Big Publishing


25 November 2015

From TeleRead:

I’d like to add a new term to the publishing debate: Bookenfreude. I’m defining this as: “irrational pleasure derived from any apparent misfortune for e-books, regardless of truth, context, or implications.” And I was inspired by Len Epps’s terrific summary of the state of modern publishing in TechCrunch, “On The Dark Matter Of The Publishing Industry.” (Chris Meadows has also covered the piece for TeleRead.) There, he waxes on Matthew Ingram’s evocation of “a whiff of anti-digital Schadenfreude” in his counterblast to the New York Times‘s recent thinly disguised puff piece for Big Publishing on the supposed slump in e-book sales. So I tried to go one better by summing up the whole phenomenon in one word.

Epps doesn’t exactly add much to our understanding of the Trad/Big Pub vs. Self/E-Pub debate, though he does articulate it beautifully. It’s not exactly news to say that traditional publishers are trying to trap the post-e-book world into the same structures and business models that were dictated by paper print publishing. After all, that’s just what Big Media has done in every other digitally disrupted medium so far. However, Epps does highlight how transparently false and self-serving Big Publishing’s arguments have become, even to relatively neutral observers.

Link to the rest at TeleRead

Click to Tweet/Email/Share This Post

UK #Workinpublishing week suggests trad publishing has a talent problem?

22 November 2015

From TeleRead:

The UK Publishers Association has just announced #Workinpublishing, a campaign “to raise awareness and change perceptions about publishing as a career option for 16+ students, especially those from under-represented backgrounds.” Coming so soon after the announcement of the London Book Fair/Society of Young Publishers Trailblazer Awards, for younger publishing professionals, this does make you wonder whether publishing is having trouble attracting and keeping the UK’s best and brightest graduates.

Certainly, the PA’s announcement suggests that UK publishing is finding it hard to pull in the diverse skill sets it needs to fully embrace digital publishing and e-books. “Publishing needs to be seen as a career option for lawyers and accountants, for digital coders and science graduates,” it says. Indeed, one key component in the #Workinpublishing initiative is an invitation to try self-publishing. “At the Birmingham Skills Show visitors will be encouraged to ‘Have a Go at Publishing’, from creating their own interactive ebook with CircularFLO, learning how to write a book blurb or design a best-selling book,” the announcement explains.

The campaign is also launching #Workpublishingweek from November 23rd, “which will see tips, blogs, videos etc posted about jobs and opportunities in publishing along with live twitter chats.” The PA evidently wants to involve and mobilize the entire industry, and is “encouraging the publishing workforce to support #workinpublishing week by getting involved and sharing their invaluable industry insight.”

. . . .

Then again, the PA may be acting to deal with a problem it isn’t quite so ready to foreground. We’ve seen several statements out of the UK lately about Big Five publishers’ failure to sign up to the UK Living Wage. Would young graduates considering a career in publishing be attracted by Accent Press’s statements in The Bookseller and on Facebook that “publishing is a notoriously badly paid industry” and has a “reputation for being poorly paid and exploitative”?

Link to the rest at TeleRead

PG doesn’t think that trying out self-publishing is likely to lead to a greater interest in working for legacy publishing unless you’re a total bust at self-publishing.

Betting Big on Literary Newcomers

21 November 2015

From The Wall Street Journal:

Cynthia D’Aprix Sweeney, a former marketing copywriter in Los Angeles, dreamed for years of becoming a novelist but never had any illusions about earning a living from it. Her goal in writing her first novel, “The Nest,” which she tackled in her early 50s, was merely to finish it.

In a whirlwind week as publishers read the manuscript last December, HarperCollins’s Ecco editorial director Megan Lynch made a pre-emptive offer to publish the novel for at least $1 million. “I never imagined people would respond that way in a million years,” said Ms. Sweeney, 55. The book, about four adult siblings whose anticipated inheritance has all but evaporated because of one brother’s bad behavior, is scheduled to be published next March.

Literary fiction, long critically revered but poorly remunerated, is generating bigger and bigger bets by publishers. Thanks to a spate of recent runaway hits such as “The Goldfinch” in 2013 and “All the Light We Cannot See” last year, publishers are increasingly willing to pony up enormous advances to secure potential blockbusters.

Social media sites such as Twitter, Facebook and Goodreads have contributed to a culture in which everyone reads—and tells their friends about—the same handful of books a year. It’s increasingly a winner-take-all economy, publishing executives say.

As a result, publishers are competing for debut literary talent with the same kind of frenzied auction bidding once reserved for promising debut thrillers or romance novels. “If they feel they have the next Norman Mailer on their hands, they’re going have to pay for that shot,” literary agent Luke Janklow said. “It’s usually the result of a little bit of crowd hysteria in the submission.”

. . . .

The need to secure one of the few must-read books of the year has given rise to an elite new club: the million-dollar literary debut.

At least four literary debut novels planned for 2016 earned advances reported at $1 million or more, a number agents say is striking in the world of highbrow fiction. At least three such debuts were published this year, and two in 2014.

. . . .

Tara Singh Carlson, a senior editor at G.P. Putnam’s Sons, said it was “terrifying” when she placed her first-ever million-dollar bid for a book last spring. “It made me want to throw up,” Ms. Carlson said. The book was “Homegoing,” a debut novel by 26-year-old Yaa Gyasi, who was born in Ghana and raised in Alabama. It traces the descendants of two half-sisters born in 18th-century Ghana, covering seven generations and more than 250 years of history—including the Jim Crow era, the Great Migration and the Harlem Renaissance.

Ms. Carlson said she saw the novel “as a 21st-century retelling of ‘Roots.’ It felt like it could have that sort of resonance.” In a 10-bidder auction, the book went to Knopf, which scheduled it for release next June. Soon after that auction, Ms. Carlson scooped up a thriller called “Maestra” for seven figures, and she’s ready to pounce on the next novel she falls in love with. “If you see something good, you want to get it,” she said.

. . . .

The lack of a sales track record is one of the factors that makes debut authors most appealing, publishers say, because there is no hard data to dampen expectations. “You can pin all your hopes and dreams and fantasies on a debut novel,” said Eric Simonoff, an agent known for negotiating seven-figure advances.

Some worry that large payouts for debut novels could do more harm than good. They put pressure on first-time authors and consume resources that otherwise might go to authors who have posted moderate sales, some agents and publishing executives said.

“It’s not that they’re betting on the wrong writer, it’s that the bet’s too big,” said Morgan Entrekin, publisher at the independent house Grove Atlantic, who noted that Grove can’t afford seven-figure advances.

Moreover, if the book doesn’t turn a profit, the relationship between the author and publisher can sour. And those disappointing sales figures are available for any other publisher to peruse when the author tries to sell her next novel. “That is a scarlet letter that you don’t get out from under,” Mr. Janklow said.

. . . .

David Enyeart, assistant manager of Common Good Books in St. Paul, Minn., said sales of “City on Fire” were “a fine, solid start” for a first-time novelist in hardcover, but were likely disappointing for Knopf. “For one like this where they made a big push, it can’t be great news,” he said.

Link to the rest at The Wall Street Journal (Link may expire) and thanks to Elaine for the tip.

The tech companies that are shaping the world the book business has to live in

18 November 2015

From veteran publishing consultant Mike Shatzkin:

Ever since Amazon arrived in the “book business” 20 years ago, each year the “book business” has become less and less of a stand-alone industry. Of course, the only part that ever really was a stand-alone was the trade business, where the entire ecosystem: authors and their agents, publishers, booksellers, and even — for the most part — the printers lived in a world of mutual dependency but pretty much standing apart from what went on in the rest of the world.

Amazon actually took advantage of that industry insularity. They developed a business model that used books as a customer-recruitment tool but with the intention of making their profits elsewhere. In ways that were not understood at the time, that strategy was both viable (the book publishing world didn’t believe Wall Street would fund a company nearly indefinitely with current losses to build a future position of strength, but they did) and impossible for a book-dependent business to compete with. (Barnes & Noble and Borders had to make money selling books; Amazon didn’t.)

By the latter part of the first decade of this century, a Big Five CEO in the US delivered this observation to me. “I used to be able to get the CEO of my biggest accounts on the phone if there was something to discuss.” That was no longer possible with Amazon. And, in fact, if he could have gotten Jeff Bezos on the phone, there would have been very little to talk about.

. . . .

This year when we met with our Conference Council to plan the next DBW, they told us our business needed to hear more about the big tech companies. That reflected the reality the CEO observed nearly ten years ago. Our world is being shaped by the big tech companies. And that doesn’t just mean the obvious one, Amazon, which is almost every book publisher’s biggest trading partner. It means Facebook and Google, which have become perhaps our primary marketing mechanisms. And, of course, it also means Apple, which has become the second-leading ebook provider to Amazon.

. . . .

Indeed, we have reached a point where every trade publisher needs a strategy for its company’s dealings with the tech giants. And the forces that might affect the growth, stability, or strategies of the big tech companies, including anti-competition actions by and within the European Union, now call for attention and understanding from publishers in the US who could be affected by these changes.

. . . .

[From Mike’s discussion of a list of speakers for DBW]

Jonathan Kanter is an antitrust attorney at Cadwalader, Wickersham & Taft and co-head of the firm’s technology group. Jonathan represents both tech companies and content providers. He is totally familiar with the business models of the major tech companies, including Amazon, Apple, Facebook, and Google. This includes both the benefits they provide and concerns that some of these companies use their position in the market to distort competition to the detriment of content providers. At DBW, Kanter will focus on how book publishers interact with the big tech platforms. He will explain the current antitrust actions pending against big tech companies and the potential impact on US-based book publishers.

We’ve also asked Kanter to talk about what remedies might be applicable here in the longer term to preserve the important services that big tech companies offer to consumers while at the same time protecting the rights and businesses of content creators. Could the government impose rigorous but intelligent remedies that address concerns without destroying the value that these tech companies create? Kanter will spell out how things could get worse for the content industries if there are no controls and explore how government agencies could use enforcement action or regulation.

And we’re working on more. There are anti-monopoly legal actions taking place in Europe against the both Amazon and Google. While Kanter will include those in his analysis, we are also talking to our European friends, looking for the right person to bring us a report from the front on these as well.

Link to the rest at The Shatzkin Files

PG says it’s nice that publishing has discovered Apple, Google and Amazon are important in a digital world.

But here comes antitrust. Again.

All but one of the largest publishers in the United States have recently settled illegal price-fixing charges filed against them by the Justice Department. The collusion was so amateurish and overt that PG concluded that either the CEOs of Big Publishing were total idiots or they had never learned anything about antitrust law.

PG will note that, many years ago, before he went to law school, at his first job out of college, he was required to attend a briefing on antitrust law as part of new employee orientation for a big financial services firm. The type of antitrust violations committed by the Price-fix Six were discussed during that briefing.

Evidently, Big Publishing doesn’t have briefings about antitrust law. Perhaps they don’t have briefings about any kind of law.

Cadwalader, Wickersham & Taft is an ancient and venerable New York law firm with a reputation for being very profit-driven. The Cadwalader attorney will give a fine presentation on antitrust law. Lawyers do this sort of thing in order to attract clients.

One does not attract clients by telling them their legal dreams are hogwash. In a perfect Cadwalader world, every publisher in attendance would hire Cadwalader as its antitrust counsel and illustrious Cadwalader partners would explore a wide variety of antitrust possibilities at close to $2,000 per hour. Publishers would move from not knowing anything about antitrust to learning nearly everything about antitrust . . . and legal billing.

Even with Cadwalader’s help, PG doesn’t think the government is going to save Big Publishing.

PG is pretty sure that Jeff Bezos knows about antitrust law. He understands that being the largest bookstore is not a violation of antitrust law. Selling books at low prices is not a violation of antitrust law. Even upsetting big publishers is not a violation of antitrust law.

At its root, much of antitrust law is designed to protect consumers. It would be hard to find a better friend to consumers than Amazon.

Mike describes the publishing business as a stand-alone industry. PG agrees, although he would use terms like insular, parochial and out-of-touch.

Major US book publishers still reporting falling eBook sales

11 November 2015

From Talking New Media:

The major book publishing companies continue to report mixed results, especially in the area of eBooks. The Association of American Publishers, who represent the major publishers, reported that publishers increased 10.9 percent in July, but eBooks sales fell in every category.

This effecting margins at many publishing houses, though the fact that many publishers have raised the price on eBooks is at least partially to blame for the trend.

It is important to note, as far too many media reporter forget this, the AAP represents a significant portion of the market, but not the whole market. So, there are plenty of observers who do not believe that eBook sales are suffering as much as some organizations are reporting.

. . . .

Sales in the US were soft as Hachette revenues were also down 4.2 percent for the quarter. Lagardère more than made up for this with stronger sales in France and Spain.

Link to the rest at Talking New Media

Declining E-Book Sales Hit Home

9 November 2015

From Publishers Weekly:

Lower e-book sales were a big factor in the weak financial performance at HarperCollins and limiting gains at Simon & Schuster in the quarter ended Sept. 30, 2015. At HC, EBITDA fell 23.6% relative to the similar period in 2014, dropping to $42 million from $55 million. Total revenue rose by less than 1%, but without the benefit of the August 2014 purchase of Harlequin, revenue would have been down about 2% and EBITDA off 33%.

Parent company News Corp blamed the weak sales performance on lower Divergent sales and lower e-book sales. Digital sales, which include both e-book and digital audio sales, accounted for 20% of revenue in the most recent quarter (about $82 million), down from 23% of sales ($93 million) in the comparable period a year ago. With digital audio sales generally performing well across the industry, the 11.8% decline in digital sales is most likely due to a drop in e-book sales. A bright spot at HC was the U.S. general-books segment, which benefitted from more than three million units sold of Go Set a Watchman by Harper Lee.

In a conference call discussing the quarterly results, News chief executive Robert Thomson said the company is “watching closely” the softening e-book sales trend in the U.S.

. . . .

While digital audio sales had a solid third-quarter performance, total digital sales fell from 28.3% of total S&S revenue (about $56 million) in last year’s third quarter to 24.8% of sales in the most recent period ($50 million). E-book sales are estimated to have declined about 17% in the quarter. Sales of digital audio, meanwhile, are up about 40% in the first nine months of 2015 compared to last year.

S&S CEO Carolyn Reidy said she is not too worried about the decline—yet. She said there are lots of factors behind the e-book sales decline, including a change in product between last year’s third quarter and the most recent period. Reidy said S&S has seen little evidence to suggest that higher e-book prices are behind the e-book sales slump and noted she wouldn’t be surprised if e-book sales started to rise again.

Link to the rest at Publishers Weekly

PG notes the big declines in EBITDA compared to smaller declines in revenue reflect the fact that ebooks are much more profitable on a per-unit basis than print books are. No printing costs, no shipping costs, no returns, publishers just squirt a bunch of ebook electrons to Amazon, then wait for the money to flow in.

Writers Shouldn’t Romanticize Rejection

8 November 2015

From The Atlantic:

Last month, the Jamaican writer Marlon James won the 2015 Man Booker Prize for Fiction for his riveting novel, A Brief History of Seven Killings. A spate of articles came out documenting his win, noting the fact that the 44-year-old James was the first Jamaican to win the prize. One article by The Guardian however, focused on the fact that the manuscript of James’s first novel, John Crow’s Devil, was rejected close to 80 times before finally being published in 2005. It also discussed how James had given up when faced with such vast rejection. “There was a time I actually thought I was writing the kind of stories people didn’t want to read,” he said, going on to describe how his desperation drove him to destroy his own work. “I actually destroyed the manuscript, I even went on my friends’ computers and erased it.”

. . . .

Time and time again, the literary establishment seizes on the story of a writer who meets inordinate obstacles, including financial struggles, crippling self-doubt, and rejection across the board, only to finally achieve the recognition and success they deserve. The halls of the literary establishment echo with tales of now-revered writers who initially faced failure, from Stephen King (whose early novel Carrie was rejected 30 times before being published), to Alex Haley (whose epic Roots was rejected 200 times in eight years). This arc is the literary equivalent of the American Dream, but like the Dream itself, the romantic narrative hides a more sinister one. Focusing on how individual artists should persist in the face of rejection obscures how the system is set up to reward only a chosen few, often in a fundamentally unmeritocratic way.

What are we meant to make of the fact that James’s manuscript was rejected 80 times? Sadly, this phenomenon isn’t that uncommon. In fact, there’s a website dedicated to bestsellers that were initially rejected. Was it lack of imagination on the part of those publishers? Was it unconscious bias against a new and unfamiliar narrative—one that they didn’t regard as “mainstream?” Or was it a complex business decision based on multiple factors? As an emerging writer of color, I’m no longer inspired by this narrative. I don’t see much cause to celebrate when writers of James’s profound talent are roundly rejected in the course of normal business.

I’m weary of articles about beloved novels that almost didn’t exist and esteemed writers who almost walked away for good. And while I’m genuinely happy and grateful for the voices that make it through to be published and am thrilled when they receive well-deserved rewards and recognition, I know they are the slim exceptions, and that this is particularly true of writers of color.

. . . .

I remain perplexed by a system that creates the conditions by which manuscripts that will go on to be lauded are first broadly rejected. While other sectors have certainly overlooked brilliant new ideas and missed opportunities for innovation, this fact isn’t usually romanticized or celebrated. In other sectors this level of oversight would be called “a system failure,” or “inefficiency,” or “failure to innovate.” And policies and practices would be put into place to try to prevent this from happening in the future.

But I don’t see those kinds of self-critiquing evaluative discussions or major efforts to dismantle such systems in the literary world.

Link to the rest at The Atlantic and thanks to Masha for the tip.

PG says perhaps it’s time to give up on traditional publishing as irredeemable for a host of different reasons.

Book Publishers Hope Holidays Bring Cheer

7 November 2015

From The Wall Street Journal:

The biggest bets are on familiar names and faces, a reminder of how much track records matter to readers at this time of the year. HarperCollins Publishers, for example, has printed 700,000 hardcover copies of Mitch Albom’s “The Magic Strings of Frankie Presto,” a story narrated by a guitarist touched by the supernatural. HarperCollins, like The Wall Street Journal, is owned by News Corp.

Tuesday also marks the return of Jon Meacham, a Pulitzer Prize-winning author. Random House is printing 390,000 copies of Mr. Meacham’s new work, “Destiny and Power: The American Odyssey of George Herbert Walker Bush,” making it the publisher’s biggest nonfiction work of the year.

. . . .

The relatively large print runs come at a time when the digital book market is in flux. E-book sales in the first half were down 10% from a year earlier, according to an industry report, a decline that industry executives attribute in part to higher prices set by the major publishers.

“There may not be one stand-out title yet, but I think the breadth and complexion of this holiday’s new titles is better than in 2014,” said Mary Amicucci, Barnes & Noble Inc.’s vice president of adult trade and children’s books.

The holiday season for publishers is particularly critical this year because the first six months have been disappointing. Through June, publisher net sales for consumer books were down 1.4% at $3.09 billion, according to the Association of American Publishers’ monthly StatShot report, which collects sales data from more than 1,200 publishers in the U.S.

. . . .

The bookselling retail landscape is unsettled. Barnes & Noble has continued to close stores this year and now operates 647 nationwide, down from a peak of 726 for the fiscal year ended Jan. 31, 2009.

To boost sales, the retailer is bringing back a wall of signed titles for the holidays, a popular and successful promotion last year. Barnes & Noble has also strengthened its educational toys and games offerings, a category that enjoyed a 17.5% revenue increase for the first fiscal quarter ended Aug. 1. Still, its first fiscal-quarter retail revenue fell 1.7% to $939 million, reflecting in part store closings and lower online sales.

Elsewhere, Books-A-Million Inc., the nation’s second-largest publicly traded bookstore chain, could soon go private.

. . . .

A survey taken in September of nearly 5,000 book buyers by industry researcher Codex Group LLC found that Amazon accounted for 68% of all online sales of new physical books and e-books, up 7% compared with a similar survey taken in November 2014.

Link to the rest at The Wall Street Journal (Link may expire)

Apple Thinks It Can Win This Case at the Supreme Court

5 November 2015

From Fortune:

It’s no accident that the petition Apple submitted to the Supreme Court last week begins with a reference to Leegin Creative Leather Products, a manufacturer of fancy cowboy belts. Or that the case known as Leegin v. PSKS comes up 81 times in the 250-page document.

Apple’s appeal rises or falls on Leegin. And Leegin, it turns out, is a precedent this Supreme Court knows well.

Seven of the nine justices who would hear Apple’s appeal were sitting on the high court in 2007 when Leegin was decided. And five of them saw things Apple’s way—or so the company believes.

Leegin raises the question at the heart of Apple’s antitrust defense: Whether the actions of a vertical player in a price-fixing conspiracy must be judged by the same antitrust rules that govern the activities of horizontal players who, by law, are supposed to compete with one another.

. . . .

“Leegin, a manufacturer of leather apparel, concluded that its interests would be best served by opting out of a price war ‘race to the bottom,’ focusing instead on quality and brand cachet. Accordingly, with specific exceptions, it decided to refuse sale to retailers if they intended to discount its products below their recommended retail price. Five years after this policy was introduced, Leegin discovered that Kay’s Kloset was violating the policy by marking down the Leegin products by 20%. When Kay’s refused to comply with Leegin’s policy, Leegin cut them off. PSKS, the parent company of Kay’s, sued charging that Leegin had violated antitrust laws when it entered into ‘agreements with retailers to charge only those prices fixed by Leegin.’”

. . . .

It’s not a perfect fit. Leegin was a manufacturer cutting deals with retailers. Apple was an e-book distributor, negotiating contracts with publishers. Leegin was well-established in the leather-goods trade. In the e-books market, Apple was a new entrant.

But in both cases federal judges rejected the defense that their respective deals were procompetitive, given market conditions. Their actions were found illegal per se—on the face of it. No ifs, ands, or buts.

In Leegin, the Department of Justice and the Federal Trade Commission recommended replacing the per se rule with the rule of reason, a legal framework that takes market conditions into account. The Supreme Court agreed.

Link to the rest at Fortune and thanks to JR for the tip.

Why Apple took its e-book fight to the Supreme Court

31 October 2015

From Fortune:

Having maintained its innocence throughout the federal district court trial, which it lost, and in the appeal, which it lost in a split decision, it should surprise no one that Apple is taking its e-book antitrust case to the highest court in the land.

Accompanying Thursday’s 250-page petition was a brief statement to the press:

“When Apple launched the iBooks Store in 2010, we brought choice to consumers and innovation to ebooks. We have always acted in the best interest of customers and content creators of all sizes. We did nothing wrong, and stand by our principles. At this point, our only recourse is to take this to the Supreme Court.”

 There’s no guarantee the Supreme Court will hear the case. And with two strikes against it, the odds of a favorable outcome for Apple are steep.

But that may not matter to Tim Cook and company.

With its war chest of cash, Apple can afford to wage quixotic fights. Especially if they are fights Steve Jobs started. Especially if a large segment of its customer base is inclined to see the case its way.

This is Apple “thinking different” to the bitter end.

Link to the rest at Fortune

For the benefit of those who may not have been visiting TPV during the extended legal battle of Apple and five major New York publishers against Justice Department antitrust charges, this was not a close case, just plain old price-fixing which has been illegal in the US since the passage of The Sherman Antitrust Act in 1890.

Apple may be sophisticated in product design and marketing, but it, and the big publishers involved, were crude and stupid when it came to violating antitrust law.

Next Page »