Reprinted in the Journal of Electronic Publishing with the permission of Laura Fillmore and the Online BookStore.

Presented at the Fifth Conference on Organizational Computing, Coordination, and Collaboration: Making Money on the Internet, Austin, Texas, May 10, 1994

I very much appreciate being here today and thank Andrew Whinston and the people at the IC2 Institute, RGK, Texas Internet Consulting, and the University of Texas for inviting me to speak at this conference, "Making Money on the Internet." I've picked up many good tips, which I hope to apply at the Online BookStore (OBS) soon, because at the Online BookStore I am *not* making money by publishing on the Internet. And I don't know anyone who is. Since 1992 our company, the Online BookStore, has been involved in Internet publishing, and we have found it an exercise riddled with paradox and the unexpected, frequent bouts of optimism and what-if idea sessions; a conundrum whose parameters keep shifting.

We have enjoyed commercial success from publishing *about,* talking and meeting and consulting *about* publishing on the Internet, but are we making money from the real live act of online publishing for a price? Not yet. As far as I can tell, publishing intelligently in the distributed Internet environment still *costs* money. I don't think I am alone in this realization. I am coming to suspect that there may be no such thing as publishing on the Internet or, rather, publishing according to the definition of publishing as we know it from our familiar paper reference points. This may not be the news you came to hear, but I am happy to share what insights I have with you.

The Online BookStore started out under the umbrella of Editorial Inc., a profitable publishing services business which I started in 1982, and which produced hundreds of books for publishers. In 1991, we had 19 employees, three offices, three shifts around the clock, and used desktop computers to produce such titles as _The Sports Illustrated Almanac_ for Time/Warner, Andy Warhol's biography for Bantam Books, and _Doing Business in Kuwait_ for Ernst and Young. We were part of a services industry trafficking in paper. Using computers, we were able to integrate the various publishing disciplines under one roof, calling on hundreds of freelancers to supplement our in-house working staff and to become a publisher's publisher of sorts, a virtual corporation.

We caught the desktop publishing wave when it was just a swell out at sea in the mid-eighties and, in the resulting shift in the typesetting business from large centralized composition companies to distributed PC-based typesetting platforms, we rode the wave and produced books using page composition systems such as PageMaker, Ventura Publisher, Scribe, TROFF, TEX, and Polaris PrintMerge. Polaris PrintMerge was my favorite, not only because it was the first and crudest PC-based typesetting platform, but because it introduced me to the notion of electronic slavery, our topic of the day. Turn the clock back ten years, when my company was five people strong, and I was salvaging a typesetting job someone had abandoned in frustration before the machine; it was a manual for hospital custodians, arranged in three columns, detailing how to keep a hospital clean and sanitary. The janitors, our future readers, were supposed to start on the upper lefthand column of each page with the instructions to don their uniforms, and then by the bottom right hand entry, they had to "clock out wearing uniform." Every page had the same layout for a different duty—mopping the floors, emptying the trash—all items in all columns had to align three across. Before the days of WYSIWYG, assessing one's success as a typesetter meant printing out again and again, at about five minutes per page. The deadline loomed. I would type and wait, type and wait, a period here, a comma there, a drone before the keyboard, caught up in the electromechanical semi-idiot production cycle. When I finally clocked out, called the Fed Ex man for the finished package, I vowed never again to wear the uniform of typesetter. I would hire typesetters.

This was my first personal experience with electronic servitude in the publishing context, though I didn't realize it at the time: I saw it as a business opportunity instead, which from a commercial standpoint it certainly was. I learned that users of Polaris PrintMerge, no matter how smart, would become the victims of badly designed software, would turn into drones, because that was their inevitable function vis-a-vis their task and the tools afforded them for completing the task; the humans workers functioned as the erring component, the wetware, charged with coaxing a right-or-wrong result out of a desktop computer.

This was the much-touted cutting edge, offering profit without honor and the opportunity to hire others to work Polaris PrintMerge till a better program came along—which happened startlingly fast. I hired others to stay up all night staring into screens, printing out, cursing the widows and orphans, and printing out again. This first generation of servitude involved securing output from single, unconnected machines, getting desktop computers to emulate the work of the large dinosaur machines lumbering reluctantly off into typesetting antiquity; we were selling output from these PCs, trying to recreate type of such quality that it did not appear to be what it was—computer byproduct. So, busily formatting the output of computers gave us a way to use and begin to understand the machines but, of course, in hindsight, how could we have been anything else but servants to the machines? We did not apprehend the utility of our machines; using computers to wrestle with the static and formatted output of single machines was an error few perceived and many committed, are still committing. We do what we know and, with the gift of hindsight, can see that this act of manufacturing type on paper, produced by distributed computers sited in decentralized locations, constituted an intermediate step from static to kinetic publishing.

As so often happens with computers, the cutting edge of desktop publishing became a swamp and then a backwater. It took about five years for publishers to discover that there are cheaper ways to typeset than paying New England style wages—particularly when they can demand from desktop publishers something they never got or even knew they wanted from the large type houses—ownership of the typesetting files and the macros that created them. Savvy publishers took advantage of the distributed environment coupled with the disconnectedness of it all to put the servitude of function together with the servitude of finance. People type fast when they are hungry, and a large part of the typesetting business, the keyboarding at any rate, after the advent of desktop publishing, migrated to romantic "offshore" locations—doublekeying in Taiwan or Jamaica or the Philippines proves more accurate and far less costly than paying a Massachusetts resident a living wage. So, while beginning to explore new avenues of employment in the areas of CD's and hypertext publishing, we continued to compete in the typesetting field, and got good prices for a while in Utah and the Southwest. We even hired freelancers third-hand in Singapore and Haiti. The publisher hired me; I hired someone stateside to hire someone in-country to hire the keyboarder and, still, the publisher ended up paying maybe half what the job would have cost him at $15 per hour. Our topic today is slavery.

In 1895, before Polaris PrintMerge was ever invented, Oscar Wilde wrote in _The Soul of Man Under Socialism,_ that "Unless there are slaves to do the ugly, horrible, uninteresting work, culture and contemplation become almost impossible. Human slavery is wrong, insecure, and demoralizing. On mechanical slavery, on the slavery of the machine, the future of the world depends." Somehow, in the arena of desktop publishing typesetting, human servitude to the exacting output demands of the machine is more the norm. The focus is output, and people become blind inputters of accurate information in the same way that minimum wage workers in supermarkets do when running barcodes over optical scanners.

I'm painting a grim picture, but the tide is about to turn. In the late '80s, we began to produce and typeset books about computer networking, books focusing on the structure and function of globally interlinked computers, which seemed to elicit life from people when used as a communications medium, rather than demeaning them when used as an output medium. One such title, probably the first book on computer networks worldwide, was John Quarterman's book, _The Matrix,_published by Digital Press which concerns computer networks and conferencing systems worldwide. In 1989, when we were working on the production of this book, the author introduced me to the then alien concept of electronic mail. My assistant would pick up mail from my lone correspondent, the author, print it out, put it in my in box, and I would handwrite responses which she would input and send back in due time. It sounds quaint, but it seemed to make sense to me at the time—in the same way computerized typesetting on distributed though unconnected PCs made sense. We do what we know.

Some of the messages he would send had nothing to do with the text of the book itself, however; messages posted to mailing lists from students in Tianamen Square during the uprising that spring, messages from Alaskans offering first-person accounts of what the oil company wasn't telling us about the Valdez disaster. Fresh and unmediated communication about things that mattered from far corners of the world—news just hours old, unsanitized by the media. Here was information, digitally recorded voices, coming out of the new machine, which itself is a vast collection of interconnected machines being used as conduits for human thought. Where the Haitian freelance typist was hidden and voiceless behind four middlemen and had no hope of a phone, no less an Internet connection, the students in Beijing and citizens of Alaska could talk electronically, and there were millions around the world who could and did listen immediately, electronically, and no one stopped them. The Internet is an open network, distributed, not contained, not owned by anyone.

I don't know if any Chinese students or Alaskan citizens profited in a commercial sense from their posting or "publishing" on the Internet—for, after all, what is publishing but writing for public consumption, regardless of the means of distribution or, in the case of Internet publishing, access—but they profited in other perhaps more valuable ways by making their voices heard as witnesses to events of their time. Clearly, in this case, the new and networked machine did not function simply as an output facilitator, a means of replication for familiar words on a paper page. It functioned as a kind of worldwide broadcasting medium.

Call it epiphany thanks to insight from the above incident, or call it simply economic necessity, our business shifted in the direction of electronic publishing, and away from paper-based publishing. Another shift in the tide. The first major step in the new direction, which involved our creating work rather than producing it for publishers, was _The Internet Companion: A Beginner's Guide to Global Networking_ by Tracy LaQuey, which was the first popular trade book about the Internet back in 1992. This book, produced with lightning rapidity and penned by a very gifted and knowledgeable author, seemed to grow beyond itself even before it was born and soon became a bestseller. At a time when there was precious little current copyright information on the Internet, and Acceptable Use Policies stood in the way of for-profit publishing on the Net, we couldn't just put a book up there with a pricetag on it. It was a brave act for Tracy LaQuey to take the innovative leap, to take the words we both wanted people to pay for in the bookstores and give them away, in ASCII, on the Internet. That was the beginning of the Online BookStore in 1992. Many thousands came and grabbed those files; many wrote in asking for more. None of the users paid a dime.

However, a conundrum is a paradox of sorts, and counterintuitive as it may seem, giving the ASCII files away by anonymous FTP spurred the print sales of the book. Who wants to read hundreds of pages in ASCII, anyway? Even our publisher was supportive of our effort and happy with the resulting sales figures. Addison-Wesley is not alone. Prentice Hall publishes Brendan Kehoe's _Zen and the Art of the Internet,_ which is available for free on the Net. His book continues to sell very well. The same applies for MIT Press's publication, _The Hacker's Dictionary,_ which is available for free on the net and sells briskly in paper as well. This leads to conundrum number one: that giving something valuable away for free can make money. It points to a richness not found in the tangible world quite so readily: the more I give to you the more I have. Some call this a new kind of marketing, and this was a pleasing lesson to learn. But was this experience really online publishing, or was it the success of an early hybrid of online/paper publication?

The popularity of the online _Internet Companion_ ASCII files drew my attention further away from paper, and I was seduced by the prospect of the then 10 million people on the Internet—10 million literate people with disposable incomes—attached to the Net. Why not acquire lots of Internet rights to lots of books and put them online at the Online BookStore? Surely some percentage of those people would buy files of a popular author's books for a reasonable price. So to test the concept that people would pay for books online, we approached one of the bestselling authors on the planet, Stephen King, and acquired first serial rights to a story from his new book, _Nightmares and Dreamscapes._ The numbers were enticing: if only one percent of the ten million people paid $5 for Stephen King's story, available only at the OBS and only on the Internet, then that's half a million dollars!

We tried to make it as widely appealing and usable as possible: we formatted it as a Voyager Expanded Book, in plain ASCII for those with only email access, in Adobe Acrobat, in HTML format for Mosaic aficionados, acquired the German rights, did a dual language edition, and released in time for the 1993 Frankfurt Book Fair, the largest book fair in the world. The result: they all came, the radio, the TV, the print media, creating lots of smoke and a nice firm footprint in the sand of Internet history, but sales? The half a million dollars in per-copy sales? All the companies who participated in bringing this story into its Internet incarnation—the Internet Company, Texas Internet Consulting, Viking Penguin, Hodder Stoughton, EUnet Germany, Hoffman und Campe, Aldea Communications, Bunyip, and the Online BookStore—we didn't pull in enough in per-copy sales to pay the phone bills for setting up the deal. A vast amount of smoke, a tremendous marketing boost for the printed book again, lots of noise—and by extension, lots of profit for the publisher and for the author—but handfuls of per-copy sales. The per-copy sales model for a contained publication, a publication which is complete in and of itself and is not linked to anything else of significance on the distributed network, does not seem to work. The OBS is not the only online publishing site which has shown these results.

However, where per-copy faltered, site licensing proved a far better option, which resulted in some commercial satisfaction on all sides. We have sold site licenses to networks and organizations with good results. Site licensing offers exclusivity to the organizations and networks which optioned the work, while offering the author the reassurance of a having defined set of users, and a certain hedge of protection against rampant copying and posting for a profit of his work. One key element in site licensing seems to be timeliness; one publishes first online, before the information or ideas grow old and gather moss. Perhaps this site license model proves more lucrative than the per-copy sales model because it enables the licensor to give the information away for free (after paying for it), while achieving a defined benefit, a market advantage over its competitors, by giving away scarce information on an exclusive or semi-exclusive basis.

This same combination of for-free/for pay can be seen in the sponsorship model, the third commercial model after the per-copy and the site license where, in the same way that Mobil Oil brings you Masterpiece Theatre, a company might sponsor a particular publication distributed for free on the Net. The familiar economy of having the book buyer, the purchaser of information, pay for the information, is reversed in sponsored publishing. The sponsor wins by having his name, his product, associated with the freely distributed text. A discreet screen of product information, a company logo attached to a file is all it takes. The money then flows thus: the sponsor pays a certain amount, probably pennies, each time someone picks up a file by anonymous FTP. The taker pays nothing at all. What is being sold here is not the information, but the *attention* of the reader; the information or the ideas function as a conduit for marketing, again. Sponsorship is an easy and risk-free model, for the sponsor. What is at risk, of course, is the objective sponsorship of truth. Which company might have sponsored the students in Tianamen Square, for example?

We see this sponsorship model in frequent practice around the Net today, vast electronic for-free Internet sandboxes such as SUNsite, funded by Sun Microsystems and Cisco Systems and others. The sponsors gain by providing their equipment to people making creative use of it, so others will come and see what they are doing, and...buy the sponsors equipment or products. So, as the freely available ASCII files for the Internet Companion fueled the sales of the printed book, so too the freely available playground sandbox at SUNsite spurs the sales of the sponsors' wares. It is kinetic advertising at its best, and it capitalizes on the fundamental shift in economics which fuels the new machine, the shift from the economy of scarcity, of buying and selling things, ideas incarnated as physical things, to the economics of abundance, where what is for sale isn't a thing at all, but the minds, the attention, of those paying attention to the ideas and information. Such an apparently "free" online environment makes for a welcome change, away from our common human penchant for owning and hoarding things with price tags on them. In the economy of abundance, the status of having shifts to the status of having access.

The notion of having access points to a fourth possible business model of publishing on the Net: subscription-based publishing. In the globally distributed multimedia hypertext environment—that's a mouthful, but how else do you say it?—an environment where the traffic increases in the hundreds of thousands of percent annually, and nothing is but what it not, a subscription seems like another logical approach. Think of the digital stream analogy—does one want to buy a piece of the stream in a bottle, or does one want to subscribe to the stream and with that monthly subscription fee get all the fish, the pollywogs, the flowing water in which to bathe—as well as the flotsam and the jetsam from the guys upstream.

But even the subscription model comes up wanting in the Mosaic environment. Mosaic is, at this point, a free multimedia "browser" on the World Wide Web of interconnected computers. Widely hailed as the "killer app" for online publishing, Mosaic enables the users to navigate around the computers of the world, accessing, picking up, customizing anything that can be digitized—for free. But even were there tollgates firmly in place on every server in the world, still, I think the traditional subscription model would at least need adaptation from what we think of today when we think of a subscription to, say, cable TV or "The New Yorker," because Mosaic epitomizes the three defining aspects of the online publishing environment which are not found together in other broadcast and print media: its distributed, interactive, and recorded nature.

A year ago, in the pre-Mosaic boom days, it seemed to the point to say that "Content is King," and to think that successful online publishing meant offering easy and commercially viable access to content. It only takes a short journey with Mosaic, which has a learning curve of under half an hour for the beginning user, to realize that content is everywhere, and more is available every day. Content alone fast becomes irrelevant in the absence of context. What good are a hundred novels online, if the Net, the means of access, is not exploited to create a context, a way of thinking about and reading these novels? Might we not learn from the above for-free experiences, and consider a publishing model where readers are allowed free access to those novels, in return for the readers allowing a publisher to record and study their thought paths, the links they make while reading, thinking, and studying online? One may not want to pay $5 for an online "contained" or finite, static, linear text of James Michener's Chesapeake, but one might pay considerably more if one could follow the electronically generated thought path resulting from a course taught by the author himself about factual fiction, a course where one could navigate the links students make in their critical thinking about the novel, navigate and link to related documents, graphics, videos, sounds, experiences, and the author himself—all in real time. How does one charge for such a contextual experience? What is in fact being published, and what is for sale? In the kinetic publishing environment, apparently the static text, the words, become subsidiary to their context as determined by each individual user.

The idea of publishers or other entities electronically tracking people's thought brings to mind George Orwell's 1984: "The telescreen received and transmitted simultaneously. Any sound Winston made, above the level of a very low whisper, would be picked up by it; moreover, so long as he remained within the field of vision which the metal plaque commanded, he could be seen as well as heard. There was of course no way of knowing whether you were being watched at any given moment. How often, or on what system, the Thought Police plugged in on any individual wire was guesswork. It was even conceivable that they watched everybody all the time. But at any rate they could plug in your wire whenever they wanted to. You had to live—did live, from habit that became instinct—in the assumption that every sound you made was overheard, and, except in darkness, every movement scrutinized..."

In the new field of kinetic publishing, the currency becomes thought itself, organized thought generated both individually and collectively, done so in a reciprocal environment. One can envision an environment then where, like the big corporations funding places like SUNsite, individuals might segment their own computers, their own servers, into public and private sites. Given this scenario, publishing loses its luster as an exclusive glamour industry, ceases to be an organized corporate activity and becomes, rather, a way of reciprocal interaction among minds, a community of thought where one pays for access to people and ideas in varying states of organization.

Online publishing is commercially successful today in the marketing sense, successful for those of us who still try to own and hoard, owning things as a bastion against mortality perhaps—such marketeers are successfully protecting their back end business by doling out carefully controlled portions in obvious marketing efforts: a chapter here, a blurb there—and then selling the printed book or the manufactured product. Publishing on the individual level, however, might be more spontaneous, more complete, a freer marketplace of ideas that will enable the testing of the concept that time and attention can indeed prove valuable currency—currency which may not be defined in dollars—online. Such an individual as a publisher might make a living on the Net, make his own Home Page, turn his "E" drive into a fast food joint or a used book shop along the Infobahn, into a public sandbox for people to link to and peruse, while maintaining a private segment to which real time access is licensed or sold, like having "This Space For Rent" (point to head).

Charging for thought, kinetic, real time thought, combined with recorded thought, what we used to call publications, might make money on the Internet. Again, as with the first Internet Companion example, this model is a hybrid, between what is living, real-time thought, and what is dead, that which is already recorded. We think by association, and associations are links. By thinking about something or someone, we give it value. The World Wide Web of computers, where traffic in 1993 increased 341,000%, is a hypertext environment allowing for the globalization of associative thought, the accessing and weaving together of chunks of information into customized sets. Anything that can be digitized can be linked to: texts, graphics, videos, sounds, experiences such as online museum exhibits and libraries. People, as well, can be linked to texts in real time via email. What is for sale in this hyperlife environment is the naming and pointing to resources, either live or dead, kinetic or static. If I were a net architect tasked with building an Ethernet and my boss wanted it done by tomorrow morning, I would pay dearly for the name of and online access to Bud Spurgeon, an Ethernet expert here at UT, and pointers to his online documents, and I would pay most of all for access to him in real time to help me solve my problem. This problem might be worth a thousand dollars tonight, and nothing tomorrow, if I lose my job because I couldn't get the network up and running. If the online publisher offering this access to Bud, access which travels right up the chain of the hierarchy of intimacy from email to phone and even face-to-face, that publisher would be capitalizing on the multimedia capabilities of the webbed environment.

We are talking about buying and selling people in real time. This gets me back to the topic at hand: slavery. But no longer are we simply talking about typesetting a janitor's manual in Haiti, of tying people to keyboards so they can make the machines spit out pages in a highly regulated format. We are talking about selling the digitized mind of a human being who chooses to sell access to his own real-time interactive original thought. It would be prudent to strike a note of caution, a note given sonority by Orwell's words quoted earlier, and in light of the marketing lessons repeatedly learned from the commercial publishing models mentioned earlier: per copy, subscription, site license, and, importantly, sponsored publishing. It might prove worthwhile to identify two obvious routes we can follow at this juncture: the new field of transcendental computing, or the digitized slave route.

In a Webbed hyperlinked universe where pointing and naming is the way we know and make ourselves known, the latter route seems a distinct possibility, given the path blazed by our marketing and advertising folks on Madison Avenue. Think of athletes who function as flesh masked in a blaze of corporate insignias, logos and endorsements. In the online recorded environment, words matter: If I were really a savvy businessperson, I could charge companies for the spontaneous words I utter in support of their efforts. Bunyip programmers are brilliant. Texas Internet Consulting corners the market on Net demographics. WAIS defines the standard for searching information on the Net. The Internet functions thanks to Cisco routers. Aldea Communications. Cyberspace Development Corporation. American Airlines. NEARNET. EUNET. Addison-Wesley. Milliman & Robertson. M & Q Plastics Company. Patterson Public Schools. It would be fair business practice for me to charge entities for my verbal endorsements because I have an audience, whether in real-time reality or virtuality. So my value as a pointer to others depends on the current value of my state of thought, and this whole models splits into two options: either the corporate slave model where people and their online incarnations are bought and sold, or to the new field of transcendental computing where creative Muse is supported. The second, and less commercially viable model, is the transcendental computing model, where the individual publisher is egoless in the distributed environment and functions independently of supporters to think objectively and deliberately, rather than thinking for the purpose of advancing either himself or his sponsor. Commercializing this model would be tantamount to marrying the transcendental eyeball with the OCR scanner, hardly an appealing prospect. It seems realistic to suppose that we are headed in the sponsorship direction, supplemented perhaps, ideally, by transcendental computing on the academic side.

If we look around us now, we can see lots of other people making money from the Internet. People selling hardware, connectivity, and software, they are making money. They are the means-makers. But once acceptable means are in place for, say, W3, what then? Will we see trading in the form of link brokers and URL futures? Will humans be bought and sold for their minds rather than for their ability to wash dishes or pick cotton? The Internet today is a multimedia environment, and it might be useful to consider the record industry for a final thought about where all this is going, for the conundrum before us involves assigning value to both recorded and live information. Recorded thought, ideas, or music, is in a sense dead. It is live when it is reciprocal, as a concert is reciprocal, or as, in a way, karaoke is reciprocal. As soon as the Rock band The Doors recorded "Break on Through," it became posterity, static, a commodity to be bought and sold, a commodity which increased in value after Jim Morrison himself was dead at a young age. In the New Machine, the recording of "Break on Through To The Other Side" might be available for free, while access to Morrison would cost dearly, and access to karaoke interaction with the Doors would cost as well. These are the living, interactive links I am referring to, the links that bind us to our new online environment and enrich us, rather than the linksthat fetter us in servitude to the Great Records machine we are in the process of creating.


Copyright 1994 by Laura Fillmore; written permission required to reprint.laura@obs-us.com

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