
The Real E-Publishing Story: It’s Not the Millionaires, It’s the Midlist - wyclif
http://steamwords.wordpress.com/2011/11/04/the-real-e-publishing-story-its-not-the-millionaires-its-the-midlist/
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pemulis
For those of you who want some background on why big publishers have mostly
abandoned the midlist, this article[1] by Kevin O'Donnell is a good summary.
Short version: A Supreme Court ruling related to tax markdowns on slow-selling
books made it too expensive for publishers to hold paper inventory of midlist
books from year to year. On the other hand, since e-books don't create excess
inventory, there are no tax penalties for Amazon (or Apple, or B&N, or
whoever) to keep a midlist book "in print."

[1] <http://www.sfwa.org/bulletin/articles/thor.htm>

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graeme
I've lived this. I'm learning programming now, but LSAT prep is my field. Last
year I wrote LSAT explanations which should earn me $15,000-$20,000 annually,
and I havent even made a physical book on amazon yet.

No publisher would have touched that, but it's more than enough for me, given
the one-time effort required.

In fact, the books that I'm writing explanations for are hardly publishable.
Every LSAT student has one, but often bookstores don't stock them because it's
such a niche market. But inventory is not an issue online.

Let a million niches bloom.

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tatsuke95
Wholeheartedly agree. The same can be said of the music industry: the return
of the middle class. Fewer people making it huge by 99% luck, more people
creating art because they enjoy it, and actually being able to live off the
proceeds.

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stcredzero
However, if you look at the music industry, online music has become more of a
means of marketing for the vast majority. I think most midtier musicians make
money by touring and selling merch. (Which may be combined with teaching or
day jobs.)

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zdw
Remove the inconvenient paper dongle and introduce pricing flexibility and
things that previously were not profitable now are.

I'm all for this as long as it doesn't cause a descent into poorly made,
ripoff, or other junk products flooding the market.

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sukuriant
It very likely will; but then something else will come around that will help
us review these stories, and it'll probably make money off advertisments (for
books, even).

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Duff
Another great example of how finance mumbo-jumbo destroys industries.

So the publishing industry's balance sheet looks better because they carry no
inventory. How is the publishing balance sheet going to look when the industry
implodes?

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tatsuke95
> _"Another great example of how finance mumbo-jumbo destroys industries."_

Finance, the art of getting capital to where it can be utilized most
efficiently, has created vast, vast, _vast_ amounts of wealth, everywhere it
is practiced. Destroys industries? Please. It has created and bolstered more
industry than anything you can name. It's the reason you own a car and a
house. Finance is not a bad word.

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Retric
You overstate your case. Finance is capital allocation not capital creation,
car companies could just as easily operate by directly leasing the cars they
made vs using 3rd party's to finance the transaction. Finance increases the
market for things beyond who can directly afford them which drives up prices,
see home housing markets around the world. However, on net it's still
generally considered a good thing.

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tatsuke95
> _"car companies could just as easily operate by directly leasing the cars"_

...which is finance. So why don't they do that, if it's just as easy? And
where does the money come from to front the cost of building the car that is
to be leased? Because the lessee won't cover the cost for quite some time.
Yep, finance.

I realize there's a populist movement, especially among the younger crowds
that frequent the interwebs, that influences people to hate everything Wall
Street. But I don't think people realize what a fascinating and, more
importantly _fundamental_ , role finance has played in history. Present day
Silicon Valley does not exist without it. It does, in fact, create capital.

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Retric
_It does, in fact, create capital._ No, it allocates capital. VC's don't
directly create capital they take money from investors, take their cut, invest
the rest and then you get Silicon Valley. It might seem like a semantic
argument, but what your suggesting would be the same thing as arguing that
Walmart manufactures TV's. They are involved in the process, but a lot of bad
policy shows up when people confuse bank balances with actual capital.

PS: 'So why don't they do that, if it's just as easy?'

A lot of car companies do that ex: <http://www.hondafinancialservices.com/>.
Whenever they advertise 0% interest that's the car company handling the loan.
However, car companies often resell these loans to third party's to get their
capital back. There is a lot of capital out there that's looking for safe
investments and repackaged loans fit the bill.

~~~
tatsuke95
> _" It might seem like a semantic argument"_

I guess it is semantics:

<http://en.wikipedia.org/wiki/Financial_capital>

