Monthly Archives: June 2013

Why Big Publishers Think Genre Fiction Like Sci-Fi Is the Future of E-Books

27 June 2013

From Wired:

One of the biggest success stories in U.S. publishing in recent years has been the continued growth of digital book publishing. Last year, total revenue for e-book sales in the United States reached $3.04 billion, a 44.2% increase on 2011′s numbers and a figure all the more impressive when you realize that growth is additive to the print publishing industry. Even more surprising, publishers have focused much of their attention on genres like sci-fi, fantasy, mystery and romance fiction – markets that have traditionally lagged behind “literary fiction” in terms of sales.

In the last few months, however, Random House and Harper Collins launched their first digital-only imprints, and all of them focused on genre fiction. Random House announced the sci-fi/fantasy line Hydra, mystery line Alibi, “new adult”-targeted Flirt and romance-centric Loveswept, while Harper Collins created the digital mystery imprint Witness in April. Although this focus on genre fiction might seem counter-intuitive according to traditional print publishing sales, Random House VP and digital publishing director Allison Dobson says there’s a simple reason for it: The digital audience wants different things.

“Certain categories [of eBooks] have a much larger digital adoption than others,” Dobson said. “The genres were among the first where readers took to the digital format and the ratio of readers of digital, as opposed to physical, are much, much higher.” In the case of some genre titles, as much as 60 to 70 percent of the sales are digital. “I think there is an enormous audience in digital right now,” Dobson said. “It’s actually where the action is.”

. . . .

But the digital delivery system also offers immediacy and ease of access for material that often is serialized and written to make you want to know what happens next, as soon as possible. Liate Stehlik, senior vice president and publisher at Harper Collins, subscribes to that idea, at least partially. Genre fans, she says, became “early adopters” of the digital format because e-books are the optimal format “for people who want to read a lot of books, quickly and frequently. Digital has replaced the paperback, certainly the paperback originals. I think the audience that gravitated to eBooks first really was that voracious reader, reading for entertainment, reading multiple books in a month across multiple genres.”

Link to the rest at Wired and thanks to Abel for the tip.

Publisher margins today may be enviable, but it will be a big challenge to keep them that way

27 June 2013

From veteran publishing consultant Mike Shatzkin:

The major publishers have apparently worked themselves into a very strong commercial position at the moment with the transition to ebooks. I say “apparently” because the data that gives the most recent rise to that understanding — a presentation by HarperCollins of the current economics — is somewhat incomplete.

What Michael Cader reported in Publishers Lunch on June 4 — about which agent Brian Defiore commented on the Aardvark blog the same day — is that HarperCollins CEO Brian Murray had laid out the standard revenue and cost structure for hardcovers versus ebooks for shareholders. What it showed very starkly is that:

1. (Even though) revenues (the top line) for ebooks are lower on a unit basis than they are for hardcovers;

2. (And) royalties for ebooks are also lower on a unit basis than they are for hardcovers;

3. (Still) unit margins for publishers net of manufacturing, distribution, returns, and royalty costs are considerably higher for ebooks than for hardcovers.

So the authors working on the contractual rates make less per unit on the ebooks than they do on hardcovers and the publishers make more. The joker in that last sentence is “working on the contractual rates”.

The biggest authors don’t, and that’s how this situation has been allowed to happen.

The savviest agents for the biggest authors don’t negotiate contracts in the same way the rest of the world does. They figure out in concert with the publisher how many copies they think the book should sell (big authors with long track records are somewhat more predictable than the rest of the universe, which is one more reason their books are so desirable to the publishers) and get an advance that is equal to a startlingly high percentage of the revenue that sales level would produce.

The advance is not expected to earn out (and, believe me, with advances calculated this way, they almost never do). That means the royalty rates are irrelevant. So they can have their star authors sign the boilerplate contract, permitting the publisher to say — almost truthfully — that they don’t pay more than 15% of cover price royalty on print or more than 25% of net royalty on ebooks (among other things).

. . . .

When ebooks started to become commercially important, which we date to the launch of the Amazon Kindle in the fourth quarter of 2007, publishers faced the challenge of reducing overheads required for print publishing as the demand for print declined. Quite aside from what was (and is) the unpredictability of the rate of the change, this is not an easy challenge. The printing you’re ordering may be smaller, but you still need to set type, design a book, and order a printing. The number of copies you’re shipping and processing as returns might be smaller, but most big publishers owned their own warehouses so it wasn’t a simple matter to reduce the cost of that component either.

In fact, it would appear that returns may have declined more than print sales have, and even more drastically as a percentage of overall sales since ebooks don’t get returned at all. All of this has been good for publisher profitability. In fact, seeing the data we see now, one might wonder whether the publishers were being self-destructive when they went through great gyrations (including everything that landed them in the lawsuit Apple just finished for them all alone and which was expensive for them to settle) to preserve print sales at the expense of ebooks. They tried windowing — withholding the ebook from the market for a while — and then, famously since the DoJ involvement, maintaining somewhat higher prices on ebooks at retail.

. . . .

Agents for the big authors will be looking for an even higher percentage of the projected revenue as it shifts to digital. Since advances from publishers for other-than-the-biggest titles are also declining, those next-tier authors will find self-publishing or publishing with smaller houses that pay lower advances but higher ebook royalties an increasingly tempting alternative. Most of all, the biggest retailers will keep pushing for more margin.

. . . .

I’ve felt for a long time that what authors (agents) should work toward is a fixed amount-per-copy-sold as an ebook royalty and just get out of the percentages business on ebooks, which, as we know, can have their prices change on a frequent basis. I know that would be resisted by the publishers, but it makes a lot of sense.

Link to the rest at The Shatzkin Files

How Is Self-Publishing GOOD for Traditionally Published Writers?

26 June 2013

From author and regular TPV visitor Laura Resnick:

There seems to be a fairly common misconception that traditionally published writers are “against” self-publishing aka indie publishing, dismiss it, don’t understand it, are afraid of it, etc.

I assume that erroneous impression is created by the most-discussed, most-visible (and most misinformed) commentaries from traditionally published authors—the comments that characterize self-publishing as destroying literature, books, publishing, and civilization itself!

However, speaking as a traditionally published writer (I’ve sold about 30 books to about half a dozen publishers over the years and am currently under contract), most of us are a lot smarter than that—indeed, most of us have had to be very smart to survive (let alone occasionally thrive) for years in traditional publishing.

More to the point, most of us are self-publishing. We’re elbow-deep in it, and we’re very excited about it. Indeed, Novelists, Inc. (Ninc), the professional writing organization I belong to, has focused much of its annual conference and its monthly journal, Nink (for which I’m a columnist), on self-publishing for the past 2-3 years—precisely because it’s such an important avenue for the working writer.

. . . .

lot of traditionally-published authors are self-publishing, and have been doing so for 2-3 years now. Most of the writers I know, which is hundreds (alas!), are self-publishing.

Here’s a typical example of why self-publishing is such a great development for the traditionally published author:

  •  In 2010, the earning life and market potential of all my backlist books was completely over. Nothing of mine released prior to 2009 was in print, none of it was earning a penny anywhere, and none of it was realistically viable for re-sale to publishers. And in traditional publishing, this was a typical position for a writer. Few people besides bestsellers had a backlist that stayed in print and earning for more than a few years.
  •  In 2011, I started self-publishing those backlist novels as ebooks—and promptly started earning income from them again, as well as hearing from new readers who’d never found my work before.
  •  In 2012, these same books, which had been dormant for years, accounted for one-third of my annual income as a full-time self-supporting writer, and they were a crucial factor in my being able to buy a house last year.

This is a typical example of why every traditionally published author with the sense that the gods gave to overcooked broccoli (and that’s most of us) is thrilled to death with self-publishing and elbow-deep in our own self-publishing programs.

. . . .

Also, precisely because we have more options for earning income with our work now, we’re in a much stronger negotiating position with publishers than we ever were before. Unless you were a bestseller or had a very hot project that multiple houses really wanted, a publisher negotiating with you always knew that you were extremely unlikely to walk away, because you couldn’t risk not earning income by deciding that something was a dealbreaker. Now, however, we always have another viable option, and that puts us in a much better position in negotiations. Publishers have been slow to recognize this, but we are now seeing the first faint glimmers of reality beginning to dawn on the industry and certain “non-negotiable” and “industry standard” clauses s-t-a-r-t-i-n-g to shift slightly in some instances. (It’s a process…)

Link to the rest at Laura Resnick

It is a mistake

26 June 2013

It is a mistake to think you can solve any major problems just with potatoes.

Douglas Adams

Barnes & Noble to Discontinue Nook Tablet Business, Continue With E-Readers

26 June 2013

From Digital Book World:

Barnes & Noble will no longer produce new tablet devices as it transitions to a “partnership model” on color tablets, the company announced today in its fourth-quarter and full-year earnings report. The company also announced greater than expected losses for the quarter of $122 million or $2.11 per share on $1.3 billion in revenue.

Investors expected sales to fall to $1.33 billion and a loss of $0.99 cents per share for the quarter. For the full year, the company’s results weren’t much better, following a disastrous holiday quarter in which it became apparent that Nook tablet sales were struggling.

. . . .

According to the company, it will still sell and service its existing fleet of tablets — the Nook HD and Nook HD+ — through the holiday season. Content sales may not suffer much.

“A majority of content sales come from non-tablet sales,” said Barnes & Noble CEO William Lynch.

Barnes & Noble has a three-pronged plan to advance the company, according to Lynch, speaking on a conference call this morning:

1. “Sustain our effort started in Q3 to significantly reduce operating expenses in the Nook segment,” he said. “We were able to cut expenses $26 million in Q4, a 34% decrease in spending.”

2. The company also intends to continue to enhance its digital bookstore service and reading app. It adds 4,000 titles a week. “We get extremely high ratings from our millions of customers,” said Lynch.

3. The company will also, as was discussed above, “adjust” its hardware and device strategy, moving away from . . . building tablets and toward a co-branded tablet program. “Our aim is to sell tablets,” he said, adding, “but to do so without the up front risk.”

The company plans to continue to design and “innovate” when it comes to new e-reader products like the Nook Glo and Nook Simple Touch. According to Lynch, Barnes & Noble “can manage this device business efficiently.”

“We are 100% not exiting the device business but we are materially adjusting our approach in the…business,” Lynch emphasized.

Link to the rest at Digital Book World

PG predicts nobody serious will be interested in acquiring the Nook tablet business. Amazon, Google and Samsung are pushing the price of tablets down and Apple owns the high end. Where does a Nook tablet fit in that competitive environment? Nowhere very promising.

The only advantage Nook ereaders and tablets ever had was that Barnes & Noble featured them in its bookstore kiosks. Done right, that strategy might have succeeded.

However, Amazon aggressively pushed ebook prices down while Barnes & Noble allowed publishers to set prices. Nook buyers soon discovered they were paying more for ebooks than Kindle owners and some Nook folks felt like suckers.

Amazon was also willing to lose money on ereaders which meant the Nook division always bled cash. Shareholders have bought into Amazon’s strategy to sacrifice profits in order to rapidly grow the company. Barnes & Noble shareholders don’t have the same attitude.

The Nook book store was never very good for discovering books and certainly no match for Amazon’s ecommerce genius. Amazon’s store also treated indie authors better and KDP Select turned out to be a big draw for some indies. The Prime lending library was another cool idea for readers and indie authors.

One of BN’s biggest problems is that the Nook kiosks are endangered because Barnes & Noble has announced it’s going to close lots of stores. The one advantage Nook had over Amazon – a retail presence with sales reps who could hand-sell devices – is wasting away.

A big tech company would seem to be the best candidate to acquire the Nook business, but tech companies and their shareholders know one thing – It’s a losing proposition to compete head-to-head with Amazon.

Iris Has Free Time

26 June 2013

Falling short: seven writers reflect on failure

26 June 2013

From The Guardian:

Diana Athill

From the age of 22 to that of about 39 I knew myself to be a failure. For many of those years I was not positively unhappy, because I was doing work I enjoyed, was fond of my friends and often had quite a good time; but if at any moment I stood back to look at my life and pass judgment on it, I saw that it was one of failure. That is not an exaggeration. I clearly remember specific moments when I did just that. They were bleak moments. But they did lead to a subdued kind of pride at having learned how to exist in this condition – indeed, at having become rather good at it.

The reason for it was banal. Having fallen in love when I was 15, and become engaged to marry the man I loved three years later, I had known exactly what my future was to be. As soon as I finished my education at Oxford (not before, because I was enjoying it so much) we would be married. I would join him wherever he happened to be stationed (he was an officer in the RAF) and my life as a wife would begin. I didn’t doubt for a moment that it would be happy. My childhood and teenage years had been very happy so I was a young woman who expected the answer “Yes”. And then, not suddenly, but with excruciating slowness, I got the answer “No”.

He was stationed in Egypt. After three months he stopped answering my letters. His silence endured for month after month, reducing me to a swamp of incredulous misery, until at last a letter came, asking me to release him from our engagement because he was marrying someone else. Like, I am sure, most young women at that time, I had seen giving my life over to a man, living his life, as “happiness”. Doing that was what, as a woman, I was for. And this I had failed to do. I did, of course, see that the man had behaved badly, cruelly in fact, in leaving me in limbo without any explanation for so long, until (I guessed) being advised that he ought to guard against me “making trouble”. But I was so thoroughly the victim of current romantic attitudes that, in spite of that recognition, I was unable to withstand a sickening feeling that a woman worth her salt would have been too powerfully attractive to allow this disaster to happen. And I was not that woman.

I was saved from total loss of self-confidence by the solid happiness of my childhood and teens; but my sexual self-confidence was wiped out. For most of my 20s and 30s I equated love with pain, plunged into hopeless relationships and staggered out of them further reduced, so that I became almost invisible to men. Though presentable, my looks had never been those of a “trophy” woman, so I needed to make an impression in other ways – and I didn’t do so. Many years that might have been good ones were turned grey, but they did force me into some very useful knowledge: I learned that it is perfectly possible for a woman to live her own life, not someone else’s, her value does not, in fact, depend on how she is seen by a man. And the clearer this became to me, the more colour was restored to my life. Bit by bit, enjoyable sex crept back into it. A romantic commitment to passion never came back, but physical pleasure did, and then the reliable warmth of friendly love – and something else happened, just as important or perhaps even more so: I discovered that I could write.

It was the writing that really put an end to failure. In the early 1960s nine stories “happened” to me. I say “happened” because I did not decide to write them, but suddenly felt a peculiar sort of itch, which produced them. One of them won the Observer’s short-story prize. I was told that I’d won it on my birthday, in December, and having submitted the story in March I had forgotten about it. The news was astounding, and became even more so when I went to collect my cheque and they kindly offered to show me the room in which all the entries were stored: two thousand of them. Two thousand stories, and mine had been judged the best! I understood at once what had happened, and it was by far the best part of a lovely experience: that dreary bedrock under the surface of my life was no longer there, and off I could go into happiness. Almost at once I started the most satisfying relationship of my life, which lasted for 40 years until it was ended by the illness of the man I was living with. When sometimes during those years I stood back and passed judgment on my life, I saw it as happy. And that is still true, because when love-happiness faded out, writing-happiness took over. I had enjoyed writing three books during the 1960s and early 70s, and had then, with only mild regret, ceased to write. After retiring from my job as a publisher I started again, and the three books – plus a collection of letters that I have written and published since I was 80 (I am now 95) – have gone surprisingly well, well enough to astonish me, and to please me a great deal. Success in old age, when things have stopped really mattering, has a frivolous sort of charm unlike anything one experiences in middle age. It feels like a deliciously surprising treat. Perhaps as one advances into second childhood one recovers something of first childhood’s appetite for treats. Whatever the nature of the feeling, it allows me to state that it is possible to recover from failure: to digest it, make use of it and forget it. Which is something to remember if you happen to be experiencing it.

Link to the rest at The Guardian and thanks to Meryl for the tip.

Here is Diana’s Amazon Author Page.

If agents are selling publishers to authors, does that mean publishers should pay agents commission?

26 June 2013

From an anonymous agent via Futurebook:

In ye olde days it was simple. Publishers were the market place, their only competition was themselves and agents were the conduits through which authors reached publishers.

It was the agents’ job to enrich the feed before publishers selected the final elements to refine and use. It was all reassuringly linear and straightforward.

Self publishing changed all of that. Now publishers do have competition. The question of whether to accept a publisher’s offer is now discretionary. Or, to put it another way, all authors already have a publishing deal available to them if they are ready to make the effort to pick it up.

Some authors self publish tremendously successfully. They REALLY do not need publishers – they are already A) finding readers and B) making money. Of course, the majority do not and publishers mention this all the time as if it is some sort of magic prophylactic against the threat of self publishing. You rarely hear them talk about the proportion of published authors who also sink without trace.

. . . .

[P]ublishers are still failing to articulate the reasons for their continued existence with anything like the passion or conviction that is needed. I spend an amazing amount of my time telling authors how good publishers are ‘really’. The perception that they are not very good at what they do is horribly widespread.

I am aware of several recent examples of highly successful self published authors talking to publishers about potential deals who have either been staggered by the derisory sums of money offered them or by the teeth pulling reluctance publishers can show to actually flesh out their publishing plans.

That mindset that they are still really the only game in town and that all authors, no matter how successfully they self publish, secretly yearn for a publishing nanny so they don’t have to worry their fluffy little heads about anything other than their writing is still massively pervasive.

Link to the rest at Futurebook and thanks to David for the tip.

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