Now that's a business model...

[taming]

Interesting Publisher's Weekly article on the Big Six and the authors they do not want to publish anymore.

The midlist is dying. That sentiment has been a mantra in publishing circles for years as agents, authors, and editors have decried that corporate publishing will no longer support the kind of author that was once an industry staple—the moderate success who was a consistent seller, if not a bestseller. With the "big six" demanding bigger sales numbers from all their authors, indie presses, which have long been the province of riskier, harder-to-market literary fiction, are finding that more commercial writers are showing up at their doors, as well as writers with serious accolades and lengthier track records.

One shift is that the definition of the midlist author has changed. A number of agents and publishers interviewed said when editors at the big houses look at the sales performance of an author's last book in considering acquiring that author's new book, the number they need to see is bigger than it used to be. While it's been rumored that a publisher at one of the major houses told his staff they couldn't acquire authors whose last book sold fewer than 50,000 copies, most sources said they thought the so-called "magic number" was closer to 25,000 or 30,000. One agent, noting that there's far more variation at the paperback imprints of the big six, said most hardcover publishers today "would settle for 20,000."

[dorino]

Oh, so the Big Six are slowly losing their monopoly?

That's a good thing, I think.

[CazMar]

This is where ebooks might change publishers' perception of what is a good selling book - a high quality long term seller might be seen as a good business acquisition, a small initial cost of publication but they might earn the publisher a steady income for the next 20 years. No need to keep expensive stock on the shelf as it is just distribution of a file. The business model might be more like a software producer than the traditional publishing house. Some academic books are like this - they just keep selling a small steady number each year (and I think some of these are currently "print on demand" so they are already using a similar model).

[Worldwalker]

I watched a company president, someone I had known personally, make decisions which turned away people who had been customers for literally 50+ years in favor of people who were unlikely to even be repeat customers. He traded steady sales for fads. It's amazing how clueless some people can be, and how counterproductive their business decisions are.

(yes, he sank the company)

[GA Russell]

It reminds of the record companies who are only interested in huge sellers.

Mariah Carey's album Glitter sold a million copies and was considered a flop.

[SlowRain]

Yes, it's pretty stupid of the Big 6 but, as mentioned in the article, this could be a huge opportunity for independent publishers--and e-books, too. I like short-sighted corporate stupidity like this as it'll end their stranglehold all the sooner.

And, please, by all means, keep MR users informed which publishers are supporting these midlist authors. That's a company I can get behind.

[Elfwreck]

Fascinating counterpoint to the way television has gone... thirty years ago, networks sneered at Neilsen ratings that they beg for today. When there were only half a dozen channels (or three, for a lot of people), every show got watched by a huge crowd; with hundreds of channels available now, only a tiny fraction sees even the most popular shows.

Even with the population being so much higher, viewing tastes are a lot more scattered. And the other entertainment industries are going to face the same problem: with the internet making promotion & distribution essentially free, publishers (and music companies, and news conglomerates) are going to have to learn what people *actually* want, not just what they want more than nothing. And they're going to discover that people's tastes are different, and that they can't capture that many people's attention at once if they have real competition.

Today's midlist numbers are tomorrow's bestsellers'; inertia will only carry the industry so far.

[Doug Huffman]

Thanks for the mention of and analogy with TV, where I would have taken the book pricing thread.

We, my wife and I are five years free of TV. We see video entertainment a bit less that alternate evenings, usually an old/"rerun" classic or foreign film. Current productions are carefully evaluated before ordering (library/NetFlix) and not often mainstream. (NetFlix is sawing at the neck of their golden-goose.)

We read a lot. E-books have removed the physical space considerations - she had insisted that my number of p-books not increase beyond my quite static collection of classics and reference material.

For academic/intellectual reading, I buy the least expensive media of the desired or directed material. For entertainment reading, IT WILL BE FREE. I have a 'Gutenberg 30,000' and can't imagine spending money on mass market entertainment.

[abookreader]

"What, some 80% to 90% of the books published are not profitable?" Temple asked rhetorically.

To me that says it right there. We see posts over and over saying "How can the eBook cost as much or more than the paperbook when they don't have to print....." but that's the issue.

Nearly every book the Big 6 publishing machine churns out is designed to be unprofitable from the beginning. Pricing seems to be the hot button topic with them, but what they really need to scrutinize is profitability and why they can't turn a profit on a book that sells 10000 copies, when a smaller Publisher would not only turn a profit, they'd consider it a success.

[Doug Huffman]

I know, I know! Ooh ooh, it's 'cause every hack expects to make a living at hacking!

Office-boy; demands a 'living wage'. Second assistant secretary to the assistant editor is a "professional" and expects remuneration commensurate with his title. On and on, ad nauseam!

[Kali Yuga]

Originally Posted by CazMar

This is where ebooks might change publishers' perception of what is a good selling book - a high quality long term seller might be seen as a good business acquisition, a small initial cost of publication but they might earn the publisher a steady income for the next 20 years....

I don't think it will change the model at all for backlists.

They will need to keep putting out paper for many years to come. As a result, paper costs will get lower, but so will paper sales.

Plus, the paper part isn't a big cost. Once it's in the back catalog, they don't have to do big print runs of a book that only sold 10,000 in its first run. They might even be able to fulfill those sales using POD at some point in the near future.

[Kali Yuga]

Originally Posted by abookreader

Pricing seems to be the hot button topic with them, but what they really need to scrutinize is profitability and why they can't turn a profit on a book that sells 10000 copies, when a smaller Publisher would not only turn a profit, they'd consider it a success.

Most of it is the advances.

At a big pub, the author may demand (and get) a $300,000 advance. A small publisher's advance could be $100,000 or less. That right there slashes the up-front budget costs by $200k.

The rest of the difference is probably advertising. A big pub that expects to sell 60,000 copies is going to spend more on ads than a small pub that expects to sell 10,000.

All the other costs should be roughly comparable.

[ypocaramel]

The rise of the internet and the long-tail trend (Wikipedia has a good definition) probably contributes to this - people are finding it easier to access works that aren't 'everyone knows' blockbusters, though they do have significant of fans, hence mid-list.

[Worldwalker]

Originally Posted by Kali Yuga

At a big pub, the author may demand (and get) a $300,000 advance. A small publisher's advance could be $100,000 or less.

For a big-name author.

For a midlist author, the advance is likely to be a tenth of that or less, no matter how big the publisher.

And remember that this is an advance. In effect, it's a bet on the part of the publisher: "We bet that this book will earn more than $X in royalties, so we'll pay the author a $X advance against those royalties to get the book." If the publisher loses that bet -- that is, if the book never earns out its advance -- whose fault is that?

That's one of the reasons I keep harping on Baen, even though I dislike their politics: They've figured out how to keep the money coming. They don't depend on NYT bestsellers (though they've had several). They find good authors and sell their books in paper and electronic formats at a fair price. They pay fair advances to authors who know their books will earn out their advance, so everyone makes money. And they keep on doing it. They're not in trouble; they're growing instead of struggling. They've found a way to make money off books: give readers what they want to buy, and give authors what they need to sell. Unlike the big publishers, they're not betting against house odds (remember, house odds built Las Vegas). And, not surprisingly, it's working.

Lotteries are a tax on people who are bad at math. So is the current state of the publishing industry. They're still acting like the entertainment climate is the same as it was when books were the only game in town. It hasn't been that way for decades, and they've been coasting ever since. They keep on betting against house odds.

[Steven Lake]

Wow, so we now see the next step in the fall of the big houses. Oddly, as some people have pointed out, this is the exact same steps the music industry took, causing the fall of seven of the ten biggest labels, with the remaining three mega record labels still barely clinging to life. This whole "big sellers only" thing is little more than the $50 glass of lemonade principle. They don't want to earn money the old fashioned way through quantity and diversification. They want it all...now. I blame some of that on the advertisers, as they've been pushing us to indulge in instant gratification. As you can see, it's already come back to haunt them by contaminating their own execs who are now making screwball decisions that will crush them in the end.