Jockeying for Position in the Muddy Publishing Future

James Scott Bell
Twitter.com/jamesscottbell



His father was a mudder. He loves the slop. Cosmo Kramer, Seinfeld



The future of the book industry got a little murkier this week. The Department of Justice, no less, thickened the soup with its announced intent to go after five of the “Big Six” publishers — plus Apple — on charges of collusion. The alleged nefariousness dates back to the wholesale versus agency controversy at Amazon.
Amazon was setting e-book prices lower than the big publishers desired. The pubs were afraid consumers would get used to lower prices, thus cutting into their margins. Also, there was major concern about undercutting a big cash cow for traditional publishing: hardcover frontlist titles. And, of course, they all worried about the future of brick-and-mortar stores as Amazon gobbled up more of the distribution pie. 

So Steve Jobs comes along (allegedly) with a plan to take major e-book business away from Amazon. With the iPad just getting fired up, Jobs (allegedly) went to the Big Six and proposed going into an e-book agency model agreement with them (Random House didn’t join the circle then, so is not part of the DOJ lawsuit). In return, the publishers would agree to keep their books off Amazon if it sold them at a lower price. In effect the five big publishers, as one, told Amazon You give us the agency model or you don’t get our books. 
The players, IOW, were jockeying for position with the future in mind. This is what big business does. It’s understandable and even desirable in a free market economy so long as the businesses are not running afoul of anti-trust laws.
Amazon, not happy with being forced into agency, decided to take on the publishing industry directly by mimicking it. So they went out and hired industry veteran Larry Kirshbaum to head up the effort. Amazon subsequently made some big name signings – Deepak Chopra and Barry Eisler, for example.
More jockeying.
And now comes a dark cloud dumping rain — the United States Gummint. The track is suddenly soaked and the mud is kicking up all over everybody.
Who is going to be the best mudder? Who is going to be left behind?
That remains to be seen. But right now it looks like agency pricing will be escorted off the track. If publishers are forced back into wholesale, Amazon will be sitting even prettier than it is now, prices will once again trend downward, and publishers’ margins will shrink. There will be renewed howls of “predatory pricing,” but the DOJ well knows that’s a much harder case to make. So Amazon goes back to selling at loss-leader prices which, in turn, will trickle down to brick-and-mortar stores where margins are razor thin anyway. More stores will probably close. Your local Barnes & Noble, for instance. There is a whole interlocking spiral here that is beyond the scope of this post.
My main interest is in what this all means for writers. For the last couple of years the self-publishing boom has been a net-gain for writers, especially those with a track record. And a backlist. But even new writers who haven’t been able to get inside the gates of the Forbidden City are seeing real money as independents.
But in gazing at the horizon in light of the DOJ’s action, some are saying that things don’t look so rosy. Here is what Mike Shatzkin, the Insightful One, has to say:
Over time, the biggest losers here will be the authors. The independent authors will feel the pain first. Agency pricing creates a zone of pricing they can occupy without much competition from branded merchandise. When the known authors are only available at $9.99 and up, the fledgling at $0.99-$2.99 looks very attractive and worth a try. Ending agency will have the “desired” effect of bringing all ebook prices down. As the big book prices are reduced, the ability of the unknowns to use price as a discovery tool will diminish as well. In the short run, it will be the independent authors who will pay the biggest price of all. But, in the long run, all authors will just get less. They will join the legion of suppliers beholden to a retailer whose mission is to deliver the lowest possible price to the consumer.

I am going to take issue with Mr. Shatzkin on his characterization of writers as the “biggest losers” in all this. Not so. This is simply another development in a long and ever changing contest. Writers who produce, consistently and well, will always have a shot at the rewards of a race well run. 
We didn’t create the Big Six or Amazon. But we will use them just like they use us. We will make strategic decisions, as they do. It’s called doing business,and writers are better positioned than ever to do it in creative ways.
So get on your horse, writer. Learn to ride in the mud. Don’t trust your fate to anybody else. You are responsible for your future, and you need to grab the reins and get into the thick of it.
For example, if you pursue a traditional contract, take a hand in negotiations. Learn what contract terms mean. Negotiate a way to produce non-competing works on your own dime. Don’t just blindly hand the reins of your very life and career to somebody else. Ever again.
Have courage. There is a lot of bumping going on in the turns. Don’t be timid. Bump back. Hang tough in the saddle. If somebody tries to hit you with his riding crop, take it from him.
While the overall effect may be greater challenges vis-à-vis “discoverability,” so what? Facing and overcoming obstacles has always been the lot of the writer. Nothing’s different now. You must produce quality, and a lot of it, for the rest of your life to have a writing career. You must add a long tail to your horse. If you do, you have a chance to cross the finish line and get pelted with flowers.
And why, as a writer, wouldn’t you do this anyway? We write. Even if some of the big publishers fall off their horses, we writers will still be in the race. Even if bookstore shelf space continues to dry up, we writers will still be coming at you.
Because we are creating stories, which is what people want and need in this crazy world. We are weaving dreams, getting under your skin, keeping you up at night, making you laugh and cry and maybe sometimes throw our books across the room. 
We are storytellers. 

And we are not going away no matter how hard it rains.

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Konrath & AmazonEncore strike a deal

by Michelle Gagnon

I’m a huge fan of Joe Konrath‘s ‘Jack’ Daniels series (written under “J. A Konrath”). So it was with tremendous excitement that I read this news:

Amazon.com, Inc. today announced that AmazonEncore, Amazon’s publishing imprint, will release the newest book in bestselling author J.A. Konrath’s Jacqueline “Jack” Daniels series, “Shaken.”

This is a huge step forward, both for Joe and for Amazon’s imprint, which traditionally has only published reprints of self-published books by new authors, not original titles from known authors.
Clearly Amazon is now throwing the gauntlet to the traditional publishing houses, starting with a writer who has already carved out a name for himself by publishing over a dozen books using Amazon’s Digital Text Platform (in addition to his success in the traditional publishing milieu).

Joe played coy regarding the actual details of his advance with AmazonEncore, saying only that he received a very favorable contract. The digital version of the book will be available on Kindle four months before the print version.

So what does it all mean? It brought to mind an interview a few weeks ago with a Newsweek editor. Responding to the news that Newsweek had been offered for sale, he said that he felt they’d been doing things backward in recent years, compiling a weekly magazine while simultaneously offering daily articles on Newsweek.com. In the future, he thinks the most viable model will be to start with the daily articles, compiling the most popular into a print edition at the end of every week for readers (such as myself) who prefer reading in print form.
In other words, the online content will drive the print content, not vice versa.

Coming on the heels of my post last week about the recent uptick in digital vs. print sales, this was big news. I’ve felt for a long time that if Amazon got their act together by offering Kindles at a lower price point (which hasn’t happened yet, but must be on the horizon), they could easily position themselves to dominate the industry, effectively cutting out traditional publishing houses. They already have massive marketing and distribution resources at their disposal. All they’d have to do was hire a team of editors, and offer the mainstays of the industry (Patterson, King, Child, Steel, etc) a larger percentage of the royalties. As Konrath says in his press release, “[This] company can email every single person who has every bought one of my books through their website, plus millions of potential new customers. I’ve never had that kind of marketing power behind one of my novels. I’d be an idiot not to do this.”

As with the music industry, what I suspect will end up happening is a consolidation of the various houses into a few major players (with, most likely, Amazon, Barnes and Noble, and Apple among them). A few months ago the industry seemed to wake up to this threat, leading to the “agency model” battles between MacMillan and Amazon. (The “agency” model is based on the idea that the publisher, not the vendor, is selling to the consumer and, therefore, setting the price.)

I think that in the end what the publishers need to fear is not that Amazon will set the prices for their new releases, but that they’ll take them over entirely.

I’m not saying this is good news for writers-it remains to be seen if this will lead to a larger publishing base, or a more narrow one. But it does appear to be the first volley over the decks in the coming battle.

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