Will books, as we know them, come to an end?

Yes, absolutely, within 25 years the digital revolution will bring about the end of paper books. But more importantly, ebooks and e-publishing will mean the end of "the writer" as a profession. Ebooks, in the future, will be written by first-timers, by teams, by speciality subject enthusiasts and by those who were already established in the era of the paper book. The digital revolution will not emancipate writers or open up a new era of creativity, it will mean that writers offer up their work for next to nothing or for free. Writing, as a profession, will cease to exist.

Generation Y and the End of Paper

First of all I'd like to clear up the question: "The end of Books?" This is misleading as it seems purely technical – a question of the paper mill versus the hard drive. Of course the paper book will survive, you may say; it will reinvent itself as it did before. Haven't future projections been wrong in the past? Didn't they say Penguin paperbacks would destroy the print industry in 1939? That the printing press would overthrow Catholicism after 1440? That home videos would destroy cinema?

On the paper front, depending on whom you listen to, statistics vary wildy. Barnes and Noble claims it now sells three times as many digital books as all formats of physical books combined. Amazon claims it has crossed the tipping point and sells 242 ebooks for every 100 hardbacks, while Richard Sarnoff, CEO of Bertelsmann, admits that the future of the paper book is tied to the consumption habits of a generation: the baby boomers. Generation Y-ers (the children of the boomers) already consume 78% of their news digitally, for free, and books will follow suit. Interpreting Sarnoff's calculations, the paper book has a generation left.

But let's leave the survival of the paper book alone, and ask the more important question: Will writers be able to make a living and continue writing in the digital era? And let's also leave alone the question: why should authors live by their work? Let's abandon the romantic myth that writers must survive in the garret, and look at the facts. Most notable writers in the history of books were paid a living wage: they include Dostoevksy, Dickens and Shakespeare. In the last 50 years the system of publishers' advances has supported writers such as Ian McEwan, Angela Carter, JM Coetzee, Joan Didion, Milan Kundera, Don DeLillo, Salman Rushdie, Norman Mailer, Philp Roth, Anita Shreve, Graham Greene, Muriel Spark and John Fowles. Authors do not live on royalties alone. To ask whether International Man Booker prizewinner Philip Roth could have written 24 novels and the award-winning American trilogy without advances is like asking if Michelangelo could have painted the Sistine Chapel without the patronage of Pope Julius II. The economic framework that supports artists is as important as the art itself; if you remove one from the other then things fall apart.

And this is what is happening now.

The Retreat of Advances

With the era of digital publishing and digital distribution, the age of author advances is coming to an end. Without advances from publishers, authors depend upon future sales; they sink themselves into debt on the chance of a future hit. But as mainstream publishers struggle to compete with digital competitors, they are moving increasingly towards maximising short-term profits, betting on the already-established, and away from nurturing talent. The Bookseller claimed in 2009 that "Publishers are cutting author advances by as much as 80% in the UK". A popular catchphrase among agents, when discussing advances, meanwhile, is "10K is the new 50K". And as one literary editor recently put it: "The days of publishing an author, as opposed to publishing a book, seem to be over."

Publishers are focusing on the short term and are dropping midlist writers. Midlisters – neither bestsellers nor first-timers – were formerly the Research and Development department of publishers in the 20th century. It was within the midlist that future award-winners and bestsellers were hot-housed (Don Delillo, for example, was supported as a midlist author over the six underperforming books that preceded his Pulitzer-nominated, multi-award winning novel, Underworld.

In reaction to the removal of their living wage, many writers have decided to abandon the mainstream entirely: they've come to believe that publishers and their distribution systems are out of date; that too many middle-men (distributors, booksellers) have been living off their work. When authors either self e-publish or do deals through agents that to go straight to digital they embrace a philosophy of the digital market called the long tail.

Living in the Long Tail

Fig.1. A Long Tail Graph

The long tail is best described by business adviser, futurologist, guru and editor of Wired Magazine, Chris Anderson, in his book The Long Tail, or Why the Future of Business is Selling Less of More. An alternative tagline for the book is How Endless Choice is Creating Unlimited Demand. In simple terms, the long tail derives its name from graphs of sales against number of products. Whereas throughout the 20th century publishers concentrated on selling only a few heavily promoted "hits" or "bestsellers" in bulk, digital shopping has meant that what was originally a tail-off in sales, has now become increasingly profitable. Rather than selling, say, 13m copies of one Harry Potter book, a long tail provider can make the same profits by selling 13m different "obscure", "failed'" and "niche" books.

The long tail is Amazon and iTunes, Netflix, LoveFilm and eBay. It is, arguably, between 40% to 60% of the market, which was hidden and/or simply unavailable before the advent of online shopping.

As more consumers come online and chose to select content for themselves, the long tail gets longer. It also starts to demolish the old mainstream system of pre-selection, mass marketing and limited shelf space for "bestsellers". Amazon is a successful long-tail industry: it has forced publishers into selling their books at 60% discount and driven bookshops out of business. As the long tail grows, the mainstream mass market shrinks and becomes more conservative. The long tail has created this effect in all of the other industries that have gone digital.

Myths of the Long Tail

The recent enthusiasm for the long-tail market does, however, obscure a very basic economic fact: very few writers and independent publishers can survive in the long tail. Amazon can sell millions of books by obscure authors, while at the same time those authors, when they get their Amazon receipts, will see that they have sold only five books in a year. This is not an accident, but part of a trend endemic to the digital world. As Chris Anderson said in his book Free: Why $0.00 is the future of business: "Every industry that becomes Digital will eventually become free."

The reason why a living wage for writers is essential is that every industry that has become digital has seen a dramatic, and in many cases terminal, decrease in earnings for those who create "content". Writing has already begun its slide towards becoming something produced and consumed for free.

In the Free Revolution, why should anyone pay for content?

The following are facts about the financial downturn in the digital industries:

(1) Home videos

Originally the industry started off with consumers having to buy expensive equipment (VHS, LaserDisc etc) - which were superseded by DVD, then by online video streaming. Over and above the possibility of ripping pirate videos (according to a 2010 study by OVN, 69% of the population do this already), the price of watching a feature film or TV show is now trending towards zero. Sites like Netflix and LoveFilm have thousands of films available to watch entirely for free or with subscriber packages for a few pounds a month. In 2005 alone, the Motion Picture Association of America announced that the movie industry lost $6.1bn to piracy (75% higher than they expected).

(2) Music

A statistical study on Information is Beautiful shows that for a musician to earn the minimum wage in the US, per month, he or she would have to sell either 143 self-pressed CDs, 1,161 retail album CDs or 4,053,110 plays on Spotify (with a 0.0016 percent royalty. In an article in Society of Authors journal The Author, Martin Hodkinson states that "Hundreds of people have 'downed their tools' in the music business, through no choice of their own. The total income of the industry dropped by 25% between 1999 and 2008 and is expected to fall by 75% by 2013."

(3) Porn

According to the LA Times "Industry insiders estimate that since 2007, revenue for most adult production and distribution companies has declined from 30% to 50% and the number of new films made has fallen sharply". One top porn star, Savannah Stern, has cited that, on par with most of her colleagues, her earnings fell in 2010, from $150K a year to $50K. As Bill Asher, co-chairman of Vivid Entertainment, states: "We always said that once the internet took off, we'd be OK ... It never crossed our minds that we'd be competing with people who just give it away for free."

(4) Computer games

Japan's Computer Entertainment Suppliers Association claims that game piracy on handheld systems has cost the international videogame industry more than $41bn over the past half-decade.

(5) Newspapers

Across the board in March 2010, every national UK paper fell in circulation by between 6% and 27%. News International lost half of its value in Q1 of 2009. As newspapers lay off staff to cut costs, they confront the fact that newspaper readership is tied to an ageing demographic. A recent business story claimed that "printing the New York Times costs twice as much as sending every subscriber a new Kindle."

(6) Photography

Staff photographers at newspapers have been laid off over the last five years. Picture desks now use amateur online photo archives instead of commissioning new images and get pictures for a fraction of previous costs or entirely for free.

(7) Telecommunications

In the 1980s, the price of a call to India from the UK was £2 a minute. Now, with fibre-optic cable, it is 4p. With Skype it's absolutely free. As concerns handsets, generally, within two years of manufacture a phone's price tends towards zero. New packages give free phones in return for small monthly payments. This impacts all other digital industries as new smart phones lower their costs on the promise of access to a world of increasingly free digital content.

(8) The internet

Many of the largest growth industries in the last decade provide an entirely free service to the consumer: Google, Yahoo, YouTube. These have facilitated other sites made by consumers for consumers, for free: the blogosphere, open source, social networks, Wikipedia. All of these, to quote Anderson, are "produced by entirely free labour, consumed with no expectation of payment or monetary exchange". As he says, "'Free' is the gift of silicon valley to the world".

The Free revolution - So who's selling what to whom?

Before we go back to books, let's look at what all this means. For all its digital-friendly rhetoric and the co-option of "radical" jargon, surely the people at Google, Yahoo and YouTube aren't working for free. These companies are making a profit big enough to place them on the Fortune 500. So if the future of digital media is "free", where does the money come from?

While providers such as Yahoo and Google provide free content, at the same time, on every screen, they sell advertising space. The culture (books, films and music) that you find for free on the sites, is not the product, it has no monetary value. The real product Yahoo and Google are selling is something less tangible – it is you.

Your profile and that of millions of other consumers are being sold to advertisers. Your hits and clicks make them money.

These digital providers are not in any way concerned with or interested in content, or what used to be called "culture". To them culture is merely generic content; it is a free service that is provided in the selling of customers to advertisers. Ideally for service providers, the customers will even provide the culture themselves, for free. And this is what we do when we write blogs, or free ebooks or upload films of ourselves, at no cost.

Forecasts predict that within 10 to 15 years the largest "publishers" in the world will be Google, Amazon and Apple. In May 2010, Google announced plans to compete with Amazon, Barnes and Noble and Apple by launching its own online ebook store, which requires no e-reader and no fees. In August of the same year, Google annonunced its intention to scan all known books (130m) by the end of the decade. All of which would be available for free or for a minuscule one-off payment to authors of around $60 per book. Google is still caught up in legal wrangles, but this change is coming.

Piracy and competitive discounting – the race to the bottom

Back again to books. In all of the cases above, digital industries have been pushed towards zero price by two factors: (1) mass piracy and (2) the consumer demand for massive discounts. Book piracy has only just begun but it is now very simple to break through the DRM protection systems set up by publishers and to illegally download books in less than 60 seconds. The shift to piracy moves imperceptibly in the mind of the consumer, as Adrian Hon, founder of a leading games company outlined in the Telegraph.

It starts in this way: consumers download electronic copies of books that they already own for convenience sake (an activity that the New York times claims is ethical). This introduces people to ebook torrents. Then they start downloading classics: "Tolkien and CS Lewis are both dead, so why should I feel bad about pirating their books?" And since they have enough memory on their e-reader to store 3,500 books and the e-reader came with four preloaded free classics to start with, what difference will it make? Then, says Hon, "you'll have people downloading ebooks not available in their country yet. Then it'll be people downloading entire collections, just because it's quicker. Then they'll start wondering why they should buy any ebooks at all, when they cost so much."

In every digital industry the attempt to combat piracy has led to a massive reduction in cover price: the slippery slope towards free digital content.

Will digital books be any different from jpegs, quicktimes and mp3s? What makes them so, other than a desire by the currently dominant generation to preserve what they have known - a trend that will be outgrown when that generation passes?

The Long Term against the Long Tail

Is there an alternative to this catastrophe? If so, it cannot lie where Chris Anderson recommends, in having what he terms "freemium viewing" – locked or extra content for subscribers (a system devised for newspapers and computer games). What would this mean for the book? An extra chapter? An author's commentary? The final sentence if you pay more?

An alternative could lie in authors writing apps and blogs, on both of which, the author would get paid per 10,000 or so hits, by advertisers. Or it could lie in crowd funding – with innovations such as publishing house 'Unbound'. You have enough readers, they pay a dollar or a pound, and en masse they see you through the duration required to write the book, that you then give then for free.

The trend of consumers demanding ever more for ever less is not restricted to culture. It's a phenomenon well documented by writers such as Zygmunt Bauman and Naomi Klein: the "race to the bottom", in which competing corporations cut their prices in the bid to put all other competitors out of business.

Can books be written in sweatshops?

Well, books might not be manufactured in China and Korea but the long tail is the sweatshop of the future, and it will contain millions of would-be-writers who will labour under the delusion that they can be successful in the way writers were before, in the age of the mainstream and the paper book.

There is no simple solution. All that is clear is that for authors and publishers to abandon each other only accelerates the race towards free content.

Authors must respect and demand the work of good editors and support the publishing industry, precisely by resisting the temptation to "go it alone" in the long tail. In return, publishing houses must take the risk on the long term; supporting writers over years and books, it is only then that books of the standard we have seen in the last half-century can continue to come into being.

This is something that publishers are well aware of, but still seem powerless to do anything about. As Sarnoff CEO of Bertelsmann has said, "… as things switch to digital there is the danger that a lot of value can leak out of the industry, and that our authors, our artists won't have enough revenues there to pay for their best work and that we won't have enough revenue to pay for our own infrastructure."

If the connection between publishers and writers splits completely, if they fail to support and defend each other, then both will separately be subjected to the markets' demand for totally free content, and both shall have very short lives in the long tail. The writer will become an entrepreneur with a short shelf life, in a world without publishers or even shelves.

But ultimately, any strategy conceived now is just playing for time as the slide towards a totally free digital culture accelerates. How long have we got? A generation. After that, writers, like musicians, filmmakers, critics, porn stars, journalists and photographers, will have to find other ways of making a living in a short-term world that will not pay them for their labour.

The only solution ultimately is a political one. As we grow increasingly disillusioned with quick-fix consumerism, we may want to consider an option which exists in many non-digital industries: quite simply, demanding that writers get paid a living wage for their work. Do we respect the art and craft of writing enough to make such demands? If we do not, we will have returned to the garret, only this time, the writer will not be alone in his or her cold little room, and will be writing to and for a computer screen, trying to get hits on their site that will draw the attention of the new culture lords – the service providers and the advertisers.

I ask you to take the long view, to look a generation beyond where we are now, and to express concern for the future of the book. I ask you to vote that the end of "the book" as written by professional writers, is imminent; and not to be placated with short-term projections and enthusiasms intended to reduce fear in a confused market. I ask you to leave this place troubled, and to ask yourself and as many others as you can, what you can do if you truly value the work of the people formerly known as writers.