From Kristine Kathryn Rusch:
Imagine my surprise, as I scanned through Twitter a few weeks ago, to see a writer I follow go after Tor for its library policies. Um…what?
Turns out that Tor, through its parent company Macmillan has started a program in which libraries cannot get ebooks of the latest Tor releases until four months after the book is released.
Remember this is traditional publishing, so velocity is important. How fast a book sells has an impact on whether or not that writer’s next book will even get an offer from the publisher. And here—stupidly—is a publisher that has decided that library ebook sales aren’t worthwhile.
Tor/Macmillan’s reasoning? To see if library ebook sales are the reason that the company’s ebook sales are so low. That thinking is so damn stupid that I can barely type the words.
Rather than go into the reasons Macmillan’s ebook sales are low which I can digress on for hours, let me share what Nate Hoffelder said on The Digital Reader in July, when this news initially broke:
Macmillan has poor ebook sales because they have adopted a policy of discouraging ebook sales in favor of print sales. Macmillan adopted this policy in late 2009 when they conspired with Apple and 4 other publishers to violate antitrust law by forcing Amazon to accept what is called agency pricing, a system where the publishers set the price and retailers are prohibited from deep discounts and sales.
That is established historical fact, and so is the antitrust suit brought by the DOJ, Macmillan settling the lawsuit, its punishment, and Macmillan’s return to agency in 2014.
Apparently, corporate think has decided that it’s better to decrease sales to increase sales. (How Orwellian.) They’ve also got on the bandwagon of punishing people with budgets and limited income. The enthusiastic readers on a book budget—folks who provide great word of mouth during that crucial velocity period—are not worth Macmillan’s time.
The problem is that these enthusiastic readers aren’t going to be able to purchase the books themselves. Many library users are unable to make regular ebook purchases, especially if the ebooks are priced at $9.99 and up, like the Tor books. I’ve seen arguments that the libraries will still get the paper books, but that doesn’t mean that these readers want paper books.
Tor/Macmillan believes that these readers can and should wait. Which is risky on the one hand—there are always new books to read—and idiotic on the other. The readers who want a book now are the book’s most dedicated consumers. Word of mouth has become even more important in 2018 than it was ten years ago, thanks to the advent of social media, online book sites, and all kinds of blogging.
. . . .
Let me tell you, as someone whose novels were traditionally published for decades, it sucks when your publisher makes a totally stupid decision that’s going to have a negative impact on your career.
If you’re a smart author, you’ll know what the impact will be. Most traditionally published writers happily know nothing about the business of publishing, so when they get their royalty statements and their sales are down yet again, or when they are unable to sell the next book in the series, or when their publisher cancels their fat multi-book contract because sales are down, those writers are surprised. (See my blog post on “Learned Helplessness” to understand some of this.)
. . . .
This comes at a perilous time for Tor. Their founder, Tom Doherty, moved upstairs into an honorary position in March, and was replaced as President and Publisher by a long-time corporate middle management guy who might or might not do a good job. If this library thing is any indication… well, you already know how I feel.
I feel somewhat bad for the writers stuck in this library situation. Not entirely bad, mind you, because if they had learned business, they would know that their publisher has a habit of chewing up and spitting out writers like crazy, and has for decades. Three books and out, usually, unless something takes off. And it used to be that awards and award-nominations were enough to save a writer at that company. That changed as the bean counters rose to the top of the business, and will probably get worse now that Tom is gone. He loves science fiction, and would occasionally swoop in to save a great voice that wasn’t selling well.
I doubt that will happen anymore.
Link to the rest at Kristine Kathryn Rusch
Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.
I thought Patrick Nielsen Hayden has basically been running Tor on a day to day basis for over a decade now?
He has, but McMillan does distribution for TOR. So PNH says, “OK, these books come out this month, and those are for pre-Christmas release,” but McM’s managers decide on e-book availability, library editions, and so on.
Actually, MacMillan does more than distribute Tor books.
They own it outright: lock, stock and barrel.
This was reflected most blatantly when Tor signed up with BAEN’s WEBSCRIPTIONS ebook store and MacMillan ordered them to pull out because WEBSCRIPTIONS didn’t sell DRM’ed ebooks.
It wasn’t until 2012 that Doherty was able to plead to go DRM-free.
From Wikipedia:
“Tor was founded by Tom Doherty in 1980. Tor is a word from Old English meaning the peak of a rocky hill or mountain,[2] as depicted in Tor’s logo.[3] Tor Books was sold to St. Martin’s Press in 1987. Along with St. Martin’s Press; Henry Holt; and Farrar, Straus and Giroux, it became part of the Holtzbrinck group, now part of Macmillan in the US.”
https://en.m.wikipedia.org/wiki/Tor_Books
Of note, the MacMillan boss was the point man in the Agency conspiracy. No friend to readers or authors.
Apparently, corporate think has decided that it’s better to decrease sales to increase sales. (How Orwellian.)
The reason a monopoly is considered detrimental to consumers is because monopolistic behavior does indeed reduce unit sales to increase total profit. It’s economics, not Orwell.
For a firm that is not a monopoly, cross elasticity of demand is a reasonable basis to consider a sales reduction in one area to increase them in another.
But that only works if only you have the items to sell, otherwise other sellers who don’t raise their prices get the customers/money.
But I won’t be writing any letters to Tor as one should never disturb the enemy while they are making a mistake. 😉
But that only works if only you have the items to sell, otherwise other sellers who don’t raise their prices get the customers/money.
For the monopolist, he has the goods because he’s the only one who does. That’s why he’s a monopolist. He controls supply. There are no other sellers who can undercut him.
For a firm that is not a monopolist, in looking at cross elasticity they might raise or lower prices for either good. The reason they look at it is to detretmine what will work best.
But as you’re fond of saying ‘books are just widgets’, so overpricing/delaying yours only helps the other widget makers (oh, and it hurts your widget makers/suppliers – the smarter of which will then find another route to get them to market.)
What KKR finds Orwellian is that they are decreasing total sales income to boost a particular sales segment that is in decline.
Look closer at the issue:
Library ebook prices are the highest of any edition. Most licenses expire after a fixed number of checkouts, unlike the print licenses.
People checking out library ebooks include people who can’t afford to buy the books at all, people with transportation constraints or limited mobility, or people unfamiliar with the author and unwilling to gamble on an unknown. Many of the latter go on to buy the book if they like it. In none of those cases does windowing the library edition result in a net gain in sales; they are giving up pricy library sales when the book is in demand in return for… nothing.
Note that the embargo just “happens” to cover the launch window, the period when interest in the book is highest. Four months later it will be lower so the library will buy less copies or, more likely, buy none because it has already spent the money on a different publisher’s ebook. This is (not yet) another “industry standard” collusion or monopoly situation; there are alternatives to just submitting to the embargo.
The big publishers fail to understand that library books are a promotional tool that *pays* them to promote their authors. In that, they are a lot like KINDLE UNLIMITED. Libraries are helping to market the authors, not just specific books.
The “stupid” in the headline is the stupidity of hurting or even killing (in the case of debutantes) the author’s brand in order to “save” the sales of one book.
Bear in mind that the embargo is being applied to Fantasy and Science Fiction titles, not tough guy action thrillers. Sales of the midlisters in the field run in the thousands to, maybe, tens of thousands. A policy that reduces library sales (by even a few thousand) will cost a significant portion of total sales. And what do big publishers do when a book “underperforms”? Blame the author.
Remember, big publishing doesn’t play by rational business rules. Certainly not by north american consumerist rules.
The “experiment” might very well result in marginally (single digit) higher launch window sales for established authors with big fanbases but it will come at the expense of minimizing “discovery” of their debut and midlist authors.
That is what “decreasing sales to increase sales” refers to.
And yes, it is Orwellian: in the ANIMAL FARM vein.
What KKR finds Orwellian is that they are decreasing total sales income to boost a particular sales segment that is in decline.
If the boost exceeds the reduction it’s a very rational decision. It’s also rational to try it to see what happens.
Lots of people try to reason to what will happen after a change, and insist their forecasts are right. Others try different things.
It’s rational, not stupid, and not Orwellian. We hear lots of stuff about how libraries, borrowers, library prices, etc affect the cash consumer markets. They are interesting ideas, and deserve considerations. But, far more reliable is actually doing something and looking at the results.
That is a big if you are postulating.
More, it ignores the volume of sales going to the thousands of libraries in the country. And the damage to Tor authors not named Scalzi. Libraries have always been key to the SF field and for ages the only hardcover sales many authors got were from the libraries. The losses aren’t speculation, they are guaranteed.
If Holtzbrink wanted to “experiment” they should have chose a genre that doesn’t rely so heavily on libraries. They are setting the authors up to fail.
Of course, it’s not as if they owe any duty to the authors, right? They’re strip miners.
That is a big if you are postulating.
Of course it’s a big if. So what? The question is what is the net effect of library sales and borrows on the cash consumer market.
There are lots of factors in play. Some produce upward pressure on cash consumer sales, and some produce downward pressure. But nobody know the magnitude of the pressures, how they interact, and how they net out.
Considering the question, and considering it a reasonable question, does not demand one ignore any factors in play. For a rigorous analysis, one has to recognize those factors.
Actually, no.
If you read the full piece and comments at the source, the subject is the effects on author finances and careers.
The people needing to “survive stupid” are the SF authors stuck with Tor contracts, not the consumers and not the german overlords telling Tor to keep books out of libraries during the launch window.
(A tactic tried more broadly by the BPHs in mid-2009 and abandoned almost immediately as the resulting *net* sales drop manifested itself. And in those days ebooks only amounted to 10% of the market. Consumer reaction was to move on and forget about the windowed books. Even video, built on windowing for different distribution channels over decades is under pressure to condense or eliminate the windows. We just saw one of the year’s top grossers, BLACK PANTHER, hit streaming services and disk sales while still in US first run theaters because of window overlap.)
There is no supposition involved in saying that windowing library ebooks results in lower sales because not only does historical data back it up, but also the libraries reaction. Many will simply minimize or totally exclude purchases of the windowed titles, which again, make up a significant part of SF title sales.
By Tor’s own statements blaming libraries, it is clear they refuse to believe their already declining sales are a result of the puppy wars, their pricing, and the increased competition from Indie, Inc. Plus the footprint of KU.
So, instead of addressing their competitive weakness, they locked on to one of their last remaining strongholds as a scapegoat. yeah, tbat isn’t stupid, right?
There is no counterbalance to be found.
Not during the launch window and not afterwards.
Postulating some magical revenue appearing out of nowhere is not anywhere near a rational analysis of this particular move.
Launch window revenues will go down without library revenues. Post launch revenues will go down because of lower library purchase of those books. And because they implemented that policy just as BAEN is joining OVERDRIVE, providing the libraries an alternate source of tradpub SF titles.
They are doing the worst possible thing at precisely the worst possible time. Science Fiction has a term for that: CRAZY EDDIE.
If you read the full piece and comments at the source, the subject is the effects on author finances and careers.
I’m not commenting on the entire article, just the following:
“Apparently, corporate think has decided that it’s better to decrease sales to increase sales. (How Orwellian.)”
It’s neither stupid, Orwellian, nor unsophisticated to consider the cross elasticity of demand with regard to library purchases/borrows and cash consumer purchases.
Nor is it unreasonable to consider that the market has changed dramatically over the last ten years, and consumer behavior may also have significantly changed in various sectors. What worked ten years ago may not work today.
Terrence – I follow your logic, but it assumes some degree of sophistication and business intelligence on the part of people controlling these sorts of decisions at a publisher.
In the hierarchy of business savvy, employees of publishers, even major publishers, are pretty close to the bottom. (See my post about Small Town Syndrome for further observations.)
They’re paid poorly, often live under economically constrained circumstances and most tend toward extreme cliquishness. The same can be said for their supervisors.
The worst abusers of power are often people who feel powerless in many important parts of their lives.
I agree I assume some degree of sophistication and business intelligence. And I have no reason to think it doesn’t exist in MacMillan. If it didn’t, they could not continue daily operations. They would never be able to produce and distribute hundreds (thousands?) of books per year. We observe they do.
And they may be near the bottom on the sophistication index, but that tells us nothing about the issue.
Nobody’s level of sophistication is high enough to give us definitive answers to the effect library sales and borrows have on the cash consumer market.
MacMillan tries something new, and authors respond with, “Stupid, Orwellian, unsophisticated!”
Good points, Felix.