The Business Rusch: The Death of Publishing
It is the last day of February, 2013, and by now, traditional publishing should have mailed its holiday cards with the gleeful misquote attributed to Mark Twain on the cards’ interior: The reports of my death are greatly exaggerated.
Not that there were actual news reports of the death of traditional publishing. But if you read the blogosphere in 2010 and 2011, a wide number of reputable publishing industry insiders predicted that traditional publishing would be dead or unrecognizable by the end of the Mayan Calendar on 12/21/12.
I’m serious. And I’m not sourcing the predictions for fear of embarrassing some good friends.
Those of us who understand how the large industry that is publishing works, and how business works in general knew that those predictions were misguided to say the least. A number of the folks who predicted such things stopped when it became clear that the e-publishing revolution wasn’t storming the barricades of traditional publishing. Like most revolutionaries, e-publishing grew older and got subsumed into the traditional system. And those who felt the revolution’s initial passion and fire have either given up proselytizing, settled into the daily grind that a real work brings, or have given up the cause altogether.
Where is traditional publishing four-plus years into the revolution? Bigger, stronger, and richer than ever. Who ended up getting harmed by the revolution itself? Writers who never really learned how the business worked and/or writers who believed their traditional publishing careers were bulletproof, that these crazy changes in the delivery method wouldn’t touch them.
Even now, these formerly bulletproof writers have no idea what happened to them. They blame traditional publishing, rather than their own business acumen.
The writing was on the wall as much as four years ago, when the recession hit. Book advances worldwide went down significantly, as much as three-quarters, according to an article in the London Times. Writers continued to accept those advances and bemoan them, so as the e-publishing revolution hit and publishers started to realize they could make more money than they ever had, they kept the advances low. Why put out a ton of money up front if authors will accept less?
It’s excellent business. Minimize your up-front costs. Think about it. Would you pay in advance for something if you could get the same (or better) product for less money, money paid out made six months after you’ve already profited from that product? You’d do the latter, of course. And many traditional publishers are doing the same. Pay less, pay lower royalties, get the same product for one-quarter the cost. Makes tremendous business sense to me.
I’ve seen this trend for the last several years. And now traditional writers are beginning to realize what’s happening—and that it’s happening to them. I have received four letters this past week from friends with many New York Times bestsellers under their belts who are now complaining that the new advances either aren’t forthcoming at all or are significantly lower than they were before. Significantly, meaning money that would have caused these writers to walk ten years ago. Now there’s nowhere to walk to that will pay a higher advance.
Back in the day, you know, ten years ago, traditional publishing advances were designed to encompass the entire future earnings of a novel. That way, the publisher wouldn’t have to pay royalties, even though royalties were listed in the contract, and the advance was essentially an interest-free loan against those royalties.
When the recession hit, traditional publishers lowered advances, thinking book sales would go down. And book sales did go down for a while—in print books only. Book sales went up in the more lucrative e-book area. And then they went up more and they went up even more. Publishers were paying only 25% of net on those e-book sales so the pay-outs to writers were significantly less on e-books than they were on print books.
Even if the publisher was selling fewer e-copies, it was making double the money it would make from print copies. In other words, folks, publishers are making much more money from the e-book revolution and they’ve designed publishing contracts so that they can keep more of that money.
Writers have signed those contracts, and continue to do so. So traditional publishers are making more money per sale and keeping more money per sale, while traditionally published book writers are taking smaller advances and making less money per sale, if they can even get accurate royalty payments from their publishers.
So…whose death should we be predicting? Maybe the career death of the full-time traditionally published midlist or lower level bestselling writer.
Not that there won’t be midlist or lower-level bestselling writers working for traditional publishers. But those writers will also have day jobs. They certainly won’t have big houses and assistants and the freedom to write whatever they want any more.
They didn’t just miss the handwriting on the wall. They missed the gigantic neon signs littering the town. They missed air raid sirens, the warnings, everything—mostly because they trusted their advisers (read: agents) to warn them that the world was going to hell.
Not realizing that agents, who make 15% of what their writers make, were dealing with their own collapsing business model and didn’t have time and/or didn’t want to tell the less business savvy clients that the End Is Near!
I’ve written about this for years. I did a much reprinted blog post called “Writing Like It’s 1999,” which was just reprinted in England and is causing some buzz there. But that post has been on my site now for years. The information is and has been available since May 10, 2011. And I wasn’t the first to discuss this.
Why am I discussing this today? Partly because of those four letters I received from different writers. Partly because I’m teaching all this week, so I’m talking about the hybrid indie-publishing/traditional publishing model. And partly because the Passive Voice blog has a link to a truly whiney writer’s blog which has some great information about declining advances (coming from his conversation with another writer), but I won’t link directly to it because the writer in question is completely clueless (and apparently always has been) about the business.
I’m concerned that these traditional writers who can no longer make ends meet are at the end of the gravy train. And by that, I mean this: Traditional publishers have gotten quite savvy in the past year. Traditional publishers no longer revert rights to out-of-print books without a long fight, which sometimes ends up in court.
The contracts I’ve seen from every traditional book publisher, including one that used to be quite writer friendly, have added deadly non-compete clauses and are enforcing those clauses.
Then, as we kicked up the Fiction River anthology series, I discovered something else: agents want to keep their hands on their clients’ short stories. The excuse is this: publishing contracts have become so complicated, that the agent must now look over even the smallest contract to make sure the writer isn’t in violation.
As if a person who makes his living with words does not understand words. The writer should know what he signed on his book contract so that he—smart person that he is—would know if the short story contract violates that book contract. The agent doesn’t need to be involved. Period.
Twenty-plus years ago, when Dean and I ran Pulphouse Publishing, a house that specialized mostly in short works of fiction (short stories/novellas), we dealt with three different agents over eight years. Two were old-time agents who had been in the business since the 1950s and hadn’t changed their business model with the time, so they still handled short fiction. One was a scam artist whom it was later discovered marketed short stories he had no right to market.
And that’s it.
That’s no longer the case. Agents want their hands in everything. Why? It’s not because of contracts, folks. Or at least, it’s not because of traditional book contracts and their clauses. It’s because of the agent agreements. Here’s the thinking: If an agent handles a work—large or small—the agent gets a percentage of the ownership in that work according to most agent agreements that the agent is forcing the authors to sign these days.
So if the agent doesn’t handle a short story contract for that $30 commission, the agent doesn’t own a piece of that short story.
No writer with an indie publishing career lets her agent handle her short fiction. Not one that I know of. All of the writers who want their agents to handle their short fiction contracts are traditionally published.
And yet again, those traditionally published writers get squeezed.
It makes me sad.
Writers have always segregated themselves into those who knew a lot about business (real business, not the goofy traditional publishing industry) and those who let others manage all that messy business stuff. Until five years ago, the writers who knew a lot about business and the writers who didn’t had a pretty equal chance of striking it rich. The only real difference between them was that the business-savvy writer would either quit publishing (because it’s so geared toward the business-ignorant) or would become well-off partly because of their own money management skills. The writers who knew nothing about business often quit publishing involuntarily when something went seriously wrong in their careers, and those writers blamed their craft for the problem instead of understanding the business cycle.
All of that has changed.
Now the business-savvy writer has a significantly bigger chance of becoming rich than the business-ignorant writer, even if the business-ignorant writer sells more books and has more readers. Got that? The business-ignorant writer has been squeezed by the publishers and the agents so that making a big six-figure income, year in and year out, is becoming nearly impossible—without a worldwide blockbuster.
The business-savvy writer is either a hybrid writer—traditional and indie—or goes indie only. Those writers can and are making six-figure incomes without having a single bestselling novel. They don’t need a blockbuster to save their financial future.
They control their financial future.
Again, it’s math. The indie and/or hybrid writer gets 50-70% of each indie book sale. The traditional writer gets 25% of net, which works out—at least according to the royalty statements I’ve seen—to 10% of the sale price of each book.
You make a lot more money faster when you’re earning two to seven times more than someone else on the same kind of product. You can also have fewer sales at that higher royalty rate and still make more money. Math.
And I was computing that as if all things were equal. They aren’t. The indie/hybrid writer gets money every month from the sales made 30-90 days previous. The traditional writer gets paid every six months from sales made six months before that—and that assumes that their advance has earned out and their publisher accurately reports both the sales and the royalties. It also doesn’t take into account that mysterious calculation publishers make called “a reserve against returns” which, in most contracts, isn’t even defined. (In other words, the publisher can hold back as much money as it believes it can get away with, because nothing in the contract says otherwise.)
A lot of the writers I will see this weekend, who are coming for an anthology workshop, are indie writers who now make a living at their fiction. In fact, several of them are making good enough livings to quit their day jobs. One, a person who is extremely conservative about finances, who once told me publishing was “too risky” to chance the loss of a high-paying day job, hasn’t worked a day job in more than a year. The steady monthly income from that writer’s indie published novels has convinced that financially risk-averse writer that the writer’s time is better off spent creating new words than it is sitting at a desk for someone else.
What do I tell the traditionally published writers who are writing to me, upset that they can no longer earn what they did in the past? I still point them to the blog posts that can help them if they would only listen. But most of them have seen those posts, and then write me angry letters telling me that “it’s too hard” or “too much work” or “not suited to their personalities.”
Which is exactly what beginning writers used to say to me when I told them that writing is a craft, not a gift from the muse, and if they wanted to earn a living as a writer, they had to write fast, write a lot, and practice, practice, practice.
After a while, I stopped giving advice to beginners. And I’m getting to the point where I’m going to stop giving advice to writers stuck in traditional publishing.
Because, honestly, I’m beginning to lose patience. I can only repeat myself so many times. There’s only so many ways I can say this: The business has changed dramatically. If you want to make a living as a writer—a good living, like you used to—then you have to change.
Here’s what I want to add, but I never do in conversation.
I’m adding it here, now.
If you’re unwilling to change, that’s your problem. If you don’t want to learn the new ways of doing business in this new century, that’s your problem. It’s not mine. I can’t tell you that traditional publishing will return to the gravy train for writers that it once was, because it won’t.
Traditional publishing has used the recession and the e-publishing revolution to improve its business model so that the companies make more money. The companies are leaner and richer. And they don’t care about you writers. Contrary to what you’ve always believed, traditional publishing companies have never cared about writers. Traditional publishers know that when one writer goes away, another will step into her place. You’re a rotating group of widgets that might make the publisher some money. If you don’t make the publisher money, then they’ll find someone who will.
It’s time to understand that.
Stop whining. Because here’s the truth of it. Traditional publishing did not die in December 2012.
And 2013 is shaping up to be one of the best years for writers ever. We have more opportunities than we ever have. We have more opportunity to make a living than we’ve had in seventy to eighty years.
That’s the truth of it. Let go of the past and move forward.
Like the rest of us.
“The Business Rusch: “The Death of Publishing” copyright © 2013 by Kristine Kathryn Rusch.