When to Jump? The Art of Asking and the Economics of Writing

If you’re a writer, artist, or otherwise creative sort, I strongly recommend Amanda Palmer’s recent TED Talk:

I first watched it when it was originally released, and since then I’ve re-watched it a time or two. And like Chuck Wendig (here), Tobias Buckell (here), and Harry Connolly (here) I have somewhat mixed feelings. On the one hand, I applaud Palmer’s philosophy of art and artistry. On the other hand, I question its practicality as applied to written art (e.g. books, short stories, poetry, sequential art, etc.).

The Traditional Economics of Art

First, I’m a dyed-in-the-wool believer in the power of commerce. I do not believe – and have never thought – that the value of art is opposed (or even in tension with) the value of commercial exchange.

The price I pay to read a book is determined by the economics of the supply chain and distribution system used to produce the book and get it into my hands. Physical manufacturing (printing, warehousing, shipping, etc.) are just one component with that, and the real supply chain for books actually starts with the artist – namely the author. The author, the agent, the publisher, the printer, the distributor, the retailer all play a role in this supply chain and they are all doing so out of enlightened self-interest: to make a buck.

This is not to say that all (or even any) of these actors are merely cynical number-crunchers out to skin either the consumer or the artist. That kind of oppositional thinking is something I’ve come across pretty often in the arts, and it is the result of naive ignorance. If the actors involved in producing and distributing a work of art cannot feed themselves, they won’t produce any more art. If the investors (authors included) whose capital finances the production and distribution of art on-spec (i.e. without a guaranteed profit) are prevented from making a profit (and so feeding themselves), they will take their capital elsewhere…again, leading to less art. Such is life in the real world (in practice, a similar economic principle has also operated within every historical attempt at a communist or socialist economic system).

With these supply chains and distribution systems, it is impossible for the actors to peg the price of a given book to its “artistic value”. Asking “What is Othello worth?” is a Zen koan more troubling than the sound of one hand clapping. We – as consumers – cannot assign our own (highly subjective) value to a work of art without having first experienced it. Unless we have read a book, we lack sufficient information to value it. Which is why when people read books that they do not enjoy, a frequent lament is “Not worth the cover price.” If we have read an author’s previous work, we may be able to predict a value (e.g. “I loved So-and-So’s last twelve books, so I expect to love the new one coming out tomorrow.”) but such an evaluation is still only an approximate prediction.

But the traditional distribution systems that bring us that book aren’t telepathic (yet, and let’s not give Mr. Bezos any ideas). They don’t know how we feel about a book, nor do they know how we expect to feel about a book. So they can only determine price out of a best-guess approximation, using their costs as a baseline. This is a fundamental philosophical fact: the price we pay for a book at retail has little relationship to its artistic value.

The Economic Consequences of the Patronage System

A patronage system – such as the patronage system that Amanda Palmer relies on – tries to bridge the gap between artistic value and price. To vastly generalize, it relies on technology to flatten the distribution system:

• It completely obviates the need for retailers to buy/warehouse/sell the product, and;
• It largely obviates the need for publishers to select/edit/print/warehouse/ship the product.

This process is – at best – approximate. Works of art (whether music or books) still need to be written, recorded, edited, distributed, etc. and the people who work on different parts of this process need to be paid. Yet by disconnecting the “price” a consumer pays from the costs of production and distribution Palmer and those who follow her model can achieve a closer alignment between what the consumer pays and that consumer’s assessment (or prediction) of a work’s artistic value.

When we pay “what we want to” (which is different from “what we can”) all we’re really doing is translating our subjective assessment or expectation of a song/book’s value into dollars and cents.

Such a patronage model is unlikely to work (due to the costs of scale) with a traditional distribution model. No retailer and no publisher will ever buy and stock books on what they consider a wing and a prayer. The reason for that is because they would be unable to determine a breakeven point. In publishing terms, no publisher would be able to predict when a book will earn out, which in turn means they would not have the ability to assess their degree of risk.

Digital distribution – whether of music or writing – lowers the aggregate cost throughout the distribution chain. It does so to a lesser degree than the digital-only/self-publishing boosters out there would want us believe, but it does objectively lower the amount of capital at risk, which in turn increases the likelihood that some publisher might take a chance on the patronage model. However – and this is where the practical part comes into play – just because the amount of capital at risk is lower doesn’t necessarily make the probability of profit any higher.

Think of it this way (this is vastly over-simplified, yet the principle holds): a publisher invests $100 to acquire, edit, design, print, and warehouse a book. Some part of this money goes to the author (an advance), some to the editors/designers/artists, some to the printer, etc. This is the amount of capital at risk in the distribution chain. Yet with a price point set at $5.00, the publisher knows that they have to sell 20 copies to break even. Based on their experience, they know that they can expect to sell 15 copies (75% of their breakeven point) at launch. So while their overall capital at risk is $100, they know that they have a near-certainty of already covering 75% of that cost. Meaning their effective risk has dropped to $25. And based on their experience, they are able to judge the likelihood of those remaining 5 copies selling over a particular time period.

The traditional economic model allows every actor in the system to control the overall amount of capital they are putting at risk, while taking into account their expected effective risk. On the one hand, the publisher has certain (known) costs, and on the other it has expected (probable, though uncertain) revenues. Decisions can be made rationally based on facts (costs) and probabilities (expected sales).

In the patronage model, the cost side of the equation is still known. The aggregate cost may be lower due to a reliance on digital distribution, but the costs remain calculable. Yet it is far, far harder to predict the revenue side because neither the artist nor the publisher are in the consumer’s head.

And this is where my practical concerns with Amanda Palmer’s Art of Asking arise.

Pretty Speeches Oversimplify

Yes, Amanda Palmer’s $1.2 million Kickstarter campaign is impressive. Yet it did not happen overnight. It was a result of the relationships she had built with her audience throughout her impressive career. By advising creators to trust their audience, Palmer is glossing over the years of hard work she invested in cultivating an audience which both shares her ethos and values her work highly.

Throughout her career, Palmer has built a highly participative fandom. This was, as she herself admits, a conscious choice borne of her artistic philosophy. I have no problem with this, and I applaud her philosophy and the conviction with which she applies it. However, her experience cultivating this relationship with her audience serves a fundamental economic purpose: it makes it easier for her to assess the probability of her “revenue” in a patronage model.

I’m sure Palmer didn’t sit down with an Excel spreadsheet and a little green visor and model out supply/demand/value curves based on historical receipts. First, few artists are that into Excel. Second, she didn’t have to. She had a “reasonable” expectation that her fan base would contribute to her artistic endeavors because they had done so in the past when asked to.

This last point is, I think, vital. The consumer who picks up a book at B&N is not necessarily the same consumer who will go to readings, nor one who will engage on social media, nor one who will pre-order titles on Amazon, nor one who will contribute to a crowd-funding campaign. Most readers (sadly) aren’t that engaged with either the books they read or the artists who produce them. Yet Amanda Palmer had – on the basis of her experience asking fans for support large and small in the past – a reasonable way of “guessing” at the likelihood that her fans would continue to support her.

I suspect Amanda Palmer doesn’t think of it in such terms. Her experiences – starting with her days as a street performer – have all contributed to this worldview. Her experience with the “art of asking” – and the probability of the audience responding – has shaped her life (in particular her lifestyle and costs of living) throughout its course.

As others have pointed out, writers with mortgages, kids, medical bills, etc. may find it far harder to take such chances…precisely because these obligations increase our (known) costs. A young kid with few bills, no family, and no other financial obligations can afford to take greater risks. In other words, our costs are known and (by our reasoning) high. Yet if we have not carefully cultivated an appropriate relationship with our audience, we have a limited ability to accurately predict the revenue side. In other words, our effective risk approaches our capital at risk, which is a position I would hate to have to justify to my bank.

What Does All of this Mean for Working and Aspiring Writers?

As I intimated above, I personally think it depends on your particular situation. If I were fifteen years younger, I would probably adopt a different strategy than I would today. However, I think even then that difference would be one of focus rather than one of principle.

I think that in today’s artistic world, it is in an artist’s best interest to cultivate a variety of distribution models. Traditional publishing with the Big Six, traditional publishing in small press, self-publishing, crowd-funding, patronage, etc. have all proven to be viable models. As artists, we can make each of them work for us. But doing so successfully means using somewhat different skills to varying degrees. If I want to be successful as a writer (regardless of what point I’m at in this career), I think it makes strategic sense to have experience in all of these distribution models.

I’m going to be better at some models than others, based on my own skills, based on my own personality, etc. But being conversant with these different approaches increases the likelihood that as the market evolves (and the balance among models shifts) I will be able to feed myself (and thus produce more art).

This principle isn’t rocket science. I kind of think of it as “writing 101”, and it has been articulated by writers far more experienced than me many times over. And yet from this principle, a simple conclusion follows:

If we want to be conversant with varying models of artistic distribution, and the patronage / crowd-funding model advocated by Amanda Palmer is one such model, then logically it makes sense to experiment with that model (Q.E.D.). So what does this mean practically?

Most writers end up with – at some point in their careers – a work that will be a hard-sell in the traditional distribution model. Some books are just like that, regardless of their artistic merit. For example, in my case, I have a script for a 128-page alternate history/western/fantasy graphic novel that I wrote about a year ago. There are good reasons why this script won’t sell any time soon:

• It’s just a script, and I am probably the world’s absolute worst artist.
• There is no artist currently attached to the script.
• It works in its entirety: i.e. it is a novel in sequential art form, and does not lend itself to single-issue distribution.
• I am an unknown – just another blogger out there on the internet with no Bookscan numbers to provide a floor.

All the factors above serve to increase both a publisher’s aggregate risk, and to diminish that publisher’s ability to predict revenue. In time, when more of my fiction sees the light of day and I have Bookscan numbers to back me up? Maybe it’ll be a different. But for the moment, the book is unlikely to sell regardless of its quality.

I knew all of this when I started writing the book, so that’s neither a surprise nor a disappointment. But it does leave me with (I think) a good product that is objectively unlikely to sell through traditional models. And that is the kind of project for which it may be worth considering either a crowd-funded/patronage model, a self-publishing model, or (most likely) a hybrid of the two.

Core Lesson from Amanda Palmer’s TED Talk

I think that the core conclusion that I draw from Amanda Palmer’s TED Talk isn’t the obvious one. Her claim that the audience will catch us if we jump is an over-simplification of a very complex process that took her years to cultivate. But she still has a point: if we do not cultivate such a relationship with our audience, and if we do not learn how to do so, we are passing up an interesting economic model that can support our art.

We can only learn so much by looking at those who were successful. Amanda Palmer’s experiences in music publishing and performance do not translate directly to the world of books. John Scalzi’s success serializing his early novels several years ago does not necessarily translate directly to the industry today. The best way for us to develop these skills (and they are skills, in the same way that speaking on a panel is a skill) is to dive in and figure it out.

It is not a question of whether to jump or not. Common sense suggests that we should all practice our high-dive, if for no other reason than career security. Yet even if we are committed to jumping into crowd-funding and the patronage model, the practical question is which cliff to jump from. Not all of us might be prepared for the high-dive acrobatics that Amanda Palmer performs. I know I’m not. And the only way to reach such spectacular heights is to train (i.e. cultivate the audience and develop the skills to do so). That, I think, is the real trick: choosing the manageable cliff, and taking that first step off its edge.