Big Publishing

Are the tech giants too big to be good partners for book publishing?

22 August 2017

From veteran publishing consultant Mike Shatzkin:

An online discussion forum that includes publishers and librarians and tech people usually sends me several emails a day. About 10 days ago, a conversation evolved about Google Book Search and the Google Library Project, two initiatives by the search giant that were initiated in the early part of the last decade.

Because both programs essentially gave Google a trove of book-published content for full text search, there was a wariness among the publishing community about them when they started. In time, publishers (through the AAP) sued Google and the course of the lawsuit ultimately led to a sharp curtailment of Google’s ability to just do the scanning. After a while, it appears the reservoir of interest at Google for the project, which started as more of a “service to humanity” idea than a profitable one, just evaporated. The scans that Google had already done became part of the HathiTrust repository of content, an important research and scholarship tool in the non-trade world without any recognition or impact on the trade world at all.

. . . .

And, of course, Google is the single most powerful source of “discovery” and many in publishing wonder if books overall would have benefited from Google being more “knowledgeable” about what is inside of them.

So, to this day, years after the litigation and the scanning program have concluded, there is a division of opinion in the publishing community. Some see Google as a bully and a villain, trying to make its own rules to benefit from publishers’ content and crippling the value of copyright. Others focus on the lost opportunity and believe publishers would actually have more valuable intellectual property (more valuable copyrights!) today if they’d just allowed the Google programs to develop and flourish.

. . . .

In the course of the discussion, a very knowledgeable and experienced veteran of publishing across education, professional, and trade offered the comment that “Google is a terrible partner.” I asked him (offline from the group discussion; he’s a friend) to amplify that.

My points of context for Google weren’t in publishing; they were in tech. My own most extensive experiences with the big three tech companies that publishers dealt with — Amazon, Apple, and Google — was working out their participation at publishing conferences.

. . . .

What I saw was that Apple was the most uptight; it was hard to get speakers because messaging was so tightly controlled by upper management.

Amazon would sometimes be very agreeable, but primarily when they had an agenda: some program they wanted to get across or some point they wanted to make. So they were often cooperative, but very much on their terms to put across their message du jour. In general, they wouldn’t do panels or Q&As. They needed to control the conversation and skillfully avoided being pushed to publicly discuss anything they didn’t want to talk about. But they were often available and always interesting, and unlike Apple (in my experience), would engage with you honestly about their agenda.

. . . .

Google was, in my experience, by far the most open and accessible of the three companies. You could tell them you wanted speakers or panelists to cover one subject or another and you’d get directed to people who could help you. And Google employed a pretty fair number of ex-publishing people who were conversant about issues from a perspective that publishers could relate to.

. . . .

What my friend said in response to my inquiry, in which I had only mentioned Google, was, “Google, Apple, and Amazon are all bad partners. Ingram, Baker & Taylor, and Firebrand are good partners.”

So much for my contextual frame.

But grouping the three to me made the point that my context was what mattered. Ingram, Baker & Taylor, and Firebrand all make their living in the book business. Google, Apple, and Amazon have a financial stake in the book business that amounts to a small rounding error to their overall financial performance.

. . . .

For the entire life of the book business until about fifteen minutes ago, it was very much a free-standing industry. The only larger-than-the-industry enterprises it had to deal with were the Post Office and United Parcel Service. Our authors, designers, typesetters, printers, and, most important of all, customers to which we shipped directly (the wholesalers and retailers and libraries) were part of the publishers’ world. They depended on the publishers as much as the publishers depended on them.

Amazon was the first piece of evidence — and still the most important piece of evidence — that the old world has disappeared.  . . . . They sell more than half of the books for most publishers, but all the books they sell probably amount to less than 5 percent of their total margin. And while Penguin Random House may be in the neighborhood of half the consumer book sales overall, they wouldn’t amount to nearly that big a percentage of Amazon’s book sales because Amazon gets a disproportionate share of professional and other niche markets and thus from publishers who don’t compete at all with PRH in the consumer market.

And because Amazon has very intentionally created a whole massive pool of consumer books that nobody else has, through their own publishing and enabling independent authors.

Link to the rest at The Shatzkin Files

PG has had direct business/legal dealings and negotiations with Apple and Amazon over the last 15 years or so. For context, he has also had business negotiations with Microsoft, Oracle, Hewlett-Packard and Intel in the tech world plus every major investment bank in New York (Goldman Sachs, Morgan Stanley, etc., etc.), most of the large accounting firms plus Disney, American Express and a bunch of other big companies.

To be clear, this doesn’t mean PG knows everything about negotiating intellectual property partnerships and other deals with large organizations, but he does know some things about that subject.

PG definitely has not represented any large publishers in their dealings with large tech companies. He has, however, represented a lot of authors in their dealings with large publishers.

Speaking generally, large publishers are not cut out to be good partners for tech companies.

Publishers are simply too rigid in their business vision and very much focused on the short term (which is strange for organizations the license copyrights, which extend far into the future).

This short term outlook is substantially affected by the fact that the Big Five publishers are all owned and controlled by other and larger media conglomerates. Four of the Big Five are owned by large European publishing corporations that are not known for their commitment to innovation and could not be described as tech-savvy in any sense. The fifth Big Five publisher, Simon & Schuster, is owned by CBS.

Each of these media conglomerates is heavily focused on this quarter’s and this year’s income, expenses and profits. They’re not what anyone would call forward-looking or focused on the long term. If they think about the long term at all, they’re convinced it will not be much different than last quarter.

(PG worked for a major subsidiary of a very, very large international media conglomerate for three unhappy years and knows that of which he speaks.)

This means that if Google sends someone to talk to the President of a Big Five publisher, Google is talking to a middle-manager in a much larger business organization. The Big Five President can do pretty much whatever he/she wants to do with Barnes & Noble and Ingram (as long as it doesn’t have an adverse impact on profits), but cutting a strategic deal with Google is way, way out of his/her job description.

Organizations like Google, Apple and Amazon quickly become frustrated with organizations that are not able to move rapidly.

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The ‘New York Times’ Books Desk Will Make You Read Again

22 August 2017

From Publishers Weekly:

The fourth floor of the New York Times Building, where the eponymous paper’s newly-formed Books Desk keeps its nest, is, somewhat appropriately, under construction. One side of the floor is blocked off with yellow barricade tape. On the other side, the books team, led by New York Times Book Review editor Pamela Paul, is undergoing renovations of its own.

Those changes began last August, when the newsroom leadership decided that the paper’s books coverage, both in print and for the web, should be centralized to one desk. Previously, books reporters and editors had been in different departments: the Book Review, part of the Times’weekend edition, remained strictly separate from the publishing reporter, who went between the paper’s Culture and Business Day desks, and the three daily critics, who remained firmly under the culture department’s wing. That made sense for a print-first enterprise. For the new digital-first Times, it was something of an albatross.

With the choice to combine books sections made, another choice was inevitable: how to combine. “You could say, ‘Let’s just take these three separate sections—which, again, were really derived from a print newspaper era—and shove them together and continue coverage as-is, coordinating more,’” Paul said. “Or you could pause and take a moment and say, ‘If you were starting from scratch and weren’t just pushing these three sections together, what would New York Times books coverage look like?’”

The paper opted for the latter, and began the process of discovering what that coverage would look like by expanding Paul’s duties from running the Book Review to overseeing all books coverage at the paper.

. . . .

[A]s Paul put it, “this is one of the cases in which centralizing and consolidating is not reduction. It’s expansion. Obviously, we need the staff to be able to carry that out.” That has meant bringing on faces both fresh and well-known at the Times over the course of the past year, including deputy editor of books features Laura Marmor (from the paper’s Styles section), Susan Ellingwood as news and features editor (from Opinion), digital staff writer Concepción de Léon (from Glamour magazine), fact-checker and occasional writer Lovia Gyarke (from the New Republic), and Book Review staff editor Lauren Christensen (from Harper’s Bazaar), among others. Earlier this month, senior editor Parul Sehgal, a PW alumnus, joined Dwight Garner and Jennifer Senior as a daily critic in the wake of the departure of longtime chief critic Michiko Kakutani—one of many writers at the Times to recently take a buy-out. Kakutani’s role will not be filled.

Once Jones was on board, she and Paul, along with the research wing of the Times, set out to investigate what current and prospective readers of the paper, both in New York City and elsewhere, wanted to see in terms of coverage. That research led them to a number of conclusions, many of which came in the form of questions: What should a reader of the New York Times read next? Why does this book—say, Colson Whitehead’s The Underground Railroad—matter? What is the role of books in our culture, and what is the relationship between books, the larger culture, and the news cycle? What are people across the world reading?

In short, the duo discovered the need for a paradigm shift in terms of how they were approaching the books that came across the Books Desk.

“It used to be that a book would come in and we’d say, ‘Should we review this or not?’” Paul said. “Now the book comes in and we say, ‘Should we cover this or not, and if so, what should that coverage be? What is the best way to tell this story, regardless of the medium?’”

. . . .

As for the Times bestseller lists—which, famously, are governed by an algorithm that the paper’s reporters and editors know nothing about—Paul maintains that publishers and authors (whom, she stressed, comprise only a subsection of the Book Review’s audience) were the only readers who showed any particular unhappiness about the axing earlier this year of such rankings as the mass market and graphic novel lists. She said that the Books Desk as a whole is providing a similar function for its readers in what she believes are much better ways.

“Many readers of the print Book Review don’t like flipping through ten pages of lists,” Paul said. “We’re going to have some kind of ‘new and noteworthy’ column [in the redesign], which is, frankly, a much better way to find out what’s new, where there’s actual description and an image of the book and a much more useful sense of what the book is about than a teeny little microdescription on a bestseller list.”

. . . .

But other growing categories, like e-book only and self-published books, will not be covered. “Frankly, many, many, many books have been thoroughly vetted and edited and worked on collaboratively, and we only review about 1% of those books,” Paul said. “For our editors to pay attention to the number of books that are coming out from every big publisher all the way down to the smallest indie publisher, and for them to do that job well, is job enough.”

. . . .

And the industry will, Paul insists, be there in 12 years for the Times to cover, undoubtedly in newer ways. The drumbeat of doom and gloom that accompanies the day-to-day existence of the book industry is, she noted, perennial. But as far as she’s concerned, that industry—like the paper that houses the Books Desk that covers it—is anything but failing.

“I am ever bullish on the book industry, because I think that people like to hear stories, and books remain one of the great ways in which to tell them. And as everything else gets faster, quicker, shorter, smaller, people look for balance in their lives and want to turn to books for a broader context, deeper context, a sustained narrative,” Paul said. “People looked at retailing, they said, ‘It’s dead, it’s gone, it’s done.’ And yet independent bookstores are thriving. Amazon is getting into the retail space. This could be a new area of growth. I don’t feel worried.”

Link to the rest at Publishers Weekly

PG says any proper “Books Desk” in 2017 would have at least one person, and likely more than one person, located in Seattle, which is where the real center of the U.S. book business is and will be for at least the next several years.

PG notes that Amazon is mentioned only one time in the OP, and only because Amazon has opened a few physical bookstores.

At times New York City seems like a very provincial place.

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My fellow authors are too busy chasing prizes to write about what matters

16 August 2017

From The Guardian:

There are at least two reasons why almost every anglophone novelist feels compelled to get as near the Booker prize as they can. The first is because it looms over them and follows them around in the way Guy de Maupassant said the Eiffel Tower follows you everywhere when you’re in Paris. “To escape the Eiffel Tower,” Maupassant suggested, “you have to go inside it.” Similarly, the main reason for a novelist wanting to win the Booker prize is to no longer be under any obligation to win it, and to be able to get on with their job: writing, and thinking about writing.

The other reason is that the Booker prize is most literary publishers’ primary marketing tool. There are relatively few Diana Athills (Athill was VS Naipaul’s editor) and Charles Monteiths (Monteith was William Golding’s) today: publishers who identify, and are loyal to, novelists in the long term because of commitment to literary merit. Publishing houses were once homes to writers; the former gave the latter the necessary leeway to create a body of work. Today there’s little intellectual or material investment in writers: literary prizes and shortlists are meant to sell books, and, although there’s a plethora of them, the Man Booker is the only one that has a real commercial impact.

The idea that a “book of the year” can be assessed annually by a bunch of people – judges who have to read almost a book a day – is absurd, as is the idea that this is any way of honouring a writer. A writer will be judged over time, by their oeuvre, and by readers and other writers who have continued to find new meaning in their writing. The Booker prize is disingenuous not only for excluding certain forms of fiction (short stories and novellas are out of the reckoning), but for not actually considering all the novels published that year, as it asks publishers to nominate a certain number of novels only.

. . . .

What is astonishing is the acquiescence with which the value system I’ve just described is met with by most writers. Most will feel that it doesn’t speak to why they’re writers at all, but few will discuss this openly. Acceptance is one of the most dismaying political consequences of capitalism. It informs the literary too, and the way publishers and writers “go along” with things. The Booker now has a stranglehold on how people think of, read, and value books in Britain.

Link to the rest at The Guardian

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HC Profits Rise in Fiscal 2017

12 August 2017

From Publishers Weekly:

HarperCollins finished the fiscal year ended June 30, with a $10 million decline in revenue, compared to fiscal 2016. However, parent company News Corp reported that the publisher saw a 7.5% increase in earnings. Revenue slipped to $1.64 billion, from $1.65 billion in fiscal 2016 , but EBITDA (earnings before interest, taxes, depreciation, and amortization) increased to $199 million, up from $185 million in the prior year.

. . . .

The expansion of HC’s global footprint also added to sales. Murray said between now and the end of the calendar year foreign-language sales will represent about 10% of the company’s total revenue

Sales of digital audio had double-digit gains in the year, Murray said, helping to offset another stretch of e-book declines.

. . . .

Murray said the continued decline in e-books isn’t a major concern at the moment, noting that in the North American market gains in print book sales made up for the drop in e-book sales.

Link to the rest at Publishers Weekly

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Print and audio book sales boost S&S revenue

10 August 2017

From The Bookseller:

Sales at Simon & Schuster grew 10% in the second quarter of 2017, hitting $206 million (£158m).

Following the trend seen by other large publishers, Simon & Schuster’s revenue is benefitting from an increase in print sales and digital audio sales.

Publishing operating was also up, by 8% to $28 million (£21.5m) for the second quarter of 2017, mainly reflecting the revenue growth.

For the publishing group, biggest sellers in the period were Lord of Shadows by Cassandra Clare and I Can’t Make This Up by Kevin Hart.

Link to the rest at The Bookseller

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The 4 Great Myths of Book Publishing

9 August 2017

From HuffPost:

Signing a contract with even a brand-name traditional book publisher initially feels like a ticket to Nirvana. You may expect, for example, your new publisher to set you up with a big fat advance, a multi-city promotional tour, your very own personal PR rep and multiple copies of your book on every bookshelf in the nation (and Canada) for as long as you and your book shall live.

But to understand how book publishers really work, study this list of what I call the four great “myths” of traditional book publishing. Then, by all means, proceed to seek out a publisher if that’s your goal but do so with your eyes wide open. Your relationship with your publisher will run much smoother if you recognize its pitfalls as well as its glories.

Myth #1: My book publisher will aggressively promote my book to the widest possible readership

In an ideal world, publishers would like to provide this but in today’s real world they really can’t. The scarcity of their own resources typically prevents it because whatever advertising and PR budget such a publisher has available is likely to be directed toward those books the publisher considers most likely to succeed, such as a book by a celebrity author, a book on a subject that is currently red-hot in the news, or a book by an author whose previous books have sold very, very, very well. Thus your publisher will likely have few resources left over to help with your book’s promotion needs.

Remedy: Plot out an aggressive “promotion action plan” of your own and include it in your book proposal. Such a plan often wins over more publishers than even the book’s core concept!

. . . .

Myth #4: My publisher will provide me with a sizable monetary advance, allowing me to take time off from my regular work so that I can focus exclusively on my book

We’ve all read about mega-million advances to celebrities and politicians and of course that makes us salivate! But after all that largesse is doled out to the famous guys, not much is left over for the 99 percent of us lesser-mortal authors. Besides, as a first-time author, your beloved publisher knows you’ll accept little or no advance in return for the opportunity to merely be published.

Remedy: Be grateful if you get offered any advance at all, since many publishers offer zero. Try to get your new publisher instead to elevate your royalty fees, increase your author discount, or agree to 20 to 50 extra complimentary copies (the typical amount is onlyl 10!)

One obvious remedy of course to all of these myths is to self-publish your book, which has in the past 20 years or so become a painless, even more satisfying process, especially in that the cost of self-publishing has plummeted dramatically. (thanks chiefly to print-on-demand technology). Also, self-publishing allows you to be fully in control so that no frustrating publishing “partner” can sway you from your original plans, including text, cover design and title. It’s all up to you!

Link to the rest at HuffPost

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Pearson to axe 3,000 jobs after slump at main US business

4 August 2017

From The Guardian:

Pearson is to cut 3,000 jobs as the embattled company looks to slash costs after a slump at its US higher education business.

The world’s largest education company, which has issued five profit warnings in the past four years, intends to axe about 10% of its 32,000 global workforce by the end of 2019.

The latest round of cuts means that the chief executive, John Fallon, will have shed 10,000 staff, about 25% of Pearson’s global workforce, since he took over from Dame Marjorie Scardino in 2013.

“No one takes pleasure in this sort of transformation we have to do but it is fundamental to the long-term future of the company,” Fallon said. “I am looking forward to getting the revenue growth of the company going again.”

The cuts, which will save the firm about £300m annually, will come from across the company with a major focus on its struggling US business, where its higher education unit is struggling with a decline in textbook sales and the transition towards digital learning.

“In North America we need to adjust the cost base to the reality of a smaller higher education courseware business,” said Coram Williams, Pearson’s finance chief.

Link to the rest at The Guardian

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On eBooks Being a Dead Format

2 August 2017

From The Digital Reader:

Have you ever had one of those moments where you kinda sorta agree with someone’s conclusion and yet still disagree with many of the assumptions that lead to the conclusion?

That’s how I feel towards a piece published in The Bookseller earlier today.

Simon Rowberry argues that ebooks aren’t dead, but his arguments betray legacy industry biases. For example, he cavalierly tosses off the assumption that $10 ebook prices are unsustainable.

The fall in revenue from ebooks is a direct consequence of legacy publishers’ prioritization of print sales at the expense of digital books. The Kindle’s North American launch in 2007 marketed new ebook titles at $9.99, a discount of at least $10 on the hardback equivalent. This approach was unsustainable, but it set readers’ expectations for the cost of ebooks.

What’s funny about this assumption are the many indie authors who would disagree, or the publishers like Baen Books that price all of their ebooks under $10.

Baen Books has been selling its ebooks at what Rowberry would describe as an unsustainable price for close to twenty years, and yet they have somehow managed to pull it off.

And that’s not the only data that Rowberry  didn’t include. A little earlier in the piece he cites stats from the UK PA and then vaguely hand waves at reasons why the data is incomplete:

But despite the early promise of the ebook, many are questioning whether it has lived up to these expectations. In recent years, the ebook has faced significant backlash amid reports of declining sales in trade publishing. The Publishing Association Yearbook 2016 noted a 17% slump in the sale of consumer ebooks while physical book revenue increased by 8%. Over the last couple of years, audiobooks have replaced ebooks as digital publishing’s critical darling on the back of a rapid increase in revenue. In this climate, several commentators have asked “how ebooks lost their shine.”

The ‘ebook plateau’ argument also ignores emergent sectors of digital-only sales, including self-publishing, where new genres drive a vibrant and divergent market. Amazon facilitates most self-publishing sales, and the company steadfastly refuses to provide sales data for books published exclusively on the Kindle. So a potential increase in sales for emergent digital-only genres is hidden by the headlines about traditional publishers.

Yeah, the data is only obscured if you refuse to go looking for it.

I am referring of course the Author Earnings Report and the pseudonymous Data Guy (who does answer press queries about the latest data).

We know exactly the limits of the stats from the PA (it misses 38% of the UK ebook market), and that is the point that Rowberry should have made.

. . . .

He actually think the legacy industry could kill off ebooks:

For the moment, reports of the ebook’s death are exaggerated. If the disinterest of Amazon and resistance from the book trade continue, however, there is a chance that the ebook is killed off – in my view, prematurely.

While an industry can refuse to supply the market with what the market wants, that industry cannot kill that want.

And in the case of digital goods, it cannot prevent consumers from adopting the digital goods – they’ll just turn to someone else to supply the content.

Link to the rest at The Digital Reader 

For a thought experiment, consider an alternative history in which printed books did not exist and ebooks are the only way books have been distributed/sold/read. As with today’s conditions, tablets, ereaders and computers are in wide use.

In that history, if someone invented the printed book and was promoting it as an alternative to ebooks, what would the reaction of the publishing industry be?

Printed books are far too expensive to produce, distribute and sell. Readers will never accept the size and weight of a printed book compared to their ereading devices.

Where will printed books be stored? Thousands of ebooks take up a bit of disk space while the same number of printed books will consume vast physical spaces that could otherwise be used for far more productive purposes.

And the forests! Think of the devastating impact on thousands of acres of beautiful trees!

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Macmillan to Relocate, Consolidate NYC Offices

2 August 2017

From Shelf Awareness:

Macmillan Publishers has signed a 20-year lease for 261,000 square feet in a 40-story office tower at 120 Broadway in Lower Manhattan. The company will move in early 2019 from multiple locations, including the Flatiron Building, to occupy floors 22 through 26 in what was the largest office building in the world when it opened in 1915. Known as the Equitable Building, the property features a grand lobby with soaring ceilings and in-building subway access.

“The move will be great for our people and our planned growth, and the architectural heritage of 120 Broadway means we will be moving from one of New York City’s great iconic buildings to another,” said Macmillan COO Andrew Weber.

. . . .

Roger A. Silverstein of Silverstein Properties commented: “In making the move Downtown, Macmillan joins a growing list of leading publishing, media and creative firms that have been attracted to Lower Manhattan for its vibrant mix of residences, open spaces, shopping, dining, cultural attractions and transit options.”

Link to the rest at Shelf Awareness

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AAP Sales: Up 4.9% in First Quarter

1 August 2017

From Shelf Awareness:

In the first quarter of 2017, revenues for book publishers rose 4.9%, to $2.33 billion, mainly because of increased growth in two large categories, adult books and higher ed course materials, according to the Association of American Publisher’s StatShot report, based on sales information from some 1,200 publishers.

Trade sales in the quarter grew 0.9%, to $1.477 billion, with adult books gaining 3.4%, but children’s/YA down 3.2% and religious presses off 7.4%.

. . . .

Overall print book sales rose some $12 million. The format with the biggest gain in sales was again downloadable audio, up 28.8%, followed by hardbacks, up 8.2%, other (including physical audio and board books), up 4.1%. The two major formats with sales decreases were paperback and mass market, down 4.7%, and e-books, off 5.3%.

 

Link to the rest at Shelf Awareness 

As usual, Nate has some good analysis at The Digital Reader.

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