Things are going swimmingly in the Land of the Fizzy with a kickass launch party for the last of the 2011 books, Kio Stark’s Follow Me Down, at the Bell House in Brooklyn on Tuesday. But in order to ensure that Red Lemonade remains insulated from the pressure to make a lot of money now, to grow to a uselessly generic size now, in order to continue to experiment with different kinds of publishing behavior, Mark Warholak and I have decided to make Red Lemonade a fully volunteer-operated enterprise.

This meant that I had to look for something new. And boy did I find it. At BEA this year I was introduced by Brian O’Leary and Kassia Kroszer to Valla Vakili, CEO of Small Demons. As he sat down and started to explain it to me, my mind flooded. There were all these people I wanted to introduce him to: publishers, writers, bloggers. People who should know about Small Demons, who can help and be helped. What I also realized is that I had never thought of this angle on books, culture, discovery, and reading.

Now this is going to sound a wee bit conceited, but I’d prided myself until then on knowing pretty much every angle there was on new modes of publishing. I was up on on annotation, social reading, transmedia, distributed editing, Digital Humanities, on music projects like Pandora, Spotify, SoundCloud, on journalism, on Shirky’s Age of Abundance and Kevin Kelly’s 1000 True Fans and Bruce Sterling’s Internet of Things and Union Square Ventures’ Hacking Education. And so on.

But what Valla was telling me was new new. And it was thrilling.

So when I realized it was time to work for someone, I talked to Valla.

And am pleased to report that I’m now VP of Content and Community for Small Demons.

So what the hell is Small Demons? It’s the New Serendipity. It’s “Go where the story takes you.” I know I owe you details, but we’re not quite there yet. Just a few more weeks and I’ll be able to start hooking folks up with some nice examples of the demonologists at work.

But I’ll tell you where the name came from, because few if any LA-based tech start-ups derive their names from Borges’s “Tlön, Uqbar, Orbis Tertius”.

“The history of the universe…is the handwriting produced by a minor god in order to communicate with a Demon.”

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Publishing is saddled with this terrible reputation for being reactionary and Luddite, our denizens known largely for caviling against technology and the new-fangled. It is perverse, truly perverse since publishing is in fact at the center of two major social revolutions that dramatically disrupted the status quo ante.

The first, printing, we all know and understand to a degree, but let me remind all concerned, pace Clay Shirky, that printing upended the established religious and political orders in ways that radio, television entirely failed to do””these latter media being readily co-opted for propagandistic purposes by the existing political and economic powers-that-were-and-are.

The second, retail, is rarely discussed but booksellers were the first retailers to take their product from the back room and place it on shelves on the other side of the counter, for the public to see, touch, peruse. The consumer centric approach to retails starts in the book business too.

So the seeming radicalism of the Cursor project, as expressed here at Red Lemonade, is not contrary to the historical spirit of publishing but consonant with it. Being opposed to technology is profoundly at odds with the book business because what is the book but technology, technology that has been smoothed and sanded by repeated contact with human society into the most comfortable technology we have, as taken for granted as our clothes, product of the looms.

I pick looms for this reason because it was the Industrial Revolution that produced the great rupture that bedevils publishing today, the abandonment of an artisanal mode of production/consumption for an industrial one, which took the highly social acts of writing and reading, almost equally performable by anyone provided they were literate (a significant proviso of course), and rent it asunder. Writer alienated from reader, writer from writer, reader from reader. Atomized. And in so doing created a system that was at its most profitable, because of the relentless logic of economics of scale, when there were the fewest number of writers, at its most profitable when the various phases of production and distribution could be handled by highly specialized entities and individuals, none of whom understood what the other was up to, a Fordist model of production combined with a Sloanist management model.

We have tended to speak of the model of publishing for the last hundred years as if it were a perfect one, but look at all the indie presses that arose in the last 20 years, publishing National Book Award winners, Pulitzer winners, Nobel winners. What happened to those books before? They weren’t published! They. Were. Not. Published. Sure, some were, but most? Nope. We cannot know how much magnificent culture went unpublished by the white men in tweed jackets who ran publishing for the past century but just because they did publish some great books doesn’t mean they didn’t ignore a great many more.

So we’re restoring the, we think, the natural balance of things the ecosystem of writing and reading. The writers read, the readers write. The About page and FAQ describe and elaborate on how we do this””the books speak for themselves, as they always have. You will have questions that these pages do not answer, so contact us. We don’t pretend to have all the answers but we’re going to organize and contend with the important questions: How do we avail of our collective intelligence to make better publishing decisions? How do we provide mentorship and advice while avoiding cronyism? How do we harness the power of the gifted editor? How do we unlock more of the great value books create in our society, so that we can all afford to write and read better?

You have the answers, not me. The site has feedback mechanisms everywhere, you can comment on this post, on a manuscript, you can create a conversation, you can create marginalia, reply to comments, you can see what we look like, hear what we sound like, you can find our names and email addresses, we will listen, we will respond, whether on matters technical or administrative or cultural and together we will restore books to their leading edge positions, once again transform social relations, once again launch revolutions.

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In honor of heading to Austin, residence (and namesake) of the brilliant Austin Kleon, illustrator, nay illuminator, nay, translator of ideas, herewith Austin’s take on how the Cursor platform works in its Red Lemonade incarnation.

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I received the below email recently, from a French acquaintance J.R. Partel whom I remembered warmly from his year in New York in 2004 or so. He is also a literary translator, a superb one, who translated one of the finest books I ever published. He wrote me in response to seeing a talk I have on Publishing 3.0 but as readers of this blog can attest, it could have been in relation to most anything I’ve talked about! I was about to reply when I realized that it might be might useful to actually do so in public, since J.R.’s critique was probably the sensitive, most aware and most grounded in actual experience (as opposed to anticipatory anxiety) I’ve yet encountered. Well not necessarily critique, I suppose, he’s writing about what we’re starting to call The Age of Abundance, which J.R. knows is happening anyway, so let’s say a critique of the possibly blithely optimistic strategies some of us propose or are implementing, a call to be alert against insouciance or naiveté. I also feel that I should let his piece stand here for a while, unmolested by me, allow it to take one a life of its own here, be somewhat Slow Web about responding myself. Do feel free yourselves to comment in your own good time…

bq. Dear Richard,

bq. I’ve just watched your presentation at BookNet Canada. I found it enlightening and surprisingly captivating for a non-betablocked disquisition on fairly abstract matters in front of a trade audience, so thank you, thank you and well done.

bq. I’ve spent the last five years running an indie record label, trying to survive elegantly in the war of attrition that is the music business. I wanted to tell you about my experience, as some of the issues faced today by the publishing world, the music industry had to deal with years ago. No doubt you’ve thought about all this already, because you’re clearly on top of what you’re doing, so apologies if this is old-hat, depressingly-rehashed stuff:

bq. I admire the excitement you get from the state of the publishing industry and its impending changes. Now that we’ve seen how the music industry failed to change on time, when it could have co-written the terms of its surrender, it is reassuring to see that other fields might not make the same mistakes. For me, however, building on unstable grounds felt horrible. It forced us to invent a business model for each record we would release, because in the interval the business had changed: vinyls were no longer a viable promo tool, MySpace had fell into irrelevance, new formats, new outlets, our Canadian distributor had folded… I’m not talking about the constant flux of influential blogs, tastemakers and promoters. Tracking all these moving parts to get a feel for the general taste and notice shifts in pertinent communities, it’s what you do to chart the course of your forthcoming records. I’m talking about rethinking the building blocks of the landscape all the time. It can be discouraging. It means spending a disproportionate amount of time on marketing issues and feeling under the siege of newness. New is good, but when you spend so much energy dealing with structural newness, you have too little left to take stock of or encourage newness of content. Stability breeds confidence. (Overconfidence breeds contempt, yes, but that’s way down the line.)

bq. The idea that a publisher is not only a manufacturer of printed matter but also the provider of a human experience (of ways to connect, if I understand you correctly) is true. But what do you make of the shift it entails, from a reader-book connection to a reader-writer connection? When I read a book, the experience I love and treasure is with the book (and its characters, sentences and so forth), not with its author. You could even say that the only necessary part of my relationship with literature is the book (printed or not, of course). But if you want to move into the $200 to $10K price range, you have to sell something else, you have to make the author part of the book experience. On Kickstarter for instance, above a certain price point the project managers are really selling privileges (more access, more involvement, more ancillary information, etc.). I’m not a wuss nor do I believe in purity of intent but are you not scared you’ll have to deal with sad fetishistic behaviors? Crazy fans spending way more than they should on diners with authors they shouldn’t idolize? Is this a necessary shift (from book to author)? Has it happened ten centuries ago and I’m just late to the party?

bq. And what happens to writers who just can’t muster the charisma or aren’t interested in writing their personal legend alongside their books? And those that aren’t writing the kind of books you can build a community on? Many of my favorite books are books that tend to be read by loners who won’t advertise their reading and for each Vollmann that I can see people paying to meet, you have a Lutz. Do you think the “old model” will still be there for them?

bq. Lastly, strong peripheries tend to take over the center, paratext becomes text and side businesses crystalize into the actual thing. Look at what happened to music (certain genres) : participatory practices have cannibalized pop music, they are pop music now. Remixes, fixes, mash-ups, fan-made videos, leaks, in some case the record itself is difficult to locate. The conversation overwhelms the discourse and you scroll down to the comments before anything else. We have something mildly interesting going on in France as far as social publishing goes. You’ve probably heard of mymajorcompanybooks? It’s like they know that the center cannot hold and operate on the assumption that it’s already collapsed. So they’re focusing on everything but the books: what comes before, after, the writer, the strategy… And the communities they build, as strong as they are, are not interested in reading or whatever, they’re interested in gambling and winning, of course, and I knew it, but still, I was expecting to see something beyond the hustle. It’s weird how fans are no longer consumers, experts or activists but want to be VCs, shareholders, editors… The original site, focusing on music, was a big hit. I’m not sure there’s a clear point here, except maybe that I’m afraid of what the systematic harnessing of communities will result in.

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Last year I concluded my contribution to the Frankfurt Book Fair’s website with an opinion piece on what I thought the Fair signified — a perhaps hubristic attempt to issue a personal, idiosyncratic, opinionated State of the Industry address. To add bloodymindness to hubris. I’m going to try this again, and again crosspost from the Fair itself. (Do please note that these are my opinions, not those of the Frankfurt Book Fair or anyone therewith associated and do also check out that blog in general, there’s a lot of really good stuff there)

So I was attending a party thrown by the good people at the Dutch Foundation for Literature (who are organizing a conference in which I’m participating in Amsterdam in January 2011) and was chatting with a US journalist, Boris Kachka, who is writing a history of Farrar Straus & Giroux, and a US technologist, Nick Ruffilo, Chief Information Officer at Bookswim, a Netflix for books. Nick was asking why there wasn’t better data about the size of the book industry. I began to bluster about Nielsen and the AAP and BISG, how the US Census included used books but excludes ecommerce, how the BISG thinks the AAP understates publishing revenue by 50%, and then it came to me — the data about the book business is poor because there is no such thing as the book business.

Yup. The book business doesn’t exist. There is no book business.

What we call the book business in fact an agglomeration of one or two components of lots of other industries–education, medical, scientific, entertainment, food–which all happen to at one point in the service offering or product cycle use the bound book. Now, this on its own isn’t a particularly new or useful observation–Mike Shatzkin most recently noted that even the consumer business is two different businesses–but I think we’ve often failed to push through the implications, or really recognized how extreme the gaps are between the actual businesses. While trade/consumer books seek (and often fail) to be desired by readers, readers of education textbooks are typically coerced into reading them. While the user desires a slow meditative encounter with a book of poems preferably rife with ambiguity, the reader of a medical reference work reference work requires fast, predictable, unambiguous information. A cook might indeed like relatively fast, predictable, unambiguous information in a cookbook but the sales channel through which it is obtained, as well as the user interface, the likelihood it might be a gift, the likelihood of its obsolescence as a product are so radically at odds with a medical reference work that to conjoin the two would be akin to lumping together the medical instrument business with the cutlery business because both involve knives. It’s not just that there is variance within the industry, then — all industries have variance — it is that the book business just ain’t a business. All these different businesses have in common is they print and bind things as a part of doing what they really do.

And they’ve one other thing in common, as the ex-Director of Singapore University Press noted to me when I marveled at this problem: they all go to the Frankfurt Book Fair. It could very well be that the actual definition of the book business is: it consists of those companies that go to the Frankfurt Book Fair.

What are the implications for the Book Fair, then, that it is a tautology? Well, a buzzword of this year’s Fair was convergence. One saw this in the title of the programming focused on the digital future: StoryDrive. Designed to appeal to TV, film, and video, it emphasized what we all (well, almost all) have in common: the story. Except of course back in the traditional publishing halls, there were an awful lot of publishers who don’t publish stories at all. Nevertheless it was a valiant effort and a useful one, in that the film and TV business not only are always looking for books to license, the reality is that many a writer makes a living directly or indirectly from the film and TV business. Luring videogames into the mix, as the Fair has shown some considerable success in doing not only helps draw their attention to books as a source of content, but also to writers and perhaps even editors as a source of talent.

Of course, there were a great many companies at Frankfurt trying to persuade traditional publishers that they too can incorporate video and interactivity into digital versions of their books and all they needed was our advice/our platform/our tools/our device. Many publishers were eager to hear this, especially those not operating in countries with fixed book pricing and therefore facing heavy retailer discounting. In these instances especially publishers believe that adding digital extras to conventional eBooks will allow them to resist perhaps reverse the downward pressure on pricing by creating value for customers — nevermind that there is little sign customers actually want these extras. Again and again, we were reminded, that films began with a single camera pointed at a stage set, that it took a while to really figure out what the true possibilities of the medium were. When we do, oh boy, the world better look out!

As this outburst of snark suggests, I’m skeptical about this kind of convergence. It is clear that there will be entire new mash-ups of text, image and sound–film created one, the mobile network will create another–but medium-based convergence is a dead-end. If adding video and audio to books were such a great idea, why didn’t publishers become movie studios in the 1940’s? The reality is that the lack of audio and video in book is a feature, not a bug. All art forms are defined as much by what they exclude as by what they include, by what is left out as much as what is put in, by performing addition by subtraction, by less being more. The rules of haiku, of villanelle, of science fiction all exist to describe what is disallowed so as to give the freedom of not-everything-being-possible to the artist.

Which, again, is not to say artists ought not create transmedia works. They should, and will. It is instead to say that when frightened publishers start scheming to create them in cahoots with third-party vendors we can safely say that this is a policy designed not to create desirable consumer products nor to create art but to create a survival pod for the publisher. What problem does the enhanced eBook solve? Not a consumer problem, it’s designed to solve a publishers’ business model problem, viz. how do we create a unit of something sold through a retailer for which we can charge $12-$20?

Again, of course, we have to re-remember. There is no such thing as the book business. So what of educational publishing, say? Enhanced eBooks for education seem to be a no-brainer. Except that what is a textbook other than just a tool for asynchronous learning. Which is also what a website is. And a cookbook is a tool for home cooking and entertaining, which a website, especially on a handheld device, is even better at doing. And the Physicians’ Desk Reference even more so.

This allows us to draw the next conclusion about convergence–what all the book businesses at the Frankfurt Book Fair had in common is that each is tending to try to use technology to create enhanced downloadable files of content formerly contained within a book in order to preserve a status quo ante business model, whether it’s selling through retailers as consumer publishers do, or selling direct to professionals, or professor-mandated coercive sales. In each case the enhancements are unnecessary, are enormously expensive requiring the skills and resources of a movie studio or large-scale video game developer, or are already offered more cheaply and conveniently by websites. So we have a kind of negative convergence, unfortunately.

Yet there was a lot to learn from the Fair about positive convergence–at the level of the business model, not at the level of the medium. There were many direct-to-consumer opportunities in evidence whether it was panels on social marketing, e-commerce solutions, mobile apps development and that is certainly a business model adjustment for consumer publishers unused to a direct relationship with readers. But the more radical opportunities for business model convergence were the numerous panels where one could begin to learn about virtual goods, monetizing communities, developing partnerships, employing subscriptions whether vertical, time-delimited, all-you-can-eat etc. The StoryDrive conference, although certainly full of gee-whiz tech, was equally replete with video game developers, music industry experts, and software companies describing not only how they’re moving on from selling physical products but also on how they’re moving on from selling digital downloads, and what the business models look like–two excellent examples of which I described in my opening post of this blog.

The capacity of the Frankfurt Book Fair, then, to draw not only those companies that can broadly be categorized as the book business (if for no other reason than that they in fact attend the Book Fair) but also other businesses engaged creating and disseminating “book-less” stories and information is perhaps its greatest utility, to point out, yes, where there might be technical convergences, but far more importantly where these tremendously divergent businesses can learn new economic models and converge on the business models of the future.

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I’ve spilled much ink, and darkened many pixels describing the community dimension of Cursor, but I’ve had relatively little to say about its publishing dimension, in particular as it relates to established writers and the traditional publishing infrastructure. I have mentioned that we would be doing some classic indie publishing, but that’s gotten a bit lost amidst all the rest.

So let me say here [well this is crossposted from The Literary Platform so I said it there too]: each community is also a publishing imprint, one that will publish one to two books a month. So, for Red Lemonade, the first community/imprint based on the Cursor platform, each of these books will be published digitally — both in the cloud, and as a download — and mechanically, as a limited edition and as a trade paperback original, this trade edition being distributed in the conventional manner by leading distributors around the world (details of authors, distributors, etc., to be announced at Book Expo America at a panel on rights and royalties y’all should check out if you’re going) and all editions being promoted with galleys, co-op, review copies, hustling, moxie, and my own brand of pimpin’ and hoin’.

Why bother, why continue to participate in this old system?

First off, Cursor is a community business, a writer-and-reader-driven business. To eschew the format and purchasing preferences of the vast majority of our community is to do them an enormous disservice. It is not our job to decide formats; it is the reader’s choice.

Second, my previous company Soft Skull derived a great deal of its success from the support of, let’s say, five hundred bookstore clerks, freelance book reviewers, sales reps, and librarians, people who are, yes, part of the disintegrating supply chain, but who are also part of the vibrant and ever more dynamic book culture ecosystem.

The best way to enable them to get the word about our books, about our community, about our writers published and unpublished, out to all the readers and writers they talk to is by participating: by having our books sold into their stores, by having our books reviewed by their conventional media that helps librarians, booksellers, and yes, even readers make purchasing decisions, by having the books visible in those places most highly trafficked by avid book readers and writers, by making books available to readers’ advisory librarians.

I admit, it freaks the investors out a wee bit, participating in this expensive and barely profitable part of the business. We’re not selling to the trade to make money, we’re selling to the trade because we owe it to the community. (Plus, we’ve other ways to make money.)

But we wouldn’t be Cursor if we didn’t tweak this. And the tweak is pretty radical. It’s not really a tweak at all, it’s a complete break with publishing norms. It already rather freaked out Jack McKeown, former head of adult trade at both HarperCollins and Simon & Schuster, and founder and former CEO of the Perseus Books Group when I hinted at it during the Digital Book World conference in January. When I discuss the details at Book Expo America at the end of this month, it’ll likely freak folks like Jack out even more.

No more life-of-the-copyright contracts.

Instead: three year contracts.

Yup, from a contract that locks you in till seventy years after you’re dead, to a three year contract. Renewable annually thereafter. Which means after three years you can walk. Or stay, but stick it to us for better royalties because there’s gonna be a movie. Or stay with us because with all the additional formats and revenue opportunities we’re creating above and beyond what any publisher has to offer, you’re making more money than ever before.

You see, most publishers have accepted they’re not going to make money publishing your book. They’re publishing your book and a bunch of other books like it so they can have exclusive rights over as much intellectual property as possible. Such that if, three or five or nine years down the road, you win the NBA, or the Orange, or there’s a movie, or an Oprah pick, your whole backlist starts to sell but they don’t have to pay you one single extra red percent in royalties.

That’s where their profits come from, from being able to NOT have to renegotiate royalties when your books start selling better than they expected.* That’s what freaked out Jack (sorry for singling you out, man, it’s just you were the one that saw the implications for the old business model and spoke up.)

My wife’s an intellectual property lawyer and deals all the time with negotiating licenses for intellectual property in fashion, cosmetics, software, design. She’s negotiated for or against DC Comics, Disney, Mark Ecko, Chanel, Michael Kors, J-Lo, the Elvis Presley and Muhammad Ali estates and so forth in creating apparel lines, fragrances, resorts. These transactions don’t involve 100 year licenses, or 20 year licenses. They’re 2, 3, 5 year licenses, the underlying philosophy being that you’re together in business to maximize the revenues from the intellectual property and if the underlying value increases, you’ll renegotiate when the license is up for renewal.

Authors deserve the same terms.

The publishing industry is in a state of turmoil. New sales channels are arising, new formats, new terms of sale.

Authors deserve the chance to renegotiate as the industry evolves.

The number of books published has increased forty-fold since 1990, the number of readers has remained broadly static.

Authors deserve to be actively connected with readers, not just be made available to readers.

OK, so I just slid from contracts and terms and rights and royalties to more general business issues. I’m cheating in my rhetoric. But in the broader sense, the authors we choose to publish know they are publishing with us because we serve them best, by actively connecting them with readers, not because of civil law penalties for breach of contract. And we know we must serve them better than anyone, else they’ll be out of here.

Are there any catches? Only this: given how tight, focused, loyal and progressive our communities/imprints will be, and given the ease with which an author can renegotiate any and all rights, we’re seeking a fairly broad basket of rights in the license. Not necessarily film, because agents get pretty emotional about film, and frankly book-to-film agents know what they’re doing and tend not to miss opportunities, but in audio, in English-language outside the US, in magazine republication, in translation, in those licensing channels, each of our imprints is going to be more active and visible than individual authors or agents or general-interest publishers are going to be. When an imprint is as focused as ours are, foreign publishers, audio publishers, magazines etc, know to come to our distinctive stable of writers.

Moreover, not only do you maximize your licensing revenue through our model, the more channels we can use to reach readers, the more efficiently we can get you in front of readers, and the more ways we can offer readers to connect with you. We collaborate with those entities licensing from us so as to, in the phrase used in the magazine business, so as to “surround the audience.”

There have been inflection points in the history of the production of culture where business norms change radically. Oftentimes the baby gets thrown out with the bathwater. We think we need to maintain selective publishing into book retailers, we think that’s the baby. But the old contract is the bathwater. Away with it. Join the baby shooting out of the bathtub with the rocket wings. We are your leg up in the world. We are your platform. And you can still fire us.

*I’m semi-exaggerating. For example, under the 1976 revision of U.S. copyright law, authors (and all other copyright holders) are allowed to terminate transfers of their copyrights to publishers after a set number of years, with different provisions for pre- and post-1978 works. The U.S. Congress made such provision “because of the unequal bargaining position of authors, resulting in part from the impossibility of determining a work’s value until it has been exploited.” However, you can expect it to cost a minimum of $10,000 right now in legal fees to perform all the very complex filings necessary to accomplish this. And I don’t know how many other countries have such escape clauses.

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