Jim Baen and I set up the Free Library--see http://www.baen.com/library--about a year and a half ago. Leaving aside the various political and philosophical issues, the premise behind the Library had a practical component as well. In brief: in relative terms an author will gain, not lose, by having titles in the Library.
     What I mean by "relative terms" is simply this: overall, an author whose work is in the Libarary is far more likely to see increased rather than decreased sales. Or, to put it more accurately, exposure in the Library will generate more sales than it will lose.
     As a practical proposition, the theory behind the Free Library is that, certainly in the long run, it benefits an author to have a certain number of free or cheap titles readily available to the public. By far the main enemy any author faces, except a handful of ones who are famous to the public at large, is obscurity. Even well-known SF authors are only read by a small percentage of the potential audience. Most readers, even ones who have heard of the author, simply pass them up.
     Why? In most cases, because they don't really know anything about the writer and aren't willing to spend $7 to $28 just to experiment. So they keep buying those authors they are familiar with.
     What the Free Library provides--as do traditional libraries, or the old familiar phenomenon of friends lending each other books--is a way for people to investigate a new author for free, before they plunk down any money.
     That was the premise behind the Free Library when I first set it up. At the time, since I had no experience to go by, I was basing that on common sense as well as Jim Baen's experienced judgement as a longtime publisher.
     Now, a year and a half later, our original assessment has been demonstrated in practice. The Library's track record clearly shows that the traditional "encryption/enforcement" policy which has been followed thus far by most of the publishing industry is just plain stupid, as well as unconscionable from the viewpoint of infringing on personal liberties.
     The purpose of this essay is to demonstrate that, based on facts.
     Let me begin by posing a simple question. Does anyone have any real evidence that having material available for free online--whether legitimately or through piracy--has actually caused any financial harm to any author?
     The entire argument for encryption rests precisely upon this presumption, which has never once been documented or demonstrated. To the contrary, it has been cast into question any number of times, and I am about to cast it into question again.

Facts You Need To Consider
     1) The first title to go up into the Library was my own novel, Mother of Demons. That was my first published novel, which came out in September of 1997. At the time it went into the Free Library--in the fall of 2000--that novel had sold 9,694 copies, with a sell-through of 54%.
     As of today, according to Baen Books--a year and a half after being available for free online to anyone who wants it, no restrictions and no questions asked--Mother of Demons has sold about 18,500 copies and now has a sell-through of 65%.
     "Sell-through" refers to that percentage of books shipped which are actually sold. Many books are never sold at all, but are returned to the publisher. Sell-through is therefore always expressed as a percentage. "Net sales" also refers to books sold, but in absolute numbers.
     I would like someone to explain to me how almost doubling the sales and improving the sell-through by 11% has caused me, as an author, any harm? The opposite is in fact the case. Mother of Demons began its life as a typical first novel, with very modest sales and sell-through. Today, it has better than average sales and much better than average sell-through--a change that took place simultaneously with the book being available for free online.
     I like to think that at least some of the reason for Mother of Demons' success is that I've become a better-known author in the last four years. Still, it is impossible to argue that the Library has hurt me. To the contrary, I think there is every reason to believe that the added exposure the Library has helped the sales of Mother of Demons as well as my other books.
     And the exposure is considerable, by the way. There were more than 130,000 visits to the Free Library in the last quarter of 2001, almost 1500 a day.
     To date, my best-selling title (as a solo author) has been my novel 1632. That book came out in hardcover in February 2000, and was reissued in paperback in February 2001. I put it in the Free Library at the same time as it came out in paperback format.
     Today, more than a year later, the paperback edition of 1632 has a net sales of about 34,000 copies and has a sell-through of 88%. If being available for free in the Library has hurt 1632, in any provable way, I'd be puzzled to see how.
     Let's now look in closer detail at the progress of another title in the Library, An Oblique Approach, the first volume in the Belisarius series, which I co-authored with David Drake. I think these figures demonstrate the impact of the Library more clearly than any other.
     An Oblique Approach went into the Library a few days after Mother of Demons--i.e., it's been available for free for a year and a half now. First in paperback in March of 1998, An Oblique Approach had no hardcover edition. Here are the royalty figures on that novel, beginning with the first period for which figures are available and ending with the last.
     The first column gives you the royalty period; the second, net sales of the book as of that period; the third, the cumulative sell-through as of the end of that period; the fourth and last column, the new sales which took place during that reporting period:

     Period             Net sales   Sell-through  Sales this period
     July-Dec 1998      30,431      70%           30,431
     Jan-June 1999      35,977      80%           5,546
     July-Dec 1999      36,812      78%           835
     Jan-June 2000      37,607      77%           795
[An Oblique Approach goes into the Library mid-way through this period]
     July-Dec 2000      39,268      77%           1,161
     Jan-June 2001      41,172      77%           1,904

     The most interesting--and unusual--aspect of these figures are the ones on the right, in the column titled "sales this period." From the beginning, An Oblique Approach has enjoyed an excellent sell-through, so it would be surprising to see much change there. The average for SF paperbacks in the industry as a whole is no better than 50%, and probably a lot closer to 40%. In short, in terms of sell-through, An Oblique Approach is doing almost twice as well as the average.
     The overall sales figures are not especially surprising either. An initial "out of the gate" sales figure of about 30,000 is nothing outstanding, but is eminently solid for a paperback title. The average paperback sells, traditionally, about 15,000 copies--but the actual figure has probably been lower for several years now because of a "soft" market.
     Given that the standard experience is that 80% of a book's sales happens in the first three months, it's not surprising that the sales are concentrated in that period. In the next period, January-June 1999, the novel had a solid 5000-plus sales. And after that, we see:
     What usually happens. Within a year after a novel comes out, the sales drop right through the floor. After that, sales steadily dwindle away. And, sure enough: in the third and fourth periods, An Oblique Approach sold considerably less than a thousand copies each period--835 and 795 respectively, showing the expected slow and steady drop.
     It's what happens next that is significant. Because, all other things considered, those "sales this period" figures should have kept steadily dropping. Slowly, perhaps, but what most certainly shouldn't have happened is a sudden rise in sales--and a rise which increases in the next period.
     Nor can this be explained, as the sharp rise in sales of Mother of Demons perhaps can, as the result of me becoming better known as an author. David Drake is listed as the lead author of An Oblique Approach--and Dave has been a very well known SF author for twenty years. Granted, my increasing popularity as a writer was responsible for some of that increase, just as the fact that Dave's popular Lord of the Isles and With the Lightnings series started coming out during this period.
     But... but....
     Nonsense! Between the January-June 2000 reporting period and the period one year later, the sales for that title--which had now been out for two years, remember, long past the time when it should have been selling very much--were suddenly almost 250% higher. 239%, to be precise: 1904 compared to 795.
     What happened in the interim? Well, obviously I can't prove it, but it seems obvious to me: An Oblique Approach went into the Library in the fall of 2000. It would certainly be absurd to claim that being available for free had somehow hurt the novel's sales! I can guarantee you that most authors would be delighted to see a two-year-old title suddenly showing a spurt of new sales.
     It's worth noting, by the way, that the second volume in the series, In the Heart of Darkness, shows much the same pattern. In the Heart of Darkness went into the Library at the same time as An Oblique Approach, a year and a half ago. In the last period before it appeared in the Library (Jan-June 2000), In the Heart of Darkness sold 1,704 copies. A year later, during the equivalent reporting period, it sold 1,886.
     The difference is certainly not as dramatic as the difference in sales of An Oblique Approach, and isn't the near-doubling of sales experienced by Mother of Demons. Still, the mere fact that sales increased at all instead of declining is significant.

Why These Figures Are Significant
     Before I move on to my next point, I want to take the time to emphasize the significance of these hard figures. I stress "hard figures" because those people arguing the "encryption/enforcement" side of the debate never come up with hard figures. Harlan Ellison, for instance, insists that he has lost sales because of piracy, but to the best of my knowledge, has never once demonstrated that this is true. Not once has he done more than endlessly assert the axiom that since a title of his was pirated he must therefore have lost sales of that title.
     I think my hard figures demonstrate how absurd that claim is. It does not follow that simply because a copy is available for free that sales will therefore be hurt. In fact, they are more likely to be helped, for the simple reason that free copies--call them "samplers," if you will--are often the necessary inducement to convince people to buy something.
     There's a different analogy which I think, in many ways, captures the reality even better. Anyone who has ever bought a car--new or used--knows perfectly well that one of the standard techniques used by a car salesman is to offer you the opportunity to take a "test drive." Far from being concerned that a test drive represents "lost mileage," car dealers know damn good and well that it's often the test drive which closes the sale.
     Does it always? Of course not. Usually, in fact, people simply take the test drive and wind up walking away. Does the car dealer then start moaning about "lost sales," or whine about the mileage he's given up on a new car?
     Hell, no. The dealer just shrugs his shoulders, writes it off to the inevitable overhead expense of his business, and offers the next customer a test drive. But if car dealers followed the practices of most publishers--and, to the best of my knowledge, the entire music recording industry--they would sternly refuse to let anyone even sit in one of their cars unless they'd already paid for it.
     I leave it to you to imagine just how long such a car dealer would stay in business. Sadly, the common sense of a used car dealer is beyond the grasp of the supposedly sophisticated publishing industry.
     As a practical proposition, I look on the Free Library as the literary equivalent of a "test drive." And, by the way, I've gotten many letters from people who've told me that's exactly how they eventually came to buy a book of mine. They heard about me, weren't sure... then tried out one of my novels--or another writer's--in the Library, and found themselves happy with the result.
     Everyone should also remember that the titles available for free in the Baen Free Library--very much unlike pirated copies--have the following two unusual characteristics:
     a) They are readily available in a well-known, well-advertised and stable web site. I stress "stable" because one of the inevitable characteristics of pirated copies is that trying to find them is a monstrous headache in the first place. For obvious reasons, pirate servers tend to disappear. In fact, every time I speak publicly on this issue I urge my audience--please! be my guest!--to test my claims by going online and trying to steal one of my titles. (The one you find easily and immediately in the Baen Free Library doesn't count, of course. That one is not pirated.) And I confidently advance the prediction that they will soon discover that the amount of time and hassle they have to go through in order to find a pirated copy somewhere of an Eric Flint title--again, excepting the legitimate copy available in the Free Library--is hardly worth the effort.
     b) The titles--again, very much unlike the typical pirated product--are in excellent shape, having been professionally prepared, and are available for downloading in no less than five different electronic formats. We even provide the reader software, if the reader doesn't have it already.
     Try finding any pirated copies of which you can say the same, even if you can find them in the first place. As anyonewho has ever looked at a pirated edition knows, as a rule they are very sloppy scanned-and-barely-proofed editions which are miserable to read.
     And yet... and yet... despite the fact that these completely legitimate copies are available for free--easily, conveniently, and professionally prepared--I have been able to demonstrate no discernable financial damage done to me as the author. To the contrary, I have been able to advance a very strong case that being in the Library has helped the sales of those books.
     In short, much like a smart car dealer, we not only allow people to "test drive" our writings, we also make sure that the showroom is clean, brightly lit, and the product itself is shiny and sparkling. And it's located on a prominent corner on a major virtual boulevard. And is also well advertised--starting very soon, Baen Books will be putting ads for the Free Library in the back of many of its paper titles.

The Feedback is Overwhelmingly Positive
     Since we set up the Free Library, I've received a total of 1,161 letters to me as "Librarian." Well over a thousand letters in about a year and a half--and, at a rough estimate, I'd say that well over half state specifically that, as a result of becoming exposed to an author through the Library, the sender of the letter went out and bought at least one book of theirs in a print edition.
     I will grant you immediately that this is purely anecdotal evidence. Still, the fact remains that I have well over a thousand anecdotes. How many does Harlan Ellison have, based on which he filed his now-famous lawsuit? Five? Six? As many as a dozen?
     The thing you should not overlook for a moment is that every argument in this dispute except mine is based on anecdotal evidence. To the best of my knowledge, I am the only author who has put up free titles and then tracked the actual effect on royalty statements. I can marshal a huge number of anecdotes to support my viewpoint. My opponents can marshal, at most, a handful. And even that handful is suspect, since they base their logic on the assumption that the author has lost sales because a title has been pirated. I think that assumption is highly dubious, and is precisely what needs to be proved in the first place.
     Keep in mind the difference, because it's quite significant. Not all anecdotes are equal. I can point to hundreds of letters where a specific person says specifically: "based on reading Book X in the Library, I went out and bought it." Whereas the anecdotes of my opponents are not specific at all. In essence, what they do is simply demonstrate that someone put up a pirated edition somewhere. Fine. But it does not thereby follow that a sale was lost. Who knows if the person who downloaded that title would have bought it in the first place? In order for my opponents to have anecdotes which carried the same weight as mine--even in quality, much less in quantity--they would have to show statements where a specific person stated that they had intended to buy a copy of Book X but didn't because they found a pirated one instead. If Harlan Ellison has even one anecdote of that nature, I'll be surprised.

The Devil's Advocate
     Last April, I attended an international conference in London on the current state of the e-publishing industry. In general, the tone of the conference was pessimistic, accurately reflecting the general state of the industry.
     I was invited to come by the organizers more-or-less as the "devil's advocate." In my own remarks at the conference, I stated that the fundamental obstacle to the success of electronic publishing was the industry's obsession with encryption. The only successful electronic outlet I knew at the time--Fictionwise.com can now be added to the list, from what I can see--was Baen Books' Webscriptions. And that was precisely due to the fact that Baen made no attempt to encrypt its product. As a result, they were able to sell electronic books both cheaply and with no hassle and aggravation to their customers.
     I measure "successful," by the way, using the only criterion that means much to me as an author: Webscriptions, unlike all other electronic outlets I know of, pays me royalties in substantial amounts. As of this writing, I've received about $2,140 in electronic royalties from Baen Books for the year 2000.
     That sum is of course much smaller than my paper edition royalties, but it can hardly be called peanuts. Every other electronic outlet I know of, in contrast, pays royalties in two figures, at most. My friend Dave Drake has given me permission to let the public know that his best-earning book published by anyone other than Baen, in one reporting period, earned him $36,000 in royalties for the paper edition and $28 for the electronic edition. And that's about typical for a successful book electronic book.
     In contrast, Dave earned probably about as much as I did in electronic royalties from Baen for the year 2000. I don't know the exact figure, but since a lot of my Webscriptions royalties come from titles I co-authored with Dave, I'm guessing that the amounts are approximately equal.
     At the London conference--at least in the public sessions--my remarks were basically greeted with pained silence. But, in private, several publisher's representatives told me that they agreed with me, but also told me that trying to get the publishing industry to give up encryption would be impossible. Why? Basically because the corporate bean-counters who now run most of the publishing industry just can't bear the thought of--gasp--giving something away.
     There was one exception. A gentleman from a publishing house which primarily produces textbooks rose in support of my point. He stated that, much to their own surprise, his company had found that those textbooks which they made available for free online also had the best sales.

MIT Press
     Is this an isolated incident? No, not really. MIT Press discovered the same thing. Here's an excerpt from a letter sent by a friend of mine after listening to the President of MIT on a radio talk show:
     "I just have a little more fuel for you to add to the fire. Yesterday on my way home from work I was listening to All Things Considered on NPR a little before 5pm CST. They had a story on MIT's offer to create a Web site for most of its classes and to post materials (outlines, detailed class notes, homework assignments, etc) from each course.
     Besides being an interesting story in itself on free information on the net the guest, Charles Vest, president of MIT, as an aside mentioned that when college textbook presses (like the one at MIT) put up free e-text copies of their new textbooks at the same time they published the print version, sales of the print versions went up."
     If it works to increase the sale for things as overpriced as the normal college textbook....

Enough, Already
     All right, I'll stop there. I believe I've provided enough evidence to support my point. Making one or a few titles of an author's writings available for free electronically in the Free Library seems to have no other impact, certainly over time, than to increase that author's general audience recognition--and thereby, indirectly if not directly, the sales of his or her books.
     I personally believe it also places such authors on the side of the angels in this dispute. For me, at least, this side of the matter is even more important than the practical side. It grates me to see the way powerful corporate interests have been steadily twisting the copyright laws and encroaching on personal liberties in order to shore up their profit margins, all the more so when their profit problems are a result of their own stupidity and short-sighted greed in the first place.
     I will leave you all with one final anecdote. Napster, of course, is held up as the ultimate "villain" with regard to the so-called problem of online piracy. The letters I received as Librarian were addressed to the issue of books, not music. Yet I was struck by how often--perhaps in a hundred letters--the writers would mention their own experience with Napster. And, in every instance, stated that their purchases of CDs increased as a result of Napster, for the good and simple reason that because Napster enabled them to sample musicians, they bought music they would not otherwise have been tempted to buy because CDs are too expensive to experiment with.
     Am I advocating self-publishing on the Web? No. Tune in next time to find out why the Baen Free Library doesn't offer unpublished work.

© Eric Flint, 2002

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