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Mike Shatzkin on the John Locke Deal

22 August 2011

As usual, Mike Shatzkin has some insightful thoughts on John Locke’s deal with Simon & Schuster:

OK, now we know another new paradigm for book publishing in the digital age with the announcement of self-publishing author John Locke’s new deal for print distribution with Simon & Schuster.

The big publishers have said for a while now that they won’t be signing up books for print rights only. That makes sense, up to a point.

It is logical that with print declining and digital sales rising, publishers don’t want to be investing in an author only to control the getting-smaller part of the sales. We’re in this moment when print sales are still vitally important but less so every day. Ebooks don’t require the same organizational scale as distributed print, so authors legitimately feel that they can get the substantial part of that sale without giving up the 75% of the ebook royalties big publishers demand as the price to gain access to the print distribution capability that makes real use of big publisher scale.

But there are limits to the publishers’ logic to walk away from print-only deals. Publishers also have the challenge of feeding the big organization they’ve built to deliver print to its shrinking marketplace. It is hard to ignore sales volume you need to support expensive operations.

. . . .

Although the details of the Locke deal with Simon & Schuster haven’t been revealed, it is characterized as a distribution deal. Strictly speaking, that would make Locke himself the publisher and the party responsible for the cost of inventory. S&S would warehouse that inventory and handle all the mechanics of distribution, including billing and collecting. Then they would remit the larger portion — probably more than 70% and less than 80% — of the revenue they receive to Locke.

. . . .

There is another way Locke will profit. The increased awareness of his books that he’ll gain by having them in stores should generate more ebook sales and he presumably doesn’t share those with his print distributor.

There have been a number of signs this year that the publishing world is changing dramatically.

. . . .

In the Locke deal, though, we can see the outlines of future arrangements by which publishers can reconfigure their dealmaking to adjust to changing times. It isn’t just agents who are changing their business models or offering new services to accommodate the reality of self-publishing fostered by the growing ebook market share (and Locke’s agent, Jane Dystel, is one that has announced that her office is doing just that), publishers will adjust as well.

The model of “self-publishing through a major house ” can be a workable one for all sides if it is restricted to authors whose commercial appeal has already been established. Since all the major houses have distribution deal models, it might not be long before there’s a person at each one assigned to making sure that authors and agents are as well taken care of as “clients” as they were in the past working through their editors.

Link to the rest at The Shatzkin Files

Mike Shatzkin, Self-Publishing

8 Comments to “Mike Shatzkin on the John Locke Deal”

  1. “…making sure that authors and agents are as well taken care of as ‘clients’ as they were in the past…”

    So…they’re going to take them out back, behind the shed?

    I’ll be listening carefully, for the sound of a pump-action stock.

    Oh a more serious note, it sounds like once again John Locke is making a smart move. Instead of being held in a choke hold, he’s “letting them in on a piece of the action” so they can help make him more money.

    Pardon the perspectives, I’m a bit of a trickster.

    • Knave – We may never know, but this sounds like Locke may have negotiated a very good deal for himself, much better than S&S has given any other author.

    • Seriously, that one caught me, too. If traditional publishing treats John Locke like they’ve treated ‘their’ authors in the past, well… it could get bloody. 😛

      • Anthea – I believe trad publishing will have a hard time treating Locke like they have other authors because he has an independent base of self-pubbing audience and revenues.

  2. Interesting, very interesting. I’m of the opinion that if you do something well, the path to real success means taking what you do well and doing it even better. S&S does turn out nice books and they do have distribution channels in place (though the model is falling apart). Seems to me, if S&S sticks to doing what it does best and Locke sticks to what he does best, this could turn out to be a really cushy deal for both parties.

  3. Like in the startup world, traction is king. Facebook doesn’t have millions of users because of their venture capital financiers, they have their financiers because they had millions of users to begin with.

    It seems like this solves everyone’s problems – with self-publishing being so easy, how do you know who to read? Like it or not, there will be a torrent of crap flooding the market every day as epublishing becomes more popular.

    Large publishers can pick up the most popular authors, provide marketing and distribution, ensure that readers are, for the most part, not disappointed, and, like Locke, the author gets a good deal. Margins are smaller for everyone, but hey, profiting is better than tanking.

    • My lesson from this is having readers puts the author in a much stronger negotiating position, Brian..

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