The Ransom Model

The single biggest challenge facing independent authors right now is (and this is a doozy) how to make money. It’s a fundamental concern, and it also happens to be the one place where traditional publishers definitively have us beat.

There are dozens of ideas floating around and I intend to talk about the strengths and weaknesses of several in the coming weeks. Today, however, I’ll be focusing on one in particular; I call it The Ransom Model, and it’s just as sinister as it sounds. *cue maniacal laughter*

Alright, I admit that was a bit of a come on. The basic concept isn’t sinister per se, but it is a little radical. It requires us to reconsider our rights as creators, our relationship to the reading public, and how we ought to be paid.

Some background…

Traditional publishing is–at least from my outsider’s perspective–a pretty complex process. The path a novel takes from the author’s desktop to the reader’s hands is twisty and circuitous, with forward steps followed by backward steps so often you might think you’re doing the cha-cha.

To grossly simplify the payment model, writers are promised a small percentage of each sale (a royalty), with that percentage fluctuating based on the number of printings and the book’s form-factor (i.e. hard-cover, paperback and mass market paperback). The author is paid an advance on their royalties, and in an ideal world, would continue to make more money as their title gains popularity and sells. The truth isn’t so rosy, however. For first time authors, that advance is just a few thousand dollars, and it’s usually the only check they get. Their books only ever see a single printing, backed by little to no marketing, and quickly fade into obscurity.

As digital publishers, we don’t have the same concerns as traditional publishers. We don’t rely as heavily on typesetting, don’t pay to print 100,000 copies, don’t deal with distributors or warehousing, and don’t have to convince book stores to buy our products so they can sell them to the public. Instead, we define the structure of a book and let the e-reader worry about the layout. We market directly to our readers, and if we embrace technologies like BitTorrent, our distribution is virtually free and only gets cheaper the more we use it. In an hour, I can spread a million copies of a book over six continents using nothing more than my residential internet connection. Sounds a bit like magic, doesn’t it?

The problem is that it’s nearly impossible to attach a dollar sign to a digital copy. That copy isn’t tangible; you can’t hold it in your hands and carry it to the check-out counter. More importantly, if we try to make the digital copy more like the printed book using DRM (digital rights management, technology that makes it harder to copy), we destroy its natural strengths. We’re taking an excellent product and intentionally making it worse.

Let me run over that again for emphasis… The key strength of information technology is its ability to copy. That’s its defining trait, which the entirety of the internet was built upon. Computers are darned good at copying bits and we don’t want to fight that power; we want to exploit it.

Essentially, we want our readers to act like pirates. That’s the best use of the tools we have.

But wait… How do we get paid?

Hum-dinger of a question, isn’t it? Well, I thought up an answer a few years back, and it’s called the Ransom Model. It works by redrawing the line between authors and their customers; instead of asking each individual reader to pay for a copy, we ask our readers to pay a single fee as a group. It’s collective bargaining, and it ideally works something like this:

Our protagonist is Herbert Hypothetical, an author who’s just finished writing and editing a fantastic debut novel, Ms. Misty and the Mists of Mystery, which is finally ready to see the light of day. He girds his loins, cracks his knuckles and register at Ransom House, a website that works as an intermediary between authors and the reading public (an escrow, basically). Once he’s registered, our intrepid indie author uploads his book, designates how much can be viewed as a sample, adds a description, and sets a target price and collection date (let’s say $10,000 and 30 days later, respectively).

During the next 30 days, readers take a look at samples of Ms. Misty and pledge whatever they feel is right, while Herbert runs around marketing his little heart out. With a little luck, some fans will be so eager to see the book released that they’ll convince their friends to pledge, too.

Then, when 30 days rolls around, pledging is over and Herbert has either met his quota or not. If he hits his target, readers’ cards are charged, ol’ Herby gets his paycheck, and the book is released with a Creative Commons license, making it permanently free to copy and share. If not, no money changes hands, and Herbert rethinks his marketing plan and price.

Using the Ransom Model, the author looks at society-at-large as his customer, and then negotiates a price.

Now the crazy part…

Much to my surprise, the idea was independently invented a few dozen times over, and some folks have already picked it up and run with it. Allow me to introduce Robin Sloan, an indie author and self-professed media inventor who’s been experimenting with self-publishing. Using a variant of the Ransom Model, he used Kickstarter to raise $13,942 for the release of a 28,000 word novella. That’s about twice the advance most first-time authors receive, and for just 80-some-odd pages of text.

That’s… Wow. Just wow.

You can read more about Robin over at Wet Asphalt. The article is perhaps a little too glowing for my taste, but it tells a compelling story.

Is this the future of publishing?

Hard to say at the moment, but I definitely think it’s a workable plan. There are hang-ups of course: it sets a hard limit on potential earnings, and requires writers to do a lot more networking and publicizing than many are comfortable with. I can see a lot of friction coming from both of those issues.

Still, it’s something to think about, and it shows that a creative new answer to a problem can be worth its weight in gold.

So, what do you think? Brilliant or insipid? Have a better plan? Leave a comment and let me know.

~Spectre-7

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Filed under ebooks, Oktopod Operations, Revenue

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