At the moment, plenty of people still pay for media content. Those reasons will evaporate. Let’s consider books. Most people still prefer old-timey tree-based books, but the Kindle and other ebook readers are eating into that preference quickly. I haven’t yet heard of anyone buying a Kindle and later returning to a preference for regular paper books. It appears to be a one way ride. The Kindle, and similar devices, are designed for buying legal copies of books, which is a doomed attempt to forestall the inevitability of all media content becoming free.

I’m not sure why this notion makes me so uncomfortable. It could be because I’m supportive of writers making money off of their content, or it could be because I’m also building something that may go that way.

My immediate, almost visceral reaction to this is to argue that there is value in commercially-created content. I think of software when I make this argument: free, open-source software has existed for years, and yet consumers have historically opted to buy closed-source products over free, open source ones (e.g: the iPad, and the variant of OSX that runs on it).

But that doesn’t make sense. Software isn’t exactly the kind of content we’re talking about – people don’t need a book or a game or a song the same way they need Microsoft Office. And I suspect open-source software isn’t as widely adopted simply because its creators (i.e.: bored geeks) don’t spend enough time optimizing for non-geek users. So this is one argument that’s fairly easy to discredit.

But then where does this leave us? It leaves me with my original discomfort, certainly. It is true lately that content is a bad business to be in, and whatever business models there are that are working are vastly different from merely ’selling’ content. iTunes works, but then they’re not really a store – some have described it as a tollbooth; a gateway that charges you at a rate below your threshold of attention. And even if that were not true, iTunes still sells its albums at a price-point lower than albums were sold pre-Internet. If we extrapolate this, we’d probably have to accept Adams’s theory as the logical end-point for the value of content.

I’m still not sure if he’s right, because the argument sounds a little odd to me. And I can’t figure that out. It’s simple, but is it too simplistic? I’d like your help here. What do you think?

PS: Sorry for the lack of updates. I’ve been spending the last three weeks programming (and all the learning that goes with that) for Pandamian. This post is my way of easing out of code and into the text editor – updates are forthcoming, I assure you.

Some men are born great, some achieve greatness, and some have greatness thrust upon them. Also, some are mentally unstable, and actively seek out disaster. That, in a nutshell, is me and publishing.

I’ve been writing fiction online for over three years now, and I’ve tried countless publishing business models, with some great successes and horrible failures. I endeavour to be the guinea pig for authors everywhere, testing the theories others are too scared to try. It takes a lot of patience, but it’s very rewarding. Here’s a bit of what I’ve learned…

Find Your Niche

This is fairly obvious, but I think it’s greatly overlooked. Possibly the most important thing you can do when starting a project is to know who your audience is, and what they’re looking for. Taken to an extreme, this could be called pandering, but that’s not what you’re trying to do. You know that expression that goes “you can’t break the rules until you know what they are”? Same idea. You can’t push the boundaries of a sub-genre unless you know which sub-genre you’re writing.

But it’s more than substance. Certain niches don’t work in certain media, and can spell disaster for your release plans. One of my series, The SteamDuck Chronicles, sold in amazing volume in e-book format, but bombed badly in print. If I’d taken the time to really understand how my niche audience worked, I would have known they weren’t interested in paper, and saved myself some money. Ignoring that tiny bit of research meant my first 30 sales went to offsetting the Print on Demand set-up costs. You don’t want to do that to yourself.

Free Works

One of my most popular titles is “TorrentBoy: Zombie World!”. It’s available in print and e-book, and just like all my other projects, it’s completely free. You can read from start to finish on my website without any obstacles, and over 250,000 people have already done so. Obviously, I’m losing lots of money on it, right? Wrong.

In the three months since it was released, TorrentBoy has earned over $9,700 in profit, almost entirely from donations. In fact, even though 99.8% of my readers don’t pay a thing for the experience, the ones that do are spending more than I would have earned from royalties under any conventional model. And the only reason they donate is because they can see the whole picture. You can’t count the non-payers as lost income, because in all likelihood, they wouldn’t pay anyway. Worse yet, if you obsess on them too much, you’re going to scare away your true customers. They’re an endangered species, and you can’t afford to mess around with their generosity.

Focus Efforts

When you’re building your website, it’s easy succumb to what developers call “feature creep.” Every new widget or feature or side-issue that you come across gets squeezed into your page design, often at the expense of the content itself. You have to make sure nothing is distracting from the text. Hosting may be expensive, and ads may pave the way to stability, but if you overload the reader’s senses when they’re trying to browse, you’re losing business.

To help test these theories, I created a special Reader site, which lets you read any of my books in whatever languages they’re available in. The design removes everything but the content from immediate view, with chapter navigation and title information one click away. Since the switch, my “rate of completion” (how many people actually finish the book) has jumped from around 40% to 98%, and both donations and sales are up (230% and 180% respectively). As a trial, I create a parallel version of the site, adding a right-hand column with navigation and tombstone information, and made it display for a random subset of visitors. The result? Smaller gains over the traditional model: 10% for donations and 0.3% for sales. The fewer distractions, the better off you’ll be.

Streamline Donations

I’ve tried PayPal buttons in various places around my sites, and this is what I know: a link in the right sidebar gets clicked 0.21% of the time. The same button in the left sidebar gets clicked 0.01% of the time. The link can be “below the fold” (not visible when the page first loads), but too far down and your click rate drops to zero. Putting the link inline almost never works (0.002%), and at the start of the text, it’s utterly useless (0%). Placing a link at the bottom of a chapter or page often works, but you need to be careful that the reader feels a sense of closure when they see that link. Cliffhangers and wrap-ups work nicely (1.1%), but if you’re just arbitrarily cutting the text mid-stream, those links never get clicked. And sometimes you get hate mail.

Another thing to consider is not using the PayPal icons at all. If you create your own button, or apply the “email link” code to plain text, those tend to outperform the branded icons 2:1. Again, don’t overwhelm readers with too many options in too many places. My Reader site places a “thanks!” page at the end of each book, with several donation options to choose from. Since it went live, donations have increased to almost 3% across the board. It’s simple, inoffensive, but blunt, and it does far better business than overcrowding ever did.

Consider a Serial, or Serial+

Serializing a novel is a great way to build brand loyalty (where the brand is you). It’s largely psychological, but I’ve found that readers who come back to you regularly for two or three months will tend to convert from “casual observer” to something approaching “fan”. But the interesting thing is, they don’t need to be coming back for new stuff, just more of the same. Serializing creates an artificial need to return to your site, thereby boosting your fan levels. For my serialized novel Fission Chips, I’ve seen a great shift in the profile of my readership over the last month and a half. Of my 10,000+ readers, 814 are now in the category I’d call “dedicated fans”, visiting not just that site, but reading my other titles as well. After the first two weeks, that number was only 12.

Another variation on this theme is what I call Serial+. In it, you release your book on a schedule (new chapters every Monday and Wednesday, for example), but put a footnote after the latest chapter informing the readers that at this rate, it will take them until some distant date to finish the story. If they want to skip ahead, they can donate a reasonable sum, and get the full story unlocked right away. In early testing, this model has an astounding conversion rate of 72%. If your writing is compelling, people will probably “upgrade” when they can’t take waiting anymore.

Be Nimble

The biggest handicap for major publishing companies is their inability to react to subtle shifts in the marketplace. Strangely, most indie authors actively emulate this mindset, even when they have no reason to. Never get stuck in one mode for too long. If you’re seeing resistance to a certain approach, look at ways to change. You’re writing fiction online here: tradition already says you’re the scum of the Earth. Don’t feel beholden to it for any reason. Do what needs to be done, and be prepared to shift your weight when the time comes.

MCM writes at 1889.ca, and he’s also heavily invested in the future of online fiction. See a full collection of his works here.

I don’t like this, of course, though I don’t think Anderson’s got any say in the matter: he blogged recently to confess that he’s limited by the way global book-rights work, and that there’s nothing he can do about it at the moment. Here’s a thought, though: why not publish the digital versions of Free under a Creative Commons license, distribute that through as many publisher-sanctioned channels as possible, and then reap the benefits this liberalization would bring to both him and his publisher? I cannot answer that question, nor can I profess to know the minds of the publishing people behind Hyperion … but it’s worked for several books published by (now defunct) The Friday Project, and I’m sure it can work for Free.

But … Why Publisher Sanctioned?

Notice that I suggested publisher sanctioned channels of distribution, and not JUST channels of distribution. This slight distinction brings us to the topic of today’s post, which is, namely: if you make something free, and you allow users access to downloaded copies of your work, should you encourage file sharing between users and prospective new readers? Should you mind, even if you’re not in this for the money?

The short answer to that is yes, you should; but the long answer is no, you shouldn’t. And I think it’s pretty obvious, what I’m going to tell you today, but the right answer to the above question also depends on why you’re writing and publishing on the Internet. Let’s begin with the basics: the first thing that springs to mind when we’re talking about file sharing is piracy, and recently Gavin Williams and John/RavenProject had a discussion on Novelr about whether sharing an already free file was considered piracy.

I didn’t have a good answer back then, but I do have one now – and the answer is yes. Let’s face it: why are things free on the Internet? Things are free on the Internet because people expect things to be free, and because they expect things to be free you get more eyeballs whenever you meet this expectation. This is a remarkably old economic truth, to be honest: people are attracted to free things regardless of whether you’re talking about baubles or condoms, and free things on the Internet are, quite frankly, irresistible. (I’ve lost track of the number of ebooks I’ve downloaded as a direct result of the writer making it a limited-time offer, so go figure).

But the thing about offering free products is that you’re not really expecting zero returns. Free downloads earn you human attention, and human attention is the real currency of the Internet. You may not consider it particularly valuable, nor may you consider it particularly helpful when the landlord comes knocking for the rent, but publishers and independent content producers would do well to sit up and take notice of this untapped resource – human attention usually leads to community, and community in turn leads to a captive audience … always a good thing to have on hand if and when you finally decide to monetize your online efforts.

If you’re a one-man show it would make sense to distribute things for free and remain ambivalent to torrenting/filesharing amongst your users. You will, after all, gain hopeful readers. But if you’re a publisher, or if you’re in this for the long-run – serious no shit I want to make money kinda long run – then controlling your free distribution matters as much as making your products free in the first place. File sharing builds no community. Stay away from it.

… and ended up buying a copy.

Something strange happened then and there. August got me - a person diametrically opposed to the idea of partial previews – to plonk down cash for a 23 page short story. This doesn’t make any sense, not from what we know of the indie online-fiction marketplace. I argued two weeks ago that selling fiction in small, bite-sized pieces did not work online, simply because much of the digital commerce that happens today rely on goodwill and trust between user and creator. In the comments to that same post Pete Tzinsky added the observation that reading fiction demands a significant emotional investment from the reader, and that most people aren’t prepared to make such an investment for an ending they might not even like. Readers don’t want to pay money for short epistolary updates, and even if they do, they certainly won’t pay money to an unknown scribe writing away in the dark corners of the Internet.

And yet … despite all that, despite even the fact that I hated having an ending held from me – John August got my money. And I loved him for it.

Why?

There are two differences between my prior argument and what happened with John August. The first was that August’s The Variant was just 23 pages long – the length of a typical New Yorker essay. I was indeed making an emotional investment, but it was considerably less than that of a novel. More importantly, this kind of length enabled me to anticipate the quality of the ending, and in that regard August completely bowed me over. The Variant is a brilliant short story. It is well written, beautifully executed, and entirely suited to on-screen reading. That last comment may not sound like a big compliment … but it is - within the first 13 pargraphs there are two meaty hooks cleverly written so as to compel you to continue reading, to find out what happens next. This is writing tailor-made for the flat screen monitor: fast, frenetic and full of unanswered curiousities, with the promise of answers lying tantalizingly beyond the horizon (or, in this case, the Paypal purchase). John August is one heck of a smart writer, with a deft gift for the grip and the run.

The 2nd difference was that The Variant was cheap. More than cheap, it was easy to buy. Consider: if you were a US citizen your entire transaction experience would be one-click on your iPhone, and in my case it took me less than a minute to have the pdf file delivered to my computer. I finished the story feeling satisfied with my purchase – The Variant was well worth the $.99 I chose to spend on it.

So what can we take away from this particular episode? First, that fiction previews can work, but only under two conditions:

1. The work must be short
2. The work must be appropriately priced

Second, that setting up shop by a steady stream of potential readers could be the best way of leveraging the Long Tail to your advantage. This is, after all, a textbook case of obscure writer finding a (paying) audience through the Internet. And that’s no small thing indeed.

So are there drawbacks to this business model? Sure they are. 99 cents for a short story is too little to live on, and I doubt many writers are willing to hop onto this bandwagon for so low a work/pay ratio. But it’s a start, and not a bad one … the only thing left to prove my last posts right would be for some Variant-loving kid to go upload a copy to a torrent site, and have everyone read that for free.

The New York Times’s got a funny little article about ebook pirating, published 11th May and online long enough to have garnered a respectable amount of blogosphere reactions. Of the authors interviewed for the article I like Stephen King’s the most, who says (in particularly King-ian fashion):

“The question is, how much time and energy do I want to spend chasing these guys (…) and to what end? My sense is that most of them live in basements floored with carpeting remnants, living on Funions and discount beer.”

You gotta love Mr. King for something like that. His comment underscores a bigger debate that’s beginning to pick up, particularly over the past two weeks: people are sitting up and talking about ebook piracy, especially now that ebooks have become viable merchandise. Reactions differ according to group: most traditionally-published authors see piracy as a threat; newer, younger authors (like old-time blogger Cory Doctorow) think that obscurity is a bigger problem. 

There are better people than me out there who are thinking and grappling with this issue, so let’s take a quick look at who’s saying what in the wild web before we go on:

1. Readers apparently revolted against David Baldacci’s latest novel, after Amazon announced that it would charge $15.00 for the digital version. Reason for the revolt? They thought it was too expensive. Most people, apparently, think that since you no longer need to spend money on printing, marketing, and distributing ebooks you can afford to sell them at cheaper prices. Some publishers are now worried that these reader expectations will ruin them; the others believe that making ebooks cheap will increase the number of purchases, therefore enabling publishers to continue making reasonable money. 

2. So what happens if publishers refuse to lower their prices? The Freakonomics people weigh in: 

When digital music fans were confronted with this problem, they just made illegal copies. If Amazon keeps prices above $10, might we soon see a spate of e-book piracy? Or perhaps people simply don’t care enough about books to steal them.

3. Textbook author Peter Wayner confesses in a Nytimes blog post that he’s not sure what he should do, after discovering a pirated copy of one of his books online. He also talked about the issue in his personal blog, where he appears bemused by the whole episode. What I find particularly interesting here isn’t the post itself … it’s the reader reactions to Wayner’s predicament. Here are some choice responses:

“It’s not piracy. It’s re-tweeting.” -DH94114

“Sorry you feel the need to be paid for your ideas. I write poems and share them all the time, like most every poet I’ve known, with little hope or expectation of payment.” – Jed Brandt

Why not stop calling these people ‘pirates’? There’s nothing romantic about them — they are just thieves. – SB

“Personally, I am happy to pay for music and books, or if not I don’t buy them. I like that the Beatles sold enough records to stop performing and produce work like “Sgt Pepper’s.” I like reading books that clearly took a long time to write. I like The New York Times. Yes, we need a new revenue model. But only because technology and greed have made it newly easy to steal with low likelihood of prosecution, not because there’s been some marvelous and freeing change in the philosophy of information.” – Josh

Piracy Makes Sense … And It Can’t Be Killed

Digital piracy is as old as the Internet itself, and I’m pretty certain we’ve all come across piracy in some form or another in all the time we’ve spent online. If you’re like me, you’ve probably touched or used something counterfeit in your life, at least once – whether it’s a cracked copy of Halo or a bootlegged version of Word, or even a burnt CD of favourite songs passed from friend to friend. The truth about piracy is that we’ve all grown used to it. We may not agree with it, and we may not download illegal copies of books, movies or music. But most of us do recognize that pirated work is but a Google search away, and so we carry out our Internet activities around this the same way pedestrians on their way to work may avert their eyes from the homeless inebriate sleeping on a bench by the coffee shop.

I believe that it is wrong to steal, particularly when the work you’re stealing is the result of so much effort by the author concerned. But while I think that, I also believe that piracy is not preventable; and that it cannot be stopped. I say that any effort to destroy piracy on the Internet is doomed to failure simply because piracy – on the Internet, at least - makes so much sense. And so it does – to the students and the USENET users; to the fans and the media bloggers – piracy is a way of life. It is a logical end-point of the democracy and the anonymity of the web, two things that today’s Internet citizenry have grown up with. I believe that it’s not so much a result of human failure as it is a result of the systems that power the web: systems that just coincidentally fit the requirements for a good pirating operation to a tee. Stopping piracy would mean changing the very way the Internet works – which is absolutely crazy, not to mention entirely impossible. Till that (or some external change) happens we’ll have to live with semi-anonymous downloaders, with torrent files, and with an ubiquitous network of USENET servers.

But living with piracy isn’t as bad as you might suppose. Let’s indulge in a thought experiment: suppose we have to prove that piracy is a bad thing, but instead of making it a matter of ownership and principle, let us say that piracy is only bad if there is a proven harm effect. So then the next question to ask would be: what percentage of sales is lost to piracy? This is the only quantifiable measurement that hurts producers, frankly, and it is unfortunate that this very measurement is impossibly difficult to record. A certain portion of book/album sales may well be lost to piracy, but over time these lost sales usually contribute to something equally important in the online sphere – human attention. People who might not have otherwise heard of you would now be able to sample your work, if only through the bootlegged copies of your work floating around the Internet, and there’s a possibility that a portion of them later become fans and evangelists.^[1] Similarly, people who are happy to ’steal’ from you are likely to be equally happy with buying t-shirts and attending concerts and helping out with financial contributions over the same period of time … all this resulting in you eventually making money from your work.

The proactive approach to piracy

Piracy isn’t all bad. Quite a number of people in more matured online marketplaces (i.e., software and music) have survived and profited in an environment that favours piracy. The first step to dealing with it – as an online writer – is to take piracy as a given. If you’re producing content on the Internet, expect some piracy, particularly so if you’re good. The second step, however, is harder: you’ll have to walk a fine line between what you’re willing to give away and what you’d like your readers to pay for. How you communicate this is tricky. Let’ s take a look at two examples (both of which have appeared on Novelr before):

Johnathan Coulton, the web musician, is up-front about piracy: on his site, above his store, is the following note:

Lots of (music) is freely available depending on how technical you are – you can get all of it for free if you really try. But please remember I do make a living this way, so you like what you hear I’d certainly appreciate you throwing a little payment or donation my way. If you can’t afford it, for goodness sake please send copies of everything to all of your friends.

He also has a ‘Already Stole It?’ subheader above his mp3 page, which says:

No problem. If you’d like to donate some cash, you can do so through Amazon or Paypal. Or for something slightly more fun, purchase a robot, monkey or banana that will be displayed here with your message.

The second example I’d like to talk about is that of Panic, the makers of ’shockingly good Mac software’. They’ve been doing it for the good part of 10 years now, and the best way they’ve found to tackle piracy has been to pop up a gentle reminder whenever a user enters a pirated product code, explaining to them that a) their code is from a pirated source, and b) Panic is a small, independent company, and it’d help them very much if you head over to the site and purchase one of your own. 

Most of the time, they say, the user does just that.

^1.Incidentally, some forward-thinking publishers have learnt to boost book sales by releasing a digital version for free, online. These promotions only happen for select titles, however, and for select periods (plus they’re usually for genre fiction and genre fiction only). The logic is that people getting free books online will buy paper versions because paper is more preferable (they last longer, they don’t suffer from battery issues and they’re easier to read). And indeed this has proven to be true, at least for the time being. ↩

And I hate this. I think it’s stupid, and it’s ignorant, and that it does little for both the writer’s reputation and the good reader’s trust. The truth is that the Internet simply cannot tolerate pay-by-installment methods … and the one or two writers who think otherwise better get used to that, and quick. It’s been 9 years since Stephen King failed to get his readers to pay for The Plant. It’s about time people stop thinking they can sell their work like this.

But what are the problems with this format, and why? Apart from the obvious arrogance (how good do you think you are, to deserve my money?) I’m beginning to think that this model is but a mistaken carry-over from the software world – you know, the one where you download a trial edition and you pay to unlock the full version. But let’s be honest, shall we? Nobody – and I really mean nobody – previews a novel for a 30 day period. The parallels between software and writing vanish when we’re talking about business model, because they simply don’t share the same preconceptions. We don’t bat an eyelid when we’re asked to fork out for an unlock key, especially when we’ve tried out our preview version and we like what we see. But ask the same question after a first chapter? Forget about it, pal – I’m more likely to close the window and roll my eyes than I am to pay you. The only thing such a request accomplishes is that it tells me just how web-savvy you are … and I’m not likely to respect you for it.

The strange thing about the Internet, however, is that the preview idea works when you release the whole book – for free – online. You can then ask for financial contributions, or sell them paper/pdf versions of your book, and you’ll find that people will pay up when you do. There’s a principle at work here, one that works only on the Internet: the more you’re willing to give things out for free, the more likely people are to reward you.

I am now sick of online writers emailing and offering me previews of their work … but only after a small payment. The last one who did had a Flash website - a Flash website! – and a badly designed one at that. It was bad enough to demand $1 payments for chapters 2 onwards … but to sell his work in Flash? That meant he didn’t trust me – or any of his potential readers – with copyable, piratable html. I closed his site within 30 seconds and deleted the email soon after.

The Internet’s an exciting place to write, really. You’ll meet amazing people, you’ll find new things to do, and there’s a boatload more new business models just waiting to be discovered. Just – please, you know? Don’t be selfish.

Note: if you want payment models that work, try reading up on MCM’s Novel+ format or John August’s Variant model.

Late last year, however, some nine months after I first wrote that 1000 True Fans post, Alexandra Erin posted in her blog to say that she was in danger of shutting down. At that moment in time Erin had been making a living from her online fiction for about a year, living off donations and ad revenue from the four serials under her name and having a rather good time of it (for the most part). Her situation was dire. The purpose of that blogpost was to request contributions from her readership, and if you’d go take a look you’d realize that her fanbase responded – and responded beautifully. Together, they donated $5000 or so within the first 24 hours (Erin only required $3000 to get out of trouble); a few days later, she announced that the eventual amount was somewhere in the range of $6000-$7000. 

In one way, at least, this particular episode tells us that the 1000 True Fans hypothesis is correct: make an outright request to your fanbase, and if the fanbase is large enough they’re likely to fulfill that request for you. But look slightly beyond that and we’ll find that there’s a problem with the way the 1000 True Fans theory is applied to blooking. Put simply, there are less established ways to make money from online fiction as compared to blogging, or webcomics, or music.

The Problem With Fiction

The most obvious problem you’ll face as a blooker when you attempt to make money from your fiction writing is that of product. It takes far longer to write a novel than it does to produce a song, or to write a blog post, or even to publish a collection of webcomics. And even if you do, say, write two novels per year, and by some chance you manage to publish them on your website after an impeccable editing process, you still have to live with the fact that books – and in this context self-published books – do not command the same money-to-effort ratio that other types of web-powered media (e.g.: music, for instance) commands. Consider: a self-published book costs about $16.00. An mp3 from Coulton costs $1. At his prime Coulton churned out a song a week, so let’s say for the sake of argument that an mp3 takes him a week to finish. What have we, money-to-effort wise? If we take the number of hours needed to create that book/song, and we divide it by the price of purchase, we’ll find that a self-published book makes you $0.0037 per hour, while a song makes you $0.0060 per hour. Not a big difference, but remember that a song a week results in a lot more product than two books a year. Writing books and banking on book sales surely isn’t the way forward, not unless you’ve got an audience numbering in the thousands.

So the second source of income in your online operation that we have to talk about is that of site revenue – and that includes ads and themed t-shirts and other cutesy stuff like pillows and mugs that people sell through 3rd party websites. And there we have another problem – ads aren’t particularly effective, not in a fiction-based project, and even the small gains you make from selling ad space through programs like Project Wonderful would arguably be offset by the sheer uglyness those ads would bring to your blook (more on this later). Merchandise, on the other hand, does make sense, but I’ve yet to see any web writer take advantage of this by first creating a visual identity for his or her work, and then extending that established visual identity to pillows, mugs, t-shirts, and so on.

The Real Currency Of The Web

But perhaps we’ve been approaching the 1000 True Fans hypothesis all wrong. Perhaps it isn’t so much of getting those 1000 fans for money as it is getting those 1000 true fans in the first place. For the truth here is that the real currency of the Internet is human attention. No matter who you are, or what you do – if you’re on the Internet your first job would be to earn in the one currency that matters, before even thinking about converting that into real-world money. And the paradox is that you often don’t know how these conversions would take place. As Coulton says it:

But somewhere along the way the bottom line started improving, and I became less obsessed with tracking every little thing. Now I sort of think of the whole engine as a special genetically engineered cow who eats music and poops money – I have no idea what’s going on in its gut, and I have the luxury of not really caring that much about the particulars.

The real reason the cash-making cows (for want of a better name for this kind of business model) work is that you don’t really know how you’re going to earn your money in the near future. Productivity guru Merlin Mann remembers releasing a video on a presentation he made in Google called Inbox Zero, and he remembers releasing the whole thing for free instead of charging for it. The video got watched a gazillion times on Youtube, and not long after corporations began contacting him to do the same thing in their in-house workshops, with pay, of course. That simple act of releasing the video for free earned Mann human attention, which in turn converted to lots of real world money over the next few years, but in a way he didn’t expect. Coulton sums it up like this:

… extrapolate (…) across my entire catalog, across all the things sold that make up my income, across the past and present and future, across all the internet radio stations and file sharing networks and Facebook pages and Twitter posts and the whole wild and wooly internet – you will never know HOW it works, but I can tell you that for me it does. The state of the industry makes a lot more sense when you think of it this way, all these new business models rising and falling, internet radio choking on insanely high performance royalties, Radiohead and NIN giving stuff away and making a killing. This is the thing about the new landscape that drives everyone crazy: you can’t see inside the cow; you can only build one, feed it music, and wait for it to poop.

The real lesson you need to take away from the 1000 True Fans hypothesis isn’t that finding 1000 True Fans would guarantee you the ability to quit your day jobs and make a living writing online fiction. The real lesson in it is that human attention is the only measurement of wealth that matters on the Internet, and once you have it – once you’ve got a significant amount of it and you don’t do things to compromise it (like, say, ugly ads) – you’ve got to keep your mind open about how you’re going to convert that currency into real-world dollars and cents. And that open mindedness is the scary bit about the cash-cow business model – for how do you prepare for something that you don’t know? The answer is – you don’t. You find your fans, you write hard, and then you hope for the best.

Johnathan Coulton is a B musician who makes enough money to get by. He is not yet the Timberlake millionare, nor is he a commercialized pop idol. You’ll probably never hear of him in mainstream media, in fact – no MTV showcases, certainly no Channel V music videos. And yet he has plenty to do, and his fans are a dedicated, semi-international bunch. He does tours. His CDs find their way into the hands of those willing to listen. And, most importantly, he replies to your email.

Coulton is one of the few musicians who have found a way to make a living online. I first discovered him in late 2007, and I’ve been a firm subscriber to his feed ever since (with good cause – he does a weekly song, often with fan input). I was rummaging through my online bookmarks when I found the NYT article that introduced me to him, and it got me thinking about how his model could be applied to blooking.

1000 True Fans

Before we apply anything to anything (and get into a big shmooze fest), let’s take a look at what other people have been saying about the business model Coulton – and others like him – have been implementing. Wired founding editor Kevin Kelly has named this concept ‘1000 True Fans’, and it says this:

A creator, such as an artist, musician, photographer, craftsperson, performer, animator, designer, videomaker, or author – in other words, anyone producing works of art – needs to acquire only 1,000 True Fans to make a living.

1000 True Fans is an extension of The Long Tail, and is only logical because the Long Tail heaps benefits on chiefly two parties: individuals and content aggregators (eg: you and Amazon). Creators still don’t really benefit: if their product is bought it may do well in the long run, but only for the store that sells it. You aren’t going to make a lot of money with flops, unless you have a) a lot of them, or b) a few hits.

So 1000 True Fans leverages the Long Tail in such a way that even B artists get enough coverage and enough sales to survive. How do they do it? What is the nitty gritty of their daily lives? The NYT article gives us some insights.

Coulton earns what he calls ‘a decent middle class living’ – $3000 to $5000 a month, and he does it through CDs and digital downloads of his music on both iTunes and his own site. He gets about 3000 visitors a day, his songs are downloaded 500,000 times, and his fan base is so dedicated he’s got people doing illustrations for his weekly songs, for absolutely nothing. He sells his CDs this via contract with a virtual fulfillment house called CD Baby, which processes the credit card payment for each sale and ships it out, taking a $4 slice (much less than an actual label – this sounds a lot like Lulu and Blurb for musicians, doesn’t it?). He also makes money by offering his songs for free (the Radiohead pay-what-you-want model) with payment through donations. And it works – the Radiohead model just seems made for the Internet. Other musicians are even more ingenious: Canadian folk-pop singer Jane Siberry’s site shows the average price for songs, thus creating a subtle minimum standard for her fans and earning her more per track than if she sold through iTunes.

Applying 1000 True Fans To Writers

It doesn’t take a genius to see the parallels between the writing and the music spheres. The NYT article throws a quick reference to us writers:

Will the Internet change the type of person who becomes a musician or writer? It’s possible to see these online trends as Darwinian pressures that will inevitably produce a new breed — call it an Artist 2.0 — and mark the end of the artist as a sensitive, bohemian soul who shuns the spotlight. In “The Catcher in the Rye,” J. D. Salinger wrote about how reading a good book makes you want to call up the author and chat with him, which neatly predicted the modern online urge; but Salinger, a committed recluse, wouldn’t last a minute in this confessional new world.

What Coulton can do, writers can do also. Our CD Baby is Lulu, or Blurb – self publishing services that take a slice out of every sale. We can make a dollar or two through ads on our blogs and T-shirt sales, or we can be slightly more creative and do a subscription service like Fray. Our stories are open to all – we just have to remember that, like the web comic world, people want to buy what they’ve read for free online. And, most importantly, we can engage with our readers – have a chat, be a friend, like what Salinger proposes.

The only thing that remains is writing something brilliant … and finding that 1000 true fans.