Two pretty easy ways to add revenue that most publishers are missing

From veteran publishing consultant Mike Shatzkin:

The biggest publishers today are regularly delivering improved profit performance on a flat or declining sales base. This masks a troubling truth about today’s book business. The core asset base of a book publisher is “performing titles”: the books that are delivering measurable revenues. The more of them there are the healthier the business is.

Thirty years ago, big publishers were adding to that core title base and, in fact, it was the effort and investment required to deliver new titles into the marketplace that made short-term profits harder to earn. Today’s reality is that new titles are much harder to introduce successfully and publishers have responded to that by flattening and even reducing new title production.

But another twist of the past 30 years is that there are more ways to get profits out of the backlist. Ebooks and digital delivery of audio, along with the online print book marketplace, have made it possible to generate revenue from books that might have been declared “out of print” with rights cheerfully reverted in the 20th century. So far, the additional sales from digital renditions and online sales, combined with the reduced costs associated with digital delivery and reduced returns associated with the shift from stores to online sales, have enabled profit growth without topline sales increases.

Of course, the fact that nothing ever goes out of print is part of what contributes to the title glut that has made launching new titles successfully so much more difficult.

There are two new opportunities to deliver profitable topline sales growth that publishers can’t get at without making some adjustments to their standard thinking about their business. It would seem inevitable that they will turn to them, even though both opportunities have been in place for a while and uptake has not been very rapid or widespread. I had to resist being sensational and titling this post “free money for publishers that they just aren’t putting in their pockets”, but that’s actually what it is about.

One of these opportunities is to set up all titles with Ingram Lightning Source for what their Chairman John Ingram calls “just in case, rather than just in time” use of print-on-demand. The other is to put some of the thousands of titles every big publisher has that are virtually non-performing into Open Road’s “Ignition” program for ebooks. (Yes, both of these companies are my clients, but they have built these capabilities to help the publishers without any direction from me.)

The Ingram opportunity is really easy to understand. Books that are in Ingram’s digital database can be delivered by their wholesale arm to every account in the world tomorrow, whether or not there is presently any stock. This matters every time there is a significant publicity break that generates demand that wipes out Ingram’s stock and they have to wait for the publisher to provide replenishment.

. . . .

The most recent eye-opening example of this was the recent death of basketball star Kobe Bryant. Apparently there were half-a-dozen Bryant books, none of which had stock to meet demand and none of which were set up for print-on-demand. When I asked a friend at Ingram how often he sees books where substantial sales are lost because they aren’t set up for immediate POD, he said “every day”.

Publishers probably need to sharpen their pencils and re-do their math. Although it is true that delivering a POD book is a great sacrifice of margin for a publisher compared to one from their own warehouse, it is both not as great a sacrifice as they think and, really, no sacrifice at all if a sale that would otherwise be lost is captured. Lower print unit costs for pressruns can be misleading if the publisher doesn’t consider the costs of multiple handlings, delivery, returns, and books printed but never used.

. . . .

The Ignition opportunity is almost as obvious a winner. Open Road started its life as an ebook publisher with a list built on the industry’s failure to see ebooks coming. Former Harper CEO Jane Friedman saw the ubiquitous contractual ambiguity around ebook rights as an opportunity and corralled a large number of titles before the publishers plugged the holes in their contracts. That left Open Road with a big list of ebooks but no real mechanism to grow their list.

So they started working on doing ebook marketing in a more focused and determined way than other publishers with big backlists. Open Road developed an understanding that the top 100,000 ranked ebook titles got boosts from industry algorithms (largely Amazon’s), but, of course, every publisher’s list (including their own) had thousands of titles that ranked well below that, in the millions and nowhere near the top 100,000.

So Open Road developed tools to move titles from virtually zero sales to really measurable ones, building mailing lists of identified customers through use of verticals (subject-specific targeting) and bargains (price-shopping consumers can really boost a title.) Doing this not only required cash and focused effort, it also required time. They’ve been at this for a few years and anybody starting now will not be able to do it much faster. In fact, there are almost certainly early mover advantages that benefited Open Road and will no longer apply.

Their results are consistently dramatic. On one representative group of 5000 titles, Ignition was able to move more than 6% of the bottom 3500 titles from ranks in the millions to a performance that would have put them in the top 10 percent of the total group. The total revenue of the 5000 titles in the year before Open Road had them was $2.4 million. It should have declined by 20-40 percent. Instead, they almost tripled the take to $6.8 million. The 500 bottom titles rose from 0 sales to $108,000; the next 500 moved up from a total of $3500 to $226,000.

. . . .

The Open Road opportunity rescues titles from total oblivion and, in addition to the ebook sales Open Road builds and shares in, grows their print sales as well. This presents publishers with the ability to create performing titles out of “dead” backlist using ebook sales and marketing to power the growth.

. . . .

Publishers in bygone days licensed mass-market paperback rights to other publishers because they didn’t have the capability to sell to the rack jobbers and the title was no longer performing in their conventional channels. Licenses were for a term, and then they reverted. This situation seems really analogous to me.

Any publisher that has thousands of titles listed in their catalogs as still “in print” but which they know are producing nearly zero sales has little to lose and a lot to gain by putting those titles into Open Road’s Ignition System.

And any publisher who sets up all their titles with Lightning and their most comatose backlist with Open Road will have sales growth they couldn’t have gotten any other way.

Link to the rest at Mike Shatzkin

PG notes that if the publishers are missing ways of adding revenue per the OP, their authors are receiving smaller royalty payments and are not in a position to do anything meaningful to increase them.

The Authors Guild Rehashes Bogus Author Income Survey as a “New” Report

From The Digital Reader:

Earlier this week The Publishers Authors Guild released a report that “explores the factors leading to the decline in the writing profession. Alas, this report is based on the flawed survey that I debunked last January, making it the epitome of the “garbage in, garbage out” error.

As I reported last year:

The Authors Guild report in particular is flawed because it is based on a self-selected survey group where self-published authors are under-represented and retirement age traditionally authors are over-represented.

And as Len Epps pointed out in the comment of that post, 18% of the survey respondents didn’t make any income from their writing in the previous year. This would arguably disqualify them from being “full-time authors” (I would call them retired, actually).

. . . .

If nothing else, its very mindset is flawed. Like we’ve seen in other The Authors Guild statements on this topic, this report focused on the income of published authors and conveniently overlooks the fact that before the internet, 99% of authors made nothing from the sale of their books because they could not get published in the first place.

Of the remaining 1%, maybe one in a hundred could make a living at it.

What The Authors Guild wants you to do is focus on the 0.01% so they can wring their hands over the poor, beleaguered authors. I am not sure what The Authors Guild gains by pushing this narrative, but it is as false as TAG’s claim that piracy is a major problem (when in fact their data shows the opposite is true).

What I do know was that author income as an aggregate is up. The 99.99% are making more than ever before by bypassing publishers entirely and going directly to market. Thanks to Amazon setting the standard, most ebook retailers pay better royalties than publishers ever did (another detail that The Authors Guild hoped you would overlook).

Link to the rest at The Digital Reader

As usual, Nate is on target. Amazon permanently upset the publishing applecart when it treated self-published books in the same way it treated books from traditional publishers. Amazon also recognized the superior profit potential for ebooks over their printed ancestors.

Big Publishing made precisely the wrong decisions at every stage of the upheaval in the book business. It sacrificed billions of dollars trying to prop up the ancient way of doing things – printed books to wholesalers to bookstores then back to wholesalers if they didn’t sell then to the pulp mills to be recycled (maybe), costing money, burning carbon and polluting the atmosphere at every step.

When faced with a choice between Jeff Bezos (one of the most brilliant merchandising and sales minds of the last 30 years) and Amazon or Leonard Riggio (a very long distance from being in the Bezos class) and Barnes & Noble, Big Publishing chose the old guys and the old ways. The Manhattan geniuses then proceeded to break the law in a way that any law student could tell them was obviously illegal to force Amazon to sell books for higher prices (so people would buy fewer books, which any economics or MBA student could tell them would happen).

And now Big Publishing and its wheezing enablers have staked their futures on promulgating the idea that, in 2020 and moving forward, talented authors can build better careers and make more money by signing terrible life-long publishing agreements which give the same publishers who have made so many stupid decisions the right to control everything about how the author’s books are produced, promoted, priced and sold.

This strategy requires that nobody in the Manhattan mafia ever (no never) acknowledge that more and more indie authors, including authors who used to be traditionally-published, are making more and more money self-publishing their books than they ever could while giving most of the money people pay for their books to those who didn’t write them.

Simply put, every year, more and more talented writers are enjoying monthly checks from Amazon and have either avoided working with traditional publishers entirely or regard their experience in doing so as their single worst business decision.

Trade Publishing Had Poor November

From Publishers Weekly:

Tough comparisons to November 2018 led to a bad month for publishing last November. According to AAP’s BookStat’s, sales of adult books from reporting publishers fell 27% in November 2019 compared to the year before, and dropped 23.8% in the children/young adult segment. Sales for all 1,361 reporting publishers declined 23.9% in the month.

Despite the poor November, industry sales were up 0.9% in the first 11 months of 2019 over the same span in 2018. Sales in the children/YA category were rose 5.2%, but sales of adult books were off 3.3%.

In November, adult hardcover and trade paperback sales fell 38.9% and 30.9%, respectively. Downloadable audio was the only format to post a gain in the month, with sales up 28.8% over November 2018.

Link to the rest at Publishers Weekly

E-Book Market Insights

From Mordor Intelligence:

Technical development and sophistication of reading devices that provide an experience similar to that of reading an actual book is the key factor driving the global e-book market. User penetration of e-books is expected to grow at a significant rate recording a CAGR of 3.3% during the forecast period, 2018-2023.

In 2013, e-books held 12.3% of the total books sale and the percentage is expected to rise to 25.8% by the end of 2018. In 2017, traditional publishers sold 10% fewer e-books compared to 2016. This is attributed to the decrease in e-book prices that has led to a decrease in sales by value. As traditional publishers saw a sales drop, customers moved to independent publishers, essentially to Amazon.com.

. . . .

The global e-books market is largely dominated by countries like the United States, Canada, Japan, China, and the United Kingdom. North America held the highest market share of 58% in the global e-books market in 2017, out of which the United States recorded the highest market revenue in 2017. With the increasing prominence of e-book in countries like the U.K, Germany, France, Europe holds the second highest market share in the global e-books market. High internet penetration and increase in number of customer preferring e-books, Asia-Pacific is the fastest growing region. With the advent of digitalization and penetration of smart devices, the region is likely to witness considerable growth over the years to come.

Link to the rest at Mordor Intelligence

PG notes that the OP originates on the public side of a website belonging to a market analytics data provider.

In PG’s observations, these companies provide some interesting facts outside their password protected data trove as a legitimate marketing tool to promote sales of paid subscriptions which all tend to cost more than PG is inclined to pay. He apologizes to any visitors to TPV who, like PG, are disappointed by the lack of depth in these underlying public releases.

The Backlash Over My Dark Vanessa

From Plagiarism Today:

Up until last week, My Dark Vanessa was one of the most highly-anticipated books of 2020. A novel by Kate Elizabeth Russell. It tells the story of a teenage girl who enters into a sexual relationship with her adult English teacher and how she is forced to deal with that past when she herself becomes an adult and another former student accuses him of sexual abuse.

Heralded by both the New York Times and The Guardian, the book isn’t even due out until March 10 but has been the subject of a mammoth press push and a reported 7-figure advance.

However, that excitement hit something of a speed bump on January 19 when author Wendy C. Ortiz took to Twitter to criticize the book, saying it was similar to her 2014 memoir entitled Excavation.

. . . .

Though this was the result of a brewing controversy among Ortiz’s fans, this brought the allegations to a new audience and prompted Ortiz not only to explain in greater detail but to follow up with an essay on Medium on January 29th.

In that essay, she said My Dark Vanessa was “eerily similar” to her book. The main difference was that Ortiz’s book was a memoir of her experiences when she was abused by a 28-year-old man when she was just 13 while Russell’s was listed as a work of fiction.

Russell, for her part, reached out to Ortiz after the initial Tweets. There, she admitted to having read Excavations as part of her research. However, this did not smooth things over with Ortiz, who posted on Twitter the next day.

. . . .

Russell has gone on to say that, though her book is a work of fiction, she has been working on it for nearly 20 years. In December 2018 she stated that it was moved from being a memoir to being fiction when she chose to make the teacher in her story a composite of the adult men that abused her.

However, the allegations of plagiarism are really only a small part of the story. Ortiz’s grievances deal less with the possibility that her story was coopted, but with the publishing industry itself.

. . . .

In Ortiz’s essay, she outlines the long path she walked to get her book published.

Despite initial interest from publishers and agents, she received repeated feedback from editors that it would not achieve the kind of “wide audience” success they were hoping for with a debut author. Others simply opined that memoirs were overdone, especially for new authors and writing about sexual abuse topics.

She ended up finding a home on a small press and, though the book did well on its initial run, she found no large publishers willing to take it up after it had proven itself.

This, understandably, made it sting all the more when she learned that Russell was becoming a press and media star with her very similar tale. While her book struggled to find a large audience despite a great deal of acclaim, Russell had praise and a significant advance before her book was even out.

For Ortiz, much of the difference could be attributed to race. Ortiz, a Latinx author, felt that at least some of the success of Russell’s work could be attributed to her being white and, thus, more acceptable to the publishing industry. As she said in her essay while discussing her editors’ notes, “‘Wide’ is likely code for white.”

This accusation is nothing new to the publishing industry, which has long been labeled as being “hideously middle-class and white” or simply not having diversity despite multiple attempts and efforts to become more inclusive.

. . . .

Though it is unlikely My Dark Vanessa was a plagiarism, it still raises difficult questions about the publishing industry. This is likely why Ortiz, when discussing the book, never uses the word “plagiarism” and, instead, focuses on the broader publishing industry issues.

. . . .

The question is: Why was Ortiz’s retelling so heavily rejected while Russell’s so quickly accepted and promoted? Race, ultimately, is just one factor in this story as there are undoubtedly countless other differences including the timing of the books, fiction vs. non-fiction and so forth.

Link to the rest at Plagiarism Today

PG suggests that media storms demonstrating the many shortcomings of traditional publishing pop up on a regular basis and everyone reliably condemns racism, sexism, classism, etc.

But publishing never changes.

PG suspects it doesn’t really want to change, but also accepts that publishing can’t change. It can’t hire the talented visionaries necessary to lead such a major change.

The other factor is that the major US trade publishers are far from independent organizations. HarperCollins, the publisher of My Dark Vanessa, is owned by Rupert Murdoch’s media conglomerate News Corp. If the executives at HC don’t make their numbers, their bosses at News Corp. will find others who will.

Striking a blow for diversity or another non-monetary good won’t save anyone’s job in Big Publishing if they don’t generate what the big boss expects in the way of cash.

‘American Dirt’ was supposed to be a publishing triumph. What went wrong?

From The Los Angeles Times:

It was poised to be a blockbuster long before copies arrived in bookstores last week: a thrilling contemporary migration story following a mother and her son, desperate to cross Mexico and reach the United States.

Its publisher, Flatiron Books, an imprint of Macmillan, paid a seven-figure advance after outbidding several competitors for the novel. It snagged a coveted selection in Oprah’s Book Club and had been shipped to key celebrity influencers, including Stephen King, Sandra Cisneros and Salma Hayek. A reported first run of 500,000 copies was printed. The film rights were sold.

But by week’s end, the novel “American Dirt” had garnered attention that its boosters likely didn’t expect: angry charges of cultural appropriation, stereotyping, insensitivity, and even racism against author Jeanine Cummins, who herself said in the book’s author’s note, “I was worried that, as a nonmigrant and non-Mexican, I had no business writing a book set almost entirely in Mexico, set entirely among migrants.”

Despite the backing of towering figures in American media, Cummins’ page-turning portrayal of a mother on the run is now at the center of the first bonafide literary controversy of the year, and is forcing a hard reflection on the state of Latinos in a cultural field that remains overwhelmingly white.

In the face of critiques, Cummins is pushing back in public. Her publisher released a statement encouraging discussion around the title, while some authors and booksellers have come to Cummins’ defense. In a culture that is used to debating black and Asian representation and stereotypes, the entrenchment around “American Dirt” is fueling even more complaints over the ease with which popular culture still employs Latino-related stereotypes in contemporary movies, television and fiction.

“American Dirt” is also highlighting factors that observers say have contributed a near shutout of contemporary Mexican and Mexican American voices from the top tier of the publishing publicity machine — the sorts of books that are guaranteed handsome sales by virtue of projection.

What went wrong?

As passages from the novel began emerging last month, Mexican and other Latino voicesbegan raising red flags. The author’s portrayal of Mexican culture was called outlandish, littered with stereotypes, stilted bilingualism and an awkward peppering of italicized Spanish phrases.

. . . .

“American Dirt” has also sparked an emotional discussion about how far the publishing industry still must go to more richly represent the scope and diversity of the Latino experience, said authors, literary agents and other industry figures in interviews last week. It’s a discussion focused on a complicated question: Who gets to frame others’ stories, and how?

. . . .

“American Dirt” has opened a window into the ways a few select books are brought to the public’s attention at a time when many authors have to hire their own publicists or arrange their own book readings and events. The roll-out to some took on the veneer of insult to Central American trauma and pain surrounding the treacherous passage through Mexico.

“They’re handling it like they handle a Marvel comics movie,” said Roberto Lovato, a Salvadoran American writer in San Francisco, who is finalizing an upcoming memoir. “But this industry will make you dance the minstrel salsa dance or the minstrel cumbia dance,” he added, in reference to the tenor of Latino-themed titles that are deemed palatable to wide audiences.

Indeed, the operation behind “American Dirt” made what many describe as cringe-worthy errors even before the book hit stores.

. . . .

More criticism followed among Latino writers, from the fringes to the center of the literary power establishment. Mexican author Valeria Luiselli, a MacArthur Foundation “genius” grant recipient, called the book the “worst possible” pick for Oprah’s nod. Francisco Goldman, the celebrated Guatemalan American novelist and journalist who divides his time between New York and Mexico City, said in an interview he was “shocked” by the “tone-deaf” publicity roll-out. “And these are supposedly sophisticated people.”

. . . .

Kate Horan, the director of the McAllen Public Library in Texas, posted portions of a letter she sent to the American Library Assn. and Oprah’s Book Club, declining to participate in a recorded “unboxing” event meant to push “American Dirt.” Horan said she felt compelled to turn down the offer from Oprah’s Book Club after seeing the reactions among Latinx writers she and her staff admire

. . . .

“When we took the book out, our hearts dropped,” Horan said in a telephone interview from Philadelphia, where the American Library Assn. is holding its mid-winter conference. “There followed many conversations with people in my community, and of course reading the book, I can only compare it to a telenovela. It’s so hyper stereotyped, that it’s harmful.” 

. . . .

By week’s end, as the U.S. commercial publishing industry was reeling from the expanding maelstrom over what its critics called a cartoonish melodrama about contemporary Mexico, Cummins still hit the road on a book tour. At an industry conference last week in Baltimore, she defended her right to write the novel from the perspective of the Mexican woman at the heart of her book.

Her character Lydia, 32, is middle-class, college-educated wife and mother who owns a bookshop in the resort city of Acapulco and survives a bloody massacre at a family quinceañera. With her journalist husband and other family members killed, the bookish protagonist and her 8-year-old son make a desperate run for the U.S. border, partly on the freight train La Bestia. Critics have mocked the narrative ploy as implausible for anyone of Lydia’s class stature, who can usually buy airline or bus tickets.

In Baltimore, Cummins said the migrants she met during her research for the novel “made me recognize my own cowardice” as she grappled with early failed drafts and doubts about authenticity. “When people are really putting their lives on the line, to be afraid of writing a book felt like cowardice,” she said, according to a report for the trade site Publishers Lunch.

The author, who did not respond to a request for comment for this article, identified as white as recently as 2016. On Wednesday, Cummins, whose grandmother was from Puerto Rico, said she was “a Latinx woman” while addressing the negative reactions to the book among Mexican, Central American and Chicano readers who have vigorously questioned her authorial integrity. “Not everyone needs to love my book,” she said.

On Friday, Cummins turned up her defense during an interview with NPR: “I am a white person. … I am a person who has a very privileged life. I am also Puerto Rican. … That fact has been attacked and sidelined by people who, frankly, are attempting to police my identity.”

But her critics weren’t buying it.

Gurba and others accused Cummins of profiting off Latina identity and transforming her own ethnicity over time to suit professional interests. “She became a person of color for the sake of financial convenience,” Gurba told The Times. “I call that POC, a person of convenience.”

Another set of earlier photos of Cummins with barbed-wire decorated fingernails brought even more criticism. “Every day I see something new that pertains to this, that it seems like it can’t get worse, and it gets worse,” said YA author Rivera.

Cummins’ somewhat apologetic author’s note also fanned the flames. In it, she says she wished someone “slightly browner” than her had written her book. She also argued that her effort seeks to counter depictions of immigrants as a “faceless brown mass.” Goldman, reached in New York, called the phrase an admission to the book’s “pornographic feedback of violence.”

“It’s just unbelievable,” he said Thursday. “How mediocre, third-rate and sleazy it is for a fiction writer to appropriate violence and suffering that way.”

In her note, he added, Cummins also writes, “we seldom think of [migrants] as human beings.”

. . . .

The controversy doesn’t look to go away soon. On Saturday, a group of writers including Lovato, Gurba and others said they sent a letter to Macmillan promising more “action” if the publishing house doesn’t respond more directly to their critiques. Industry players are abuzz with the topic, book agents said, as a string of “American Dirt”-inspired Twitter parodies by brown writers took flight, mocking the publishing industry’s devotion to tired Latino tropes involving gangs and grandmothers.

Eddie Schneider, vice president of JABerwocky Literary Agency, and who represents author Rivera, said Flatiron Books made a string of mistakes in rolling out “American Dirt” and isn’t correcting them. On Thursday, the publishing house defended the title in a statement to The Times.

“I’m baffled I haven’t seen any apology yet,” Schneider said. “Maybe not for the book, but certainly it seems like an apology is in order for the insensitivity of the roll-out.”

Link to the rest at The Los Angeles Times and thanks to Karen and Elaine for the tip.

PG says that indie authors must admit that, for executing a really big book release, nobody can match the world-class talent and savvy that a major New York publisher brings to the task.

Smorgasbords Don’t Have Bottoms

From N+1 Magazine:

For the first time since 2011, when Borders shut down, or 2007, when Amazon launched the Kindle, or maybe 1455, when Johannes Gutenberg went bankrupt immediately upon printing his game-changing best seller The Bible, the news about book publishing has seemed less than dire. A June 2019 New York Times article captured the mood: “Independent bookstores are thriving again, and print sales are rising while e-book sales are declining. Even Amazon is investing in physical bookstores across the country.”

A decade ago, few in the industry anticipated the comeback of indie bookstores. But the numbers are unambiguous: between 2009 and 2018, the number of indies in the US grew by nearly 40 percent. Ninety-nine stores opened in 2018, up from seventy-five in 2017. The indie model depends on expertise and endless hustle — as well as the active participation of consumers who have been galvanized by buy-local campaigns. The new independents host constant readings and book groups, and many also offer subscription programs and curated perks, like signed first editions, for their regular customers. Increasingly, the owners of these stores see their purpose in more ambitious terms: as rising rents threaten third places everywhere, indies’ physical locations become as valuable as their inventory. The stores are sleek and splashy and well-lighted places, their vision of reading centered on enthusiasm and edification. Their employees may be no less adventurous or snobby in their tastes than bookstore employees used to be, but now they hand-sell on social media, not just IRL. On the stores’ Instagrams, copies of Ducks, Newburyport and the latest Krasznahorkai pose on park benches next to scattered autumn leaves, or on beautifully pockmarked desks, latte adjacent. The bookstores have cats, and the cats, too, have Instagrams.

Meanwhile, up in the cloud, things look even brighter. As digital audio attains complete domination over CDs, audiobook sales keep rising, reaching nearly $1 billion in 2018, the seventh year in a row of double-digit revenue growth. Helped along by our smartphone addiction, the podcast boom, and the unending American commute, audiobooks have become the industry’s most durably growing sector and, though they have been around for nearly a century, its zeitgeist, with publishers happily experimenting in formats and release strategies. Audiobooks have gone where no physical books could — namely, into readers’ ears. There is every indication that they will remain there.

There are even encouraging signs at Barnes & Noble, the largest and most important bookstore chain in America, the last remaining obstacle to Amazon’s complete control of the sector, and, until recently, an ongoing source of gloom and worry for the publishing industry. It feels like B&N has been perpetually in decline, making poor decisions, and on the verge of utter collapse. But hope that this might change arose last summer, when Elliott Management, the hedge fund of the Republican megadonor and “vulture capitalist” Paul Singer, bought B&N for $683 million and brought in James Daunt to run the chain.

. . . .

Every article about [new Barnes & Noble President James] Daunt mentions the fact that Waterstones looks a lot cooler since he brought it back from the brink. B&N stores do not, at present, look cool; the caption of one photo in the New York Times’s glowingprofile of Daunt, published the same day as a glowing Wall Street Journal profile, read: “The homogeneous table legs at the Barnes & Noble in New York. At Waterstones, the look is varied.” Those of us whose primal bookstore memories include browsing Adbusters at the Borders next door to Circuit City, the smell of burnt milk wafting from Starbucks over B&N’s art history shelf, and the seemingly random stacks of hardcover frontlist fiction at the always empty Media Play never noticed homogeneous table legs. Homogeneity was the water we swam in. We are the children of Marx and Coca-Cola, but we bought both at big-box stores.

. . . .

Though he did recently describe the vibe at B&N as “crucifyingly boring,” Daunt has more than aesthetics on his mind. When he arrived at Waterstones, Daunt decreed that store managers would take back control of their own stock: in the Guardian’s words,“What sold in Hampstead might not go down well in the Highlands.” He also abandoned co-op, the somewhat crooked practice of publishers paying for display space and the reason why every B&N feels the same. British publishers grumbled, but they also realized they finally had a serious retail partner. Customers, meanwhile, were pleased to discover that there was more to British book production than memoirs by footballers or the Gallagher brothers. A similar change in direction at B&N, accompanied by even a modest uptick in market share, would mean a more diverse bookselling landscape. For a reading and buying public accustomed to bespoke retail, exhausted by the strip mall experience, and far from the closest independent bookstore, more attractive and autonomous Barnes & Nobles would be an improvement over the homogeneous table legs of the status quo.

. . . .

Unlike Waterstones, Barnes & Noble stores are enormous, their decadent square footage an artifact of the supersize 1980s and ’90s, the apex of the exurban dream. Too many of these giant stores are located in places frequented by dead-mall enthusiasts with drones and GoPros. In the short term, Daunt’s revival efforts are likely to lead to an even more accelerated schedule of store closures than B&N has experienced in the past decade. The parent company, too, seems cause for concern. Hedge funds have a gruesome, destructive record in retail. Along with private equity, they have fueled the retail apocalypse to a far greater extent than Amazon. How long will Daunt’s leash be? And how much time can he spend letting it out?

As consequential as it is, the indie resurgence is modest when weighed against the shelf space lost to the closure of Borders, or to the B&Ns that have reliably shuttered every year. Indies have benefited from the patterns of gentrification that have proved so punishing to other kinds of small businesses, and future growth may be inhibited by those same forces. (Bookstore owners’ public opposition to minimum-wage increases and unionization in New York, San Francisco, and elsewhere suggests other tensions in the ecosystem.) Daunt has called the US “extraordinarily underbookshopped,” but it isn’t clear that either he or independent bookstore owners can do much more than stanch the bleeding.

On closer inspection, the news of decreased ebook sales, like that of B&N’s revival, is more complicated than the publishing press’s cheerful headlines suggest. When ebooks first emerged on the scene, the response from publishers (and, by extension, authors) veered from anguish to jubilation. Ebooks were going to destroy traditional publishing, as Amazon tightened its stranglehold — but they also, in the short run, expanded total revenues, as popular products tend to do. In the early 2010s, publishers enjoyed strong years of sales growth, driven in large part by ebook sales. Ebooks weren’t bad for writers, either — amid the byzantine royalty structure, in which it has been written in stone that authors should earn different and seemingly random amounts depending on the format their book is being conveyed in, it’s far better, for no discernible reason, to sell an ebook than a paperback.

The fear, though, was for the future. Would readers abandon print books for ebooks? If they did, would that leave publishers at the mercy of Amazon — which had cornered a market it helped create, via the Kindle — and its aggressive loss-leading discounts? 

. . . .

The real omission from the good-news stories is any honest acknowledgment of Amazon. The company sits comfortably at the peak of its influence, its supply chain built on the back of tax evasion, labor exploitation, corporate lobbying, massive profits from its web-server business, and federal antitrust enforcement that has hovered between lax and corrupt. Amazon’s power has been vast and growing for so long that it’s no longer new or noteworthy in the publishing press, except for the occasional article about its depressing brick-and-mortar bookstores, where endcap displays say things like “Books Most Frequently Highlighted by Kindle Customers.”

. . . .

Sadly, publishing will never be as interesting as the complete and total restructuring of society. But with a market share of 45 percent of print books and 83 percent of ebooks, Amazon remains capable of crippling the industry and upending its practices with little more than an algorithmic tweak.

. . . .

With the launch of the Kindle in 2007, Amazon helped reach the most “underbookshopped” readers of all — those without easy access to a bookstore or a library. The device remains a utopian innovation, a smartphone without most of the smartphone’s oppressive qualities. For all its disruptive impact on the industry and the environment, the Kindle has given readers a profound degree of choice and flexibility in their reading habits. Its accessibility features represent a true advance on the print book for the visually impaired and physically disabled. Amazon and its hardworking subsidiary, Audible, are making similar progress in audio.

In the past decade, Bezos’s early, antagonistic mentality has been diffused across a massive platform with limited oversight and the default ability to make life hell for publishers. 

. . . .

These days the buttons don’t have to vanish for publishers and authors to get screwed. Since 2017, third-party sellers are no longer relegated to links in small type: now they can compete for orders directly through the buttons. When you click buy now or add to cart, you might be purchasing a book — even a new book — from a reseller, even when you intend to do no such thing. You might end up with a foreign-market edition, or a secondhand edition at such a steep discount that the brand-new paperback seems like a bad deal. Or you might forget about the book altogether, because throughout the shopping process Amazon has been encouraging you to choose one of its own titles instead. Imagine an independent bookstore whose employees are always interrupting your browsing to offer a cheaper, bootlegged copy of the book you’re holding, and to point you to an array of even cheaper books they wrote themselves. Now imagine that process weaponized with vast amounts of information about your browsing and purchase history — and that of millions of other consumers.

. . . .

In a 1980 Senate hearing dedicated to conglomeration in the publishing industry, E. L. Doctorow warned that “when the publishing and distributing of books is finally in the hands of five or seven giant corporations, we will have a condition equivalent to that of the broadcast industry — network publishing and network bookselling.” The point wasn’t that he objected to commerce or making money, he said elsewhere in his testimony:

Publishers have always wanted to make money. . . . The point is that [the] delicate balance of pressures within a publishing firm is upset by the conglomerate values. The need for greater and greater profits and the expectation of them overloads the scale in favor of commerce — depending on the particular house and its editorial resources, faster or more slowly: the crossword-puzzle books and cookbooks and sexual-position books and how-to books and movie-tie-in books and television-celebrity books gradually occupy more of the publishers’ time and investment .

With the Penguin Random House merger, book publishing is down to the lower end of Doctorow’s estimate. The Big Five are increasingly at the mercy of a monopsonist that also serves as the digital storefront for self-published writers hoping to disrupt the big publishers. The publishers now earn over 10 percent of their annual revenue from ebooks they sell through the monopsonist, which, in return, withholds all the sales data from them, with the paltry exception of units moved. Publishing-friendly media — book reviews, and also newspapers more generally — has meanwhile been hollowed out.

Link to the rest at N+1 Magazine

PG had never heard of N+1 Magazine before stumbling across the OP.

He’s not certain whether he will hear of it again or not.

PG is regularly struck by how often the undoubtedly young writers for various online startups with pretensions toward literary commentary and reporting about contemporary book culture sound like a collection of old geezers dreaming about the good old days when Meg Ryan ran their local bookstore and Tom Hanks quit Amazon to join her there.

The rocket league

From The Bookseller:

Between 1950 and 1970s, the US and the Soviet Union (USSR) spent millions in an attempt to beat each other into space. The activity, known as the Space Race, led to a technological leap, paving the way for many of the things we take for granted today, including GPS, powdered milk and the PC mouse. Publishing has never quite made it into orbit, but just as the world changed once the US landed Apollo 11 on the Moon, so publishing was irrevocably altered by its own celestial eclipse: the 2013 merger of Penguin with Random House.

In the run-up to the mega-coupling, Random House and Hachette had long duked it out to be top dog in the UK, with Hachette ahead at the turn of the last decade thanks, in large part, to the runaway success of Stephenie Meyer’s Twilight series. With digital just beginning to make its mark, it was a period when print success made the difference to the publisher rankings, with Random House only leaping over Hachette again in 2012, thanks to E L James’ own leftfield take on Meyer’s chaste vampires.

The rest is, um, history. As this week’s publisher league table shows (see p06), PRH has an unassailable lead over the rest—a gigantic market share of 21%, making it bigger now than the next two, Hachette and HarperCollins, combined.

. . . .

The curiosity is Hachette, for so long—and, for the purposes of this analogy—the USSR to RH’s US. In 2019 its sales fell 2.7%, with a market share of 12.2%, way off its 2009 high of 16%. While much has remained the same since P joined RH, Hachette has not, consolidating its divisions within one building, and broadening its business with smart acquisitions, such as Bookouture, Quercus, JKP and Short Books. What it has not done is chase the market. If there was an element of vanity about the Space Race, it is hard not to read Hachette’s settling into second as an effort to put profit before growth, to focus on maintaining its bloc, rather than re-engaging in a disorderly hustle for the top.

Link to the rest at The Bookseller

What Are the Top Strategic Issues Facing the Book Value Chain?

From Book Business:

As we head into the middle of the year it is time to reflect on the state of our business and what might lie ahead. We have seen some significant changes in the past year as it relates to the Book MFG platform in the U.S.

I will not go through the litany of changes, but the end result is going to be a significantly consolidated platform of book printers with the bulk of the traditional offset capacity, production inkjet capacity, and book finishing solutions for mainstream book publishers being at Quad/LSC, or in one of the many plants that are now part of the CJK Group.

As the various mergers, tuck-ins, and acquisitions are integrated into their new companies, we will see ongoing consolidation of capacity and rationalization of the overall number of available press hours for one and four-color book work. For the first time in decades, book publishers are going to have to think and work on their manufacturing plans for the year, especially as they relate to work on the offset platforms during peak demand seasons.

. . . .

Supplies of book papers will continue to decline as mills close or redirect capacity to more profitable grades. Again, more planning is now going to be required by publishers and printers.

The health of book publishers is a mixed bag. The trade book folks continue to see stability and some growth of their printed products along with significant ongoing growth of downloaded audio books. K-12 publishers struggle for profitability as they are all focused on moving the revenue model from printed books to a stronger digital curriculum platform that can either supplement or even replace print. In either event, print — which in this segment is primarily four-color text books — continues to decline.

In higher education, the print decline continues in what many are experiencing as a double-digit rate. The issues for this segment are more dire than K-12. Here the publishers are dealing with a complete repudiation of their product model because of pricing issues by a significant number of their primary adopters, the professors and universities. This is a segment whose current business model may be stuck in a doom loop and, again, here we see four-color printing as one of the area’s of manufacturing that will feel the decline, which is why you may see some significant capacity rationalization in the four-color area from all the merger and acquisition activity among printers in the past 12 months.

. . . .

The retail distribution model is already changing in a dramatic fashion. Brick and mortar is in decline, especially in the big box store model. We see this in trade with Barnes and Noble as well as education with the college book store models. Amazon continues to grow its presence in both trade and higher education. Publishers and printers both need to be planning for the possibility that big box book brick and mortar might fail. How will publishers replace those sales and the bandwidth of all that shelf space? How will printers plan for the reduction in print demand when all the books sitting in stores and warehouses come back to the publishers through the return channel?

Paper continues to be an issue and it is not going to go away. There is no new domestic capacity coming online for uncoated book free sheet or groundwood for the mono books. Coated graphic arts papers of all grades are in short supply for the same reasons. Mills are closing or switching capacity to more profitable and easier to manufacture packaging grades.

. . . .

As publishers work toward reducing turnaround times with tighter SLA’s, the printers will need a distribution system that can move product quickly and effectively. The primary method for moving books is by truck. There is a critical shortage of over-the-road truck drivers in the U.S. and the shortage is growing as baby boomers leave the workforce and trucking companies struggle to attract good candidates into the jobs. How will publishers plan for this emerging problem?

Offset print plants require skilled craftsman to run one and four color offset presses, as well as high speed soft cover and case binding lines. There is a significant amount of labor required in a medium size and large book plant, especially in the bindery. Many of the markets where these book plants exist today have a shortage of the skills and labor required for these plants to run at full capacity. This is an ongoing issue, which was experienced by many mainstream book printers this past year and will continue as the talent pool who used to fill these jobs find better paying and less demanding jobs. This issue has a compounding effect. It creates capacity shortages caused not by lack of equipment, but rather by the inability to utilize all the theoretically available time on that equipment for lack of operators. This then reduces the potential ROI on those expensive investments in web presses and new and more automated binding lines.

. . . .

We have some really tough issues facing the book business and the structure of the future book value chain. This is a very conservative industry and the nature and past behavior of the industry as a whole would suggest that movement and change will not take place until crisis is upon us. We should all be learning from what is happening in the higher education business.

Link to the rest at Book Business

PG suspects that most people in the traditional publishing world take printing capacity for granted. He hasn’t seen a potential printing capacity problem discussed in any publication that the managers of traditional publishers are likely to read.

Obviously, POD doesn’t work if there isn’t enough P.

2020: Zero year thoughts about the changes in book publishing

From veteran publishing consultant, Mike Shatzkin:

In 1990, three zero years and three decades ago, the universe of books available for a person to buy or for a store to carry was pretty much defined by “Books in Print”. This annual compilation, at that time primarily delivered as a book itself, passes along the aggregate of what publishers say is available. At that time, the total was in the mid six figures, not more than 500,000 titles. BIP contains duplicates, so the number of available titles was probably less than that, but that’s a reasonable working number.

That means each new book brought out by a publisher was competing against a universe of half-a-million other books.

As we begin 2020, Ingram’s Lightning Source has about 18 million titles in its Lightning print-on-demand database, ready to be printed and delivered to you tomorrow. Of course, there are duplicates to consider and some junk in there too, so let’s say that there are actually 15 million discrete titles. There are also more than 750,000 titles in stock in Ingram’s warehouses, most of which are not reflected in the POD database, which tends to collect titles after their prime sales life has passed.

So each new book brought out by a publisher today may be competing against 15 million other possible titles. The competitive set has grown by as much as 30 times.

When substantial commercial publishers or university or academic presses with real sales organizations published new titles 30 years ago, they routinely sold at least a couple thousand copies of almost every title. Stores that carried 125,000 titles were proliferating at that time, which was about a quarter of the theoretical possibilities and well over half of the titles that had any real commercial appeal. That meant both that the consumer was likely to find what s/he was looking for in one of those giant stores and that the publishers with real access to the retail network could count on a measurable sales result for everything they did.

This is no longer true in the 15+ million title and heavily online retail world we now live in. There just aren’t as many bookstores as there were back then and the ones we have are much smaller. Today it is not uncommon for titles on a major publisher’s list to sell almost nothing, low hundreds of copies or even less.

The difference is critical. Sales of, let’s say, 2000 copies of a hardcover book will deliver about $25,000 or more in sales revenue for the publisher. If the advance was modest and the publisher didn’t wildly overprint, that would probably cover the out-of-pocket expense of delivering the books required to produce that revenue. In other words, most books published by most substantial publishers in those days didn’t cost the publisher out-of-pocket cash.

. . . .

When Thomas McCormack was CEO of St. Martin’s Press, which he was for about the last three decades of the 20th century, he exploited that understanding to the max. McCormack saw that the true revenue picture meant that the more titles he published with the same corporate overhead, the more money his company would make. St. Martin’s relentlessly expanded their title count year after year. And they grew consistently.

The key insight was that overhead is mostly fixed, not variable. And calculations that pretend that it is variable lead you to very erroneous conclusions.

Another important reality of the new title economics that existed then was that the backlist grew steadily. Not every title that recovered its costs would sell for a long period of time, but many of them did. Others produced additional revenue from rights sales: foreign, paperback, book clubs. So the short-run economics that encouraged title count growth also created companies that were constantly expanding their asset base to produce future revenues.

The predictability of a substantial minimum sale from established publishers back then was the result of two things that have since changed. One is the number of titles effectively competing for sales all the time, the explosion from half-a-million choices to 15 million. But the other is that the sales base shifted. Thirty years ago, the sales came mostly from a highly disparate retail network, which did have some big customers but also had hundreds of smaller ones that had to be addressed individually, preferably by a human being who showed up to “present” the title choices. Big publishers had tactical advantages to employ for both the chains and the individual accounts.

The major accounts naturally gravitate to the major suppliers. They are important to each other. The big publishers have the biggest books, the biggest budgets to spend on marketing and promotion, and the authors whose store appearances will pull in the most customers. But everybody, large or small, put their books in front of the big chain accounts. Thirty years ago that meant both the mall chains, Walden and Dalton, and the expanding superstore networks of Borders and Barnes & Noble.

But the vast array of independents, several times larger than it is now in numbers of stores and even more dramatically larger than today in shelf space, depended on visits from local reps to know what to stock. And there the smaller publishers were much more variable. Many didn’t cover individual bookstores effectively.

So with bigger stores, a smaller number of titles, and filters that favored placement of the larger publishers’ books, the net result was that big publishers achieved a pretty high minimum sale right to the bottom of their list. And the ultimate consumers chose from the books that were in stores, not the entire universe, and publishers with real sales organizations had a significant advantage.

All of this began to change with Amazon’s arrival in 1995. Online sales grew relentlessly, but slowly at first. Twenty years ago Amazon was still a single-digit percentage of the total book business in the US. Today it is probably more than half.

. . . .

[F]rom the consumer perspective, shopping at Amazon (or any online retailer working with the Ingram database, which includes other big brand merchants) gives them the choice of any book, whether the publisher has a good sales force or not.

With more titles competing for sales and the advantage of blanket coverage by the big publishers diluted, it is no longer true that every title on a big list achieves a substantial minimum sale. Big publishers are having the experience of three-figure unit sales — and sometimes even less — on books they issue, and not infrequently.

The net result is that new title publishing has become much riskier and more expensive for all publishers. They naturally react to that by publishing fewer new titles, and that describes the tactics of just about every publisher in the business over the past decade. And a smaller percentage of those titles go on to become enduring backlist.

. . . .

If this analysis is right, the inevitable result is that commercial trade publishing will (continue to) shrink. (And it will also consolidate. The big publishers today substitute for new title production by buying other people’s backlists.) The number of titles entering the marketplace might not shrink, because self-publishing authors and other entities that see benefit to putting out books will continue to add titles. Those publishers are not primarily motivated by profit. But publishers who are primarily motivated by profit will keep seeing, as they have, that the financial risk of putting out a new title keeps growing.

Publishers have found ways to turn the new world into an advantage for their backlist (which is why they find acquiring others so attractive). They can capitalize on a break more readily than they used to because an increasingly-online marketplace does not require inventory to be “in place” for sale. 

. . . .

What could be deceptive is that the new world of less new title production and the shift to online sales is making profit growth attainable, almost routine. Cash investments go down and overheads go down (less shipping and billing and warehousing). Returns, which are expensive, also go down.

But, unlike the growth that came from an expanding title base 30 and 40 years ago, today’s growth can not be sustained on the present course. (In fact, the new audio growth is itself a delayed benefit from the old title base expansion!) Backlist title decay — lower sales in each format for most titles year after year — is still a fact of life; a backlist beating last year’s sales is only an occasional event. There will be an end to audio sales growth for publishers as the available backlist is exploited and those available to be acquired also are diminished in number.

And the non-commercial portions of the business will continue to churn out new titles to compete with the output of publishers. The growth of the competing title base will not stop.

Link to the rest at Mike Shatzkin

PG has always been interested in Mike’s discussions of the inner world of publishing, in part because of his perspective arising from decades in the business. The role of backlist in the long-term profitability of a publisher, as described in the OP was interesting and reflects the thoughts and experiences of indie authors with large backlists. It also explains why, although the author is receiving a pittance in royalty payments, some publishers are so resistant to reverting rights to the authors (which behavior helps the parts of PG’s business involving “persuading” publishers that it’s a good idea to revert rights instead of having the existence of some very poorly-drafted boilerplate in the client’s publishing agreements as well as every other author’s publishing agreements signed during the same period of time).

(It will shock many of you that publishers sometimes publish editions of books for which they hold no rights under the terms of the contracts they drafted and signed. And sometimes, publishers get mixed up about how royalties should be paid to the author according to the publishing contracts. PG has never seen a publisher which paid more royalties than the author was entitled to, however.)

Back to Mike’s thoughts. Perhaps he is wrong, but, to PG, it appears that, since his retirement several months, Mike’s posts have become more pessimistic (realistic?) about the future of the traditional book business.

With respect to relying on backlist titles for a significant and predictable portion of a publisher’s income as described in the OP, PG will note that many indie authors experience the same thing. Also, each successful new book an author publishes reaches new readers who then explore the author’s backlist for other books they will enjoy.

For authors who are seeking to pursue the traditional route to publication of their books, there is a credible alternative to mourning over rejection slips. The stories from earlier decades about a talented author who was rejected by 30 publishers before finally finding one who would publish the book will, in PG’s superabundantly humble opinion, become more and more rare.

Even if indie publishing is not her/his first choice (as it is for a growing number of savvy younger authors), the existence of remunerative indie publishing as an alternative to dealing with the flavor of the month attitude in New York City and London is going to attract more and more authors with important/entertaining stories to tell.

One lovely thing about writing and reading is that we’ll never run out of stories.

OverDrive Reports Record Digital Borrowing in 2019

From Publishers Weekly:

Public libraries around the world generated a record level of digital content circulation in 2019, providing patrons access to more than 326 million e-books, audiobooks and digital magazines, a 20% increase over the previous year, according to a report by Rakuten OverDrive, a digital distribution vendor for libraries

According to the report, 73 public library systems in five countries each loaned over 1 million digital books over the past year, including eight systems that hit the million loans mark for the first time. Among the top digital library lending systems are the Toronto Public Library (6.6 million digital loans), Los Angeles Public Library (the top U.S. library with 5.9 million digital loans); and the National Library Board of Singapore (the top lender outside of North America with 4.2 million loans).

According to the OverDrive report, the increase in digital borrowing represents the “library’s role as a valued discovery channel” for publishers and authors. Nevertheless, the OverDrive report on digital lending comes in the wake of continuing concerns by publishers that digital borrowing may undermine book sales. These concerns have led to a continuing dispute between publishers and libraries over efforts by some publishers to restrict the ability of libraries to offer digital access to their titles.

According to the OverDrive data, the number of e-books borrowed rose 15% in the year to 211 million; digital audiobooks borrowed jumped 30%, to 114 million, and 59 million children’s/young adult checkouts took place, a gain of 27% over 2018.

Link to the rest at Publishers Weekly

PG thought publishers’ concerns about consumers borrowing physical titles from the library instead of buying them at bookstores had been resolved a long time ago. If lending libraries and the consumer behavior they enable were dangerous or fatal to publishers and physical bookstores, such damage would have manifested itself long ago.

If it makes sense for publishers to sell physical books to libraries with the understanding that the library is going to lend the book and the publisher will receive no incremental income from such loans, nothing about ebooks should really change the underlying business considerations. With the specialized software the library uses to lend a copy of an ebook and delete it from the reader’s device at the end of the loan, the likelihood that ebooks lent through the library are going to be pirated is lower than those sold (licensed) through Amazon where no such automatic deletion function is built into the ebook management system (at least to PG’s knowledge).

Here’s an excerpt from the help file of Libby, a popular (the most popular?) lending software used in the United States:

Books are automatically returned to the library on their due date. When they’re returned, they’re also removed from your Loans and deleted from your device (if downloaded).

PG has noted before that on a scale of most to least sophisticated marketers and advertisers, traditional publishers are at the bottom, just below used car lots and payday lenders.

Why?

Free samples are a long-time staple of advertising and promotion campaigns for a variety of products.

Perhaps there are physical bookstores that do not allow visitors to leaf through and read parts of books as part of the shopping process, but PG is not aware of their existence. Such consumer behavior is sampling. Amazon permits the same behavior in its bookstore. No one expects that everyone who samples a product will purchase it.

If sampling was not a reliable method of increasing sales, PG expects retail establishments would end the practice.

If a reader borrows an ebook from a library by an author she hasn’t read before, from the reader’s perspective, that’s another form of sampling. (In this case, the publisher receives some compensation from the library for licensing the book in the first place.)

If this instance of book sampling is successful and the reader enjoys the book, then returns it to the library and looks for the next book in the series or another book by the same author and finds a two-month waiting list to borrow that next book, the reader is only a few clicks away from buying the next ebook by that author on Amazon and starting to read it in a couple of minutes. The reader may even purchase a printed version of the book she has borrowed and enjoyed for her own physical library, sign up for the author’s and/or publisher’s email list, etc.

Discovering a great new author and buying other books written by that author is a far more frictionless process with ebooks than it is with physical books. Going to a physical bookstore to buy that book requires transporting oneself to that store, hoping the store stocks the book, etc., etc. Buying a physical copy of the book from Amazon involves a wait of at least one or two days.

The incremental cost of goods for the publisher in creating, storing, transporting, etc., a copy of the second ebook is probably zero. The same costs for a physical book are definitely more than zero.

A sophisticated seller would be overjoyed to sell products with no incremental costs of producing and transporting those products instead of dealing with the costs and friction involved in selling physical products. Bill Gates, Microsoft and a lot of other people and business organizations have become extremely wealthy from selling organized collections of electrons.

The 2010s were supposed to bring the ebook revolution. It never quite came.

PG’s last post on December 24 was about the following Vox article that purported to talk about what a bust ebooks have turned out to be.

If you missed it in the holiday rush, there were some good comments and, yes, it is a Vox article, so you can assume the author was born yesterday.

From Vox:

At the beginning of the 2010s, the world seemed to be poised for an ebook revolution.

The Amazon Kindle, which was introduced in 2007, effectively mainstreamed ebooks. By 2010, it was clear that ebooks weren’t just a passing fad, but were here to stay. They appeared poised to disrupt the publishing industry on a fundamental level. Analysts confidently predicted that millennials would embrace ebooks with open arms and abandon print books, that ebook sales would keep rising to take up more and more market share, that the price of ebooks would continue to fall, and that publishing would be forever changed.

Instead, at the other end of the decade, ebook sales seem to have stabilized at around 20 percent of total book sales, with print sales making up the remaining 80 percent. “Five or 10 years ago,” says Andrew Albanese, a senior writer at trade magazine Publishers Weekly and the author of The Battle of $9.99, “you would have thought those numbers would have been reversed.”

And in part, Albanese tells Vox in a phone interview, that’s because the digital natives of Gen Z and the millennial generation have very little interest in buying ebooks. “They’re glued to their phones, they love social media, but when it comes to reading a book, they want John Green in print,” he says. The people who are actually buying ebooks? Mostly boomers. “Older readers are glued to their e-readers,” says Albanese. “They don’t have to go to the bookstore. They can make the font bigger. It’s convenient.”

Ebooks aren’t only selling less than everyone predicted they would at the beginning of the decade. They also cost more than everyone predicted they would — and consistently, they cost more than their print equivalents.

. . . .

When the Kindle entered the marketplace in 2007, Amazon had a simple sales pitch: Anyone with a Kindle could buy all the ebooks they wanted through the online marketplace, and many of those ebooks — in fact, all New York Times best-sellers — would cost no more than $9.99.

$9.99 is a steal for a new book. At the time, most hardcovers were averaging a list price of about $26, and many cost more. But for Amazon, this price point was an apparent no-brainer. The first generation Kindle was expensive, and value conscious customers needed some incentive to buy into it. Why would anyone spend $399 on an e-reader if they couldn’t expect to make up at least part of the cost in a discount on ebooks?

And while this point is often glossed over, Amazon was actually following a precedent set by publishers in its pricing model. In her opinion for US v. Apple, Judge Denise Cote noted that before 2009, most publishers discounted ebooks by 20 percent from the price of a hardcover, which often led to a suggested list price of around $9.99.

But by 2009, publishers had changed their minds. Now they considered the idea of $9.99 ebooks to be an existential threat. Printing and binding and shipping — the costs that ebooks eliminated — accounted for only two dollars of the cost of a hardcover, publishers argued. So the ebook for a $20 hardcover book should cost no less than $18. And according to publishers, by setting the price of an ebook at $9.99, Amazon was training readers to undervalue books.

. . . .

Before we delve further into the weeds here, a quick primer on how book prices are set. Print books are generally sold under a wholesale model, which works like this: First, the publisher will set a suggested list price for a book; say, $20. Then it will sell the book to resellers and distributors for a discount off that suggested list price. So if Simon & Schuster wants to sell a $20 book to Amazon, Amazon might negotiate a discount of 40 percent for itself and end up paying Simon & Schuster only $12 for that book.

But once Amazon owns the book, it has the right to set whatever price it would like for consumers. The $20 list price that Simon & Schuster set was just a suggestion. Under the wholesale model, Amazon is free to decide to sell the book to readers for as little as a single dollar if it chooses to.

Until 2010, ebooks were sold through the wholesale model too. So if Simon & Schuster was publishing a $20 hardcover, they could choose to set a suggested list price of $18 for the ebook — two dollars less than the hardcover — and then sell that ebook to Amazon at a 40 percent discount for $10.80. And Amazon could, in turn, feel free to sell that ebook for $9.99 and swallow a loss of 81 cents.

To be clear, the numbers we’re using here to get a handle on how pricing works are imaginary. (Amazon negotiates different discounts for itself at different times from different publishers, sometimes around 40 percent, but at other times higher and at other times lower.) But we do know that Amazon was making very, very little money off ebook sales in 2010, and was in fact probably losing money on most of them.

. . . .

“Amazon can still discount whatever they like on the print side,” explains Jane Friedman, a publishing consultant and the author of The Business of Being a Writer. On the ebook side, however, Amazon now lists publisher-mandated prices, often with the petulant italic addition “Price set by seller.” “So the market is very weird, and often the ebook costs more than the print,” Friedman says. “Sometimes it feels like Amazon is trying to make the publishers look ridiculous.”

And because ebooks are often more expensive than Amazon’s heavily discounted print books, traditional publishing’s ebook sales seem to have fallen off — and Amazon is more dominant than ever in the print book market. “It’s so much cheaper,” says Friedman.

In this new market, high ebook prices make it harder than ever for young authors in particular to survive. “The split has really hurt debut novelists,” says Friedman. “It’s hard to ask readers to take a chance on someone unproven at that high price point, and since the ebook market does lean towards fiction, it’s hurting the new people.”

Self-published authors, meanwhile, are flourishing. They’re allowed to set their own ebook prices just like publishers are — and consistently, they set their prices very, very low. “It’s a shadow market,” Friedman says. “Novelists with huge backlists go and put them out as ebooks independently. And if a reader has a choice between reading this great series at $2.99 a pop or a $12 novel, what are they going to pick?”

Antitrust law professor Christopher Sagers argues that the outcome of the DOJ’sebooks case shows that the real problem with the industry is not just that Amazon has a monopoly. The big trade publishers, he says, have a monopoly too.

“There used to be hundreds of publishing companies. They’re now mostly owned by five,” Sagers says. (After that Department of Justice lawsuit, Penguin merged with Random House, and the Big Six became the Big Five.) “Why are ebooks expensive? It’s not because Amazon is vicious. It’s because there’s no competition at the wholesale level.”

. . . .

The Big Five publishers “are huge, and they have been able to put in place practices that are kind of unfair and that authors have to put up with,” Friedman allows. “That said, they need that kind of size to be able to effectively deal with something like Amazon. If you look at an indie publisher, I wouldn’t want to be one of them.”

Link to the rest at Vox and thanks to DM for the tip.

PG notes that the OP devotes one paragraph to independent authors and that paragraph implies that indie authors are primarily publishing their revered backlist titles.

Unlike Big Publishing, nobody is really beating any publicity drums for indie authors.

One other point the OP doesn’t discuss is that Barnes & Noble is still cratering and, when it finally goes down the drain, retail bookselling via physical bookstores will take a huge hit and publishers who have failed to develop their chops selling ebooks and encouraging readers to buy them will regret that their profitability will take an enormous hit.

How the decade in books changed what and how we read

From Our Windsor.ca:

In 2010 or so I bought my first e-reader. A Kobo. I was intrigued by the idea of an e-reader; I thought it might be convenient. But I equivocated — should I buy a Kobo? Or a Kindle?

Kindle was associated with the growing bookseller Amazon, the Kobo with the Canadian company Chapters/Indigo. Which company would have more books available? Apple released the first iPad at the beginning of the year and sales took off immediately. Technology was changing so quickly I wasn’t sure what to buy. Would it all be obsolete a year from now?

Little did I know then that the questions I was asking would form the crux of what occurred in books over the ensuing decade, in which what we read, how we read and who we read have created industry-wide changes.

Bookstores aren’t dead

One of the hallmarks of the decade before the 2010s was the death of the bookstore, thanks to the proliferation of big box stores selling books plus online retailers, Amazon in particular.

A recent headline in the American newspaper the Grand Haven Tribune asked: “Are bookstores back?” The piece quotes the American Booksellers Association, which says between 2009 and 2019 the number of new shops owned by members increased by 53 per cent. They might not be big, but they are there.

New bookstores have been opening in Toronto and across the country, too. A bookshop can’t live by selling books alone — but they can when the community gets involved. Stores such as Another Story Bookshop in Toronto have increasingly organized author readings; some organize writers’ workshops, book clubs. In other words, bookstores and books do what they’ve always done: contribute to a community of ideas and storytelling.

Print’s not dead, either

The total volume of print units sold in 2018, as tracked by BookNet Canada SalesData, is 54.7 million at a value of $1.13 billion. BookNet’s State of Digital Publishing in Canada survey showed that 18.6 per cent of books purchased in 2017 were ebooks. That was up just slightly from 2016.

But when it comes to Canadian books, the picture looks bleaker. According to the More Canada Report, published in December 2018, only 15 per cent of books purchased were written by Canadians. Part of the problem is that it’s difficult for readers to identify Canadian books. That’s in great part due to the way they are bought: through Amazon. Amazon’s algorithm recommends books to you — but not necessarily Canadian books, leaving Canadian publishing houses and Canadian authors at the mercy of an algorithm that isn’t interested in promoting them.

. . . .

The report also found that independent publishers’ sales were down 44 per cent over the past 10 years.

That’s happened as big publishers are getting bigger. The publishing giant Penguin Random House didn’t quite exist at the beginning of this decade — the takeover of the two companies Penguin and Random House by the German multinational Bertelsmann wouldn’t take effect until 2012.

. . . .

Self-publishing has also become a way to, sometimes, make a living as a writer and publish books that mainstream publishers might not have picked up. It also allows mainstream writers to capture income in different ways — they become hybrid writers, publishing some of their work in the traditional way under one name and self-publishing under another.

Some, such as the science fiction writer Robert J. Sawyer, have launched Patreon accounts so that readers can basically become “patrons of the arts and of individual creators,” he told the Star in a 2018 interview. Even bestselling authors find the freedom of non-traditional publishing a positive thing. They get to keep a bigger cut of the books they sell and they get the creative freedom to do what they want.

Does all this access to potential audiences work? It depends. Overall, writers are earning less money than they ever have. A Writers’ Union of Canada survey in 2018 found a 27 per cent decrease in writers’ income over the previous three years. Part of the reason for that was copyright legislation in Canada. In the U.K., authors reported in 2018 that their incomes had declined 15 per cent over the previous three years.

. . . .

Marketing books changed as publishers embraced online advertising through Facebook, finding the ability to directly target a specific audience and, as the algorithms got even better, specific readers, was attractive. “Influencers” also became a key part of targeting book buyers. With the increasing closure of traditional media outlets came the withering of books sections and an erosion of readily accessible reviews. Instead, reader-generated review sites such as Goodreads proliferated. Some mainstream news outlets, including the Star, kept their books sections going, and many smaller literary magazines began publishing more reviews and stand-alone review sections.

Link to the rest at Our Windsor.ca

As PG and others have pointed out before, stories about the book industry that cite legacy publishing and traditional book store industry statistics are always wrong because Amazon doesn’t break out sales figures for books, including books from traditional publishers, self-published books and print on demand books and, with no denigration of Kobo intended, Amazon sells the large majority of English-language ebooks.

Amazon created the market for ebooks, at least in the English-speaking world, by offering ebooks at attractive prices, building and selling ebook readers at attractive prices, creating the software and commercial infrastructure to build, distribute and sell ebooks efficiently around the world and putting a lot of brains and money into the task of introducing and attracting readers to ebooks. Because old-line traditional publishing promotional tools like book reviews in newspapers and magazines (yet another sinking ship and no friend to Amazon or other online competitors), Amazon acquired and built Goodreads up into a leading (the leading?) online book review site.

Could anyone else have accomplished this task as quickly and effectively and at the scale Amazon did? A hypothetical competitor might have done so, but real-world competitors have not. See, for example, Nook.

PG is not certain whether the Writers Union of Canada welcomes indie authors or not, but most traditional authors organizations are of little interest to indie authors because these organizations focus on topics like improving the standard contract terms that old-line publishers offer authors and flagging the latest fly-by-night publishing scam that comes floating up from the sewers.

PG is not familiar enough with the details of the Canadian bookstore market to know whether a retail disaster on the order of Barnes & Noble has occurred or is threatened, but as he has mentioned before, if Barnes & Noble can’t be saved, a huge part of the world of traditional publishing and bookselling will simply disappear.

If you were counseling a college student nearing graduation about career choices, would you recommend that they go to work for Barnes & Noble? Penguin Random House?

As far as a writing career is concerned, if this hypothetical college student wanted to earn a living by writing, would you suggest s/he complete a quality manuscript, then start sending it to agents or publishers and wait for a response? While working at Starbucks? Instead of signing up for campus interviews with companies who want to hire graduates right away?

 

 

The Long Tail of ‘Where the Crawdads Sing’

From The New York Times:

In the summer of 2018, Putnam published an unusual debut novel by a retired wildlife biologist named Delia Owens. The book, which had an odd title and didn’t fit neatly into any genre, hardly seemed destined to be a blockbuster, so Putnam printed about 28,000 copies.

It wasn’t nearly enough.

A year and a half later, the novel, “Where the Crawdads Sing,” an absorbing, atmospheric tale about a lonely girl’s coming-of-age in the marshes of North Carolina, has sold more than four and a half million copies. It’s an astonishing trajectory for any debut novelist, much less for a reclusive, 70-year-old scientist, whose previous published works chronicled the decades she spent in the deserts and valleys of Botswana and Zambia, where she studied hyenas, lions and elephants.

As the end of 2019 approaches, “Crawdads” has sold more print copies than any other adult title this year — fiction or nonfiction — according to NPD BookScan, blowing away the combined print sales of new novels by John Grisham, Margaret Atwood and Stephen King. Putnam has returned to the printers nearly 40 times to feed a seemingly bottomless demand for the book. Foreign rights have sold in 41 countries.

. . . .

Industry analysts have struggled to explain the novel’s staying power, particularly at a moment when fiction sales over all are flagging, and most blockbuster novels drop off the best-seller list after a few weeks.

. . . .

For the past several years, adult fiction sales have steadily fallen — in 2019, adult fiction sales through early December totaled around 116 million units, down from nearly 144 million in 2015, according to NPD BookScan. In a tough retail environment for fiction, publishers and agents frequently complain that it has become harder and harder for even established novelists to break through the noise of the news cycle.

“Crawdads” seems to be the lone exception. After a burst of holiday sales, it landed back at No. 1 on The Times’s latest fiction best-seller list, where it has held a spot for 67 weeks, with 30 weeks at No. 1.

“This book has defied the new laws of gravity,” said Peter Hildick-Smith, the president of the Codex Group, which analyzes the book industry. “It’s managed to hold its position in a much more consistent way than just about anything.”

Link to the rest at The New York Times

Penguin Random House’s International CEO’s Year-End Letter

From Publishing Perspectives:

In his message to Penguin Random House’s (PRH) worldwide staff, the company’s global CEO Markus Dohle thanks his colleagues for “bringing the world’s best books to readers.”

Commending the workforce for “a run of bestsellers around the world,” Dohle calls out a wide range of international success stories.

“Among the critical acclaim and international literary awards our authors received this year,” he writes, “are the Nobel Prizes for Literature and Economic Sciences, won by Olga Tokarczuk, and Abhijit Banerjee and Esther Duflo, respectively, as well as the UK Booker Prize for co-winners Margaret Atwood and Bernardine Evaristo, and Canada’s Scotiabank Giller Prize for Ian Williams.”

He also points to “many of our companies and territories” in which he sees “market-leading positions” being strengthened in shares and revenue.

“As one major priority, we long have focused on expanding our leadership in the children’s market,” Dohle writes, “and this year we acquired several thriving businesses that will help us do exactly that: the global publisher Little Tiger Group, the book-publishing assets of India’s Duckbill Books, and the intellectual property world rights for Eric Carle.

. . . .

Perhaps an eye-opener to consumers who know only their own territory or country’s PRH, Dohle goes on to cite several significant, far-flung expansions from the year, writing, “”We have capitalized on a number of additional growth opportunities with the purchase of Catalan-language publisher La Campana Llibres in July. We made our debut as a South East Asia publisher with the first list from Penguin Random House in Singapore,” based on the establishment of the new installation in October 2018.

“We increased our ownership stake in Brazil’s Companhia das Letras, and then they acquired Zahar in October.”

. . . .

In what may be the most reflective of the interests you hear when you speak with Dohle about his work or listen to him in a stage presentation, he writes, “What is most notable about these acquisitions is that the founders and leaders of these companies wanted to become part of Penguin Random House because of our performance and our culture.

“Since our earliest days as the world’s largest trade publisher, I have said that sheer size, in and of itself, is not a competitive advantage. Rather, what’s key to our success is leveraging our scale as a force for greater good and demonstrating to our authors that we can connect them to more readers than any other publisher.

“We all need to continue to be ambassadors of our unparalleled publishing, unmatched global reach, and first-in-class operations. And we want to embrace and leverage our unique role in the world as a force for good and a creative and entrepreneurial community of book lovers.”

Link to the rest at Publishing Perspectives

Perhaps PG is being too persnickety, but, when used by a publishing executive, “our authors” carries a hint of an ownership attitude toward a corporate asset.

 

Gartner’s Predictions For Retailers Show More Change Ahead

From WHICH-50:

Customers are demanding greater levels of contextualisation of products and services. Retail CIOs can leverage intelligence to capture deeper insights, anticipate customer needs and proactively deliver across every touchpoint. Retailers must reinforce their store’s position as an integral part of delivering unified commerce. Gartner’s recent research Predicts 2020: Consumers Determine Retail Success Well Before the Sale expands on the five predictions from our Gartner team on the future of retail.

. . . .

The retail industry continues to transform through a period of unprecedented changes, with customer experience fast becoming the new currency. The digital disruption caused by new technologies and a shift in customer expectations continues to challenge traditional retail models.

. . . .

Robots

Tight labor markets and disruptive technologies have caused retailers to investigate new human-machine hybrid operational models. These models are built on the foundation of AI and automation technologies to assist human workers in streamlining and optimising efficiency and accuracy in tasks such as warehouse picking, inventory management and customer services to boost productivity.

Inventory

The level of investment for digital transformation efforts continues to rise, forcing retailers to find alternate sources of funding beyond cost optimisation efforts. Inventory reduction provides a clear opportunity for funding if “dead” inventory can be reduced. This will require a delicate balance of inventory management, particularly in the store, as buy online, pick up in store (BOPIS) remains a popular choice for consumers. Many retailers are now leveraging their existing store estate as local fulfillment hubs to mitigate the rising costs of last-mile delivery. Furthermore, retailers now have the challenge of predicting demand and aligning inventory at a localized level to support customer expectations for same-day in-store pickup or same-day delivery option. Retailers must also further investigate new models to profitably deliver against the growing needs of online shoppers and make their networks of stores less of a financial constraint.

Digital Workplace

This will require a focus on associate training and development, including upskilling in-store associates to perform a wider variety of specialised tasks. At the same time, retailers continue to have challenges in retaining skilled and productive staff, as well as a continuing increase in employee turnover. To mitigate labor constraints, retailers can collaborate to enable a shared workforce.

Alternate labor models are part of the “future of work,” which will include more freelance, part-time and limited-term employment. This is the expectation of the millennial and Gen Z cohort as they become the mainstay of both consumer and labor markets.

. . . .

Artificial Intelligence

Ever-changing consumer expectations and the addition of new business models mean retailers must operate more efficiently, preemptively and at scale. Through the application of AI across a retailer’s ecosystem, retailers are applying data analytics into every touchpoint of their business. Including sales predictions, consumer personalisation, store optimisation and product recommendations.

Link to the rest at WHICH-50

As many perceptive visitors to TPV will have already concluded, PG posted this item with Barnes & Noble in mind.

In 2018, Barnes & Noble reported revenues of $3.7 billion for the full year. It presently reports that it has 627 retail bookstores, including stores in all 50 states in the US.

Barnes & Noble is by far the largest operator of physical bookstores in the United States.

The second-largest retail bookstore in the US is Books-A-Million: 260 retail book stores in 32 states with an estimated annual revenue of $472 million.

PG Notes on Books-A-Million:

  1. Books-A-Million went public in 1992 at an initial price of $3.00 and its share price reached a high of $39 per share in 1998. In December, 2015, the stock’s final closing price on a public market was $2.64 per share. During 33 years as a public company, the company had declined in value.
  2. At that time, all shares of Books-A-Million were acquired by its chairman and it became a privately-owned company once again.
  3. In 2014, Books-A-Million was identified by 24/7 Wall Street as America’s worst company to work for, citing low satisfaction among employees due to “high stress and low pay… low chance of promotion, [and] hours are based on magazine and discount card sales.”
  4. Doing a bit of math – always a dangerous thing – PG determined that it would take almost 8 booksellers the size of Books-A-Million to equal the annual sales of Barnes & Noble.

The third-largest retail bookstore in the US is Half Price Books: 127 stores in 18 states with an estimated annual revenue of “about” $230 million. (Some third-party sources say sales are lower – $208 million is one estimate.)

PG Notes on Half Price Books:

  1. 45 of the company’s 127 stores are located in the state of Texas.
  2. Many (All?) of the stores also sell used books.
  3. Per PG’s still-impaired math, it would take about 16 booksellers the size of Half Price Books to equal the annual sales of Barnes & Noble.

PG’s bottom lines from this mish-mash of facts and statistics:

  1. Barnes & Noble’s new CEO, James Daunt, doesn’t strike PG as the kind of guy who will embrace and expand the BN online bookstore. He seems to be a B&M sort of retail guy who only grudgingly tolerates ecommerce.
  2. Based on what PG has read about Mr. Daunt, he also doesn’t seem to be the kind of guy who will, per the OP, develop “human-machine hybrid operational models,”  position BN’s retail stores “as an integral part of delivering unified commerce” or “investigate new models to profitably deliver against the growing needs of online shoppers.”
  3. In contrast to PG’s impression of Mr. Daunt, PG believes Jeff Bezos would hire the Borg to staff Amazon warehouses if only to silence major media bleating about the poor oppressed and exploited Amazon warehouse employees who really need to unionize, etc., etc., etc.
  4. As far as either artificial intelligence or the old-fashioned kind of intelligence that resides between an employee’s ears, Amazon is already so far ahead of anyone else with respect to selling its customers exactly what they want at a great price at the precise time they want it that no traditional retailer of fungible products like books has much of a chance.
  5. Are serious readers and book-purchasers really pining for a better retail bookstore so they don’t have to go to Amazon to buy a book right away?
  6. In an era where everybody seems to be pulling a device out of their pocket to look at a screen, are ebooks really going to give way to dead-tree products sold in physical bookstores?
  7. If Barnes & Noble continues to sink into the commercial sunset, closing stores to lower costs, downsizing, trimming, cutting, etc., etc., what’s the future of Big Publishing?
  8. Does “Only an established publisher with a good reputation can get your book into the bookstore” carry much weight when that bookstore is called Half Price Books? What about, “We can only publish one book per year for any author other than James Patterson?” or, “We don’t accept manuscripts other than those presented to us by a literary agent?”

 

US vs. Apple

From The Wall Street Journal:

Politicians and social critics who worry about “the curse of bigness”—and vow to rewrite antitrust law to break up Facebook and Google—forget what happened the last time the government used the law against a Silicon Valley company. In 2012 the government successfully sued Apple for daring to compete with Amazon in selling e-books. The unintended result was not exactly a victory for the consumer or for competition: the continued dominance of Kindle, Amazon’s e-book format and reading device; increased e-book prices; and suppressed e-book innovation.

Chris Sagers, a law professor at Cleveland State University, explains in “United States v. Apple: Competition in America” what he sees as confusion about antitrust law. His analysis can be helpful—he notes the long history of companies invoking claims of “predatory pricing” as a cudgel against more efficient competitors and stresses that consumers often benefit when industries and companies are driven out of business—but he is confused about the case itself.

His thesis is that Apple’s entry into the e-book market was so clearly a violation of antitrust law that critics of the case must not believe in competition. But critics object to an interpretation of antitrust law that ended up punishing Apple for introducing a new pricing approach—an approach that is now common in every other area of online sales. Mr. Sagers forgets the guardrail rule of antitrust: Don’t bring cases against innovations that create more competition.

Consumers were delighted when Amazon launched its Kindle e-reader in 2007, and book publishers were happy to sell books in digital form. But there was an unusual feature. In its selling of e-books, Amazon operated according to the same pricing arrangement that had governed the sale of print books—that is, it bought e-books wholesale and chose its own price for them, just as bookstores had long done with print books. Brick-and-mortar bookstores needed this pricing flexibility for many reasons, not least to clear their inventory of unsold books by means of lower prices. The arrangement let Amazon sell e-books for years as a loss-leader—at the low price of $9.99—to boost profitable sales of its Kindle devices.

Around the same time, Apple had set about licensing music, video and games so that consumers would have reasons to buy its iPad. Apple realized that, for digital goods, there was no reason to follow the wholesale model. It could simply set up a revenue-sharing formula. Content owners and app developers—think of an iPad or iPhone game, such as “Minecraft” or “Fortnite,” that offers premium features—could pick their own price, even choosing to offer content free, and Apple would take 30% of any sales as a commission.

When Steve Jobs decided to include e-books on the iPad in 2010, Kindle had a 90% market share. So book publishers were again delighted—that Apple would be entering the market with its revenue-share model and letting publishers set the prices for their e-books. The largest publishers met among themselves to agree on the terms for licensing their books to Apple. The government sued, claiming an unlawful conspiracy masterminded by Apple.

Mr. Sagers sees this as an open-and-shut case of an unlawful pricing conspiracy and expresses surprise that there was so much support for the book publishers and Apple. He rightly dismisses the self-serving argument that books are so culturally important that publishers and Apple deserved an antitrust exemption. He is also right to note that Amazon was not, despite its huge market share, an unlawful monopolist—big is not always bad.

. . . .

Mr. Sagers believes that opposition to the Apple case shows that Americans are ambivalent about competition. There are times, he says, when “competition seems destructive.” When antitrust law requires firms to compete in such circumstances, then “antitrust itself has seemed like a failure.” The government claimed that Apple conspired with book publishers, risking higher prices, but the case was perceived as a government favor to Amazon, which it was.

Indeed, people objected to the Apple case because it was ill-advised—limiting consumer choices and blocking lower prices. Appeals Court Judge Dennis Jacobs made this point, writing in his 2015 dissent that Apple’s conduct “immediately deconcentrated the e-book retail market, added a platform for reading e-books, and removed barriers to entry by others.” With Apple in the game, Amazon’s 90% market share fell to 60%. Now it’s back up to 83%, according to the latest industry estimate. As competition decreased, prices increased. The typical price for a Kindle best seller is now in the range of $14.95.

. . . .

The Apple case violated the first rule of antitrust: First, do no harm.

Link to the rest at The Wall Street Journal (Sorry if you encounter a paywall)

PG hasn’t read the book that is the subject of the WSJ review. However, the author of the review wildly misstates the purposes, activities and actions of Apple and all but one of the largest publishers in the United States.

Let us review the actions and actors in this matter (which were extensively documented and discussed on TPV during the days of yore):

  1. While Amazon was not the first entity to sell ebooks, it was the first to sell ebooks from traditional publishers at a substantial discount from their list prices, which correlated with the suggested list prices for printed versions of the same books.
  2. Amazon also was revolutionary in permitting self-published books (including ebooks) to be listed and sold side-by-side on the same basis as traditionally-published books.
  3. The six largest publishers in the United States – Random House, Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster had developed a cozy little dinner group consisting of their CEO’s who met about every three months in a private dining room in Manhattan to talk about their mutual concerns – most often Amazon’s habit of discounting the prices of their books and what they could do about it. These six produced the majority of books sold in the US and were receiving complaints from their traditional bookstore customers about Amazon’s low prices. The publishers did not want to “cannibalize” their sales of printed books and were the recipients of a growing number of complaints from their traditional bookstore customers. No company attorneys were present during these dinner discussions.
  4. PG will note that private meetings of the top executives of large companies that dominate an industry to discuss the pricing of their products are almost always a bad idea and, by themselves, raise a big red antitrust flag. Competent corporate counsel would always advise against such a practice.
  5. Apple was planning to introduce its iPad in January, 2010, and include an iBookstore as one of the product’s attractions.
  6. PG notes that Apple has never been a fan of significant discounts for the products it sells.
  7. In December, 2009, Apple’s senior VP of Internet Software and Services, Eddy Cue, contacted the members of the Publishers dinner group to set up meetings.
  8. During these meetings, Cue said that Apple:
    1. Would sell the majority of e-books between $9.99 and $14.99, with new releases being $12.99 to $14.99, higher prices than Amazon was charging.
    2. Apple would use the same “agency pricing model” that it used in the App Store for ebooks.
    3. Agency Pricing allowed the Publishers control the retail price of the e-books with Apple receiving a 30% commission.
    4. Most significantly, Apple would require what is generically described as a “Most-favored nation” clause in its contracts with publishers that allowed Apple to sell e-book at the lowest price of its ebookstore competitors (read “Amazon”).
  9. PG doesn’t recall if the publishers had another private CEO dinner or not, but evidence at the later antitrust trial showed the Big Six publishers called each other over 100 times in the week before signing the Apple agreements. Everyone except Random House boarded this bandwagon.
  10. In January 2010, Apple held one of its typically flashy product launches for the iPad together with its associated ebook, music and video stores.
  11. During the post-launch mingling, Wall Street Journal reporter Walter Mossberg asked Steve Jobs why people would pay $14.99 for a book in the iBookstore when they could purchase it for $9.99 from Amazon. In response Jobs stated that “The price will be the same… Publishers are actually withholding their books from Amazon because they are not happy.” In other words, the publishers would force Amazon to raise its ebook prices to match those in the iBookstore.
  12. Amazon complained to the Federal Trade Commission and, rather than not being able to sell any ebooks of the major publishers, switched to the agency model after negotiations with the major publishers. This resulted in an average per unit e-book retail price increase of 14.2% for their new releases, 42.7% for their NYT Bestsellers, and 18.6% across all of the Publisher Defendants’ e-books.

For lots more information, see United States v. Apple on Wikipedia.

Back to the book reviewed in the OP, there was nothing wrong with Apple “introducing a new pricing structure” – agency pricing. Had Apple only done that, no antitrust violation would have occurred. However, when Apple conspired with a group of the largest publishers to force Amazon (and anyone else selling ebooks) to adopt agency pricing when such had not previously been the case, that was an antitrust violation, particularly in the light of what happened to ebook prices after the coordinated joint action took place.

Had the big publishers individually been willing to lose the highly-profitable ebook sales on Amazon as a potential consequence of telling Amazon it had to raise its prices and/or agree to let the publisher set the price, that would probably not have triggered any antitrust concern. Coordination between the publishers to use their combined power to force Amazon raise prices was where the publishers crossed a clear legal line.

With respect to what happened in the court case, each of the publishers admitted guilt, settled the antitrust claim and promised not to do any price-fixing in the future. Apple litigated the antitrust case to the max and lost at every stage.

Although Amazon was not a party to the litigation, Amazon won.

More significantly (in PG’s majestic and resplendent opinion), authors won. Indie authors in particular won. In June, 2010, a couple of years before any antitrust litigation had been commenced, Amazon introduced its 70% ebook royalty option which has put a great deal of additional money into authors’ pockets ever since.

NaNoWriMo Has The Writers To Solve The Book Industry’s Diversity Problem

From The HuffPost:

When I was in seventh grade, my teacher instructed the class to read “Roll Of Thunder, Hear My Cry” by Mildred D. Taylor. It was the first time I’d been assigned to read a book or story written by a non-white author about non-white characters.

Mainly, my classes focused on the works of great American novelists such as Ernest Hemingway, F. Scott Fitzgerald, Mark Twain and Harper Lee. Even outside the classroom, my favorite books came from popular series such as “The Baby-Sitters Club,” “A Series of Unfortunate Events” and, of course, Harry Potter. All great stories, yet all written by white authors featuring white main characters.

These days, there are more diverse stories about race, religion, gender and sexuality for kids, teens and adults than before. But the numbers are still too few and the majority of books, diverse or not, are still being written by white, cisgender, male authors.

. . . .

There’s a way to help change that starting this month. In November, aspiring writers across America and around the world are going to put their diverse stories into words. And those stories are ripe for the publishers’ picking ― if publishers are looking at NaNoWriMo.

. . . .

The aspiring authors who sign up for the challenge “win” if they manage to complete their novel. NaNoWriMo helps them along with free tutorials, community support, advice on tracking progress and connections with published authors, all of which are not normally available to budding novelists, especially not those of color.

Numerous published novels have come out of this process, including such best-sellers as “The Night Circus” by Erin Morgenstern, “Water for Elephants” by Sara Gruen and “Fangirl” by Rainbow Rowell. An even wider range of voices could emerge.

. . . .

But none of this matters if publishers don’t look at the works of NaNoWriMo writers of color. Diversity isn’t just the responsibility of authors or readers. Publishers have to be interested in changing the landscape of the industry and willing to expand their networks and pay attention to emerging non-white authors and reviewers. (Right now, an overwhelming 89% of book reviewers at major publishing houses identify as white.)

Link to the rest at The HuffPost

A reminder that PG doesn’t always agree with everything he posts on TPV.

PG keeps wondering why the various and sundry people and groups who express reality-based claims against traditional publishers always want those publishers to reform themselves.

And expect that such reform might happen.

Perhaps it’s time to declare traditional publishers irredeemable, unreformable, irreversible, unregenerate and beyond any hope of changing their retrograde ways even at the militant urging of social justice warriors.

Maybe it’s traditional publishers time to be dumped onto the ash-heap of history alongside the Whigs, Microsoft Bob, the Copperheads, Sony Betamax, Esperanto, Neville Chamberlain, hippies, the Tea Party, hula hoops, Tiny Tim, Occupy Wall Street, George McGovern, Trump University, Google Glass, Ted Nugent, Ross Perot, The Delorean Motor Company, Carrie Nation, New Coke, Dan Quayle, Evel Knievel, lava lamps, pet rocks and mood rings.

Ken Follett Opens Brexit-Inspired Friendship Tour This Weekend

From Publishing Perspectives:

Even as the impeachment inquiry in Washington revs to fever pitch with its battery of public hearings riling Capitol Hill and many of your American colleagues, the Brexit crisis in the UK has gone into a comparatively quiet phase ahead of the December 12 general election. Perhaps that’s the perfect moment for author Ken Follett and three of his high-profile writing associates to launch their “Friendship Tour” in Europe.

The associates on the road with Follett are Jojo Moyes (Me Before You, Penguin, 2012); Lee Child (Blue Moon, Bantam, October); and Kate Mosse (The City of Tears, Mantle, releasing in May).

. . . .

And although the Brexit crisis is starting point for the concept, Follett is careful in such an uncertain time, sometimes opting to stress the opportunity of the tour for these authors to thank their European readers, albeit with a secondary message—”please keep reading us”—reflected in the fact that the tour is paid for by these authors’ translation publishers.

As Birgit Lübbe of Germany’s Bastei Lübbe (Follett and Mosse) is quoted saying in tour material, “One of the rewarding tasks in publishing is to make the works of international authors accessible to our readers.

“We support the Friendship Tour because the friendship between our authors and their loyal fans, as well as the friendship between our authors and us, transcends national borders. Publishing and reading books is a cultural exchange for all book lovers worldwide.”

Link to the rest at Publishing Perspectives

PG is not an expert on Brexit, the EU or any related subject, but this strikes him as a sleazy attempt to gain publicity at a time when a great many people across Europe are upset about Brexit.

Is anyone really going to feel better because Ken Follett or Lee Child comes to visit a bookstore?

“We feel your pain, so buy our books”

FutureBook Live 2019 Ramps Up: Maintaining the Cultural Caché of Books

From Publishing Perspectives:

Those of us on the annual international tournée de livres can tell you that, as advertised, FutureBook Live really is the largest of today’s conferences in terms of turnout. Not trade shows, mind you, this is a conference, a one-day outing which includes not only plenary sessions but four strands of focus.

. . . .

  • Hook the Readers sessions (purple)
  • Take Smarter Risks sessions (navy)
  • Seize the Agenda sessions (pink)
  • Hack the Process sessions (a kind of worried blue that’s not navy)

. . . .

As Flatt announced earlier this autumn, you’ll find appropriate change afoot this year in the show. “As we approach our 10th anniversary,” she wrote, “you may have noticed that we’ve dropped both ‘digital’ and ‘innovation’ from our tagline and marketing. Why?

“Because in this extraordinarily unstable time, those terms no longer feel very useful. Everyone who works in publishing, whatever their seniority or specialism, must now understand digital; everyone, whether a conglomerate CTO or a self-published author, must innovate or die. And nor are digital solutions or splashy innovations always the best way to answer the challenges exploding around us.

“We have to use everything at our disposal, from woodblocks to Weibo, to restore books to a central place in our culture and to keep book businesses afloat.”

. . . .

Bookseller editor Philip Jones writes, “The conference began as a digital event, morphed into one concentrated on innovation, and is now squarely focused on the business in its entirety, particularly, ahem, the future bit.”

He goes on, as Jones is still perhaps the best in the business at doing, at capturing exactly the challenge that world publishing–don’t tell the Brits it’s not just them–faces today: “How we maintain the cultural caché of books.” Exactly.

Link to the rest at Publishing Perspectives

PG found it interesting that British (and perhaps other European) publishers are worried about the “cultural caché of books.”

PG speculates the unspoken extension of this concern is the “cultural caché of traditional publishers.”

If an intelligent and well-meaning young person who loves books were to ask PG about going to work for a publisher, PG would paint a dire picture of the future of traditional publishing. The echo chamber of New York (and, likely London) publishing is growing smaller and smaller by the day.

If the traditional book business is losing cultural caché, how will it justify its high prices and low royalties?

No Time for Sargent

From Scrivener’s Error:

It’s not often that one can legitimately call an “official” major corporation CEO communication “inherently deceptive and based on fantasy or science fiction only.” OK, it’s not routine that one can do so — not even in the entertainment industry — thanks to SEC disclosure rules. But there’s a recent opportunity; and I have both personal knowledge and verifiable data to do it.

In this instance, for public consumption I’m relying upon (hack! phhhhht!) PW‘s account of Macmillan “CEO” John Sargent’s presentation to state librarians on discriminatory e-book distribution. So, why do I think Sargent was being deceptive? In no particular order:

  • Anecdotally (apparently according to Sargent himself!), eight percent of science fiction and fantasy fans who couldn’t get an e-book promptly from the library would instead go out and buy it. So it really is based on fantasy and science fiction! One wonders what kind of anecdotal “evidence” this is — whether it’s based on a random sample of fannish statements of intent, actual general sales figures (but see below), comparative library purchase figures and circulation statistics (but see below), or as is most likely self-selected fannish responses based on a self-selected subset of fen.
  • Well, how about reproducibility? A nonscientific, nonreplicable sampling indicates an increase of between 12 and 15% in publicly stated “user views” of library-embargoed Tor titles over the past year at relatively safe pirate venues… and a disproportionate (compared to other similar imprints, and even generally) increase in the number of pirate handles associated with library-embargoed Tor titles over the past year. This has been a distinctly, but due to the poor quality of the dataset not statistically validatable, greater increase for library-embargoed Tor books than for other similar and dissimilar imprints. The conclusion one can draw is that an unknown but probably substantial proportion of the vaunted 8% were interested in acquiring the Tor titles, not necessarily buying them. And demonstrated with their actions (not unverifiable, anecdotal statements of intent) that that is precisely what they would do.

. . . .

As a follow-on to the preceding point, carefully consider the assertion (quoting the PW piece’s summary of another summary) that

[Sargent] likened the e-book marketplace to that for major motion pictures in that new releases have the greatest value in their first few weeks and their initial release should allow for the greatest return on both creative and business investment. The availability of e-books through libraries, which may be perceived as being free, is, in Macmillan’s opinion, the major driver in the consumer decline.

which rather self-refutes the argument. Bluntly, if this were actually a valid consideration, the combination of revenues from DVD sales and post-release streaming/broadcast/etc. would not frequently exceed the initial release revenue… when one allows for the avoided costs in that back end (such as “distribution fees”). It also implicitly assumes that every Macmillan title is a superhero blockbuster. It ignores cult films. Or “indie productions” over at, say, Picador (“Fox Searchlight”).

More subtly, it ignores the more-valid comparison. Library sales — thanks to the discriminatory terms offered to libraries — are a helluva lot closer to “iMax 3D” with a $25 ticket than to no sale at all, as implied both in the PW piece’s summary and the continuing rhetoric coming out of Macmillan. There is one, and only one, market segment in which “discounting” of library sales as “insignificant” has any validity at all, and it’s not category trade fiction: It’s textbooks (at least in the 1990s version of the market, and those who came up selling textbooks in the 1990s are now in charge of overall sales and marketing at more than one Big Five publisher).

. . . .

Bluntly, this is so delusional that I can’t really say it’s a “lie.” Lying requires actual knowledge that what one is saying is untruthful and deceptive. I’m not certain that mere ignorance and/or self-deception, even when willful, qualifies, so I’m explicitly not calling Mr Sargent a liar. Fraud goes just a bit farther, in that it also requires intent that the listener reasonably rely on those statements, so I’m explicitly not calling Mr Sargent a con artist, either. I am, however, explicitly calling him out for putting forth bullshit.

Link to the rest at Scrivener’s Error

And these people style themselves as curators of our culture.

Plus, a reminder that traditionally-published authors basically have no say in what these curators do with their books.

Is Publishing Too Top-Heavy?

From Publishers Weekly:

Book publishing has long been a hits-driven business. The bestsellers, the logic went, paid for the flops. And it was the authors of those in the middle—the so-called midlist—that publishers hoped to build into the next crop of bestsellers. But midlist sales have faltered enough in recent years that there is a growing concern among publishers and agents about how the business can create new hits when the field they once turned to is, well, disappearing.

Simon & Schuster CEO Carolyn Reidy, during a discussion of the company’s second-quarter results, pointed to generating interest in midlist books as one of the biggest challenges facing all publishers.

Though the hits-driven nature of publishing has not changed in recent years, the nature of those hits has. Due to a number of coalescing factors—including a shrinking physical retail market and an increase in competing entertainment driven by the proliferation of streaming TV platforms—book publishing has watched as a handful of megaselling titles have begun to command an ever-larger share of its sales.

According to NPD BookScan, which tracks an estimated 80% of unit sales of print books, sales of the 100 bestselling adult titles increased 23% in 2018 compared to 2017. All other titles ranked below that top tier either fell or remained flat. On a 52-week rolling basis through Oct. 5, 2019, the sales of the top 100 books rose another 6% over the comparable 52-week period ending in 2018, while, again, all other sales levels either fared worse or stayed flat. Taken together, sales of the 100 bestselling print books rose nearly 30% over a period of about two years, while books that ranked between 101 and 10,000 saw their total print unit sales fall 16%. Books that ranked below 10,000 remained flat in the period.

. . . .

The cycle that creates this system is a frustratingly circular one. “The top books—[which are] most often [earning] the highest advances—require serious capital and resources to push them into the top slots,” McLean explained. And publishers, she added, “are under serious pressure to recoup their investment” on their most expensive acquisitions. The situation, she went on, “is amplified by the need for books to earn their shelf space in mass market retail—big books are a better bet” for those types of outlets.

A publisher at a major house agreed that, to an extent, publishers have contributed to the gap between the top sellers and those below. With social media offering a variety of ways to promote titles that are selling, publishers usually put more resources behind books that are succeeding in order to maintain momentum. As these books get the lion’s share of the houses’ focus, other titles are left to find audiences on their own.

. . . .

As one Big Five editor who specializes in commercial and literary fiction said of his category, “There used to be a lot more books that could sell 40,000–50,000 copies. Now more sell fewer than 10,000 copies.” It seems, he said, that “it’s either feast or famine.”

Those suffering from the famine are, to an extent, a group once known as the midlist. Ironically, if you ask most editors or literary agents to define the term, you’re unlikely to get a specific answer. Few can say, for example, how many books one needs to sell to be considered midlist. The only thing sources agreed on is the fact that the term is negative.

“You want to be debut, literary, or bestselling; you don’t want to be midlist,” one literary agent said. “The midlist is like the middle class; it’s the group that gets squeezed. They don’t get the support from their publishers. They don’t get their due [as writers]. They don’t get the attention they deserve from reviewers. Everybody wants to break out of the midlist.”

Link to the rest at Publishers Weekly

PG notes that an indie author can support a reasonably good standard of living by selling 40-50,000 of his/her books. 10,000 copies also works if the author can indie publish 2-3 books per year.

The other point PG will note is that a midlist book that is released by a publisher is left to sink beneath the waves while many indie authors tend to pursue strategies that will help sell both new and old books.

The Problem(s) with Damaged Goods

From Publishers Weekly:

Is it just me, or are damages out of control lately? By damages I mean the multiples of unsalable books that arrive from publishers and distributors alike—ones that are dinged and dented, with pages folded and jacket covers torn. If you don’t regularly work in the receiving part of a bookstore, then you may not be aware of just how much time and inventory is lost in the shipping and delivery process.

Here’s a summary of a Monday at my shop in a recent week: We received a total of 16 boxes of books from five publishers and one distributor. Two boxes were full cases of a book for an author school visit in the week. The others contained a mixture of new releases and backlist orders, as well as a couple of mixed-copy seasonal displays. In addition, our mail carrier brought three small boxes of ARCs and a couple of those giant envelope-type packages created by sealing two squares of cardboard on four sides around a book or two with an inch or two of adhesive. (For the record, if terrorists or spies ever want to smuggle sensitive material into the U.S. via our postal service, these hermetically sealed cardboard packages are clearly the most tamper-proof method, for it takes our staff a good 20 minutes, a case cutter, and a pair of shears to pry a corner of one open in order to liberate the single title inside.)

But let’s get back to the Monday box pile. Of the 16 boxes, nine cartons contained damaged titles. One entire case of paperbacks (in an undamaged carton) for the author event were unusable. Three other boxes each had eight or nine books with ripped jackets and badly dented covers. In our box from the distributor—in which the books were stacked on a cardboard base and then wrapped with plastic to prevent shifting inside the box—all four novelty books had crushed spines or ripped covers. Granted, board books with cutouts on the cover are tough to stack, but they can be layered with early readers or even packing paper to prevent damage—and shipping books, after all, is the distributor’s job. Four other boxes, all new releases, were unusable. Of course, given the Monday delivery, this meant that our Tuesday new-releases display was going to look a little anemic.

. . . .

Each of these publishers has a different method for us to report damages: some require emails, some require phone calls, and some request photographic evidence. It can take days to receive responses to these reports, during which time we must either store the damaged books, waiting for instructions or a call tag, or repack them and wait for UPS to return to pick them up. Then all of those titles must be credited, reordered, and we begin again, hoping as we wield our case cutters that the new boxes will contain undamaged merchandise to sell. All of that time is on the clock—increasing payroll for booksellers in managing the losses and tying up the customer service departments of our publishers, who are simply logging lost potential on phone calls rather than discussing new releases and placing backlist orders.

Link to the rest at Publishers Weekly

PG will note that, although most reading in his household is done with ebooks, occasionally, Mrs. PG will order a hardcopy via Amazon. PG doesn’t recall any book arriving from Amazon in anything other than pristine condition, lately inside a light, generously-padded plastic envelope.

The OP raises the possibility in PG’s jaundiced mind that some book distributors are juicing their profits by reselling damaged books returned for credit instead of pulping or otherwise destroying the returned books.

Major Public Library System Will Boycott Macmillan E-books

From Publishers Weekly:

With Macmillan’s controversial embargo on new release library e-books set to begin in just two weeks, PW has learned that the King County (WA) Library System has decided it will no longer purchase embargoed e-book titles from the publisher.

“Despite months of discussion and advocacy, Macmillan continues its position to embargo multiple copies of e-books,” writes King County Library executive director Lisa Rosenblum, in a note sent to fellow library directors (and shared with PW). ”Therefore, effective November 1st, KCLS will no longer purchase e-books from Macmillan. Instead we will divert our e-book funds to those publishers who are willing to sell to us.”

The King County Library System, headquartered in Issaquah, Washington, is one of the nation’s busiest and best library systems, circulating more than 21 million items every year. It has earned a coveted five star rating from Library Journal. And for five years running, King County has been the top digital-circulating public library system in the country, logging more than 4.8 million checkouts of e-books and digital audio in 2018.

In her note, Rosenblum acknowledged differing opinions among public library staff around the country on whether to boycott Macmillan e-books, and said King County’s decision was ultimately driven by two reasons: one “pragmatic” and the other “principled.”

As for the pragmatic side, Rosenblum explained that King County has pledged to readers to limit the wait time for any title to around 3 months. “Not allowing us to purchase multiple copies of an e-book for two months artificially lengthens the queue, triggering more of the same title to be purchased than would have occurred if we had been allowed to buy for the first two months,” she explains. “With an ever-increasing demand to buy a wide variety of digital titles, we do not think this is the best use of public funds.”

. . . .

The “principled” argument, Rosenblum says, is to send a message to other publishers that public libraries cannot accept limits on basic access. To do so, she writes, would “profoundly” change the public library.

Link to the rest at Publishers Weekly

PG has posted about this stupid plan by Macmillan before here and here.

Suffice to say, this is harmful to libraries and those who use them and unlikely to generate significantly more revenue for Macmillan.

As far as Macmillan’s justification – that library patrons will buy more Macmillan books if they can’t borrow them, PG expects this is likely the case in the short run. However, as library patrons continue to discover new authors they love through the books they borrow, and buy books from those authors, and tell all their friends how great those authors books are, Macmillan is short-changing its owners and its authors by effectively giving up on a major (and free) source of additional sales.

As compared with purchasing advertising and giving big discounts to Barnes & Noble (is that still a thing?), whatever dribs and drabs Macmillan fails to garner from regular library patrons who decide they simply must read whatever Macmillan claims is the latest and greatest instead of borrowing a different book are a drop in the bucket compared to the priceless word-of-mouth avid readers provide.

What’s an Influencer Worth to Books?

From Publishers Weekly:

A mini-scandal lit up Twitter last month when the Cut featured a tell-all essay by 27-year-old writer Natalie Beach. In the piece, Beach exposes her seven-year relationship with her friend Caroline Calloway, who scored an agent and a reputed $375,000 book deal for her memoir. Beach, who ghostwrote the book, says her former bestie bought Instagram followers after being told by literary professionals that “no one would buy a memoir from a girl with no claim to fame and no fan base.”

Platform has always been key when putting together a nonfiction book proposal. But back in the not-so-very-distant past—a mere dozen years ago!—publishers were throwing six figures and two-book deals at anyone who had a half-decent story and a clip in the local newspaper. These days, a huge following on social media, particularly Instagram, is a must for a book deal.

The moment agents or editors hear an author has a small following or no following, it’s over. Yes, there are exceptions. Still, worthy authors are overlooked every day—in favor of a young woman with a photo of macarons that went viral? Now her friend the ghostwriter has CAA shopping rights to her story? Which era is crazier?

The Kardashian/Jenner sisters have 500 million followers. So how come fewer than 500,000 viewers (18–49) tuned in to the latest episode of their show? Kim Kardashian’s book of selfies sold fewer than 40,000 copies, according to BookScan—yet she remains a powerful influencer. When are publishers going to concede that number of followers (fake or not) is only one key to book sales?

Naturally, some influencers produce books that are megabestsellers (usually with a lot of help). That is because they deserve a wide audience for whatever message they are sending. Ariana Grande, who has one of the biggest social media followings in the world, should get a huge deal… because she’s an incredible singer with a fantastic story to tell—not because of her follower count!

. . . .

This latest story about two millennial influencers and their book deal reminds me of that hype. Except now I’m overprotective. Some wanna-be authors are using the acquisitions process to snow us, to dupe us, to basically make a mockery out of what publishing stands for—content. Is this what they mean by influence?

Link to the rest at Publishers Weekly

PG has two reactions to the OP:

  1. He has zero sympathy for publishers who are snowed, duped or mocked by anyone, including authors (or more likely their agents) who are looking for a book contract.
  2. If PG were looking for a book contract (he is not and never will), he would be inclined to buy Instagram followers if that would help get him a deal. If publishers can’t look farther than the number of followers on an author’s Instagram account, why not? Is there a strict code of ethics that binds publishers to do or not do things like puff up the quality/importance of a book they’re releasing? What’s sauce for the goose . . . .

One big change in book publishing is that it does not require you to have much of an organization to play anymore

From veteran publishing consultant, Mike Shatzkin:

More than two decades into its digital transition, book publishing has evolved so that a capital-intensive infrastructure is no longer a requirement to successfully develop a book, or a list of books, and bring the books to market. This has resulted in a self-publishing segment, so far almost entirely author-driven, that is substantial in reach and readership and which offers ongoing competition to the commercial publishing business largely because of its ability to price its ebooks below what would be survival levels for commercial publishers.

. . . .

What publishers do, over and over again, is the business of “content” and “markets”. Each book is unique content and is individually delivered to its own unique market. So publishers need to stick to content and markets that they understand in a contextual way. That is usually done by sticking to genres in fiction and topics or “audiences” for non-fiction. But people who live in any of many non-fiction “worlds” could well be as well-equipped as any publisher to grasp the content-and-market equations in those environments.

The discrete tasks are:

1. Creating the content, which requires domain knowledge (the world of the content) and, of course, the ability to discern good and effective writing and presentation. And a knowledge of the content world implies a sense of any particular project’s uniqueness and timeliness.

2. “Packaging” the content in a form that is reproducible. That means different things for print and for digital. And it is more complicated for books that are illustrated or annotated with charts or graphs.

3. “Marketing”, or making potential readers aware of the book. This takes in what we used to think of as publicity and advertising, which in the “old days” largely centered around book reviews and the sections in newspapers that carried them, but which is now much more about search engine optimization and social network marketing.

4. Connecting with the avenues of distribution: reaching the sources of printed books their customers might use — bookstores, other retailers, or online merchants for consumers and wholesalers or distributors for those intermediaries, print and e. You have to sell to them and serve them: persuade them to carry or list the book and then deliver, bill, and collect so they can.

5. Selling rights where you can’t sell books. Because many books, no matter their origin, have the potential to gain additional revenue and exposure through licensing for other languages or placing chunks of the book’s content in other venues (what was very simply “serialization” in the all-print days), rights sales and mangement is another activity that a book publisher has to cover.

How have the avenues for sale to end users changed in the past two decades?

Before digital change arrived, which for trade publishers we could say began when Amazon opened in 1995, publishers sold most of their books in stores. The books got there because their sales reps persuaded the stores to stock them. Reps and stores are still a part of the delivery system, but they are no longer the only path to an audience that can deliver a book’s author substantial revenue.

In the past 20 years, online sales of print have moved from under 5% of the total units to certainly 40% of units, perhaps 50%. And it can be much more for some titles.

In addition to print, publishers sell ebooks and those are exclusively online. Twenty years ago, sales were zero. Now they appear to be 20% or more of the sales for big publishers. Once again, there is a range across titles and types of titles and there is a whole new segment of digital-first publishers for which the percentage of ebook sales is much higher, sometimes approaching 100%.

. . . .

Twenty years ago was probably the peak of the big bookstore chains — Borders and Barnes & Noble. Two decades ago, those two retail behemoths were more than 30% of many publishers’ sales. Today, Borders is gone, Barnes & Noble has shrunk, and their sales are less than 10% for most publishers. The number of chain stores is fewer than half of what it was, but shelf space for books has shrunk even more.

As a result of the diminishing bookstore space — shrinking and disappearing chains and despite a recent resurgence of independents the growth from them hasn’t nearly replaced what’s been lost — the opportunities to put printed books in front of consumers have shrunk. So the shelf space in mass merchants, like Walmart and Costco, is especially important for the big books.

. . . .

At the same time, the general interest book clubs have pretty much disappeared. Publishers used to be able to move thousands of copies of big books through those direct mail channels. They’re effectively gone.

And all of the above is really attributable to the fact that the sales have moved to Amazon. Twenty years ago they were probably not as much as 2 percent of book sales. Now, if you include Kindle sales, they are almost certainly 50 percent of the sales. For printed books alone, they are over 40 percent for most publishers.

. . . .

Amazon sales reached a tipping point about ten years ago. Kindle, launched in 2007, grew fast, as the first “direct download” ebook system. (Before Kindle, the ebooks had to be downloaded into a computer and then “synched” to a device.) So when Amazon first offered the self-publishing opportunity through Kindle, they were able to “reach” an audience of sufficient size to enable aspiring authors to actually make some money. When they added their “Create Space” capability for print-on-demand, an author could readily reach half the book-buying audience with one stop.

That was really the catalyst for what has become a tsunami of self-publishing.

. . . .

The much-cheaper [indie ebooks on Amazon] were most compelling for the audiences that consumed many titles: readers of romance, sci-fi, thrillers, and mysteries. It didn’t take long — maybe a couple of years — for a very robust title selection in those genres to become available from many previously-unknown authors.

Whether it was intentional or not, Amazon’s flipping of the time-honored “razors and blades” pricing strategy contributed to their rounding up all those multiple-book readers.

. . . .

[F]rom day one, the tiny-but-growing community of Kindle readers bought an outsized number of books.

For those authors who captured readers through the combination of low-pricing and the appeal of the free book “samples” that digital enabled, the Amazon self-publishing ecosystem could be very remuerative.

. . . .

Regular publishing required an agent most of the time but it required a lot of patience all of the time. Finding an agent took effort and could take months. The publishers’ decision-making process to buy also took a long time, often months. The act of publishing took a long time, also often months. It quite often added up to years. And then the share the author got was a fraction of what Kindle would pay them.

. . . .

So by 2010, we had a very different profile of intermediaries between publishers and their readers than we had a decade or so before.

And in the decade since, the total retail shelf space dedicated to books, across chains, independents, mass merchants, and specialty merchants, has continued to decline. The share of sales being taken by online has continued to grow to the level we cited: 50 percent for most titles. All publishers, but particularly big publishers, have taken to heart that they have to market direct to consumers . . . .

. . . .

If you go back to the top to look at the requirements to publish a book, numbers one and two are the creation and designing of a book, and most publishers use freelance capabilities for that which are available to anybody, including individual authors. Number three (marketing) has many components, but there are a plethora of independent services available to deliver most of the capabilities. Number four (connecting with the avenues of distribution) is delivered by Amazon to their customers and by Ingram to the world. And number five (licensing, particularly foreign rights) can be done by a vast network of agents and digital marketing consultants that already exists. You don’t need to own any of it to play.

And, as a result of all of that, many of the structural advantages a being a book publisher have faded in importance. A person with a manuscript, a computer, and a bit of a budget has been able to publish effectively, and sometimes profitably, for the past ten years. That has spawned the current infrastructure of capabilities and services that might suddenly be discovered as a key tool by entities bigger than individual authors. On another day, we’ll explore that might mean to publishing’s future.

Link to the rest at The Shatzkin Files

PG has been hard on Mr. Shatzkin on many occasions in the past. However, over the past several months, Shatzkin has come around nicely (in PG’s occasionally meek and deferential opinion).

If PG were to date this change, he thinks it may have begun when Shatzkin retired (or mostly-retired, PG has no familiarity with anything other than what The Shatzkin Files have disclosed) from his work as a long-time and well-respected publishing consultant based in New York City.

As PG considered this apparent change, he was reminded of Miles’ Law, reputedly named for Rufus E. Miles, Jr., a supervisor in the Bureau of the Budget in the 1940s who told a group of subordinates that, in government agencies, “Where you stand depends on where you sit.”

PG has never been in the traditional publishing business (although he has been exposed to traditional publishers via helping Mrs. PG by reviewing the publishing contracts from the traditional publishers with which she formerly did business).

PG was not alone in recognizing the potential for Amazon and its general pricing practices, but particularly for its aggressive move into ebooks, to completely upend traditional publishing. He had witnessed and participated in the revolution that had significantly impacted the legal profession with the birth of computer-based word-processing and its ability to turn out perfect, custom-fitted documents of all sorts very quickly and inexpensively. When he was still practicing retail law, PG made a lot of money by building software programs that could start printing out sophisticated wills and trusts or divorce petitions and related documents while the client was still in the process of writing a check and handing it to one of his legal assistants.

Even more importantly, PG had absorbed significant amounts of the thinking and writing of Clayton M. Christensen, Harvard Business School professor and well-known author of The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, a book that Jeff Bezos and Steve Jobs have each said had a major impact on how they built Amazon and Apple.

The early moves of Bezos into providing self-publishing tools for the masses were extraordinarily disruptive, especially for ebooks, putting Amazon’s promotional power behind making some of those indie ebooks into big sellers and, even more important, on a per-ebook basis, paying authors far more than they would receive from the sale of an ebook via a traditional publisher through Amazon.

When you add the tools Amazon has provided for author to exercise broad control over ebook pricing plus author access to the Amazon-based advertising and marketing tools for selling books, Amazon has effectively set up an online laboratory that permits authors to experiment with all sorts of marketing/pricing strategies in an ongoing search for the best way to sell a lot of ebooks. Perhaps more important even than the money Amazon earns from selling indie ebooks, it is in a position impossible for any traditional publisher to equal, where it can watch and learn from all the various pricing/marketing/product design experimentation going on among thousands of individual authors, including some who are selling a huge number of ebooks.

PG suggests that, while good editors, nicely-formatted books and skilled cover designers are very important for most indie authors, paying for those services separately (or doing them yourself, particularly in the case of book formatting), instead of offloading those jobs to publishers and giving up far more income than even the most expensive editor or designer would charge just doesn’t make sense.

If you’re writing in a niche that benefits from quick-to-market strategies to take advantage of something that’s happening right now or soon will happen, a traditional publisher is most definitely not a smart strategy. You can make it all happen much faster (and probably  much better – most publishers’ employees are generalists, not specialists in particular market segments or sub-segments, plus everything at a publisher is subject to bureaucratic time lags) by doing it (or hiring specialists to do it) yourself.

The discovery of truth is prevented more effectively, not by the false appearance things present and which mislead into error, not directly by weakness of the reasoning powers, but by preconceived opinion, by prejudice.

~ Arthur Schopenhauer

Bureaucracy defends the status quo long past the time when the quo has lost its status.

~ Laurence J. Peter

In any bureaucracy, there’s a natural tendency to let the system become an excuse for inaction.

~  Chris Fussell

Bureaucracy is a giant mechanism operated by pygmies.

~  Honore de Balzac

It’s a Fact: Mistakes Are Embarrassing the Publishing Industry

From The New York Times:

In an era plagued by deep fakes and online disinformation campaigns, we still tend to trust what we read in books. But should we?

In the past year alone, errors in books by several high-profile authors — including Naomi Wolf, the former New York Times executive editor Jill Abramson, the historian Jared Diamond, the behavioral scientist and “happiness expert” Paul Dolan and the journalist Michael Wolff — have ignited a debate over whether publishers should take more responsibility for the accuracy of their books.

Some authors are hiring independent fact checkers to review their books. A few nonfiction editors at major publishing companies have started including rigorous professional fact-checking in their suite of editorial services.

While in the fallout of each accuracy scandal everyone asks where the fact checkers are, there isn’t broad agreement on who should be paying for what is a time-consuming, labor-intensive process in the low-margin publishing industry.

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“The standard line from publishers is, ‘We rely on our authors,’ and, well, that’s not good enough,” said Gabriel Sherman, a journalist who paid two fact checkers $100,000 from his advance for his 2014 book, “The Loudest Voice in the Room,” about Roger E. Ailes and Fox News. “I wish publishers did see the importance of fact-checking as essentially an insurance policy.”

. . . .

Publishers have long maintained that fact-checking every book would be prohibitively expensive, and that the responsibility falls on authors, who hold the copyrights. But in today’s polarized media landscape, that stance appears to be shifting as some publishers privately agree that they should be doing more, particularly when the subject matter is controversial.

“If you’re writing a remotely controversial book, there’s going to be an active audience that’s invested in discrediting it,” said Kyle Pope, the editor and publisher of the Columbia Journalism Review. “This notion that books are above the fray, I don’t think it’s going to last.”

Accusations of sloppiness and journalistic malpractice now quickly explode on social media.

. . . .

In May, The New York Times Book Review published a blistering review of Mr. Diamond’s book “Upheaval.” The reviewer, the author Anand Giridharadas, cited mangled facts and what he described as misleading generalizations, and argued that the flaws were emblematic of a systemic lack of fact-checking in publishing.

“Fact checkers are as important as cover designers, as editors,” Mr. Giridharadas said in an interview. “It’s not treated as mandatory, and I think it should be.”

. . . .

In his new book, “Talking to Strangers,” Malcolm Gladwell writes that poets have “far and away the highest suicide rates,” as much as five times the rate for the general population. The statistic struck Andrew Ferguson, a writer for The Atlantic, as odd, so he tracked down its source: a paper that cited a 1993 book by Kay Redfield Jamison, a psychologist who based the finding on suicides among 36 “major British and Irish poets born between 1705 and 1805.” Somehow, a narrow analysis of a few dozen 18th- and 19th-century poets was mistakenly applied to all poets, then amplified in a best-selling book.

When publishers do conduct a factual review, it’s often in response to a crisis.

Link to the rest at The New York Times

PG suggests that the ultimate owners of major US publishers pay very close attention to the bottom lines of their subsidiaries. Fact-checking is seldom necessary for increased profits. Indeed, as the OP indicates, it may be a major cost, something that prevents a book from showing a profit. Anyone in New York trying to justify such an expenditure has a steep hill to climb unless there is a positive short-term financial return that can be reliably anticipated to cover those costs.

It is far less expensive to blame the author for being careless and inattentive to his/her art. There is always another author.

Besides, anyone who may need to be fired for appearances’ sake is a long way down the corporate ladder from the owners.

Physical books still outsell e-books — and here’s why

From CNBC:

Do you prefer reading an e-book or a physical version? It might be a surprise, but for most people, old school print on paper still wins.

Publishers of books in all formats made almost $26 billion in revenue last year in the U.S., with print making up $22.6 billion and e-books taking $2.04 billion, according to the Association of American Publishers’ annual report 2019. Those figures include trade and educational books, as well as fiction.

While digital media has disrupted other industries such as news publishing and the music business, people still love to own physical books, according to Meryl Halls, managing director of the Booksellers’ Association in the U.K.

“I think the e-book bubble has burst somewhat, sales are flattening off, I think the physical object is very appealing. Publishers are producing incredibly gorgeous books, so the cover designs are often gorgeous, they’re beautiful objects,” she told CNBC.

People love to display what they’ve read, she added. “The book lover loves to have a record of what they’ve read, and it’s about signaling to the rest of the world. It’s about decorating your home, it’s about collecting, I guess, because people are completists aren’t they, they want to have that to indicate about themselves.”

. . . .

It’s more than a decade since Amazon launched the Kindle, and for Halls, there is also a hunger for information and a desire to escape the screen. “It’s partly the political landscape, people are looking for escape, but they are also looking for information. So, they are coming to print for a whole, quite a complex mess of reasons and I think … it’s harder to have an emotional relationship with what you’re reading if it’s on an e-reader.”

. . . .

Sixty-three percent of physical book sales in the U.K. are to people under the age of 44, while 52% of e-book sales are to those over 45, according to Nielsen.

It’s a similar picture in the U.S., where 75% of people aged 18 to 29 claimed to have read a physical book in 2017, higher than the average of 67%, according to Pew Research.

Link to the rest at CNBC

With data from the Association of American Publishers and the Booksellers Association in the UK, PG notes a distinct lack of information in the OP regarding how many ebooks Amazon sells in the US and UK. Unless he is much mistaken, the statistics quoted in the OP don’t include sales of ebooks by Amazon Publishing and indie ebooks via KDP.

When PG last checked, in addition to not collecting ebook sales information, Nielsen (now NPD) Bookscan figures didn’t include printed or POD books that weren’t registered with Ingram.

 

Book publishers sue Audible to stop new speech-to-text feature

PG has posted about this latest dispute between Big Publishing and Amazon before, but thought the OP was a good (though speculative) description of Amazon’s possible legal analysis supporting its offering of this new audiobook feature.

From Ars Technica:

Seven of the nation’s top book publishers sued Amazon subsidiary Audible on Friday, asking federal courts to block the company from releasing a new feature called Audible Captions that’s due out next month. The technology does exactly what it sounds like: display text captions on the screen of your phone or tablet as the corresponding words are read in the audio file.

The publishers argue that this is straight-up copyright infringement. In their view, the law gives them the right to control the distribution of their books in different formats. Audio is a different format from text, they reason, so Audible needs a separate license.

This would be a slam-dunk argument if Audible were generating PDFs of entire books and distributing them to customers alongside the audio files. But what Audible is actually doing is subtly different—in a way that could provide the company with firm legal ground to stand on.

The caption feature “is not and was never intended to be a book,” Audible explained in an online statement following the lawsuit. “Listeners cannot read at their own pace or flip through pages as they could with a print book or eBook.” Instead, the purpose is to allow “listeners to follow along with a few lines of machine-generated text as they listen to the audio performance.”

“We disagree with the claims that this violates any rights and look forward to working with publishers and members of the professional creative community to help them better understand the educational and accessibility benefits of this innovation,” Audible added.

. . . .

[A]n Audible executive explained that the technology was “built on publicly available technology through AWS Transcribe.” That’s Amazon’s cloud-based service for automatic text transcription.

So it seems that the Audible app is generating text captions in realtime as the user plays an audio file. The app sends snippets of audio files to an Amazon server and gets back corresponding sections of text, which it then displays on the screen one word at a time. (It’s possible that AWS Transcribe has an offline mode that allows the transcription to happen on-device, but I haven’t found any documentation about this. I’ve asked Audible about this and will update if they respond.)

Audible is likely doing this because it strengthens the company’s argument that it can do this without a license from publishers.

To see why, it’s helpful to review two of the most important copyright decisions of the modern era. The first was the 1984 decision of Sony v. Universal that declared the VCR legal. Hollywood argued that the “record” button on a VCR was an invitation for customers to infringe their copyrights. But the Supreme Court disagreed, arguing that copyright’s fair use doctrine allowed “time shifting”—recording a show now to play it later.

The courts built on this decision with a 2008 ruling known as Cartoon Network v. Cablevision. In that case, a bunch of media companies sued the cable company Cablevision because it was offering customers a “remote DVR.” Like a conventional DVR (or a VCR before that), Cablevision’s technology allowed customers to record and play back television shows at their convenience. But unlike a conventional DVR, the remote DVR was located in a Cablevision data center, not in the customer’s home.

Television content owners argued that Cablevision was infringing their copyrights by making unauthorized copies of their show on a massive scale. Cablevision disagreed, arguing that the copies were being made by customers, not by Cablevision. The physical DVR might be owned and maintained by Cablevision, but the customer was deciding which shows to record. And the customer was entitled to do that under the earlier Sony ruling. An appeals court ultimately accepted this argument.

The Cablevision ruling provided a legal foundation for cloud-based “storage locker” services that allowed customers to upload, save, and stream (but not share) their music and video collections.

. . . .

That brings us back to Audible’s new transcription technology. Audible doesn’t have the legal right to sell text versions of audiobooks to customers without publishers’ permission. But we can expect Audible to argue that it does have a right to sell software tools that allow customers to do speech-to-text conversion.

Audible’s case will likely be strengthened by the fact that its app never creates or saves a permanent, full transcript of an audiobook. Instead, the software only displays a few words on the screen at a time.

If Audible is sending audio files to Amazon’s servers for transcription, publishers are likely to argue this means Amazon—not users—are creating the transcripts. But this seems closely analogous to the Cablevision case: the conversion is being done by Amazon servers but only when explicitly requested by users. And each translation is only sent back to the user who requested it.

Link to the rest at Ars Technica

 

 

Why Angry Librarians Are Going to War With Publishers Over E-Books

PG has mentioned this brilliant strategy from Macmillan here and here, but under the principle that you can’t celebrate Big Publishing stupidity enough, here’s more.

From Slate:

If I wanted to borrow A Better Man by Louise Penny—the country’s current No. 1 fiction bestseller—from my local library in my preferred format, e-book, I’d be looking at about a 10-week waitlist. And soon, if the book’s publisher, a division of Macmillan, has its way, that already-lengthy wait time could get significantly longer.

In July, Macmillan announced that come November, the company will only allow libraries to purchase a single copy of its new titles for the first eight weeks of their release—and that’s one copy whether it’s the New York Public Library or a small-town operation that’s barely moved on from its card catalog. This has sparked an appropriately quiet revolt. Librarians and their allies quickly denounced the decision when it came down, and now the American Library Association is escalating the protest by enlisting the public to stand with libraries by signing an online petition with a populist call against such restrictive practices. (The association announced the petition Wednesday at Digital Book World, an industry conference in Nashville, Tennessee.) What’s unclear is whether the association can get the public to understand a byzantine-seeming dispute over electronic files and the right to download them.

In a July memo addressed to Macmillan authors, illustrators, and agents, the company’s CEO John Sargent cited the “growing fears that library lending was cannibalizing sales” as a reason for embargoing libraries from purchasing more than one copy of new books during their first eight weeks on sale. “It seems that given a choice between a purchase of an ebook for $12.99 or a frictionless lend for free, the American ebook reader is starting to lean heavily toward free,” he claimed.

Many individual library systems and companies that work with libraries swiftly responded with objections. “Public libraries are engaged in one of the most valuable series of community services for all ages, for all audiences,” said Steve Potash, the CEO and founder of OverDrive, a company that supplies libraries with e-books. “The public library is just something that is underappreciated. It certainly is so by Macmillan.”

. . . .

“If you think about equitable access to information for everybody, there shouldn’t be discrimination or anything like that,” said Alan Inouye, the senior director for public policy and government relations at the ALA. “So consumers can get this book on Day 1 without limitation, but libraries have to wait for eight weeks? That’s just very wrong.”

. . . .

The controversy over Macmillan’s new policy gets at one of the central issues facing book publishing today. “There’s a tension in e-book pricing generally between consumer expectations that a digital file will be less expensive than a physical copy and the reality that very little of the cost of making a book is tied up in the physical format,” said Devin McGinley, a senior industry analyst covering book publishing for Ibisworld Inc., a market research firm. “Publishers are rightly concerned that if the price of books erodes too much, they will no longer be able to cover their creative costs and subsidize more speculative bets on emerging authors.”

. . . .

“They really did not have any reasonable data to support a narrative that if an author’s new book is withheld from public library lending when it first comes out, that might impact the author’s or the book’s sales during those first few months,” Potash said. “That isn’t borne out. The data that OverDrive has is that for every title that actually gets borrowed or downloaded, the library is engaging with dozens and dozens of readers who are discovering the book, sampling the book, or just looking for a recommendation on what to read next.” Potash said that studies consistently show library patrons to be more frequent book buyers overall—which is another reason Macmillan’s letter stung. “They are taking their readers, their customers, their fans, and intentionally trying to frustrate them,” he said.

Link to the rest at Slate

PG will state that whenever a business executive talks about making a decision to avoid “cannibalizing sales,” you will find many other stupid words and acts following shortly thereafter.

Steve Job famously said, “If you don’t cannibalize yourself, someone else will.” He made this comment when Apple was selling a lot of iPods, and had just announced the iPhone.

Did the iPhone cannibalize Apple’s iPod business? You bet. Were any Apple shareholders upset by this cannibalization? Not really. The iPhone would make Apple the most valuable company in the world.

The first iPhone was announced in January, 2007, and went on sale in June, 2007. One year after the announcement of the first iPhone and six months after its launch, in January, 2008, the value of a share of Apple stock had almost doubled. About six months later, in July, 2008, when Apple launched the iPhone 3G (the first iPhone with an app store), the stock value was 285% of the price only 18 months earlier.

Not many people were worried about iPod sales at that point.

From an interview with James Allworth, the co-author, with Clay Christensen and David Skok, of a new Nieman Reports article called “Breaking News– Mastering the Art of Disruptive Innovation in Journalism.” The Harvard Business Review published a transcript:

Well, if you can see a way of cannibalizing your existing business, then chances are somebody else can see that same opportunity too. And if it’s a choice between you or your competitor cannibalizing that business, I think in almost every instance you will be better off in the long run if you yourself choose to do it.

Link to the rest at The Harvard Business Review

Back to Macmillan, once a book is completed, PG will note that each copy of an ebook that Macmillan licenses to a user costs the company essentially nothing. This cannot, of course, be said about a printed book, each one of which carries costs for printing, shipping, warehousing, handling returns of unsold books from bookstores, etc.

PG suggests that an intelligent executive would be happy to cannibalize the sales of more copies of costly printed books by selling costless ebooks.

 

Level the Playing Field for Books in Translation

From Publishers Weekly:

(PG Note – The author is a Slovenian publisher)

Nowadays, when everything is just a click away, people around the world have come to expect the latest installment of great TV series such as The Handmaid’s Tale or Game of Thrones to be delivered to their screens more or less simultaneously with the original release, together with corresponding subtitles in Croatian, Macedonian, Serbian, Slovenian…. There are many people involved with the production, and the security risks are extremely high, but still—the magic happens.

It is therefore somewhat surprising that in book publishing we’re witnessing a discriminating practice that has become increasingly common in recent years. In fact, this is now a sort of a status symbol, which divides major from merely big or important authors. At my Slovenian publishing company, Mladinska Knjiga, we still receive Mr. Barnes’s or Mrs. Hawkins’s or Mr. McEwan’s or Mr. Nesbø’s or Mr. Walliams’s new novels way ahead of publication (Mr. Nesbø even kindly provides the complete English translation for those who are not translating from Norwegian!), whereas this is not the case with authors (brands?) such as Dan Brown, John Green, or J.K. Rowling. Even Harper Lee’s second novel, Go Set a Watchman, was strictly embargoed until publication of the English edition. And now Margaret Atwood’s The Testaments faces the same issue.

The reason given is always the same: security. We were told by Atwood’s agency: “If this manuscript leaks, the consequences are huge, and therefore we have to have a strategy that minimizes the risk.”

A strategy? Some (well, most) of us are obviously not trustworthy. But there’s more. Initially a universal practice, this “strategy” is not without exceptions now. For example, the German version of The Testaments is scheduled for simultaneous publication with the original—so is the Spanish one and the Italian one. Is this then just a variation on a good old theme of “paying more” ? (One wonders how much of this is known to authors themselves, all fine people, who are usually sincerely grateful to each of their publishers from all around the world.)

The Booker shortlist was just announced, and it includes The Testaments. This is great news. It means that the book is good. But what it also means is that the jurors were given the manuscript ahead of publication, too. How did security procedures work in this case? I would rather not speculate, but let me just say that this only made us even more furious.

. . . .

In the case of The Testaments, we were particularly disappointed because we had initially been promised the manuscript in March (just enough time to publish more or less simultaneously), only to later be told that we’ll have to wait until September 12.

Why is this so crucial? We will lose the global promotional momentum and lose face in the eyes of our readers, booksellers, and librarians: the book is published, so where’s the Slovenian version? Most of them will think that the publisher is rather sloppy and slow.

The bottom line: we will sell less. And this is as important for German publishers as it is for Slovenian, Slovakian, and Icelandic publishers. Literary bestsellers are extremely rare. Therefore, one must seize every selling opportunity, and publishing simultaneously with the original edition is an especially effective one.

Sure, there are those houses that will hire multiple translators to finish the translation in two weeks, enabling the hasty publisher to publish the book just in time for the Christmas season. But would you really want to see or read the result? Margaret Atwood is a very fine author, one of the best. Her books deserve a committed translator and proper editorial dedication. And this takes time. So here is another factor that speaks against this strategy—the author’s reputation is at stake.

Link to the rest at Publishers Weekly

PG suggests that large publishers are almost religiously attached to their superannuated ideas about how to promote and advertise the books they release. Based upon shared folklore that the world is breathlessly awaiting the next release from OldPub in New York, they believe that a relative handful of chosen bookstores and an exclusive review in The New York Times will move the sales needle like it did before most people buy books online and the Times print circulation is plummeting.

New York Times Print Circulation – Monday-Friday – Wikipedia

BookExpo Announces a Shorter Trade Show for 2020 in New York City

From Publishing Perspectives:

In a “Dear Valued Customer” letter this morning (September 9) from Reed Exhibitions event manager Jennifer Martin, BookExpo has announced changes in its approach for the 2020 outing of the beleaguered US trade show at the Jacob Javits Center in New York City.

Citing a 38-percent increase in bookseller and retailer attendance in May for this year’s show, Martin also points out that 145 American Bookseller Association attendees were supported by the show’s “Bestsellers Grant Program” of travel subsidies.

Nevertheless, what Martin describes as a jump in attendance has not led the administration to continue its two-and-a-half-day schedule. The first of several changing elements Martin announces in her letter is a return to the two-day show schedule.

Distilled to the points being announced, however, there actually are very few confirmed elements of next year’s show in Martin’s letter.

. . . .

A two-day exhibition floor. BookExpo 2020—which is set for May 27 to 29—will return to a two-day exhibition-floor schedule. As Publishing Perspectives readers will recall, the floor opened this year at midday on the Wednesday of the week. Next year, Martin writes, Wednesday will revert to being a full day of conference and “education,” the latter referring to informational sessions akin to those known as Insight Seminars by regular attendees of the London Book Fair.

As Martin explains the reversion to the shorter exhibitors’ show, “In 2019, we moved back to a three-day event. The goal was to give everyone additional time on the floor to discover and connect. Though some saw value in it, most found it challenging and costly. After two months of in-depth conversations with customers, we have decided to return to a two-day trade show schedule, with Wednesday dedicated solely to programming and education. BookExpo will take place on Thursday and Friday; BookCon on Saturday and Sunday.”

. . . .

Editors’ Speed Dating. Martin says a cooperative effort in one-on-one encounters for booksellers with editors proved to be “a good format.” She writes, “It is platforms like this that we plan to increase, that connect the right groups of people in a focused way to foster real discussions with measurable and actionable outcomes.” She does not, however, actually say that this program will return.

Non-book retail show. Dubbed “UnBound” by the fair, this parallel exhibition floor is placed on the southern end of the Javits Center, a vast area largely abandoned by publishing exhibitors in the last few years as the show shrinks. The exhibitors here comprise, as Reed puts it, “a curated assortment of distinctive bookish goods hand- selected for the book channel.”

. . . .

The New York Rights Fair. Here again, Martin isn’t clear, but her tone seems to indicate that the rights-trading floor will be back in 2020. In 2018, as BolognaFiere and Publishers Weekly reconstituted BookExpo’s rights-trading area as the New York Rights Fair, they moved it to the Metropolitan Pavilion across town. The distance and separation of the rights center from the rest of the trade show pleased very few people, and the rights trading was brought back into the Javits in May, still as the newly branded New York Rights Fair.

On the whole, the rights-trading tables area looked remarkably empty during BookExpo in May, although Martin says that exhibitors and attendees came from more than 73 countries. What seemed to work best, as it did in 2018, was the programming attached to the rights trading area in a comfortable stage area with effective (and welcome) sound-deflection panels. Again, however, this rather imprecise letter doesn’t actually state the 2020 status of the New York Rights Fair.

Link to the rest at Publishing Perspectives

During an earlier stage of his legal career, PG was involved in the planning of the largest legal technology trade show in the United States. He has also attended some giant technology shows in San Francisco/Silicon Valley. These experiences don’t make him an expert on publishing trade shows, but does lead him to speculate on what’s happening with BookExpo.

  • Reed Exhibitions is a subsidiary of RELX (formerly Reed Elsevier), a very large company that makes most of its money from legal, scientific and academic publishing.
  • RELX used to own Publishing Perspectives, the source of the OP, but sold it off in 2009. The only reason a company like RELX sells something is that what’s being sold isn’t making much money.
  • Trade shows must cater to two audiences who don’t necessarily have the same interests:
    1. A business or professional group – doctors, lawyers, book stores, etc.
    2. Entities that sell products or services to the business or professional group
  • So, a typical trade show consists of two parts:
    1. Education/information programs that attract significant numbers of book stores, doctors, lawyers, etc.
    2. An exhibition hall in which vendors who would like to reach book store owners, doctors, lawyers, etc., set up booths, put on product demonstrations, give away tote bags, caps, buttons, etc., bearing the corporate logo or product name.
  • A trade show usually requires an admission fee from members of the business or professional group, but free tickets are often available for members of the target group who are in the know or are typically given to those speaking in the educational segment.
  • PG can’t speak for all trade shows, but has been informed that most of the money most shows generate comes from the exhibitors.

PG’s semi-professional take on the OP is that Reed Exhibitions doesn’t think the latest BookExpo was very successful from a financial standpoint. Perhaps Reed had to discount exhibit space or bring in exhibitors tangential to the core purpose of the show in order to fill the exhibit hall. Perhaps Reed is having problems attracting good quality speakers for the show.

The garbling of the message from Reed described in the OP may be an indication that Reed’s best thinkers are paying more attention to other shows than they are to BookExpo.

Amazon Under Fire for Breaking Margaret Atwood ‘Handmaid’s Tale’ Sequel Embargo

From The Hollywood Reporter:

Margaret Atwood’s latest work The Testaments — the highly anticipated sequel to her 1985 best-selling novel The Handmaid’s Tale — is set to be released globally next Tuesday. However, a “retailer error” by Amazon broke the embargo, resulting in a “small number of copies” already ending up in the hands of readers.

Todd Doughty, Doubleday’s executive director of publicity, told The Hollywood Reporter in a statement, “A very small number of copies of Margaret Atwood’s The Testaments were distributed early due to a retailer error which has now been rectified. We appreciate that readers and booksellers have been waiting patiently for the much-anticipated sequel to the best-selling The Handmaid’s Tale. In order to ensure our readers around the world receive their copies on the same day, our global publication date remains Tuesday, Sept. 10.”

. . . .

The embargo breach has also created an outcry from independent booksellers on social media, including Astoria Bookshop owner Lexi Beach, who shared her frustration on Twitter. “There will be ZERO consequences for $amzn violating not just the fine print but the entire basis of this embargo agreement some exec surely signed digitally through Adobe Sign just like the rest of us did,” she wrote Tuesday.

Added Beach: “And the kicker is that $amzn will make hardly any money selling this book. Books (especially big splashy publications like this) have always been a loss leader for them. Whereas I and many other independent retailers are counting on this release to pay our bills.”

Link to the rest at The Hollywood Reporter

PG notes that embargos occupy a hallowed spot in the uninspired world of Big Publisher marketing.

Embargos are also breached with some regularity by people other than Amazon. PG is not the only one who suspects that publicity about the breaking of more than one embargo has been part of a publisher’s staged marketing campaign for quite a while.  Throw in the dreaded Zon and people become even more excited.

From The Washington Post, September 27, 2012:

The embargo on the J.K. Rowling novel “The Casual Vacancy,” reportedly one of the most draconian non-disclosure agreements in the history of publishing . . . did not quite work. ¶ Thursday is the release date for the first book for adults written by the empress of Hogwarts. Reviews were embargoed until 1 a.m. and book sales until 3 a.m. Since Rowling’s Harry Potter books have sold more than 450 million copies worldwide, the release of her new book — even though it is set in an unmagical British town called Pagford — is one of 2012’s largest publishing events. ¶ Thus, it is a test case for the common, if unloved, practice of forbidding booksellers from selling the book in advance of the embargo date, and forbidding media outlets from reviewing said tome before the date the publishing company decrees. ¶ The practice generally has several intents: to make sure books are in stores when readers hear about them; to retain the news revelations in nonfiction books; and to try to bottle up interest in big fiction titles, propelling them onto bestseller lists with an unusually high number of immediate sales.

“For franchise authors, you want to drive it to Number 1 by having everyone buy it the first week of release,” said Elyse Cheney, a literary agent in New York.

Rowling, who is nothing but a franchise author (she is the first in the world to earn more than $1 billion in book sales), added spice to this release with an unusually strict legal document that its publisher, Little, Brown, reportedly imposed on prospective reviewers.

The Independent in London reported a clause that not only required signees to hold off on sales and reviews but also forbade them to even mention a contract.

But — and this almost always happens — somebody got the book anyway.

The Associated Press and the New York Daily News (and perhaps others) said they managed to get early copies of the book, and they published reviews Wednesday. AP reported it did not sign the contract but “purchased” the book; the Daily News said the novel was “obtained.” Because they alone had reviews, those two organizations set the tone for readers’ perception of the book.

The Post and other news organizations observed the embargo, running reviews Thursday.

Just about nobody was happy.

“I couldn’t even get an embargoed copy to review,” said Dan Kois, editor of the book section for the online magazine Slate, which is part of The Washington Post Co. “They wouldn’t send it to us. They had very clear levels to this campaign.”

. . . .

The Post and the New York Times refrained from publishing their staff-written reviews online Wednesday, though The Post put AP’s review on its Web site. The Post’s executive editor, Marcus Brauchli, said he thinks the publishing industry is ultimately “fighting a losing battle.”

A spokeswoman for Little, Brown said she would have a company representative call for comment on this article, but no one had done so by press time.

This sort of struggle between publishers and media outlets has been small-arms combat for years. With some books, in which authors and publishers have signed exclusive excerpt rights with magazines or newspapers, there is a clear business mandate to preserve those rights and to keep others from writing about the material.

. . . .

Connie Ogle, books editor for the Miami Herald, and LaFramboise, the Politics & Prose book buyer, both noted a similarity between some embargoed titles and B movies that are not made available to critics for pre-screening.

“There is a core audience that is going to go see the movie or read the book anyway,” Ogle said, “and those films or books often tend not to have a long shelf life.”

Link to the rest at The Washington Post

Big Pubs Have Mixed First Half of 2019

From Publishers Weekly:

The first six months of 2019 were something of a mixed bag for trade publishers whose financial results are publicly reported.

Penguin Random House had by far the best first half of 2019, with earnings jumping 33% over the comparable period in 2018, while revenue rose 11.3%. Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) rose from €171 million in the first six months of 2018, to €227 million, PRH parent company Bertelsmann reported. Sales were €1.65 billion, up from €1.48 billion.

Acquisitions and hundreds of bestsellers drove the gains. Three acquisitions in particular affected first-half results, as detailed by PRH CEO Markus Dohle in a letter to worldwide employees: the purchases of children’s publisher Little Tiger Group in London as well as Spanish-language literary publisher Ediciones Salamandra and Catalan-language publisher La Campana Llibres, both of which are based in Barcelona. The company also acquired a 45% stake in Sourcebooks in late May.

Organic growth was led once again by Michelle Obama’s Becoming, which sold more than 2.8 million copies across all PRH companies in the first half of the year. Where the Crawdads Sing by Delia Owens sold over two million copies in all formats in the period. A third factor in the sales growth was “high growth rates in audio formats,” Bertelsmann said. In his letter, Dohle also noted PRH’s “thriving” distribution business.

. . . .

Revenue at HarperCollins fell 5.4% in the first six months of 2019 compared to last year, and earnings dropped 14.1%. Much of the decline was due to a down second quarter (or fourth quarter for HC, which operates on a June 30 fiscal year). The company was facing a difficult comparison to the second quarter in calendar 2018 primarily because of the absence of $28 million of revenue from the Lord of the Rings trilogy licensing agreement in the prior year, lower sales of Magnolia Table by Joanna Gaines, and $18 million less in revenue as a result of adopting the new revenue recognition standard.

The decline was partially offset by the success of new releases such as Everything Is F*cked by Mark Manson and The World’s Worst Teachers by David Walliams. Audiobook sales were generally strong in the first half of the year, offsetting soft e-book sales. Overall, sales in the second quarter were down 14% from a year ago, offsetting a 5.8% sales increase in the first quarter.

Link to the rest at Publishers Weekly

When PG examined this article, he saw only three comments, each a generic pitch for a website that promised the reader that he/she could earn big money for a work-from-home online job.

“­­I­­ ­­am ­­m­­a­­k­­i­­n­­g­­ ­­$­­9­­2­­ ­­a­­n ­­h­­o­­ur ­­w­­o­­r­­k­­i­­n­­g ­­f­­r­­om ­­home. . . .”

“M­­y la­­st mo­­nth pay­­che­­ck wa­­s f­­or 11­­0­­00 do­­ll­­a­­rs. . . .”

“E­v­e­r­y­ m­o­n­t­h m­a­k­e­s m­o­r­e t­h­a­n ­$­1­5­,­0­0­0­ j­u­s­t b­y w­o­r­k­i­n­g o­n­l­i­n­e h­o­m­e j­o­b i­n s­p­a­r­e t­i­m­e.”

PG is not certain exactly what the relationship between the OP and the comments might mean.

How could Big Publishing and shady get-rich-quick schemes be related?

A Book Biz Insider’s Letter to a (Future) Assistant

From Publishers Weekly:

In every informational interview I’ve participated in, students and interns begin in the same way—what they most want me to know about them, even before the school they’re going to (or in one case, even their name): They love to read. When I hear this my heart sinks. I don’t want to put these applications in the “no” pile, but I know I have to. In declaring that they should be hired for a job in publishing because they love to read, they betray that they have no actual idea what an assistant job in publishing entails.

To be clear, I do not fault anyone for writing cover letters like this. I wrote some truly heinous cover letters that spent more time waxing poetic about learning to read the Berenstain Bears on the subway than they did actually clarifying any of my qualifications or skills. This oft-repeated mistake seems to be more a product of the shroud of elitism that publishing as an industry hides behind than it is of the people who most want to work within it. There is lots of speculation as to how to get your foot in the publishing door. In the course of four years applying and reapplying to assistant jobs, I’ve read lots of advice. Like anything else, some of it is good and some of it is, well, less good.

As an assistant for four years, my two cents are this: Do not focus, in your cover letter, on your love of reading, your passion for the power of storytelling, or your favorite books on an editor’s list. Instead, you should be focusing on the unsexy parts—your office skills, your ability to communicate, your willingness to learn, and your resourcefulness. Hiring managers or editors or head publicists are not necessarily looking for great literary minds; they are looking for someone who will competently check and respond to emails, write marketing copy, read slush, answer phones, mail books, wrangle contracts and forms from authors, negotiate text and image permissions, walk the director’s dog, or literally any other task the hirers don’t feel like doing. Optimistically, you will spend about 2% of your time reading things that are not emails, and those stolen hours will feel like a blessing.

Link to the rest at Publishers Weekly

If PG were to conduct an “informational interview” with someone who was considering entry into the world of traditional publishing, his advice would include the following (For the record, no one has asked him for an informational interview about publishing and he doesn’t expect anyone to do so):

That is a seriously dumb move. Don’t do it.

The traditional publishing industry is a dead man walking. Whatever glamour it may have possessed twenty years ago is gone, gone, gone. The business is not about art, it is about commerce, just as much as an investment bank is, although vastly less remunerative to its employees. If you want to hang around authors, find out which bars they patronize and go there or join a writers group.

Over time, the friends and acquaintances who you hope may be impressed by your underpaid job in publishing will come to regard it as a suicidal career choice. The transferrable skills you learn as a publishing assistant won’t be much different than the skills you would learn working as an assistant for a mid-level executive in a meat packing plant.

At an entry level, it’s mostly going to be drudge work and the atmosphere in a business organization that is circling the drain is seldom very healthy. You will almost certainly learn what it’s like when people you know are laid off. Plus, it will be of minimal assistance in paying off your student loans from Sarah Lawrence, even if you get promoted at some time in the future.

Audible Captions vs. The Publishing Industry

From EContent:

I moved to Nashville, Tenn., in the summer of 1999 to go to college, in the height of the file-sharing “crisis.” I put the word “crisis” in quotes because while the music industry was quick to judge on what was, and was not, ethical consumption of music, we learned a few things from the episode:

  1. Napster, Limewire, etc. opened my eyes to a vast multitude of new artists, many of which I may never have discovered. I then paid money, either through album sales, concert ticket sales, festival ticket sales, and/or artist merchandise, in support of those very same artists for decades to come. That revenue may not have ever come to exist without file-sharing services.
  2. During the process of songwriter groups and music publishers suing these file-sharing services out of business, Napster at one point tried to form a royalty agreement with music publishers by which Napster would contribute royalties per download back to the publisher. This arrangement looked similar to the arrangement music publishers have today with streaming services. Music publishers rejected this arrangement 20 years ago, causing a precipitous decline in publisher revenue while the file-sharing entities all went out of business. Everyone lost.
  3. Only after muddling through a lot of lean years did music publishers finally realize they needed amicable, mutually beneficial relationships with tech companies like music streaming services, and frankly couldn’t afford to be standoffish and uncooperative with potential partners.
  4. The eventual result is that, here in 2019, the music industry is thriving – Spotify, Apple Music and the like are making music publishers more money than they’ve made in a very, very long time.

. . . .

Audible rankled book publishers by introducing, albeit in beta, a new feature called “Audible Captions,” which allows users of audiobooks to read along with transcribed text, a few sentences at a time.

Publishers argue Audible doesn’t have the rights to do that. That’s an argument straight out of 1999. Did tech companies like Napster have the right to give music away to downloaders? Of course not. But did music publishers devastate their own revenue for years to come by not forging a path to partnership? Sure did.

In a better argument, publishers argue Audible will cost publishers ebook sales and possibly even print book sales by making Audible Captions available. This is obviously true, at least for some people, and I’d be one of them. A read-along version of a book accompanying the audiobook playing would be an ultimate version of a work, rendering owning other formats completely unnecessary. I’d go back to it over and over again and would feel no need to buy anywhere else.

The funny thing about this particular scenario is that accessibility lies at the heart of the debate. There is zero question that by providing read-along text accompanying the audiobook will help make these audiobooks more accessible to more people. This has some similarities to the fact that music file-sharing services in the late 1990s/early 2000s served the purpose of making music much more accessible to those who couldn’t purchase $20 CDs at Sam Goody or Musicland.

What the music industry ultimately learned is that it is far better to partner with tech-oriented disruptors, and monetize the new situation as best as possible, than to fight it tooth and nail and risk losing.

Link to the rest at EContent

PG agrees with the OP.

Setting aside copyright arguments, providing subtitles with audiobooks is a strategy designed to sell more audiobooks, a win-win for Amazon and the publishers and the authors.

The idea proffered by Big Publishing – that audiobooks with captions will diminish ebook sales of the same title is, for PG, ridiculous.

For someone who desires to read an ebook version of a work, reading audio captions is like running a marathon on snowshoes, way, way too slow.

For someone who has problems reading (physically or mentally), listening to an audiobook while following the captions may allow that person to consume and enjoy the book when either the printed book/ebook alone or an audiobook without captions would be far less enjoyable.

Listening to an audiobook with captions could help someone who doesn’t read learn to do so.

In PG’s written and verbal opinion, the traditional publishing industry is technologically and financially inept in the extreme.

The industry fought ebooks when it was patently obvious that creating, storing and distributing an organized collection of electrons is vastly less expensive than printing, binding, boxing, warehousing and shipping vast quantities of paper is. You can reduce ebook prices and make gobs more money than trying to sell printed books at full price.

Imported Books and Their Resale in the U.S.

Yesterday, PG had a post about a Publishing Perspectives piece discussing a New York Times article condemning Amazon’s sale of “counterfeit books,” many of which originated overseas.

An alert commenter to that post mentioned a U.S. Supreme Court case that may be relevant, Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519 (2013)

PG won’t go into detail about the case, but the gravamen of the holding was that Mr. Kirtsaeng, who, through friends/family, purchased new English-language Wiley textbooks in his home country of Thailand, could legally resell those books in the United States.

The books purchased in Thailand were legitimate copies published and distributed by the Asian subsidiary of Wiley, WileyAsia. WileyAsia’s books stated that they were not to be taken (without permission) into the U.S.

The Supreme Court ruled in favor of Kirtsaeng, grounding its decision a provision of U.S. copyright law generally referred to as the “First Sale Doctrine.”

[S]ection 109(a)’s “first sale” doctrine, … provides that “the owner of a particular copy or phonorecord lawfully made under this title … is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.”

Without the First Sale Doctrine, there would likely be no used book stores in the United States.

A new book store acquires the right to sell new books via the publisher which has a publishing contract with the author, who is (or should be) the owner of the copyright to the book. Under the publishing contract, the author grants the publisher the right to make copies of the author’s book and sell them (directly or through distributors) to bookstores which, of course, can sell those new books to readers.

After a copy of the new book is sold to a reader, the author’s rights to that particular copy of the book are exhausted. The purchaser can lend it, resell it, donate it, etc., without violating the author’s copyright.

To be clear, the purchaser of a copy of the book cannot make copies of the book to give or sell to others, because the First Sale Doctrine applies only to that particular copy of the book the purchaser legally acquired.

So, when Mr. Kirtsaeng purchased multiple copies of the English language textbook in Thailand and resold them in the United States, the Court held that the Thai purchase was the First Sale of each textbook and Mr. Kirtsaeng was effectively in the same position as a used book store operating in the US.

Back to the NYT condemnation of Amazon for selling “counterfeit books,” it is possible that Amazon is doing so. However, it is also possible that Amazon (or third-party sellers on Amazon) is/are acquiring books from foreign publishers in the same way that Mr. Kirtsaeng was acquiring the Wiley textbooks.

If a U.S. publisher decides to permit foreign publishers to print, publish and sell books in the English language for a cost/royalty that is lower than the price the U.S. publisher charges its U.S. customers for the same text, that’s a business decision for the U.S. publisher to make (and, incidentally, that the author has no control over under typical publishing agreements).

If a foreign publisher decides to sell English language copies of a book at a much lower price than the price set for English language books in the U.S. and has a contract with the U.S. publisher that sets no price limits for the book (which might be a violation of antitrust laws somewhere), the foreign publisher can set the price and make the sale directly or through distributors or bookstores.

Under Kirtsaeng and the First Sale Doctrine, once the foreign publisher sells a copy of the book, under U.S. copyright law, the wholesaler, retailer or other purchaser of that copy can do anything with it that a purchaser of the same book from the U.S. publisher could do in the U.S., including resell the new book or ship it to the U.S. or any other destination for resale.

(A contract between a publisher and distributor could impose geographical limits on where the distributor could offer the book for resale, but once the book is sold at retail, First Sale definitely kicks in. PG has no idea what might happen legally if each bookstore required each purchaser of a book to sign a contract agreeing not to resell or give the book away. From a commercial standpoint, PG suspects such a requirement would dampen sales of the book.)

Is there a solution to counterfeit or unauthorized books?

In PG’s internationally-celebrated humble opinion, requiring Amazon to determine whether books that an Indian or Chinese publisher delivers directly to Amazon or via a U.S. book distributor or other intermediary are properly authorized by the party who owns or controls the copyright is an unreasonable burden to place upon Amazon or Barnes & Noble or Shirley’s Books located on Main Street, USA.

PG does think Amazon’s idea for the establishment of a central database that permits sellers to know if a publisher in the U.S. or anywhere else is authorized by the copyright holder to create and sell a particular book is a good idea. It’s not a complete solution, but a practice that would diminish the flow of improperly licensed books through commercial sales channels.

What organizations are in the best position to create such a database and populate it with accurate data?

Publishers.

And, in particular, large publishers, including large international publishers. They know who holds rights to the books they publish in various geographical areas. They know who has translation rights in those same areas. They and their authors bear the largest losses from pirated copies of their books in various nations and languages.

In conclusion (finally), PG asks a rhetorical question:

How likely is it that Penguin Random House will lead such an effort to create a central database of literary rights and permissions and put up a significant share of the costs necessary to do so?

Pearson? ThomsonReuters? Wolters Kluwer? Hachette Livre?

 

David Streitfeld’s Orwellian Shopping List, and Amazon’s Retort

From Publishing Perspectives:

As Publishing Perspectives will remember, when The New York Times’ David Streitfeldwrote in June that “Amazon takes a hands-off approach to what goes on in its bookstore,” resulting in what the Authors Guild said has been a surge of counterfeit books, the retailer responded at unusual length to defend itself and its intentions of consumer protection and quality assurance.

On Monday (August 19), the San Francisco-based veteran Amazon observer and journalist published a new piece in the Times, in which he recounts buying “a dozen fake and illegitimate Orwell books from Amazon.”

For book industry players and those who respect literature, the story is harrowing and illustrates how many in the books business see what Streitfeld earlier has described as “a kind of lawlessness” in how Seattle sells books.

And yet, once again, a Streitfeld piece has elicited a substantive response from Amazon, indicating at the very least that the vast tech company does not take lightly the sorts of weaknesses the reporter discerns in its work–and making a case to publishing people for a “single source of truth” on copyright status.

. . . .

In describing the bad editions of George Orwell books he was able to order from Amazon, Streitfeld writes that some “were printed in India, where the writer is in the public domain, and sold to me in the United States, where he [Orwell] is under copyright.

“Others were straightforward counterfeits, like the edition of his memoir Down and Out in Paris and London that was edited for high school students. The author’s estate said it did not give permission for the book, printed by Amazon’s self-publishing subsidiary. Some counterfeiters are going as far as to claim Orwell’s classics as their own property, copyrighting them with their own names.”

In cases of such illicit content, of course, rights holders are being stiffed, as Streitfeld reminds us, and the readership is being sold bogus and often badly corrupted work. “After all,” he writes, “if you need a copy of Animal Farm or 1984 for school, you’re not going to think too much about who published it. Because all editions of 1984 are the same, right? Not always, not on Amazon.”

. . . .

Indeed, a lot of what Streitfeld describes in these bogus editions is remarkable as much for how small and random the changes seem to be as anything else. In that “edited for high school” version of Down and Out in Paris and London, for example, the bowdlerized result removes “my chicken” from Charlie’s call to a young seduction victim, “Come here, my chicken.” Can it possibly have been of much concern that a modern high school student might encounter the phrase “my chicken” in this context?

None of this is acceptable. Particularly in an age in which truth itself is under a furious assault by political forces in the United States and many other parts of the world, the protection of every author’s and publisher’s work is mandatory.

And Streitfeld is correct when he writes that the arrival of the biggest seller of books in history has presented an unprecedented challenge in which counterfeiters can profit from their ability to cheat us all: “Until recently,” Streitfeld writes, “improving Orwell was not a practical business proposition.

“Then Amazon blew the doors off the heavily curated literary world. No longer was access to the marketplace determined by publishers, booksellers, or reviewers.”

While Amazon is the company that has, he’s right, made it possible for “even the most marginal books” to be “suddenly available to everyone everywhere” from the most earnest but artless authors (self-published or from the trade), it also can enable the chicanery of ruthless forgers.

Books people struggle with this perhaps more than lawn mower manufacturers or apparel makers. As Faber & Faber’s director of digital and new business Henry Volans once said during a conversation in London, “Publishing has taken the digital disruption rather hard.”

. . . .

Publishing Perspectives has been provided by Amazon with a response to Monday’s Streitfeld article.

[PG asks: Is he alone in questioning the sentence structure of this bit?]

. . . .

(From Amazon’s response)

“The books in question are authentic titles provided to us by publishing houses and distributors for sale in our US store.

“However, there is an issue of differing copyright timing between countries and sometimes even different titles within the same country.

“Today, there is no single source of truth for the copyright status of every book in every country that retailers could use to check copyright status. Retailers are dependent on rights holders to tell them where they have the rights for each title and for how long. Without a single source of correct information, this is a complex issue for all retailers–a number of the books in question are for sale in the stores of several other US book retailers, from independent bookstore Web sites to large chains.

“We work with rights owners to quickly resolve questions about what publisher has what rights in each geography because only the rights holders know the disposition of the intellectual property rights to the works that they represent. We have removed these titles from our US store, and we have informed the publishers and distributors who listed them.

“We believe that a single source of truth for the copyright status of every book in every country would help all booksellers.”

. . . .

But neither can any level of vetting succeed in catching all counterfeited content. Streitfeld points out, “If Amazon vetted each title the way physical bookstores do, it would need lots more employees.” And even a good hands-on examination might miss faces changed to feces in an otherwise expertly produced copy of a book.

. . . .

At the same time, Streitfeld has put his finger on a problem in how Amazon at times displays its consumer reviews of books. “Amazon sometimes bundles all the reviews of a title together,” he writes, “regardless of which edition they were written for. That means an unauthorized edition of Animal Farm can have thousands of positive reviews, signaling to a customer it is a valid edition.”

In comments made on background by the company, Publishing Perspectives has determined that Amazon knows clearly the complaint Streitfeld is making but may not be convinced that exact matches of reviews to a given edition would prevent problems. There are, for example, consumers who might complain about what they consider to be poor-quality printing in a book that nevertheless is an authentic work.

And Amazon is correct that it’s not alone in carrying some of the precise bad Orwell editions that Streitfeld has pointed to here. Some of them can be spotted on competitors’ sites, including those of Barnes & Noble and the independent powerhouse Powell’s. Needless to say, a determined counterfeiter may find it pays well to spread his or her tawdry work to as many points of sale as possible.

. . . .

The Authors Guild reports good cooperation from Seattle in working on problems the guild’s member-authors run into sometimes in working with Amazon. Perhaps an organization like the Book Industry Study Group (BISG) led by Brian O’Leary could look into the development of some of the data centralization that Amazon’s developers believe could strengthen their ability to spot bad material.

. . . .

Update: 11:38 a.m. ET August 20: To help represent the kind of response that many in the industry will have to Amazon’s stance, we’re adding here part of the comment from Michael Cader today in his edition of Publishers Lunch, published shortly after this story. Cader refers to Amazon’s arguments as “worthy of a child. Both in the statement and on further background they complain that it’s hard, that other people do it too, and that it’s somehow your (the industry’s) fault for not having a universal catalog of every right throughout the world. It all ignores the fact that this is a problem of Amazon’s own creation. Their ‘global store’ initiative that started in mid- to-late 2017–which makes the default to sell everything everywhere, unless someone actively complains about rights issues–directly aligns with the explosion of infringing book editions.”

Link to the rest at Publishing Perspectives

PG will note that he is against counterfeit books and the failure of any publisher, small or large, to respect the rights of the owners of the copyrights to those books and pay appropriate royalties for properly-licensed books.

However, PG notes the OP is less about the existence and sale of counterfeit books by Amazon and any other ebook seller and more about a hard-core resistance to change in the world of traditional publishing (including the world of newspaper publishing) and an unwillingness to adapt to a digital world which most consumers really like, both in English-speaking nations and elsewhere.

PG says the traditional book industry, whose profits have been greatly aided by Amazon during a period in which the amount of leisure reading done by Americans (and perhaps residents of other nations) has been in significant decline, seem to want to turn the clock back to 1990 and somehow erase online commerce.

As PG has pointed out before, traditional publishing has committed a serious strategic error by overpricing ebooks. The reasons, of course, have been an irrational hatred of Amazon and the accompanying desire to prop up sales of traditionally-printed books and the bookstores that sell them.

In a purely rational book publishing world, traditional publishers large and small would be happily reaping profits from increases in sales of reasonably-priced ebooks while gently nudging printed books toward a respectable antiquarian retirement. (From an ecological standpoint, think of the millions of trees that would be saved along with the birds and tiny creatures whose forest homes would remain secure.)

Of course, the publishers would still have their secret worries about Kindle Direct Publishing and the steady stream of popular and talented authors, both new and established, who are going indie due to both the increased income and increased power over their own careers that KDP provides.

Besides, Amazon is consistently ranked as one of the most-admired companies in the world. PG doesn’t remember ever seeing any of the huge media conglomerates that own the major New York publishers (or, to come to think of it, The New York Times and its wealthy owners) on any most-admired list. Indeed, PG would rank these huge media conglomerates as among the most retrograde large business organizations found anywhere.

 

 

Little, Brown To Release J.D. Salinger E-books

From Publishers Weekly:

Little, Brown, in conjunction with the estate of J.D. Salinger, announced plans to release e-book editions of Salinger’s four beloved works of fiction, marking the first time his books have been available in a digital format.

The release of the four books—The Catcher in the Rye, Nine Stories, Franny and Zooey, and Raise High the Roof Beam, Carpenters and Seymour—An Introduction—in e-book editions (with new cover designs) marks a continuing year-long centennial celebration of Salinger’s acclaimed works of fiction.

. . . .

Reagan Arthur, senior v-p, publisher of Little, Brown. said “This centennial year is an occasion for revisiting J. D. Salinger’s books as well as for approaching them for the first time. So it’s the ideal moment to be publishing his works as e-books.

The release of the e-books will be accompanied by a special focus on libraries and will include a 1,000 e-book giveaway sweepstakes to public libraries in North America organized by OverDrive.

. . . .

Salinger, who died in 2010, rejected digital editions of his work while he was alive. Since his death, Matt Salinger, the author’s son and administrator of the Salinger estate, has continued to carry out his father’s wishes. However, Salinger said the time has come to make sure his father’s books are available to a new generation of readers.

Salinger said “There were few things my father loved more than the full tactile experience of reading a printed book, but he may have loved his readers more—and not just the ‘ideal private reader’ he wrote about, but all his readers. As it became clear to us that increasing numbers of readers today read only e-books, and after I was taken severely (if also humorously) to task by a reader with a disability in Ypsilanti, Michigan, who can’t read except on an electronic device, we decided it was time.”

Link to the rest at Publishers Weekly

PG is 99% certain that the publishing agreements J.D. Salinger signed would not have included ebooks and likely had a reservation of rights clause that provided that all rights not granted to the publisher were reserved to the author.

The publisher paid Salinger’s heirs a tidy sum and they signed either an updated publishing contract or an amendment to the original contracts to permit the publication of ebooks.

 

AAP Objects to Trump’s China Shift: Only Children’s Book Tariffs Delayed

From Publishing Perspectives:

In her statement issued today (August 13), the Association of American Publishers‘ president and CEO Maria A. Pallante has pointed out that the book publishing industry is in no way out of the woods, as Donald Trump’s administration continues its lurching sequence of threats and feints on a proposed US$300 billion in new tariffs on goods imported from China.

“We remain deeply concerned,” Pallante says in her statement, “that a wide range of other books remain on the list, including American fiction and nonfiction books; art books; textbooks; dictionaries and encyclopedias; and technical, scientific and professional books.”

Moving to delay the levy of tariffs on certain classifications of goods until December 15—ostensibly to avoid damaging the American holiday season revenue for many industries—the United States Trade Representative’s (USTR) offices in Washington have included (as described on the agency’s listings):

  • 4903.00.40 Children’s picture, drawing, or coloring books
  • 4910.00.20  Calendars printed on paper or paperboard in whole or in part by a lithographic process, not over 0.51 mm in thickness

And Bibles—which perhaps with some irony are said to be printable almost exclusively by Chinese presses—are off the tariff lists.

But, as Jim Milliot at Publishers Weekly sums up the remainder, about which Pallante is expressing the association’s concern, “All other [than children’s] books printed in China, including trade, education, and professional titles, are still subject to 10-percent tariffs beginning September 1.”

Link to the rest at Publishing Perspectives

PG did a quick and dirty online search to see if he could find the locations of Amazon’s print on demand presses. He found an item that said European POD Amazon books were printed in Europe, but found nothing about KDP hardcopy printing locations elsewhere.

The Amazon Publishing Juggernaut

From The Atlantic:

Have you read Victoria Helen Stone’s False Step? No? Surprising, given that it’s a best seller, and that you clicked on an article about books and publishing—I thought you were more widely read. Surely you’ve at least gotten through Loreth Anne White’s The Dark Bones? Julianne MacLean’s A Fire Sparkling? Claire McGowan’s What You Did?

No? Each of these books beat out Where the Crawdads Sing, then the No. 1 New York Times best-selling novel, on the Kindle Store best-seller chart in recent months. Each one is a bright star in the self-contained, lucrative universe of ebooks. And each one was published by Amazon Publishing, a subsidiary of the store we already buy everything else from.

Founded in 2009, Amazon Publishing is far from the tech giant’s best-known enterprise, but it is a quietly consequential piece of the company’s larger strategy to become a one-stop shop for all your consumer decisions. As Amazon Studios does with movies, Amazon Publishing feeds the content pipelines created by the tech giant’s online storefront and Amazon Prime membership program. At its most extreme, Amazon Publishing is a triumph of vertical engineering: If a reader buys one of its titles on a Kindle, Amazon receives a cut both as publisher and as bookseller—not to mention whatever markup it made on the device in the first place, as well as the amortized value of having created more content to draw people into its various book-subscription offerings. (One literary agent summed it up succinctly to The Wall Street Journal in January: “They aren’t gaming the system. They own the system.”)

. . . .

And Amazon Publishing is a culture-making juggernaut, even if the literati don’t much think about it. According to Peter Hildick-Smith, the CEO of the book-industry analysis firm the Codex Group, roughly 25.5 million U.S. households bought books in the past month, and fully a quarter of those households use Prime Reading, a feature of Amazon Prime that allows subscribers to borrow 10 items at a time from a catalog of 1,000 ebooks, magazines, and other media, including the tech giant’s originals.

Prime Reading is far from Amazon’s only reading subscription service. Kindle Unlimited, a similar program, costs an extra $9.99 and offers a wider selection of 1 million titles. The Prime Book Box for children includes a selection of age-appropriate books delivered regularly for $19.99. Amazon First Reads allows members to download a book a month earlier than the unsubscribed public for no extra cost. Often, First Reads are—you guessed it—Amazon Publishing titles, and they rocket up the Kindle best-seller charts as soon as they’re made available; A Fire Sparkling and What You Did both topped the charts in early July despite being due out August 1.

. . . .

Amazon Publishing is still a relatively small fry: According to Hildick-Smith, it puts out 1,100 titles a year, compared with the 1,500 to 2,000 a large publishing house such as Simon & Schuster might publish. Estimating sales for those 1,100 titles is difficult, according to experts, because the tech giant doesn’t disclose ebook sales numbers for its original books, and its proprietary methods of distribution obscure those figures from the third-party researchers who determine best-seller lists.Grace Doyle, the editor who oversees the Amazon Publishing mystery/thriller imprint, Thomas & Mercer, and the science fiction/fantasy label, 47North, says the subsidiary looks at three things when measuring the success of a title: the book’s sales, the number of people who actually read it (Amazon maintains a “most read” chart, measured by ebook pages turned), and whether the company can expect more books to come from its relationship with the author. She said again and again in our interview that her goal was to maintain partnerships with authors for as long as possible, which often results in publishing series, especially for the thrillers and mysteries that do so well with ebook readers.
Indeed, Amazon Publishing knows its readers and has pursued their appetites since its inception. Jeff Belle, the vice president of Amazon Publishing, acknowledged their tastes in a 2011 interview: “Our customers are voracious readers of genre fiction.”. . . .Many authors seem to love Amazon Publishing. Robert Dugoni, who has written 10 mystery and thriller novels for Amazon, inked a deal with the company in 2013, after becoming dissatisfied with the amount of advertising his previous publisher, Simon & Schuster, put behind his books. Amazon Publishing, he says, still promotes the opener of his ongoing mystery/thriller series, My Sister’s Grave, a six-year-old book, in Kindle Store promotions; Dugoni says he’s sold 1.5 million copies of that title and 5 million copies of all his books with Amazon Publishing since 2013. The “hunger” of Amazon Publishing’s employees, along with its reams of customer data and speedy editing process, impressed him, he says, to the point that he recently appeared in one of its marketing videos.

“They’re constantly reinventing marketing and promotion to keep my name and my books in front of readers,” Dugoni told me. “From an author’s perspective, that’s all I ever wanted: people to read my books.” Doyle called Amazon’s success with Dugoni—a reinvigoration of an established author who wasn’t selling well elsewhere—“emblematic of our goals.” In January, Mark Sullivan, an author who writes historical fiction and mysteries, relayed a similar story of a career revived by Amazon Publishing.

. . . .

Prime subscribers are so valuable to Amazon because they spend more in the long run: Jeff Bezos has said that people who stream videos on Amazon convert from free trials and renew their Prime subscriptions at higher rates than those who don’t. He put it bluntly in 2016: “When we win a Golden Globe, it helps us sell more shoes.”

Book readers are the same. Content is the hook; commerce is the goal. If users join Prime for early access to a new title by their favorite author, rather than buying a one-off copy of the book, they become much more likely to purchase other things on Amazon—couches, clothes, cutlery, etc.—to take advantage of the membership. Bezos said in 2015, “It’s how our whole model works. When someone joins Prime, the more they buy of everything we sell.” That is to say, when the Amazon Publishing original You Are (Not) Small won the 2015 Theodor Seuss Geisel Award, one of the most prestigious for children’s books, diaper sales presumably skyrocketed. (Amazon did not immediately respond to a request for comment on sales spikes correlated with awards.)

Link to the rest at The Atlantic and thanks to DM for the tip.

Although to the best of PG’s knowledge, Amazon hasn’t released any sort of detailed demographic data about its Prime members, PG would bet most members of this group comprise the principal target market for a large number of retailers.

Money to spend, convenience-oriented, well-educated, big digital fans are likely among the principal descriptors of Amazon Prime subscribers. A great many retailers, service providers and others would love, love, love to reach this demographic efficiently.

Again, PG is not aware of any publicly-available customer satisfaction data for Prime members, but he would also bet that it’s sky-high. This group likes to buy a lot of different things from Amazon because Amazon makes it easy for them to discover, select and receive the goods (and, increasingly, he predicts, more of the services) these customers want.

Obviously, PG would love to see a lot of proprietary information Amazon has, but one of the items he most covets is what a typical Prime member and a typical non-Prime Amazon shopper spend on Amazon in the 3-5 years after their first Amazon purchase.

See Amazon Prime: 20 benefits every member gets and 31 Best Amazon Prime Benefits to Use in 2019 for more of the reasons why a lot of people love Amazon Prime.

ALA Statement on New Macmillan Library Lending Model

From The American Library Association:

On July 25, Macmillan Publishers announced a new library ebook lending model. In response, the American Library Association’s Public Policy and Advocacy Office released the following statement:

The American Library Association (ALA) denounces the new library ebook lending model announced today by Macmillan Publishers. Under the new model, a library may purchase one copy upon release of a new title in ebook format, after which the publisher will impose an eight-week embargo on additional copies of that title sold to libraries.

“Macmillan Publishers’ new model for library ebook lending will make it difficult for libraries to fulfill our central mission: ensuring access to information for all,” said ALA President Wanda Kay Brown. “Limiting access to new titles for libraries means limiting access for patrons most dependent on libraries.

“When a library serving many thousands has only a single copy of a new title in ebook format, it’s the library—not the publisher—that feels the heat. It’s the local library that’s perceived as being unresponsive to community needs.

“Macmillan’s new policy is unacceptable,” said Brown. “ALA urges Macmillan to cancel the embargo.”

The new Macmillan ebook lending model is an expansion of an existing policy that went into effect in July 2018, when the company, without warning, issued a four-month embargo applying solely to titles from the company’s Tor imprint. At the time, ALA stated that the delay would hurt readers, authors, and libraries.

Since last fall, Hachette Book Group and Penguin Random House have eliminated “perpetual access” for libraries and replaced it with a two-year access model. Simon & Schuster changed from a one-year to two-year access model. While reevaluating their business models, none of these firms implemented an embargo—deciding that equitable access to information through libraries is also in their business interest. HarperCollins continues with its 26-loan model. Macmillan now stands alone in its embargo policy among the largest Big Five publishers.

Macmillan will decrease its price to $30 for the single initial copy of an ebook. Unlike other Big Five publishers, this copy of Macmillan titles come with perpetual access. After the embargo period, additional copies will be available for $60 per copy for two years of access.

“This new embargo is the latest evidence of a troubling trend in the publishing industry,” said Brown. “ALA is developing a strategy to address this trend in the long term. Following the model of ALA’s former Digital Content Working Group, this advocacy effort will extend several years, not several months, and will not be limited to one company in the publishing ecosystem. ALA will push harder and explore all possible avenues to ensure that libraries can do our jobs of providing access to information for all, without arbitrary limitations that undermine libraries’ abilities to serve their communities.

“In the short term, ALA calls on library customers of Macmillan Publishers to tell CEO John Sargent they object to the publishing company’s new policy.”

Link to the rest at The American Library Association

In the US and, perhaps, elsewhere, the community public library stands with mom, apple pie and the flag as a loved and respected institution, especially in smaller communities.

The library often sponsors a children’s story hour during which a librarian will read a children’s book to any children who wish to attend. While the children are listening, the parents are chatting in the background, usually talking about their children and challenges, community happenings, etc.

The library will also often have a space for small meetings that is available at no charge in the evenings so community groups can gather to further their various purposes.

For lower-income patrons, the library may offer the only high-speed internet access available. Libraries also often host adult-learning classes, both online and in person.

Suffice to say, in a public relations battle between Big Publishing and community libraries, the libraries will win hands-down.

PG’s only criticism of the OP is that it didn’t include an email address where complaints could be sent to Macmillan and a hashtag for social media use.

 

After Tor Experiment, Macmillan Expands Embargo on Library E-Books

From Publishers Weekly:

More than a year after imposing a controversial four month “test” embargo on new release e-books in libraries from it’s Tor imprint, Macmillan announced today that it will now impose a two month embargo on library e-books across all of the company’s imprints. The terms take effect November 1.

Under the publisher’s new digital terms of sale for libraries, “library systems” will be now be allowed to purchase a single—that is, one—perpetual access e-book during the first eight weeks of publication for each new Macmillan release, at half price ($30). Additional copies will then be available at full price (generally $60 for new releases) after the eight-week window has passed. All other terms remain the same: e-book licenses will continue to be metered for two years or 52 lends, whichever comes first, on a one copy/one user model. A Macmillan spokesperson confirmed to PWthat the single perpetual access copy will be available only for new release titles in the first eight weeks after publication—the option to buy a single perpetual access copy expires after that eight week window, and the offer is not available for backlist titles.

In what counts as a measure of good news for libraries, however, no changes were announced for Macmillan digital audiobooks.

Macmillan is now the fourth Big Five publisher to change its terms for digital content in libraries in recent months—but its changes, and the views expressed by Macmillan CEO John Sargent, are by far the most unique and contentious of the group. In a July 25 memo (addressed to authors, illustrators, and agents), Sargent not only delivered the news of Macmillan’s library e-book changes, he basically called out libraries for depressing author payments.

“It seems that given a choice between a purchase of an e-book for $12.99 or a frictionless lend for free, the American e-book reader is starting to lean heavily toward free,” Sargent wrote. “Our new terms are designed to protect the value of your books during their first format publication. But they also ensure that the mission of libraries is supported.”

In the memo, Sargent asserted that 45% of Macmillan’s U.S. “e-book reads” were now “being borrowed for free” from libraries,” a trend he attributed to a mix of factors, including the lack of “friction” in e-lending compared to physical book lending, the “active marketing by various parties to turn purchasers into borrowers,” and unnamed apps “supporting e-book lending regardless of residence, including borrowing from libraries in different states and countries.”

. . . .

Alan Inouye, ALA’s senior director, for Public Policy & Government Relations, offered a blunt first assessment of Macmillan’s plan: “Worse than expected,” he told PW. “Embargoes violate the principle of equitable access to information that is at the core of libraries,” he added, pointing out that Macmillan’s policy is curiously out of step with the rest of the industry. “Within the past year, three of the other Big Five publishers revised their library e-book business models, and none of them concluded that libraries were a threat to their profitability,” Inouye observed. “Indeed, these other publishers believe that libraries benefit their businesses. Macmillan stands alone with its embargo.”

. . . .

“This is just Sargent using fear tactics, trying to gaslight authors and agents,” said PW library columnist Brian Kenney, director of the White Plains Public Library, citing Sargent’s references to “mysterious” data that “is never shared” and suggestions that libraries are somehow circulating e-books outside their service areas. “My library is able to share its e-book collection with other libraries in my consortium, but with the consent of all the publishers involved. And it rarely involves sharing frontlist titles, since an algorithm ensures that my e-book copies go to fulfill requests from my users first. And for every four requests, we purchase another copy.” As for an app that would allow libraries to circulate e-books to patrons outside of their service area, Kenney says he is unaware of any.

. . . .

Susan Caron, director, Collections & Membership Services, for the Toronto Public Library, which racked up the most digital lends in 2018, according to vendor OverDrive, said the claims in Sargent’s memo left her speechless. “I don’t know where to start,” Caron said. “Active marketing to turn purchasers into borrowers? There is no friction in e-lending? Except that people have to wait months for a title. I just randomly picked Normal People by Sally Rooney, published in August 2018. One year later, people still have to wait 29 weeks for a copy and we have 130. Hardly frictionless.”

And both Kenney and Caron suggest Macmillan clearly did not listen to librarian input, because the single perpetual access copy is not useful. “If we need more than one copy of a title, we’ll just wait. [Otherwise] our users will be upset if we don’t buy more to reduce holds, as we normally do. And if we can wait eight weeks, we may decide not to buy the title at all.”

Link to the rest at Publishers Weekly

PG suggests that this is a ham-handed, short-sighted action by Macmillan and other members of the Big Publishing Groupthink Boys Band.

But it’s what PG has come to expect from a declining, antediluvian industry that is out of original ideas.

PG remembers when publishers believed that exposure of their books and authors among library patrons helped to spur additional sales. Avid readers who use the library frequently are often regarded as excellent sources for information on great new books for their friends. Many a book club selection was first discovered as a book borrowed from a library.

This move also strikes PG as an attempt to manipulate the masses by executives who are far-removed from the masses and lack any real comprehension about how the proletariate will react to efforts to manipulate more money out of their pockets.

Here are some unintended consequences that PG suspects may result from this strategy:

  • Those who are inclined to remove copy protection from ebooks will feel more justified if ebooks are expensive and not readily available through libraries.
  • If an ebook is unavailable at the library due to the publisher’s strategy, librarians will be more inclined to recommend other books that are available. By the time the publisher’s embargo finally expires, more than a few readers will have forgotten their interest in a book/author because the effects of launch publicity will have faded.
  • More readers will turn to KDP and Kindle Publishing books and discover a lot of excellent ebooks at much more reasonable prices or at no cost through Kindle Unlimited and/or Prime Reading or simply among indie authors on Amazon.

From Wikipedia:

The [Titanic’s] eight musicians – members of a three-piece ensemble and a five-piece ensemble – were booked through C.W. & F.N. Black, in Liverpool.They boarded at Southampton and traveled as second-class passengers. They were not on the White Star Line’s payroll but were contracted to White Star by the Liverpool firm of C.W. & F.N. Black, who placed musicians on almost all British liners. Until the night of the sinking, the players performed as two separate groups: a quintet led by violinist and official bandleader Wallace Hartley, that played at teatime, after-dinner concerts, and Sunday services, among other occasions; and the violin, cello, and piano trio of Georges Krins, Roger Bricoux, and Theodore Brailey, that played at the À La Carte Restaurant and the Café Parisien.

After the Titanic hit an iceberg and began to sink, Hartley and his fellow band members started playing music to help keep the passengers calm as the crew loaded the lifeboats. Many of the survivors said that Hartley and the band continued to play until the very end.

Link to the rest at Wikipedia

A Measure of Progress

From The Bookseller:

Will we see this week as the moment when everything changed, a peek through the looking glass into a new era? I speak not of the sometime author and Conservative MP Boris Johnson becoming the UK’s Prime Minister, but the release of Amazon’s new weekly charts showing, for the first time, the impact of the huge but opaque digital sector on book sales.

There are plenty of known knowns from the first week’s release. Rachel Abbott, the author behind the biggest-selling fiction title of the week, And So it Begins, has long been a digital hit-maker. Her début thriller, Only the Innocent, was self-published in 2011, with Amazon revealing in 2015 that she was its bestselling “indie” author in the five years since Kindle launched. Like many of these authors, however, she has been largely absent from Nielsen BookScan’s bestseller universe, her top-seller having shifted just 6,955 copies in print. The chart also highlights the success of new digitally-led publishers such as Joffe Books and the more familiar Bookouture, which feature along with Amazon imprints Lake Union Publishing and Thomas & Mercer.

There is also the impact of audio, particularly in the most read/listens chart, where Audible’s release of Arthur Conan Doyle’s Sherlock Holmes: The Definitive Collection, read by Stephen Fry, sits in 10th, below the seven Harry Potter titles, their popularity also augmented by the Fry-narrated audio editions. That so many readers are listening to backlist audio shows the potential of the market, but also that it may need a different approach.

Link to the rest at The Bookseller

Amazon UK book charts top 10 most read non-fiction books this week (across digital, audio and subscription service books)

1. Becoming – by Michelle Obama

2. This is Going to Hurt – by Adam Kay

3. Sapiens – by Yuval Noah Harari

4. 12 Rules for Life – by Jordan B. Peterson

5. The Subtle Art of Not Giving A F*** – by Mark Manson

6. Can’t Hurt Me – David Goggins

7. The Secret Barrister – by the Secret Barrister

8. The Chimp Paradox – by Professor Steven Peters

9. The Book You Wish Your Parents Had Read – by Philippa Perry

10. Educated – by Tara Westover

Amazon UK book charts most sold fiction books this week (across physical, digital, audio and subscription service books)

1. And So It Begins – by Rachel Abbott

2. Darkness on the Fens – by Joy Ellis

3. The Winner – by David Badalcci

4. The World’s Worst Teachers – David Walliams

5. The Things I know – Amanda Drowse

6. The Lemon Tree Hotel – Rosanna Ley

7. I Looked Away – Jane Corey

8. Child’s Play – Angela Marsons

9. What You Did – Claire McGowan

10. The Perfect Child – Lucinda Berry

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

A lot has changed in book publishing in the last ten years

From veteran publishing consultant Mike Shatzkin:

I am returning this September to speak at Digital Book World.

. . . .

The new DBW is well aware of “corporate” publishing, a term they use to describe the increasingly frequent occurrence of non-publishing companies and entities issuing their own books (and not necessarily with the primary objective being to make money doing so).

This inspired me to make a list of Big Changes since 2009. It did not take long to come up with quite a few.

The arrival of the IPad and ubiquitous smartphones and tablets
Pretty universal broadband
Apple iBookstore
Nook: big arrival on the market, large uptake, fairly rapid sunset
Successful, as in producing dollars and reaching readers, self-publishing
Disappearance of Borders
“Resurgence” of independents (and its limits)
Diminishing of B&N
Growth of Amazon from less than a fifth of sales for most publishers to over half
Through Ingram, a full POD and distribution infrastructure available to anybody
Audio has become ubiquitous (fastest-growing segment; smartphones; Audible)

. . . .

Ten years ago: Pub date was the key organizing point for the assignment of a publisher’s budgeted and conscious efforts on a book. Generally, publishers marketed six months around pub date.
Today: Any book can pop at any time. This has had a very visible impact on budgeting and marketing resource allocation, but it also adds a new challenge: monitoring the world to make the best decisions about what books to put effort into right now.

TYA: “Direct marketing” to consumers was the work of specialists.
TOD: Every publisher builds and maintains email lists, with widely varying degrees of expertise applied to using them.

. . . .

TYA: Popular reference books were enduring backlist for book publishers. I know, because in the 1980s I created a compendium of baseball biographies called “The Ballplayers”, trying to appeal to the same audience of the perennial bestseller, Macmillan’s “Baseball Encyclopedia”.
TOD: You wouldn’t think of going to a book for either of these things. “The Ballplayers” had a life online as BaseballLibrary.com before Wikipedia mooted it. And the encyclopedia was effectively replaced long ago by baseballreference.com.

. . . .

TYA: In order for a book to sell, it really needed to be distributed by a “legitimate” publisher, because it was a requirement to be on sale in bookstores to move the needle and only a publisher could get books stocked across a wide range of outlets.
TOD: There are big categories of books (mostly genre fiction) that have a vast number of crowd-curated self-published titles that are available at prices no commercial enterprise can consistently match. And anybody with a worthy title can buy their way into full distribution without having to persuade a publisher to give them a contract.

Link to the rest at The Shatzkin Files

Amazon’s Upcoming Audible Captions Feature = Unhappy Publishers

From The Verge:

Earlier this week, Audible revealed that it was working on a new feature for its audiobook app: Audible Captions, which will use machine learning to transcribe an audio recording for listeners, allowing them to read along with the narrator. While the Amazon-owned company claims it is designed as an educational feature, a number of publishers are demanding that their books be excluded, saying these captions are “unauthorized and brazen infringements of the rights of authors and publishers.”

On its face, the idea seems useful, much in the same way that I turn on subtitles for things that I’m watching on TV, but publishers have some reason to be concerned: it’s possible that fewer people will buy distinct e-book or physical books if they can simply pick up an Audible audiobook and get the text for free, too.

And Audible may not have the right to provide that text, anyhow.

In the publishing world, authors and their agents sign very specific contracts with publishers for their works: these contracts cover everything from when the manuscript needs to be delivered, how an author is paid, and what rights to the text a publisher might have, such as print or audio. As an audiobook publisher and retailer, Audible gets the rights to produce an audiobook based on a book, or to sell an audiobook that a publisher creates in its store. Publishers say that a feature that displays the text of what’s being read — itself a reproduction from the original text — isn’t one of those specific rights that publishers and authors have granted, and they don’t want their books included in Audible’s feature when it rolls out.

. . . .

Audible tells The Verge that the captions are “small amounts of machine-generated text are displayed progressively a few lines at a time while audio is playing, and listeners cannot read at their own pace or flip through pages as in a print book or eBook.” Audible wouldn’t say which books would get the feature, only that “titles that can be transcribed at a sufficiently high confidence rate” will be included. It’s planning to release the feature in early September “to roll out with the 2019 school year.”

Penguin Random House, one of the world’s five biggest publishers, told The Verge that “we have reached out to Audible to express our strong copyright concerns with their recently announced Captions program, which is not authorized by our business terms,” and that it expects the company to exclude its titles from the captions feature.

Other publishers have followed suit. Simon & Schuster (disclosure: I’m writing a book for one of its imprints, Saga Press), echos their sentiments, calling the feature “an unauthorized and brazen infringements of the rights of authors and publishers, and a clear violation of our terms of sale,” and has also told Audible to “not include in Captions any titles for which Simon & Schuster holds audio or text rights.” A Macmillan spokesperson said that “the initiative was not authorized by Macmillan, and we are currently looking into it.”

The Authors Guild also released a statement, saying that “existing ACX and Audible agreements do not grant Audible the right to create text versions of audio books,” and that the feature “appears to be outright, willful copyright infringement, and it will inevitably lead to fewer ebook sales and lower royalties for authors for both their traditionally published and self-published books.”

When asked about the feature squares up against the existing audio rights that are granted to it, an Audible spokesperson told The Verge that it does “not agree with this interpretation,” but declined to comment further on whether or not the company actually has the right to go through with it.

Link to the rest at The Verge and thanks to Jan for the tip.

This looks like one more instantiation of Big Publishing’s ancient credo, “New is bad, old is good.” Heaven forfend that books of any sort be improved without more money going to legacy publishers.

Absent a problem with the definition of “ebook” in the contracts between Amazon and the publishers, PG thinks what shows up in Amazon’s video at the end of this post is clearly distinguishable from an ebook.

PG suggests complaining publishers are attempting to extort more money from Amazon.

He predicts it won’t work.

If Amazon wants to play serious hardball, it can begin to delist audiobooks from major publishers which don’t agree to permit the new feature.

If Amazon wants to play a step-below-serious hardball, it can penalize audiobooks that don’t offer the new captioning feature in Amazon search results or tag those audiobooks with a warning to potential purchasers that the audiobooks are only available in an outmoded format or some such thing.

Back to even more serious hardball, how about declining to sell new print and ebooks released by publishers unless the accompanying audiobooks include the captioning feature?

If the publishers want to continue their snit fit, who are they going to turn to for sales, Barnes & Noble?

Amazon Gets Bulk of Complaint in AAP Filing with US Trade Commission

From Publishing Perspectives:

For years, many in the publishing industry of the United States and other parts of the world have wanted to see Amazon examined by American governmental regulators for potential anti-competitive practices.

And, as various elements of Washington’s apparatus now address issues in terms of the major tech platforms, the Association of American Publishers (AAP) today (June 27) is filing a 12-page statement with the Federal Trade Commission (FTC), urging the commission to more closely scrutinize the behavior of dominant online platforms that “pervade every aspect of the economy.”

And while we find 12 references to Google in AAP’s commentary, it will surprise few in the book business that Amazon is mentioned 33 times.

Today’s filing from the Washington-based AAP, in fact, references that Streitfeld article from the Times’ June 23 edition, though not the Amazon answer, and is responsive to the FTC’s hearings near the close of a long cycle called “Competition and Consumer Protection in the 21st Century” and frequently touching on privacy concerns—often, of course, the entry point to debate and examination relative to tech corporations’ focus on consumer data.

. . . .

Today, in a prepared statement drawn from the commentary and released to the news media last evening for publication this morning, AAP president and CEO Maria A. Pallante is quoted, saying, “Unfortunately, the marketplace of ideas is now at risk for serious if not irreparable damage because of the unprecedented dominance of a very small number of technology platforms.

Link to the rest at Publishing Perspectives

PG suggests that any supposition that Amazon’s publishing activities and its self-publishing platform aren’t viewed as a serious threat by traditional publishing would be rebutted by the strong opposition by legacy publishing’s chief lobbying organization.

PG doesn’t think this organization would be complaining so much if Amazon was just the largest bookseller in the US and many other places in the world.

Rethinking the Writing Business

From Kristine Kathryn Rusch:

When the disruption hit the publishing industry ten years ago, I watched with a wary eye. After I finished The Freelancer’s Survival Guide in the summer of 2010, I repurposed this weekly blog to help me understand the changes the publishing industry was undergoing. It seemed, in those heady days, that everything changed daily. And there was a large contingent of brand-new writers who knew so much better than the rest of us how revolutionary this indie publishing thing would be.

Most of those writers—the hoards that used to come screaming (literally) to this site every Saturday to denounce me and tell me what an idiot I am and how wrong I was—are gone now. They quit the business not because they weren’t earning money—most of them earned a boatload—but because they couldn’t handle what they had set up.

Many of them published rapidly and followed an insane publishing schedule that couldn’t be maintained in the face of real life. Some based everything they had and everything they knew on Amazon algorithms, only to be shocked when Amazon persisted in changing up those algorithms.

Others couldn’t handle the financial ups and downs of freelancing and some, frankly, didn’t give themselves a chance to succeed. They saw others making thousands every month while they were making coffee money, and decided that they’d never succeed and quit without ever completely learning their craft or building up an audience.

. . . .

New, hot, and trendy has a shorter shelf life these days than it did, and I wasn’t sure why. There’s a lot about this new world of publishing, as I called it, that I couldn’t figure out.

. . . .

We’ve been doing this wrong.

By this, I mean the writing business post-Kindle. We’re all approaching our business like we’re still in the publishing business. But we’re not. We’re part of the entertainment industry, and that entails a lot more than we think it does.

Let me see if I can retrace some of this thinking, so that I don’t just spring my ideas on you and have you balk at them.

I signed up for the Licensing University classes connected to the [Las Vegas Licensing] Expo. I saw those last year, and felt that I would miss a huge opportunity if I failed to attend.

This year, I looked at the roster of classes, and promised myself I could leave any class that was too basic for me. The “Is Your Brand Ready For Licensing” was a case in point (although I didn’t realize it until later). That was a copyright/trademark basics course that falls into the well-duh category for me, but is probably necessary for most first-time attendees at the Expo (and for most writers as well).

But the Basics of Licensing class? Holy Crap-Poodles. I figured I’d sit there for ten minutes before going out to the floor to look around. Instead, I took 30 pages of notes. (In future posts, I will deal with much of what I learned on a detail level.)

That class laid out the basics of a licensing deal, while acknowledging that each deal is different.

Let’s back up. We writers are creators of intellectual property. We have the property to license. We are the licensors. We’re looking for licensees. Okay? Got that?

The terms of a basic licensing deal includes these elements:

  • A Royalty
  • An Advance Payment Against That Royalty
  • Net Sales Definition
  • Some Kind of Reporting Process
  • Termination
  • Insurance/Warrantees/Indemnification
  • Jurisdiction

A basic licensing deal includes a lot more than that, things like minimum royalty guarantees, an audit schedule, minimum performance threshold, quality and approvals, advertising and marketing requirements, and so on.

The licensor is a participant in all of that. An active participant, who can terminate if, for example, the quality of the product (based on the sample) doesn’t come up to snuff after several tries.

I remember thinking in the middle of that class that the publishing agreements that I signed back in the 1990s had a lot more in common with a standard licensing agreement than standard publishing contracts do now. In fact, there was a lot in the old publishing contracts that were just like a licensing agreement. In fact, the old publishing contracts were licensing agreements with the pro-licensor stuff (the stuff that benefits the licensor/writer/creator) taken out.

. . . .

Fast-forward through the afternoon to the class on How To Negotiate A Licensing Deal, which was listed as a negotiation class, without the “licensing deal” part added in. I wrote a book on negotiation, for godssake. I’m damn good at negotiating. I figured I’d be leaving this one early as well.

Nope. Another 30+ pages of notes. With two surprises added in.

First, from a passing comment on royalty rates.

In licensing, the royalty rates can vary from 2% to 20% of the net sales price (usually wholesale, but that’s changing depending on distribution). One of the instructors (an agent) mentioned that really big brands with a lot of clout like Disney can get the 20% royalty without a lot of pushback because their brand is so valuable.

. . . .

Once upon a time, I was a work-for-hire writer, and one of the properties I wrote work-for-hire was Star Wars. I got a 2% royalty on the books published (see above).

In most work-for-hire publishing projects, the royalty rate gets split between the licensor who created the intellectual property and the writer who does the actual work on writing the novel. I do not know what Bantam paid LucasFilm for those early books. It might have been 10%, it might have been 15%. I do know it was less than 20%. At the time, you see, Star Wars was considered moribund. The books, Tim Zahn’s first trilogy in particular, led the entertainment industry to realize that there was a hungry audience for more Star Wars. The revival of the brand dates from that very first publication.

So I know that, in those days, LucasFilm didn’t have the Disney-level clout that it would later achieve. Which had an impact. Because, when it came time to renegotiate the license with Bantam, LucasFilm asked for a 20% royalty.

Bantam balked. They claimed they couldn’t make a profit. They claimed they couldn’t pay their writers. They claimed they wouldn’t get writers.

So, LucasFilm threatened to pull out, and the dance began. LucasFilm came down to 19% which still didn’t give Bantam enough room to pay the writers from the royalty rate (the standard way that writers did/do business in traditional publishing).

Bantam came with a compromise. Rather than a 2% royalty, they’d pay the authors $60-90,000 for the book, which was what those books earned out at in those days. Those payments would be guaranteed, but they’d be a flat fee. So if the books sold better than that, the writers would get no more money. If the books sold less, the writers would get more than they usually would.

Business-minded writers realized this: that if they took their upfront payment (which Bantam was offering in four payments) and banked it, they’d make more than they would off the 2% royalty rate. (Money in hand is worth more than money promised. Money in hand allows things like paying down credit cards rather than charging them, and having an emergency fund, rather than borrowing, and so on.)

A bunch of us agreed, our contracts were in the works, and then the idiots at the Science Fiction Writers of America got their undies in a bundle and denounced the entire deal and faxed a protest letter to LucasFilm, naming every single Star Wars writeras agreeing, even those who didn’t agree (and had threatened them if they used our name, like me) and even those who weren’t members (like me). That piece of idiocy cost me at least $90,000 if not more, because I was slated to write a bunch of books, and LucasFilm canceled all communication with me and cut me out of everything, just like they did with all the other authors named.

The books went on without us. And I just thought it a weird deal—that LucasFilm wanted 20%–believing what Bantam put out there (that LucasFilm was greedy) and what SFWA put out there (that LucasFilm was greedy) rather than understanding that LucasFilm was treating the books as a standard licensed product.

My brain was spinning as the negotiation class went on, because I finally understood the other side—the other side not being Bantam Books, but LucasFilm. I was just a sorry little contractor caught in the middle of a negotiation for a licensing deal, with a stupid idiotic third-party organization sticking its ignorant foot into the mess.

. . . .

The royalty rates class looked at all kinds of things that can have an impact on royalty rates, including net sales.

In that discussion, one of the agents on the panel clicked the next slide in the deck, which showed Publishing. She made a face, and said, with great disbelief, In publishing, the product is 100% returnable, so you have to figure out how to cap the losses.

She went on to talk about how difficult traditional publishing was to work with because of all the quirks in its contracts.

But I sat there and found my brain spinning again. When I was a baby writer, my book agents could get a minor cap on returns, limiting them to only two or three years. After that, the publisher had to eat the returns.

A standard licensing deal has a three-year term, which meant that publishers were already set up to cap returns earlier than that.

The licensing agent also went on to talk about how she had to explain basic licensing to her publishing partners, and how she had to hold them to the fire to get them to agree to a full royalty for all the participants (meaning that if the brand was say, a star quarterback for the NFL, the NFL would get its share of the royalty and the star quarterback would get his—so maybe a 50-50 split of a 20% royalty—meaning the author would write for a flat fee).

I immediately got retroactive anger.

Licensors from outside the publishing industry—that is, nonwriters. Celebrities. Grumpy Cat—got not just an advance against a substantial royalty, but a term-limited contract, and minimum royalty payment guarantees, and guaranteed marketing/advertising budgets, and the ability to easily and routinely audit the publisher, and, and, and…

. . . .

The licensing professionals who worked for a nonwriter licensor, like LucasFilm, got a licensing deal that would make writers and their book agents fall over in stunned surprise. Simply by using industry standard.

Okay, got all of that?

In the past, writers have gone begging to book agents, to publishers, to comic companies, to gaming companies, hoping to get someone to “take a chance” on their writing.

Writers weren’t acting as brand owners, licensors, people in control of their IP, asking for a standard licensing arrangement. Writers were beggars, which put them in a terrible long-standing position with the publishers.

. . . .

The book, the published book, is not the holy grail.

The story, the thing that the writer has created, is the holy grail. Before publication of any kind.

Because publication is a license. Whether you do it yourself and upload to Amazon (Direct to Retail, is what that’s called) or whether you go through a traditional publisher (Business to Business, is what that’s called {and notice that the businesses are on equal footing in that definition}),  you are licensing a tiny portion of your copyright to make distribution of some product (in this case a book) possible.

We’ve been teaching for years that publication is a license. Not a “sale” because you don’t lose the copyright. You license it.

But Dean and I and damn near every other writer out there (with only a handful of exceptions throughout the last 100 years) have not gone any farther than that. We haven’t thought about the published book as being a single licensed product.

We’ve been conditioned by our upbringing in the business culture of the previous century to think of the published book as the be-all-and-end-all of everything we did.

. . . .

We are not in the publishing industry. We are in the entertainment industry.

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.

For PG, Kris is one of the most interesting commentators on the publishing business, traditional and modern, and he always appreciates her Business Musings posts.

In these posts, Kris often looks above and beyond agents and publishers, KDP, etc., etc. in a way most authors do not.

In a former legal life, PG represented some software and technology companies whose products were sometimes licensed to very large business organizations, including Goldman Sachs, Morgan Stanley, Merrill Lynch, Fidelity Investments, Apple, IBM, Oracle, Disney, Hallmark, Intel, Hewlett-Packard, and American Express.

(For context, at an earlier stage in his legal career, PG also represented abused spouses, dairy farmers, the tenants of small-time slumlords, people who wanted a divorce and/or needed to file for bankruptcy, a couple of arsonists, drunk drivers and people who couldn’t afford to pay an attorney and got help from Legal Aid.)

PG provides the big business list not to show what a big deal he is or was, but simply to demonstrate the variety of different licensing agreements he has seen outside of the traditional publishing business.

From a legal standpoint, as Kris says, a publishing contract is not a special snowflake, it’s a license of intellectual property, specifically, the copyright to a book which is owned by the author. Copyrights to software are what Microsoft owns and licenses to everybody who buys and uses MS Word, Excel, Windows, etc.

Although PG has not seen very many publishing contracts that acknowledge the fact, a traditional publishing contract also includes a sort-of implied license to the author’s right of publicity, sometimes called personality rights (which may include individual’s image, personal data and other generally private information).

However, most publisher-provided publishing contracts don’t look much like licensing agreements used elsewhere in the business world. Publishing agreements have little quirks that would seem strange to any attorney accustomed to seeing licensing agreements for technology or almost anything else.

PG understands the principle of customs of the trade, assumptions that govern niche businesses and the agreements they make. For example, in another case from PG’s olden days, he learned all about the New York City garment business and the strange ways it operates.

However, trade publishing and, to an even greater extent, academic and professional publishing still operate as if ebooks and other epublications have never existed. Even more important for authors, many publishers operate as if the cost of publishing was still based upon the expense and compensation structure that existed when printed books and journals were the only way to disseminate knowledge and long-form writing.

PG suggests that even for traditionally-published authors, Amazon has provided a great service by offering both self-publishing and Amazon Press as alternative methods of reaching readers. Absent Amazon’s influence, publishers would still be operating as if it were 1955 and today’s authors would be earning much less and accepting it as the author’s burden in life.

Yet, from a legal and commercial viewpoint, traditional publishing is still a screwy business and authors bear most of the burden of its bizarre practices.

PG repeats the admonition of Kris in the OP –

The book, the published book, is not the holy grail. We are not in the publishing industry. We are in the entertainment industry.


Amazon Gets Bulk of Complaint in AAP Filing with US Trade Commission

From Publishing Perspectives:

For years, many in the publishing industry of the United States and other parts of the world have wanted to see Amazon examined by American governmental regulators for potential anti-competitive practices.

And, as various elements of Washington’s apparatus now address issues in terms of the major tech platforms, the Association of American Publishers (AAP today (June 27) is filing a 12-page statement with the Federal Trade Commission (FTC), urging the commission to more closely scrutinize the behavior of dominant online platforms that “pervade every aspect of the economy.”

. . . .

And while we find 12 references to Google in AAP’s commentary, it will surprise few in the book business that Amazon is mentioned 33 times.

Today’s filing from the Washington-based AAP, in fact, references that Streitfeld article from the Times’ June 23 edition, though not the Amazon answer, and is responsive to the FTC’s hearings near the close of a long cycle called “Competition and Consumer Protection in the 21st Century”

. . . .

A distinctively international element is engaged at points in which AAP relies on the European Commission’s investigations and action on Amazon’s use of “most favored nation” clauses (MFNs)and the May 2017 acceptance by the EU of Amazon’s commitment to stop using those clauses in distribution agreements with book publishers in Europe.

. . . .

AAP president and CEO Maria A. Pallante is quoted, saying, ““Unfortunately, the marketplace of ideas is now at risk for serious if not irreparable damage because of the unprecedented dominance of a very small number of technology platforms.

“In order to mitigate this crisis and protect the public interest, AAP urges the FTC to exercise much-needed oversight and regulation, particularly as to circumstances where technology platforms stifle competition and manipulate consumer outcomes.”

. . . .

The formulation used by AAP in setting up its commentary rests in two key areas: book distribution and search.

Regarding search, Google is naturally the key interest and AAP’s messaging to the media flags this, saying, “AAP notes that Google’s complete and untouchable dominance is highly problematic [quoting now from its own FTC filing] ‘because its business model is largely indifferent to whether consumers arrive at legitimate or pirated goods.’”

But in reference to book distribution, of course, it’s Amazon that comes in for the lion’s share of complaint. The association in its media announcements finds something of a thesis statement in its commentary to be “No publisher can avoid distributing through Amazon and, for all intents and purposes, Amazon dictates the economic terms, with publishers paying more for Amazon’s services each year and receiving less in return.”

The association delineates five “primary areas of concern” for structuring its commentary this way, we’re quoting here:

  • “Platforms exercising extraordinary market power in the markets for book distribution and Internet search
  • “The threat to competition when platforms act as both producers and suppliers to the marketplaces they operate
  • “Platforms’ imposition of most-favored nation clauses and other parity provisions that stifle competition, market entry, and innovation
  • “Platforms’ use of non-transparent search algorithms and manipulated discovery tools that facilitate infringement and deceive consumers
  • “Platforms’ tying of distribution services to the purchase of advertising services.”

. . . .

In its introductory comments, AAP asks the FTC to consider ways in which tech platforms differ from other players in dominant market operation. It’s here that the association starts grappling with the traditional idea that if prices are low, then anti-competitive harm to the consumer isn’t a factor.

“First,” the association writes, “the assumptions that consumers will purchase goods at the lowest available price and that competition for market share will exert downward pressure on market prices depend on consumers receiving timely and accurate information about prices and quality. … That is often not the case in markets in which one or a handful of platforms use proprietary search algorithms and manipulated discovery tools to tilt the playing field toward particular suppliers or their own distribution channels or products.

“Second, modern technology platforms benefit from—and in some cases depend on—network effects. The larger the network, the greater the competitive advantage over rivals and potential rivals and, once entrenched, the platform has a greater ability to preserve and extend its market power in ways that are not available in markets that are not characterized by network effects.

“Third, in markets dominated by modern technology platforms, an analysis of consumer welfare must not overemphasize retail price levels relative to other critically important factors. The analysis of consumer welfare also must account appropriately for factors such as decreases in quality, consumer choice, and innovation, and a corresponding rise in consumer deception. Nowhere are these considerations more important than in the marketplace for information and ideas.”

Link to the rest at Publishing Perspectives

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