The Indie Author’s Bad Bargain with Ad Algorithms Part 2

When the Kindle launched, there was almost no supply of ebooks. The need was met by text-only, public-domain files such as provided by the Gutenberg Project, and the small number of indie authors who noticed and got in the game early on. They will still wax romantic about the good ol’ days—like being in California in 1849.

It’s changed so much in the past dozen years that newcomers to indie publishing despair that all the gold has been panned.

Of course, there’s no way to recreate the conditions of a new medium and the good luck of striking it rich. But striking it rich is almost always like that—sheer fate. Luck favors the prepared, but the prepared aren’t always lucky.

Sustainable wealth doesn’t come from luck or fate. It comes from participating in a very large system of exchange that trends toward freedom and away from exploitation based on extreme power and knowledge imbalances.

The ironic tragedy is how much indies inadvertently contributed to the latter while championing the former.

Here’s the freedom part: the cost of capital investment and the gatekeepers both set aside, all sorts of authors could enter and compete in the marketplace and find an eager audience. They have. There’s a reason for the recent explosion of subgenres—authors willing to supply and readers voracious to read have finally been able to find each other. This can only be cause for rejoicing.

But here’s the extreme power and knowledge imbalance part. It has a number of layers.

First, Amazon was almost the only market. That has changed, but it still dominates. And again, Amazon gave a much better deal, not to mention access at all, to countless authors. Give Goliath his due before you whack him with a stone in his forehead. The giant did a lot of good.

But like all giants, without competition he got a little full of himself. He had too much power. And he made use of it.

To get the giant to work for them and not against them, indies inclined toward two trends that were ultimately going to harm them:

1) Indies priced their ebooks way too low. Understandable at first: they had to be appealing to people who were used to reading print on paper. It was the cheap light bulb strategy to pull people into the ecosystem. But indies had no equivalent of an expensive power bill to compensate for the cheap upfront goods. They trained their readers to expect ebooks to be cheap. Awhile back I discussed my own feelings about the cost of ebook vs print and how weirdly, inappropriately I assign more value to the paper than to the intellectual and artistic property. But that’s partly how I was trained by this very practice. The funny thing is, traditional publishers were so offended at cheap indie ebook prices that they kept their own ebooks priced as high or even higher than the print books. It felt like a kind of punishment upon lowly tablet readers. It also was terrible for their sales.

2) Indies got sucked into algorithmic advertising. This ultimately was even worse, though initially it seemed ideal. Back to the original problem: in a world awash in books, more than ever now with the indie renaissance, and for that matter competing with every single other book in print with the huge network of used bookstores online, how on earth do you get noticed? Answer: buy ads on Amazon and Facebook. They know what people like and can target your ideal reader. Bingo! A handful of authors have made fortunes this way, and a not inconsiderable number have made decent wages. What’s not to love?

Here’s what’s not to love:

a) So obvious it’s amazing nobody saw it coming, traditional publishers finally woke up to the revenue potential of ebooks. Admittedly, it took the pandemic-inspired lockdowns for this finally to happen, since it converted huge numbers of print readers to ebook readers, even more dramatically in Europe than North America. That means they priced their ebooks more competitively, and indie books were suddenly less of a bargain.

b) Algorithmic advertising has over time replaced organic advertising on Amazon. Remember back when you would search for a topic and you’d get a list based on, say, popularity or also-boughts? Pay attention—that approach to selling you other books is on its way out, because it was free. In other words, it was automatically generated information that Amazon didn’t get any extra profit off of. But now, with the amount of data it’s collected on reader habits, instead it can auction off book placements to people searching for a term, and that is very lucrative. Indies now regularly find they are priced out of ad markets they used to depend upon. That is only going to increase—especially with traditional publisher budgets and/or celebrity-influencer books having much larger advertising budgets than indies. Indies had a good run of it with the digital arbitrage of ebooks. But other prospectors have come a-hunting, and they have bigger guns.

c) Finally, but least obviously, all algorithmic recommendations are fundamentally predatory. They are premised on mass theft of data that people don’t even know they’re generating—see my comments earlier on Shoshana Zuboff (and more to come in the future). The enormous knowledge imbalance in this case leads to a power imbalance and thus to a money imbalance, with profits draining to a small handful of winners—see my comments on Jaron Lanier (also more to come). Indies and other independent creatives who celebrate the access they gain from algorithmic boosts are kind of like people swept away by a flood expressing joy that the drought is over. In the end, algorithmic systems will always tilt toward a winner-takes-all system. The indie movement was supposed to break this up, not reinforce it.

There’s nothing inevitable or irreversible about these processes. A good place to start is both for consumers and creatives to learn other ways of reaching each other. All creatives are also consumers, so we should lead the charge.

But since not all consumers are creative, we are going to have be diligent and deliberate about educating our consumers and urging them toward better, freer markets of creative exchange.

Oddly enough, a free market means actually paying *and* being paid for your creative work.