Mike Shatzkin

The establishment seems very unworried about being toppled by indies, and 5 other learnings

30 June 2015

From veteran publishing consultant Mike Shatzkin:

Programming Digital Book World and the kind of consulting we do require that we spend a lot of time in our office trying to figure out what the industry should be thinking more about.

. . . .

A recent DBW agenda planning meeting, which had participation from most of the ten biggest trade publishers, some literary agents, and service providers ranging from marketing services to digital distribution providers, yielded a lode of really interesting ideas that we’re going to act on.

1. One thing that came through loud and clear was big publishing’s interest in hearing how books fit in the greater landscape of digital change. They want to hear from curators of other media and online retailers from other businesses about how they learn about their customers, position a variety of products, and work with search and social media.

2. One participant, whose business provides digital sales data and analytics to a variety of clients, posited that there are four “stages” of behavior that we want to watch around consumer interaction with books. His paradigm is that we want to know:

  1. How they find out about the book
  2. How they purchase the book
  3. How they read, or navigate, the book
  4. How they talk about the book

. . . .

Publishers want to concentrate marketing efforts where the decision is made, not necessarily where the transaction occurs. And, in fact, we’re figuring that as time goes by, more and more ebook readers will buy on the particular platform they most favor regardless of where they learned about the book.

. . . .

I’d be a lousy blogger if I didn’t save best — or most proactive — for last (except in the post titling, of course). I told the assembled group that I wanted to do a panel on “the future for indie- and self-publishing.” There was remarkably little interest in the subject from those in the room. One literary agent said, “four years ago, indie publishing had us quaking in our boots. We really wondered whether our whole business model would be upended. We don’t worry about that anymore.” Another said “we counsel our authors about self-publishing, but there is less interest in it and less of a rush to it than there was a couple of years ago.” The publishers were similarly relaxed about whatever “competition” self-publishing offers.

So, from the perspective of the publishing establishment, the whirlwind of change has slowed down, we are in a “new normal” and there is absolutely no shortage of writers pining to be published for the deals the industry is offering and the output from those willing writers continue to deliver sales that keep big trade companies profitable. If self-publishing is constituting some mortal threat to everybody’s existence, that appears less evident today than it did a few years ago. And, of course, every big publisher is set for the next X years (unknown numbers that might be different for every big publisher, but almost certainly three or more for all of them) with their single biggest intermediary relationship since they’ve all just done deals with Amazon. One big variable in their commercial calculus that had been highly problematic in the recent past is now stable for a while into the future.

Link to the rest at The Shatzkin Files

The publishing business as we have known it is not going away anytime soon

11 June 2015

From veteran publishing consultant Mike Shatzkin:

A friend who has actually been working fulltime in the book business since I was still in college and who remains active was speculating at BEA about the “next big disruption” in our business. He’s expecting it sometime pretty soon.

I don’t think I am.

Gareth Cuddy is one of the most practical service providers in the industry. His Vearsa ebook distribution company is providing global services to publishers large and small and he is a pioneer in reading and sales analytics. He recently wrote a piece that concludes “whatever emerges from this next phase will surely be a complete departure from what we understand today as an industry” with timetables around it wondering whether 2016 will be too late to respond and whether we’ll have an unrecognizable industry in 2020.

I don’t see it.

One of the disruptor-authors, one who studies the industry trends closely with special attention to indie author growth, told me he “is pegging 2019 as the year that major media outlets cover the collapse of the major publishing houses the same way they started reporting on newspaper declines last decade”.

I wouldn’t be surprised to see a merger or two by then, but “collapse”? I don’t see that either.

. . . .

[after listing and describing all the various sources of tradpub sales data]

Despite and because of all the sources, the data is incomplete and scattered. There is inevitable ambiguity in interpretation so that a variety of conclusions can be reasonably drawn. From the big publisher perspective, it would appear that sales are about flat and that the ratio of print and digital sales has become pretty stable. This is true in an environment where publishers have experimented with even higher ebook prices and, for a variety of contractual and commercial reasons, discounting of ebooks has diminished. But that’s been true for a relatively short period of time, and the ebook reporting is routinely delayed by three months, so we don’t have enough evidence to know for sure that higher ebook prices are sustainable in this marketplace. And even if they are sustainable today, that doesn’t prove they will be in three months or a year.

On the print side, Amazon continues to be the largest single customer for almost every publisher. And even though they have managed to increase their discounts and various marketing fees and their returns have creeped up, they are still the most profitable large account for many, if not most, publishers. Since Borders went down several years ago, Amazon has, indeed, grown, but independent stores have also thrived and become more numerous. And although Barnes & Noble still slowly shrinks in sales, it remains the most important account for “breaking” many new titles and still provides more sales to most publishers than all the indie bookstores combined.

While I’ve been working on this piece, the AAP data has been being worked through. Nate Hoffelder (whose blog has been renamed “Ink, Bits, and Pixels”) scoffed at the Nielsen claim that their hard numbers constitute 85 percent of the book market. The AAP, which like Author Earnings, uses modeling and guesstimating to get from the data they have to a bigger industry picture, sees a much bigger trade industry. The point Nate wanted to make, using the AAP data (echoed by an indie author friend of mine who believes that the indies are toppling the establishment and we’d all know that if we knew the “real” numbers that didn’t leave out all the indie success stories) is that the ebook market is not shrinking or flattening.

. . . .

I asked my knowledgeable indie author friend what he thought the consumer dollar volume was for indies last year. He reckoned it at $459 million (I love the presumption of precision: not $450 million or $475 million, but $459 million!) Since the AAP figures adult trade fiction and non-fiction at about $10 billion (and the juvie numbers, another $5 billion, actually have some big “adult” sales in them), he is implicitly acknowledging (but would never say explicitly) that indies are 5 percent of the adult business at retail, using what I’m sure is the most ambitious estimate of indie sales you’ll see anywhere.

. . . .

Trying to view things from the author perspective requires one to divide them into at least three big “buckets”: successful authors who know where their next totally-acceptable contract that pays them a living wage in advance to write a book is coming from; aspiring authors who either can’t get an agent or a deal or have decided that with self-publishing working as it does that they simply don’t want one; and the ones in the middle, who might have an agent or have had a deal or two, but aren’t really making a commercial success of authorship.

. . . .

For those authors who are working steadily and profitably for publishers, self-publishing has offered the possibility of greater control and bigger margins: more profit if they can achieve the same level of sale. This is not an opportunity very many authors in this category have pursued. That has surprised me a little bit, but probably it shouldn’t have. Being a publisher is a lot of work and no small risk. If an author is making a living doing the writing and letting a publisher handle the rest, that’s damn near nirvana. Very few in that position want to abandon it.

. . . .

So another source of potential disruption — authors abandoning publishers to do it themselves to make more money per unit and claim greater control of their work and career — has also not really happened. I was among those who expected, during the era of dizzying change we experienced for a few years until a couple of years ago, that publishers could have a big problem holding on to their biggest stars.

Both the supply (authors) and demand (sales channels) sides of the equation appear more stable than they’ve been in recent memory. But there’s no guarantee they’ll stay that way. The number of self-published titles keep growing by a million titles a year or more. They sell a paltry average per title, and a very small percentage sell a measurable amount at all, but cumulatively, their sales add up. Most of the revenue from that growing market segment goes to Amazon and a very small share of it goes to print or brick-and-mortar. Amazon’s growth in any way fuels their ability to be tough on terms, reducing publishers’ margins. (One big potential wild card is Amazon’s pressuring publishers to allow them to manufacture more and more of the inventory; that could be a paradigm-shifter if they succeed in making it widespread.) And more ebooks, particularly indie ebooks, and the subscription services for ebooks also tend to force down retail prices, which puts further pressure on publishers’ margins.

. . . .

I wouldn’t be surprised to see only two or three big trade publishers as soon as ten years from now. I’d expect that the two recent plateaus we’ve reached, with ebook sales stabilizing in relation to print and with bookstores holding their own, will prove temporary. I wouldn’t expect ebook sales or online purchasing to grow by the leaps and bounds they did a few years ago, but it would surprise me if we’ve reached any long-term limit, particularly in ebook use. (The devices keep proliferating and people get increasingly comfortable reading for a long time on screens.)

Link to the rest at Mike Shatzkin and thanks to Andrew for the tip.

UPDATE from Felix in the comments:

The biggest disruption is well on its way: the diminished importance of the BPHs. Best highlighted by the recent Nielsen fiasco.

And the only reason he doesn’t see the big guys bolting (yet) is because the decline has only now starting to hit their pocketbook.

But even when they do start to defect, that won’t be the kiss of death. The kiss of death has already been administered. It’s a slow acting poison but will kick in over time.

The BPH killer isn’t losing today’s Bestsellers, it’s losing tomorrow’s best sellers.

And no, they still don’t see that.

Considering the very wide range of digital change topics that should be candidates for discussion at DBW 2016

28 May 2015

From veteran publishing consultant Mike Shatzkin:

The challenge for the book business for the past decade has been rapid and less-than-predictable changes in the ecosystem because of digital. There are two underlying shifts that fundamentally alter the ecosystem: people substituting ebook consumption for print book consumption and people substituting online purchase of printed books for buying them in stores.

. . . .

1. Data. This is a wide-ranging topic. We look for original data about what’s going on in the ecosystem wherever we can find it and we have done sessions in the past (and could again) about “Big Data” and what publishers need to understand about it. With pricing of ebooks becoming an increasingly important financial consideration for publishers and data being such a crucial component of doing that well, this is bound to remain a top-of-mind subject.

. . . .

4. Authors and self-publishing. Authors didn’t used to have much alternative to publishers; now they do. As a result, authors have developed marketing capabilities and support services have grown up to help them. This all raises a host of issues for publishers. They have to learn how to capitalize effectively on what authors can do on their own, but they also need to provide great marketing support to authors and be seen as collaborative and as adding real marketing value.

. . . .

8. Agents and editors, how they relate in a mutually-supportive way. They share ownership of each author’s personal loyalty, they both might shape the book editorially, and they both will hear the author’s career ambitions and influence him or her about self-publishing and their publishers’ efforts. If publishers are going to start collaborating meaningfully with authors about marketing, that suggests agents and editors are going to be working together differently.

Link to the rest at The Shatzkin Files

My personal list of what should be top-of-mind for publishers around digital change today

20 May 2015

From veteran publishing consultant Mike Shatzkin:

What are the most important digital change issues publishers face?

. . . .

1. Ebook pricing. Publishers get anywhere from 50-to-70 percent of the retail price from most ebook retailers. Unlike the print world, where price-setting must take place before the book comes out and is, because the price is printed on the book, very hard to adjust, ebook prices can be changed quickly and frequently.

Pricing variation has historically been the province of the retailer. In the physical world, markdowns were almost never shared: the retailer voluntarily gave away part of their margin to gain market share or to build customer loyalty.

In the agency world that four of the Big Five have now created (with Penguin Random House almost certain to follow on), pricing is not only mostly controlled by publishers, they are the direct beneficiaries of higher prices and lose margin if prices are lowered.

It is true — and the indie authors who like it better when Amazon is in control rather than the publishers often point this out — that publishers have almost no experience with pricing and the impact of changes. But it is also true that the retailers, who do have more experience with it, have different objectives than publishers. Retailers want a competitive advantage against other retailers and, as part of that, they want to build customer loyalty. Publishers want to maximize revenue for each SKU, build awareness of authors, and use one book by an author or in a series to sell other titles under the same brand.

Publishers are starting very near zero on knowledge. How does discounting one title in a series affect the audience’s likelihood of getting started with it and then buying other titles at higher prices? If a book is in the news, is the right strategy to raise the price (to maximize revenue) or to lower the price (to get better market penetration on the back of the news). And is the strategy the same if the story is about the book, rather than the book being about the story? Do pricing strategies need seasonality rules, and how is that different across genres or topics?

. . . .

7. Allocating effort across a large backlist. The biggest opportunity and the biggest challenge for publishers, as they have historically operated and as they are currently structured, is maximizing their opportunities across their backlists. The big houses are dealing with many tens of thousands of titles. We advocate techniques that require some human application so scale techniques have to be used to pinpoint the titles worth an effort.

Although we are developing tools to help digest the external cues that might affect where the focus should be — cues from the news and social graph — each publisher has to start with a combination of knowledge of the list, intuition, and a sense that sales can be improved to pick those titles worth reviewing for better audience understanding and descriptive copy improvement. Almost certainly, titles that are more than a couple of years old will need work for several reasons: the house knew so little about SEO when copy was written; time will have changed the search terms that matter; and reviews and awards and other things from the book’s experience in the marketplace might need to be incorporated.

Link to the rest at The Shatzkin Files

Advice for an author looking for a literary agent

29 April 2015

From veteran publishing consultant Mike Shatzkin:

Until last week, I hadn’t stopped to think about how often I’m advising authors about how to deal with the publishing business. I would imagine this is something that most of us in the industry find ourselves doing very frequently. There are, after all, a lot of aspiring authors in the world and when one’s a friend, or a friend of a friend, they ask. And you try to help them.

. . . .

Although we all know stories of self-published books that went on to have fabulous runs with a publisher (“50 Shades of Gray” being the obvious example), it seems that most agents think that most publishers see the previous publishing history as a challenge. If the book didn’t do well, they don’t attribute it to poor or non-existent marketing. And if it did well, they sometimes wonder if the audience has been exhausted.

Obviously, there are both agents and editors who don’t think that way, but I was really surprised to learn that so many of them apparently do.

. . . .

I have long had a formulation of how to recruit an agent which I passed along when asked.

This assumes the aspiring author is starting from scratch: they have a manuscript completed or in development and they need to start knocking on agents’ doors. What I suggest — not rocket science but most writers don’t know about it — is using the databased information at Publishers Marketplace to find which agents to target.

. . . .

I do know dozens of agents personally. But rarely do I have a sense of what they are looking for, what kind of author would be suitable for them. I have one friend in particular who runs a large agency and for whom I have very high regard. So, often, if I know somebody to be a good and competent writer, I’ll send them to him. But that’s a sloppy answer. I find I have no good way personally to distinguish among the dozens of agents I know. That’s why I send people to the databases at PM. I tell my writer friends that if they narrow down their search and let me know whom they’re targeting, I’ll introduce them to any targets that are in my circle. But that’s been the extent of my help and that’s as far as I’d thought it through.

. . . .

So I reached out to a very powerful travel publisher I know and asked for an agent suggestion. He gave me one name, an agent based in San Francisco and, as it happens, a person I know well. Since Rand and Geraldine are in Seattle, I thought that was worth passing along and I offered to make the introduction. That’s when I started to learn what even very smart people who know how to look have trouble finding out about how our business works. And I was forced to learn because Rand and Geraldine asked me about assumptions I had made that, it turns out, at the least required some explanation and perhaps required rethinking!

First I told Rand I had an agent to send Geraldine to if she wanted to connect with him. Rand passed me to her. She said that being in Seattle, she was as comfortable with people in NY as with somebody in San Francisco. But, she added, she had already reached out to a number of agents in New York. Some had gotten back. Some hadn’t at all. So, first she wanted to know, is that typical? Do agents often just fail to respond?

. . . .

This is yet another example of how granular publishing is: so many editors, so many agents, and then the numbers of them dwarfed by aspiring authors. In fact, they’re even dwarfed by the number of competent aspiring authors there are. Writing takes time. Reading takes time. Editing takes time. Developing a project takes time. Nobody gets paid until the reading takes place at a publishing house and a buying decision can be made. No wonder so many authors throw up their hands trying to break in and just publish themselves. Even with the best techniques and people with industry contacts to help make introductions, finding an agent is not easy for a writer.

Link to the rest at The Shatzkin Report

More thinking about how author and publisher marketing collaboration should change

14 April 2015

From veteran publishing consultant, Mike Shatzkin:

Because of our Logical Marketing work and our interest in author websites(admittedly just a corner of the author-marketing world, even if we think it is a cornerstone), I did a couple of recent posts, the basic thrust of which was that publishers needed to rethink marketing and the author interaction around it.

. . . .

Now, British author Harry Bingham and American consultant and indie-publishing expert Jane Friedman have published the results of a survey they did asking authors what they think of their publishers. What Bingham and Friedman found suggests strongly that the topic of the author-publisher relationship around marketing will be the subject of attention from a lot more people in the months and years to come.

. . . .

Significantly more felt their books “weren’t really marketed at all” (28 percent) than felt that the publisher made “full use of” their “skills, passion, contacts, and digital presence” (17 percent).

Although half of the respondents were satisfied with the communication they got from publishers, only 20 percent thought they got the “systematic guidance” they needed so they could “add most value” to the overall effort. It is precisely that challenge that my prior posts, in perhaps an unneccesarily roundabout way, sought to address.

. . . .

At the end of last week, we conducted a survey of our own among agents and editors, trying to discern whether self-publishing is a useful tool to get a deal. Much to my surprise, the consensus is that it is not useful. We got far more answers from agents than we did from editors, but the clear prevailing opinion is that publishers don’t know how to interpret independent publishing efforts and, most of the time, trying it does an author’s chances of selling that book to a publisher much more harm than good. Most agents responding said they really don’t want to try to peddle a book that has already been self-published unless it has achieved pretty extraordinary success.

(What’s “extraordinary”? One UK agent suggested that it would take at least 50,000 sales to get the attention of a British publisher. An American agent said in that market the number is about 100,000.)

Agents are less negative about whether self-publishing might be helpful selling anext or different book to a publisher, but, even there, they are far less than enthusiastic about the help it provides. One agent said that publishers care about the quality of the writing and very little about the author platform. (To me, this reflects the same lack of grasp of the importance of the author’s online presence that I was writing about in those recent posts. And whatever failures of understanding there are, they are more widespread among editors in publishing houses than they are among marketers.)

. . . .

So, here are a few conclusions from all of this.

1. Agents are driving the bus. They control the authors; the publishers don’t. That’s not to say that publishers don’t know this; most of them surely do. But this reality — that publisher behavior is channeled by trading partners more powerful than they are — is definitely not appreciated by indie authors and it appeared not to have entered the DoJ’s calculations when they saw collusion in the marketplace a few years ago.

. . . .

4. There are really simple things a publisher could do that would be very evident to authors and helpful to sales. Why aren’t publishers putting some lower-level marketing staff on the task of “retweeting” and “liking” author efforts online? At a slightly higher level of effort, why aren’t publishers evaluating author websites that already exist to make SEO suggestions? The author survey results suggest that doing even little things like this would help a publisher with author loyalty, which should be an objective for every publisher. Publishers should see virtue in the idea that providing authors with knowhow would make them more effective advocates for their own work. It would be very cheap to transfer that knowhow (once it was thought through) and publishers would effectively acquire enthusiastic, energetic and FREE marketing resources.

Link to the rest at The Shatzkin Files and thanks to Jan for the tip.

Starter thoughts for publishers to develop new author marketing policies

26 March 2015

From veteran publishing consultant Mike Shatzkin:

In a prior post, we suggested that the time has come for publishers to have clear policies around what they should require from author web presences for an effective publishing partnership. This is a really complex and multi-faceted challenge for every publisher.

. . . .

1. The first step is for a publisher to articulate their minimum standard for an author’s online presence. We have found that the role of web presences an author controls in helping Google and other search engines understand an author’s importance in context is routinely underappreciated. In addition to a properly-SEOd web site, publishers will want to make sure authors fill out their Amazon author page, their Google Plus profile, and their Goodreads page as well. All of this verbal metadata — along with images including photos and book covers — builds a strong foundation for discovery.

Obviously, Facebook, Twitter, LinkedIn, Medium, Instagram, and Pinterest (among others) could also be a constructive part of the web presence for many authors.

. . . .

2. Although many, if not most, authors will have a website or the intention to create one, many others don’t. In that case, the publisher will want to have a fast, inexpensive, and effective way to put one up on the author’s behalf. (The non-website components of the foundation don’t lend themselves as readily to publisher assistance.)

For authors who either don’t have the skills to put up their own WordPress site or the budget to pay for a unique one to be designed and built for them, the publisher should provide a templated interactive process to create a site inexpensively. They also will have to do the research into key words, topics, and phrases to inform the SEO. We believe that for a publisher who will operate at scale, building dozens and perhaps hundreds of these sites per year, the cost should come down to $2,000 or less per site, perhaps $1,000 or less for first-time author sites that have minimal needs for unique book pages.

. . . .

4. Of course, in more cases than not, the author will already have a site. In that case, the publisher won’t be building one but does need to assure itself that the existing site meets the SEO standard.

. . . .

5. The publisher should also be giving authors advice about maximizing other opportunities. If the author might blog, suggestions about length, frequency, and topics are worthwhile as are very specific ideas about maximizing the other platforms like Facebook. The publishers should be giving authors a Wish List, making absolutely certain that no opportunity for author-based promotion is ignored because of a lack of awareness on the author’s part.

. . . .

8. What should be clear is that the author is being given a choice: they can build their own website (or do the tweaking necessary to one they already have to bring it up to standards) or they can have one built for them by the publisher from the templated choices the publisher offers.

9. This leaves two very large commercial questions for the publisher and author to negotiate, both of which should rise to the level of being covered in the contract. The first one revolves around the investment in and “ownership” of the author’s website and, perhaps the investments needed for ongoing marketing on the author’s behalf. Of course, there is nothing to discuss if the author builds and maintains her own site and social presences. The publisher should still provide all the help they can — SEO research at the beginning and analytics help all along — but there would be no reason for any compensation or publisher ownership.

However, if the publisher invests the dollars to build the author’s site or pays for any of the ongoing efforts by freelancers, there is definitely a negotiation to take place and there are a few moving parts to that negotiation. One way to address this might be for the publisher to advance the money for this work but have the opportunity to recoup it out of proceeds, as though it were part of the advance. Or the publisher could just render the author a bill for the site creation cost (remember, we’re positing $2,000 or less) which the author could simply pay. Another possibility is that the publisher might “own” the author’s website. That is not an end result we would recommend and, if it is necessary, there should be a “buy back” clause that enables the author to recover that ownership if, for example, they move on to another house.

. . . .

10. The other knotty element that should be negotiated is around the use of email lists that these optimized author sites will generate. It is self-destructive for either the author or the publisher to simply say “they’re mine!”

Link to the rest at The Shatzkin Files and thanks to Jan for the tip.

No author website rules of the road in publishing contracts is a big fail for the industry

20 March 2015

From veteran publishing consultant Mike Shatzkin:

The topic of author websites and what the relationship between publishers and authors around them should be is a big “fail” for the publishing industry at the moment. Nobody seems to have thought this through. Publisher policies are all over the lot, even within houses, and that demonstrates that agents haven’t figured out what policies and publisher support an author should require. When they do, there will be much greater uniformity across publishers. (Note to conspiracy theorists about often-alleged Big Five “collusion”: that’s how it actuallyhappens. They’re bullied into it by agents or accounts.)

. . . .

On one hand, we have supplied an agent who asked for one with a proposal to build a website for a key author. The agent is talking to the publishers on both sides of the Atlantic (different divisions of the same big house), trying to get some financial support from them for what the author wants to build and own. Each of the two imprints is lobbying to build the site themselves. We’re not privy to the details of that conversation, so we’re not sure exactly why they want to build it themselves or what other considerations — like domain name ownership, list ownership and management, outbound links, and day-to-day attention to the site — might be motivating the publisher side of this conversation (in addition, we’d assume, to legitimate concerns about the quality of the site and its SEO).

Last week we did a seminar at another house. As we usually do in those sessions, we gave the house the benefit of some of our research into digital footprints for some of their own books and authors. What we found, as usual, is that the author website deficiencies were handicapping their sales and discovery efforts, sometimes by their total absence. That is, on occasion we found no author website at all.

. . . .

From where we sit, not having contractual policy around a host of questions that involve an author’s web presence is as big an omission as it would be not to have clearly-defined subsidiary rights splits. In fact, we’d argue that, for most authors, the commercial value of the assets around the web presence are more valuable than subsidiary rights are! No publisher or agent would accept a contract that didn’t cover subsidiary rights. It is a sign that the industry is not keeping up with the new realities that the website policy is so far from being worked out.

This is a big challenge on both sides: for agents and for big houses. Most agents don’t operate at a scale that would enable them to gather the expertise and the knowledge to set their authors up properly or to inform what the demands on the houses should be. But the biggest publishers have a hard challenge too. They’ve all structured themselves around clear delineations between what’s big, requires scale, and should be handled centrally (warehousing, sales, IT) and what’s small, requires an intimate relationship with the author, and should be handled in decentralized imprints (title acquisitions, creative decisions, individual title marketing and publicity). This is a really tricky balance to strike from an organizational perspective. It is reflected in job descriptions and in each staff member’s bonus structure. That is, it is really complicated stuff to mess with and requires attention from the very top of enor

Link to the rest at The Shatzkin Files and thanks to Jan for the tip.

PG did some arithmetic on his fingers and discovered he built his first website over 20 years ago.

Big Publishing is a slow-lane kind of business. One where the turn signal never gets shut off.

PG’s second thought was that’s all publishing contracts with authors need: a binding provision requiring that an author have a website. On a contract that will last perhaps 100 years.

Asking whether Amazon is friend or foe is a simple question that is complicated to answer

17 March 2015

From veteran publishing consultant Mike Shatzkin:

I’ve been invited to join a discussion entitled “Amazon: Friend or Foe” (meaning “for publishers”) sponsored by the Digital Media Group of the Worshipful Company of Stationers (only in England!) and taking place in London next month.

. . . .

The first thoughts the question triggers for me are three ways I think Amazon has profoundly changed the industry.

Although just about every publisher has headaches dealing with Amazon, very few could deny that Amazon is their most profitable account, if they take sales volume, returns, and the cost of servicing into consideration. This fact is almost never acknowledged and therefore qualifies as one of the industry’s dirty little secrets. Because they’ve consolidated the book-buying audience online and deliver to it with extraordinary efficiency, Amazon must feel totally justified in clawing back margin; it wasn’t their idea to be every publisher’s most profitable account! But since they are effectively replacing so many other robust accounts, the profitability they add comes at a big price in the stability and reliability of a publisher’s business, which feels much more comfortable coming from a spread of accounts.

. . . .

It took the combination that only Amazon could put together to make an ebook marketplace really happen. They made an ereading device with built-in connectivity for direct downloading (which, in that pre-wifi time, required taking the real risk that connection charges would be a margin-killer). They had the clout to persuade publishers to make more books, particularly new titles, available as ebooks. And they had the attention and loyalty of a significant percentage of book readers to make the pitch for ebooks. With all those assets and the willingness to invest in a market that didn’t exist, Amazon created something out of nothing.

. . . .

The other big change in the industry that is significant but might not have been without Amazon is self-publishing. The success of the Kindle spawned it by making it easy and cheap to reach a significant portion of the book-buying audience with low prices and high margins. Amazon added its skill at creating an easy-to-use interface and efficient self-service. Again, others have followed, including Smashwords. But almost all the self-publishers achieving commercial success have primarily Amazon to thank. It appears that, in the ebook space at least, self-publishers among them move as many units as a Big Five house and, in fiction, they punch even above that weight. Without Amazon, this might not have happened yet.

. . . .

The second big heading for this Amazon discussion is around the asymmetry between what Amazon knows about the industry and what the industry knows about Amazon. Data about the publishing industry is notoriously scattered and because of the large number of audiences and commercial models in the “book business”, very hard to interpret intelligently. Amazon, on the other hand, has its own way of making things opaque by not sharing information.

The first indication of this is that Amazon doesn’t employ the industry’s standard ISBN number; they have their own number called an ASIN. So whereas the industry had a total title count through ISBN agencies that required its own degree of interpretation, the titles published exclusively by Amazon, which only have ASINs and not ISBNs, are a total “black hole”. Nobody except Amazon knows how many there are or into what categories they fall.

Another piece of Amazon’s business that has critical relevance to the rest of the industry but is totally concealed from view is their used book business. There is an argument to be made that the used book marketplace Amazon fosters actually helps publishers sell their new books at higher prices by giving consumers a way to get some of their money back. But it is also pretty certain that people are buying used copies of books they otherwise would have bought new, with the cheaper used choice being offered to them from about the first moment a book comes out.

Link to the rest at Mike Shatzkin and thanks to Andrew for the tip.

Better book marketing in the future depends a bit on unlearning the best practices of the past

6 March 2015

From veteran publishing consultant Mike Shatzkin:

A few years ago, publishers invented the position of Chief Digital Officer and many of the big houses hired one. The creation of a position with that title, reporting to the CEO, explicitly acknowledged the need to address digital change at the highest levels of the company.

Now we’re seeing new hires being put in charge of “audiences” or “audience development”. I don’t know exactly what that means . . . but some conversations in the past couple of weeks are making clearer to me what marketing and content development in book publishing is going to have to look like. And audiences are, indeed, at the heart of it.

I’ve written before about Pete McCarthy’s conviction that unique research is needed into the audiences for every book and every author and that the flow of data about a book that’s in the marketplace provides continuing opportunities to sharpen the understandings of how to sell to those audiences. Applying this philosophy bumps up against two realities so long-standing in the trade book business that they’re very hard to change:

How the book descriptions which are the basis for all marketing copy get written

A generic lack of by-title attention to the backlist

. . . .

I had a conversation over lunch last week with an imprint-level executive at a Big House. S/he got my attention by expressing doubt about the value of “landing pages”, which are (I’ve learned through my work with Logical Marketing; I wouldn’t have known this a year ago) one of the most useful tools to improve discovery for books and authors. I have related one particularly persuasive anecdote about that here. This was a demonstration to me of how much basic knowledge about discovery and SEO is lacking in publishing.

. . . .

But then, my lunch companion made an important operational point. I was advocating research as a tool to decide what to acquire, or what projects might work. “But I could never get money to do research on a book we hadn’t signed,” s/he said, “except perhaps to use going after a big author who is with another house.”

. . . .

I also had an exchange last week with Hugh Howey, my friend the incredibly successful indie author with whom I generally agree on very little concerning big publishers and their value to authors. But Hugh made a point that is absolutely fundamental, one which I learned and absorbed so long ago that I haven’t dusted it off for the modern era. And it is profoundly important.

Hugh says there are new authors he’s encountering every day who are achieving success after publishers failed with them. It is when he described the sales curve of the successful indie — “steadily growing sales” — that a penny dropped for me. An old penny.

We recognize in our business that “word of mouth” is the most effective means of growing the market for a book. If that were the way things really worked, books would tend to have a sales curve that was a relatively gentle upward slope to a peak and then a relatively gentle downward slope.

Of course, very few books have ever had that sales curve. Nothing about the way big publishers routinely market and sell would enable it to happen. Everything publishers do tries to impose a different sales curve on their books.

A gentle upward slope followed by a gentle downward slope would, in the physical world, require a broad and very shallow distribution with rapid replenishment where the first copy or two put at an outlet had sold. But widespread coordination of rapid replenishment of this kind for books selling at low volumes at any particular outlet (let alone most outlets) is, for the most part, a practical impossibility in the world of distributed retail.

. . . .

[I]f a store sells two copies, say, of a new book in the first three months, it probably doesn’t make the cut as a book to be retained. If they bought two, they’re glad they’re gone and not likely to re-order without some push by the publisher or attention-grabbing other circumstance. If they bought ten, they’ll want to get their dollars back by making returns so they can invest in the next potentially big thing.

But that’s not the case online, where there is no need for distributed inventory (especially of ebooks!)

. . . .

[I]n the brick and mortar world, the book will effectively be dead if it doesn’t catch on in the first three months. And the reality of staffing, focus, and the sales philosophy of most publishers means it won’t be getting any attention from the house’s digital marketers either.

Link to the rest at The Shatzkin Files and thanks to Dave for the tip.

PG was going to make a comment, but he slapped his head too hard.

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