The Business Rusch: The Changing Definition of Publishing

Kristine Kathryn Rusch

 

This week, the announcements for the Pulitzer Prize shocked the publishing world because, for some reason, the Pulitzer board declined to chose a winner from the three fiction nominees. Lost in the controversy (besides the hurt feelings of the fiction nominees and the fact that no award was given in the editorial writing category either) was the fact that David Wood won in the National Reporting category for a series he published in  The Huffington Post.

A few news outlets mentioned this, but very few, because it scared them. And because they really prefer a juicy, meaty, why-the-hell-didn’t-these-novels-measure-up scandal.

What’s so important about Wood’s win? It marks the first time that an online–only outlet won in the national reporting category. Or as Rem Reider, editor of The American Journalism Review, commented in the Huffington Post on the win itself:

“I think it’s very healthy to see the Pulitzers have moved, albeit slowly, from a solely print focus. The world has changed dramatically. There’s an awful lot of exciting developments with digital news operations.”

The Pulitzers have acknowledged “new” media in the past, including ProPublica and PolitiFact, both of whom are affiliated with “old” media, like (ahem) newspapers. But this win is a first for an online publication only in a reporting category.

What I find most fascinating isn’t the win, which was inevitable for an online news site at some point, considering the good work being done by so many online sites, but Wood himself. He’s not an upstart blogger or a thirty-something reporter who has only worked online.

He’s a sixty-six year old reporter who got his start in 1970 with the Pioneer Press chain in the Midwest. The farther back in his resumé you read, the more you realize that this man worked for dozens of traditional outlets, most of which no longer exist.

He joined The Huffington Post in early 2011, not as an early adapter, or an early cross-over pioneer, but as a legitimate reporter whom the Post hired (along with others) to beef up their reporting credentials. (Well, he definitely did that.)

I would also wager, given his age and his resumé, that he would have been a tough hire at what Jay Rosen of New York University calls “legacy media companies.” Wood still has a lot of reporting in him, and he clearly wasn’t ready to retire or slink off into obscurity.

New media worked for him, as it’s doing for so many of us.

Also this week in the Huffington Post came the news that one-time indie sensation Boyd Morrison is returning to indie publishing. And not entirely willingly. It seems that Simon & Schuster, which had published four of Morrison’s novels, abruptly canceled his new three-book contract in January.

Morrison was, so far as anyone can tell, the first Kindle bestseller to get a traditional publishing contract, based on his indie sales. His sales were good, but not spectacular. He was selling 4,000 copies per month of three books.

I’ll wager—and I do not know exactly—that he received a helluva deal from S&S, a deal that did not match those sales figures. Someone at S&S believed his sales would jump once a “legacy” publisher got involved. I’ll even wager that those sales did jump, just not as significantly as expected.

I’ve seen this before. Anyone who has been in publishing a long time has. Something changes in the marketplace, and traditional publishers jump on that something with too much money and too little sense. The one I remember clearly happened twenty years ago because of The Firm. The Firm sold to the movies first. There was a lot of excitement in Hollywood over the book, and the excitement traveled backwards to New York.

Grisham got a sizeable advance, and The Firm became a bestseller, partly riding on Scott Turow’s Presumed Innocent wave and the fact that Turow wrote too slowly to meet the demand for the legal thriller genre that he essentially started. Because The Firm became a bestseller, Hollywood gave the book a green light, and in 1993, the movie came out.

Fast forward to 1994. At that point, publishers seemed to believe that whenever a book sold to Hollywood first, that book would become a bestseller, not thinking, of course, about the differences in the two businesses. What works in Hollywood often differs from what works in New York. A novel with a spectacular pulse-pounding plot, thin setting, and even thinner characters will work in Hollywood because real locations provide the setting and the actors develop the characters into something memorable.

(Before you all jump on The Firm, let me say that I like the book a great deal, and believe it does have good characters and a helluva setting. The books that followed Grisham’s onto this bandwagon usually did not.)

So for about three years, New York bought books that had sold into Hollywood. Those books came out first, sold poorly, and the movies never got made.

That wave ended with a violent whimper. Publishers vowed never to do anything like that again.

The new wave? Buying books from successful indie authors for outrageous sums of money. From a traditional publishing perspective, this actually makes a lot more sense than buying something Hollywood loved. The indie book is proven: it can attract an audience.

But here’s where traditional publishers’ vaunted gatekeepers screwed up. They seemed to think with their editorial paws on the book, their interior and cover designers improving the exterior, and their sales force (such as it is) on the game, they could increase sales to justify those advances.

And guess what? They couldn’t. Because they didn’t—and don’t—understand that indie publishing can reach a national (and international) market. So Morrison sold 4,000 copies per month of three books. That’s 1,333 copies per book per month on one site (Amazon) or a  mid-list level of sales for a thriller.  Yeah, the book might greatly improve on that number with a bit of publicity or promotion behind it. It might sell similar numbers in paper as well.

Or it might not.

From the looks of what happened to Morrison, his books didn’t do a hell of a lot better through a traditional publisher than they had from an indie publisher. The fact that S&S canceled his contract meant that the claim that the book needed a hefty revision was just an excuse. They were losing a lot of money on this contract, and they wanted it off their financial books.

Expect to see more of these kinds of stories in the future. As Morrison says, he was the first indie author to get a traditional publishing deal. Now he’s the  first indie author to get dumped by a traditional publisher for not performing to expectations. Of course, the expectations weren’t his, but that publisher’s, but when has traditional publishing ever owned up for its own errors?

Note that Morrison is doing better in the UK. He has an editor who loves his work and is championing it, and if you look at the deal notices on Publishers Marketplace, Little Brown UK clearly paid less for the privilege of publishing him than Simon & Schuster did.

The kind of books he’s writing (see the comparison to Steve Berry) have a European flavor, which do better there than here (at least according to traditional publishing). And then there’s this important fact: when Boyd Morrison began his indie publishing venture, it was 2009. He didn’t have access to Europe or anywhere other than the US. The Kindle store hadn’t gone into the UK yet, the iPad was just a glimmer in Steve Jobs’s eye, and Kobo didn’t have a good e-reader.

In other words, Little Brown UK brought him into a market which he hadn’t tapped yet. Those 1300 readers per month hadn’t already downloaded a copy of the book—which, by the way, has to be good, or it wouldn’t sell at those numbers.

And what is the possibility that S&S screwed up the marketing of Boyd Morrison’s traditional published books? Excellent. I did fifteen minutes of digging and found that the first books were sold for six-figures on a pre-empt, which means the offer had to be high enough for Morrison’s agent to recommend that he forget about the other players. Then I looked at the promotion for his books, and the covers he has.

Um. I read the kind of thrillers that Morrison writes, and while I remember hearing about The Ark when it sold, and seeing a Publisher’s Weekly ad for it, I don’t remember hearing or seeing anything else about it. S&S paid too much money for a book selling 1333 copies per month on Kindle, but not enough to put the real promotion machine behind it—the TV interviews, the planted stories in Vanity Fair (I’m looking at you, The Art of Fielding), and so on. And they actually had a story that could have gone to the media. They could have had a media blitz on these books when they came out.

I note that St Martin’s Press is making the same mistake with Amanda Hocking. If I didn’t follow her twitter feed, I would have had no idea that the first book in her Trylle series came out in January. In fact, the marketing is so poor on her books that I didn’t realize that the second book came out last week until I went to Amazon to double-check the spelling of Trylle.

With the public failure of Morrison’s traditional books (which got more press than the initial sale had), and the upcoming mishandling of other indie writers books, traditional publishing will soon jump off the non-existent gravy train.

What traditional publishers will do is take a nice-selling indie book, like Morrison’s, and make the writer an offer that actually reflects its current sales. As one friend said to me at our weekly professional writers’ lunch, “If a traditional publisher offered me a midlist deal, I’d laugh at them.” Not just because of the money, although the money is a huge factor, but because of everything the writer is supposed to give up.

If you want to see the difference in the money that a writer can make indie publishing these days and the money that the writer will make publishing traditionally, go to my husband Dean Wesley Smith’s blog. He has a post in his New World of Publishing series called “No Balance.” It’s accurate and a bit frightening.

If you understand contracts—which most writers don’t—then it gets even more terrifying. The writer is expected to give up years of copyright, not write a “competing” work, and essentially chain herself to that publisher for as little as $5,000. But as my writer friend said at lunch, it’s the lack of consideration that bothers him.

Consideration, in this instance, isn’t a term for politeness. It’s a legal term. What he meant in this case was that traditional publishing contracts expect the writers to give up a great deal for almost no money, while the traditional publishers give up only the cost of producing the book. For example, if traditional publishers want a writer to stop publishing loosely defined competing works, then the publishers should do so as well. If you sell a vampire romance to a traditional publisher, then your vampire romance should be the only vampire romance that they publish. Not that month or that year, but for as long as they expect you to forgo competing works as well.

See what I mean?

But writers are used to that. The problem isn’t the lack of consideration (well, it is a problem, but an age-old one), but that traditional publishers have gotten more dogmatic in their contract negotiations, not less. I’ve been through three rounds of contract negotiations since 2009, and the contracts have gotten nastier and nastier. What’s worse is that clauses we used to be able to negotiate are now non-negotiable.

Why would I sell a book for five figures or even six figures into a system that will not promise me good treatment—a new cover, for example, if the first cover sucks—and yet expects me to give up most rights to my own work (and often adding a legal injunction against creating other work) when I can publish the book myself, write other works, and make the same amount of money in less time than it takes to receive the entire advance?

It really makes no sense.

As traditional publishing digs in and starts treating writers worse than ever, it’s going to lose even the mystique that it had of being able to take a product, improve it, and sell it at a premium.

Professor at the renowned Interactive Telecommunications Program at NYU, Clay Shirky, sent ripples of fear through the traditional publishing community last week by talking about this very thing. Worse, he gave it a label that’s going to stick.

He said that publishing is a button.

A button.

Here’s the exact quote: “Publishing is going away. Because the word ‘publishing’ means a cadre of professionals who are taking on the incredible difficulty and complexity and expense of making something public. That’s not a job anymore. That’s a button. There’s a button that says ‘publish,’ and when you press it, it’s done.”

Then he goes on to discuss what parts of the old industry matter. Editing matters. Fact-checking matters. For some kind of texts, designers matter. But editors, fact checkers, and designers can be hired individually. He sees most content creators acting on what he calls the movie system—hiring a professional to do a particular job, combining that professional with other professionals until the job is done. Then the band breaks up and goes their own way.

Think of it like this: a movie studio hires a director, cinematographers, actors, extras, costume designers, etc. to work on a movie. When that movie is over, the professionals from the actors to the directors can work on a different movie for a different studio. That’s how Shirky envisions the creation of a book working. The content creator hires the designer, the editor, the fact-checker, and maybe even someone to sell the book, and then launches it herself.

With the touch of a button.

Shirky ends that section of his piece with this: “Now publishers are in the business not of overcoming scarcity but of manufacturing demand. And that means that almost all innovation in creation, consumption, distribution and use of text is coming from outside the traditional publishing industry.”

You can take that phrase “manufacturing demand” two ways. He means it the way movie studios manufacture demand, by getting the film into theaters, by advertising, by doing all that hype that we’re used to when a film gets released.

But the first time I read his phrase “manufacturing demand,” I saw it as something else. Publishers must now manufacture demand for their own services. They must convince the content creators to join forces with them to release a product.

And, judging from my last few contract negotiations, the publishers are failing at this.

One thing I’ve asked for in all of my recent negotiations is a limited license. Meaning the publisher has the right to publish the book for a limited period of time. Industry standard—and yes, there is a publishing industry standard on this—is ten  years. The license would then be up for renewal after ten years.

Amazon’s publishing arm just acquired a ten-year license to publish the James Bond books.  The Bond estate’s previous ten-year license—with Penguin—expired in March. At the same time, the estate sold a ten-year license in the UK to Random House.

I’ve signed license agreements in the past, mostly with my overseas books. It’s not unusual. I routinely sign limited license agreements for my short fiction. I plan to continue traditionally publishing short fiction because the editors in short fiction treat the writers well, and because the stories do act as a loss leader. And because it makes good business sense in many instances.

Yet when I told my traditional book publishers that I was moving to the license model for my novels, I got a tremendous amount of pushback. One publisher completely refused to consider my next work. Another told me that “only bestsellers” can have a license. A third considered it, but we decided to part ways over other matters.

Mostly, though, I’ve been told that “licenses aren’t done,” or I got the who-the-hell-are-you? treatment.

Well, who the hell am I? I’m a long term professional writer with more publications that I’ve written than some editors in New York have edited. I have a dedicated following of fans for all of my pen names all over the world, and I have guaranteed sales whenever I release a book.

Who the hell am I? I’m someone who can now make a living publishing her own work electronically and in print.

So here’s what I figure. If traditional publishers want me on their list, then they have to make it worth my while. Not just financially, but in the contract terms as well. Then they must live up to those contract terms or risk termination. That’s what a limited license would do. If I don’t like the way Publisher A treated my books, I do not have to renew the contract when it comes up after ten years. I can move to Publisher B.

Chances are I’m not going to play that game, because from what I can see, no traditional publisher can offer me anything that I can’t get on my own at less risk to me and my work, and at less cost to me and my work

And about that whole loss-leader idea I had a year back, when I thought maybe it would be worthwhile to have a book published traditionally for the access to a traditional publisher’s ties to help my indie books? That’s out the window, primarily because of traditional publisher’s contracts and their screw-ups.

I’m seeing more screwups ahead. As traditional publishers try to justify their positions (manufacture demand for their services), they’re talking out of both sides of their mouth. Digital Book World had an article this week about consumer reactions to high e-book prices in the face of the Justice Department suit (yes, Rick,  you were right about this). In that article, Molly Barton, Penguin’s global digital director said that e-book production “costs 10% less” than print book production. “But,” she added, “the largest expense is author payment and always has been.”

Let me say, simply, bullshit.

Most writers get paid $,5000 to $20,000 as an advance on their book. They get 25% of gross (theoretically) for their royalties after that $5,000 to $20,000 gets met, if creative accounting allows it to ever get met. If that’s the largest expense on an e-book for a traditional publisher—larger than their overhead—then e-books truly are cheap to produce.

Her argument assumes ignorance on the part of consumers who think all writers are rich.

But her argument should strike fear in the heart of all writers who want to remain in traditional publishing. Because the argument traditional publishers are now giving for their ridiculously high e-book prices is that authors cost too much.

Got that? Authors cost too much.

I’ve seen that argument time and time again as the e-book pricing wars with traditional publishers have heated up. What does that mean? It means that authors who want to go traditional will be asked (or, more accurately, forced) to take even more of a cut in advances and royalties.

Think traditional publishers will pay writers well? Think again. Traditional publishers will look at failed contracts like Morrison’s and take the wrong lesson from it. They will think either that indie books don’t translate into the traditional publishing realm  or that they shouldn’t pay so much for indie books.

Never ever does a traditional publisher take responsibility for their own failures. And they did fail Morrison. They expected to publish the books with little effort and reap the profits. They probably sold double what he could sell, but that’s not enough to cover their overhead or their production, shipping, and manufacturing costs. Ooops.

Better that traditional publishers believe that indie books don’t translate. That’ll protect more writers from the insanity to come.

Want to sell a book traditionally? Sign away your copyright,  your ability to publish books with another company, let the publisher pay you $2,500 to $10,000, with 10% of net royalties, and maybe, maybe the publisher will buy your book.

And oh, the publisher will not guarantee that they will do a good job of publishing that book. Doing a good job is not their responsibility according to the contract.

According to the contract, the only person who has to do a good job in traditional publishing is the writer. If she doesn’t, she has to pay back her advance and the contract gets canceled.

Oh, and who decides who does a good job? The publisher, of course. Never the writer, never another publisher, never an impartial third party.

If I were traditional publishing, I would look at this year’s Pulitzer Prize results and tremble. Not because some jerks declined to make a decision in the fiction category, but because non-traditional media is moving into the mainstream.

Move aside, traditional publishers. You’ve already lost your monopoly. And you don’t know how to justify your jobs any more.

Publishing is a button.

Get used to it.

In 1988, I co-founded a publishing company. In those days, publishing was hard and costly. We spent thousands, tens of thousands really, every month to produce books that had a large impact on the sf/f field. We also got our education in a system that’s akin to manufacturing buggy whips now.

Instead of putting this blog in a magazine that will then need to go to a printer and get sent to you through the US mail, I can write the blog on Wednesday, post it Wednesday night, and you can start reading it on Thursday in places like the UK and Australia, places I couldn’t even mail that magazine without incurring tremendous costs.

Publishing is a button. And the button that will keep me publishing this blog is the PayPal link below. Because my overhead is low, so I only need you to leave a tip on the way out—if (and only if) you get some value out of this blog.

Thanks to everyone who does contribute, not just financially but with comments, e-mails, and links. For example, I’m not sure I would have found Shirky’s piece in a timely manner without you. So thanks, and thanks for returning week after week.

Click Here to Go To PayPal.

“The Business Rusch: “The Changing Definition of Publishing,” copyright © 2012 by Kristine Kathryn Rusch.