Big Publishing

Publishing Industry Speculates About Expansion Plans for Amazon Books

7 February 2016

From Publishers Weekly:

Remarks by the CEO of a mall operator set off a firestorm of speculation in the media and book publishing industry last week about what plans Amazon might have for creating its own bricks-and-mortar bookstore chain.

. . . .

Amazon had no comment on Mathrani’s remarks, which were made last Tuesday morning, and the company declined to elaborate when asked how Mathrani knew about Amazon’s plans.

. . . .

Asked whether the job postings prove that the company is planning to open more Amazon Books locations, an Amazon spokesperson said the only publicly announced store is the one it opened in Seattle in December.

As with most issues that involve Amazon, publishers were reluctant to discuss what the company may or may not do with Amazon Books, although a few executives did speak for attribution. Sourcebooks CEO Dominique Raccah said she does not think Amazon will look to open hundreds of stores, but believes the most likely course of action is a strategic expansion to showcase its electronics—as well as some books.

Another industry executive, who requested anonymity, said a limited store rollout is the most probable scenario. He said Amazon has to be tempted to do something in physical retail given the success Apple has had in selling its devices through the Apple Store.

. . . .

Kensington Publishing CEO Steve Zacharius questioned whether Amazon would open hundreds of stores that focus primarily on selling books that carry low margins, but he observed that if Barnes & Noble, Books-A-Million, or an independent chain announced it would open 400 outlets, “we’d all be jumping for joy.” Given Amazon’s dominant position in selling books, Zacharius said such a large bookstore expansion by the company could be a positive move for the industry—if “the books are sold at a reasonable price, not as loss leaders, so that everybody is competing on a fair basis.”

The head of another midsize independent publisher also pointed to Amazon’s strong market position and concluded that a large Amazon bookstore presence would be “unquestionably bad” for the industry. A big physical store footprint would position the company to take an even bigger slice of consumer book spending, the executive said. This executive feared that, rather than expanding the book market, a chain of Amazon bookstores would make it even harder for B&N to survive—and the survival of B&N is one of all publishers’ top priorities.

Link to the rest at Publishers Weekly

PG says if your industry’s future is based upon the survival of B&N, you might want to move to a different industry. And Steve Zacharius made sense for a couple of minutes, then his case of Amazon Derangement Syndrome kicked back in.

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Fox’s Megyn Kelly strikes a book deal

5 February 2016

From CNN:

Fox News host Megyn Kelly is about to become an author.

Kelly’s first book was acquired by HarperCollins this week after a bidding war involving several publishers.

HarperCollins said Thursday night that the untitled book would be released in the fall.

Reports about the value of the book deal varied widely. Deadline.com reported that it was worth $10 million, an exceedingly high price for any first-time author, even one as well known as Kelly.

. . . .

The deal keeps Kelly’s book in the Fox family. HarperCollins is owned by News Corp, which is controlled by the Murdoch family, just like 21st Century Fox — the parent of Fox News Channel.

The timing is noteworthy since Kelly’s Fox News contract comes up for renewal in 2017. Having a book come out in the fall of 2016 will surely raise her profile.

Kelly famously tangled with Donald Trump during Fox’s first GOP debate of the season last August, and Trump has attacked her many times since.

Link to the rest at CNN and thanks to Barb for the tip.

The State of the Industry

2 February 2016

From Hugh Howey:

Over the last ten to fifteen years, the publishing industry has undergone a massive shift from print to digital and from the east coast to the west coast. Understanding this shift is critical for anyone working in the field or who wishes to. Taking stock can be difficult. All manner of publishing has been greatly disrupted, but it’s often hard to see because what has changed is what’s now missing from our lives. And these missing things have not disappeared all at once. Rather, it’s been a gradual vanishing.

Your glovebox is no longer crowded with maps. The lowest bookshelf in the living room no longer sags under a full set of encyclopedia. There is no phone book in the top kitchen drawer. Manuals no longer come with every device. How-to books have gone away. Cookbooks as well. Driveways are no longer dotted with newspapers. And the daily commute sees far more people staring at screens rather than anything printed on paper.

There are exceptions in every household, of course. But for most consumers, the GPS-enabled smartphone has obviated the need for maps. Wikipedia and Google replaced the encyclopedia. We connect via social media, not phonebooks. Manuals are now online PDFs. The newspaper is our Facebook and Twitter feeds. To learn how to do practically anything, we turn to YouTube. Recipes are searched for online. And well over half of fiction reading has gone digital.

Publishing is all of these things. Publishing was even the little booklets that lined our CD and DVD cases, which have largely gone away. We don’t think of all of these printed artifacts as publishing, but they were. They not only required printing, they required copywriters, editors, and layout designers. Those who used to do these jobs now work in digital spaces. And this has been the great shift in publishing, from physical to digital. And the center of publishing — New York and the east coast — is now the west coast. The Big 5 of publishing is now better thought of as: Google, Amazon, Apple, Facebook, and Twitter.

. . . .

Digital is easier to spread, which increases information equality. It’s also better for the environment, not just in paper consumption but in the polluting delivery costs. Ideas are easier to generate, which has increased the diversity of voices. News has become crowdsourced, which reduces the corrupting power of those who formerly had monopoly control of information. With a camera and a broadcast booth in every pocket, the fears of Big Brother have turned into the mediating effect of billions of Little Brothers. We report on abuses of power, taking to Twitterverse to pressure corporations, and sharing videos to police the police. And we are far more accurate and informative taken as a whole than we are on relying on lone experts.

It’s difficult to find anything to complain about with this transition, unless you are a middleman who no longer provides a service commensurable with your cost.

. . . .

Let’s start with a list of those who are being disintermediated in the modern publishing landscape: Major book publishers, their historic retail partners, their former marketing muscle, the printers, and previously bestselling authors. We should feel empathy with those who are disrupted, as pivoting can be painful. But when the overall benefit to the general public is weighed, we understand that these disruptions are to be applauded. Again, we’re talking about greater access to information, a wider variety of voices, a boon to the environment, and a more equitable share of profits to creatives. This doesn’t make the pain of the formerly entrenched any less, but it should prevent us from making policy and purchasing decisions based on their appeals.

. . . .

In 2015, the only thing that saved print from serious decline was the adult coloring book fad. That craft books are counted alongside novels is revealing, both for the widget and profit-minded nature of the legacy publishing industry, and also the greater concern for sales over the culture of actual reading. 2016 will need another 50 SHADES OF GREY or coloring book phenomenon to stem the bleeding. This is a precarious situation in which publishers find themselves, especially with fewer medium sized presses to acquire. It would surprise me to see all of the Big 5 publishers standing two years from now. It would not surprise me to see a Big 3 five years hence.

. . . .

Controlling this message (or attempting to) has been another outlet made irrelevant by the west coast shift. Newspapers used to matter for book sales. Bestseller lists were checked weekly, as were the arts sections and the special Sunday book review inserts. No longer. Now, the only bestseller lists that move titles are the online sales lists, primarily Amazon’s. I saw this clearly as a bookseller. Even the front page of the New York Times Book Review couldn’t budge sales. But a mention on a late night LA talkshow, or a Tweet from a celebrity, or a recommendation from Zuckerberg, would shoot a title straight to the top. And nothing is more powerful than one of Amazon’s daily promotions. The marketing muscle, the inside access, the exclusive reviews, the feeling of mattering in this grand cultural tradition — all of this has been taken away from legacy reporters. And keep in mind that these same reporters were often aspiring novelists and non-fiction authors. They have done a miserable job of covering the disruption to publishers, because they are too emotionally invested to cover these trends like they cover the rise and disruptive forces of Uber, Lyft, AirBnB, Google, Facebook, et al.

The authors who benefitted most from the censuring of ideas have also been hurt. When 99.99% of books were not allowed to come to market, and the diversity of voices was culled to obviate risk to publishers, these .01%ers made hay. Mostly white males, there are many of them complaining today because their power, prestige, and incomes have all declined. The new power authors are predominately female, and to cope with the reality of this transition, the media and legacy authors have had to resort to lumping them into a single genre (erotica) in order to stigmatize them. Despite the fact that these authors write romance, thrillers, science fiction, literary fiction, non-fiction and other genres.

. . . .

Lately, these authors have had to team up with their advocacy groups in a PR battle against digital and self publishing. Writing letters to the DOJ, the argument here is that free speech was better served when only .01% of authors could publish their works. The share of income earned by these authors has plummeted, replaced with income heading to self-published authors. Last year, Amazon paid out over $140,000,000 to authors in its Kindle Unlimited program. That doesn’t count the dollars paid for book sales. This would be like publishers announcing a 7-figure advance every two and a half days for an entire year. The overall expenditure by consumers has only gone up a little, while the payout to independent authors has soared. That money came from somewhere. Those authors being hurt are now railing against a system that, once again, is good for consumers, for diversity, for the environment, and for creatives.

Link to the rest at Hugh Howey and thanks to Karen and others for the tip.

E-book sales abate for Big Five

2 February 2016

From The Bookseller:

For those who predicted the death of the physical book and digital dominating the market by the end of this decade, the print and digital sales figures (see below) from the Big Five for 2015 might force a reassessment.

Somewhat smugly, The Bookseller predicted 2015’s e-book decline in these very pages back in 2013—and endured ire (much of it in digital form, unsurprisingly) at the time. We were attempting to be objective about e-books, acknowledging that they were (and are) an exciting, vital part of the industry—but that they were also just another format, and one that was (and is) in its relative infancy.

But sales have dropped. Or, at the very least, we can without a shadow of a doubt say that e-book volume slid for the Big Five publishers for the first time since the digital age began, collectively down 2.4% to 47.9 million units last year. That 2.4% drop is probably shallower than many observers would have predicted.

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. . . .

The Big Five have a 56% share of 2015’s print volume through Nielsen BookScan. Assuming a broadly similar share in digital—the five probably garner a greater piece of the digital pie compared to other traditional publishers, but self-publishing makes up a decent percentage of e-books— that gives us 85.5 million e-books sold in Britain in 2015.

Link to the rest at The Bookseller

PG says “self-publishing makes up a decent percentage of e-books” substantially underestimates both the number of ebooks sold and the ebook revenue generated by indie authors.

However, at least it’s a nod in the general direction of what’s happening in the hidden Amazon ebook market not measured by the tools Big Publishing uses.

HC UK profits tripled in financial year 2014-15

2 February 2016

From The Bookseller:

HarperCollins UK’s profits tripled year-on-year in the 12 months to end June 2015, accounts newly filed at Companies House have revealed.

Revenues were shown to grow by £6.6m to £186m and profit before tax by £8.9m to £13.1m (£4.2m in 2014).

. . . .

HarperCollins attributed the growth to the success of its Children’s and Collins Learning divisions: David Walliams’ Awful Auntie outsold any other title published in 2014, according to the report, with strong sales reported from authors Veronica Roth, John Green and Michael Bond.

. . . .

HarperCollins’ global earnings were down 24% for the first quarter to 30th September 30th 2015 owing to reduced e-book sales, as well as lower sales of its Divergent series in the US.

Link to the rest at The Bookseller

At Authors United Event, a Call to Bust Amazon ‘Monopoly’

29 January 2016

From Publishers Weekly:

If Amazon’s business practices continue unchecked the result could be a “nuclear winter” for book publishing, said founder and CEO of Smashwords Mark Coker during a January 27 event called Amazon’s Book Monopoly—A Threat to Freedom of Expression?

Coker participated via Skype in a panel called “Amazon and the Author” at the afternoon-long event sponsored by the Authors Guild, the American Booksellers Association, the Association of Authors’ Representatives, and Authors United, and held at the New America Foundation in Washington, DC.

Last year the event sponsors asked the Department of Justice to examine Amazon for antitrust violations. After a meeting with the DoJ that Authors Guild executive director Mary Rasenberger said “went very well,” the organizations planned this event to delve into antitrust concerns, as well as ways in which Amazon’s “book monopoly” affects ideas and their dissemination in a democratic society. As the invitation to the event from Authors United founder DougPreston said: “Never in the history of our country has a single corporation dominated a vital marketplace of information—until today.”

. . . .

 Foer claimed that Amazon is “destroying the culture of book publishing.”

Link to the rest at Publishers Weekly and thanks to Randall and others for the tip.

Publishing industry is overwhelmingly white and female

28 January 2016

From The Guardian:

A survey of American publishing has found that it is blindingly white and female, with 79% of staff white and 78% women.

Multicultural children’s publisher Lee & Low Books surveyed staff at 34 American publishers, including Penguin Random House and Hachette , as well as eight review journals, to establish a baseline to measure diversity among publishing staff. They found that 79% were white. Of the remainder, Asians/Native Hawaiians/Pacific Islanders made up 7.2% of staff, Hispanics/Latinos/Mexicans 5.5%, and black/African Americans 3.5%.

“Does the lack of diverse books closely correlate to the lack of diverse staff? The percentages, while not exact, are proportional to how the majority of books look nowadays – predominately white. Cultural fit would seem to be relevant here,” writes publisher Jason Low. “Or at least in publishing’s case, what is at work is the tendency – conscious or unconscious – for executives, editors, marketers, sales people and reviewers to work with, develop, and recommend books by and about people who are like them.”

When it came to gender, Lee & Low found that 78% of publishing staff overall were female. At executive or board level, however, 40% of respondents identified as men.

Link to the rest at The Guardian

Amazon has officially won the multibillion-dollar self-publishing market

28 January 2016

From Quartz:

Penguin Random House, the largest book publisher in the world, is chopping off its self-publishing arm. The company said Tuesday (Jan. 5) that it has sold Author Solutions—the self-publishing author-tools platform that it bought in 2012—to an unnamed affiliate of US private equity firm Najafi Companies for an undisclosed sum.

. . . .
 By the numbers, self-publishing should be a lucrative endeavor.In 2015, author-published books accounted for 18% of the entire book market in the US; the industry’s growth is staggering, and some firms predict the business could eventually get as big as $52 billion.

. . . .

 Analysts told the Financial Times that Penguin Random House likely sold the company for a fraction of the $116 million it paid in 2012.

But whether driven by sinking profits or negative publicity, Penguin Random House’s exit from self-publishing is also an admission of defeat: The giant self-publishing market essentially now falls largely to Amazon, which already churns out an estimated 85% of self-published titles via its various platforms.

Link to the rest at Quartz and thanks to Jan for the tip.

Traditional Publishing, Non-Compete Clauses & Rights Grabs

27 January 2016

From author Kameron Hurley:

When you’re a new writer, you mostly talk to other new writers about craft. Once you publish a book or two, though, you’re increasingly talking to your peers about the business of writing and publishing. You talk about contracts and foreign rights deals and rights grabs and the benefits and drawbacks of self-publishing and being a hybrid author.

One of the big issues we’ve been dealing with the last 15 years or so as self-publishing has become more popular are the increasing rights grabs and non-compete clauses stuck into the boilerplate from big traditional publishers terrified to get cut out of the publishing equation. Worse, these clauses are becoming tougher and tougher to negotiate at all, let alone get them to go away.

. . . .

This reluctance to nurse mid-list careers is bad news for writers who want to go the traditional publishing route, especially as it’s happening at a time when many editors are overworked and marketing budgets continue to get slashed and advances continue to tumble. If you’re a new author in SFF, don’t be surprised to get a first offer of $5,000 that demands your first-born child and everything you and they will ever write, and if you sell just 3,000 copies, well, sorry, we’re done with you and maybe go back to the small houses or come back to us with some vampire erotica we can sell.

. . . .

Non-compete clauses ask a writer to take an advance of $10,000 or $20,000 or whatever and prevent them from having any other novel-length work come out for a full year (or more!) before and after the book is published by that house. Sometimes this is “only” six months before and after. Sometimes it’s “only” novels in a related genre or can be negotiated to “only” novels in the same world. But it’s always awful and you always have to yell hard about it to get it wittled down to something manageable.

. . . .

For authors who write four books, or eight books, or more a year, big houses adhering strictly to this clause while paying advances under $50,000 a book would mean preventing most authors from making a living wage as writers (remove agent’s cut, taxes, and health insurance from that number, and yes, friends, that is what I’d consider an actual living wage, not . . . $20,000.

. . . .

Also of importance is that this clause makes the sort of unreasonable demands on an author that can only be made of an actual employee. You know, someone who gets health insurance and other benefits. By asking authors not to compete against themselves, they’re skirting dangerously close to moving us into the “employee” category that they want to keep us out of.  I have a non-compete clause in my employment agreement at my day job that prevents me from taking on freelancing work that competes with my day job work, and those hold up (mostly) because I’m actually categorized as an employee.

So are we employees or contractors? I’m actually surprised no one has taken a non-compete clause to court, because I think a serious legal inquiry would be interesting.

. . . .

I have some great publishers, and editors who have gone to bat for me to make things work. I have great relationships with the vast majority of them. I know it’s a tough business. I know they struggle with it too

But their parent companies see us as widget-makers, and they make it tougher and tougher for editors to hold out the open palm instead of the fist. Goodwill with your editor, or “my editor is so nice!” does not always translate to the nitty-gritty of the contract. A lot of those things are determined by the parent company up high, and are negotiated not with the editor but with people in the contracts department. Having a super nice editor who wants the best for you is great, but it does not guarantee there will be nothing but roses in your contract.

See, the big corp parent companies prefer the fist. They’d like to legally tie you to them, condemning you to live in poverty or keep your day job throughout your contract. But what editors and writers would certainly prefer is that publishers provide you with more value that helps make you and the work a success. Publishers who do things that make you WANT to do business with them are going to win over those who make it tough.

But that takes time, and effort, and resources. And so many editors are so short on those that it’s criminal. The great ones have done a fabulous job of helping us along, but their parent companies don’t always make it easy.

Clearly the parent companies, like many businesses today, are choosing the cheaper solution first. It’s way easier to serve up awful contracts than it is to invest in more editorial and marketing support. Better to just contractually bind authors to you because they have no other choice and are desperate for a sale.

Link to the rest at Kameron Hurley and thanks to Dana for the tip.

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

Kameron points out an interesting phenomenon in the dynamics of the author/editor relationship.

Authors, especially new authors, often regard editors as powerful deities who exercise life-or-death power over the author’s career. The editor is, of course, the gatekeeper controlling access to the publisher.

However, inside the publisher, except for all but a handful of senior editors, acquisition editors are pretty far down in the corporate hierarchy. Several levels of executives above the editor are the gatekeepers controlling the editor’s ongoing access to paychecks.

The lawyers responsible for a publisher’s contracts typically report through the general counsel up to the big bosses who are high above the editor in the corporate organization.

Life is much easier for the editor if she doesn’t rock the contract boat. While some authors can hire an attorney, who will talk directly to the publisher’s lawyer without going through the editor, new authors may be concerned about legal fees and being viewed as a troublemaker inside the publisher.

The power dynamics are completely screwed up for the new author unless he/she is determined to exert management control over his/her career.

A couple of notes on non-compete clauses that PG has mentioned before, but are worth repeating:

Non-compete agreements are creatures of state law and limitations on them can vary from state to state.

Virtually all Big Publishing contracts specify that New York law will govern the contract. PG is not a member of the New York bar, but his nonofficial opinion is that many of the non-compete clauses contained in publishing contracts would run into problems in New York courts. PG doesn’t believe that lifetime noncompete agreements (the life of the copyright is the length of most publishing contracts) in an author/publisher relationship would be enforceable under New York law, for example.

PG is a member of the California bar, however, and is able to state that California simply makes noncompete agreements unenforceable except for a couple of narrow exceptions that don’t apply to publishing contracts.

With respect to noncompete agreements that specify the law of another state will govern the contract, where a California resident is involved, California courts have, in the past, decided that California law will protect California residents from noncompete clauses regardless of what the contract says about choice of law and venue.

PG is not saying that all authors should move to California to get out of their noncompete publishing clauses. However, if an author is thinking a change of location might be a good idea (Malibu has never had two feet of snow), being able to write what the author wants to write without worrying about publishing contracts might be a factor to consider.

 

The (Real) Future of Publishing

27 January 2016

From Digital Book World blog opinions:

Everything being said about the state of publishing is (relatively) true—but not everything that is true is being said, as there are data points and trends being left out of the broad discussion. I’d agree that ebook growth has slowed down for many of the major houses, and that it now accounts for 20-25 percent of their revenues.

. . . .

If we are painting the landscape with a broad brush, there are some significant shifts that have gotten mysteriously little attention. A few worth noting include:

• The U.K’s biggest publisher, Penguin Random House, is closing its largest distribution center and is citing the reason as “an increase in the people reading ebooks.” In the last sentence of the article, it states that print sales were down 5 percent while ebook sales were up 11 percent.
• According to the New York Times, Ron Boire, the new CEO of Barnes & Noble, is leading a push to rebrand the company as a “lifestyle brand,” which includes removing more print books and expanding its offerings in games, toys and other gadgets. Sales are down 4.5 percent for the same quarter year-over-year, and the Barnes & Noble stock is down 20 percent. The company plans to close an additional 10 stores next year.
• Wal-Mart has announced that it is committing $2 billion to expanding its digital footprint in 2016. The company is exploring new digital channels and opportunities in an effort to innovate at a speed similar to Amazon’s. This will most certainly affect all forms of media, including physical books and ebooks.
• In 2015, readers borrowed more than 169 million ebooks from libraries, a 24-percent increase over 2014. This is a record number and a significant increase.

Link to the rest at Digital Book World blog opinions and thanks to Jan for the tip.

There’s also the Costco index at PG’s Costco store. The amount of floor space devoted to selling books is about 20% of what it was 2-3 years ago. Sometimes it’s even smaller. Author book signings were formerly a regular Saturday feature at PG’s Costco. He hasn’t seen one of those in a year or more.

Has anyone seen a large national retailer increase the amount of floor space devoted to printed books in the last couple of years? Barnes & Noble certainly has not. BN’s bookselling floor space has been decreasing at startling rate.

Retailers vote on the success or failure of products with floor space. That’s why the checkout line at the last BN PG entered was lined with geegaws and gimcracks, not books.

Big Publishing and bookstore owners are quite public about their deep emotional commitment to the idea that ebook sales have leveled off and won’t seize more market share from print.

PG calls it an emotional commitment because it’s not really a rational response to the realities of the growing ebook market and declining print market. It’s not PG’s job to solve tradpub and bookstores’ problems, but he suggests denying reality is not a good strategy.

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