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Another Nail in the Coffin – Part 2

Last week, I wrote about how publishers and agents were crying “FOUL” over news that Amazon would be publishing some 120 over the last few months and yet few were talking about how Perseus was going to “help” authors self-publish.  My basic points regarding these two pieces of news were that publishers wouldn’t have to worry about authors leaving them IF the publishers and agents were really doing the job they said they were.  I honestly thought that would be the end of the post and I’d move on to something different this week — of course, it is never that easy.  So, to continue from where I left off, sort of. . . .

Publishers were busy puffing out their chests and declaring that e-books were reaching a saturation point in the market when July’s sales figures were released.  After all, hard cover sales had increased 33%.  At the time those figures were made public, a number of people — yours truly included — wondered if that was an anomaly caused by the sell-off of stock held by Borders.  Well, confirmation, at least partial confirmation, of our suspicions came this week when the Association of American Publishers announced the sales figures through August.

From Publisher’s Weekly:  For the first eight months of 2011, e-book sales increased 144.4%, to $649.2 million, from 18 reporting publishers to the AAP monthly statistics program. Sales were off by double digits in all trade print segments in the January-August period, although sales in the religion category were up 9% in the year to date at the 22 reporting houses.

GalleyCat has the complete breakdown:

With regard to the August figures, for the month, hard cover sales declined 11% and adult paperback sales declined close to 6%.  According to the AAP (again from Galleycat), “Strong, continuing revenue gains from digital formats in the Trade market – both e-books and downloaded audiobooks – helped offset declines in revenue from physical formats, resulting in only nominal, near-identical decreases vs the previous year’s and YTD’s figures

So, for the first eight months of the year, e-book sales are up 144.4%.  It is this increase that kept the figures from looking truly abysmal.  The only other areas to post gains are religious books and downloaded audio books.  If you’ve been tracking the figures for the last year plus, this follows the trend.  Even I, who run far and fast in the opposite direction when someone tells me I need to do math, can see that the figures for July when hard covers posted a double digit increase were not the start of a new trend.  Instead, it was an artificial increase in sales caused by the discounting of merchandise during the Borders bankruptcy sale off.

And yet, even with the figures staring them in the face, legacy publishers refuse to admit that e-books are not only a viable part of the marketplace, but all that is keeping some of them afloat right now.  Just think how many more units they might be able to sell if they simply lowered the prices of their new releases below hard cover prices.  Oh, I know.  They tell you they have to price e-books at near hard cover prices in order to make a profit.  Bull!  Remove DRM, admit that once they have the final text, all they really have to pay for above cost of setting the book for print is the conversion price and then the cost of having someone do a check of the conversion files to make sure nothing got screwed up.  Lower the price to even $9.99 — a price point most e-book buyers will pay for a new “best seller” — and they will sell more copies and that, eventually, will lead to more profit.  Not to mention more good will for the publisher which will also lead to more sales.  More sales equal more money.  Makes sense to me.  But then, I’ve never been a bean counter, much less one in a rarified office in NYC.

Going back to the cries of anguish last week caused by Amazon, there was a deafening silence this week when Kobo announced it would now start publishing books.  For those of you not familiar with Kobo, it’s an online presence, not unlike that for Amazon or B&N when it comes to e-books.  When Borders still existed, Kobo was associated with it for e-books.  This isn’t a self-publishing venture for authors.  No, according to the article, Kobo will do editing, design, marketing and the selling of the books.  Sound familiar?  So, why no hue and outcry by the publishers?  Simply put, they aren’t scared of Kobo because its name isn’t Amazon.  It doesn’t matter that Kobo is offering the same service as Amazon.  All that matters is that Kobo isn’t the 800 pound gorilla.  The publishers have forgotten about the tortoise moving slowly and surely toward the goal.

So, does all this mean the end of publishing as we know it?  Eventually.  Even if legacy publishers were to suddenly understand the importance of e-books and reasonable pricing, the snowball has already started rolling down the mountainside.  Publishers — and agents and authors — are going to have to adapt to the changing expectations and demands of the reading public.  Just as publishers had to change as technology and society changed in the early to mid 1900’s, they are going to have to do so again.  If not, the publishers will perish.  But, in their places will be new publishers, those flexible enough to adapt to the changes.  In other words, there will always been books and short stories.  It’s just the format and pricing that may change.

Cross-posted to the Naked Truth as well as here.

What I Saw At The Revolution

As many of you know I went to the Oregon Coast to take a workshop with Dean Wesley Smith and Scott William Carter with Special Guest Appearance by Kris Rusch ;), on the whats and hows of epublishing, and – more importantly – whys.

I’ve taken other workshops with Kris and Dean in the past, and this one was both similar to those (starting with the very first master class which I attended) and completely different.

It was similar in that Kris and Dean give value for their workshops.  I’ve said this before.  They don’t have the lengthy breakfasts, the laid back chats…  No, every minute of the workshop – and often of the working lunches, when they have to let us eat before we faint (grin) – is dedicated to learning.  This makes it very exhausting even if you already know some of the material they’re teaching and, probably, near-lethal if you’re learning and thinking it all for the first time.

This is in no way a complaint.  If you’re going across the country for a workshop; if you’re a writer who is perpetually semi-broke; if you have a family you’re leaving on their own while going, you WANT the workshop to be intensive.  The last thing you need is to spend time out there doing nothing, while you know you could be working at home.

It was very different from past workshops, though, in that Dean was sharing things he learned just recently and often saying “this might change” or “this might be different for you.”

It was similar because, as with many of their workshops, a lot of what they said I have to struggle to accept – even when I logically should know it’s true.

It was different because the market portion of it was more tentative.  See, the market portion used to be on how to submit to editors.  It now is on how to submit to… readers.  Editors were a small group, living in NYC, attending the same parties, talking about the same topics, practically inhabiting each other’s pockets.  You could psyche their preoccupations and their hot buttons one way or another.  Apparently my subconscious has a long – LONG – list of “do not write this, no one will buy it” topics, and by “no one” I mean NYC editors.  OTOH, ebooks are marketed to a for all intents and purposes infinite market, which does not live in each other’s pockets.  Who knows what will find a niche audience of, say, a million people or so, and take off like a rocket?

It was similar because the emphasis was on writing, telling good stories, writing fast and well.  Okay, it wasn’t a writing workshop, but 99% of the attendees were traditionally published authors, and Dean kept emphasizing if you stop writing to do tech, you will fail.  The writing is what drives all the rest, and the tech is designed to give you freedom to create what you want to, beyond the limits of the traditional market.

The funny thing is that they didn’t really tell me anything I didn’t know.  I mean, at the back of my mind, I’d already arrived to similar conclusions.  I know this, because as they presented their conclusions, the reaction wasn’t (usually.  There’s one exception) Oh, Heavens.  I Never Thought Of That!  It was more like Oh, Well, DUH.  However, they were things I knew but would never have put together, if that makes sense.  As is, some of them, though I know intellectually, will take me months to adjust my mind to.

So, without further ado, let me give you some things I learned at the Think Like A Publisher workshop.

1- The market is infinite for all practical purposes.
Qualifications – of course it isn’t infinite.  There is a limited number of readers in the world.  Also, for now ebooks only reach into about four countries (easily and from the US, that is) and are way behind the US in most of those countries.  BUT in terms of “there will be enough people in that group that like any given thing that you could not just make a living but become a millionaire” the market is infinite.

1.a – This is an answer to the “tsunami of sh*t” complaint about how indies will ruin publishing.  You see, with that vast a market, what you have to remember is that there are a lot of people in the group you can now access who LIKE sh*t.  (This reminds me of the quip in Pratchett’s Monstrous Regiment “I just said it was horse p*ss.  I didn’t say I didn’t like it.)

1.b. – by the law of statistics this creates a curious “flattening” of the market.  Yeah, some things will sell better than others, but not that insanely better.  Look, the thing about our “names” in publishing (by which I mean bestsellers.  For the benefit of the audience, no, I’m not a name.  I’m barely a name in my OWN household.) is that lately there have been so many of them they’ve become “niche names.”  Unless you’re talking of J. K. Rowling – and even then you might have to add “Harry Potter, you know?” – chances are any of your non-writing friends will give you a blank stare at the mention of any bestseller.  Heck, I’ve had people in the business give me a blank stare at t he mention of a bestseller in UF.  Part of what causes this is that there are so many books/authors out.  Now multiply that by a bazillion (yes, this is an exact figure!  Shut up.)  And throw in every writer who ever lived and whose work can be scanned in.  Compared to Rowling, I have a name in my own household.  Compared to, oh, Kipling, I’m “who is she?” even to my own kids.  But the thing is this is NOT a problem.  Why not? Because some night people might not want to read Potter or poems, and they might type in keywords that kick up my books – like Shifter.  Or Dark Ships.  And given an almost infinite market, there will always be a baseline of those enough to keep me in roof and meals and possibly even assistant.  Also, with luck and a little care on my part, they’ll come back because I give value.  And I’ll have an expanding audience that does not rely on gimmicks or publisher push.

2 – The supply is infinite for all practical purposes.  There’s every author who ever lived out there.  If you read a new author every day of your life, you’d never run out.  It’s reader’s paradise.  It’s also writer’s paradise.

2.a This creates the next answer to the tsunami of fecal matter thing – in the enormous pool of the market, no matter how much er… waste splashes in, it will be negligible.  Think of the difference between peeing in your bathtub and peeing in the ocean.  (This is not, btw, an encouragement to put out randomly generated stories, based on an algorithm that scrambles sentences and creates the equivalent of Atlanta Nights.  Peeing in the ocean is still bad manners and if people pay you for it, they’ll get upset.  At you, personally.)

2.b.  The doors have been thrown wide open.  You want to write about people who have a fetish for hydrogen peroxide?  There are probably enough of them out there to make you a very rich writer.

3- Chinese Math applies.  Sort of.
(Chinese Math states that if you sell something for a dollar to every Chinese person, you’ll still be rich beyond the dreams of avarice.)

3. a But Sarah, you say, you are unlikely to produce something that EVERYONE out there wants to read. [Stop.  Just stop.  You’re giving me the shakes.  I’m visualizing billions of dollars flowing in.  (Moans.  Clears throat.  Sits up straighter.)]  Right.  So, I am.  But I don’t need to.  Even if any given piece of my work appeals to say 1000 people on any given month, I’m making a living.  And if it appeals to 10000 people, I’ll be making a GOOD living.

3.b. It has a multiplier effect.  If one piece of my writing appeals to a thousand people a month (these numbers seem to be unrealistic, btw, unless you’re very good or very lucky.  Or both – hi Ric!  If a story is doing well it will sell maybe a few hundred a month) then why don’t I have ten pieces out?  Or twenty?  What am I, stupid?  At the level of criminal stupidity?  Agatha Christie used to say she sat down and said “I think I’ll write myself a house.”  Midlisters, in a way can now do that.

3.c. It REALLY has a multiplier effect, because readers are creatures of habit.  What in heck do I mean by that?  Well, once we find a writer we like we will keep reading him/her.  Sudden, for us, that author has stood up and is beyond the random selection thing I talked about.  Oh, it’s unlikely he/she will be an author “everyone is talking about” – look at that near infinite supply thing – BUT he/she will have a growing share of the market and enough to be very rich indeed.  So, have books out there under the same name/in the same style, etc, enough to make a living.

4. Book launches are irrelevant.  So is most other publicity.

4.a. All they do is speed up the process of finding an audience.  Okay, so perhaps not totally irrelevant, particularly very early on, when you want to start seeing some money for a proof of concept on your indie efforts.  But ultimately, say two years in the future, you’d be in the same place.  This means, if you can wait, you don’t need to publicize. Your book is not going to age or fall off the shelf.

4. b. Yes, this means that books don’t “age” – that relates to shelf space, etc.  If anything, since the best publicity in the new market is word of mouth, older books have an advantage.  Stop thinking of your books as bananas that will spot and spoil.  Now.

4.c. If you’re the sort of writer who wants to sit down and write furiously, your time has arrived.  (Thank G-d almighty, free at last.)  Oh, okay, you might need to learn some basic coding, but I’m now where I can see how to do it, sort of.  And if I can do it, ANYONE can do it.  Including people who’ve never seen a computer before and for whom chipped flint is the height of technological innovation.  (Yes, that’s how techy I am.)

4.d. There is no such thing as a “big book.”  Oh, sure, some of your work will sell better than other work.  But the difference won’t be enough for you to think in “big book” terms.  What I mean is for most of us, the editors have got in the back of our head and made us think things like “Oh, this next book is going to be huge.”  Now you don’t need to let that happen.  Just make each book the best it can be, and enjoy the process.

Now, for the one thing that is still hard for me to accept: It is still very early days on this.  Dean said it over and over again.  And I couldn’t believe it.  I mean, intellectually I know it’s true.  The very cumbersomeness of the software proves it.  You have to spit and duct tape things.  When it becomes more main stream, it will become easier, and eventually there will be a push-button solution.

But that’s INTELLECTUALLY.  Emotionally, it seems like everyone got there before me.  I have to tell myself this is not true and to calm down.

Anyway – these are the general impressions from the workshop.  Of course I can’t tell you everything they said over three days.  Even if I could, I’d miss little points, which would mean something for you that they don’t mean for me.  This is all filtered through my mind, of course, and I might have drawn conclusions the presenters never intended.  However to me, it is what I’ve seen.

I went to the revolution and took some snap shots.  And now, if you’ll excuse me, I’m going to write me a house.

Really?

by Dave Freer

“Come gather round people wherever you roam And admit that the waters around you have grown…”
Bob Dylan, The times they are a-changing.

And I am painfully aware that the waters out there are very full of ‘sharks’, some of which do good cryptozoological imitations of literary agencies, publishers etc. All suddenly very keen to ‘help’ you self-publish…

I was going to quote Amanda’s NYT article of yesterday at you, but she beat me to it.

However I will riposte with this one . Please note just where it comes from.

I’m going to deconstruct a little of Brian DeFiore’s rage…

” Publishing folk remember that over a year ago Amazon punitively stopped selling all books, print or electronic, from Macmillian Publishing when Macmillian was the first to change its selling terms to stop Amazon from pricing e-books below cost. Amazon was choosing to lose $2-5 per copy on the most popular books it sold, which gave it a virtual monopoly on e-book sales. No other book retailer could have afforded to lose so much money on e-books, so Amazon was on its way to becoming the only player in the game. Until Macmillian did a little David vs. Goliath act of its own—and Amazon blinked.”

Well, let’s put the record straight here. 1)Macmillian were on the canvas and ready to cave… when their authors (and their author’s fellow author-friends) rode to the rescue. And Apple.  The authors and their call to readers, not Macmillian, forced Amazon to blink. And the threat of Apple in the wings making deals with the publishers (not the authors) to cut Amazon out allowed the agency system in. So: no the publishers did not David Goliath. They left that to the spear carriers/meat-heads/cannon-fodder. Macmillian wasn’t rescued by its own courage, skill or acumen. It was rescued by a consumer backlash against AUTHORS being delisted. Amazon could have penalised Macmillian in any other way they liked and won, but it chose to do it by delisting authors, which was a mistake. The big 5 publishers then rode into the breach, slapping each other on the back… counting their profits and celebrating their power. Then the publishers thanked the authors for their rescue by taking 70% of the gross… increasing their take by 25%… and giving their rescuers an offer of a 4.8% increase.  Doubt this version? Well, consider then the Amazon counterattack. They made no attempt to subvert or browbeat the publishers. Instead they subverted the force that laid them low: the authors.  First they GAVE authors – for free, gratis, for nothing the bookscan sales data that publishers had actively prevented authors or author-groups from even being allowed to buy, let alone given. And then they offered them a chance to cut out the middlemen, offering 70% of gross as opposed 15% of gross.  Now, to be sure, Amazon isn’t doing this for love of the common author. Or for the benefit of readers… but then, neither was the publishing industry. The trick is going to be keeping it worth Amazon’s while to treat authors and readers as well as possible, for their own benefit. Actually there is a balance, it works, it’s just that the publishing industry became an oligopoly where their interests and the interests of most authors and readers diverged. And as an oligopoly they could push it their way for a while… it damaged the customer base a lot,

2) “No other book retailer could have afforded to lose so much money on e-books”.  Really? The big players in e-ware – Apple and Google, both now entering the fray (as are many others) can match and raise Amazon… if they choose to. The difference is Amazon has shown them that they don’t have to do so with PUBLISHERS, but writers.

“There is enormous value to writers—and to readers—in the professional job that publishers do: the selection, editorial development, packaging, distribution, publicity and marketing of books. Those are the things that turn manuscripts into the prize winners and best-sellers that we all hear about and want to read.”

Welllll…. let’s start with saying that yes, there is enormous value in these things. But really, Brian, the question is: do publishers actually do all of them for their authors?  And the answer is: no. For a start, they outsourced selection to agents, who charge their authors 5% extra for this (agency fees went from 10% to 15% when publishers stopped reading slush).  So: not only do publishers not do it, but the producers pay for it. Is there really any reason why authors shouldn’t still just pay 5% (a realistic fee on 70% of gross, still more than 15% of 15% of gross) for the same service? “Ah, but they select the best from the agents…”  Really? That explains the many perennial best-sellers who got rejected by house after house before finding success. But anyway, they only get it right 25% of the time (1:4 authors makes past 3 books), and of that 25% only 25% survive to make a career. So: 95% wrong. Or there is something wrong with the rest of the list of things they do. And yes, there is. But ‘selection’ is not something that publishers can claim they alone  do, or that their small role in this is singly successful. Part of this is that they have not systematised selection, and this would require a new statistic, which, as far as I know no-one collects. And that is ‘sales per unit effort’ – because this would measure quality-to-readers.  ‘Sales numbers’ without a measure of effort is near meaningless.

So what of the rest of rest of DeFiore’s ‘you will lose’ list? Well, these
are the ‘effort’ per book which no-one bothers to quantify. Publishers have
finite resources, and the amount of effort allocated is not equal.  Better at some publishers than others, of course, but not equal. Now: for
the best value for the reader and author, these resources need to be
allocated in such a way that as many readers get as good a book as possible.
However the perceived best value for the publisher has been to maximize
profits by a ‘best-seller’ strategy, which means spreading cost allocation,
and narrowing effort so the fixed costs per best-seller unit are low as
possible. Which means, de facto, you empty the butter-boat on the chosen few
(which as we have established are not chosen effectively, and often have no
need of spend – publicity on say Gaiman for example) and chuck-and-chance
the rest – which have to be there, for their capacity to carry costs -with minimal
spend. There are varying degrees of this, some publishers far worse,  some
better.

As you can imagine this is not the same ‘best value’ as readers and authors
want. It’s not even in reality good value for publishers. BUT _ALL_
publishers to a greater or lesser degree still indulge in it. As they’re
doing this on guesses, which have repeatedly proved quite inaccurate (or
no-one would have vast print runs and loads of remainders) this is
intrinsically a form of gambling. And like the banks, it’s a kind of
gambling where they privatise their profits, and socialise (to their midlist
and new authors) their losses.

It’s a gamble in which there are very few real winners, and most of the
responsibility for the situation falls on publishing, not authors, agents or
retailers. For example: If you’re a butter-boat author and they ordered a
huge print run, and did the works, and there are large numbers of remainders
of that book to be bought, then they either did their selection wrong —
mis-guessing the popularity, or failed the marketing and distribution – also
their responsibility.  If the book sells out (especially if it does so
rapidly) and they fail to reprint – they also got it wrong. If they cheated to make this not happen or appear to happen, well that’s even worse.  In all cases,
at the expense not only of that author, but all the other authors in their
stable. The other new authors and midlisters, who got the chuck-and-chance,
and very likely the minimum advance, and very little editing or marketing
etc. are the worst victims.

Even if you were the lucky one, that means little, unless… you were lucky
AND they got it perfectly right, and there were no vast amounts of
remainders, and, in fact, you stay in print for a long, long time, meaning
that profit is real and would have been so even if the company had not
published another book in that month.  This seldom happens (most
‘best-sellers’ would be loss making under these circumstances, and are only
profitable because they are not the only book), or publishing would be
vastly more profitable. In the meanwhile the new authors who got
‘chuck-and-chance’… if they succeed (usually by their own effort and skill)
their publisher reaps the bulk of the benefit.

The actual number sales needed to make this a _real_ loss (ie where the
publisher would have been better off to not publish the book at all, as
opposed to a paper loss, where, due to the accounting used, the book loses
money, but the publisher is still better off publishing it than not
publishing) are fairly small. It’s really not much of a gamble for them,
especially when you work out that for that 6% royalty, and minimum advance,
the author had to have a day job, or a supporting partner, de facto
subsidizing her publisher’s gamble (by allowing them to pay far far below
the ‘cost’ of the work), and the ‘lucky’ author who was therefore able to
get all the resources.

So: I am afraid that claiming publishing has done all these wonderful things
that we’ll lose now, is rather like saying Ben Ali/Gadaffi/Mubarak’s
governments were wonderful,  because the state was generous to those their
rulers favored – some of whom were indeed deserving of favor. True for those
people, but not plausible in its entirety. And yes, some of these countries, and
some publishers, were worse than others. What follows in those countries,
and in publishing, may very easily be far worse still. But like the curate’s
egg, you can’t really say the industry is good… in parts.

After the Amazon bashing it’s quite… interesting to quote from DeFiore’s last paragraph: “and I’m eager to work with them [Amazon] and see what they can do.”

Really?
So: Having talked about serious things, I thought I’d make you laugh.  Firstly because it funny to see a monkey’s advice being followed (even by accident).

My favorite quotes have to be: “Publishers didn’t realize the frustration that authors have.”

Closely followed by

“While book publishers say that they openly share information with authors and agents”

and the weasel spin on this, assuming that authors don’t talk to each other, and think it was only them that had trouble getting this blood out of a stone: “,they will sometimes hesitate to do so if a book is not selling well.”

So you only beat us for our own good, because you love us? Really?

For their next trick quarterly payment, at the end of each quarter not years later, would be good to repair those bridges.

In other interesting times developments  .  I do wonder what they’ll offer to pay?
As Bob said: “You better start swimming or you’ll sink like a stone…” I guess.