The Business Rusch: A Paradigm Shift (Discoverability Kinda)

Business Rusch logo webAs many of you already know, I write out of order. It is, perhaps, the most irritating part of my own writing process—at least to me. Fortunately, this new world of publishing really works for someone like me. Everything I write is not set in stone. I can move the pieces around when I’m done.

Why am I starting like this? The clue is in the subtitle. This really isn’t Part 5 of the Discoverability series, even though it should be. When I put this into a little book—and I’ll do that when I’m finished—this will be part one.

You see the marks on my forehead? That’s the visible sign of head-desk syndrome.

Because what I’m writing about this week is something I already knew—I’ve said it over and over in the contract pieces—but I never ever put it together with all of writing, and I never thought of the implications before. Especially what those implications mean to discoverability.

We all know that our industry—publishing—is going through a massive disruption caused by new technology. The disruption is in two areas—the production system and the distribution system.

It’s easy and cheap to produce a book these days. Understand that I’m not talking about writing one. I’m talking about the things that happen after the book is finished. Please be clear on that, because if you misunderstand that point, you’ll miss the point of the entire blog.

In the past, it took tens of thousands of dollars to produce an actual physical book. Then you’d end up with a warehouse (or a garage) full of books, and no way to get them to a customer.

In the early part of the 20th century, a lot of writers self-published and ponied up that large amount of money. But by the middle of the century, writers couldn’t get the books to market, even if the writers produced the books.

Traditional publishers created a lock on the distribution system that was pretty extreme. Books went from the publisher’s warehouse to hundreds of distributors all over the country, who sent the books to bookstores, grocery stores, truck stops, and drugstores. Any place that wanted books could get them.

That system was already breaking down when Amazon started up in the mid-1990s. The main part of the distribution system had collapsed by the end of the century, murdered by large stores that wanted centralized ordering. The day of the local distributor who knew what his customers wanted disappeared.

Books got delivered to bookstores and a few non-bookstore chains, like grocery stores. But the small non-bookstores that used to get a spinner rack of books? Those stores couldn’t order books if they tried. The markets contracted.

Traditional publishers responded to this contraction by getting rid of the bulk of their sales reps, leaving a small sales force that mostly sold to a handful of buyers. Traditional publishers changed editorial strategy to meet the new reality, trying to find books that would appeal to a mass audience, just as the mass audience in all other parts of entertainment was breaking into pieces.

If traditional publishers want to know why Amazon was successful, it was because Amazon distributed books to the people who wanted them. Amazon didn’t try to dictate who should get what book. (Nor did it chastise its customers for shopping elsewhere, something a lot of independent bookstores still do.) The shopping experience on Amazon wasn’t pleasant at first; it isn’t always pleasant now. But it is useful, and easy.

Thanks to Amazon and other online retailers, books went from the publisher to the online site to the customer. Note that this procedure cut out at least one middleman.

Combine all of that with the ease of production, and suddenly, midlist writers and wannabe writers didn’t have to go to traditional publishers to get books to readers. Even without the rise of e-books, even if the only change in the system had been the low-cost self-published paper book, writers still would be going direct in much larger numbers than ever before.

The one thing traditional publishers did not change in response to this two-pronged attack on the old system was the marketing strategy. Marketing really is all about discoverability, getting the customer to find something that is new to them, not necessarily newly produced.

As the outlets for books shrank, traditional publishers did nothing to compensate. Nothing.

Here’s what a physical book rack is. It’s advertising. Even if a shopper does not buy a book off that rack, she sees the books, notes them, and maybe decides to buy them from her favorite store or get the book from the library. People discover books by browsing. I don’t care how good Amazon’s analytics are, they simply do not compare to that moment of discovery—that moment when a weird-looking book catches your eye, you pick it up, and realize that it’s heavier than expected and the deckle edge makes the book prettier than you originally thought.

Holding a book is a sensual experience, one that book lovers adore. You might decide to buy the e-book instead, but  you might never have seen that book if you hadn’t been standing in that store at the moment the book was on the shelf, and you happened to see an intriguing cover (or title or something).

Traditional publishers panicked about the changes in distribution, but did nothing to combat it. They didn’t increase their sales force, and try to take the books themselves to independent bookstores. They didn’t woo regional grocery chains (as opposed to national ones). They didn’t talk to museums or truck stops or department stores, any other place that used to take books.

Traditional publishers gave up without a fight.

Worse, they maintained their marketing strategy, as if the old 20th century system was still in place.

Go back and read my two posts on the old ways. Please understand that those old ways were built for a completely different world. And they were built for a different type of business.

The different type of business is where the paradigm shift comes in.  Let’s go back to the very basics, here, which I have said a million times in my contract posts. Writers do not sell books.

Repeat after me: Writers do not sell books.

Writers license copyright.

I always follow that statement with this one: if you don’t understand what I mean, then buy the Copyright Handbook and read it. I tell writers that all the time, and I can always tell by their questions and their actions whether or not they have read and understood the book. Too many simply have not a clue what copyright even is.

Let me tell you.

Copyright is property.

And an even nicer thing about copyright is that it’s intellectual property. Unlike a physical object which can be sold and you’ll never see it again, intellectual property exists in many forms. My husband, Dean Wesley Smith, believes those forms may be infinite. He limits them to a writer’s imagination. He likens it to a bakery—a magic bakery—which sells only pies.

I’ll let Dean explain:

Think of us (every writer) as a huge bakery and all we make are pies. Magic pies, that seem to just reform after we sell off (license) pieces of the pie to customers.

And each pie can be divided into thousands of pieces if we want.

The Magic Pie secret ingredient is called “Copyright.”

Every story we write, every novel we write, is a magic pie full of copyright.

We can sell (license) parts of it to one publisher, other parts to another publisher, some parts to overseas markets, other parts to audio, or eBooks, or game companies, or Hollywood, or web publishers, and on and on and on. One professional writer I knew licensed over 100 different gaming rights to different places on one novel. He had a very sharp knife cutting that small section of his magic pie.

You really need to read the article in which he discusses the magic bakery. It has a different focus than I have here. But I’m going to add just one more thing from Dean’s post:

You create the inventory, the pie, just once, but can license it for your entire life, having pieces you licensed keep coming back to the pie over and over, and your estate can keep taking and licensing parts of that pie for seventy years past your death. Nifty, huh?

Are you all starting to see why Kris and I are harping all the time about bad traditional publishing contracts? If you give too many rights to work away for too long, it never returns to your bakery to make you money. (Maybe in 35 years…again, study copyright.)

Magic pies are a great thing. They’d be even better if they had magic calories that stuck to you if you needed them, and dropped off if you didn’t. But that would be another story.

Here’s a different way to think about your book, copyright, and intellectual property. Think of it as property.

Let me be more specific. Think of it as a house that you built. You already have a home, so you’re not building the house for personal shelter.

You put time and effort into that newly built house, not counting the costs of construction (which, in the case of writing, would be the care and feeding of the writer, the overhead [which is the computer time and the electricity], and on and on). So you have an investment in that house right from the very beginning.

When the house is finished, you could sell it. You would probably make quite a bit of money up front if, of course, you built the house right and you had the ingredients that people wanted, in a neighborhood they wanted. If you were good at house-building, you’d recoup your investment in that house, plus a percentage.

That percentage is your profit. It might be a few thousand. It might be tens of thousands. It might be hundreds of thousands. But that’s all you will ever get from the house, because the house is no longer yours.

Pretty simple, huh?

Now, if you rent the house, you won’t recoup your investment right away. It’ll take time to make the initial investment back and even longer to make a profit. Once you pass that profit threshold however, the earning continues.  Yes, you might have to do some maintenance here and there, and you’ll have to pay attention to the overall marketplace, particularly when it looks like the current tenant is about to leave. But the house will continue to earn for you as long as you own it and as long as you keep it on the rental market.

The analogy breaks down a bit here, because copyright is not like a house, at some point, the copyright on that property will fall into the public domain (unless you’re really smart and know how to manipulate copyright legally to maintain copyright on some bits of the property—and no, I’m not going into that here). But stick with real estate for a moment.

You guys are familiar with the property argument for contract purposes because you’ve been reading my blog. But we’re talking about discoverability here, not contracts.

What’s the difference?

Marketing.

When you put that house up for sale, you have one chance to recoup your investment. Just one. So you get the word out everywhere. You want velocity. You want that house to sell as fast as possible, so you can make your money back as fast as possible.

Then, if you rehab or build a lot of houses, you’ll pour that money into another project and do it all over again. Build, sell, profit. Build, sell, profit.

By the end of the year (if this isn’t a year like 2008-2010), you’ll make a tidy sum of money. Not enough to retire on, but enough to get you through the next year and the next.

The problem is  you’re working your butt off. You’re working on the sell/velocity model. The faster you build, the faster you sell. The faster you sell, the faster you make a profit.

All of your marketing efforts focus on that first moment when your property goes up for sale.

But…

What happens if, two years after you sold that property, the neighborhood it is in gets gentrified? That neighborhood becomes the cool neighborhood, the one everyone who is anyone wants to live in, and they’ll pay ridiculous prices to buy a house there.

Will you get a piece of that ridiculous price?

Hell, no. You sold the house two years ago. All of it. Every last bit of it. You’ll never see another dime from that house. You’re done.

What if you kept the house and rent it? Well, let me tell you as a former rental agent, that when a neighborhood becomes gentrified, the rents go up along with the housing prices. The cool people who can’t buy (or can’t afford to buy) will rent, and at inflated prices.

If you still own the house and rent it out, you’ll be making more money per month than you made when the house was finished years before.

You might invest some money into marketing when the neighborhood becomes hot. One of the property owners I used to work for advertised his upscale rentals even when they weren’t available. He was creating buzz, he was making them desirable, and when those rentals became available, they stayed available for hours, not days, not weeks, not months.

The man was a savvy marketer. He always advertised his upscale housing. But he never advertised his student housing. Ever. He didn’t need to. That’s what I managed. The student properties. And they rented in about two weeks in March—for the beginning of the Fall Semester. By the end of the first week in March, all the good student housing was gone. Only the mediocre-to-crappy stuff remained. And that was gone by the second week of March.

So how did new students get rental housing? They didn’t. They had to live in university housing—dorms or graduate apartments. New students didn’t find out about off-campus housing until they’d lived in town for a while.

Discoverability.

Because there was a built-in (continually refreshing) market for student housing, and because there wasn’t enough off-campus housing for everyone who wanted it, the student housing needed no boost from advertising dollars. In fact, that ad money would have been poorly spent.

But, the upscale housing needed the constant boost, because—to be honest with you—the neighborhood wasn’t yet the best in the city. It aspired to be the best, but hadn’t achieved it yet. Without the word-of-mouth, and the occasional buzz, those properties would not have remained full.

Was my old boss able to rent all of his former properties? Hell, no. He had rentals that needed work and rentals in undesirable neighborhoods, that turned over every few months, instead every year. The complexes had a lot of vacancies. He also had new properties that had just been completed that no one had heard of yet, and were less than 20% full.

Was he panicked? Nope. That vacancy rate was built into the earnings projections. His marketing campaigns hadn’t even started for the new properties, and it wasn’t worth marketing the old ones until they got spruced up.

I do want you to note something: The new properties didn’t fill immediately, and my old boss didn’t panic. Because he wasn’t working on the velocity model. He wasn’t trying to sell something to recoup his money fast. He was handling earnings over time.

He was treating the properties as investments.

“Investments” as defined in the financial field (not in economics) are all about putting money into an asset with the hope of good return (in the form of appreciation, dividends, interest earnings, etc.). All investments involve risk. The key to investing is to manage the risk in relation to the reward.

Before you make an investment, you need to calculate what sort of return you want from it.

Again, let’s go back to our house. If you need a quick return, you might sell the property.  However, you might want to hold onto the property and make a small annual return in the hopes that the property will appreciate.

Before you do anything with the property, you decide what you want from it.

Now, let’s return to writing. Most writers want to be published. Then they get published and they realize they want their books to make money. Most writers hope to make millions, usually within the first year. Hardly anyone ever does that. Over time, perhaps, but never up front.

Writers rarely (read: almost never) think about their time as an investment, and the writing they produce as an asset. These are tough concepts, because publishing changed twice in my lifetime, and the old thinking got engrained.

From about 1920 to about 1960, traditional publishers were smaller companies, generally owned by their founders. I’m currently (yes, still) reading Hothouse, the history of Farrar Straus Giroux, and FSG’s main owner from its founding in the 1930s to the early 1990s was Roger Straus.

Straus tried to buy as many rights as possible from his writers, particularly in the early days, so that he could then apply the magic-bakery thinking to these assets he purchased from the know-nothing writers. Straus kept the properties he bought in print, and he capitalized on waves that came through. That’s why FSG made money when Isaac Bashevis Singer won the Nobel Prize in 1978. The company did not have to find Singer’s backlist and reprint it. They had had it in print for years. They did have to do additional printings, but that’s different, and less costly.

In other words, back in the old days, traditional publishers treated books as assets, not just in accounting, but in practice as well. If there was a bandwagon to jump on six  years after a book was published, the traditional publisher had the in-house memory to know the book belonged on that bandwagon. Since the book was in print, the publisher could jump fairly nimbly onto that bandwagon with just a change of marketing.

The first wave of corporate mergers in publishing started around 1960, and got worse in the ensuing forty years. Traditional publishing kept books as assets in accounting, but no longer treated them like assets  in practice. Instead, traditional publishing treated books like widgets and counted those widgets as inventory. Stock. Stuff that would grow stale and have no value—which was why writers could win awards a year after the book came out, and no reader could find the book, because the publisher had determined that the award-winning widget was already past its sell-by date, and didn’t need to be reprinted.

Instead of making money off the bandwagon, traditional publishing let most parades march on by.

This thinking became so pervasive—forty-plus years of pervasive—that when Dean and I taught beginning writers, we told them that when they took their books to market, they had to think of the books as widgets.

We also told the writers to negotiate their contracts and keep as many rights as possible, treating the books as assets that needed to be protected.

Yes, we were as crazy as the rest of publishing, and only recently have I realized just how deep the crazy went.

This series has helped with that.

Because if you are marketing a widget that will spoil within a few months, then your marketing plan is based on getting the most out of that widget in the shortest amount of time. Not only that, but you’ll need a different widget in the second month, and yet another widget in month three.

But, if you are accumulating assets, then you need to manage the asset. You might not choose to market the asset at all until you figure out exactly what you want from the asset.

The fascinating thing about assets, folks, is that their value isn’t constant. The values are in flux. Sometimes an asset isn’t worth what you paid for it, and sometimes the asset’s value is outrageously inflated.

Mostly, though, people who manage assets manage a lot of them. How many investors do you know who only own one share of stock? I know no one who manages rental properties for a living who only  has one property. I know a lot of people with day jobs who also own one rental. Just like I know a lot of writers with one novel who also have day jobs.

So…

The paradigm shift is pretty simple to say and difficult to comprehend.

Every item that you write is an asset. More than that, each asset can be divided à la the magic bakery into dozens, maybe hundreds, more assets. Then you need to decide how you want to market each asset.

Each asset needs its own investment calculation done so that you can figure out what to expect from that asset and how best to handle the asset.

Not every asset needs a marketing plan—at least not in 2014. Not every asset needs careful tending. Most assets don’t do well in the velocity method, although a handful do.

Because our assets exist in the entertainment field, we want customers to interact with the asset—whatever that means (play a game from it, see a movie based on it, read the short story that started it all). We want those customers to find each asset. We also want to make a small profit off of each asset, so that we can live off our investments.

When you start thinking of your writing as an asset which will, if you do things right, appreciate in value over time, then you realize that applying marketing methods based on widgets that will spoil does your asset no good at all.

Your thinking has to change before we start talking about ways to market your asset. Or not market your asset. Or market some of your assets and leave the rest alone.

Think of my former boss, the man who marketed the assets that needed constant championing, maintained the assets that were doing well without an marketing at all, and didn’t market the assets that still sprucing up. Each time he advertised something, he had a reason for doing so. That reason had to do with managing assets, not with becoming famous or making a financial killing using suspect methods because “that’s how it’s always been done.”

As you move into 2014, practice thinking of your output—all of your output—as individual assets. If the magic bakery doesn’t work for you Star Trek fans, then think of your work as tribbles hiding in a pile of grain. Each story can have a thousand lives, if you let it. Each life is an asset. And each asset might require marketing so that it can be discovered. Or it might simply need to be left alone to grow on its own.

It’s a difficult shift to make, growing up as we all did in Widget World. But it’s a shift we need to make.

It’s time.

Fortunately, I’ve been able to carry two contradictory thoughts in my brain at the same time. I’ve always treated my copyrights as assets, but I used to market (and write) my fiction as if the stories were all widgets. I know now that I operate in a writing world without widgets.

Unfortunately, the one constant remains the amount of time it takes me to write new material. And these blogs take time away from my fiction writing, which is the most lucrative part of my investment portfolio.

That’s why I put a donation button on my nonfiction, but not on my fiction. I need a little added incentive to keep writing the blog, an incentive I don’t need for the fiction.

Thank you all for coming here every Thursday, and thanks for the support you give me by linking to others, discussing ideas in the comments, e-mailing me, and yes, donating. I appreciate all of it more than I can say.

Click Here to Go To PayPal.

“The Business Rusch: A Paradigm Shift (Discoverability Kinda)” copyright © 2013 by Kristine Kathryn Rusch.

SPECIAL NOTICE: I’d like to put out a call to those of you who are traditionally published. I need to update my Deal Breakers book for 2014. I have quite a bit of material, but I would like to see what I’ve missed.

So if you received a traditional publishing contract from a major publishing house and/or an agency agreement from an agent, please black out all the personal information and send it to me. I’m particularly interested in the contract clauses you negotiated away and/or that you walked away from.

I also would like to see the clauses you’re proud of getting. The ones where you feel you triumphed in your negotiation.

I need the entire contract, because a contract is a living document, and what it says on page 13 has an impact on what it says on page 2. Please black out your name, the name of your agent, the advances, etc., and send me the file.

I promise, I will not use your name or any personal information, except that I might say something like “a first-time author” or “an author who has published novels for fifteen years” or “a bestselling author.” I won’t even use a personal pronoun to give your secret away. And I’ll be the only one who looks at this.

If you want to see how I do this, look at the Addendums post from earlier this year. (And yes, that will be in Deal Breakers 2014.)

Thank you! I appreciate all of the help.




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37 Comments

  1. I still remember going into a toy store and gravitating straight to a bookshelf of hard backed books they sold for kids (drool city!). I also remember going into the bookstore and finding this great book by an author. So good, I went back and found the author’s name again and purchased another book he’d written. I can’t do that now at my major chain bookstore. They’ve got only the current release, and that’s it.

    But there’s another trend that’s disturbed me while the publishers flounder around, trying to figure out how to generate sales. In the last few years, they’ve leaned toward covers that objectify women. I went to a book sale where someone had donated their urban fantasy books and well, it was horrifying. It didn’t used to be this bad, but it seems like the more in trouble the publishers get, the more they evolve backwards. They’re not treating this as a long-term asset, but to get a quick sale, so they titillate with the covers, but they may not be earning a next read for that author. I’ve actually stopped buying any books that objectify women.

    Reply
  2. What’s tough is when a brand new book sells one copy and then slowly drops further and further down the rankings. How much marketing is enough? How much is too much? I agree that a book might be marketed a year later, but without a few sales and some ranking history, who would want to license a slice of it, say as an audiobook or in a foreign language? It seems to me that we need some level of sales success just to keep the whole thing afloat long enough to make it worth our while. I recall that Donald Trump started off with one building, and by leverage of his assets, be has become a billionaire. Somehow he found the funding to buy that first building. The problem is that by not marketing, and relying on ‘discoverability’ I have seen sales fall, and while it may be possible to resuscitate a book at a later date, there’s not much incentive to write more and it’s all very discouraging.

    Reply
    • If I remember correctly, Louis, Trump’s first building was a hotel or an office building, something that generated multiple rents. You can’t base sales on one product. You need to have many products. Promoting one is a waste of time if there are no other products to buy. You’re always better off writing the next.

      Reply
      • Donald Trump received many millions from his father’s estate. It wasn’t difficult for him to come up with start-up capital.

        But, of course, a key difference between real estate and writing is that the investment required is low on capital and high on time. Yes, you need to value your time appropriately, but it’s an asset you already have that you can choose to use however you’d like.

        Reply
        • Exactly on time. It’s as if we inherited millions; we just have to know how to manage it. :-) (Time, that is.)

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      • Donald Trump’s father, Fred, was a wealthy real estate developer in New York City. Donald took over the assets in 1971. Before that, he managed and greatly enhanced an apartment complex his father owned in Cincinnati, Ohio.
        This isn’t to be critical of Mr. Trump, but he isn’t the “start from nothing” person some people think he was. Check out the Donald Trump article in Wikipedia.

        Reply
  3. Hi Kris, great post. Another good way to look at property is the “bundle of sticks” metaphor. Here’s a post I did that explains it further. Much of my legal career involved real property law. There’s a lot of people involved in publishing – including copyright attorneys – who either overlook or don’t understand basic property law concepts. For instance, an ebook and a tangible book should be priced differently not only because of the difference in production costs but because they represent different levels of property transfer. Intellectual and real property are different in many ways but the basic underlying legal theory is the same. You can fashion all sorts of creative licensing deals that will generate future revenue streams – as opposed to one chunk of cash – if you retain the rights to your content and understand how the sticks work.

    Reply
    • Thank you for sharing this, Laura. Excellent. Everyone, go read her post! It’s fantastic!

      Reply
      • Thanks! I’m glad you enjoyed it.

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  4. Hi Kristine,
    Just read your Discoverability series in its entirety. Thanks – great overview. I’ve been speed-studying the new wild and wonderful world of books and I think that you (and Dean for that matter) are wonderfully astute and articulate on what’s facing professional authors today. I especially like your emphasis on getting more books done as the best thing you can do for your career – no one else that I know of makes this point so often.

    Here’s a thought on those “old ways” (blog tours, book marks, radio interviews): they may not do much for book sales, but they may get people to go to your website and (hopefully) sign up for your email list. Probably the second best thing you can do for your long-term success (after writing the next book) is build your email list. And you can get a lot more people to take a bookmark than buy a book (hopefully they’ve stopped because they’re interested in your genre at least).
    Thoughts?

    Reply
    • You’re exactly right. It’s the one area where I fall down, and fortunately, I will repair that in 2014 (early 2014). But I’m on a lot of writers’ lists, and I go out and buy immediately when I hear about something new.

      Reply
  5. Great article, Kris. I find myself wondering whether series of novels should be considered as a single asset, or whether each installment in the series should be considered individually. I suppose the answer probably depends on the series and the books.

    Reply
    • And what you’re trying to do. I think free works sometimes when it’s the first book in a series. But only when the free promotion is limited and only if there are a lot of other products out. And so on. Some of this will be next week. :-)

      Reply
      • Giving away the first one free when you’re up to number 3 or 10 or whatever works far too often with me. :( ;)

        As a teen in the 70’s (we all know there’s nothing sulkier or more overdramatic than a teenage girl), my reward for pushing the cart around the grocery store and heaving items into it for my mom as she chatted with people was to end up in the book aisle and get one paperback. Our grocery store carried a lot of reprints of classic SF as well as MMPBs of newer works. The stuff that had been originally printed in the 30’s-50’s was pure gravy for the publishers, I’m sure — no royalties. But they were doing a very savvy thing — they were reprinting works by authors who were still alive and writing then. And thus I was led to the new books by those guys and a few gals… and lo, I am still buying new stuff by Robert Silverberg. (And he and I give each other a hard time in person, which whiny teen me would NEVER have dreamed of!)

        Which is to say a) Kris is right about volume of stuff and b) I miss having decent books available between the dairy aisle and the breakfast cereal.

        Reply
        • Sally,

          I was a teen in the 70s too :-), tho I don’t remember going for any MMPBs there. My mother used to get Reader’s Digest Condensed Books, and I would always read those. Plus go to the library.

          The one “off” place I remember picking up books was in a shoe store, lol! In the late 60s, my mother would take us to a local shoe store, and there in the spinner racks were dozens of Peanuts compliations. I think they cost about 50 cents apiece or something, and my mother would indulge me. I still have those 6 or 7 or 8 paperbacks and still occasionally read them. :-)

          Reply
  6. Your comment. “In other words, back in the old days, traditional publishers treated books as assets, not just in accounting, but in practice as well. If there was a bandwagon to jump on six years after a book was published, the traditional publisher had the in-house memory to know the book belonged on that bandwagon. Since the book was in print, the publisher could jump fairly nimbly onto that bandwagon with just a change of marketing.” Is dead on, and caused in part by the widget mentality, and caused a change in tax laws. Which hangover still works against manufacturers today.
    It costs more than just property taxes on inventory, but also *inventory itself is now taxed.* Due to tax laws changes, publishers _can’t_ hold and re-market. Of course, they mindset wouldn’t allow them to do it, even if tax laws change.

    Reply
    • I know, Walter. It’s too complicated to go into here. However, e-books are not taxed the same way, so publishers must change their thinking again. And they’re not.

      Reply
      • Not just ebooks, but POD. As more publishers shift to POD for all but the highest-volume titles, the Thor Power Tools decision that Walter’s talking about has less sway over the entire supply chain–and yet, the mindset remains.

        Which does create some nice opportunities for us small fish :-)
        -Dan

        Reply
        • Exactly, Dan. I forgot about POD. A lot of traditional publishers have already switched to POD; they just haven’t told anyone. (You can see it if you know what you’re looking for, esp. on trade papers.)

          Reply
          • I’m learning to look at the very last page, where it states the date and place where the book was printed, which is usually a day or two before arriving at my house.

            I assume they’re printed in Amazon’s fulfillment center, based on the UPS package tracking. I was excited to discover this, just because it reassures me that a “properly produced” book really doesn’t look any different whether it’s POD or traditionally printed. I’m just waiting for the day they make a RedBox for books.

          • That’s right, Jamie. And I love the idea of a RedBox for books!

  7. I’ve noticed that the “investment” paradigm itself seems to be something that “employee”-type people don’t easily understand, while entrepreneurial people follow it better. I only moved out of my parents’ house last month, for a lot of reasons. I’ve ended up in an apartment, but when looking for a place to live, my first thought was to find a small house in need of some work. I went with this apartment when the opportunity opened, for my mother’s sake (she’s understandably paranoid and anxious about me being on my own). But when my lease is up, that’s what I’m planning to seek—and then my entrepreneur grandfather advised that exact route of action, last time I saw him.

    With my writing, my entrepreneur grandfather again is the family member who “gets” what I’m doing. Other family members, not so much; they still consider my speculative fiction writing a waste of time, and I have to frequently remind myself of my long-term goals—which are, in fact, making progress. My average self-publishing income per month has essentially doubled per year since I started, though it’s still low—and that’s despite my slow release schedule (1–2 novels and perhaps 6 shorter titles per year).

    But thinking of that long tail also gave me an idea that’s proving to work well for me: Wattpad. Within 6 months of becoming active on that site, I managed to become one of Wattpad’s most-followed members…by posting complete books in one series…and by running “First Draft Fridays”, wherein I pick a story and post at least a scene in its first draft every week until it’s drafted. I actually work very well that way, easily dismissing any input that doesn’t fit my goals for the story. (Note that my first drafts are also fairly “clean”, typo-wise. I’m most prone to missing transitions and details.)

    I do warn other writers to not emulate me on the first draft thing unless they know they work well that way. I’ve noticed those of us who’ve grown up with fan fiction websites tend to be comfortable with such sharing of first drafts.

    Is my popularity on Wattpad increasing sales? Not really…yet. I say “yet” with certainty, because it is building fans—which will be more important for my long-term goals than short-term money. My Wattpad readers are generally unable to afford to buy stories right now, and many have expressed gratitude for my 1. freebies and 2. approachability.

    I’ve also noticed a consistent correlation between my titles that are available for free and the ones that sell the most copies, but from others I know who offer their titles for free, I’m not necessarily the norm.

    In any event, in case you don’t realize: Your posts often apply to non-writers, too. Paradigm has a huge influence in how a person approaches anything involving finances, not just intellectual property. Business is business, and in my experience, a lot of people don’t comprehend what’s involved even after you spell it out for them.

    Reply
    • Carradee,

      Do you write YA? Because I’ve read here and there that Wattpad attracts people who are mostly into YA stories.

      Reply
  8. Kris,
    One of the reasons writers have trouble using the assets/rental model for their writing is the way most writing awards are designed. For the most part, you earn an award only in the first year a book is published. Older books are not even considered for awards.

    So, the awards go to books that make an initial splash, not to books that have a long lifetime of sales (rentals). To the extent that writers sense this bias, it influences their writing—their subjects, their style, and anything else that might influence the splash-factor of the book.

    If this old-fashioned idea is supplanted by a different model of awards, maybe more writers will wake up to what business they’re in (or should be in).

    Reply
    • Well, I suppose, Jerry, but that’s putting the cart before the horse, imho.

      Awards are a different animal, and some exist for bodies of work or for works that have had influence. But awards are promotion, like everything else. You’ll note that movies which win the Oscar or are even nominated get rereleased and then do well, often going back up the top five for a week or more. And they’ll sell better on DVD and rent better on the streaming services. So awards are just another tool. Having them occur in the first year is just convenient. Others do occur in later years (particularly awards from libraries).

      The problem is that traditional publishers no longer use awards for promotion, which is just plain silly. So indie writers can. :-)

      Reply
  9. Thank you for this. I started off writing in the widget model and am now writing in the asset model. I like the asset model much better. It also makes sense to me as an entrepreneur.

    Every career path I’ve followed, from counseling to education to technology, is based in the asset model. That is I put in hours, days, years of work that is then reused in a number of ways with each career. Though I’m retired from everything except writing, I still use all that I learned and all that I built in parts of my writing.

    I believe that because the careers that I chose did not have instant “widget” gratification, it better prepared me for this writing career with the long tail. When I worked as a counselor, I often didn’t see the end result of the sessions with families. I knew they had progressed but I didn’t know whether they were happy or stayed together. Those decisions came after sessions. The same as an educator. I saw students at particular times in their life–learning and changing. It is rare to know what happens to a student later. Did they stay with the same profession? Choose something else? Then technology taught me that nothing stays the same, not even for a year.

    Like others have mentioned, I too have seen remarkable increases in year over year income. It was a ten fold increase between years one and two (2 books to 4 books) and a three fold increase between years two and three (4 books to 8 books). Given the sales in the last few months, I anticipate that 2014 may be another ten fold increase as I go from 8 to 14 books. Two were planned this year but didn’t quite make it.

    Definitely, with every book I put out my discoverability increases and with every new reader I get backlist sales. More than that, it’s just in this past year that I started the magic bakery process with my work. I will begin to see those assets producing in 2014 as well. It truly works, and it makes perfect sense when you think of each book as an asset.

    Reply
  10. We invest our time and money to create assets. We make money by selling to others the rights to use those assets in various ways, for various periods of time, and in various places.

    When we talk about discoverability, we often talk about ways to help get the benefits of the assets we’ve created in front of those who would want those benefits. We’re offering a cold glass of water—how do we get it in front of those folks who are dying of thirst?

    However, isn’t there an aspect of discoverability that starts before all of that?

    I don’t know any business person who doesn’t look at projected ROI before they invest in an asset, i.e. is anyone dying of thirst around here? If so, how many? And how many other water carriers are helping them?

    Good business folks gather facts and determine if there is a business case for their idea. Sometimes they can get good comparable data. Sometimes they can’t. But I don’t know any good business person who doesn’t look at potential demand (even if it’s a rough guess) for an asset before investing in it.

    If your landlord has $250k to invest in an asset, and he looks over the city and sees three rental properties that all cost that exact amount. One is in an awful area and has huge vacancy rates and renters that default all the time. Another is in an okay area and has okay vacancy rates and rents. And the third is a cash cow.

    We know what he’s going to do with his $250k. It’s a no-brainer.

    So does that apply to writers and our assets?

    One way our assets are different from rental properties is that we can’t get historical rent data. Or even good comparable property data. We can’t know beforehand how well a book or series will do. If you can’t estimate revenue, you can’t estimate ROI.

    So what’s the next best thing? How does a business writer go about this?

    One suggestion is to not think about it. Just write what strikes your fancy and figure out how to market it later.

    But that doesn’t sound like what a business person would do.

    Writer A is passionate about epic fantasies of 200k word length, thrillers of 100k word length, and romances of 50k word length. She could write any of them.

    She can’t know how her version of any of those might sell. But she can get market data. Very rough comparables. Again, I don’t think comparables are as helpful in writing assets as they are in real estate assets. But what else do you go on?

    If Writer A can be passionate about her flavor of story in any of those genres, would it not make sense to factor in the demand a certain genre has first?

    If Writer A sees that romances take ¼ of the time it takes to write an epic fantasy, that they sell for the same prices, and usually sell more units than epic fantasies (Amazon rankings or bestseller lists), then would it not seem like romances ought to be the path she should test first? There is lots more demand; she can get more product to the market quicker; because she has more out there, she has a better chance at finding readers . . .

    Doesn’t discoverability start with estimating the potential demand for a product?

    If so, then what are tips and gotchas for doing that? How does a writer go about that as a business person, not just as a swooning artist?

    And then doesn’t this carry over into understanding the key things those readers want out of that genre? If you’re trying to slake someone’s thirst, you are not going to do very well trying to sell them potato chips or gardenias.

    Seems to me that if you don’t get this stuff up front right, discoverability efforts after the fact won’t do much good.

    Reply
  11. As a follow up, I just finished THE LEAN STARTUP by Eric Ries. He defines a startup as “an organization dedicated to creating something new under conditions of extreme uncertainty [about the demand for the product].” I

    It sounds like this definition applies to writing a novel. Of course, they say that to open up a business that’s an exact clone of another is not what they’re talking about. I don’t know if writing to the constraints of a genre fits that.

    Has anyone here read this?

    The goal of the lean approach is to conduct a series of experiments to “figure out the right thing to build–the thing customers want and will pay for–as quickly as possible.” We’re trying to answer the questions “Should this product be built” and “Can we build a sustainable business around this set of products and services?”

    I’m thinking it the lean approach applies, but I’m trying to figure out how or if it does in practice.

    Thoughts?

    Reply
    • Okay, John, your two comments together–yes, Eric Ries is closer. Remember that at some point, you’re not creating a service, but art. And the thing about art and entertainment is that neither can be tested or audience-approved before they exist. I’ll tell you that as the former editor of F&SF that anything written about a game, especially in sf, won’t sell. Yet Suzanne Collins hit big with the Hunger Games, because she’s a great storyteller.

      The neighborhoods you’re looking at aren’t genre. They’re story. So you look at the great storytellers and decide you want to be in their neighborhood. Then you better learn story. But you can still publish and have your rental properties in the neighborhoods filled with houses built by less accomplished storytellers. There are still renters there, just not as many. You work your way from the land of okay stories to the land of I-need-that-now-no-matter-what-he-writes.

      At some point, market research fails in the arts. If it didn’t, every Hollywood movie would be perfect, and novels would be written in house by people following a formula.

      Story, story, story. That’s what we’re in the business of. And entertainment. Never forget that.

      Reply
      • So you’re saying genre is too broad. It doesn’t matter if you’re writing about romance; what matters is how well you tell the romance story. Correct?

        Would you agree that when we say that was a “great story” what we really mean is that it was a great experience? And so what writers are doing is developing this thing that guides the reader through an experience.

        And your point is: learn how to give the reader an awesome experience. If you do that, it won’t matter as much what genre that experience is in.

        Of course, there are different types of experiences. I think that’s what genre is. And different sizes of audiences seeking those different types of experiences. Which means there’s a better chance, not a guarantee, but a better chance of a good ROI in one genre vs the other.

        Which seems to take me right back to looking at the potential market size. Did I miss a turnoff somewhere?

        I also wonder if big hits like Hunger Games aren’t where we should be looking because what elevates something into that level of popularity is outside story. You have to have a great story, but it isn’t sufficient to make a book go nuclear. I wonder if we should be looking at the midlist to see what readers are demonstrating they like over and over again.

        Finally, the lean startup method suggests we test our hypotheses about what customers want by creating the minimum viable product. We don’t listen to what customers say they want. We look at what they demonstrate they want with that minimum viable product.

        Seems to me the minimum viable product is indeed the full story, as you say. Or maybe 2 or 3 books in a series. Because we’re testing repeat business.

        We can test various ways of opening, presenting characters and events, ending, etc., not with the same book, but with additional books, to confirm what customers really value. And I think with ebooks it’s actually become feasible to get good specific data.

        For example, I just read about Oyster’s data on reading habits, and that books with shorter chapters are finished more often than books with longer chapters.

        So it seems the quicker we can get product out there to test, the quicker we learn what does and doesn’t work and how to build experiences customers truly value. Which means write, write, write.

        Still, some genres simply have more demand than others. Looking strategically, it seems you’d want to hone your story skills in those genres you’re passionate about that have the greater potential demand.

        Or have I missed your point completely?

        Reply
        • You missed most of it, John. The only thing you got right is the advice to write a lot.

          Stop thinking about what someone else says makes a good story, and use your own judgement. Write the best story you can, and then the following week, write a better story. Keep practicing, keep publishing, and eventually you’ll get there.

          Whenever you feel the need to “analyze” something to death–which is what you’re doing here–ask yourself how writers like Douglas Adams and Kurt Vonnegut got successful. They had a voice, and a perspective all their own–one no one had before. So if you try to be like everyone else, if you take all the goofy advice about chapter length–which is stupid, because it doesn’t tell you anything about the real reasons for chapter length, like pacing–then you’ll never ever ever write anything that’s yours nor will you write anything good or memorable.

          By the way, the Hunger Games wouldn’t have sold so well if the story wasn’t fantastic. Great storytelling=great sales. Longtime sales. That’s why Shakespeare is still performed–in multiple languages. Great storytelling.

          Genres come and go. By the time you figure you should be writing dystopian fiction, the wave is gone. So write what you love, tell a good story, publish, and keep at it.

          Just write, publish, and constantly strive to improve. (And it sounds like you should see my lecture on how to read like a writer.) That help?

          Reply
  12. Thanks for this, Kris.
    I was a bit depressed about my book sales recently. I was lucky in that one of my books hit in mid-2011 and carried me through 2012, but sales have really bottomed out in the past ten months or so, even though I kept adding more, good-quality bakery items. I still sell, but less than 10 percent of my peak.
    So even though I agree with the discoverability model, and it’s much more suited to my personality, and it worked for my one book, I felt bad. I think it’s like being a child star. You get used to that level, you think you should be able to leverage it higher, and it’s hard to re-adjust back down. For my day job, I’m more used to what Maggie Lynch describes, moving steadily upward through hard work and accumulation of assets/experience, not going from 0 to 60 and dribbling back down to 5 or 10.
    Overall, I feel lucky, because I went from years of occasional short story sales to a taste of indie publishing success, but a vague cloud of failure was also shadowing me, even though I’d lecture myself, “Your books are not rotten bananas. It’s okay if they don’t hit for another ten years, or until after you’re dead.” But obviously, it does matter to me, and I feel less motivated when it seems like very few people care what I write, even though objectively, I’m significantly better off than I was three years ago.
    So of all your discoverability posts, this one resonated the most to me. Instead of thinking, “What’s the point?”, it reminded me that I’m building assets for the long haul. I’m usually good at long-term gratification. Time to strap on my steel-toed boots.
    P.S. Feel free to delete this part. I don’t usually comment on grammar, but I would correct “á là the magic bakery.” The “a” should have an accent grave, the “la” shouldn’t have any accent, and “la” is an article, just like “the.” So “à la Magic Bakery” is more correct (http://en.wiktionary.org/wiki/à_la).

    Reply
  13. (grin)

    I suppose this is one of those discussions that has too many points for a comment section, or I’ve just been unclear because I do rely on my own judgment, write what I love, don’t want to be like everyone else (unless I like what they’re doing), read for the joy of it, and then analyze what’s causing something to thrill or not thrill me after the fact. I don’t look to follow forms blindly. I look for the effect in me first. And then try to see what form was causing that effect.

    I agree totally with you on that bit about short chapters—it’s a sign of engagement. It doesn’t tell you what was going right in the story telling, but it does tell you in big letters “look here, something is going on here!”

    You say: “Write the best story you can, and then the following week, write a better story. Keep practicing, keep publishing, and eventually you’ll get there.”

    But what is the measure of better and best? How do you know if what you did this week was an improvement?

    Sure, it has to jazz me. That’s a given. But I think our measurement of progress always has to include the audience. If it’s thrilling the intended audience, then we know it’s working. If it’s not thrilling them, then it isn’t. And we know it’s thrilling them because they demonstrate that in some way. They buy the next book. They recommend and sales increase. They write reviews. They create derivative works. They hold balls and dress up like the characters in the book. They read the whole book (Oyster’s data). Etc.

    It’s not about form. It’s about effect. Form follows function.

    From what I’ve read on your blog, I can’t image we disagree on any of that.

    What I’m trying to get at, and obviously fumbling, is a more strategic view. The choice of what type of stories to tell as we try to build a business. And maybe this is where you’re trying to make your point. I’m wondering if it isn’t wise from a business perspective to set up shop in place with lots of potential. It appears you’re saying you can’t know the potential of your stories, even when looking at audience size for similar stories, so don’t even bother with it.

    Reply

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