Economics

How To Succeed as an Independent Bookseller

~ Cheryl

Today’s Guardian book blog has a post about how the London Review Bookshop has managed to succeed in a commercial environment that has seen other independent bookstores closing all over the place. It is written by someone involved in managing the store, and is pretty self-congratulatory in places, but this bit in particular rang true:

More than anything, the LRB shop’s defining achievement of the last five years, if I may modestly boast, has been the events programme. It has established the shop as a place where literary and political debate can flourish week after week, with American, European and Arabic writers and commentators, as well as British. We have held over 250 such evenings, and very labour-intensive they are too…

That (as Mr. Punch so famously said) is the way to do it.

The Economics of Retailing

~ Cheryl

There’s an interesting blog post over at The Economist today. The author is thinking aloud about the fact that music retailing has become increasingly flattened, with no one act achieving the same superstar status of people like The Beatles, David Bowie or Michael Jackson, whereas book retailing has gone in the opposite direction, with JK Rowling being only the latest superstar author and every publisher looking for the next big name.

I suspect that the reason for this may be quite simple: music is now predominantly sold online, whereas books are still predominantly sold in shops. The business model of the bookstore works best when you have a small number of titles to sell (especially as the most popular books are often sold through outlets other than specialist bookstores). As I said to David Barnett recently, the SF industry is well aware of independent publishers and is happy to promote them. However, it is still too hard for people to buy the books.

That Work Thing

~ Cheryl

I doubt that many of you will be interested in this, but I’ve just launched a major re-vamp of my energy economics business web site. It was, I’ll admit, entirely fortuitous that the re-launch happened on the same day that the UK had a major power outage, but sometimes luck is on your side.

Free Money

~ Cheryl ~ 4 Comments

Thanks to an LJ friend I have just signed up for a new Internet payments system. It is called Revolution and it is run by First Bank of South Dakota. As Danjite points out, doing financial business with a real bank is rather safer than doing it with PayPal. And from my point of view the fact that Revolution doesn’t charge you to receive money is very attractive indeed. Besides, as an economist, I thoroughly approve of competition.

Now of course it will take quite an effort to break PayPal’s stranglehold on the market, but Revolution has come up with a good gimmick to get started. They are offering everyone who opens an account $25. Yes, $25 for free. Unfortunately you have to have a US address and social security number to sign up, but nothing’s perfect. And if you go to their site via the button below, they pay me a $10 referral fee too. (Or you could click through to Danjite’s LJ and get him the $10.) Sadly the offer is only valid today, but it is only just gone lunch time on the west coast, so California folks have plenty of time, right?

Update: Someone who tried to sign up tells me that they demanded faxes of his driving license and a utility bill. It sounds like the site may be doing background checks on applicants. I figured I’d better warn you.


Refer A Friend using Revolution Money Exchange

Spikes and Tails

~ Cheryl ~ 7 Comments

Cory Doctorow has an interesting new article up on the Locus web site (which I probably should have read on paper but didn’t get an interrupt on). I was pleased to see a new rationale for not publishing reviews long before a book is available in the shops, but the thing that jumped out at me was this:

After all, the majority of links between blogs have been made to or from blogs with four or fewer inbound links in total — that means that the Internet has figured out a cost-effective means of helping audiences of three people discover the writers they should be reading.

That’s what I call a long tail. And the converse is the spike. I’m assuming that Cory got that data from Technorati. Those blogs would all have an authority of 4 or less, and a ranking somewhere in the millions. This blog has an authority of 36 and a ranking of around 272,000. SFAW is up to 73 and 124,000, while the Hugo Awards site manages a ranking of just under 100,000 with just 15 points more authority. Cory’s blog, Boing! Boing!, is currently ranked 5, and has an authority of 16,730. See what I mean by a spike?

This is, of course, just an example of a more general phenomenon. Only a few people get to play Premier League soccer, or star in a Hollywood blockbuster, or get to govern their nation. The trick, I guess, is to find one small area of personal endeavour in which you are in the spike, not in the tail.

Really Very Scary

~ Cheryl

This week’s Economist suggests that it is time to stop worrying about the price of oil and the credit crunch and start worrying about the price of food. Money shot:

Bob Zoellick, the president of the World Bank, reckons that food inflation could push at least 100m people into poverty, wiping out all the gains the poorest billion have made during almost a decade of economic growth.

Of course this won’t affect people in the West much, because food makes up a relatively small amount of their daily budget. When Zoellick is talking about the “poorest billion” he’s talking about people who live on $1 a day or less, and for whom food is a major expense. For them, life is getting very ugly.

Part of the cause, however, is that we in the West are encouraging our farmers to grow biofuels instead of food.

Men Are Dangerously Emotional

~ Cheryl ~ 3 Comments

In my real world job I take a keen interest in commodity trading and management of the associated risks. Indeed, I used to call some of the training courses I ran, “How not to lose your shirt to Enron.” The current problems with credit derivatives, and spectacular trading disasters such as the recent one at Société Générale, are the sort of thing I used to teach people to guard against. Mostly the work I did was mathematical and procedural, but I’ve always been interested in other explanations as to why people take silly risks. One of the explanations that is gaining ground is that men get overcome by their hormones. In a high stress situation a good dose of testosterone turns out to be quite useful, but the worse things get, the more testosterone men pump out, and the less rational they become.

You know, we hear an awful lot about how women are unsuitable for management or public office because they are “too emotional”, but actually men get emotional too, and sometimes their emotional reactions can be really, really dangerous.

(This is also a very good reason for discouraging men from having business meetings in lap dancing clubs. It clouds their judgment.)

Earth Hour Tomorrow (and some economics)

~ Cheryl

Yes, this is another one of those international “everyone do something” events. Tomorrow the World Wildlife Fund is asking everyone to turn off their lights (and hopefully most other energy-using appliances as well) for an hour. It will be 8:00pm in California when Earth Hour starts, so there will probably still be some daylight, but our apartment gets so little natural light that we’ll be in the dark anyway. I have no idea how they are planning to monitor the success of this, though electricity output numbers will be interesting, but there is an event for it on Facebook so you can register your intention to participate there. It currently has just short of 800,000 members, which is a drop in the ocean for the world population but not bad for Facebook. More details from the official web site.

Kevin has just commented that various people are blogging about what a sham the whole thing is because it won’t actually do much to reduce energy consumption. Here’s an example. Power station economics is, of course, one of my areas of expertise, so here’s my take.
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Free Is Popular

~ Cheryl ~ 9 Comments

There appears to have been a small firestorm in the blogosphere today. Both John Scalzi and Justine Larbalestier have put out posts trying to head off a flame war directed at Robin Hobb for this rather amusing post.

Oh Noes! Someone has said that it is more important to write novels than spend all of your time blogging!

But you know, I’m not really surprised. Blogging is instant daily entertainment. Novels you have to wait months for. And blogging is free. Novels you have to pay for. Is it any wonder that fans would prefer to have writers spend their time blogging than writing books? Why does the phrase “sense of entitlement” come to mind? Maybe what Robin needs to do is employ a ghost writer to blog for her.

Regulating Pharmaceuticals

~ Cheryl

Thanks to Peggy at the very wonderful Biology in Science Fiction blog I am reminded that I really out to be reading Ben Oldacre’s excellent Bad Science blog on a regular basis. And that led me on to this post, which is ostensibly about other things but also manages to illustrate one of the reasons why the NHS is such a disaster zone. Commercial companies milk money out of the system in various ways, and suppressing evidence of negative field trials is just one of them. But having a state-owned health service doesn’t necessarily stop that from happening. And if you do have a state-owned system one thing I can guarantee is that it too will suck money away, only it does it through an ever-expanding bureaucracy. Here’s Ben:
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Down the Drain

~ Cheryl

Various economics blogs I follow are buzzing with the news that talented professionals are leaving Britain in droves. Various theories have been put forward, but mainly they seem to agree with The Telegraph‘s original assertion that “high house prices and taxes and poor climate” are the prime culprits. The Economist notes, “Given the strength of the pound and the ongoing American housing market meltdown, a Briton can now purchase most of Phoenix for the price of a Chelsea broom closet.” Quite.
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Too Cheap to Meter

~ Cheryl

Over at Wired Chris Anderson (he of the “long tail”) talks about how the marginal cost of many commodities is falling to zero. This is very much in line with my comments about Western society becoming more and more like The Culture. (And take a bow, Sir Arthur, for getting it right about telephone costs many years ago.) Anderson also manages to spot that there are some things that will always be in short supply. He mentions time and reputation, but until such time as we build a ringworld he could probably add space. All interesting stuff.

Cooking Quickly

~ Cheryl ~ 3 Comments

Speed in the kitchen is obvious the in thing right now. Hot on the heels of Nigella Express comes Delia Smith’s how to cheat at cooking. As far as I know, she hasn’t really made it across the Atlantic, but Delia is a patron saint of British kitchens (and of Norwich City football club) and I suspect that almost every British woman of my generation has at least one of her books. Naturally I had to grab the new one.

My mother is disgusted at the idea that people might actually buy frozen puff pastry rather than making their own (which would, of course, be much cheaper, not to mention save oodles of carbon emissions). But, as Delia points out, much of the cookery we have grown up with was predicated on the expectation that you had servants to do it for you. Indeed, I have the distinct impression that the whole housewife scene back when my mother was young was designed to give other people the impression that you did have servants, or at least could live as well as you would if you did have them. I prefer to have a different sort of economic relationship with people who provide things for me, and I’m not averse to buying pre-prepared food.

Unfortunately product placement is the order of the day with modern cook books. Delia used to make a fortune for kitchen gadget manufacturers, but a quick browse through the new book suggests that these days she has done a deal with Marks & Spencer’s food department. That’s sure proof that she doesn’t sell in the US, because there is no point in putting out a cook book if your readers won’t be able to buy key ingredients (though I see it is on Amazon’s US site so maybe there’s a US version with different product placement). Fortunately I am a cunning cook, and can doubtless find replacements for most of the label items. But I won’t be back in my own kitchen for a few weeks yet, so you are going to have to wait for recipe reports.

Island Life

~ Cheryl ~ 1 Comment

Today’s Independent has a feature on life in The Isles of Scilly, a beautiful location off the south-west tip of Cornwall. But this is not a tourism story, it is pointing out just how hard it is for the islanders to earn a living. Island life is always hard, but at least if you live on an isolated rock off the north of Scotland you can be pretty sure that no one else will want to live there. Scilly, on the other hand, is a prime holiday home location, and consequently the price of housing is well beyond most of the locals. I’ve spent a lot of holidays on Scilly, and when you stay B&B you get to know the islanders fairly well, so none of this is a surprise to me. As I recall, Fraser Hicks, who is interviewed in the Independent, was one of the stars of the local gig racing teams in his youth.

I really don’t know what can be done. You can’t stop going there on holiday. That would only deprive the islanders of their major source of income. And if you encourage more people to go there then the place is likely to be bought up by people wanting to build hotels and holiday cottages. Sometimes you can’t fix things. But I do hope that one day I will be able to go back, and take Kevin with me so that he can see what a beautiful place it is too.

Oil Bonanza

~ Cheryl

Forget peak oil. Scientists have just discovered new reserves of liquid hydrocarbons that are 100 times as large as all known reserves on Earth put together. There’s just one problem. They are on Titan.

Did someone say something about the commercialization of space…

Brief Political Interlude

~ Cheryl

Not being a US citizen, I’m trying to stay out of the Presidential circus. However, I couldn’t resist linking to this post on The Economist’s blog which explains why the Republican candidates can’t be trusted to run the economy. Money shot for most of the world:

Last night’s Republican presidential debate was representative. Candidates displayed a number of disconcerting opinions on current economic topics. They expressed deep discomfort with foreign trade, repugnance at labour mobility, ignorance of the workings of monetary policy, and routine incoherence.

And special money shot for Kevin:

In terms of additional transportation system capacity per dollar spent, improved rail service would beat new highway lanes hands down.

I do, however, have a sneaking suspicion that what The Economist thinks is bad about the Republican candidates is going to cause some staunch Democrats to conclude that maybe Republicans aren’t so bad after all. Funny stuff, politics.