Publishing is always changing

Guess what time period this quote describes:

Publishers had to improve the way they did business. So they tried several things: [. . . and] in general, they became less worried about literary merit and more about salability as the ultimate criterion in accepting a manuscript.

It could have be from last week’s New York Times, except with “publishers” perhaps replaced with “Amazon,” but the overall gestalt is there, complete with the carping about the lowering of standards when entrenched powers are losing their powers. But D. G. Myers wrote it in The Elephants Teach, and the quoted passage applies to the early 20th Century.

Someone out there is always lamenting the deplorable state of literary merit these days, but someone has been always been lamenting it, just like some old person is always lamenting kids these days. Don’t listen. The next big thing is probably not going to come from the old guard.

On "Amazon Signs Up Authors, Writing Publishers Out of Deal"

Seemingly everyone in the book “blogosphere” has something to say about Amazon Signs Up Authors, Writing Publishers Out of Deal, which points to Amazon’s growing presence not just in book retailing but in book publishing (“Amazon will publish 122 books this fall in an array of genres, in both physical and e-book form. [. . .] It has set up a flagship line run by a publishing veteran, Laurence Kirshbaum, to bring out brand-name fiction and nonfiction”). And that’s just its big-name efforts: it now offers a platform for any moron, including this one, to upload and publish eBooks.

Naturally, as someone mulling over options, I’ve been thinking about this stuff:

1) There are a couple of problems publishers have. One big problem is simple: they offer lousy standard royalties on eBooks. Publishers apparently offer a measly 17.5%, before the agent cut. Amazon, Barnes & Noble, Apple, and so forth will offer 70% (if the author is using an agent, presumably the agent gets a cut). Big-name authors can presumably get better deals, but probably not 70% deals. So an author can sell many, many fewer eBooks and still make more money.

2) Smart authors are probably thinking about whether publishers are going to be in business at all in anything like their current form five years from now. This means authors, especially younger ones, might not want to lock in their eBooks at a 17.5% royalty rate for the rest of their lives only to discover that, five or ten years from now, virtually no one is reading paper books and virtually no one is using conventional publishers in conventional ways. If you’re a writer and you have a longer-than-the-next-quarter outlook, this makes a lot of sense.

3) On a subject closer to home, publishers and agents probably have too many false negatives—that is, people who they should offer representation to but don’t. For a long time, those people simply had no real recourse: they went away or kept trying through the rejections. Lots of now-famous writers went through dozens or hundreds of rejections. If I one day become a now-famous writer, I’ll have the same rejection story. But we don’t know about the could-have-been-famous writers who had to give up for various reasons. Today, if writers are sufficiently determined, they can start selling on their own (I may fall into this category shortly) and see what happens. Chances are good that “nothing” happens, but chances are good that “nothing” happens in traditional publishing land too. But if something happens, it would be hard to imagine that writers used to taking home 70% will happily roll over and let publishers give them 17.5%.

4) Publishers more generally are facing a classic Innovator’s Dilemma-style problem: what happens when the old model is fading but the new one is less profitable in the short to medium term? You run the risk of startups and new-model companies overtaking your business, leaving you in the position of Kodak, old-school IBM, Polaroid, everyone who ever competed with Microsoft prior to about 2004, and innumerable other companies who’ve been killed by shifting markets.

5) Since the massive bloodletting at publishing companies in the 2008 – 2009 neighborhood, it seems to have gotten even harder to get the attention of publishers, which exacerbates numbers 3 and 4, and probably drives more people toward self-publishing, thus accelerating the overall dynamic.

The major publishers aren’t daft and know all this. But they are constrained and can’t do much about it. They can’t distinguish between standard slush and what I’d like to think is my own worthwhile stuff, because if they could, they wouldn’t say no to duds and pass on hits. So this may simply be the sort of thing everyone can see coming and no one can do anything about.

EDIT: This, from Jamie Byng, is worth remembering too: “Publishing is also about finding new talent, rigorous editing, championing the books you believe in, and all that doesn’t just disappear with digital books.” The essential challenge of writing remains even if the distribution changes.

EDIT 2: Literary agent Jane Dystel:

Last week while I was following up on a proposal I had out on submission to publishers, I heard back from a senior editor at one of the top six publishing houses. This person is someone who I consider to be very smart and who has great taste. I had sent him a proposal which he acknowledged was very well done and which covered a subject he was interested in. In turning it down, he sounded discouraged and demoralized as he said that the higher ups in his company were no longer allowing him to buy mid-list titles that in the past he had been able to turn into bestsellers. Rather, he said, they were only allowing him to buy “sure things,” which I took to mean books that can’t fail.

If this story is actually indicative of a general trend in publishing, the number of false negatives should be going up and, concomitantly, the number of writers willing to try new things should too.

On “Amazon Signs Up Authors, Writing Publishers Out of Deal”

Seemingly everyone in the book “blogosphere” has something to say about Amazon Signs Up Authors, Writing Publishers Out of Deal, which points to Amazon’s growing presence not just in book retailing but in book publishing (“Amazon will publish 122 books this fall in an array of genres, in both physical and e-book form. [. . .] It has set up a flagship line run by a publishing veteran, Laurence Kirshbaum, to bring out brand-name fiction and nonfiction”). And that’s just its big-name efforts: it now offers a platform for any moron, including this one, to upload and publish eBooks.

Naturally, as someone mulling over options, I’ve been thinking about this stuff:

1) There are a couple of problems publishers have. One big problem is simple: they offer lousy standard royalties on eBooks. Publishers apparently offer a measly 17.5%, before the agent cut. Amazon, Barnes & Noble, Apple, and so forth will offer 70% (if the author is using an agent, presumably the agent gets a cut). Big-name authors can presumably get better deals, but probably not 70% deals. So an author can sell many, many fewer eBooks and still make more money.

2) Smart authors are probably thinking about whether publishers are going to be in business at all in anything like their current form five years from now. This means authors, especially younger ones, might not want to lock in their eBooks at a 17.5% royalty rate for the rest of their lives only to discover that, five or ten years from now, virtually no one is reading paper books and virtually no one is using conventional publishers in conventional ways. If you’re a writer and you have a longer-than-the-next-quarter outlook, this makes a lot of sense.

3) On a subject closer to home, publishers and agents probably have too many false negatives—that is, people who they should offer representation to but don’t. For a long time, those people simply had no real recourse: they went away or kept trying through the rejections. Lots of now-famous writers went through dozens or hundreds of rejections. If I one day become a now-famous writer, I’ll have the same rejection story. But we don’t know about the could-have-been-famous writers who had to give up for various reasons. Today, if writers are sufficiently determined, they can start selling on their own (I may fall into this category shortly) and see what happens. Chances are good that “nothing” happens, but chances are good that “nothing” happens in traditional publishing land too. But if something happens, it would be hard to imagine that writers used to taking home 70% will happily roll over and let publishers give them 17.5%.

4) Publishers more generally are facing a classic Innovator’s Dilemma-style problem: what happens when the old model is fading but the new one is less profitable in the short to medium term? You run the risk of startups and new-model companies overtaking your business, leaving you in the position of Kodak, old-school IBM, Polaroid, everyone who ever competed with Microsoft prior to about 2004, and innumerable other companies who’ve been killed by shifting markets.

5) Since the massive bloodletting at publishing companies in the 2008 – 2009 neighborhood, it seems to have gotten even harder to get the attention of publishers, which exacerbates numbers 3 and 4, and probably drives more people toward self-publishing, thus accelerating the overall dynamic.

The major publishers aren’t daft and know all this. But they are constrained and can’t do much about it. They can’t distinguish between standard slush and what I’d like to think is my own worthwhile stuff, because if they could, they wouldn’t say no to duds and pass on hits. So this may simply be the sort of thing everyone can see coming and no one can do anything about.

EDIT: This, from Jamie Byng, is worth remembering too: “Publishing is also about finding new talent, rigorous editing, championing the books you believe in, and all that doesn’t just disappear with digital books.” The essential challenge of writing remains even if the distribution changes.

EDIT 2: Literary agent Jane Dystel:

Last week while I was following up on a proposal I had out on submission to publishers, I heard back from a senior editor at one of the top six publishing houses. This person is someone who I consider to be very smart and who has great taste. I had sent him a proposal which he acknowledged was very well done and which covered a subject he was interested in. In turning it down, he sounded discouraged and demoralized as he said that the higher ups in his company were no longer allowing him to buy mid-list titles that in the past he had been able to turn into bestsellers. Rather, he said, they were only allowing him to buy “sure things,” which I took to mean books that can’t fail.

If this story is actually indicative of a general trend in publishing, the number of false negatives should be going up and, concomitantly, the number of writers willing to try new things should too.

Why publishers are scared of ebooks — the standard reasons and Amanda Hocking as symbol

Amanda Hocking, the now-famous indie writer, has an interesting post where she says, “Here’s another thing I don’t understand: The way people keep throwing my name around and saying publishers are “terrified” of me and that I really showed them.” They aren’t terrified of her, specifically, as an individual (which she notes), but they are scared of her as a symbol and what she represents: a world where you don’t need publishers as much. She just happens to be an early example of how to make it financially via ebooks. At the moment, publishers have one big advantage that no writer, no matter how skills, can replicate: distribution. If you take that advantage away, a lot of the raisons d’état of publishers goes away.

Later, she says: “And just so we’re clear – ebooks make up at best 20% of the market.” But that’s up from virtually nothing in 2006. In 2001, discs sold on shiny platters made up the vast majority of the music business. In 2011, the “music business” as it existed from the days of the first records until about ten years ago is gone. You still need a big record label if you want to be Lady Gaga, but almost no one else does. Music industry profits have never recovered. This is great for people who want to listen to music but not so good for people who want to make money from music, especially if they can’t actually make music themselves. Media executives, including publishers, know this, which is why they’re watching what happens in book-land so carefully.

“Nobody knows what makes one book a bestseller. Publishers and agents like to pretend they do, but if they did, they would only publish best sellers, and they don’t.” That’s the scariest thing of all: no one knows. This has long been a truism in lots of forms of art. William Goldman’s Adventures in the Screen Trade came in 1982, if I recall correctly, and he said almost the same thing about movies: “Nobody knows anything. Not one person in the entire motion picture field knows for a certainty what’s going to work. Every time out it’s a guess—and, if you’re lucky, an educated one.” Or, Scott Adams, if you prefer someone with even less movie experience than Goldman or me:

Evaluating whether an idea is good enough for a movie is a bit like an automobile expert saying a certain brand of car doesn’t taste good. It’s absurd. You can only hold the opinion that a particular movie concept is a good or bad idea if you don’t understand what a movie is or what an idea is.

Movies have a slight advantage in that making movies technically pretty (which requires foley artists, on-set locations, lots of actors, careful detail to light, and lots of other stuff) is still pretty expensive. A lot of people also still go to movie theaters, so that advantage hasn’t completely disappeared. With books, all you really have is the book.

There are probably lots of undiscovered bestsellers out there, which, if writers get tired of submitting to agents and all the rest, they can now relatively cheaply and easily put online and let the market sort it out. Again: if enough people succeed at this, publishers go away.

Big publishers might be dying in the way Paul Graham describes Microsoft being dead. Microsoft will continue making lots of money for the foreseeable future, but it’s no longer leading anything in tech. (Enough people misinterpreted him that he wrote the Cliff’s Notes version too.) They’re not dying in the sense that whoever owns Alfred A. Knopf is going to be gone tomorrow, or the day after. But if their relevance starts to slip, they could fail with surprising speed. Look at what happened to Blockbuster: Netflix undermined them, and within a decade of Netflix on the scene all the Blockbusters near me have “going out of business” signs on them.

Back to Hocking: “Traditional publishing and indie publishing aren’t all that different, and I don’t think people realize that.” They might not be as different as some make them out to be, but from the perspective of shareholders they’re very, very different, in that shareholders can make money off publishers in one model and they probably can’t in the same way in the other. From the perspective of the writer, she’s certainly right, as she goes on to say: writers still have to put in an enormous amount of time and effort. As I’m only too aware.

I’m not the only one saying this. Here’s what Kevin Kelly says: “I don’t think publishers are ready for how low book prices will go. It seems insane, dangerous, life threatening, but inevitable.” It’s scary because $.99 isn’t going to support cushy Manhattan offices, long lunches, interns, marketing departments, and everything else modern publishers do. It’s not going to support 5–10% growth every year, which most investors assume before they part with their money. As mentioned elsewhere, publishers can see what trend lines are like and they’ve all read The Innovator’s Dilemma, like everyone else who does anything business-related. The upshot of the book is that incumbents often recognize disruptive technologies and products and then fail to respond to them effectively anyway. Think of Microsoft and the Internet, or record labels and the Internet, or newspapers and the Internet. Yeah, I keep using “the Internet” as an example, but you can see this in other areas, like American car companies when the Japanese first entered the U.S. market. Microsoft is probably the best example, since the famous “Cornell is WIRED!” e-mail alerted them to the threat, and they responded with Internet Explorer.

Today, 17 years after that e-mail was sent, I’m typing this on an iMac, Google and Facebook are arguably the dominant Internet players, and Microsoft failed utterly to foresee the importance of search, like a lot of other people. Publishers know that they can’t really compete with $.99 – $2.99 ebooks, and that, in most genres, readers just aren’t that picky. Publishers know the sound of a market shifting underneath them because some of them have been to Harvard Business School or hired people who have been to tell them about the history of companies failing to adapt to new models and environments. That’s scary.

I pay some attention to this stuff because I’m about to take the latest plunge in the crocodile pit that is agent land. If I fail, sometime in the next two years or so I’ll probably say, “Screw it, I’m self-publishing.” Chances are, I’ll be the person who wastes a lot of money and time doing so, but that’s also true of traditional publishing. There’s still that small chance I’ll succeed. Although I’m hardly the best judge of these things, I think I would want to read my own novels, and at some point, I won’t have anything to lose by not self-publishing, if the choice is between that and letting my work sit on my hard drive. There might be other people who want to read my work too. Publishers don’t know. I don’t know. But Amazon, Barnes and Noble, and Apple will make it easier for me to find out than Alfred A. Knopf ever did.

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