From The Huffington Post:

The death of publishing has been greatly exaggerated.

Though traditional publishers are being threatened from all sides — the rise of ebooks, competition from other media, the growing shadow of Amazon — publishers have learned from the failures of the music industry, the futility of closing one’s eyes and trying to deny an evolving marketplace. They have conformed to many aspects of digitization, hurrying to convert to required formats and bowing to imposed pricing structures, hoping to not miss the last boat provided by the new marketplace.

However, accepting the future is not the same thing as embracing it, thriving in it. Many of publishers’ traditional functions — printing books, storing and shipping them around the country, maintaining a far-flung sales team — are becoming less relevant as content moves to digital. Self-publishing is an increasingly plausible option, with some remarkable success stories. While nervous companies typically fight to preserve and protect what’s left of their industry, the smart ones figure out how their skills might be applicable in the next. In this new world, how do publishers make themselves valuable and even necessary?

Salvation may lie in the same source as the challenge. Ebooks alone may not require a traditional publisher, but simple ebooks only scratch the surface of the potential of this new realm.

. . . .

Expecting books to be unaffected by these new reading devices would be like expecting cinema to consist of nothing more than filmed plays. True embrace of the emerging formats requires projects more ambitious than simply digitizing a traditional text.

So far, the growth of these evolving forms has been limited by practical obstacles. Unlike straightforward ebooks, transmedia projects can be very difficult for individual authors to undertake on their own. Platforms must be built from the ground up, new markets must be discovered, audiences educated — all for a single one-off project. These challenges would instantly shrink, however, if many projects were brought under a single umbrella — essentially, a new-media publisher.

. . . .

The real potential of digital storytelling will be uncovered only via iterative experimentation, not by eyeballing each plucky startup’s new publishing platform. Today, it’s those startups that attract the brightest technologists and creative thinkers, eager to own the production tools and distribution channels, and sound the death knell for old-world publishing. But “content” is often an afterthought for these companies — public-domain novels, crowdsourced texts, faddy non-fiction; most don’t have the ability to produce powerful, original writing or develop talented new authors.

Link to the rest at The Huffington Post and thanks to Randall for the tip.

PG has had a lot of dealings with publishers and worked for part of a giant international publishing conglomerate.  He has had a lot of dealings with tech companies, including being employed as an executive by a few.

The words, “never the twain shall meet,” come into his mind.

From Scott Turow at The New York Times:

Last month, the Supreme Court decided to allow the importation and resale of foreign editions of American works, which are often cheaper than domestic editions. Until now, courts have forbidden such activity as a violation of copyright. Not only does this ruling open the gates to a surge in cheap imports, but since they will be sold in a secondary market, authors won’t get royalties.

This may sound like a minor problem; authors already contend with an enormous domestic market for secondhand books. But it is the latest example of how the global electronic marketplace is rapidly depleting authors’ income streams.

. . . .

Take e-books. They are much less expensive for publishers to produce: there are no printing, warehousing or transportation costs, and unlike physical books, there is no risk that the retailer will return the book for full credit.

But instead of using the savings to be more generous to authors, the six major publishing houses — five of which were sued last year by the Justice Department’s Antitrust Division for fixing e-book prices — all rigidly insist on clauses limiting e-book royalties to 25 percent of net receipts. That is roughly half of a traditional hardcover royalty.

Best-selling authors have the market power to negotiate a higher implicit e-book royalty in our advances, even if our publishers won’t admit it. But writers whose works sell less robustly find their earnings declining because of the new rate, a process that will accelerate as the market pivots more toward digital.

. . . .

Even libraries and authors, usually allies, have grown less cozy. No one calls our public library system socialistic, though it involves free distribution of the goods authors produce, and even though in many Western nations, authors get a tiny fee when libraries lend their works. Authors happily accept our system, because libraries have nurtured them as writers and readers.

Now many public libraries want to lend e-books, not simply to patrons who come in to download, but to anybody with a reading device, a library card and an Internet connection.

. . . .

 An even more nightmarish version of the same problem emerged last month with the news that Amazon had a patent to resell e-books. Such a scheme will likely be ruled illegal. But if it is not, sales of new e-books will nose-dive, because an e-book, unlike a paper book, suffers no wear with each reading. Why would anyone ever buy a new book again?

Link to the rest at The New York Times and thanks to Dinah for the tip.

Scott’s problem is that he conflates the well-being of authors with the well-being of publishers. PG suggests that a better title for the piece would be The Slow Death of the American Publisher.

PG would advise anyone not to get too close to a dying organization. See Night Shade Books as one example of why this is a bad idea. When an author’s writing success is bound up with the success of a publisher, if the publisher dies or contracts, the author will definitely suffer.

On the other hand, a great many indie authors are doing quite well these days in a new and thriving world of publishing. Many who were formerly associated with traditional publishers find their incomes increasing as they self-pub.

As far as the sales of books in overseas markets are concerned, indie authors can enter an increasing number of those markets with a mouse-click and set prices in a way that optimizes their profits from the sale of their books around the world.

From The Washington Post:

Revolutions in the book business make headlines day after day. Two years ago, Borders filed for bankruptcy; Amazon, the bane of bookstores, has become a formidable publisher, as well; and, among other upheavals, a dispute over financial terms between Barnes & Noble and Simon & Schuster has led the retailer to cut back on orders from the publisher. What does all this mean for the people who work in the industry, from authors to literary agents, publishers and librarians? Style posed that question to several Washingtonians who live by the book.

. . . .

The Publisher – David Miller

For years, book publishers have relied on a rich ecology of media to present authors and their ideas to readers. Magazines, journals, newspapers, radio and television partnered in ways that were mutually beneficial. They needed fresh ideas and voices; we needed audiences to learn about those we were publishing. They had content that fit into books; we had access to channels they did not. Everyone had a clearly defined role and we all reaped the benefits. The Washington Post was a newspaper, Island Press was a book publisher. End of story.

As we stumble our way through the Great Disruption, we’re learning that the digital world is quite different. The first irony turns out to be that, while “word of mouth” is the holy grail of book selling, we publishers were never very involved in the conversation. As newspapers, magazines and journals move online, they too are focused on connecting closely with readers. Unfortunately, you readers have only so much time and attention to give. Whether it’s Penguin Random House, with thousands of titles aimed at just about every possible audience, or Island Press with about 40 much more narrowly focused titles, publishers now must connect directly with readers. Increasingly, we need to create word of mouth ourselves.

The second irony is that the ecology of media is becoming a convergence of competitors. If once our products were cozily distinct, when digitized they become frighteningly alike. Newspapers and magazines are able to publish successful e-books without us. The journal Nature recently published an online biology textbook quite successfully without any help. TED isn’t just producing talks, but publishing print and digital books. Say goodbye to that mutually supportive media ecology.

. . . .

The Literary Agent – Raphael Sagalyn

I could give you the glass-is-half-empty publishing story from the demise of retail chains to the jawdropping acquisition of Penguin by Random House.

But no, this glass is more than half full. Books from the mainstream publishers still drive national conversation and keep us up at night, turning pages or swiping screens. Writers still really want a deal with Harper or Crown or Knopf or FSG or S&S or Little Brown. Indie bookstores are thriving. Amazingly good books keep coming and selling amazingly well, from “Gone Girl” to George Saunders, from Daniel Kahneman to Kate Boo.

Like every agent, I’m deluged with submissions from the “slush pile” — the aspiring novelist with the next “DaVinci Code,” the memoirist certain his story is utterly unique and bound to sell. My staff and I browse them, hoping for a jewel. Late last year we were fortunate to find one: a business visionary with a blog, a “big idea” and a proposal that won a large six-figure advance. But the barriers to entry have never been higher. And electronic publishing is a fantastic option with fantastic, albeit few, stories of million-dollar success. (To pick one, in case you don’t know it, search “Wool” by Hugh Howey.)

One question dominates the conversation in mainstream publishing. Will it sell? Agents make that call every day: Is this an idea and a writer I’ll devote two years of my time to representing? The big-time publishers make similar calls at ed board meetings each week, deciding if this proposal or novel gets “thumbs up” and, if so, for $10,000 or $100,000 or, in Lena Dunham’s case, more than $3 million.

For “traditional” publishing, it’s a simple but very complicated equation: a writer who passionately believes in his or her work, an agent who says, “I’m with you,” and a publishing company that writes a check, ideally a six-figure one.

Link to the rest at The Washington Post and thanks to Meryl for the tip.

From James McQuivey on Forbes Blogs:

I fell asleep on a train yesterday and missed one of the most noteworthy events of the week: Amazon acquired Goodreads.

. . . .

I’ll do my best to be objective in answering all the anger being expressed on Twitter and in the trades when I point out that Goodreads was not saving itself for Amazon like some virginal tribute. It has been sitting there, all along, waiting for the right offer to come along. That’s how venture capital works, people.

. . . .

I have an important question to ask, one that I am stealing from author Nick Harkaway (@Harkaway) who wrote this on Twitter the morning after:

The point isn’t that Amazon bought GoodReads. The point is why GoodReads wasn’t snapped up by a publisher years ago.

The obvious reason is that based on the rumors of a purchase price in the “low eight-figures” as some are confidently whispering, most publishers weren’t really in a position to buy Goodreads. Unless they had seen this coming and had bought it many years ago. Let’s say back in 2010, when I first urged one of the Big Five (are there five now?) publishers to buy it.

. . . .

Digital disruption is built on — and therefore requires — direct digital customer relationships. Publishers haven’t had direct relationships of any kind historically — in fact, they are the first to admit that their customer was the book buyer at Barnes & Noble. This used to be a good thing until digital disruption came in and made it not so much a bad thing as an old thing. In the race to grab a customer relationship publishers have worked hard to build pages on Facebook, they’ve tried to reinject energy into their genre portal sites (Suvudu.com, anyone?). But none of them have managed to create anything as powerful and as useful to both themselves and to readers as Goodreads.

Only with a direct digital customer relationship can you learn from the customer in real-time, rapidly expand your total product experience, and easily offer new benefits to your customer.

. . . .

In each case, the solution to keeping up with digital disruption is to have a customer relationship, one that digital tools and platforms make incredibly cheap and increasingly powerful. Goodreads is one such tool. It still is, by the way, even now that publishers will be wary of it. And so I’ll offer this one piece of advice to publishers who may now feel like they should back away from Goodreads for fear that they are sleeping with the enemy: Don’t do it.

Link to the rest at Forbes Blogs

From Collegiate Times, a successful indie in a different branch of the arts:

Have you ever been to a thrift shop? If you have, then you’re participating in the latest transformation of the music industry.  A small indie, genre-bending hip hop artist from Seattle has changed the landscape of music business forever.  If you have not heard of Ben Haggerty, known globally as Macklemore, you need to start listening. His rise to the top has the era of dominant music labels is crumbling.

According to Entertainment.ie, Macklemore has recently become the first unsigned artist to reach number one on the U.S. music charts since Lisa Loeb did it in 1994 with her song “Stay” from the popular movie, “Reality Bites.”  However, Macklemore did not have a hit movie to promote his song, but what he did have was a strong social network following and a passionate fan base.

Macklemore did not have a powerful label promoting his songs on the radio.  He did not have a world famous producer making his beats.  He did not have name recognition in the rap game.  With simple word of mouth and an Internet takeover by his fans, Macklemore’s song “Thrift Shop” has become a staple on the radio waves without any label backing.

. . . .

What does this mean for famous music labels like Warner Bros., Island/Def Jam, Aftermath, Epic, Atlantic and Columbia?  Macklemore has showed us that he does not have to conform to a label’s requirements or creative control over his music to become popular.

. . . .

The consumers decide who will become popular in the music world based on our decisions to buy an artists’ music we can choose who to promote.  Would you rather want music formulated by generic labels or an artist who makes music simply based off of desire and emotion?

Link to the rest at Collegiate Times and thanks to Meryl for the tip. Here’s Thrift Shop

From Digital Book World:

One of America’s oldest brands is joining its colleagues in entering the ebook business.

The Saturday Evening post, a 300-year-old magazine, will publish a collection of Fitzgerald’s stories along with illustrations — both from the magazine’s archives — in a new ebook out May 7 for $8.99.

. . . .

Now that ebooks are popular and relatively easy and inexpensive to produce, non-book-publishing media companies as well as others have jumped on the bandwagon and are making ebooks part of their media  mix.

. . . .

Most recently, Scientific American launched a series of ebooks. American Express Publishing launched an ebook line with Vook. The Atlantic began to publish its own ebooks. USA Today published USA Tomorrow, a collection of expert predictions about the future of America. Harlequin and Cosmopolitan magazine inked a deal to publish several ebooks a month together.

Link to the rest at Digital Book World

From veteran publishing consultant Mike Shatzkin:

The announcement of what amounts to the first book publishing program spawned by Google demonstrates a paradigm we’re seeing repeatedly. It suggests a sweeping change in publishing from how we’ve known it. The bottom line is that most people employed publishing books perhaps as soon as 10 years from now won’t be working for publishing companies.

. . . .

The Internet, which so many of us said two decades ago “changes everything” is ultimately responsible. Amazon.com has been the primary catalyst, with print on demand technology (especially Ingram’s Lightning Source) and ebooks (mostly Amazon, but others too) as supporting players. With so many more books to choose from and really available than there ever were before, the function of gatekeepers, which trade publishers and booksellers clearly and proudly were, becomes an anachronism.

The big question — at least for me — is what is trade publishing transitioning to? What does the trade publishing world look like when it doesn’t primarily reach readers through bookstores anymore, a day which one could say has already come in the past five years.

. . . .

However we view the current division of sales, the trade book business was built in a completely different environment. Indeed, the central proposition that all publishers offered all authors is ” we put books on shelves.” The companion reality was “you can’t do this by yourself”.

. . . .

The requirements to deliver on the promise “to put books on shelves” included the capital to invest and specialized knowledge to turn a manuscript into inventory, a physical plant to manage the warehousing and shipping of those books, and a network of relationships with the owners of the shelves (in the bookstores) to get the right to put your books on those shelves. These were the minimum requirements to be a publisher. If you had them, you could move on to being smart about selecting books (in the case of non-fiction, almost always before they were were completely written), being skilled at developing them, being capable of packaging them attractively, and being managers of another network — of reviewers and broadcast conversation producers and, more recently, bloggers and social megaphones — to bring word of them to the public.

All of this together gave a publisher the capability to pay authors advances against what amounts, for all but the very biggest authors, to a minority share of the revenue the book generated. But, in fact, the central proposition has lost its power. Only a quarter to a half of the sales now — far less for fiction and far more for illustrated books — require a publisher to “put books on shelves”. And that number is going down. For the balance, no inventory investment is actually necessary. Nor is a physical plant or a vast network of sales relationships.

And, without that requirement, the barriers to entry to becoming a “book publisher” have collapsed, particularly if you’re willing to start with ebooks and think of print as an ancillary opportunity.

. . . .

That is: publishing will become a function of many entities, not a capability reserved to a few insiders who can call themselves an industry. Think about it this way. If you had told every museum and law firm in 1995 that they needed a web page, many would have wondered “what for?” If you had told them in 2005 that they needed a Facebook presence or in 2008 that they needed a Twitter stream, they would have wondered why. We’ve reached the moment when they all need a publishing strategy, and that will be as obvious to all these entities in a year or two as web pages, Facebook pages, and Twitter streams look now.

This is the atomization of publishing, the dispersal of publishing decisions and the origination of published material from far and wide. In a pretty short time, we will see an industry with a completely different profile than it has had for the past couple of hundred years.

Atomization is verticalization taken to a newly conceivable logical extreme. The self-publishing of authors is already affecting the marketplace. But the introduction of self-publishing by entities will be much more disruptive.

Link to the rest at The Shatzkin Files

Let’s touch on some points that Mike (and presumably other savvy publishing insiders) is making.

1. Most people currently working in publishing won’t be working for publishers in 10 years.

2. Publishers don’t reach readers primarily through book stores any more. This situation has developed in the last five years.

3. The massive amount of capital necessary to “put books on shelves” is not going to be significant for much longer.

As PG has mentioned before, the timing of various stages of disruptive innovation is very hard to call. It takes longer to get started than a lot of tech visionaries think it will. It moves in fits and starts, not a smooth upward path.

However, the final collapse of the old business model that’s being disrupted usually happens much faster than anyone expects it to.

From Futurebook:

The growth in the e-book market is not linear, but that does not mean that its impact won’t be. Data released by Bowker/BML ahead of it Books and the Consumer Conference (20th March) suggests that while consumers enjoy a mix of e-book and print book purchasing, their choices may mean they have less chance to enjoy this diversity in the future.

The headline data from Bowker showed that e-book reading in the UK peaked in the summer and then fell back in the autumn. According to the stats, the share of the book buying market taken by e-books reached a peak of 13% in July 2012, at the height of the Fifty Shades of Grey phenomenon, but dropped to about 9% in November 2012. This was still more the double what it was in December 2011.

. . . .

What the information does confirm, however, is that growth in the e-book market is not uniform. Why this is the case is interesting. The sale of e-book content is impacted by a number of external factors, for example a reader must first buy a device. It means that the market can be artificially impacted by competition among e-reader manufacturers, as well as by competing devices such as cheap tablets.

. . . .

In the US, according to the same Bowker presentation, e-books saw their strongest growth in the period between November 2010 and March 2011, when competition between the Nook and Kindle was at its height, and the only good tablet on the market was the iPad. But then there was scarcely any growth again in 2011 until January 2012, when the market leapt a further six percentage points. According to the data, in both 2011 and 2012, the market reached its peak in July, and fell back marginally in the autumn.

. . . .

[T]he Bowker survey also showed that in two years, the share of book purchasing captured by e-retailers in the UK rose from 25% to 38%. In the US it now stands at 44%. The move is away from the high street and in particular the large chains.

Link to the rest at Futurebook

Sometimes when you stand by the ocean and watch each wave break on the shore, you might not perceive that the tide is coming in. One wave is higher, but the next is lower and you can lose the trend in this short-term noise.

Long-time observers and analysts of the book business tend to focus on major publishers, major bookstores and printed books because that’s what they know and the industry tends to publicize itself to those who already watch it.

PG has previously mentioned that Bowker doesn’t see a lot of the growth of indie ebooks because most indie authors don’t bother with ISBN numbers unless someone forces them to do so.

However, Bowker’s finding that 44% of the books purchased in the US in 2012 were purchased online, up from 25% in 2010, while only 19% of books were purchased through chain bookstores – Barnes & Noble, Books-A-Million, etc., means that the chains and physical bookstores in general are well into a death spiral.

No, not all physical bookstores will disappear, but they’ll become a less and less important channel for Big Publishing to reach readers. Given their general antipathy toward indie authors, physical bookstores are already pretty much off the indie radar so indie bestsellers aren’t going to help save these stores.

Physical bookstores are the optimum channel for physical books. Online bookstores are the optimum channel for ebooks. Yes, you can certainly buy physical books from Amazon and physical books won’t disappear overnight, but if book buyers in general are moving to online etailers, they’re also going to move to ebooks.

For one thing, the lower price of ebooks will attract them and, on Amazon, they’ll keep seeing the price of the ebook next to the price of the physical book over and over. For another, once they click “Buy Now” and find the book on their tablet or ereader a few seconds later, they’ll be hooked. Physical books may play a role on special occasions, but day-to-day, bread-and-butter reading for frequent book purchasers will be all electronic.

With respect to various industry observers, looking for hopeful signs for physical bookstores and physical books in various data releases on book sales is like watching individual waves. One survey will make it look like ebook growth is slowing and the next that ebook growth is increasing. Bestsellers may disguise the overall trend for a quarter or two. Individual waves in the UK will look different than individual waves in the US.

These perturbations will give bloggers and journalists with daily deadlines something to write about, but the tide is moving and it’s moving in only one direction.

From PBS MediaShift:

On January 29, Amazon Technologies Inc. received a patent pertaining to the “secondary market for digital objects.” According to the patent abstract, the technology will enable Amazon customers to transfer — and presumably sell — e-books, MP3s, and other digital files to other customers. And, Apple too has filed for patents on the transfer of owned digital items.

The whole issue of used digital goods is a big one, with far-reaching implications for media in general, but music and publishing in particular.

. . . .

It’s still unclear however, if Amazon will actually use the patent. And if it does, how it might structure such a business. An Amazon representative declined to comment to MediaShift on the issue.

. . . .

Still, prominent authors have begun to debate what the potential sale of used e-books would mean for the publishing industry and the writers who depend on it. If used e-book sales follow the model of used print book sales, they will provide no revenue for authors and publishers. But digital copies don’t degrade the way printed books do, so the availability of used e-books could also remove readers’ incentive for buying new e-books.

In selling used digital music, ReDigi differs from other used goods marketplaces (including how Amazon deals with used physical goods) in that it pays both the copyright holder and the artist. Recently at the Tools of Change conference in New York, ReDigi CEO John Ossenmacher assured the book industry that the company would also compensate publishers and authors with e-book resales.

. . . .

Bill Rosenblatt, president of digital consulting firm Giant Steps Media, summed up at the Tools of Change conference the ramifications for authors by simply saying that they’re most likely to be the ones stuck in the middle. The winners will be the resellers, libraries and consumers. The losers will be conventional publishers and new retailers. But for authors, it could go either way.

“Perhaps the increased economic activity of digital resale will make up for any losses in new sales,” Rosenblatt said.

. . . .

John Scalzi wrote on his blog, “There’s a direct correlation between me getting paid to write novels, and me writing them.”

Do readers fail to appreciate that their book purchasing decisions affect whether or not their favorite writer can produce another book? Scalzi said this might be true.

“People don’t see creative people as they are in reality,” he said. “Ninety-nine percent of everybody in a creative field is barely eking by. Also, when it comes right down to it, people like getting bargains. They’re not following the product chain back to the initial starting point.

“People are always going to want to get things inexpensively, so part of our job these days is to remind them there’s an actual human being on the other end of the equation, and that actual human being has rent to pay, and children they’d like to feed. The vast majority of writers are not like Stephen King or J.K. Rowling or Suzanne Collins. The average author makes a four-figure salary a year from their writing. If you don’t pay them, a lot of them will decide they can’t afford to write professionally anymore.”

. . . .

In a February 7 post on his blog, Scalzi wrote, “I would rather you pirate the e-book than buy it used.” When asked to explain this comment, he said, “If you’ve made the determination that you’re not going to pay me for the book, I don’t see why [Amazon CEO] Jeff Bezos or anyone else should get paid. I’m the guy who wrote it. Why should they get paid? All they are doing is giving you a space to sell that thing. They’re going to take a cut out of work that other people did.”

Link to the rest at PBS and thanks to Jeanne for the tip.

From Slate:

Of all the startups that launched last year, Fuzz is certainly one of the most intriguing and the most overlooked. Describing itself as a “people-powered radio” that is completely “robot-free,” Fuzz bucks the trend toward ever greater reliance on algorithms in discovering new music. Fuzz celebrates the role played by human DJs—regular users who are invited to upload their own music to the site in order to create and share their own “radio stations.”

. . . .

“Can the auteur survive in an age when computer algorithms are the ultimate focus group?” asked Leonard. He wondered how the massive amounts of data that Netflix has gathered while users were streaming the first season of the series [House of Cards] —how many times did they click the pause button?—would affect future episodes.

Many other industries are facing similar questions. For example, Amazon, through its Kindle e-reader, collects vast troves of information about reading habits of its users: what books they finish and what books they don’t; what sections they tend to skip and which they read most diligently; how often they look up certain words in the dictionary and underline passages. (Amazon is hardly alone here: Other e-book players are as guilty.)

Based on all these data, Amazon can predict the ingredients that will make you keep clicking to the very end of the book. Perhaps Amazon could even give you alternate endings—just to make you happier. As a recent paper on the future of entertainment puts it, ours is a world where “stories can become adaptive algorithms, creating a more engaging and interactive future.”

Just as Netflix has figured out that, given all their data, it would be stupid not to enter the filmmaking business, so has Amazon discovered that it would be stupid not to enter the publishing business. Amazon’s knowledge, however, goes deeper than Netflix’s: Since it also runs a site where we buy books, it knows everything that there’s to know about our buying behavior and the prices that we are willing to pay. Today Amazon runs half a dozen publishing imprints and plans to add more.

Link to the rest at Slate and thanks to Susan for the tip.