Ebooks: Scarcity, abundance and economy

[Steven Lyle Jordan]

A recently revived subject by Kristine Kathryn Rusch, Scarcity and Abundance, examines the ebook industry in terms of the shift from a "scarcity" economy, in which things are valued and priced due to their limited availability, and "abundance," in which items are available in almost limited supply, turning the old economic model upside-down or destroying it entirely.

I've touched on the subject in my own blogs in the past: I don't think there is any aspect of ebooks that isn't impacted by the shift from scarcity to abundance... and most of those aspect changes are good things. The (possible) exception to this is in ebooks' economy. Abundance has shaken consumers' expectations of what a book should cost, in light of its now-ephemeral state and the need to use a device to read them. And authors/publishers who still desire to make a reasonable income from books struggle to create an economic model that works for both parties, with mixed success.

I, myself, still work to promote my books, whilst watching the market and re-evaluating book pricing and value, on a regular basis. But I've come to realize that I still think in terms of the scarcity market in many ways, possibly (probably) clouding my mind to avenues and solutions I'm not seeing.

Can the average ebook be monetized in an abundance market? Is profit to come only to rare books... the "scarce" success or popular subject? Do we need an entirely new economic model for ebooks, and indeed all digital goods, that properly takes abundance into account?

Or are ebooks in general destined to remove themselves from the profit market, and perhaps become promotional items for some other commodity that still sells in the "scarcity" economy?

[Kumabjorn]

A very valid quest and not entirely easy to answer. Partly because we are still in the middle of a paradigm shift and partly because traditional economical tools of analysis may not be applicable. Price is traditionally decided by an equblium between supply and demand. In traditional publishing supply is set by a print order. In the new world order supply is for all practical purposes unlimited and this will put pressure on price down towards zero. That is the first shift in the pricing model and this is still where we find ourselves (just look at all the predictable postings on why e-books should be cheaper then p-books). This pressure will continue downwards towards a new equilibrium. That price point will likely be so low that it discourages new agents (authors in this case) to enter the market, hence no new books until the lack of supply will begin to put an upward pressure on prices. The problem we face for us and the forseeable future is that there are already so many free (or almost free) books available that it will probably take a long while before we realize the lack of supply.

If I was dependent for my livelihood to write fiction I would seriously look into writing movie scripts.

[Steven Lyle Jordan]

Originally Posted by Kumabjorn

If I was dependent for my livelihood to write fiction I would seriously look into writing movie scripts.

As a matter of fact... I'd been thinking the same thing, and planning to begin converting some of my novels to movie scripts, to see if any of them had legs.

The traditional movie (and television) industry is another model of scarcity; but even as it swings in the abundance direction via the web, Netflix, etc, the fact that it gets a lot of its financing from third parties who will pay for all those eyeballs to sell their other products helps to insulate the movie makers from this effect.

It may be that third-party support (through advertising) is the real solution of abundance: Let someone pay you to give your product away, in order to sell theirs. Will ebooks become that give-away product?

[Synamon]

As a reader I'm rubbing my hands with glee at the abundance. In the short term many authors and publishers will make out like bandits because they can monetize their backlist books. New authors in this environment aren't only competing with current authors, they are competing with all this backlist inventory, their odds of breaking through are astronomical.

[Kumabjorn]

That glee is short lived euphoria (then again, in the long run, we're all dead) once we start to realize that nothing new is written. Look at what happened in the music industry, lots and lots of covers, not a so much new and innovative scores coming out. If you can't make money off it there is really no impetus other than to indulge your personal ego. Most readers get tired fast of pamphleteering.

[Kumabjorn]

Originally Posted by Steven Lyle Jordan

As a matter of fact... I'd been thinking the same thing, and planning to begin converting some of my novels to movie scripts, to see if any of them had legs.

As understandable as that is, unfortunately it is also a step away from the substance that makes books more interesting than movies. The ability to explore the human dimension in the written word is soo much more versatile than on the silver screen. On the other hand if it doesn't put a steak on the BBQ...

[patrickt]

Chocolate is not a scarce product. You can buy chocolate candies quite cheaply. Or, you can go with a fancy foo-foo California chocolate and spend a fortune.

Ebooks. I can get a sufficient quantity of free, or less than $4.00 books to keep me reading for the rest of my life. Or, I can buy Carlyle Wilkie's hot new best seller the first day it comes out and spend a fortune and sneer at all my friends in California.

Scarcity is relevant only for some items. I'm only seventy but scarcity hasn't been a relevant factor in my reading. Taxes have been a factor here in Mexico. Collusion between publishers has certainly been a factor. Escalating legal costs, driven by lawyers, have certainly been a factor.

[J. Strnad]

It sounds as if you're thinking of books as commodities, like bushels of wheat, where you might as well buy this one as that one. In some cases you'd be right, and you might as well read this genre book as that genre book. Prices will be most competitive in this area.

In other cases the author works to build his/her "brand" so that the book is not easily replaceable by any other. These books can maintain higher price points.

I don't believe there is any single model that applies equally to every book.

[Steven Lyle Jordan]

Actually, as abundance kicks in, objects cease to become commodities: They no longer need to be collected or traded, as there's enough for everybody; but genre, or uniqueness, is still valuable as the method of telling one product from another. Think of it as infinite bushels of wheat, but each bushel has a unique color, and the consumer can strive to obtain all of the blood red bushels they desire.

It's suggested that the controller of the abundance economy will be the search engine, the review and the customized aggregator.

[Penforhire]

I like to think we'll make it up in volume. Having that lower-priced e-book in front of more readers will bring in a similar or larger amount of income. Not sure if that is true yet. I think we'll need true fans of our work to support us in the future, people who will pay to read you even when they don't have to.

[Steven Lyle Jordan]

Originally Posted by Penforhire

I think we'll need true fans of our work to support us in the future, people who will pay to read you even when they don't have to.

That concerns me, because of a demonstrated aspect of human nature: Do it if you can get away with it. If so many people illegally obtain ebooks and don't get caught or punished, others come to be desensitized to the need to be upstanding citizens, and will begin to do things illegally because it's accepted that it's okay (like speeding and jaywalking).

This could change if authors somehow become more "respectable" as creators in society, worthy of everyone's support, instead of the prevailing attitude that they all but sponge off of society, and at the very least, produce a value-less product in entertainment media. I don't see that happening anytime soon.

So I suspect an ebook system making everyone pay--but with micropayments that few would oppose because of their low impact on the wallet--would be more effective than essentially hoping for what amounts to donations from a few patrons.

[MikeB1972]

@Penforhire

How do you think you will make it up in volume.

I read, like most people here, a fair amount - But, I don't read any more because it's cheaper, a book lasts the same length of time to read if I spend 0/£5/£10 on it, the main limiting factor to me reading more books isn't money - it's time. So the only thing that cheaper books are doing for me is that I'm spending less money (now, don't get me wrong, I'm very happy spending less money but I can't see how you are going to make it up in volume)

As far as I can tell the only "new" readers you might get by lowering the prices are the second-hand book market (and to be fair that's quite large but I'm not sure it will counter the effect of lower prices for all books)

[Steven Lyle Jordan]

Originally Posted by Kumabjorn

As understandable as that is, unfortunately it is also a step away from the substance that makes books more interesting than movies. The ability to explore the human dimension in the written word is soo much more versatile than on the silver screen. On the other hand if it doesn't put a steak on the BBQ...

That doesn't mean one couldn't support the other: Perhaps the ebook will be the free giveaway to entice people to go see the movie. No, they're not the same, but one can add value to the other.

[Elfwreck]

Originally Posted by J. Strnad

It sounds as if you're thinking of books as commodities, like bushels of wheat, where you might as well buy this one as that one. In some cases you'd be right, and you might as well read this genre book as that genre book. Prices will be most competitive in this area.

In other cases the author works to build his/her "brand" so that the book is not easily replaceable by any other. These books can maintain higher price points.

No author can write fast enough keep up with my reading; there's *always* a level of "I'm going to read [this] because [that other thing I really want] isn't available right now." Because of this, readers have always treated books somewhat like commodities.

There's an understanding among many (most?) avid readers that reading the new novel RIGHT AWAY is not crucially important... that if it weren't available for another six months, they'd be reading something else, so reading something else today is not a great hardship in the long run. (In the short run, not reading it NOW means missing out on the early hype and possibly running into spoilers, so there is incentive to buy it full price new.)

But we've all read great books years after they were published, and years after anyone we knew was talking about them. And we've all *not* read some great book that everyone we knew read and loved.

The more voracious the reader, the more likely they are to treat books as commodities, the more likely that they want to be reading *something* rather than "this particular thing." The "Big 6" publishers seem to miss that point entirely. Of course, they also seem to think that "voracious reader" means "15 books/year," so their conclusions are understandably skewed.

[fjtorres]

Originally Posted by Kumabjorn

If I was dependent for my livelihood to write fiction I would seriously look into writing movie scripts.

I wouldn't.
Unless you're targetting Bollywood.

Hollywood is on a downward spiral of ever less, ever more-expensive product. Theater attendance is on a steady decline and industry revenues are only propped up by increasing ticket prices and absurd candy and drink prices.
DVD revenues are down and the studios are struggling to find a viable business model to make up the revenue.
https://www.mobileread.com/forums/sho...d.php?t=170267

The only way I would target video as a venue for a story of mine would be if I was prepared to take it all the way myself, probably for one of the emerging digital distribution channels; Netflix, Hulu, Crackle, or yes, Amazon.

The problem of abundance--of too much product chasing too little revenue--is not exclusive to books or to the creative industries but rather a sign of the greater economic problems of the times. You can find it all over; world-wide auto manufacturing over-capacity, B&M specialty chains folding, housing...

In the creative industries, the problem of abundance is simply magnifying the eternal problem of visibility. In the old days, visibility was about getting through to one of the gatekeepers--now, as the gatekeeping power is broken, visibility is about finding ways to be noticed in the flood of ever-available content.

No silver bullets are to be found.
Expect excellence to be a merely necessary, but not sufficient, pre-requisite for success. Which is pretty much as it always was, right?

The more things change...