The Business of Writing

Nine Lessons from a Small Indie Publisher

13 February 2019

From Publishing Perspectives:

Last October here at Publishing Perspectives, I wrote about starting my new publishing house—actually more like a publishing room—Mensch Publishing.

I promised/threatened an update when its first book hit the streets, and February 7 saw the release of Guy Kennaway’s affectionate, funny, and important story of his mother’s desire to end her own life. Time To Go will be available around the world in English, in print, in ebook, and in audio formats.

What, if anything, have I learned? Perhaps nine lessons to follow up a Christmas theme.

Lesson 1. Finding the right book is by far the most important thing, but getting the small things right is vital and unbelievably hard work.

Lesson 2. Being a small (tiny) independent publisher is liberating in its avoidance of group think and corporate bureaucracy but challenging in its complexity. I have more than 1,000 emails in my files all for one book and that’s computed after I’ve assiduously deleted the several thousand I was copied into for no reason.

Lesson 3. Treat your suppliers with respect. I’ve taken a policy decision to pay cash owed into a freelancer’s account the same day I receive the invoice. My cash flow is important but respecting other people’s cash flow generates goodwill, and better relationships are vital for a small enterprise—perhaps for big enterprises too.

Lesson 4. Everything costs more than estimated, and income is always less. Those who see publishers, large or small, as greedy monsters making large profits should try it for themselves.

. . . .

Lesson 8. Managing a site. Tweeting. Communicating with authors, agents, sales, distribution, rights, design, production, finance, agents. Setting up accounts with Publishers Licensing Society. With Nielsen. All take time, obsession, attention to detail and all are essential.

Link to the rest at Publishing Perspectives

When PG read the OP, he was curious about whether a publisher with a single employee (the author of the OP) used the same types of contracts and paid royalties at the same rate a much larger publisher would. PG notes from the book’s Amazon listing that the one-person publisher is pricing the book at the same level a major international publishing house would.

The Beginning of the End for Patreon

9 February 2019

From The Digital Reader:

There comes a time in the life of many companies when the owners (or investors, or vulture stockholders) decide that they want to extract more profit than is healthy for the company to survive. This is one of the things killing American newspapers, and it’s even impacting B&N, and now it’s about to kill Patreon.

Patreon is fairly healthy, but apparently not profitable enough for its capital investors.

From CNBC:

The number of active patrons supporting artists on the platform in 2019 has seen significant growth, up 1 million over the last year, the company said. The company is also on track to pay out $500 million to content creators in 2019, pushing the company to surpass $1 billion in payouts since its inception in 2013.

Under the company’s current business model, 90 percent of funds are paid directly to content creators. Patreon takes 5 percent, and the remaining 5 percent covers transaction fees.

Patreon CEO Jack Conte said in an interview with CNBC that the platform will soon be facing the challenge of maintaining a profitable model as the company continues its growth.

“The reality is Patreon needs to build new businesses and new services and new revenue lines in order to build a sustainable business,” Conte said.

The company does not currently provide contracts, which allows users to retain 100 percent ownership of their work and full control of their brand.

The company plans to provide creators with new “value services,” like options for merchandising, to generate new revenue. Creators will be given the opportunity to participate in these services, and it could ultimately reduce Patreon’s generous 90 percent pay-out model.

What this means is that Patreon’s investors want the company to be more profitable, and if necessary they’re going to force the company to pay its users less.

. . . .

I do not currently use Patreon; I closed my account when they tried to jack up costs in late 2017. But I had been thinking about going back to Patreon in order to fund the blog through donations and pledges.

Now I think I’ll just still with Paypal (not exactly a nice company either, but beggars can’t be choosers).

The thing about Patreon not being profitable enough is that Paypal has a very similar model and they turn a profit on a smaller cut of the funds they transfer. Paypal only collects payment processing fees (the 5% transaction fees mentioned above) and yet Paypal is so profitable that they spun off Ebay as not being worth the hassle.

Of course, Paypal had a unique advantage when they were starting out; they were acquired by Ebay, which then forced buyers and sellers to use the service (when you’re growing your business, there’s nothing like having a captive audience who can’t say no).

. . . .

Folks, Patreon’s attempts to increase its profitability are doomed not because this is going to drive away users but because their niche is too damn small. Patreon only handles one small segment of payment processing (what are essentially charitable fundraising campaigns); in comparison, Paypal covers dozens of segments.

Link to the rest at The Digital Reader

PG suggests that, unless an internet-based business has some sort of moat around it (patents, must-have technology, unique voices or expertise, etc.), raising prices is very difficult because someone else is always ready to clone the business plan and offer the service for less.

PG is only passingly familiar with Patreon, but is not aware of any patents or similar limits to those who might build a similar platform for the same purposes – providing an online means for people to help fund various creative endeavors.

However, while PG was looking at Patreon’s Terms of Use to see if there were any mentions of patents, trade secrets, etc., he did find a rights grab that may be troubling to authors and other creators:

You keep full ownership of all content that you post on Patreon, but to operate we need licenses from you.

By posting content to Patreon you grant us a royalty-free, perpetual, irrevocable, non-exclusive, sublicensable, worldwide license to use, reproduce, distribute, perform, publicly display or prepare derivative works of your content. The purpose of this license is to allow us to operate Patreon, promote Patreon and promote your content on Patreon. We are not trying to steal your content or use it in an exploitative way.

You may not post content that infringes on others’ intellectual property or proprietary rights.

Patrons may not use content posted by creators in any way not authorized by the creator.

On the front page of Patreon’s site, the company makes a representation that some might construe as conflicting with the quoted portion of the Terms of Use:

You own your content

There are no contracts to sign and you retain 100% ownership of your work. You made it, not us.

Under Patreon’s equivalent to an FAQ, the following is a question and answer about ownership of creative works:

Wait, does Patreon own my content?

Nope! Your content is 100% yours, unless a record label or studio owns part of it, in which case it’s partly theirs too, but it’s definitely not Patreon’s — not even a little.

PG suggests that Patreon’s Terms of Use are, in fact, a contract between Patreon and its creators. It is a “click-to-accept” contract with an electronic signature by the creator which is not physically “signed”, but is still enforceable by Patreon against the content creator.

In the United States, the Electronic Signatures in Global and National Commerce Act (15 U.S. Code Chapter 96) explicitly authorizes electronic signatures in interstate commerce and makes electronically-signed contracts enforceable. Here are the first paragraphs of the law:

(a) In general Notwithstanding any statute, regulation, or other rule of law (other than this subchapter and subchapter II), with respect to any transaction in or affecting interstate or foreign commerce—(1)a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and
(2) a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.

In particular, the quoted portion of the Terms of Use above explicitly create a license, which is most definitely a species of contract, between the content creator and Patreon.

Furthermore, the license cannot be unilaterally canceled by the content creator – it is a “perpetual, irrevocable”, “sublicensable, worldwide” license.

What about all the “you own your content” messages on Patreon?

In a traditional publishing contract granting a publisher all rights to an author’s book, the author continues to “own the content” in that the author is the owner of the copyright to the book. However, the publishing contract grants the publisher the exclusive worldwide right to print, publish and sell the book in all its various forms, including the right to license subsidiary rights for movies, television shows, etc.

Under such a contract, the author owns the content, but can’t do anything with it because the publishing contract grants the publisher all rights to exploit the contract.

Let’s briefly unpack the licensing paragraph:

By posting content to Patreon you grant us a royalty-free, perpetual, irrevocable, non-exclusive, sublicensable, worldwide license to use, reproduce, distribute, perform, publicly display or prepare derivative works of your content. The purpose of this license is to allow us to operate Patreon, promote Patreon and promote your content on Patreon. We are not trying to steal your content or use it in an exploitative way.

PG suggests that the first sentence is inconsistent with the second sentence in tone and, perhaps, in the manner in which it may be enforced.

The portion of the first sentence beginning with “you grant” is precise and definitive. The second sentence is squishier. “The purpose of this license is to allow us to” . . . .

Under general principles governing the interpretation of contracts, if there is a conflict between a specific and a general provision, the specific provision will govern. If PG were representing a content creator, he would suggest that the second sentence above be reworded for clarity:

“The license granted in the preceding sentence is expressly limited to grant Patreon the ability to include content created by the author in various ways that are reasonably calculated to promote the author’s content on Patreon’s website. All other rights of author in and to the content are expressly reserved to author, including, without limitation, the exclusive right to grant others the right to print, publish, license and/or sell the content and/or any derivative rights arising from the content to any third party. After termination of this Agreement for any reason, at author’s request, Patreon will provide a document disclaiming all rights to author’s content if reasonably requested by author disclaiming any and all rights in and to the content.”

 

 

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.

.



The Disastrous Decline in Author Incomes Isn’t Just Amazon’s Fault

20 January 2019

From Electric Lit:

[T]he Authors Guild published its 2018 Author Income Survey.

. . . .

This was the largest survey ever conducted of writing-related earnings by American authors. It tallied the responses of 5,067 authors, including those who are traditionally, hybrid, and self-published, and found that the median income from writing has dropped 42% from 2009, landing at a paltry $6,080. The other findings are similarly bleak: revenue from books has dropped an additional 21%, to $3,100, meaning it’s impossible to make a living from writing books alone.

. . . .

The Authors Guild has a pretty clear idea of what’s behind this disturbing trend, namely the rise of Amazon, which severely cuts publishers’ margins on book sales. Authors ultimately shoulder the cost because publishers offset their losses by giving out smaller author advances and royalties. The platform’s resale market also means that, within months of publication, books are being resold as “like new” or “lightly used,” a scenario in which no new money goes to the actual author of the book. The Authors Guild acknowledges that Amazon isn’t the only place where authors are losing out, but the culprits are of a kind: electronic platforms like Google Books and Open Library claim fair use rights in order to offer classrooms products without paying authors royalties. This is problematic because those royalties, a kind of pay-to-play model of compensation, are how artists have made their money ever since it went out of fashion to have a patron who could support your entire career.

. . . .

This year’s Authors Guild Survey is right to focus on the harm Amazon does to working writers; personally, I’ve made my 2019 resolution to put my money where my mouth is and buy all my books at local, independent bookstores. But the survey results made me wonder if that would be enough—if it’s possible, in the age of the Internet, to reverse the belief that content should mostly be free. By content I do mean to encompass all ends of the artistic spectrum, that ill-defined mass of high and low entertainment and art and news that rubs up against each other on the web in a way that makes it more difficult to separate out, and perhaps less meaningful to do so. Basically, people are insatiable for this panoply of words and images; they want mass input. If you do a Google search for “apple pie recipe,” for example, the top results include both Pillsbury’s website and the personal blog of a home cook. The point isn’t that there is anything wrong with the latter, it’s that discernment has taken a backseat to access; we want all the apple pie recipes, all the videos and photographs and articles and books. We are here now. Entertain us.

. . . .

People have always felt a sort of ownership over art, and that’s actually good. It’s why you keep a book on your shelf and return to it, it’s why you hang a picture on your wall that speaks to you. But when this gets out of hand and you mistake access or a personal connection with your rights, as happens so often in our Internet age, it leads to a dangerous sense of entitlement. That’s why readers feel empowered to complain, directly to the creator, that a book or show doesn’t have absolutely everything they want: the romantic pairing they’d hoped for, the language they find most friendly, the ending they desired. And it’s also why, for instance, the last Harry Potter book leaked on the internet before it was officially published: fans saw the book as something they were owed, not the product of labor that deserved compensation. Not that J.K. Rowling needs more money—but she, and all authors, deserve to have their work recognized as work.

. . . .

Consumers hold a pernicious power, so this trend towards free content won’t reverse itself unless we want it to. This is a sad thing, and we will all be much worse off if we can only hear stories from people who can afford to write. Nicholas Weinstock, a Guild Council member, said: “Reducing the monetary incentive for potential book authors even to enter the field means that there will be less for future generations to read: fewer voices, fewer stories, less representation of the kind of human expression than runs deeper and requires and rewards more brain power than the nearest bingeable series on Netflix or Amazon or GIF on your phone.” Maybe we will all get what we think we’re entitled to — free art — but what kind of art will that be?

Link to the rest at Electric Lit

While we will never know for certain, PG suggests that the rise of Amazon has increased the number of books sold in the United States (and maybe elsewhere) by a substantial margin. Absent Amazon, fewer people would be reading books today.

Not everyone enjoyed the trips to the bookstore in pre-Amazonian days. If a reader’s interests were much out of the mainstream, there weren’t many books available. If finances were a little tight, a shopper might not be in the mood to pay.

PG just checked the Top 10 Hardcover Fiction Bestsellers at Barnes & Noble. The average suggested retail price for the Top 10 was $25.59.

For some visitors to TPV, paying almost $26.00 for a novel would seem reasonable. For others, it might not.

Let’s assume we have an avid reader of fiction who reads four books per week. Even PG can do the math in his head.

Over $100 per month for books. Almost $6,000 per year for books.

Who knows more about pricing anything to maximize sales, the CEO of a New York publisher or Amazon?

Who knows more about pricing anything to maximize profits, the CEO of a New York publisher or Amazon?

Traditional publishers try to cultivate a particular image of books as a unique product, unlike any other. (Corinthian leather!)

Like it or not, books are a mass-market product that competes for consumer dollars. Books don’t just compete with other books. Books compete with every other product a consumer might be thinking about purchasing.

If you want to price for the carriage trade, open an art gallery. The New York book business doesn’t work without lots of titles that sell in the tens of thousands or hundreds of thousands. That’s a mass market.

PG suggests that “Amazon is causing the sky to fall on the book business” is erroneous. If the traditional book business is to be saved from its own management over the next ten years, Amazon will do the saving. A book business that sells an electronic version of its principal product for $3.00-7.00 has a better future than one which appears to prefer selling a physical copy of its principal product for $28.00.

 

New, Larger Authors Guild Survey: Falling Incomes for US Writers

9 January 2019

From Publishing Perspectives:

In one of those quirky coincidences of news coverage, a familiar number has arisen in the top-line reporting from the United States’ Authors Guild about author incomes.

. . . .

Since 2009, their newly released report says, median incomes for authors from writing have fallen by 42 percent.

And when the United Kingdom’s counterpart survey results were announced in June of last year, the Society of Authors reported that the Authors Licensing and Collecting Society had found that median incomes for professional writers since 2005 had dropped the same amount: 42 percent.

. . . .

The sample comprises input from 5,067 published book authors. For the first time, the [Authors Guild] expanded its survey range, requesting responses not only from its own membership but from members of 14 additional writer organizations. That overall group numbered 9,288 people.

. . . .

·         53 percent said they consider authoring books their primary occupation, spending half or more of their work time writing

·         56 percent said they write fiction

·         18 percent said they write literary fiction

·         38 percent said they write genre fiction

·         22 percent said they are academic, scholarly, or textbook authors

·         18 percent said they write general nonfiction

·         9 percent said they publish books to advance their work or personal brand

·         46 percent said they’re traditionally published

·         27 percent said they are strictly self-publishing

·         26 percent said they are both trade- and self-published—the guild notes that “slightly more than half of the respondents have done some self-publishing”

Taken together the responses reported by the full sample of participating published authors indicate that their median income from “all writing-related activities” was US$6,080, down three percent from the guild’s sruvey work in 2013, and down from $10,500 in 2009.

. . . .

There is what appears to be a brighter spot. Authors identifying themselves as full-time, when reporting “all writing-related activities,” showed a median income that was up 3 percent over 2013, coming in at $20,300. The guild points out, however, that this is still substantially lower than the $25,000 median income that class of writer reported in 2009.

. . . .

Self-published writers responding to the survey overall reported earning 58 percent less than trade-published authors in 2017, even while citing what the guild says was a 95-percent increase from 2013 to 2017. (In the top decile, the indies had a median of $154,000 while the trade-authors reported $305,000.)

Not only did self-published romance and romantic suspense writers report median incomes “almost five times higher than the $1,900 median author-related income for the next highest-earning self-published genre category of mysteries and thrillers,” the guild writes, but “the median author-related income for self-published romance and romantic suspense writers was only $50 more in 2017 than in 2013, which may indicate that self-published romance writers as a group have reached a plateau for earnings under current business models.”

. . . .

The organization also points to “blockbuster mentality” as hurting authors, along with those stubbornly low ebook royalty rates of 25 percent and increases in deep discounting.

. . . .

Cal Reid at Publishers Weekly does a good job of summing up the Amazon-related commentary of the survey, “Unsurprisingly, Amazon—described as a dominant force in bookselling and book publishing—figures prominently in the income survey, cited as both a positive and a negative force.

“Amazon has ‘democratized’ publishing, enabling more people to publish books than ever before and the survey found that 76 percent of self-published authors used one of Amazon’s platform. Amazon’s requirement that authors sell exclusively on their platforms limits the amount of money they can make by being forced to participate in Kindle Unlimited and receiving only a 35 percent royalty on books priced at over $9.99, the report says.

“Moreover, the survey found, Amazon’s dominance over online bookselling (the e-tailer controls 72% of the online market, the report found) forced traditional publishers to effectively suppress the income for traditionally published writers. ‘Amazon puts pressure on them to keep costs down and takes a large percentage, plus marketing fees, forcing publishers to pass on their losses to authors,’ the report said.”

. . . .

Over 2,000 authors had average publisher royalties of almost $32,000; close to 1,700 self-published authors reported royalties of just over $31,000.

Link to the rest at Publishing Perspectives

PG suggests traditional publishers could increase the royalties they pay to provide increased income for traditionally-published writers.

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 Writer’s Vision for 2019

23 December 2018
Comments Off on The Writer’s Vision for 2019

From C.S. Lakin:

As 2018 winds up, I’m revisiting an in-depth look at strategic planning for writers that I published six years ago. It’s all still perfectly relevant. In last week’s post, I introduced the four things we need to look at when planning our writing careers: visionstrategytactics, and action. Rather than have a nebulous idea of what we want to achieve as writers, it’s helpful and wise to think about the goals we want to reach.

Then we want to take our vague vision and form it into something not only specific but laid out with reasonable milestones to reach at certain steps along the way.

By transforming our vision into doable steps, we can measure our success, reevaluate the milestones and goals as we go along, and hone that vision into a reality with its resultant rewards.

The first thing we need to explore regarding strategic planning is our vision. That equates to a clear mental picture of what you want your career to look like by a certain date, such as the end of one year, two years, and even five years. If you don’t have any long-range goals for your career, then you may not achieve much, and your efforts to succeed as a writer may be haphazard and scatter-shot

. . . .

Last week I encouraged you to freewrite some of your dreams—imagine what your ideal successful writing career looks like in specifics. When you take time to dream, you can be as ambitious, outrageous, or ridiculous as you want. This is your dream. We all know the truth of these famous quotes:

  •  “All our dreams can come true, if we have the courage to pursue them.” (Walt Disney)
  • “A dream doesn’t become reality through magic; it takes sweat, determination and hard work.” (Colin Powell)
  • “There are those who look at things the way they are, and ask why . . . I dream of things that never were, and ask why not?” (Robert Kennedy)

. . . .

Now, fill in these blanks by answering this question (compliments from Randy Ingermanson, who has such great resources at his blog www.advancedfictionwriting.com): In ____ years this is what I want my life to look like: (Do this for each period of time for which you are setting up your vision.)

  • I will be having a wonderful time writing ___________________________________________ (What do you want to be writing about/what kind of writing?)
  • I will be earning $____________ from my day job each month, working _________ hours per week doing ____________.
  • I will be earning $____________ from my writing job, working _________ hours per week.
  • I will also be doing these fun or cool or worthwhile things: ______________________________________________________ (because you also have a life and other things are important too).

If you are going the indie publishing route, you will want to add these:

  • I will have ___________ ebooks for sale by this benchmark date.
  • Each ebook will be selling ____________ copies per month and earning me $______________ per month.

If you are looking to get traditionally published (or have more books published via this channel), you may need something like this in your vision:

  • I will have landed an agent contract by this benchmark date.
  • I will have gotten a publishing contract for this novel ______________ or this many novels ___________________.
  • I will be selling _________________ copies per months of my published books and will have earned $ ________________ royalties by the end of this benchmark date.

Link to the rest at Livewritethrive.com

and thanks to Joel for the tip.

The Measures That Matter

16 December 2018

From Publishers Weekly:

A fellow publishing professional told me recently that she wished hybrid publishing had a different name—that it would be better if hybrid publishing could be clearer, sexier somehow, as if that would solve its lingering challenges. But there is no name hybrid publishing could adopt that would change the fact that it’s a gray zone—between traditional publishing and self-publishing—or that it’s an emerging model that’s still being defined.

The Independent Book Publishers Association took a giant step earlier this year to codify hybrid publishing by laying out nine criteria that publishers must meet to be called hybrid publishers. The criteria are important because hybrid publishing, despite its unsexy name, does have clear appeal. It’s getting attention. The industry is writing about it and therefore further codifying and validating it. And because the business model is one in which authors pay, service providers and other entities that do not meet the criteria are calling themselves hybrid because it behooves them to do so.

Not all of these players are sinister. I’ve talked to plenty of service providers who say, “We’re hybrid. We meet most of the criteria.” The issue is that most isn’t enough, and hybrid publishing will only be fully embraced and legitimized once the good actors understand that aspiring to be hybrid and being hybrid are two separate things.

Hybrid publishing has, in fact, been around for as long as publishers have existed. In its simplest definition, hybrid publishing is traditional publishing in which authors invest in their own book projects in exchange for higher royalties. On the front end, the difference comes down to the money and who pays; on the back end, reputable hybrid publishers must adhere to the industry’s best practices and standards. Traditional publishers have been cutting these kinds of deals for decades, and often the authors who want them are the savviest and most entrepreneurial: they understand that there’s a certain insanity to giving up over 90% of their earnings and that the reality of a big advance is that it has the potential to be a career killer.

. . . .

One editor, quoted in a 2014 Publishers Weekly article titled, “The Rise of the Seven-Figure Advance,” in attempting to explain these enormous advances, said, “The whole pool of talent is shrinking. There are fewer publishers, fewer slots, and fewer submissions, so… the higher the quality of the project, the more you’re likely to get.”

The talent pool is not shrinking. Far from it. It’s just that there are fewer “sure bets”: the debut (often young and attractive) literary ingenues and celebrities. Publishers cry poor and then throw a million dollars on red. What’s actually shrinking is any space within traditional publishing for new ways of thinking about how publishers might do business. Those who think outside the box, as always, are the indies.

The big question that continues to challenge hybrid publishers is how they can prove they have a stake in projects if they’re not paying for them.

Link to the rest at Publishers Weekly

PG has responses to a couple of issues raised in the OP.

  1. A fellow publishing professional told me recently that she wished hybrid publishing had a different name – Perhaps it could be called Big Five Bankruptcy Insurance.
  2. The big question that continues to challenge hybrid publishers is how they can prove they have a stake in projects if they’re not paying for them. – Include a clause in the publishing agreement that permits the author to terminate the agreement and regain all rights to the book(s) upon reasonable notice – one year should work.

PG also cautions that a hybrid publisher is not the same as a hybrid author.

PG also double-cautions that more than one “hybrid publisher” is really operated to rip off authors without providing any meaningful commercial value.

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