Amazon Publishing on Wooing Dean Koontz

From Publishing Perspectives:

Keen observers of the trade publishing scene this week may have noticed in the news Publishing Perspectivesreported on Monday about longtime bestseller Dean Koontz taking a new five-book series and short story collection to Amazon Publishing.

For decades, the prolific Koontz made his publishing home primarily at Penguin Random House’s Bantam, racking up more than 45 titles with the Big Five imprint, only to be discovered now talking of being “creatively rejuvenated” to have found a publisher “where change is understood and embraced” and “a marketing and publicity plan smarter and more ambitious than anything I’d ever seen before.”

And yet, years ago, many in publishing, including veteran observer Mike Shatzkin, were watching for “defections” from major houses—not to Amazon Publishing but to the self-publishing platform Kindle Direct Publishing. The idea was that an established and well-heeled author could easily hire the “author services,” as they’re called, to do the grunt work of preparing a manuscript for self-publishing and managing its life in the online sales maelstrom, while using print-on-demand to produce brick-and-mortar store copies for physical book fans.

Instead, Koontz may be the canary in the trade industry mines who hops off that darkening perch and buzzes out into the sunlight of Internet sales leadership—where the Association of American Publishers’ annual StatShot tells us, more book sales now are happening than on physical retail channels.

On Tuesday, Shatzkin wrote in a well-timed addendum to a column on publishing’s past decade, “If this is a sign of things to come, and it is hard to see why it wouldn’t be, some profound changes might be just around the corner.”

As Shatzkin tells it, “Between the time this post was started and when it was finished and published, another sign of disruption took place. Amazon Publishing signed the bestselling author Dean Koontz to a multi-book contract. At the beginning of this decade, Amazon Publishing had ideas about signing up big authors. But they were stymied then by the pretty stubborn refusal of the rest of the supply chain to stock books published by their biggest retail competitor.”

. . . .

“Whether they will successfully sell Koontz … remains to be seen,” Shatzkin writes. “But,” he goes on—italics ours—”their no-middle-person structure enables them to pay far more of each retail dollar in royalties.

“Half the sales or more can generate more income to the author than a publisher without its own retailing capability can deliver selling a larger number of units.”

Link to the rest at Publishing Perspectives

22 thoughts on “Amazon Publishing on Wooing Dean Koontz”

  1. It is worth remembering that APub and KDP are separate and distinct arms of the octopus named Amazon.

    They may both sell books through the website operated by Amazon LLC but all three are run by different people with different agendas and different ways of making money. The same applies to Audible, AWS, Kiva Robotics, and Whole Foods.

    What APub does not necessarily signal anything about KDP or vice-versa and typically doesn’t.

    That said, if APub is making a second run at name authors in the tradpub segment (rather than this being a one-of) it may indeed signal a big change, either at APub or the retail market.

    Me, I suspect it is an actual market shift because APub has always been trolling for established tradpubbers tbrough its White Glove program.

    A market change driver could be as simple as the BPH belt-tightening having gotten severe enough to impact name authors and not just mid-listers (as in, Roberts’ recent move to the randy Penguin because she didn’t like how she was being treated) or it could be that with declining B&M sales their boycott is losing impact. The latter might not be because of B&N’s cohorts ignoring the boycott of APub but because it might not matter as much as Amazon’s 50%+ market share. Also authors and agents have to have noticed the kingmaker power of First Reads (née Kindle First) vs the decline of BPH front list and (maybe even) factored in B&N dropping payola once the sale closes.

    Yeah, interesting things may be coming.
    At least on the tradpub side.

  2. I’ve said this before, but if Stephen King took control of his trade paperback books and self published them, they would not sell much at all.

    King has to compete with the vast penny sites that recycle his mass market books through the used book market. I have every one of his books in hardback — that were published in hard back — most of them bought used. He didn’t make any money from me.

    He has at least 30 million people who will buy his books new. There are more than that who only buy used.

    Any best selling author in that used book market will never be able to compete with their own used books, that they make no money from.

    Indy lives mostly in new books, ebooks and paper, because they do not compete with the used book market. So when people complain about competing, Indy vs Trad, they miss the vast number of people who only read used and will not buy new.

    That is the untapped market.

    • eBooks don’t have a used book market.
      That right there is why ebooks need to be cheaper than print.

      The used book market is to a certain extent the creation of the BPHs. The two drivers behind used books are availability and price. Both are a part of the long tail that pbooks can’t monetize but ebooks can.

      It’ll take time but anybody depending on used books for survival should be preparing a life boat.

      • eBooks don’t have a used bookmarket.
        That right there is why ebooks need to be cheaper than print.

        For what objective does an ebook need to be cheaper than print?

        For what objective does print need to be more expensive than ebooks?

        • Because a print book has a recoverable resale value.
          Just like cars.
          The consumer market recognizes this and factors it into the pricing of some products. Cars, college textbooks, and yes trade books.
          Some consumers are more conscious of it, others aren’t, but it is an unavoidable part of the market.

          Two for one bookstores and used CD stores are all built around this. The used book market in particular depends on the people who try to recover part of the purchase price by selling off the book after reading it. For those people, the ebook price needs to be at least as low as the pbook’s sale price minus its resale value.

          There are some that consider the ebook virtues as enough of an excuse for a higher price than, say the paperback, but few think that and don’t work for the BPHs.

          Look to the decline of pbook ebook sales for the result of that market dynamic. Or to textbook publishers moving to digital. Not everybody is a hoader.

          • I think the textbooks are going paperless mainly to kill the resale/reuse and force students to buy new each year.

          • Ok. The lack of resale is an observation. But, what objective is met by making ebooks cheaper than pbooks?

            Stated another way, how does a publisher benefit by making the ebook cheaper? What business objective does the publisher realize?

            • “What business objective does the publisher realize?”

              Not losing a sale because the buyer sees no reason to pay a resalable price for something that can’t be resold.

              Keep the prices too high and those of us on a budget will check out the ebooks that aren’t overpriced.

              • Publishers want to max total revenue. So, they want a mix of paper and ebook sales. They want price and volume for each version to deliver sales that max total volume for the given book.

                If they simply concentrate on ebook sales, they can easily lose paper sales. If they concentrate on paper sales, they can easily lose ebook sales. That means they have to work both at the same time. It may very well be that max revenue for a given book comes from a ebook price higher than paper.

                My answer to the question about what a publisher gains by lowering eBook sales below paper is, “I don’t know that he gains anything. It depends on the performance of paper and eBook together, and the cross-elasticity of price.”

                And while we are at it, we may as well throw hard cover, paperback, eBook, and audio in the pot and see what gives the max total revenue.

                • “Publishers want to max total revenue.”

                  Objection. Assumes facts not in evidence.

                  All the evidence supports a different position: Publishers want to maximize unit profit. Often this position has a deleterious effect on total revenue.

              • If they were so happy with total revenue they wouldn’t be warring on libraries over lost ebook sales and claiming 45% of digital sales are on libraries because readers refuse to pay the oh-so-reasonable price of $13.

                It’s easy to talk high-minded economic theory but not so easy to wave off five years of declining ebook sales, declining front list, and corporate belt-tightening adding up to flat sales *before* inflation. I’m not buying the tired old “big picture” scam; they’re growing nothing. Their actions doen’t even hint of wise policies but do speak of failure and panic, taking out tbeir failures on their weakest account.

                I’m guessing a pink sheet is coming soon from Germany.

                • The economic case is not a scam. It’s a strategy used by zillions of businesses. It’s old stuff. We have to look at each title and cross elasticity. Any given product may logically be priced above or below close substitutes. People were doing linear programming on this stuff before computers.

                  The principle exists and operates regardless of the behavior of any market player in any specific industry, and it explains why it is reasonable for an ebook to be priced above paper.

                • The economic case is not a scam. It’s a strategy used by zillions of businesses. It’s old stuff. We have to look at each title and cross elasticity. Any given product may logically be priced above or below a close substitute. People were doing linear programming on this stuff before computers.

                  The principle exists and operates regardless of the behavior of any market player in any specific industry, and it explains why it is reasonable for an ebook to be priced above paper.

                • BPH Publishing is a special snowflake, remember?
                  They do nothing like rational businesses so where’s the evidence they’re acting rationally in this one area?

                  You give them too much credit and ignore too much publicly available data.

                • I don’t consider publishers a special snowflake. And they do lots of things just like any other rational business. Finance, accounting, production, contracting, banking, marketing, logistics, taxes, warehousing…

                  And as rational players, eBook prices higher than paper are a reasonable outcome of considering cross elasticity of close substitutes.

                • I wouldn’t discount the impact that warehousing has on this topic. The BPHs don’t outsource their warehousing. Those are sunk costs in physical space and robotics that they invested in during the previous decade, that may need to be amortized against physical book sales only on the ledger. We have no idea what mandated KPIs the BPHs have from their corporate overlords.

  3. There’s already been a shift, because there are more authors making six-figure incomes outside of trad publishing than within it.

    It’s even possible to make a five-figure income, which is still better than trad publishing.

  4. In 2001, Stephen King decided to test the ebook market by writing THE PLANT in segments. Each segment a buck a pop and sold at his own site. You could download it for free and pay later. If enough people paid for the segments, he would continue writing. If too many didn’t, he announced he’d stop writing. Enough did, and he finished the book and ended up with almost half-a-million dollars in profit, but, after that, he returned to regular publishing.

    These days, despite the ridiculously low ebook and paper royalties from the traditional publishers, the biggest name authors stay with traditional publishing. I do, however, see more and more of the secondary tier of bestselling authors who are hybrids. Some have a series with traditionals and other books self-published. I’ve also seen authors who were very successful as self-pubs who are moving to traditional publishing despite the loss in revenues.

    In other words, don’t hold your breath with the Dean Koontz announcement because the cachet of traditional publishing still has a firm grip on authors.

  5. I’ve said this before, King made his fortune on being paid royalties as follows:

    Mass market – $0.48 (6% on $8.00)

    Trade paper – $1.00

    Hardback – $2.00

    Look at King size books and realize that he only made $0.48 on the mass market The Stand, and $2.00 on hardback. The Stand is huge, but it is priced the same as shorter books like The Shining. (We will avoid the mess of discount books.)

    Pick what “royalty” that you want to make on your ebook or paper, and set your prices. Be consistent.

    For ebooks:

    You get 35% on anything below $2.99:

    – At $1.99 you get $0.69, which is well above mass market “royalty”.

    You get 70% between $2.99 and $9.99:

    – At $2.99, you get $2.09 which is a Hardback “royalty”.

    Don’t charge more for a big ebook versus a short ebook, I’ve seen too many people set their ebook at $9.99, then wonder why they don’t make sales.

    Variable prices only come in on paper where you set the price to make $1.00 or $2.00 above the cost of the paper book. More pages is higher cost.

  6. It’ll be interesting to see whether Amazon tries to curb the piracy of ebooks published on its site (primarily through KU) when a top-tier author of theirs is being copied. Then again, I guess they make their money either way…

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