Business Musings: Trainwreck November Edition

Three days before I sat down to write this blog post, I finished reading Drama High by Michael Sokolove. I clutched the book to my heart, and thought, no one will ever see books like this again.

Then I mentally slapped myself. I had slipped into traditional writer think.

Drama High was published by Riverhead Books in 2014. Riverhead was once a literary imprint of Penguin Publishing, and got subsumed into the whole Penguin Random House merger. Imprints lose their identity in mergers like this, and Riverhead is no exception. I doubt the imprint would have published a book like this in 2019.

For those of you who haven’t seen the book, and I would assume that’s most of you, Drama High focuses on a high school in Levittown, Pennsylvania, that has developed a highly recognized theater department. The book, written by a former student, is a love letter to teaching as well as to theater. It’s filled with heart and compassion and general quirkiness.

The book ended up becoming a bestseller after it became the inspiration for the short-lived TV show Rise. I have no idea how I found it; probably the Amazon algorithm, because I haven’t been in a bookstore since the pandemic started.

But I got caught in that traditional publishing think: that only trad pub could take a risk with a small book like that and yet make sure it got to the places it needed to go.

And you know, in the limited book world I grew up in, that was true. When I came of age as a reader, there was a mountain of book outlets—not bookstores, per se, but places to buy books all the same. As a kid, I got my books (gothics and skinny mysteries and the occasional weird horror thing) from a drugstore a few blocks from my house.

By the mid-1990s, there were “dozens, perhaps even hundreds, of stores in the country that carried 100,000 titles or more” according to an October blog post by Mike Shatzkin.

That seemed like a lot of books. But we had to buy a title when we saw it, because if we waited, we might never see the book again. I searched for books by Phillip Rock for three decades, because I discover the first in the series in a used bookstore. I might never have found the last two books in his only series if it hadn’t been for Amazon and Downton Abbey.

Quirky books, like Drama High, only got commissioned because someone thought the book would do well enough. Had the book been published in the previous century, someone would have thought the book would do well in niche bookstores.

Only there really aren’t that many niche bookstores anymore. There are barely bookstores right now, because of the pandemic. This month, for example, we are losing one of our oldest bookstores here in Las Vegas. The owner finally decided—with the economic collapse and the pandemic—that it’s time to retire.

Other bookstores have other issues. It’s going to cost money for bookstores to get proper ventilation systems and, in some cases, put their inventory online. It’s not something you can just hire a few college students to do; it takes a true structure.

Book buying has changed, although reading hasn’t. As I’ve said in the previous two trainwreck blogs, traditional publishing needs to recognize how book buying has changed.

And it looks like some people in traditional publishing are finally beginning to understand that the changes they’ve been living through these past 20 years are permanent. The way Things Are Being Done has to change.

The article I mentioned above, by Mike Shatzkin, is startling for a couple of reasons. First, he’s late to the party, but he has arrived. (And he’s arrived with a business that will profit off clueless writers. There are ways to get the same services he provides for a lot less money. Just a warning, before you click on over.)

His point, that trade publishing is an outdated business model, is one I’ve been making for a decade now. Most indies understand this very, very well.

The article is also startling, though, because of who Shatzkin is. He’s a publishing industry guru, read by everyone in traditional publishing (whether they agree with him or not). He’s not what most businesses would call a forward thinker, but he can read the handwriting on the wall. And the handwriting gave him his article’s title, “The End of The General Trade Publishing Concept.”

You need to read this yourself. However, I will give you a few excerpts and summarize a bit.

First a definition (from the article). “Trade publishing concept”:

Big consumer publishers are called “trade publishers” because they have historically sold the vast preponderance of their units through “the trade”, the network of bookstores and libraries and their wholesalers that has grown up in the US over the past century.

The entire traditional publishing industry is built on this concept. Once upon a time, it was impossible to get into “the trade” with a single book or as a writer. Dean and I figured out how to get around it over thirty years ago, by starting our own publishing company. The distributors wouldn’t deal with individuals, but they dealt with new companies all the time.

Once we had a name and a business account, the distributors worked with us. What a simple workaround that is still necessary in some parts of the business.

Anyway, because it was hard to get books to bookstores, writers had to work with traditional publishers. They became incredible gatekeepers, and managed to keep out anyone who wasn’t Their Sort. That’s why diversity has taken forever to arrive in traditional publishing. If you think of traditional publishing as a country club, then you’ll understand almost everything you need to know about it.

Traditional publishing, like a country club, is not about who they let in, but who they keep out. They need to keep their little club pure. The difference is miniscule, really. Traditional publishing’s purity test was “literary values” which is nebulous. When I wrote a book under a pen name with an African-American main character (not Smokey, by the way. Another byline), my then-agent submitted the book without a history of the author.

The letters I got back, informing me that I couldn’t write and they didn’t want to “indulge” in that kind of storytelling, should tell you everything you need to know about traditional publishing. Editor after editor after editor—gatekeepers all—thought I was African-American, and so they decided that I did not belong in the club. All of the rejections claimed I did not meet the literary standards of the company. Me, more award-winning as an editor and as a writer than the people who were judging me (but didn’t know I had already joined the club years before when they saw my white skin).

The club of trade publishing was as insular as the country clubs I mentioned. A book like Drama High could sell because there were bookstores that specialized in theater, and bookstores in theater towns had drama sections. In his article, Shatzkin clearly describes the profit and loss on books like that, back when the trade worked properly. All the book had to sell to be profitable to the company (not to the author) was a few thousand copies, which the publisher was guaranteed to get by going to the correct niche (or club).

But here’s what changed, and what some in traditional publishing are finally beginning to realize. In the words of Shatzkin:

General trade publishing will be soon be recognized as an artifact of a trade that no longer exists. It doesn’t make sense any more for the organizing principle for title acquisition and marketing to be “if it works in bookstores, and we are confident we can convince them it will, we can do it”. That was the general trade that the general trade publisher served. As the trade shrinks, so does the universe of general trade publishers.

“If it works in the bookstores and we can convince them it will…” Another limiting phrase that cut out a lot of diversity. African-American bookstores, for example, couldn’t buy much from a general trade publisher because those publishers didn’t let African-Americans into the club. So, back in the day, when you walked into an African-American bookstore, you found books that came from smaller presses, regional presses, and university presses, none of which were considered “trade.”

It’s nice to see the limitations go away.

But I worry about my writerly friends still toiling in traditional publishing. Shatzkin’s article shows how duplicitous traditional publishing is. Read the section on profit and loss, which was designed to put profit in a publisher’s pocket but not in a writer’s.

This is worse now. In fact, let me pull a quote from the article that Shatzkin linked to, by Joseph Esposito. Talking about the possibility of Penguin Random House buying Simon & Schuster, Esposito makes this point:

With S&S as part of its operations, PRH would then turn its attention upstream with renewed vigor. Authors and agents will not be happy about further consolidation in the industry, as it will lower advances and put downward pressure on royalties; it will also add to the many “non-negotiable” aspects of a publishing contract such as the disposition of subsidiary rights and the ability of authors to revert rights after a period of time. It is a remarkable fact that publishers have succeeded over the past two decades in reaping 100% of the efficiencies from digital media and workflows and shared none of that with authors. This will continue.

Note, please, that part about publishers reaping 100% of the digital money and writers getting none of that. And that’s the future of traditional publishing.

(After this section, Esposito makes so many false claims, including two in the same paragraph—that trade publishers still have market reach and that writers can’t make money self-publishing. Both are so laughably wrong, along with much of the rest of the article, that there’s no reason for you to read it.)

Note also that both articles casually talk about publishing profits that come at the expense of writers as an accepted thing.

I’ve been saying this for years, but it’s still a bit breathtaking to see it so casually and blatantly discussed in publishing articles.

Now, both articles point out that the future for trade publishing is in their backlist. Again, I’ve been discussing this for a long time, wondering why the traditional publishers weren’t exploiting all the rights they had gobbled up in their rights grabs.

Looks like that’s starting now, although it’s clear from both articles that neither man understands how backlist works in the modern era. Shatzkin talks about backlist “decay,” which makes sense for some nonfiction books that cease to be relevant as times change, but not for fiction or creative nonfiction. These men also don’t seem to realize that there is no longer anything resembling “backlist” and “frontlist,” only books that readers want and books that are not, for some reason, capturing reader attention.

These two articles are the beginning of the change in traditional publishing. Things are bad in any industry when articles like this start coming from industry gurus.

The articles are written with the idea that they will “fix” the problems, and on some level, the article writers are correct: You have to identify a problem in order to change it. The thing is, though, is that these large trade publishers don’t know how to rebuild their business model because they really can’t.

The model is based on a system that doesn’t exist any longer. The entire foundation is gone. So trade publishing needs to be rebuilt from the ground up.

Think about this for a moment: houses that have their foundations crumble beneath them collapse. I’m seeing a lot of flailing. From Esposito’s 360 suggestion, which is still built on an old (and dated) foundation to forced retirements and layoffs of publishing staff, the companies are trying to figure out a way to survive.

They’re going about it badly. I’ve heard from bestselling writers at Harlequin who have not had their contracts renewed. Others had books cut, with a promise that they could keep their advances. Still others, who were with Carina, which was royalty-only, are being let go with little more than a by-your-leave.

The same thing is happening at Houghton Mifflin Harcourt, which has completely cut John Joseph Adams’s sf imprint. The books in the pipeline will be published, but badly. I’ve been involved in two separate imprints that have been canceled, and the publisher simply will not throw promotion money on a dead book line.

The JJA imprint isn’t the only part of HMH that has been trimmed. Several writers I know have not had contracts renewed. Cuts like that are happening all over the industry.

I keep waiting for several other imprints, which have never made money, to be cut, and suspect they will once other contract terms are met. (When companies get bought by other companies, there’s usually an agreement to keep things “the same” for one to five years.)

I’m also seeing weird little sideways evidence of contracts not being renewed. No marketing for New York Times bestsellers next book in a series, no preorders for books that should be in the pipeline. Utter demoralized silence from writers who had a good career going in what we used to call the midlist. Even those NYT bestsellers, above, were not #1 bestsellers, but people who routinely kissed the bottom of the list—which means, in 2019, that they sold as few as 5,000 copies (or as many as 50,000)—peanuts in the old days of the list, back when trade publishing was built.

I have no idea what 2020 numbers look like on all books published, but I can imagine that, with the exception of nonfiction bestsellers that had a heck of a season based on the news cycle in the late summer/early fall, it’s not pretty. I found some of my favorite bestselling authors because the annual time clock went off in my head. Isn’t it the time for the latest book by so’n’so?

I didn’t see advertising anywhere, didn’t see reviews, didn’t see marketing, didn’t see any promotion—and of course, there were no bookstores to see the books in. In the grocery/Walmart/Target market, I saw books on the shelf that had been there for months, not the latest releases.

It’s ugly out there for traditionally published writers, and getting worse. If you have friends who still dream of a traditional publishing contract, you might want to show them these three trainwreck posts. You also will want to encourage them to read Shatzkin’s post.

He sees the crumbling house and is talking about ways to shore up the walls—without rebuilding the foundation. That’s the sad part. The house needs to be moved off its blocks and the foundation needs to be poured anew, with materials that hadn’t even been invented when trade publishing was young.

Eventually, new companies will take over in the publishing business, companies that were built on the models for 2020. Not everyone wants to be a self-published writer, or to own their own publishing business. The writers who need to be taken care of will not ever make money in the new model. There won’t be large advances anymore or good paying royalties (not that there were, in the past 20 years).

Writers who need to be taken care of will make a tiny bit of money and get some kind of prestige to carry them through their teaching position or their managerial day job.

Writers who are willing to start their own companies and learn business will make more money than they ever would have in trade publishing, even from the before times. That’s what I usually blog about, and that’s what I had forgotten in that moment after I finished Drama High.

Because now, a book like that doesn’t have to prove itself. No caretaker is going to say if it works in bookstores, and we are confident we can convince them it will, we can do it.

Now, the author of a book like Drama High, can publish the book himself. He can make it available worldwide, and it will reach a real audience, not just a theater audience or some other niche audience that might or might not be the right audience for that book.

There are more opportunities for the quirky book, not less. And the book’s author doesn’t have to qualify for country club membership. No more assumptions about books for Our Sort.

I love that about the new world of publishing.

We’re so much better off now that trade publishing is not the center of the business.

I hope writers will realize that, and let go of their traditional publishing dreams. I hope the writers will learn the industry as it is, rather than the industry of their childhoods.

I hope…but I know that it’s probably a vain hope. The traditional publishing industry became rich and fat off the backs of writers, and it’s clear from those two “repair” articles that the screwing of writers will remain. Hell, Esposito flat-out said so: “… publishers have succeeded over the past two decades in reaping 100% of the efficiencies from digital media and workflows and shared none of that with authors. This will continue….”

All those old traditional publishing houses are dinosaurs. Those of us who are self publishing or who have started our own companies are the wave of the future.

We just have to remember that, each and every day.

*****

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“Business Musings: Trainwreck November 2020” copyright © 2020 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / Aleutie.