Eye on the Publishing Business

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by James Scott Bell
@jamesscottbell

We’re over halfway through the year (ack!), so it seems an apt time to catch up on a few publishing business items. Here are five that recently caught my eye. Additions and prognostications are welcome in the comments.

Traditional Publishing’s Flat Sales

This from Jane Friedman’s Hot Sheet (subscription required; reprinted with permission):

For the first five months of the year, the Association of American Publishers reports that adult book sales are flat versus 2022 across all formats (print, ebook, audio), while children’s and YA sales fell by nearly 8 percent versus last year. The main weakness is in children’s hardcovers; as we reported last year, Barnes & Noble has become reluctant to stock such books due to high returns.

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So far Big Five publisher Hachette has seen profits decline 16 percent versus last year; the company blamed a lighter publication schedule, lack of bestsellers compared to 2022, and a downturn in the US market. CEO Michael Pietsch said, “Sales of backlist titles, children’s and Christian books, and general and prescriptive nonfiction faced particular challenges in a down market. … Backlist sales began to grow toward the end of the first half, and we anticipate a considerably stronger second half.”

Layoffs at Penguin Random House, Hachette, HarperCollins

Penguin Random House has been laying off staff. Some employees have accepted a “voluntary separation offer” (VSO); others have been given the pick slip. PRH CEO Nihar Malaviya put it this way in an email to the company:

As you know, the book marketplace has had several shifts over the past years. At Penguin Random House, we, too, have experienced these shifts and changes, especially during the last months. We are halfway through 2023, and while the book market has grown, particularly over recent years, we have also faced significantly increased costs in all areas across the board, and we expect these increases, as well as inflation, to continue….

We have been taking various actions over the last months to adapt our business to these market realities, and I’m sad to share the news that yesterday some of our colleagues across the company were informed that their roles will be eliminated. Everyone being affected has been informed directly in individual meetings. We long sought to avoid these actions, but unfortunately could not do so. This was the hardest decision I have had to make as a leader.

The same challenges are happening at Hachette and HarperCollins. HarperCollins is “working toward a 5 percent workforce reduction.”

Kindle Unlimited Payout is Up

In belt-tightening times, a swath of voracious readers opt into a subscription model in lieu of buying books. Amazon’s Kindle Unlimited is the largest subscription-reading service, and offers indie authors a cut of the pie, promotional opportunities, larger royalties in certain international markets (when the book is purchased), and preferential placement in their online store. For these benefits, the ebook must be exclusively in KU for a 90-day period.

KU authors are paid by the total number of pages read (KENP) in any given month. The KENP payout has hovered at just under 1/2 a cent per page for the past year. At the end of every month, Amazon sets aside a pot of money called the KDP Global Fund, to be paid out to authors whose titles are enrolled in KU. Each author receives a chunk of the pot proportional to how many pages of their titles were read. The more pages read, the bigger the payout. According to one source, for the first half of the year (H1):

[T]he KU pay-out has reached $278.2 million. The figure for H1 2022 was $251.2 million, so an increase year-on-year of $27 million, or 10.7%.

[It’s] worth adding here that in June 2022 the KU pay-out for the month was $38.1 million. This year, 2023, the pay-out was $47 million, which you can no doubt work out is $8.9 million up, but will perhaps be interested to know equates to a 23% rise. And on past performance we can expect to see a December pay-out of about $50 million if Amazon adheres to that pattern.

This tells me Kindle Unlimited remains a solid option for indie authors who are revenue driven. There has yet to be a strong enough competitor to offset KU’s exclusivity advantages, though Scribd has a footprint, and Rakuten’s Kobo Plus became available in the U.S. earlier this year. We await developments…

Influencer-Driven Publishing

A new publishing model is being rolled out by an outfit called Bindery. Recognizing that internet influencers—or “tastemakers”—are a powerful marketing avenue, the company is setting up a membership platform for these “bookish curators” to monetize their “communities” and use a portion of revenue to become, essentially, a book imprint.

Bindery is a membership platform like Patreon or Substack, but designed for bookish curators. Tastemakers invite core fans into an exclusive community space for access to them and their extended content. Unlike other membership platforms, tastemakers with large communities on Bindery, upon invite, may opt to use a portion of their earnings to fund the publication of new books by authors their community will love. Use your platform to make it possible for an author to get a meaningful book deal, partner with them to bring it to life, and share in the book’s success.

Manuscript acquisitions will happen this way:

To find titles, Bindery will deal directly with literary agencies, approaching them … to solicit manuscripts that fit the interests of individual tastemakers. From there, Bindery will hand over submissions to tastemakers for consideration. Tastemakers’ evaluation process may be “in dialogue with their paywalled community members,” said [co-founder Meg] Harvey…. She added, “Once tastemakers identify a book they’re excited about and want to greenlight, Bindery offers a contract to the agency—between the author and Bindery—and manages the author relationship directly.” Bindery offers a standard $10,000 advance.

When the books hit the market, authors will make 50% of the net earnings, tastemakers 25%, and Bindery the other 25%.

Is Bindery’s vision of scores of micro-imprints “a recipe for an oversaturated market” (PW) or “a return to the days of independent publishers leading the industry: taking risks, uncovering new voices, and igniting a passion among readers who want to see more creativity and diversity in the publishing ecosystem” (co-founder Matt Kaye)? Time, as they say, will tell.

How Readers Pick What to Read Next

Over at Written Word Media, a survey found that the book description and author are the most significant factors for how readers choose a book, followed by book cover and average review score. While all are obviously important, the description is vital. But writing marketing copy is often not in an author’s skill set.

Which is why so many authors are using AI to generate ad copy. I know it’s the shiny new toy, and has some beneficial uses (like brainstorming). But my advice is to learn how to write copy on your own. It’s really not that hard and it’s good exercise for your creativity muscle. You can start with Sue’s post on the subject. Practice, write, show it to friends, get feedback.

Over to you. What have you noticed lately regarding the buying, selling, and publishing of books?

33 thoughts on “Eye on the Publishing Business”

  1. Influencers – ANOTHER layer on top of agents and publishers to take a cut.

    Maybe I’m just wishing I had their numbers, the authors who can afford to share the results of their work (authors really do put in the largest number of hours) to get to readers.

    And I won’t go near AI even for ad copy – I’m not attracted by the idea of a mishmash of ‘the best’ ads for mainstream fiction as MY ad copy.

    It’s not at all how I thought a writing career would go – I was just going to write a nice academic mystery series, one a year, like Sue Grafton but in an American Inspector Morse style. After I retired from physics.

    Ah, well – the best laid plans gang aft agley. Why should mine be any more robust than anyone else’s?

    • Under the old, traditional model there was really only one way to go, from agent to publishing house. All that has changed, and all these variations are a roiling sea. But resilient authors are corks floating on the waves. Just keep aware and keep writing.

  3. Either I don’t have enough caffeine in me yet or I missed something. Did the backlist news contradict itself?

    Thanks for keeping us up-to-date, Jim. Fascinating data!

    Question: If your backlist is already widely distributed, can you enroll those books in KU?

    • If I’m reading him correctly, he was comparing last year with the first half of this year, and seeing hopeful signs in the latter.

      Question: If your backlist is already widely distributed, can you enroll those books in KU?

      Sure, but only if you remove the books from those other channels for each 90 day period. Many writers have tested the KU waters this way.

  4. Great roundup of where publishing is at the moment, Jim. Fascinating info on what’s happening with tradpub. I hadn’t heard of bindery, it will be interesting to see how they do.

    For my part, indie publishing continues to mature. The “gold rush” days are long behind us now. I’m concerned about AI but believe that discerning readers will prefer human written fiction over the generated results of a “plagiarism engine.” I refuse to use AI for copy editing as well.

    Sales for my first cozy mystery have included a surprising number of print books, something I didn’t see with my fantasy novels. Less a market trend than a possible preference of certain mystery readers I’m guessing.

    I have a prequel novella this month, “Farewell, My Cooke” (riffing in cozy fashion off of Chandler 🙂 that is in a multi-author promo run by a small press. It’s garnering a number of downloads, so that route to building a newsletter is still viable. As an indie author who is wide, a newsletter (AKA my reader group) remains a vital way to reach readers.

    • Dale, I too am seeing a surprising number of print book sales. The last couple of months, sales of my books in print were greater than ebook downloads.

      Is this a trend? Too soon to tell yet but I wonder if readers are becoming disenchanted with reading on a screen? And are falling back in love with physical books?

      • Debbie, good to know it’s not just me. I’d love to see this continue and broaden. I had read somewhere before I published “A Shush Before Dying” that mystery readers do love print, but it was still a surprise to see it actually happen with my sales.

        • I think I’ve read that millennials by and large prefer print. I know my two kids do. Back in 2010 so many people were predicting the death of print. But it seems to be holding strong.

    • RE: PRINT… I’m still seeing 10:1 for ebook:print orders. That’s both “last 90 days” and “last six months.” I’m guessing it may be both Genre and Generational-based. Not sure.

  5. Jim, thanks for compiling this update. It reinforces my gut feeling that the industry is experiencing downturns, based on reading trade publications and talking with other authors.

    Makes me glad to be indie b/c I expect the trad world will undergo even more layoffs…of even more authors.

    I totally agree with exercising our own brains rather than falling for the seduction of AI shortcuts.

    Let’s hear it for being corks on a roiling sea!

  6. Thanks for the update, Jim.

    Thanks for the link to Bindery. It will be interesting to see how successful their model becomes. If it takes off, it would seem to give some advantage to new writers (new voice), IF they have an agent.

    • The bindery model makes sense in this digital-celebrity world. But I wonder if their contract has a right of first refusal on the next book, and what the return of rights clause is like.

  7. In regards to social influencers, I joined TikTok this year and while in the beginning, I was posting a video a day, I’ve dropped off dramatically. I never noticed an impact to my sales. What I find fascinating about the platform is how readers talk about books.

    As a reader, I want to be entertained. I’m shallow and don’t look for a deeper meaning (I read mystery and fantasy). However, listening and watching these readers I’ve learned how they evaluate books and just how passionate some of them are as readers.

  8. Just call me confused. I’m an author who chose to publish wide. As a reader, I buy exclusively at Kobo. I recently joined their Kobo Plus subscription program. Imagine my surprise when I saw John Gilstrap’s books offered as part of Kobo Plus. I see they are also offered as part of KU. How does that work?

    I recently read one of Val McDermid’s newer offerings through Kobo Plus. The ebook cover price is $12.99, out of my limited budget for purchases. Wow, what a deal, to get to read it and loads of other books for my $8/month subscription. This expansion of subscription models seems to level the playing field between publishing house authors and indies and takes a bite out of the skyrocketing price of books. I’ll be listing my books with Kobo Plus now that I’ve seen the program from the reader side.

    • Now there’s a mystery for you. I have no idea how Brother Gilstrap can be in KU if he is also in Kobo Plus. I’m not sure Brother Gilstrap himself knows; he is trad pubbed. But I’d love to find out. Is this some sort of publisher white glove treatment that excludes indie authors?

  9. Thanks for the update, Jim! My newbie-indie-author head is spinning. It’ll take me awhile to pick it apart and see how I can use all these bits and bytes.

    One thing I agree with, though, is that AI should not be allowed to take over my creativity.

    Can you say, “Hi. My name is Dave.”? 🙂

    Happy Sunday!

  10. So far this year, my print sales represent 0.03% of my total sales. Actually it’s probably less, because these are just Amazon numbers, so all my Apple, Kobo, and Nook sales, which are all digital, aren’t included.

  11. Thanks for the update, Jim. I am one of those corks bouncing around on the ever-changing tide. But I have to admit: it’s a lot of fun. 🙂

    I love the idea of subscription programs, and I have my books in Kobo Plus, but I don’t like Amazon’s KU exclusivity requirement, so I won’t be putting any of my books there. (I hope John Gilstrap will let us know how his books are in both Kobo Plus and KU.)

    • I’m with you, Kay. Kobo doesn’t require exclusivity, and I’ve doubled my income (or more) since enrolling my books in Kobo Plus.
      My ebooks (and audio) are also available through libraries, which is another revenue source. Not only that, but I’m reaching a wider audience of readers.
      And I’m willing to bet Brother Gilstrap’s publisher is the one getting his books in multiple channels. They play with a different rulebook.

  12. A friend of mine who has self published (I think) three collections of short stories says that ebooks and electronic files are evanescent and easily discarded/eminently forgettable but that a printed book is a physical reality you can hold in your hand, put on a shelf and take it down and reread it next year, and he thinks that’s significant.

    Brother Bell mentions that millenials by and large prefer print. I do not know whether the great mass of readers prefer this, but, being an artifact the printed book says “Read me dammit!” where it sits on the pile of TBRs I have. Compare to my spouse’s 170 or so ebooks on her ipad and she has read maybe half a dozen? I’ve got a few and I rarely look at them. You can’t write in the margins or dogear the pages either. The same holds true for streaming services as well.

    Maybe there is a connection to some folks’ seeking for authenticity and connectivity because they have the sneaking feeling they’re being used like Cottonelle. It’s kind of like niche marketing in a way and why farmers markets, Niman Ranch and Whole Foods seem to prosper despite the reports of their demise.

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