Han Solo likes me, but I can tell he doesn’t understand how I will make money as a full-time writer. At least, when he asks me questions, they come from a place of curiosity, rather than a place of anxiety like the Emperor’s questions did. But Han Solo is smart, and a software developer, and as much as he wants to support my tiny media empire, he has a good idea of the obstacles I’m facing–the main one being how I will ever get anyone to pay for content when there is so much free content out there already.

As bleak as the outlook for writers is, it’s easy enough to see how competition from other writers is logically dealt with: write better content than them. Not easy in practice, but clear enough. The real competition is when the content is the same, but the price is different. Because who would pay for something when they can get it for free?

As Cory Doctorow points out, “The one thing that everyone should have uppermost in your mind when you’re designing your business is that computers are never going to get worse at copying things.” So, bootlegging is a part of business for anyone who makes (or wants to make) their money from selling digital media. Digital media, in my mind, is anything that you create once and can distribute at a negligible cost. This includes software, music, video, television, film, books, newspapers, magazines, and more.

After I wrote my blog post about why I liked Crowdspring, an angry designer tweeted to me that he had scraped my entire blog and was selling the content to third-party providers.

My first reaction was not anger, not even surprise. All I could think about was, why? How would he benefit, and how would it hurt me? After looking at the three most likely scenarios for how this could play out, I practically laughed out loud. But we’ll get to that in a bit…

Before I get into this next part, you should know that in another life, I was a software engineer. Although I am now in marketing, I still have the ability to switch on the extremely logical side of my brain. You’ve been warned! What follows is a totally nerdy (but hopefully insanely insightful) argument in favor of letting people bootleg your work.

The simple case: free content

Scenario #1 – Someone takes my free content and sells it.

Let’s first assume someone scraped my entire blog and sold the content. In even the simplest of businesses, there are often a creator, a distributor, and a retailer who bring a product to the consumer–and of course, most businesses have many more middle men. In this case, the blog scraper could be considered a distributor of my product. Distribution adds value to a supply chain, so the blog scraper is seemingly adding value to my business by bringing my product (my blog posts) to people I would not normally reach.

Now, there is an issue of how much they sell it for, and how I receive compensation. I wouldn’t get a cut, but it doesn’t matter: both issues are moot points. There is a near-zero value in becoming a distributor of my blog posts. There are essentially few retailers to sell to, and all of those retailers want exclusive, original content. So the number of retailers drops to zero once the post is published on my blog already.

In the end, there is no motivation for someone to become a distributor of my content. I’m the only person with anything to gain, and that would only be in the form of more exposure for my ideas. And if someone *could* actually find a way to make money from solely distributing my blog posts, they deserve to keep it! They earned it for finding a retailer when I can’t.

A more complicated case: premium content

I also have several books out in ebook and paperback. Let’s say that someone started distributing these without my permission.

Scenario #2 – Someone makes my work (sold as premium content) available for free.

Even though I’m selling the work as premium content, this scenario is much like the first one. Sure, someone could do this, but what is their motivation? To get a free book? And in that case, would the people who download this free version of the book have paid for my content anyway? (Answer: No.) With each download, I would choose between:

  1. having no sale (because the person didn’t want to throw down the $5 or less it would cost to buy the book) and no exposure, or
  2. having someone read my work and potentially leave a review, share it with someone, buy more of my books, or become a regular blog reader.

Logically, I should choose the latter in every case because it benefits me more.

Scenario #3 – Someone tries to sell my ebooks.

The books are already listed (by me) on most of the ebook marketplaces, including Amazon, Barnes and Noble, Apple’s iBookstore, Google’s bookstore, and Smashwords. Most of these marketplaces are good about recognizing and removing duplicate content, and none allow merchants who break copyright laws. That means that most of the money would have to come from driving traffic to an independent site where these ebooks would be sold… which is expensive and time-consuming, and probably wouldn’t generate many sales.

And even if these bootlegged versions of my books do make it onto the virtual shelves, there is still a ton of competition. For starters, they are competing against me in the marketplace, and I’ve priced the books pretty low (under $5). They are also competing against all the other people in Scenario #2 who are giving my books away for free. And they are competing against all the people I’ve given my books to for free (more on this in a minute).

Like the previous cases, there is little money to be made as a distributor, and far better business models to pursue.

Bootlegging is good… always?

This leads me to my next point, that you should maybe not wait for others to bootleg your work. Instead, you should bootleg it yourself.

What do I mean by that? I mean, don’t just sit around and wait for someone to steal and distribute your work for you. Be proactive. Give it away on your own.

Ready for more scenarios? (Can you tell I’m loving scenarios right now? Good.)

So, there are four scenarios that can happen when you give away a book (or any other piece of media):

  1. You give it to someone who never reads it – not a loss in income because they never would have purchased it anyway.
  2. You give it to someone who reads it and hates it – maybe a loss of income, but probably not. Also less risky, because this person is extremely unlikely to pass the free book on, and is also extremely unlikely to write a bad review because they didn’t pay for it. Because bad reviews hurt your book sales, you may actually gain sales by giving it to this person for free rather than them paying for it.
  3. You give it someone who reads it and likes it – maybe a loss of income, but this person probably wasn’t excited enough to buy in the first place–only excited enough to sample. They may or may not pass it on, bringing you more potential readers, and they may or may not buy the next in a series or check out more items on sale. This is a share-or-pay model, which has become popular on the internet in recent months. There are no guarantees, but this is more likely to benefit you via word-of-mouth than not.
  4. You give it someone who reads it and loves it – a small loss of income, but there is lots of upside if you have more products. These people buy your other products and share the freebie with similarly minded friends, who are very likely part of your target audience. You win big.

It’s clear from these four scenarios that you have much more to gain by giving away your premium content–the same content that you are trying to sell.

Counterintuitive, right?

I can imagine what at least half of you are thinking. “But if you give things away for free, no one will pay for them.”

Maybe, but not in my experience. The reality is you have to be smart about what you give away, who you give it to, and how the exchange happens. Here are a few things I’ve learned (again, I’m talking specifically about selling books, but I think the concepts apply to all types of digital media):

You should NEVER give away something that you are not also selling in some form.

Something on sale has perceived value, even if you don’t intend to sell a single one. Something not on sale has no perceived value (blogs, youtube videos, etc.).

Think of your first songs or books as marketing. Have them on sale to show that they have value, but don’t expect to make any money from them. Instead, get them to spread as far and wide as possible. Use them to build your reputation and platform. When I was writing my fiction novel series, it because obvious to me that no one would read the third book in the series unless they had read the first and second. In other words, the only way to sell the third book is to get a lot of people to read the first one and encourage a portion of them to stick with the series through the second. The number of people who read the third book is a function of the number of people who read the first.

This is also a big reason why I will soon be charging for full access to my blog–perceived value.

You have to give away something that has full value on its own, but that is a gateway to more of your work that is also for sale.

Most media is progressive. People like to do things in order. You complete level 1 of Super Mario before you get to level 2. You watch the first Twilight movie before you watch the second.

Can someone buy your second album if they haven’t heard a single one of your songs? Will they buy Season 3 on DVD when they haven’t seen a single episode from the first two? Get people hooked first. Then raise your price.

This doesn’t just apply to digital content. I’ve made tons of money on my blog posts already in the form of jobs, consulting, speaking, and product sales (books). That is money that no one can make from my blog except me. But it’s also money I wouldn’t have made if I didn’t let people sample my ideas and thought process via my blog.

Create a sense of scarcity by limiting how much you give away, but don’t limit others’ ability to share your work.

When you limit what you personally give, people will still pay. In the past, I’ve limited my giving by only giving free versions of my book to reviewers and a small group of my readership on an email list. You can also limit giving by limiting the time frame on availability, or by only allowing access after a certain action is taken.

But don’t limit others’ opportunity to share your work. Make it easy to share a link, and don’t use any sort of DRM (digital rights management) to lock people out.

You see results only after you attain critical mass.

All media suffers from a network effect. The tech industry is familiar with this idea as it applies to social networks, but most people forget that the concept actually applies to all media.

A Harry Potter midnight viewing, for example, would not be nearly as fun if it weren’t for the fact that over half a billion people worldwide have read the books. And it would not be nearly as fun if you didn’t know that these 3D glasses are specially made just for the premiere.

If you want to succeed, you have to gain critical mass for your media as well. The curve for getting critical mass, however, isn’t linear. There is no formula that says if you give away one book, you will sell five. But it’s a little easier to believe that if you give away a thousand books, you will also sell books from the word-of-mouth that generates. And if you give away ten thousand books, you will sell more books than if you only gave away a thousand.

Make it easier to pay than to steal, and prices will never really drop to zero.

Given how “free” the internet has become, aren’t prices on all digital media just going to drop to zero? Economically, it’s unlikely. That’s because the best writers are not going to keep publishing if they can’t make a living from it, and the best musicians will not keep playing if they can’t make a living from it. Cable channels will not stay in business if they can’t make a living from it. Directors will not continue to make movies if they can’t make a living from it.

The key is to get people to pay for convenience, rather than a product. If you keep prices low and reasonable, it is more convenient to spend $3.99 downloading your product (which is insanely useful or entertaining) from the Apple or Amazon store than it is to track it down on a malicious site and download it illegally. At that price, no one will think twice about paying.

I think Han is worried about me. I think he is worried that I will have to leave Chicago because I don’t have a six figure salary anymore.

“Are you worried about my finances?” I ask over fast food mexican at El Famous Burrito in the West Loop.

“A little,” he admits. “But you’re smart, and you probably know what you’re doing.”

He sees the frown on my face, and adds, “It’s like the way I worry about Harry Potter. Sure, he’s in a dangerous situation, but I know he’s not going to die at the end of the series.”

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