Who Needs a Publisher?

[Nathanael]

I didn't see this anywhere, so I thought I'd toss it out.

Newsweek recently ran an article, Who Needs a Publisher? that highlights the experiences of three authors self-publishing at Amazon, including thriller writer JA Konrath, who claims to be pulling down $100,000 a year from his self-published books, and Boyd Morrison, who became the first self-published author to be picked up by a major publishing house (The Ark, published by Simon & Schuster in May).

According to a recent Bowker report, the market for “nontraditional books” in the United States grew by more than 750,000 new titles in 2009—a 181 percent increase over 2008. Five of the top 100 bestsellers in the Kindle store—which now produces more sales than Amazon’s hardcover list—are currently self-published.

Future of publishing, or just hype?

[neilmarr]

***Future of publishing, or just hype? ***

Well, Nathanael, let's look again at the two unusual Newsweek-reported stories in your post. One is about an author who can actually make a living from his work, the other is about someone who measures his success by landing a traditional publishing deal. These two winning examples are set against 750,000 other new authors last year alone who, presumably, didn't hit the big time so didn't merit a mention. Best wishes. Neil

[Worldwalker]

The "750,000 new titles" number is meaningless. You could probably get 750,000 people to try to sell pictures of their houseplants, but does that mean there's a market for glamor shots of petunias?

As Neil said, 2 successes and 749,998 failures makes for pretty long odds.

[Nathanael]

Originally Posted by neilmarr

One is about an author who can actually make a living from his work, the other is about someone who measures his success by landing a traditional publishing deal.

I had all the same thoughts; just wanted to toss it out for other comments.

Originally Posted by Worldwalker

As Neil said, 2 successes and 749,998 failures makes for pretty long odds.

Pretty typical reporting, I agree: play up the anecdotals -- puts a personal face on things -- then try to scare up a story behind it.

We've heard similar anecdotals from some of our own MR authors vis-a-vis Amazon sales, of course. But the bottom line is we don't know what percentage of those 750,000 authors are "successful", becaue Amazon doesn't release those figures.

It does kind of tie in with my thoughts on the recent Amazon press release, however. Amazon claims to sell more ebooks than hardcovers, while admitting that hardcover sales were also up over the same period. That doesn't sound like ebooks are cannibalizing hardcovers; more like Amazon is growing a parallel ebook market which could be fueled by all these self-pubs.

[HamsterRage]

I think we're still on the very, very thin edge of the wedge here. pBook sales still swamp eBook sales so the economic arguments for independent electronic only publishing are still a little shaky. But I doubt anyone here thinks that will still be the case 5 years from now, and maybe not even 2 years from now. The way that eReaders have been dropping in price lately, not to mention the opening up of the tablet computer market, is changing the landscape very quickly. Would any of you have predicted last Christmas that a $139 Kindle would be available by this summer?

I'm not sure anyone can really predict what the impact of this is going to be on the marketplace or on society. These technology changes have a habit of coming with a bunch of surprises. Who would have dreamed that the iPod would bring about podcasting? Have you ever wondered how many person-listening-hours that commercial broadcast radio has lost to podcasting?

My guess is that any "reasonable" prediction on the impact of this stuff on the publishing world is going to turn out, in hindsight, to be pathetically conservative. I'll check back in 2015, and see how many of the big publishing houses are still afloat.

[neilmarr]

I firmly believe that there's no such thing as false hope. Only hope. On the other hand, even the most cockeyed optimist will be less likely to suffer a broken heart through perceived failure if s/he faces the stark realities of the odds against success. Cheers. Neil

[Worldwalker]

As far as the ebooks vs. hardcovers issue, I have to wonder what percentage of the market is people who read, say, six books a year, and are going to read six books a year if those books cost $25 or $2.50, and what percentage is people like me (and I would suspect most of MR), who read at least a book a week, and are therefore far more price-driven on our buying?

On one hand, ebooks have certainly cannibalized hardcover sales for me -- I used to buy one or two hardcovers a year from Baen. Now I buy ebooks from them instead. But I've bought over $100 in ebooks from them in the first half of this year alone, so they're making a lot more than the profit from those two hardcovers from me ... and so are their authors. The truck drivers who have to haul pallets of books around the country, not so much.

Again, if we go with the figures Salon quote a few months ago, a publisher nets around a dollar from a typical hardcover. I'm sure Baen nets a lot more than that on one of their $5 or $6 ebooks. And for the price of one hardcover, I can (and do) buy several ebooks, tripling or quadrupling that net. So if ebook sales are cannibalizing hardcover sales, I'm sure Baen is crying all the way to the bank.

Let's make the generous assumption that the publisher gets half the cover price from a mass market paperback. So for a typical $7.99 paperback, that would be $4.00. Let us further assume that the cost of printing the book, sending it to stores, marketing it, and whatnot, all amounts to $1.50 per book. Since half of those books will be returns, each book sold has to pay for one of the unsold ones. That gives us $1 per MMPB net profit. Let's further assume that the production and distribution costs for an ebook are exactly the same (really expensive one and zeroes), except that there are no returns. So if it's a cartel publisher we're talking about here, insisting that they "have to" sell the book for $15, minus 30% for the reseller we have $10.50, and minus the production costs we have $9.00 ... nine times the profit they're getting on the mass market paperback. At least. They could sell that book for $5, give $1.50 to Amazon, $1.50 to cost of goods sold, and still be making twice the profit they are on a mass market paperback.

That's why they not only shouldn't worry about cannibalizing their pbook market, but instead they should be trying as hard as possible to do exactly that. It's not even a matter of accepting less profit but making it up on volume -- the profit, too, is greater. And there will be volume, because more people will buy $5 ebooks than $15 ebooks. Cheaper ebooks will drive the sales of ebook readers, which will expand the market for ebooks, and around again. Everyone wins.

The publishers' current idea of positioning ebooks as a luxury item ... well, I can't see anyone winning from that at all, including the publishers. Especially the publishers.

[saoir]

As I see it the big change that is now occurring is that while previously Publishers held the keys to distributing writer's works to a paying public, now there is a new entity able to deliver paying customers .. the eBook retailer.
What has not changed is that it is mainly successful authors that have these choices because they have established readerships. Clearly they now have a serious new option of bypassing the Publisher and selling direct via the eBook retailer (like amazon).

For lesser authors (i.e. the vast majority) the situation must remain quite muddied. Are Agents going to edit and shape an author's work to prepare it for sale via eBook retailers? What is the risk of destroying a relationship with a Publisher by bypassing them and selling to eBook retailers ? Is it worth destroying that relationship if the Publisher then stops pushing hard copies ? Clearly this is a high risk strategy until there will be a tipping point somewhere in or around 5 or 10 years time.

As this process unfolds and we approach this tipping point, then there are two major issues that need to be restructured. If Agents are to take on this new role of bypassing Publishers they will need to offer new services that used to be offered by Publishers (e.g. editing) and they will need to find a way to get their author's works promoted.

It's not a huge stretch to imagine an Agent offering these additional services but clearly their fee will have to increase. The question of who will pay for the marketing of the author's title is a bit more uncertain. I cannot see any Agent getting involved in this kind of speculative expenditure, can you ? So who is left ? Only the eBook retailer.

So we are now left with the question of how is the eBook retailer to fund the marketing ? when it carries thousands of titles ? Keep in mind that within a year or two it will inevitably be illegal for titles to be only available through exclusive deals with eBook retailers ? (for example there is no way the EU will ever allow this to continue).

It's not so easy to find a solution to this dilemma. But two things are clear. Firstly the eBook retailers can only give sporadic promotion to a small group of it's titles. Secondly they will inevitably require a higher margin to cover this marketing. This is a good time to remember that we have now increased the margin taken by the Agent for additional services previously delivered by the Publisher and we have also to increase the margin taken by the eBook retailer to pay for the marketing previously done by the Publisher ...

Lastly who is going to fund media tours by book writers promoting their new book ? tours of tv and radio stations ? what will replace in-shop promotion days ? who will pay for newspaper adverts for new titles by moderately new writers ?

We may be eager to cheer the removal of Publishers from the scene because of their appallingly slow reaction to the new market and their inept strategies for pricing and DRM control - but as entities that promote author's titles across all media I find it difficult to see how they can be replaced by anything other than a new entity doing the same job by another name.

In conclusion it seems to me that the best solution for writers is not the removal of Publishers from the scene at all. The best solution is a reborn Publisher with a tech savvy strategy, who offers all the traditional services of a Publisher including marketing, but who is far leaner, more efficient and responsive to the new eMarket and the transition that will be happening over the next 20 years. Like so many other industries going through this kind of restructuring, this offers huge opportunities for small or medium sized Publishing houses to bring in new management blood, cut out the rotten timber, dive into the new world order with energy and gusto and knock the old farts of the Publishing business on their arses.

[rhadin]

Originally Posted by Worldwalker

As far as the ebooks vs. hardcovers issue, I have to wonder what percentage of the market is people who read, say, six books a year, and are going to read six books a year if those books cost $25 or $2.50, and what percentage is people like me (and I would suspect most of MR), who read at least a book a week, and are therefore far more price-driven on our buying?

I have found my bookbuying habit has changed, but not in the fashion you suggest. Like you, I read at least 1 book a week. I often start several books only to find that say 2 of 3 aren't worth spending any time reading.

But I do not find myself price-driven except on the ebook side. For example, yesterday I spent over $200 at my local B&N on hardcovers -- I found books that interested me and I bought them, not thinking about price. But I am price conscious/driven when it comes to ebooks, primarily because I buy only fiction ebooks and from authors with whom I have no familiarity. (Fiction authors whom I like, such as David Weber and LE Modesitt, Jr., I buy their new releases in hardcover, not in ebook form.) On these authors, I am unwilling to gamble large sums.

So I'm not sure how much amount of reading correlates with price-driven buying. I would think there is a stronger correlation between unknown authors and price-driven buying and between fiction (vs. nonfiction) and price-driven buying.

[Worldwalker]

Originally Posted by rhadin

For example, yesterday I spent over $200 at my local B&N on hardcovers -- I found books that interested me and I bought them, not thinking about price.

All I can say is editing must pay better than I ever imagined!

Which gives me an idea ... off to Feedback to ramble about it ....