From Kristine Kathryn Rusch:
Not that there were actual news reports of the death of traditional publishing. But if you read the blogosphere in 2010 and 2011, a wide number of reputable publishing industry insiders predicted that traditional publishing would be dead or unrecognizable by the end of the Mayan Calendar on 12/21/12.
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Those of us who understand how the large industry that is publishing works, and how business works in general knew that those predictions were misguided to say the least. A number of the folks who predicted such things stopped when it became clear that the e-publishing revolution wasn’t storming the barricades of traditional publishing. Like most revolutionaries, e-publishing grew older and got subsumed into the traditional system. And those who felt the revolution’s initial passion and fire have either given up proselytizing, settled into the daily grind that a real work brings, or have given up the cause altogether.
Where is traditional publishing four-plus years into the revolution? Bigger, stronger, and richer than ever. Who ended up getting harmed by the revolution itself? Writers who never really learned how the business worked and/or writers who believed their traditional publishing careers were bulletproof, that these crazy changes in the delivery method wouldn’t touch them.
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The writing was on the wall as much as four years ago, when the recession hit. Book advances worldwide went down significantly, as much as three-quarters, according to an article in the London Times. Writers continued to accept those advances and bemoan them, so as the e-publishing revolution hit and publishers started to realize they could make more money than they ever had, they kept the advances low. Why put out a ton of money up front if authors will accept less?
It’s excellent business. Minimize your up-front costs. Think about it. Would you pay in advance for something if you could get the same (or better) product for less money, money paid out made six months after you’ve already profited from that product? You’d do the latter, of course. And many traditional publishers are doing the same. Pay less, pay lower royalties, get the same product for one-quarter the cost. Makes tremendous business sense to me.
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I have received four letters this past week from friends with many New York Times bestsellers under their belts who are now complaining that the new advances either aren’t forthcoming at all or are significantly lower than they were before. Significantly, meaning money that would have caused these writers to walk ten years ago. Now there’s nowhere to walk to that will pay a higher advance.
Back in the day, you know, ten years ago, traditional publishing advances were designed to encompass the entire future earnings of a novel. That way, the publisher wouldn’t have to pay royalties, even though royalties were listed in the contract, and the advance was essentially an interest-free loan against those royalties.
When the recession hit, traditional publishers lowered advances, thinking book sales would go down. And book sales did go down for a while—in print books only. Book sales went up in the more lucrative e-book area. And then they went up more and they went up even more. Publishers were paying only 25% of net on those e-book sales so the pay-outs to writers were significantly less on e-books than they were on print books.
Even if the publisher was selling fewer e-copies, it was making double the money it would make from print copies. In other words, folks, publishers are making much more money from the e-book revolution and they’ve designed publishing contracts so that they can keep more of that money.
Writers have signed those contracts, and continue to do so. So traditional publishers are making more money per sale and keeping more money per sale, while traditionally published book writers are taking smaller advances and making less money per sale, if they can even get accurate royalty payments from their publishers.
So…whose death should we be predicting? Maybe the career death of the full-time traditionally published midlist or lower level bestselling writer.
Not that there won’t be midlist or lower-level bestselling writers working for traditional publishers. But those writers will also have day jobs. They certainly won’t have big houses and assistants and the freedom to write whatever they want any more.
They didn’t just miss the handwriting on the wall. They missed the gigantic neon signs littering the town. They missed air raid sirens, the warnings, everything—mostly because they trusted their advisers (read: agents) to warn them that the world was going to hell.
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Now the business-savvy writer has a significantly bigger chance of becoming rich than the business-ignorant writer, even if the business-ignorant writer sells more books and has more readers. Got that? The business-ignorant writer has been squeezed by the publishers and the agents so that making a big six-figure income, year in and year out, is becoming nearly impossible—without a worldwide blockbuster.
The business-savvy writer is either a hybrid writer—traditional and indie—or goes indie only. Those writers can and are making six-figure incomes without having a single bestselling novel. They don’t need a blockbuster to save their financial future.
They control their financial future.
Link to the rest at Kristine Kathryn Rusch and, as usual with Kris, you’d better read it.