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.