What Is the Value of a Free Ebook? Louis Shalako.

Louis Shalako.

Louis Shalako

Last year I gave away probably ten thousand ebooks. In my opinion, any business may promote itself, and any business might claim this expense as a legitimate business deduction.

Yet I have a funny feeling the ODSP (Ontario Disability Support Program) won’t see it that way at all.

I regularly sell ebooks for $0.99, $1.99, or $2.99. I’ve had them priced higher and sold a few books. The reason I don’t do this all the time is that volume suffers, and pretty quickly—and rankings are determined by an algorithm. Lower volume, lower the ranking.

Sales and net earnings drop. This is why I resist the urge, and the overwhelming advice to raise prices. The fact is, they don’t know anything and some of them are also full of shit.

That’s just my opinion after seven or eight years of study—such algorithms are proprietary and rightly so. Otherwise it would be too easy to game the algorithms for the average person, although I do a bit of it myself.

Let’s take a baseline figure of $0.99/ebook, rounded off to the dollar to keep the math simple. 

I gave away 10,000 ebooks, that’s a promotional expense for the calendar year 2016.

Ebooks have perceived and intrinsic value. That’s why people pay money for them and they take them in impressive numbers when they’re free.

It takes effort to produce them, I have to have the internet, a phone, a camera, I have to purchase stock photos for the covers. I have to put the hours in and my time is valuable if not exactly precious sometimes. There are all kinds of expenses involved. Some people spend a lot more than I do, but then, I do all the work around here.

That’s how I learned how—that’s how I trained myself.

That’s how I got all the wonderful skills, ladies and gentlemen.

And yet the ODSP will deny the validity, or more accurately, the monetary value, of an ebook—just as I kind of did myself, over the last seven or eight years. I say that because while I know I’ve given away over 120,000 ebooks since Sept. 2010, I’ve never reported that to the ODSP.

At an estimated royalty of $0.35/per book, mostly for the sake of completing our little math exercise, that would add up to $3,5000.00 CDN in promotion.

At one time, there were a lot of book commentators, traditionally published authors for the most part, blogging and bleating on the subject of ‘devaluing’ literature and especially ebooks by setting them at free or $0.99 or whatever. By the very nature of the product, this is possible. A free print book is much more expensive to produce, I will grant you that.

I saw it for what it was at the time. It was just polemic. They were just trying to destroy all the credibility and all the legitimacy of independent publishing. They were trying to destroy ebooks, ladies and gentlemen. Their own position was threatened by this revolutionary technology.

They had an interest in sapping the confidence not just of the writers, but also of the readers.

They wanted to control the situation. They wanted to keep us out of the market, didn’t they?

The government of the Province of Ontario, not very popular at the moment, has an interest in controlling costs too. They want to control the situation too.

The way they do that with the 750,000 disabled clients of the Ontario Disability Support Program is to make us think that we are stupid. That we can’t do the math. That we are somehow the enemy, and that for whatever imaginary reason, we must be punished.

We live in such fear of our benefits being cut and not being able to pay the rent that we tend to take the easy way out and go with the flow. We don’t ask too many questions, We tend to avoid our social worker rather than seeking them out.

We tend to keep our mouths shut and our heads down. We tend to keep moving.

Well.

Fuck that.

No more.

No more.

Nothing great was ever achieved without risk, without thought, effort, and ultimately, sacrifice.

Hopefully that’s not going to be me, but this government would do well to lower the rate of claw-back on earnings for ODSP clients who work or operate a business to $0.35/dollar rather than the current rate of fifty percent. They would do well to raise the allowable earnings limit, bearing in mind the poverty line in this province and across the country is estimated by this very government to be $22,000.00/year for a single adult.

Your pension pays a bare $13,000.00 or so and that is simply not good enough, ladies and gentlemen.

Not good enough.

This government would be doing the right thing by putting a line for ‘promotional expense’ on the reporting form for business and expenses. Not to do so would appear disingenuous, especially so now that this government has been duly notified of the moral repercussions.

I might have a few other ideas as well, as time goes along.

Naturally, these are suggestions rather than demands, which would presuppose a rather different power relationship than that which presently exists between the disabled and the government of this province.

Thank you for reading.

Oh, and don't be afraid to grab a free ebook once in a while. You might be surprised by how helpful that can be sometimes.

END

The ODSP and That Advance Against Royalties.

Dubkat, our mascot here at Long Cool One Books.

Louis Shalako

Okay, let’s say you’re a client of the ODSP and you’ve sold a book project to a traditional publisher.

Forget the intricate details of the actual book deal. Forget rights and licenses, signings and conventions where everyone pats you on the back and wants your autograph.

The key thing is that you’ll be getting an advance against future royalties.

Since we’re operating as a business under ODSP guidelines, we’re allowed to earn $100 a month without penalty against our benefit cheque. We’re also allowed an ‘automatic expense deduction’ of $100 a month. This is similar to, but not the same as the Work Related Benefit of $100 cash which the government would send to a client employed by somebody else. They could work two hours a week and still get that cash.

So. Let’s say you get an advance of $20,000. It's in the form of a cheque, and all in one lump sum. You’re allowed the first two hundred free and clear. After that, the ODSP wants their money. They figure their share is $9900. Sure seems simple enough. They’ll just stop your cheque for eight or nine months, until you’re paid up. 

They will still (arguably) maintain other benefits, such as dental, medical, drug and eyeglasses.

You would basically be living on ‘their half’ of the advance money until you are good with them again. Presumably, you’ve stuffed the rest into your business account, keeping everything nice and separate from your personal affairs. Your business account is now $2900 over the allowable limit. You’ll be asked to spend it down, take it as income, or invest back into the business. Investing back into the business is problematical for someone still living below the poverty line, and expenses must be incurred during the month the income arrived.

Since you’ve already been assessed an overpayment, theoretically, you should be able to take it out of the business account (maximum of $7000 allowable) and just put it in your personal account. The trouble there is, depending on the size of the advance, you also have a limit (six or seven grand) of how much you can have in the bank. Yet isn't this what you’re sort of supposed to be living on…it’s very difficult to explain the guidelines, but if you don’t understand them, you’re going to get stung.

Yeah, they’re real nice that way. The tax people recognize averaging of income, over a period of years, to make an assessment of what you owe, at the present time. 

The ODSP does not recognize this concept.

According to my worker, the ODSP is interested in ‘cheques cashed and deposits made’. 

They're not all that worried about you living below the poverty line.

It would be wise to have some kind of plan in place to deal with this kind of financial challenge. After all, you haven’t had any money at all for quite some time. The fairest thing I can think of is to hang onto as much of it as possible, for as long as possible, and to do with it what you want when you want it. This is not the way the ODSP generally works. It’s a publicly-funded disability pension, and they all have their restrictions, no matter what the jurisdiction. This one just happens to be Ontario.

In terms of being $2900 over the limit in the business account, (remember your $9900?) theoretically you could buy computer components, perhaps an ereader, perhaps a tablet or laptop might be appropriate to the business. You still have the challenge, where the ODSP will never tell you up front just exactly what might be acceptable and what might not—although their reporting form shows a box called ‘approved expenses’, it is more probably a case of them assessing things after they have happened. What if I bought a five hundred dollar phone? The trouble is, I don’t really need anything that expensive. And they might very well say it’s for personal use, and so it’s not accepted. In which case, I just pissed a bunch of money away, where I really didn’t have to—not exactly a sound business decision. And it would now be income, and then they want their fifty percent, sometimes double-dipping because you're already in over-payment mode. 

It is as complicated as it sounds. Most disabled people really don't have that much business experience, and we are all too easily burned.

And you have to get all this shit down in the month you received the income—the big advance we’re talking about.

Your ‘legitimate’ business expense might be denied. Yet any other businessman could have the same phone and write it off, or some portion of it off, against the business.

It gets worse when dealing with the ODSP, for your twenty thousand dollars (income)  is now above the basic personal exemption for income-tax purposes.

Basically, the challenge there is to show the ODSP, probably using current tax tables, exactly how much money you’re going to owe the tax people, (in Canada, the Canada Revenue Agency) at the end of the current fiscal year.

I have to be honest with you. Dealing with the ODSP, after the fact, and sort of telling them what happened after it happened is real bad policy. I don’t think it necessarily needs an accountant, just to figure out some simple numbers. You have to be able to explain it to the ODSP, in terms that they can understand and accept.

It would be very wise to go in, talk to the lady and ask a few questions, as specific as you can possibly make them. As thorough and full and complete as you can make them, and try and get any answers in writing, which generally-speaking they aren’t all that eager to do. If nothing else, it adds to their workload.

Therein lies the challenge. It’s a social challenge, it’s a challenge of personal communication. 

You have to find the nerve to go in there and ask all these questions.

Diplomacy is an extension of war by other means.

You can’t get all loud, uptight and sweaty with them, because it’s not going to do you one damned bit of good.

As it is presently constituted, the game doesn’t look very winnable.

Not very easily, anyways.

END