Monday, November 28, 2011

Is My Publisher a Piracy-Denier?

Dear Rich: I am a writer and my publisher recently sent out an email telling authors not to worry about illegal downloads. It makes me mad to see how easy it is to obtain free copies of my book. How do I tell whether piracy affects book sales? Gee, this is a tough one to answer for a few reasons: (1) Our bodies are still clogged with post-Thanksgiving metabolism-slowing leftovers. (2) Our books have been pirated so we may be too close to the issue to provide a balanced response. (3) When talking about piracy we're never sure which statistics to trust. (4) More importantly, we're not sure whether the statistics even exist currently to answer your question. In general, we don't think anyone really knows the answer, but here are some things to consider:
Using the music industry as a paradigm. One theory about illegal downloads is that the people who download them would not have bought the product in the first place. In other words, no sales are lost. Using that line of thinking, the 95% of international music fans who downloaded an illegal copy of the latest Katy Perry album would never have purchased it. Hmm. Even if that number is inflated by the music industry, it's hard to believe all these Katy Perry fans wouldn't pay for her recordings. Even a small conversion rate would double Katy's sales. Of course, book readers and music lovers are different types of consumers (like they say, we don't need to carry a copy of every book we like in our pocket) so analogizing to the music business may not be proper. But it's also possible that the book industry has not yet reached the same digital precipice (from which the music biz has already fallen).
Does DRM have an effect?  Digital rights management (DRMs) built into all eBook readers probably doesn't have too much effect on piracy (and nor will SOPA, if passed). The train has left the station, so to speak.
What about surging eBook sales? It's true that eBook sales are rising dramatically. But that's a measurement of the popularity of iPad and Kindles and only partially counterbalances the disappearing physical book (and physical bookstores). As digital devices become the choice du jour for readers, piracy will probably have an increasing impact on eBooks (just as the popularity of MP3 players triggered the end for the music biz). More importantly, even if not directly, unauthorized digital downloads will be one of the indirect forces causing legitimate revenue to diminish (see below). 
Where is the book industry headed? The content business is heading away not just from physical products, but from downloads too (both legal and illegal). The new model is to replace individual purchases with subscription/streaming services as exemplified by Spotify, Netflix, and Rdio. Of course, there will still be print books, but for the most part, consumers won't possess individual units of content; they will subscribe to a service that provides a content library. No doubt Amazon and Google will eventually drag us to library subscription models for books (though there are still piracy problems with that as well). But in any case, we may be headed for a world where all downloads, not just illegal downloads are irrelevant when offered a fulltime streaming/subscription model. 
Check's in the mail dept. Alas, all of this digital transition doesn't bode well for author revenues (musicians, take a look at a Spotify accounting statement to see the diminishing profit margin). And that's why, as authors, we admire piracy-deniers like your publisher. We may not know for sure what those diminishing royalty checks mean, but denying that the end is coming allows us to still have a nice day!