Home » The Business of Writing » When Reality Kicks Back

When Reality Kicks Back

31 March 2017

From author Sarah A. Hoyt:

Well, yesterday this was doing the rounds of our circles: Sales, Earnings Fell at PRH in 2016.

First of all, what doesn’t this mean?  It doesn’t mean Random Penguin is in serious trouble.  Not yet.  It doesn’t mean the entire edifice of traditional publishing is going away, either.

Look, at this point, just like Hollywood is mostly supported by foreign releases of the movies that don’t do too well here, traditional publishing is owned and propped up by European media houses who, if I read the situation right, don’t even understand how obsolete they’re becoming on this side of the pond.

. . . .

I think the European overlords of publishing houses have no fricking clue what is going on with reading here.  Note that all the official publications still lie about it.  And the trend is masked with things like the adult coloring book thing, which has kept Barnes and Noble afloat for the last 10 years or so.  We went in before Christmas, looking for something for Robert.  We found it.  It was a book of Drawing prompts.

In fact, the part of Barnes and Noble that is still books is mostly what I would call “novelty books” — drawing prompts, writing prompts, ten things you can do to make your house smell better this afternoon, and adult coloring books.  A LOT of adult coloring books.  By comparison the fiction section, let alone the science fiction section, was almost impossible to find and paltry.

Which is okay.  I mean for years I went to Barnes and Noble and the only thing I bought were the sort of Barnes and Noble Published books like “ten tales of knights and dragons.”  Only of course, now that’s not such a good business, because all that stuff is on the net.  And their fiction still disappoints me, which is why I started buying from Amazon the year it started up, when it sold only books.  Because books were published that I wanted to read, they just didn’t get SHELVED at my Barnes and Noble.  Which is why now that the coloring book thing is receding, B & N posted a loss (I think 16%) OVER CHRISTMAS.

But hold on to that “Books were being published.  They just weren’t shelving them in my Barnes and Noble so I could buy them.”

Because that’s what this post is about.  Reality and the limits of manipulating it.

Barnes and Noble isn’t going away tomorrow, there are fifty shades of bankruptcy in the west before you even have to face you shat the bed and should change approaches.  They’re not close to that yet, or if they are they think they can fix it with more cowbe– toys.  And “lifetsyle” gifts like mugs and reading lights (not needed since I got the backlit kindle.  Never mind.) Yes, I believe they will eventually go the way of Borders, and it will be sudden and terrible when it happens, but I don’t think we’re close to it yet.  On the other hand I could be optimistic.  I’ve been so in the past.

The publishers are even less going away tomorrow, because frankly, the non-fiction side is still very profitable and besides they get money from Europe.  Mind you some of their lines might disappear with an earthshattering kaboom very suddenly, and I’ve heard rumors that better connected people than I expect it “in the next five years.”  Could be.  Could not be.  I don’t know.  Indie has moved both faster and slower than I expected.  The establishment has certain resources, including money to weather slow periods (which they don’t seem to realize is now permanent) and a lot of magazines and papers willing to do its bidding so it seems like it will recover TOMORROW.

. . . .

First let me take you to a time far away, where there were no mega bookstores.  No Borders, no Barnes and Noble, none of the others, either.  The biggest ones were two or three branches of a bookstore in a big city.

These businesses were managed the way such things are managed.  You hired people who like books.  You eventually promoted them to managers.  And then you had managers who liked books.

To communicate with these people who loved books, you had book reps who loved books. I met some of these before the great layoff.  These people read the books and pushed them at the bookstores with attention to “Well, old Joe who has a bookstore at the back of his feed store in rural Colorado has done pretty well for science fiction in the past.  So, this book I just read which knocked my socks off will interest him.”

The system worked pretty well.  Look, no one was going to get massively rich from running a bookstore.  And writers still worked on a hit or miss basis.  But there was always the possibility of a surprise bestseller.  You might not appeal amazingly to your publisher, and you might stand outside the narrative they’re pushing, but if you’re a fan and you love the genre you’re writing in, well, some rep or even a bookstore owner might read it, love it, and handsell it to everyone, and word of mouth spreads…  So, in a way writers could sell to the public bypassing gatekeepers.

This didn’t make the gatekeepers happy for several reasons, the first being that after several mergers the houses behaved like normal corporations (which could be titled “death by bureaucracy”) and so an editor got incentives to accurately forecast how a book would sell.  Yes, your career could, justly, be ruined by giving millions to an author who no longer has a book in him and who writes something pathetically poor, but it could also be ruined because that book you bought for $5k had a runaway bestseller run with a hundred reprints, because it threw all the schedule out, and why didn’t you foresee this?

Link to the rest at Sarah A. Hoyt

Here’s a link to Sarah Hoyt’s books. If you like an author’s post, you can show your appreciation by checking out their books.

The Business of Writing

19 Comments to “When Reality Kicks Back”

  1. The BPHs won’t totally vanish any time soon, simply because of all the copyrights they control. If they stopped publishing new titles and fired everybody except the licensing group they’d still be sending billions every quarter to their overlords. Or maybe hundreds of millions… or millions… 🙂

    As for B&N, I might be reading their financials wrong but I think their over/under is three years.

    Doesn’t matter.

    What matters is the steady erosion of their market power and credibility. There is a tipping point ahead but it’s not a point where the vanish but rather where their credibility, even with Dreamers, vanishes. Still a ways off.

    They can still tighten the screws on Dreamers by not only reducing advances but by bringing back open submissions…with reading fees…editing fees…marketing fees. And because Dreamers think the Imprint matters, they’ll pay. For a while…

    They have lots of tricks they can still use. Like, “The Stephen King Collection, a full set of the works of the master of horror printed on fragrant 24 pound paper and rich corinthian leather”. Advertised on late night TV, QVC, and the CW streaming app.

    It’s just a matter of time.

    (BTW, anybody out there seeing actual TV commercials for new books? I am. Last week they were carpetbombing the CW streams with ads for Veronica Roth’s new one. It’s been a looonnnggg while since I saw such a campaign.)

    As for B&N, I might be reading their financials wrong but I think their over/under stands at 3 years. They might not see 2020.

    • Yes. The big publishers could lay off most of their staff and live off the backlist and a few proven bestsellers for decades yet. I expect them to do that, sooner or later.

    • What is telling to me about B&N was the analysis a few weeks ago that showed them loading up on debt and paying dividends and bonuses even though they were losing money. Those are the acts of people packing their trunks as they see the ship settling low in the water.

      Thing is, if they implode, where will be no end of blame for Amazon having done so, and I hate to think where it might be channeled.

    • “If they stopped publishing new titles and fired everybody except the licensing group they’d still be sending billions every quarter to their overlords. Or maybe hundreds of millions… or millions…”

      Yes. But then, once they become profitable simply focusing on their back catalogue, the temptation to add to it becomes strong (since they have the distribution and marketing machine going anyway). And, once profitable, the temptation for some rich person/corporation to buy it up for the glamour and influence peddling opportunities of being a big publisher becomes too tempting.

      We’ve seen the same thing happen over and over with the big Hollywood Studios (which also make most of their money from their old catalogues). They waste money, start losing money, go almost bankrupt (or actually bankrupt) and then are bought by someone who scales them back, makes them profitable, and then starts expanding until they are unprofitable again. Repeat.

      So I don’t think we’ll ever see the end of these big publishers. In fact, indies need to be prepared that someday they might get a grip and start printing books people really do want to read, and figuring out how to market them in a digital world. There was a time when Marvel Comics was completely failing, both as a comic book company and as a licensor of their intellectual property. They finally found a team that figured it all out and could take advantage of both their catalogue and their money to become ridiculously profitable.

      Probably, the current slate of NY editors and executives will have to die out or retire. But some sharp person might take charge, cut overhead and waste (as Hugh Howey has proposed, move out of New York), and that might give indies some real competition again in ebook sales.

      • The issue isn’t just the NYC crowd. As the OP points out, the bigger issue is their foreign bosses who don’t quite grasp the differences between the markets. Or how fast those differences are growing.

        And profitability is far from a problem just yet. What is starting to sink in is that the lottery winners are getting scarcer and the jackpots smaller. And that is making it harder to maintain the cash flow their overlords are used to. Those double digit net margins aren’t long for this world and without those margins there won’t be money for influence peddling or shotgunning titles into the market.

        The key change is a change in consumer behavior and that isn’t something they can’t change. At its most basic, what is happening is consumers are spreading their spending across the frontlist, midlist, and backlist; across formats, including digital; and across time, including used pbooks. Their entire model is predicated on big release window sales and those early peaks are declining because readers are no longer afraid of titles selling out a print run or going out of print. So even casual readers are learning to wait a bit after a high visibility title is out, to wait for closeouts, promo sales, cheaper editions, or just used copies. And many who do buy early cut their costs by selling their copies to recoup some of their money. Just notice how quickly after release used copies become available.

        Books are going now through the same changes music went through around the turn of the century with the rise of exchange stores that let them swap used CDs for credit towards other CDs. With CDs it was more noticeable because some woukd buy a CD, rip it or copy it, and then resell the still pristine original.

        None of these changes can be controlled, not by NY and certainly not from abroad. And they won’t go away so future investors will be only too aware of the reduced value of even the deep catalogs.

        Hollywood does offer a good example but the best examples are MGM and RKO RADIO. Sold and resold repeatedly and each time there was less and less remaining value.

        • “the bigger issue is their foreign bosses who don’t quite grasp the differences between the markets///

          i think Felix, this particular OP is opine rather than fact. Trust. The ‘foreign bosses, for instance at Penguini Randy, are from THIS side of the pond often. Though the Mohn family and their incessant foundations still ‘own’ PRH, Peng and RH, both have their top USA based heads of houses ALSO in charge of say, UK and other arms of P and RH. The rootstock is in USA,
          sending some of the most shrewd to also have oversight on various foreign ops.

          My hunch is the issue is not management, but rather Dohle, for instance who may put the kibosh on various as he is utterly beholding to the Mohn family to keep his job.

          Regarding on another note, just generally, the Band Ns here dont even remotely resemble the OP writer’s strange little bookstore. Ours here, and there are several within a truckride, are rows and rows of fiction, rows and rows of sci fi and fantasy, a huge history section, huge artist bio section, huge home improv section, enormous children’s area, strong poly sci area, a whole wall of craft books from making swords to making paper and more, with maybe half a shelf of coloring books. The stores are vibrant, populated with customers, lots of families, many students and singles. Im sure there must be a few ‘drawing prompt’ books, but there is a rich section of Basquiat, and other young and dead and young and living Abrams and Taschen books, etc.

          Could be wrong, but a lot of viability of bookstores is ok for now I think, as I agree with you, the next turn of the decade will tell.

          • Felix J. Torres

            Independent bookstores are a different story than B&N. For starters a lot, a plyrality, possibly a majiruty by now, rely on used book sales and specialization to survive.

            When you consider the third largest chain in the land is called HALF-PRICE BOOKS and suburban strip malls are peppered with tiny two-for-one used paperback places instead of WALDENS and B. DALTONS… well, it ain’t the 80’s any more.

            As for the nationality of the CEOs that matters less than the agenda they follow and where they get their marching orders.

            Remember how in the aftermath of the conspiracy trial the gut reaction of the establishment was to suggest they needed to go to the government to get fixed price laws like they have on the continent? Even parochial Newyorkers know that is not happening any time soon, what with the underpinnings of US antitrust law being cobsumer harm and the rising tide of populism that started in 2000. That right there shows a serious lack of understanding of the marketand the culture.

            The same can be said of the widely expressed expectation that merging Penguin and Random House would aggregate ebough market power to dictate terms to Amazon. Totally out of touch with the forces reshaping the US market.

            There’s more than water separating the US from European publishing.

        • Not to mention library use. I’d say about 80-90% of my fiction reading (ebooks) comes from the library. Most of those do not get bought, at least right away.

          And in the case of non-fiction, I’ll try a book from the library first (if I can find it) before deciding to buy it, especially a pricey book to be used for research for a series or novel.

  2. She says an awful lot of smart things in this post. I thought, huh, tradpub should hire her to explain to them what’s what. And then I realized no, they’re too busy trying to wedge their heads even farther up their own butts, so that’s not going to happen.

    More money for me.

    • “We’re the professionals, this is our business. We know best.”

      “You probably did, but it’s not 1990 any more…”

    • >More money for me.

      That’s what I say, every time I read articles like this. Big publishing missed the change, now they can’t even play catch up, because they — or their corporate masters — can’t or won’t see that it’s not their world any more.

      And yeah, about three years for B&N sounds about right. I mean, they’re not even hiding they can’t sell books, because they’re opening restaurants, for mercy’s sake.

      Oh, and another thought: We have a regional discount department store chain, and they’ve started selling adult coloring books. It’s hit the cheap stores now, that fad is old news.

  3. Bonus points for the Marvin the Martian nod: https://youtu.be/z8rYotiiFP8

Sorry, the comment form is closed at this time.