Indie Authors, Gamers, and Monopoly Censorship

Book publishing and game news journalism are both being disrupted by “user generated” platforms that have consumer-side economies of scale.

For book publishing, two of these platforms are Kobo and Amazon Kindle. The users/producers of these services are called “indie authors.”

For game news publishing, two of these platforms are Twitter and Reddit. The users/producers of these services are called “gamers.”

While these services are united in their hostility to other types of publishing, each still faces competition from other “user generated” platforms with consumer-side economies of scale.

For instance, in book publishig, Kobo’s President Michael Tamblyn is warning “indie authors” that Amazon Kindle’s interest is not theirs, and Amazon Kindle could use market power to take away their profits and silence them.

Meanwhile, in game news publishing, this form of censorship has been observed. Early on in the #gamergate scandal, reddit began censoring discussion of collusion between Vox Media, Gawker Media, and game developers. This lead to the discussion to shift to twitter, a rival platform.

The power that monopolies have to extract all profits and control the agenda is called wholesale transfer pricing power.

If Amazon achieves a monopoly in “indie author” book publishing, they would have wholesale transfer pricing power, be able to strip all economic profits from indie authors, and censor indie authors at will.

If Reddit would achieve a monopoly in “gamer” news publishing, they would have wholesale transfer pricing power, be able to strip all economic profits from indie authors, and censor gamers will.

The only difference is that this shift from command-and-control to user-generated publishing is more advanced in game news than it is in books.

The today of gamers is the tomorrow of indie authors.

That’s why the gamergate scandal is the biggest news in publishing.

Types of Publishing Platforms

There are three (maybe four) kinds of publishing platforms

Consumer-side economies of scale are currently disrupting the publishing industry. That is why the rise of consumer-side economies-of-scale platforms is currently the biggest news in publishing. The increasing power of platforms such as Twitch (widely used by gamers) is removing the prestige associated with journalism. Likewise, the loss of audience from “traditional media” (employee-produced, with no consumer-side economies of scale) means that traditional media needs to further cut wages, and cut quality.

There are three (and maybe four) important kinds of publishing platforms

  • Consumer-produced, consumer-side no economies of scale
    Most published content is produced by users of the service. Each additional consumer/producer does not increase the utility of the service for other users (in ways not related to producer economies of scale)
    Examples: WordPress
  • Consumer-produced, consumer-side economies-of-scale
    Most published content is produced by users of the service. Each additional consumer/producer increases the utility of the service for other users (in ways not related to producer economies of scale)
    Examples: infiniteChan, Facebook, Reddit, Tumblr, Twitch, YouTube
  • Employee-produced, no consumer-side economies of scale
    Most published content is produced by paid employees or contractors. Each additional consumer/producer does not increase the utility of the service for other users (in ways not related to producer economies of scale)
    Example: The Washington Post
  • Employee-produced, consumer-side economies of scale
    Most published content is produced by paid employees or contractors. Each additional consumer/producer does not increase the utility of the service for other users (in ways not related to producer economies of scale)
    Example: This may not exist in a pure form. But a pretty close example is Amazon Kindle, where the bulk of the material is created by paid authors, while reviews and annotations are shared between consumers.

Interestingly, Amazon.com is involved in three of these platforms. Amazon owns Twitch, Kindle, and Amazon CEO Jeff Bezos owns the Washington Post.

Just as interesting is the predictable way besieged “traditional media” (employee produced, and without economies of scale) attacks “new” media with consumer-side economies-of-scale. For example, the Washington Post employs Caitlin Dewey, whose only responsibility appears to be targetting media that has consumer-side economies-of-scale. Recent targets include

If you didn’t know the kinds of publishing platforms, you might think the Washington Post was just publishing objectively interesting news, or that Amazon was just a book seller.

The Gamergate Pattern of Future Scandals

The Gamergate scandal is interesitng, not just because of the media firestorm, but because it predicts future firestorms.

The Gamergate pattern occured first in games journalism, given the high technical skill of many readers. But it will to other forms of publishing.

The basic pattern is as follows

1. Self-publishing platforms decrease profit of traditional publishing outlets
2. Traditional publishing outlets respond by decreases wages (and thus skill) of editors and reporters
3. Decreased attractiveness of traditional oulets because of low skill (#2) increase the draw of self-publishing platforms, giving them consumer-side economies of scale
4. At some time, traditional outlets consider an “outrage” (some behavior interpretted as both incompetent and hostlie) because of the low skill of their editors and writers (#2)
5. A significant fraction of the most engaged consumers mobile on self-publishing platforms (#3) because of the outrage (#4)

This is the pattern of the gamergate scandal.

We’ve also seen a pattern in how journalists have circled the wagons, but that is a post for another time

Gamergate is a Publishing Scandal: The High Cost of Low Wages

Gamergate is a scandal, not a movement. The gamergate scandal is a sign of a publishing industry in crisis. The scattered demands of those who talk about gamergate are irrelevent, because it’s not a political or even social campaign. The gamergate scandal goes away either when game journalism once again becomes a skilled profession, or when the digg-like exodus from dying old game outlets concludes.

Gamergate is a scandal which outrages a community because it combines collusion between journalists (like the secret GameJounroPros” mailing list) with collusion between journalists and the industry they cover (including sex-for-favors, and even commissioning works to review).

But I’m more cynical than I was when I started this blog. If gamergate was just a scandal of corrupt journalists fucking their subjects and working together to cover that up, I probably would be bored.

But it’s not just corruption, which is normal, but actual incompetence, which is rare. When caught, a normally intelligent corrupt figure will apologize, pretend to make amends, and wait for things to die down before being corrupt again.

An incompetent tells their audience they are “over.”

gamasutra_gamers_are_over

When you see an multiple employees causing havoc, poor pay is to blame. Smart editors would apologize, change policies, and at least wait for the buzz to die down before going on with life. Incompetent editors brag about coordinating a public relation campaign on the behalf of the industry they cover, against the interest of their readers, in an official column, writes that he suggested that gaming journalists organize a “public letter of support” for a favored game developer.

The gamergate scandal is what happens when publishers cannot pay high enough wages to attract competent editors. Gamergate happens when a new self-publishing media with consumer economies of scale cannibalizes revenue from old publishing media. This kind of scandal happens when editors lose access and need to find something else to talk about, without any training in deciding what to talk about.

Gamergate ends when the habit of gamers to care about what “game journalists” say ends. This could end by kotatku, gamastura, and other websites changing their mind and deciding they don’t want gamers to be “over.” But more likely: the gamergate scandal ends when gamers realize that their voice is as important as a theatre-major in Brooklyn, or a hipster in San Francisco. The gamergate scandal ends when black gamers, white gamers, asian gamers, gay gamers, straight gamers realize the one thing they share — love of being gamers — is the one thing that game journalists despise.

Gamergate ends when Twitch replaces Kotatku, Youtube replaces Gamasutra, and twitter replaces Polygon. Gamergate ends when the cost of self-publishing is so low that gamers on youtube get equal access to upcoming games as game “journalists.”

The gamergate scandal shows how when a publishing industry keeps lowering wages beyond what is required to attract competent editors, the outcome is the mamarginalizationf a publishing industry and a mass defection to new media.

Hachette, Penguin, Simon & Schuster — are you listening? This is the biggest news in publishing. I hope you’re ready..

The Gamergate Scandal is the Biggest News in Publishing

The fight between Amazon and Hachette has got a lot of publishers paying attention. But it’s not a scandal. It’s exactly what you would expect when a big five technology company and a big five book group try to dividie profits between themselves.

There is a scandal in publishing though, and it takes place in a part of publishing where self-publishing platforms have economies of scale and publishers are no longer attractive to their traditional partners: game journalism publishing.

The gamergate controversy began after it became clear than a celebrity indie developer (whose game I positively reviewed) slept with at least one journalist after positive coverage of her television show and game. Given the insular nature of game journalism, no action was taken against either the journalist or the developer by the publications in question. A series of public relations disasters — collectively called the gamergate scandal — later brought the disclosure of a secret email group designed to coordinate coverage, harassment of critics of game journalists, and then the weirdest news in publication history…. coordinated editorials of magazines condemning their own readership.

gamasutra_gamers_are_over

The scandal (journalists like some of their subjects, and fuck them) is not new to anyone familiar with human nature. But the public attacks and mockery of a magazine’s own readership may be unprecedented.

If  that wasn’t inexplicable enough, it then followed that game journalists were actually paying for games they were covering to be created. Kotatku, publicly supporting the concept of journalists financially supporting their subjects:

However, Kotaku still allows its writers to directly purchase a game for reviewing, or to back projects on Kickstarter and Indiegogo, two other, more established platforms for people to crowdsource revenue, despite the fact that both of these transactions also involve the writer financially supporting the developer. Where Kickstarter and over-the-counter purchasing differ from Patreon, according to various writers and figureheads at Kotaku, is that through them you support the product, whereas through Patreon you support the person.

Imagine if Sports Illustrated said that athletes — or football fans — where “over.” Imagine if there were football teams operating because of donations by ESPN columnists.

Imagine if ESPN said they had no obligation to look out for the interests of football fans

no obligation

The gamergate scandal is the biggest news in publishing, because it shows how publishers operates after the industry can no longer pay grown-ups. Game journalists actually thought it was a good idea — in any sense — to publicly attack and mock their own readers. Game journalists actually have been creating stories — funding favorite designers — in order to give themselves something to write about.

Major book publishers like Hachette, Penguin Random House, and HarperCollins can afford to pay professional salaries to editors, because self-publishing platforms don’t have economies of scale yet. When that day passes, when you see editors at Penguin declare that “readers are over” and the New York Review of Books publishing reviews by books commissioned by the reviewers, book publishing will be as wasted as game journalism is now.

Journalism, Access, and Gamergate

Journalism and Access

The business of journalism is built on access. And the prestige of journalism is related to the ease of access.

Areas that are the easiest to access allow journalists to be most prestigious. For instance, covering the Unitd States government is a prestigious assignment of a journalists. It’s always an “easy” on: there are so many agenda and centers of powers in the United States government that it is relatively easy to aquire access. Occasionally, this allows journalists to present themselves as hollywood heroes. An example of this is All the President’s Men, a book (and later movie!) which is about two journalists special access to an FBI bureaucrat.

all_the_presidents_men

Areas that are moderately difficult to access allow journalists to be moderately prestigious. For instance, the organizational behavior of large companies shares with the United States multiple centers of power and many agendas. Unlike the ggovernment almost all employees at a company share some material interest in the well-being of a company. This, journalism about organizational behavior in large companies can be most prestigious either during a scandal, or during a succession transfer. An example of this is Inside the Plex, a book that was written during current Google CEO Larry Page’s successful campaign against former Google CEO Eric Schmidt.

steven levy

Areas that are the hardest to access allow journalists to be least prestigious. This is because of the monopoly power of any source that chooses to talk: they can extract concessions from the attractiveness of the reporter to a very real fear that access can be revoked if the tone of coverage becomes un-flattering. Journalists in these situations may find themselves almost indistinguishable from corporate shills

selling_journalism
Access and Gamergate

The gamergate consumer revolt against the low-prestige game journalists is in its second month. One reason  for this revolt is the disgust that journalists feel about gamers: as Vox Media’s T.C. Sottek says, that game journalists feel no obligations to look out for the interest of gamers

no obligation

But even before gamergate, the feeling was mutual: gamers do not like game journalists. The most successful game outlets, whether in terms of consumer recommendations or twitter followers, are “celebrity” gamers on youtube and twitch, and not journalists who declare their core demographic dead.

So if you are a publisher of games: who would you provide access to? Low-prestige journalists that do not like gamers, do not like games, and are unpopular with gamers? Or celebrity enthusiasts who are popular with the community and care about it?

Journalism and GamerGate

This is the context for Kotatku announcing they were deprioritizing access

The future of games coverage is in the present. For too long gaming coverage has focused on the vague future, the preview mindset of possibilities and maybes. And when it’s involved the present it has been drenched in the dreary falseness of empty interviews, bland producer-speak and executive-hype. It’s neither been real enough nor true enough to what is actually happening now. For too long games reporting has involved staring at what is opaque, maybe glimpsing something through it and reporting about that possibility, all the while ignoring so much of what is clearly visible and exciting around us. P

I believe there is a better way to cover games, one that puts future-based coverage and executive interviews in proper diminished proportion. We must focus on the games that are being played now and the human beings—the gamers, mostly—who are doing interesting things with them.

Game journalists have made their living as low-prestige journalists for decades. That’s not ending because they have a chance of being higher prestige journliasts. It’s that they’ve given up on being journalists.

This shift was made by the rise of consumer-side economies of scale which allowed self-published youtube and twitch channels to be more popular and trusted than gaming journalists.

top_steam_currators

Conclusion

I ignored #gamergate for the first month because I recognized game journalism as a low-prestige, low steaks profession.  Only this inexplicably stupid editorial from a once-respected magazine got my attention.

But my attention is mostly on the collapse of an industry I loved growing up — game journalism — its painful death throws, and seeing what comes next.

After GameGate, the deluge

GamerGate began with a sex-for-reviews microscandal concerning a free-to-play online game. It continued with coordinated editorials in which major publications asked their primary demographic to stop reading their magazines, in perhaps the most self-defeating series of op-eds in history

It is now an ethics-in-journalism movement.

Those all will pass. What comes next is the deluge.

Martin,_John_-_The_Deluge_-_1834

The Economies of Scale

There are two kinds of economies of scale. One, producer-side economy of scale (just called “economies of scale” by old textbook) refers to the cost advantages of dividing a large fixed cost of capital over an even larger number of consumers. The great modern enterprises of our day — Barnes & Noble for example — were primarily based on the immense cost savings of producer side economies of scale.

Producer-side economies of scale allowed Barnes & Noble to nearly destroy the local bookstore industry.

Barnes & Noble’s rise was the crowning glory of the Modern Age.

They were once even cool enough to draw protesters.

Barnes-and-Noble-Action-March-2012-20

But there’s another kind of economy of scale: consumer-side economies of scales. This, called “network effects” in the booming days of the .com bubble because the socialized road and postal systems had been frozen for so long as to be invisible, refer to the transactional cost savings (reduction of duplication of effort, reduction of friction, etc) of acceting a standardized communication platform. The Internet itself is an example of something with massive consumer-side economies of scale: the more consumers are on it, the easier it will be to procure goods and services on it.

Consumer-side economies of scale allowed Amazon to challenge Barnes & Noble, until it had acquired enough producer-side economies of scale to bury it.

Amazon was, and is, a company straddling the line between Modern enterprises, and whatever comes after.

large_article_im4500_amazon_kiva_robots

The Publishing Industry

There are two ways to treat a human client. You can treat him as your customer, from whose wallet you obtain your income. Or you can treat him as your product, selling him to your actual customers. Amazon is an example of the first sort of enterprise, Google the second. Both approaches can lead to happy humans, and happy shareholders.

But not always.

Consider magazine publishing. Traditionally, magazine publishers received their income from a combination of subscription revenue of and advertising revenue. These magazines benefited from a “multi-sided market” in which they the human end-users were both the client and the product. This allowed magazines to nimbly change their pricing strategy as the situated warranted. Humans were happy. Advertisers were happy. Shareholders were happy.

And all this coincided with massive supplier-side economies of scale, and no consumder-side economies of scale except for the socialized (and static) highway and postal systems. This was the Golden Age of publishing

mao-zedong-time-magazine-cover-1967-january-13

The introduction of new consumer-side economies of scale meant that it was really, really cheap for each marginal consumer to aquire published materials — the internet, the web, web browsers, even communication lines were there, and accepting these standards was invisible. This allowed micro-amazons, with goals of large readership bases and exploiting consumer-side economies of scale, to thrive.

Time’s cover stories were for a quant age, in which transaction costs were still high enough to exclude low-cost low-quality competitors. Instead, new competitors enjoyed the benefits of economies of scale, from both the consumer and producer sides.

The new companies (Buzzfeed, Vox, and so on) were further able to exploit the economies of scale by substituting quality of audience for quantity. Instead of dedicated readers paying $10 or $20 or $100 dollars a year, instead htey focused on “click-bait” or emotional pieces written by even worse paid writers. The advertisers got their audience, the new publishers still got money, but the core readership felt increasingly alienated.

gamasutra_gamers_are_over

The day of the endless “Top Ten Reasons Why You’re Addicted to Buzzfeed” had dawned.

buzzfeed_listicle

Self-Publishing and GamerGate

Just as Amazon put fatal competitive pressure on Barnes & Noble, Buzzfeed and its ilk put fatal competitive pressure on Time-Warner. With consumer-side economies of scale taking away its moat, and producer-side economies of scale fading with declining readers, the old Modern enterprises began fading.

Two-forces kept churning: consumer-side economies of scale continued to reduce transaction costs. And the most engaged readers (those who had been most willing to pay for subscriptions, and more enthusiastic about their subject) felt increasingly alienated by the new Buzzfeed world.

In gamer-oriented commentary-and-entertainment publishing – because of the relatively young and educated nature of its target demographic — we see this post-Modern world right now. Self-publishing is more valuable than traditional (magazine-based) or hybrid (listicle-based) publishing.

The top self-publishing platform for gamers — twitch.tv — was recently purchased for Amazon.com for one billion dollars. This is ten-times more than the highest estimate I was able to find for an estimate of the entire Vox Media congolomerate (of which a very small fraciton is gaming).

And it’s not just revenue, but influence. “Steam” is the top online marketplace for video games. The top curator is a guy with a Youtube channel.

top_steam_currators

Of the top 10 curators, only 3 are magazines.

An example video from “cynical brit” is this op-ed piece, which combines footage of a computer game with commentary on Gamer Gate itself

These change are coming to other parts of the media. The recent fight between Amazon adn Hacette is just bargainin for a cut of the profits. It does’t matter. But what matters is when Amazon is able to drive the cost of reading for consumers to $0.

What happens then is what happened to gaming 15 years ago: a widespread collapse of the old publishers, a shift to an advertising model of some form, a collapse of wages, and a deprofessionalization of writers.

What happens after that? What happens when those future readers exploit even newer self-publishing platforms to cater to a nearly-forgotten core audience? What happens when book writers and journalists become as out of touch with their audience as game journalsits?

Gamergate.

tdaxp storms New England

Before this week, I had visited only one state in New England — the ancient land of my paternal ancestors. But now, 3 of 6 states have fallen to the tdaxp March of Remembrance

tdaxp ri ma

First, I visited the grave of my cousin, H.P. Lovecraft, in Providence. The cemetery that contains many generations of my family is about 25 miles from the town that inspired Innsmouth — and my great-great grandfather sailed to the East Indies, much like old man Marsh….

hpl grave

Of course, Lovecraft wrote of giant indifferent gods and human sacrifice… hopefully nothing like that ever bothered tdaxp’s lineage…

cthulhu sacrifice

To get my mind off that, I next went to Pawtucket, real-life suburb of Providence and fictional home to the Pawtucket Brewery, from Family Guy. But the town is nearly dry, with beer not sold in gas stations!

Certainly Massachusettes did little to calm my nerves — but — those crazy elusive angles

mit_stat_center

But all too soon the trip ended, and we left by water taxi from Boston to the airport. Bye bye New England!

boston ma from water taxi

Impressions of “The Spectral Link” by Thomas Ligotti

The Spectral Link is a short collection of two stories, “Metaphysica Morum” and “The Small People.” They are of wildly different quality, and represent two possible directions for Mr. Ligotti’s future work.

The Spectral Link

Let’s hope his future output is more like “The Small People,” because “Metaphysica Morum” is garbage. Thomas Ligotti, besides being a first rate fiction writer, is a fourt rate philosopher. And a fifth rate writer of suicide notes. Whether “Metaphysica” is supposed to be philosophy, or farewell to an uncaring world, there’s one thing it certainly is not: entertaining. Save yourself some trouble, and stare intently into space instead.

That will prepare you for the Smalls, whoever they are.

“The Small People,” by contrast, is Ligotti in top form. The narrator presents a world almost identical to ours: except for the presence of Smalls. Doll-sized mannequin-like creatures who mimic human society, but seem to have no history of their own, most of the “Real People” simply ignore the smalls or avoid them in the way that a man may avoid an annoying bird. “The Small People” works on three levels: the world that’s presented by the narrator, the world the narrator may actually be in, and the metaphors that Ligotti uses to connect the first two layers with the “real” world.

If you are already a Ligotti fan, get the Kindle edition to read “The Small People” in about an hour.

The tDAxp eXPerience