Our regular readers will remember the formal establishment we reported on May 12 of the Global Association of Literary Festivals.
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And in a way, the development of the new association may well have come at a surprisingly good moment during the coronavirus COVID-19 pandemic. With festivals driven to consider online evocations of their usual offers, there’s temporarily less organizational burden on them, a chance to reflect and strategize.
The downside, of course, is that revenue has also come to a standstill for many if not most festivals, and while we’ve seen one sterling example of a huge success on the ether this spring—the UK’s Hay Festival with its 490,000 streams served out in a two-week offer of sessions—few festivals start with the heft of the Hay and the fundraising capacity that program was able to mount so it could stage its digital presentation.
Wednesday’s session, then, is a consideration of the issues and the imperative faced by many faces during the pandemic–which health officials caution is still in its first wave, and not subsiding.
PG suggests that the timing of the creation of the Global Association of Literary Festivals is sadly ironic because, as indicated in the OP, literary festivals have stopped happening since last spring.
After sheltering in place and avoiding airline travel for several months (and likely several more to follow) PG wonders how many people who are not traveling on corporate expense accounts will be interested in flying to book festivals.
In the US, the National Football League, the source of more television and ticket revenue than any other sport, may well be operating under rules that will keep 50% or more of the seats in NFL stadiums empty. Both the pre-season, which attracts both fans and viewers, as well as the season itself are likely to have many fewer games than is normally the case.
PG wonders how many exhibitors, typically a large source of revenue for commercial gatherings, such as literary festivals, will be willing to pay the necessary exhibitor’s fees, pay for the creation and shipping of exhibits and pay travel, food and lodging costs for publisher’s personnel to staff and mingle, etc., with sales of traditionally-published books entirely in the tank (other than via Amazon).
As far as attendees are concerned, PG can’t help but believe that numbers will be impacted by the absence of a great many retiree readers who are likely to be extra-cautious about venturing forth prematurely.
If the Association of Literary Festivals is holding a webinar, why not webinars to introduce big books from traditional publishers? Or webinars for sci-fi or fantasy fans?
PG is not an expert on the world of romance and authors and fans, but why not a Romance webinar?
A commercial webinar need not consist only of individuals sitting at their desks peering into the screen. Nothing precludes a festival that features authors in local professionally-operated studios speaking about their books or being interviewed, perhaps from a distance, by an expert and experienced interviewer?
Net publishing sales fell 3.5% in April compared to April 2019 for the 1,361 publishers who report revenue to AAP’s StatShot program. The small decline, however, is deceiving. Gross sales fell in the monthly comparison, dropping 16%, but were offset by a nearly 49% drop in returns. (AAP calculates net sales by deducting returns from gross sales.) Returns were down in every category and point to an issue that many publishers are keeping an eye on—the possibility of heavy returns when bookstores reopen after closing because of the pandemic.
Nearly all college stores were closed in April, leading to a 57.9% decline in returns to publishers of higher educational course materials in the month compared to 2019. And even though gross sales fell 30.8% in the month, the plunge in returns led to a 139.8% increase in net sales in the category. The AAP said it expects an increase in returns in the category in future months as stores, distributors, colleges, and universities reopen.
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The same, but less extreme, pattern was seen in the two trade categories. Gross sales of adult books fell 16.4% in April, but returns dropped by 46.3%, resulting in a 7% decline in net sales. Many chain and independent bookstores were closed in April and unable to return books, but they are now slowly reopening and may soon start shipping back unsold copies.
When coronavirus lockdowns sent Americans into a frenzy of panic buying, the bad news came almost as quickly as the good for online organic grocer Thrive Market.
In March, the company that aims to compete with Amazon.com Inc. in the health-food sector suddenly found customers flocking to its site as its giant rival struggled to handle its own pandemic business surge. Thrive notched record sales and membership sign-ups.
Then it buckled. Orders ballooned to five times what Thrive could handle. Delivery times for some customers reached two weeks. About 30% of items were out of stock on some days. To keep delivery times from slipping further, Thrive made the previously unimaginable decision to throttle demand by limiting shopping hours.
“It was excruciating,” recalled co-founder and Chief Executive Nick Green. “It felt like a pick-your-poison moment.”
Thrive Market, based in Los Angeles, is one of a host of retailers that have spent years trying to compete against the Amazon retail juggernaut. The coronavirus pandemic provided a fleeting window of opportunity. Amazon, overwhelmed by a wave of orders, temporarily reoriented its business toward essential items, leading consumers to begin looking elsewhere.
But capturing that opportunity—and trying to ensure it is more than a temporary blip—brought extraordinary challenges for Thrive and others, demonstrating the difficulty of competing with even a weakened Amazon.
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The pandemic has accelerated the shift to online shopping and devastated traditional retailers, including Neiman Marcus Group Inc. and J.Crew Group Inc., which have filed for bankruptcy protection. Financial-services firm UBS Group AG recently predicted the percentage of groceries sold online will rise from 3% this year to 15% by 2025.
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Mr. Green calls Thrive the “un-Amazon” because, he says, it offers a curated selection of merchandise. Early on, many reluctant investors had the same question: How would it compete with Amazon or Whole Foods Market?
Mr. Green was betting that consumers would try it out for its carefully selected inventory and competitive prices and stick around because they feel good about shopping there. He also billed the company as socially conscious by adhering to such practices as not offering genetically modified products.
Thrive, which is privately held, eventually raised more than $160 million. It now has more than 800,000 members who pay $60 a year. Although Thrive doesn’t disclose sales, Mr. Green said they were in the hundreds of millions of dollars annually.
On March 11, Mr. Green was preparing to leave work when he glanced at a computer monitor showing the company’s financial metrics. That day’s revenue line shot up like the handle of a hockey stick.
He messaged an executive to make sure there wasn’t a bug in the system. There wasn’t. Checking CNN’s website, he learned the World Health Organization had declared the coronavirus a pandemic. People were buying in a panic.
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Days later, the country shifted into lockdown mode. Within a week, Amazon was struggling to meet orders promptly. On March 17, it said it was prioritizing the shipments of medical supplies, household staples and other high-demand products. Toilet paper and many cleaning supplies became unavailable, and shipping was taking weeks for some products. Amazon retooled its website to encourage shoppers to buy fewer items.
A survey by investment bank Jefferies Group LLC showed that almost one-third of respondents said they turned to non-Amazon sites during the pandemic because of delivery and inventory problems.
At Thrive, new paid membership sign-ups in March and April were up threefold from the prior year. But the same problems that plagued Amazon ravaged Thrive. Customers rushed to buy cleaning supplies, canned food and other essentials. A six-month supply of toilet paper ran out in three days. Mr. Green wasn’t sure how quickly the company could address the backlog.
Earlier in March, Chief Financial Officer Karen Cate had asked Thrive’s supply-chain director to order five times the usual amount of canned goods and cleaning supplies. She left out toilet paper. “If I could go back, I would change that one,” she said.
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To some, limiting online store hours seemed a sensible middle ground. Ms. Cate, the CFO, was skeptical. She said she felt Thrive could gain control of its order backlog without limiting members to ordering during working hours. She worried that members who worked during the day—including her daughter, a nurse at a hospital in Pasadena, Calif.—would be shut out.
She relented after seeing internal metrics that showed delivery times would only increase. “OK, I surrender,” she recalled thinking.
On a midnight call, Mr. Green and co-founder and Chief Technology Officer Sasha Siddhartha decided to move forward with limiting the hours. They told other executives the next day and instituted the new policies on March 25.
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The stress mounted for Mr. Green, whose wife had just given birth to their second child. He was getting a handful of hours of sleep per night and didn’t shave for a month. He stopped working out. Outside of work hours, his time was consumed by his newborn son and late-night emails and calls with executives.
It was difficult to concentrate from his setup in the family’s guest bedroom. He took two monitors and his MacBook Pro and set up an office in his closet, placing the equipment on shelves near his T-shirts and jeans. He scrapped a strategic plan and built a new one, staying up one night until 3 a.m. to finish it. The plan re-examined hiring goals and when the company should expand its fulfillment network, among other things, to ramp up faster.
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Holding on to customers became harder as Thrive struggled to handle the order influx. Online, customers were threatening to leave over the delays. Members were frustrated and questioned why Thrive was taking on new customers.
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By early April, Thrive Market was hiring as many as 30 warehouse workers a day. Using several recruiting agencies, it hired more than 300 warehouse workers in less than two months, adding to the roughly 500 it had. Labor costs jumped 20%.
The company also removed nonessential items such as water bottles and yoga mats from its website to concentrate on delivering essentials like food and cleaning supplies. It tinkered with its fulfillment processes, processing orders for high-demand products in one section of warehouses. It prioritized orders with the longest delivery times. It stopped selling low-demand items in the back of the warehouses, partly so workers wouldn’t have to waste time fetching them.
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Higher costs have reduced the percentage of profit made on orders, Mr. Green said. And the store has had to dip into its cash reserves to pay for a spike in inventory expenses. But the year’s revenue projections have risen, and the company is in a strong cash position, he said, although he declined to provide details.
Thrive’s goal to reach profitability by the end of 2022 hasn’t changed, he said. “With our growth accelerated,” he said, “we expect to get profitable even faster.”
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The lessons from the pandemic have changed its fulfillment processes. Mr. Green said the company will hold 20% more inventory and will work with a larger number of suppliers. Its technology team plans to roll out improved recommendation functions on the website for when items are out of stock.
PG has a soft spot for scrappy young tech startups and was heartened by the apparent survival of Thrive as depicted in the OP. For PG, a couple of smart young gals/guys who put it all on the line to start their own internet business is the cutest thing since puppies. That’s one reasons why he appreciates indie authors.
PG remembers when he first heard about Amazon from a friend and read an interview with Jeff Bezos. Later, PG created quite a few posts as the illegal Apple/Big Five Publishers scheme to kill Amazon fell apart.
Of course, Amazon has probably been the best single thing to happen to authors and readers in the last twenty years. Gatekeepers of dubious ability knocked back on their heels. Talented authors who want to move fast and write a lot of books unchained. Indie authors who know their readers because they pretty much are their readers instead of believing most people are more like their classmates at Swarthmore and Princeton than anything else.
Literati will go to their graves without admitting it, but Amazon has also helped Big Publishing to avoid becoming Semi-Big or Largish-Medium Publishing during the same time-frame. Since a great many publishing executives fall into the category of smartish, Amazon may have even prevented Big Publishing from becoming Chapter 11 Publishing.
Based upon a whole bunch of authors that he knows and carefully monitoring of what authors, particularly indie authors, are sharing about the business side of their art, PG feels comfortable in stating that Amazon’s self-publishing programs have made it more possible for many, many more authors to quit their day jobs than any other organization or collection of organizations on the planet.
As he has mentioned before, PG hopes JB’s style and savvy doesn’t slowly fade away at Amazon since he’s becoming less and less involved in the management of the company. Amazon works in a tough neighborhood. The list of huge, well-known retailers that have lost their mojo and disappeared into Chapter 11 or, at best, irrelevance is a long one and if Amazon ever starts taking its customers for granted, it might join the Wikipedia throng of giant retailers that are no more.
No longer will we print 200 copies of an academic monograph, ship 150 to warehouses around the world, then on to university libraries, and hope the remaining 50 will evaporate somehow over time. Should any library actually want a print copy for archival or other reasons it’s perfectly easy to produce one on a print-on-demand basis and that single copy will cost less in money and damage to the environment.
As it happens, the same technology and attitude will pervade the thinking of general as well as academic publishers when maintaining the availability of backlist titles.
This will of course lead to a complete revision and rethinking of reversion clauses.
Scientific publishers will abandon any semblance of print production including the age-old tradition of printed offprints of an author’s article.
Print in the new world is akin to the old French tradition of delivering the mail by postmen on stilts—charming but ridiculous.
And how about the absurdity of sending printed copies to media for review?
During the lockdown, newspaper mailrooms have been empty and it has been pointless to send printed books. It turns out that for the purposes of review and criticism, a PDF is perfectly adequate in all but heavily illustrated art, lifestyle, and children’s books.
Of course the reviewer will find it hard to sell the PDF on eBay as a way of supplementing the paltry reviewer’s fee but perhaps it’s about time that reviewers were paid properly for their important function.
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Can anyone imagine any learning environment without a significant digital dimension? From the library to the lecture theater or classroom, the buzzword in educational publishing for schools and colleges has been “blended learning”–essentially a teacher, a book, and some digital supplements.
This will be reversed and will become a digital course supplemented by a teacher and the very occasional printed textbook.
It will still be blended learning but as in any blend everything depends on the proportions of the ingredients. In education, these proportions will never be the same again.
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With more people working from home, how can our industry justify typical midtown offices? How can senior executives justify large offices for themselves and battery-hen cubicles for lower-level staffers?
Old-fashioned offices and structures will not survive to be replaced by more employee-friendly work spaces and work practices.
Adieu, 9-to-5 work schedules. I’m very glad I haven’t invested heavily in big-city commercial property, and I’m pretty certain that most publishers will be looking to reduce their rent bills by taking less space and renegotiating leases.
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No more sales conferences in exotic places.
No more teeming academic conferences.
No more all-company rallies.
No more flying around the world when a phone call would suffice.
Leaving parties will be sadly frequent but less grand.
And finally, of course, the parties.
No more book launches in lovely but pokey independent bookshops.
No more cheap white wine.
No more self-serving speeches by the publisher.
No more shushing in order to hear the author’s speech or reading.
No more air kisses and mwah mwah.
No more trying to persuade staffers to mingle.
No more sucking up to journalists in the hope of a one-line mention in a diary column.
No more bundling up the unsold books to return to the warehouse.
The post-COVID-19 launch parties will be digital. Many more people can and will attend. The wine and refreshments will be top-notch. The author can be heard and seen. The event can be recorded and shared universally.
They worked in Manhattan, which was too hot in the summer, and too cold in the winter. They didn’t make enough money to buy their own apartments downtown, but they’d never think of moving to Brooklyn or Queens or any of the outer boroughs. Mummy and Daddy had the money, boatloads of it in many cases, and Mummy and Daddy believed in appearances. So, if Second Son needed a place to live, well, then let’s just buy him something in the right neighborhood, so that he can live in relative comfort.
Second Son had use of the summer house upstate or in the Hamptons (before, y’know, it got discovered by [sniff] celebrities) and in due time, Second Son and the wife would move to Connecticut to raise the kids, commute into the City to do Important Work.
What Important Work? Publishing, of course. Perfect work for the Second Son or the Third Son or the Fourth. Perfect way to use that expensive education without really going into Trade or soiling the hands on something a little less…dignified.
Most of the people running publishing companies in those days were the children of old money who were not expected to make a profit at what they did. They were expected to do good work, to influence the culture, to put their minds and hearts behind good (or at least the right sort of) causes.
The people who started or ran the companies were, for the most part, male. All of them were white. And only a handful—the most innovative (and the most underrated)—were not from old money. Ian and Betty Ballantine, for instance, started Ballantine Books in their apartment in 1952, which was not the way most publishing houses started in those times. Ian and Betty were the anomalies.
The children of old money were not anomalies. Their influence pervades publishing even now, when all that remains of their companies are dusty old names that have long since been sold to corporations.
When I came into the business, though, handshake agreements were common, particularly with agents, who talked about things like “gentlemen’s agreements,” and “honor,” even though most of them had as much honor as any thief.
The publishers, though, the publishers truly were not interested in making a profit. They wanted enough money to keep their Manhattan offices, and to publish prestige products. They liked bestsellers, although they often manipulated the lists so that the worthy books could be considered bestsellers, and they really liked dominating the conversation around the entire country.
The books that made profits for the publishing houses—well, we don’t discuss those much. The “trashy” novels. Science fiction. Mystery. Romance. The [sniff] genre titles, they funded the literary titles, and made the prestige books possible.
But, long about sixty years ago, the culture was changing. The masses—always a problem when it came to prestige products—had a lot of disposable income, and wanted—not the most prestigious book—but something fun to read. Sure, they bought the prestige book, and displayed it on the coffee table so that their neighbors thought they were erudite, but the books they read lurked in the bedroom closet or the enclosed end table or the basement, and those had lurid covers and shocking subheadings.
The problem was that a lot of the racks around the nation that handled books wanted books to sell, not books to impress. The handful of bookstores weren’t enough to make the requisite amount of sales, so somehow, these publishers had to convince the department store book departments and the grocery stores and drug stores and the truck stops to take prestige books.
Truck stops never did, and neither did drug stores, but department stores…they could be lured by prestige. Just like university bookstores and libraries—with the right promotion.
What was the right promotion? Well, that was the question, wasn’t it, in a mass market world. How to make books that are good for you, or at least books written by the right sort (our kind of people) sell better than they naturally would.
The editors who actually believed in the product, and the sales force who were, in those days, an actual force, unique to the company, had the job of making those books profitable. And sometimes, that was impossible.
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A lot of things were tried, and a lot of things failed. But the successful things, well, some were done utilizing the Right People Who Had Jobs in the Right Places, things such as:
Convincing that one reviewer to read the book and maybe, in exchange for a lovely lunch, write a slightly more positive review than usual.
Planting interviews in the right magazines and newspapers, read by the right people
Sending copies to the influential bookstores ahead of publication, so that the store owner felt involved in the process and might encourage the influential in the community (including the reviewer at the local paper) to cover the book.
Sending the author to universities, to talk to professors and other influencers (although that term wasn’t used then).
Sending the author, and copies of the book, to the influential bookstores. Initially, the authors gave lectures there as well, but most authors are dull as dishwater even when someone poured a lot of liquor into them, so the talks evolved into signings only, and more than one per day.
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But for the most part, the book publicity you still see today started around 1955 or so, and changed only as book buying changed. The sales force went away—why have a sales force when all you had to do was sell to the single buyer for the nationwide chain? And then the right magazines became shadows of themselves, the struggling newspapers cut their book sections, and the author tour became a way to get bookstores around the country to order enough copies of the book to get on the New York Times list.
But that was that.
Ads on television, still in its infancy in 1960, didn’t really work, especially with Our Sort, because television by its very nature appealed to the masses. Jaqueline Susann, author of Valley of the Dolls, revolutionized book publicity, but it was commonly accepted that she wrote trash, and the techniques she used were unique to her.
(They weren’t. They were the same techniques most companies used at the time to sell any brand name item. Techniques all snubbed by traditional publishers at the time because of the whiff of the masses…snubbed until they actually needed those techniques to get their books on the shelves.)
Book publishing rolled in a few more techniques—the book fairs, like the LA Book Fair and a few other “accepted” methods of promotion—but for the most part, until January 2020, the promotion done for books by traditional publishers was the same kind of promotion done by traditional publishers 60 years ago.
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Only now, the Right People don’t control the media. Corporations do. And there’s too many diverse voices and too many influencers not under the control of Our Sort.
The right magazines are gone. The newspaper book sections are gone or styled back to one review.
But that doesn’t matter. The booksellers…they’re Our Sort. They will come through. We can market to them, support them against the Big Evil Amazon, and our books will sell enough to make a decent profit, enough to keep our little division of our books in the black.
Let the authors handle the online promotion. We’ll set up a book tour, and maybe some direct-to-bookstore marketing, and all will be well.
But problems lurked on the horizon.
Bookstores were struggling. Big or little, it doesn’t matter. Barnes & Noble, the last big store, was being mismanaged into oblivion. The little stores were hanging on by finding their niche, but that niche wasn’t always The Right Book. Some of the most successful stores were genre—mystery, science fiction, and quite often, romance.
Even so, they weren’t making a big profit, and it had become a sad ironic joke in the industry that book buyers would use the stores to pick up a book, maybe read the opening, and then order the ebook online. Or the hardcover from Amazon, where the price was half of what the bookstore was doing.
Still, the book tours continued and the promotion wheel geared up, and writers occasionally appeared on the Today show (but not on Ellen or any of the talk shows, which were more focused on performing than ever).
PG keeps thinking one day he’ll disagree with one of the posts Kris writes about the book business, but he’s probably wrong.
The “business” end of the traditional book business is full of people who would have a difficult time being hired by any revenue-generating employer other than a publisher. Evidence to the contrary notwithstanding, they genuinely believe they are good business people despite growing evidence to the contrary.
Jeff Bezos knows how to sell books. Random House, not so much.
For visitors to TPV who may be aghast at PG’s opinion, he would ask how many books Amazon sells each year vs. how many books a traditional publisher sells each year.
Ditto for how many books Amazon sells each year vs. how many books Barnes & Noble sells each year.
Canada’s book publishing trade association Booknet is warning that as bookstores open their doors there will be even more books than usual being sent back unsold and unwanted.
While some bookstores have managed to maintain curbside sales, overall bricks & mortar sales are down about 63% and bookstores are sitting on case after case of unsold books that there is unlikely to be sufficient demand for as high street trade gradually resumes.
Canada’s The Star quotes Booknet Canada’s Noah Genner as saying:
If we just look at physical bookstores, so not online retailers, but mostly physical bookstores, they’re down almost 63 per cent year over year for the period. So 63 per cent in unit sales. That is hugely significant.
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The returns model, introduced last century to give bookstores flexibility to stock more books than they needed at no risk, is not just a Canadian problem but a model used around the world, and in normal circumstances the expectation of returns is factored into the production costs, so would not be a heavy drain on publisher profits.
But now publishers face not only the loss of sales for the lockdown duration (and however long it takes for some degree of normal trading to resume) but also an exceptional excess of unsold titles that will end up being pulped or more likely sold off to remaindered operations for re-sale.
PG says that the book returns system is a twist on vendor financing, which, outside of the book business, typically happens when the retailer can’t qualify for conventional financing in order to pay for its purchases from a bank or other financial institution.
In the reality-based business world, vendor financing is often regarded as an indication that the customer isn’t in very good financial shape and doesn’t have enough working capital to operate its business. It can also be regarded as an indication that the vendor has a hard time selling its inventory unless it becomes what is, in effect, a bank or finance company for its customers.
Vendors often offer a price discount if the purchaser pays within X time period. This may be structured as follows: The Seller offers a 2% discount on an invoice due in 30 days if the buyer pays within the first 10 days of receiving the invoice. This usually doesn’t carry the same taint as vendor financing over a much longer period of time.
It was week four of coronavirus shelter-in-place. Going on 2 p.m.; I’m at my desk at home, answering emails, filtering submissions, contemplating a forthcoming edit. But wait, what’s that sound? Oh, right, it’s my stomach growling. I’m hungry. Must be time for a can of that chicken noodle soup I’ve been hoarding.
What a difference a couple of weeks makes. Before the lockdown orders came down in New York City, no self-respecting publishing person could forget about lunch. We all knew the drill. At 12:30 or 1 p.m.—occasionally as early as 12:15 or as late as 1:15—the office exodus would begin. We’d gather our coats and bags and wits and head out to meet with agents and authors at restaurants where reservations had been scheduled two, three, six, or eight weeks in advance. The mission: start or continue relationships that might lead to new submissions from said agents and authors, which in turn would lead to new acquisitions to be announced at future in-house editorial meetings.
While we might have shared sushi at Nobu, everybody knew lunch wasn’t really about food. No, it was about gossip, shop talk, and bringing brand new projects to fruition. Lunch, in other words, literally meant business.
So it should come as no surprise that among the questions, and there were many, that a lot of us asked when this whole work-from-home thing started was what would happen to the publishing lunch.
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We have now had 10 weeks of sheltering in place, and I am happy to report that while I haven’t met anyone in a restaurant for what feels like forever, I, and most of my colleagues, are still making and publishing books and signing up titles for forthcoming seasons. I’m on the phone constantly, checking in with agents and authors about how they’re doing with kids at home and a bunch of new worries—but also about the projects they’re shepherding. I’ve been in a couple of major auctions and have won and lost several books, both fiction and non.
Will those books “work”? Who knows? Determining what the future reading world will embrace… well, that’s been a problem endemic to our industry forever; we’ve asked the question before (most recently during the 2008 recession, and before that after 9/11) and we’ve always survived. Sorry to paraphrase the over-paraphrased Mark Twain, but despite bookstore consolidation, the rise of e-books and audiobooks, and the explosion of interest in streaming TV, publishing’s death has been greatly exaggerated—many times. So what if now we’re talking books over Zoom, or WhatsApp, or maybe just in a plain old-fashioned phone call instead of across a two-top? We’re still publishing.
While PG believes and ardently hopes there will always be an England, he can’t say the same thing about the traditional publishing business.
There will always be books, albeit in evolving forms, and books require authors (AI is lurking, but PG needs a bit more convincing that AI is capable of creating good fiction.) but printers used to do much of what publishers do today.
Publishers are an example of a classic middleman (or middleperson if you prefer, agents are as well) receiving products created by somebody else and funneling them to the organization or person who will actually sell those books to readers.
PG concedes that editors (whether they are called agents or not) can and do add value to the end product. However, this function can be outsourced to nice people working from their home office in Kansas where (for the benefit of those New Yorkers who have never visited), the costs of a comfortable life are much, much lower than on that skinny island hanging off the eastern part of the United States. The restaurants may be of a different type than Manhattan’s were before the plague, but with all the newly rich indie Kansas authors, Nobu may find greener pastures in Wichita.
If authors and booksellers (online or off) can work without the middlepersons, they both will probably make more money from their respective businesses.
From whatever New York restaurants survive the current disruption, the decline and fall of traditional publishing may cause an occasional tear to be shed, but there will be more-prosperous authors and booksellers who may make up the difference.
U.S. lockdowns to contain the coronavirus pandemic prompted record monthly drops in retail spending and industrial output, as consumers pulled back sharply on shopping and eating out and factories suffered a sharp drop in demand.
The Commerce Department on Friday said retail sales, a measure of purchases at stores, at restaurants and online, fell a seasonally adjusted 16.4% in April from a month earlier. The drop eclipsed a revised 8.3% drop in March sales, and marked the steepest month-over-month decline in records dating to 1992.
The Federal Reserve separately said industrial production dropped 11.2% in April, its steepest monthly fall on records dating back more than a century, as the coronavirus response closed factories, sapped demand and froze supply chains.
“They’re just dramatically weak numbers,” said Jim O’Sullivan, an economist at TD Securities. “We’re obviously in this big hole now.” He said a key question is how long it takes to climb out of it, which depends in part on the speed of reopening.
Social distancing, business closures, travel restrictions and other disruptions that started in mid-March have taken a particularly heavy toll on retail stores and restaurants, many of which remain closed or are opening gradually as states begin to reopen their economies.
Consumer spending in April was down more than 20% from the same month last year, and certain categories posted dramatic declines. Clothing-store sales in April were nearly 90% lower than a year earlier, while sales at department stores, bars and restaurants, and sporting goods stores were all down nearly half. By contrast, sales were up over 20% on the year for online retailers and up 12% at food and beverage stores.
Lower vehicle sales and spending at bars and restaurants drove last month’s decline in retail sales, but nearly every other category suffered too as commuters worked from home and malls remained shut.
The exception were sales at nonstore retailers, a category that includes internet merchants such as Amazon.com Inc. and which grew 8.4% month-over-month.
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Sales were weak across a range of categories, but nonessential businesses were particularly hard hit. Sales at furniture stores dropped 58.7% and electronics fell 60.6%. Clothing sales plummeted 78.8% from March.
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Consumer spending is the main driver of the U.S. economy, accounting for more than two-thirds of economic output, and retail sales account for about a quarter of all consumer spending.
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Workers also are losing jobs in record numbers because of the coronavirus pandemic, another factor hitting consumer spending. And declining consumer sentiment has economists worried about how quickly people will return to spending, as the economy opens back up.
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Some retailers are also unlikely to weather the pandemic and face permanent closures.
“2020 is going to be a year of rebalancing,” said Under Armour Chief Executive Patrik Frisk during an earnings call Monday. The athletic-apparel retailer reported that about 80% of global business has been at a standstill since mid-March, and revenue may drop as much as 60% in the second quarter.
Retailers on both sides of the Atlantic are “trying to figure out how fast they can open and how fast the consumer is going to come back,” Mr. Frisk said.
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)
PG hasn’t seen any information from major business publications about Big Publishing, Barnes & Noble and other parts of the publishing establishment.
His guess, as mentioned previously on TPV, is that Barnes & Noble will experience a substantial financial impact and that its online business won’t be nearly large enough to materially offset the costs of cutting off its retail arm for an extended period of time.
At least some B&N stores located in malls will have problems if major mall tenants close and/or the foot traffic they generate is substantially diminished. If a mall shuts down, as many malls have done in the recent past, there is likely to be one fewer Barnes & Noble store in the vicinity.
A year from now, PG believes there will be substantially fewer Barnes & Noble stores than their were pre-corona. Ditto for a great many other physical bookstores. He suspects this is the type of major societal and financial upheaval that changes some habits and institutions on a permanent basis.
Unfortunately, PG believes a number of small traditional publishers won’t be able to reopen or will reopen with substantially reduced staff and much-reduced advances.
PG suspects that traditional publishing will see mixed results with bookstore declines offset to some extent by improved Amazon sales. It’s pure speculation on PG’s part, but he would guess that Amazon sales of ebooks from traditional publishing will have seen an uptick while the market share of hardcopy books may decline.
In the short run, an increased proportion of ebook sales, which involve no costs for warehousing, shipping or returns of unsold hardcopy books from physical bookstores may well increase the profit margins of traditional publishers even as, if PG is correct, gross sales revenues suffer steep declines.
Over a longer period of time, if readers under lockdown have sampled ebooks from Amazon or their local libraries to read on their own electronic devices (or devices purchased from Amazon for the purpose), PG suspects some proportion of this group will become permanent ebook aficionados.
It may be too much to expect, but PG would hope that those in traditional publishing with any business sense would put a stop to the childishly petulant attitude displayed toward Amazon by so many New York publishing drones and their associated literati. Absent Amazon or someone like Amazon, traditional publishing’s future would look a lot more like Barnes & Noble’s than is the present case.
PG predicts that, ten or twenty years from now, intelligent and informed individuals will have concluded that Amazon saved literature (and a bunch of jobs in the literature biz that don’t involve writing books) during this difficult time.
First, the store doors shut. Now, the walls are closing in.
Retailers have furloughed hundreds of thousands of workers, cut executive pay and stopped paying rent, all to conserve cash. For the most indebted retailers, particularly those already struggling before the crisis began, those measures may not be enough.
Neiman Marcus Group Inc. and J.C. Penney Co., both of which have looming debt payments, have been reaching out to creditors in the hopes of buying more time, according to people familiar with the situation. Representatives for Neiman Marcus and Penney declined to comment.
. . . .
The retail industry was going through a shakeout before the coronavirus pandemic hit. As shoppers migrated away from malls and bought more online, specialty-apparel retailers and department stores were among the hardest hit. A record number of chains have filed for bankruptcy protection in recent years, and others have closed hundreds of stores. As the virus keeps American businesses temporarily closed, the weak will only get weaker, analysts said.
“Companies we weren’t that concerned about a month ago, we are now concerned about,” said Mickey Chadha, a senior analyst with Moody’s Investors Service. Mr. Chadha estimated that operating income for department stores, which have been losing market share to fast-fashion retailers and discounters, will fall 20% this year. He predicted operating profit for the retail sector overall will fall by 2% to 5%, a drop not seen since the 2008 financial crisis.
. . . .
The National Retail Federation has been lobbying the government to ensure that companies with credit ratings that fall below investment grade have access to loans. “We want them to design these programs to be broad enough to tackle the significant problems of distressed industries such as retailing, which employs a large chunk of the population,” said David French, the trade group’s senior vice president of government relations.
. . . .
Retailers are cutting every cost they can, including delaying payments to suppliers and canceling orders. “In this environment in which 90% of our stores are closed to the public, we are forced to make difficult decisions,” wrote an executive of Harmon Stores Inc., a health and beauty-products chain that is owned by Bed Bath & Beyond Inc., in a letter viewed by The Wall Street Journal. The letter notified suppliers that payments would be delayed by an additional 60 days.
“Retailers have cut variable costs, but there are a lot of fixed costs that they can’t reduce,” said James Gellert, CEO of RapidRatings, which analyzes the financial health of companies.
. . . .
“Retail bankruptcies are coming, but not necessarily immediately,” said Deborah Newman, a lawyer in the bankruptcy and restructuring practice of Quinn Emanuel Urquhart & Sullivan LLP. She said there are public-relations and economic ramifications when companies are forced into bankruptcy during the pandemic. “Now is not a good time to find buyers for assets,” she added. “It’s also hard to get a true sense of a company’s value.”
. . . .
Chains that survive will have to grapple with consumer demand that may not snap back quickly. Consumer spending had buoyed chains before the crisis, but now many shoppers are facing reduced income and they may be skittish about rushing back to public spaces.
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)
PG reluctantly suggests that a great many independent bookstores, often thinly capitalized, relying on the effective equivalent to no-interest loans from publishers in the form of books shipped to stores at no charge with payments for those books happening later as the books are sold.
If there are bookstore bankruptcies on a widespread basis, not only will traditional publishers lose a significant portion of their distribution systems, but their financials will be hit with a lot of debts that will never be paid.
For publishers which are public companies with publicly-traded stock, PG suggests that those stock prices will drop like a rock. If some Wall Street financial engineers leveraged the assets of the publishers to the hilt in some complex financing scheme, the survival of such publishers, even with radical downsizing of their staffs, will be in doubt.
Advertising and publicity budgets that support new releases by these publishers will see a very sharp knife.
For traditionally-published authors, PG is afraid that advances will be hit hard. Those who live from advance to advance will be particularly stressed. When five-figure advances become four-figure advances, maximal mental stress may not have a positive impact on artistic output.
New authors striving to get into traditional publishing will find rejection slips arriving in repeating waves may force those who would have managed to snag a first contract in earlier times into alternate employment.
PG suggests that a substantial portion of traditionally-published authors who desperately want to continue their careers will be sheepishly contacting the handful of indie authors that are casual acquaintances for tips on how to make money on Amazon.
Very few major companies will exit from the current world-wide panic without picking up some bruises. Amazon has become such a complex skein of businesses that what sort of company will come out the other side of the current maelstrom is difficult for experts (and impossible for PG) to predict.
However, in the face of closed stores, Amazon has gained a great many new customers. PG suggests a meaningful number of those who didn’t use Amazon in their past lives or used it on rare occasions will be more enthusiastic Amazon customers in the future, particularly if physical retail stores continue to be hit hard.
Lots of people who are self-isolating in their homes are doing a lot of reading these days. Care to guess where they’re buying their books of access to physical book outlets is prohibited by executive orders from various public officials?
And when you’re stuck in your home and need a good book quickly, where do you point your iPad? Kindle ebooks are always ready to serve.
I want to talk for a minute about why publishing is in so much trouble right now.
It’s way more complicated than most people seem to think.
First, you need to know that the vast majority of our business remains in hardcover and paperback books. Hard copies, physical objects. The second strongest sector has been audio books. Ebooks are a distant third.
Selling books is a very long and complicated supply chain. Ignore editorial — writers and editors can work at a distance and electronically. It really starts with the paper. Storing paper for the big presses takes an enormous amount of warehouse space, which costs money. Printers don’t store a lot — they rely on a “just in time” supply chain so that when a book is scheduled to go to press, the paper is delivered to the printer. Most of that paper is manufactured in China. Guess what isn’t coming from China? Anything, for the last three months. Some of it comes from Canada. Guess what the Trump administration put a big tariff on at the beginning of the year?
So, we don’t have adequate paper supplies. Then consider, big printing plants are not “essential businesses”. There are only a couple printers in the US that can handle the book manufacturing business. One of them shut down last week. Covid-19. We started rescheduling books like mad to deal with that.
But supposing we had paper, and a printer and bindery, the books have to be shipped to the warehouse. Again, non-essential movement. The freight drivers moving books? Staying home, as they should. Not all of them. I hope they remain healthy, because dying to get the latest bestseller to the warehouse doesn’t seem quite right to me.
Now then, our warehouse. We have a gigantic facility in Virginia. Lots of people are working there, bless them, but it’s putting them at risk. There they are, filling orders, packing boxes, running invoices. Giving those boxes to the freight drivers who take the books to the bookstores and distributors. Again, truck drivers risking their lives to bring books to the bookstores.
But think again. The bookstores are closed. The distributors are closed . No place open to deliver the books to. Some bookstores are doing mail order business, bless them, but they aren’t ordering very many books from our warehouse. Amazon isn’t ordering very many, either — because they have (correctly) stopped shipping books and are using their reduced staff to ship medical supplies and food.
In these isolated times, many people are inside reading, but the book business, like others, is bracing for catastrophe. Major literary festivals and fairs around the world have been canceled. Public libraries have closed. Author tours, signings and bookstore appearances have been scrapped.
As the severity of the coronavirus outbreak continues to intensify, authors, publishers and booksellers are struggling to confront and limit the financial fallout. Many fear the worst is yet to come, including more store closures and potential disruptions to warehouse and distribution centers, as well as possible paper shortages and a decline in printing capacity.
“There’s no question we’re going to see a drop in sales,” said Dennis Johnson, co-publisher of the Brooklyn-based independent press Melville House, who has directed staff to work from home. “It’s unprecedented. Nobody knows what to do except hoard Purell.”
. . . .
The potential long-term effects for book retailers are sobering. Many in the industry are worried that independent bookstores will be devastated as local and state officials mandate social distancing and order some businesses to temporarily close.
. . . .
Mitchell Kaplan, the founder of Books & Books, an independent chain in South Florida, said sales have fallen at the company’s stores and cafes, and author appearances have been canceled.
“The irony of all this is that what makes bookstores so potent, our ability to be community gathering places, has become our biggest liability,” he said.
. . . .
Some independent booksellers, including Powell’s, have already begun cutting staff. On Monday, Powell’s announced to employees that it will begin involuntary layoffs after determining the minimum number of employees it needs to keep the online store functioning. A representative of the local union that represents 400 Powell’s workers said that about 85 percent of them had already been affected by temporary layoffs, and that the company has signaled that permanent layoffs are likely to follow.
McNally Jackson, an independent chain in New York, let a substantial number of its employees go after deciding to shutter its stores for the time being. On Twitter, the company said it had temporarily laid off many of its staffers while “facing down a massive, unprecedented loss in revenue,” and added that “we intend to hire back our employees as soon as we can.” A note on the company’s website said that it is still accepting phone and online orders while the stores are closed, and offering delivery.
. . . .
The American Booksellers Association said it has been lobbying publishers to support independent stores by offering discounts, free shipping to customers and a removal of the cap on returns of unsold titles, among other measures. Other groups have been raising money to donate to hard-hit independent stores. The Book Industry Charitable Foundation, which gives financial support to independent stores, released a statement offering potential assistance to stores that have been impacted by the epidemic and are unable to pay their rent or utilities bills as a result of lost sales.
Still, many in the industry worry that financial losses stemming from the outbreak will cripple a significant number of stores and cause them to close permanently. Others fear that the lockdowns and government guidelines mandating social distancing will give an even greater advantage to Amazon as more homebound customers turn to internet shopping.
. . . .
The art critic Jerry Saltz was scheduled to launch his new book, “How to Be An Artist,” at the Strand in New York on Tuesday, but will instead appear in a livestream conversation broadcast on the store’s Instagram account, which has 225,000 followers.
Some stores see virtual events as the best alternative for the foreseeable future, and perhaps the only way to stay connected with readers and their communities as more physical spaces are forced to close.
Politics and Prose, in Washington, is aiming to turn all of its scheduled author appearances into virtual events, with writers hosting a conversation about their books remotely by web video through the platform Crowdcast. “Authors are self-isolating along with the rest of us,” said Liz Hottel, the director of events and marketing at Politics and Prose. “I’m sure they are as starved for meaningful dialogue as readers are.”
As it works to meet the surge in demand for “household staples, medical supplies, and other high demand products,” Amazon has told other suppliers, including publishers, that they will likely see reduced orders and longer delivery time at least April 5, according to both a letter PW has obtained that was sent to independent publishers earlier today and an article Amazon posted on its Amazon Seller Central website.
In the letter, sent from Amazon Vendor Central to a wide range of its suppliers including most publishers, the online retailer said that due to a surge in online orders, it is “temporarily prioritizing household staples, medical supplies, and other high demand products” in order to restock those items. As a result, the letter said, from now through April 5, suppliers of products that are a lower priority should expect both reduced purchase orders and extended delivery windows for existing purchase orders.
“We have temporarily paused ordering for products that are not household staples, medical supplies, or other high demand products,” the letter said. “We have extended the shipment/delivery windows for some existing purchase orders to give you more time to fulfill the order. Please ship your products toward the end of the extended window.”
What a difference a major public health emergency makes. As of this writing, the numbers of identified coronavirus cases in the States are rising quickly as testing–long delayed by the federal government–finally begins to come online.
The New York Times’ 1:24 p.m. ET update (1724 GMT) has at least 5,002 cases now identified in the United States, and CNN is reporting that the 100th American death has been recorded. And, of course, the most vulnerable demographic to COVID-19 is citizens in their 70s and 80s–a sector of the population that typically appreciates and uses library services.
Abruptly ending a months-long battle of wills, Macmillan CEO John Sargent this afternoon (March 17) has abandoned his embargo of newly released ebooks for libraries in the United States, issuing a short note to the news media:
“Dear Librarians, Authors, Illustrators and Agents,
“There are times in life when differences should be put aside.
“Effective on Friday (or whenever thereafter our wholesalers can effect the change), Macmillan will return to the library ebook pricing model that was in effect on October 31, 2019. In addition, we will be lowering some ebook prices on a short-term basis to help expand libraries collections in these difficult times.”
The case of the New York Public Library, as we reported Monday (March 16), reflects those of library facilities and programs in many world markets: As social distancing requirements intensify, physical library facilities are being shuttered and digital lending systems become more important.
This seems to be behind the announcement made today by Sargent–who, by the way, is seen as a hero in the national and world publishing industries for his eloquent defiance of Donald Trump in January 2018 when the White House tried to intimidate Macmillan’s Henry Holt & Company on the publication of Michael Woolf’s Fire and Fury. Calling Trump’s effort “flagrantly unconstitutional,” Sargent accelerated the publication of the book and won the admiration of free-expression advocates everywhere.
Much less happy were many library enthusiasts with Sargent’s eight-week windowing of new titles for libraries, an embargo put into place on November 1. That followed an initial hold-back of new Macmillan/Tor new titles, which started with July 2018 titles. For four years prior, major publishers in the States had provided their full catalogs to libraries without such embargoes.
Sargent’s assertion has been, of course, that making new Macmillan titles available on publication as lend-able library ebooks was creating what he described as a growing “imbalance” in the marketplace as e-borrowing’s popularity rose, costing the publisher too much in what might otherwise be sales for new titles when they might be most popular.
In Andrew Albanese’s coverage for Publishers Weekly of a January meeting between Sargent and librarians at the American Library Association’s annual Midwinter Meeting, Sargent also apologized for the impression many in the library community shared that he might consider libraries to be a problem for publishers. Instead, Sargent said, the problem was real but about the financial results of expanding e-lending on a publisher’s bottom line, not on any lack of recognition of the importance of libraries and their work.
As Albanese quoted him, Sargent said, “If you are in the state of California, you can easily own a library card for every library in the state of California, and when a book comes out that you want, you can put your name on every wait list in every county, and there are apps being developed to make that easier to do, and so that drives up the number of lends for every book in every library and that causes the amount of money per reader reading a book to go down. And that is the change that we worry about.”
The publication of American Dirt raised a host of issues that the publishing industry is likely to be dealing with for some time. The release of the novel forced the industry to ask who should write certain books, reignited the conversation over the lack of diversity within the industry, and also exposed the continued lack of understanding of the Hispanic/Latino consumer by most all publishers.
On January 29, a statement by Bob Miller, president of American Dirt publisher Flatiron Books, noted that the publishing house was “surprised by the anger that has emerged [in response to the book] from members of the Latinx and publishing communities.” The anger was the result of Flatiron’s demonstrated lack of understanding of Latino readers. This lack of understanding is by no means unique to the imprint but is a reflection of a prevalent problem within the book publishing industry. It is clear that the gatekeepers in publishing do not reflect, nor do they appreciate, the complexities of Latinos. Latinos are not a homogenous group; they are as vastly different as the general population, but with the added intricacy of acculturation.
The vast majority of adult trade books are written and published with the white, non-Hispanic reader in mind, at the exclusion of multicultural readers. Can the publishing industry afford to continue on this path? The consumer landscape has greatly changed in the last 20 years. The country has become much more diverse: almost 40% of the U.S. population is nonwhite, and almost 50% of Gen Zers are from communities of color.
This is a shift the industry must recognize and address, as most other industries are already devoting greater resources to capture revenue from diverse communities. Publishers can’t afford to continue publishing for 60% of Americans while excluding the rest. It just doesn’t make business sense.
Some publishers think they have solved the problem by having an imprint or two dedicated to books by authors of color, but diverse voices should be part of all publishing plans and not relegated to a single or limited number of imprints. Creating an imprint for these titles often leaves their authors pigeonholed and without the possibility of reaching wider audiences.
Marketers and publishers also need to go beyond the thinking that Latino readers will only read books written by Latinos or that black readers will only read black authors. That is a simplistic formula publishers often use to reach nonwhite audiences, but it will never deliver on the true potential of reaching multicultural readers. This signals a problem with an industry that lacks understanding of the multicultural consumers and seldom markets to them.
PG is confused by the OP, (written by a multicultural marketing expert (is the marketing expert multicultural or is her (PG knows he shouldn’t assume even though there’s a photo in the OP) expertise primarily in the field of multicultural marketing? (or both?))) (PG apologizes if he has inadvertently and without malice aforethought used any parenthesis in a racist or gendered manner. If he has done so, he will promptly seek counseling from a multicultural marketing parenthetical expression expert.)
The publisher published a book about a group that is underrepresented in books from traditional publishers – Latinos.
The publisher didn’t understand Latinx readers.
The publisher and author took heat for the book because it was not written by a Latino.
Publishers are wrong because they have a couple of imprints that publish for people of color (and presumably have sufficient expertise to do so without offending anyone).
Publishers are wrong to think that Latinx readers will only read books written by Latinos.
Publishers should publish more books by and about Latinos and make certain they don’t offend Latinx readers.
PG suspects more than a few publishing executives may be thinking (but not saying) that they will allow other publishers walk through the minefield of racial grievances and firm up the rules before venturing back into the business of publishing books by and/or about racial minorities.
Another question occurred to PG – What if an editor of color accepts a book about people of no special color which is written by an author of color? Is someone going to complain? Is review by a sensitivity expert required?
PG suspects he’s not the only person who doesn’t care (and almost never knows) the color of the author of books he reads (more often than not, he ends up forgetting the author’s name as well).
PG certainly doesn’t remember the publisher or the imprint and has no knowledge of either’s race/gender/policies relating thereto, etc. (PG knows he probably should pay attention to that stuff, but he doesn’t. He only really pays attention when somebody gets sued.)
Simon & Schuster, the publishing powerhouse behind best-selling authors like Stephen King, Ursula K. Le Guin and Judy Blume, is up for sale.
Its owner, ViacomCBS, announced Wednesday that, after a “strategic review,” the book publisher was no longer essential to its business and that it would seek a buyer.
“We will look to complete a transaction that maximizes its value once the market stabilizes,” Robert M. Bakish, the chief executive, wrote in a memo to employees, most of whom learned of the sale only on Wednesday.
ViacomCBS, the newly combined business controlled by Shari Redstone, is betting its future on streaming and sports content. Owning a major book publisher does not fit into those plans.
A sale of Simon & Schuster, one of the five largest book publishers in the country, would shake up the publishing industry, which has become a winner-take-all business dominated by huge companies and brand-name authors.
A wave of consolidations has swept the book business in the last decade. In that series of moves, Penguin and Random House merged, Hachette Book Group acquired Perseus Books and News Corporation bought the romance publisher Harlequin.
. . . .
The company is going up for sale at an uncertain moment for publishers, who have struggled with lethargic sales and anxiety over the future of Barnes & Noble, the once-dominant chain that was bought last year by the hedge fund Elliott Advisors.
“It hasn’t been a strong growth industry in a long time, and what little growth there has been recently seems to be arrested,” said Thad McIlroy, a publishing industry analyst.
. . . .
Still, with the rise of Amazon and e-books, the business has suffered. In 1989, one of its best years, the publisher generated $1.3 billion in sales. Last year, sales were $814 million. The company’s profits have also declined, hitting $143 million in 2019, a 6.5 percent drop from the previous year. Legacy media businesses can sell anywhere from five times to 10 times annual profits.
. . . .
The potential sale of Simon & Schuster is part of a great unwinding taking place across the media industry as conglomerates cleave off or close down ancillary businesses. The spate of acquisitions in recent years — AT&T bought Time Warner and the Walt Disney Company absorbed the majority of 21st Century Fox — has largely been a defensive measure against Big Tech and a bet on digital video as the future of entertainment.
Books won’t play a significant role in the coming skirmish, in Mr. Bakish’s view. Simon & Schuster is “not a core asset of the company, it is not video-based, it doesn’t have significant connectivity to our broader business,” he said at an investor conference Wednesday morning.
Jodie Archer had always been puzzled by the success of The Da Vinci Code. She’d worked for Penguin UK in the mid-2000s, when Dan Brown’s thriller had become a massive hit, and knew there was no way marketing alone would have led to 80 million copies sold. So what was it, then? Something magical about the words that Brown had strung together? Dumb luck? The questions stuck with her even after she left Penguin in 2007 to get a PhD in English at Stanford. There she met Matthew L. Jockers, a cofounder of the Stanford Literary Lab, whose work in text analysis had convinced him that computers could peer into books in a way that people never could.
Soon the two of them went to work on the “bestseller” problem: How could you know which books would be blockbusters and which would flop, and why? Over four years, Archer and Jockers fed 5,000 fiction titles published over the last 30 years into computers and trained them to “read”—to determine where sentences begin and end, to identify parts of speech, to map out plots. They then used so-called machine classification algorithms to isolate the features most common in bestsellers.
The result of their work—detailed in The Bestseller Code, out this month—is an algorithm built to predict, with 80 percent accuracy, which novels will become mega-bestsellers. What does it like? Young, strong heroines who are also misfits (the type found in *The Girl on the Train, Gone Girl, *and The Girl with the Dragon Tattoo). No sex, just “human closeness.” Frequent use of the verb “need.” Lots of contractions. Not a lot of exclamation marks. Dogs, yes; cats, meh. In all, the “bestseller-ometer” has identified 2,799 features strongly associated with bestsellers.
What Archer and Jockers have done is just one part of a larger movement in the publishing industry to replace gut instinct and wishful thinking with data. A handful of startups in the US and abroad claim to have created their own algorithms or other data-driven approaches that can help them pick novels and nonfiction topics that readers will love, as well as understand which books work for which audiences. Meanwhile, traditional publishers are doing their own experiments: Simon & Schuster hired its first data scientist last year; in May, Macmillan Publishers acquired the digital book publishing platform Pronoun, in part for its data and analytics capabilities.
While these efforts could bring more profit to an oft-struggling industry, the effect for readers is unclear.
“Part of the beautiful thing about books, unlike refrigerators or something, is that sometimes you pick up a book that you don’t know,” says Katherine Flynn, a partner at Boston-based literary agency Kneerim & Williams. “You get exposed to things you wouldn’t have necessarily thought you liked. You thought you liked tennis, but you can read a book about basketball. It’s sad to think that data could narrow our tastes and possibilities.”
They Know What You Did Last Night
Once, publishers had to rely on unit sales to figure out what readers wanted. Digital reading changed that. Publishers can know that you raced through a novel to the end, or that you abandoned it after 20 pages. They can know where and when you’re reading. On some reading sites and apps, users sign in with their Facebook accounts, opening up more personal data. There’s a wrinkle, though: Companies such as Amazon and Apple have the data for books read on their devices, and they aren’t sharing it with publishers.
The ability to know who reads what and how fast is also driving Berlin-based startup Inkitt. Founded by Ali Albazaz, who started coding at age 10, the English-language website invites writers to post their novels for all to see. Inkitt’s algorithms examine reading patterns and engagement levels. For the best performers, Inkitt offers to act as literary agent, pitching the works to traditional publishers and keeping the standard 15 percent commission if a deal results. The site went public in January 2015 and now has 80,000 stories and more than half a million readers around the world.
Albazaz, now 26, sees himself as democratizing the publishing world. “We never, ever, ever judge the books. That’s not our job. We check that the formatting is correct, the grammar is in place, we make sure that the cover is not pixelated,” he says. “Who are we to judge if the plot is good? That’s the job of the market. That’s the job of the readers.”
. . . .
The Data Scare
As Archer and Jocker shopped the *Bestseller Code *manuscript to acquisitions editors, word of their powerful algorithm spread—as did worry and suspicion among those in the publishing profession. “The fear is we can homogenize the market or try and somehow take their jobs away from them, and the answer is no and no,” says Archer. “What the bestseller-ometer is trying to do is say, ‘Hey, pick this new author that you might not dare take a risk on with your acquisitions budget. Their chance is really good.’” Archer, now a writer in Boulder, Colorado, insists that she and Jockers, now an English professor at the University of Nebraska-Lincoln, are “literature-friendly” and want good books to succeed.
Andrew Weber, the global chief operating officer for Macmillan Publishers—whose St. Martin’s Press is publishing *The Bestseller Code—thinks algorithms should be viewed as an additional piece of information, rather than as an excuse to fire the editors. “Whether it’s in acquisition, whether it’s in pricing, whether it’s in marketing, whether it’s in distribution, there just seem to be many, many, many opportunities to improve the quality of our decision-making—and therefore hopefully our results—*by bringing data into the equation,” says Weber. “I would say we are still in the early days of that journey, but that’s the direction we’re headed.”
Archer and Jockers watched eagerly to see which novel would be their algorithm’s favorite. It turned out to be The Circle, a 2013 technothriller by Dave Eggers about working for a massively powerful Internet company. The Circle spent multiple weeks on both The New York Times hardcover fiction and paperback trade fiction bestseller lists. A movie version starring Emma Watson and Tom Hanks is expected in theaters this year.
It appears that PG missed this when it first appeared in 2016.
He suspects the almost-universal phobia towards computers, algorithms, quantitative analysis, sophisticated metrics, etc., among the indwellers of traditional publishing is related to the widespread incidence of innumeracy among English majors.
Worship of The Golden Gut is the state religion of this group. For them, no collection of numbers and formulae can ever replace The Hunch. That’s one reason why so many books fail to earn out their advances, how many mega-sellers are first rejected by every major publisher before stumbling into the market and finding success.
Indie authors include a much wider slice of humanity than either publishers or traditionally-published authors. That diversity of talent and background combined with Amazon’s relentless pursuit of customers and, thus, numbers, analytics, categories, sub-categories and sub-sub categories fosters the creation of niches within niches all the way down to the micro-reader level.
PG just checked a random book on the Zon and discovered that it encouraged drill-down and discovery as follows:
(PG is not certain how much of this collection of information is presented as result of PG’s and Mrs. PG’s past buying habits.)
Finally, if you prefer, you could check out 383 different categories, series, spinoffs, heroes/heroines, etc., etc., etc., (including, 盗墓笔记, El cementerio de los libros, Svartåsen and Die Krimi-Serie in den Zwanzigern as follows:
In a letter to the staff of Simon & Schuster this morning (March 4), the publisher’s president and CEO Carolyn Reidy in New York City says, “I am writing to let you know that today ViacomCBS CEO Bob Bakish announced that the company is beginning the process by which ViacomCBS will potentially sell Simon & Schuster.
“Whatever the outcome, this process does not change what we know to be true of Simon & Schuster: we are a great publishing house and one of the world’s best known publishing brands, with an incredible legacy and bright future.
. . . .
“We have a history of strong and long lasting relationships with our authors, and we will continue to bring important voices to readers around the world, both with our current publishing and our rich backlist of perennially favorite titles.
. . . .
“This process,” Reidy concludes in her message, “will surely be an adventure for all of us, but we are a company that has always risen to the challenges we face. It is your professionalism and expertise that makes Simon & Schuster great, and I thank you in advance for your hard work and commitment during this coming period of transition.”
In his coverage of the news, Brian Steinberg at Variety writes that Bakish said to investors today that “‘Simon & Schuster is not a core asset. It is not video-based. It does not have significant connection for our broader business. “We have had multiple unsolicited inbound calls about that asset, and so as the market stabilizes, we are going to engage in a process’ to examine strategic alternatives.
“ViacomCBS said publishing revenue in 2019 came to $814 million, down 1.3 percent from $825 million in the prior year,” Stienberg says.
“We’ll have a different owner, but everything will remain the same.”
PG suggests if you don’t know who the new owner is, you have no idea whether and how things will change. Ms. Reidy could be the first one sacked. Almost certainly, a new owner will look for fat to trim at S&S.
It’s not hard to fathom why. The World Health Organisation has just raised the warning level to its highest. The world is on the brink of a global pandemic. And the London Book Fair is inviting 25,000 people from around the world to cram into a closed environment for three days in a city of 8 million people, and then fly home.
Today comes news that Macmillan US and Simon & Schuster US have pulled out of the London Book Fair, as has the Penguin arm of Penguin Random House, and also Ingram.
Many smaller publishers and also literary agents are also pulling out, and it’s pretty much certain others will follow suit over the weekend and into next week, and there now seems little realistic prospect of the London Book Fair going ahead next month.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.”
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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?
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.”
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.
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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.”
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.
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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.
. . . .
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.
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.
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.
. . . .
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.
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:
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.
At that time, all shares of Books-A-Million were acquired by its chairman and it became a privately-owned company once again.
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.”
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:
45 of the company’s 127 stores are located in the state of Texas.
Many (All?) of the stores also sell used books.
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:
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.
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.”
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.
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.
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?
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?
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?
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?”
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.
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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.
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The Apple case violated the first rule of antitrust: First, do no harm.
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):
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.
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.
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.
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.
Apple was planning to introduce its iPad in January, 2010, and include an iBookstore as one of the product’s attractions.
PG notes that Apple has never been a fan of significant discounts for the products it sells.
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.
During these meetings, Cue said that Apple:
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.
Apple would use the same “agency pricing model” that it used in the App Store for ebooks.
Agency Pricing allowed the Publishers control the retail price of the e-books with Apple receiving a 30% commission.
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”).
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.
In January 2010, Apple held one of its typically flashy product launches for the iPad together with its associated ebook, music and video stores.
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.
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.
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.
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.
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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.
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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.)
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.
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.”
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.
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?
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.
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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).
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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.
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.
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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.
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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.”
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.
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.
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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.
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.
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.”
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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.
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.
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!
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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?
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.
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 . . . .
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.
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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.
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[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.
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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.
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.
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.
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.
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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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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:
A business or professional group – doctors, lawyers, book stores, etc.
Entities that sell products or services to the business or professional group
So, a typical trade show consists of two parts:
Education/information programs that attract significant numbers of book stores, doctors, lawyers, etc.
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.