Business Musings: The Rise of The Backlist
The new year hadn’t even had a week to catch its breath before the first year-end numbers for 2014 appeared. The definitive numbers—if you can call any numbers “definitive” in traditional publishing—won’t show up until late February or early March. But the early numbers reveal quite a bit.
Publishers Weekly spent the first full week of 2015 reporting the numbers, but Publishers Marketplace actually analyzed them. Publishers Marketplace is an online trade journal for the traditional publishing industry. The links I have here may or may not get nonsubscribers to the articles in question.
I often find Publishers Marketplace’s analysis of the publishing industry useful, not because it’s accurate, but because it gives me a fairly clear snapshot of what the traditional industry’s thoughts on the business are. Publishers Marketplace’s focus on traditional means that it misses a lot of the trends and changes that happen because of indie.
In other words, sometimes Publishers Marketplace makes pronouncements that, to those of us who watch all parts of the industry, seem like a heartfelt well-duh. And they are well-duhs, kinda sorta. Except that if those pronouncements have finally reached traditional publishers, then those publishers are beginning to understand some of the important changes in the industry.
The case in point is from an article that appeared on January 5, 2015. Publishers Marketplace analyzed the sales figures from Nielsen Bookscan (some of which you can find on Publishers Weekly’s site.)
Those figures that we’ll deal with are these:
Nielsen Bookscan reported that print book sales—in the outlets that report to Bookscan—went up 2.4% in 2014 over sales from 2013. Half of the gain in sales—1.2%—came from a better-than-expected holiday season.
In that first week, Publishers Marketplace went deeper into the numbers than Publishers Weekly did and came out with some fascinating information, some of which I’ll deal with in the next week or two. But here’s the take-away:
All of the year’s gains and then some came from backlist, however, not newly-released titles. Frontlist unit sales fell 2 million units to 276 million, while backlist sales rose 17 million units to 359 million…
Those of us who’ve been publishing indie have known how powerful the backlist is since 2010. Fortunately for most of us early adapters, the traditional publishing industry didn’t get the memo for about three years. They started to get a clue in 2013 that there was wine in those dusty old bottles, which is why it’s become harder and harder to get rights reverted from traditional publishers in the past couple of years.
(Simon & Schuster was quietly ahead of this in the United States, and refused to revert backlist since the beginning of this century, because they were among the first companies to use print-on-demand to keep their titles in print. I’m not sure, but I suspect this came from the fact that S&S is part of a huge media conglomerate that understood the power of content, even then.)
Traditional publishers still don’t have a complete clue about the importance of the rise of the backlist, as evidenced by this comment from Publishers Marketplace:
[backlist sales rose]…reflecting the lack of new breakout hits…
Sorry, Publishers Marketplace, no. The backlist rose because the industry is changing. The way books are being sold everywhere, not just online, is changing. Readers are changing.
Well, actually, readers are staying the same. They want “what they want, when they want it, and at a reasonable price” to quote Kevin Spacey on the lessons Netflix learned from House of Cards.
Readers have always wanted that. But traditional publishing, like all other media in the 20th century, was based on the scarcity model: if you make readers hunger for a book, they’ll pay more when they see one. They also buy it immediately, and they’ll be grateful for what’s offered, rather than buy what they like.
The internet broke the scarcity model. Actually, it didn’t break the model, it obliterated the model. But you still hear how the rising availability is bad. As Hugh Howey said recently in a good post:
You mostly hear about this glut nonsense from book producers, and they aren’t worried about an infinite number of books, they are worried about the finite number of wallets. They see every one of those ten trillion llama books as taking money out of their pockets, because they think every reader would enjoy their work if there was nothing else to read. They think if they could just limit the number of books, they’d sell more. They’d be richer…
As Hugh accurately says, “…the glut is good. The glut is golden. There’s never been a better time in history for literature.”
But he’s looking at the “nonsense” as he calls it from traditional publishers, and not understanding the source.
Because the entire traditional publishing business is based on the scarcity model, Publishers Marketplace can’t understand the rise of the backlist. The rise doesn’t fit into the scarcity model.
Here’s the logic of the situation when looked at from the scarcity model: if people are buying “old” books, then the new books aren’t satisfying. The new books aren’t “good.”
That analysis was true-ish before backlist was constantly available. I say true-ish because, remember, not a lot of “old” books were available—just the ones that readers would keep recommending to their friends, so publishers couldn’t take those books out of print.
Back then, breakout books happened for two reasons: First, the books stayed on the shelves long enough to get word of mouth; and second, the books dominated the conversation.
It’s almost impossible to dominate the conversation now. Traditional publishing doesn’t control every book that makes its way into the media now. One book might get some traction, but definitely not all of the traction.
And the conversation moves faster as well. We might discuss Book A today, but tomorrow we could be discussing Book J. Or not discussing any traditionally published book at all.
I was discussing this with a friend who still works in traditional publishing. He mentioned that traditional publishers have a lot of evidence going back decades that people who live in urban environments buy more books than people who live outside of major cities.
He said that traditional publishers believe this is because people who live in cities are better educated than people who live in rural areas. (Don’t you just love that New York snobbery?)
I responded that of course surveys have shown for decades that people who live in urban environments buy more books than people who live in rural environments. Cities have bookstores. Many (most) rural communities do not.
Back when Walmart started selling books in rural environments, I was working hand-in-glove with traditional publishers, and they started complaining about the “dumbing down” of book sales. Walmart did (and does) sell a lot of books, just not the ones sanctioned by Those In The Know.
Walmart was screwing up the bestseller lists all by its little self. Oh, dear. People in rural environments bought books when they could find books. Those country folk had an education (who’da thunk it?) and knew how to use it. They just didn’t follow the “rules” on what to buy.
(By the way, Walmart didn’t start sharing actual book sales figures until 2011, long after those complaints. Now, Walmart’s book sales figures are included in the Bookscan data. Up until the middle of 2011, Bookscan didn’t count most places where rural book buyers bought books. Even now, that’s where Bookscan’s information falls through the cracks.)
Online book sales obliterated the urban/rural divide. Now I don’t have to drive to the nearest city to get an obscure title; I can order it after midnight with the click of a button while sitting at the kitchen table in my jammies.
And that ability hurts the scarcity model. I can get my hands on a fantasy anthology that traditional publishers let go out of print (and no one has done an ebook of), and that book shows up at my doorstep a few days later.
My dollars are finite, just like yours are, but book-buying dollars are not. Now that more books are available to more people, book sales should—logically—go up.
And they are. But they are going up outside of the traditional models. At least 20,000 of my ebook sales in 2014 did not get counted by any traditional measure—Bookscan or otherwise. I say “at least” because I don’t know if Smashwords sales count toward Bookscan numbers or if some of the other ebook sites (like Kobo) count as well. I do know that Amazon and Barnes & Noble ebook sales get counted.
So there is a shadow industry. There always has been. Even Bookscan itself says that it only covers 80% of the print book business. That’s up, by the way, from the old days, when Bookscan was less than 50%. There’s a lot of give in that 20%. And that’s in the traditional industry.
There’s even more give when you consider indie publishing. A lot of indie writers publish their print books without an ISBN, so the books don’t get tracked by traditional means. I suspect Bookscan covers 80% of the traditional market, but in all of trade publishing? I think that Bookscan misses a lot of books. How many? I have no idea. I doubt anyone does.
So what does the rise of the backlist mean? Ask any indie writer and they’ll tell you. Backlist and frontlist are losing their meaning. There are books that are recently published and books that are new-to-the-reader. Both seem just as fresh as each other, even if one was published ten years before.
That keeping-up-with-the-Joneses thing in all of entertainment has fallen by the wayside. The discussions at the water cooler disappeared with the water cooler. Now, everyone seems to understand spoilers, saying, “We’re probably going to reveal crucial plot points, so if you want to watch…read…listen to…whatever we’re discussing, you should probably say so now.” That someone can decide to hear the spoilers or leave the conversation entirely.
That fundamental misunderstanding of why the backlist sold so well in 2014 means the traditional publishers haven’t entirely figured out what’s going on. But they’re marching in the right direction.
For example, Publishers Weekly published an interesting chart on January 2. Called “Readin’ With The Oldies,” PW mentioned that some books have long lives. They listed seven “literary classics” that were still “racking up blockbuster numbers decades after publication.”
Those seven books are To Kill A Mockingbird, The Great Gatsby, Fahrenheit 451, Lord of the Flies, Catcher in the Rye, 1984, and Of Mice and Men. Some, like Gatsby, actually have public domain editions online whose sales aren’t counted in the totals.
What does PW consider blockbuster numbers? These books have 2014 sales of 382,587 (Mockingbird) to 160,424 (Mice & Men). I assume these numbers are combined ebook and paper book, but I don’t know, since PW doesn’t tell me.
Still, these are backlist numbers, acknowledged by a trade journal that never used to discuss backlist at all. In fact, eleven years ago, PW actively wondered how long Doubleday would continue to manipulate the hardcover list by refusing to put The DaVinci Code into mass market paper, like a sensible publisher, so that other books, newer books would have a chance at the list.
Never mind that Doubleday’s decision was one of the few brilliant decisions I’d seen in traditional publishing in all my years. Why put out a cheaper edition when the expensive one—the profitable one—was moving millions of units? Because it was tradition? (And now, I hear Tevye singing about the importance of “Tradition!” Worked out well for him, didn’t it?)
As I said in a blog post in mid-December, traditional publishing companies are starting to figure all of the changes out. It takes a while for common knowledge among the more nimble indies to filter its way through a large conglomerate. Look, for example, at the ways the television networks are still dealing with on-demand programming.
CBS has finally—finally—jumped into the video streaming market in a way that makes some kind of sense. Untethered from the cable box or any other subscription, CBS All Access allows viewers to subscribe to CBS programming (new and old) for $5.99 per month. I haven’t read the terms of service, so I don’t know how easy it is to leave once you join, but I suspect you can spend $6 and binge-watch for 30 days, and then move onto something else if you want to.
This seems like a logical development, particularly in response to Netflix and Hulu and Amazon Prime, but because of the complexities of contracts and affiliates and various markets, it has taken years for a network behemoth to even try this. It doesn’t surprise me that the first major old network to do this is CBS—whose parent company is the same as Simon & Schuster’s. They’re working hard inside that organization to stay as close to the cutting edge as a gigantic company can possibly do.
In fact, at the Consumer Electronics Show last week, Les Moonves, the CEO, described CBS as a content provider, not a video producer. This is the same man who described Simon & Schuster as “a little gem” last year. A little gem of content.
At CES, he said, “In the end “we don’t care when you watch it or where you watch it. We just want it to be counted and to be paid appropriately.”
Sounds like someone at CBS is beginning to understand the new entertainment framework.
The rest of traditional publishing is behind—as evidenced by a lot of their behavior and the things they say. But they’re not that far behind. And money talks.
Of the 635 million paper books sales made by traditional publishers last year, 56% were backlist. Over half.
Since those books were sold at full retail, the profits remained the same as the frontlist titles. Who knows how many backlist books sold in used bookstores in the same period? No one tracks those numbers.
Nor does anyone track the sales of backlist ebook titles that don’t use an ISBN, but instead use an internal retailer identifier number (like Amazon’s). I have no idea what the numbers are. Again, no one does.
But what that tells me is this: The backlist numbers are much bigger than traditional publishing thinks they are. It’s probably safe to assume that backlist of previous traditionally published titles outsell frontlist by 75% or more.
What were the percentages of backlist and frontlist sales in the past? Again, I don’t know. I do know backlist sales were less in traditional retail markets because of the limitations of shelf space. It was big news when the big chain bookstores took over book retailing in the 1990s because those stores needed backlist. But even those backlist sales weren’t as big as the sales now.
I’d guess, from all the hand-wringing going on now, that backlist sales were closer to 30% to 40% in the old days. This change, as witnessed by traditional publishing, is huge.
Backlist has become the heart of the publishing industry—finally. As it should be.
What does that mean for writers?
It means writers have to stop being complacent. Traditionally published writers need to pay attention to their backlist. Indie writers do as well.
I’ll break it down.
Traditionally Published Writers
- Traditionally published writers need to monitor their backlist’s visibility on online stores. If the book is an ebook or if it has been reissued as a print-on-demand, then the writer should be aware of that.
- Traditionally published writers need to monitor their contracts and the rights they sold. Many traditional publishers are putting books into ebook format without the right to do so, thinking it’s better to apologize than ask permission. Here’s the problem, though. If the contract doesn’t call for an ebook, it doesn’t call for an ebook royalty payment either. So a lot of companies are just making pure profit on a format for a title that they haven’t licensed.
- Traditionally published writers need to monitor their royalty statements. Writers’ backlist sales, particularly ebook sales, should be increasing if the books are visible on online sites. Also, if the publisher did a big promotion, like one of my traditional publishers just did with one of my pen names, then that promotion should show up on the next royalty statement. My publisher counts those promotions as deep discounting, which I’m not sure is correct. I haven’t hired an IP attorney to confirm that suspicion of mine, however. But if this practice continues, I might.
- Traditionally published writers need to revert the rights to the books that have gone out of print and have no online presence. The publisher will probably balk. Fight hard. If you need a primer on how to do it, give this a shot.
- Traditionally published writers need to make sure to sign new contracts that have a term limit for the rights reversion, not some kind of speed limit. In other words, make sure that the contract ends after 5 or 10 or 20 years. No vague description of sales as the end of the contract. An actual end date. (Your agent might not want to do this. If that’s the case, fire the damn agent.)
- Traditionally published writers need to get the backlist books that have reverted into print somehow. If you go with another traditional publisher, watch your contracts. If you do it yourself, make sure your covers and blurbs are well branded. Don’t leave the backlist out of print. That’s money you’re ignoring—and it’s a lot of money.
- Traditionally published writers need to write off some books. Most traditionally published writers have signed a bad contract at one point or another. Sometimes you have to shrug and blame your mistake on callous youth or sheer ignorance, and move on. If you’re a longtime traditional writer, you won’t be able to control your entire backlist, no matter how much you want to. Just accept that, and write new books.
- Indie writers need to keep their backlist active. Remember, the books are always new to some reader somewhere. Just because you published the book in 2011 doesn’t mean it should languish even if it isn’t part of a series. Revisit the book, see if the cover is still relevant, if the blurb is any good. If you got some pull quotes, use them. If you published a similar title or more in the series, make sure the old books are updated to reflect that.
- Indie writers need to keep an eye on trends. If you’re the kind of writer I am, then you will have written a few books that were years ahead of their time. If you wrote something in a genre that was dead or dying years ago, but is alive and kicking now, make sure you rebrand that older book to reflect the modern market. You don’t have to rewrite, but you should do new covers, etc., and maybe even some kind of promotion to get new readers for the title.
- All Writers need to identify themselves as content providers, and watch their contracts accordingly. Every contract—from terms of service to subsidiary rights contracts. Any media company can slip a rights grab into a TOS or a movie deal contract. I’ve seen rights grabs in foreign rights contracts and contracts to produce an online game (The gaming company wanted all the rights to the story and the characters. Um, no.) Rights grabs will become more common in this new world rather than less common as every kind of company figures out how the new publishing game gets played. (Actually, the new game is entertainment across all formats—just like Moonves was implying above.)
- All writers need to control their content. Control doesn’t mean doing everything yourself. It means understanding the partnership you set up with suppliers or distributors or other media companies. It means learning contracts. It means saying no occasionally. It means standing up for yourself and your work all the time.
As Hugh Howey said, we have entered a golden age. The golden age isn’t just for readers or writers or books; it’s a golden age of storytelling, across formats and media types. If we want to be successful, we need to recognize that we’re playing in a very big pool now—an ocean, really—and we need to proceed with care on the business side.
The big companies are figuring this out. As the backlist revenue grows even larger, the big companies will want more and more of it.
Our job, as content creators, is to hang onto the rights to our content and license as little as possible in the agreements we enter with others.
Those early 2014 number reports are just the beginning. There’s a sea-change coming at the top, and we’ll be able to observe it over the next 12-18 months.
Now is not the time to be smug. Now is the time to pay attention and make sure that your own content castle is well defended.
I still have more to blog about concerning the early numbers and will do so off and on all month as time permits. I’m back in the swing of blogging, and have a lot to say.
I don’t get paid for the nonfiction and blogs, though, so I do need some financial incentive to keep going. If you got anything out of this post, please leave a tip on the way out. (And yes, White Mist Mountain is my company.)
“Business Musings: The Rise of The Backlist” copyright © 2015 by Kristine Kathryn Rusch.