DOJ Responds to Public Comments

[tompe]

Originally Posted by Elfwreck

I'd add one more:

5- Advertising - letting the public know this book exists, and that it's worth their time and money.

That's the *only* aspect that indie authors will never be able to do as well as a big company.

They will never be able to do the developmental editing either since they are not forced to listen to the editor that they are paying themselves.

[fjtorres]

Originally Posted by Elfwreck

I'd add one more:

5- Advertising - letting the public know this book exists, and that it's worth their time and money.

That's the *only* aspect that indie authors will never be able to do as well as a big company... and it's the aspect publishers cut first when they're feeling strapped for cash. Over the years, they've pushed more and more of this onto the authors: Start your own blog! Schedule your own bookstore appearances! No talk shows, not even local-tv interviews, for anyone not on the NYT Bestseller list! No press releases, no attempts to get reviews in big publications, no "coming soon" announcements for the midlist.

No wonder those authors are pondering how much they can do for themselves. While print distribution is still tricky for indie authors and small publishers, it's no longer essential to an author's career. Advertising is, and will remain, crucial to a financially successful career. And publishers are failing to provide it for anyone they don't think is a superstar.

I won't argue with the *need* for advertising but since I haven't actually seen the BPHs do it I wasn't sure if it was fair to list it. Of course, I'm not a subscriber to the New Yorker or the NYT so I could just be missing out on hordes of highly valuable ads...

Most of what I've heard lately is about what the authors are doing *themselves*, which is stuff they can do regardless of the publishing track they choose to follow.

[Elfwreck]

Originally Posted by tompe

They will never be able to do the developmental editing either since they are not forced to listen to the editor that they are paying themselves.

Some authors are quite capable of taking editorial advice from someone they're paying.

None of them are able to call media attention the way Macmillan or Random House can. Maybe Rowling or King... but maybe not. I have doubts that either of them could pull as much media attention as Doctorow if they didn't have their publishers' support.

I don't mean that all or even most would-be authors can do all their own support work as well as publishers can--just that, among those who *can* do their own support work, there's at least one aspect of it that they can't do as well as a skilled large company with resources.

Of course, for that to matter, the large company needs to *use* its resources, and apply them with skill, and we're not seeing much of that. They seem to be under the impression that if they stick to the habits that made them profitable 10-50 years ago, they can ignore newfangled media changes and still be profitable. (That, or their marketing staffs are incompetent bozos who think that having a Twitter guarantees attention and sales. I'm not sure which I think is worse.)

[Kali Yuga]

Originally Posted by fjtorres

Gatekeeping....

As the sheer volume of self-published works rises, gatekeepers will be more and more critical. They don't have to be publishers, and will never be perfect, but the more crap that's out there, the harder it will be to wade through.

Self-publishers also don't normally get anywhere near prestigious (or half-way decent) reviewers -- another gatekeeper.

Originally Posted by fjtorres

Editorial services - proofing, editing, formatting, covers. All of which are available separately from qualified professionals for lump-sum fees instead of an eternal percentage of income.

1) Good editors are not easy to find.
2) It's very easy for an author to fire an editor who is in fact doing good work, and doing what they're supposed to do -- namely, challenge the author to do better -- mainly because they hate the idea of someone changing their work.
3) Good editors (and formatters, and cover artists) are not cheap. You're basically pushing a few thousand dollars onto each self-publisher, or at least those who actually care about their work.

Don't forget the authors will also have to absorb any and all legal costs, PR costs and advertising costs.

It should not be much of a surprise that many who benefit from self-publishing are authors who were already published, already have industry experience, and thus have significantly lower costs for distributing their own work.

Originally Posted by fjtorres

Up-front financing - basically, payday loans....

The reason it's called an ADVANCE is because they're paying you, up front, against what they expect you to earn. If you fail to earn out your advance, you're not on the hook. You aren't charged interest. The loan doesn't grow in size every week.

At least some authors can't do their work without the advance, especially if they actually need to do research to write the book.

I agree it's up to the author to decide if that's something they want or need. However, you're not going to get an interest-free loan from a bank.

Originally Posted by fjtorres

Distribution services....

I doubt many self-publishers can get their books on Amazon's front page.

For example, when I navigate to the Kindle Books initial page, there's a "New & Noteworthy" section. The titles are published by Amazon Crossing, Thomas & Mercer, 47 North, Montlake Romance -- i.e. Amazon imprints. One is from "Other Press," which appears to be a small publisher.

How can a self-publisher compete directly against their biggest distributors/retailers?


Another element to consider is that in theory disintermediation is great, but in reality it means more work, more exposure and less protection for the authors.

If the DoJ gets its way, it won't be long before Amazon is back to dominating the market, and will be able to impose higher costs on self-publishers. People will kvetch and moan, but the reality is that anyone who will want access to the big retailer will have few options but to knuckle under.


Meanwhile, the music industry is several years ahead of the book business. The record labels are also far, far more mercenary than book publishers. So what do we see? Is the top 100 better quality than it was 10, 20 or 30 years ago? (No.) Has it been bum-rushed by self-publishing musicians? (No.)

The record labels are threatened -- but not because fully independent musicians are disintermediating, but because revenues from recordings are dropping overall. Recording revenue is plummeting, which means the only way to really make a living as a musician is from live touring and merchandising.

I.e. the Wonderful Digital Future really has not materialized for musicians. And the same is a likely outcome for authors as well, who will find it harder and harder to rise out of the sea of self-published drek, and will become more and more dependent upon Amazon as their distributor and retailer.

[MovieBird]

Originally Posted by Kali Yuga

I.e. the Wonderful Digital Future really has not materialized for musicians.

Originally Posted by Planet Money - NPR

Jonathan Coulton's songs almost never get played on the radio. He doesn't have a contract with a music label. Yet he's a one man counterargument to the idea that musicians can't make money making music.

In 2010, Coulton's music brought in about $500,000 in revenue. And since his overhead costs are very low, most of that money went straight to him.

Also note this is NOT for mainstream music, or even trendy undercurrent music like dub step. This is for nerd music.

[tubemonkey]

No sympathy for traditional publishers. If they don't get their act together, the market will crush them.

[cfrizz]

Originally Posted by fjtorres

Exactly.
The reason disintermediation happens in the first place is because those specific players serve no clearly useful *economic* role or because others can fill the same role *better*.

Publishers currently defend their "special" place in the product supply chain in four ways:

1- Gatekeeping, keeping the "slush" out of the market. So far in the ebook era, the market has shown there is no value in keeping content out of the market and that content rejected by the gatekeepers can have substantial value to consumers and producers. (Do we really need to list examples beyond Hocking?)

2- Editorial services - proofing, editing, formatting, covers. All of which are available separately from qualified professionals for lump-sum fees instead of an eternal percentage of income. Clearly this is a personal choice for the content creator but the trade-off between limited up-front cost and persistent charge is, under currently prevalent practices, very hard to justify. At a minimum, rates need to change to favor the creator.

3- Up-front financing - basically, payday loans that trade *potential* future income for a guaranteed up-front lump sum. Again, strictly a personal choice for the creator. And again, the currently prevalent terms are quite punitive to a lot of creators, though a certain portion of the Authors Guild are blessed with special terms. It is pretty clear that creators with a deep enough catalog don't need up-front financing so if the aspiring author can bootstrap themselves through the first few *successful* releases they will no longer need advances. Though a good financial advicer would be hepful.

4- Distribution services - in the pre-internet era, freedom of the press was only for those than owned one. In the pre-ebook era, publishers controlled access to the pbook distribution system and the bookstore shelves. Rarely if ever did an independent title find its way to market without a publisher. That particular barrier to entry is gone, though. Even pbook distribution is opening up to independent content. This still remains but the value is much diminished and for many creators the added income provided by the greater visibility is wiped out by the terms under which the broader reach is provided.

In other words, for three of the four main "services" that traditional publisher provide, viable alternatives exist and they come with greatly reduced financial burden on the creator's project. The fourth one, gatekeeping, has been proven to be valueless to the creator. There is no gate to keep anymore.

Things are not so far gone *yet* where *every* creator can reasonably do without traditional publishing services, but the number of those that *can* is increasing rapidly. And it will continue to increase as long as the traditional publishers maintain their current advance and royalty rate structures.

To ever increasing numbers of authors new and *established*, the traditional services simply are no longer worth the traditional charges.

The traditional publishers are being disintermediated because of the collapse of the barriers to entry to the marketplace, not because of the actions of any single vendor. Technology has changed the market and changed consumer behavior. Past tense. Done deal. The ramifications haven't fully played out but there is no going back to the "ancien regime".

Trying to restore the old balance by force of market power, either by collusion to fix prices or to hold back content from any specific channel is not the answer.

Ultimately the only viable answer is to rebalance Traditional Publishing's value proposition; overhead has to come down, royalty rates have to go up, and delivered value is going to have to be obvious to the author.

Otherwise, disntermediation will continue and accelerate.

Originally Posted by fjtorres

BTW, all those comments harping about how "special" publishing is?

Here's a short-n-sweet tutorial on how other "special" industries fared in antitrust court:
http://www.courtneymilan.com/ramblin...ust-snowflake/



One particularly interesting court opinion:



Anybody still doubt the outcome of the court?

At this point, all that matters is that Five Publishers coordinated through a sixth player to *simultaneously* raise consumer prices. (Three accepted they were caught with their hands in the cookie jar and settled or a mild wrist-slap.)
Unless the DOJ fabricated their email evidence (seriously?) there really isn't much *fact* to debate here.

Just emotion.

Time to get past denial.

http://en.wikipedia.org/wiki/K%C3%BC...s_model#Stages

Thank you for two outstanding posts!

[AnemicOak]

Originally Posted by Elfwreck

I'd add one more:

5- Advertising - letting the public know this book exists, and that it's worth their time and money.

Except they only do that, in general, for big bestsellers at least to any great extent. Most mid list authors I can think of do most if not all of their books advertising and marketing themselves.

[Elfwreck]

Originally Posted by AnemicOak

Except they only do that, in general, for big bestsellers at least to any great extent. Most mid list authors I can think of do most if not all of their books advertising and marketing themselves.

I don't mean that they do it *well*, or much at all for most of their books, but it's the one service that authors can't provide for themselves. Or rather, the one that a big company really can do *better.* Three of the other services can be done just as well, perhaps even better, at the micro-scale, and distribution is quickly shifting to where the differences don't matter.

Publishers need to be aware of that, as more backlists are reclaimed and self-pubbed, and more midlist authors opt to self-publish rather than seek a second BPH contract. Advertising is something that publishers *can* offer, as a reason "why you should accept only 17.5% of cover price on this book when you could get 70% selling it yourself."

18% of a big marketing campaign can be a lot better than 70% of a blog-based push for readers. However, for authors to accept that in the future, the publishers will have to convince the authors there will actually be an advertising campaign.

[Kali Yuga]

Originally Posted by MovieBird

Also note this is NOT for mainstream music, or even trendy undercurrent music like dub step. This is for nerd music.

OK, so that's one artist who has made money from recordings.

Meanwhile, global recording revenues fell from a peak of $26.9 billion in 2000 to $16.6 billion in 2012.

But let's not get too far off track. Namely: Music started trying to disintermediate as far back as 1997, with efforts like MP3.com. And yet here we are, 15 years later, and the structure isn't much different. Most of the top 100 are artists on big labels, with the occasional indie label poking in.

Despite the dreams of numerous musicians hoping to be free of the evil record labels, we have not wound up in a world where the overwhelming majority of musicians earn a living by selling their recordings directly to the public.

[fjtorres]

Originally Posted by Elfwreck

18% of a big marketing campaign can be a lot better than 70% of a blog-based push for readers. However, for authors to accept that in the future, the publishers will have to convince the authors there will actually be an advertising campaign.

How often do you think Trad pub advertising results in a 4X sales increase? To surrender 75% of the per unit income (at a constant price) that advertising is going to have to convince 4 times as many people to buy.

Of course, with typically-higher Trad-pub'ed pricing, the advertising not only has to convince people the book is worth reading, but also worth paying 2-5x as much as a self-pub'ed title. Might not the two effects (ads and higher price) cancel out? In other words, what if the advertising is needed merely to offset the lost sales due to the higher price?

Writers have to take a lot of things on faith regardless of the path they take to market. I'm thinking it will be a few years before there is enough data to measure the price elasticity of ebooks with any meaningful accuracy. Once that is known, we'll know if Trad-publishers (and advertising, if any) actually provide added value, instead of taking it on faith.

Until then, all we have is stuff like this interesting (but at least partly self-serving) analysis:
http://blog.smashwords.com/2012/07/h...ould-harm.html

If we believe Coker, a 3-4X price increase results in something like an 85% drop in unit sales. I'd like to see where he gets those numbers but they sound like a start for a proper discussion of price elasticity.

Edit: this thread is probably not the best place for that discussion. Maybe a new thread in General discussions?

[Fbone]

Originally Posted by Elfwreck

I'd add one more:

5- Advertising - letting the public know this book exists, and that it's worth their time and money.

That's the *only* aspect that indie authors will never be able to do as well as a big company... and it's the aspect publishers cut first when they're feeling strapped for cash. Over the years, they've pushed more and more of this onto the authors: Start your own blog! Schedule your own bookstore appearances! No talk shows, not even local-tv interviews, for anyone not on the NYT Bestseller list! No press releases, no attempts to get reviews in big publications, no "coming soon" announcements for the midlist.

No wonder those authors are pondering how much they can do for themselves. While print distribution is still tricky for indie authors and small publishers, it's no longer essential to an author's career. Advertising is, and will remain, crucial to a financially successful career. And publishers are failing to provide it for anyone they don't think is a superstar.

Advertising is a tricky industry. Too little and it's not effective. Too much and you drive customers away. And what you encounter depends on your personal routine. Last week I received 26 emails advertising hundreds of books. Plus what I saw on blogs, Goodreads, Overdrive, Amazon, posters at various stores, magazine and newspapers. Even a TV commercial or two. New arrivals at my public library are the product of industry advertising. Add to that what your device may recommend. It's apparent that I am heavily exposed to publisher/author marketing. In fact, I'm overexposed and wish for less advertising. Can you imagine if I actually sought out a new title to read? It's staggering to think what else businesses would throw at me.

And almost half were for indie publishers. The TV ad was William Patterson, naturally. With hundreds of thousands of title published annually it's just not possible to market every one comprehensively ... thankfully.

[BeccaPrice]

I, on the other hand, avoid advertisements. I get very few through my email, and email from senders I don't recognize get deleted unread. I use ad blocking software, so I don't see ads on my computer screen.

I get my book suggestions via a few trusted review sites - and I have plenty to read, more than I can catch up on.

I may be excessive in my avoidance of ads, but advertising dollars are wasted on people like me.

So publishers have to add more value to their books than just advertising for me to be willing to spend money on the Big 6 books. Things like gate keeping and editing (more than just proofreading, but true editing) are more important to me - and poor editing and formatting are usually called out in the reviews I read, and so factor in my purchase decisions (although as I get better at using Calibre and Sigil, there's a lot of bad formatting that I'm willing to put up with - heck, it's even kind of fun.)

[JD Gumby]

Originally Posted by Elfwreck

None of them are able to call media attention the way Macmillan or Random House can. Maybe Rowling or King... but maybe not. I have doubts that either of them could pull as much media attention as Doctorow if they didn't have their publishers' support.

As who? Cory Doctorow? He gets no media attention as an author. At least no media that normal people pay attention to...

Or E.L. Doctorow? He gets no media attention, except among literature snobs (and one Presidential award, I guess, devoted to the type of stuff that literature snobs like).

Frankly, if either of them put out a book, you hear nothing in the mainstream media. If Rowling has one coming out, it's pretty much everywhere (people are a bit too used to King, so it's not considered news when he has something coming out :P - but it doesn't need to be, since he can sell on his name alone).

[JD Gumby]

Originally Posted by MovieBird

Also note this is NOT for mainstream music, or even trendy undercurrent music like dub step. This is for nerd music.

And he's going to get even more money due to being in the Humble Music Bundle that came out today.