Kristine Kathryn Rusch

Data Diving

24 March 2017

From Kristine Kathryn Rusch:

Once a month (more or less), we host a gathering of professional writers on a Friday night. The gathering is open to writers from our writers network, and other professionals we know. Most are from the Pacific Northwest, although folks who are traveling through often stop as well.

We have only one criteria: The writers have to be working hard at the business of writing. You’d be surprised at how many professional writers are ineligible just from that criteria. You’d also be surprised at how many writers who absent themselves from the gathering after attending once. We’re too intimidating, I think.

I mean that sincerely. I don’t think it’s because of the accolades in the room (multiple award-winners, New York Times and USA Today bestsellers, multi-published fiction and nonfiction writers). I think it’s because we’re all working hard at our indie publishing businesses, and we don’t dumb down the meeting.

One extremely prolific traditionally published writer showed up last year, and started asking basic questions (how do you format books?) and everyone shut him down before the meeting even started.

If you don’t know something basic, you can ask someone on a break, and more often than not, you’ll get weird look and a series of links. This is a serious meeting of hardworking, serious professionals who are bootstrapping each other into the ever-evolving new world of publishing.

. . . .

In the middle hour of our three-hour talk, the conversation went something like this:

my click-through rate is…

…I received 96,000 impressions…

…at least thirty-percent downloaded my…

Numbers, data, and more numbers. Writer after writer recited facts about their newsletters, their ad campaigns, their book sales, and all of those facts had data to back them up. These writers were often looking at phone screen or their laptop to give accurate information (as if the rest of us would shoot them if they reported wrong), and we were comparing performance, subscribers, money earned, and books sold.

I don’t think anyone mentioned craft except to acknowledge that a certain level of craft is necessary to get readers to return to the fold.

I sat back and absorbed this conversation, letting the words run over me a little, because I was surprised by it. Not by the conversation itself—we’ve had a variation of that conversation off and on for a year now—but by the complete acceptance of it. I was surprised by the way that no one, not even the newcomers to the meeting, seemed to think the conversation was out of the ordinary. We were comparing results of various marketing techniques, trying to figure out our way through the morass of data that’s being flung at us, and—most importantly—sharing what we had learned, what worked for us, and what didn’t.

. . . .

[In years past] At conventions, we writers discussed a variation of the same topics—agents, editors, marketing to the increasingly smaller and smaller subset of publishers, and the best way to handle the problems that came up in our various careers.

Not once did we mention data. We did discuss how to goose book sales, but based on the royalty reports. We tried to figure out how to get rid of our reserves against returns. We often argued about the value of book signings and book tours, but we never had data.

Because our publishers didn’t have data either.

Data is becoming the new religion at traditional publishers, but they’re the proverbial first-year English majors trying to understand an advanced-level Physics course. They don’t have the math skills, mostly, to understand, for example, why Author Earnings really is a good way to look at the entire industry.

(The responses to Data Guy’s presentation at Digital Book World, both live tweeted [live social media-ed?] from the conference and in private, were disbelieving. I’ve heard industry professionals say that the only accurate reports came from Nielsen later in the day. (I searched for someone courageous enough to write that in their blog about the event, and couldn’t find it. I don’t want to out folks who wrote me emails, so I’m afraid I can’t link here.)]

. . . .

But the one thing we didn’t discuss, something I hadn’t even thought of until Saturday morning, was how to manage all the data we were receiving. We joked about it a bit, about a writer we had been watching—a high-end marketer who reported that his well-known marketing practices were finally failing him, until he realized (hello!) that he needed to produce more product. Everyone he had reached had bought his five or six books. He needed to write another one.

That got a great laugh from the group, because the one thing we do, we all do is write the next book. We’re constantly trying to figure out how to write as much as we can, with this fire hose of information streaming our way.

And it’s not just the new programs, the new way to market, the new opportunities opening up each and every moment of each and every day. It’s also the changes in the data we receive.

. . . .

However, we are rapidly getting to the place, as writers, where we need to figure out how much of this data is relevant or useful. Just because I can find out that more people in Hong Kong open my newsletter at 10 in the morning on weekdays than on weekends doesn’t necessarily mean that I need to know that information. I might, if I’m looking for the best time to send a newsletter. But the service I use for my newsletter will aggregate that data for me, and tell me the optimum time to send a newsletter to that subset on my mailing list.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

PG says anybody who doesn’t understand why Data Guy’s information is extremely useful shouldn’t be trying to run a business in 2017. With every passing month, the business practices and business savvy of traditional publishing are falling farther and farther behind both indie authors and the rest of the world.

When PG is negotiating agreements with traditional publishers, it’s an entirely different experience than negotiating IP rights agreements with tech companies or investment bankers. The publishers are so far behind and so unaware of things that are taken for granted in today’s business world, it’s almost laugh-inducing.

Just as one example, royalty statements every six months give rise to visions of row after row of ink-stained bookkeepers laboriously adding up long columns of numbers by hand.

Of course, Amazon pays every month and so does the rest of American business. The same people who don’t understand Author Earnings are the ones saying it’s impossible to calculate and pay royalties more than twice per year.

And this is a business which is heavily dependent on Barnes & Noble and similar organizations that are stumbling towards bankruptcy court.

In a near-future United States where 80-90% of all books are sold through Amazon, what, exactly will publishers have to offer authors?

 

Writing with Chronic Health Problems

5 March 2017

From Kristine Kathryn Rusch:

Dozens of you have asked me, both privately and in comments, how I write with a chronic health condition.

There really is a trick to the writing while chronically ill. But the trick is personal, and it’s tailored to each individual person.

So, more personal stories—and then tips.

I have many many many allergies. It’s taken years to identify them, particularly the food allergies. I’m deathly allergic to perfume and soaps (particularly anything with manmade glycerin) and that causes more problems than I can say. It’s also the allergy that’s forcing me to rethink travel.

The worst health problem I have, though, is chronic migraines. From the age of 19 on, I got migraines so severe and long-lasting that I would lose weeks to them. By the time I reached my mid-thirties, I would have migraines 21-25 days per month.

And yes, those were the years I was building my career, and editing The Magazine of Fantasy & Science Fiction. I was working at an international level career, traveling (even though it made me sicker), and was horribly ill through much of it.

. . . .

So…how did I work with all of that? Mostly, I didn’t. That’s the odd thing. If I had a nine-to-five day job, I would have had to go on disability, like so many of my friends in similar situations. Either that or have a truly understanding boss, one who knew I wasn’t faking when I said I couldn’t come in until the afternoon—and maybe not even then.

With the exception of one job I had with a truly understanding boss, I never worked traditional hours. When I had day jobs, I had unusual ones, the kind with flexible hours or the kind that were performance based. (If I finished all my work, I could go home.)

So, as we’re talking about working through chronic health problems, keep in mind that as writers, we’re in control of our own schedules. We figure out how to manage the day-to-day business.

. . . .

So I evolved around the migraines.

Here’s what I realized I could control:

  1. I could control the triggers—and avoid them.
  2. I could exercise. The migraines got better if I exercised. And I could run (or walk) with a migraine and, magically, the migraine often got better.
  3. I could divide my work days according to the migraines. Remember, I told you that I could work through some migraines. The key for me was to try to do the actual work I wanted to do. If that wasn’t possible, then I would move to “easier” work. If that wasn’t possible, then the couch it was for me for the rest of the day, so I could work the following day.
  4. I could prioritize everything. Rather than try to do all of the work all the time, I could divide the work into things that I absolutely couldn’t miss to the things I could let slide. (Filing, I’m looking at you.)

. . . .

I came up with a list.

I needed to:

Write Every Day

Exercise Every Day

Manage My Food Intake

Get Enough Sleep

Read something

Sounds simple, right? But simple was what I needed, what I still need.

Notice what’s missing from the list? No email, no website work, no promotion. Those weren’t my priorities, and still aren’t. Those things can—and often do—wait.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

Writer Finances Versus The Paycheck World

23 February 2017

From Kristine Kathryn Rusch:

 Here’s a piece of advice you don’t hear very often:

Pay off your house.

Seriously, my writer friends. If you get a lump sum of money, pay off your house.

Or your car.

Definitely pay off your credit cards, and take them out of your wallet. Use them only when you travel to a conference or plan to make a big purchase.

If the indie writers who made a lot of money in 2012-2014 had followed that advice, they’d still be writing and publishing. Sure, their incomes would still be down, along with their sales, but their careers would continue.

How do I know they didn’t do that?

Because they’re gone. Mark Coker commented on it in his year-end blog. Writers in the comment section on this blog have mentioned that they’re leaving the business. The Kindle Boards discuss all the writers no one hears from any more.

And if you go to writer website after writer website, many of them for successful indies, you’ll see sites that haven’t been updated for a year or two, or you won’t find any site at all.

What happened?

Well, those writers will say that their sales went down to unsustainable levels. Those writers will say there’s no point in continuing now that they can’t make the same kind of money they made in 2013. Those writers will say that writing, as a profession, is impossible.

And it is, if you don’t understand money management.

. . . .

I’ve never had a traditional job (for long) or a traditional attitude (ever).

And therein lies the heart of this blog post.

Because if I had had a traditional attitude toward money, you would not be reading this blog. You would never have heard about me. My career would be over now.

Money management is a crucial part of running your own business, and in the Survival stage, it’s all about cash flow.

Cash flow, for those of you who don’t know (and in the U.S., I’m assuming that’s two-thirds of you reading this blog) is about the way money flows into a business and flows out of it. In a business, cash doesn’t arrive at predictable intervals or in predictable amounts—such as $2,000 every two weeks. Sometimes a business is lucky enough to have a predictable payment cycle (for example, Amazon KDP pays at the end of each month), but not a predictable amount.

Even when a young business has a predictable amount of money headed their way—say, a client who agrees to pay $1,000 every month until a bill is paid off—that client might pay $1,000 one month, and then pay the entire amount the next.

The problem is that the business might have planned for the $1,000 per month, but not the entire payment. That entire payment (let’s call it $4,000) might seem like a windfall, but it isn’t. Instead, it’s money that was expected and should have been used in the succeeding months.

How many writers would parse out that “extra” $3,000 at intervals of $1,000 per month? Not many.

Link to the rest at Kristine Kathryn Rusch and thanks to Anthea and others for the tip.

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

Writing in Difficult Times

3 February 2017

From Kristine Kathryn Rusch:

This morning, a tweet from a British comic book writer floated across my Twitter feed. He wrote (and I’m paraphrasing here):

Sorry about the flurry of political tweets. I’ll get back to light stuff—comics, games, graphic novels—when the world is no longer on fire.

Oh, boy, do I understand how he feels. I’ve been there. I am there for a variety of reasons.

But I’m going to disagree with him—on a couple of things.

First, the apology for the political tweets. If you feel the need to speak out on social media, it will impact your brand (both negatively and positively). Accept that. Then speak out and don’t apologize.

Second, the phrase “light stuff” concerning his art. Implying that what he does—what all of us do—is unimportant.

Or as another writer, an American this time, put it on Facebook a few days ago, (again, paraphrasing) sure is hard to write when the house you live in is tearing up its own foundation.

Yes, it is.

And still, you must write.

People need your art, now more than ever.

. . . .

I learned this lesson about art during 9/11. I was writing Thin Walls, a Smokey Dalton novel, set in Chicago in 1968—one of the most terrible years of the latter half of the 20th century. The novel deals with racism, and murder, and hatred, and love and family, all tied into one package in a Chicago neighborhood during that bleak December.

I had just hit the climax of the novel—my hero, about to confront the villain—when terrorists flew planes into the Twin Towers and the Pentagon. Another flight went down in a Pennsylvania field because the passengers rose up and prevented more deaths than their own.

Evidence of real heroism, more as the news continued to unfold.

And more horrors too. For a while, it truly felt like the world was on fire, at least from a perspective inside this country.

(And, frankly, I never again want to wake up to these words coming out of my radio: …the fires at the Pentagon are still burning out of control…)

I have a vivid memory of standing in my kitchen, looking at the television, and stepping outside of myself, realizing that the government we have—the world we all have—is a consensus, something we all agree to. That it is as fine and as thin as paper, and it’s only as good as the people who are willing to uphold its ideals, laws, and values.

That realization terrified me as much as the events of the day. Because it became clear to me what shaky ground we were all on, we had always been on. Until that moment in September, 2001, I had been immersed in 1968, another time when it felt like the world was becoming unmoored, and I knew that these moments came about—for the world, for individual countries, for states, for neighborhoods, and for us individually.

I couldn’t get back to my novel. I felt it unimportant—light stuff. It didn’t matter, not like running into a burning building mattered to save people covered in dust and ash, not like jumping terrorists on a plane and sacrificing your life to save others.

. . . .

The night of September 11, when I knew that friends and family had survived, I turned off the news. Dean and I watched some fluffy crap on cable TV. Later that week, after trying to go back to the books I had been reading, I started the Harry Potter series—and allowed myself time to go somewhere else, because I couldn’t stay here. I would break if I stayed here.

And that was when I had my epiphany. I realized that escape is rest. It’s important. It gets us away from the horrors, the terrible things, the stresses and upsetting moments of every day life.

Sometimes, art provides a different perspective, a new way of thinking about important things. And sometimes, we just hang out with a little boy wizard fighting a big powerful evil because it entertains us.

This is not light stuff. It is not unimportant. It is extremely important.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

UPDATE: PG is sorry to remove/shut off comments, but he has tried to keep TPV separated from the politics surrounding the recent election, an island of comity in the midst of the storm if you will.

2016 Disappointments

20 January 2017

From Kristine Kathryn Rusch:

As I write this in early January, fourth quarter numbers for all big businesses are just starting to trickle in. The whining about 2016 has commenced, some of it justified, some of it not.

The numbers aren’t just in for the major publishers; the numbers are in for indie writers as well. And the writers who crunch numbers are having varied reactions, often depending on years of business expertise.

I have a hunch that when all of the numbers arrive toward the end of this month or so, we’ll find out that 2016 was truly a mixed bag.

Which is what we should expect from a healthy publishing environment in transition.

. . . .

Self-published writers who remain in the business have become independent publishers in their own right. Which is why from now on in this post, I’ll call it indie publishing.

Even though ebooks have existed for decades, the Kindle made them a viable career path. Indeed, the Kindle and Amazon itself began a major disruption of the traditional publishing industry, a disruption all of us are living through.

Changes still happen almost daily. But a lot of us have worked on the indie side long enough now to take some things for granted. We’ve also worked in it long enough to have actual numbers. We can project this year’s earnings based on last year’s behaviors—kinda sorta.

I add the “kinda sorta” because, as I said, changes still happen daily.

As this blog goes live on my website (some of you got it early on my Patreon page), the Digital Book World conference is going on in New York. Data Guy is making a presentation that I’m sure will become public a week or two after the conference.

. . . .

Data Guy will be analyzing the digital market based on genre. But some of his findings have already gone public. He found—to the delight of traditional publishers everywhere—that indie book sales took a dramatic fall in the summer and early fall of 2016. (Writers have experienced this from the beginning.)

In the white paper, he notes:

In May 2016, verified self-published indie authors were taking home nearly 50 percent of all US Kindle author earnings. Now, as of early October 2016, the indie share has fallen below 40 percent.

As Porter Anderson writes in his introduction to the white paper, this rather steep decline brings indie sales back to their 2015 share of the digital marketplace. He adds,

No more can cordial skeptics like myself say that everything is always coming up indie roses at Author Earnings. The news of a downturn isn’t what the project’s chief admirers, the indie author corps, would prefer, obviously. But it helps lend a kind of real-world credibility to the effort: what goes up does not always keep going up in life as we know it.

Anderson is right: the downturn does show skeptics that Data Guy’s numbers are real and not just the product of indie “cheerleading” to use Anderson’s term.

Data Guy’s October numbers also show something that writers have been saying all summer: for many, their sales fell off a cliff. That cliff is composed of many things—the contentious U.S. election, the changes in Kindle Unlimited, a general overall retail downturn in the fall, and more.

I examined some of this in “Third Quarter Blues,” because as I learned when I wrote that post, that election downturns happen every four years in the United States—and some downturns are more prolonged than others.

However, the research told me (and the numbers later bore it out) that the U.S. retail economy would rebound after the election. The holiday season would set in with a vengeance, and consumers would buy more than they usually did in the last few weeks of the year to make up for time lost.

. . . .

Data Guy’s numbers are from October, before the holiday sales happened and during the election effect. I can’t wait to see his conclusions, because I suspect his spider, crawling through the various databases, will catch things we can’t see with the naked eye.

What we can see, though, is—I’m sorry to say—unsurprising in this kind of maturing traditional marketplace.

Some balance is coming back into the system. Consumers are getting used to a new way of doing things. Readers are getting used to a new way of doing things.

Readers still go to bookstores, yes, and some readers will go to the brick-and-mortar store first. But most readers go online first, even if they choose not to order the book there.

There’s an interesting piece from The International Council of Shopping Centers (which I found through the Marketing Land article). On January 3, the International Council of Shopping Centers released the results of a survey conducted after the holiday season ended. The survey had a relatively small sample size (1030 adults) , but the findings seemed to be backed up by the other data that’s coming in.

The survey found that 70% of the shoppers surveyed preferred shopping at a place with an online and a physical presence. That number was even higher for Millennials—81%. Part of the reason was the ability to compare prices, but some of it was—again—convenience. Since most shoppers waited until the last minute in 2016 to shop, they ended up looking online to see if what they wanted was at a store, and then they went to the store to pick it up.

Sixty-one percent of the people who went to the store to pick up the item they purchased online bought something else at that store (75% of Millennials.) Why am I harping on Millennials? Because they are the future of the next decade or so of retailing.

. . . .

What happened to books in 2016?

You’ve seen the traditional publishing headlines, right? Traditional Publishing Needs A Blockbuster, one newspaper wrote. And it’s true. There was no breakout book in the last part of 2016. The breakout books of 2016 were pretty small potatoes compared with previous years. In fact, single title sales were unbelievably tiny compared with…ahem…the 1980s or even the early part of this century. The week before Christmas, for example, John Grisham’s new hardcover sold “only” 71,000 copies.

Why do I say “only”? Because traditional publishing is set up so that the hardcover bestsellers sell best during the holiday season, and should rake in the bulk of the book’s profits by then. I quickly tried a like-to-like comparison with Grisham, using Google, and here’s what I found.

In 2002, Grisham released two novels—one in February (which I’m not using) and a non-traditional Grisham title, Skipping Christmas, which released on November 1. By the end of the year, Skipping Christmas had sold (shipped) 1,225,000 units.

Eight weeks left in the year when Skipping Christmas was released meant the book had to sell about 150,000 units per week. Clearly sales didn’t work that way—some weeks the book probably sold more than others. But book sales around the holidays are pretty consistent, and sometimes rise rather than fall.

In 2016, Grisham released a new traditional (legal thriller) Grisham title, The Whistler, and the hardcover “only” sold 71,000 copies in week seven after release. Of course, competing with that was the $14.99 ebook which—when I looked it up on the night of January 8—was #27 in the paid Kindle store. Price be damned.

. . . .

Mass market has declined because there are fewer mass market retail outlets. Most grocery stores have gotten rid of their mass market slots, many big box stores no longer carry mass market paperbacks, and many of the chain bookstores have closed. Mass market is dying from a lack of oxygen and shelf space, not because people dislike the format. Trad pub is killing mass market all on its own.

So what’s fueling the rise in print book sales? Availability. Traditional publishers never had a clue about what some of us called the book desert. There were large swaths of the United States where you couldn’t find a new hardcover book for sale on any shelf. Rural towns had mass market racks (sometimes) and libraries (often) but no bookstores. So rural readers were stuck buying books when they went “to town” or buying mass market off the truck stop rack or buying no books at all.

Now there is no book desert. Any rural reader with a mailbox and a debit card can order a book online and have that book delivered in any format in which the book is available.

. . . .

Perhaps the biggest retail story of 2016 came out last June where study after study showed that shoppers now make more than half of their purchases online. Remember when you knew a lot of people who refused to buy something online? Now, try to find someone who hasn’t ordered at least one thing online in the past year. If you’re dealing with people who have some disposable income (and aren’t living near the poverty line), then you’ll have a hard time finding someone who hasn’t ever bought anything online.

Consumers are moving between the digital world and the brick-and-mortar world with incredible ease. The transition is happening, folks, and we’re getting used to the new world.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

All Romance Ebooks & Visions of The Future Part Two

13 January 2017

From Kristine Kathryn Rusch:

The indie publishing world remains stunned by the sudden closing of All Romance Ebooks (ARe), an ebook distributor that had looked—at least in the beginning—like it was very successful. Maybe it had been, and had simply been undercapitalized (which is my guess).

But whatever the reason, ARe closed its doors on December 31, 2016, and is now dealing with a heck of a financial fallout.

. . . .

ARe wasn’t the only venture to go belly-up in 2016. A couple of other companies that got their start as some kind of support, or “new” business model based solely on the indie publishing revolution also liquidated in 2016. Another—Booktrope—vanished fast as well, although unlike ARe, Booktrope gave its suppliers a month to handle the loss.

. . . .

So, what are these three intertwining factors that will impact us in the next few years?

They are:

  1. A gold rush
  2. An investment bubble
  3. A business cycle

Each has patterns so clear that a thousand books have been written about those patterns. You can find the patterns by Googling, or (in the case of gold rushes) by watching the History Channel.

Let’s start with the gold rush, because everything starts when someone discovers a shiny hunk of metal hiding in plain sight.

The ebook revolution wasn’t a literal gold rush—there were no creeks, no slipping hands in ice-cold water to shake gold flakes loose from bare rock in a little makeshift pan.

What there was were a few frustrated writers who used Amazon’s easy Kindle interface to upload books that these writers either couldn’t sell to traditional publishers or were too afraid to try to sell. And because the Kindle was such a nifty device and because there wasn’t a lot of content, back in them thar days (nine years ago), these books took off. Writers who had books with bad covers and poor copyediting sold and sold and sold because those writers could tell good stories.

. . . .

Gold rushes follow a pattern. The pattern goes like this:

  1. The work is so easy that anyone with the desire can do it with little or no capital outlay. It takes being in the right place at the right time with the right set of skills. (In an actual gold rush, the first skill was patience and the ability to touch ice-cold water for hours at a time.)
  2. The tools improve. They remain easy to use. There’s a capital outlay, but it’s still tiny. Again, right time, right place, right set of skills. (In an actual gold rush, the miners built sluicer boxes that quickly separated the gold from the rock. The work with a sluicer box was faster than work with a regular pan, and much faster than working by hand.)
  3. Outsiders notice and want in. That’s where the word “rush” comes in. Everyone wants a piece of gold sitting on the ground. It’s easy. Everyone will get rich!
  4. With the outsiders come the side businesses. These businesses make it “easier” to do the work. Some actually do. Some fill a need—like the general stores that rose up around the mining camps. Others are scams, trying to take gold away from the miners. (Or money away from the writers.)
  5. The easily attainable gold goes away. Now, it takes some work to make money. In gold mining, the workers actually had to start mining for gold (yes, there were other steps here—establishing claims, etc. They’re no longer relevant to our discussion). It also takes money to do this work, not a lot, by normal business standards, but still more than some people have.
  6. The operation goes from low capital with small (or no organization) to large capital and big operations. The small workers who started all of this become one of three things:
    1. big business owners (and rich);
    2. workers with expertise…for someone else
    3. retired or bankrupt or moving on to the next crazy idea
  7. The gold rush is a distant memory but it has changed the landscape forever. New towns exist. New jobs exist. New wealth exists. New businesses exist. Lost in all that newness is the destruction of old businesses and the people who suffered lottery luck. (Lottery luck: they win riches, then spend it all, with no hope of ever having money again.)
  8. Small business becomes Big Business becomes The Way We Do Things Around Here. You see that in the American West, more than 150 years after the gold rushes of the 19th century. Mining still exists. Heavily regulated, with a ton of problems. States exist where there were only territorial governments before, because of mining. And so on and so forth. Indie publishing is decades away from this one.

. . . .

Here it is, the life cycle of an investment bubble. (If you want to read about this in-depth, go to Investopedia.)

  1. Displacement: Something happens that changes an industry, something that investors will eventually notice. Introduction of new technology, for example, might make some work easier. Consumers change their behavior for a weird reason. Whatever it is changes the way things are done, and investors start paying attention. Some get in on the ground floor.
  1. Boom: Everyone wants in. Everyone wants to invest money in this new thing, whatever it is. The increased investment spurs growth, but that growth isn’t natural. There is a natural growth curve, but it’s being masked by the enthusiasm.
  1. Euphoria: We’re going to be rich! Forever! It only takes a few dollars. Or as a friend said to me during the real estate bubble, parroting what he heard from his (now-out-of-business mortgage broker), Real estate always increases in value. It never goes down. Yeah, right. And I know of this land in Florida…oh, wait! I’m referencing yet another bubble (from the 1920s).

In other words, no one researches anything. Everyone throws money at this hot thing, thinking they’ll make a killing at it. This is different from a gold rush, in that we’re talking about people with money to invest, not people who will do the actual work. Keep that in mind.

  1. Profit Taking: Smart investors leave. In fact, some of them left before the euphoria started. But people who have been doing this for a long time recognize the euphoria for what it is and get out at the height of the market, selling their holdings for a profit. Stupid money stays. And believe me, there’s a lot of stupid money in investments.
  1. Panic: Yeah, you know this one. We’ve all seen the movies about 1929, where people jumped off buildings because they lost everything. (Not that such things actually happened, but they could have happened.) We lived through 2008-2009, which was a panic as well. People want their money now, and they want what they put into the investment, which is no longer possible.
  1. Never Again: This isn’t on Investopedia but it’s there. A lot of people, burned by the bubble, will never invest in that particular business again, whether that business is stocks, real estate, tulips, or technology. The romance is over, the possibilities are dead.

How does an investment bubble relate to publishing’s gold rush? There are two points of entry for investors into a gold rush. The first is #3: Outsiders notice and want in. Non-writers think they can profit on this growing phenomenon by helping writers with their businesses, by giving loans or doing other forms of investing.

The second point of entry is #6: The operation goes from low-capital to high capital. At this point, the gold rush is established and everyone knows about it. Even investors who don’t read knew what was going on in publishing. I had several angel investors approach me about my writing or WMG Publishing in 2014. I could have had meetings with venture capitalists who were willing to put $10 to $20 million into my publishing business—for 50% of the profits. I didn’t laugh. I made note of where we were in the investment cycle. Then I laughed—and did not take the offers.

. . . .

I’m telling you about the life cycle of a business, not to help you with your writing business (although you can probably see yourself here) but to think of all of those outside businesses that have attached themselves to writers who want to indie publish.

We’ve already seen countless business go out of business because they couldn’t survive the existence phase.

Most businesses that started to augment indie writers are now in the survival stage. This new environment hasn’t existed long enough for the businesses to adequately predict the future. They can only guess.

. . . .

If the writers don’t get rich, then the businesses that are making 10-20-30% off those writers don’t make money. Those businesses are hemorrhaging capital.

If the business managers/owners are optimist types who don’t understand the various bubbles and life cycles they’re in, they’re going to try to get investment. And they won’t be able to get real investment, because smart money left the industry years ago. Stupid money has lost its interest in publishing. And only usury types remain—the kind who give loans at 30-40%. These businesses won’t qualify for anything else.

Survival is all about cash flow, and managing cash flow is an art. The concerns of the business in the survival phase, according to Churchill and Lewis, are pretty simple:

  • In the short run, can we generate enough cash to break even and cover the repair or replacement of our capital assets as they wear out?
  • Can we, at a minimum, generate enough cash flow to stay in business and to finance growth to a size that is sufficiently large…to earn an economic return on our assets and labor?

Many of these side businesses will soon learn that the answer to those questions is no, because the flood of money is gone. The gold rush is dead, and investors want nothing to do with publishing.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

All Romance Ebooks & Visions of The Future: Part One

1 January 2017

From Kristine Kathryn Rusch:

All Romance Ebooks and its sister website Omnilit did something incredibly awful on December 28, 2016. It sent out a handful of emails, letting writers, publishers, readers, and others know that it was shutting its doors four days later.

The letter WMG Publishing got said this,

On midnight, December 31, our sites will go dark and your content will cease to be available for sale through our platforms. This includes any content you are having us distribute to Apple.

We will be unable to remit Q4 2016 commissions in full and are proposing a settlement of 10 cents on the dollar (USD) for payments received through 27 December 2016.  We also request the following conditions:

1.     That you consider this negotiated settlement to be “paid in full.”

2.     That no further legal action be taken with regards to the above referenced commissions owed….

It is my sincere hope that we will be able to settle this account and avoid filing for bankruptcy[KKR: all bold mine]

I have no books on that site. Hadn’t for a long time. If any of my work is there, it’s there through other publishers or as part of an anthology. WMG pulled its books off All Romance Ebooks (ARe) almost a year ago, because of problems dealing with the site, the people behind the site, and just some really unsettling business practices.

How unsettling? Nothing concrete. It looked (from the outside) like their interface was breaking down. We knew of sales on our account that never were credited to our account. I believe WMG even tested the site by buying (or having someone buy) a book, and seeing if we got credited.

We didn’t. Then we tried to track down what was owed, what payments had been made, and communications issues. We had a handful of truly incompetent employees (nice people; terrible workers) in 2014, and at first, we attributed our ARe problems to them. But after some dealings, we realized that, nope, the problem wasn’t ours. It was ARe’s problem, and that was a very, very, very bad sign.

We pulled all our titles off ARe, deactivated our account, and moved on to other sites.

So when we got this ridiculous letter, we knew it would have no effect on us. But as Allyson Longueira at WMG noted, ARe (a major Apple portal) made its announcement while Apple is shut down for annual maintenance, and writers who have to switch from ARe to Apple direct can’t do so.

Not only that, authors will lose any algorithm from Apple, and probably any revenue from them.

. . . .

ARe is a distributor, mostly, and so it is dealing with its writers as suppliers and unsecured creditors. I’ve been through a bunch of distributor closings, many in the late 1990s, with paper books, and they all happen like this.

One day, everything works, and the next, the distributor is closed for good. In some ways, ARe is unusual in that it gave its suppliers and creditors four days notice. Most places just close their doors, period.

I’m not defending ARe. I’m saying they’re no different than any other company that has gone out of business like this. Traditional publishers have had to deal with this kind of crap for decades. Some comic book companies went out of business as comic book distributors collapsed over the past 25 years. Such closures have incredible (bad) ripple effects. In the past, writers have lost entire careers because of these closures, but haven’t known why, because the publishing house had to cope with the direct losses when the distributor went down.

The difference here is that ARe wasn’t dealing with a dozen other companies. It was dealing with hundreds, maybe thousands, of writers individually, as well as publishers. So, writers are seeing this distribution collapse firsthand instead of secondhand.

To further complicate matters, ARe acted as a publisher for some authors, and is offering them no compensation whatsoever, not even that horrid 10 cents on the dollar (which, I have to say, I’ll be surprised if they pay even that).

. . . .

Now, let me give you all some advice.

Lawsuits cost time as well as money. I know a whole bunch of angry writers are banding together to go to war with ARe. Which is good, on the one hand, because these kinds of things should not ever happen.

But on the other hand, it’s not good, because a whole bunch of writers are going to lose a year or more of precious and irreplaceable writing time to go after this company.

Some writers have that time; others do not.

Frankly, if the writers’ organizations put together some kind of lawsuit, sign on to that, because it will be more effective. They can afford good lawyers and they will have a huge number of writers that they represent.

I know you’re angry. I know you may have serious financial problems because of this shut-down.

You need to take a deep breath, and look at the impact ARe’s shutdown and the loss of fourth quarter earnings will have on you. Then you need to understand that any lawsuit will take a year or more (courts are slow). ARe might settle; they might not.

. . . .

Guessing now, purely guessing.

ARe had run ahead of their money since they started. They used today’s money to pay yesterday’s bills. They had no profit. So they were floating money—payments to authors, payments to creditors, payments like website and rent.

That’s why ARe’s technology grew antiquated, why they weren’t keeping up with the times, why payments in some cases were late or impossible to get. They probably got a line of credit too late or they didn’t have one or they were borrowing off credit cards.

This fall, book sales went down. I discussed some of that after the election, but I’ll be discussing it more and in a different way later in January. Like its authors, ARe was counting on a certain level of revenue. That revenue went down, starting in July (maybe sooner), and continued downward all fall.

ARe paid writers and publishers 45 days after the close of the quarter. So they had to have made the Q3 payments by early November. That probably used most of their capital. They figured the holiday season would save them, along with holiday ad buys.

I’ll wager those were below what ARe expected—significantly below. So, they tried the 2017 ad buy the week before Christmas, hoping that would save them.

Link to the rest at Kristine Kathryn Rusch on Patreon and thanks to C.G. for the tip.

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

As usual, Kris’s advice is sound. If you’re involved in the ARe matter, you’ll want to read her entire post.

In a past life, PG represented lots of people in lots of civil litigation. He spent a great deal of time in court.

In some cases, litigation is a necessary part of solving a dispute. The parties are unable to agree, so a judge or jury must decide the matter.

On the other hand, litigation takes a financial and emotional toll on the parties. In some cases, the tangible and/or intangible rewards of litigation outweigh the financial/emotional costs and in other cases they do not.

PG was once involved in finally settling a lawsuit over the validity of a will that had lasted 13 years. He’s comfortable in saying that the costs outweighed the rewards for the litigants in that case.

PG says it is almost always a bad idea to entrust your business or personal welfare to the outcome of litigation.

You can move on with your life without a lawsuit or sue and move on with your life. The moving on with your life part is always the most important.

Patreon

23 December 2016

From Kristine Kathryn Rusch:

I finally started a Patreon account for this blog. Many of you had asked, but every time I looked at Patreon, I froze.

Part of the problem is Patreon’s guide for writers. It’s rather lame. I’m not interested in doing anything they suggest.

Part of the problem is me as well. I looked at the Patreon’s for some of my favorite writers. I love that Judith Tarr gets over $1,000 per month for her horse musings and her wonderful fiction.  I’m rather gobsmacked that Seanan McGuire can get $7,000 (roughly) whenever she produces a short story or N. K. Jemisin receives about $5,000 per month from her supporters.
Let me clarify my surprise: My surprise does not come from the quality of the work offered. These women are excellent writers. N.K. Jemisin writes wonderful stories and novels. I’ve published Seanan McGuire in Fiction River. I’ve read and loved Judith Tarr’s work for years and years, and have included her in some Storybundles I’ve curated. All three women deserve every dime and more.

Here’s what surprises me: I’m surprised that these three writers (and dozens more) are willing to have Patreon accounts for their fiction. I’m such a delicate flower that I worry about having anyone involved in my fiction-making process. That I think Patreon support is reader involvement is clearly my problem, but I can’t get that thought out of my head. If I had a Patreon that promised me $7000 every time I finished a short story, I would write novels. Seriously, I am that contrary about my fiction. And it’s been a part of my process since I was a teenager.

So, every time I tried to sign up for a general Support Kris on Patreon! account, I backed away.

. . . .

I had to start analyzing why I couldn’t pull the trigger on a Patreon account.

It came back to what I could comfortably ask for–and what I wanted the account for. Searching other people’s Patreons only confused me. Everyone had great ideas and did great things, but I couldn’t see myself doing things like that for long. Or if I did, I could see those things consuming me and my time.

However, the whole Jazz24/OPB comparison made me realize that my publishing blog was a different entity than my fiction was. I had always treated my blog that way. I put a donate button on the blog from the very first post in April of 2009.

I even wrote my Please donate pitch in what I consider to be my radio voice. I’ve done reader/listener supported nonfiction my entire life. That’s a place where outsiders fit into my writing. My nonfiction writing is better for the reader/listener participation. I could ask for nonfiction support, and it wouldn’t bother my delicate flower self.

Once I had that goal in mind, I decided to set up Patreon. I tried and tried and tried to do a video, with me on camera, asking for support. Have you ever seen the public radio people show up on the sister public television station during the TV station’s on-air fundraisers. The TV people are relaxed. They know where the camera is. They look like…well…like TV people.

The radio people look like someone just released them from a three-day camping trip that no one wanted to go on. Their eyes are wild, their hands go every which way, and their clothes aren’t ready for prime time.

Welcome to Kris trying to do a video about Kris. I didn’t just look dorky. I sounded hesitant and reluctant and slightly crazed…because I was.

. . . .

I would feel obligated to the patrons if I got paid thousands for every short story I finished. If a group wanted me to write a fantasy novel next, I would write that fantasy novel, until I ground down because fantasy wasn’t what I wanted to write. And then I would blow up the whole experiment. I don’t write fiction on demand.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

PG’s not entirely sure what he thinks about Patreon. He’s always in favor of authors and other creative folks being paid for their work but when he checked out Patreon not too long after it became a thing, it didn’t really click for him.

However, PG long ago learned that what clicks for him is frequently not what clicks for others. For example, PG is really loving

For example, PG is really loving Absolute War, which describes the conflict on the Eastern Front, fought between the Soviet Union and Nazi Germany between 1941 and 1945 in great detail, including information from many sources which only surfaced after glasnost opened a whole lot of Soviet-era archives.

Mrs. PG (who knows a great deal about central and eastern Europe already) has banned any Eastern Front discussion over lunch.

Because PG is concerned that he may have missed something interesting about Patreon, he would be interested in the thoughts of others on this topic (or the Eastern Front, your choice).

The Hybrid Learning Curve

16 December 2016

From Kristine Kathryn Rusch:

 Recently, my husband and writer Dean Wesley Smith ran a series of excellent posts on his blog about following your muse versus writing to market. Whenever one of us writes about this topic, writers come out of the woodwork to tell us that we’re wrong. Those writers, all of whom have been in the business less than five years, state that they understand the market, they have been writing to market, and they make way more money than we do.

Um…sure. Yeah.

They base their assumptions on Amazon sales ranks of a handful of our titles, not realizing that between us, we have over 600 titles in print, and we make money all over the world (and the spectrum) on subsidiary rights. For example, I’ve spent much of the past month (since the election, oddly enough) negotiating four new Hollywood projects, as well as finalizing some details of a movie that’s in development.

None of those projects, all of which started as novels, was written to market. Not a one. They were all written because I was following my muse. And traditional publishing repeatedly told me (back in the day) that one of those projects—the one that has currently earned the most in subsidiary rights, including Hollywood—was completely unmarketable.

. . . .

Dean has always answered this by noting that he spent about ten years writing to market, and it burned him out. He wrote tie-ins and ghostwrote dozens of books, none of which he owned the copyright to. He will always respond to those writers who contact him by telling them the latest royalty amount he made on those books in the past six months.

This time? It was (I believe) $12. Yep. $12, on all of those projects. For six months. Yep, made him rich writing to market did, writes Kris, channeling Yoda. Am I making a lot of money off the single Star Warsbook I wrote now that the new movies are out?

Well, I’m making more than I did a few years ago. I think my last six-month total on that book was $50. The contract was atrocious. Believe it or not, the publisher still has a reserve against returns. On the ebook. Which didn’t even exist when the contract was written.

Yeah, I’m making a fortune off those books I wrote to market as well. Not.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

A Real Book Contract

1 September 2016

From Kristine Kathryn Rusch:

[O]ne of my readers forwarded me an article from Locus Online about Hachette suing one of their bestselling authors. It seems that for some reason, Seth Grahame-Smith did not turn in the second book of his contract with Grand Central for the follow-up book after Abraham Lincoln: Vampire Hunter.After two extensions of his deadline, and a threat from Grand Central, Grahame-Smith turned in something that Grand Central found terribly unacceptable. They claim he appropriated a 120-year-old manuscript as part of the book.

Considering Grahame-Smith also wrote Pride and Prejudice and Zombies, a book substantially based on a 203-year-old novel, I kinda had a yeah-so? reaction to the 120-year-old manuscript thing. So I went and read the lawsuit, and realized a few things.

First, the deal was made in 2010, before a lot of the major changes in traditional publishing occurred. The handwriting was on the wall, but back then, this Pride and Prejudice and Zombies thing was hot, so Grand Central ponied up a four-million-dollar advance, paid in $500,000 chunks.

Grahame-Smith received at least 1.5 million of those chunks, maybe as much as 2.5 million before the relationship soured.

Grand Central’s parent company Hachette is suing Grahame-Smith for $500,000, the advance on that second book of this contract.

Figure this: The publisher believes it’s better to sue the author than it is to leave that $500,000 outstanding. There are several reasons that Hachette could have made the decision to file suit.

For example, the time has long past for the second property to ever earn what the first properties did.

. . . .

By 2016, it’s really clear that Hachette will lose money on this second book. Better to file suit and ask for the $500,000 plus interest than it is to pay out an additional 1.5 million owed through the contract. Legal fees won’t equal that amount, even if the case makes it to court.

The case is a pretty standard breach-of-contract suit, and from my glance, it looks winnable for Hachette. Even if it’s not, the contract will be canceled, and Hachette won’t owe Grahame-Smith another dime.

It’s pretty much guaranteed that Hachette wouldn’t have accepted a manuscript from Grahame-Smith for any reason in 2016. Hachette was looking at a major financial loss on the second book in this contract.

Expect more of these kinds of suits in the future. If the writers who got huge advances do not meet their obligations with the publishers, the publishers will cut their losses and run as fast as they possibly can.

. . . .

I’m going to tell you a few things.

  1. This is an agent-negotiated contract. However, the agency that negotiated the contract is William Morris. I can tell you from experience that William Morris has lawyers on staff. In theory, those lawyers advise the agents. So, in theory, William Morris had lawyers who talked to Grand Centrals lawyers while negotiating this contract.
  2. I don’t care what entity negotiated for the writer. Whoever the hell it was did a piss-poor job. I have had better contracts for novels paying me $10,000 than this multimillion-dollar contract. I have to admit: I’m shocked by this contract. It’s a midlist writer contract (for a writer with no clout) dressed in million-dollar clothing.

I scanned, but I didn’t see anything I would expect in a multimillion dollar contract. No escalators. No protections for the writer. Low royalty rates. Bad discount clauses.

Half the stuff I listed as dealbreakers in this series are better than many of the terms in this contract.

. . . .

And then…and then…oh, my God, and then!

The agent clause (p. 19-20). It is the worst agent clause I have ever seen. Worse than the ones I warned you about. It has this lovely addition, which is new to me:

The provisions of this paragraph 25 shall survive the expiration of this Agreement and are specifically included for the benefit of the Agent which is hereby named as a third-party beneficiary.

Wow. Just—wow. Go back to the agent clause post I did, and scroll through the comments. See what the lawyers who responded said about the duties of agents and how these clauses are most likely illegal.

From one of the lawyers answering a question on the post: “Yes [the agent clause] is illegal. (1) “Agent” is a legal term for someone empowered to act on behalf of another person. (2) A conflict of interest occurs when a person acting as an agent benefits from the transaction. If a lawyer did this, the lawyer would be [disciplined]….”

. . . .

[R]ealize that this contract isn’t the worst I’ve seen, and it certainly isn’t the best. It’s a really crappy multimillion dollar contract—the author should have received protection from his representatives, but we all know how good that representation is. (Or, at least, you folks know if you’ve been reading my blog.)

Then realize that traditional publishing is not really giving these big advances any more. The big-advance books aren’t earning out. Which is why Hachette is cutting its losses here.

So your chance of getting this kind of advance is pretty slim. And even if you do, did you notice the lovely clause about promotion?

The Publisher shall have the sole discretion to determine what, if any, promotional services the Publisher may perform for the work…

(I added the bold for emphasis here and below.)

That’s clause 8(d) (p.14) and while there are other clauses that apply to promotion, the operative phrase here is “if any.” It means all those other clauses are wasted typing. If the publisher doesn’t want to promote these books, the publisher doesn’t have to. Ever.

. . . .

[T]here’s another scary clause that favors the publisher in this contract, a clause that I had never seen before. The royalty statements don’t have to be accurate. It says so right in the contract. It uses a phrase I’ve never seen in any contract before.

It says:

The Publisher shall render semi-annual statements of “estimated net sales” and net licensing revenues…

“Estimated net sales.” That’s new to me. The Publisher then defines “estimated net sales” as “sales less actual returns and less a reasonable reserve against returns of the Work…”

“Reasonable reserve” is not defined, and if the author wants to know what the publisher actually is withholding, the writer has to ask, in writing, for that information. The writer also has the right to audit the publisher—at the writer’s expense, of course.

Oh, and—there’s no cap on returns, and no time limit on the reserve.

I had the misfortune of mis-negotiating a reserve on returns twenty years ago on a work-for-hire project. I still get royalty statements—on a book published in 1995—in which reserve against returns continue to be withheld. Even now! Twenty-one years later.

Link to the rest at Kristine Kathryn Rusch

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

PG will note that the lawyers on staff for the William Morris Agency work for William Morris, not the author. William Morris lawyers were likely the ones who crafted the agency clauses that Kris rightly criticized as totally unfair to the author.

PG was not and is not involved with this matter in any way. Looking from the outside, he wonders if counsel for the author is considering a suit against William Morris for failure to properly advise the person who was supposed to be their client.

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