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The idea of the e-book market as a market for lemons has once again popped up, this time in a post by Sunita on Dear Author. I covered e-books-as-lemons last July when Baldur Bjarnason at Studio Tendra brought it up, though I kind of went way off-track in nitpicking the differences between e-books and cars in that one. I’m better now, really!

To review, the idea of a market for lemons is that, when consumers have no way of telling at the outset whether an item is good or bad, the bad items drive the good out of the market. People who have “good” items still have to price them not at the price point a “good” item should bring, but at the average of the bad-and-good prices because otherwise people won’t be willing to risk their money. Which means people with “good” items don’t have as much incentive to sell them, which means there are more “bad” items on the market, which means the average price drops even further, lather, rinse, repeat.

Anyway, Sunita notes that the lower price point of self-published new and rights-reverted backlist books makes them more attractive compared to higher-price-point new and backlist titles from major publishers—but that the vast difference in quality at the same price point makes it hard to distinguish good books from bad.

And she also finds that the reviews on Amazon are not always helpful, because reviews of some self-published books seem unrealistically high. For example, 93.6% of the reviews for Hugh Howey’s Wool omnibus are either 4 or 5 stars, and there are almost 7,600 of them.

Quite apart from whether reviews are genuine or fake, written by people with a stake in the book/author or by an unconnected reader, I don’t find it believable when a best-selling book has a 93.6% positive rating. But even if I were convinced of the overwhelming love for it, when so many books get 4.5+ star averages, two things happen to me, the unconnected reader:

  1. I have trouble knowing which book to pick;
  2. When I read it and find out it is not a 4.5 star book in objective terms, i.e., technique/production issues, I start to mistrust reviews. A lot.

And when I mistrust reviews, there goes my second signal. Rather than having helpful signals, I now have two measures that provide noise. So how do I choose among the vast numbers of books Amazon offers me? I can flip a coin, read a lot of samples, or throw up my hands and decide to stream something on Netflix or Amazon Prime instead.

She notes that, of the ways readers have of discovering new self-published works in the slush pile, two of them—reading established authors’ self-pub or backlist books—rely on there being a traditional publishing establishment to establish those authors. (She doesn’t really say much about the third method, relying on word-of-mouth and reviews from trusted friends.) Thus, she adds, if traditional publishing goes belly-up, so does self-publishing.

Of course, there are a couple of problems with this argument. One that I harped on a bit too much in my last post is that there’s really no objective standard for what makes a work “good,” nor is there any requirement that consumers buy only good works. (If there were, Adam Sandler and Paulie Shore would never make another movie again.) Even Sunita recognizes that bad books sell. In one comment below the article, she notes:

However, the fact that bad books sell is reinforcing self-published authors’ arguments about not paying for work that can make a book objectively better, and that’s a problem. You regularly see posts about how self-pubbers don’t need to hire editors, etc. And conversations among authors about book quality are not always welcome on author boards. I see this as a separate problem from the subjective quality issue, and it’s one that will drive down the overall quality and increase convergence toward lemons.

I have to wonder: if “bad” books sell well enough to cause a problem, then is quality of books really an issue? If they’re selling, and not being returned in droves via Amazon’s up-to-one-week refund offer, then apparently the people who buy them are happy with them. And if the books are selling to people who want them, it seems to me like the market is working just fine for that author and his readers, because they’re both getting what they want.

And there’s also the fact that the number and ratio of reviews is not all readers use to make their decisions. A commenter going by “pamelia” has this to say:

As for Amazon reviews, I have learned to never go by overall star rating or percentage of positive reviews; instead I read the negative reviews first and then look for the most informative 5-star reviews (the ones that cover plot, themes and the reviewers thoughts rather than the squee-filled rants of FANS) then I read a sample and make the decision. Given that that decision may cost me less than $1 and certainly less than $5 I don’t agonize overly long on it.

And commenters such as Bill Smith and William Ockham point out that people have been making the argument that bad will drive out good over and over again as different media—indie music, podcasts, blogs, cable TV—have proliferated and expanded. And yet people have been able to find good content in those media, and are still finding good content now in indie e-books. And for that matter, the traditional publishing market has published plenty of lemons itself, and hasn’t been the most open in terms of being able to tell them apart either.

In a series of comments, Courtney Milan suggests that the reasons Wool has so many reviews might come down to a confluence of Howey asking for reviews in a postscript to the book, self-pub e-book fans being more likely to review books than average, and the book selling its most copies at a time when Amazon prompts buyers for reviews via email and a pop-up notice on the Kindle itself. Sunita doesn’t find the explanation entirely convincing, given the extreme paucity of negative reviews, but doesn’t have any other to offer. Commenters such as Danielle have pointed out times when they left a negative review for a self-published book and then got harangued by the author for it, but it doesn’t seem likely to be the issue with Wool given there are over 7,000 reviews for it—it would take hundreds of one-star ratings just to have an impact.

When you get right down to it, perhaps the best refutation of the lemon market for e-books is the numbers Hugh Howey’s Author Earnings reports have been showing. While the reports have only been snapshots of individual days, and the method of estimating sales probably has a fairly high margin of error, there’s still no doubt that independent/self-published books are consistently selling in huge numbers. And if they’re selling, there have to be people buying them. So there’s proof that those people, at least, are able to find the books they want to read without any trouble. Where’s the proof that people are getting fed up and frustrated with being unable to find good self-published books, the way they were fed up and frustrated with being unable to find good used cars back when George Akerlof published his paper about the market for lemons? (But then, Sunita was notably unimpressed with Howey’s numbers, so she probably isn’t willing to take them as proof of anything.)

When I was first on the Internet back in the ‘90s, Dave Howell came up with a revolutionary system for matchmaking people with books through collaborative filtering. Called Alexandria Digital Literature, or AlexLit for short, it was based on enough people entering ratings of books they enjoyed to be able to pair up users with similar tastes and suggest books to people that their close-taste “neighbors” had liked but they hadn’t read yet. (It was also one of the first e-book stores, though it concentrated mainly on short stories.) Howell brought it back in recent years, though lately it’s only been limping along due to hardware and compatibility issues. Though Howell tells me there might be some hope on the horizon in getting it back up to working speed.

A system like that would be really useful in helping people find good books, because it wouldn’t care about the number of Amazon reviews, or who the author was, or anything else about it at all other than whether or not the people who have tastes most like yours liked or hated it. I hope that Howell can bring AlexLit back up to spec soon, because with the recent explosion of self-publishing something like it is needed now more than ever.

But with or without AlexLit, I suspect Sunita’s worries are overblown. She can complain that people can’t find good books all she wants, but that doesn’t seem to be stopping the people who are finding them from doing it.

How does that old saying go? “Those who think something is impossible should not be allowed to interfere with those who are doing it anyway.”

 
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