SitePoint Podcast #48: Publishing Futures with Derek Powazek

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Episode 48 of The SitePoint Podcast is now available! This week, Kevin Yank (@sentience) and Derek Powazek (@fraying), co-creator of JPG Magazine and creator of Fray, discuss the pros and cons of ebooks, what Apple’s iPad means to publishers big and small, and why print may be here to stay.

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Interview Transcript

Kevin: February 12th, 2010. The pros and cons of ebooks, what Apple’s iPad means to publishers big and small, and why print may be here to stay. I’m Kevin Yank and this is the SitePoint Podcast #48: Publishing Futures with Derek Powazek.

Hi there. Kevin Yank with you today for the SitePoint Podcast, and today I’m joined by Derek Powazek. I’m really excited about this show because Derek and I get to geek out about publishing. We do a lot of things at SitePoint, but one of the things we like to think we do well is publishing great books for web developers and designers, and Derek is a creative force of nature on the Web. He is at the heart of several sort of publishing initiatives that he’s grown up from nothing. JPG Magazine was probably the first thing that showed up on my radar, which is a … it was a digest, a collection of photography that was put together by a community of photographers who would submit photos and then vote on which ones made it into the magazine. More recently, Derek works with Hewlett Packard, consulting on a project called MagCloud, which is a print-on-demand service that allows anyone to upload a magazine, a fully laid-out and designed magazine, print it one copy at a time and ship it around the world to people who want to buy it.

Derek also, sort of as a side project for him, but perhaps it’s the thing he’s best known for at the moment is Fray, a quarterly magazine filled with original writing and artwork, again contributed by people online who just want to get their stuff out there who people who enjoy reading it.

So today Derek and I will talk about publishing, and specifically about digital versus print publishing—why digital perhaps hasn’t fulfilled the promise that it once had, what’s holding it back, and what’s keeping print around. So without further ado, I’d like to welcome Derek Powazek to the show.

Derek: It’s nice to be here. Thank you.

Kevin: So some would accuse you of sentimentality there. Could you fill us in on the path you’ve taken and why print has continued to play an important role?

Derek: Sure. Sure. So let’s see. It depends how far you want to go back but my background is in print. I studied journalism and photo journalism in college and I got out in 1995, which is when the Web was just starting to take off. At that time I applied to newspapers all over the country and all of them in the mid-90’s said, “Oh, we’re not hiring anymore. It’s a dark time for newspapers and we’re all going broke.” This was 1995, so newspapers have had a lot of experience with claiming to be on hard times.

My first job, in fact, working on a website was for a magazine and then I wound up working at HotWired which was the website component of Wired magazine.

So my background is in print and in journalism and so when I discovered the Web it was kind of the answer to a prayer of, “God, wouldn’t it be great to do all this journalism, storytelling, whatever you want to call it, and not be bound to paper?” In college I was the guy who drove my VW bug over Highway 17 over these mountains to pick up 8,000 copies of the newspaper we were publishing and drive them back to Santa Cruz to hand out. So the idea of being able to communicate and put out media without all the paper was great, and for my entire career I have just not been able to get rid of the paper.

Kevin: Well, that’s it; in my mind you’re the paper guy. You’re the one who’s supposed to be telling me why paper is great.

Derek: Well and paper is great. Why has paper stuck around? Well I think the problem is we still exist in the real world and until the moment where we can jack in cyberpunk-style and exist on the ’net, there’s still this real life component of our lives and that is where print fits really well. In fact when my wife, Heather and I started JPG Magazine, the idea in that case was actually specifically to take the best work out of the photo-blogging community where all this amazing photography was coming out and put it in print because viewing great photography in print is better than viewing it on a screen. There’s just more resolution. It’s a different experience to hold it in your hand, and it turns out that a lot of those people who participated online and posted all those photos to Flickr and other places really enjoyed having that magazine in print. So that tells me that there is a place for the digital exchange of information where to use the web for what it’s really, really good at—which is connecting far-flung people and spreading information for almost no cost—but there’s still a role for this print relic that exists in the real world with us.

Kevin: There’s a romanticism surrounding print for sure. I mean the smell of the ink, the weight of the paper. I’m as digital a guy as you could find and still when I get a new issue of a magazine, as rarely as I buy them, when someone hands me one, I open it up and I go, “Oh, that’s the stuff!”

Derek: (Laughing) Well, speaking as a magazine publisher, I thank you for maintaining that, what did you call it earlier?

Kevin: Romanticism?

Derek: Yeah, that romanticism about print because I have the same thing. I mean honestly, I don’t know if this is too blue for the podcast but I remember sneaking into my parents’ bedroom and finding my dad’s Playboys and leafing through them. It was like, okay, yes there are naked girls involved in that, but there’s the physical product of the magazine with all the 70’s smoking ads and stuff in it … there’s something deeply wonderful about that kind of beautiful full color print object.

Kevin: Oh, yeah. SitePoint is a publisher and we publish in print as well as digital. No one’s excited when the new PDF lands in their inbox or at least not as many people are as excited. I think the people who worked on it are. When a box of newly printed books comes to the door, even though we saw the finished PDF a month ago in most cases, everyone crowds around, opens up the box, everyone needs a copy for their desk … it’s really exciting.

Derek: It’s a different experience, absolutely. I think in the same way that digital video recorders didn’t kill film, they just made it more rare and they made it more purposeful, right? So there’s still plenty of stuff that’s shot on film but now it’s a choice. It’s a choice between whether you want the look of digital or the look of film or what you’re doing, and I think we’re still trying to figure out when it comes to content—storytelling, journalism, photography, illustration—where it belongs, and there are certainly some kinds of content that are just going to work better on computer screens because it’s searchable, archivable, communicatable, all that wonderful stuff about the Internet that we don’t have to talk about because everybody listening to a podcast already knows it, but we don’t have to become so enamored with it that we lose sight of the stuff that print is really good at.

Kevin: You mentioned the high resolution which is really good for photographs, and artwork as well when it comes to your current project, Fray. Are there other rational reasons for preferring print?

Derek: I think there are some and here it is off the top of my head. If your business is selling content, exchanging money for content—for lack of a better word—which means stories, things written down in text and images… I have been trying for 15 years to get people to part with money for digital content and in my experience so far, it doesn’t work because there is so much of it that is free. Unless you’re selling porn of some kind—and by porn, I mean naked pictures but also financial porn, things that are tied to your … some baser instincts let’s say of making money, getting ahead, and being aroused. If you’re doing Fray, if you’re doing storytelling or journalism, it’s exceptionally hard. Like, I think it might be insolvably hard to get people to pony up with money for that digital content, and it completely makes sense when you realize that most people out there had paid money for their hardware. They’ve paid money for their internet connection. They’ve already paid a ton of money just to get to your website. To ask them to then to pay money for something that, let’s be honest, it’s just ones and zeroes on their screen and could really suck. That’s really hard. It’s really, really hard.

So. Why print? Because people still pay money for print, and one of the really interesting things I’ve observed with doing Fray as a quarterly magazine and as a free website is that if you ask people to, say, pay $5 for the ability to access online content, it’ll be like pulling teeth, but if you ask them to pay $12 to receive something beautiful in the mail, they do. They will. It’s much easier to convince people to pay for that print, so that’s a very businesslike reason of why print still matters is because there’s still a value attached to it.

Kevin: And the value isn’t just what people will pay for it. I mean, print still has a sense of authority about it. Something that’s in print is given more weight and I imagine just getting people to write for something like Fray must be easier because there is a print product attached to it.

Derek: It is, and when we were publishing JPG, the one thing we heard consistently from photographers is that— So if your photo was accepted— I don’t know if this is still the case, but when we were running it, if your photo was accepted to be published in JPG, you got a hundred dollars and a free subscription and your photo was in print and of those three perks, the thing we heard consistently from participants was, “Yeah, yeah—a hundred bucks is great. Subscription, whatever—I’m going to buy one anyway. But look, it’s my photo in print!” like that was the value.

So it definitely means something to the participants. And the other crazy thing we found when we were doing JPG is that by far, the majority of our subscribers were people who did not subscribe to any other magazines. I thought that was weird. Like, you’d think, “Okay, maybe the people who like print would buy it.” But what we learned was it was the people who felt involved in the creation of it who were buying it. The people who were submitting their photos, voting on other people’s photos, who felt involved in the community were the ones buying it.

So I think there’s a real opportunity here for media makers to learn from this to say, “Well maybe the reason why people aren’t buying newspapers and magazines is because they feel completely disconnected from the product, right? Because the old style of journalism was sit down, shut up and consume what we say. And in a world of collaborative media where everybody can participate online, everybody can make content, maybe what these media organizations need to do is tear down the walls a little bit and let people feel involved in the making of it, and then they’ll buy the product.

Kevin: You mentioned the community around JPG and how it was so important to its success. Is there a community around Fray today?

Derek: There is, but I have been very stingy and I haven’t given them many tools to talk to each other. So when Fray started we did a very standard editorial process for story submissions and basically every story was— The HTML was handcrafted by me or a guest designer and put up. Then every story had a conversation thread attached to it where the community could tell their story in return. This was blog comments 101 but it was before any of that happened. We were using these hacked guest book scripts.

Kevin: Was this before Fray was a print product?

Derek: Oh, yeah. This was 1996.

So we did Fray as using that kind of model for about a decade and then in the era of copious blogging we thought, “Well, what’s the point? Everybody has a stage of their own now so we don’t really need to do this anymore.” So we kind of went on hiatus and after JPG, after I left JPG I thought. “Well, I know that this model works. Let’s bring Fray back but this time as a print thing.” So we’re actually evolving in reverse, where we started as a website and backed into being a quarterly magazine. I think the next thing we’ll do is a telegraph or something. I’m not sure. I’ve heard “the talkies” are really big.

Kevin: So is it working the same way as JPG did? Do you get a lot of submissions for an issue of Fray and some people just they’re out of luck? They don’t get in?

Derek: Yeah, definitely. So what we’re doing now is each issue is themed. We put out a call for submissions—very traditional, editorial call for submissions. People submit. Most of them don’t get in. Some of them we send back and say could you work on this. Some of them are great and those go on to the illustrators that illustrate them and then I put it all together in InDesign. We’ve tried various methods for making the print, everything from kind of very artisan offset presses to using MagCloud for the printing part and that’s been very interesting too.

Kevin: Fray has changed shape for three out of its four issues so far, it’s come in a different shape than the last time.

Derek: That’s right, yeah.

Kevin: Talk about that process and would you be very disappointed if I said I liked the first issue the best in terms of …

Derek: Not at all, not at all. Most prints products exist— Let’s put it this way: their formative years were when the Web didn’t exist. So if you’re going to create print in a world where the Web already exists, you have to really make the print special. It has to be worth the user’s time. You can’t just do the same thing over and over again. I mean, the ultimate example of this is McSweeney’s which is the brilliant quarterly printed thing that was started by Dave Eggers and every issue is something completely different. One of them was just kind of cards in a box. Another one was a hardcover book that could be read from two sides. So you flip it over and it’s a different cover. They’re all different sizes, and they’re playing with print means to be print. The same organization just did a broadsheet newspaper that was like 11×17, big traditional newsprint.

Because if you’re going to try to sell something, I think you have to keep it interesting. If you realize what you’re selling is not the information, it’s the coveted object, selling into the community that hopefully cares about it, you have to keep playing with it. I’ve been doing experiments to see if I can make the business part work because printing paper and putting it in envelopes to mail is very expensive, especially if you’re in Australia and I’m not. So I’ve been playing with a lot of different methods to see how the money works out too.

Kevin: Right.

Derek: Traditionally, print gets cheaper the more you do. So if you do a print run of 1,000, it’s going to wind up being $10 a copy for everything you’re doing, but if you do a print run of 100,000 it’s going to be less than $1 because there are economies of scale with this kind of mass production.

What’s really interesting about what we’re doing at MagCloud—where I’m a consultant on the project so full disclosure—it’s all print on demand so the price is the same whether you print one or whether you print a hundred. And when you take away the economies of scale, it completely flattens out the hierarchy where it’s just as profitable to do some really interesting niche project that is going to be interesting to you and a hundred other people in the world as it is to do some celebrity gossip rag. So I think if we’re really successful on flattening out the cost structure, it could give rise to some very interesting media that would not have been supportable in the old traditional method of printing.

Kevin: It’s interesting to hear you talk about the playing with the format though. Did you grow up in a house with a collection of National Geographics?

Derek: Of course I did.

Kevin: Because I did too, and there was the wall of yellow in the bookcase, but the ones I always got out to play with were the ones with the holographic covers, the ones that folded out; the ones that they played with the formats were the most intriguing and the ones that you kept going back to.

Derek: Yeah and yet I don’t think you could pick a better example of a magazine that has changed less…

Kevin: Yeah, it’s ironic.

Derek: …over its lifespan because you could really put them all in a bookshelf and they would all be the same height and the same color, except for maybe an occasional issue.

Kevin: And one year in I can tell that’s never going to happen with Fray.

Derek: Oh no, no I’m already— Maybe it’s just that I get bored of things rather easily but I’m playing with it and so that first issue was smaller but it was also traditionally bound, in that the magazine was actually physically stitched together, which is a very, very traditional method of bookbinding. The binding on that book will probably last longer than the pages and I wanted to do that because it was the first issue and it was very special, and I still have too many of them in my house. And it’s super expensive, so that’s why with the next one, we went the totally opposite way and said okay, let’s do this all with the newfangled tools. And so it was only through MagCloud, which means it was printed on digital presses and folded and stapled. That allowed us to do— There was a pull-out poster in that one. So you can do pull-out posters in something that is saddle-stitched but you can’t do that in the more traditional Smithson bindings.

And then the third one we said, “Well, let’s do this one perfect bound but not with the fancy stitching, to see how that comes out.” So it’s all a grand experiment and if I had much more money or many more subscribers, we’d do a hardcover or something just to play with. I think because we’re still trying to find out like what is the point of having a print product in the world where the Web is obviously the dominant information exchange medium.

Kevin: Yeah. Well, there you go podcast listeners. Subscribe to Fray so I can get my hardcover.

Derek: (Laughing) There you go.

Kevin: Let’s go to the other end of the spectrum and talk about ebooks for a bit.

Do you read many ebooks? Have you tried many of the ebook reading solutions?

Derek: I can say that I’m well versed in the world of PDF because that’s part of understanding print but I haven’t consumed a lot of ebooks. We have a Kindle in the house and my wife adores it and so she probably has shifted about 50% of her book buying to the Kindle. I am less enthused with it because I think I’m spoiled by my iPhone. Having any kind of screen at this point that I can’t flip through is just annoying to me and I think Amazon knows that which is why they just bought a touch sensitive screen company so it’s clear that that’s where they’ll go eventually too.

Kevin: Okay. So no touch screen yet on the Kindle but obviously these devices are catching your eye so what do you like about the idea, if not the current experience of digital media?

Derek: Well, I’ll give you my fantasy and I’m not alone in having this fantasy.

Kevin: This is the fantasy you posted about just before Apple’s iPad came out.

Derek: Yes. Yes.

Kevin: I think we all had our own fantasy for that device.

Derek: Oh, we so did. In fact, I think the most intriguing thing about the iPad right now is that it does not actually exist in any way besides locked to a table in Cupertino, right?

Kevin: Or in Steven Colbert’s jacket pocket.

Derek: Oh, that guy. Oh, yes! So okay, except for Steve Jobs and Colbert, it doesn’t actually exist and it’s already a Rorschach test for whatever your hopes and fears are. So the programmers are freaked out that it’s going to destroy programming. The newspapers and magazines are freaked out that it’s going to destroy newspapers and magazines. Booksellers are completely wigged that it’s going to destroy books, etc., etc. I don’t even want to talk about Flash … that was your last podcast.

Kevin: We covered it. We covered it.

Derek: Yeah, I know. So my fantasy for the device goes something along the lines of I’ve observed that it is impossible to get people to pay for content online outside of some shallow circumstances, some very specific, shallow used cases, and I’ve observed that it’s possible to get people to pay for print, and my theory is that’s because consuming media in print is still better for certain things than consuming it online. So the lavish, full page, beautiful stories, long New Yorker articles … Rolling Stone … the things that magazines are really good at.

Kevin: The high fidelity experience.

Derek: That’s right. And even a focused experience. The Web is a very multi-tasky and ADD but a magazine is not multitasking; a magazine has your attention.

Kevin: Well, I’ve said that a few times about the iPad. The first time a tweet pops up over the novel I’m reading, game over.

Derek: Which it won’t do because it doesn’t have multi-tasking so don’t worry about it. At least we think but again, no one has held one except for Steven Colbert.

My theory is, people will pay for print because it’s fundamentally a better experience for media consumption for certain kinds of media. My hope was if the iPad could do the impossible of making media consumption really sexy but still digital, we might for the first time have something that people would be willing to spend money on. Now, that’s just a guess and it’s assuming a bunch of stuff, but I think the hardware is pretty much what I expected. They’re adding books to their iTunes Store, which is a good first step but they’re going to be way too expensive because of publishing media having a stranglehold on what can be published, but I actually think that’s great because it’s going to give independent publishers like me a way to undercut them and authors to just publish themselves. But the iPad does nothing in its current state, we think, for newspapers and magazines. They’re not in the iTunes Store. The answer from Apple was basically people can use their website—which again, can’t pay for—or you can make an app, which you’re going to have to pay a programmer to create and then maybe be able to sell.

So the iPad is not going to make our hopes and dreams come true…

Kevin: It sounds like it’s part of the solution.

Derek: But it’s a step.

Kevin: Yeah. Yeah.

Derek: I think it’s a stumble in the right direction. I think it depends on its ubiquity, so we’re going to find out how much it sells. I think it’s a sure thing that it won’t be the only touch sensitive “pad” that someone is trying to sell you. There’s going to be a lot of other companies that put them out and then we’re going to have accessibility problems just like we always do. It’s going to take us a few years to figure this out. But in a few years, if there are a lot of touch-sensitive, beautiful media consumption devices sitting around and there’s a way to access a common format on all of them whether it’s EPUB or PDF, I think we’re inching towards a situation where you can use free content on the Internet to raise community, to raise awareness of your media brand, to do all the things that the Web is really good at, to create content and create submissions and activity around the content.

You can use print for what it’s good at, which is archival, beautiful, rich keepsakes. And then there’s going to be this third thing, which is this paid-for digital content that exists somewhere in the middle that should be cheaper than print—and this is the thing that publishers need to learn, it has to be about half of what the print version is and then people might actually pay for it—and I think then you’ll be able to see some models that come out of that.

My hope is that— I was in my 20s when the Web really took off and that is what propelled my career and threw me into this spot where I am and I’m really happy that that happened to me. My hope is that for the next batch of 20 year olds coming up in a few years that this is going to become for them what the Web was for us, which was this new, exciting platform that may, this time, have a business model attached to it. We’ll see.

Kevin: Down here in Australia one of the things that really, I spend a lot of time thinking about in connection to digital reading, is the broken rights systems where publishers for different countries have the distribution rights for just that country.

Derek: And you guys are in the middle of copyright kerfuffle, aren’t you?

Kevin: We’re always in the middle of a copyright kerfuffle. Which one are you talking about?

Derek: When I was there, there were protests coming up because of a version of the DMCA that was going to happen. And just today, I heard about the Men at Work sample, which is not about publishing, but is about copyright. Did you hear about that?

Kevin: No.

Derek: I know about something in Australia that you don’t know about! {laughing} Do you come from the land down under? The flute loop in that?

Kevin: Yeah.

Derek: It was based on another song and a judge just ruled that Men at Work has to pay damages…

Kevin: Oh, man!

Derek: …to rights holder of that song for that little— for like a musical reference in the flute part in that song. Sorry, random.

Kevin: But yeah, you look at something like the Kindle Store—the Amazon Kindle store—in Australia, there is almost nothing in it. It’s one tenth the size of the US Kindle store. I don’t know what someone like you would have to contribute to a conversation like this, but this is something that for outside of the United States and to some extent outside of Europe where there are also, usually, good publishing arrangements in place for any book that someone who’s going to want to read, this is the big problem—that we have these great devices, we have these great formats, but no one will sell us the books that we want on them.

Derek: Yeah. And again, I would lay the blame for that at the feet of the publishing companies because there’s nothing in copyright law that is preventing me from selling my book in Australia or the United States. It’s the rights agreements that the publishing companies worked out, and they worked out these right agreements because when you had to put a bunch of books on a boat for a month or whatever it is to get from one country to another, it made sense to basically sell those publishing rights to a local company.

I would say, “Well I have rights to publish in this country and I am going to sell you the right to publish my stuff in your country.” And there wasn’t much competition there because it’s such a pain in the butt to get the books from one side to the other. But with the Internet and digital material, that makes no sense. And these publishing companies are kind of bound by the legal agreements that they have already made.

Again, color me optimistic, but I think it’s going to give small upstart publishing companies an edge because a smaller company could have come out and say, “We’re not going to do that crazy thing because we’re starting in the age of the Internet and we know better, so we’re going to secure world wide rights with the author from the outset, and by the way, we’ll probably have to pay the author a lot more or give them better terms because the author could do it themselves if you’re not nice to them.”

Kevin: It looks like that’s what Amazon is trying to be. They’re trying to cut out not only one middle man, but two middle men. They want to become the publisher, the distributor worldwide for digital.

Derek: One of the reasons they’re in so much trouble— I mean, yes you’re right, and they’re in so much trouble because they’re playing both sides of the fence. They have programs that deal with authors directly and they have programs that deal with the publishing houses and it’s very hard to make both of those contingents happy at the same time because they want different things.

It’s very, very similar to what happened with the music labels and the Internet. The music labels used to be the only way your band could get out into the world, and now Jonathan Coulton has a website and has more people buying MP3s from him, and makes more money from those MP3s, than he ever would have at a label. He doesn’t need them.

In the same way, authors are going to realize, “Well, if I go to this publishing house, they’re going to pay me 10 cents every time I sell a book, but if I write a really good book and raise Interest around it online and sell it myself through, oh I don’t know, a print-on-demand publishing company like MagCloud or even hire my nerdy friend to write an iPad app where you can read it, well then I get 100% of the net proceeds,” minus whatever minimal thing Apple charges to me in the iPad store or MagCloud charges per page and then you basically are not sharing that with these labels because labels don’t have the power anymore, you do.

Kevin: This is where I have to remind our audience of my own bias—obviously I work for a publisher, but this is the exact sort of stuff that these issues are what we’re wrestling—what is our role in this digital world where talented authors can take their products directly to an audience. We’re more and more beginning to think that our role is for helping people who have an important message, but don’t necessarily have the skills or abilities necessary to communicate them effectively and create books and products in partnerships with those authors where those authors wouldn’t be able to do it themselves.

Derek: Absolutely. I’ll also add, I don’t think it has to be— I think the two models can coexist.

It’s like the young illustrator who submits his stuff to Threadless and winds up getting a few t-shirts through the process and makes a little money through Threadless, but then all of a sudden has a freelance career and starts to get clients. I think these things can be stepping stones to each other.

So if I was a book publisher like in a publishing company, I’d be watching MagCloud and Lulu and the print-on-demand places to see who’s rising to the top in those places, because then you know you’re already dealing with someone with talent and they already have an audience that’s willing to pay for their stuff, so I think people can rise and fall out of these different environments.

There are also always going to be projects that are going to make sense for different things. If I was going to write another web design book, I would go to a publishing house that has sales and distribution channels that are specific to that kind of content. If I’m going to write my personal stories about living in San Francisco, then I’m going to go to a print-on-demand service because I really don’t want to run those by an editor and I don’t want to have to submit them to all of the fiction publishing houses and have to talk about it. I’m just going to do it myself because that’s what those things are for.

Kevin: It’s exciting, and it’s creating some mind-bending side effects to changes going on. I look at the Amazon/Macmillan kerfuffle that’s going on as we record this, where Amazon has pulled all of Macmillan’s books—both digital and print—out of its store because Macmillan wants to raise their prices. By all accounts, the reason they want to raise their prices is because of the Apple announcement, or at least it’s a contributing factor. It’s the first time I can remember where new competition is driving up prices.

Derek: It’s because—if you don’t mind me saying so—these bastards at the publishing houses, they realize that their monopoly is running out and they are literally trying to suck every dollar out of their audience before they lose the ability to do so. The labels did the same thing, and I think it’s a disservice to readers, it’s a disservice to their authors, and it’s only going to hasten their demise.

I think Amazon really screwed up in the way that they handled the PR around this, but I don’t blame them for trying to fight about this because in the end what Amazon should have done is come out to their users and say, “Look guys, we’re trying to get you the lowest price for your books, which you love, and we’re trying to be fair to the authors, but the publishers are the ones who are going to make us raise our prices and so we’re going to fight with them a little bit about this and we’re sorry that you’re caught in the middle, etc., etc.” Instead, they said nothing and just did it and then afterwards, they posted some mealymouthed defense about how Macmillan has a monopoly on their titles. Well, of course, they have a monopoly— It’s like saying Amazon has a monopoly on Amazon.com … of course they do! That’s not the point. They did a really bad job of the PR and they burned a lot of authors, which is too bad because Amazon— That’s what I mean about Amazon playing both sides of that fence; they’re trying to be nice to authors and to keep the publishing arms happy.

What’s going to happen, which is unfortunate, is the iPad is going to come out. Some competitors are going to come out. They’re all going to go to the publishing houses. The publishing houses are going to be able to name their price, which they already have with the Kindle. Amazon is actually losing money when you spend $15 on a book, which is absurd.

If you spend $15 for a series of ones and zeros and Amazon loses money on that deal, that’s how absurd the pricing is from the publishing houses.

Kevin: And they’re no Apple. They’re not a company that’s making money off the hardware either.

Derek: That’s right. So all of these ebook readers are going to come out and the prices for books are going to be way too expensive and then the publishing houses are going to say, “See, no one will buy ebooks,” and it’s going to take someone like Apple—I don’t know if will be Apple, but someone like Apple—to say just the same way that Apple said to the music publishing houses, “Look you guys, 99 cents a song, trust us. It’s going to work.” The music companies had so little to lose at that point that they said, “Sure,” and it’s been wildly successful. Now, of course, they haven’t raised their prices because they haven’t learned anything.

It really is going to take someone with clout to say, “Look guys, the latest pulp novel – it’s probably not worth $9.99 to our folks, $4.99 would be great.”

Kevin: I think music is a great example because I went through the— I feel like I’m going through the music revolution again where I used to buy CDs and then digital came out and I wanted it because it was more convenient, it was a better product, but no one would sell it to me at a reasonable price or without DRM that limited my ability to listen to it the way I wanted to, so I just took five years off of buying music. It wasn’t an intentional decision, but every time I went to buy something, someone put a barrier in my way and I lost my taste for the purchase, and so five years went buy and I literally bought maybe one album in those five years.

Then finally, Apple found the right combination to get DRM off of its store and a bunch of sort of little indie music stores have sprung up online and it finally came together so that now I’m buying music weekly again. The more I think about, the more I think maybe I need to like five years off buying books.

Derek: Well, it may be the only thing that makes them learn. They may have to just really fail at this for a while before they get it. I’m an optimist so I think that that actually could be really good in that new publishing houses could form that will be much smarter with the way they deal with authors and much smarter with the way they deal with technology and give the little guy a chance to throw some new stuff into the world because we can’t expect Macmillan to do this. They’re too old and they have too much invested in the previous system.

Kevin: Definitely, we’re trying to do our best at SitePoint and in general, the technical publishers seem to be leading the way here.

Derek: The tech publishers are smart about this because they understand that certain things especially about tech books are better digitally. So search, obviously. Searching across multiple books or searching through books you already own is just something that computers do really well that books do really badly. Obviously, there’s always the travel example of being able to travel with a ton of material.

This is the incredibly important thing that’s happening right now that the book publishers and traditional publishers are completely missing as they scream about the death of print, is that there is more literacy now and there’s more reading that goes on every day now than there has been ever in the history of humanity.

There are more people writing and reading words on the Internet, and it’s because of the Internet that we’re raising a new generation of readers and writers. So that should be really, really good for people who sell words, but instead, they’re so focused on the technology of print and all the technology stuff we’re talking about, they’re missing the fact that there’s a renaissance in reading and writing happening now and all it will take is the right product at the right price to really capture that, I think.

Kevin: You spoke about how with Fray you’ve pretty much, for the time being, given up on getting people to pay for digital content and that rather you find you can make more money by selling the same content that’s available free online in a prestige-packed print format.

Do you think following that model represents a concession that we’re never going to find that way to get people to buy digital? Do you think it’s getting people used to the fact that digital content is free and might keep us from finding the way to get people to pay for it?

Derek: Well that’s certainly what’s the newspaper mafias are saying. The big few newspapers that are left are saying that the problem here is like a psychology a problem, like we’ve trained people that they can get it for free and therefore we are ruining our own business.

Kevin: We’ve heard the same thing from the death throes of the music DRM cartel saying we have a whole generation of kids who have grown up thinking of music as something you download for free online. We’re screwed because this whole generation will never pay for music.

Derek: And yet then comes the Apple store and they’re selling how many billion songs? So obviously money is changing hands. I guess you could also say that there’s more legal purchasing of music, digital music, now than there ever has been. So there was a solution there, you just have to find the right combination of things.

I think if your business models depends on simply making everyone decide to spend money when they don’t want to, that’s a very difficult business model. If it’s everybody else’s problem for not buying your thing, then maybe your thing isn’t worth buying. I really don’t think people are so simple that it’s really just a matter of flipping a bit in everyone’s expectations. I think it’s a perfectly rationale decision to not want to spend money for digital things that have no permanence, that are difficult to consume in the format they’re in, when there are free alternatives.

I don’t think that the solution is to take away the free alternatives because that’s impossible. I think the solution is to make the experience of consuming digital better and I think the Web is not that. The Web is good at a lot of things, but I think the fundamental experience of consuming content on it is not going to drastically improve. I think it takes new hardware, and that’s why I’m excited to see the new hardware happening.

As a publisher, I don’t feel that I’m conceding by embracing this wonderful medium that everybody can access where a story on Fray can be read in Australia and America and Antarctica as easily as anywhere else. I think that’s an enormous gift I’ve been given by the universe. So blaming that method of distribution is a fallacy. It’s not the method of distribution’s fault. It’s actually a great gift that allows you to publicize what you are doing, to find contributors, to grow community that the print world always lacked.

I think instead of seeing it as a concession, what it actually is is a tradeoff. I am willing to trade access to this content in return for all the things I get back from it, which in Fray’s case is growing community, meeting new authors, getting great submissions, contributing to the good of the Web—all of this great community stuff that happens when you put content out there and let people talk to each other. That’s a gift.

Kevin: So if all your dreams come true and we find a way to create the hardware and the software necessary for digital to become an experience the people will pay for, what is your vision for Fray and MagCloud in that world? Are these things attempts to create businesses in the unstable and temporary present or do these things have paths into that future as you see them?

Derek: Well I think for Fray is at its core a labor of love for me and something that brings me immense joy. So the only business connected to it is that it helps me stay current on what it’s like to be a publisher and it helps me self-educate about lots of things. I learned all about UPC bar coding in the United States and how … the mafias that control that. There’s so many little strange bits about publishing that are phenomenally old school. But in the end, it’s a labor of love, it’s not a business model. Labors of love are for joy, not for money. If it vaguely supports itself financially, then I’m happy.

MagCloud obviously is a business. It’s by HP. It has employees and consultants like me and so it is a business and as a business, it’s capitalizing on two trends. One is if you look at the cost per page of digital printing—so that’s printing on the HP Indigo machines that MagCloud magazines come off of—that is getting cheaper every year, whereas the cost of traditional printing is increasing per year because fewer and fewer people are doing it, actually, so the economies of scale are going away. It’s a laborious, very old fashioned kind of printing. If you’ve ever seen one of the old web presses running, it’s phenomenal, but it’s really old school. Literally, they are etching copper plates and applying ink to paper physically. It’s phenomenal to watch it.

As the price per page for traditional printing gets more expensive and the digital printing gets cheaper, there’s going to be a certain point rather soon where it is just as cost effective to do it digitally as it is to do it traditionally. At that point, MagCloud is the perfect print option for the big guys and the little guys alike. And what I see is, as the great opportunity for all of these web-based communities that have all the necessary pieces of what a magazine is. A magazine is a community that cares about a topic and content that is interesting to that community—that’s all a magazine is.

If these communities that have never published anything have this opportunity to create beautiful print outputs for their communities—that’s what a magazine is. If they can do it easily, all of a sudden, they have a business model. They can print paper and sell it and I think we’re going to see a lot of niche magazines come out of that, as the kind of existing print publications continue to struggle.

Kevin: Derek, thanks for taking the time today.

Derek: It’s my pleasure. I think about this stuff way too much.

Kevin: It’s great to get to spend some time with someone who geeks out about the stuff as much as I do, if not moreso.

Derek: It was all my pleasure.

Kevin: And thanks for listening to the SitePoint Podcast. If you have any thoughts or questions about today’s interview, please do get in touch. You can find SitePoint on Twitter @sitepointdotcom, and you can find me on Twitter @sentience.

Visit sitepoint.com/podcast to leave a comment on this show and to subscribe to get every show automatically. We’ll be back next week with another news and commentary show with our usual panel of experts.

This episode of the SitePoint Podcast was produced by Karn Broad, and I’m Kevin Yank. Bye for now!

Theme music by Mike Mella.

Thanks for listening! Feel free to let us know how we’re doing, or to continue the discussion, using the comments field below.

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  • powerpotatoe

    I enjoy the freedom and accessibility that the web platform provides. Writing to my state’s United ‎States Senators in regards to an initiative by U.S. President Obama seeking ways to require equal ‎access and time for opposing ideas on broadcast media, I argued that the web and various digital ‎medias provides the world with more than adequate access for ideas. Print and broadcast, due to ‎money and advertising professionals, may reach more people more quickly, but we have seen ‎numerous web based groups successfully create and maintain information portals. Digital media is a ‎great tool and force for intellectual freedom, but I agree that print will never go away.‎
    Print gives a sense of professionalism to a work; a status not easily acquired by its digital cousin. ‎Anyone can post their writing, good or bad, on the web or create a PDF and email it to a group, but ‎print cost money. Money is not just given away. If a reader will spend money, the reader wants ‎something worth their money. Much of the world’s digital print is not worth many people’s money. ‎Although many print works are not worth many people’s money, the web is flooded with a lot of ‎garbage. Print still creates a celebrity status, a status of “you’re there!” or “you’re a bona fide ‎professional”.‎
    For example, I use the Site Point website for design and developer news and training, but I trust the ‎printed books more than the online articles and the PDFs (even if it’s the digital counterpart to a ‎printed work!). Interestingly enough, I put more trust and preference into hard cover versus ‎paperback. I regularly use another site, Ligonier.org (the online home of Ligonier Ministries, an ‎American Reformed Christian group in Florida, USA) not only because it provides excellent resources, ‎but my trust, in part, is due to the excellent web design and more importantly the excellent book ‎publishing arm of the group.‎
    I am a web designer, developer, and passionate communicator. I speak, I preach, I teach, and I write. ‎A goal of mine is to have a printed work, but I still utilize the web to pass on ideas; to light an ‎intellectual fire in the minds of my readers and students. Another benefit of the digital publishing ‎world is that the publishing software industry as grown along with (or because of) it. No longer is an ‎aspiring writer required to send an idea or a rough draft to a printer for layout and design purposes. ‎Anyone can buy a desktop publishing program such as Adobe InDesign, Quark, or even Microsoft ‎Publisher if they have the money and everyone can download an Open Source alternative such as ‎Scribus. Digital tools and digital platforms are of great significance because of the access to the world ‎they provide any person with a computer or any person that knows someone with a computer.‎
    As usual, the discussion on this Podcast is helpful and inspiring. Keep up the good work. I will post this ‎on iTunes as well.‎

  • kc! Bradshaw

    Thank you for the wonderful interview. My publication (http://www.LEGENDmag.net) rides the same lines Derek is talking about and listening to him it makes me really proud to be in “the game”. We have been alternating between print and digital publication forms for the last 5 years. Still working on that ideal solution, but aren’t we all really.

  • Louis Simoneau

    Great interview!

  • http://www.sitepoint.com/articlelist/487/ Andrew Tetlaw

    I remember discovering the original Fray website more than 10 years ago when I was first getting into the web. One of my first ‘wow’ moments about the web as a medium for creativity was from the presentation a story that had the word curtain in the title. I think it was called Through the Curtain or something like that.

    Anyway, it was presented via 3 frames (framesets were newish back then!), the middle frame had a 0 width, and the two outer frames had a curtain texture. To read the story you had to pull back the two outer frames to reveal the middle one.

    I still remember how cool I thought it was :) Don’t remember a thing about the story, but the HTML was great!

  • http://www.sitepoint.com/articlelist/487/ Andrew Tetlaw

    Now you got me thinking… Who can remember the original Fray story categories? They each had a kooky icon. I can remember Love, Drugs (a coffee cup character I think), … Time(?). Anyone?

  • Michael

    I had a really good lough when Kevin said, that Sitepoint is trying to do a better job then the other tec publishers. Where? I don’t see it!

    1.) With a ten bugs discount the price for the “ebook” is still much to high. As Derek said, half the price of the printed version is reasonable and I totally agree here.

    2.) Where are the real ebook formats? Pdf is a nice by-product, but in times of the kindle and other ebook readers we need formats than are optimiced for reading and searching on this devices like epub, or mobi.

    3.) Where is the inovation? Where are the livetime subscriptions to an ebook, where are the really cheap updates to an ebook? Why isn’t the ebook version updated when errors are found? Where a the discount for the ebook for people who bought the printed versions a while ago, when they didn’t have an ebook reader. The list could go on, there is so much potential in ebooks!

    Take a look at commonsware.com they are doing a great job on publishing ebooks!

    Just one mor remark on Dereks comment, that people are not willing to pay for the digital version of a publication: If this is really a fact, why did amazon sell more ebooks last Christmas than printed books?

  • dkardys

    Hey Derek,

    Nice job. I tend to agree with you on just about every point. Keep up the good work.

    Dennis

  • http://www.sitepoint.com/articlelist/487/ Andrew Tetlaw

    @Michael, I can answer some of your questions. re: #2, we’re organising other formats right now, and #3 when we update a PDF with errata fixes we do increment the ‘updated’ value. If you look inside one of our PDFs you might see “1st Edition, December 2009″ and “Last Updated: February 2010″. That’s done when errata have been fixed.

  • jakejay

    That was a fantastic interview. I checked out magcloud and it looks really cool. Kevin, your interview questions are top notch. I’ve listened to a lot of interviewers and done some interviewing myself and questions that have some depth are so important. You do a phenomenal job at that. Thank you for making every episode worth listening to. Just a note, not to brag or anything, but I emailed Site Point a while back saying they needed a podcast and that I would actually listen to it and nearly 50 episodes later I’m still listening to it. It get’s better every time. Keep up the great work!

  • Khalid

    very insightful
    the best episode till now.

  • Khalid

    I agree that Amazon is dropping the ball on e-books and allowing “today’s” publishers to destroy users experience. I stoped buying Kindel e-books were Amazon/publishers don’t allow text-to-speech. If I buy a book, I want to feel I really own it and can do ‘within reason’ whatever I want to do with it.