Home » Big Publishing, Mike Shatzkin » The establishment seems very unworried about being toppled by indies, and 5 other learnings

The establishment seems very unworried about being toppled by indies, and 5 other learnings

30 June 2015

From veteran publishing consultant Mike Shatzkin:

Programming Digital Book World and the kind of consulting we do require that we spend a lot of time in our office trying to figure out what the industry should be thinking more about.

. . . .

A recent DBW agenda planning meeting, which had participation from most of the ten biggest trade publishers, some literary agents, and service providers ranging from marketing services to digital distribution providers, yielded a lode of really interesting ideas that we’re going to act on.

1. One thing that came through loud and clear was big publishing’s interest in hearing how books fit in the greater landscape of digital change. They want to hear from curators of other media and online retailers from other businesses about how they learn about their customers, position a variety of products, and work with search and social media.

2. One participant, whose business provides digital sales data and analytics to a variety of clients, posited that there are four “stages” of behavior that we want to watch around consumer interaction with books. His paradigm is that we want to know:

  1. How they find out about the book
  2. How they purchase the book
  3. How they read, or navigate, the book
  4. How they talk about the book

. . . .

Publishers want to concentrate marketing efforts where the decision is made, not necessarily where the transaction occurs. And, in fact, we’re figuring that as time goes by, more and more ebook readers will buy on the particular platform they most favor regardless of where they learned about the book.

. . . .

I’d be a lousy blogger if I didn’t save best — or most proactive — for last (except in the post titling, of course). I told the assembled group that I wanted to do a panel on “the future for indie- and self-publishing.” There was remarkably little interest in the subject from those in the room. One literary agent said, “four years ago, indie publishing had us quaking in our boots. We really wondered whether our whole business model would be upended. We don’t worry about that anymore.” Another said “we counsel our authors about self-publishing, but there is less interest in it and less of a rush to it than there was a couple of years ago.” The publishers were similarly relaxed about whatever “competition” self-publishing offers.

So, from the perspective of the publishing establishment, the whirlwind of change has slowed down, we are in a “new normal” and there is absolutely no shortage of writers pining to be published for the deals the industry is offering and the output from those willing writers continue to deliver sales that keep big trade companies profitable. If self-publishing is constituting some mortal threat to everybody’s existence, that appears less evident today than it did a few years ago. And, of course, every big publisher is set for the next X years (unknown numbers that might be different for every big publisher, but almost certainly three or more for all of them) with their single biggest intermediary relationship since they’ve all just done deals with Amazon. One big variable in their commercial calculus that had been highly problematic in the recent past is now stable for a while into the future.

Link to the rest at The Shatzkin Files

Big Publishing, Mike Shatzkin

109 Comments to “The establishment seems very unworried about being toppled by indies, and 5 other learnings”

  1. Now he’s just trolling. I mean, that title… 😉

    • You’re right. Shatzkin is literally trolling for attention.

      If you check out his site you will notice that he puts out a few blog articles where he doesn’t say anything negative about indie publishing, and his articles get no comments. So he follows those up with an article where he gets at least a few digs in on indie publishing because he wants people to argue with him. He actually craves our attention.

      Even in the comments on his blog to this article, he is talking about how he is eagerly awaiting the attacks from people from Passive Voice (though he doesn’t name the site explicitly) and from what he likes to call the “indie militia”.

      The funny thing is the so-called “attacks” from indie authors usually come in the form of well thought out comments where people try to educate him about the real landscape of publishing (using real data). Of course he always ignores or denies such evidence because he has his own unnamed sources who tell him different.

      • Yeah, don’t fall for the clickbait, folks. If you want to argue Mike’s points, just do it here. His reliance on TPV traffic is distracting him from his core business and making us look like attack dogs.

    • the Other Diana

      I knew from the title it was Shatzkin.

      And I haven’t been on TPV for very long.

      I see this for what it is: Big Pub telling Indies, “You’re not a threat.” And hoping we’ll listen.

      I have my business to run and I’m not worried about Big 5. They are too locked into the old ways of doing things to make any effective changes.

      I’ve read Author Earnings Reports. I know Indies who are very successful. If Big 5 doesn’t see them as a threat, then they are more foolish than I thought.

  2. No shortage of dreamers, huh?
    All set for the next three years.
    Gonna be fun…

    http://thelibertyblog.org/wp-content/uploads/2012/01/Alfred-E-Newman-what-me-worry.jpg

  3. And that final paragraph is certainly true and we’ve seen other new writers still trying to be published by the big publishing houses. From the indie side, we know that the tide is still rolling on this change and that absent some major change from the big publishers (and that certainly doesn’t seem likely based on the above statements), more and more of the mid-list writers will see the economic advantages of going indie.

    The big publishers have long been focusing on the blockbuster releases and have been putting much less time and money into the mid-list. From this, we can see that trend is only going to continue for the next few years.

  4. Shatzkin? Head straight for comments.

    “There was remarkably little interest from those in the room.” Typical. La la la, fingers in ears.

    Live long and prosper, traditional publishing. You’ve earned it.

  5. Forget books and publishing a moment.

    Say you and a handful of your buddies basically own 100% of a particular industry. (yes I’m exaggerating a bit). Let’s say it’s all the fast food restaurants in a huge city like LA or Tokyo.

    Now someone comes along, ignores the little boys’ club you’ve created with all of your arbitrary rules and schemes and opens a hotdog stand.

    How much business does that guy do before he’s a threat? What about a thousand hotdog stands?

    NO BUSINESS IN THE WORLD looks at ANY competition and says “they’re no threat.”

    Years ago, Home Depot though Lowes was no threat. Now Lowe’s is a major competitor. Henry Ford used to brag that you could have any color car you wanted as long as it was black. Now Ford is no longer the #1 car maker in the US.

    McDonald’s is losing market share basically daily. Everyone from Subway to Panera Bread to cafes in super sized grocery stores have taken a bite of their business.

    If publishers in NY really think or thought indies were no threat, they are not just mistaken – they’re complete morons of the highest order.

    • AFAIK, in Tokyo, you send squads of guys to ask for the exact same item, the one that takes longer to cook. You get long queues and you run out of ingredients. And next customer has to, gasp, wait.

      Tokyo fast food is a tad bleeding edge.

      Take care.

  6. Dinosaurs unworried about being toppled by mammals.

    Couldn’t resist. 😉

  7. “…and there is absolutely no shortage of writers pining to be punished by the deals the industry is offering…”

    There, Mike. I fixed it for you.

    The unfortunate thing is: this time he’s right.

    • Well, except the Authors Guild is making these noises…
      And 30% unit sales are gone…
      And their sales are down more than 7% in constant dollars since 2007…
      And they never have recovered from the post-2008 drop…
      And 6-figure contracts are being laughed off…
      And their primary value-add, B&M shelf space, has dropped by about a third in four years…

      No shortage of dreamers…
      …but are they capturing the productive, high value dreamers?

      Again: once upon a time, they had a crack at all the good manuscripts, on their terms; usually low. Now? Not so much.

      Yup.
      No reason to be even mildly concerned, nosirree bob…

      • The thing is, they don’t have to rely on “good manuscripts”.

        They just need ones that sell. Was FSoG a “good manuscript”? I think most agree the writing is subpar at best. Yes, she came from the indie ranks, but didn’t really explode until she signed on with the big pub.

        What about Dan Brown? Again, most aren’t fans of his writing, but the guy moved books.

        If the big pubs do fail, it won’t be because they lacked material to print. It will be because they priced themselves out of the growing portion of the industry (digital).

        • “Good” in this context = “commercially viable” not “critic-acclaimed”.

          Dan Brown was a midlister until he popped out the code.
          And 50shades was not a bargain aquisition on old school terms.
          The BPHs are still going to get their bestsellers…except the peak of the bestsellers will be lower and the monsters will be few and far between. And the ones they secure will cost them more.

          They are hollywood-ing themselves into a regime of higher acquisition costs and lower returns which will result in less new titles. Which means less tickets for the monster seller lottery.

          It won’t be a death spiral exactly but their already declining power will continue to slowly wither away.

        • Yes, she came from the indie ranks,

          She came from fan fiction and then a small Australian publisher. She was never really independent in the sense most indie authors would use it.

          • Technically, she was. That small Aussie publisher was a group of fanfic authors who got together to file off serial numbers together and publish. Indie coop style, just as a publisher. She was indie. Doesn’t mean her fic was good, but it was still independent.

            • Not really indie coop style. That’s why one of the founders sued a couple of others. I mean, I could agree it was independent in the sense that, like, Algonquin and maybe even some zines are, but it’s not like there was anything like control or much cover input or etc.

              You can read about her original publisher here:

              http://www.thewriterscoffeeshop.com/page/c/about

              Definitely check out the “Staff” page.

              Worth noting: from what I understand, 50 Shades was the result of a contest TWCS held several years back. There were two winners, both of whom ultimately moved on from TWCS to other publishers. James went to PRH; the other writer came to Exciting Press.

              Not to nitpick. Sorry. You know, I tried, for a moment, to think about why it bothers me that James is so often referred to as a “self-publishing success story,” and I realized I think it’s because it feels like another way for corporate people like Shatz to continue to dismiss/write-off “self-publishing.” Like, most people pretty much agree that 50 Shades isn’t very well written (and I think that’s charitable), and it seems like that’s what they’re saying. By lumping James into the indie world, they’re defining the indie world’s only metric of success as either 1) sales or 2) “graduating” to a corporate contract.

              When the media talks about “self-publishing success stories,” I think I’ve seen maybe once or twice “You know, it didn’t sell a boatload of copies, and AuthorSolutions’ parent company isn’t trying to use it to pad out its bottom line, but it’s really well written and you might like it, so hey check it out.” I mean, that’s sort of how it was at the start, with that POD-dy Mouth feature in Entertainment Weekly all those years ago, but all the emphasis on market share and earnings and revenue, I fear, tends to belie that regardless of how well they’ve performed, there are some legitimately great books out there their authors uploaded to Amazon with nothing but a dream and a wish to rub together.

              So no, I don’t think James was indie. She had humble beginnings, perhaps, but I don’t think she’s a success story like you or Hugh or several other awesome authors are.

              • Different people write for different reasons.
                Such a simple concept, right?

                You’d think even pea-brained dinos could grasp the idea that some people write for money, some write for love of the craft or the material, some write to get ideas out, and some for validation.

                Instead, tradpub apologists constantly try to pigeon hole all indies into negative and extreme classes.

                Kinda, like… I dunno… Maybe they feel threatened? 😉

    • They can have all the writers, for all I care. Now… who gets the READERS? You know, the guys who actually put up the money.

      Take care.

  8. I wonder if Shatzkin is right.

    Traditional publisher profits are doing fine.

    And there was never enough capacity in the trad pub channel for all of the books trying to make their way through it anyway.

    Some assume they looked at all the submissions and selected the best manuscripts, but I don’t think that assumption is accurate. How many stories have we heard about authors who couldn’t make it through the slush reader and agent gates but went on to find huge audiences as indies?

    Heck, sometimes good manuscripts made it all the way to the editor only to be rejected because the publisher had just acquired the rights to a book in the category of the new submission and didn’t have any more slots for that type of book in their schedule.

    The trad pub pipeline has probably always had far too many good books in it for them to publish. So if some of them go elsewhere, the publishers may not be feeling it because they are still getting more good books coming to them than they can handle.

    • Hm, I don’t know about the “doing fine” part:

      Publishing conglomerates Penguin Random House and Simon & Schuster are facing tough times this quarter as ebook sales fell and total profit dropped 5.6% at S&S and approximately 12% for RPH. The potential culprits? A lack of blockbuster books and low ebook sales…These falling percentages don’t seem like much — what’s 1 or 2 points in a billion-dollar market? But to publishers, they are a major threat. A number of outside influences are affecting their bottom line including Amazon‘s own publishing efforts, the rise of indie writers, and the slow but sure shrinking of the print market. The inflection point isn’t quite here yet but I’d expect it to hit in the next five years.

      Source: Techcrunch.

    • Aggregate profits have been essentially flat over the past seven years despite all sorts of potempkin prop-up ploys. Factor in inflation and their profits are actually in decline.

      • Also factor in population growth and increased literacy. When potential customers are going up, but profits are going down, then the slide is greater than what is measured.

        I have yet to see Mike admit that BPH growth is currently relying on acquisitions, mergers, reduction of overhead, and the like. There are so many health factors that haven’t even been measured yet.

        • “I have yet to see Mike admit that BPH growth is currently relying on acquisitions, mergers, reduction of overhead, and the like. There are so many health factors that haven’t even been measured yet.”

          Why would he ever admit to something that counters the message he’s trying so hard to spew? 😉

          • Because I keep assuming he’s interested in understanding the industry he advises on, and also on dispensing sound advice to industry partners?

            Am I doing this wrong?

            • Someone else pointed out poor Mikey doesn’t get anywhere as many ‘clicks’ or comments when he’s not bashing at self-publishing. So deliberately saying what he knows isn’t there could indeed be a part of his ‘click bait troll’ plan to get noticed.

            • At this stage…? Yes, sorry; you’re likely wrong. Some time ago, your hopes would have been logical, charitable; this late in the game, I’m afraid that if he was interested he’d have seen the elephant in the room. You know, the one that just trod on his bunion. It’s not even funny any longer.

              Take care.

  9. Well they’ve been able to fend off steeper declines with really author unfriendly ebook contracts combined with cutbacks. That works, at least on paper, for a couple years, but when you’re sitting atop a declining revenue stream, it fails to address the core problems, and may actually make them worse. Eventually, they rear up again, followed by another round of even less author friendly terms and cutbacks, which stabilizes things. But the declines are still happening, and possibly accelerating, so the problems rear up once again, only now, your author contracts are so bad, you’re left with either the name brands who negotiate much better terms or really naive newbies, many of whom end up one and done, as it were. You’ve cut away all the fat and now you’re cutting muscle to the bone. Next thing you know, you’re down a limb or two and you couldn’t offer better author terms generally even if you wanted to, which becomes a competitive disadvantage. What you absolutely don’t want to do is see the brief periods of seeming stability in between as any kind of “new normal” until you see overall growth rather than steady declines, even if profitability looks good. Complacency kills, and when it’s based on wishful thinking and backed up by short term gains from cutbacks, it kills even faster. The thing to watch is the strategy. No one has a plan to grow the print sector, only fend off declines, and they’re all lockstep behind the efforts to force an artificial plateau on the ebook market. If they’re not worried, they’re not paying attention. And if that’s the case, any kind of long term bet on these folks is a fool’s game. They’re having a picnic in the eye of the hurricane at the moment, willfully ignorant that the worst is still likely yet to come.

    • But then add in the normal management “not on my watch” and most of them looking at retirement in another 5 years and we have a strong tendency to just leave things working well enough.

      This shorter term strategy is an all too common behavior of long entrenched industries and it would be hard to find an industry that is longer in the trench than publishing. The last major disruption was with the 1979 Thor Power Tools ruling that changed the economics of warehouses of previously printed books (see http://www.sfwa.org/2005/01/how-thor-power-hammered-publishing for a pretty thorough explanation).

      Publishing has been working on a same-old, same-old basis since then until the Kindle appeared, or more importantly Kindle Direct Publishing and its competitors.

  10. I really don’t like the word ‘learnings’.

  11. Smart Debut Author

    I’ll take author earnings over tradpub learnings any day.

  12. You know what I very rarely ever talk about?

    The stuff that scares the sh!t out of me.

    I like to talk about all the other stuff.

    • Yep. Exactly the same as the executives at the big publishers that were quoted.

      Good point.

      • If I were Mike, I’d be asking myself why not one of my trusted confidants in BPH ever mentioned to him that they were scared of self-publishing. Or why not one major media outlet ever quoted someone from BPH saying they were scared of self-publishing. Because hardly anyone talked about self-publishing except to denigrate it until a couple years ago.

        I’d also be curious to know how … if we could trust BPH to keep their fears to themselves for all this time, with nary a leak … we can trust them now. They lied to Mike for 4 years. Or Mike didn’t report on their fears for some reason. And nothing has changed, is that what I’m hearing?

        I feel bad for Mike. Not only is the industry he covers becoming something he doesn’t understand, but the way it is covered has turned into something he doesn’t understand. He reports and consults on publishing. Both the reporting side and the publishing side are being disintermediated. Which is where all the passive aggressiveness toward TPV and the indie militia is coming from. We report on what’s happening with more incisiveness (and better blog titles) than he does. It’s a double threat. Hence the anger and ad hominems.

        But that’s all the professional side of things. As a person, you couldn’t drink a beer with a more likable and fun guy. It’s a shame all of this is taken so seriously that people become caricatures. We have to dehumanize them to not feel threatened by the fact they disagree with us. That part is really sad.

        • Good points, Hugh.

          • ” As a person, you couldn’t drink a beer with a more likable and fun guy”

            Ahem!! I have two beers that are daring me to prove you wrong, Hugh!! 🙂

            • I’d be willing to front the cost of a couple of beers to tackle that title. Win-win to try, anyway 😉 I’ll keep an eye out if that boat of yours comes anywhere near the west coast of Australia…

  13. ‘Learnings?? Where did he study English?

    • I recently read of someone “dinnering” with their friends. Not going out to dinner, or even simply eating with. Gah!

      • Well, there’s nothing wrong with “lunching” with someone. Language usage does move right along…

        But it’s not always predictable — in my circle, you don’t “snack” with someone, you “graze”.

    • Maybe he was sick that day? 😉

      ‘He was an outstanding student — he was usually found out standing in the hall …’

  14. …the whirlwind of change has slowed down…. If self-publishing is constituting some mortal threat to everybody’s existence, that appears less evident today than it did a few years ago.

    Whew! That’s sorted!

  15. I think that the publishers are right. Indie publishing has certainly exploded and will continue doing well for the foreseeable future, but the print model will remain the top dog. Dead trees turn out to be a difficult technology to upend. The publishers remain in control of the most profitable channels.

    What indies did was to provide for underserved areas of the market. Now that the market’s needs have been met, we have a good idea of its size. From here, the publishers get to decide where they’ll grow into, concentrating on the most profitable niches and dropping less popular ones.

    I don’t think that the publishers are necessarily playing a better game, although it’s certainly a more hard-ball game. I think that the indie market has just gone through it’s easy growth stage.

    • Even if print remains the top dog, the sales of print have moved online, which is a space where indies have equal access to customers.

      I’ve got a print deal with S&S that has one of my novels in lots of bookstores. It was in airport shops for months. I still sell four figures of this work in paper a month, and this is 4 years after release. Most books aren’t even stocked that long. So I should be chuffed, right?

      Well … my POD books sell more copies every month, and I make 4 – 5 TIMES per sale for each copy sold. I could live comfortably off my print sales, and NOT the print sale that I get from my BPH deal. Which, thankfully, reverts back to me in another 3 years.

      Am I an exception? Yeah, and so is every author who gets a book in a bookstore. The point is, there’s not a blockade on print success for indies. The chances are slim whichever way you go, but one side doesn’t have the lock on print that they like to think they do. CreateSpace, as an entity, is selling a LOT of books.

      • And I am thankful for the few books that I sell.

        Your numbers, though, tell the story that the big publishers are still sitting on a big, profitable business, with ignorant authors throwing themselves into that sausage factory every day because humans have egos. With their businesses stabilizing from the market changes, the big 4 are no longer faced with catastrophic doom.

        As for equal access to customers, I disagree. At this point, it’s common wisdom (feel free to disagree) that you need advertising in order to sustain your sales. A low-level indie like me blanches at the cost of bookbub, and doesn’t have enough reviews to get picked up by most of the curated advertising lists. A big publisher can buy advertising without issue and bypass all curation. That isn’t equal access.

        My guess, if John Q. Public was to win a book by either a new indie author or a new Big-4 author, the public would overwhelming choose the Big-4 author. Public perception isn’t fair. Biases aren’t fair. Fame isn’t fair. The marketing learning curve isn’t fair. If anything, I expect the Big-4 to invent new ways to make the system unfair, such as buying Bookbub. Rigging the system is a tried and true tactic (such as contracts lasting lifetime+75 years.)

        None of this means that there aren’t indie success making better money than they could from the Big-4. Yay for that. And more will make success, yay, but our success no longer threatens to overturn their comfortable boat.

    • Dean Wesley Smith

      Doug, you said…”The publishers remain in control of the most profitable channels.”

      Ahh, more fairy dust myth. For some reason the myth that the channels traditional publishers use to get to bookstores both online and print stores is magical. It is not. Any indie writer with a little knowledge of the business of the trade channels can plug into the exact same channels. And we do here at WMG, all the time.

      And any indie publisher can buy the exact same ads if they thought it was valuable (my opinion, they have limited value) and any indie publisher can use the same channels through the ABA as traditional publishers use to get to the thousands of stores. It’s actually fairly cheap.

      No fairy dust sprinkled on books that make traditional books any different from indie books. Honest. The key is that indies have to get past this silly myth and open their minds to learning traditional trade channels. And once that starts happening, when the standard trade channels are clogged with all the new indie publishers, that will really signal the end for the traditional publishers.

      • I think this is a point that is perhaps theoretically true, but far less so in practice. I seriously doubt there are any indies managing to achieve comparable distribution of print books to bookstores as traditional publishers do.

        I’m not saying that makes it worthwhile to sign with a publisher. But it’s just as misleading as anything Shatzkin says to act as if indies are getting into bookstores en masse.

        • Dean’s right. There’s absolutely nothing stopping indies from getting onto bookstore shelves.

          I don’t know about indies doing it en masse… But I did.

          My books were on the shelves at several large Barnes & Noble bookstores, Books Inc. stores, non-chain indie bookstores, etc.

          I sold a couple hundred print books at those stores, made the bookstores a few thousand dollars, and lost a few hundred dollars myself in the process, although it was fun and I learned a lot doing it.

          Maybe I shouldn’t have made my books returnable, or offered the industry standard discount. Maybe Ingram Lightning Source overcharges the hell out of indie publishers to print our books and distribute them into regular bookstore channels. Based on my experience, it’s hard to say.

          But mainly what I learned is that selling ebooks and audiobooks is WAY more profitable than selling print books, and selling print books online is WAY more profitable than selling print books through bookstores. Which is why I stopped rolling out to more of them.

          YMMV. But it’s pretty safe to say that indies already have equal access to the most profitable retail channels, which are online. And thus Doug’s comment upthread about publishers controlling the “most profitable channels” is doubly wrong.

          Back to you, Dean. 🙂

          • Dean Wesley Smith

            Paul, I agree. Selling online and audio books is far, far more profitable than print, and selling print books online is way more profitable than selling through stores.

            I just rail at the silliness of indie after indie saying only traditional publishers can do that.

            As has been proven over and over, the people running those companies are mostly idiots and don’t realize exact what you said, so they still focus on the trade paper into stores. But smart indie publishers can follow the same route if we want, and which you did.

            And we do. And others I know do as well. I just hate the myth that indie publishers can’t do it. Of course we can. But saying we can’t gives traditional publishers more power. And lets the uniformed young writers have a reason to go to them.

            Yet I hear this over and over, a lot on this very site, sadly. And that’s just because most indie writers are smart enough to know that it is more profitable to stay online. And haven’t taken the time to learn the other routes.

            So deciding not to go trade routes into stores is vastly different than saying only traditional publishers can do it.

            • Dean, I’m a newbie who came up in the post-traditional-publishing world, and like you I’m constantly astounded by the number of writers — trad-pub and indies alike — who fall prey to these self-limiting myths. And go around blindly repeating them.

              I’m sure there are many things I could learn from you to get my bookstore profit margins up, things which you live day in and day out at WMG. I’m sure that half of the reason that it was so unprofitable for me was that I was doing it wrong.

              And while I’m focused mostly on ebooks and audio right now, the fact that a total no-connections, no-experience newbie nobody like me had exactly zero trouble getting my books into bookstores — even the biggest bookstore chain extant today — tells me you’re spot-on.

              When it comes to finding readers and selling books, there are very few things a traditional publisher can do nowadays that an indie can’t. But there are lots of things that indies can do that traditional publishers can’t.

              The playing field is pretty level these days.

              • “even the biggest bookstore chain extant today”

                My brain might have had a BPH glitch. First thing that came to me was “Sears? Why would he want his books…? Oh, wait”

                Take care.

        • Dean Wesley Smith

          Seriously, Jay. See my response to Paul. But we do it, and I know of at least ten other indie publishers who go trade as well as online, and that’s before I read Paul’s post. He tried it and it worked as well.

          Saying only traditional publishers can do it for some fairy dust reason is misleading. If you took the time, you could do it as well. And it doesn’t cost that much, surprisingly.

          Knowing how and deciding not to go that route is smart business. Claiming only traditional publishers can in reality do it is just spreading a myth.

  16. If you’re an indie author, now is the time to persevere. Forget about Amazon for a moment and imagine that you, the indie author is competing for the readers’ dollars. This is your moment of truth.

    I have pointed this article before, but the lesson is still true: http://blog.learningbyshipping.com/2014/01/18/if-at-first-you-dont-succeed-disrupting-incumbents-in-the-enterprise/

    The most important thing to realize about a large successful company reacting to a disruptive market entry is that every element of the company just wants to return to “normal” as quickly as possible. It is that simple.

    Once the initial wave of competitive wins settles in and the disruptive products lose, there is much rejoicing. The teams just get back to what they were doing and declare victory. Since most of the team didn’t change anything, folks just assume that this was just another competitor with inferior products, technology, approaches that their superior product fended off. Existing customers are happy. All is good.

    This is exactly where the biggest opportunity exists for a disruptive market entry. The level of complacency that settles into an incumbent after the first round of victories is astounding.

    If you can produce a product that the market wants, this is your chance. While the traditional industry is patting itself on the back and the gold rush writers are getting discouraged, you need to be out there finding your fans.

    • I really, really need a like button so that I can use it on this.
      So well said.

    • This is one of the best things I’ve ever read on TPV, and that’s saying a lot.

    • Bravo, Mr. Ockham. Your closing paragraph, especially, ought to be carved into the foreheads of all writers so that they see it each morning while brushing their teeth.

    • Well said, William.

      People and companies settle into their new version of ‘normal’ and assume the storm has passed.

      I use an analogy at my day job all the time that goes like this (and I think of big publishing every time I say it):

      If you own an auto repair shop in town and everyone brings their car, let’s say you can hire 4 people to work for you.

      1 year later, a guy moves into town, opens a repair shop and takes half your business and 1 mechanic.

      Your response? You lay off another mechanic because you can’t afford him on half the business you used to have. Now you make 50% of your old revenue with lower expenses and think things are good.

      You;re an idiot. If you were a good shop with happy customers, the new guy who opened down the street would have failed. You were established and kept people happy wiuth honest work and fair prices – that should be a recipe for success. Instead you lost half your business.

      The problem was you. It certainly wasn’t the guy you fired to mask your ineptitude – you know the same guy who was fine when you were doing well….

      Publishing is the same. Downsized staffs, rights grabs and tiny advances later, everything is fine???

      Wow…

      William is right, author/pusblishers need to be working hard to earnt heir place in the market right now. It’s a great opportunity.

    • Boom. That one just went right into Evernote for the next time I’m procrastinating.

    • I am reminded of the Roman Empire in its latter stages:

      – disruption, loss of territory to barbarians.
      – incomplete recovery.
      – big sigh of relief.
      – another disruption, loss of territory to barbarians.
      – another incomplete recovery.
      – another big sigh of relief.
      – etc.
      – final disruption.

      • They even tried recruiting the barbarians to protect them.
        Which cost them money and taught the barbarians how weak and ineffective the empire was.
        Ended up hastening the end.

        • So, trad publishers should start offering us jobs soon. I am holding out for chief data analyst for $500 K per year. Well Assistant Vice President of Analytics, at least.

    • I hear you, William: get out there and start finding your fans.
      Except that’s what I’ve been trying to do for the past 3.5 years since I left trad publishing (3 novels with those bandits) with a lot of battle scars, and began with indie publishing. I’m still a stranger in a strange land–to the extent that while I write novels that I daresay are written above the standards of their genres (fantasy and suspense and award nominations in both)–I don’t, alas, have what it takes to be one of the indie success stories: primarily, I’m not productive (slow writer and slower imaginer). So that’s on me. Only five books out there and a sixth very soon; working on a seventh.
      But finding those fans? Sheesh! BookBub was a bust for me and now is far too expensive. Like Doug M. I haven’t enough reviews (except for one novel) to qualify for BookBub Lite sites. Goodreads Giveaway promotions were a waste of time and postage. I’ve tried ethically soliciting reviews and the return on all the hours spent was discouraging to say the least, though my single review was a lengthy 5-star. My book covers and formatting–technical stuff–were professionally done. I have a newsletter but as yet only a few subscribers.
      I’m afraid that as much as I hate to say it about trad publishing–how I loathe thee, let me count the ways–it still remains the better route to visibility, even if you’re not one of its 1% darlings.
      I may, in fact, not be producing stuff the market wants, but it’s what I want to write so we keep on keeping on.

      • Bruce, hang in there. There are no guarantees. But a little more attention to detail in your indie publishing wouldn’t hurt.

        It’s awesome that Greg Iles, whose writing I admire, wrote a blurb for you.

        But you should at least try to spell his name right on your website.

      • Hmm… “The Shadow of His Wings” looks pretty interesting… I’ll add it to my TBR wishlist on Amazon. 🙂

  17. “One literary agent said, “four years ago, indie publishing had us quaking in our boots. We really wondered whether our whole business model would be upended. We don’t worry about that anymore. Another said “we counsel our authors about self-publishing, but there is less interest in it and less of a rush to it than there was a couple of years ago.” The publishers were similarly relaxed about whatever “competition” self-publishing offers.

    I suspect most self-publishers are just skipping the agent inquiry stage now, so it is no wonder they don’t hear about it.

    As for the publishers saying they are “relaxed” – business people will generally feign non-concern about the competition, just like sports coaches and army generals. What they say and what they feel are two different things.

    • Exactly. They don’t see the number of people who never talk to them, so they don’t worry about it.

      And, in a similar vein, “we counsel our authors about self-publishing, but there is less interest in it and less of a rush to it than there was a couple of years ago”. I read this as 1) the folks who were willing to leave have all gone now, so 2) the rate of author loss has plateaued, and 3) we’ve already written off that loss, so the worst part is over. And, from their point of view, they may be right. If your goal is not to win but is simply to not lose too badly, then a plateau looks just fine.

  18. “From veteran publishing consultant Mike Shatzkin:”

    So you know it’s a load of BS (no, not best seller …)

    “One literary agent said, “four years ago, indie publishing had us quaking in our boots. We really wondered whether our whole business model would be upended. We don’t worry about that anymore.””

    They know they’re in trouble, so why worry about it? 😉

    “Another said “we counsel our authors about self-publishing, but there is less interest in it and less of a rush to it than there was a couple of years ago.””

    Of course, the poor fool writer went to the ‘literary agent’, so they’re already on that path. (this is where you throw a ‘Do’h’ brick at them in the hopes of knocking some sense into them …)

    The primary sensory organs on this one are shoved way up his solid waste chute …

  19. Well, I’m glad the big publishing machine isn’t worried about me. I’m not worried about it either. We can all live and let live and sing in perfect harmony and buy the world a Coke and everything.

    But:

    whatever “competition” self-publishing offers

    If self-publishing is constituting some mortal threat to everybody’s existence

    I’d be a lousy blogger if I didn’t save best … for last

    The tone here is not suggestive of an indifferent professional. It’s suggestive of a gossipy middle-schooler meangirling the new kid. Just saying.

    • And the majority of mean girls from my junior high are waitressing or weaving baskets for a living while I’m doing something I love. Karma’s a b****.

  20. Some months back, I was offered a BPH contract for a series I was shopping. The money was okay, low five figures per book in a three book deal, BUT the BPH wanted all rights (world, audio, etc) as part of that deal.

    I said no. I’d pretty much had enough of BPH at that point and the rights grab was egregious. I decided to make a real attempt at self publishing.

    In the first month of release, the first book in that series made and exceeded the advance offered to me by that BPH. In the first month.

    No disruption? No threat? I’m one formerly BPH pubbed author who will not be returning to NY any time soon.

    • Congratulations on your sales, RA.

    • Mike has never met a person with your story.

      I’ve met dozens.

      And authors talk to one another.

      There will be a slide in quality at BPH, as more and more talented writers stay away. Readers will continue to find plenty to read at great prices and not know they are reading indie. The process is self-reinforcing.

      • You’ve met me. And you better believe I talk.

        Also, readers don’t care if we go indie so long as they can get our books.

      • Hugh,

        sorry… I thought he’d met you? Not the exact same story, granted, but…

        Again, at this stage of the game, if he hasn’t met someone equivalent it’s because he doesn’t want to. Willful ignorance.

        Take care.

  21. Think about applying the football term: “run for daylight.”

    The BPH’s are running for daylight, through the hole before the hole closes behind them (closed by indie competition). The BPH’s are banged up a little but relatively unscathed (Yay!, they say, “We’ve made our quarterly projections!”)

    Meantime, the rookie squad they’re playing is learning something about the game, something about them (the BPH’s), and something about themselves, to be better players individually and to work better as a team.

    And of course, we’ll play again tomorrow.

    😮 )

  22. One of the things we don’t know about the BPH’s and their perceptions of being unscathed by indie publishing, is… the details of the BPH contracts with Amazon.

    I think we can be sure that the BPH’s have tremendous contractual advantages over the Indies (as in the levels of payments they receive for their books that are not listed by them in the Kindle Unlimited program) and, given the throughput of Amazon as a distributor of paperbacks and ebooks, it’s hard to appreciate the impact of that set of unknowns (which may vary somewhat, publisher to publisher).

    So, factor that set of variables into the “run for daylight” model. We may think we’re gaining on them, but BPH numbers may have shifted, per their Amazon contracts, in ways we can’t know or measure.

    Ultimately, the BPH’s will lose market share and probably end up with way less than half of the (new measure:) Annual Reading Hours of Americans (others, too). But they may still look good to their corporate media owners (for a while) and, potentially, even to investors….

    One thing good to do, if you’re amind to: Watch the annual corporate filings of the media companies who own the BPH’s… watch for signs suggestive of what’s in the contracts of their BPH subsidiaries, with Amazon. The corporate filings aren’t going to say directly, but we may be able to figure some of it out.

  23. The publishers were similarly relaxed about whatever “competition” self-publishing offers.

    That is wonderful news. If they said it at a public book convention, I take them at their word.

    • Agreed, I love a foe that lays down and dies without me having to dirty my hands in a fight. (or at least takes a nap while I work around — and undermine him. 😉 )

      • Makes me think of that scene in… Zatoichi? were the ronin finds the duelist who bested him in combat… bedridden and dying.

        Take care.

  24. This seems to be the Day-of-the-Cartoon, so I’ll just throw this one in the mix: http://penny-arcade.com/comic/2015/06/29/fine-distinctions1

  25. James Scott Bell, you’re looking at a quarterly report. Things always go up and down, month to month and quarter to quarter 🙂

    According to Publisher’s Weekly, 2014 was a good year with sales up 4.6%.

    See the report and tables here: http://www.publishersweekly.com/pw/by-topic/industry-news/financial-reporting/article/67131-the-verdict-on-2014-sales-up-4-6.html

    The same folks report just a 1% increase in 2013: http://www.publishersweekly.com/pw/by-topic/industry-news/financial-reporting/article/61667-book-sales-rose-1-in-2013.html

    So the big publishers aren’t growing like weeds, but this last year was good news. And the point is that such numbers tend to lead folks to believe things are going well.

    I’m not arguing that PBH are on the right track. Just that there’s no big warning bell sounding with earnings.

    • Smart Debut Author

      John, I’d take a closer at those year-on-year numbers if I were you. And also read some of the deeper mainstream industry analysis. Because mergers and acquisitions get folded into those reported “growth” numbers.

      Except in Hachette’s case, where even rolling in the sales of their 2013 Disney/Hyperion acquisition couldn’t fill the 2014 hole in Hachette’s core business compared to their Hyperion-less 2013.

      Remember, PRH added Penguin and Santillana.
      Harpercollins bought Harlequin and Thomas Nelson.
      That’s how they managed to “grow” their sales.

      But according to Publishers Weekly,

      “Without any significant acquisitions, sales and earning fell at Simon & Schuster, Lagardere Publishing, and Houghton Mifflin Harcourt’s trade operation in 2014.”

      See: http://www.publishersweekly.com/pw/by-topic/industry-news/publisher-news/article/66108-bigger-is-better.html

      The “growth” is illusory — it’s the Big Five trying to buy their way out of the quicksand they find themselves in.

      • Not only this, but every week I see another consolidation story about “simplifying” imprints at a major publisher with some editorial “restructuring.”

        People are losing their jobs. Imprints are shuttering. I had dinner with my old boss two days ago, who runs an independent bookstore, and he says the PRH merger has been a nightmare for everyone involved. Sales reps are being canned; imprints are a hot mess; and no one can see where the actual savings are going to come from.

        • Interesting that news about the effects of the PRH merger. Most outside reporting has been treating it as just a machine-like entity, grinding out the efficiencies of the merged company. That the customers of PRH are seeing problems with their sales team and the component imprints is not what is being reported.

          I wonder if the PRH corporate masters are listening to their own press releases too much and may be blind to the problems being seen by their customers.

          • @ JR

            “Most outside reporting has been treating it as just a machine-like entity, grinding out the efficiencies of the merged company. “

            Most “outside reporting” today, sadly, is merely reprinting a press release verbatim, or, even worse, using it as sole-source “research.” Real journalism requires a modicum of investigating. It’s just not being done much anymore. Too much work and lost time in the 24-hour news cycle.

            There’s a scarey book out now Trust Me, I’m Lying: Confessions of a Media Manipulator by Ryan Holiday that details WHY this is all happening, especially on the Internet.

      • Hum. I’m looking at the tables at the bottom, but I’m not seeing what you’re seeing 🙂

        The AAP reports are a summary, not of one or five or ten publishers, but of hundreds. So if one of the big ones acquires twenty of the little ones, that doesn’t change the over all number. It simply switches who reported the numbers.

        The only time these numbers would grow through acquisition is if someone in the AAP acquired a publisher that wasn’t already part of the AAP.

        The Association of American Publishers (AAP) is the largest U.S. trade association for the consumer, educational, professional and scholarly publishing industry. Our more than 400 member organizations include U.S.-based multinational corporations, independent publishers, university presses, nonprofit publishers, professional and scholarly societies and industry service providers.

        More: http://publishers.org/about/overview

        I think we also have to look at the industry overall. It makes no sense to look at reports from one, two, or three publishers. There are always some publishers making more or less than others. Some having a bad quarter or year, some having great ones.

        You publish Twilight, you’re up. That phase runs it’s course, and you don’t have another one in queue, and now your numbers are down. But someone else publishes EL James, and now they’re racing to the moon.

        It wasn’t too long ago that we were reading about the awesome profits TPH were making because of ebooks. TPHs love ebooks. They love the high prices and the fat profits each makes.

        Furthermore, I wonder if we’re forgetting something about the industry in general. It’s a 90/10 industry–10% of the titles make 90% of the profits. So BPHs don’t need a gazillion new authors. They don’t need 1,000. They don’t need 100. They just need to make one or two big hits.

        A Divergent, a 50 Shades of Grey, a Dan Brown, a you name it makes them their money. Big book becomes movie or TV series becomes a bigger book.

        I gave a speech at the national ALA back in 2009. Working through Tor, I got Nielsen to agree to help me and share some data on YA titles. What I found was that Rowling made up around 12-15% of all YA sales. When Meyer came along, she took over that spot. Now that’s across all the publishers they pick up. This means those folks were swimming in money with just one author. I don’t think the publishers who had those licenses would care about the fact that they now had 3,000 books a month in the slush instead of 6,000.

        Again, BPHs have to do that with only a couple of books.

        I could be wrong.

        But I’d need to see some compelling trend lines over the last 3-5 years that would show these folks getting the teeth of their profits knocked out. I just haven’t seen that.

        Now, they could be ripe for a fall. But I would need to see it in the data. Hugh shows their portion of the pie via Amazon shrinking. But is the pie growing? Is their piece growing, even though it’s a smaller portion of this burgeoning pie?

        • The trick — and problem for the publisher — is knowing which 10% is going to make that 90%.

          The problem lies with the fickle public, the readers at large. We have yet to design a system that we can plug a book/movie/song into and get a good reliable dud/okay/great/blockbuster reply. Since publishers can’t be sure which goose is about to lay a golden egg or three, reducing the number of writers in their coop reduces the odds of golden eggs, eggs if laid free range they don’t make any money on. (and if golden eggs are available from other sources, it can lower the value of their golden eggs.)

          And the geese are wising up, many are finding they can live just fine outside the coop — and they get more scratch for their eggs (golden or not) than they would in the coop.

          The times, they are a changing, and the publishers will be forced to change with it or be left behind when the flock takes wing.

          • This is true, but I wonder what the goose ratios are.

            How many slush submissions does that channel need (agents and editors) to get the geese they’ll fly?

            And how many geese do they need to fly to get their big sellers?

            And how frequently do they need to do this to replace the big seller churn?

            Patterson makes them a boatload year after year after year. Child does the same. Roberts. Koontz. Go on down the line. How frequently do you need to replace them? How many new ones do you need to add to grow that pool?

            I have to think the goose ratios are smaller than we think.

  26. Also, to the comment about inflation. It hasn’t been that high: http://www.usinflationcalculator.com/inflation/historical-inflation-rates/

    Looking at that table, it seems the BPH are growing.

    Again, I’m not saying BPH are on the right track. Just that it seems reasonable that many of them wouldn’t feel the sky is falling.

    • Smart Debut Author

      See my above comment.

      It’s like five big corporate farmers watching their orchards dying, but reporting year over year growth because they are buying up the neighboring farms, too.

  27. The pendulum swings, and I’ve noticed there’s always a tendency for each side to think it’s stopped and will stay on their side (or the other side) forever.

    Change isn’t linear, the pendulum swings right, center, left and back.

    It’s important to stand back from the swings and look at the bigger picture.

    There are three very important factors in operation here.

    1. Amazon and its ability to both completely replace publishers and to subsidize self-publishers. Great monolithic and capitalistic (meaning the pursuit of money is the ethical directive) power in development.

    2. The freedom of the writer to publish without a publishing company, and to publish whatever they want.

    3. The digital technology that will replace paper (and board and mortar stores for that matter), along with the growing generation that is more comfortable with electronics than books.

    My guess is that on some level the upper management in Publishing knows this, but they hope most of them will be retired before all of this really comes into play.

  28. I think Mike Shatzkin is reporting what he heard and experienced. If it is true that the Big-pubs et al are not worried about Indie Authors, how would that affect us? We continue publishing per the rules allowed by Amazon. My sales have increased year over year and that’s what counts, not scaring the Big-pubs.
    However, what if the Big-pubs are putting up a ruse? You don’t want to let your competition know that you’re scared or weak. And if you display success a lot of potential writers may be discouraged by the self-publishing fad and come back to them hat in hand, with trembling hands offering their manuscripts for publishing. Kicking the can down the road and delaying the inevitable is a strategy as well.

  29. Agree with the feeling that big publishing is telling indie authors, “We are not scared of you.” Mix of bravado, deception and that same old ostrich-head-in-the-sand approach.

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