From Kristine Kathryn Rusch:
I have known for decades that collusive behavior exists in publishing, although I have not personally been involved in any “at the highest level.” I’ve seen it at lower levels, from editors warning each other away from writers because the writers are litigious or business minded or just terrible people to work with, from publishers discussing troublemakers with each other, and other things. Whether or not this rises to the level of collusion under the legal definition, I have no idea (although I have my doubts), but it exists and has for a long time. I suspect such behavior at the higher levels for everything from the development of the returns system in the 1930s to the high discounts for chain bookstores in the 1990s, but such things are old, stale, unimportant, and probably unprovable.
What matters for today’s blog is this phrase: when you see…
Behavior like that which [US Justice Department antitrust official] Pozen referenced was invisible in the past. Traditional publishers had no great competition, so no one had a vested interest in bringing bad behavior to light.
. . . .
Traditional publishing has been Big Business for decades, bringing in billions (yes, with a “b”) of dollars in this country alone. But traditional publishing has presented the persona of a mid-19th century shopkeeper, there for the good of the field. All those articles you see about defending quality and about the importance of publishers toward “literature” come from this projection that traditional publishers’ spokespeople put out into the world.
But traditional publishers haven’t cared about literature in more than 130 years, if they ever did. Sure, they wanted to keep the difference between high-brow and low-brow writings alive in the late 19th century because they wanted to have different price points for their products. A high-brow product (literature) came out in expensive hardcover, sold only to those with money. The low-brow product (that nameless stuff the unwashed read) came out in broadsheets and daily newspapers and in dime-novels, cheap reads for cheap folk.
As is so often the case, the myth never meets the reality. Since I’m quoting favorite movies tonight, let me quote yet one more—The Man Who Shot Liberty Valance: “When the legend becomes fact, print the legend.” Yep. And then people believe the legend as truth.
As they have with traditional publishing for years.
. . . .
Traditional publishing isn’t afraid of its readers or its writers. It still behaves like the Great and Powerful Oz, expecting us to fall to our knees. The thing is, most writers and many readers will continue to accept the myths.
. . . .
Random House, which is a corporation in and of itself, is owned by a multinational media corporation called Bertelsmann. Bertelsmann operates in 50 countries and had 15.3 billion dollars in revenue in 2011. Nearly 80% of that revenue comes from Europe. It made only 14.3% of that revenue in the United States.
In other words, Bertelsmann is huge. Or as it says in modest tiny type on its website “Bertelsmann AG is the world’s most international media company.”
We writers never think that the CEO of a traditional publishing company like Random House has to answer to someone in an even larger organization. But they do. And in this case, the new chairman and CEO of Bertelsmann AG, Thomas Rabe, put Random on notice that changes would happen within the company or else.
In a statement released with the earnings report, Rabe said, “Our primary goal is to grow the company faster, and to make it more digital and international. We plan to achieve this with four strategic approaches: first, by further consolidating and strengthening our portfolio. Second, by accelerating the transformation to digital of our core businesses. Third, by establishing new growth platforms. And fourth, by expanding into new geographic growth regions. On this basis, we will reshape Bertelsmann over the next five to ten years.”
. . . .
[From Richard Alan Dickson] “When all those writers conceded all those e-book rights to NY, Bertelsmann noticed the profit margin. Boy, did they notice! … NY may have told them why they can’t have more rights…. It doesn’t matter. Bertelsmann isn’t listening.
“Bertelsmann is shocked by the money pouring in from the e-book ‘platform.’ They see all the years that the money was NOT pouring in. They have no confidence that NY isn’t missing many other opportunities on many other ‘platforms.’ There’s gold in them thar hills, and plenty of writers who’ve proven willing to sign it over. Expect contracts to get even more convoluted with rights grabs into more new areas.”
. . . .
Right now, most places in traditional publishing are like Random House: they need to clear out the old to make way for the new. And the way to do that is not to collude with a single company like Apple to control pricing and force consumers to behave in a certain way. The way to do that is to understand the digital marketplace, transform the company to take advantage of it, and to move forward with a new vision in a new way.
The writers who have said that traditional publishing will go away simply do not understand business on this vast scale. What we’re seeing now, in all of these examples, is traditional publishing struggling to not just stay alive but to thrive in the new marketplace.
Traditional publishing no longer has a monopoly, so its business practices must change to reflect that. Those companies that do make the change will become stronger and healthier businesses.
Some of that strength will come on the backs of writers. Note Rick’s mention of convoluted contracts and the desire to own more rights. We’re already seeing that.
But when you’re looking at business on this vast a scale, writers are merely cogs in a gigantic machine, just like employees are, just like certain companies owned by the parent company are. We are figures on a balance sheet, folks, and we need to understand that if we want to stay in business with traditional publishers.
Link to the rest of this must-read essay at Kristine Kathryn Rusch
Dean Wesley Smith has a blog post that discusses this topic at greater length.