A readers shouldn’t have to pay anything to download an e-book. Here’s the gist of the economic argument from Postcapitalist Books — Pamphlet 2:
There are no variable costs associated with printing, transporting, warehousing, and distributing copies of e-books, so I ought to be able to download them for free.
Libraries already give readers free access to books. But it’s just a loan: the reader borrows the book for a short duration, then returns it. Libraries also lend e-books. There is no physical book being lent, its possession being transferred from the library to the reader; rather, the reader is granted access to an electronic copy of the book. The reader doesn’t return the borrowed e-book either; rather, when the predetermined lending interval expires, the library blocks the reader’s online access to the book. Why doesn’t the library simply let the reader keep the downloaded copy of the e-book? It would be cheaper and less of a hassle. Every member of the library could download a copy of the book without paying for or returning it, and without exhausting the library’s “supply” of that book. No waiting lists to be maintained by the library; no waiting by the reader: just click and go.
Well, it wouldn’t be fair, would it? Just because there are no costs to be covered in making copies of an e-book, that doesn’t mean that the book cost nothing to make. Writing, selecting for publication, editing, formatting: all of the fixed costs incurred in transforming a manuscript into a real book remain. Selling e-books one at a time, even when there are no one-at-a-time costs to be covered, is a way of recouping incrementally the fixed costs.
However, as I belabored previously, the writer, who does most of the work, gets paid only a small fraction of the per-book revenue. Most of the revenue stream gets funneled to the middlemen. That’s true even with e-books: the writer might get 20 percent instead of 12, but the other 80 cents on the dollar goes to the agent, the publisher, and the e-bookstore. The per-book price for an e-book is lower than that for a physical book, but the price gap is surprisingly small and getting smaller. Even much of the responsibility for editing and publicizing new books — fixed costs traditionally covered by the publisher — have largely been shifted to the author. Lower costs of production translate into higher profit margins for the commercial publisher and its investors.
If the writers organized their own publishing companies and could find readers for their books, they could continue to sell the books one at a time, recouping their own costs of writing and editing more directly. That’s the dream of the self-publisher. it’s also the dream of writers who envision organizing themselves into publishing Houses, then networking the Houses into a large-scale Syndicate.
But for a writers’ Syndicate to perpetuate the e-book’s economic position as a commodity, sold or lent one at a time to readers as if it were a scarce resource, ignores the virtual reality of the e-book. It’s not scarce; it can be replicated again and again and again for no cost and without ever exhausting itself. The e-book is a post-commodity.
What’s needed is a means of covering the fixed costs of turning a manuscript into a book, because the individual e-book copies can be distributed freely to one and all. In short, the e-book industry would be replaced by an e-book utility.
Who then pays the writers and editors if copies of books are being freely distributed to readers?
Nobles and bishops aren’t in the habit of patronizing writers these days. Not many novel-writing grants are bestowed by governments or charitable foundations. University-level teachers of creative writing can presumably get paid enough to subsidize their own creative writing endeavors, but those gigs are few and far between.
What about libraries? The infrastructure is already in place: counting local branch facilities there are more than 16,000 public libraries in the US. Suppose a thousand libraries bought my book for $10 per copy: that’s $10K right there; I’d be fully patronized, not by a single government grant or a sugar daddy but by a thousand $10 grants. And the cardholders would benefit. Each of those thousand libraries, by purchasing its single copy of my book, would acquire the right to duplicate and distribute e-copies of it to any or all of its members, for no charge, with no returns and no waiting.
Why don’t libraries do this already? Because the publishing companies won’t let them. Publishers don’t embrace the role of the library as a public utility; instead, they regard the library as a loss leader, a means of stimulating reader demand that translates into more sales at the bookstore. Not only that, but publishers of e-books have figured out an angle for finagling even more money from libraries:
Not only is the individual library user’s access to the e-book time-limited – so is the library’s. In effect, the library rents e-books rather than buying them. After a certain number of people borrow the e-book, or after a predetermined interval of time has elapsed, the library’s right to loan out the e-book expires. The library then has to pay another fee to the publisher in order to renew its lender’s license for that book. Instead of letting readers take advantage of the cost-free duplication and distribution potential of e-books, the publishing industry turns book usage into a metered transaction – like buying gasoline at the pump. Instead of charging libraries less for e-books, the publishing industry ends up charging them more.
The libraries might welcome a return to the traditional arrangement of actually owning their e-book holdings rather than renting them. Still, the primary incentive for decommodifying e-books lies elsewhere:
In an era of shrinking government, public libraries face tight budgetary constraints. Even if the library could give away unlimited free copies of each and every book in its holdings, it would still have to pay for its own copy, which for budgetary purposes would cost the library no less than the book it lends out one patron at a time. The incentive to stock the virtual shelves of the giveaway public book utility lies not with the local government but with the local readers. All it would take is for one person to buy a copy of a book and donate it to the local library: then all of the other library members could download their own free copies.
The replicating library replaces both the lending library and the bookstore, letting readers obtain, for free and instantaneously, their own copies of any and all e-books in the library’s holdings. Readers might well go for this scheme. What about authors, who typically are paid $6,000 or less from sales of their published books, $600 or less from self-publishing?
In our imagined book utility an e-book is bought only by libraries, and only one copy per library. If every public library branch in the US bought a copy of a book, that’s 16 thousand copies total. At ten bucks a pop the book would generate $160K in aggregate revenues – not a windfall, but not bad either. Still, most books probably wouldn’t achieve such widespread societal distribution in the book utility model. Let’s say the average book is acquired by a quarter of the libraries: that’s 4 thousand copies and $40K revenue. The publishing industry would probably abandon ship, unable to generate enough return to compete with alternative opportunities available to investors.
But what if the writers owned and ran their own publishing companies? Eliminate the variable costs and the time lag entailed in turning books into commodities, eliminate the middlemen and investors, and most of that $40K per book goes to the writers. Now maybe the writer can earn a living wage. Then there’s the multiplier effect: each book purchased by a local library could be freely copied and distributed to a dozen readers, a hundred readers, a thousand… An e-book distributed widely and freely through local book utilities could attain a cultural cachet equivalent to or surpassing that of a bestseller even if no money changes hands. I’m guessing that a lot of writers would go for this arrangement, even if it meant abandoning the dream of making a fortune by writing industry-published bestsellers.