Passive Guy has received lots of email about the terms and conditions of the newly-announced Amtrak Residency Program for writers. If you’re not familiar with it, Amtrak is offering free tickets for authors, presumably on train trips that will last for at least several hours, encouraging them to write about their experience.
6. Grant of Rights: In submitting an Application, Applicant hereby grants Sponsor the absolute, worldwide, and irrevocable right to use, modify, publish, publicly display, distribute, and copy Applicant’s Application, in whole or in part, for any purpose, including, but not limited to, advertising and marketing, and to sublicense such rights to any third parties. In addition, Applicant hereby represents that he/she has obtained the necessary rights from any persons identified in the Application (if any persons are minors, then the written consent of and grant from the minor’s parent or legal guardian); and, Applicant grants Sponsor the absolute, worldwide, and irrevocable right to use, modify, publish, publicly display, distribute, and copy the name, image, and/or likeness of Applicant and the names of any such persons identified in the Application for any purpose, including, but not limited to, advertising and marketing. For the avoidance of doubt, one’s Application will NOT be kept confidential (and, for this reason, it is recommended that the writing sample and answers to questions not contain any personally identifiable information – e.g., name or e-mail address – of Applicant.) Upon Sponsor’s request and without compensation, Applicant agrees to sign any additional documentation that Sponsor may require so as to effect, perfect or record the preceding grant of rights and/or to furnish Sponsor with written proof that he/she has secured any and all necessary third party consents relative to the Application.
PG has the following responses:
1. He is exceptionally pleased that authors and others are carefully reading terms and conditions relating to their writing and encourages the continuation of this practice.
2. PG is also pleased that authors and others are raising the alarm about problematic terms and conditions and hopes this practice continues and grows.
3. For attorneys who are writing terms and conditions, PG suggests it’s a good idea to consider public response before pulling out the moldy boilerplate paragraph covering a Grant of Rights. Amtrak should be asking uncomfortable questions of its counsel about this public relations disaster. Because it is counsel’s fault.
4. This language is, in fact, a rights grab. Amtrak officials have issued statements saying this isn’t what they meant, they would not use any materials without consulting the author, etc. As with all “we would never do that” responses to contract concerns, PG’s response is, “Great. Let’s change the contract to reflect what you just said.”
5. While this is a rights grab, it only covers the Application that would-be train-riding authors submit to Amtrak, not the stories and books the authors write while they’re on the train. So it’s a baby rights grab.
6. However, babies grow up, so authors who are selected to receive free train travel will want to carefully review any other terms and conditions or contracts that Amtrak requires them to sign before the conductor says, “All Aboard!”
The 9th Circuit Court opinion in Garcia v. Google begins as follows:
While answering a casting call for a low-budget amateur ﬁlm doesn’t often lead to stardom, it also rarely turns an aspiring actress into the subject of a fatwa. But that’s exactly what happened to Cindy Lee Garcia when she agreed to act in a ﬁlm with the working title “Desert Warrior.”
The ﬁlm’s writer and producer, Mark Basseley Youssef—who also goes by the names Nakoula Basseley Nakoula and Sam Bacile—cast Garcia in a minor role. Garcia was given the four pages of the script in which her character appeared and paid approximately $500 for three and a half days of ﬁlming. “Desert Warrior” never materialized. Instead, Garcia’s scene was used in an anti-Islamic ﬁlm titled “Innocence of Muslims.” Garcia first saw “Innocence of Muslims” after it was uploaded to YouTube.com and she discovered that her brief performance had been partially dubbed over so that she appeared to be asking, “Is your Mohammed a child molester?”
These, of course, are ﬁghting words to many faithful Muslims and, after the ﬁlm aired on Egyptian television, there were protests that generated worldwide news coverage. An Egyptian cleric issued a fatwa, calling for the killing of everyone involved with the ﬁlm, and Garcia soon began receiving death threats. She responded by taking a number of security precautions and asking that Google remove the video from YouTube.
Most copyright case opinions don’t begin in such a compelling manner. Passive Guy could provide numerous examples, but you’ll have to trust him on that contention for now.
PG includes the full opinion below, but will summarize some of the major points here. For copyright nuances, read the opinion.
Ms. Garcia’s contention was that her performance in the film was a copyrightable work and that she never granted the producer any rights to her performance, particularly the right to make a derivative work in which she appeared to be speaking different words.
Mr. Nakoula was guilty of a number of errors of judgement with respect to this film, one of which was not following the standard Hollywood practice of having everybody sign a work made for hire agreement.
Under copyright law, a work made for hire means that the creator of a book, song, movie or acting performance has transferred all of his/her/its interest to whatever copyrightable work he/she/it creates under the agreement to the producer. Under a proper work made for hire agreement, Mr. Nakoula would have owned all of Ms. Garcia’s copyright to her performance. Since he owned the copyright, he would be permitted to make derivative works, like putting new words into her character’s mouth.
As an illustration of the layers of copyright involved in this decision, let’s start with a simple example that was mentioned in the case opinion.
1. The artist known as Prince writes a song called Nothing Compares 2 U.
2. The singer known as Sinéad O’Connor performs the song with a proper performance rights license from Prince for the song music and lyrics.
Prince owns the copyright to the music and lyrics of the song. You need a license from him to do anything with the music and lyrics. Sinéad owns a copyright to her performance of the song. You need a license from her to do anything with that performance.
Even though Prince is the author of the song, he can’t do anything with an audio or video recording of Sinéad performing the song without Sinéad’s consent.
For copyright purposes, there are several levels of derivative works in the Garcia case, each of which is copyrightable:
1. The copyright to the screenplay is owned by the screenplay’s author (unless they signed a work made for hire agreement).
2. The film made from the screenplay is a separate derivative work of the screenplay and the film’s creator owns the copyright to the film. The filmmaker needs rights to the screenplay to do anything with the film, but the author of the screenplay does not own the film because the film is a separate creative work.
3. The court held that Ms. Garcia’s acting performance, while derivative of the screenplay and incorporated in the larger film, was a separate work as well and she owned the copyright to her performance (absent a work made for hire agreement). Like the filmmaker, Ms. Garcia was the author of her performance. She would need rights to the film (and, through the film, the screenplay) to do anything with her performance, but she owned the copyright to her performance.
Because she owns a copyright in part of a video YouTube is streaming, she has the right to pursue a DMCA take-down enforcement action against YouTube for her copyrighted performance in the film. If the filmmaker didn’t have rights to her performance, neither does YouTube.
This is a long prologue to a few thoughts that are more directly related to authors and the kinds of contracts they’re asked to sign.
1. As a general proposition, authors should not sign work made for hire agreements. In doing so, they are transferring all their interest in their books written under such agreements, including their copyright, to someone else. Advertising copyrighters, screenwriters hired by a producer, etc., should expect to sign work made for hire agreements, but fiction authors (and, most of the time, non-fiction authors as well) should not.
Instead, the author gives a license under his/her copyright for others to do things with the author’s book – put it up for sale online in ebook form, publish it, translate it, turn it into a movie, etc.
2. Generally speaking, PG doesn’t like publishing contracts by which an author gives up all rights to his/her books to a publisher. Draw the line at licensing the publisher to publish ebooks, printed books and, perhaps, audiobooks.
Unless the publisher owns a movie studio, the author should keep film, TV, etc., rights. The only way the publisher will monetize those rights is to license a producer or studio to use them. The author can do exactly the same thing her/himself with no need to give a big chunk of film revenues to a publisher.
3. PG has been seeing some publishing contracts that include a grant of rights to publicly perform the author’s work in addition to the right to print, publish and sell hardcovers, paperbacks and ebooks.
The idea behind the publicly perform language is that licensing and distributing ebook files for people to read on digital devices is pretty much the same thing as licensing and distributing video files for people to watch on digital devices.
Motion picture studios earn most of their money by licensing others to publicly perform their movies, whether the license is to a movie theater for paying customers to watch sitting in a big dark place or to Netflix for subscribers to watch in a small dark place.
PG’s problem with the publicly perform language is that it can cause big problems for authors who retain movie, TV, etc., rights. The author can license the studio to create a screenplay and movie from his/her book, but, with the broad language in the publishing agreement, the author can’t license the studio to publicly perform the movie because the publisher holds that right.
Producers and studios aren’t interested in only giving private performances of their films to friends and family at home.
Such public performance language can constitute a back-door rights-grab.
The extended discussion in the comment string of the prior post had to do with to what extent publishers serve authors, and to what extent authors are better off eschewing publishers and working on their own. Unless and until publishers turn digital marketing at scale into a clearly compelling proposition, their power to serve authors effectively diminishes with each closing bookstore. The less bookstore- (or brick-and-mortar retailer-) dependent any book is, the less additional benefit in sales and exposure can be delivered by a publisher (although a cash advance and somebody to handle all the business aspects of putting a book out will still be both helpful and persuasive to many authors). Bookstore shelf space, and printed books, seem to be suffering slower erosion over the past year or two than they did in the several years before that. Michael Cader has made a convincing case that we actually know that for a fact. But, even if we accept the fact, whatever erosion continues will affect different books and authors to different degrees.
. . . .
So generalizations about the book business, whether they come from a self-published author or an industry expert like O’Leary, really require us to do a little parsing to make them useful. We’d be steering toward a more constructive conversation if we posed three questions every time somebody posits a Great Change we will see in the book business.
1. Which books, exactly, should we expect to be affected by this particular Great Change? This is necessary to specify now that most people would agree that “books” has become a pretty worthless generalization.
2. How soon can we expect a meaningful change in the perceived utility, and therefore the demand, for the affected books? That is, are we talking about a change that is already happening and evident and having a commercial impact (travel books are suffering and have been for years) or one we expect to see in the future (readers abandoning longer form books for shorter content choices) for which we might have only the scantiest evidence is affecting commercial reality today?
3. How likely is it that whatever the Great Change is going to be that publishers are well-positioned to affect or control or accommodate it? Brian suggested, and I wholeheartedly agree, the answer is “often not”. That being the case, the prediction of the Great Change should not necessarily be accompanied by the prescription that the publisher should change behavior to address it, although it seems to me they almost always are.
. . . .
Could a publisher of travel books have created Trip Advisor? Does the publisher-created Cookstr do the job of digital assistance for a cook better than allrecipes.com or cookbooks.com or betterrecipes.com? It doesn’t take a lot of deep thinking to see that a publisher’s skill sets are not the best match for building an interactive internet business where content is a component of the strategy but everything else about it is different from publishing books.
Over time, I expect the book business is going to get smaller, whether the number of books consumed goes down or not. Among the reasons for that is that, over time, the intrusion of self-publishing entities will be even more disruptive than self-publishing authors have been.
. . . .
Whether “book publishing” or “book retailing” shrinks, disappears, or changes form depends on how widespread across the various silos of interest and utility we call “books” today are the many disruptions that will affect those verticals in different ways and at different speeds. And generalizing about what these changes mean, let alone delivering advice that isn’t informed and bounded by an understanding of how any particular book or author or publishing program fits into the time and scale of any particular change, is as likely to be wrong and harmful as it is to be correct and illuminating.
While PG sometimes disagrees with Mike, he usually thinks what Mike says makes sense when viewed from the perspective of an established publisher.
This post is pretty loosey-goosey, however.
What is happening to the publishing business begins with technology disruption – ecommerce and ebooks – and is manifesting itself in a massive restructuring of the publishing business that involves the disintermediation of traditional publishers, distributors and booksellers from readers.
Complaining that the precise boundaries and directions of this tumultuous change are not being forecasted with useful precision sounds a little like a surfer complaining that nobody can specifically describe what the next wave will look like.
One of the reasons disruptive change is interesting is that it’s impossible to forecast with specificity.
If Apple hadn’t rehired Steve Jobs in 1997, the music business would look much different than it does today.
Yes, digital music would exist and portable digital music players would be sold in large numbers, but the contours of the digital music business would not be the same as they are with iTunes, iPods, iPhones and iPads. A Microsoft-driven digital music business would look much different than an Apple-driven digital music business or a record-label driven digital music business.
Likewise, the ebook world would look much different if Jeff Bezos still worked for a hedge fund and Sony had led the market into ebooks.
One thing that is clear is that some individuals and some businesses respond better to disruptive technologies than others do.
So far, in PG’s persistently modest opinion, Big Publishing has been remarkably inept in its responses to ebooks and ecommerce. It’s not a business that is tech-savvy or tech-friendly, for one thing. It’s not a business that really wants to change, for another.
The fact that major publishers are owned by large media conglomerates (another group without a lot of tech chops) is a huge disadvantage in a dynamic and rapidly-changing technology and business environment. No big media conglomerate will allow a large subsidiary to lose money or fail to deliver steady profits like the stock market permits Amazon to do.
Mike and Big Publishing want predictability in a business which has become and will remain generally unpredictable for a while. Too bad they can’t choose a different business.
Passive Guy put together the following for the IndieReCon online writers conference which continues through today:
Let’s discuss the rights authors own under their copyrights to their books.Although we could talk a long time about what copyright is, for the purpose of this post, we’ll call it the exclusive legal right of the author of a literary work to reproduce, publish and sell a book for the period during which the copyright is in force. Copyright also includes the right of the author to permit others to do the same thing.Copyright is a collection of different rights. Some of these are called derivative works.
Here’s a definition from the United States Copyright Office:
A derivative work is a work based on or derived from one or more already existing works. Common derivative works include translations, musical arrangements, motion picture versions of literary material or plays, art reproductions, abridgments, and condensations of preexisting works. Another common type of derivative work is a “new edition” of a preexisting work in which the editorial revisions, annotations, elaborations, or other modifications represent, as a whole, an original work.To be copyrightable, a derivative work must incorporate some or all of a preexisting “work” and add new original copyrightable authorship to that work. The derivative work right is often referred to as the adaptation right. The following are examples of the many different types of derivative works:
• A motion picture based on a play or novel • A translation of an novel written in English into another language • A revision of a previously published book • A sculpture based on a drawing • A drawing based on a photograph • A lithograph based on a painting • A drama about John Doe based on the letters and journal entries of John Doe • A musical arrangement of a preexisting musical work • A new version of an existing computer program • An adaptation of a dramatic work • A revision of a website
Note that a derivative work includes uses for the work that are developed in the future. Authors who wrote novels long before ebooks were invented still have copyright protection for their work in the form of ebooks.
So, what is a rights grab for the author of a book?
Here’s Passive Guy’s own definition: A rights grab happens when a publisher demands more rights than to print, publish and sell hardcovers, paperbacks and license ebooks. Period.
Of course, many publishers ask the author to grant many more rights than those three. Common additions are motion picture, television and dramatic rights.
Why does PG not like this?
Does Penguin make movies? Does HarperCollins create stage plays?
Those sorts of things are done by people whose principal business is something other than publishing. Publisher like these sorts of things because all they have to do is contact someone, usually a Hollywood agent, and ask the agent to sell performance rights. Quite often, the author even pays some or all of the agent’s fee through royalty deductions.
That’s a lot less work than editing, printing and promoting books.
An analogous set of rights are translation rights. The right to translate a book into German, French, etc., and sell those books world-wide. There are some exceptions, but quite often, the process is similar to performance rights. The publisher contacts a German publisher or agent and the German publisher does all the work.
Of course, the publisher takes a cut of all of these subsidiary rights, sometimes a very large cut. The author gets what’s left.
So, PG’s standard for what rights an author should grant to a publisher are those that the publisher has the in-house capability of exploiting without involving third-party agents, producers or publishers.
If a book sells well, it will attract people in the movie business and foreign publishers on its own, without the involvement of the US publisher and, if the author retains these rights, he/she keeps all the money.
How does the author know what to do with these non-book rights? Hire an attorney or agent to help. They will charge much less than a publisher will to handle those types of licenses. And the author will be in control of negotiations and the contract terms, not the publisher.
What does rights grab contract language look like? Here’s a short one from a real publishing contract (but not a contract that involves one of PG’s clients):
The Author hereby grants the Publisher the exclusive, worldwide rights to publish, display, reproduce, license, grant subsidiary rights, distribute, and sell the Work, in any and all forms currently, or in the future, known for publishing such material.
Here’s that same contract provision with key terms highlighted:
The Author hereby grants the Publisher the exclusive, worldwide rights to publish, display, reproduce,license, grant subsidiary rights, distribute, and sell the Work, in any and all forms currently, or in the future, known for publishing such material.
Often grants of right are significantly longer than this, but this gives you the idea of the kinds of things to look for.
Why does a publisher need worldwide rights if it only publishes in the US?
Why does a publisher need subsidiary rights if it’s never produced a movie or sold rights to a movie?
Why does a publisher need rights to some unspecified future use of the work when the publisher doesn’t even know what that might be?
If you’re looking for a compromise between a rights grab and PG’s absolutist position about hardcover, paperback and ebooks, here are some ideas:
1. The publisher has the right to seek movie, TV, etc., deals for a period of time – three years, for example. If no deal is consummated during that time, those rights revert to the author.
2. The first $1 million derived from the sale or license of any subsidiary right is divided 50/50 between author and publisher and any revenues above that are paid to the author.
3. The publisher has rights in any countries where it presently has offices and operations with the author retaining rights everywhere else. The countries should be listed.
In our first two reports, we concentrated on Amazon’s e-book sales. We analyzed the top 7,000 e-books in three bestselling genres [link]. Then we followed up with a look at all 54,000 ranked bestselling e-books on Amazon in a single day snapshot [link]. We now turn our attention to the next bestselling book and e-book retailer, Barnes & Noble. The methodology is the same. Barnes & Noble’s online store lists overall ranking for their e-books, and as with Amazon, current rank generally correlates with daily sales.1 We determined sales rates based on the sales of our own books and from data gathered from other authors. In all cases, the rates we collected were within 20% of each other. Adjusting rates even beyond this margin of error does not alter the percentages of market share shown in our pie charts — it simply adjusts the overall size of the pie.
Last year, Barnes & Noble reported that 25% of the Nook market was made up of self-published works [link]. We were curious to see if this meant 25% of the bestselling titles were self-published, 25% of the sales came from self-published e-books, or if self-published e-book sales accounted for 25% of the gross dollar market. As always, our primary concern here is where authors are doing better, sale for sale. It doesn’t help authors to say that 70% of the book market is in print if only a small fraction of that money ends up in authors’ pockets [link]. What we want to see is the combined effect of royalty rate, sales volume, and sale price. These three factors combine to give us a true picture of comparative earnings, as shown in our pie charts. Let’s see what our spider gathered as it snared 5,400 of Barnes & Noble’s top genre e-books in its digital web:
Just as we saw in Amazon’s store, indie titles make up a very large percentage of the bestseller lists. More than half, in fact.
Indie titles make up almost a third of Barnes & Noble’s e-book sales as well. The extent to which self-published content dominates Barnes & Noble’s e-book store is even more starkly apparent when the market shares of the Big-5 publishers are shown individually, rather than lumped together:
The Big-5 publishers still rake in the lion’s share of Barnes & Noble publisher dollars, as shown below:
However, publisher revenue is far less meaningful to authors than authorrevenue. And in Barnes & Noble’s e-book store, just as in Amazon’s case, we see that indie authors and small publishers are earning almost as much as all of the Big-5 combined:
. . . .
Far from being an Amazon-only or Amazon-created phenomenon, the market dominance of indie authors can also be seen here at the second-largest e-book retailer, Barnes & Noble. As some have opined, this reflects a much larger consumer-driven economic reality at work. Retailers and industry middlemen no longer dictate to readers what they should be reading. Readers now vote with their wallets, and everywhere we have thus far looked with our spider, readers are choosing self-published works at a higher rate than those by any other publishing entity.
. . . .
Publishing’s print retailers, print providers, and other businesses in the print supply chain clearly have reason to expand and simplify print distribution options for self-published authors. By doing so, they can increase their profitability and ability to serve consumers, while giving consumers the full range of quality content they demand. In fact, looking at the above chart might give Barnes & Noble a reason to reach out to indies for merchandising opportunities, and also to readers in order to promote these works.
. . . .
[A]t Barnes & Noble, just as with Amazon, best-selling indie content is better rated on average than best-selling traditionally published content. Our initial speculation about price correlating to average review score has since been disproven by others, who looked at our data more closely. We may be left with the conclusion that self-published works are outselling every other publisher by dint of readers simply liking them better.
PG says, given the generally poor placement of indie books on the Nook Store and its poor search capabilities, it’s interesting that indie book sales patterns for the Nook are so similar to those on Amazon.
The Author Earnings report also raises the widely-circulating, but never confirmed (at least to PG’s knowledge) report that the Nook Store sells top spots on its bestseller lists to Big Publishing’s books.
PG hasn’t commented on the paid bestseller spots before, but, if the reports are true, it reflects one of the dominant reasons why Nook is losing so badly to Amazon.
Customers, particularly online customers, particularly heavy readers, use bestseller lists to help them locate books they will like.
A customer-centric organization would never tamper with bestseller lists because doing so would not improve the customer’s shopping experience and satisfaction. If a customer is less likely to find a book he/she likes, that customer is less likely to buy in the first place, to return as often as he/she would if the store made it easier to locate desirable books or to return at all.
Smart ecommerce companies treat customer visits like gold. They never want to waste a single visit or send a customer away unsatisfied.
However, Barnes & Noble is a creature closely tied to Big Publishing and in Big Publishing, you can work your way onto the New York Times and Barnes & Noble bestseller lists without actually outselling books that aren’t listed. In Big Publishing, what’s best for the customer takes a backseat to generating cash in pay-for-play schemes.
One of the behaviors of traditional publishing that never fails to puzzle PG, regardless of how often he sees it, is that publishers don’t treat authors as exceptionally valuable partners – customers for publishing services, if you will.
Sweet talk often ends as soon as the forever publishing contract is signed. Marketers treat authors like cheap labor with clueless social media exercises. Authors are constantly blamed for poor sales regardless of the failings of the publisher. Royalty reports are a semi-annual insult, not just for the size of the royalty payment, but also for the impenetrable mass of numbers designed to obscure, not enlighten.
On the other hand, Kindle Direct Publishing explicitly regards indie authors as customers for its epublishing platform.
When customer-centric organizations compete with those which aren’t, guess who wins?
Here’s a hint: What would happen if the Seattle Seahawks played the Bayonne High School Bees?
A storm was created last week in response to Hugh Howey’s Author Earnings post. It was widely criticized by many but also praised. It started a lot of discussion.
Having read most of the back and forth, I did notice a few commonalities.
Some issues all sides generally agree upon:
1) Digital has demolished the distribution barriers to entry for self-publishing. Before digital a self-published author would have to pay to print and distribute books. That was an outlay of cash and inefficient. The author then went to indie bookstores to get distribution one book at a time. Hoping to eventually break through and signed a major deal. Today an author can upload their book and get instant distribution to the entire country. Sales can happen immediately. The goal may be to remain independent or to gain negotiating leverage with traditional publishers.
. . . .
4) Only those authors at the very top can “quit their day job.” There are enormously successful authors in both self and traditional publishing. But less than 5% can be a full-time author (possibly less than 1%). It is still tough, regardless of the path to market. There is a definite “95/5 rule” where 95% of the sales come from 5% of the writers.
. . . .
6) Without Amazon, not much of this would be happening today. Amazon controls the content; the distribution; the terms of the deal and even the pricing of self-published ebooks. Amazon has an exclusive on many of the titles too. These books have given Amazon leverage in their battle with traditional publishers. It’s unclear what Kindle’s market share of self-published books is, but it is quite possibly over 90%. Without Amazon creating the ease to market, self-publishing would most likely be small and not mainstream.
If it were worded, “Many authors who can’t quit their day job in traditional publishing can do so when they self-publish,” he would agree.
If it were worded, “Ebooks and Amazon make it possible for more authors to quit their day jobs than ever before,” he would agree.
It’s total income from self-published books, not a few blockbusters, that makes it possible for a lot of indie authors to quit their day jobs.
Those who think like traditional publishers assume that most authors will only have a limited number of books – publishing a book a year or less will limit the total body of work an author produces. Once a tradpubbed author’s books are no longer featured or even stocked in physical bookstores, income usually plummets.
On the other hand, the only restraint on an indie author’s profitable publishing output is his/her capacity to create books that readers will enjoy.
Here’s what 75 sales per month (way below blockbuster status) will do for an author with 40 ebooks on Amazon:
I had a fascinating conversation with Porter Anderson as part of The Booksellers #PorterMeets on Twitter on Monday. The topic was Hugh Howey’s AuthorEarnings project (after they released the original 7,000 report but before they released the 50,000 report) which has been raising hackles and causing ruckus in publishing the last few weeks. The conversation fired up loads of thoughts about self publishing and I wanted, following that discussion, to write a post that encapsulates the discussion and the reality of self publishing now.
The problem has been presented as an oppositional one, almost a battle between self publishing and traditional publishing. I think looking at it that way is useful in many ways but also obscures other issues too. Even so, in order to make sense of the current situation I’m going to explore self publishing from three perspectives in sequence, first authors, then publishers and finally readers.
. . . .
Well the truth is, if there was a war between self publishing and publishing, it’s over and authors (who are the major self publishers and hence the foot-soldiers, commanders and field marshals of self publishing’s forces) have won it. Yes, many people are still fighting that war, on both sides of the debate, and it may well be some time before the most reluctant publishers realize that their cause is lost, but the gains made by self publishing have been so pronounced, so rapid and what is most important, so irreversible, that it’s time to call it done.
To be fair, authors have had some powerful allies on their side in this battle. Most notable among them is Amazon, but the truth is that victory was in many ways assured before they even realized there was a fight at hand. Powerful forces were driving change and the industry in their direction before self publishing began to grow.
An often ignored precursor to this era of digital publishing was the emergence of cheap or free tools for digital authoring and editing and for digital packaging of content. If we were still using analogue typewriters or paper and pens, then the emergence of this vibrant field of self publishing would be harder to imagine. It might seem a simple and almost ridiculous point, but the revolution in creative tools has had a huge impact in the back office operations of publishers, made them more profitable, more efficient and lead to the creation of databases and servers of content, assets and items.
. . . .
Of course authoring tools on their own would not be worth a huge heap to writers unless they had ways to get their works into the hands of readers and digital distribution and e-commerce tools have made that possible, powered by a second more obvious force, the growth of the web and connectivity.
Without these forces doing most of the heavy lifting (these forces are also partly behind the success of businesses like Amazon, at least the second one if not the first, enabling the retailing giant to develop a business model that undercut existing retailers and took advantage of almost infinite shelf space to appeal to huge swathes of customers) authors and self publishing would still be clamouring for attention not demanding a place at the table.
Yet, despite their sense of achievement, authors will find that victory is not as sweet, as complete nor even as satisfying as it might appear. The main reason for this is that the very forces that are driving change and have swept them into a position of victory are opening up the doors for everyone else. As more and more writers release more and more material, the content space becomes more and more crowded. Where in print, books were as likely to be out of print ten years after publication as they were to be in print, now, with ebooks and digital publishing, they will remain available and competing forever. The reality of competing with everything that has ever been published is not going to be fun.
. . . .
The truth, one that publishers have been reluctant to admit, is that self publishing is a real threat to their position. It is the manifestation of the growth of author power that has been fostered by cheap digital creation, growing availability of digital distribution and increasing internet connectivity. These things have reduced the wrinkles of inefficiency in the book publishing industry, the very wrinkles upon which our major publishers have built their businesses.
. . . .
However, and playing to publishers strengths for adaptability, there is one big problem for everyone in the digital space, reinforced by digital trends towards more of everything, obscurity and competition for attention (as was correctly identified by Tim O’Reilly as far back as 2002!). One thing online marketing needs is hours something that can be best applied at scale. Another is depth (scale again) within and across verticles/genres/niches. One further advantage for online marketing is influence or the ability to drive conversations. Book publishers are exceptionally well positioned to use their superior capital, market knowledge (because most publishers publish more books than most single authors and so can gather data across a broader sweep) and influence to the advantage of their authors.
There is no doubt that certain brand name authors far outpace their publishers in recognition and attention stakes, but in general, for the vast majority of authors that is not the case, and even for those authors who do surpass their publisher, when the publisher can do such things more effectively, more efficiently and has a competitive advantage in doing them, the sensible thing to do is to trade some margin and let them do it.
. . . .
Despite what is being said about them, the major traditional publishers are in the process of changing (many of the smaller and mid-sized ones are too). I expect them to become much sleeker beasts in the decade ahead, concentrating more on the biggest authors than they even do now. I could be wrong but I’d see the industry leaders becoming more like studios than they currently are, applying capital to produce and market content as best they can, at scale, it will simply be more efficient.
There will be considerable casualties for certain and it may well be some people feel that the industry that emerges from this ongoing change is so altered as to be unrecognizable. There are unknowables too, like the prospects for continued conversion from print to digital. The quicker that happens the more bloody the change will be, in particular for the smaller and medium-sized publishers, the slower it happens and, with that slower pace, the longer bookstores survive in numbers, the better it will be for all publishers. What self publishing has done is show publishers that the rules that they have worked by for a while now, are broken or are breaking. They should know when to throw in the towel and accept that and accelerate the process of change that many have already begun.
This is a thoughtful and worthwhile essay and well worth reading.
With respect to the future of traditional publishers, PG will point out that most large organizations are best at wringing inefficiencies out of their traditional business processes and providing improved versions of their most profitable products serving the needs of their most profitable and reliable customers – brick and mortar bookstores in the case of traditional publishers.
When the history of the decline and fall of Big Publishing is written, PG expects one large chapter will be devoted to its inability to adapt to serve its suddenly largest customer – Amazon – and to efficiently make a transition from physical to online booksellers.
Amazon Derangement Syndrome will be viewed as a remarkably self-destructive phenomenon that sped publishers’ demise. Publishers’ reflexive embrace of their traditional sales channels in the face of new, more profitable online channels will be taught to future business students as something they must never do.
Many of those grounded in the world of traditional publishing see the proliferation of new titles enabled by Amazon and other online booksellers as a problem. PG disagrees.
Traditional publishing and physical bookstores segregate books into broad categories – Fantasy, Juvenile, History, Business. This is a marketing imperative for physical bookstores – there is only so much room in the store, signs identifying categories of books were in place and regular customers wanted to walk to the location of their favorite category of books to browse. Publishers require that new books fit into these categories because selling a Business Fantasy to Barnes & Noble is probably impossible. Where would you shelve such a book?
Online booksellers can potentially offer an infinite number of categories and subcategories. Amazon does this to some extent with its granular categories (although PG thinks they could do better). Mrs. PG and PG were recently discussing how her books have been highly visible on the Clean Regency Romance listings, for example.
What could be better for avid readers than more of their favorite kinds of books?
Indie authors are perfectly positioned to discover and exploit new reader niches, in part because they can bring books to market so much faster than traditional publishers and because indie authors don’t need to sell millions of books to pay their overhead.
PG believes those who see disaster in an ever-increasing number of books available for sale online are underestimating the intelligence of readers who regularly use Google to navigate the internet.
Categories, key words and terms used in book descriptions are all ways that indie authors and publishers can assist readers in locating their books. The internet itself provides fabulous ways for communities of readers with common interests to form, flourish and talk about their favorite books.
Traditional publishers are accustomed to living in a limited book world. Before Amazon, a limited number of retail locations sold their products. Since the bookstores are of a certain physical size, they can display only a limited number of books. The large majority of bookstores are in locations where it makes business sense to serve the tastes of the general reading public, including those who purchase two or three books per year rather than subsets of readers, no matter how enthusiastic those readers might be. Other than a small section of regional books, a Barnes & Noble in Texas looks pretty much like a Barnes & Noble in Minnesota.
Ultimately, traditional publishers are built to serve mass markets. Indie authors can do that, but they can also profitably serve an almost infinite number of niche markets.
On Amazon and other online bookstores, an indie author can sell a million books per month and get rich. Or an indie author can regularly sell 100 each of 20 different books per month and get by. Making more money than a typical tradpubbed author in the process of getting by.
I was staring at a dinosaur–an old-school publisher.
When I say “old-school publisher,” I’m not referring to just a traditional publisher; I’m talking about a publisher who apparently isn’t used to working with agents. I hadn’t sold a project to this publisher for decades, but one of my clients had created a proposal for a book that seemed a perfect fit for this niche publishing house.
As I anticipated, the publisher offered my client a contract. But the agreement reflected an old-school mentality toward authors. In essence, the publisher wanted to retain complete control over every aspect of publishing with no guaranteed input from the author. For example, the publisher could hire a writer to make the manuscript into whatever the publisher chose, and the author would foot the bill for that writer–all without the author having any say in whether a writer should be hired; who that writer would be; or how the manuscript would be changed. The publisher also proposed a two-book option at the same terms as the current contract; the ability to put in the book an ad for any product the publisher chose without the author’s input; an out-of-print clause that guaranteed the book would never go out of print, etc.
I rolled up my proverbial sleeves and went to work on making the contract a document that reflected a process an author could live with.
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Then the dinosaur (probably the executive team) woke up and realized this wasn’t a contract it wanted to honor. The publisher withdrew the offer.
When I asked why this decision had been made, I was told that my client probably should self-publish because she was unrealistic in what the role of an author was, that she didn’t trust the publisher so how could the relationship ever work?
What a perspective! As I was negotiating the contract, the editor would explain that certain egregious clauses existed to protect the publisher from “worst case scenarios.” Yet, when I added or changed elements of the contract to protect my client from worst case decisions on the publisher’s part, the publisher declared my client a perfect self-publishing candidate.
PG sometimes gives agents a hard time, but sends kudos to Janet for pushing to turn a terrible contract into something her client could live with.
In this case, the publisher withdrew its offer, which was probably the best outcome for the author, given the publisher’s attitude and style.
An author or any other prospective party to a contract can learn a lot about who they may be doing business with through the negotiation process.
Most of the time, during contract negotiation, each side is trying to show their best face because, at least at the beginning, each side had the idea they wanted to do business with the other.
The behavior of each side is unlikely ever to be better than it is during negotiations. If the opposing party is a jerk during negotiations, they’re probably going to be a bigger jerk after you enter into thc contract. If the opposing party is rigid and unyielding during negotiations, ditto after you sign. If the other side doesn’t give serious consideration to your concerns during negotiations . . . you get the idea.
Unlike selling a used car, where you’re done with the purchaser once you get the cash, entering into a publishing agreement is the beginning of a long-term business relationship.
If you think a tough publisher was hard to deal with during negotiations, wait until after you sign the contract. And, remember, since most old-style publishing agreements are for the length of your copyright, you’ll be linked to that difficult publisher for the rest of your life.
PG has mentioned before that, as a class, publishing contracts are the most unfair and one-sided of any of the many different types of contracts he’s dealt with over his legal career. Plea bargains for drug dealers are more balanced than some publishing contracts he’s reviewed.
The good news for authors who want to work with a publisher is that a few publishers understand their contracts can make or break a deal and are introducing far more reasonable terms into their boilerplate. The bad news for authors is that most publishers haven’t reached that point yet and some will go bankrupt before they do.
However, from the publisher’s viewpoint, if most authors sign whatever the publisher puts in front of them, why not load up the contract with everything the lawyers can think of?
One thing a smart negotiator always keeps in mind is the “or else” option. Negotiation theorists call this BATNA - Best Alternative to a Negotiated Agreement. If the parties are unable to agree, what will happen to each of them?
Most publishers think their BATNA for most failed publishing contract negotiations is to move on to the next sucker author who wants them to publish a book.
Until recently, most authors saw their BATNA as going back to the long and soul-crushing process of trying to find a publisher.
As Janet’s article indicates, the self-publishing BATNA is in the process of significantly changing the negotiation dynamic between authors and publishers.
PG was interested to note that the publisher Janet describes suggested self-publishing was the best alternative for Janet’s client if the client didn’t like unreasonable contract provisions.
PG doubts he would find much common ground with this publisher, but he does agree with that suggestion.
So, self-publishing and traditional-publishing author Hugh Howey published a report on some data he pulled from Amazon and crunched . . . purporting to show some things about the number of self-published books compared to those from traditional publishers. This has touched off a lot of blowback in the last couple of weeks as everyone and their uncle has attacked the data set for not being comprehensive.
Howey has some interesting things to say, to be sure. Across 7,000 titles, Howey noticed that those from Big Five publishers tend to have the lowest average star rating, but the highest average price. He wondered if those two statistics might be related—that people’s amount of satisfaction relative to the amount they paid drives lower star ratings. He also noted that Big Five published titles made up only 28% of the titles on genre bestseller lists, and only 34% of daily genre unit sales (as estimated by sales rankings)—which is to say, the minority of the books sold. Furthermore, his data suggests e-books (in the form of Kindle books) made up 86% of the top 2500 and 92% of the top 100 selling titles from the genres.
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[N]o matter what the percentages are, it’s abundantly clear there are plenty of people making a go of self-publishing now, in ways that simply were not possible before e-books and especially the Kindle.
It used to be that the only way to get your book out there to a wide audience was to publish through a traditional publisher. When you did that, you didn’t have a lot of control over how it happened. The publishers controlled the vertical and the horizontal, and you took what crumbs they could give you and were grateful. But now there’s another way.
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Does it matter whether self-published author revenue makes up 30%, 40%, or 50% of daily revenue earned by authors from Amazon? Not really. All we need to know is that it’s a big, non-trivial chunk of revenue, no matter what the real size of the chunk actually is. Maybe Howey is off on the size of it in one direction or another, but there can be no question that it exists. And as he gets more data, the numbers should become more accurate.
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Small wonder that publishers are starting to feel threatened. What if everyone—or even just a whole bunch of people—decided they were no longer necessary? They can’t publish good books without decent manuscripts. Whether that’s actually likely to happen is not clear, but from all the vitriol coming out of publishing industry mouthpieces, it sounds like they’re certainly worried about it.
Link to the rest at TeleRead and thanks to David for the tip.
Passive Guy would add that publishers don’t have to lose all the good authors to self-publishing to be harmed, perhaps fatally.
Trade publishing is a narrow-margin business with high fixed overhead, primarily salaries and rent. It is also absolutely reliant on bestsellers. If a publisher manages to grab a Hunger Games or Fifty Shades, it has a great year or, with sequels and movie deals, several great years. Since the majority of books break even or lose money, those bestsellers are the difference between profit and loss.
The Author Earnings report focused on ebook bestsellers.
Big Publishing is psychically invested in the idea that indie books are those that BP could never have made money on.
If indie books aren’t bestsellers or if BP can grab the one-in-a-million indie author who somehow emerges from the primeval swamp and sells well, then the future of Big Publishing looks pretty much like the past did.
However, if the next Fifty Shades or Hunger Games starts indie and stays indie, the sun is setting on the publishing empire. The bean-counters at the big media conglomerates that own Big Publishing will send the band home and shut off the lights or, perhaps even worse, move the party to a Chuck E. Cheese in New Jersey.
The reason that Hugh and Author Earnings have generated such a hissy-fit in the publishing establishment is because they have intimated that which must not be spoken: Bestsellers ≠ Big Publishing.
On Radio 4′s Today programme this week I overheard a discussion between climate change denier Nigel Lawson and the climate scientist Sir Brian Hoskins. It ought to have been a slam-dunk for Hoskins. Not only is Britain experiencing the worst floods in a life-time, but no serious person now denies that man-made climate change is a reality. But actually Lawson came out on top. Where Hoskins expressed quite reasonable scientific doubt, Lawson was confident, bombastic, and assured. Lawson’s best rhetorical technique was to use Hoskins’ words against him. Picking up on Hoskins’ uncertainty, Lawson said he agreed with the scientist that “nobody knows” whether there was a connection between the current weather and global warming. “I don’t blame the climate scientists for not knowing,” said Lawson. Hoskins’ hesitant retort, “we are very sure”, just didn’t cut it.
The conversation reminded me of the publishing industry’s response to author Hugh Howey’s AuthorEarnings website and his first report, based on an Amazon scraping exercise. Howey says he has created the website to lobby on behalf of authors. Gathering and sharing information is its primary aim, but the “secondary mission is to call for change within the publishing community for better pay and fairer terms in all contracts”. His first report has analysed “nearly 7,000 e-books from several bestselling genre categories on Amazon”, using the relative positions of the titles in the bestseller lists over on 24-hour period to extrapolate some broad conclusions: like for instance the relative annual earnings of authors over a full year, or the number of bestsellers being published by traditional publishers compared to self-publishers.
Sounds ambitious? It is. But Howey is unabashed. As he writes: “What emerges is, to my knowledge, the clearest public picture to date of what’s happening in this publishing revolution.”
Privately publishers and industry technologists are scathing about the approach. Words such as “misinformation” and “bad data” abound. The charge, as Porter Anderson, writes here, is that Howey does not understand the publishing business, and his “loose use of data” is serving to create a misleading view of publishing. Mike Shatzkin is one of the few industry observers to have written publicly about it. He view is that the report is potentially “toxic to consume” with Howey drawing some “breathtaking (and breathless) conclusions that go way beyond what the data could possibly tell anybody”.
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But Walter’s blog also inadvertantly sums up the problem for traditional publishers. Having said he finds the data shonky, Walter adds: “But, in the absence of transparency from the industry itself (either Amazon or the Big 5) it’s the best data we writers have access to. And the story it tells is shocking.”
In other words, the data may be screwy, but I’ll buy into it anyway.
The truth is there is nothing wrong with the data, so long as its limitations are understood. Helpfully, Howey provides an excel download, so if interested parties wish to interrogate it further, they can. They can even produce their own analyses.
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Howey is critical of big publishing and its over-reliance on BookScan. In The Bookseller, he said publishers want to have control. But this is inaccurate. Publishers don’t control BookScan: that data is derived from bookshops tills (including virtual ones). Much of the data BookScan publishes has the potential to make publishers wince, but I can’t remember the last time one complained to me about it. Similarly, publishers don’t ignore data about the self-published market, they simply don’t have access to it. If Amazon allowed its e-book data to be used by BookScan (as it does its print book sales data) our understanding of this world would change overnight. Yet, I cannot find a word of rebuke offered to Amazon in Howey’s report. I cannot explain Howey’s omission. If I really wanted to shed light on this world, I would ask the one individual capable of switching on a torch to do so.
Perhaps the most fascinating aspect of the entire Author Earnings episode for PG has been the extraordinarily overwrought response it has engendered from traditional publishing and its assorted hangers-on.
Indie authors just can’t, can’t, can’t be selling more ebooks anywhere on Amazon than tradpub is. Indie bestsellers just can’t, can’t, can’t be making more money that tradpub authors are. They just can’t.
The vitriol and mathematical illiteracy have flowed like half-priced beer during Happy Hour.
A psychoanalyst might observe, “I can see we have some real issues here.”
A dispassionate viewer might consider this outsized reaction to a one-day screen-scrape of Amazon genre titles and conclude several things:
1. Hugh has made visible what Big Publishing has been seeing (and hiding).
2. Amazon Derangement Syndrome is mutating into a more virulent form.
3. Tradpub is feeling a little tippy these days.
Or it might just be people cutting their pills in half. Again.