Kristine Kathryn Rusch

The Business Rusch: The Way We Were

Written By: Kristine Kathryn Rusch - Oct• 05•11

The Business Rusch: The Way We Were

Kristine Kathryn Rusch

Fascinating, fascinating week for me—and a rather insane one at that. I finished a novel whose deadline got pushed back after our friend Bill died because I knew my time would be limited. For those of you who don’t know, Bill left Dean as the executor of his estate, so we dealt with a lot of estate stuff last week.  I’ll be blogging about some of the estate stuff later, as it pertains to writers and others who are leaving large estates behind.

But suffice to say this: We all know that CSI is inaccurate, but we didn’t know how inaccurate until Bill died in Nevada, unattended (the legal term) in a hotel room after Worldcon. We still don’t have a death certificate, because an unattended death requires a full autopsy, which requires toxicology, et al, which Nevada farms out to another state. So we’re waiting in Oregon for information from two other states.  This has caused all sorts of weird issues, which are all great fodder for mystery stories. And they’re preventing me from leaving in two weeks to go speak at the Novelists Inc. Conference in Florida.

I had to cancel that last week, much to my chagrin. I’ve had to cancel a bunch of things because of the various obligations of work and the estate. I’ve had other points like this in my life. When we roll-play a writer’s career at the Master Class, we call things like Bill’s death “life rolls.” It means that life has gotten in the way of best-laid plans, and the only thing the writer can do is deal with the life issues before returning to the world of writing.  I’ve managed to write through all of this, but only through jettisoning many other important things.

It’s much harder on Dean, who is the official executor. He’s been doing without sleep a lot—not the best thing. Dean has also had to cancel a lot of appearances because of this. His writing has suffered. It’s a tough time.

When I turned in the book, I realized that I left a lot undone—not in the book, but in other obligations. (If you’ve sent me an e-mail that required more attention than a simple glance and answer, I probably didn’t get to it—and won’t for another week or more. Please be patient.) I’ve been spending the last few days catching up on those.

Then, on Monday, I discovered—accidentally—that my traditional publisher for my Grayson romance novels, Sourcebooks, has offered a deal on Wickedly Charming for this week only. The ebook is free on Kindle and Nook. Surprisingly, that took a bit of my time to deal with as well. I let my readers know, of course, but the loss leader idea is one that I’ve played with and that WMG has discussed. Now Sourcebooks leapt right in, and so I’m trying to monitor the results to report on a business level. I wrote a short blog post about that on Tuesday, and I plan to have some updates next week. (I hope!)

The publishing news continues to be unsettled, with the announcement of the new company that agents can sign on for. Dean wrote a great blog post on this. If you’re a traditional publisher, you should read what he wrote—because essentially, any agent who goes into backlist publishing is now your competition, and you shouldn’t do business with them. But writers, you need to read the post as well. It’s pretty fascinating.

You folks continue to make good comments and points on last week’s blog and the one from the week before. Those comments, plus some of my so-called relaxation reading for the week as well as an interview with the writer Michael Lewis on Fresh Air on Tuesday, got me thinking about a few things, which I’ll explore below.

Does this mean I’m going to miss the self-help microtopics yet again? Yep. Each time I pick them up to explore them, I find myself thinking that the problem isn’t just with writers. The problem is with the entire industry. So while I will return to those topics, I probably won’t do so as I originally planned—which was in an order, several weeks until it’s done. I’ll do one or two of the posts, and then deal with something else.

Because things are changing too much to just focus on writers right now.

My reading these past few days was in The Washington Post, which had a great business editorial on the price of fear as well as some other malaise pieces. (No, I’m not going to link. It’s too general.) I just started Michael Lewis’s book, Moneyball, which is the basis of the movie.  And I read a chapter from an upcoming book on politics and statistics.

I think about publishing all the time. I love reading about politics, and I also love reading about baseball.  I’m a big fan of Michael Lewis, and I love a well-written book on business, which Moneyball is.

But what struck me is this: All three businesses—politics, baseball, and publishing—have something in common.  They revere tradition.  The way things get done are the way things have always been done.

(Yes, politics is a business, folks. Just look at the budgets of the various campaigns if you don’t believe me.)

Because of this, all three businesses accept common knowledge as the final arbiter of the Way To Run The Business. Dean used to laugh at publishing when we were doing Pulphouse, because we repeatedly got told that we couldn’t do something because so’n’so tried it back in 1950 or 1960 or 1935, and it had failed.

Those sorts of sentences cropped up in the political book I was reading—about a group of scientists hired to shake-up a campaign—and also in Moneyball, both the  movie and the book itself.

I got to wondering why this attitude was so prevalent, and then Michael Lewis answered it for me in Moneyball. The kind of statistical analysis that we have become accustomed to in modern business was nearly impossible before the advent of personal computers. Sure, in the 1960s, you could do such analysis on the big IBMs that filled entire rooms, but those  machines had barely any brainpower, compared to the thing I’m typing this blog on (and this computer is so old its dictionary doesn’t recognize the word “blog”). You had to reserve time on those computers—whether they existed in a large corporation or a large university—and it often took hours to run a calculation that would take my little machine here five minutes.

So while the information was available, processing it was difficult at best, impossible most of the time.  Scientific studies, accounting departments, major research all took precedence on the great machines over “frivolous” things like publishing, baseball, and politics. Besides, those three things are human-centric, and so they’re impossible to predict, right?

But they’re not, entirely. Yes, baseball is played by humans who don’t hit their batting average every day—that’s why the statistic is an average.  Publishing sells books to readers who may like one science fiction novel and hate another on the same topic for reasons that can’t be quantified. People vote with their hearts as well as their minds — and to make matters worse for the statisticians, people often lie about what they’re going to do when they go to the ballot box.

Those variables became a major part of the mythos of the three businesses. A pitcher may have a great fastball until one day he doesn’t. People might like westerns until they get sick of them. Voters might say they’ll vote Republican, except in their own district where the Democrat is more personable.  The variables “make it impossible” to predict anything, so why even try.

The scientists in the political book asked different questions. They wanted to quantify how various advertising methods worked in promoting a candidate. They wanted to run controlled experiments.

The number-crunchers in Moneyball wanted to look at different statistics than baseball usually used to predict the success of a new player.

Yes, the human variables still existed, but so did data, uncrunched and unexamined.

Such data also exists in publishing.

Now if you go back and look at my previous blog posts, you’ll see me say over and over that you can’t predict a bestseller. I still stand by that. You can’t really predict it.

But you can predict failure.  In fact, if you step back from an industry, you can often see it coming. That’s what I realized as I listened to Michael Lewis promote his latest book on Fresh Air. He talked about Wall Street and the financial crisis. He said that when he worked on Wall Street decades ago, it worked like this: If the very smart people who ran the major financial firms made a bet on something, you shouldn’t bet against them because they knew the bet was damn near a sure thing.

What shocked him was between the time he left and the most recent financial crisis was this: the folks running the Street had gotten dumb. (He may have said stupid. Either way, it was a harsh word.) They no longer made sure bets. They were the kind of people you sat across a table from in a poker game and you called them easy money, because you could pluck them like a chicken.

And he was shocked that an industry went from so incredibly smart to so incredibly dumb.

I was listening to this with Dean and I mentioned to him at that point, this is what happened to traditional publishing. It went from being a very smart industry to a very dumb one.

And I think what happened to it is different than what happened to the financial industry. I think in publishing—as in politics and baseball—tradition and “the way we do things” triumphed over good business sense.

Here’s what I mean:

A couple of lines in Michael Shatzkin’s article from last week have bothered me. One of them has to do with percentages. He wrote: “We know that ebook uptake, as measured in sales or in their percentage of publishers’ revenues, has doubled or more than doubled every year since 2007. We know that the rate of growth is mathematically prevented from continuing for even three more years (because it would put ebooks at 160% of publishers’ revenues if it did!)”

I asked Dean about it, and he mumbled something about a mathematical formula, which shut me down, because I’m often mathematically challenged. But someone challenged that number in the comments on Shatzkin’s blog, and then someone mentioned that in the comments on my post last week.

I couldn’t get that number out of my head. And I finally figured out what was bothering me about it.

Publishing has had a 4% growth rate (on average) for the past fifty years. If you believe that the industry can only grow at that 4% rate, then you can see Shatzkin’s point. Publishing is a finite industry with a finite group of customers who only allow the business to grow at a tiny percentage each year.

If you think of readership as finite—with less than one reader coming in for every reader who dies off—then he’s right: ebook sales can’t grow exponentially.

But that thinking is wrong. It’s based in the past fifty years. It doesn’t look at the past sixty years at all.

Publishing’s habits got set in the 1960s.  The blockbuster novel started in those years. There were always bestsellers and often bestsellers that did better than others. But the blockbuster—the book that everyone who read had on their bedside table—didn’t really exist until the 1960s.

The folks who work in traditional publishing now got trained by the folks who worked in the 1960s. The people who run traditional publishing got their start in the 1970s or 1980s, after methods and procedures got established to run the companies. The design of most royalty statements came out of the lawsuits of the 1980s. The advertising methods used on books got perfected in the 1970s. The procedures companies use to keep a blockbuster from overwhelming the company’s finances were developed in the 1960s.

All before the advent of personal computers.

But after—and here’s the important point—well after the GI Bill.

Why I am mentioning the GI Bill? Because the advent of the GI Bill was the last time publishing grew exponentially.

Here’s what happened. After World War II, GIs came home and went to college on the government’s dime in return for their service. Because WWII was such a huge war, a large number of people who wouldn’t normally have access to higher education got that access. They were full-fledged adults when they went to school, so they took their education seriously. They learned to read for pleasure.

In turn, they taught their children to read for pleasure.

Many analysts believed the increase in book sales came from the rise of the baby boom generation, and the analysts are right about that: the baby boomers read more than any previous generation because their parents put a premium on reading. The problem that publishing analysts had was they believed the book sales were tied to population growth—so they constantly expected book sales to go down as the boomers went through the population like a giant bubble. But the sales didn’t go down. They continued to increase at an average of 4% per year from the mid-1960s to now.

But the 1950s, wow, in the 1950s, the growth in book sales was explosive, due to readers who would never have been in the market, if it weren’t for the GI Bill.

Fast forward to the last few years. Readership is growing again, exponentially. This time, it’s growing because of access to books. Now everyone with a smart phone can download a novel. As bookstores vanish and book sales racks go down, the virtual bookstore continues to sell books at an astonishing pace.

The change now isn’t a government program, but the reason is the same. The reason is access.

Study after study from the 1990s onward showed that most people did not buy their books at a bookstore. They bought books from places like grocery stores or Wal-Mart or places like that. After the big distribution wars of the 1990s in which the entire book distribution system of the United States essentially collapsed, many readers no longer had access to books.

Not because the readers had lost interest; they hadn’t. It was just their lives were too busy to allow them into a bookstore. Bookstores were places the elite reader went, not places the reader who was stressed, working two jobs, and unable to get more than six hours of sleep, went.

But that reader, that stressed, overburdened reader, can easily download a novel on her smart phone or her dedicated e-reader. And those readers do, bringing them back into the marketplace.

Again, study after study shows that readers who have an e-reader or an e-reading program on their smart phone buy more books than they ever have before because of the ease of access.

This is what the traditional publishers miss. They miss that ebook sales can go up exponentially because ebooks appeal to more readers than those who go into bookstores. People who never read for pleasure before are reading for pleasure now—and their numbers will grow as the  price of e-readers goes down. The fact that you can buy a dedicated ereader at places like Wal-Mart guarantees that folks who have never set foot in a “real” bookstore will set foot in a virtual bookstore.

The tradition, mythos, and habits of traditional publishers aren’t designed for this new world. The way that traditional publishers have “always” done it (always being defined as the past 50 years) is to market books to bookstores. And in that rarified world, certain rules applied: readers only went to particular sections. The books on the walls were “wallpaper” and therefore there as decoration. Many readers bought only what you put near the check-out.

Readers—in that environment—could be easily controlled. Because the books the store had were the only books the reader had to chose from.

That’s no longer true. Now readers can chose from millions of available books.  The readers can chose according to their tastes.  A book no longer has to appeal to just the people who go into bookstores. It can appeal to readers we (the industry) have never encountered before, readers whose tastes are unknown.

But those readers are making their tastes known, through the books that are selling electronically—not just from traditional publishers, but from indie publishers and self-published writers. Traditional publishers have long discounted self-publishing as the realm of the desperate, and are still trying to do so, in the face of evidence to the contrary. Yes, there is the junk (and yes, we’ve dealt with that in previous posts), but there’s also stuff that rises to the top because of something traditional publishers abandoned years ago: word of mouth.

Traditional publishers tried to control word of mouth through advertising and product placement, but never really managed it. They were always surprised by the book that took off when it shouldn’t have, like Cold Mountain or (ahem) Harry Potter and the Sorcerer’s Stone. They could never figure out why that book did or what need it appealed to, but once they sensed a need, they tried to bottle it. That never worked either.

Traditional publishers try to force readers into particular niches, to control what they read. That habit comes from the turn of the last century when the number of readers (or good readers—the folks who read hardcovers instead of pulp magazines or (later) paperbacks) truly was finite, based on education.

But forcing readers to behave in a certain way has gone out the window now that readers can chose from the virtual bookstore.  Many traditional publishers (not all: witness what happened to my work with Sourcebooks this week) are ignoring the new way of marketing books. They’re also ignoring the algorithms that Amazon has developed.

Amazon’s algorithms are scary. That’s the other thing that happened to me this week. Shortly before I wrote last week’s blog, I went with Dean to look at the house we’d just inherited. It’s near a Barnes & Noble. I didn’t want to go into the store because I didn’t want to see the loss of shelf space. I am mad about that, and the estate stuff was tough enough. Bookstores used to be a place of comfort. Now they just piss me off.

So I came home and went online. I preordered a whole bunch of books, except for six that I will get from my local indie mystery bookstore here in on the Oregon Coast.

Two days later, Amazon asked me if I wanted to preorder those six books. Now, realize that I never even looked at those books on Amazon. I knew they were coming, and knew I wanted to get them elsewhere.

But that little “people who ordered this book also ordered these books” algorithm conjured up all six books and sent them to me via e-mail. I’ve gotten the same kind of mailing for indie published ebooks because I order those as well, and I click on the books if I haven’t heard of them. I’ve even ordered a few.

That’s an analysis that most traditional publishers ignore. Because it’s not relevant to them if I order their book and then order a similar book from another company. The traditional publishers only want to see their books and compare their books to each other.

That algorithm, however, benefited me on Monday. As the free book climbed its way up the Kindle bestseller list, my indie published titles under the Grayson name climbed up as well. So I went and looked at Wickedly Charming. Sure enough, the other books that sold were ones on the bottom of the screen with the “readers who bought this book also bought these books” tagline. The Grayson books not included on that list did  not sell in large numbers on Monday.

It was fascinating. It made me think of Moneyball and hidebound traditions, and people who only think inside the box.

It also made me realize just how narrow the box had become from 1960 onward.

I do find it fascinating as well that I learned some of this lesson from a traditional publishing company—Sourcebooks. It’s a newer company. It didn’t exist in the 1980s. It was founded in the 1990s by someone who didn’t like how traditional publishing works.

I’ve often said that a writer should balance traditional publishing with indie publishing. If you want to stay in traditional publishing, do so if it benefits your indie career. I just left a traditional publisher who added absolutely nothing to my writing (and in fact, did significantly less than I can do on my own).  But on the Grayson books, Sourcebooks is doing a bang-up job that helps my indie published books. And that’s the relationship I’ve been hoping for in my traditional/indie balancing act.

The key isn’t whether the company is traditional or independent. The key is vision, a willingness to look at the world the way it is now as opposed to the way it was back when I was born.

Doing things the way we’ve always done it doesn’t take into account computers or changing demographics. It doesn’t take into account the wealth of information we now have at our fingertips.

Weirdly, everything I read this week from that political book to Moneyball made the same point. Tradition is nice, but tradition must combine with an accurate view of the world of today.

And that’s where most traditional publishing companies make their  mistakes.  Hell, that’s where most writers make their mistakes. Most writers want to go back to 1990 when the agent took care of their business and the publisher did their best to put out a good midlist book.

That world is gone, folks. We’re in a world with expanding readership and a lot more personal responsibility for the business of publishing on the writer herself. Traditional publishers need to look to the indie world to see what works; writers need to take responsibility for their own careers—which should include learning how to do business in a world where anyone can publish anything with the click of a mouse.

Things are changing too fast for all of us to keep up with each detail. So we have to pick the details that we need for our own business. And if you’re in the publishing business, be it as a writer or as a publisher, you have a lot to keep up with every week.

Even if it’s a week like the one I just had. On a personal note: I’m sorry I’ll miss many of you in Florida. Believe me, I wish I could be there. But there’s always another conference. I hope it goes well.

I write this blog in part as an excuse to keep up with current trends, but mostly to talk to like-minded folks about the changes in our industry. I make my living as a fiction writer, and the blog postings take time away from fiction. So if you find the blog of value, please make a small donation to keep encouraging me to write it. And please continue to share your thoughts and ideas. As you can tell from this week’s post, I’m listening and I’m learning, just like you are. Thanks!

“The Business Rusch: The Way We Were” copyright 2011 by Kristine Kathryn Rusch.

 

 

 

 

 

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38 Comments

  1. Incredibly astute observation. =)

    Something that keeps coming to me again and again… In a time of disruption, it seems to me that it’s rarely the people who think in the old pattern who do well. It seems that it’s more often those who find new patterns – who see things like they are, not like they were, as you put it – who excel.

    I think we need to be constantly re-evaluating not just the business and trends, but maybe our assumptions about those things as well.

    • Kris says:

      Good point on disruption, Kevin. It truly is a disruptive time. Thanks for the comment.

    • Kris says:

      In fact, I need to thank y’all for the comments. I’m typing this in the Portland Airport, on the way to the Yukon to teach. Dean was supposed to be with me–but yet again, the dang estate stuff got in the way. Anyway, I will be intermittently unavailable to approve/answer comments. I’ll do my best to keep up.

  2. Wayne Borean says:

    Fascinating. I hadn’t considered the GI Bill as a driving force behind the expansion of leisure reading. I can see the logic behind it, but really hadn’t thought it through. I need to check and see if we had something like it in Canada. It is possible that we didn’t. I know that our education system evolved in a different manner than yours did (FYI, I am working on a book about the One Room School House in the Township of Markham, I’m one of the last generation who attended those schools).

    I do agree that E-Readers are going to expand availability of books. ITunes did that for music. Look at how many stores sell ITunes cards now.

    Wayne

    • Kris says:

      Robert, post written before Jobs died, posted as the news broke, being read afterwards. Quite weird. And yes, talk about making a difference. Btw, y’all, Wayne’s point is also a good one, about iTunes. And since Jobs died, all the obits talk about the difference iTunes made. I suggest you read them. It’s fascinating stuff about an innovative thinker–who worked almost to the very end. Wayne, I do think there was something similar to the GI Bill in Canada. I seem to recall someone tell me about it and/or reading about it. WWII experts? Anyone?

  3. John Walters says:

    Wow, Kris, another breath of fresh air. Thanks. Your blog is empowering. Just this morning I got the finalized beautiful cover for my second short story collection and worked on uploading the files to CreateSpace. In the coming days I hope to publish more e-stories, as well as send new stories to print publishers. It’s a great time to be writing and publishing. Those who can’t get the point will sink in the mud with the other dinosaurs, I suppose. But really, this new world is a lot of fun. As you say, it’s important to keep up with the latest, and due to my intense work schedule right now there’s not much time for that, but I know I can count on you and Dean to point out the top publishing news.

  4. David Barron says:

    I don’t call myself ‘indie’ by reason of I understand ‘traditional publishing’ had a purpose: to make sure that some young, penniless jackass(?) who wrote an awesome book, got that book out to where she could make money. But, apparently (and I base this entirely on ‘market research’ not personal experience) that’s breaking down. But I think it won’t break down to the very foundation…the most clever ‘traditional publishers’ will soon occupy a more responsible position as “The Money”, venture capitalists in the new book market.

    Every book is a start-up.

    • Kris says:

      David, I love that last line because it’s so true: Every book is a start-up, and traditional publishers–along with most of us writers–have forgotten that.

  5. I love this post. I follow your blog because of your business posts.

    The thing that makes that a little unusual is that I’m not a writer, I spent 13 years in the finance and ops side of publishing houses (one of the folks that they would NEVER let talk to an author).

    On this point, I can add some support to your point. When I came out of B-School in the 90s, and took up a more senior rank, I tried to get the marketing departments to give me some basic numbers (how many copies a given campaign might sell, what the demand curve for a particular type of book might be, other BASIC stuff).

    Over and over I was told that it wasn’t possible. And it hadn’t been possible — until the advent of spreadsheets and computing power. But even in the 90s, much less now, the number of available databases was growing, and the things we could do with them were exploding.

    The lesson here: spreadsheets are the book business’ friend, just as in any business. And authors are IN THE BUSINESS, not just making art. A writer who isn’t learning to crunch numbers is asking to be marginalized. (There’s probably a pun in there, isn’t there? Sorry.)

    • Kris says:

      Thanks for the post, Marion. Yes, isn’t it frustrating to know that something would improve a business and no one will listen? When I was at The Magazine of Fantasy & Science Fiction, I had help laying out an entire issue on computer to show the publisher that it could be done–at one-tenth the cost of what he was paying for traditional methods. He listened, and since it was a small company, he made the changes. I did something similar at a public radio station in the 1980s–not the listener-sponsored one–and got excoriated by the folks who told me the change was “impossible” even though I had the radio piece proving that it was possible. I think traditional publishing right now–for the most part–is like that. I’m keeping an eye on the innovative companies, Sourcebooks, Baen (any others?) to see what I can learn from them.

  6. Interesting (and sad) that this post appears the day after Steve Jobs died.

    So, I got an iPad in May, and I’ve read more books since then than I have in some time. Largely they’re classics from Project Gutenberg, but still. At the 4 SF cons I had a table at this year, I sold history books as well as my genre books. Strange that unknown little me should know something that many of the people running publishing companies don’t.

    Thanks again for this series of posts!

  7. Thursday morning and I’ve got another great Kris post to enjoy with my tea. Thank you.

    Your thoughts about tradition and the business of writing get me thinking about tradition and the content of what we write for the market as well.

    I’ve been writing romances for several years. Before that, I was completely unaware of the genre: I was a snob. Nevertheless, I was always seeking out love stories in fiction (and trying to write one) that weren’t packaged as romances–like chick lit, Dorothy Sayers, anything. Then I discovered the greats of genre contemporary romance at the library (Susan E Phillips, Jenny Crusie) and had an aha moment. That’s what I want to do. That KIND of book.

    The problem is, I dove into the genre with such gusto, reading hundreds of genre romances (mostly from RWA conference freebies), that I feel overly biased by those traditions. The romance genre has too many damn rules, rules that the most enthusiastic readers and writers and pros all know about and expect. I don’t mean there’s a formula that the ignorant assume is the blueprint for all “romance” (which for them usually means a category book with a funny title at KMart). I mean the subtle rules, the ones that great writers bend or overcome until it creates its own subgenre (M/M, erotic, paranormal, interracial, inspirational).

    I’ve discovered that now it is very hard to set aside the knowledge of what is expected when I sit down to write a new novel. All genres have these expectations (no graphic violence in a cozy mystery, for instance); it helps the loyal reader find what they like.

    But your post gets me thinking: all these new readers you mention don’t have expectations. They don’t even read romance or mystery or what have you–because they’re new, just as I was new. They aren’t going to complain if your 1810-era romance takes place in Venezuela instead of Mayfair–because they’ve never read any of the million billion novels that did. They just like the sound of your story. You won’t have an agent warning you that “that’s a tough sell, set it in Bath with an American heiress who chases a duke and send it to me again.” (Though of course you might come to that conclusion yourself if you self-pub and nobody buys it.)

    There are going to be a lot of changes in how we make a living as writers, from using IP lawyers to hybrid careers with print books selling our ebook backlists, etc.

    But how we approach the story itself is changing, too. Perhaps genres will reassert themselves as a way to help people through the flood available online. But perhaps they will splinter and become meaningless, a spectrum of microniches a person will navigate with a handful of keywords (ie, “Venezuela & romance & 1810 & llamas & murder & pirate).

    Sorry for the book! I’ve been thinking about this a lot. I’m not making any predictions, just pondering. Thanks for the great blog, as usual.

    • Kris says:

      Great post, Gretchen. Exactly. I’ve been noodling on that. It might be a post–if I remember when I get home. But you’re exactly right about genre strictures. They’re marketing strictures designed to get into bookstores. It’ll be interesting to see the change…

  8. Suzan Harden says:

    Kris, thanks for putting your finger the convenience aspect of book sales. A lot of the “traditionalists” miss the concept that you now have customers who can shop 24/7. Personally, I love that on the nights my insomnia kicks in and I want a certain book and don’t have it, I can download it with a couple of mouse clicks.

    • Kris says:

      Me too, Suzan & JR. I order at the weirdest times and in the strangest places. Gina, great anecdote. And I recently had to tell a waitress friend of mine in our very small town where my favorite “new” bookstore was. She drove by it all the time. Just never noticed it.

      Shaun, thanks for the purchase!

  9. JR Tomlin says:

    Brilliant post, Kris, particularly on access to books. My own book buying has changed for exactly that reason. It has been widely mentioned that people with ereaders buy more books, but I don’t think many people have pinpointed why that is so very important.

  10. This is purely anecdotal,but years ago when our children were younger, we were out running errands as a family. As usual, my kids brought books with them to read and keep themselves entertained. A woman approached us and said she’d love for her son to read, too. She wanted to buy him some books, but had absolutely no idea where books were sold. So we gave her some ideas and directed her to our favorite bookstores. It was so strange to me that she’d never heard of bookstores. I’m guessing there are many more people like this woman. At least she was trying :-)

  11. Kris, thanks for the post. I saw Moneyball too and I appreciate your comments about that. Perhaps, I’ll pick up the book as well. I got the point about tradition too versus accounting for changes in the way the world works.

  12. Oh yeah, I also picked up Wickedly Charming too. I look forward to reading some of your fiction.

  13. Pati Nagle says:

    Great post, Kris!

    Sorry we won’t see you at the conference. :( Maybe next year?

    • Kris says:

      I hope I’ll be there next year. This better be resolved by then. I’ll have stories about this quite strange process soon…. Thanks, Pati.

  14. Steve Lewis says:

    @Gretchen and Kris: I’m also glad about the whole genre thing because I have no clue what genre my current work is in. I had a well read friend read it and she said it was like Stephen King meets Nick Hornby. No idea how I’d even begin to market that to Big Publishing and I’m glad I don’t currently have to suss that out.

    Plus, I’m enjoying reading all the fun, quirky stuff that might not have found a home if not for this current e-pub revolution. Like these Poker Boy stories by some guy whose name I can’t remember at the moment. =) Fun, fun times folks.

  15. Frank Dellen says:

    On a related note, Neil Stephenson wrote this article about innovation starvation and why Big Things aren’t getting done anymore: http://www.worldpolicy.org/journal/fall2011/innovation-starvation

    “The illusion of eliminating uncertainty from corporate decision-making is not merely a question of management style or personal preference. In the legal environment that has developed around publicly traded corporations, managers are strongly discouraged from shouldering any risks that they know about—or, in the opinion of some future jury, should have known about—even if they have a hunch that the gamble might pay off in the long run.”

    Stephenson puts some emphasis on NASA’s projects but I think his more general observations apply to the publishing world as well and partially explain the mindset behind “We always did it like this”

    You quote Shatskin: “We know that ebook uptake, as measured in sales or in their percentage of publishers’ revenues, has doubled or more than doubled every year since 2007. We know that the rate of growth is mathematically prevented from continuing for even three more years (because it would put ebooks at 160% of publishers’ revenues if it did!)”
    I’m not sure I’m understanding his words completely but isn’t he missing the possibility that ebooks might actually enlargen the market? Like a publisher is selling 4 ebooks and 6 paper-books out of 10 sales now, next year 8 ebooks out of 10 sales and then 16 sales, all ebooks, instead of 10 sales?

  16. “there’s also stuff that rises to the top because of something traditional publishers abandoned years ago: word of mouth.”

    Let’s talk about that word of mouth for a minute, Kris.

    Where do people find out about good books? Friends? Blogs? Reviews? I’ve looked in vain for decent reviews of indie books. Most professional reviewers (defined as: paid to review books) won’t touch indie books with a ten foot pole. At WorldCon in August, I queried every panel I could attend, especially the ones devoted to publishing, about reviews: not one “professional” reviewer there would review self-published books. Ironically enough, this includes the reviewers for “Locus”, the original “indie” book review magazine. I will repeat: I explicitly asked, and was explicitly told, that no reviewer associated with any magazine that publishes SF or fantasy or reviews will review a self-published book. They don’t even like to review small-press, professional books.

    I didn’t like the “gatekeeping” function of Big Publishing and I hope it dies a fiery death. But the need for some kind of filter remains. There are literally thousands of books on Smashwords, with dozens or scores being added every day. How does a reader figure out which ones might be worth the cover price? The few “reviews” posted on Smashwords or other sites are usually gushing variations on “ZOMG Awesome” or otherwise not helpful.

    I am a book reviewer, among other things, and my most recent review was of a first novel, published by a major publishing house. I did not learn about it through word of mouth, or Goodreads, or Locus. I learned about it through ads on the ‘Net and articles in publishing blogs. I would love to review indie novels, self-published novels, you name it. My editor won’t consider it. Why? He says they’re mostly crap. He is right, but then the same can be said for traditionally published books. What it boils down to, for reviewers as for publishers, is that right now everyone is doing it the way they always have.

    Your remarks about the traditional publishing business are dead on. But I think there may be more to be said about that word-of-mouth, the reviewers and bloggers and yes, the Amazon algorithms, that may ultimately prove more important to authors than the budget of any major publisher. I hope you can address that in a future column.

    Thanks again for sharing your thoughts and insight on this, Kris.

  17. Astute observations. Kris, I’ve believed for months now that book sales are going to spike with electronic books, and that we’ll see growth by volume (total number of books sold) rise dramatically over the next two years. Dare I say that 300% growth in the markets is possible? Think about it. If I’m used to buying a paperback for $8.00, and I can get three books for that same amount, I’m likely to buy more books just to try them out.

    But you’re right on so many levels. It’s not just that reader are going to buy more books, but whole new markets will open up. For example, the English book section is very popular in Germany, as it is in China and Korea and India. We can be hitting whole new markets.

    Don’t forget the rural buyers, either. When I was a kid, we lived 20 miles from the nearest bookstore. I never got to set foot in one until I was sixteen. Now, my fans in the Outback of Australia will have instant access to my enhanced novel NIGHTINGALE when it comes out next week–along with my fans in South Africa and the UK and the Phillipines.

    It’s an exciting time!

  18. Susan in AZ says:

    Dead on when you talked about “grocery stores or Wal-Mart or places like that”…

    I live in a very small town. Previously, I might have a “list” of 7 books to find in any given month, when we had 2 bookstores, K-Mart, Wal-Mart, and a few supermarkets selling books. I’d spend half a day searching all those stores, and maybe find three of my seven books.

    Now we have one bookstore, and all the other stores have reduced their shelf space for books. Luckily, I got a NookColor for Christmas last year, and have been buying more books than ever because I can find them all from the comfort of my home in Nowhere, USA the same day they are released in Big City, NY. Yay for my e-reader.

    About Steve Jobs, the I-Pod nearly killed the traditional Music Industry. We travel for Jazz Music events, and the traditional music stars told me they were HURTING in 2009. Then they discovered self-marketing on the Internet, and Pandora music stations. According to some of their blogs, this is earning them more money than ever! So your self-publishing business model also works for music and not just literature.

    Pandora is like a loss-leader publisher, just for music instead of books. Works well for those who take the time to learn it.

    Have fun in the Yukon; hope the weather there is gorgeous.

  19. F.R. Savage says:

    Kris,

    This is one of your best blogs so far. I’m a huge fan of Michael Lewis. Haven’t read MONEYBALL, but I have read everything else of his and THE BIG SHORT in particular was an eye-opener for me in terms of understanding group-think in business. Highly recommended.

    Now, I want to second Sarah Stegall’s thoughts about word-of-mouth. I’ve been harping on this for some time, but something new needs to be done in terms of gatekeeping or filtering. As a reader, I am personally unable to find new, good books (that are not by friends!) anywhere but from the so-called Big Six, because they’re the ones who can get their books reviewed… and I’ve wasted too much money on crap in the past to try any more unknown authors without seeing a few positive reviews = good word-of-mouth. And I’m a professional writer, with a lifelong reading habit that requires 2-3 novels a week in addition to quantities of non-fiction. You would think I would know how to find the good stuff without a bookstore, if anyone does. But I don’t! So how are these millions of new readers supposed to manage it?

    I have a bleak suspicion — unsubstantiated except anecdotally — that we may be headed for a new dumbing-down.

    Amazon’s algorithms work quantitatively. They’ll show you first the books that were “also bought” in the greatest numbers, not necessarily the best ones by anyone’s criteria, or the ones you may most want. But if you don’t know what you do want, you may just end up choosing those books… without the benefit of the human “quality filters” that used to exist in editorial departments or good bookstores, which hitherto acted as a counterweight to the gravitational pull of the bestseller lists. So when you rely on Amazon, you end up with your Kindle bookshelf shifted a couple of notches towards the lowest common denominator.

    This is fine if all you want to read is, say, formula romance or cookie-cutter thrillers. But those of us who like our fiction a bit more “difficult” or “thinky” are SOL, given that “difficult” stuff tends to sell in lower numbers and the Amazon recommendation method turns this into a self-perpetuating cycle. I’ve personally gotten great “also-bought” recommendations based on Michael Connelly purchases, for instance. Conversely, recommendations based on my more obscure purchases tend to be useless (the one other person who bought a collection of Malcolm Muggeridge essays apparently also bought a book on DIY kitchen renovations…).

    So, a future dominated by online book-buying algorithms looks pretty bleak for many readers and writers alke. Someone please tell me why I’m wrong about this! Or, if I’m not wrong, let’s start brainstorming ideas for new quality filter systems. This is a great community and this is exactly the kind of problem we need to work on AS a community.

  20. Speaking of Pulphouse, I was helping Ed Bryant pack up his storage unit a week or so back, and came across a wealth of old Pulphouse material — the books, the magazine (at least, Volume 0, with Ed on the cover), the mini single-story volumes — somehow I managed to miss all that when it first appeared. I could see echoes there of what you and Dean and WMG are doing now.

    I was sorely tempted to grab an armful and retire to a corner to read.

  21. Thomas E says:

    “We know that ebook uptake, as measured in sales or in their percentage of publishers’ revenues, has doubled or more than doubled every year since 2007. We know that the rate of growth is mathematically prevented from continuing for even three more years (because it would put ebooks at 160% of publishers’ revenues if it did!)”

    He explained this in the comments. He is referring to market share. ebooks can’t go to more than 100% market share – at 100%, every book read would be an ebook.

    The number of ebooks sold can, and will, increase even if the growth in market share slows or stabilizes.

    My interpretation of the post is… well… that he is more fearful than even Kris says. What he is saying is he doesn’t know how much, or even if any, of the market will remain print. But that he thinks at the minimum, a very substantial percentage will go to ebooks.

  22. Kris,
    Great post, as always. I think, though, people get confused about how percentages work and how they represent change. Slatkin says that eBook sales can’t continue to double. You want to challenge that by suggesting their is no limit to eBook sales, that Slatkin’s view is a traditional publishing view.

    Reality is, Slatkin is right, for exactly the reason he states. We don’t even have to be talking about books to make that claim. In fact, making that claim doesn’t say anything about books, sales, or any other darn thing. It’s a simple reality associated with percentages.

    Here’s why:

    Let’s assume that the number of widgets sold in the first year is 1000 and that it doubles in the next year, so now 2000 are sold. If sales double in the subsequent year there are 4000 being sold. This continues until, only 5 years from launch, there are 16,000 units sold. Notice how much harder it will be for year 6 to show double sales? That’s not to say that the company wouldn’t be pretty darn happy if they sold 28000 units but that would only be a 75% increase.

    Slatkin implies that because nothing can double beyond 100% will somehow stem the tide of eBooks becoming an ever-greater percentage of total book sales (which is is goal of his argument). The two things have nothing to do with one another. If the annual industry growth rate is 4%, 6$, or 20%, as long as the growth in eBook sales, and any decline in print sales add up to more than the annual growth rate, eBooks will represent a larger and larger percentage of total book sales. We don’t have to be talking books, here. This is a function of percentages and nothing else.

    Percentages are a great way to get lost when it comes to looking at trends. If you understand them they can help but if you don’t they will obfuscate what’s going on completely.

    Cheers — Larry

  23. Bob Mayer says:

    I was stunned to see execs at Publishing Houses saying they had to outsource more of their IT work and also focus on datamining. Datamine what?
    I just blogged about how Neal Stephenson’s latest book had to be pulled, redone and repulbished in ebook. Assume that was outsourced. Pottermore failed miserably with beta testers.
    I’ve been saying consistently for a long time that the Big 6 don’t understand the ebook market and I’ll keep saying it. They don’t understand it because they haven’t done it, like I have at Who Dares Wins, and they don’t understand it because they think an ebook is just a digital version of the print book. NO. An ebook is a very different beast from a print book. If you read the NY Times article by Lev Grossman From Scroll to Screen http://www.nytimes.com/2011/09/04/books/review/the-mechanic-muse-from-scroll-to-screen.html he just begins to touch on the differences. Because an eBook is more than just a scroll too.

  24. Nancy Beck says:

    Kris, I have to say this is one of the most fascinating posts you’ve ever written. I actually re-read a lot of it, rather than just bulldozing thru as I usually do. (It’s how I read fiction, too, much to the consternation of my hubby. :-))

    I guess 2 of the things that stood out were the explosion of readers because of the G.I. Bill and the fact that baseball, politics, and publishing have traditions. I’d never heard about the outpouring of readers after WWII, but it makes sense that would’ve happened with the G.I. bill sending tons to college; and the traditions among those 3 institutions was an eye opener.

  25. Nancy Beck says:

    @Sarah,

    I just did a Google search for my favorite genre (fantasy review blogs) and came up with dozens of blogs for fantasy books. I didn’t read to see if they reviewed indie/self pubbed books, but my guess is probably more than a few do.

    And most are probably not “professional” review blogs. But IMHO, just because they’re not doesn’t necessarily mean they’re any worse (or better) than the pros.

    Just my 2 cents. :-)

  26. Lee Allred says:

    Another factor in the post-WWII reading boom was the wartime Armed Services Editions program (and to a lesser extent the Victory Books Campaign before that) that gave away paperback books sized to fit in the cargo pockets of military uniforms. (Today’s mass market paperbacks still fit nicely into current uniform cargo pockets.)

    http://www.associatedcontent.com/article/673487/americas_victory_book_campaign_during_pg3.html?cat=37

    The easily portable books were very, very popular (much of military life is long stretches of tedium, even in war zones) — sort of a low-tech equivalent of the ebook. Many returning vets came back with a new habit of reading books for entertainment and the idea that the default version of a book was a cheap paperback.

    How much this contributed to the post-war book boom is subject to debate, but I think one could credibly argue that it was as much a factor (or more) as the G.I. Bill.

  27. Sharon L Reddy says:

    One of the most difficult ‘traditions’ to overcome is the mass-market mindset. “I write for everyone who reads…” I don’t. I identified a market for a specific type of book, because I was in it, and others who are, asked me to write for them. I developed a style for that market, which is so radical, people say, “You can’t do that!” when they’re being polite. I smile when I look at my sales reports and someone else has bought 10-20 of my titles in a single purchase.

    The style is based on extensive research, physiology and psychology, not book sales. I’m very specific about my target market. I’m the only one writing a specific type of story for that specific market. My sales technique is “Look Inside” and a dynamite hook, then word-of-mouth. I can keep a reader in my target market long enough to get used to the style, then women will read my books up to 20% faster than others, average 14%, university tested and documented. Men read them an average of 8% slower. They’re built for the way women visualize, and for this era.

    Every time you create a profile, those demographics are entered into a data base and ads you see on web sites are selected to best ‘target’ you. You and your spouse may see ads for the same product on one of the major sites, but it won’t be the same ad. Electronic publishing is ‘splintering’ the market. The more defined your target market, the better you can select how and where to advertise your work.

    Note that word, “work.” In this era, it is not the individual book, but the entire body of work which is the basis of sales, over the long term. Define your market, carve your niche and grab your splinter. The demographics of your target market are available. But remember, the most important thing is you must know the ‘rules’ very well, before you can choose which to break and do it consistently.

  28. Jenny Milchman says:

    The links and connections you make are fascinating to follow, and I appreciate your balanced, neither black nor white, perspective.

    I’m sorry bookstores piss you off now! Where on the OR coast? We just returned from a coast to coast tour of bookstores; OR is a great bookstore state. My feeling is that they sell very differently from the algorithmic Amazon approach–but therein lies their beauty and their charm. In the surprises, and the esoteric combinations. Plus the whole experience of being physically surrounded by books.

    I have just signed a traditional publishing contract after 11 years spent trying to break in. But I routinely tell students something like what you said here–that both paths (all paths) offer benefits, and it’s a question of balancing which might be right for you when.

    I’ve donated in the past, and will again.

    • Kris says:

      Thanks, Jenny. I should probably have been clear: B&N brick-and-mortar pisses me off. I am in Whitehorse right now, in the Yukon. I just went to the main bookstore, Mac’s Fireweed. Wonderful–exactly what a bookstore should be. It was nice and relaxing, perfect after a long day of teaching & talking. A lot to answer here, but I don’t have the energy to answer all the wonderful comments. I hope to try tomorrow, but we’ll see…right now brain is mush…

  29. Chris York says:

    Kris – I haven’t had time to read all the comments, but I would like to point out one additional change that came about during the Second World War – the advent of the paperback, and with it affordability and increased accessibility.
    I think/hope that we will see the same reaction to e-reading devices and content over the next few years. The devices are dropping in price and-as you pointed out-more and more devices can act as readers (smartphones,etc), thus creating an affordable and accessible delivery system. If content is available at an affordable price-point, this could mimic the paradigm shift that came with the advent of the paperback.