A simple (but long) explanation of Gamestop, RobinHood, Capitalism, and Socialism

First, let me say that capitalism isn't "less government" and socialism isn't "more government." But seeing as how many people are confused by that, I'm going to relate them to those concepts in a general way because for some people that will make the sides clearer.

Second, this is laid out in three parts.  The first indentation at the top is a description of what has happened so far. After that, without indentation are the answers to questions about socialism and capitalism. At the end are two indented parts, one for other considerations and the other for what will happen.

This is what happened.

Several institutional investors (hedge funds) placed large bets that GameStop, the company that sells computer and video games in malls, was going to fail.

GameStop, it should be said, made money last quarter. That doesn't mean that their business could continue forever, just that they weren't insolvent yet.

The bets that were placed on the failure of GameStop are called "shorting" the GameStop stock ($GME).  The bets were noticed by other investors, and so more bets were placed.

When this happens, people generally see the end coming and they try to sell their stock for the best price that they can get, which means that they sell their stock *NOW* before it goes down further.

Selling stock reduces the price of the stock, creating more rush to sell stock.  The stock would then go down further, and if it would go low enough, generally the company would be unable to get loans because they would be considered worthless on the markets, and they would have to declare bankruptcy.

However, in this case what happened was that Redditors from /r/WallStreetBets looked at the shorting of GameStop stock and decided that it was creating what might be called an upside-down bubble. GameStop *wasn't* dead yet, and so acting as a group of small investors, they went out and bought $GME.

Buying stock increases a stock price.  This countered the slide started by the shorting and was enough to increase the value of the GameStop stock.

So, here where I don't know if it was just the original /WallStreetBets folk or a second layer of people that I'm going to call the F*ckWallStreet people. They realized that if the $GME stock didn't go down, they hedge fund bets would lose, and they would lose their money.

So the F*ckWallStreet people doubled down on the $GME and the price went WAY up to at least 14,300% of what it originally was. 

Now, shorting is a bit different than a bet you'd have with your friends. Instead of being out just the money they laid out on the bet, if the stock price went UP above the original price of the stock, you OWE the difference on the increased price of the stock to the person you bet with. (Technically, you need to purchase the stock, so that means that this is driving the stock price higher as you fight with small investors for them).

That meant that at least one of the hedge funds, Melvin Capital, was bankrupted by the increase on the stock price.  There may be more by now.

And here's the thing about the psychology of the F*ckWallStreet people, their main motivation was that they wanted to fuck Wall Street (the institutional traders, basically). The name I chose was no coincidence, eh?

So they realized that they could really, really hurt some hedge funds, and so the strategy spread to a few other companies.  AMC movie theaters ($AMC), BlackBerry ($BB), Macy's ($M), Nokia ($NOK) and National Beverage ($FIZZ) have apparently also seen increases.

Ok, now if you invested at few hundred dollars on Monday, on Wednesday you could have tens of thousands of dollars, and the news was reporting on the "GameStop stock" thing. That news exposure actually increased the demand on GameStop stock by two groups, the loveable F*ckWallStreet group and people that wanted to make money (i.e. Latecomers).

Today is Thursday, and what happened is that retail (RE: small investor) trading platforms suspended the ability of users to *buy* $GME and other affected stocks.

The reason that RobinHood gave is that they were trying to "protect" their users from the bubble that was being created. This would be the Latecomers that were mentioned two paragraphs back, who were buying high priced GameStop stocks on the hope that it would go even higher.

But you'll notice, they still allowed users to *sell* GameStop and other affected stocks ("close their position" is the jargon they use). And when a stock is sold, the price goes down. So users could sell their stock, but only for *less* than what it was worth at Wednesday's high point.

So if all the small individual investors were only allowed to sell their stock, you should ask "Who was still allowed to buy?" Funny thing, the answer is institutional investors, like the hedge funds that desperately needed to drive down the price of the stocks that the individual investors were holding in order to cover their short positions.

Here's the thing though, the F*ckWallStreet people were never really in it to make money.  They didn't want to be "protected" from bubble losses, their whole point was to create a bubble that was going burst under Melvin Capital and other hedge funds. So when RobinHood and other platforms froze their ability to buy, they were actively protecting hedge funds from the F*ckWallStreet investors.

You might enjoy the irony in that: a company called RobinHood was protecting the rich from the poor(ish).

Knowingly driving down the price of a stock could also be called "stock price manipulation" so now there is at least one class action lawsuit (same link as last time) by the people affected by RobinHood closing down the ability of people to buy more $GME stock.

Lots of people are pissed, including politicans from both sides of the aisle. They have differing motives, but are coming to similar basic conclusions.  

First off, the left side you have Alexandria Ocasio-Cortez, who is pissed off about the manipulation of the stock price to hurt small investors, because until recently she probably wasn't rich enough to own stocks, and identifies with those small investors.

On the right side you have Ted Cruz, who is pissed off that the F*ckWallStreeters were stopped, probably because hedge funds give millions of dollars more to Democratic Party politicians and seeing them collapse is highly enjoyable for a Republican.

The politicians that you probably won't hear excoriating RobinHood et al., are people like Schumer (D, who got millions and millions of dollars from Wall Street), Pelosi (D, the same), McConnell (R, who suckled on the Wall Street teat too) and former Senator Kelly Loeffler (R, who is married to the head of the NYSE).

So, in the comments on Twitter, I see a lot of people arguing about FREE MARKET CAPITALISM and SOCIALISM and wondering which of those would have solved this.

Neither of those things works like that, but let's look at what people are actually asking.

So the first question is "Would a free market have helped?" and what they usually mean is "Wouldn't free trading of the stocks have helped?"

It certainly would have helped the users of the RobinHood App, who wanted to keep trading. But RobinHood App is a private company, and they are free to set the rules by which their users trade.  I'm sure there is some language in their user agreement that allows them to close down trading if they wish.

So what people that want a "free market solution" are actually asking for is to be free of the rules that the RobinHood App set, they want to take their ownership of stocks to a different platform and continue to buy and sell there.

Except, by asking for a free market, they don't seem to realize that RobinHood would still be able to set their own rules for use as a private company.  Additionally, in a free market, stock price manipulation wouldn't be illegal, so there would be no class action lawsuit through which they could seek redress.

The next question is "Would socialism have helped?" and what those people usually mean is, "Wouldn't increased regulation have helped?"

Maybe. Some kinds of regulations could have helped people get their money and stocks out of RobinHood and the other retail stock traders, but only if regulators had seen this coming (which I don't think anyone could have). Thankfully, at least the "don't fuck with stock prices" regulation was in effect so that users can sue the apps that they used that ended up screwing them.

The next question is "Would socialism have helped?" and what *these* people mean is, "Wouldn't socialism have helped?"

No. Socialism doesn't work like that. Stock markets like the NYSE would be incredibly different under any *remotely* socialist system. Under communism, any kind of stock exchange would be virtually impossible.

But here's the thing, we exist in a system that is mostly capitalist and partly socialist. Pure free market capitalism has never existed because it fucks everyone so quickly. "Pure" socialism, as it has been previously been attempted, still fucks up people, but slower.  Things could be better, but that means different regulations (maybe more, probably not less). That doesn't mean America is going to be more socialist or more libertarian. Being better means better politicians.

Next, there is an additional concern that I need to address that I feel is relevant to the story but I didn't want to include above.

One thing that has been talked about in a few places is the existence of high frequency trading (HFT), where a computer system buys and sells stocks based on algorithms in fractions of a second.

Apparently, RobinHood the app, was selling their user's trades to HFT companies, so that the high frequency traders could see the trades that users were making fractions of a second before RobinHood could make them.

This means that it wasn't just users that were making money on the stock increases that were occurring when they bought shares of $GME and other affected stocks, some institutional investors were making money buy buying stocks fractions of a second before the small investors.

And when you buy a stock the price goes up.

These HFT sales are, in my opinion, a kind of mirror to the other investors that sell a stock when they see an institution short a stock. What they are creating is "momentum," that is, more people follow along when one person does something. Maybe "person" is the wrong word there.  Maybe "actor" would be more precise since there are small traders, HFT computers, and big investment firms all involved.

Momentum is seen throughout this entire situation. Shorting creates momentum.  r/WallStreetBets created momentum.  The F*ckWallStreet people created more momentum. Then the Latecomers created momentum. When RobinHood and the other stopped their users from buying, they were meddling with momentum.

Momentum is a huge deal in stock trading. Any opinion on a financial news show is probably an attempt to create or increase momentum, and those networks are built around that.

It's also dangerous. The latecomers are probably going to lose thousands, maybe millions of dollars because they were following the momentum. Melvin Capital was effectively killed by momentum, created not only by the small investors but the HFT competitors that magnified what those small investors were doing.

I'm personally in favor of a trading tax, probably a cent or less per transaction. That would instantly kill the HFT. It would also make following along after other actors slightly less desirable, and so it might slightly reduce momentum in stock trading and decrease volatility overall.  I think that would be a good thing.  You might disagree.

Finally, what do I think is going to happen with this?

People are angry at RobinHood, and that's pretty reasonable. They did something to protect rich investment firms from their clients. This lawsuit is not good news for them.

On the other hand, they protected the big rich investment firms, and investment firms don't like it when they get hurt, so they might pull some strings in the background to help out RobinHood.  And maybe the SEC will just give RobinHood a slap on the wrist.

That would be really bad.  Not for RobinHood or the big rich investment firms directly, they'll probably be happy with an outcome where they take zero responsibility for screwing people. It would be really, really bad for confidence in the stock market, specifically the New York Stock Exchange, which is currently owned and operated by Intercontinental Exchange, a public company traded on the New York Stock Exchange under the symbol $ICE. That's the company that Kelly Loeffler's husband started and runs.

Is anyone else smelling a market opportunity?

It seems like a stock exchange that guarantees that it treats the small individual investor equally to the larger institutional traders, perhaps by requiring institutional firms to abide by the same rules and restrictions as small investors and forbidding small investors to be locked out of opportunities like RobinHood did? Perhaps that forbids high frequency trading and has rules in place that limit volatility?

Maybe, and this is just spit-balling, the company running the exchange could institute rules that would limit the hedge funds that it trades from owning huge shares in it, unlike Intercontinental Exchange (NYSE $ICE).

Maybe that would also cause people to pressure their companies to switch their 401(k) and other institutional investments to this new, less risky and more fair stock exchange.

That would probably cause a massive dip in the stock price of a company that runs the NYSE.  Gee, they'd probably have to worry about a bankruptcy of their own then, eh?

Of course, I can't do this.  I don't have the billion dollars or experience required to establish a new stock exchange and marketing campaign by Monday, February 1st, 2021.  But if someone was inspired and wanted to run with it, I'd be happy to take a few million in options as payment for the idea.  I even have more suggestions, and a communications company that could advise.

Of course, it's not quite that simple. A more realistic prediction is that the pro-corporate politicians in our government will intervene somehow, and even though that will cause some sort of confidence crisis involving the NYSE, nothing will really change while small investors find themselves restricted by their retail stock brokerages, until eventually something else breaks. Who knows what that crisis will be, or what will happen then.

I think that's enough for an evening.  Let's see how things go, and how my predictions hold up.  Cheers.

Post-Publishing Perspective

In response to this DailyKos post and this New Republic article, I wrote the following comment that I think I want to save.  It's related to this other post here at W&T.

Until fairly recently I was working for a fairly major publisher (not one of the big five, but in the top twelve in the United States) in their ebooks division.

Between this article and the one at the New Republic, there are way too many things for me to comment on, but I will try to make a couple of points.

First off, I have absolutely no idea how the New Republic arrived at a 75% profit margin for each ebook sold.  The main reason that this number sounds bunk to me is because the margin on every single title is vastly different and the median margin is way, way lower than that.  If that's an average (and even then it sounds utterly outrageous), then they're not understanding the place of best sellers (mega hits) in the publishing world.

Also, "profit margin" more than suggests that these are "profits."  They're not, because NR is obviously only factoring in the one time production costs of an ebook and ignoring the massive costs of actually running a publishing company with sales and marketing & support staff, infrastructure, and the massive cost of publishing books that never earn out their advance.  I should also say, related to this, I was involved closely in the production of ebooks, and the actual creation of each ebook still requires thousands of dollars.  They're not as cheap or fast to produce as even my own managers used to expect (with the casual, "why do we even pay you?" arrogance when I couldn't create a book in two days for some Amazon promotion that they wanted to join).

Second, about bestsellers, they do make publishers a lot of money.  We had four titles at my publishing house that were bringing in a gross of $24 million a year some 30 years after they were first printed.  However, those kinds of books are insanely rare.

I already mentioned this, but most books don't earn out their advances.  Even if a book is phenomenal, that doesn't guarantee that it sells well.  The print book world is built on forecasting: you need to predict as closely as possible how many books a specific novel will sell, and then print that many.  If you guess under, you'll sell out and Amazon/bookstores will end up getting pissed because you can't fill orders.  Too many and bookstores will return books to you and you have to eat production and shipping costs for those books.  I was very glad that ebooks aren't like this, except that I was continually producing books that would sell twenty copies a year when I had just sunk $2500 into making them.  Generally, that book is going to take years to pay off.

The big books allow publishers to make the small books.  And take risks with some authors that try new things.

Third, most books (and ebooks) don't actually sell at the cover price.  There are always daily deals on Amazon, B&N, or Apple and sometimes they're ridiculous.  For example, one of the e-cookbooks that I worked on retails in print (and originally in e) for $40, and the ebook went on a weekend sale for $1.99!  And even with that, we only sold about 5,000 copies.  It bumped us up in the rankings and we eventually sold another 1,000 copies at the full print cover price (this is super secret publishing strategy, everyone).

But that means that the average sale price of a $40 book was $8.33 per book over that retail period.  This specific case was ridiculous, but this happens a lot on a smaller level.  On an earnings report you see the list price, and the average price per unit sold.  I think the best case scenario I saw on a year was about 90%, and that was the best case.  I would hazard to guess that most are lucky to do 75%.  And big promotions often result in 25-40% averages.

Fourth, about the Apple price fixing thing, the New Republic article mentions this in the last paragraph, but that was actually an attempt to prevent Amazon from becoming a monopoly.  Apple and the big five lost.  Yeah, it was about higher prices for consumers, but I think consumers might have won a short term victory at a long term cost.

Fifth, the cost of ebooks and writer's share:  Yeah, I disagree with the publishers on this.  I think a $9.99 ebook is a fair price (none of this $26.99 for an ebook crap) and I think authors should be making way more in e-royalties than they currently are.  Most authors I worked with had an e-royalty of no more than 15%.  Given a book sells a certain number, say a thousand copies, I think that it should go up to 25% or more.  Publishers aren't handling these aspects particularly well.

BestSFBooks Ranking System

So, since I'm sort of obsessed with Speculative Fiction awards (you may have noticed), my boyfriend emailed me a link the other day:

BestSFBooks

I took one look at it and decided that I have serious disagreements with the rankings generated by that site, although they generally do what I do, which is count various awards that books get and then rank them by the number of awards and nominations.

The first issue that I have with their method of ranking is that they count the wins and the nominations at the same value. Which has some merit, I admit. I also maintain a straight count of nominations and wins counted as "1" each. You can look at that and get a 2 vs. a 6 and generally tell that if that first book has two wins and the second book has six nominations, that second book is probably more widely liked among a general audience.

But I also maintain a "weighted" score which provides me with a different look: where wins are worth 1 and nominations are worth .5. A book with three wins should have a higher ranking than a book with 3 nominations or even a book with 5 nominations. And so you can easily differentiate in that way between the big winners and the big nominations.

If you're looking for a list of the best speculative fiction, I don't think the straight number of awards gets you to that book. The BestSFBooks site gives second place over the last 3 years to Anathema and The Dervish House each with a count of 7. But The Dervish House has 4 wins and Anathema has 3. If you're looking for an actual ranking of the books, then I would rank Dervish House higher than Anathema, although I would still rate Anathema higher than a book that got 3 wins and two nominations (like Blackout).

The second quibble that I have with their rankings is that they're weighted toward British Books.

Several of the awards that they rank are international. Hugo Awards, Locus SF/Fantasy Awards, John W. Campbell Awards, and World Fantasy Award are (as far as I can determine) all open to books published anywhere in the world. Hugo Awards are explicitly open to books in any language, although the general voting membership is English speaking and I don't think a non-English book has ever made the shortlist.

But BestSFBooks also lists the British Fantasy Society Award, British Science Fiction Association Award, and the Arthur C. Clarke Awards, all of which are only open to books published in the U.K.

Those Awards directly compare to only one strictly American award: the Nebula Award. And, while the American Nebula Award can go to either a science fiction or fantasy book, those categories are split out amongst two of the previously listed British awards, giving double weight and twice as many nominations to the British awards before even taking into account the Arthur C. Clarke excess.

There is one more American award on their list, the Philip K. Dick award, but the Philip K. Dick award can't be directly compared to the British awards, or even the other American awards. The Philip K. Dick award is specific to a subset of American speculative publishing: original paperback science fiction publications, which means that usually the awards go to books that aren't nominated in any of the rest of the categories. There are notable exceptions (Yarn, Nova Swing, The Devil's Advocate), but mostly the Philip K. Dick award targets an entirely different category or book than the other American science fiction awards do, so it doesn't tend to boost the numbers of awards from American authors. In fact, since the Philip K. Dick targets some books that are paperback reprints of British books, it can further inflate the number of wins or nominations of British works (such is the case with Nova Swing, for example).

So the top books on the recent lists are British, and there are a lot of British authors on top as well. This year, skipping the obvious winner of The Dervish House by Ian McDonald (sometimes the out-and-out winner is British, I have no quibble with that) there are two British books and two British authors on top of the first American in either category. Overall, there are five British books and five authors writing in the British scene on the top 10 award winning lists of the last year.

Over the last three years, you can see much of the same. Five of the site's best speculative fiction books are from British authors, but there is a shift as 6 of the top 10 "best" authors are writing for a primarily British audience as well.

Over ten years, the 10 best books have Americans in only three spaces. And there are only four Americans on the authors top 10 list.

All of this shouldn't be construed as implying that British science fiction authorship isn't enjoying a bit of a golden age at the moment, with authors like Mieville, Stross, Gaiman, McDonald and Clarke, but I do think that the way that BestSFBooks counts it's points skews toward British writers and books.

Third, I'm not sure that I would count the SFsite Reader's and Editor's choices as awards with the same weight as the Hugos, Nebulas, and Locus awards. Or even smaller awards like the Philip K. Dick. That's just a personal choice though, in the same way that I count the "big three" as the Hugo, Nebula, and Locus awards (I freely admit my Amerocentrism, and my list is primarily for me) despite the John W. Campbell awards' claims.

Fourth, and I agree that this is a bit quibbly with regard to a website called BestSFBooks, but they're really doing a disservice leaving off all of the rest of the categories beyond novel. There are some amazing short stories out there, and there are plenty of novellas that get limited publication as their own books. Heads by Greg Bear jumps instantly to mind.

Finally, i wish they had an "all-time" option. There are lots of great older books that could easily rank against more recent books if BestSFBooks gave them the chance to compete. Let's see some Ursula K. Le Guin toward the top.

Kudos to them for maintaining a usable, clear and professional site though. That isn't easy and they should be lauded for that.

NetGalley and Carina Press

So, through something I have to deal with at work, I found the website "NetGalley" which allows you to request eARCs (electronic advance reader copy(s)). Basically, you can get a digital copy of a book to read or review before the actual book comes out in stores.

The Neil Gaiman edited Best American Comics 2010 is on there, which is pretty cool. There's also a version of the Little Prince as a graphic novel. But I don't expect those things really need my attention to sell them. Neil Gaiman and The Little Prince are both brands that aren't going to be helped by a relatively minor blog review. And I'm not really interested in either of them enough to want to request them.

But I do get some blog traffic around both my comments on gay porn and science fiction fantasy. So I was especially interested to find that there was a novel listed that actually fit into that niche: Savage Sanctuary by Jacqueline Barbary. I requested that one and another one that Carina Press publishes, Life After Joe by Harper Fox.

Both were denied, which was too bad. I wouldn't have bought either of them, especially from an unknown press. It's not the loss of a sale for them. Really, the best that could have happened was that I liked them an gave them a favorable review. Well, won't bother now.

So, I guess the whole point of this post is: what's the point of NetGalley if you can't get galleys from it? If you're wondering whether to bother signing up (and they ask you for a lot of personal information, including your real address and phone number), I would say no.

More on the Amazon/Macmillan Thing

I guess that I couldn't keep away. All the discussion that I've been reading last night and this morning have left me with a few more opinions. First though, I have to say that there are a lot of people screaming about slippery slopes and the end of the world. I just don't understand any of that in this case so I'm going to try to ignore some of it.

Before I get further, I don't think there are any slippery slopes. Amazon winning wouldn't have meant a dystopian future of $900,000 ebooks or authors starving in the streets. Macmillan probably isn't going to keep the cost at $15 forever (check out the "Fictionwise" section of this post out for a counterpoint that is very well written). Also, this is mostly about ebooks (although it temporarily affected the way that Amazon sold real books for a while) not "the future of all books, forever!"

To start with, there are four positions on this subject, none of whom is really wrong or right. They're just looking at things to figure out what would be best for them. They are:

1. Macmillan. Macmillan wants to sell titles for more to make more money. Note the phrase "more money." Not, "some money" because that would indicate that they were making nothing prior to this, which as far as I can tell is just untrue. They just weren't making as much money as they thought the "market could support" so they want to increase prices to that point, and will apparently get to do so.

2. Amazon. Amazon wanted to make more money as well. They were pursuing a different strategy. They were trying to corner the market in ebooks so they wanted low prices so that people would buy all of their ebooks from them. If they controlled the market, they would have the advantage of volume on something that would cost them very little to distribute. However, now that they've basically agreed to do what Macmillan wants, they'll make more money now but slightly less in the long term. Not much skin off their teeth. They'll still make money.

3. The Authors, represented by John Scalzi. They want to make more money too, and won't make the extra money that Amazon would if it controls the market, so they support Macmillan.

4. The Readers/consumers. They're going to pay more now, and would have paid less if Amazon had won. It's not really unfortunate or anything, but it's certainly not a gain for them in the short term or probably the long term. Macmillan has to make a profit, after all, so there's not much of a chance that any of that money would go into more "R&D" development of new writers. Not more than there already is. The reader isn't winning, but this isn't life or death. They're just going to pay a bit more.


*****


So, as I understand it, there are four major areas of cost that get factored into the price of a book before profit is made (for both the publisher and the author). They are editorial (and acquisition), marketing, printing and distribution.

For the sake of this post printing and distribution can be considered a single unit because that is the major difference between ebooks and printed books. Ebooks have a miniscule and nearly marginal cost of materials and distribution.

Let me speculate on these costs for the moment.

So, if you look at editorial, marketing, and P&D, P&D will cost the most by far. Probably between 35-50% of the cost of any book. Perhaps even more although right now all of the people working for publishers are furiously claiming that P&D is not the "majority" of a book's cost. Everyone that I talked with before this little battle says that it is the single largest cost of book making, so as I'm assuming thirds I'm assigning it the largest percentage.

Then there is marketing and sales, which is probably between 15-25% of the cost. From what I can see, actually selling the book requires a lot of staff and a lot of money suck (sending books to readers, buying advertising, creating promotional materials and events and sending authors on book tours). I haven't seen a company with a smaller marketing/sales department than editorial department, but again I'm simply making up these numbers so many I'm wrong.

Editorial is probably about the same or smaller than marketing and includes design and layout. True, it involves editors and lawyers and designers but sales involves lawyers and designers and has just as much staff to support.

Then, every author gets 5-10% of the list price on a book sold, often up front in the form of advances.

So, there are costs associated with putting out a good product, I don't dispute that at all. But to put out an ebook rather than a physical book removes the largest chunk, even if that chunk is not greater than 50% of the cost. That novel is going to be 35%-50% less expensive to produce at the same level of quality than a physical copy. And most of the cost to do this is shared between the physical and ebook versions. A book really should only need to go through copy editing for both print and digital because that print copy is based on a digital file.

(The only numbers that I've found [through the Ars Technica article below] indicate that 35-50% is in the ballpark or even optimistic. For the first book listed the "PPB" costs are 53.5% without shipping/distribution included.)

When I see an ebook being sold at $9.99 or $14.99 brand new for the early adopters/get it first crowd, I can see how that works. It's about half as much as a new hardcover, the cheapest of which that I've seen published in the last year is $26.00.

But, once a book is published, the cost to create it is fixed, or nearly fixed. If it took $100,000 to get the first printing of a book to the shelf of a bookstore, it isn't going to cost another $100,000 to do a second printing. With traditional publishing, it'll cost a bit more to print and ship more copies out, but the price goes down substantially. So we get trade paperbacks and mass-market paperbacks which cost $15.00 and $8.00, respectively.

Ebooks should be cheaper though. If a book is selling for $7.99 as a paperback, then it really should be selling for $4.99 as an ebook because the cost of printing is still going to be the major source of cost for that mass market paperback. And you can sell more of them, for longer, at lower expense.

If a book has already made it's production costs back, then it could drop even further in an ebook format to make even more money at little expense for the publisher. If it isn't a big seller at $4.99 any more, maybe drop it to a dollar cost somewhere down the line. People will still be buying it and the only thing that you need to do is change the number in a computer system. Authors will still get their 10%, and you can try to make up in volume over time what you never could have made up in traditional distribution. If you continue to offer it, that is, and occasionally do some limited marketing of your backlist.


*****


The costs for editorial review and novel creation are also dropping. A single person with a computer can do the job that five people with pencils used to do. The tools are getting better. Soon, a person with a computer will be able to do the work that five people with computers used to do because the computer can do things like spell check and auto-format and all sorts of nifty stuff like that.

It doesn't make sense to publish fewer works because tastes are fickle and you can't always know (or decide, as the case may be) what works will be the huge best sellers. The more things that you publish and get people into, the more books that you'll sell. With the cheaper distribution that I mentioned above, the more money you make per sale.

BAEN seems to be doing this right. Digital distribution to the hardcore fans to test out the waters and see what sells before printing the real books seems smart. I'm not saying that digital distribution for first works should be exclusive. If you know a book is going to sell physical copies, printing them up at the same time is fine too.

But pretending that ebooks are the end of the tail and not the tusks sometimes . . . that's not working either. Maybe digital distribution could increase the number and breadth of published works, even under the consolidation of publishers and distributors.

I hope so.


*****


Here are some other posts by people that are not crazy:

Lynn Abbey
Sean P. Fodera (read some of the comments, too)
Chris Meadows (who is also linked to above and has more comments all over the blogs about this)
Jane Fancher
Also, Cory Doctorow, of whom readers should already know that I am a huge fan, makes a good point about DRM

Not on this exact point, but there is an interesting Ars Technica article about ebooks by John Siracusa here that seems to confirm a bunch of the points that I'm trying to make.

The Amazon-Macmillan Thing

Amazon and the publishing company Macmillan have been having a tiff recently. As far as I can tell Macmillan wanted to raise prices and break Amazon's monopoly and Amazon wanted to continue to make more per book and keep prices low.

What do I think about all this?

Neither of these sides represents the end consumer and no matter what happens the consumer loses. As Mr. Buckell says, there really isn't anything that we can do about this except watch from the sidelines. Amazon will continue to be the largest online retailer of physical books and Macmillian will continue to publish many of my favorite writers. I won't stop utilizing either of them.

Patronage and Publishing

Via Neil Gaiman's blog I discovered this today, which quotes a very small section of this longer interesting piece.

I dutifully read the longer Dewitt piece and have to say that she makes a good point that I agree with: the current publishing model is extremely hard on the author in many respects, when they're delivering the product that is sold.

The best analogy that springs to mind to describe the situation of writers is that of growing drugs (marijuana, I guess) in the United States. Both authors and marijuana growers have to spend a long time producing their product without revealing it to anyone. Then they furtively cast around looking to secure a buyer, who will then go out and deal the product of the authors and the marijuana growers to the people. At most, both the author and the marijuana growers probably make a few dollars on each street level transaction.

I'm sure the first reaction to that analogy is "Growing marijuana is illegal! Writing a book isn't against the law!" That's true but to defend the integrity of my comparison I'll point out that authors like Dewitt fear the interruption of their work for lack of money just as much as marijuana dealers fear interruption by the cops. Both interruptions will shut down operations. Granted, in the case of the writer, that just means going out and getting a job instead of going to jail, but the loss or delay of the product is similar.

No analogy is perfect anyway.

There's a very obvious observation about patronage here that seems to have escaped Gough and Dewitt even though she's the one that brought up Virigina Woolf first. In a discussion of what writers need to write, Woolf is the fundamental source. "Money, and a room of one's own," does not just apply to women any longer.

And patronage, as Dewitt and Gough point out, would solve those issues. It's not like we're lacking in millionaires and multi-millionaries. According to wikipedia, one of every 176 people in the U.S. has a net worth of a million dollars. If a few of the richer ones decided to hire writers to take care of their summer homes in the winter, or lend out a room that they're not using in their town houses during the winter, there would be a lot more good writing from some upcoming authors.

Of course, as the internet has shown, mirco or collective patronage is possible as well, but I doubt that the collective as a total has a lot of summer homes to let out. In this case, it's probably better to approach the millionaires as individuals about it.

-*-*-*-

While I'm talking about publishing, let me just say that I've been thinking a lot about the future of publishing since most people, even some people in the publishing world, think that book publishing is dead. Or at least in serious need of change.

Publishing isn't going to die like the VHS tape has. Books, even ones that never get opened or read, are still a status symbol in certain parts of our society. To others, they're the ultimate repository of ideas.

But the traditional model of publishing (writing the book, getting an agent, getting accepted for publication, having the book go through the editing process, typesetting it, printing it en masse in quantities of at least 8k and then shipping it all over the U.S. to sell in bookstores) is probably dead.

Traditional models just don't have the alacrity to deal with the ever increasingly digital era. They're unresponsive and they don't know how to market aggressively or find their audience (see the criticisms leveled by Richard Laermer via the link embedded in the word "think" above).

But what is going to replace it? (see the link to the NY Mag embedded in the word "that" for some of their speculation.)

I don't know the answer yet and I'm looking for it, but if I had to point to something right at this very moment as the future of publishing, I would point at Scalzi's Your Hatemail Will Be Graded: A Decade of Whatever 1998-2008.

That book is a collection of his blog entries, things that did not go through the traditional model of publishing. Instead it's almost all available for free, if you want to go through Scalzi's archives. Yet, people will pay for it because now it's gone through a bit of that process and ended up as a book, and that book offers both things that I mentioned that will keep book publishing from dying: it's a status symbol (to certain geeks) and it contains special ideas and memories that are worth having.

If it gets nominated for a Hugo, and I suspect that it might, that will only be further proof that it's probably worth looking at alternative models of publishing fiction in which the traditional model is avoided.

Spam 101

I was just watching Bender's Big Score and something obvious occurred to me.

Here's a prediction about my (probable as per actuarial tables) lifetime. Someday, we're going to have to teach kids, probably in fifth or sixth grade, how to avoid getting suckered into phishing and infected with email based viruses.

Considering the amount of personal data that will be available electronically to the average sixth grader, they're going to have to be able to protect themselves. And if there's one thing going to a public school has taught me it's that there are a large numbers of people that need to be taught the basics, be it sex or defense against protection.

So, for the good of society, we're going to have give those classes in public schools, basically giving people anti-Turing test lessons to teach them how to avoid getting suckered.

The spammers will get better, of course, as will the swindlers and the scammers but perhaps once the lessons are common enough there will be enough people out there that can recognize a scam getting played on them that spamming, phishing, and scamming won't be nearly as profitable as it is now.

The Bar of Entry

So, the holy grail of the internet seems to be online communities. If you've got it, you get page views by the thousands and people will follow your every move and buy products that you recommend and basically make your life a joy worth living. Or at least that's how it seems to me from the outside.

I think that a person that doesn't live their life on the internet can maybe belong to five online communities without running into trouble. Big ones, that is, and they can replace a big one with two or three small ones without issue.

Take me. I used to be a IIDBer, a CFer, a nominal Farker, a Myspacer and I read a few webcomics (Ooh, I forgot those. They don't require much time. You can probably read ten to twenty comics regularly before it sucks up as much time as a big online community).

Now I'm a TFarker, a Facebooker, a slactivist witness, a Qweerty/TowleRoader, and I read a few webcomics and I'm on the periphery of being a TalkRatter.

Your affiliations change from time to time. IIDB rejected me. MySpace suddenly wasn't cool any more. And some of the webcomics that I used to read don't update any more.

When that happens, you're lost to the winds for a while. You can't spend more time at the places that you frequent than you already do without suffering from boredom or overload, so you drift about and check profiles and eventually find another community to join.

But even though I've got logins at dozens of places, I don't really pay much regular attention to them.

So what prevents me from becomming invested in a new online community? The Bar of Entry. Dun-dun-dun.

This imaginary object, the Bar of Entry, is set higher or lower by the conditions of the community and makes it either easier or harder for people to join and form a community at. This is probably written in some guide to forming stable online communities so that business people can make money off of them, but let me see if I can recreate it from deduction.

1. Design
   
2. Broad Appeal
3. Stimulation
4. Ease of Application
   
5. Consistency
6. Prior Community
7. Popularity
   

First, Design. Some sites are badly designed and some sites are well designed. And this isn't necesarily just measure of how visually pretty a site is but also how easy it is to use.

One of my favorites pieces of widely used community software is vBulletin. vBulletin is a great piece of software. It usually looks good, it's nearly infinitely customizable and it presents a profession and polished user interface that is easy enough to understand and take from vBulletin site to vBulletin site.

On the other hand, the typepad comment system that slacktivist currently uses blows chunks. It only shows 50 comments per page, and the typical slactivist post gets around 300 or so. Navigating between pages is a pain in the ass. It won't tell you how many pages the thread has, and it only provides forward and back buttons. If you read 100 comments the first day and then come back to read the next few hundred posts the next day, you still have to scroll through the first and second pages to get to the links to the next page. Nor does it allow you to put all of the comments on one page so you can scroll up and down to see which comments link with comments that are more than 50 responses removed.

Facebook also has some issues with the way that it operates, especially around photos. This entire post exists because BoingBoing just ate one of my posts, and I started to wonder if it was worth the trouble to try to get myself invested there.

Despite my love of vBulletin, only the community that I'm peripherally involved with uses it. In fact, I would hazzard to say that slactivist is one of my favorite communities, despite all the usage issues. So even though in this catecory it has a high bar, that didn't prevent me from joining the community.

Broad Appeal is the next notch on the Bar of Entry that I came up with. The more broadly the site appeals to people, the more people will want to join it. The number of Christians is greater than the number of atheists, so CF > IIDB. This will always be the case.

However, there are limits to Broad Appeal. Yeah, if you run a site that talks about fast cars you have broader appeal than a site that caters to Mustang owners only. (# of Fast Car owners > # of Mustang owners). Unfortunately, you'll also have a really difficult time creating an interesting community for the owners of all fast cars because people want to engage with what you're talking about.

Thus, the counter to Broad Appeal is Stimulation, by which I mean having interesting things for people to come look at and interact with.

If you try to create a site for all fast cars, it's pretty much impossible for one (or two or three) people to really do the sort of research and writing that will people coming back and getting engaged.

Stimulation also covers a few other things: How often are things posted, how well are they written, and what can I do to respond/interact with the community?

Whatever, John Scalzi's blog is usually posted multiple times a day, creating a high level of interest because every day I can visit and find something new.

Slactivist only posts one to three times a week but the quality of the articles is incredibly high.

Fark scores incredibly well in this category though, the highest of all my communities. It gets posted multiple times an hour (once a minute or so for TFark), the article headlines are diverse and funny, and not only does it provide a way for me to submit my own headlines, it has huge comment threads (and TFark has even more). Digg is another community that just hits this out of the park.

MySpace and Facebook also have lots of stuff for a person to do. MySpace has infinitely customizable pages and Facebook has the wall and games.

Ease of Application is how easy things are to join. I just need to leave a user name and email address on Making Light and Slactivist, and they don't even bother to verify them. Registration is the next step up (which will keep a surprising number of people from joining, See Bugmenot.com). After user name registration, the next step is actually forcing people to gain human verified approval (IIDB required all new users to go though Admin approval) and the final step is requiring money. TFark costs five dollars a month. Something Awful requires a one time $9.95 fee.

Consistency is easy enough to understand. Qweerty has a semi-daily post with hot guys in it. I've already mentioned that slactivist is consistently high quality. On the other hand, some days Fark will be bouncing off the walls and some days nothing that gets posted catches my eye.

This blog happens to be terrible at consistency. I mean, you never know when one of these things is going to go up. There was a six month period where nothing got posted (visibly, anyway). The only three posts that people care about are: The Hot Gymansts post, the 10 Intellectual Sci-fi Movies post, and the review of Little Brother so I'm not even consistently boring.

Prior Community is a little more difficult for an aspiring blogger to control. Some places are generally genial and nice to new people. Making Light is good at this. Slacktivist is okay at it, although people there tend to use big words like "consistency" and "dominionist" and other four syllablers.

Fark treats newcommers like tumors on toliet scum. TFarkers look down on Farkers, and join date and user number is sometimes used like a badge. Most swearing isn't censored and implied and outright insults go unedited.

Part of prior community is definitely the people that run it. The way that Fark is run shapes that community. The way that slactivist writes shapes the community there.

Finally, the last on the list is Popularity. When someone is searching for a new community to join they can only join the communities that they can find. An intensive search for their perfect community might reveal a small place with six other members but they're more likely to find a place where those six members exist among a thousand other members. If everyone lists "BoingBoing" on their list of blogs that they follow a new person is more likely to wonder what all of the fuss is about.

The weird thing about Popularity is that it's inextricably linked with the popularity of the person running it. Rosie O'Donnell blogs and probably gets hundreds of thousands of people that read her blogs even though they don't appear to be particularly engrossing or well written. But she's popular, so her blog is too.

Sometimes this creates a recursive loop. Wil Wheaton was just an actor. Then he started blogging. Now he's more famous as a blogger and writer than I think he was as just an actor. Scalzi was a blogger first, and blogging led to writing, and now people that read his books can become invested in his blogs. Now they've got slowly expanding audiences that will someday take over the earth.

So now that I've explained all of the parts of the Bar of Entry, there's still the bar itself.

If you start a blog or website looking to build a community of users, all of the notches get added together. Even if you have the best designed blog on the planet, if it's about Ukrainian Easter Eggs, gets posted twice a year, requires a registration, and the only other member is your foul mouthed Aunt Ester you probably don't have a winning combination.

On the other hand, if you're a internationally famous actor, blog every day in perfect English about your life and the behind the scenes exploits of your costars (immensely broad appeal), and have a site that is designed that makes your users want to pull their own teeth out in frustration, you'll still have thousands flock to you.

It's all a balancing act. Control the variables that you can and see where it takes you.

One final caveat that I want to repeat about all of this though: not all users are looking for a new home. No matter how interesting, easy to use, and how broad your appeal is, not everyone is going to be interested. Perez Hilton doesn't have a 100% of the market share, although I'm sure he's working on it.

He does have millions of people that check his blog daily though and I'll bet that he's mostly happy with the community of people that check him everyday.

If I had millions of people reading my blog, I think I would be.

Joanne Rowling Gives the Comencement At Harvard

Ad Hominem Behind Someone's Back

Scalzi gave a platform to Vox Day, and Chad Orzel got upset with him for doing so.

In one of the comments (#88), MikeT says that

Chad should be ashamed of himself for writing a seven paragraph long post that is almost entirely ad hominem, and that doesn't even take a stab at proving why Vox is a "poopyhead" for making his arguments...

Now, I obviously used to spend a lot of time at a website where ad hominem was not allowed, and edited whenever seen. For most of my time there, it was my job to edit it. However, I don't always think that all ad hominem is necessarily immoral, bad, or even incorrect.

The problem is that I've seen examples of people consistently unable to address arguments against them. Peace girl, or whatever her name was at IIDB, was sure that she'd found the true secret to universal happiness which basically boiled down to: Everyone should ignore the bad things that they see, because if they pretend not to see them and do good things, everything will become perfect.

Yeah, if that was possible for everyone to overlook bad things to happen, it might make it easier to live on this planet (probably not perfect, bad things will still happen), but unfortunately the implementation of that is utterly impossible.

And over the course of months and thousands of posts, Peace girl just couldn't understand the arguments against her. At all. She was so utterly sure that she was right that her sense of logic and her common sense were swept away. Folie à deux, in her case.

She was wrong though. Her perfect solution depended on convincing everyone on earth that her ideas were just as perfect as she thought they were, despite the flaws and the misconceptions and the just pure wrong facts (she thought that since c was a universal constant, it meant that what we see has no time delay to it, that visible light traveled instantaneously). She didn't understand that people can't just accept that people wouldn't and couldn't accept her mentor's theories. She didn't understand that some people would look for ways to take advantage of believers and only pretend to convert if they felt it was in their best interest.

If I could have gotten Peace girl to reconsider her opinion through ad hominem attacks on her, I probably would have done it myself.

After a few days it was pointless to argue with her but people kept trying, remaining remarkably civil in their attempts to convince a mule to dance for months at a stretch.

Specific to the case of Peace girl is the fact that she was engaged in behavior that was couched in the most polite possible terms, but with the rudest possible intent: she wanted to convert people.

So people argued with her for months, trying to convince her that most people were rational enough to realize that there were so many flaws in her plan that it was impossible to make real. Eventually people did issue attacks against her, and I empathize with them.

Ad hominem attacks are what happens when someone reaches the end of their ability to argue coherently. Sometimes people go to it quickly because they are poor advocates for their position or their arguments suck. After a long, long time of valid arguments that are constantly ignored and dismissed out of hand because of deeply held irrational beliefs, sometimes even the best of us do it.

Orzel calls Day a lunatic. That's his opinion, and from what I see Orzel isn't the type of person to call someone that lightly.

I think that TheOtherMichael from IIDB is a moron. That's my opinion, arrived at through a long process of examination. I think the same thing about George W. Bush, for the same reason.

My father thinks that Thom Hartmann is a tool. That's his opinion, arrived at . . . uh, based on his assessment of Hartmann's opinion gleaned from a few minutes of radio exposure.

I can't say that I agree with Orzel yet, but if the faithful pack of Day supporters that shows up whenever his name is mentioned is any clue, then I suspect that Orzel's not completely out of line for having dropped the logical arguments in favor of the ad hominem attacks.

He's just tired of saying things that are ignored.

Cory Doctorow's Extraordinary Rendition!

(I love how that title sound remarkably like the title to a children's book.)

What if Cory Doctorow is arrested for Little Brother?

See, I was reading about some of the plots which the Bush Administration has been claiming to have prevented since taking office. This is in response to the recent fires in the Seattle region which can be attributed to domestic terrorism by the group ELF, the bombing of the recruiting station in NYC, and various episodes of school violence that have occurred all over the country. If they're going to keep claiming that only Republicans make you safe, they need to promote the fiction that they are keeping you safe, and this latest up tick of violence is spoiling their slogans.

Some of the plots on that list weren't really stopped by the Bush Administration though. Richard Reid, at least, was stopped by damp matches and a nearby flier. The Fort Dix plot was more about trying to get money and food than about terror.

Some of the entries on that list are even more vague. I'm sure "Supporting al Quaeda" is considered a serious crime, but we've gone from a country that forbids us to provide material aid and comfort to the enemy to one that has very nearly made the consideration of terrorism a crime.

Cory's book is not particularly subversive, but at the very least it portrays civil disobedience in a positive light (Fight the system and you too can get laid!) and the government as the enemy. Considering that the fictional terrorist attack that occurs in the book could be considered to be a suggestion for a successful method of terrorist attack, I could easily see some government censor picking up the book and decrying it as both un-American propaganda and an aid to the enemy.

That's a stupid charge, but this administration doesn't seem to really care about realistic charges or due process. I can imagine Cory stepping off a trans-Atlantic flight on his way to a Con and being picked up by the FBI, and then shipped to Guantanamo, or whatever offshore island they're using as Guantanamo since the press got wind of what was going on at Camp X-Ray.

I can't remember if he's currently got Canadian citizenship or British citizenship, but that might not protect him considering what happened to Mahar Arar. Of course, I don't think they'd send him to Syria. Maybe Iran or North Korea, if we ended up invading there, to use their preeminent torture facilities.

We'd all protest, of course. BoingBoing would run countless stories about him. However, if the government didn't want him to have a lawyer, he wouldn't get one. They could hold him indefinitely, link him to any wiretapping containing the word "bombing" and then convict him with "secret evidence." After all, if he sees it, he might be able to rebut the charges and prove his innocence.

Of course, now that we've determined that Cory is a terrorist, anyone supporting him would be considered to be supporting terrorism and would also face the wrath of the government. Mark, David, and Xeni would probably continue to publish with the EFF backing them up, but I bet that lots of people running personal "Free Cory" blogs would be shut down or harassed with FBI surveillance. Soon, there would be an anti-Cory backlash from the right.

"If they didn't support a terrorist-lover, they wouldn't get harassed!" people like Anne Coulter, Bill O'Reilly, Rush Limbaugh and the National Review would announce. People that kept supporting Cory as the weeks turned into months and the months turned into years would be regarded as crazy. "After all, we'd never hold someone for five years if they were innocent, would we?" they'd say. He'd be a sort of Leonard Peltier for the 21st century, without actually having killed someone.

Cory's daughter Poesy would grow up something of a cause célèbre. She'd be a living symbol of American hypocrisy and oppression, but she'd be well known and loved among the English language science fiction community. After all, out of all Americans, we in the science fiction community seem to have among the longest memories. She would probably spend her life talking about growing up without her father's presence and at the same time quoting and promoting Cory's work. We've seen that before with Christopher Tolkien and Brian Herbert. She might become something of a science fiction writer/blogger herself, to continue her father's legacy and focus on the issues for which he eventually was arrested.

In the meantime, Cory would spend his days in a six foot by ten foot concrete cell (or about 2 meters by 3.2 meters for him, since as a non-American he's used to metric). He'd still write on nearly anything that he could get his hands on, but the regular cleanings and searches of his cell would often destroy his fragile stacks of handwritten work. The guards would be warned not to let the writings of a subversive and terrorist out, so occasionally they would "accidentally" destroy a pile or two. If someone could read his work though, they'd learn that his writing had become darker. There would be an edge to it, from his long years of imprisonment, and many of the whimsical bits would be lost. Disneyland would slowly morph into Mordor.

His lawyers would occasionally manage to get letters and short stories out, but only things reviewed and approved the military. Of course, his lawyers would be forbidden from talking freely about his situation directly with him. As an enemy combatant, giving him too much information about the charges against him could result in similar charges against his lawyers.

Occasionally, after his visitors left and the lights were off, Cory would sometimes wrap himself up in the sheets off of his bed and pretend that he was wearing his red cape and goggles, flying high above the American oppression of ideas in his wi-fi enabled high altitude balloon.

Then, twenty some years from now, when the political climate changed and the government thought that he was no longer a threat, he'd be released. The charges against him, never actually tried by a jury, would be dropped and pardoned by the conservative administration who would be desperate to show that they were on the cutting edge of technological progress without actually doing anything to support technological progress.

He'd go home, finally.

It would be a while before he would be seen in public, but he'd be back. From his home in London he would become an even more powerful and convincing speaker for freedom of speech, especially the new frontiers of electronic speech being developed in the mid 21st century, like Vroggling and Sitchcasting and especially hyperGOEing.

Eventually, in his efforts to allow free speech everywhere in the globe, he'd be nominated for the Nobel Peace Prize, but he'd unfortunately lose to Ashley Simpson, whose selfless charity work in the name of her long deceased sister will have made her the most recognizable person on the planet, comparable to Mother Teresa, Princess Diana, and Lurz the intelligent dolphin.

Nobel nomination and all, I think I'd rather not see him arrested in the first place. Oh, right, and go preorder his book. It comes out next week!

How many countries can I name in five minutes?

71

Well, that was actually kind of fun.

Why I Have So Many Sidebar Links

When I log into a computer, the first thing that I do is log into my gmail account and check my mail. These days, I usually have about 4 to 6 emails to deal with, which is more than a year ago when my average was probably about 1. This sounds like very few, and it is, and I like it that way, because it doesn't make me feel stressed out about getting to everything.

Then I go up to the Google "more" tag at the top of the screen, and pull it down. Since I've been using Google for a while, it's learned to recognize the Google Aps that I use the most, and thus "Blogger" is usually at the top of the more list when I'm logged in.

Then I check Right Behind and Pocket Lint Communications because I consider those to be more along the lines of "work" and thus important to deal with right away. I'm the person that puts the tags onto Right Behind posts most of the time, and I try to make sure that the Right Behind sidebar is constantly up to date with all of the authors and stories.

After that, I check out Worlds & Time. Right now I'm posting all those backdated posts which have been previously written, so I find the oldest one that isn't posted, post it, and then update it on the Myspace and LiveJournal mirrors.

Then I use the front of my blog as my hub, as a collection of the links that I use the most. I check out my favorite blogs such as Whatever, Making Light, and Slacktivist, and then try to find something interesting on Fark or Totalfark.

Since my blog is accessible from nearly anywhere, that's the easiest way to keep in touch with the stuff I like. All those places are literally things that I pay attention too and read.

Message Board Administration

Here's some thoughts on what my two and a half years at IIDB taught me about running message boards, presented in unreadable block paragraphs. Forgive me, please, but I had to get it out somehow, but I couldn't make it comprehensible.

• Given a large enough population, there will always be some people that disagree with a change in policy.
  

IIDB had long term users that had joined before the board had formally codified its current rules, and some of them considered the less restrictive environment "the good old days" and longed for the time where calling people names was allowed. They chaffed at the new rules, and some of them were eventually banned when they violated the rules too many times. Making sure that your users have a comfortable environment is key to quality moderation, but that doesn't mean allowing your long term highly recognizable users to run roughshod over new users just because they were around when times were different.

Disagreement doesn't necessarily mean disruption or argumentation either. People can be polite in their disagreement. I've seen it happen and if someone says "I can't be polite and expect you to listen to me" then you should immediately disabuse them of that notion. Politely.

Also realize that there's a difference between a few people and a vast number of people. If people start complaining and are still complaining two weeks later, that's probably an indication that the change you made isn't going over very well. It usually takes people a few days to become acclimated to significant chance. Also, if there are 200 people complaining on a website with 1000 active members, that might be another sign that you should listen to what they have to say instead of dismissing their actions as unrepresentative of the feelings of the membership as a whole. That's a large chunk, and while there are people that always complain, numbers above 1 in 10 should be considered significant.

• Moderation is intended to present a clean, comfortable environment for discussion and debate.

With all due respect to Teresa Nielsen Hayden, I disagree with her practice of "disenvowelling" posts to make them nearly unreadable. Leaving incredibly unreadable and still possibly disruptive posts to indicate where disruption occurred can still be disruptive. On blogs with comments, such as BoingBoing, Making Light, and this one I would prefer to remove the disruptive post completely. Thus, space and attention isn't granted to people that need to learn how to make constructive comments.

This is a little more complicated in a message board situation. Our policy at IIDB was to leave as much of the post as possible undisturbed and insert special "edited" marks, and that's about as much disruption as I think is appropriate. If the entire post is provocative or problematic (i.e. a rules violation) then the entire post should vanish into the ether (but the moderator must let the poster know why it vanished). That allows people to know that an edit occurred without disrupting the flow of the conversation.

Also, IIDB mods were charged with cleaning up problems with the bbcode tags, especially the quote tags, which a lot of boards don't do but certainly contributed to the professional appearance of the board.

• Privacy relates to the personal and private information of users and everything else is simply a courtesy.

I first saw this become an issue at CF, where it caused huge problems in interactions between the staff and the general membership, but it had started to become an issue at IIDB when I was dismissed. IP addresses, real names, locations and anything else that the staff may be able to learn about someone through their higher level of access should be protected as "private." Anything else that is protected by the board's privacy policy is just a courtesy that the board provides according to the environment that the board wishes to cultivate. I would say that staff members shouldn't talk about infractions/warnings and edits required by users publicly unless those same users give you permission to talk about them, but that is up to the owner's discretion.

Under no circumstances, though, should staff have "privacy" from the users. Anything said about a user in staff forums, or pretty much anything said in a staff forum at all should never be considered "protected."

As soon as staff needs "privacy" in which to operate, problems occur. At CF, the staff cited privacy to cover themselves when they made mistakes and obfuscate issues in which they were clearly in the wrong. People couldn't defend themselves against unfair warnings delivered by abusive and factionalized staff members because the reasons behind the warnings couldn't be discussed with the person that had incurred them without breaking "staff privacy" even when the warnings were technically "official" correspondence.

• Promote staff due to competence, not ideology.

There is a certain acceptance of the goals of a message board that is necessary for a user to make a good staff member but I would much rather have someone calm and collected that can enforce the rules with equanimity that disagrees with me on who should be the next president of the United States than a hot head that thinks exactly what I think and enforces rules emotionally. IIDB was usually very good about this, but I did see the occasional problem with some staff members who seemed to be think that their rank gave their political opinions extra weight.

One of the requirements for inclusion on IIDB staff was the ability to let insults and personal comments slide off. If a staff member got mad or upset every time someone called them incompetent, then it wouldn't be long before someone upset them. When people are angry and emotional they make mistakes and so you shouldn't be moderating someone that is personally calling you a name, but you shouldn't let it get to you either.

A minor part of this emphasis on competence has to be a consideration of reliability. I noticed that there were a few people that handled most of the issues and could be counted upon to show up day after day, while other staff members might show up once every few days. Oddly, since input is important to being a moderator, those people that had irregular schedules weren't just holding up their own work but other people's work as well. This led to the delay in the resolution of complaints on multiple occasions.

I know that there's the old saying that the people that desire power should be the very last people that should actually have power, and that's partially true in moderating a message board. People that want to be moderators just so that can boss others around should never be promoted to those positions. In fact, I recommend making it clear that to be a moderator is a role of servitude: they serve the needs of the community. "With authority comes responsibility" to paraphrase the Spider-man movie. Be careful not to mistake people who want power with people who want to serve. Sometimes people that don't have the ability to consistently contribute discourse still have the time, ability, and inclination to moderate in order to make the message board a better place, and those people should be snapped up whenever available.

One final note on this, as much as I hate to use a phrase that's been used against me, sometimes good moderators are poor administrators. If you are having trouble with a new Admin but that person was one of the best moderators that you've ever had, consider explaining the situation and asking them to step back into their old position.

• Enforce the spirit of the rule, not the letter of it. Make this one of your rules.

If someone manages to insult someone else without actually breaking a rule, perhaps by way of comparison with something that most people wouldn't be offended by ("You are an Eagle" where "Eagle" is taken by the other person to be an insult), they've just broken your rules even if this specific instance isn't specifically mentioned in your rules.

This is a tough one, because experience with the American legal system is predicated in the exact opposite terms. Judges typically seem to uphold the letter of the law even if the result seems counterintuitive and users sometimes get upset that you are giving your moderators discretion to make their own determination of what breaks the rules or not.

This is exactly why I say that you should make this one of your rules, because each moderator action should be what the moderators understand to be a violation of the rules, not necessarily something that the violator understands it to be. I have my own understanding of trolling, and if I say "no trolling" then people could argue endlessly about what that prohibits or permits. However, this leads directly into the next point, which is:

• Allow moderators autonomy but review their actions.

Moderators shouldn't have to wait to do things. The absolute worst case of this is also derived from CF, where at one point you needed at least two people to sign off on any moderator action before the post was edited. I've heard unconfirmable rumors that at one point you needed two moderators and a supervisor before any action could be taken. Whether true or not, forcing currently active mods to wait for input before allowing them to edit problematic posts only cripples their ability to do their job.

Ideally, you should have a certain amount of trust in your moderators. Instead of waiting for multiple other people to weigh in, they should be able to take action as soon as they find a suspect post.

However, this doesn't mean that first impressions are always the correct impressions. I once edited a series of insults in a thread that I hadn't been closely monitoring only to find out that the insult had really been intended as a light-hearted jest. It wasn't the person who'd said the insult that complained about my edit, it was the person who'd been insulted. He was upset that I'd interrupted their friendly back and forth. When I re-examined the situation I found that the supposed insult really was clearly not a violation of our rules, and I reversed my edit and apologized.

Even though in the above example the insulted party complained, the first people that should be reviewing the moderator's action should be the other moderators. At IIDB, we had multiple moderators assigned to each forum, and they would review each others actions if they weren't quite sure that they'd done the correct thing. If they can't agree, that's when the Admins should step in and review the situation.

At IIDB if a moderator saw something problematic, such as a blatant insult or a copyright infringement, they could edit it as soon as they came across it. If you choose the correct people, you shouldn't have to worry that most actions are approved by handled by a single person. After all, if you can't reliably count on your moderators, then why are they moderators?

• Have a simple and clear way to complain or challenge moderator actions and never ever penalize anyone for using it.
  

Again, IIDB did this fairly well, especially for the first year and a half or so after I joined. There was no required format, only the requirement that you needed to provide a link to the post or thread that you were complaining about.

Once a complaint had been made, the other moderators of a forum would review the edit, and an uninvolved moderator of the same forum, or rarely an administrator, would provide a response. Now CF has moved to a completely transparent process where moderator deliberations can be seen but I don't necessarily think that's the better way to handle it because it can distract from the topics of conversation on the message board. As long as a board is well administrated (by which I mean run by people that understand that moderators can make mistakes which need to be corrected, and that prevents mods from forming cliques of moderators working together for mutual protection and support) I don't think that absolute and complete transparency is necessary to maintain a fair and working complaint system.

Granted, at the end of my experience with IIDB, this system had broken down mostly because there was no one overseeing it. In the ten days that I administrated IIDB two cases were brought to my attention of complaints slipping through the cracks, and more appeared to be on the way. However, when the system was working, it worked very well.

• Within reason, document everything.

When any edit is made, no matter how clearcut the violation is, the original text and state of the post needs to be documented somehow. When I started at IIDB as a moderator we used user notes to document any edit made by a moderator. Later we used the infraction/warning system that was inherent to vBulletin which had the added benefit of sending a PM to the user letting them know that they'd been edited.

There are always cases where this may be superfluous. If all a moderator is doing is correcting the formating tags of a post, I don't think that requires documentation. However, any time actual words are removed from a post, or a post is removed from place, that requires some note on what was removed and the reason why.

If a mistake has been made, or the other moderators or the administrators have determined that no rules were broken, the post should be restored with all possible haste, and the only way to do that is if the text of the post is saved somewhere.

• Term limits for moderators suck. Term limits for administrators are mandatory. (Only at big boards)
  

I haven't clearly differentiated between moderators and administrators, so let me do that here. Moderators are the people that handle the day to day work of editing posts, issuing warnings and infractions, and spend a lot of time on the public forums. Administrators are those people that make the decisions about what the rules are, how they are enforced, and they're the people a user would appeal to in a last resort for relief from an abusive moderator.

Moderators usually moderate forums that they love, and are invested in the topic. In my experience at IIDB, at busy boards administrators tend to have their favorite topics and forums as well, but they spend most of their working time in the staff forums making sure that things run smoothly. Or they should be doing that.

What that means is that moderators often have an emotional investment in the forums that they moderate, and if you were to remove moderators with term limits you would be removing the people that care most and are most knowledgeable of the forum subject. My experience at CF and IIDB has led me to believe that the administrator job is different. Administrators often don't have as much of an emotional investment in running the board as they do to contributing to it.

Eventually, when Administrators drift away and stop performing their duties, they tend to become entrenched. This happened all the time at CF, where the number of Supervisory moderators, Admins, and super-Admins eventually rivaled the entire number of moderators. At IIDB, some administrators reached that position and eventually stopped regularly contributing. Unfortunately, at that point, they had no one to review their activity or behavior and they would enter a fugue state where they wouldn't be contributing but they couldn't be removed either. Term limits, or perhaps just a non-staff governing body that reviewed the Admins could have prevented that from happening.

This doesn't make sense at smaller boards because usually they are privately run and the administrator is also the owner of the board. However, for large boards catering to large segments of the population such as CF and IIDB, making the top positions change is usually necessary, especially if:

• A council of equals should administrate your large board.

Erwin, the former owner and webmaster of CF, had almost no time to focus on the things that needed his attention because he did everything. Not only was he in charge, he did the programming, maintenance and set policy for most of his ownership of the forum. CF, with thousands and thousands of active members at a time was simply too large to controlled by a single person.

However, when things on the administration side went wrong (and they always go wrong) things had to be approved or fixed by Erwin which meant that he'd get slammed when he went online. And he was a busy guy, so he wasn't always online and things would take weeks or months to deal with.

At IIDB, the Internet Infidels Board of Directors created a circle of seven equal Administrators to run the board. Major policy changes were sometimes approved by the board, but the rules were written and enforced by the Admins, and they were the last resort in appeals.

A system like that is designed to prevent one person from getting too uppity. Major changes require votes, but the Admins can handle the more common administrative tasks on a medium to large message board by themselves, which means that no one is going to get overwhelmed. Just like the moderator actions are reviewed by other moderators, the administrators can review each other's work if there is a problem.

• People have different senses of humor.

I suppose that just thinking about this, I could shorten it down to "people are different" because that's certainly true. However, as it relates to message boards, I think that humor is a more important quality to be taken into account.

The upshot of this is that sometimes someone will say something intended to be funny which comes out completely wrong. I've definitely said the wrong thing and the wrong time and had my head nearly snapped off by upset users/moderators/admins. In the sort of situation where no one's really at fault, instead of telling someone "YOU BROKE A RULE, OMG!!!" it's much more effective to discuss the post with the person that's offended and the person that made the offending post.

Most good users (i.e. people with an ounce of compassion) will understand this implicitly and sometimes even agree to edit themselves or personally apologize to the offended party. Sometimes the offended person will calm down once they realize that what was said wasn't intended to be mean/nasty/rude. And if they don't understand, then you'll know that they're probably trouble makers that may need some further attention.

Oh, right, I forgot this when I proposed the "enforce the spirit of the rules" bulletin point: Enforcing the spirit instead of the letter of the rules means sometimes not enforcing the rules. After all, the rules are intended to provide a clean and comfortable place for discussion of the issues and sometimes you can bend a rule if its relevant to the conversation. Ask your moderators to recognize that sometimes the enforcement of a rule isn't necessary, but if they aren't sure to bring the matter up with other moderators and administrators to ask for their feedback.

• If you aren't having fun, then you're probably not doing it right.

There are a few odd people out there that can't deal with online socialization, and obviously this point doesn't apply to them, but running a message board is fun. If it isn't fun, then you're doing something wrong and you (and possibly your admins and mods) may suffer from burnout.

The most common problem I see that tends to lead to burn out is the driving need to make sure that you get everything done right now! You don't. If you're facing an overwhelming amount of work find more people to help Administrate and search for more good moderators to help them deal with their forums. More people equals more fun, as long as they're competently doing their jobs.

Besides, there's nothing special about the number 7. If you run CF maybe you need a group of 11 Admins or maybe 21. Maybe they do need to be divided into teams of administrators to deal with different sections of the board, but be careful. Large bureaucracies can turn a little bit of poor leadership into huge honking messes. The people at the top need to be the best of the best, regardless of what they believe. They need to be able to coordinate dozens and sometimes hundreds of people and make sure that they're all on the same page and getting work done at multiple levels. This is where you need dedicated HR people, dedicated moderator trainers, and a Super-Admin group, all of which can be interesting jobs, but need to be carefully watched.

Remember though, if you can't trust the people that run the site, you'll have problems. This is where its especially important to promote due to competence and not seniority because the temptation will be there. You'll certainly have people that will get upset when they're passed over for positions but you have to remember that these people don't deserve the positions, they earn them.

Finally:

• Any message board staff other than the owner are there to serve the interests of the users and the board, not the other way around.

This is sort of a big deal, and it has definitely been touched on before under "promote due to competence." CF eventually had people in powerful Super-Admin positions that took those positions not because they wanted to do them or were good at them but rather because they liked the feeling of superiority that they had over all of the normal members.

The didn't realize that Administrator is actually the lowest position on a message board. Yeah, it's an exclusive position and it offers a lot of benefits, but it requires mounds of hard work in the guts of the system, often dealing with angry people and upset moderators. It's hard and emotionally draining, and if you aren't up to dealing with all the pain and tough decisions you really don't want to get involved with it.

Administration means that you see everything, including all the worst facets of people. You'll deal with almost all of the porn, spam, fights between friends, stalking and internet spats that occur on the site. Every move that you make will be questioned and examined for a deeper meaning. People will consistently fail to treat you nicely.

And through it all, you need to remember that your position exists to serve the people that treat you like crap.