Economies of Scale in the Writing World: Beyond Talking Indies

My fall “Talking Indies” column, “Three Money Lessons for Starry Eyed Authors,” comes out today at TW. It summarizes three important lessons I’ve learned since I dove full-time into the publishing and writing world in 2012. The column is intended to be slightly provocative and amusing as well as heuristic with respect to self-publishing. It deals, essentially, with key economic/business elements that all writers need to understand — supply and demand in the writing world is not something to gloss over if you’re an indie author.

These three lessons are not unique to self-publishing. They are true for all the arts, and not just for indie artists, but for everyone in the world of creativity.

1. There’s a shitload of other work out there, i.e., you have more competition than you can possibly imagine (supply)

2. Unless you’re The Beatles or Picasso — or Derek Jeter — no one cares what you just put onto the market (demand)

3. The digital world makes product availability infinitely perpetual (leap frogging the supply and demand problem)

All three points are obvious and essential to understand for success in the modern world where half of what we do, think, and say is part of the roaring virtual wind tunnel of flashing lights and shimmering text we all stare at all day, every day.

Certainly people in the traditional (legacy) publishing world understand points one (1) and two (2). But it is the last point — digital products are available in perpetuity — that is key for everyone to understand here in 2014 and onwards. Before iTunes and Spotify popped up in my virtual reality, if I wanted, say, to listen to Led Zeppelin III (a masterpiece if ever there was one extending the blues idiom beyond imagination), I had to either go to a bunch of record stores to find it or I might get lucky and be able to order it through Amazon. I have that album on vinyl with all its pops and hisses. But  maybe I want a new copy. These days, I can just download it or simply call it up online through Spotify. And I will in theory be able to do that for the rest of my life.

The same is true with books. Last year I began research for a novel I’m writing on love, sex, and the meaning of life in the blown-out negation of suburban America. I wanted to read Mary Gaitskill’s short stories. Mary Gaitskill is a force to be reckoned with if you’re interested in women’s sexuality and confusion about love — real sexuality, mature sexuality, intelligent sexuality, the Gaitskillesque take on women’s sexuality. I will admit to perusing aisles in our local Barnes and Noble and my neighborhood indie bookstore in search of Gaitskill’s work Bad Behavior and Don’t Cry. I could have purchased hard copy versions of these online of course through Amazon. But after a couple of days of book hunting to no avail, I just dialed Mary’s work up at the iBook Store and was reading by lunchtime.

Here’s something I don’t talk about directly in my column this month: the supply and demand concept in the arts has always been distorted, even retarded, by the owners of the traditional marketplaces — studios, publishers, movie houses, and record companies. The standard supply and demand discussion in economics is centered on price. Greater supply of a product means the need to drop price (to increase demand). More demand means an increase in price (the old scarcity principle at work). We all know this logic instinctively if not explicitly.

For books, though, or music, or movies, pricing does not really float with supply and demand in a rational manner. Why are hardcover books generally priced out for retail at about $35? Why are iTunes songs usually $1.29 (or $0.99). And why are digital albums priced at $9.99? Why indeed, since the music and book industries claim to be struggling so these days.

This is where Amazon comes in. I’ve made it clear in other posts that I don’t think of Amazon as either good or bad. To me they’re just a new kind of store. But one thing they’re attempting with books and movies and music is to play with pricing. This is the crux of the problem that the publishing world has with them. Publishers want to command pricing for books. Amazon wants to be able to charge as they see fit (often lower, but, perhaps in the future higher). Had Apple not cornered the music market, Amazon would be working the same methodology on songs and albums. Can you imagine paying $0.19 for the latest Coldplay single?

Granted, things are loosening up in many ways with iTunes and other outlets. Pricing is getting somewhat plastic. But it’s not rational yet. It’s more a tool for promotion. You also have systems like Spotify and Netflix (and Scribd and Oyster in the book world) that let you pay a monthly subscription to get all the content you want. That further obfuscates supply and demand pricing, but it also doesn’t lock the consumer into paying $35.00 for a single volume of work either.

Let me conclude by pointing out one interesting problem with the infinite shelf life of books and music and film, etc. It means a supply curve that will go up, theoretically, forever. In the old days, books went out of print. So did albums. And movies disappeared from theaters. That was a sad reality for authors, musicians and producers. Now it’s a glorious impossibility. But with artistic work always going out of print and being harder and harder to find, at least that meant new room on shelves and in people’s minds for recent releases. Back in the 1980s all of Arthur Upfield’s Bony mysteries were out of print and impossible to find in the U.S. For me, that meant finding a replacement. That’s when I discovered Tony Hillerman’s detective stories and Walter Mosely’s Easy Rawlins novels.

It’s vital for everyone, from consumers to creators to distributors and re-sellers, to keep thinking about the shifts going on in the world of the arts. There is a sloppy tendency to think you know and understand how things are shaking out on the nexus between money and creativity. But you don’t know shit. None of us really do. The issues are so basic they seem simple. But everything in the virtual world is so malleable and up in the air, what was true today won’t be true tomorrow.

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