PG’s Thoughts

Books’ Prices and Writing’s Value: Careful What We Asked For?

23 May 2016

From Writer Unboxed:

Blurring ‘Our Dignity, Our Value’

“The biggest issue is one that will be difficult for us to recover from…the degradation of our worth as creatives.”

That line is from a piece here at Writer Unboxed a year ago, in May 2015. Our colleague Heather Webb, in As Writers, What Are We Worth?, was anticipating a groan heard ’round the world.

Last month, when I led a round-table discussion at Berlin’s Publishers’ Forum, our topic was “Re-Thinking Ebook Sales and Understanding the Consumers.” But what drew the biggest response was book pricing.

“The consumer,” one of our publishers said, “is in perpetual confusion. No way to understand what a single book costs or how to value our authors’ work.” And at the influential publishing house Bastei Lübbe AG, executive board member Klaus Kluge is calling book prices “staggeringly low” in an interview with Sabine Schwiering Tert at

In the UK in January, Penguin Random House CEO Tom Weldon told my Bookseller colleague Benedicte Page: “”One of the biggest challenges in 2016 will be e-book pricing: how do we maintain the value perception of our quality content and maximize revenues across all formats for both authors and publishers?”

. . . .

What have we done to the idea of writing’s value? How fuzzy is this math going to get?

That’s my provocation for you today. How are today’s pricing problems affecting what Webb characterized here last year as “our dignity, our value, and the viability of this industry”?

Books were always commodities of a kind, and buying second-hand romances by the grocery-bagful didn’t start yesterday.

. . . .

With both the trade and the self-publishing sectors in rampant over-production as they are today, you’re facing a sheer rock face of competition for every glance your book might get, let alone a read, let alone a sale. Your price is in free-fall.

And we can look to our cohorts in Hollywood for a little guidance here, too. You may not remember what the advent of Blockbuster video and then Netflix did to film. But those of us who watched those developments roll in know. Suddenly there were films everywhere, peopled with actors who are not quite the stars they look like speaking dialog that’s as wooden as they are, in strangely unsatisfying knockoffs of other films.

We can’t entirely blame independent authors for this gauzy focus on pricing in books. As the indie insurgence began to impact the trade a few years ago, authors who had never been able to get past the agents and editors, the dreaded gatekeepers, found that they could self-publish in our digital age. But self-selling was a different thing.

When you have no marketing department behind you, when you’re not even listed in a publisher’s catalog or recommended to a Barnes & Noble buyer—and no one’s ever heard of you in the world of books—the one way you might turn the head of a potential buyer cruising Amazon is offer a low price. Or no price.

. . . .

If the trade was aghast at Amazon’s institution of $9.99 as a viable price for the ebook version of a hardcover hit, it’s tempting to mutter “all is forgiven” now. I know many authors who’d love to get $9.99 for their ebooks. Free downloads by the hundreds might feel exhilarating, but your take-home pay? And while it’s popular to hunker down in the bloggoria and shoot the breeze about the “sweet spot” between $2.99 and $4.99, what frequently is not mentioned is frequency: how many of those things do you have to sell at $3.99—even if you’re getting 70 percent—to put together an income?

. . . .

And nobody forced the industry to follow the self-publishing sector in driving the car right on over the cliff. For a time, a UK publisher staged a 20-pence promotion on some of the hottest titles of the year. Now, the bigs are in “new-agency” pricing contracts with Amazon that somehow have them charging high “this price set by the publisher” prices for ebooks at the very moment that the industry needs to energize its digital investments, not price them out of reach.

Link to the rest at Writer Unboxed and thanks to Kristian for the tip.

PG says successful indie authors are very savvy about pricing their books at a level that maximizes author income. And more than a few earn their living from their writing. And nearly all authors who were traditionally published earn more as indies.

Yes, there are exceptions, but PG hears and reads success stories often enough to feel confident these are reasonably reliable generalizations for mid 2016. Simply put, in 2016, an author is much more likely to be able to support themselves as an indie than as a traditionally-published author.

The “pricing problem” that bothers Big Publishing is centered around the unfortunate reality that ebook prices which will maintain an indie author in fine fashion don’t generate nearly enough money to support a large publisher, regardless of how little it pays its authors.

One of the pivotal stages in a disruptive innovation comes when low-priced producers learn how to satisfy an economically significant portion of the overall market and use that position and their low prices to keep garnering more and more customers. These customers are satisfied with the quality of the product the low-priced producers offer and the low-priced producers have reached a point where they sell enough products and earn enough money to continue their business without interruption and without infusions of new capital. In short, the low-priced producers – indie authors – aren’t going away.

Speaking generally, more and more purchasers of ebooks are making purchasing decisions that say they don’t see enough added value from large publishers to justify the higher prices they have to pay. If $2.99 buys them an enjoyable reading experience, why would they pay $14.99 for an enjoyable reading experience?

The more enjoyable reading they experience for $2.99, the less likely they are to ever go back to paying $14.99. They’ll spend time digging around in the $2.99 bin to find a good book instead of paying $14.99. If they get stuck with a $2.99 clunker, they won’t give up on $2.99 books because experience has taught them there are more than a few good reads available at this price.

The question that Big Publishing can’t afford readers to ask is “Will I get five times more enjoyment if I pay $14.99?”

PG has been in the tech business for long enough to see the disruptive innovation process play out in many different markets. In each case, the incumbent market powers believe they add some special sauce to their products for which customers will always be willing to pay incumbent prices. Names like Novell, Lotus 1-2-3, Digital Equipment and Sun Microsystems come to mind, names once associated with the finest products, products that customers were happy to buy at the prices these companies set.

Today, major publishers assume today’s market will support the same prices as the book market of 2-3 years ago. They want to believe customers will agree that ebooks should be priced like printed books. They want to believe that ebook purchasers pay close attention to how much printed books cost and will use that price to determine the reasonable price for ebooks.

PG says these publishers do not understand consumer behavior.

Referring back to the OP, the relevant question in 2016 isn’t “As Writers, What Are We Worth?”

The real question is “Publishers, What Are They Worth?”


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Our (Bare) Shelves, Our Selves

18 May 2016

From The New York Times:

When I was 13, in the early 1990s, I dug through my parents’ cache of vinyl records from the ’60s and ’70s. We still had a phonograph, so I played some of them, concentrating on the Beatles. Their bigger hits were inescapably familiar, but a number of their songs were new to me.

Were I a teenager in 2015, I may not have found “Lovely Rita” or acquired an early taste at all for the Liverpudlian lads. The albums stacked up next to the record player, in plain sight for years, would be invisible MP3s on a computer or phone that I didn’t own. Their proximal existence could have been altogether unknown to me.

S. Craig Watkins, a professor who studies the digital media behavior of young people in the department of Radio-Television-Film at the University of Texas at Austin, said that he and his family almost exclusively stream music now in their home and that he and his wife stored their old CDs in a seldom-used cabinet. To his teenage daughter, “those CDs are, at best, background matter,” he said.

“I can’t recall her ever taking time to search through what’s in there,” Professor Watkins said. “But I could imagine that when she gets a little older, it might become meaningful to her — that those artifacts are a way to connect back to us.”

Sometimes, though, he and his daughter discuss what is on their devices’ playlists.

. . . .

Aside from the disappearance of record crates and CD towers, the loss of print books and periodicals can have significant repercussions on children’s intellectual development.

Perhaps the strongest case for a household full of print books came from a 2014 study published in the sociology journal Social Forces. Researchers measured the impact of the size of home libraries on the reading level of 15-year-old students across 42 nations, controlling for wealth, parents’ education and occupations, gender and the country’s gross national product.

. . . .

After G.N.P., the quantity of books in one’s home was the most important predictor of reading performance. The greatest effect was seen in libraries of about 100 books, which resulted in approximately 1.5 extra years of grade-level reading performance.

. . . .

The implications are clear: Owning books in the home is one of the best things you can do for your children academically. It helps, of course, if parents are reading to their children and reading themselves, not simply buying books by the yard as décor.

“It is a big question of whether it’s the books themselves or the parental scholarly culture that matters — we’re guessing it’s somewhere in between,” said Mariah Evans, one of the study’s authors and an associate professor of sociology at the University of Nevada, Reno. “The books partly reflect intelligence.”

Although the study did not account for e-books, as they’re not yet available in enough countries, Dr. Evans said in theory they could be just as effective as print books in encouraging literacy.

“But what about the casual atmosphere of living in a bookish world, and being intrigued to pull something off the shelf to see what it’s like?” she asked. “I think that will depend partly on the seamless integration of our electronic devices in the future.”

We’re not quite there. Amazon Kindle’s Family Library enables two adults in a household to share content with each other and up to four children. But parents must explicitly select which of their books their kids can read. So much for the “casual atmosphere of living in a bookish world.”

Will parents go out of their way to grant access to their latest book to their 9-year-old?

. . . .

But the decline of print journalism means that millions of children are eating breakfast at tables without any reading material other than what they bring. That hypothetical 9-year-old may not be inclined to read an op-ed about Syria in the family’s copy of the newspaper, but at least that child sees the headline and is reminded of the existence of the outside world, for better or worse. And it would take very curious teenagers to read, during a hurried meal before school, an adult periodical online over whatever they typically default to on their own devices.

Digital media trains us to be high-bandwidth consumers rather than meditative thinkers.

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

PG suggests that the decline of The New York Times (and accompanying layoffs) appear to have colored the author’s view of physical books and newspapers.

The younger members of Clan PG are digital natives. They’ve grown up around computers, tablets, smartphones, etc. Finding information that fascinates them is emphatically not a challenge for these little people.

PG was about to relate anecdotes, but he will restrict himself to saying both monster truck and lemur aficionados can feed their interests easily and to a great depth online.

As a lifelong lover and rabid consumer of printed books, PG believes the digital world presents much richer possibilities for expanding an inquisitive child’s horizons and satisfying their quest for understanding and delight than the largest of home libraries.

And, considering those of modest means, how many printed books can you buy for the price of a $50 Kindle Fire? $50 does not buy most people weekly trips to the local library for very long.

Why Distributors Are Book Publishing’s New Gatekeepers

13 May 2016

From The Huffington Post:

As a former gatekeeper, I’m fascinated by the gatekeeper divide in book publishing, where the role gets falsely propped up by supporters of traditional publishing and completely dismissed by those who favor the indie space.

In a January 2015 article on Slate, former Random House editor Daniel Menaker wrote about gatekeepers (defined as editors at major houses):

In my judgment, there are between 20 and 30 editors and publishers in New York who — along with experienced and discriminating publicists, marketers, and sales reps — have over the decades regularly and successfully combined art and commerce and, in the process, have supported and promulgated art. They are in fact the main curators of our life of letters. They have somehow survived the grinding — tectonic — friction between creativity and business and made a go of both. They are cultural heroes, actually.

By contrast, Hugh Howey posted on his blog in June 2015 that “the best thing about indie publishing is the complete lack of gatekeepers.”

Because the publishing model I’ve adopted for She Writes Press falls between traditional and self-publishing, I take issue with both extremes. Menaker represents a class of people (industry, high-brow, elitist folks) who believe that New York publishing is the center of the universe. I would venture to guess that these curators of “our life of letters” have largely made successful white male authors, and maybe a handful of white female authors. These editors have attained their eminence from a system that is set up to make successful a certain kind of writer — MFA grad from the right school, polished, mediagenic, probably young, definitely white.

. . . .

Because self-publishing lacks any kind of vetting, and because self-published authors can (and unfortunately still do) publish inferior books, all indie authors suffer together.

. . . .

But there’s another gatekeeper arising in our midst that no one is talking about — and that’s the distributor.

Right now, the biggest pain point of self-published authors is lack of distribution. If you’re a genre writer like Howey, it might not matter. For those authors making most of their money on e-books, distribution may be a take-it-or-leave-it kind of endeavor. But in the genres I work in, primarily memoir and fiction, it means everything.

I tried for one lousy season (our first season in business) to make a go at being the publisher of a self-publishing company, and immediately hit wall after wall after wall. After qualifying to sign up with a traditional distributor, the landscape opened up tremendously. Overnight our status changed from self-publisher to traditional publisher (even though we have always self-defined as hybrid). With traditional distribution, I was again working in an environment I recognized, where a sales force gets materials early, pitches books to accounts, and where preorders are placed, upon which print decisions are made. This is the traditional system, for better of for worse, and as long as we have and want retail outlets beyond Amazon, the system will continue to favor books with traditional distribution.

. . . .

Because distributors are opening up to nontraditional models, including successfully self-published authors, they’re starting to set measures that indie authors can reach to gain access. It’s unfortunate that indie authors do not have any kind of grading system in place that would give a stamp of approval to booksellers or reviewers or associations. Independent publishing desperately needs that.

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

PG says almost anybody can sell almost anything that’s legal on Amazon.

Do purchasers of power saws need gatekeepers to assure them of the quality of the tools they buy on Amazon? How about purchasers of shoes? Toys? Dishwashers? Cameras?

Each of these items costs more than an ebook and consumers have no problem buying them without a gatekeeper. Especially since they can return what they bought to Amazon for a full refund if they don’t like it.

PG suggests that those performing a gatekeeping function believe gatekeeping is important because it’s depressing to think otherwise. Do people buying books, etc., even think about gatekeepers that may have inserted themselves into the chain of commerce? If they do think of gatekeepers, are they motivated to buy a product that has made it through the gate rather than one that hasn’t received the stamp of approval but still looks good?

PG doesn’t think so. In an internet age, consumers have access to huge troves of information about virtually any consumer good, including books, before they purchase it. They’ll use whatever information they feel they need to make a purchase decision and return any products they don’t like for a refund.

Additionally, 99.99% of readers simply don’t believe buying a book that disappoints them is the end of the world.

A physical bookstore has to be a gatekeeper because it can’t hold all the books in the world. PG thinks that’s a bug, not a feature.

Earlier this evening (PG is writing this on Thursday night), after Mrs. PG and PG went out for an early dinner, Mrs. PG suggested they visit a nearby Barnes & Noble, something neither has done for months.

PG was disappointed with how sparse the History section was. He has read some really terrific histories of this and that over the past few months and not a single one of those books was in the store.

Mrs. PG was looking for mysteries and couldn’t believe how little space was devoted to those books in comparison with the same store a couple of years ago. Both of us walked out without making a purchase or even coming close to making a purchase. Nothing about the experience encouraged us to return in the future.

In an earlier time, PG might have purchased a pretty good book because he’s almost always in the market for a new book. These days, if PG wants a really great book, he can always find one by spending a few minutes on Amazon. He no longer has to accept pretty good because a gatekeeper doesn’t understand what PG really likes.

Birth of a Publisher

12 May 2016

From Authors Electric:

OK, so this is not about self-publishing and it’s not exclusively about digital, but it’s a case study of how two people with more ideals than sense decided to start a publishing company that would operate rather differently from the traditional model and the Big Five. If anyone else out there wants to follow suit, it might help you to avoid some of the mistakes we made.

. . . .

It was in the Roxy bar in Siena some time in July 2014. I was there drinking coffee with my husband Stephen Barber (I think he had a round cake too) and we were sitting outside, when the heavens opened and we were going to get soaked.

We ran inside and ordered another round of coffee while we waited out the storm. I had a notebook and pen with me (naturally) and we had been talking for some time about possibly starting an independent publishing house. We knew from blogs like this and the experience of friends that it was getting easier for complete tyros to bring out good-looking books.

We talked and roughed out a possible two-year publishing schedule. There are a couple of books Stephen wants to write and I had the feeling that no-one was going to want to publish my next two YA novels, which were both historical, so this could be a vehicle for both of us.

But I was also acutely aware of the tough time fellow YA novelists were having in getting publishing contracts – great writers, some of them prize-winning but writing the kind of books that just weren’t fashionable currently.

. . . .

It took a bit longer to take the definitive steps towards making it real but in October 2014 we registered The Greystones Press with Companies House. It was on a Sunday and took less than an hour. Setting up a business bank account with HSBC, however, took MUCH longer.

. . . .

My agent had sent a synopsis and some sample chapters to the main publishers the year before but had replies like “we already have a book on Shakespeare” or “we’ll need to see the whole text.” For someone who had been accustomed to sell a book on a paragraph or two of an idea, this could have been a bitter blow. But I determined that this was just the way things were now and wrote a different novel – of which more anon.

But having missed the 450th anniversary of Shakespeare’s birth in 2014, I suddenly realised that I had to get a move on if I wanted to make this year’s 400th anniversary of the playwright’s death.

I finished the first draft on January 22nd 2015, aware that no conventional publisher would be likely to get the book out in time, allowing for revisions, submission and then my agent sending it round all the publishers. So we said, “October then”, to get it out at the same time as the other Shakespeare titles.

. . . .

So we had some books. But what next? We had initially decided to do a small print run of paperbacks for review copies and author copies and then do Print on Demand (POD). And we would do ebooks too.

What we had to find was editors, designers and other team members. So we joined the Independent Publishers Group (IPG), got their book and started trawling the Net for likely people. Then we had a piece of good fortune – we found Talya Baker, who not only is a superb copy-editor but took on the role of Project Manager for fiction for us.

Talya, with whom I’d worked briefly at Bloomsbury, introduced us to the other rock of our enterprise, Nigel Hazle, Text Designer.

. . . .

To stop this post from being too long, I’ll whizz through some of the stages: we had to discover about writing Advance Information sheets (AIs), Press Releases, buying ISBNs and tangling with Nielsen’s Title Editor online.

We had to commission and provide material for a website, write contracts, decide what to do about PR, choose covers for five books, work out how on earth we were going to publish the illustrated book (of the kind we positive were not going to do, remember), re-think the whole POD and ebook model, have stationery designed, etc. etc.

. . . .

We had been veering towards Ingrams (Lightning Source) because of the shipping costs from America of using CreateSpace but as we were going to be a small independent publishing house rather than a self-publisher, we were fearful that bookshops would not only not stock but also not order our titles if they were POD only. A brutally frank email from a US publisher we were talking to made us think again about our publishing model.

. . . .

Kindle accounts for 85% of ebook sales so we have gone for the KDP Kindle Select option, which brings in 70% of the price, in return for exclusivity.

If you want your books available for other platforms, the royalty drops to 35%. Our margins are so tight on the paperbacks (see, I even talk like a publisher now) that it will be n Kindle if anywhere that we make some money, enough to enable us to publish more books.

Link to the rest at Authors Electric and thanks to Diana for the tip.

PG says these new publishers seem to be intelligent and well-intentioned people, but he wondered about the contracts they ask their authors to sign. Specifically, how long those contracts last.

PG hopes they did not follow standard industry practice and make their publishing contracts last for the life of the copyright or some other ridiculously long period of time.

It’s a big risk for an author to sign up with a new publisher. Most such publishers (like most new businesses) will not be successful and close their doors within a few years. If the authors can walk away with their work, both author and publisher can agree it was a tough learning experience but tomorrow will be a brighter day.

However, if the author’s work is tied up with a typical publishing contract, the author may not be able to walk away with his/her work. Rights to those books may go to whoever buys the assets of the failed publisher, either via the bankruptcy court or in a forced sale.

The publisher’s founders may have been the nicest, most honorable and well-meaning people in the world. Unfortunately, there is absolutely no guarantee that owner #2 will be of similar character. Every industry includes a collection of sleazeballs and thieves and publishing is no exception.

There are two simple contractual means of avoiding or ameliorating the author’s damages. Either one is good. Both are better.

  1. A Change of Control contract provision. Boiled down to basics, this clause says if the current owners lose ownership or control of the publisher, the author has the right to terminate the publishing contract and all rights to his/her book will revert. (PG notes that, if the publisher files for bankruptcy relief, the bankruptcy court may have something to say about enforcement of the Change of Control provision. Further discussion would put you to sleep.)
  2. A contract that lasts for a specific and limited period of time. Three years, five years, seven years would seem to give a publisher, old or new, the opportunity to demonstrate that the relationship is worthwhile to the author. If everyone is happy, they can renew the contract for another specified period of time. If not, entering into the contract may have been a regrettable experience, but not a disastrous one for the author.



26 April 2016

From time to time, PG is approached by artists who create infographics with an infographic which may be of interest to authors. These artists suggest that PG might like to publish their infographic on TPV.

PG has declined such requests, not because infographics are a bad thing or the particular infographic is inaccurate or poorly designed, but because he has doubts about whether infographics in general would fit into whatever visual vibe exists on TPV and be of interest to lots of visitors.

One of the online rules PG violates is Online Rule 37: Illustrations, photos, animations, Vines, videos, etc., etc., etc. should be inserted in lots of different places so several appear on every screen a visitor sees. TPV is much too text-heavy to comply with this particular best practice.

However, PG could be wrong about infographics. (He’s not going to use Vines no matter what anyone thinks or says.)

If you have an opinion about whether infographics would be a good thing for The Passive Voice, feel free to voice it in a comment.

Know Your Rights

23 April 2016

From Kristine Kathryn Rusch:

I recently got an email that sent a chill through me. It was a newsletter from a traditional publishing organization. This organization is geared toward publishers and editors, not toward writers.

The newsletter was essentially an ad for an upcoming seminar that will teach publishers to understand intellectual property and expand their rights business.

Why did this send a chill through me? Because the one thing that has protected writers who signed bad contracts is the fact that their traditional publishers have no idea how to exploit the rights they licensed.

. . . .

[I]n short, most publishers ask for more than they have ever used in the past. Publishers have been very short sighted in how they published books.

. . . .

Ten years ago, it was relatively easy to get the rights reverted on a book like that. Essentially both parties agreed that the terms of the contract had been met, that the parties no longer had need of the relationship, and so they severed their business relationship.

It wasn’t easy-peasy, but it wasn’t hard either. It usually took a letter or two.

By 2005, however, most agents refused to write that letter which severed the contract. The reason was simple from the agent’s perspective. Many, many, many agents used a combination of their agency agreement and a clause in the writer’s book contract to define their relationship with the writer, and determine who controlled the marketing and finances of that book.

It wasn’t in the agent’s best interest to cancel the contract. In fact, the longer the contract existed, the better it was for the agent.

Writers with agents would have to write those letters themselves—and then, publishers would often contact the agent to find out why the agent was “letting” the writer do this.

. . . .

In the last year or so, I’ve been hearing from writers who say it’s almost impossible to get their rights reverted. The publishers want to hold onto those rights as long as possible.

The main reason for this has nothing to do with reprinting the book or keeping the book in the marketplace. It has to do with the changes in accounting that have occurred in the big traditional publishing companies.

The Big 5 (4? 3? Whatever. Jeez.) are now part of international conglomerates. Those conglomerates understand that intellectual property has as much value or more value than the buildings and land that the conglomerates use to house their businesses.

Those conglomerates put all of the intellectual property on their account books as an asset. So your novel—even if it’s more or less out of print (or has a $19.99 ebook like my novel Fantasy Life)—has a value assigned to it that reflects not only its earnings right now, but its potential earnings in the future.

The command came down from on high that publishers should retain the assets as best as possible. (I’m pretty sure some of these publishing companies were purchased for their intellectual property assets, not because of their bottom lines. I have no interest in proving that, though.)

So, publishers have kept the assets, doing the minimum to retain the rights to them. But they really haven’t maximized their profits.

. . . .

In practice, publishers have started to claim rights they never had. They’re interpreting the contract terms for something negotiated in 1997 by 2016 standards, and finding ways not to pay for those uses.

Big corporations are all about profit for the corporation. The best way to maximize profit is to lower expenses.

That’s why, after these big companies merge, you see layoffs a year or so later. That gives the new company time to define itself, find employees with overlapping duties, and streamline production.

Once the layoffs are over, once the agreements with the subcontractors (like printers and distributors) end or get renegotiated, the corporations look around for other ways to cut expenses.

The easiest way is to cut the payments to the suppliers—the writers.

. . . .

Just be aware that publishers often cut payments, and they use the contract as their guide. Not necessarily the contract negotiated in good faith with a corporate entity long merged into five other corporate entities, but the corporate entity that exists now.

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

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.

As usual, Kris does an excellent job of talking about the business/legal aspects of being a successful professional writer.

PG would like to talk a bit about authors making a decision to sign a publishing contract with a particular publisher or editor.

Isn’t that a huge reason why most authors sign a publishing contract? RomancesRUs is the hottest publisher around and some of their authors are New York Times Bestsellers. And Leticia is the best romance editor who ever walked the earth plus she is so nice on the phone. (ditto for SciFiRUs, etc.)

The idea that no one will remember RomancesRUs in ten years and Leticia will be fired in six months doesn’t enter most authors’ calculations.

It is the nature of declining businesses to attempt to consolidate their way to survival. That’s what’s been happening in big and small publishing for awhile and what will continue to happen.

Many authors sign with a publisher because of that publisher’s reputation for quality books and successful authors. Some authors will sign because they’ll be working with an editor with a great reputation for excellence and success, the kind of editor that bestselling writers mention in interviews.

Similar thinking goes into an author’s decision to sign with a star agent, one with many happy authors who say nice things about the agent’s work.

These would be good business reasons to sign a contract that lasted for five years.

However, current reputations and past successes are a terrible reason to sign a contract that will tie up rights to an author’s books for the full term of the copyright. As a reminder, in the US, copyrights last for as long as the author lives plus 70 years.

In a successful business, management can last for a long time and often the original management hires new managers with similar business acumen and passes down the business principles that lead to that success through the hierarchy. Such businesses can work their way into long-term success.

When a business is declining, especially when it is part of a declining industry, management turnover and ownership changes become near-constants. Yesterday’s management practices are no longer today’s management practices. Some investors make a lot of money by acquiring problem businesses, cutting costs to the bone, then harvesting profits (pulling cash out the business) or finding someone else to buy the business because its financial statements now look better.

Traditional publishing is in decline. How long the decline might last is speculative. However, the words of Ernest Hemingway are instructive. “How did you go bankrupt? Two ways. Gradually, then suddenly.”

The Securities and Exchange Commission requires mutual funds to warn their investors that “Past performance is not a predictor of future results.”

Of course, an investor who bought into a mutual fund can sell his/her shares and have nothing further to do with that fund and its managers. A hedge fund that purchased a publisher can sell the publisher and be done with it. Since no US state permits life-time employment contracts, a publishing executive or editor can either quit immediately or wait a couple of years, then bail out on a failing publisher.

Only the authors who signed contracts that last for the full term of the copyright are tied to whatever corporate entity once called itself a publisher, but now is a hedge fund asset, for the rest of their lives plus 70 years.

(PG will note that a provision in US Copyright Law permits the creator of a copyrighted work or his/her heirs to terminate a contract 35 years after publication or 40 years after the contract was signed, but it doesn’t happen automatically and 35/40 years is also way too long. PG won’t get into the technicalities of this part of the law.)

“But it’s a contract for only one book,” an author might say. PG won’t take more space to discuss unfair non-compete clauses, option clauses, etc., can undercut the excuse that it’s only one book. Such clauses can affect a whole bunch of books.

Under current contract practices, the author is the only person who has to think in the long term while everyone else in the publishing business is focused on the short term.

Publishing contracts need to include provisions that end the contracts after a few years so the author can have the same flexibility as everyone else involved with the author’s books.

Data Guy’s Web of Analysis: DBW Turns Hostility Into a Handshake

10 March 2016

From Publishing Perspectives:

Author Earnings was born amid controversy and rancor around a Digital Book World event two years ago. The 2014 conference had worked with its sister FW Media vertical Writer’s Digest to update a survey of authors that the author Hugh Howey and a host of independent writers said was incorrectly depicting self-publishing as a financially lesser alternative. Howey’s answer was to create a new effort to gauge ebook sales that aren’t counted by typical industry statistical programs. And his partner in was and is an unnamed writer and technologist nicknamed “Data Guy.”

Data Guy made his first appearance Wednesday (March 9) in a 35-minute morning keynote presentation at DBW 2016, and he followed it during the afternoon with a question and answer session with Publishers Marketplace’s/Publishers Lunch’s Michael Cader.

. . . .

Cader had neatly set up Data Guy’s session for DBW’s morning mainstage presentation, going over the three statistical programs traditionally used to try to track a publishing business we can’t see very clearly:  the Association of American Publishers’ reports, Nielsen’s BookScan (print), and the PubTrack Digital (ebooks, also Nielsen). Each source of analysis has strengths and limitations.

None has the thing needed most: the ebook sales data known only to the largest online retailers.

. . . .

Once he’d handed off to Data Guy, the keynote was primarily an explication of the Author Earnings methodology from a man who, it turns out, has his background in data analysis in the video-games industry.

In terms of what his analysis offers to the industry — “I’m trying to solve the [same] problem the Big Five is trying to solve,” he said from the stage — Data Guy focused, in part, on an interpretation of debut-author unit sales, with 22 percent of them in 2014 coming from Big Five publishers, 11 percent in 2015 coming from Big Fives, and only 9 percent coming from Big Fives in the first quarterly report of 2016.

As Cader’s associate at Publishers Lunch, Sarah Weinman, wrote:

“DG [Data Guy] showed how his analysis of Kindle store data can point to ideas across the publishing chain.

“‘There is an opportunity to give debut authors a different price point,’ DG said, pointing to the heavy concentration of sales around ebooks from debut authors priced between $2 and $5.99 versus the very small amount of sales garnered by traditional publishers bringing debuts out priced between $11.99 and $14.99.

“‘They can graduate to higher price point, the same way that mass market paperback titles graduate from trade paperback and on to hardcover. Every debut author is an investment for a publisher and they have time to develop in the market and create a good return. The risk is to become too dependent on movie tie-ins, big-money indie author acquisitions, and other acquisition-driven strategies.’”

. . . .

The potential progress that may eventually set off this iteration of Digital Book World from others was evident later Wednesday, in the last hour of the conference’s breakout sessions. Someone in the audience for the Data Guy Q&A asked if Cader might be able to merge “his” data with that of Data Guy.

Cader, making it clear that the trinity of trade-industry protocols is not his but simply the material with which we’ve had to work until now, showed a lot of interest in the idea— if not of “merging,” exactly, in some way exploring what one approach to quantifying the industry has to offer the other. Data Guy was immediately game, even soliciting data from industry players who’d like to share it.

. . . .

Until now, Author Earnings’ protocol of harvesting bestselling ebook sales data from and creating a rank-t0-sales comparative curve to interpret that data has reflected its original agenda of demonstrating self-publishing as a potentially viable financial approach to a writing career.

But on Wednesday, with Data Guy’s first public appearance at DBW, this changed. For the first time, Author Earnings spoke directly to the industry. And rather than spinning a web of upbeat numbers on self-publishing’s performance on the Big Platform in Seattle, Data Guy used his time in the mainstage keynote sessions to suggest that his analysis can bring new insights to an industry sorely in need of them — and in a cooperative context: what was agreeably missing was the hostility that many Author Earnings supporters have brought to the discussion.

Weinman describes Data Guy’s message this way:

“At the organization level in particular, knowing more about the missing data gaps will allow for better questions to be asked about competitive market analysis, dynamic pricing, identifying takeover targets, real-time sales projections, and more.”

. . . .

While we saw the guy — he’s witty, engaging. “quite a likeable chap,” as agent Laurie McLean referred to him — his actual name was not revealed. We called him DG. He told us at the press table that he is the author of two books. Both self-published. He mentioned that he finds publishing people nicer than video-game people. And that’s it.

But meeting him was helpful. Even learning this small amount of info was useful because he now is understood to be more Data Guy than Book Guy. Maybe it’s his distance from the center of the indie book crowd that has made him remarkably cordial to media members who emailed him — sometimes with criticism — even as some of his supporters snarled at anyone who dared suggest that Author Earnings may not be holy scripture.

Link to the rest at Publishing Perspectives and thanks to SFR for the tip.

PG congratulates Data Guy on the success of his presentation. It sounds like he was able to accomplish in person what the voluminous statistics and analysis he and Hugh Howey created with Author Earnings could not do – convince an audience oriented toward traditional publishing that AE provides very useful information about ebook sales.

For PG, the history of Author Earnings and its initial reception by Big Publishing is one more piece of evidence of the huge gap between the worlds of technology and traditional publishing.

For PG, who has some history in the tech world, the first AE report was fascinating and revealing. Through a neat (and Amazon-approved) hack, DG and Hugh had provided a deep look at what was going on in Amazon’s part of the ebook world (which is, of course, the most powerful and sophisticated part of the ebook world). Part of the reason the information was so interesting is that it contradicted several narratives about ebook sales from Big Publishing and shone a much brighter light onto what was happening with indie authors.

PG is pretty certain that most tech people who examined the first and subsequent AE reports would approve and admire the project as an innovative method of digging into a somewhat opaque market.

The initial response of the traditional publishing world was, of course, dismissive of AE. Media covering tradpub found no shortage of publishing experts to dismiss AE’s work as inaccurate and unhelpful. Some of the experts’ comments revealed that they didn’t really understand what AE was doing.

Ebooks are a technology product, data files delivered over a digital network to sophisticated devices containing hardware, firmware and software that decodes the ebook file and presents it to an end user in a (hopefully) attractive and useful format.

PG respectfully submits that if you think of an ebook as just another form of paper book to be created, marketed, priced and sold in a paper book sort of way, you don’t really understand the ebook. Barnes & Noble certainly knew how to sell a lot of paper books. We all know how little of this expertise transferred to selling ebooks.

In this post, PG won’t make any predictions about the future of traditional publishing, dire or otherwise, but will suggest that the ability to deeply understand technology and think like a technologist has become a vital and mandatory skill for publishers. Success in the future publishing business will require skillful navigation in a world that is inevitably, inexorably moving towards selling more and more of the software known as ebooks through electronic retailers via a technology known as the internet.

ABA Urges Federal and State Investigation of Amazon’s Business Practices

3 March 2016

From the American Booksellers Association:

This week, the American Booksellers Association launched a national advocacy campaign with letters urging the U.S. Congress, the 50 state attorneys general, and the 50 state governors to investigate Amazon for violations of antitrust laws.

In the letters, ABA CEO Oren Teicher wrote that the association strongly believes that “Amazon’s abuse of its dominance and its growing monopolization have had a negative impact on free expression and the health of America’s book industry, including a chilling effect on the diversity of, and access to, books and information.”

In conjunction with the antitrust campaign, ABA launched its Antitrust Action Kit, which provides booksellers with state-specific letters that they can adapt and send to both their state and federal lawmakers as well as other key officials.

“We strongly encourage booksellers to use the templates in the Action Kit to reach out to their federal and state lawmakers, as well as their attorney general and governor,” said Teicher. “Antitrust laws exist to protect consumers, their communities, and small businesses from the very business practices now being employed by Amazon.”

. . . .

Teicher also pointed out that Amazon’s business model is very similar to the A&P grocery store chain’s business model prior to 1949, when the U.S. Court of Appeals ruled that A&P violated antitrust laws.  “Like A&P,” he wrote, “Amazon is not keeping prices artificially high. Indeed, it is keeping prices artificially low, and extending its reach into production and distribution. This spurs further growth for Amazon, while forcing smaller competitors to do business with it even as it simultaneously competes against them. In the process, Amazon has garnered great influence among policymakers in states and in the federal government, garnering tax subsidies that only increase its market advantage at the cost of tax revenue and millions of jobs.”

Link to the rest at the American Booksellers Association

PG is continually amazed at all the instant experts on antitrust law that keep popping up in the book business these days.

The most common antitrust case they cite is Standard Oil Co. of New Jersey v. United States, decided in 1911. PG notes that, while Standard Oil still stands for some antitrust principles, it hasn’t been 1911 for a long time and the competitive world has changed a bit since then.

Amazon’s supposed sin is “predatory pricing,” known in some circles as low prices, great prices, wonderful prices, affordable prices, etc.

Here’s the theory about how predatory pricing is supposed to work and why it is dangerous:

  1. Big Bad Company lowers prices.
  2. Competitors wither and die.
  3. After finishing off competitors, Big Bad Company raises prices to ruinous levels.

Bullet Points 1. and 2. simply describe free market capitalism as practiced in many parts of the world.

Bullet Point 3. – raising prices to high levels after putting competitors out of business hasn’t happened, at least in the modern US.

If any company was in a position to jack up prices in recent times, it would have been Walmart which, in many small towns, became the only grocery store, the only clothing store, the only book store, etc., after local competitors selling those products did go out of business. Did Walmart raise prices? Nope. Everyday low prices.

Sam Walton understood there was always some mini Sam Walton lurking around waiting to underprice Walmart if Walmart raised its prices. And people would travel further for low prices in 1990 than they would in 1911.

Plus Sam Walton had good lawyers who told him that if he did raise prices under these circumstances, he would check the box for Bullet Point 3 and be guilty of predatory pricing.

Twentieth century antitrust law was often based on companies gaining monopoly power in one or more geographic areas. With poor transportation options or goods too bulky to ship very far, a competitor one hundred miles distant might still be shut out of a geographical market because customers wouldn’t travel that far to purchase goods.

Of course, Amazon lives on the web where, in most of the world, geography doesn’t matter. PG could set up an ebook store today that competed with Amazon on book prices (for a limited selection of ebooks). Baen, which is way smaller than Amazon, has an ebook store for its own books and offers some products Amazon can’t.

Amazon even enables hundreds of used book stores to directly compete with it on price by including used book listings beside Amazon’s new book listings. PG has no inside information, but he bets that Amazon loses a significant number of new hardcopy book sales to used book stores. Abe Books looks to be well-positioned to compete in in this market should Amazon ever decide to shut out used book stores.

PG says there is nothing noble about the efforts of the ABA or Authors United or any of the other whiners who are trying to prevent Amazon from selling books at low prices. They have no interest in defending the great principles of antitrust law. They are simply trying to use government agencies to protect their right to sell expensive books. This crusade provides no public good and is entirely self-serving.

The future of books is here and there’s not much room for expensive middlepersons.


Where Do Visitors Come From?

3 March 2016

PG has been extremely lax about checking the stats for TPV .

Here’s an interesting tidbit from a visit to Google Analytics last night.

This is the list of the top ten countries where sessions on TPV have originated during the last 30 days:

  1. United States
  2. United Kingdom
  3. Canada
  4. Australia
  5. Germany
  6. India
  7. New Zealand
  8. France
  9. Kenya
  10. Ireland

Sessions are a way of identifying meaningful interactions between a visitor and a website. It’s generally regarded as a better measure of visitor engagement than just the number of visits.

Here’s Google’s definition:

A session is defined as a group of interactions one user takes within a given time frame on your website. Google Analytics defaults that time frame to 30 minutes. Meaning whatever a user does on your website (e.g. browses pages, downloads resources, purchases products) before they leave equals one session.

For PG, the surprise on this list is Kenya. He doesn’t recall seeing any African nation on a top ten list before. He’s excited to have this many active visitors from Kenya.

Why all the news about Amazon?

2 March 2016

On occasion, PG is accused of being some sort of shill for Amazon.

He’s not.

He’s one of the millions of fans (including shareholders bidding up Amazon stock into the stratosphere) who thinks Amazon is a cool company doing cool things in cool ways.

This goes way beyond Amazon’s participation in the book business.

Beginning in the eighties, Wal-Mart (now Walmart) was recognized as an extremely well-run retailer. Among many other innovations (including extraordinarily sophisticated computer systems way ahead of their time) Walmart was notable for putting big box stores in small communities, places other big box retailers thought were not populous enough to support a large store. Virtually all of its early growth was outside of major metropolitan areas.

In addition to substantially improving the lives of the people in those small communities (better prices, better selection, retail jobs that weren’t dead-ends), Walmart made a lot of money for people who bought its stock. Business magazines and newspapers loved writing stories about Walmart and how Sam Walton had built a worldwide empire from a single store in a small town in Northeast Arkansas.

Of course, those who saw Walmart as a business that was challenging legacy retail practices suffered from Walmart Derangement Syndrome. Suppliers complained that Walmart buyers pushed harder than anyone else for low prices and fast delivery which squeezed supplier profit margins. Competitors built fantasies that the world would be better if Walmart stopped offering every day low prices.

Customers voted with their money and made Walmart the largest retailer on the planet. Low prices helped poor people stretch their money to buy food and clothing for their families. To this day, if you want to see where local poor people shop, go to Walmart. For PG, at least some of the anti-Walmart sentiment included an element of disdain for Walmart customers.

Reportedly Jeff Bezos studied Walmart closely before he started Amazon. Every day low prices could be Amazon’s credo as well.

The response of some suppliers to Amazon – traditional publishers most notably – has reminded PG of the response of some suppliers to Amazon Walmart. Amazon is an agent of change at least as much as Walmart was an agent of change. From the viewpoint of some suppliers, change is fine as long as they can continue to run their businesses in the way they always have.

The simple reason that PG posts so many items about Amazon is that Amazon is doing far more interesting things than any other organization in the world of books. And, with Amazon’s help, indie authors are doing far more interesting things than non-indie authors are.

How many interesting things does Hachette do in a week? Could you build a blog around the latest developments from Randy Penguin?

While PG appreciates all authors, all too often, he sees talented authors who are traditionally published limited by their publishers.

Indie authors often act like Amazon has set them free.

PG likes posts about freedom and innovation.

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