Kristine Kathryn Rusch

The Growing Importance of Intellectual Property

31 January 2019

From Kristine Kathryn Rusch:

I need to be clear as I start this post. We writers create intellectual property. We license our copyrights. We do not sell stories. In fact, the stories we tell, along with their titles, are often not copyrightable. The form in which we tell that story—the order of the events, the order of the words we use,—those things are copyrightable, but the basic boy meets girl, boy loses girl, girl discovers she’s fine on her own storyline can and does fuel a thousand books and movies. (That’s why so many memes over the holiday season made fun of the romance movies on Hallmark. Because the movies—all copyrighted in their own right, all different in the copyright sense—share a lot in common.)

If you don’t understand copyright and you consider yourself a professional writer, then you do not understand the business you are in. If you have published a novel, traditionally or indie, and you do not understand copyright, you are volunteering to get screwed over and over and over again. I say this often, and I’m saying it loudly again, because the trend for 2019 and beyond is that every organization you do business with will try to take a piece (if not all) of your copyright on each and every one of your projects.

Your job is to protect that copyright.

. . . .

Forbes actually published an article in fall of 2018 titled “What Authors Should Do When Their Publisher Closes.” You can click over there if you want. The advice isn’t good, because as someone in the article says, what an author should do varies based on the author’s contract. And if the author has an agent, then they’re probably screwed. If the author doesn’t understand copyright, then they’re definitely screwed.

. . . .

I recommend publishing indie, because that’s the best way to protect yourself and your writing income. You’ll have a career if you do that. Your career might vanish on you if you try to remain traditional. Or, rather, you will write as a “hobby” while you make your living doing something else.

Yes, I’m being harsh, but that’s because the intellectual property apocalypse that I’ve been warning you about is upon us. The trends are there, and the signs that traditional publishing (and all of the other big entertainment organizations) know about the value of intellectual property are becoming clearer and clearer.

. . . .

For years now, the Big 5 traditional publishers have had contracts that essentially transfer the entire copyright of a novel from the author to them. The contracts don’t say that explicitly, but when you read the contract as a complete document (which is how you should read it), you realize that the sum total of what the clauses mean is that the writer retains no part of the copyright, and is only entitled to a tiny percentage of the money that copyright earns.

The reason these contracts changed about a decade ago had nothing to do with publishing and everything to do with mergers. As these publishing companies became part of big international conglomerates, many of them entertainmentconglomerates, the legal teams redrafted the contracts to do the copyright grabs.

Most writers had no idea what they were signing, and most of their agents didn’t either. Agents are not trained lawyers. A handful of the big agencies have lawyers on staff, but most of those agencies are concerned with making the agency money, not with making the writer money. So a lot of the contracts are structured to pay and protect the agent, while bilking the writer.

. . . .

Up until a year or so ago, most of the Big Five continued to operate like traditional publishing companies have since the 1990s—a focus on publishing a lot of titles, hoping that some will stick and become bestsellers. But that strategy isn’t working, and sales are down precipitously.

. . . .

[Simon & Schuster] has been in a media conglomerate since the 1980s. I’m not going to go through its tortured history, which runs from Paramount to Viacom and beyond, but realize this: It became part of the CBS Corporation officially in 2005. Around then, it became impossible to get book rights reverted, which is one of the tricks that is recommended for writers in the Forbes article I cited above. (How 1995. Sigh.)

S&S has experimented with electronic books since the 1990s. Dean and I personally made a lot of money in the early 2000s when S&S realized they hadn’t licensed e-rights for Star Trek books. (Dean and I wrote a bunch of them in the 1990s). S&S has tried to have a self-publishing arm since 2012, and they’re doing a lot of things that require writers to pay for services that publishers used to provide.

. . . .

The more IP a company acquires, the more its value goes up. Even if they don’t create anything from that IP. Acquiring a novel’s copyright—with all its potential spinoffs, TV shows, toys, comics—increases a company’s value tremendously.

Read that paragraph again, because the information therein is the key to this whole piece.

The more IP a company acquires, the more its value goes up. Your novel is IP. If they acquire it, their bottom line goes up, even if they never do anything with that IP. Got that?

That’s why S&S stopped, in 2000 or so, reverting the rights to the novels they acquired. Those novels equal more earnings potential—and they allow the company to maintain a value that it wouldn’t have otherwise.

I’ve been warning writers about this copyright grab by corporations for some time, but it was easy to ignore me because the Big 5 have not been (for the most part) exploiting (the legal term for developing or making use of) that copyright.

S&S finally is. That’s what Simon & Schuster’s CEO Carolyn Reidy’s heady year-end report was really all about. She called 2018 “the most successful year in Simon & Schuster’s history,” and yet she didn’t cite a single print bestseller as something that caused the success.

Instead, she touted the rise in audio . . . as well as a mention that sent a little shiver through me.

She wrote:

…[backlist sales now] comprise a higher portion of our revenue than at any time in memory…while readers wanting the tried and true is an industry-wide phenomenon, our concerted effort during the last few years to acquire books with the potential for long-term backlist sales has yielded dividends.

This article does not specify what exactly she means by “backlist sales.” Does she mean actual ebook and print sales, or other licensing, such as foreign rights and so on? Clearly S&S is exploiting the audio rights clauses in their contracts.

What is clear, however, is that a big traditional publisher has finally figured out that not only does their backlist have value in raising the company’s worth, but it also has earnings potential that can be exploited in 2019.

Why does this send a chill through me? Because if one traditional publisher learns it, the others will learn it as well. And the ability of writers who have sold their work into traditional publishers to get the rights reverted will go down to almost nil.

Big traditional publishers will finally join their counterparts in the entertainment industry—the movie/TV companies, the music studios, the game companies—in demanding control of every aspect of the copyright from the original author.

Which means that if an author signs one of those agreements, the author will get pennies on the dollar (if that) for any rights—audio, movie, TV—rather than the kind of earnings writers could have gotten as recently as 10 years ago.

. . . .

And those of you who licensed mass market rights a few years ago, thinking you’d get your ebooks into stores, you probably already signed away most of the copyright, particularly if you went with Harlequin or Simon & Schuster.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

As usual, Kris incorporates a lot of intelligent business thought and advice into the OP (and her other posts in this series).

As PG has mentioned before, he has negotiated, drafted and/or reviewed a great many contracts during his legal career, including some large technology copyright and patent licensing agreements. As he has also mentioned before, the typical contracts between authors and traditional publishers are some of the most unfair and one-sided agreements he has seen.

In a prior era during which it was impossible for an author’s works to reach any sort of meaningful audience without a publisher to cover the costs of printing books and provide meaningful access to buyers for large numbers of physical bookstores, perhaps the value of a publisher’s services was an extremely large portion of the income generated by sales of a book.

However, in an age in which:

  • Amazon is the largest English language bookseller in the world; and
  • Opens its electronic doors to self published authors on terms substantially equivalent to those it provides commercial publishers; and
  • Ebooks have the highest profit margin of any edition of a book a publisher sells; and
  • Ebook editing, formatting and cover design of a quality comparable to that provided by a commercial publisher can be had for a few hundred to a few thousand dollars;

the real value of a publisher for a typical author compared to the effective cost of a publisher to that author has declined precipitously.

PG was about to discuss the value of branding for either an ebook or a printed book, but he will be uncharacteristically brief.

Does anyone go to an online or offline bookstore seeking out a Random House book? Of course not. They’re looking for an author, a genre, etc.

With respect to promoting and selling books, which brand name is most valuable, James Patterson’s or Little, Brown and Company’s?

Without singling out any particular literary agent or agency, PG will say, as a general observation, that agents famous and obscure don’t do anything significant to improve the contract terms for publishing contracts other than increasing the amount of the advance on some occasions. In particular, agents rarely if ever do anything to address the issues Kris discusses in the OP.

In some types of contracts — consumer loans, for example — federal and/or state legislatures have passed laws that prevent commercial lenders from including some contract provisions that are unfair or harmful to borrowers. Compared to the number of individuals who take out loans to purchase a house, automobile or dishwasher, however, authors are a tiny constituency and elected officials have much bigger fish to fry than commercial publishers.

However, perhaps as a result of such consumer protections, some authors may believe they are somehow protected from  unfair provisions in publishing contracts between themselves and large publishers. That belief is incorrect.

Some of the most unfair provisions in a typical publishing contract are presented in the most innocuous manner imaginable.

 

 

Finally, there is nurturing. Publishers don’t just produce books. They nurture. Literary agents also provide nurturing in case publishers fall short in any way.

Like a baby duckling, a baby author needs to be nurtured and petted and encouraged and gently guided if she/he is to grow into a beautiful swan.

Who better to nurture such a delicate creature than a Kommanditgesellschaft auf Aktien headquartered in Gütersloh?

Off the top of his head, other than publishing, PG can’t ever remember ever having a business discussion that included the word nurture or any of its variants.

PG is reminded of a quote attributed to former president Harry S. Truman, “If you want a friend in Washington, buy a dog.”

PG suggests that if you want someone to watch over you, steer clear of the publishing business.

.



Business Musings: Audio

19 January 2019

From Kristine Kathryn Rusch:

Publishing analysts have said for years that if the disruption hadn’t hit with ebooks, the story of publishing in the past decade would have been audio. By that, the analysts mean audio rights. They have become increasingly important and will remain so.

Here in the States, where so many of us commute to our jobs, digital audio created a revolution around 2010 or so. Rather than buy a CD or a tape to use in the car (or rent them), folks with the right kind of vehicle could play their digital audiobooks in through their car’s sound system, often by linking their phone to the system.

That has become more common rather than less. But the revolution continues. Joanna Penn, on the Creative Penn, was the first in my experience to point out that voice-first devices, like Amazon Alexa or Google Home would be able to play digital audiobooks. So someone could go from the car to the house without headphones and pick up on the audiobook exactly where they had left off.

For a while, Amazon enabled this too, by offering an inexpensive audio version of a book if you’d already bought the book in another format. Like so many things Amazon, the cheap early adaption part of this vanished, only after people got hooked, of course.

A lot of books aren’t in audio—it’s expensive to produce a good audiobook—so readers have defaulted to having their dry computer voice (Siri or Alexa) simply read the text. Purists complain about this, but when you’re desperate for audio story, you will listen any way you can.

Audio story is expanding almost daily. Podcasts have moved from a group of people talking or someone interviewing someone else into the storytelling format. Some of those podcasts are nonfiction, but many are fiction, and have become a gateway into reading novels and other fictional products. (As I write this, I just got hit with three different ideas that I want to do if only I have the time.)

. . . .

Audio is expensive to produce and it takes time to earn back the initial investment, without proper set up. I’ll get to that below, but first, let’s look at #voicefirst and Voice SEO.

Voice SEO is search engine optimization for voice-commands. With the growth of things like Google Home, Amazon Alexa, and Apple’s Siri, voice commands are becoming more and more common. They can handle relatively easy commands, but not complicated ones or something said in an accent that the system doesn’t recognize.

. . . .

A lot of people make fun of readers who ask their Google Home or Apple’s Siri to read a book to them. Right now, the voice is flat and often mispronounces words. (My favorite version of Siri, whom we have dubbed “The British Guy,” says Wig-Wham for wigwam, and mispronounces every Spanish word he encounters. Which is tough here in Las Vegas, when he’s the one giving driving directions for the GPS. (Wigwam is a major street.) And don’t get me started on how badly he pronounces Hawaiian words, which are also common here.)

The flatness and mispronunciation won’t be a forever thing, though. The read-aloud feature will probably never be as good as a human performance. (The science fiction writer in me forced me to use the word “probably.”) But more and more people will use the feature as the reading improves.

Because the future of audio is moving so rapidly that I missed significant developments by taking nine months off, it’s more essential than ever for writers to hold onto their audio rights.

However, traditional publishers are snapping up audio rights with every single book contract now, which is rather like snapping up movie rights or TV rights. And writers are letting the publishers do it—usually on the advice of idiot agents.

Audio is the reason that Simon & Schuster’s Carolyn Reidy declared 2018 the best year ever for the company—the growth of audio and backlist sales, which I will get to in a future part of this series. S&S has its own audio division, and it increased its title count in 2018. The company has also started producing original content, just like Audible has.

Reidy expects S&S’s audio division to become even more important. She told Publisher’s Weekly:

With even more audio retailers coming on board, and the further proliferation of smart speakers and other listening devices, audio will remain a growth engine for us.

Audio will be a growth engine for all of us, if we can manage it. In addition to the audio retailers growing almost by the day, ways for indie writers to produce their own audiobooks and get them into the market have grown in 2018 as well.

Findaway Voices, in particular, has become a go-to site for writers who want to produce their own audiobooks.

. . . .

The key here with audio rights—with all of your rights, really—is maintaining control of them. Watch your contracts. If you’re publishing traditionally, reserve your audio rights. Do not sell them as part of a package to your traditional publisher, no matter how big those companies are.

If you’re indie publishing, watch your contracts, particularly if an audiobook publisher comes to you. As I mentioned above in the bit about S&S, they now have an entire audio division and are producing original content. Which means that they might contract for audio first.

The problem with all of the S&S contracts I’ve seen—the problem with most of the Big 5 contracts I’ve seen—is that they won’t accept a license for a single right. They want to license the entire property, even if they don’t exercise all of those rights. Which means that by licensing audio to them, you might lose paperback rights as well. Or the entire copyright, since that seems to be the M.O. for many of these companies.

Be very careful.

Link to the rest at Kristine Kathryn Rusch



Planning For 2019 Part 2

4 January 2019

From Kristine Kathryn Rusch:

 The biggest issue for the latter half of 2018 was book sales. Indies and traditional publishers both complained that book sales were down, and that a crisis was imminent. Their ideas of crisis were different, but they come from a similar source, which is the current state of disruption in the publishing industry.

. . . .

I’m doing this short series focusing on 2018 with an eye toward 2019 because I firmly believe that you cannot plan for the future if you don’t know where you’re standing right now. (And a note on terminology: I’ll be using indie published writer instead of self-published writer because indie writers are running a business, whether they like it or not. I want the terminology to reflect that.)

This series is important to all kinds of fiction writers, whether they’re traditionally published, indie published, or a hybrid of both. Please remember that I write this blog for the writer who wants a long-term fiction career, so keep that in mind as well.

. . . .

What started this discussion were some alarming numbers from the Association of American Publishers, which can track fiction sales through traditional venues  but not, mind you, sales figures from Amazon, which is the largest bookseller in the United States. (Some of the Amazon numbers were reported to AAP from the publishers themselves.) There’s a lot of self-reporting in the old fashioned way that publishing numbers get gathered, from independent bookstores telling their numbers (without a fact check) to publishers doing the same.

Still, no small bookstore will deliberately underreport its numbers unless there is a business or tax reason to do so, which doesn’t seem to factor in here. Verifying the numbers from both booksellers and publishers has never been part of book sales reporting, not even after computers came into the picture. (Although, with the assistance of numbers from Bowker and book distributors, the introduction of computers did help.)

The numbers that caught everyone’s attention were two-part.

1) Sales of adult fiction titles fell 16% from 2013 to 2017.

2) That 16% represents a rather large dollar figure. Sales went from $5.21 billion to $4.38 billion.

Realize we are talking about traditional publishing here, not indie publishing at all. Those numbers aren’t really baked into the book sales numbers in any significant way. (Remember, Amazon isn’t counted here, and Kindle Unlimited isn’t reflected here at all.)

The scarier number for traditional publishers appears deeper in the article. This number comes from Bookscan, which only tracks print sales. I’m going to quote PW here. The italics at the end of the sentence are my emphasis added.

…the BookScan figures show that no fiction title topped one million copies sold in 2016 or 2017 at outlets that report to the service.

For an industry that used to sell print titles well over a million on a regular basis (at the turn of the century and before) that’s a scary, scary, scary number. For comparison, I tried to go to 1998 with a quick web search of Publisher’s Weekly, but I only managed to find 1999. It’ll do.

There were six trade paperback fiction bestsellers that sold one million copies plus, and trade was the smallest selling fiction category at the time.  There were more mass market paperback bestsellers than I wanted to count—and these listings began at 2 million sales plus. Leading that list with 2 books was John Grisham at 4.1 million and 3.875 million respectively.  Eight hardcover novels sold more than 1 million copies, including (again) a John Grisham.

. . . .

Last year, John Grisham admitted to the New York Times that his novels sell half of what they sold in 2007, which was less than they sold in 1997.  Here’s how Janet Maslin of the Times reported his comments:

He doesn’t worry much about book sales either, except he’s very alert to the numbers. “The biggest change for me has been that I’m selling about half the books I sold before the Great Recession,” he said. “Maybe a little bit more than half. This is discretionary spending, and people are not spending.”

Savvy readers will see that I used this same quote last year in discussing book sales.  Nothing has changed in the year or so since I wrote that post.

Until the last ten years or so, traditional publishing dominated the marketplace. They could sell millions of copies to readers because there was no other game in town. Nothing competed with traditionally published novels.

. . . .

We are at Stage Three in the publishing disruption, though, and traditional publishers are no longer the only game in town. Not even close. And they’ve got a really serious issue: their business model was built in the previous century. To make matters even worse, they’ve consolidated. None of the big traditional publishers are nimble in anyway. They’re part of large conglomerates who expect major earnings from each corporation under their huge umbrella.

In an upcoming part of this series, I will examine how traditional publishers are looking to keep themselves relevant to their corporate masters. It will change the traditional publishing model forever, but it won’t benefit writers in any way.

. . . .

Traditional publishers are terrified by these shrinking sales numbers. Their solutions are based in their old model thinking—and, unfortunately for them, are mostly impossible.

The reason I chose John Grisham as my example is three-fold. First, there’s that lovely quote he gave the New York Times. Second, I looked up his numbers last year and the current ones are this: His books now sell in one month what they used to sell in one week. Sometimes in one day.  The third reason? He’s still sitting on top of the bestseller list, as one of the most important big guns, twenty-seven years after he hit it.

He’s on the list, Nora Roberts is still on the list, Stephen King…

Let’s go back to that Publisher’s Weekly article that sparked so much discussion. A lot of the discussion was about what’s “wrong” with fiction sales. The discussion is lost in that traditional publishing bubble, thinking they’re still the only game in town.

They talk about movies and TV as competition (what is this? 1960?) and claim that people are either reading nonfiction or aren’t reading much at all. Worse, they’re blaming Amazon for much of their problems—refusing to see that Amazon is their biggest client.

. . . .

There is one line in here, though, that speaks to the problem that traditional publishers have had since 1997 or so—and they have not solved, despite being told over and over and over again that they need to rethink this.

They’re not building author careers. Or, as Peter Hildick-Smith of The Codex Group (which many industry insiders use for market research and pre-publication book testing) told PW:

Creating a dependable, bestselling author is a multibook investment that requires different strategies and great persistence. It’s not a one-and-done launch.

. . . .

The essence here is that the author is the brand, not the publisher, and traditional publishers are no longer putting the money into developing new brands. Which is why you’re seeing the same old same old on trad pub bestseller lists, and why the sales figures are going down.

There’s a lot to read out in the marketplace. Readers who like legal thrillers don’t have to read John Grisham. They can read a variety of other authors in a variety of different ways.

Hildick-Smith put his finger on the rest of the problem. He said that “so much inexpensive genre fiction [is] now available at ‘subprime price points under $5’ (from such channels as Kindle Unlimited), publishers must invest to develop brand name authors who can command premium-price loyalty.”

. . . .

Traditional publishing is not going to build new writers into bestsellers. They’re not even trying. That’s clear from a quote from Paul Bogaards, a vice president of Alfred P. Knopf who is apparently still dining out on his 2009 acquisition of Stieg Larsson’s books. In talking about rebuilding fiction sales, Bogaards is simply quoted as saying this:

There will be another big novel. There always is.

Link to the rest at Kristine Kathryn Rusch


As PG was reading this excellent post by Kris, he was also thinking about flightless birds.

PG claims no special expertise about flightless birds, but he understands that most/all flightless birds have vestigial wings. Their distant ancestors could fly, but, over time, for one reason or another, flying became less important and they lost the ability to do so.

Some species of flightless birds live exclusively on isolated islands where few predators are found. These birds deal with whatever threats remain for them without needing to fly.

Other species of flightless birds have become very large – the ostrich and emu, for example. Given their size, they are no longer potential prey for predators like weasels and small cats which could pose a threat to smaller birds.

On occasion, a small flock of wild turkeys strolls through the grounds of Casa PG. They can fly and run and, particularly in flocks, intimidate a small carnivore.

These wild turkeys bear little resemblance to the domestic turkeys which may provide the main course for your dinner next Thanksgiving. The domesticated turkeys have been bred to develop outsized breasts, the better to provide more white meat which many consumers prefer. However, the domestic turkeys are so large and heavy, they are completely unable to fly. At best, they can run for a short distance while flapping their wings.

So back to books and publishing.

Thirty or forty years ago, there were a great many more publishers in the United States than there are today. There were more large traditional publishers in New York, some of which operated under the management of their founder or founder’s heirs and including many medium-sized publishers that have now been absorbed into giant conglomerates. There were also quite a number of successful regional publishers focused on serving a particular geographic area and many more specialty publishers that focused on particular interest groups – golf, military history, regional cooking, hunting and fishing, local history, cowboys, etc.

Today, traditional US publishing is much more concentrated, with the “Big Five”, five huge publishers, all of which are located within a short cab ride of each other on the island of Manhattan and are subsidiaries of even larger worldwide media conglomerates.

One might be tempted to compare them to giant flightless birds, living within a monoculture comprised of wealthier-than-average white people who, by and large, attended the same 20-25 colleges and haven’t had any real jobs outside of publishing. All five Big Five CEO’s are white. Four are male.

Each of the large publishers relies heavily on sales through traditional bookstores. Barnes & Noble is their largest bricks and mortar customer.

Perhaps the best example of the dangers of the Big Five monoculture is the illegal price-fixing conspiracy that began in 2009 and was designed to allow Apple to derail Amazon’s ebook business.

In 2009, Big Publishing was not happy with Amazon. The publishers had finally decided they needed to start selling ebook versions of their books. However, in the typical fashion of organizations who felt entitled to exert control to protect their quasi-monopoly, the publishers did not want ebooks to cannibalize the sales of their printed books. The publishers had for some time discouraged bookstores from aggressive price discounting. This policy worked well with smaller customers, but Borders and Barnes & Noble were large enough that they were less subject to this pressure

Accordingly, the publishers set the prices of their ebooks high so as not to “devalue” their books in the eyes of customers and to encourage customers to continue purchasing printed books through traditional bookstores and restrain Amazon’s book sales.

Amazon was not cooperating with this strategy, however, and was selling ebooks from the large traditional publishers for $9.99, even if the company had to take a loss on each ebook sale.

Approximately every three months, the CEOs of the Big Six (Penguin and Random House had not yet merged) would meet in private dining rooms in New York restaurants without counsel or assistant present, in order to discuss the common challenges they faced, including most prominently Amazon’s pricing policies. (When PG first learned about this practice, he was absolutely astounded. It laid the groundwork for a classic slam-dunk victory in the later antitrust case. Any lawyer who learned a client was doing this would be hoisting red flags from morning until night. It was a profoundly stupid practice.)

In 2009, Apple was preparing for the announcement of the first iPad in early 2010. Apple CEO Steve Jobs was a very sick man.

Jobs had been diagnosed with pancreatic cancer in 2004. By early 2009, he was a very sick man and had lost a great deal of weight. He took a medical leave of absence in late January and had a complete liver transplant in April, 2009. Following the transplant, he was better, but still not completely well. He would die from his illness in 2011.

In late 2009, Jobs’ lieutenant, Apple’s senior VP of Internet Software and Services, Eddy Cue, set up meetings with the top executives of the six largest New York Publishers. Apple wanted to announce the iBookstore in conjunction with the iPad announcement but had concerns about Amazon’s pricing.

Cue told the publishers that Apple wanted to sell the majority its e-books between $9.99 and $14.99, with new releases being $12.99 to $14.99. Apple also adopted the agency model of pricing, wherein the publishers would control the price of the e-books with Apple receiving a 30% commission.

However, Apple didn’t want to be underpriced by Amazon, so it would insist on an agreement with the publishers that Apple could match any price at which Amazon was selling an ebook.

Leading up to the agreement of five of the publishers to agree to Apple’s terms (Random House abstained), they continued their private dining room discussions and called each other over 100 times in the week before signing the agreement.

On the day of the iPad launch, On the day of the launch, Jobs was asked by a reporter 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.”

The plot quickly fell apart and the Justice Department sued the five big publishers and Apple for conspiring to illegally fix the prices of ebooks. Later, the Justice Department publicly humiliated management of the Big Five by requiring an admission of guilt and forcing monetary settlements.

The whole ebook price-fixing fiasco is an excellent illustration of one of the most serious weaknesses of the groupthink monoculture that governs Big Publishing. Even after their price-fixing fiasco, they have not made any meaningful changes to avoid becoming even bigger, fatter domesticated turkeys who are unable to respond in a meaningful way to the changes in the publishing business.

While PG believes the five huge flightless birds do not have a bright future before them, as Kris suggests, indie authors need to keep their eyes open and options ready to respond to changes in the book business.

Amazon is not the same as it was nine years ago. In 2009, its net sales revenue was $24 billion. In 2017, it was $178 billion. In 2009, Amazon was filled with managers who remembered when the company was a scrappy little underdog and maintained that mindset.

Between 2009 and 2019, a lot of new people have become Amazon executives. To the best of PG’s knowledge, the KDP group has substantially changed since then. It has undoubtedly grown into a huge organization. In 2009, Amazon had a total of 24,000 employees. Today, it has 566,000.

PG continues to be pleased with Amazon, as reflected by its usual treatment of authors. However, with a large organization, things can always change and indie authors need to be wise and ready to change when change is thrust upon them or when change can provide better opportunities for their books and their business.

 

The Current State of Disruption (Planning for 2019 Part 1)

27 December 2018

From Kristine Kathryn Rusch:

 For years now, I’ve done a year-end review, examining what happened and where the industry stands.

. . . .

I wrote down lists and links and reviewed notes and thought long and hard about things…and still couldn’t figure out how to wrap my arms around what I wanted to talk about.

I initially thought about combining the different parts of the industry under topics, and examine the topic rather than that part of the industry. But the industry is diverging in some important ways, making that way of writing these blogs exceedingly difficult.

This afternoon, it struck me: I write the year-end reviews so that I can focus on what to expect from the year to come.

So rather than look in detail at what happened in 2018, I’ll be looking at what happened with an eye toward the future.

. . . .

A reminder: I write these weekly business blogs for other writers who want to make or already have a long-term career. If you’re just starting out, some of this stuff won’t apply to you. If you’re a hobbyist who never wants to quit your day job, again, some of this stuff won’t apply to you. Don’t ask me to bend the blog toward you. There are a number of sites that cater to the beginner or the writer who doesn’t really care if she makes a living.

. . . .

For the most part, however, dealing with beginner and hobbyist issues doesn’t interest me. I’m a long-term professional writer who has made money as a writer since I was 16, who has made a living at it since I was 25, and who started making a heck of a great living at it by the time I was 35. I started writing these weekly blogs to make some kind of sense out of the disruption in the publishing industry in 2009. I did it for me, because I think better when I am writing things down.

The disruption continues, albeit in a new phase (part of what I’ll discuss below), and so I am focusing on what I need to focus on for my long-term writing career. I hope that some of these insights will help the rest of you.

. . . .

The disruption in the publishing industry will continue for some time now. Years, most likely. I don’t have a good crystal ball for how long it will go on, but we are past the gold rush years in the indie publishing world and have moved into a more consistent business model. It’s at least predictable, now. We know some patterns and how they’re going to work.

. . . .

The disruption in traditional publishing has gone on for nearly two decades now. It began before the Kindle made self-publishing easy by giving writers an easily accessible audience. Traditional publishing became ripe for disruption in the 1990s when the old distribution model collapsed.

Many of you saw it from the outside—the decline of the small bookstore, the loss of bookstores in small towns, the rise of the bestseller only in chain bookstores. All of that came from a collapse in the distribution system, from hundreds of regional distributors down to about five. (I don’t off the top of my head recall the actual number.) That made publishers panic. They couldn’t figure out what kinds of books sold best in the Pacific Northwest as opposed to what sold well in the Southeast, and worse, they didn’t have time to figure it out.

(When I came into the business, a top sales person for a major book company would know that science fiction sold well in California and quest fantasy sold well in Georgia, that the Midwest really enjoyed regional books, while New Yorkers often didn’t.)

Bestsellers sold everywhere, so publishers ramped up the production of already-established authors and sent those books all over the nation. Then, when the crisis leveled out, the publishers did not return to the old ways, scared of what to do. They continued to push for huge sellers rather than grow newer books.

Writer after writer after writer got dumped by their publisher in this period, while some new writers made fortunes because they wrote books that were similar to existing bestsellers.

When the Kindle came around and disrupted publishing, both writers and readers were ready for something new. That combination of forces created the blockbuster indie sellers—which were not blockbuster to traditional publishers. (The writers were making significantly more money, but selling fewer units than trad pub bestsellers.)

Hold that thought for a moment while I remind you that another disruption—a different one—was hitting publishing at the same time. Audiobooks went digital, and exploded. It became easy to download an audiobook and listen to it on your iPod (remember those) or your favorite MP3 player. Some cars made it easy to hook up those players to the sound system of the car.

And thus, commuters wanted everything on audio, and the demand in audio grew exponentially. As so many industry analysts said five or six years ago, if the Kindle hadn’t come around, the big story in publishing would have been the audiobook.

And here’s another publisher problem: most publishers never secured audio rights to the books they published. That money went directly to the authors.

. . . .

For years now, those of us who watch business trends have predicted that book sales would plateau. In reality, “plateau” is the wrong word for overall book sales. Those continue to grow, sometimes in ways that aren’t entirely measurable. New markets are opening all the time, bringing in new readers.

The system for measuring both readers and sales is so inadequate that we can’t count the readers we have, let alone the new readers who are coming into the book industry sideways. However, there is a lot of evidence—scattered, of course—that new readers are coming in. (I’ll deal with this in future weeks.)

Readership is growing, but individual sales are mostly declining. Traditional publishing’s fiction sales are down 16% since 2013. Traditional publishing has a lot of theories about this, delineated out in the Publishers Weekly article I linked to.

Indie writers believe a lot of the trad pub sales migrated to them. Maybe.

But some of what happened here was the inevitable decline from the gold rush of a disruptive technology.

Let’s look at traditional publishing for a moment. Traditional publishing moved to the blockbuster model at the turn of the century, meaning that the books that were published had to have a guaranteed level of sales or the author’s contract wouldn’t be renewed. The sales rose, partly because traditional publishing was the only game in town.

In that period, if you went to bookstores all over the country, and followed that up with a visit to the grocery store, as well as a visit to a story like WalMart or Target, you’d find the same group of books on the shelves. A few more in Target than in the grocery store, and certainly more in the bookstore, but still, the same books. And the airport bookstores were the same way.

If a reader needed reading material, he only had a few hundred titles at any given time in the stores to choose from. So the reader read the best of what he found, not necessarily what he wanted to read.

Then the disruption happened. Kindles and ereaders proliferated. Readers found books they’d been searching for, often for years. The readers also found some genres and subgenres that they hadn’t seen in a decade or more, usually books by indie writers that oculdn’t sell to the big traditional companies.

The boom in ebooks grew and grew and grew. (And if traditional pubishing hadn’t dicked around with pricing, their book sales would have grown even more.) That’s why the S-curves on that graph grow precipitously in between Stages Two and Three. Adoption increases revenue for a very very very short period of time.

That kind of growth is not sustainable for years, though. That’s why I say it was an inevitable plateau. If you’ll look on that graph again, though, you’ll see that both curves end higher on the y-axis—the profit axis—than they were at the beginning.

But hitting that plateau after years of rapid growth and, in the case of traditional publishing, a near-monopoly on the market, is painful. And that’s what we’re experiencing.

Also, sales are spreading out. I’ll talk about this a bit more in the next couple of weeks. But think of it this way. Instead of a lot of readers reluctantly reading the latest blockbuster because they’re trapped in the airport and can’t find anything else to read, those readers are now downloading dozens of books on their phones, and reading a variety of things—some of which we don’t have measurements of. Those readers have left the blockbusters they barely liked behind and found books/authors they like better.

So the money that would have gone to five different authors at three different publishing companies is now going to twenty authors, and only two of those authors are with traditional publishing companies. The books the readers are reading, though, aren’t the latest blockbuster by that author, but an older book that came out a decade ago. The price is lower, and the companies aren’t interested in those sales. They want the newest book to sell the most copies.

The consumer spends the same amount of money, but spreads it out over a wider range. Many of these sales are untrackable. Not all of those twenty authors report their sales to anyone, and not all of those sales were made through traditional channels. A few of the authors sold on their own websites. Some of those books came out of bundles. And some came out of a subscription service like Amazon. The traditional publishing companies lost most of the revenue, because their book sales have legitimately declined.

But that doesn’t mean people are reading less or that fiction reading is declining.

I’m not the only one who sees this. Mark Williams of The New Publishing Standard had the same reaction to the traditional publishing fiction numbers that I did. He wrote on November 18:

The big problem we have is that the fiction market, much more so than the wider book market, is so fragmented now, thanks to digital (by which I mean not just ebooks and audiobooks but online POD and most of all social media democratising the promotion of fiction titles), such that it seems like fewer people are reading fiction, but the reality is likely just the opposite.

The fragmented market is but one thing we’ll talk about in the next few weeks. We’ll look at how writers can use that market to their own advantage.

Link to the rest at Kristine Kathryn Rusch

PG always appreciates the analysis Kris and Dean bring to the publishing world, traditional and indie. He was going to add a few of his thoughts to Kris’ excellent post, but, perhaps as a result of holiday hangover (not the alcoholic kind), his little gray cells are not as well-regimented as usual.

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

Here is the most recent Kris Rusch book selling on Amazon:

Business Musings: Generations

6 December 2018

From Kristine Kathryn Rusch:

The sf field is getting hit hard right now with a clash between generations. The clash isn’t a minor one: it’s over the future of sf. It’s about bringing in diverse voices, which sf failed to do (mostly through the gatekeepers who were [and some still are] bigoted against anyone who is not a white male). Some of the voices that are coming in are strident. Many are accusatory. A few are judgmental.

All have legitimate grievances. When you’ve been pounding on a door for years, and the door finally cracks open, you don’t say thank you. You say, What the hell? I’ve been trying to get in here for a long time. Didn’t you hear me?

Some of that generational conflict broke out on social media the morning that I’m writing this. A tone-deaf member of the older generation tried to defend himself, and failed miserably. Another member (in a different genre) has attracted national news because she was so overzealous in her real world job that she literally cost young black men decades of their lives. Her behavior back then (and now) is news to some of her younger fans. It had been so long ago that I never put the writer with the prosecutor. (I don’t think she’d been writing back then.) That terrible thing she had done is back in the news—and it should be.

That’s what some of her defenders miss. We should be discussing misuse of power and the harm we do, even as we think we’re doing good.

. . . .

I went into my office and grabbed . . .  Creative Quest by Questlove (with Ben Greenman)

. . . .

[Questlove] deals with generational change. He expresses it in metaphor.  (which is probably why I like the book: I think in metaphor.)

Once, as a young man, he walked along a train track after a train had left and wondered how long he had before another train would mow him down. He moved that physical thought into the creative realm.

How long does an artist have alone on a track, heading to the future, before another artist comes up behind him, and takes his place?

Questlove knows that art isn’t a zero-sum game. He doesn’t mean that only one artist can be on that track at one time. He really is discussing being the cool, the new. The person creating the wave, or riding the crest of the wave. Being the cutting edge.

That’s the focus here.

Because being the cutting edge is addictive. And it makes an impression on our brains as artists. Some artists continue to chase being cutting edge (which puts them behind the cutting edge train, to use Questlove’s metaphor). Others loudly defend that they once were cutting edge. And some move quietly forward, learning and growing, and accepting that they can only be cutting edge once in their careers.

Judging from this book, Questlove and the Roots belong to the latter group. Yes, they’re still learning and growing, but they’re never going to be the hot thing again. They might become more popular than they were in the beginning, but they will never be that new, surprising voice again.

We only get one chance at that.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

Your Basket is Leaking

2 December 2018

From Kristine Kathryn Rusch:

In October 2018, Sears filed for bankruptcy. The form of bankruptcy the corporate heads chose was something called Chapter 11 here in the U.S. It means that the company—once the largest retailer in the entire world—will be able to reorganize and, if they’re lucky and the folks running the company are smart, they might be able to emerge from bankruptcy with some of the business still intact.

The key here isn’t the details of Sears’ bankruptcy. It really isn’t even Sears itself which, when I was a child, fifty years ago, was a fixture in America. It’s the trajectory of the company.

. . . .

By early 1940s, Sears’ catalogue became  known as the Consumer’s Bible. In the 1950s or so, Sears started opening brick-and-mortar stores, and by the mid-1970s, the brick-and-mortar business overshadowed the mail order catalogue.

Mismanagement, a failure to keep up with the times, and a large corporate structure led to a decline starting in the 1980s, exacerbated by the rise of Wal-Mart in the 1990s. Sears still had a lot of value after the turn of the 21st century, but not in retail. The value was in its properties and its stock, and eventually that declined as well.

And now, Sears—mismanaged to pieces, its mail-order business (and famous catalogue) a distant memory—has almost thrown in the towel. They’re fighting for their existence. Very few adults alive remember the store in its heyday.

But look at that trajectory. Mail order on one item only. Then more items. Then unrelated items. Then becoming one of the biggest companies in the world. Then adding brick-and-mortar.

Does that sound familiar? Think of it this way: instead of mail order, think online. Instead of watches, think books. And then realize that Amazon shares much of Sears trajectory, only on a slightly accelerated pace—and without the name changes and the obvious added partners.

Sears to Wal-Mart to Amazon. There is a direct line. Wal-Mart is still fighting for dominance, but they’re no longer fighting Sears. They’re fighting Amazon. And Amazon is probably fighting some other company with a good idea, some company that I’m not entirely aware of.

Why is that important?

Because currently, Amazon is the biggest online retail company in the world. (Wal-Mart is still the largest retailer, but Amazon has moved up to second there as well.)  Amazon is exceedingly important to the indie writer movement. In fact, indie publishing would not be where it’s at without Amazon’s innovation with the Kindle ereader ten years ago.

In that time period, a lot of self-published authors have used Amazon’s ecosystem to make themselves, if not wealthy, then at least comfortably well off.  Many of those writers don’t even market their work outside of Amazon at all, preferring to use the tools provided by Kindle Select to promote their series and their work.

Early on, writing advice for indies (as I’m going to call writers who work outside of traditional publishing) centered on an Amazon-only strategy. If you look at my earliest blogs on the publishing industry, back in 2009/2010, you’ll see me constantly defending myself against that very argument. I learned as a young freelancer to go wide—and that was back in the early 1980s. Relying on only one source for income—no matter how large that source is—is never a good idea.

. . . .

Having been in traditional publishing, with its weird rules and limitations, meant I had learned early on how angry readers get when they can’t get a book that they want. I didn’t want to replicate that experience for them, particularly as I took back control of my publishing, so I never even considered Select.

Although, I had to admit, I was envious at times of writers who could manipulate that system to raise their profiles—at least on Amazon. It would have been nice to have access to the same tools. Eventually, I developed a few new pen names (for a variety of reasons, and no, I’m not telling you who they are), and they experimented in Select.

The Select promotion tools are good until they’re not, as everyone who plays in that ecosystem knows. Amazon changes the system, and then the indies figure out how to best use that system, and then Amazon changes it again.

There have been complaints about Amazon and its practices from the start. But savvy writers have known that Amazon started this revolution, and no matter what they’ve done, we all owe them big for that.

But…then there’s the argument I’ve been making on this blog since at least 2010. Do not put all your eggs in one basket. Even if that basket is the biggest online retailer in the world.

I still get pushback on that advice. But not as much as I used to. Because some of the big pro-Amazon indies are beginning to see cracks around the edges of Amazon. There’ve been too many changes to Select, too many broken promises, too many costly mistakes.

Some of the formerly pro Select-only gurus are now quietly going wide. A few others, trapped in the ecosystem, are using other tools to make their novels available before they put the books into Select. They’re still gaming Amazon’s system, but they’re gaming it to keep the income coming—until they can move out of the exclusivity trap that they had allowed Amazon to build around them.

For the writers, though, who continued to argue that Select was the only viable place to play, October and early November were a difficult time. Writer after writer here in the U.S. noted that their international sales had declined dramatically.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

PG says that very few, if any, large organizations are unchanging.

Since he has watched the tech world, from the inside and the outside, for a long time, he has seen a great many changes.

Microsoft is not the same organization it used to be. Neither is Apple.

WordPerfect was a wonderful product and a superb organization in its day, but it’s gone now. Ditto for Lotus 1-2-3, Novell and Netscape. In some cases, former tech giants continue as zombie caricatures of their former selves, but the spark is gone.

The personal influence of a strong executive can profoundly shape an organization. Think of Sam Walton and Walmart. When that entrepreneurial executive leaves or dies, it is quite common for such organizations to change. The Sam Waltons and Steve Jobs of the next decades aren’t working for today’s Walmart and Apple. They wouldn’t fit.

Jeff Bezos and Amazon have a similarly tight bond. Amazon has mirrored Bezos’ personality in many ways.

But Amazon has become an extremely large company and the Bezos influence travels through lots of management levels and and subordinants’ decisions before it reaches indie authors and individual consumers. Bezos simply can’t know about everything Amazon is doing today and he’ll know even less next year.

PG thinks the Amazon plan to have two headquarters locations, which later morphed into three headquarters locations is Exhibit A in demonstrating that Bezos has taken his hands off the wheel.

While widely-dispersed major “headquarters” locations may make it easier to tap into a larger geographic pool of talent to fill the entry-level and middle-management jobs, PG suspects it’s going to be a management mess with queens and kings of little Amazon kingdoms sprouting everywhere.

Bezos’ ability to effectively provide vision, leadership and shape Amazon’s corporate culture is going to be substantially diminished. Any future Jeff Bezos-type Amazon employees who might have the talent to continue the level of innovation and organizational excellence he established are not likely to rise through this type of management structure. And their chances of catching Bezos’ attention and obtaining his help in rising through Amazon by their job performance will be slim.

 

Getting To The Stories You Love

9 November 2018

From Kristine Kathryn Rusch:

One of the comments I heard the most at this year’s Business Master Class was a bit wistful. And the comment usually came in a discussion about something else.

  • I sure would like to get to the place where I can do what you folks do: where I can write what I love.
  • As soon as this [insert detail] is over, I might be able to write what I love.
  • Writers who write what they love are really lucky. Sure wish I could get there.

Over and over and over again. Those phrases have been going round and round in my head, partly because I have a lot of compassion for the speakers, and partly in conjunction with other things that have happened this past year.

About a year ago, I wrote a blog post on burnout.  It, and the subsequent posts, got reprinted in the magazine for the Romance Writers of America, the Romance Writers Report or the RWR. I got a lot of email from the original blog posts and from the RWR reprint. I had hit a nerve.

I was aware of the nerve, but not thinking about it too much, except to realize that so many writers were on the hamster wheel of doom—trying very hard to write more and more and more to make the same amount of money they had made a few years ago. We’re in a mature market now, and the highs aren’t as high (and the lows aren’t as low). Things do change, sometimes daily, in this new world of publishing, but the business models remain the same.

Dean and I have also been planning a new series of online courses which we call the Futures courses. We learned long ago that most writers don’t look very far ahead in their careers. Writers have no idea how to sustain a career past the first few years. That kind of long-term career takes not only planning, but a certain mindset, which some writers never learn.

. . . .

It’s also not fun to do something because you have to do it or lose everything. It’s better to do something because you want to, or you have hit that point in your career (or in life) that makes a change possible.

As Dean and I planned  these futures workshops, we had discussion after discussion about what’s going on in indie publishing right now. In addition to the burnout, lots of writers who were the early adapters of self-publishing have disappeared. They quit, pulled their books down (!), pulled down their websites, and moved onto other things.

Even the early gurus of self-publishing have either given up or gone back to traditional publishing in whole or in part. Considering how outspoken some of them were about the evils of traditional publishing, you (I) have to wonder what caused the shift. And the silence. None of them are blogging any more.

I suspect I know. Because Dean and I have been around forever, we’ve seen a lot of writers come and go. In traditional publishing, the average length of a writer’s active career is about ten years. That clock usually starts with the first major professional sale, and ends when the writer either can’t handle the crazy of traditional publishing any more and/or when the writer can no longer sell a book to any traditional publisher due to a variety of factors (including but not limited to declining sales numbers, burnout, difficulty of working with the author, burnout, difficulty of working with the publisher, burnout).

. . . .

The thing Dean and I have come to realize is that indie careers have a shelf life as well. Most indie writers seem to be disappearing after five to six years of really hard work.

Much of that is burnout. Some of it, though, is that hamster wheel of doom and the mature market. When a market is new, it’s in a boom cycle and everyone gets rich. When a market is mature, it’s in a sustainable place where some get rich, while others make a healthy living, but nothing more.

The tricks of the boom cycle don’t work in the mature market, and making the shift to a different way of doing things is hard.

I’ve examined those things in the past, but the one thing I didn’t examine is a whole different side to the hamster wheel.

Writers who make a good living writing something they don’t want to be writing. Writers who aren’t writing what they love.

I think every long-term writer has gone through this phase, and the writers who end up with decades’ long careers have figured out a way through it.

. . . .

I’m seeing indies hit the same problems. Sure, they might have liked writing billionaire erotica a la Fifty Shades of Gray, but after a book every two months for the past five years, writing that subgenre has gotten old. And the indies find themselves in the place that Dean (and I) found ourselves in years ago: they’re making such a good living at what they’re doing that walking away is hard.

Or walking away will be detrimental to their families. I was single when I quit writing nonfiction. The only person who might have gotten hurt when I cut my expenses and took a day job was me. At that point, I rented an unfurnished apartment and couldn’t afford to buy a couch. I lived with one living room chair and a futon on the floor for a year—not something someone with a spouse and two kids can do.

That trapped feeling—the feeling that you have to keep writing this particular thing, whatever it is, no matter what—makes everything worse. You got into writing for the love, and now it’s no fun at all, but you need the income.

You are trapped by your success and that’s harder to get away from than being trapped by failure.

. . . .

The one option that is not sustainable, however, is to continue writing books you no longer enjoy writing with no way to get to writing what you love. At some point, you’ll have to add in writing books of the heart. If you don’t, you’ll burn out and vanish like so many indies before you.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

As PG previously mentioned, he spent an enjoyable week in October attending and presenting at the Business Master Class conference mentioned in the OP, organized by Kris and her husband, author Dean Wesley Smith. In addition to their writing, Kris and Dean regularly hold workshops on various topics for authors. See WMG Workshops for more information.

PG has a couple of responses to the OP.

Where is the Revolution Today?

The Passive Voice sprang from PG’s fevered brain in 2011. Since its beginning, PG has uploaded almost 18,000 posts, proof that a little OCD can go a long way.

The first post on TPV was titled, Imagine There are No Bookstores , based on a now-disappeared post by a small publisher which discussed Amazon ebooks and their potential impact on traditional publishing and bookselling.

This post appeared in February, 2011, the same month that the Borders bookstore chain filed for bankruptcy. This bankruptcy would remove 650 large bookstores from the market within a very short span of time. Publishers large and small took large writeoffs for books Borders had sold but would never pay for.

In the previous year, 2010, Amazon reported $14.9 billion in book sales.

In 2010, Barnes & Noble had 720 trade bookstores plus 637 college bookstores (acquired in 2009). Barnes & Noble launched its ebookstore in 2009 as well.

Barnes & Noble reported 2010 sales from its trade bookstores of $4.3 billion, down 4.5% from the prior year.

In 2018, Barnes & Noble, still the largest bookstore chain in the US, continues its long decline.

In 2018, Barnes & Noble had 630 trade bookstores. Barnes & Noble spun out its college bookstores into a separate independent business in 2015.

Barnes & Noble reported fiscal 2018 (April 2017-April 2018) retail sales of  $3.5 billion, down 5.4% from the prior year.

Amazon no longer publishes its book sales numbers in its annual reports to securities regulators or elsewhere that PG was able to locate, likely because, compared to the rest of Amazon’s sales, book sales are not large enough to be material from a financial point of view.

The Bookseller reported that Amazon’s 2017 revenues from book sales were up 46% in the UK.

In sum, the retail book business today is increasingly centered on Amazon.

Physical retail bookstores are in a continuing long decline. Publishers Weekly reports that, in 1991, there were 11 US bookstore chains that had 13 or more outlets, with total outlets topping 3,000. In 2017, the five chains on Publisher Weekly’s book chain list had 1,076 outlets. Just since 2011 the store count has fallen by 32%.

PG is going to cut off his expatiations at this point and continue them in another post.

Suffice to say, PG doesn’t believe that the revolution is over for authors and publishers. Electronic and communications technologies will continue to grow apace over at least the next several years and the population at large will continue to want stories, so the future is still bright for storytellers.

 

 

 

 

Surviving The Stupid

21 September 2018

From Kristine Kathryn Rusch:

Imagine my surprise, as I scanned through Twitter a few weeks ago, to see a writer I follow go after Tor for its library policies. Um…what?

Turns out that Tor, through its parent company Macmillan has started a program in which libraries cannot get ebooks of the latest Tor releases until four months after the book is released.

Remember this is traditional publishing, so velocity is important. How fast a book sells has an impact on whether or not that writer’s next book will even get an offer from the publisher. And here—stupidly—is a publisher that has decided that library ebook sales aren’t worthwhile.

Tor/Macmillan’s reasoning? To see if library ebook sales are the reason that the company’s ebook sales are so low. That thinking is so damn stupid that I can barely type the words.

Rather than go into the reasons Macmillan’s ebook sales are low which I can digress on for hours, let me share what Nate Hoffelder said on The Digital Reader in July, when this news initially broke:

Macmillan  has poor ebook sales because they have adopted a policy of discouraging ebook sales in favor of print sales. Macmillan adopted this policy in late 2009 when they conspired with Apple and 4 other publishers to violate antitrust law by forcing Amazon to accept what is called agency pricing, a system where the publishers set the price and retailers are prohibited from deep discounts and sales.

That is established historical fact, and so is the antitrust suit brought by the DOJ, Macmillan settling the lawsuit,  its punishment, and Macmillan’s return to agency in 2014.

Apparently, corporate think has decided that it’s better to decrease sales to increase sales. (How Orwellian.) They’ve also got on the bandwagon of punishing people with budgets and limited income. The enthusiastic readers on a book budget—folks who provide great word of mouth during that crucial velocity period—are not worth Macmillan’s time.

The problem is that these enthusiastic readers aren’t going to be able to purchase the books themselves. Many library users are unable to make regular ebook purchases, especially if the ebooks are priced at $9.99 and up, like the Tor books. I’ve seen arguments that the libraries will still get the paper books, but that doesn’t mean that these readers want paper books.

Tor/Macmillan believes that these readers can and should wait. Which is risky on the one hand—there are always new books to read—and idiotic on the other. The readers who want a book now are the book’s most dedicated consumers. Word of mouth has become even more important in 2018 than it was ten years ago, thanks to the advent of social media, online book sites, and all kinds of blogging.

. . . .

Let me tell you, as someone whose novels were traditionally published for decades, it sucks when your publisher makes a totally stupid decision that’s going to have a negative impact on your career.

If you’re a smart author, you’ll know what the impact will be. Most traditionally published writers happily know nothing about the business of publishing, so when they get their royalty statements and their sales are down yet again, or when they are unable to sell the next book in the series, or when their publisher cancels their fat multi-book contract because sales are down, those writers are surprised. (See my blog post on “Learned Helplessness”  to understand some of this.)

. . . .

This comes at a perilous time for Tor. Their founder, Tom Doherty, moved upstairs into an honorary position in March, and was replaced as President and Publisher by a long-time corporate middle management guy who might or might not do a good job. If this library thing is any indication… well, you already know how I feel.

I feel somewhat bad for the writers stuck in this library situation. Not entirely bad, mind you, because if they had learned business, they would know that their publisher has a habit of chewing up and spitting out writers like crazy, and has for decades. Three books and out, usually, unless something takes off. And it used to be that awards and award-nominations were enough to save a writer at that company. That changed as the bean counters rose to the top of the business, and will probably get worse now that Tom is gone. He loves science fiction, and would occasionally swoop in to save a great voice that wasn’t selling well.

I doubt that will happen anymore.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

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