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Insightful article, but notice that the business model being criticized is in many ways well known (and successful): namely, that of book publishers. When an a

Insightful article, but notice that the business model being criticized is in many ways well known (and successful): namely, that of book publishers. When an author deals with a book publisher, he/she gives up some of their future revenues in exchange for cash in advance and publicity. Likewise, when a local business deals with Groupon, they are giving up part of their revenue in exchange for upfront cash and publicity. The main difference might be in the actual numbers (cash upfront, revenue share %, etc). The risks pointed out remain, and are very real though.

larrys 15y ago
Authors don't really have ongoing costs once they get the money though like a restaurant as one example would. Publishers also handle promotion and distribution as well. You can self publish of course but then you don't normally get the same legitimacy, distribution, and other intangible benefits.
tomp 15y ago
Except for the upfront payment, which is obviously a sunk cost, book publishers have no other liability. Unlike Groupon, which might have to reimburse its customers if a client business goes under. Furthermore, AFAIK author deals are screened/filtered, a bad book will not get published (not that this is a 100% accurate process, see for example 4 Hour Work Week). Judging from the article, Groupon does little screening, so their risk is much greater.
- commandar 15y ago
  >(not that this is a 100% accurate process, see for example 4 Hour Work Week). While I got a chuckle out of this, given the financial success of the book, it's a good book from the publisher's perspective.
  - tomp 15y ago
    Actually, that's exactly what I meant. I can't remeber where I read it, but Tim claimed that many publishers rejected him, before he found that one that wouldn't. Or am I thinking of the wrong title?
jtbigwoo 15y ago
> namely, that of book publishers It's entirely different, actually. The risk to publishers is much lower because the book publisher, not the author, control the means of printing the books. In Groupon's case, Groupon would be like a publisher paying in advance to a printing company. There's nothing wrong with such an arrangement, but those that invest in the publisher should acknowledge the risk that the printer will go out of business before delivering. It's doubly risky if the payment terms ensure that the printer will lose money on each book printed.

larrys 15y ago

Authors don't really have ongoing costs once they get the money though like a restaurant as one example would. Publishers also handle promotion and distribution as well. You can self publish of course but then you don't normally get the same legitimacy, distribution, and other intangible benefits.

tomp 15y ago

Except for the upfront payment, which is obviously a sunk cost, book publishers have no other liability. Unlike Groupon, which might have to reimburse its customers if a client business goes under. Furthermore, AFAIK author deals are screened/filtered, a bad book will not get published (not that this is a 100% accurate process, see for example 4 Hour Work Week). Judging from the article, Groupon does little screening, so their risk is much greater.

commandar 15y ago
>(not that this is a 100% accurate process, see for example 4 Hour Work Week). While I got a chuckle out of this, given the financial success of the book, it's a good book from the publisher's perspective.
- tomp 15y ago
  Actually, that's exactly what I meant. I can't remeber where I read it, but Tim claimed that many publishers rejected him, before he found that one that wouldn't. Or am I thinking of the wrong title?

jtbigwoo 15y ago

> namely, that of book publishers It's entirely different, actually. The risk to publishers is much lower because the book publisher, not the author, control the means of printing the books. In Groupon's case, Groupon would be like a publisher paying in advance to a printing company. There's nothing wrong with such an arrangement, but those that invest in the publisher should acknowledge the risk that the printer will go out of business before delivering. It's doubly risky if the payment terms ensure that the printer will lose money on each book printed.