The Business Rusch: More Distribution Changes

Business Rusch logo webThis morning, my iPad Los Angeles Times app informed me that the creators of the TV show Veronica Mars had started a Kickstarter project. They wanted two million dollars to jump-start a movie, using the original cast. I clicked the link to Kickstarter and donated. At the time, the movie hadn’t yet reached its goal. As of Wednesday evening, it had. I have my browser open as I type this, and the number of supporters goes up by two or three every ten seconds.

Some fascinating things about this Kickstarter program. Rob Thomas, Veronica Mars’ creator, is quite aware of the copyright implications of what he’s doing. As he says in the Kickstarter promotion itself, “Of course, Warner Bros. still owns Veronica Mars and we would need their blessing and cooperation to pull this off. Kristen and I met with the Warner Bros. brass, and they agreed to allow us to take this shot. They were extremely cool about it, as a matter of fact. Their reaction was, if you can show there’s enough fan interest to warrant a movie, we’re on board. So this is it. This is our shot.”

As Lisa de Moraes, the TV columnist for The Washington Post, commented later in the day, “Speaking of the good folks at Warner Bros., you can imagine how silly they were feeling Wednesday afternoon for having set the greenlight threshold at a mere $2?million.”

Yeah, they were feeling silly, and other auteurs were feeling hopeful. The Post interviewed a few of them. I’m sure others are watching this with interest. I know I am.

Veronica Mars had about 2.5 million viewers in its first season back in 2004. A little more than one percent of them have pledged to donate something so far.  The show’s viewership grew in later years thanks to DVDs of all three seasons. Which means that in the 29 days remaining in the Kickstarter project, the VM team has even more potential than it seemed just two days ago.

From Amanda Palmer’s successful Kickstarter project last year to this Veronica Mars project, Kickstarter, crowd-funding, and the internet itself have changed the way we consume entertainment. I’ve been writing about this change for years, but the one thing that readers don’t seem to get is this:

What’s changed are the distribution methods.

Had Veronica Mars barely made its two million dollar threshold in 30 days, Warner Brothers would probably have released the movie direct to video or with a limited release in a handful of theaters. (It still might do that.) One of the things I’ll get when my rewards come in is a digital version of the movie a few days after the theatrical release. In other words, I won’t have to go to a theater at all to see the movie. And, if you pledge, neither will  you.

How you see a movie depends on the movie’s distribution. Back in the dark ages, movies got released to a limited number of theaters and slowly spread across the country, like a virus. (Those flu charts from January? That’s how movies got released.) Then, thanks to Jaws and the blockbuster revolution in the 1970s, movies got released on as many screens nationwide as possible. Then video came about and we all had VCRs, to be replaced later by DVD players. Then came On-Demand movies,  streaming video, and all sorts of devices on which to view that movie. I can even watch on my phone if I’m so inclined (and the battery life holds up).

Theoretically, all of this means more revenue to the creator, but of course, that changes depending on the contract terms. Rob Thomas made his deal with Warner Brothers back in the dark ages, before most of this stuff existed, and now he’s working in a new age—of distribution.

We’ve been watching the distribution revolution hit publishing. Once upon a time, the only way to get your book to the masses was to go through a traditional publisher. Print on demand and e-books have changed that. Now, self-published novels can sell millions of copies, just like novels put out by traditional publishers.

Those self-published novels have hit e-book bestseller lists, including the prestigious New York Times list, but so far, none has hit the print bestseller lists. The one place that traditional publishing continues to hold its advantage is with print books.

There are a couple of reasons for that. First, self-publishers can’t do presales through Amazon or any other distributor. Many books, particularly later books in series, receive preorders and those preorders are counted as sales in the first week of publication. (In other words, they’re not counted on the day the order is made, but on the day the book is shipped.)

Secondly, Amazon, the largest seller of self-published titles, keeps its sales numbers secret. It won’t give the Times raw data, calling that proprietary. Amazon will only release a vague formula, which invites many national bestseller list compilers to either ignore the gigantic retailer or downgrade the information in the formula the list uses to figure out what’s actually selling.

At the moment, then, traditional publishers are right: if you want to hit a bestseller list that doesn’t have the word “electronic” in the title, you need to go through a traditional publisher.

By this time next year, that might be different.

This has frustrated me from the beginning of the indie revolution. Getting books into bookstores is a labor-intensive job that requires not just finesse in dealing with the booksellers, but giving booksellers things that they expect from ordering convenience to good discounts.

At Pulphouse Publishing, it took us years to develop a list of 200 booksellers who ordered from us regularly. Dean got them onboard one bookstore at a time, and often spent much of his day dealing with them.

Many independent presses join with several independent distributors to get their books and e-books on the market. The problem with all of those distributors is a glaring one: they expect exclusivity. One of them—the most famous one—existed twenty years ago. When Dean saw the contractual terms the distributor wanted to take on our little publishing company, he threw the contract  in the trash, preferring to build our own little list.

As we became hybrid authors in this new world of publishing, I made a list of all the bookstores who had contacted me about getting my books. I had a dream that someday those stores would be able to easily order my books. At the time, those stores could order my books through Ingram’s and Baker and Taylor. Createspace offers a way to get into those catalogs. Bookstores have ordered my books through those large distributors, but at a small discount, which many booksellers balk at.

Dean and I got talking, which is always dangerous, and we realized that there was a gaping hole in getting independently published books to bookstores. Most publishers didn’t want exclusivity with their distributor and most booksellers didn’t want the small discounts being offered through larger venues.

So we asked what if someone took on a non-exclusive distribution of the paper books of indie writers, provided a good discount for booksellers, made money for the publishers, and offered pre-orders.

The idea was too good to ignore. So we, crazy people that we are, backed Ella Distribution, which officially launched this week. Let me be clear: Dean and I are not running Ella. We’re the initial idea and the initial funding behind it, but it’s so much bigger than anything we imagined.

Right now, the bulk of Ella’s catalogue comes from us, from other beta-testers, and from collectables. Eventually, there will be a lot of other writers involved. Ella’s beta testers are all established, hybrid writers who have had at least one New York Times bestseller or a demonstrable fan base.

Why? Because Ella’s goal this year is to bring as many bookstores as possible on board. Booksellers will order a book by an established author through a new imprint. Once the bookseller is on board, he will thumb through Ella’s catalog and at least look at books from authors he doesn’t recognize.

The more bookstores, the more books sell. The more books sell, the more Ella grows. The more Ella grows, the more opportunity there is for writers outside of the traditional publishing model.

In other words, within five years, preorders through Ella to bookstores might actually lead to a New York Times print bestseller for an indie-published novel. To hit the Times print list, a book must sell rapidly through a group of bookstores known only to the Times. Which means that said book must be in many if not most bookstores to get on that list.

See why I’m hopeful?

Mostly, though, I’m happy that there’s a way to reach booksellers with proper discounts. Ella is offering books on a non-returnable basis, with a 50% discount and free shipping, provided the store orders a minimum amount.

Ella will also work with libraries on similar terms.

It’s a new distribution model and an old distribution model all at the same time. In other words, Ella is a distributor that gets books into bookstores, just like Ingrams or Baker & Taylor. But unlike those larger companies, Ella has a system to work with independent publishers outside of the Createspace model.

For those of you with questions, and I know that’s a lot of you, most of the answers can be found on Ella’s website. The answer to your first question is this: you may not blindly submit your print novel to Ella. They’re not interested at the moment. They’re working on getting bookstores.

But you can prep for the day when they will be interested by looking at their terms, which are here.

The best thing you can do, though, is point out Ella to your favorite retailer and your favorite library. As I said, the more bookstores and libraries Ella gets online, the better for everyone involved.

If you see a book you want, then order it. That will also help Ella on the beta test. Or click around the site and see what you can find. Again, beta testing is all about making sure everything works and everything grows.

Right now, hundreds of people in Hollywood are watching Rob Thomas’s Veronica Mars Kickstarter project, wondering how his success can translate to their projects.

We want a lot of people to help get Ella Distribution to the level that it can challenge the one peg left standing in traditional publishing’s hold on writers. If Ella Distribution ends up with a wide range of bookstores who then preorder the next print book in some indie writer’s series, then that writer has a very real chance of hitting all the major bestseller lists.

Just like e-book writers have done this past year.

The e-publishing revolution started in 2009. It took to 2013 to challenge the supremacy of the bestseller lists when it came to alternative media (like e-books). That’s less than five years.

Wouldn’t it be fun if the distribution revolution happening in print makes the same kind of challenge to the print bestseller lists in 2017?

I think so.  I hope you do too.

2009 feels like just last week to me. Exactly four years ago this spring, I ventured into the world of nonfiction blogging with great trepidation. I have yet to miss a Thursday. That consistency has built a readership that I greatly value. Thank you all for coming here week after week.

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“The Business Rusch: “More Distribution Changes” copyright © 2013 by Kristine Kathryn Rusch.





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28 Comments

  1. I saw this on Dean’s blog a few days ago, and all I can say is…I’m *really* excited about this. I admit, I’ve been kind of waiting for someone to start a distribution offering for paperback books for indies…even if it was a well-run cooperative venture of some kind. This is so much more than this, if I’m understanding it right, and all I can say is, hurray! I only hope I’m in a position to take full advantage of it when it blossoms.

    Reply
  2. Looking at the kickstarter:

    As of 12:30am pacific, Thursday morning the 14th (just over 28 hours into the kickstarter) they are almost at 2.5M, with every reward at the $400 and over mark being sold out.

    I’d say that they have the interest they need.

    It’ll be interesting to see what additional rewards they can manage to come up with to keep interest up (and to see how high they go with 29 more days to go)

    Reply
  3. Great project. I wouldn’t have worked with a distributor that allowed returns. I see Ella distribution is working with Createspace.

    Would it be possible for authors who work with Lightning Source (LSI) to make separate deals with Ella ? In order to obtain better prices ?

    In my experience, when you have absorbed the revision costs of LSI, it is possible to make better profit with them, especially if you sell by packs of 10 books.

    Reply
    • I assume it will, Alan, but I don’t know. You’ll have to ask directly.

      Reply
    • Alan,

      Good question and we will make sure to clarify this on the website.

      Please utilize the printer that works best with your business model! Ella pays Publishers 33% of cover price plus shipping. We hope that works for you and will add to your profit streams.

      Ella’s success equals our publisher’s success and we appreciate these questions as it helps us refine further improvements.

      Thank you!

      Reply
      • Thank you, Stephanie, for your reply. I haven’t got yet a book in english but I felt the question would be useful for other indie authors.

        Last question : is there a minimum number of different titles in order to be eligible for distribution ?

        Reply
        • Alan,

          Currently no, we do not have a minimum # of titles required to submit.

          One of our goals is international distribution, which would include the distribution of non-english language titles. However, we will not be moving forward on international distribution for at least a year.

          Reply
          • Thank you, I’ll definitely watch that.

      • Will you be accepting publishers from Canada in the future?

        Reply
        • We are looking into how to make that work now. If you are a Canadian Publisher looking to distribute in the US, please contact Ella in July.

          Reply
  4. I loved Veronica Mars – quirky & fun – so of course it was cancelled! (Happens to offbeat shows I like all the time.) I may just donate something this weekend, will have to see how the money runs. :-)

    Heard about Ella Distribution on Dean’s site, and I couldn’t be more thrilled. As you and Dean have pointed out, having a story in ebook form only means missing out on that segment of the population that either doesn’t want or isn’t interested in ebooks. (I’m finally putting my 3 novella series into one print book as a sort of test run for what I’ll be doing as a regular thing from now on.)

    So this is good news indeed. The site looks great, very clean, uncluttered. I like the cover price/number of pages info on the Publishers page. Gives me something to keep in mind for my stuff. :-)

    Reply
  5. As I write this, the Veronica Mars movie Kickstarter is at $2.66 million, with 30 days yet to go….

    An independent author can do a lot these days on their own that was the provence of a publishing company. They can format, design a book cover, or hire people to do all this for a flat fee. Uploading an Ebook is a few clicks and the entire world can see your work.

    But physical book distribution is not something an independent author can do by themselves. As you’ve aready described, Kris, it takes time and smoozing to get bookstores to take a book, and frankly, that’s time better spent writing. Also, writers tend to be introverts, and not salesmen by any stretch of the imagination.

    This is a new world in publishing, and it’s a unexplored one. The pieces are falling together — Fee-based companies have sprung up to help those who need the help, and bookstores are finding their new nitch in this world. Now, the first of the Distribution companies has appeared, the last link in the physical book chain between author and bookstore.

    Going to be an interesting few years….

    Craig

    Reply
  6. I know this is sort of off the point, but ‘Firefly’ kickstarter. Makes me feel almost giddy to think about the possibilities.

    Okay, I’m excited about new distribution possibilities for books too.

    Reply
    • I had the same thought, Linda. Wouldn’t it be great?

      Reply
  7. Glad to see Veronica Mars resurrected… it was such a clever show.

    I’ll share a nice story about Kristen Bell, who plays Veronica. Her dad works in the TV news business and I got word to him thru a friend that my wife was a huge fan. Kristin sent her a personalized autographed photo for her birthday.

    Reply
  8. I’m excited about Ella, as well, and hope maybe some day to be a part of it or of something similar.

    With the changing times, though, I have to wonder … how much longer can bookstores continue to expect relatively large discounts? I have no experience as a bookseller, but with all the changes going on in publishing, it would seem logical to me that this is one more thing that’s going to have to change eventually. Or am I way off base? Just wondering.

    Reply
    • You’re off base, Ty. Retailers have to make money. They’re not there to showcase books; retailers need to make a profit just like every other business. No grocery store gets a small discount for the food it carries. It gets a good discount. Same with booksellers. You have to remember they’re in business, just like you are, and you need to respect their business needs as well as your own.

      Reply
      • Oh, I understand they’re a business. I get that. But using grocery stores as an example, the very one you used, I was a grocery store manager for 7 years, and we never got 50 percent discounts, usually more like about 12 percent, sometimes 20 and very occasionally 25. As far as percentage of profit goes, soft drinks were usually the best item around. Some few items we actually lost money on for brief periods because of various reasons. Admittedly, though, I’ve been out of the business a long while, so maybe things have changed.

        Let me put it this way: If I’m selling a book for $14.99, and the retailer expects a 50 percent discount, why not go for a 25 percent discount and let me sell my books for $9.99? They’d make just as much, give or take a few cents, and potentially sell more books.

        I’m not trying to force a retailer to do this, and not even saying I want to do it, but I’m wondering why the retailer doesn’t do this itself?

        Reply
        • You have to go with the industry as it is, Ty, not the industry as you want it to be. It’s tough enough being a no-return company. The big guys offer returns. Indie publishers can’t and shouldn’t, so you have to give a bigger discount. That’s just the way it is. If you want a smaller discount and returns as a bookstore, you can always order the same books from Ingrams or B&T. But most bookstores won’t. They want a large discount and returns. Ella’s giving them free shipping instead of returns. Better for everyone.

          Reply
        • In fact, Ty, the way you calculate is just wrong. With a 25% discount for the bookseller/retailer, he/she would make only 2,5 $ on a 9,99$ book, which is a third of what he/she would make with a 50% discount on a 14,99$ book. While the author/publisher would, indeed, make the same amount of money. So the retailer would have to stock, and sell, three times as many books if he/she applied this model. Which, again, means that the readers would have to spend twice the same amount of money if they want to keep their beloved bookseller in operation.
          So I do not think it would be a good business idea. No offense, but I do hope you ran your grocery store with a better sense of algebra.

          Reply
          • Alexis, I didn’t go into detail about it, but I was taking it for granted that contractually the writer/publisher would take the hit, not the retailer.

          • All right then, but it’s not what you wrote.
            You are now talking about a 75% discount, allowing the retailer to keep the same margin. Two objections :
            - No way the author/publisher will be able to recoup HIS costs.
            - Is it compatible with your initial question, “how much longer can bookstores continue to expect relatively large discounts?”
            I am sorry Ty, but as I am sure this is also not what you intended, what is it exactly that you meant ?
            Let us not bother Kristine and her readers any longer.
            Alexis

  9. at present I have a novel and a collection in POD from Createspace. Does Ella require we move to someone like LIGHTNING SOURCE? I wasn’t able to find an answer to that on the site.

    (Plus, say “Hi” to Dean. Bet he doesn’t remember me but I definitely remember him. Like Daily.)

    Reply
  10. Interesting idea for print distribution. I definitely agree that indie authors need to have a way to distribute in print as well as ebook. I also believe that authors working together have better market penetration and cross-promotion/recommendation capabilities than authors working alone. A number of authors are finding that banding together is the best way to go.

    For that reason, I started an author cooperative to provide both a press name and an e-commerce direct sales site (both for ebooks and print) for authors in the cooperative. Though I started Windtree Press two years ago, it’s just in the past month I’ve completed the e-commerce capabilities and will have 4 additional authors joining us this year. So far, on the print side, I have 30 bookstores at 40% discount and no returns if they order 2-5 books. Discounts go up if they order more. We drop ship direct from CreateSpace or LSI.

    It is a tough slog to get in bookstores, especially if you don’t already have bestseller authors on your list. IN that way, Ella’s is way ahead if they already have 200 bookstores. It would be great to have another distribution point to offer Widntree Press coop authors who want/need wider print distribution than we are likely to achieve in the near future.

    Reply
  11. I recently joined Book View Cafe, a cooperative publisher, for this exact reason — better, wider distribution. It’s primarily electronic, gets me into libraries and other places. They’re exploring more paperbacks, and are growing. They have NYT best sellers on their list which also helps.

    http://bookviewcafe.com/bookstore/about-book-view-cafe/

    Reply
    • Leah, a quick scan of the site gives me nothing except e-books, and no information for retailers. Not complaining, mind you, just saying I don’t see paper books.

      Reply
  12. Oh very good, and good luck with this. This one thing I have been expecting. It makes sense that there should be alternative distribution paths now. The technology has definitely gotten to that point.

    This is a spin on the idea I mentioned last time of offering a publishers services as options under a central cover. Here you are offering the distribution portion. Something very much needed.

    Reply
  13. Veronica Mars is at 3.5 million and rising, with most of their month to go. Yeah, I think they’ll do okay. :P

    Reply

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