The Zero-Sum Game

by rahego under Creative Commons
by rahego under Creative Commons

John Scalzi wrote an article about the new Amazon all-you-can-eat-self-publishing model, and why it’s bad news for self-publishing authors. I agree that this kind of subscription model makes writing a zero-sum game, but I disagree that that’s not the case for other forms of publishing.

Full disclosure, I’ve written a book, but haven’t published it yet, so I have limited knowledge of the publishing industry. I have been part of the software industry for fifteen years, and seen the way economics work there, which I feel has some bearing on e-books at the very least.

What’s it about?

Amazon’s Kindle Unlimited is a subscription service, like Spotify and Netflix, only for books. Each month Amazon takes the subscription money, subtract a part for themselves, then distributes the rest among the authors based on how much their works have been read. As a reader, you can read anything from the Kindle Unlimited catalogue you want.

Problem is, now that the number of self-published authors has exploded, the money authors are receiving is decreasing rapidly. This is quite logical: the pool of money stays the same, but the number of authors to divide it among is growing.

Scalzi asserts that this make writing a zero sum game:

“That said, the thing to actively dislike about the Kindle Unlimited “payment from a pot” plan is the fact that it and any other plan like it absolutely and unambiguously make writing and publishing a zero-sum game. In traditional publishing, your success as an author does not limit my success — the potential pool of money is so large as to be effectively unlimited, and one’s payment is independent of any other purchase a consumer might make, or what any other reader might read.”

I agree with the first statement, but I do not agree with the second. The pool of money in traditional publishing is bigger, but it is also limited.

What do you mean?

Consumers spend their money on numerous things. Food, housing, medical care, and entertainment. In the entertainment category you’ve got books, movies, music, video games, museums, etc. So, part of the total income of all people in the world goes to buying books.

This pool of money is huge, much larger than Amazon’s pool, but it is finite. So, if the number of authors increases dramatically, then yes, income for all authors will dwindle. This doesn’t happen, because there is a mechanism in place to limit the amount of authors on the market: the traditional publishing industry.

I really hope I can get my first book published traditionally, but that’s hard, because publishers only take on a small number of new authors a year. They do this, because they only have a limited budget. Editing, marketing, and printing a book is an enormous investment that they can’t do for too many books a year. And even if they could, producing twice as many books would not mean doubling their income, readers are not suddenly going to buy twice as much, so the same income with twice the costs. As a result, a balance is struck with only a few new authors a year.

Cutting out the publisher and self-publishing sounds like a good idea, right? You can do the marketing yourself and maybe have it edited for a small fixed fee. That has worked for many, but what you see with Amazon Kindle Unlimited, you will see in the entire industry: the number of (self-published) authors is increasing, but the total money in the pot is not.

After some bumps, this will balance itself out. With less potential income, being a self-published writer will quickly become less attractive. Also, some mechanism will appear to filter out the crap from the gold, what the traditional publishers used to do for all books, creating a new balance.

So what’s your problem?

Commoditisation of books is my problem. Creative works are all treated equal by consumers. I pay the same for Harry Potter, as I do for a book like I Am Not a Serial Killer. However, Harry Potter probably sells a thousand times as many copies. The up-front costs are the same, but Harry Potter makes the publisher and author vastly more money. What you see in all creative industries is a tendency of distributors and consumers to focus on that top tier of vastly successful artists (J.K. Rowling, Taylor Swift, etc.) and call for lower prices while spending less. The total amount in the pot is going down.

Some numbers. Say you price e-books at 1 dollar. When a million copies of a book are sold, and after subtracting distribution costs, say 30%, that will net the author and publisher 700,000 dollars. You can live well from that. However, most books sell less than 10,000 copies. In that case, that leaves less than 7,000 dollars for author and publisher.

The amounts of books sold will increase of course, but will books that sold 10,000 copies all suddenly sell 100,000? I doubt it. I used to buy hundreds of dollars worth of CDs a year, now I only have a Spotify subscription for 10 dollars a month.

Conclusion

If things continue as they are, prices will be driven down so that only the top performing authors can make a living. Whole genres, like fantasy and science fiction, might become unprofitable. A service like Amazon’s cheapens the value consumers ascribe to books, hastening this process.

I understand Scalzi’s point. I understand Amazon is a business and this benefits them. However, it’s bad for authors, traditional and other, because it’s all a zero sum game in the end.

Author: Martin Stellinga

I'm a science fiction and fantasy writer from the Netherlands