The Business Rusch: The Logic Behind Self Publishing

Business Rusch logo webEvery morning, I read two or three newspapers on my iPad. One of those papers, The Los Angeles Times, has continued to showcase an editorial about the “death” of the self-published author. (I refuse to link to this thing; look it up yourself if you’re curious.)

Okay, the article’s not really the death of the self-published author. But the stupid piece, which I have clicked on three days in a row because I was tired and I didn’t recognize the headline, claims that because e-book growth has slowed in the last few months, self-published authors will never reach the pinnacle of success that they all dreamed about a short year ago.

It’s like comparing apples and farts. Seriously. And about as scientific.

The editorial was inspired by an article in Salon, which has caused a lot of discussion in the mainstream media in March. The Salon author, who did about as much research as a kid trying to finish a paper an hour before it’s due, even misspelled Hugh Howey’s name (and fixed the misspelling after it got pointed out by commenters). She was writing in response to a Wired article that called Howey’s deal with Simon & Schuster “a huge concession” by the publisher. S&S did not take e-book rights, and probably didn’t take all of those other rights they’re forcing less-in-demand authors to take, including the non-compete clauses that essentially tie up writers for years and years if the writers aren’t careful.

Yes, S&S made a huge concession. It will lose a lot of revenue here if it’s not careful. E-books are extremely profitable for traditional publishers because publishers pay significantly less for the license—even when they’ve licensed the e-book rights from mega-bestselling authors. (I’ve discussed this before; see this, this, and this)

Hugh Howey is not the only writer to make a print-only deal with traditional publishers in the past six months. But his deal is the most watched. Everyone is looking at his deal to see if it can be replicated, and the timing couldn’t be worse for other writers who want print-only deals. Publishers are going to claim that Howey’s print books aren’t selling to expectation and no one will admit the reason why.

The reason? Howey’s print book got released by S&S on March 14, just as S&S began a war with Barnes & Noble. I have no idea what the actual disagreement is because neither side is talking, but here’s what the New York Times says:

The dispute centers on the financial arrangement between Barnes & Noble and Simon & Schuster. While neither side will specify exactly what new terms Barnes & Noble is seeking, a senior executive familiar with the negotiations said that the bookseller wanted to pay less for books and receive more money for giving titles prominent display in its stores. Such display spots are coveted because they are thought to be critical in helping customers discover new books….

Simon & Schuster has argued that while it wants to support the retail chain, it cannot afford the terms Barnes & Noble is demanding. The publisher’s chief executive, Carolyn Reidy, would not give specific details, but said the two sides were at odds over many issues, including both physical and digital distribution.

The problem? In the middle of this dispute, Barnes & Noble has demonstrated its clout by cutting back on the number of titles it has ordered from S&S. The publishing industry is screaming about this, because at the moment, B&N accounts for 20% of “consumer book spending and is a main conduit for publicizing new releases.”

Jodi Picoult’s agent says that this dispute has had a noticeable effect on Picoult’s latest release, The Storyteller.  A repeat bestseller’s agent would notice these things, because an author’s numbers usually vary a small amount between book releases—incrementally up or incrementally down. For the agent to mention this, the sales have to be significantly down.

The new president of Writers House, Simon Lipskar, who is always quick with a quote, said, ““Without pointing fingers, authors are being hurt by this, and I think it is despicable.”

Remember that when authors are hurt, agents are hurt as well—sometimes more, because agents theoretically make less than their writers. (Although that’s changing. See this post on the problems with agent rights grabs and agency accounting.)

Authors are getting hurt, of course they’re getting hurt. Because their books are product that is being distributed by publishers to bookstores. One particular publisher in particular is being punished by one particular bookseller in a negotiation over a business deal.

The product gets hurt in the middle of such negotiations, just like it did last year when the Independent Publishers Group took on Amazon, just like it did when Macmillan and Amazon went to war in 2010.

When you have middlemen, and they have businesses to protect, they have their own conflicts that have nothing to do with the product that they theoretically represent.

The writers who will get hurt the most are those whose books are being released in the first part of 2013 by Simon & Schuster, and that includes Hugh Howey.

Whatever S&S’s projected sales figures for Wool are, those sales figures won’t get met. If S&S is smart, they’ll accept that those numbers will be lower—that all of their sales numbers—will be artificially low this quarter, and they won’t make business decisions with those authors based on the artificially low sales numbers.

And pigs will fly out of my butt.

Mark my words: next year, when some author who sells a million copies of her latest self-published title gets an all-inclusive offer from a traditional publisher, the author’s lawyer (I hope she won’t have an agent, but she probably will) will ask for print only. And someone at the publishing house will look at the Book Scan numbers for the Howey book, and say, We can’t make enough money on print only. We’ll need e-rights as well.

I hope that author is smart enough to walk at this point. But so many authors haven’t been smart enough so far. Only a few have stood up for themselves, Howey included.

I’m disappointed at the timing of Howey’s book release and the S&S/B&N war. I truly am. Because this is a major experiment being watched in the trades by book people. Book people, who have notoriously short memories and who never seem to understand that x and y can happen simultaneously and both can have an impact on sales.

Here’s the other problem with what’s occurring between S&S and B&N: the distribution channel has been blocked. Not just blocked. Barricaded, closed, warning signs placed around it, and attack helicopters flying over it.

And you know who is really being hurt here? Readers.

Because traditional publishers treat books like produce. So the books being released this quarter by S&S have only a few weeks to make an impression on the publishing world. If 20% of consumer spending occurs at B&N and S&S’s books aren’t there, then S&S’s books in this quarter will sell quite poorly.

Sure, a reader can get that book from a different retailer, probably with no problem. (Note to B&N: Great way to drive your customers to your competition. Just sayin’.)

But the future is the problem here. It sounds like Jodi Picoult is on top of this thing, doing signings and such to make up for that damaging loss in sales. However, most writers want to be “a writer, not a manager” to quote Charles Stross from this past week. Those writers are willfully naïve about the business of writing (and I almost didn’t link to Stross here because his piece (and his comments afterward) are so full of misinformation [like the fact that he confuses net and gross, and seems to believe that writers and publishers make the same percentage on each book sold {!}]).

So when a crisis hits A-Writer-Not-A-Manager’s career, usually that writer knows nothing about the crisis and certainly doesn’t know what to do about that crisis to fix the crisis. Or even what the impact of that crisis will be and when that impact will hit.

Here’s the impact: When a first-time author negotiates her second-book contract with S&S, S&S will claim that sales were not to expectation and either not buy the next book or will low-ball the offer. And then will ship the same number of copies that got sold in this crisis period, so sales will continue to decline.

The same decline in sales will happen to a long-time author, and even to the bestsellers for S&S for the same reason. S&S will look at the sales figures for the previous book’s release and claim they were “disappointing” and will make the offer on those numbers.

That’s how it’s done in traditional publishing.

Will S&S admit that the low sales are its fault? No, nope. Not at all. Never. Well, maybe to Jodi Picoult and a few of the bestsellers who actually challenge S&S on this. Will S&S admit it to other writers? Writers farther down the totem pole?

Naw. And even if the author or author’s representative brings it up in negotiation, the response will be simple: We’re sorry, author. We have no idea if the low sales are because of the B&N negotiation. In fact, we doubt it.

Will the author have access to sales figures proving her side of the issue? Nope. She’ll have to trust S&S or whatever traditional publisher she goes to for this negotiation—and it’s not in the publisher’s best interest to claim fault here. Got that? The publisher wants the next book for less money and wants to grab more rights. So the publisher will use whatever cudgel it has to get those things.

If the writer is not a business person, the writer won’t know what hit her. If she is, she might be able to argue for an increased initial printing, guaranteed in her contract, which, if she gets it, would be a concession by the publisher that indeed the lower sales were the publisher’s fault.

But that’s it.

And believe me, some writers who are being published by S&S in the first quarter of 2013 won’t be able to make another traditional publishing deal under the same byline when the current contract ends.

Why don’t publishers care more about this? Why doesn’t S&S?

Because they publish thousands of books per year. If some books get caught in a dispute with B&N, so be it. If S&S wins this dispute, and gets better terms from B&N, then S&S will count this negotiation as a win.

And it will be—for them.

So let’s go back to that annoying Los Angeles Times essay about the death of self publishing. Let’s answer Ms. Miller of Salon who seems to assume in her badly researched piece that self-published authors only put their books out in e-book format. She thinks self-published authors are going with places like S&S to get their books into print, ignoring Createspace and Lightning Source and all of those other avenues.

She writes: While most self-publishing platforms, including Amazon, do offer print options, they aren’t able to effectively distribute print books to the best places to market them: bookstores.

Of course, that’s not true. Createspace and Lightning Source do get books into bookstores. Mine are going there, and so would any other author whose work is already in demand. And that would be true if the self-published author has books that have taken off in e-book format or if the author has had a traditional career before self-publishing. And none of that counts what Ella Distribution is set up to do as this  year progresses.

Be that as it may. Let’s assume Miller is right. Let’s assume that self-published writers aren’t getting to bookstores easily. Well, gee, then those writers should really go with a traditional publisher, like Macmillan or Simon & Schuster. Because they never have trouble placing books in bookstores. They would never use the sweat of their authors’ labor as leverage for something else, would they? Nope. Not ever.

Sigh.

Here’s the thing, people. This kind of crap has happened before and it’ll happen again. For example, at the beginning of this century, the bookstore chains (and back then there were a lot of chains) decided en masse not to take small hardcovers because too many specialty and small presses used that format and the bookstore buyers didn’t want to be bothered with figuring out which books were “good” and which weren’t.

Lots of traditionally published books from places like Doubleday and St. Martins Press got caught in that mess. I know about it because my Smokey Dalton novel Thin Walls was one of those. That book did not go to mass market paperback because (gasp!) its sales weren’t to expectation and that was somehow my fault, not the fact that the previous hardcover, Smoke-Filled Rooms, had been distributed to chain bookstores and Thin Walls had been denied for no reason of its own the same distribution.

Nope. It was my fault. And St Martins never put another Smokey Dalton novel into mass market paper again, despite great acclaim, despite every award nomination possible, despite demand from bookstores who ordered and never received delivery of the requested copies. (Yeah, that happened several times, including on a book tour the publisher set up and paid for—and never provided the books for.)

I’m not telling you this because I’m bitter. I’m actually not. I saw what was happening. I understood it. And frankly, it’s because of my business savvy, Dean’s business savvy, and the help of independent booksellers, that this series went to six traditionally published books before I walked away from St. Martins insulting offer for seven and eight. (And before you Smokey fans ask, number seven is nearly complete and will be published about this time in 2014.)

I’ve rescued books and my career before. I knew the buyer at Barnes & Noble fifteen years ago when the new publisher at a company I was with decided to murder the books of an editor who got fired. (There’s a long backstory here, which has to do with things that were later litigated between the editor & publishing company, which I am not at liberty to discuss.)

I told my friend the B&N buyer what was going on, and bless him, he ordered every book I ever wrote for that company in large numbers and placed those books on B&N’s shelves all over the country. He did the same for other authors caught in that mess after I had told him about it.

If I hadn’t said anything, most of us would not have careers. That’s the kind of business savvy that Jodi Picoult is displaying at the moment, the kind that most Writers Not Managers never roust themselves to try, let alone understand.

Why would writers self-publish in this climate? Because that way, the writer won’t get caught by someone else’s business dispute.

Sure, the writer might get involved in some sea-change at one of her distributors. Maybe Amazon decides to lower the percentage it gives KDP authors (oh, no!) or maybe B&N decides to make it harder to publish through Pubit.

Those hypotheticals are with one company and the self-published author will know about the problems and make decisions for her own career  instead of getting used as a pawn. If the writer’s smart, she’ll have her books in every single available distribution system for e-books and for print books, and the loss of one won’t have the impact that it would if she lost her only distributor.

Because mark this: for most S&S writers published in the first three months of 2013, they’ve lost access to 20% of consumer book spending because their distributor (their publisher) is screwing with their business. And those authors have no choice: they have signed a contract keeping them with S&S.

So, Ms. Miller of Salon and author whose name I’ve deliberately forgotten from the LA Times, here’s why so many writers are self-publishing these days. They like this business model:

Writers provide content (product) to Bookstores

Bookstores distribute that content to Readers

 

Instead of the traditional business model:

Writers provide content (product) to Publishers.

Publishers distribute that content to Distributors.

Distributors distribute books to Bookstores.

Bookstores distribute that content to Readers.

 

That’s why.

And some writers on some projects go directly to their readers without bookstore involvement. That’s what I do on this blog. I post here and you guys read it when you have time. I support this direct-to-consumer blog through donations only.

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“The Business Rusch: “The Logic Behind Self-Publishing” copyright © 2013 by Kristine Kathryn Rusch.

 




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53 Comments

  1. How many writers lost their careers due to having their books published in September/October 2001?

    We’ve all seen how a Hollywood strike (actors, writers, whatever) can result in good TV series being permanently killed.

    These things are always the fault of the Author or Series, no consideration is ever given for other things happening in the world

    Reply
    • David, a lot of writers lost their careers in Sept/Oct 2001, including a really good thriller writer who was on her way. Her February 2001 hardcover was about terrorists attacking NYC and causing world chaos. February. Apparently her publisher either declined to do a mass market paperback or it came out and I missed it. What I remember is that Sarah Paretsky’s latest novel came out on 9/11 and she had to scramble to save her career after that. Her publisher said her numbers were “disappointing.” Um…duh…

      Reply
  2. The irony here is that the Createspace version of my book was being sold in independent bookstores and a smattering of Barnes & Noble bookstores before the S&S deal. I was selling a few thousand copies of the print book a month before I had to pull it down. The notion that publishers are required in order to secure bookstore distribution is simply not true. The book was face-out in many stores and even an end-of-year staff pick at Powell’s. Readers have a lot of power over what is shelved. There’s something to celebrate there.

    To S&S’s credit, they have done an amazing job placing the book everywhere else after being stymied by B&N. Target has been a huge supporter, as has Hudson’s, which runs a vast network of airport bookstores. I just got home from a 12-city tour, and I saw copies of the book everywhere (and learned the trick of carrying my own “signed by the author” stickers in my briefcase). Readers checked in on my Facebook page on where they were able to find the book. Quite a few of them badgered their local B&N for not carrying a title with such pent-up demand. Some stores ignored corporate policy and stocked the book; a few displayed it prominently.

    As a former B&N employee, this has been especially painful to watch. I feel they missed an opportunity to play up my having worked as a bookseller while in college and later while writing this work. I know they missed out on sales. The Wall Street Journal story and Washington Post review both hit the weekend before release. On Tuesday, the largest chain of bookstores didn’t have stock. It was confusing to readers. Stockholders might also be confused that the store intends to profit on publishers rather than customers. It’s sad for everyone, really.

    Except for independent bookstores, perhaps. First Border’s and now this. Indies saw sales increase 8% last year, according to Publisher’s Weekly (I think that’s where I read this). They have been huge for us, and are likely the reason we hit 4 of the NYT lists on the week of release, with the TP at #8. We would have been on the combined list if the NYT would recognize my e-book as being the same book. The hardback hit the extended list and is already in its third printing. Indies and persistant shoppers deserve a lot of credit. Amazon orders were also key, which is where B&N is driving people to shop for books.

    How does all of this affect me? I’ve already broadcast my fears on writing forums and my website. Before the book released, I admitted that my greatest fear was that the title wouldn’t do well and that this would affect future authors and future deals. That remains my fear, which is what lies at the heart of Kris’s excellent analysis. I like to think two weeks on the NYT list (so far) will allay some of those fears. The fact that the hardback is selling so well with a simultaneous release (even though few stores are stocking both) is also heartening. And then there’s the fact that the book hit the Sunday Times list in the UK after being out as an ebook for over a year. Publishers, take note. The two formats don’t compete as much as you think.

    The last thing I’ll point out is that the real harm is to the S&S authors we don’t know about, the debuting authors who spent years acquiring an agent and working up to this moment in their professional lives. Whatever happens with my book is of little consequence to me financially. I’ve always assumed I would never earn out my advance. But other authors have careers at stake, and that’s a shame. Just as the pressure I feel surrounding this deal is mostly from the perspective of future indies hoping to secure a similar deal, most of the sadness I feel is for the myriad other people affected by this senseless class, from reader to debut author to the poor employee behind the customer service counter who can’t figure out why this new release is flagged in their computer as “Home Delivery Only.”

    Or, as the customer will hear it: You’re better off ordering this from Amazon.

    Reply
    • Showing yourself to be a class act as always, Hugh. That’s why we all love you.

      :)

      Reply
    • OMG – a comment from the real Hugh Howey. I’d stick this whole post to my fridge if it weren’t so LONG. And if something similar ever happened to me and my novels, I know where to come. Back to the second draft of number four.

      Reply
    • I read the post you wrote on your site about how the deal came about. The next day I went to B & N to buy Wool, but it wasn’t there. I still bought it, on my phone, for my Kindle, while I was walking out of B & N.

      It’s a good read.

      Reply
    • Fantastic, Hugh. Thanks for the post. I’m glad that S&S is fighting for you. They have a lot invested in that print deal. I also believe that they’re fighting harder because you are. You’re doing as much of this as you can by mobilizing your readers, who are stepping up. (Yay, readers!) Also, indies are great. Independent booksellers are our friends, folks, and they can make or break books. Indie booksellers are growing again, after a decade of decline, and they’re helping all of us.

      I’m pleased that your closely watched sale is going well. That’s fantastic news.

      You’re exactly right that the real harm is to the authors we don’t know about, and we won’t get the chance to hear about because of this problem. MJ Rose deals with some of it in her comment later in this thread.

      And I love your comment on the stockholders!

      Great analysis here. Folks, this is how you save a book, if you have to. (Let’s hope you never have to.) Thanks, Hugh.

      Reply
    • Hugh, you talk sense!

      Barnes and Noble Corporate:

      Listen, you’re being stupid. I tell you this related true story in order to show you the end of the road B&N turned on when they stopped ordering from Simon and Schuster:

      About ten years ago, the employees of the three big supermarket chains in Los Angeles went on strike. The stores hired temps, but the regular employees picketed the stores and told all the customers, “Go shop at [the local independent grocery store].” And customers did this.

      Months later, when the regular employees were done striking, guess what? Many of their stores went out of business. The customers had discovered they liked shopping at their local independent grocery store.

      B&N: in this example, you are the regular employee who will be out of a job soon if you don’t quit this strike.

      Reply
  3. Really sad to see Charles Stross’s post. The things he is scared about, like getting tax back from the US government, takes 5 minutes, over the phone, and only needs to be done once. I’ve done it myself, and my taxes are never withheld in the US (I live in the UK too).

    And he’s an author, so I assume he’s self employed, and already pays his own taxes. Why is he so scared of paying taxes on ebooks? It’s not like they are treated differently.

    It’s sad authors are so scared of moving even an inch out of their comfort zone, not willing to learn anything new.

    As a side note, you say “See this post on the problems with agent rights grabs and agency accounting.” But there is no link.

    regards,

    Reply
    • Fixed the link, James. Thanks for pointing it out.

      What I find sad about Charlie’s post is that I assume he has an agent. Which means Charlie should be a manager, at least in that instance. I’ll wager, like most who don’t want to think about business, he is not. :-(

      Reply
  4. S&S were praised for stepping outside the box for offering deals to Hugh and I believe Colleen Hoover got the same kind of deal. If S&S doesn’t make money from them they won’t be stepping outside the box anymore and no other author will get offered those deals.
    This is why I chose to go the self published route. It leaves me in charge and my art doesn’t get caught up in any disputes that is going to leave my art at the curb.

    Reply
  5. Years ago, around 1996 or there abouts, I was working in a small discount chain bookstore. The large bookstores had just become popular and our little store was feeling the pinch. At that time S&S and our bookstore chain got into a battle. It was over the ‘new’ book release distribution. When a new book is given a big push by a publisher they send many boxes to a bookstore with a release date on the outside of the box and by law we were forbidden to sell before this date so all the bookstores would release the book at the same time.

    The problem was S&S gave preferential treatment to the larger bookstores. We were given either a much reduced stock (think a single case which barely covered first day demands of the book) or we were given the book DAYS after the new release date. For those who don’t know the first forty-eight hours of a new book release is like a mini-Christmas for a bookseller. For a small bookstore this meant a great loss of immediate income and worse a loss of loyal customers who went the extra half mile down the road to the larger bookstore.

    Our bookstore chain fought this by pulling all S&S books from the shelves (yeah, not sure they cared) and so we had even less books to sell (sort of cutting the nose despite the face thing). Eventually a few months later things were resolved, but the damage had been done. By 2000 the store was defunct.

    I’m not saying S&S killed our bookstore — the larger bookstore was doing that quite nicely — but it gave the store a few mortal wounds on its way out.

    I’m not sure what B&N and S&S hope to accomplish, but it’s good for no one. The authors hoping to get a big push during this time are going to suffer, the B&N will suffer as customers discover other avenues for getting a book and perhaps S&S will too although I’m guessing they calculated the loss better than everyone else involved.

    What a pain.

    Reply
    • I’m sorry that happened to you, Josephine. It happened to a lot of others as well, from the moment the chains really gained power.

      For example, that happened to our local bookstores in my small town with a book in the Harry Potter series. The chains–and the grocery stores and the Walmarts, etc–all got the midnight book, but the indie stores that had planned events did not because the distributor ran out. Fortunately, our grocery store let our bookseller (right next door) have their copies and the party went on as planned. Then the grocery store got the bookseller’s copies when the book came in later. I’m sure neither corporate master (Scholastic or the grocery chain) knew about this side deal, but it kept little kids happy and made for great relations in our small town. Sometimes these disputes are so stupid and harmful and nonesensical…Okay. I’ll stop now.

      Reply
      • That was so generous of the grocery store to donate those books — I can’t even imagine having to tell kids (both young and young at heart) who were planning a big party over a release that the book wasn’t in. It was hard enough telling hardened business men and women that their books weren’t in (our store catered to a lot of professionals). I like the stories about your town and how they pull together for one another – it gives me hope and it is a good reminder to look around and see a community around and not just isolated businesses.

        Reply
  6. Unbelievable. I have no other word for all of this crap but “unbelievable.” (I laughed out loud at comparing apples to farts, BTW. :-))

    here’s why so many writers are self-publishing these days. They like this business model:

    Writers provide content (product) to Bookstores
    Bookstores distribute that content to Readers

    Instead of the traditional business model:

    Writers provide content (product) to Publishers.
    Publishers distribute that content to Distributors.
    Distributors distribute books to Bookstores.

    Bookstores distribute that content to Readers.

    Truth.

    Reply
  7. I have an acquaintance who got caught in similar crossfire in the late 2000s, when Walmart decided to cut WAY back on a certain imprint they were carrying — after her books were printed. She sold only 1/3 of that print run. Her editor (who happened to be editor-in-chief of the publishing house) patted her hand and told her not to worry. When contract renewal time came up, they’d definitely keep in mind what had happened with Walmart.
    Well, of course they didn’t, and she was dropped from the publishing house because her ‘numbers weren’t good’.

    It’s too bad to see that happening here with other authors. And you make a good (and sobering) point, Kris, about Howey’s print sales and how they will be used as evidence against the print-rights-only business model. Dang.

    Reply
    • Read Hugh’s comment elsewhere in the thread, Anthea. I should have realized he would be one of the smart authors on this. :-) But yes, you’re exactly right: this sort of crap happens to writers in traditional publishing houses all the time. And your friend, sadly, is just another example. (sigh)

      Reply
  8. “like the fact that he confuses net and gross, and seems to believe that writers and publishers make the same percentage on each book sold {!}]).”

    Charles Stross just has to look at Fortune 500 and see if the best fortunes are distributors, publishers or writers. And then, draw his own conclusions. He may also be reminded of Stephen King’s example with Doubleday you previously mentioned, and how big names can be screwed.

    He may also got a look at all the publisher’s New York offices and wonder how they can afford that with only 10% of revenue on each book.

    Naivety ? Intellectual dishonesty ? Foolishness ? I wonder.

    Reply
    • Unwillingness to learn business?

      Honestly, I vote for a trusting personality and a bit of naivety. I’m pretty sure that’s what’s going on. I sure wish I could trust people more. But I’ve learned in business that way lies madness.

      Thanks for the post, Alan.

      Reply
  9. It always surprises me to learn of yet another way writers are getting screwed, though you’d think I’d be used to it by now.

    Big sellers, little sellers, in-between sellers, are all at the mercy of a corporation who cares little to nothing about the writer or his/her career.

    The more stuff I read, the more I’m convinced that going it on my own is still the right choice for me. Thanks to you and Dean, I’ve learned a lot about this self-publishing thing, and I’m proud to call myself and indie writer.

    Reply
    • I’m always surprised too, Sheila. You’d think old jaded me would know all the icky tricks by now. And then someone comes up with a new one…

      Reply
  10. Here’s how to understand the B&N/S&S price war, through negation:

    Name another industry in which the consumer’s default end price is determined, well inside a close order of magnitude, by the packaging of similar-but-not-identical goods.

    I’ll wait, but I won’t hold my breath (there is an answer that I’m aware of, but you’re not going to like it).

    Here’s an example: Consider Mr Howey’s book. I’ve not looked it up — I know nothing about its content — but if it’s a casebound original trade work under 1200 pages its price is between $24.95 and $28.95, a span of less than 10% from the median price point of $26.89; if it’s different from that, it’s not different by much. If, however, the identical content is in a mass-market-paperback original, its price is between $7.99 (extremely rare these days, particularly for S&S) and $9.95; again, this is a span of 10% from the median price point of $8.96. Only a trade-paperback original falls outside of the 10% rule, and then only if one establishes medians across publishers. (Trade-paperback reprints, however, do seem to meet this rule, even across publishers.)

    Keep in mind that this has nothing to do with branding. We’re not talking about Air Jordan/Nike here, where the brand sells the product. In publishing, the most that brand can do is get a tiny minority of the target population to buy the product… and then solely upon the author-series brand, having little or nothing to do with the publisher (just ask the current president of the Authors’ Guild… and, without looking, name his principal publisher).

    No, the industry that publishing resembles is hospital supplies, in which packaging without regard to content really is (mostly) price dominent. (It also resembles major-weapons-system procurement in Western democracies during the Cold War, but that’s a different story entirely.) And that tells you all that you need to know about the B&N/S&S battle: It’s about negotiated profit allocation in an inelastic vertical distribution system. In short, it’s a “why can’t they both lose?” situation; the problem is that if either one loses, the authors do, too, because neither is the endpoint in the distribution system.

    Reply
    • Exactly, CE. I love that “why can’t they both lose”? question. :-) Thanks.

      Reply
  11. I read Charles Stross’ note with sadness as I think he is a really sharp guy and very interesting writer… but I don’t think anyone will be able to convince him to rethink this.

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  12. Thank you for your information on how to consider writing as a business. Some people are coming around– The Passive Guy (who quotes you on a frequent basis) posts a link from a newly self-published success, a guy who finally got tired of the gatekeepers, did it himself, and is making sales (and money) hand-over-fist.
    Sadly, though, what the guy leaves out is that a mere 2 years ago, he was dead set against self-publishing– he posted this:
    http://munchkinwrangler.wordpress.com/2011/01/04/why-i-wont-self-publish/

    Ah, the irony. Delicious…

    Reply
    • I love people who change with the times. Some of us can learn. I changed my Freelancer’s Guide because initially (in 2009) I worried that some writers might self-publish too soon. Now I believe that there is no such thing as too soon. There might be “not soon enough.” :-)

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  13. Absolutely brilliant post, Ms. Rusch. Here’s hoping its wisdom is spread as wide or wider than those poorly done slam pieces for Salon and LA Times.

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  14. Thank you, this is an excellent apologia for self-publishing. I decided it was the right way for me, and have met with some skeptiscm, which is understandable from those outside the business. I quoted you in my blog for tomorrow, I hope you don’t mind, you just sum up what I have been trying to express so neatly.

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    • I don’t mind, Cedar. Please do send me the link. And thanks for the kind words.

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  15. After reading this, I assumed that Howey’s book wouldn’t be found at B&N, but it was there, on one of the front tables labeled “Notable Paperbacks” or something like that. Just as a point of information…

    Reply
    • Good to know, Scott. See Hugh’s comments elsewhere in this thread. A lot of good material there.

      Reply
  16. Well, call me a masochist but when you drop a tease in the opening paragraph like that I had to dig up the LA Times article. As I’m reading, I’m thinking, “This guy sounds like a frustrated author.” So, I copy the author’s byline, paste it into the Amazon search box, and… jackpot! Unless the NY Times extends its best-seller list to three million, this guy aint makin’ it.

    Reply
    • LOL, Randy, you reporter you. :-) Yeah. I noticed that too. Man, that article pissed me off, mostly because I kept rereading it, expecting something good. :-)

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  17. I am getting the impression that there a very few adults and a hell of a lot of children in the publishing industry.

    Has publishing always been this illogical? Two corps get into a spat over how much to pay, and the author, who isn’t invoilved, gets the blame for slumping sales? I have come to the conclusion there are for systems of accounting in the US.

    1) Normal — the type most normal people use.
    2) Government — enough said.
    3) Film and TV — Movie makes $500 million in all sales and it still doesn’t “break even.”
    4) Publishing — “Well, Mister X, you had bad sales this quarter. The fire in the warehouse that destroyed 90% of the print run, the storm that destroyed another 5 percent, and our little legal spat with Bookchain Z which reduced the channels were could sell you book by 30% don’t factor into our decision to drop you. Oh, by the way, we want our advance back.”

    If anyone was to write a book on this subject, they would have to get it self published…..

    Craig

    Reply
    • Yes, Craig, it has always been this way. And frankly, it’s better than Hollywood. The writers don’t even get credit there unless they know what to fight for. And most writers don’t know how to fight or that they should fight.

      Ironically, there are books on this subject that have been traditionally published. :-) Just more illogic from our favorite industry.

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  18. I first read about the S&S/B&N stand-off on the blog of an S&S author a few days ago. It struck me as a typical example of a self-evident problem in traditional publishing that increasingly convinces writers to turn to self-publishing:

    Two large corporations are focused on their own self-interest in this stand-off. Corporations are not about books, love, passion, ethics, people, or mission; they are entirely about profits. S&S and B&N are each trying to ensure/protect their own profits in their mutual transactions.

    While that goal is perfectly understandable from their perspectives… it has absolutely nothing whatsoever to do with what’s good for readers or writers. This is entirely a battle BETWEEN middlemen and entirely about what’s good for MIDDLEMEN.

    The battle itself is bad for both readers and writers. The result of the battle, no matter how it ends, will be bad for writers, for the reasons Kris has described. This isn’t a scenario in which, having been damaged by this battle between two middlemen corporations, writers might then emerge BETTER OFF from it–better royalties, better advances, better licensing terms in their contracts, wider distribution, etc. The BEST CASE scenario is that some S&S writers might not be damaged in the long-run by this matter, though all will be hurt in the short-run. That’s the BEST outcome possible from this middlemen corporate battle: some writers might not sustain long-term damage. From a battle that has NOTHING TO DO WITH their own profits, rights, or best interests.

    This is a very old, very familiar, all-too-common scenario in the publishing industry, and MANY writers have experienced the fall-out from the incidents Kris describes here. There difference is that these days, when we see this happen, we know there are options and alternatives that didn’t exist before. These traditional corporations and middlemen are -a- way to get books out there, not -the- way. And the more they act as an impediment to getting books out there, the more writers will look with serious interest at the growing number of viable alternatives available now–and in future.

    Of course, there will still be writers who disppear because they’re not smart about business, refuse to get smart about business, and/or sitting around moping for years, constantly replaying The Thing That Went Wrong rather than looking for and exploiting the next opportunity. That’s been true throughout my entire career, and I don’t think the expansions of opportunities will change the inherent nature of the sort of writer who says now, as a portion of writers have been saying for many years, “I don’t want to think about business. I leave all that up to my agent/spouse/editor. I don’t read my contracts. I don’t care about any of that. I just want to write.” (I don’t want to pay taxes or track my deductibles every year, sweetie. Yet somehow I bring myself to do it. Go figure.)

    Reply
  19. Had the same problem with my book, “Writers Gone Wild,” which came out the same month Borders imploded. The book’s still available (god bless Penguin), but at a reduced price on Amazon. (Admitted, my marketing efforts came up short as well — god bless my publicists — but where else is the person with the least experience in marketing the one expected to do the most of it?)

    Reply
    • Dude, I bought that book! Found it browsing at Borders, in fact, and I’ve recommended it to multiple friends. There’s still hope!

      Reply
      • I love this comment. I think I’ll look the book up after work.

        Reply
  20. Good post, Kris.

    No link in this line:

    “See this post on the problems with agent rights grabs and agency accounting.”

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  21. Just added the link. Thanks to all of you who mentioned it. I was in all day meetings yesterday, so am behind on responding to comments. I’ll try to do so throughout the day. Thanks to everyone who responded!

    Reply
  22. “It’s like comparing apples and farts.”

    Lol! I’m going to have to use this at some point, providing the appropriate attribution of course.

    Excellent post, as usual.

    Reply
  23. Lots of food for thought – one critical addition. Its not just sales we are losing not being in B&N – its key and critical visibility because people browse in bookstores and then go home and order the books on line… or they don’t even realize they saw the book in the store but when they see an ad for the book – or a tweet or a Facebook post – the book is suddenly familiar and they are that much more likely to buy it. So authors like me (I’m one of the S&S releases) are not just seeing that 20% loss but a greater loss due to the lack of visibility.

    Reply
    • Great point, M.J., about the “ad” value of bookstores. And I’m very sorry you’re caught up in this mess. I can truly relate. Folks, go find her book from an independent bookseller! Now!

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  24. As someone who helped usher in the technology eBooks use and who’s wife published self-help eBooks in the early 1990s, I have heard of this dispute through the grapevine and found this article eye-opening. You see, I decided to go the old school route. (Maybe because when I started writing it was on an already old Royal and I haven’t done enough research to bring me up-to-date. Sad but true.) My friends and old colleagues in software have been extremely puzzled why I don’t self publish my novels. I have a friend who uses Amazon as a testing ground for his novels and plays.
    The myth of the writer in the garret is pervasive in our culture. As pervasive as the suffering artist. (As Arne Westerman says in his great book, “How to Become a Famous Artists Through Pain and Suffering”, all you need to become a great artist is pain and suffering.) These two myths leave out the hard work, practice and business practices of the self-employed businessman. And yes, it does take practice to be good at business. Faulkner famously would only read a letter if a check fell out of the envelope. Plum Wodehouse took up writing seriously when he realized he could make money at it.
    I am surprised at Mr. Stross’ attitude. Perhaps he has enough handlers that he has the luxury of not worrying about the business side of the equation. That’s all find and dandy but to recommend to anyone, especially painters and writers, not to worry about business is insane. At the two art schools that my wife and I own, our teachers often take 10-15% of class time to talk about (self-)promotion, selling your work on eBay a la the Daily Painters (officially Daily Paintworks), and how to utilize contests and societies to further your own career. Because career, job, and self-employed are the important keywords here. Illusions and expectations are the hardest roadblocks to overcome in any career.
    On a funny note, when I read ” For example, at the beginning of this century, the bookstore chains (and back then there were a lot of chains)…” it took me many seconds to realize you meant 2001 and not 1901. LOL and :-) Thanks again for this wonderful article.
    “No man but a blockhead ever wrote, except for money.” – Samuel Johnson

    Reply
    • Thanks, Mark. You are so right about illusions and expectations. What so many writers don’t seem to understand is that they have a choice now. You can choose to self-publish, go traditional, or do both. I’m doing both right now, and loving it.

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  25. I spent two decades in the trenches of NY Publishing. Several times I experienced “higher sell through with lower numbers” on next title. It’s a frustrating system that is still broken. After selling a million copies of one series at Random House with zero in-house marketing support, they simply didn’t renew me.

    As my own publisher now, my focus is on digital. I do publish via Createspace but the price point is still not there yet. Perhaps the espresso machine will revolutionize the bookstore and print by eliminating the need for shipping and stocking.

    After blogging about the hybrid author in June 2011, I’m amused to see it suddenly being proclaimed the new ‘hot’ thing in publishing here in 2013. My current form of hybrid is another evolution: my own publishing company, working in partnership with a handful of other authors, while at the same time also having some titles published by 47North.

    A handful of authors with the right numbers will get the Bella Andre/Hugh Howey kind of print only deal. For the vast majority of the rest, the physical marketplace is shrinking at a much faster rate than many are willing to admit. Which reminds that I also smile as people say “ebook growth is slowing”. Apparently these people don’t understand a mathematical truism that growth has to slow because there is no such thing as 110%. Just three years ago ebooks were 3% of the market.

    If there is a new print distribution model coming, Cool Gus, and our over 100 titles, is certainly interested.

    A realization I’m coming to is that self-publishing will continue to thrive because it’s done something fundamental in publishing: the gatekeepers are now readers. They’re voting with their wallets. Writers who might never have had a chance via agent/editor/publisher/sales forces/book buyer/bookstore now can go directly to those who consume.

    One of our favorite sayings here at Cool Gus we’ve had for a while is this:
    Writers create the product which is story (not book).
    Readers consume the product.

    Everyone else is in between. They must add value, or they’re not going to be around much longer.

    Reply
    • This reminds me of something we learned in my marketing class, how marketing went from the industrial era (we make it, people buy it) to the sales era (we make it, then convince people to buy it), and then into the marketing era (we find out what people want to buy, then we make that). It seems like maybe publishing is just late to the change.

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    • Good point about adding value, Bob. I recently attended a e-Textbook seminar at National Book Fair in Bangkok and one of the representatives from a prominent textbook publisher said that publishers might not be needed in the near future. They must learn how to be the service provider to facilitate content creators (writers).

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  26. If Hugh’s hardcover is already in its third printing, I find it hard to believe S&S won’t move as many copies as planned. I’ve seen his book (only one left in two different Targets) in several stores, and I’ve been requesting other book sellers to stock it.

    He has a movie deal in the development phase. There will be a second push and more sales there.

    The only loser I see is B&N, not S&S or Hugh Howey, because of the additional places S&S can get it in quickly, and the freedom of buyers to purchase it from anywhere at a minutes’ notice. Plus, Hugh does have a fan base that can spread the word.

    Reply
  27. Fascinating post, Kristine. A real eye-opener for me. And I enjoyed reading all the great comments. First time here. Cheers!

    Reply
  28. I bought my copy of Hugh’s book and he signed it at a indie book store in Redondo Beach, CA. I paid more for it but it was so damn worth it! In fact, just because of all this corporate BS, I probably would have paid double! Go Hugh!!

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  29. Great post. Thanks to Hugh for posting it on Facebook! I’m just starting to get into the self-publishing game, but I am definitely not one of those authors who doesn’t want to be a manager. I’ve already set up my publishing company and am getting a second major in business because I want to know what I’m doing. I’m also prepared to never take a deal with a major publisher unless they are offering me something I can’t get myself. I know that was something about Hugh’s experience that resonated with me. If I’m making a livable wage, and I’m assuming I would be to be getting an offer from a major publisher, then I have no reason to let that go by handing away my ebook rights.

    Reply

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