If you are in the business of selling things, and you sell something for less than you paid for it, this is a failure on your part.  Now, it’s a little different if selling that thing at a loss enables you to sell more of other things (see loss leader).  But that’s not what’s happening here.  The publishing industry is essentially selling the profitable thing to pay for the loss leaders.  This is not how selling things works.  This, incidentally, is why the publishing industry has such a problem with Amazon – Amazon is very good at using loss leaders, and it undercuts the way publishing has always worked.

There are numerous solutions to the problem, but all involve a big change in the way publishers do business.

First, they can make the “losses” less costly.  Move compensation towards the back – advances are gambles by publishers that often don’t pay off, and guess who gets to make up the difference?  That’s right, the reader.  Won’t this hurt authors, you ask?  Probably.  This is not what anyone wants, so we’re going to have to figure out ways to fix it.

Perhaps a better idea is for the publishers to learn how to use loss leaders correctly.  When someone buys the latest Dan Brown hardcover, give them the debut novel from a relative unknown who writes fast-paced conspiracy thrillers.  Note that this works even better with ebooks, where the marginal cost to produce another copy is infinitesimal.  You’ve now increased the value of Brown’s book, and maybe you’ve gained a fan for the new author.  I rarely buy books from authors I don’t know (not without strong and trusted recommendation), but I often by the second and third and fourth books from authors I first read for free.

As an aside, this works even better if you’re an indie bookshop run by someone who would know right away which unknown author would perfectly complement a Dan Brown or other famous author.

Publishers, recognize that the way (most of) you do business now is broken.  It is fixable.  Go figure out how.

It’s interesting – this sort of thing is not that uncommon in a charitable context, but it’s pretty rare for the author to be using a similar technique to make a living.  Is it a perception thing?  That this is okay for charity, but not to make a living?  I think the idea that we can get a pass for doing otherwise objectionable things if it’s in the name of charity is wrong.  Either the ends justify the means, or they don’t.

If the ends justify the means, the end result of raising money in this manner is that an author can make or supplement a living by writing.  This is generally seen as a good thing.  It may not be as important in the grand scheme of things as feeding the hungry or fighting disease, but advancing the arts is universally accepted as a positive outcome.

And if the ends don’t justify the means, then anything objectionable is objectionable in the name of charity or otherwise.

In either case, authors should be doing more of this sort of thing.

I would say that the absolute upper limit of OK is 100,000 for a debut novel, but you’ll find some people turned off to it if it’s anything above 80,000.

I’m not making these numbers up from my experience–I’ve read identical stats on a lot of agent blogs. It’s pretty much an industry standard.

There is effectively a hard cap on the number of words you can have in your debut novel.  More words equals more expensive to print, and a new author is too risky.

That sucks.

Let’s assume that we’re talking about a book that 1) would have a reasonable audience if it were published, and 2) would be significantly harmed by chopping words off until it got under the cap.  That is, this cap is the only thing keeping it from being published.  So how do we fix this?  How do we get these books out where the author can make some money, and people can experience a book from a new author?

Well, the simple answer is to remove the risk.

Luckily, digital distribution and print-on-demand makes it much easier to do just that.  The up front costs are much lower, which allows the non-traditional publisher to take risks that a traditional publisher couldn’t dream of.  There are no expensive print runs, or extra books to be pulped.

If you’re interested, let us know.  We’re still on track for a November launch of ManfredMacx.com, and we’d love to talk to interested authors.

I was arguing with a friend about this article, which talks about creating artificial scarcity in place of something in infinite supply.  They give an analogy – what if we had Star Trek replicators for food, so everyone in the world could always have enough food, and no one would have to pay for it?  Who, then, would take this food away from the starving?  My friend argued that this would be terrible, taking jobs from everyone who works in the food industry.

Unfortunately, it’s not a very good analogy.  There’s no real substitute for food – people have to eat.  Whether or not you consider  high-fructose corn syrup to be food, you can’t escape the need for calories to survive.  For the analogy to hold, we’d have to replace the entire music industry, or the entire publishing industry, with something free.  No one is talking about doing this.

A better analogy would be if the replicator only made tomatoes.  You could have as many tomatoes as you wanted, they’d always be perfect and delicious, and they’d always be free.  This would put tomato farmers out of business.  But these tomato farmers could likely start growing something else instead.  And what happens to the rest of the economy?  Pizza and pasta restaurants suddenly find that a major ingredient in many of their dishes just became free.  Now, for the same dish, they can charge less, or buy higher quality ingredients, or make more profit.  And if you’re a really talented cook specializing in tomatoes?  Your skills are now in very high demand.

And there is still a demand for the people who bring the tomatoes from the replicator to your table.  There is still a demand for the person who stews and cans the tomatoes, or dices and seasons them.  And all the other food items, the ones that aren’t in infitnite supply, still need people to produce, process, and distribute them.

This is what’s happening in the music industry, and starting to happen in the publishing industry.  Some parts of the industries are finding their functions obsolete.  Instead of looking at the money they could save with electronic distribution, and what good use they could put that money to, the industry is seeking new laws and regulations to limit the infinite supply so business can continue as usual.

Even if every single song, book, and movie was distributed digitally for free, there would still be a need for the music, publishing, and movie industries.  There would still be demand for editors, producers, marketers, and all sorts of other services that these industries have always provided.

Reasonable people aren’t calling for the abolition of the music, publishing, and movie industries.  They’re just asking these industries to look to the future, and stop trying to limit supply to protect obsolete business models.

Edit to add:  This post has been translated to Spanish by a reader.  My Spanish isn’t good enough to read the whole thing, but the parts I understand look good.

At Manfred Macx, the author has a book, and the author has a goal, a target dollar amount that unlocks the electronic version of the book.  The author can sell almost anything;  Paper copies of the book, dinner with the author at a fancy restaurant, a character in the book named after you – whatever.  When the target goal is reached, everyone gets the ebook.

Beyond that, Manfred Macx is creating a community around authors and fans, fostering communication and connection in ways that weren’t possible before the internet changed our lives.

Watch this space for updates, or sign up for the mailing list.  We’re looking for authors right now, and expect the site to go live in November.

When it returns, which I hope will be early fall, 2009, it will be more than a blog.  It will address some of the ways in which the publishing industry is horribly broken.  I will explain what’s been keeping me busy since I last posted, and why it’s more important to me than keeping up with the blogging.

The World Digital Library will make available on the Internet, free of charge and in multilingual format, significant primary materials from cultures around the world, including manuscripts, maps, rare books, musical scores, recordings, films, prints, photographs, architectural drawings, and other significant cultural materials.

Manuscripts, rare books, significant cultural materials – these are the things that are in danger of being lost, things that only exist on paper.  While it’s great to have a paper copy of something written or printed long ago, in the end it’s the content that’s important, and the permanence of the content that’s more important still.

And all for free?  Some time in the not-too-distant future, we’ll see a day when the quality and quantity of free content for ebook readers will make companies like Amazon rethink the way they do business, and maybe even start charging for the real scarcities while giving away the infinite.

World Digital Library via TeleRead

Meanwhile, Comedy Central and The Daily Show are making a pretty strong case that we may actually have more accountability.

Stewart’s point was that Wall Street got fat off of all our pension plans, 401K’s and long-term investments, while the “Fast Money” crowd cashed in our long-term investments — and CNBC was complicit in the entire gambit…

Click through below and watch the video, which I believe includes unaired content, and watch Stewart skewer Jim Cramer over CNBC’s role in our financial mess.

Far from needing newspapers to keep everyone honest, perhaps the time has arrived when newspapers are actually holding us back.  If they go away, we won’t see an end to journalism.  In fact, with greater freedom, unshackled from the old ideas of what journalism is, we may see a renaissance.  In some ways, with anyone who cares to observe and share the world, we already have.  People can complain about the quality of much of this sharing all they want, but the fact that much of it is well-produced, well-thought-out, and spot-on is inescapable.

The world does not need newspapers.  It simply needs good journalism.  And that shows no signs of going away.

via Jon Stewart slaughters crazy finance guy Jim Cramer — video – Boing Boing.

It’s pretty simple: many book publishers look at this new medium and ask, “how can I use it to augment my current business model.” I’d like Amazon to challenge that thinking and say to the world, “how can you use this platform to create a new business model?”

There were really two ways to look at the release of the Kindle.  On one hand, you could look at it as an extension of the current market, something to fit nicely into the well-defined parameters of the publishing world.  Or, you could look at it as something entirely new, something unrestricted by past practices and old ways of thinking.

Clearly, Amazon chose the former.  There are advances in the way you can buy and read books.  The always-on internet connection is a great idea.  But there are no giant leaps.  It’s more business-as-usual in a slightly new way.

Article:  Seth’s Blog: Reinventing the Kindle (part II).