Re: Paul Krugman holds forth on the future of publishing

On Jun 9, 2008, at 7:18 AM, Jon Jermey wrote:

> Nothing esoteric about this; it's the kind of question wage   
> tribunals deal with all the time. Basically, a 'fair wage'  for  
> writing is the minimum that an average person with the requisite  
> skills and an alternative source of income would accept in return  
> for the effort involved in producing a novel. But because all  
> novels are different, let's be more flexible and say it's the  
> minimum that _that person_ would accept in return for the effort.  
> So if Steven King would produce a novel for $50,000, then paying  
> him $1,000,000 for it is a gross misallocation of resources which  
> could be better spent elsewhere, just as it is to pay someone  
> $1,000 for a novel when they would have written it for nothing. The  
> degree of misallocation gives us an indication of how badly the  
> market is malfunctioning due to artificial restrictions on trade  
> and distribution.
>


I disagree with this definition, and with the assumptions that  
underlie it.

First, what are the artificial restricitions? All rights holders are  
able to distribute just about any way they want to distribute. It is  
true that if the rights holder has very little sales history, they  
may have to convince someone that their work has a chance in the  
market, but that's not all THAT big a restriction, given the number  
of channels available to them.

Or do you mean that those who own the rights aren't willing to sell  
you everything you want in the way you want, and at the price you want?

That latter isn't a failure of the market -- it's the essence of the  
creator's right to control his or her own work product. And it's not  
that much different from your ability to control the fruits of your  
own labor, and decide for whom you're willing to work, and whether or  
not to accept the price that entity is offering.

I know that we can seize property through eminent domain and the like  
when there's some critical societal good involved, but I just don't  
think that our desire to read any particular book reaches that  
threshold of necessity.

As for having some central authority set a price for an artist's work  
(author or otherwise), that just gives me the heebie jeebies. Let's  
give up freedom of the press, shall we? When we give up control of  
who gets how much for their words, we more or less do just that.

Last, I think that it's the height of arrogance for any of us to set  
up as judges of how good any book may be. Let the readers decide if  
they want it enough to pay for it, and if so, how many of them do.  
The vast majority of authors are paid royalties, so that translates  
very directly into the author's pay scale. And what could be more fair?

Now, I know some of you think that the big greedy corporations are  
soaking up far too much of the pay. All I can say is that most of the  
arguments I've seen in that field have been sadly lacking in any  
understanding of the costs involved in producing, marketing and  
distributing the works that they discuss. I only WISH that publishers  
were making a ton of money, but the reality is very different. That's  
why every so often there's a spate of M&A activity.

Experts from other industries come in, they look at publishing and  
say "Oooh, they're so backward, we can make these companies make so  
much more money! What bargains! What fools!" Then they spend a few  
years trying to make good on their expectations, realize that it  
isn't going to happen, and find another set of popinjays to buy the  
underperforming properties (that would be all of them).


Marion Gropen
Gropen Associates, Inc.
www.GropenAssoc.com
Offering Financial Advice By-The-Question,
Downloadable Profit-Enhancing Tools,
and Classes to the Small Press Community.




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