[fjtorres]

Value propositions aren't eternal.
They change over time, often very fast...overnight even.

Ask Sony, the kings of CRT TVs for several decades who were certain their expertise in analog video was relevant in the age of digital video. Who invested in all forms of TV display--Plasma, DLP, rear projection LCD, CRT--except flat panel LCD, the one technology that took over the living room. Because it turned out people valued cheap, thin, and bright a lot more than color purity, accuracy and, ahem, bulk...

Or look to home ownership, where every few decades the previously unquestioned value proposition of renting vs owning gets totally overturned, within just a few years, by external forces.

Over the past 50 years book distribution and retailing has seen four major revolutions--mall chain stores, superstore chains, online stores, and ebooks--yet tradpub's practices and terms have changed little if any. In fact, the only noticeable change in royalty rates has been in ebooks that used to be considered subsidiary rights with 50% royalty, that got *cut* down to 25% of net or roughly 12-17% of retail, the same as print. In all that time, all the savings from consolidation, computerization, retailer warehousing, etc have flowed solely to the publisher and occasionally the retailer (if they have the muscle to force the publishers to cough up bigger discounts) but practically nothing to the majority of tradpub authors.

A reckoning has been long overdue.
And it is here now.

The value proposition has changed:

In a world where 25% of book revenues are from ebooks and 50% are from online sales what is the value of front table payola for a handful of titles? High if you're James Patterson, zero if you're any of the hundreds of thousands of authors whose books don't get payola support.

What is the value of spine-out stocking on a shelf in 500 superstores that barely draw enough traffic to breakeven by turning over more and more floor space to trinkets and toys and ever less to non-blockbuster selling books?

What is the value of three months distribution to a few hundred indie bookstores in an age of near-permanent online stocking? In a world where the BPHs alone are putting out 25-30,000 titles a year and all tradpub puts out hundreds of thousands, few indie stores can carry even a fraction of the titles in print.

Most of the print book industry's revenues are tied to the big name authors and the big name authors fortunes are tied to print. Their books are carried at B&M forever. Midlist authors, veterans and newcomers, are lucky to get three months of spine out exposure. After that it is the limbo of "special order".

Typical author advances run in the low four figures and advances in the hundreds of dollars are not unheard of. For this, authors are expected to give up a century of copyright control and agree to onerous delays and clauses?

The value proposition for the big name legacy authors is juicy--they get millions in upfront cash, just like the politicians--but the vast majority of tradpub authors get scraps. If they get anything at all, since the system denies access to 99% of all writers to start with.

Small wonder Patterson has no shortage of willing co-writers to do work for hire filling out his outlines.

Some of the smaller players operate under slightly different, more author-friendly rules but realistically they only encompass a tiny fraction of the titles released in a given year.

That is the value proposition that tradpub offers.

The value proposition of tradpub has for decades been almost exclusively tied to their cartel-like control of print distribution. To the extent that that control withers away, so does their value to authors. And once the authors walk away, so does their value to readers.

The smiley curve is a clear indication of what is happening to tradpub's value proposition. And what will continue to happen.

A third of all ebooks at Amazon are indie. 20% of the top sellers, accounting for as many sales as the BPHs and, on average, twice as many sales as non-BPH tradpubs. And, from the author's point of view: more money to them.

Tradpub takes more money out of readers pockets yet delivers less, on a book by book basis, to the authors. That is untenable.

The storm isn't just coming: it is right on the doorstep.

The world has changed but tradpub hasn't.
Look beyond the massive sales of the aging bestsellers to the younger authors, the ones with maybe two or three titles to their name. How are those folks doing?

Who is misvalueing what? My money is on the tradpub insiders, trapped in the Manhattan echo chamber.

It all starts with the authors and, absent big change on their side of the tradpub chain, no amount of fighting Amazon or Apple or Google is going to change the curve.