The Business Rusch: Sea Changes
The Business Rusch: Sea Changes
Kristine Kathryn Rusch
A lot of readers have commented on my blog posts of the past two weeks. For those of you who missed this while on spring break or family holiday, I wrote about some discrepancies I found in royalty statements. I checked with other writers and publishing professionals and discovered that these discrepancies weren’t unusual. I wrote about that the first week. The second week, I updated everyone on the progress made on the royalty statement front.
My blog design tracks the most-read posts. If you look at the first page of my website, you’ll see that last week’s post is number one, with the previous week’s as number two. Thousands of people have read these two posts. Most have not contacted me directly, although some commented here. A few e-mailed. And many blogged about the issue.
Like I expected, however, I’m no longer in the loop. Because I asked people to move their information-gathering to their writers organizations and their agents/advocates. I don’t expect to have any news for you on the royalty front for some time. That might be weeks or months. In fact, now that the ball is rolling, I might be among the last to learn what the upshot is, because I am not directly involved in any writers organizations, large agencies, or traditional publishing houses.
I do know that there’s a lot of misinformation flying around the blogosphere, and some of it was headshaking to me. Until I figured out what was going on.
I started this blog feature on my website two years ago to help freelancers survive the economic downturn. Eventually that project became a book, The Freelancer’s Survival Guide. When I finished that book, 18 months in, readers asked me to continue writing a business blog, and even contributed a new name to the blog. I wrote about various business topics, until I could no longer avoid the elephant in the room: all the changes that are going on in the publishing industry.
In October, I started a long series of blog posts about the changes. I finished that miniseries about a month ago, and promised to continue discussing the changes individually instead of in a series.
While I knew that I was regularly getting new readers, I have continued to write for my established readers, the folks who have followed me either from the days of The Freelancer’s Survival Guide or from the beginning of the publishing series. I expected that everyone who read the blog had the same bits of knowledge, since we had discussed them previously in many posts.
I did not expect to have my blog readership triple with the royalty posts. I did know that it would go up, but not quite that dramatically. Even if I had known, I doubt I would have written the posts any differently.
But the truth is that long-time readers of this blog brought more to the reading experience than first-timers. And one of the things that long-time readers brought was a knowledge of the way that electronic and indie publishing work, even if those readers had never tried their hand at publishing themselves.
Many of the newer readers didn’t have that reading experience, and didn’t go back to any of the previous blog posts. (That’s okay. I don’t always have time to do that either with a new blogger.) A few people, when they were confused, either commented here or e-mailed me personally. (By the way, if you haven’t already done so, go back and read the comments sections from both weeks. There’s a lot of good information there [mixed in with the occasional just plain weird comment].)
However, quite a few traditionally published writers blogged about my post, pointing other writers to it (thank you!) and then, in a paragraph or two, “corrected” me about the way that e-book sales are reported. These traditionally published writers said repeatedly that there is no way any writer could ever get e-book numbers.
Once I factored out the folks who don’t understand how audits work (and for an explanation of that from people much more savvy than me, look at last week’s comments, starting with the one from Christina F. York), I still found people who firmly believed there was no way for writers to get numbers on e-books.
A dear friend of mine e-mailed me personally about that this week, succinctly saying that there is no Bookscan for e-books, so any writer who says she has numbers on her e-book sales is obviously guessing.
Um. No. Let me be clear on this point, because it needs saying. Writers who self-publish an e-book get the sales information for that book directly from the vendor. In other words, if you put an e-book up on Kindle, Amazon will let you check the sales numbers hourly—not the rankings, but the actual numbers. If you sell one copy of the book today, and you check your Amazon sales figures page, you’ll see that sale on the total number of sales this month. If that book sells another copy tomorrow, you’ll see the total sales for that title jump by one.
And so on.
This is different, traditionally published folks, than getting a royalty statement from your publisher, and not just in the time factor. Let me show you using some information from one of my earlier publishing posts. (If you haven’t read these earlier posts on publishing, then check them out.)
This is how traditional publishing works:
Writers provide content (product) to Publishers.
Publishers distribute that content to Distributors.
Distributors distribute books to Bookstores.
Bookstores distribute that content to Readers.
When a writer self-publishes through Amazon.com or through Barnes and Noble.com, this equation changes dramatically:
Writers provide content (product) to Bookstores.
Bookstores distribute that content to Readers.
Both Amazon’s Kindle store and B&N’s Nook store are bookstores. Some other e-bookstores allow writers to publish direct as well.
When a writer uses a service, like Smashwords, to access harder-to-reach stores, like the iBookstore, then the equation looks like this:
Writers provide content (product) to Distributors.
Distributors distribute books to Bookstores.
Bookstores distribute that content to Readers.
Distributors, just like bookstores, deal with sales, not production. Publishers produce the books, then distribute them. Writers who self-publish their own books are acting both as writer and as publisher.
Therefore, the writer/publisher becomes privy to the same information that a Big Six Publisher has concerning sales. The difference is that the distributors and bookstores report directly to the writer, using the same forms that they would use for a Big Six Publisher.
There is no royalty statement, and no need for Bookscan, not for self-published e-books.
So when I say that the numbers on my self-published books are much higher than the numbers reported to me from my publisher, I am looking at actual sales figures for my self-published books, the same kind of sales figures that the traditional publisher has. The traditional publisher is supposed to record those numbers and put them into my royalty statement accurately.
And accuracy is the only thing I’ve been discussing these past few weeks. Or to be more specific: inaccuracy. I do not know the reason for the apparent inaccuracy. Until I have more information, I can only guess.
As for print books, several writers organizations and Amazon itself will provide Bookscan sales figures directly to the writers of those books. Sometimes the writer must pay a fee. Amazon provides this service for free for six months.
This too is a change from the past. Until a year or so ago, writers had no access to Bookscan numbers without paying an exorbitant price for the service.
These changes are Sea Changes. Never before in the history of traditional publishing have writers had access to actual sales figures for each individual book. The writers had to either trust their publisher to report accurately or the writers had to audit the publisher to get that information.
Most writers’ contracts have a clause in them that allows for an audit of a particular book’s sales and all the material pertaining to those sales, provided the writer gives the publisher proper notice of the audit, and provided (usually) that the writer pays for the audit herself. In the not-too-distant past, writers who audited their publishers were labeled “trouble” and often found themselves unofficially blacklisted.
Therefore, when you combine the expense and the fear of an unofficial blacklist, writers often opted to avoid an audit, even when the writer suspected something was wrong with the numbers being reported from the publisher.
(Let me add here that in the past two weeks, I’ve been subject to some pretty nasty comments from some folks in traditional publishing. On a few blogs run by folks in publishing, I’ve seen myself referred to as a woman who has always made trouble. So the bad-mouthing and minimizing still happen.)
Let me clear up one other misconception that I saw on various blogs: Just because I can see the e-book sales figures for my self published books doesn’t mean I can see the e-book sales figures for my traditionally published books. That information does not go to me. It goes directly to my traditional publisher who has a legal, contractual obligation to present it to me accurately within six months of receipt of that information. (Publishers violate that part of the contract all the time. By contract, the information should have reached me in December. It arrived in April. Such delays are common.)
This sea-change is hugely important. Because for the first time, writers have access to actual sales information. Not all writers have that access, however. Writers who aren’t self-published don’t have that information. Writers who haven’t signed up for Bookscan don’t have access to the sales numbers either. (And remember, Bookscan only accounts for 50-75% of all books sold, maybe less.)
Still, enough writers have this information to realize that their royalty statements are incomplete, murky, or just plain wrong. This realization—and the availability of real hard sales data that did not exist for writers three years ago—is what’s causing this consternation over royalty statements right now.
It was astonishing to me how many traditionally published writers only understood part of what I was talking about. Several didn’t understand at all. They have no idea that they can now monitor their own sales through Bookscan. Many traditionally published writers told me flat out that they never check their royalty statements if the statements are unearned. (Meaning the books haven’t yet earned out their advance.) These writers tell their agents not to send the unearned royalty statements.
I want to know how a writer knows the royalty statements are unearned if she hasn’t seen the statements. For all the writer knows, the publisher is reporting earnings, and those earnings are going into someone else’s pocket. I know of at least one agent who used that scam repeatedly.
Several months ago, my husband Dean Wesley Smith said to me that this sea change in publishing would cause a huge division between writers. He foresaw the writers who were capable of handling not just the writing but the business of writing separating from the writers who want someone else to take care of book sales and production.
Over the past few months, it’s become very clear to me that he’s right. Some writers are unable to make their extensive backlists available to readers, not because of a lack of desire or an unwillingness to work, but because of other obligations. One writer wrote me a rather plaintive letter. Her backlist makes mine look small (I have 29 books and 300 short stories that need to return to print), but she’s in her seventies, with multiple book deadlines for traditional publishers. She doesn’t have the time or the energy to learn new skills.
So many writers are in that position. They often default to agents who have set up an e-publishing wing or to e-pub services that charge a percentage of future sales in perpetuity to format, publish, and “promote” these books.
These writers are falling back on the traditional publishing model because that’s what they’re familiar with, and so many new services are rising up to take advantage of those writers.
Here’s the problem: It only takes about 8 to 12 hours total to create a cover, format, and upload an e-book to the various e-bookstores. And for that, these new companies that work on a percentage will get paid for decades.
There are companies that will do the same work for a flat fee. The problem is that the fee must be paid when the work is finished. Writers, chronically broke and mathematically challenged, don’t seem to understand the value of paying $200 now instead of 25% for the lifetime of the work. But the math is this: on a successful established writer’s novel, one of these percentage companies will earn upwards of ten to twenty thousand dollars over ten years for the same 12 hours work that the writer could have paid $200 for.
That makes no business sense to me. If I lacked the $200, I would save up until I had it, and then hire a flat-fee company. But I would never pay a percentage on this new way of publishing. Not ever.
It seems like a no-brainer to me. But I spent weeks arguing with some pretty savvy writers over it. I wrote the trust-me post in an attempt to understand their thinking.
But I knew I was missing something.
I finally got a glimpse of what I was missing this past week.
If you have an active and busy traditional publishing career, with multiple deadlines and no time to read, let alone follow industry changes, you might not know how massive these changes hitting publishing are. If the evidence turns out to be correct, then your royalty statements do not accurately reflect how high your e-book sales are. As a result, those sales (as reported on your royalty statements) look insignificant.
Even if your e-book sales are accurate and rather large, the dollar amount might look insignificant to you. Most writers are only getting 25% of net on their e-book sales, minus another 15% for their agent. (For that math, see last week’s post). The amount of money you will receive for your e-book sales is quite small in comparison to the money you would get for your print sales. You have no idea what all the fuss is about. It looks like a bunch of writers whining about a tiny amount of money.
Last week, a well-published writer said exactly that to me and implied that since I’m a short story writer, small amounts of money matter to me when they don’t matter to other writers. (Apparently this well-published writer is unaware of the fact that I’ve published more novels than that writer has (and in more genres too).) The comment perplexed me (and not just because of the short story barb). The writer who made the comment used to know a lot about business but, as Dean said to me later, that writer is stuck in the 1980s.
Dean’s assessment wouldn’t leave my mind. And as I read blog after blog, and fielded comment after comment from traditionally published writers who didn’t understand what all of the fuss was about, I realized that a lot of them are still stuck in the 1980s or the 1990s. They have no idea that a revolution has hit their business because that revolution has not had a visible impact on them.
That there could be a hidden impact in their royalty statements does not compute for them because they know that writers can’t get sales figures and writers who self-publish by definition know nothing about publishing—both valid points of view for the 20th century.
I fully admit that some of the problems I’ve had in getting writers to understand what’s going on came from the way I wrote the last two posts. I assumed knowledge on the part of writers. I figured they understood how their industry is changing.
But many, many writers have no idea how drastically this industry is changing. Oh, they’ve heard of e-books and they might even own an e-reader, but they’re under the impression that e-books are a minor, minor part of the industry, and e-books sales will have no real impact on them.
And nothing could be farther from the truth.
I have no idea how to bring these writers up to speed and get them to look at the 21st century.
I do know how hard this change has been for me.
You can see the evolution of my own thinking on this blog. I went from thinking that some writers were giving up on themselves by e-publishing books that hadn’t had a real chance in traditional publishing to telling writers they need to assess whether traditional publishing is even right for them. I’m giving advice now that would have appalled me two years ago.
And my thinking is still evolving. I know that I made decisions three years ago that I would not make now. But I have also come to realize that my history makes this new world of publishing perfect for me.
Dean is writing a series called “Think Like A Publisher,” in which he explains how publishers approach publishing and distributing books. Dean and I owned a publishing company twenty years ago. Dean edited for several other companies, including Pocket Books, and I have edited for companies as well. I’ve also been a business writer for more than thirty years. I like business and understand it.
When Dean writes his “Think Like A Publisher” blogs, they seem quite obvious to me. But the more he writes, the more I realize how rare our knowledge is. I’m very aware of the fact that to his blog’s readers the information he is presenting is new and somewhat frightening.
Also, the more he writes, the more I realize how few writers have the skill sets that Dean and I have. And some of the writers who have those skills don’t have the time or are too old or too ill or too overwhelmed to take advantage of what’s going on here.
A lot of writers are going to be left behind by these changes in publishing. Even more are going to go from making a reasonable living to making pocket change. Some writers will wake up one morning and realize that their once-thriving careers are now over, and they won’t understand why.
Even if we settle the royalty statement controversy, and e-book sales get reported accurately, those writers listed above probably won’t make a good living any longer. Because the contract terms currently offered by traditional publishing make it nearly impossible for writers to earn a good living off their e-book sales. That’s the next fight for traditionally published writers, and it’s an important one.
The issues are different for writers willing to self-publish their work. Those writers will need a lot of patience. They’ll need to learn a whole new set of skills in addition to the writing. They’ll need to figure out how to publish while maintaining their writing output.
If they do, then they’ll make a great deal of money over time. Not everyone will become a bestseller. But for the first time, established writers can earn good, consistent money on their work. Monthly incomes, which is a strange thought all by itself for writers. Steady monthly incomes.
Dean’s right: writers are already splitting into two groups— the traditionally published professionals and the self-published professionals — with a handful of us straddling both camps. The problem is that we already speak different languages, and these camps have only existed for a few years.
Imagine what a decade will bring.
We’re going to have to figure out how to keep each other in the loop, and how to respect each other’s choices. Because it’s becoming clearer and clearer to me that only by sharing information will we be able to help each other in our traditional—and untraditional—careers.
“The Business Rusch: Sea Changes” copyright 2011 by Kristine Kathryn Rusch.