The Business Rusch: Changing Times (Overview)

The Business Rusch: Changing Times

(Overview)

Kristine Kathryn Rusch

As I have mentioned many times in the past, my industry—publishing—is changing.  I have written a few posts about it, but generally, I have avoided the topic.  My reason is simple: this business blog, and the Freelancer’s Guide before it, are geared toward the general business reader, not just toward everyone in the publishing industry.

However, the changes in publishing have become, at least to me, the elephant in the room.  I’m going to deal with them in the next few posts, and I hope you general business readers who are not in publishing give me some leeway.

After all, these changes do have an effect on you.  You’re all readers and consumers of electronic publishing or you wouldn’t visit this blog.  I have a hunch you’re also readers of books, or you probably wouldn’t have stumbled upon me.

Right now, if you read all of the blogs and articles, listen to the pieces on the evening news, or walk into a bookstore, you hear a confusing amount of information about the future of publishing.  Some sources claim it’s going to die an ugly death.  Others say everyone will stop reading.  Some claim that reading will increase. Still others believe that the publishing industry as we know it will collapse by 2012.  A few believe that publishing has become completely irrelevant.

Only a few seem to understand that one thing will remain consistent.  Readers will want to read somethingStephen King has a great take on this. He points out that the book is a delivery system for a story.  Readers want stories, and readers will chose the delivery system they prefer so that they can consume that story.

The same thing applies to nonfiction, of course.  Nonfiction provides information, and readers want that information.  In some cases, the book is no longer the best delivery system for that information.  Witness the venerable Oxford English Dictionary, which has always—from its inception—been unwieldy in book form.  The OED has decided the next volume will be entirely online, which is a much better delivery system for their product.  We still need the OED’s exhaustive derivation of words.  Now we don’t need a magnifying glass to read it.

What is happening worldwide is that the delivery system for the things we read—fiction, nonfiction, plays, poetry—is changing.  In addition to the book itself, we now have online books.  We have e-books.  We have audio books.  And we have books with enhanced content. The new delivery systems have created new ways to consume stories—stories that wouldn’t exist outside of the new delivery system, like the cell phone novels in Japan and the multimedia app books reaching iPads here in the U.S.

Each group involved in the old system of publishing has new challenges.  And the challenges are different for each group.  Existing publishers must change their business model to accommodate the growing e-book phenomenon.  Writers (and other creators of content) must figure out on their own the best way to get their creations to consumers.  Bookstores must figure out ways to become relevant as books, audiobooks, and e-books become available at the touch of a finger.  And readers have to figure out what they want to read, and how to find it in the growing and changing marketplace.

I’m going to deal with all of that in the next few weeks.  But first, let’s look at what’s really happening to the publishing industry.

Most people compare the changes in the publishing industry to the changes experienced by the music industry in the last twenty years.  This is a scary comparison, particularly for big publishing (which is what I’m going to call established publishers).  The record labels (which changed their name from “record labels” which was accurate to “labels” which wasn’t to “studios” which isn’t accurate either) suffered greatly in the last twenty years. The profits to the labels went down significantly, many went out of business, and most are a shadow of their former selves. They do survive, but in a diminished capacity.

The musicians suffered as well.  First they got screwed by the labels, who wanted an increasing piece of the pie.  The labels have always mistreated the artists, especially financially.  The problem was bad in the heyday of the industry—the 1950s and 60s—but it became even worse in the 1980s.  Unless an artist  became a blockbuster star, that artist could not maintain a career in the industry because of the financial baggage the label itself put on the artist. If you want to know more about this, read Jacob Slichter’s So You Wanna Be A Rock And Roll Star (or really, any book on the music industry).

Add to this the constantly changing format of the music you bought.  In my lifetime, purchased music went from the 78 and the 45 to the 33 (the long-playing album, which is short by today’s standards) to the 8-track to the cassette to the CD to the MP3.  Music buyers got sick of repurchasing their entire collection for a new system.  (In 1990, I sold all my albums because I couldn’t get a turntable any longer.  I regret this now.)

The music marketing system was vastly different than the book marketing system. In short, music consumers were used to hearing songs—or entire albums—for free on the radio before they purchased.  Most consumers play their music over and over. When the radio stations consolidated, and the independent stations vanished, free music disappeared for all but the most successful artist. CD prices went through the roof, and music stores tried to compensate by letting you listen for free. But listening once for free is not the same as constant airplay on your favorite stations.

Fans fought back by sharing files, which then cut into the music industry’s profits.  The music industry fought file sharing hard, not understanding where it was coming from.  File sharing came from two major areas: first, music wasn’t available online in the early days and second, price point.  The price to buy a single had become prohibitive.  Either you had to buy the full-length CD, which cost too much, or in a very few cases, you could buy the single for $3 (in the 1990s!)  Music lovers didn’t want 12 songs; they wanted one. And they didn’t want to spend $3 for it.  It wasn’t until the advent of the free download as a promotional device that the music industry started to recover from piracy.  And then the sale of the 99 cent single online boosted music sales all over again.

The final difference is this: the music industry has several arms: the sheet music publishing arm, the album/CD/MP3 arm, and the performance/concert arm, all of which were (and still are) profitable.  The sheet music arm which was the most profitable a hundred years ago is the least profitable now.  A few years ago, the concert arm became the most profitable with the loss of album/CD revenue, but the recession has killed the high end concerts except for the megasuperstars.  The MP3s have become profitable, but not at the monetary numbers of the late 1980s (although the number of actual purchases have gone through the roof on all types of music).

In other words, the music industry is now a shadow of its former self.

For those of you who are about to write me a screed, let me add this:  Yes, I know, the changes in the music industry are more complicated than that.  Other factors came into play.  Yes, piracy is wrong.  Okay.  I know. But this particular post isn’t about the music industry.  It’s about publishing.

Publishing has and always has had a completely different business model than the music industry.  About the only thing they have in common is that they are both part of the entertainment industry and they both need the occasional blockbuster (big hit/artist) to survive.

But the book industry never gave its product away for free on a mass level to entice purchases.  Books rarely get read over and over again.  Nor have books constantly changed form since they were introduced.  Until recently, the biggest technological change in the publishing industry was the introduction of the printing press so that books didn’t have to be laboriously copied by hand.

Although writers have gone on tour and made money—Charles Dickens’s speeches in the 19th century drew capacity crowds—the concert arm really doesn’t exist for book publishers.  Most writers who get appearance fees are not contractually obliged to give that money to their publishers.  And most writers don’t receive appearance fees, period.

To top it off, the book industry treated its artists much better than the music industry. The music industry tried to take everything, from the copyrights of the songs a singer/songwriter wrote to the bulk of the recorded music profits to most of the income from concerts.  Some writers have lost everything to book publishers because the writers didn’t know business well enough to understand their contracts, but generally speaking, publishers haven’t screwed their artists—at least not as thoroughly as the music industry has.

The music industry’s greed in two areas—the price of CDs and the price of concert tickets—caused its sales figures to go down long before the technological change hit. And the only reason profits remained the same or went up was because the recording industry jacked up prices.

You see a similar phenomenon in the movie industry at the moment.  Profits are still high, but ticket sales are down dramatically from ten years ago partly (mostly) because ticket prices are so astronomical.  (The movie industry has yet a different business model, which I will not get into here.)

The differences between the book industry and the music industry are so extreme that comparing the industries is like comparing apples and flowers: they both grow, they both have a finite lifespan, sometimes they’re both red, but they’re not at all the same thing.

Instead of looking at the music industry as the model for what’s going on in publishing, look instead at the television industry. To do this, you have to go back decades.

From the moment television sets became available across the country, somewhere around 1955, television programming consolidated into three networks: The American Broadcasting Company (ABC), the Columbia Broadcasting Company (CBS), and the National Broadcasting Company (NBC).  (PBS is a different phenomenon altogether; but it did join the line-up most places in the late 1960s.) These broadcast networks developed local affiliates all over the country to help distribute the broadcasting signal. Those affiliates had to agree to broadcast only ABC’s programming or NBC’s programming, although when I was little (the early 1960s) a few local affiliates were still protesting that.  The affiliates had to agree to broadcast network programs at selected times. The evening block was untouchable, but other times—late night, mid-afternoon—could be given over to local programming instead.

Big stations, like KTLA in Los Angeles, developed a lot of local programming and sold it to the networks, but small stations like KATU here in Oregon didn’t have the resources to develop such programming. So the smaller stations ran as much network programming as they could.

The networks developed some content on their own, but outside providers—production companies (think DesiLu for I Love Lucy)—developed most of it.  Networks, in other words, became the delivery system for the content.  (Publishers are the delivery system for books, which are generally produced by outside services [writers].  Occasionally publishers produce their own content [think house names], but mostly, they contract out the content.)

Television networks wanted a count of the number of people who watched each program.  (Think of this as the sales figures for the program—a show like Bonanza, the most watched show of its long run—could have upwards of thirty million of viewers; a news program, like the NBC Nightly News, might only get ten million on a given night.)  If you didn’t like the programming on the big three networks for, say, the hour between 8 and 9 p.m., then you settled for the show you liked the least or you read a book.  If you missed Star Trek’s latest episode on Friday night, then you missed that episode.  Period.  You might catch it in reruns—if the network deigned to rerun that episode at all.

If the show didn’t attract enough viewers to win the timeslot or to satisfy the advertisers, then the show got canceled.  In other words, no more national delivery.  This happened to Star Trek in Season Two, and only a write-in campaign by viewers allowed a Season Three.

Enter cable television in the 1970s.  It became a nationwide phenomenon in the late 1970s with the advent of Home Box Office (HBO), a channel you could pay for that would provide movies only a few month old direct to your home.  You have no idea what a revolution that was.

You also needed to have a good discretionary income to add HBO to your TV line-up, because it was extremely expensive.  My parents bought HBO in its first year in Wisconsin because my mother loved the movies and she watched television all day. But she soon realized that the programming repeated over and over again, and she would have been better off going to a few movies than paying for premium service.  So my folks canceled.

I didn’t own a TV from 1978 to 1983—I couldn’t afford to buy one—so the gradations of change in that period are not as clear to me. But somewhere in that period, local cable channels became regional channels which then became part of a basic nationwide cable network.  Around that point, too, someone got the bright idea to do new programming on cable—although the new programming was mostly news because news was cheap to produce.

By the late 1980s, we had 57 channels (and nothing on) in the words of the songwriter.  By the mid 1990s, we had hundreds of channels and a lot of choice.  You could watch new shows on USA or Lifetime (which started with movies) or the SciFi channel (now SyFy) and never again look at a network show.

Also in this period, the DVD got introduced and someone got the bright idea to put old shows on DVD. DVDs worked better than video tape.  In order to have a full season of say, Classic Star Trek, on videotape, you needed one tape per episode, but you could put four episodes on a DVD, not to mention a few “extras.”  Eventually, the TV industry got smart and put season one of a current show on DVD, releasing that a week before season two started.

Then the internet came in, and now you can download last week’s episode of your favorite show off Hulu or the show’s website.  You will never ever miss an episode of your favorite program again.

Has all of this expanded viewing gotten rid of network television? Of course not. But what it has done is this: the number of watchers per show has decreased dramatically.  Forty  years ago, Hawaii Five-0 could command one-third to one-half (or more) of all the people watching television that night; now the revamped Hawaii Five-O commands about 14 million viewers when it’s aired.  It gains about 4 million more viewers within the first week, because those viewers recorded the show on their DVR and watch on their own schedule. That’s all the advertisers care about. They don’t care about people like me who watched that first episode nearly a month after airdate.

Because of the advertisers, television needs as many viewers as possible as quickly as possible.  That’s how TV makes its money.

From a viewer’s point of view, we’re in TV heaven. We can watch any show from any time period at any hour of the day or night—and we do.  In addition to watching the current seasons of my favorites (and trying to see the new shows), I’m catching up on the first season of The Closer, which is several years old.

For the big three networks, revenue has declined with the audience per show. The new Hawaii Five-O is highest rated new show of the 2010 fall television season, but its numbers are pathetic compared to its predecessor.

But don’t let anyone tell you that the Big Three fail to make money. They still have the highest viewership of all the television channels. As a Hollywood producer who wants to buy one of my projects told me just last week, he wants to sell my work to the networks so that we’ll get the biggest audience—and the biggest payday.  But if the Big Three turn us down, we’ll still have a lot of options.

Nowadays, if you want to write, produce, and sell a television show, you have hundreds of places around the globe to sell it to. And that doesn’t count webisodes—web-only television episodes.  The thing is, if you sell your television show to cable, you can have four million viewers and be considered a success.  In the 1960s, four million viewers for a primetime TV show would have been laughably small—and that show would have gotten canceled.

How does all of this apply to publishing?

Simple.  Quite honestly, until a year or so ago, the major publishers were the only game in town if a writer wanted a national or international audience.  If you didn’t get into a big publisher’s program, your book either got put into a drawer or put out by a regional press.  Instead of selling tens or hundreds of thousands of copies, your book would sell maybe 500—and no one outside of your region would see it.

With the wild success of the Kindle, all of this changed.  For the first time since the development of the e-book twenty years ago, readers found a good way to consume the form.  Combined with Amazon.com’s huge backlist, the Kindle provided a voracious reader with a constant stream of books twenty-four hours per day if the reader wanted it.

The Nook, the iPad, the Sony E-Reader, and soon-to-be countless other devices have continued this phenomenon.  Writers whose books are easily available in e-book format have seen their sales increase (at last count) by 197%.  This will continue to go up as more and more e-readers penetrate the market.  Right now 9% of all books sold are e-books.  Some estimates put that number at 50% within five years.

Does this mean big publishers will go away?  Heavens no.  No more than the television networks (or the  music studios, for that matter) went away.  Big publishers will still be the biggest game in town. But their share of the pie will become smaller.

What all of this means is that readers now control what kind of content they consume.  Instead of easy access to the bestsellers and blockbusters, limited access to all other titles, and no access to the quirky unusual title, readers can now read whatever kind of book they want.  Most readers will mix current books with books published ten years ago, quirky with blockbusters, big with little.  Readers don’t care who published the book just like television viewers don’t care who produced the TV show.  They just want to be able to read what they enjoy.

As readers, our choices have just expanded, and will continue to expand, in exactly the way television has done, until we reach the point when most people will not read the same books, just like they don’t watch the same shows.  The proliferation of content, and the forms in which we can consume that content, matches television as well.  Readers can choose between an e-book, a hardcover, a used book, reading online—a huge variety of different ways to look at a “book.”

From the perspective of some writers, this is a tremendous thing. But it’s not a boon to all published writers.  Nor is it a boon to all publishers or all booksellers.  The changing landscape means that there will be short-term winners and short-term losers.

The only group that I can say firmly will benefit from this as a group (meaning everyone in that group) is readers.  Readers will get to finish a book series that big publishers cancel before it ends because the writer can afford to finish it now.  Readers can buy a book published five years ago right now on an e-reader, instead of scouring libraries and used bookstores, hoping to find a copy.  Readers will be able to chose between everything that’s being published, not just everything that’s available.

And of course, the book—the hardcopy book—will remain.  Unlike the music industry which never really settled on a form, the book industry has had the bound book as its form for hundreds of years.  It works.  It’s permanent.  So if you read a book on your Kindle, and want to make sure you have a copy you can access forever and ever, no matter how e-readers change, you’ll buy the hardbound book.

I’m very excited by these changes, but I belong to two of the groups that benefit.  I’m a reader, who has fallen in love with her Kindle and her iPhone (and who still reads hardbound books).  I’m a midlist writer with a long track record who will be able to make her entire backlist available again.

But because of my background as a retail store owner and as a former publisher, I understand the concerns of the booksellers and the publishers.  I also know that blockbuster bestselling writers have some things to worry about as well.

I’ll explore all sides of this changing landscape over the next few weeks. I will also draw more upon this analogy in the weeks ahead.

One note: things are changing so rapidly in publishing that in the time it takes me to write these blog posts, some subtle changes will occur.  I’m teaching right now, so I wrote this in my free time from October 17-20.  In four days, some parts of the landscape changed—small parts, mind you, but they changed.  That’s how quickly the sands are shifting.

So if you’re at all part of the publishing industry, keep up on the day-to-day industry news.  It’s essential—and will be for the next few years.

I’ve been taking part in the change by writing a business essay every week on my blog and asking you, the readers, to support this effort.  No big publisher pays me to write these.  What brings me to the computer week in and week out is you.  So thank you.  And if you like what you’re reading, please contribute, comment, or share the post.


“The Business Rusch: Changing Times (Overview)” copyright 2010 by Kristine Kathryn Rusch.

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28 Comments

  1. Kris,

    Thanks for getting into this topic. I can’t get enough of it right now. And the places I look first – every day – for new articles are first of all Dean’s and your websites. As I recently wrote on his website, you and Dean have changed my life as a writer. It has been downright depressing to proceed so slowly through the publishing strata, with a short story sale here and there and few to no nibbles on the novels. Now I can do it myself and I will soon be uploading my first e-story collection of previously published stories. It’s true – the whole industry is changing. And it’s great news for writers. I look forward to your upcoming articles on the subject.

    Reply
    • Thanks, all of you, for the quick comments. John, I appreciate the compliment. I’m glad the advice is working for you. :-) Michael and Matt, thanks too. These long introductory posts always make me a bit uncomfortable, but there’s much too much information to cover in short bursts.

      Robert, thanks for pointing me to I09. I’ll check out their latest insights. I’ll deal with all the ways bookstores can survive–and the ways bookstores will change in a later post. This stuff may take me to the end of the year (and by then I might have to revisit one of the earlier posts), but I think it’s all important.

      Reply
  2. An excellent column. I wish I had something to add, but I really don’t. Except to say that I’m pointing people here.

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  3. Riveting! I’m a “big picture” guy. And this is riveting! Thanks!

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  4. I really like what you had to say about this topic. There’s been a discussion about this same issue at io9 the past day or so. Lots of posters invoked the music industry. I like how you drew a better comparison to TV.

    You mentioned bookstores. As it happens, I’ve been posting at my blog on some of these issues, and my latest is on bookstores. I think they might survive the ebook by adding ebook kiosks in their sections. Buying books might be turning into a social activity. Being able to tell your friends about a book, then going to a kiosk and getting it, seems a better deal than searching shelves or making a note to get the book later.

    I’ll be curious to hear what you have to say about self-publishing. To me this is a greater threat to the big publishers than piracy or the ebook. Up to now the publishers could offer the author two things s/he couldn’t get: national distribution and a quality book. Today all sorts of technology allows an author to create a quality book. Amazon offers national distribution, as does the ebook in general. I think the big publishers need to consider what they can offer authors to keep us from self-publishing.

    Can’t wait to read more, however long your posts are!

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  5. I never would have connected the way television changed with the advent of pay cable channels and on demand and Hulu to the way publishing is changing, but it makes perfect sense. Until the last couple of years, most of our favorite shows were on pay cable. These days, it’s about equal (which either means the networks are producing better quality or I’m mellowing with age). But the bad news for network advertisers is that even though I’m watching more network shows again, I watch most off my DVR where I can zip through commercials. Which, really, is no different than when I fast-forwarded through commercials back when I videotaped shows to watch later.

    My book buying habits are changing thanks to technology too. I just bought the new Lee Child (Jack Reacher!) for Kindle instead of brand new hardback. Why? Borders has the hardback for 30% off, Amazon for slightly less. But the Kindle version is $9.99 and I can see how Child resolves the cliffhanger from the last Reacher book in just a couple of minutes. I’m still buying the story because the writer set up a heck of a cliffhanger at the end of his last book. I just don’ t have another hardback I have to try to find room for in my house.

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  6. Most people don’t know that local television network affiliates used to be paid huge sums of money (millions, even to small market stations) to run network programming. It was called “network compensation.” That figure is now zero, forcing local stations to look for new sources of revenue. One of the main reasons networks still make big money….and local affiliates are really struggling.

    One of the main reasons cable networks (many are owned by the big three networks) can make a good profit on a show with just a few million viewers is that they don’t have the overhead of the broadcast networks. They also have a stable revenue stream (cable and satellite fees) along with the advertising income.

    As for the DVR hurting ad revenue, you hay have noticed those annoying pop-up ads in the middle of your favorite shows, along with a lot more product placement. So the networks are still getting their money, just in another way.

    The delivery system for TV is different, but there’s still a huge amount of money to be made in the industry.

    Reply
    • Thanks for all of that, Randy, particularly the paragraph on how the cable channels make their money. You anticipate a point I shall be making.

      I didn’t go into network compensation because it is too technical. Honestly, book publishers prop up the bookstores in the same way with the returns system and with paying for endcaps, etc. I might go there, I might not. Although I will discuss returns.

      I haven’t seen revenue figures–maybe you have, since it’s your industry–on how much money can be made in TV now as compared to, say, 1970. I would suspect revenues across the board (all venues) are up, but that’s a hunch rather than a fact. (Simply because there are more places to spend ad dollars and subscription fees exist now and and and…but again, it’s a guess.)

      Reply
  7. While I like the point of books as a story vehicle, it’s worth pointing out that there are a couple of other niches that some books serve, which will contribute to them staying in print for the right publishers.

    The first is the “book as art.” Coffee table books are the obvious example of this, but art can certainly be combined with story. Remember “Griffin and Sabine”? Graphic novels may also fall into this category (may–I’m not sure).

    The second is “book as vanity.” I was surprised, in my research, to discover how many political autobiographies were bought not to be read, but to be displayed prominently on the desks or bookcases of their respective parties or followers. They’re Mao’s little red book turned into modern American political culture. I suspect other subsets of Americana have their equivalent.

    Neither of these will be satisfied by ebooks because they need the physicality of the book to fulfill their purpose. So it will be interesting to see how they find their own place in these changing times.

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    • I disagree about books as art, Ed. The graphics on the iPad make art books a viable option for e-books. It’s starting a revival in comic books already.

      Of course people will always want the book. But we stopped looking at each other’s “record” collection years ago. Dunno if that’ll happen to books (doubt it) but there’s a possibility.

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  8. What I would miss about hardcover books is what they can tell you about the person that owns them. While visiting, I am always attracted to the books laying about. The titles give me a sense of the person’s inner life; it’s almost osmotic. Many first introductions are eased by the excitement of having something in common, and I frequently find a new title to add to my list of books to read.

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    • I would miss that too, Mark, just like I miss going over people’s “record” collection. But again, I don’t think paper books (hardcovers included) are going anywhere. They’re still 91% of the market and they are the “permanent” form of the fiction story.

      If we lose the hardcopy book we also lose moments like I’ve had this week. I’ve been trying to get Dean to read Lee Child’s Jack Reacher books for years. So Wednesday, a friend gave me the new book. I’ve been looking forward to this book all summer. Dean checked out the first page, and the next thing I know, the book has vanished–into his reading pile. He’s halfway done. Can’t do that on Kindle. (Of course, if I had the Kindle version, I would be halfway done now. :-)

      Reply
  9. Hello

    I just today received my copy of cyroburn. By Lois McMaster Bujold. Attached to it is a cd. Took me quite a while but as near as I can tell it has all of Miles adventures all in one cd. The cd says I can copy and give to anyone but not sell it. Change is happening. I have recently bought stuff from you and Steve Perry computer wise but not this much. Now I have to read the book because I really prefer the printed pages in my fingers. Your story that I liked quite a lot I printed to read using something.. Steves I read on the computer and did not like it a lot (the reading not the story) maybe I need to explore buying a ( kindle, apple?, something) ???

    Reply
    • Fascinating about Lois. Good for her.

      Do get yourself a device if you can afford it. I strongly dislike reading onscreen on my computer, but I love reading on my Kindle and on my iPhone (that one surprised me). After a while, you get lost in the story and forget about the delivery system. And on really big books, it’s easier–I have fallen asleep reading giant tomes and bruised myself. Now I read bigger books on the Kindle and it doesn’t hurt at all. :-)

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  10. Hello

    I can afford most anything less than $500 as a test. I guess you like Kindle?

    Bill

    maybe everybody does not see this?

    Reply
    • I like my Kindle. But I’ve look at the Nook and it looks good as well, and my friends with iPads like them. So shop around and see what works for you. I’ll bet you find something in your price range.

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  11. Great introductory post, Kris, and I like the TV analogy. I lived through those same times with TV, though I didn’t enter the TV era until 1965 (near my 11th birthday) because my family couldn’t afford one.

    I’ll be interested to see your ideas about saving bookstores. I agree with another poster that they are likely to become social places, networking in person instead of online. I also believe we will see more Espresso POD Machines as a critical part of the bookstore. It will allow bookstores to carry so much more back list without having to carry the inventory or for stores to pay in advance for books. AND publishers will surely appreciate the no returns.

    Personally, I think the big 6 will come through this change. Many of them were already making changes in the non-fiction arena–with websites, interactive information, and electronic/DVD options. It is the fiction side that has been taken somewhat by surprise. I predict about a two year realignment time that will see more fall out for authors and agents as everyone scrambles for role definitions and guessing market trends again. Then there will be a settling period with what I suspect will be a very different payment plan–lower advances, higher royalties, and more negotiation on escalators. In these cases more “risk” is shared more by the authors. The bigger question in my mind is services. Will more of those services be outsourced, priced as part of negotiation, or left out completely? (marketing, promotion, art, co-ops) Or will that be the new model for agencies and if it is will fees be included?

    All very exciting. I see it all as opportunities for writers. Not scared yet–just planning a lot of contingencies.

    Reply
    • I’m not scared at all, Maggie, but I don’t look at Big Publishing as the only way for writers to make money in this economy. More on that in future weeks. :-) I’m overwhelmed with the amount of material. I’m not even sure how I’ll approach next week’s post, let alone all of them. But I’ll figure something out!

      Reply
  12. Very interesting overview, Kris. The one subject I’d add is the changes to photography. It used to be you had to take a lot of photos to get a few good ones yet you had to pay to have them all developed.

    Now photos are digital and you can see them immediately and delete the ones you don’t like. (I still have to remind Rita of this when she takes pictures with her digital camera. Old habits are sometimes hard to break.)

    Before digital cameras people had photo albumns to hold all their hard copy pictures. Now you have a myriad of ways to store, save, manipulate, and view your pictures including digital picture frames that hold more than one picture. And don’t even start talking about cell cameras or we’ll be here all day.

    I know someone who works for Kodak and they and the other film supply companies are struggling to keep ahead of the rapid changes in the industry.

    The changes in all these industries, including ours, is rapid and opening up incredible opportunities for the creators.

    Exciting times.

    Reply
    • Very good point, Russ. I hadn’t even thought about the changes to photography. Everything is changing and in fascinating ways.

      Reply
  13. As a TV viewer and a book reader, I can say that in general, the massive expansion of content delivery systems has been a boon. I love my DVR, and my Nook, and I have a plethora of media enhancing electronics wired throughout my house. However, the ability for anyone to jump into content production is probably the least attractive feature of this “brave new world” for me; it makes it too difficult to sort through all the crap to find the gold.

    Recently I spent a weekend sorting through self-publishing sites trying to find something good to read, and discovered they’re nothing more than a vast slush pile of crap. (No, I won’t use a softer word to describe the offerings – that is what is available.) Perhaps there is something worth reading in those sites, but I just do not have the time to sort through it all. This is perhaps the prime reason why the major content providers (networks and big publishers) aren’t going anywhere soon. There is something to be said for the pruning, editing and refining process which provides an end product vastly superior to what would otherwise be the case, and for me this is worth the extra cost.

    Reply
    • Your point is a good one, Brigitta. The vetting process helps. Readers will do it on self-publishing sites in this way: Books that are good will take off. But there will be piles and piles of crap. Now the average reader will know what a slush reader goes through. Thank heavens for the free sampling. I love that feature of the new books. It works. I buy books because I want to continue what I’m reading; delete those samples that don’t catch my interest. Like you, I love this new world, but I am getting buried in content. (Not that I’m complaining…)

      Reply
  14. Great article series, Kristine. I’ve posted an excerpt on our blog.

    I represent best selling technology author, Peter H. Gregory, and believe me we are thinking about this topic every single day.

    Reply
    • Thanks, Rebekah. I think all of us in the business are thinking about this every day, and talking about it, and trying to figure out where we’re going.

      Reply
  15. I know this responds only to a small point you make, but CD’s had seen a year by year price decrease throughout the 1990′s. They increased in popularity year over year as well. The number of units sold increased year over year until 2001. People were very happy buying CD’s, moreso than LP’s, and the reason that singles were expensive was because there was no demand for them, had been none for many years, and they took up the same amount of space in stores. In the end though, the hugely popular CD could not compete with something offered for free.

    Complaining about the price of the concert tickets is akin to people complaining about the price of books with even less justification. Putting on a show was and remains very expensive. Some of the largest tours you could see, with some of the highest ticket prices, were and are barely profitable or lose money. There are many people to pay, from the promoters to the crews to the venues to the agents and artists. Perhaps all of those people were and are greedy. Certainly the insurance companies that take a cut at every step of the chain are the ones with the highest margins.

    Reply
    • Also, Jason, the CD had another problem. Music listeners often wanted the single only. Once upon a time, the music industry offered the 45, with an A & B side for those who didn’t want the entire album. A CD of a single was ridiculous–the storage capacity of the CD made a single untenable. The industry tried (with tiny CDs) or half of the album, but there was never a way to release the single. And that’s often what pirating was about. It was about a return to the single. The same with the free download. It’s a single.

      Reply
  16. It’s true that the single was a difficult thing to sell in chain stores, because even when everything was still vinyl they took up the same amount of shelf space in a shop and rock listeners in particular didn’t see them as particularly valuable compared to the value they got from an LP. Though the single did survive even in CD format in the UK. I think to a certain extent you’re right in that people say they don’t want to pay for the filler, but I’d be very suprised to find that people are selecting only certain songs out of an album torrent for instance. I personlly think it was a mistake for the legal download business to go to singles, maybe unit sales would be lower but profit higher.

    Thanks for the very informative series of articles, btw!

    Reply
    • I disagree with you about the mistake in going to singles. I own dozens of albums that I never listen to because I bought them for one song and then regretted it. On the other hand, I’ve purchased 100s of albums (even MP3 versions) because I downloaded a single, then went to the album and listened to others. I think sampling is probably the best thing possible–books or music.

      And you’re welcome. :-)

      Reply

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