Passive Guy

The Opposite of Legacy

30 August 2014

From Joe Konrath:

So I just read the latest drivel from The Guardian which completely misrepresents self-publishing. There’s no need for me to fisk it–Howey, Eisler, Gaughran, and others already shredded the stupid in the comments. And there was a lot of stupid. It makes me ponder how the mainstream media keeps getting so much wrong.

It also makes me ponder why self-pubbed authors care.

As far as mainstream media, I can point to lazy reporting, willful ignorance, nepotism, and not-so-hidden agendas. This blog has a long history of pointing out why legacy publishers do what they do, and their priorities often coincide with those of the legacy media.

. . . .

Years ago, Eisler used “legacy” to describe traditional publishing, and I’ve played a small part in popularizing the term on this blog. Indeed, the paper publishing industry is a legacy system. There are now faster, cheaper, and less-restrictive ways to get words to consumers than the antiquated method of acquiring, printing, and shipping.

The legacy publishing world knows this, and they have been putting up a continuous, united front to preserve this status quo while doing their best to inhibit the widespread adoption of ebooks. They’re so single-minded in this pursuit, that they are missing opportunities to capitalize as much as they can on this new tech, instead trading potentially higher profits to retain a paper oligopoly.

I call self-publishing a shadow industry because the mainstream has steadfastly refused to understand its scope and power. Self-publishing is the most serious threat that legacy publishers must face, but legacy publishers don’t realize it is a threat. They don’t see the money being generated. They don’t see the scale of authors adopting it. They haven’t been hurt enough to acknowledge that a revolution is even taking place.

. . . .

If the mainstream news is just as antiquated, biased, self-interested, and increasingly obsolete as mainstream publishing, isn’t it also a legacy system? Hachette isn’t reading my posts and admitting I’m right, then following my advice. Why would The Guardian or the NYT or PW listen to me or any other self-pubbed author? The legacy media are facing the same problems as legacy publishing; digital replacing paper, readers going elsewhere for information and entertainment, talent creating content without them and building their own followings and fanbases.

As a writer, I once craved the validation that came with a legacy publishing contract. I felt it legitimized me. Once I was accepted, I experienced a sense of fulfillment. Getting a PW starred review was a victory. Seeing my book on a library shelf was its own reward.

Now I realize how empty those feelings were. Getting paid well and being treated fairly is much more fulfilling that the approval of a clique. Having power and control over my career trumps seeing my book in Wal-Mart. I don’t care what the legacy publishing industry thinks of me, or of self-publishing. We’re going to outlast them.

. . . .

What is happening is an echo chamber on both sides. Legacy authors, and those who want a chance to be legacy authors, continue to defend the status quo. Indie authors continue to point out the stupidity exhibited by legacy authors, publishers, and media. The only time anyone will change their mind is when they have direct experience of one, the other, or both.

. . . .

Evolution isn’t about choosing sides. It’s about slowly adapting to new environments. The Guardian doesn’t want to adapt? They’ll be forced to deal with the consequences of their actions. Click bait and concern trolling isn’t going to pay their shareholders. Like the Big 5, the days of Big Media in its current form are numbered. There is still some money to be squeezed out of it, but status quo bias is an indicator of desperation, not growth.

Self-publishing may always be a shadow industry. The media may not ever discuss it. The Big 5 will continue to ignore it. And that’s okay.

As writers, we can continue to inform one another, share data, and point out stupidity. This is helpful.

But it isn’t vital. Change will come even if we all remain silent.

Link to the rest at Joe Konrath

Here’s a link to Joe Konrath’s books

As usual, Joe makes some excellent points.

It doesn’t matter what the Guardian or the Times say. It doesn’t matter what a group of rich tradpub authors say. The PR strategies of Hachette and other large publishers will have no effect on the ultimate outcome of the disruptive change that is taking place in the way books are created and consumed.

Technology disruption is based upon some iron laws, some of which are relevant to the book business:

1. Cheap beats expensive.

2. Even if cheap isn’t as good as expensive at the beginning, it will catch up.

3. Bits always beat atoms for the dissemination and consumption of information.

The contents of books are information. Bits – the basis of digital representations of information – are virtually free. Yes, the infrastructure required to distribute and consume bits isn’t free, but once it’s in place, sending trillions of additional bits through that infrastructure is virtually costless.

Nobody charges you any more money when you download hundreds of ebooks from Project Gutenberg instead of just one book. It costs Amazon almost nothing to make and distribute 100 copies of an ebook file to sell to 100 different customers. Credit cart fees are probably the largest per-ebook cost for each incremental sale.

Traditional publishers are primarily focused on the atoms business – hard copy books. Traditional bookstores require a lot of atoms – bricks, bookshelves, etc. – to remain in business. Atoms cost money. The atoms for two bookstores cost more than the atoms for one bookstore.

The value-add of traditional publishers is all on the atoms side. Creation of physical books is an industrial-age process involving paper mills and printing presses and ships and trains and trucks moving boxes of books around, ultimately delivering them to those big stacks of atoms called bookstores.

Success in the industrial, mass-production world of atoms requires scale. Huge publishers dealing with millions of physical books have a substantial financial advantage over individual authors in a world where mass quantities of atoms are cheaper to create and deal with on a per-atom basis than smaller quantities of atoms.

Life is much different in the post-industrial world of bits. An author sitting at a personal computer can create all the bits necessary for an ebook without any assistance from any third party or any incremental cost. A personal computer costs as much if you use it for surfing the web as it does if you use it for writing a book.

Once an author creates the bits for an ebook, the author can send those bits to a dozen ebookstores for no additional incremental cost. An internet connection costs as much if you use it for surfing the web, etc., etc.

Once the bits arrive at the ebookstore, those bits can be offered for sale at an infinitesimally small incremental cost to the ebookstore.

The ebook monetization process includes no industrial-era components and no industrial-era advantages for Big Publishing. Not only is the author is the most important part of ebook commerce, the author is the only necessary part of that process other than an ebookstore.

At the moment, the atoms-world publishers are leeching off the bits-world of ebooks and ecommerce, but their ability to continue to do so is entirely dependent upon the willingness of authors to be hosts to which the leeches attach.

As Joe implies, the enthusiasm tradpub authors express for the legacy publishing business is in direct proportion to their ignorance of what is happening in self-publishing. To put it very directly, the dumber the author is about self-publishing, the more likely he/she is to be an ardent supporter of Big Publishing.

On Agency Clauses

29 August 2014

From Adventures in Agentland:

A typical agency clause will read something like:

Author authorizes Agent, located at (ADDRESS), to collect all gross sums of money due under this Agreement. Any receipt of such sums shall be a good and valid discharge of Publisher’s obligations to make payments to Author. Agent is empowered to act on behalf of Author in any and all matters arising out of this Agreement.

In the article, the author addresses why this is problematic, and recommends either not having this clause, and having all money go directly to you, or modifying it to be revocable at any time.

For the record, I HIGHLY respect SCBWI, and I HIGHLY respect the author of the article. The intention behind it is very good, and authors SHOULD think about what they’re agreeing to; it IS problematic if you’ve signed with a “schmagent” – someone who disappears, along with your statements and royalty checks, leaving you high and dry.

I shared my post with Sara Rutenberg, the author of the SCBWI article, who pointed out: “Unfortunately, there are so many agents out there who are unscrupulous. The column was written in response to a number of people who found themselves in [the position of being with an agent who is not remitting timely or disappears]. It is critical to [discuss the agency clause] up front, or people will not feel comfortable taking actions needed to protect themselves.”

. . . .

I think it would be a mistake to feel that you are getting a bad deal from, or not sign with, an agent or agency that insists on this language.

Why?

There are several issues with direct payments. If you have your royalty statements and payments coming to you, instead of your agency, you would be responsible for remitting your agency’s commission and, at the end of the year, also remitting a 1099 to that agency for what you paid them. I actually can’t imagine that any foreign publisher would be ok sending payment to the author, instead of the foreign co-agent who brokered the deal – but, in that case, you’d be responsible for remitting payment to your agent, your co-agent, and dealing with any tax withholdings applicable to the specific country’s laws when you pay your co-agent (and then have to remit a tax form to them, too, at the end of the year).

You would also be responsible for sharing statements with your agent(s). Why? We need to check them! Think mistakes never happen? Think again!! It is part of my job to monitor any statements that come in, to be sure everything is calculated and reported correctly.

. . . .

You can absolutely discuss the split payment option with your agent upfront. However, keep in mind that not all publishers will agree to this (particularly in the case of subsidiary rights), which is why an agent may not agree to contractually be obligated to secure split payments for you.

. . . .

But, as I said, this isn’t something every agent will agree to, even if discussed upfront. And that doesn’t have to mean the agent is a schmagent, or that you’re getting screwed. The agency clause is VERY common. At the end of the day, if you have doubts about whether or not you can trust your agent to handle funds or statements – why are you signing with this person?! I think the true warning, and really, what Sara was after too, should go against schmagents, rather than the agency clause. You sure as heck should have done your research to make sure the agent offering rep is legit.

The agent-author relationship should be one of trust. If you’re worried your agent is going to, or currently is, screwing you over…you’ve got issues that need to be addressed immediately, either in conversation with your agent, or by parting ways/not signing with that agent.

Link to the rest at Adventures in Agentland and thanks to Sandra for the tip.

The original post is incoherent in spots, so allow PG to clarify a few points:

1. The agreement between author and agent as well as an agency clause in a publishing agreement should always provide for split payments with 85% going directly from the publisher to the author and 15% paid to the agent. Each payment should be accompanied by a royalty report delivered to both the author and the agent.

There are no benefits and many potential downsides for an author to have the entire royalty check sent to the agent. At a minimum, there will be an unnecessary delay of a few days or a few weeks between the time the royalties are paid to the agent and the time the author receives his/her share of the royalties.

And if an agent runs into financial troubles or develops a drug habit . . . . Stories of agents stealing from authors are legion. PG believes most agents are honest, but everyone is better off to avoid the possibility of temptation. An old Mark Twain (PG thinks) saying applies here, “Many a man has been saved from sin by the lack of opportunity.” Mark Twain spoke before gender language equity, but the saying would also apply to many a woman.

2. PG usually doesn’t play  the lawyer card, but the advice to check out your agent and go on trust (instead of a proper contract) is typical of the way non-lawyers think about business relationships. And very few agents are lawyers.

How long does the contract last? While PG strongly objects to their length, a typical publishing contract lasts for the life of the author plus 70 years in the US and for a similarly long time in most other industrialized nations.

Under a standard agency contract, how long will the agent be collecting royalties when an author signs a typical publishing contract? You guessed it, the life of the author plus 70 years.

Agents die. Agents go out of business. Agents sell their businesses to other agents. Agents merge their businesses with other agencies. The probability that the agent who sells a book to a typical publisher will still be around when the publishing contract finally ends is very close to zero. The probability that, at some time during the life of the publishing contract, a total stranger will take over administration of the contract in place of the original agent is close to 100%.

Your original agent could be the Mother Teresa of the agent world, someone who would never, ever do anything to harm an author under any circumstances. But, when Mother Agent goes to her heavenly reward, she could be succeeded by Mother Devil. You don’t want Mother Devil’s hands on your money.

3. PG could mumble on about other problems with the original post, but he won’t. Like many other fields of human endeavor, some agents are wonderful and capable, other agents are terrible and incompetent and most are somewhere in the middle.

Some of the problems with agents are a result of the fact that anybody can call themselves a literary agent regardless of qualifications or the lack thereof. Cathy Convict could walk out of a twenty-year stretch in Folsom Prison on Monday afternoon and set herself up as Cathy Agent on Tuesday morning.

For all their shortcomings, lawyers must hold a valid license to practice law. For all their shortcomings, bar associations can and do cause lawyers’ licenses to be yanked if the lawyers don’t follow the rules. Clients can file complaints with bar associations without hiring a lawyer to assist them. For all its shortcomings, the threat of losing a license helps keep lawyers in line.

If a lawyer does what virtually all agents do – receives all the royalties payable under a publishing contract, then pays the author 85% of the proceeds – the lawyer would be required to maintain a trust account separate from any other bank accounts for the purpose of holding client funds. The lawyer would have to deposit the publisher’s check into the trust account and pay the author directly from that account. The trust account is subject to audit by the bar association to make sure client money is handled properly.

Trust account mismanagement is one of the quickest ways to lose a law license. A complaint from a client to a bar association about trust account problems may be the best way to fast-track a bar association investigation of that lawyer. A lot of lawyers (including PG) strive to avoid receiving client funds in order to stay clear of potential trust account issues.

None of these safeguards apply to a literary agent. There is no agent’s license to yank. The agent may have a trust account, but nothing requires the agent to put all client funds in the trust account. If a client has a complaint about improper behavior by an agent, there is no agents’ bar association where the client can lodge a complaint. An author has no way to resolve a large problem with an agent short of hiring an attorney and, if that doesn’t work, filing suit against the agent.

Disruptive Innovation Theory Revisited

26 August 2014

From Off White Papers:

Perhaps it was on the limb-strewn battlefields during the Franco-Prussian war in the 1870s that one disruptive innovation gained great favor with a whole generation of adherents. Young doctors on the frontlines readily embraced Dr. Joseph Lister’s new and rather simple technique for combat triage using anti-septic surgery for life-saving amputations and skin piercing compound bone fractures. Previously almost any large incision resulted in death from infection caused by unsanitary conditions.

Lister’s carbolic acid concoction was easy to use and quite effective at getting the job done even in the field of battle. It prevented infection from what turned out to be airborne microbes. Unfortunately the U.S. medical establishment did not embrace Lister’s radical idea of germ theory even when presented with incontrovertible evidence. They defended the long-standing medical wisdom that bad air or miasma were the source of infection, and not invisible microbes. Germ theory was outright rejected. While there was ample documentation and statistics provided by Lister to the AMA and the establishment, it would take a public outcry after the assassination attempt and the unfortunate, and probably avoidable, death of U. S. President James Garfield to create a serious enough crisis to challenge the entrenched thinking of the old guard. A paradigm shift was at hand.

The medical establishment’s resistance to Lister’s technique is an instructive narrative in trying to better understand innovations that, on the face of things, should catch on and spread rapidly. Yet in certain domains, where entrenched worldviews, attitudes and values are deeply woven into the societal architecture, innovation can come to a grinding halt. This is particularly noticeable in those domains with multiple stakeholders whose identities and livelihoods are being challenged by the threat of innovation. In those situations where simply getting well-defined jobs done a product or service’s utility is the main driver. But in those domains where stakeholders’ identities are being challenged the identity function can often overwhelm the more straightforward utility of the innovation. In turn, the predictive power of disruptive innovation theory is diminished.

. . . .

Inherent in every product or service is both a utility function and an identity function. Understanding each of these functions and the interaction between the two might shed light on some of the anomalies observed in the original theory. It appears that in utility-centric products and services such as mini-mills, semi-conductors, disk drives, MP3 files, Wikipedia, Amazon and the like, the original theory does keep its predictive potency. Consumers and non-consumers with no vested interest in anything other than “getting the job done” will change behaviors quickly and readily with little anxiety. They are simply focused on the product or service’s utility—and the incumbent will be disrupted. All you need to think about is how quickly we “consumers” (or the new “non-consumers” as the case may be) migrated from vinyl to cartridge to cassette to CDs to MP3s on our iPods; from Encyclopedia Britannica to Wikipedia; from Borders to Amazon.

In utility-centric innovations water runs downhill; there seems to be very little consumer resistance to successful adoption and diffusion. Resistance to change, however, does often come from within from industry incumbents whose jobs are dependent on maintaining the existing business model and power dynamics. As Upton Sinclair said “never expect someone to understand change when their livelihood depends on not understanding it.”

. . . .

ITunes successfully introduced modularity to the consumer who could now buy singles rather than an entire album to the dismay of most record industry executives and to the occasional artist protestation. The interdependence created by having to buy 16 songs when you only really wanted four might have been highly profitable for the record companies but over-served the consumer at a cost substantially higher than purchasing the four singles. No wonder, as the original theory neatly predicted, disruption in the music industry was fast and ugly.

In high-identity domains, however, products and services are almost always highly interdependent and successful modular architecture is elusive. Even when the consumer is over-served and the price too expensive, and modular solutions are “good enough” resistance is still encountered.

Link to the rest at Off White Papers

“in certain domains, where entrenched worldviews, attitudes and values are deeply woven into the societal architecture, innovation can come to a grinding halt. ”

Sounds like traditional publishing.

For PG, understanding the difference in disruptive innovation for products that present a utility function vs. those that present an identity function was useful.

He would suggest that for most readers, books serve a utility function. Whoever can provide the reader with a book that pleases the reader most efficiently will get the reader’s business.

On the other hand, for publishers and agents and booksellers and many traditionally-published authors, books are definitely the basis of identity and serve an identity function. “Literary culture” is a pure identity construct.

Clearly, the value of the identity as an author whose books are the product of a well-known publisher outweighs the increased monetary value that self-publishing presents to a significant number of traditionally-published authors. Hence, some tradpubbed authors feel impelled to vociferously trash indie authors to protect the value of their identity. Indie authors are breaking the rules that underlie that identity.

The identity function is also prominent in the rapturous descriptions of the joys of purchasing physical books in an physical bookstore. For a reader who finds a basis for identity in being a “book person,” as well as for booksellers and producers of physical books, the physical-bookstores-for-physical-books meme, complete with deep conversations concerning the merits of one book over another, Amazon is anathema. Clicking “Add to Cart”  just doesn’t bring on the rapture for these people.

However, pursuing the book-person identity as a reader requires access to a bookstore and a decision to devote time to the browsing/discussion/purchasing pursuits instead of competing pursuits like making a living, family life, GOT or actually reading books.

PG suggests that the Amazon vs. the rest of the world battle will be fought and won with readers and that, for the vast majority of readers, books serve a utility function. For utility-focused readers, the combination of ebooks and Amazon’s convenience and pricing are the clear winner, disrupting and replacing the traditional world of books.

The book identity group is simply unable to impose its will on the online Amazon market at least in the United States. We do see organized attempts by book identity people to hamstring Amazon with pricing, taxation and other impediments in some non-US jurisdictions, but PG believes any success in these attempts would be a Pyrrhic victory because interfering with the tremendous reader benefits of ecommerce coupled with ebooks with lower prices would result in fewer readers buying fewer books.

No one has compared Jeff Bezos to Joseph Lister, but PG suggests Amazon’s efforts to make books cheap and easy to purchase is, in its own way, just as life-saving for literature and reading in the 21st century as carbolic acid was for the wounded combatants in the Franco-Prussian War.

And ebooks smell a lot better than carbolic acid does.

Amazon ignites culture clash over France’s beloved bookstores

24 August 2014

From The Seattle Times:

Like many of the bouquinistes, the booksellers who line the banks of the Seine in the French capital, Bernard Terrades is a bit brusque.

Terrades specializes in thrillers, and he speaks in the clipped, precise patois of the literature he sells. And he regards the rise of Amazon, currently at the center of a heated French debate over e-retailing, as more than a little sinister.

Terrades fears that online bookselling, which Amazon.com dominates in France, is robbing the country of its culture.

“It’s completely empty,” Terrades said. “There is no connection with customers. People have lost the curiosity to go out and find books.”

All of which makes Terrades’ decision to sell books through Amazon’s marketplace wrenching. When online shoppers happen upon his digital storefront on Amazon.fr, they’ll never hear him wax on about the exploits of Hubert Bonisseur de La Bath, the superspy creation of Terrades’ favorite author, Jean Bruce. Instead, they’ll see the uniform, lifeless Web page where Terrades sells his books alongside thousands of others.

“It really hurts me to do it, but I don’t have a choice,” said Terrades, whose Amazon sales account for about 20,000 euros ($26,477) a year, roughly 20 percent of his revenue. It’s what enables him to employ a part-time staffer to keep his bookstand and bookstore alive.

Like many French, Terrades is torn over Amazon. It has become a fixture in French literary life, a force that can’t be ignored. It’s so powerful that the French government recently passed legislation with no other goal than to thwart the Web giant. Dubbed the “anti-Amazon law” by the French media, it went into effect July 10 to combat what Culture Minister Aurélie Filippetti called Amazon’s “dumping” of low-cost books in France in order to protect independent bookstores. It prohibits online retailers from discounting books or offering free shipping.

. . . .

“They come to Europe and they try to use the same business model,” said Kiran Girotra, professor of technology and operations management at INSEAD, a top European business school based in Fontainebleau, just south of Paris. “[It] hasn’t worked as well.”

That is a risky place for Amazon to be, perhaps more so than for most companies. Meteoric growth has always been the fuel that powers Amazon’s financial engine. Wall Street has long been willing to give the company a pass on slim profits, or even losses, as long as revenues continued to soar.

But Amazon’s international operations grew just 14 percent last year, to $29.9 billion. Many companies would be happy with that, but it’s just half the pace of its more mature North American unit, which grew 28 percent, to $44.5 billion. The weaker international performance, which also includes sales from emerging markets such as China and India, dragged Amazon’s overall growth down to 22 percent, a sharp drop from the 27 percent posted in 2012.

. . . .

The battle in Europe is as much cultural as it is financial. In France, the government moved to protect independent bookstores, as it has for years, because books hold a revered spot in a country that’s produced literary giants such as Voltaire and Proust.

In Germany, Amazon warehouse workers are fighting for a union contract because unions are deeply revered as part of the country’s fabric. And in the United Kingdom, lawmakers from across the political spectrum have chastised Amazon’s tax strategy for not paying its fair share.

To some extent, Amazon is battling cultural currents.

“These are uncontroversial issues,” said Girota, co-author of “The Risk-Driven Business Model,” which praises Amazon’s skillful shifting of strategy to adapt to evolving market challenges in the United States. “These are part of the broad social contract.”

Amazon, never averse to conflict, continues to battle its opponents in Europe. Executives say the clashes haven’t curbed sales; instead, they blame the slower growth on Europe’s moribund economic recovery. And they insist customers there want the same things its U.S. customers crave: low price, wide selection and shopping convenience.

“I don’t see people in Europe waking up in the morning saying I’m not going to shop at Amazon because I don’t like them,” Xavier Garambois, vice president of Amazon’s European retail operations, said in an interview at the company’s European headquarters in Luxembourg.

Link to the rest at The Seattle Times and thanks to CG for the tip.

The real problem, in PG’s eyes, is that the traditional guardians of literature both in the US and in Europe were presiding over a long decline in that business as the Internet and its myriad attractions were rapidly gaining an audience, particularly, but not exclusively, among the young.

Books were a stagnant business, headed toward a backwater. Bookstores were closing before Barnes & Noble and Borders exerted commercial pressure on them to close. Then Borders cratered.

PG says that Amazon saved books both as a commercial proposition and as a moving force in culture from the inept and blinkered grasp of a publishing business that, while once diverse and energetic, had become more and more concentrated into large media conglomerates which are surely among the most anti-creative organizations ever conceived by humankind.

Ebooks and a superb ebook store have reinvigorated both the purchasing of books and the culture of books. Millions of people who had given up visits to physical bookstores have regained their enthusiasm for reading via tablets and ereaders and an enormous range of choices in reading material that the corporate publishers deemed too non-commercial, not something you could put on the front tables at Barnes & Noble.

Amazon gave an Internet with an endless range of choices an internet bookstore with an endless range of choices. Books are much better off in this environment than they were in a world of narrow curation and bottom-line publishing.

Simply put, the literary, bookselling and publishing establishments were killing books with an exclusionary and elitist attitude coupled with an accountant’s obsession with quarterly profits. Amazon has opened the gates to an enormous democratic wave of authors and their books. Readers everywhere are responding to this wave with their dollars, euros and pounds.

And now, what the establishment can’t accomplish in free marketplace, it is trying to achieve with corrupt backroom political deals.

Amazon’s awful war of words: How an iron-fisted PR strategy went off the rails

21 August 2014

From Salon:

Since 1948, Highlights for Children (“Fun With a Purpose”) — a magazine most of us have only ever encountered in pediatricians’ waiting rooms — has featured a cartoon called “Goofus and Gallant.” Intended to teach kids the basics of courteous behavior, it stars two boys who illustrate the right and wrong way to behave in various situations. “Goofus and Gallant” has gone on to inspire some dark adult imaginings, but never before has it seemed so perfectly applicable to the book business.

That’s because lately Amazon has become the Goofus of publishing news, the surly, inconsiderate and gauche kid who never seems to get anything right. This is not to say that Amazon is any less powerful in the marketplace or less likely to triumph in its ongoing war against book publishers. But on the P.R. front, in its most recent battle against the Hachette Book Group, the online retailer has stumbled again and again.

. . . .

Amazon has long been a tight-lipped operation, refusing to release hard information to the press (which to this day has never received figures on just how many Kindle e-readers the company has sold) and communicating through the rather arcane medium of the forums on its own site. This strategy, however, was patently inadequate to the sudden onslaught of high-profile bad press. It kept coming, too, zeroing in not just on the company’s dealings with book publishers, but also on its impact on the economy and its own workforce.

. . . .

All of these criticisms forced Amazon to respond in a fashion to which it was not accustomed: via public statements issued to the press and direct communication (i.e., email) to customers. Its lack of experience in such communications showed. When Publishers Weekly approached the retailer for comment on a conversation between Grandinetti and Preston in which Grandinetti reportedly asked Preston to quiet his protest, an Amazon spokesperson accused Hachette of using its authors as “human shields,” a highly untimely bit of hyperbole. Another spokesperson told the Guardian that Preston was “entitled” and an “opportunist.” Of course, Preston had himself described Amazon’s behavior as “thuggish,” but public relations is not a rational art; insults that sound merely intemperate from the mouth of a novelist in a shed (a New York Times article on the petition came with a photo of Preston standing in his “writing shack”) register as ominous and bullying as part of the official response of a gigantic corporation.

. . . .

Yet Amazon does have its partisans — specifically, the authors who use its self-publishing programs and whose books are published by its imprints. Nearly 8,000 of these signed a verbose petition at Change.org calling for Hachette to capitulate. (If there were ever a document to suggest that self-published writers are insufficiently edited, it’s this one, even though it begins with a promise to be concise.)

This is Amazon’s core constituency, one whose loyalty is fueled by gratitude for the technological innovation that has permitted them to publish their e-books and also by loathing for the publishing “oligopoly” that has denied them publication the old-fashioned way. The Readers United letter, with its misquoted Orwell, its bitter asides (“Well … history doesn’t repeat itself, but it does rhyme”) and its vaguely conspiratorial/messianic tone (“the powerful interests of the status quo are hard to move”) may sound like “full-out crazy town” to Eldritch, but it is the native tongue of the indie author community.

Amazon much resembles a political party that hasn’t figured out how to recalibrate its rhetoric to appeal to voters outside its base. Its pronouncements come in Amazonspeak, a language bred in a corporate echo chamber and the cheerleading threads of its self-publisher forums. Hence, its incessant harping on the fact that Hachette is owned by the “$10 billion global conglomerate” the Lagardère Group — itself dwarfed by Amazon’s own $90-billion valuation.

Link to the rest at Salon and thanks to Patricia for the tip.

People who are associated with Big Publishing have the idea that the public is fascinated with stories about Big Publishing.

In this case, the author of the Salon piece appears to have published a book with Hachette, a fact she fails to note in her piece. So if she’s fascinated by Amazon/Hachette, everybody else must be similarly fascinated.

The New York Times is also fascinated, but, despite its reputation, the NYT doesn’t reach a very large number of people – 1,865,315 daily; (including 1,133,923 digital) according to the best info PG found on the web. For comparison, the population of the United States is over 318 million.

So, even if every subscriber to the NYT cared about Amazon/Hachette (a vanishingly unlikely prospect), NYT articles about Amazon/Hachette would reach about one-half of one percent of the population of the US.

For comparison with NYT circulation, 11.8 million people watch Duck Dynasty. Almost ten times as many people pay attention to the Robertson family as pay attention to the NYT. If Phil Robertson ever weighs in on Hachette’s side, maybe Amazon would be worried. (For overseas visitors, you probably won’t understand Duck Dynasty. It’s an American thing.)

Let’s take this one item at a time:

1. Nobody cares about Hachette.

2. Amazon is the single most admired brand among US consumers.

3. Amazon is still growing at a rapid pace, so US consumers, including US readers, are voting for Amazon with their dollars.

4. Barnes & Noble’s sales are shrinking and it is closing stores on a regular basis. Indie bookstores (bless their hearts) can’t and won’t make up for the sales decline at Barnes & Noble. The value for an author in signing with a traditional publisher, including Hachette, in order to get his/her books into bookstores is on a steep and steady decline.

5. The traditional model of publishing is in a downward spiral. How fast it’s going down is up for debate, but the overall share of books sold by tradpub is shrinking.

6. More importantly, tradpub is leaking authors to self-publishing. The share of royalties paid to authors by tradpub is declining and the share of royalties paid to self-pubbed authors by Amazon and others is increasing.

 

 

Amazon Responds to German Authors’ Protest

19 August 2014

From Publishers Weekly:

Over the weekend, the New York Times reported on a letter of protest, from authors in Germany, about a terms dispute between Amazon and the local publisher, Bonnier. The dispute, the Times noted, mirrors the issue Amazon is having with Hachette in the States and, just as U.S. authors have spoken out about the situation here, German authors have now responded with their own open letter to the tech giant.

. . . .

[A]n Amazon spokesperson said the company issued a response late Friday. Amazon’s response reads:

“For the majority of their titles, Bonnier have chosen to set terms that make it significantly more expensive for us to buy a digital edition than it is to buy the print edition of the same title. This is a poor choice because with an e-book, there’s no printing, no over-printing, no need to forecast, no returns, no lost sales due to out of stock, no warehousing costs, and no transportation. E-books can and should be less expensive than print books, and this should be reflected in the terms under which booksellers buy their books from publishers. The fact is Bonnier’s terms are out of step with other major German publishers. We are working diligently with Bonnier to reach a new agreement more in line with typical industry terms in Germany.”

Link to the rest at Publishers Weekly

PG wonders if the 1% authors have stopped caring about their readers. Or perhaps, they’ve reached the point where they take readers for granted.

Low-priced ebooks allow more books to reach far more readers than any conceivable print-based system. For all their virtues, physical libraries don’t have nearly the reach that the Internet and smart phones have.

Publishers and 1% authors are delusional if they don’t believe that books compete with other entertainment options like movies and television and videogames.

Books priced high to support the profit margins of huge media conglomerates and their 1% managers will invariably lead to less reading and fewer readers. Mercedes prices for ebooks will certainly destroy literary culture.

Indie authors seem to be the only authors who are really thinking about their readers and their ebook pricing reflects that.

Amazon focuses on readers and other individual consumers because it’s not Tiffany. It rises or falls on purchase decisions made by the 99%.

Amazon would go broke if it made its business decisions to please 1% purchasers. Or 1% publishers. Or 1% authors.

Inkshares Looks to Marry the Old with the New

19 August 2014

From Publishers Weekly:

In early 2013, Thad Woodman, a manager at an economics consulting firm, reached out to Larry Levitsky, previously the publisher and general manager of the computer book publishing division of McGraw-Hill, about developing a startup that would combine the services of a legacy publisher—editing, marketing, design, and distribution—with the ever-growing model of crowdfunding. That company, Inkshares, was incorporated in April 2013, with Levitsky as CEO and Woodman as chief product officer.

“It occurred to Thad that there had to be a better model [than traditional publishing],” said Adam Gomolin, who joined Inkshares shortly after Levitsky, as chief legal officer, “one that is more remunerative for authors, more sensibly disperses risk, and does not diminish quality in an age of already abundant digital content.”

. . . .

Inkshares functions on an “all or nothing” model—a project doesn’t move into publication until it has raised the critical mass of funding, determined by Inkshares, required to cover the costs of editorial, design, and an initial 1,000-copy print run. If a book isn’t funded successfully, contributors are fully reimbursed.

. . . .

Gomolin described the Inkshares concept as an amalgamation of two popular platforms for independent authors. “If we can’t help you crowdfund, we’re CreateSpace,” said Gomolin. “If we can’t edit, market, or design, we’re Kickstarter.”

. . . .

Inkshares sets the price of the book, and, once it’s published, writers receive 70% of net receipts, for both physical and digital titles. Inkshares will release titles in print and digital, and writers can opt to publish in digital only, which has a lower funding floor. The company is currently negotiating with Ingram Publisher Services on a distribution agreement.

. . . .

All of the money raised by authors on the platform goes to editorial, design, production, and marketing. “We don’t make money unless a book sells,” said Gomolin. “Just like a traditional publishing house.”

Inkshares sets the price of the book, and, once it’s published, writers receive 70% of net receipts, for both physical and digital titles. Inkshares will release titles in print and digital, and writers can opt to publish in digital only, which has a lower funding floor.

. . . .

Though Gomolin said that Inkshares will inevitably hire more editorial staffers, at present, the startup utilizes a team of freelance editors, many with experience at traditional publishing companies.

. . . .

Goldenberg worked on children’s lists at Houghton Mifflin Harcourt and Clarion Books, and designed and directed art for five Caldecott Medal–winning titles. “I am a dyed-in-the-wool printed book devotee and once vowed never to get involved with anything that lived online,” said Goldenberg.“But working with Inkshares has been exciting.”

Keller also worked at Houghton Mifflin Harcourt for nearly 10 years, as both a children’s editor and managing editor. Speaking to Inkshare’s different acquisitions model, Keller said that she “liked the challenge of making a book the best that it can be, knowing that it already has readers behind it.”

With a traditionally published author penning its first title, editorial and support teams made up of industry veterans, and the potential for a major distributor to handle its list, the aim of Inkshares, according to Gomolin, isn’t to abandon all that has been built by the existing model, but rather to integrate new ideas into what works in legacy publishing. “We’re not going to boil the ocean,” predicted Gomolin. “And we’re not out to overthrow publishing. Everyone [at Inkshares] has a very romantic conception of reading that was incubated by the great writers and the great editors of legacy publishing. But there is a clear need that has been validated by crowdfunding.”

Link to the rest at Publishers Weekly

So, Inkshares utilizes Kickstarter, freelance editors and designers and Ingram – resources that are already available to indie authors and have been successfully used by many – to publish a book and keeps 30% of the revenues the book generates (or perhaps more, read this contract carefully).

PG also expects that Inkshares will keep all the money from the Kickstarter campaign, ostensibly to pay for “production costs”. What could go wrong with that?

PG didn’t excerpt a paragraph in the article mentioning that one of the financial backers of Inkshares is a rap star.

PG has heard that the model is based on the author doing all the work to promote the Kickstarter campaign and raise the money. And of course the author also has to write the book.

PG suggests this project is one of the answers to the question, “What happened to all the people who have been downsized by tradpub?”

The Inkshares website explains it all:

Our model is simple:
Authors pitch,
the crowd funds,
we publish.

PG suggests a better model:

Authors pitch,
the crowd funds,
the author publishes
and keeps all the money.

However, the author will have to do this without a rap star.

We. Don’t. Care. How. Traditional. Publishing. Works.

16 August 2014

One of the standard put-downs of indie authors and their way of doing business repeated by “experts” on publishing is that indie authors should be ignored because they don’t “understand” how traditional publishing works.

We. Don’t. Care. How. Traditional. Publishing. Works.

Knowledge of traditional publishing is becoming more irrelevant to authors with every passing day. Authors don’t need to know anything about traditional publishing to earn six or seven figures per year from their writing.

These days, the more authors understand about how traditional publishing really works, the less they want to be involved with it.

P.S. – Indie authors don’t understand how steam locomotives work either.

Why Do Some Self-Published Authors Care How Hachette Prices Its Books?

12 August 2014

From Digital Book World:

One of the most confusing things to me about the Amazon-Hachette contract dispute saga is why do so many indie authors want so passionately for Hachette, a competitor, to lower its prices?

Isn’t it against their self-interest?

Don’t indie authors, who generally price their books lower than traditionally published books.

. . . .

 The idea behind the argument is that if I see a book by a big-publisher author I don’t know in a genre I like for $12.99 and see another book, perhaps self-published, by another author I don’t know in a genre I like for $4.99, I may decide to buy the $4.99 book instead because of the price difference.

. . . .

 I’ve reached out to some of these folks to see if they can tell me why they want one of their competitors to lower its prices. Apologies to them and to you, readers, if I’ve missed where they’ve already written it up. (So far, I haven’t heard back. If I do, I will let you know and update this post.*)

Link to the rest at Digital Book World

As PG and many others have pointed out approximately forever, if BigPub priced its ebooks at $49.99, indie authors selling ebooks at $2.99 would sell more ebooks. DBW has not made a profound discovery here.

However, to PG the DBW thesis feels like a back-handed suggestion that indie authors ought to shut up and let “real authors” and Hachette set the topic of the debate as “Amazon: Threat or Menace?”

Indie authors jump into the discussion because they recognize that Amazon is the innovator, the true friend of both readers and authors while Hachette and its co-conspirators are champions of the retrograde.

Indie authors jump into the discussion because they understand that Preston, Patterson and the rest of the 1% authors are not at all representative of the typical bigpub author and that bigpub establishes an iron code of silence among authors who don’t agree with the party line on pricing or anything else.

Indie authors jump in because they understand that the memes Hachette is trying to sell, “Authors love us and they hate Amazon” “Big Publishing is a friend to authors and Amazon is an enemy” are totally incorrect, cynical lies backed by the enablers of traditional publishing.

Indie authors understand that Amazon has made it possible for more authors to earn a living from writing today than at any other time in history. Indie authors know that increasing numbers of traditionally-published authors are finding a way out of their traditional publishing contracts so they can have the freedom to write and publish their books in their way and that Amazon is making this possible. Trashing Amazon is one way tradpub tries to keep its captive authors from fleeing the plantation.

Indie authors understand that Hachette and other publishers were relentlessly raising the cost of books, pricing them farther and farther out of the reach of middle-class readers, before Amazon came along and demonstrated that you can sell more books and make more money by offering books for a fair price.

Traditional Publishing, the self-styled guardian of literary culture, was in the process of driving the book business into the the ditch before Amazon came along. If literary culture is going to be saved, PG suggests Amazon is a more likely savior than the media conglomerates that control Old Publishing.

Indie authors have jumped into the discussion to call baloney on the corporatist claptrap of a selfish cartel that treats a tiny number of authors well and oppresses the rest.

In short, indie authors have discovered a better way to be a successful author and they want to spread the word. They support Amazon because they choose the smart side instead of the dumb side of the Hachette/Amazon dispute. They choose the future over the past. Indie authors are the future. Hachette is the past.

Amazon and the Myth of Perfect Pricing

11 August 2014

From publisher Andrew Wheeler via The Antik Musings of G.B.H. Hornswoggler, Gent.:

For the “world’s most consumer-centric company,” Amazon has real trouble actually talking to people. Their corporate communiques tend to be written in clotted, hermetic language; are few and far between; and appear only when posted on obscure corners of their own site. Amazon’s managers and leaders are never quoted in the media, except for an occasional Bezos sighting. And both customers and suppliers struggle to connect with a human being at Amazon at all times.

And yet Amazon has a universal reputation for making customers happy, driven primarily by low prices and lenient return policies — in this, as in so many other things, they’ve been using their investors’ money to buy customers for almost two decades now. It has definitely been a successful strategy: they outcompeted, outlasted, and outgrew their Web 1.0 rivals to become the dominant online retailer and one of the world’s top retailers, period.

. . . .

This is what’s behind Amazon’s current simmering conflict with Hachette: Amazon wants to be able to continue as it’s gone (discounting to equal or better the competition’s prices; expensive loyalty programs to lock in customers; aggressive expansion into new devices, new business models, and new territories; benign neglect from The Street and an ever-soaring stock price) and also generate more cash. The easiest way to generate more cash, as Walmart discovered before them, is to squeeze your suppliers: once you’re that big, they’re more dependent on you than you are on them, so you’re likely to win that squeeze.

Amazon, though, wants to be loved. It’s not enough that they force their suppliers to pay to have buy buttons that work, or pay to have their products actually show up in searches, or pay for an Amazon employee that the supplier can actually talk to and get results from. (Though Amazon has been forcing their suppliers to do all of these things for a long time. And Barnes & Noble forces their suppliers to do similar things, as do Walmart and your local grocery-store chain.) Amazon is an Internet-era company, so they need the world to admit that they are right and that their way of doing business is better and more special than anything the world ever saw before the Glory of Bezos was unfurled.

. . . .

So Amazon’s boosters remain who they have always been: the few self-publishers who won that particular lottery and have made a lot of money because of Amazon’s terms and market. (Every publishing ecosystem is a lottery, and only a very few writers are ever big winners in any of them — the trickier question is which ecosystems are better for the vast majority of authors who will never hit big.)

But they keep trying. Even after a couple of failed “offers” to Hachette, for both sides to give away their profits to compensate authors, they keep trying. (Those offers were very carefully chosen — Amazon is full of smart, sneaky people, and their tactics are routinely brilliant when they don’t have to account for the preferences of small groups of individual, grumpy authors — to do the maximum damage to Hachette, cause the minimum damage to Amazon, and seem the most generous possible offer to authors. Unfortunately for Amazon, the authors realized this.)

Now, they’re going back to one of their favorite tactics: the naked unsupported statistic, carefully deployed. Their latest salvo against Hachette — again, remember that their real audience is Hachette authors; they’re trying to demoralize the rank and file of the opposing army and force a capitulation — relies on declared Amazon experience on the sales of ebooks to “prove” that $9.99 is the best price for an ebook.

. . . .

But note what Amazon is ignoring: primarily, the existence of other formats of that same content, with varying prices and varying responses to ebook discounting. (And secondly, the existence of a market outside of their own site — though any damage to sales elsewhere due to their pricing changes would clearly be a feature rather than a bug.) That $14.99 ebook is likely also a $19.95 trade paperback or $24.95 hardcover. Presumably, Amazon can track the effect of sales on Amazon of print editions correlated to changes in ebook pricing, but they say nothing about such sales.

Link to the rest at From The Antik Musings of G.B.H. Hornswoggler, Gent. and thanks to Scott for the tip.

PG notes the standard tradpub tropes:

1. Amazon doesn’t “support” its statistics.

Well, you’re the publisher. Are you seeing something different in your analyses the relationship of pricing to sales than Amazon is seeing? If you are, explain where your data differs.

No analyses? No clue? English majoritis?

2. Ebook to Paperback to Hardcover.

Even publishers admit they’re making more money from ebooks than they are from the paper variety. But they keep talking about their problems balancing the pricing of ebooks with two kinds of paper books. PG suspects that a cold-eyed analysis of the true costs of creating those paper copies by someone not steeped in publishing would result in a conclusion that it’s time to start phasing out paper. But that would be a math major thing, not an English major thing.

More importantly, as far as the rest of the world is concerned, the worry about pricing correlations and conflicts is publishing narcissism. Maybe publishers are trying to impress us with the complexity of their business and how smart they are to be able to handle it.

The reality is: Nobody. Cares. About. Your. Pricing. Problems. Including Amazon.

3. Indie authors aren’t really making money.

Author success is all about winning the lottery. Tradpub or Indie, it’s all the same. A long-shot.

There are very, very, very few indie authors who are making more than gruel money from their writing. Every indie success story you read about is just a one-in-a-billion chance.

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