What Authors Need To Know About the Publishing Industry Today

by James Scott Bell
@jamesscottbell

And by today, I mean the date of this post. Because the only constant now is change!claude-vernet-81514_1280

If you’re in the writing game to make serious bank, or at least a good side income (and only “blockheads” never write for some kind of income, according to Dr. Johnson), then you need to keep up to date on industry developments.

Now is a good time to look, as reports about the first quarter of 2016 are coming in.

Traditional Publishing Sales Are Down

According PW, sales of adult print books fell 10.3% in the first quarter of 2016, compared to the first period of 2015, and ebook sales in the same category fell 19%. Regarding the latter, industry observer Mike Shatzkin says a big part of the problem is the pricing of ebooks by publishers:

High ebook prices — and high means “high relative to lots of other ebooks available in the market” — will only work with the consumer when the book is “highly branded”, meaning already a bestseller or by an author that is well-known. And word-of-mouth, the mysterious phenomenon that every publisher counts on to make books big, is lubricated by low prices and seriously handicapped by high prices. If a friend says “read this” and the price is low, it can be an automatic purchase. Not so much if the price makes you stop and think.

This puts publishers in a very painful box. When they cut their ebook prices, they not only reduce sales revenue for each ebook they sell; they also hobble print sales.

casino-royale-181How much of this “pain” can the big publishers endure? Economics in a disruptive environment is merciless. Remember that scene in Casino Royale? (All the men do.) But also recall that Bond got out of it.

 

Barnes & Noble Barely Hanging On

The biggest bookstore chain has been closing stores and circling wagons. They’ve been emphasizing vibe (coffee house, browsing chairs) but not expanding shelf-space for books. Thus, says another article in PW:

Sales at Barnes & Noble fell 6.6% in the quarter ended July 30, compared to the same period last year. Revenue fell 6.1% in the company’s retail sector, and Nook revenue fell 24.5%. As a result of the lower-than-expected sales, B&N reported a net loss from continuing operations of $14.4 million in the period, its first quarter of 2017, compared to $7.8 million in the first period of fiscal 2016.

We all love bookstores. We hate to see physical shelf space shrink, and brick-and-mortar stores shuttered. A nice development is a rise in the local independent bookstore. Good! There are many cultural benefits to this uptick. However, the scale is small relative to a large chain, and breakout books by new authors cannot be driven on these tiny islands alone.

Meanwhile, Amazon Opens Another Physical Bookstore in San Diego

This to go along with their first such store in Seattle. And there are plans to open stores in Chicago and Portland.

According to industry observer Jane Friedman, here’s what you need to know about Amazon’s bookstores:

  1. They have a relatively small square footage when compared to Barnes & Noble. The most recently opened store is 3,500 square feet, and the average Barnes & Noble is ten times that size, sometimes more.
  1. All the books are face out, so the emphasis is on curation.
  1. No prices are listed; customers have to check book prices on their phones.

On this last point, a marketing professor quoted in the San Diego Union-Tribune says the intent is to “drive consumers deeper into the Amazon system.” The books “act as conversation starters with staffers, who can then teach customers about the benefits of [Amazon] Prime membership.”

Amazon has proven over and over again to be ahead of the curve, as they say, even though the curve these days is as formidable as that tossed by Mr. Clayton Kershaw. Amazon keeps staying in the batter’s box making contact.

What Should Writers Do?  

This is a blog for writers, so the key question for me is always what do I and my fellow scribes need to be about in these turbulent times?

My drumbeat has always been: First, write the best book you can every time out! That’s why we emphasize craft here at TKZ. There is no substitute for quality. And if you can up your production, so much the better.

Next, turn your ear to wisdom, and your heart toward understanding (Proverbs 2:2). You need to decide what path to pursue as a writer, and how to do so with eyes open and good business practices. Thus: 

Perspective #1 – Indie Writers

In a comment on the PW site, the estimable Hugh Howey said, in part:

The reality is that acquisitions and mergers have hidden the steady loss of market share by the Big 5, market share gladly gobbled up by self-published authors. Coloring books, plays, and rejected rough drafts have also helped the last two years, but it’s hard to rely on these things going forward. And publishers have to stop believing surveys that say people prefer print books. Yeah, the people who don’t read much do.

If the Big 5 are going to continue to guide their businesses by personal editorial tastes, celebrity tomes, and the whims of those who read (but probably don’t finish) 2 – 3 books a year, they’re in trouble. The real market for publishers should be the voracious readers who consume several books a week.

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For authors, this time of flux is critical. As bookshelves dwindle, and B&N appears on the verge of going the way of Border’s, now would be a terrible time to take a work of art that lasts forever and sign it over to any publisher for term of copyright. The new standard has to be 5 to 7 years of license, or self-publish, until things shake out.

One ongoing debate is about whether an indie author should go exclusive with Amazon in order to take advantage of promotional opportunities (such as limited free pricing), and the page payouts of Kindle Unlimited. I think this is a great option for new writers who need to get eyeballs on their pages so they can begin building a readership. See the substantial discussion and links in the section on Kindle Unlimited in Jane Friedman’s post, mentioned above.

Perspective #2 – Traditionally Publishing Writers 

For those writers in the midst of––or are hoping to land––a contract with a Big 5 or other traditional publisher, it’s long past the time when you can leave all contract negotiations to someone else. You must be informed. You need to know what to accept, what to reject, and where to compromise.  Which also means knowing what your leverage is. If you are being represented by an agent, this is a conversation to have with them. (Oh, are you looking for an agent? Well, maybe one is looking for you. Keep track of the new agent alerts and other info at Chuck Sambuchino’s Guide to Literary Agents blog.)

Big tip: Don’t do any of this with a chip on your shoulder. Be polite and businesslike. But as the great Harvey Mackay counsels in Swim With the Sharks Without Being Eaten Alive, you need to know when to “smile and say no until your tongue bleeds.”

Mackay also says, “Make your decisions with your heart and what you’ll end up with is heart disease.” Don’t be so dreamy-eyed about being invited into the Forbidden City that you fail to make rational, long-term decisions.

A place to start is with attorney David Vandagriff’s book, The Nine Worst Provisions in Your Publishing Contract. Not only are important clauses explained, but Vandagriff (who is also known as the Passive Guy blogger) offers you strategies on how to make them better.

As I have stated several times, authors with a modicum of business sense (which is why I wrote How to Make a Living as a Writerare the only corks on this roiling sea of change.

Be a cork. But be a smart cork. Subscribe to the Publishing Trends blog, which posts links to the “Top 5 Publishing Articles/Blog Posts of the Week.” Also consider a paid subscription to “The Hot Sheet” the twice-monthly industry dispatch written by the aforementioned Jane Friedman and journalist Porter Anderson.

Because information is now the coin of the realm. Get the info, digest it, use it. But don’t ever let it freak you out. Remember:

keep-calm-write-on

What about you? Where do you see the publishing industry going? How are you, as a writer, dealing with constant change?

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Field Report From the E-Book Revolution #2


UPDATE: Well, that didn’t take long. Random House and Penguin have announced their merger. So what will that mean for authors? Agent Richard Curtis has one opinion. So does The Passive Voice.


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David Letterman once did a Top Ten list of headlines that would cause a panic. Such as:


“Sometimes When We Touch” Made National Anthem.
Constitution Thrown Out in Favor of Old “Marmaduke” Cartoon.
Willie Nelson Discovered Washing Hair in New York City Water Supply.
That last one is very troubling. And in the publishing industry, it seems there are headlines each week that, if they don’t cause a panic, at least give traditional publishing executives the jimmy-legs at night. Headlines like the following:
Indeed, it was inevitable that the Big 6 would become the Big 5, and maybe even the Big 4, and that soon. I predicted this would happen sometimes in 2013. Well, the talks are happening right now.
“It’s a recognition that they don’t individually have the scale to be able to stand up to companies like Amazon or Apple,” Philip Downer, former chief executive of Borders UK who now runs the retail consultancy Front of Store, told the BBC.
Thus, it seemed apt to file another field report on developments in the e-book revolution. It was a year ago that I filed my first one. Happy anniversary:
1. The Business Cycle as a Funneling Sump Pump
Traditional publishers are in the midst of a horrible business cycle (not necessarily in terms of income, but in terms of sustainability and growth of income). We all know that, and the merger talks are a sign.
Another sign: In an effort to “streamline operations,” Simon & Schuster has reduced its adult publishing divisions from six to four, with accompanying layoffs.
Layoffs, hires and re-structuring are all focused on digital now. For example, Hachette announced changes in its sales force with an appropriate press release: “We are changing our current structure to enable HBG to meet the needs and challenges of our ever-shifting world, where digital has made a deep and lasting impression on the way HBG sells and the customers we sell to, the platforms we advertise on, and the manner and type of content we publish.”
On the other side of the publishing fence (an electric fence, BTW):
• In 2011, 39% of books were sold via some form of e-commerce. Only 26% in bookstore chains. (Source: Bowker)
• The number of self-published books produced annually in the U.S. has nearly tripled, growing 287% since 2006, with 235,625 print and e titles released in 2011. (Source: Bowker)
• And a company that recorded $13.8 billion (with a “b”) in sales this past quarter did not make a profit, but rather a $247 million loss. That company is Amazon. But it is also Amazon’s strategy. As Jeff Bezos puts it:
“Our approach is to work hard to charge less. Sell devices near breakeven and you can pack a lot of sophisticated hardware into a very low price point. And our approach is working – the $199 Kindle Fire HD is the #1 bestselling product across Amazon worldwide . . .The next two bestselling products worldwide are our Kindle  Paperwhite and our $69 Kindle.”
Is this just sound and fury? Or is it, as Forbes magazine puts it, a crafty strategy worthy of Steve Jobs? For it just may be that what Amazon is after now is Apple. As Bezos says, in a shot across the bow from the above release:And we haven’t even started shipping our best tablet – the $299 Kindle Fire HD 8.9.”
And this in light of Apple’s disappointing iPad sales this past quarter.
2. The New Vanity?
“Vanity of vanities; all is vanity,” wrote Solomon the Wise. Was he thinking of self-publishing Ecclesiastes? Or was he hoping to sell it to a big papyrus company? One writer has gone so far as to call traditionalpublishing the “new vanity publishing.”

According to this HuffPo post, many writers “are willing to forego the benefits of self-publishing for the unshakable belief in the “prestige” of signing on with a ‘real publisher.’” He concludes:
Think about how much you are willing to sacrifice for a “real publisher.” Is the “prestige” of a traditional publisher’s imprint mostly illusory in the context of the new world of publishing? Ask what traditional publishing will do for you in the long run if you don’t get effective distribution and publicity. Which platform is more likely to bring you sizable sales? Which will help you build a large following for marketing future publications? These are critical questions that deserve serious attention, especially if you are planning a career in writing.
Is the imprimatur of traditional publishing the new “vanity” plate? Perhaps that’s not the right designation. Vanity publishing was about paying your way in with a crummy book. Traditional publishing requires a great book (and/or platform, and/or celebrity co-writer who does not really do any of the real writing but is on TV.)
But more and more authors are asking what specific benefits are there for a new writer within the walls of traditional publishing. Especially in light of low advances (or, in the case of digital only, no advance at all), the semi-fixed royalties in the publishers’ favor, the shrinking of shelf space, and the lack of a significant marketing push unless you have a “name.”
If deals are to be made favorable to both sides, they will have to be creative, forward thinking, shared-risk and flexible. This is my message to the Big 6 or 5 or 4, or whoever is left standing when we file our next field report.  

As Jane Friedman (not the former CEO of HarperCollins Jane Friedman, but the publishing world observer Jane Friedman) recently wrote:

In a nutshell, I suggest that—given the changes happening in the industry—traditional publishers will need to be more author-focused in their operations by offering tools, community, and education to help authors be more successful, to everyone’s greater benefit. If publishers fail to do so, then authors, who have an increasing number of publishing options available to them, will depart for greener pastures.
3. Remember Sony Reader?
With all the talk about Kindle, Nook and Kobo, it’s easy to forget the first kid on the block, the Sony Reader. Yes, it’s still out there and people still have them. But if Kindle is Godzilla, and Nook is The Hulk, and Kobo is Mothra, what would Sony Readers be? Jean-Claude Van Damme?
Because at least they are alive and kicking. From a press release this week:
Today Sony Reader Store has announced the launch of its inaugural virtual Book Club, the ‘Sony Readers Book Club.’ Each month, Sony Reader Store will select a book of the month. During each month, Reader Store will host a virtual Book Club meeting, an online chat with the author, on the Sony Reader Store Facebook and Twitter pages, giving participants the opportunity to interact with the author and each other and ask questions related to the book. The Sony Readers Book Club will also offer special discounts and book club extras for download, available to U.S. customers at Reader Store.
Upcoming chats will feature Barbara Kingsolver and Michael Connelly. Not a bad start. I wish them well.
4. Happiness as the New Currency
In Field Report #1 I wrote this: Authors who are succeeding at being completely independent are those who are able to bring entrepreneurial analytics to the task. If you’re going to publish successfully as an indie, you have to think like a business.
Which is why, not long after, I published Self-Publishing Attack! The 5 Absolutely Unbreakable Laws for Creating Steady Income Publishing Your Own Books. I’ve used the formula successfully for going on two years now, and am holding workshops to help others do the same.
Because I want writers to be happy in their work.
I have a friend who is a New York Timesbestselling author. He has found advances decreasing and the publishing lag time of 18 months – 2 years intolerable. So he has self-published his new book, in both e form and POD (Print On Demand). He has set up his own book signings with independent bookstores. And he’s happy about it.
I have another friend who is a successful screenwriter. But he now finds the whole vibe of the business “soul sucking” and longs to get out and just write fiction. He has self-published a thriller, and I’m helping think things through.
You see, sometimes being happy as a writer is worth trading in other things that just don’t matter so much anymore.
Happiness just may be the new currency in the writing game. Make your choices accordingly.


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