novel, which came out in print in
September of 1997. At the time it went into the Free Library, in the fall
of 2000, that novel had sold 9,694 copies, with a sell-through of 54%.

("Sell-through" refers to the percentage of copies shipped which are
actually sold, as opposed to being returned to the publisher.)

	As of today, according to Baen Books--a year and a half after being
available for free online to anyone who wants it, no restrictions and no
questions asked -- Mother of Demons has sold about 18,500 copies and now
has a sell-through of 65%.

	I would like someone to explain to me how almost doubling the sales and
improving the sell-through by 11% has caused me, as an author, any harm?

	To be sure, most of that improvement is not due to the Library. It's
simply due, I'm quite sure, to the fact that I've become a better known
author in the meantime. Still, it is impossible to argue that the Library
has hurt me any. To the contrary, I think there is every reason to believe
that the added exposure the Library has given me helped the sales of that
book -- as well as all of my other books.

	And the exposure is considerable, by the way. The fact that being in the
Library does not seem to have hurt sales of Mother of Demons in the least
-- to put it mildly! -- is not due to the Library's obscurity. Quite the
opposite, in fact. There were more than 130,000 visits to the Free Library
in the last quarter of 2001 -- almost 1,500 a day.

	To date, my best-selling title has been my novel 1632. That book came out
in hardcover in February 2000, and was reissued in paperback in February
2001. I put it in the Free Library at the same time as it came out in
paperback format.

	Today, more than a year later, the paperback edition of 1632 has a net
sales of about 34,000 copies and has a sell-through of 88%. If being
available for free in the Library has hurt me any, with that book, I'd be
puzzled to see how.

	Let's look in closer detail at the progress of another title in the
Library, this time using a novel I co-authored with David Drake: An Oblique
Approach, the first volume in the Belisarius series. I think these figures
demonstrate the impact of the Library more clearly than any other.

	An Oblique Approach went into the Library a few days after Mother of
Demons -- i.e., it's been available for free for a year and a half now.
That novel first came out in paperback in March of 1998. (There was no
hardcover edition.) Here are the royalty figures on that novel, beginning
with the first period for which figures are available and ending with the last:

					Period  Net sales  S/T	New sales

July-Dec 1998		30,431		70%		30,431

Jan-June 1999		35,977		80%		5,546

July-Dec 1999		36,812		78%		   835

Jan-June 2000		37,607		77%		   795

	[An Oblique Approach goes into the Library mid-way through this period]

July-Dec 2000		39,268		77%		1,161

Jan-June 2001		41,172		77%		1,904

	The most interesting -- and unusual -- aspect of these figures are the
ones on the right, in the column titled "new sales." From the beginning, An
Oblique Approach has enjoyed an excellent sell-through  --  77 to 80% -- so
it would be surprising to see much change there. (The average for SF
paperbacks in the industry as a whole is no better than 50%, and probably a
lot closer to 40%. In short, in terms of sell-through, An Oblique Approach
is doing almost twice as well as the average.)

	The overall net sales figures are not especially surprising either. An
initial "out of the gate" net sales figure of about 30,000 is nothing
outstanding, but is eminently solid for a paperback title, especially when
combined with a good sell-through. (The average paperback sells,
traditionally, about 15,000 copies -- but the actual figure has probably
been lower for several years now because of a "soft" market.) And, given
that the standard experience is that 80% of a book's sales happens in the
first three months, it's not surprising that the sales are concentrated in
that period. In the next period, January-June 1999, the novel had a solid
5000-plus sales. Thereafter...

	What usually happens. Within a year after a novel comes out, the sales
usually drop right through the floor. Thereafter, sales steadily dwindle
away. And, sure enough: in the third and fourth periods, An Oblique
Approach sold considerably less than a thousand copies each period -- 835
and 795 respectively, showing the expected slow and steady drop.

	It's what happens next that is significant. Because, all other things
considered, those "new sales" figures should have kept steadily dropping.
Slowly, perhaps, but what most certainly shouldn't have happened is a
sudden rise in sales -- and a rise which increases in the next period.

	Nor can this be explained, as the sharp rise in sales of Mother of Demons
perhaps can, as the result of me becoming better known as an author. David
Drake, not me, is listed as the lead author of An Oblique Approach -- and
Dave has been a very well known SF author for at least fifteen years.
Granted, my increasing popularity as a writer was undoubtedly responsible
for some of that increase. (Just as, for that matter, the fact that Dave's
popular Lord of the Isles and With the Lightnings series started coming out
during this period and undoubtedly attracted some readers also.)

	But... but...

	Nonsense! Between the January-June 2000 reporting period and the period
one year later, the sales for that title -- which had now been out for two
years, remember, long past the time when it should have been selling very
much -- were suddenly almost 250% higher. (239%, to be precise: 1904
compared to 795.)

	What happened in the interim? Well, obviously I can't "prove" it, but it
seems blindingly obvious to me that it was the fact that An Oblique
Approach went into the Library in the fall of 2000 that explains most of
that increase. It would certainly be absurd to claim that being available
for free somehow hurt the novel's sales! I can guarantee you that most
authors would be delighted to see a two-year-old title suddenly showing a
spurt of new sales.

	It's worth noting, by the way, that the second volume in the series, In
the Heart of Darkness, shows much the same pattern. In the Heart of
Darkness went into the Library at the same time as An Oblique Approach, a
year and a half ago. In the last period before it appeared in the Library
(Jan-June 2000), Heart of Darkness sold 1,704 copies. A year later, during
the equivalent reporting period, it sold 1,886.

	The difference is certainly not as dramatic as the difference in sales of
An Oblique Approach, much less the near-doubling of sales which Mother of
Demons experienced. Still, the mere fact that sales increased at all
instead of declining is significant.

	Before I move on to my next point, I want to take the time to emphasize
the significance of these HARD FIGURES. I stress "hard figures" because
those people arguing the "encryption/enforcement" side of the debate NEVER
come up with hard figures. Harlan Ellison, for instance, screams that he
has "Lost sales!" because of piracy -- but, to the best of my knowledge,
has never once even tried to demonstrate that this is true. Not once has he
done more than endlessly assert the "axiom" that since a title of his was
pirated he "must therefore" have lost sales of that title.

	I think my hard figures demonstrate how absurd that claim is. It does not
follow that simply because a copy is available for free that sales will
therefore be hurt. In fact, they are more likely to be helped, for the
simple reason that free copies -- call them "samplers," if you will -- are
often the necessary inducement to convince people to buy something.

	Everyone should remember, also, that the titles available for free in the
Baen Library -- very much unlike pirated copies -- have the following two
unusual characteristics:

	a) They are readily available in a well-known, well-advertised and STABLE
web site. I stress "stable" because one of the inevitable characteristics
of pirated copies is that trying to find them is a monstrous headache in
the first place. For obvious reasons, those addresses tend to disappear
constantly. In fact, every time I speak publicly on this issue I urge my
audience -- please! be my guest! -- to test my claims by going online and
trying to steal one of my titles. (The one you find easily and immediately
in the Baen Free Library doesn't count, of course. That one is not
pirated.) And I confidently advance the prediction that they will soon
discover that the amount of time and hassle they have to go through in
order to find a pirated copy somewhere of an Eric Flint title -- again,
excepting the legitimate copy available in the Free Library -- is hardly
worth the effort.

	b) The titles -- again, very much unlike the typical pirated product --
are in excellent shape, having been professionally prepared, and are
available for downloading in no less than five different electronic
formats. (For which we even provide the software, if the reader doesn't
have it already.)

	Try finding ANY pirated copies of which you can say the same, even if you
can find them in the first place. As anyone knows who has ever looked at a
pirated edition, as a rule they are very sloppy scanned-and-barely-proofed
editions which are miserable to read.

	And yet... and yet... despite the fact that these COMPLETELY LEGITIMATE
copies are available for free -- easily, conveniently, and professionally
prepared -- you have seen for yourself that in no less than four instances
I have been able to demonstrate no discernable financial damage done to me
as the author. To the contrary, I have been able to advance a very strong
case that the Library has helped the sales of those books.

	2) Since we set up the Free Library, I've received a total of 1,161
letters to me as "Librarian." Well over a thousand letters in about a year
and a half -- and, at a rough estimate, I'd say that about two-thirds of
those letters (certainly well over half) state specifically that, as a
result of becoming exposed to an author through the Library, the sender of
the letter went out and bought some book of theirs in a print edition. Very
often, a number of books.

	I will grant you immediately that this is purely anecdotal evidence.
Still, the fact remains that I have well over a THOUSAND anecdotes. How
many does Harlan Ellison have, based on which he filed his now-famous (or,
in my opinion, notorious) lawsuit? Five? Six? As many as a dozen?

	The thing you should not overlook for a moment is that everyone's argument
in this dispute is based entirely on anecdotal evidence. (Except for me, I
should say. To the best of my knowledge, I am the only author who has put
up free titles and then tracked the actual effect on royalty statements.
Still, even there, I will immediately grant that there are a number of
variable factors which cloud the issue.)

	The difference is that I can marshal a huge number of anecdotes to support
my viewpoint. My opponents can marshal, at most, a handful. And even that
handful is suspect, since they base their logic on the assumption that
simply because a title has been pirated that the author has therefore "lost
sales." I think that assumption is highly dubious -- and is precisely what
needs to be proved in the first place. (See my various remarks elsewhere in
the Free Library for an expansion on this point.)

	Keep in mind the difference, because it's quite significant. Not all
anecdotes are equal. I can point to hundreds of letters where a specific
person says specifically: "based on reading Book X in the Library, I went
out and bought it." Whereas the anecdotes of my opponents are not specific
at all. In essence, what they do is simply demonstrate that someone put up
a pirated edition somewhere. Fine. But it does not thereby follow that a
SALE was lost. Who knows if the person who downloaded that title would have
bought it in the first place? In order for my opponents to have anecdotes
which carried the same weight as mine -- even in quality, much less in
quantity -- they would have to show statements where a specific person
stated that they had intended to buy a copy of Book X but didn't because
they found a pirated one instead. If Harlan Ellison has even ONE anecdote
of that nature, I'll be surprised.

	3) Here's another anecdote. Last April, I attended an international
conference in London on the current state of the e-publishing industry. In
general, the tone of the conference was pessimistic -- accurately
reflecting the general state of the industry.

	I was invited to come by the organizers more-or-less as the "devil's
advocate." In my own remarks at the conference, I stated that the
fundamental obstacle to the success of electronic publishing was the
industry's obsession with encryption. The only successful electronic outlet
I knew at the time -- Fictionwise.com can now be added to the list, from
what I can see -- was Baen Books' Webscriptions. And that was precisely due
to the fact that Baen made no attempt to encrypt its product. As a result,
they were able to sell electronic books both cheaply and with no hassle and
aggravation to their customers.

	I measure "successful," by the way, using the only criterion that means
much to me as an author: Webscriptions, unlike all other electronic outlets
I know of, pays me royalties in substantial amounts. As of now, I've
received about $2,140 in electronic royalties from Baen Books for the year
2000. (The last period reported.)

	That sum is of course much smaller than my paper edition royalties, but it
can hardly be called "peanuts." Every other electronic outlet I know of, in
contrast, pays royalties -- if at all -- in two figures. My friend Dave
Drake has given me permission to let the public know that his best-earning
book published by anyone other than Baen, in one reporting period, earned
him $36,000 in royalties for the paper edition -- and $28 for the
electronic edition. And that's about typical for even a successful book
issued electronically.

	In contrast, Dave earned probably about as much as I did in electronic
royalties from Baen for the year 2000. (I don't know the exact figure, but
since a lot of my Webscriptions royalties come from titles I co-authored
with Dave, I'm sure the amounts are approximately equal.)

	At the conference -- at least in the public sessions -- my remarks were
basically greeted with pained silence. But, in private, several publisher
representatives told me that they agreed with me -- but also told me that
trying to get the publishing industry to give up encryption would be
impossible. Why? Basically because the corporate bean-counters who now run
most of the publishing industry just can't bear the thought of -- gasp --
GIVING something away for free. Even if it benefits them in the long run.

	There was one exception. A gentleman from a publishing house which
primarily produces textbooks rose in support of my point. He stated that,
much to their own surprise, his company had found that those textbooks
which they made available for free online ALSO had the best sales.

	4) A disconnected anecdote? No, not really. MIT Press discovered the same
thing. A friend of mine sent me a letter recently after listening to the
President of MIT on a radio talk show. Here is the relevant excerpt from
his letter:

	I just have a little more fuel for you to add to the fire. Yesterday on my
way home from work I was listening to "All Things Considered" on NPR a
little before 5pm CST. They had a story on MIT's offer to create a Web site
for most of its classes and to post materials (outlines, detailed class
notes, homework assignments, etc) from each course.

	Besides being an interesting story in itself on free information on the
net the guest, Charles Vest, president of MIT, as an aside mentioned that
when college textbook presses (like the one at MIT) put up free e-text
copies of their new textbooks at the same time they published the print
version, sales of the print versions went UP.

	If it works to increase the sale for things as over priced as the normal
college textbook...

	All right, I'll stop there. I believe I've provided enough evidence to
support my point. Making one or a few titles of an author's writings
available for free electronically in the Free Library seems to have no
other impact, certainly over time, than to increase that author's general
audience recognition -- and thereby, indirectly if not directly, the sales
of his or her books.

	I believe it also -- I leave it up to each individual to weigh this out
for themselves -- places such authors on what you might call the side of
the angels in this dispute. For me, at least, this side of the matter is
even more important than the practical side. It grates me to see the way
powerful corporate interests have been steadily twisting the copyright laws
and encroaching on personal liberties in order to shore up their profit
margins -- all the more so when their profit problems are a result of their
own stupidity and short-sighted greed in the first place.

Eric Flint






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