The sharing economy.

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Amazon Pays Writers to Keep Readers' Attention

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
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Books were the original "sharing economy"; Ben Franklin founded the first American lending library before there was even a United States to found it in. But Amazon has brought this into the 21st century with Kindle Unlimited, a service that lets you borrow and read a certain number of books at a time. Authors who participate in the program are paid out of the pool of subscription funds (about $3 million last month) according to how popular their books are.

But now Amazon is changing the model to pay, not by the book, but by the page. I don't mean by the length of the book, which would favor massive, weighty tomes liberally padded with unnecessary dependent clauses that hang like barnacles and with abstract, abstruse adjectives that add little meaning but much verbiage. Ahem. Amazon will actually pay by the number of pages read. This won't affect the books that Amazon sells outright, only the books that are borrowed through Kindle Unlimited or the Kindle Owner's Lending Library. But it's still a big deal.

This is not a bad idea, mind you; it fixes some of the problems with the old system, like the fact that someone who wrote a short novelette gets the same pay as the guy who spent years writing a 500-page monster. But this will inevitably affect how people write for Kindle Unlimited -- and if that becomes a bigger part of the book market, that means anyone who wants to write a book.

Consider Thomas Piketty's "Capital in the Twenty-First Century." The book was a huge bestseller. But when I wrote about it for Businessweek, it struck me that many of the people who were commenting on the book hadn't actually, well, read it . They had read the introduction. Or they had read articles by people who had read the introduction. But they weren't actually discussing much of the content of this doorstop tome.

My suspicions were confirmed when the Wall Street Journal did a quick-and-dirty analysis of the book's top Kindle highlights. It turns out that "Capital in the 21st Century," despite its bestseller status, may be one of the least-read books in history, topping even Stephen Hawking's "A Brief History of Time." It is the sort of book that people like to be seen reading, or to think that they will read, but its less-than-glittering prose and dense analysis do not make for the sort of book that most people actually like to spend a few months of their life on.

Kindles already elevate certain kinds of book sales higher than they otherwise would be -- it's hard to imagine "Fifty Shades of Grey" becoming such a massive bestseller if you had to let people see you reading it at the coffee shop or on the subway . It's easy to predict that as e-books become the dominant form of reading, "trash" will sell better and "serious" books will sell worse, since your purchases will no longer be on display. But this new pricing model in Amazon's lending library exerts a different sort of pressure. What will happen?

  1. Serious books may actually be borrowed more frequently, because you don't have to plop down $30 on the off chance that you might suddenly become interested in quantum physics. On the other hand, most people will discover that they are not actually interested in quantum physics, suddenly or otherwise, so not many pages of these books will be read, and reimbursement for the authors will go down.
  2. People will actually read less of those serious books than they did before, because once you've paid $30 for something, you feel duty-bound to at least try to read it.
  3. Fiction writers will fight two opposing temptations: the temptation to pad, and the temptation to make it as readable as possible so that people will read everything they write. It's not clear to me how this resolves, though we do know what happened when serialization took off in the 19th century: Writers padded like mattress salesmen.
  4. How did fiction writers make people keep plowing through all that prose? Cliffhangers and tearjerkers! Characters will spend as much time as possible stranded in difficult situations that do not resolve for many chapters. They will linger with diseases. What happens to those people? You'll have to read on to find out. Perhaps to the very last page.
  5. Agonizingly crafted writing will be at a serious disadvantage. Yes, yes, it already is. But if you get paid by the page read, you cannot afford to spend three months crafting a chapter unless what you end up with is the opening sequence to "Bright Lights, Big City." We'll see something like what has happened on the Web: higher productivity, less craft.
  6. Reimbursement for writers overall will probably go down. This is essentially unbundling the pages from the book. And while in theory, you should be willing to pay as much for the pages you actually read as you were for the whole book, what we've learned from music is that somehow this perfectly sound economic theory does not work in practice. People buy singles instead of albums, and they do not buy enough singles to make up for the lost album sales. Spotify does not pay artists anywhere near what they'd make on the singles. Rinse and repeat, ad infinitum: At some point in the future, if sharing becomes the dominant business model, there will be a lot less money for writers. And there's no claiming that they're going to make it all up in live performance.
  7. Episodic fiction, on the other hand, will probably do very well. Think "Law and Order": bite-size bits that don't require vast understanding of the pre-existing universe and can be consumed in one sitting. This might be the twilight of the novel and the golden age of the short story, if people can remember how to write short stories.

That's just what I can think of, of course. As someone who might like to write a book in the future, I'm more worried about the things I can't think of. In some ways, publishing, which really depends on a few revenue streams, all of them financially challenged, looks even murkier than the still-mysterious music industry.

But that's far in the future. For now, the good news is that writers will be getting paid on what seems like a fairer model: whether they keep their readers reading. In the long run, it may not be a good thing for a lot of writers, or readers who favor labor-intensive prose styles. But it's still probably a good thing for all readers in the short term, and for most even over the longer run.

  1. But, I hear you cry, didn't you do that very thing, Megan? Er, no, though I did take a lot of chaffing about it from people who hadn't read past the first paragraph of what I wrote. I was arguing with all the reviews of the book that started by noting that inequality was the most important issue of our time, which is not actually what "Capital" is about. I had read all of the reviews I was arguing with. But I saved discussing the actual content of the book until I had actually, y'know, read the book.

  2. For the record, yes, I purchased it out of morbid curiosity, yes I plowed through some of the worst prose I've ever encountered outside of a high school composition class, and if I'd actually had to go to a bookstore and purchase the thing, well, science be damned.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Megan McArdle at mmcardle3@bloomberg.net

To contact the editor on this story:
Philip Gray at philipgray@bloomberg.net