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insights_lemon_carFor some reason that’s unclear to me, cars seem to be one of the favorite metaphors for intellectual property. You can’t read very many discussions of piracy without some misguided soul spouting, “You wouldn’t steal a car, would you?” (And occasionally someone points out the inadequacy of this metaphor by replying, “No, but I’d happily duplicate the car and drive off in my copy of it!”)

But on the blog Studio Tendra, Baldur Bjarnason compares e-books to cars in a different and rather intriguing way. They are, he says, essentially all lemons.

Bjarnason is speaking in context of used car dealerships and lemon laws. Given that you have no way of knowing whether a used car is going to be a lemon or not, and there’s more incentive to sell bad cars than good, the existence of bad cars on the market tends to drive out all the good cars. It is Bjarnason’s fear that this will happen to the e-book market.

Most e-books are terrible, Bjarnason writes—either poorly written or badly converted and full of OCR errors. And most reviews are useless because they’re so broadly gamed. Even sample chapters are of limited use since they just tell you how good the writer’s spelling and grammar are, not how good he is at plotting over novel length. Since you can’t tell ahead of time whether or not a book is going to be lousy before you buy it, every book is a risk. Bjarnason is afraid this could either mean publishers are forced to reduce prices across the board to sell anything at all, or that prices could become a function of a writer’s reputation within his core group of fans.

If the former model is correct (i.e. the ‘we’re all screwed’ model) then the ebook market can only be saved by the ebook retailers. They’d have to begin to practice complete information transparency and put in place aggressive returns policies (yes, even more aggressive than the one Amazon currently practices). Sales information, return rate, who exactly is that reviewer and where did they come from—anything and everything about the book would have to be shared in a digestible manner. A culture of secrecy at this stage would risk killing the market off entirely.

If the latter model is correct (i.e. you can only charge when you’ve built up a reputation) then we enter a world where the publishing industry needs to learn how to engage directly with readers to build their audience. This means that they would have to give a lot more stuff away for free.

Bjarnason believes that readers should be able to return e-books for a refund even if they were bought ages ago. “A year should be enough,” he suggests. (This is unlikely to endear him to the people who think Amazon’s current week-long policy is far too long and ripe for abuse.)

This would obviously shift most of the economic power back to the reader but it would also have several consequences. Low quality books would be hammered in the market. Publishers would no longer have incentive to market bad books. Prices would rise to account for the returns and the portion of readers who dishonestly return ebooks but readers would likely accept the rise because of the generous refund policy. The market would contract sharply at first as the bad actors get shaken out but would begin to grow aggressively as the good actors, who are rewarded with both a higher price and a lower return rate, reinvest their profits in product development.

That’s the theory, anyway.

I can tell that Baldur Bjarnason has put a lot of thought into this theory. But like most attempts to compare intellectual and real property, it falls short in a number of key areas.

First of all, you can objectively judge whether a car is good or bad. If it works, it’s good. If it doesn’t, it’s bad. But with e-books (or regular books), quality is more often subjective. There are some objective standards of quality, of course (the OCR errors Bjarnason mentions, really lousy grammar/spelling, and anything else that makes a given book hard to read), but publishing in general is a history of books that appeal to one person while turning another off.

Someone who reads trashy romances like they’re going out of style might turn up her nose at science fiction. Someone who reads “mainstream” drama might scoff at murder mysteries. Fetish pornography horrifies most people—except for those who share that particular fetish, who love it. One man’s “lemon” is another man’s…well, lemonade. Nobody in his right mind would knowingly buy a lemon car—but lots of people would happily buy certain e-books that considerably more people wouldn’t touch with a ten foot pole, and both of them would be right to do so.

Second, you can’t buy a new e-book, wear it out, and then try to foist it off on unsuspecting used car buyer. In fact, as much as startups like ReDigi would like to have it otherwise, you can’t legally resell an e-book at all once you’ve bought it. You don’t have to worry about an e-book “losing value” once you “drive it off the lot,” because it has no resale value at all once you buy it. Granted, from one perspective this makes the risk of buying a lemon even worse. But from another, it means that the number of lemons can’t be increased by turning a good e-book into one by mistreating it. People don’t go around rewriting the e-books they buy into worse ones!

Third, e-books are a lot cheaper than cars. If you buy a bad car, you’re out a ton of money. If you buy a bad e-book, you’re out the price of a couple of dinners at McDonald’s. And again, other people who buy that same book will consider it to be money well spent!

Fourth, you might use your car every day, but most people will read a given e-book once in a very long while, if they read it more than once at all. This is where the real problem with Bjarnason’s year-long return period comes in. It incentivizes treating e-book stores like libraries. You “buy” a book, you finish reading it, then you happily return it for a full refund. If you ever want to read it again, you can just buy (and return) it again. And as a result, writers don’t get paid whether they’re good or bad.

People are already afraid Amazon’s promoting this kind of behavior even now with its one-week return period, even though Amazon keeps an eye out for abuses. With Bjarnason’s system, there wouldn’t be any brakes on this.

I haven’t seen any signs that the availability of low-quality self-published or poorly scanned e-books are driving down e-book prices overall. If anything, it’s been quite the opposite, as publishers conspired to raise prices, and they haven’t really returned to their pre-lawsuit levels even with the settlement. Finding a good book to read can sometimes be tricky, but I’ve never had a huge problem all things considered. I already own more good books than I’ll ever read, thanks to Baen.

(And that’s another thing. He mentions free e-books being used to build community and transfer risk from readers to the publisher as being used by Smashwords—“exactly the crowd that churns out the most rubbish”—while Amazon makes it difficult, but doesn’t bring up Baen at all, and they’ve been doing this for well over ten years. What?)

Reviews can be lousy, I’ll give him that, but canny readers develop their own criteria for figuring out whether a book has appeal to them. Reviews are part of it (especially Amazon user reviews, which tend to be real more often than not—while they can be astroturfed, a little bit of checking any given reviewer’s record can usually make it easy to spot a fake), and if they recognize the author is another part. Whether it’s from a known publisher or self-published, whether the sample chapter grabs them (true, it can’t show how good they are at plotting, but it can at least weed out the worst of the quality offenders—the bad mechanical skills, the OCR errors), whether they’ve liked the writer’s other works, whether it seems reasonably priced, and so on. We can be fooled, but I don’t recall it happening to me very often.

In the end, this looks like someone latching onto a theory, then adapting the facts to fit the theory. I’m actually glad to see this kind of post, because it is good to think about this sort of thing. But sometimes thinking about this kind of thing can lead you to conclude that the one who had the thought had it wrong.

 
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