Business Musings: Heads, Sand, and Traditional Publishing (Fear-Based Decision-Making Part 4)
Something fascinating happened on the way to writing this blog post. The Big Four TV networks held their upfronts. And, as the Hollywood Reporter writes in their coverage, “What a difference a year (and a global pandemic) makes.”
In the past, the upfronts were where network television sold their fall shows to advertisers. The list would come out, big stars would schmooze the advertising reps, trailers would get shown, and critics would eviscerate some new shows and gleefully anticipate others.
Um…not this time.
This time, there were hardly any trailers. In fact, according to THR, the “buzziest” trailer was for the Friends reunion special that airs on HBO-Max.
What seems to have stunned all of the TV reporters who attended the upfronts is that the networks—all of them—focused on their portfolios. For example, NBCUniversal discussed the content airing on their various platforms. ViacomCBS focused on its “beautiful ecosystem” of “premium content.”
But here’s the analysis that caught me. From Variety:
As technology gives rise to piles of consumer data, the networks are no longer solely in the business of selling TV commercials. They are also working to define niche audiences, and then assemble them for sponsors eager to find the next great vein of soda-drinkers, auto-intenders and IT decision makers.
In other words, as JP Colaco, who heads up ad sales for WarnerMedia, told the gathered virtual attendees, “IP is the new primetime.”
Finally. Someone gets it. And as THR said, it only took a global pandemic for this to happen…to TV.
TV has changed greatly, and so, frankly, has book publishing, thanks to the disruption that was 2020.
But I’m not seeing the same kind of internal analysis from traditional publishers. In fact, an article on Jane Friedman’s Hot Sheet newsletter for March 31 reporting on Ingram’s marketing webinars was the closest thing I’d seen to any kind of analysis of the changes of the past year.
Most of the things mentioned at those marketing seminars could have been written six or seven years ago. Things like… publishers need to optimize online retail (well, duh) and online sales favor backlist (another well, duh) and pricing is important…and you indie folk see where I’m going here.
Traditional publishing is terrified of online sales, but can no longer deny that they’re important. That was the biggest change that came out of the pandemic, and even then, I’m thinking they will deny it.
Right now, the articles I’m seeing on traditional publishing glorify how first quarter book sales are up from the first quarter of 2020, and only a handful of article writers acknowledge that book sales fell off a cliff in March of 2020, only to be revived later in the year. So, if book sales weren’t up in Q1 of 2021, we’d all have a serious problem.
We don’t. Not only have book sales grown on all platforms—and these are traditional sales—but Amazon’s book sales went down slightly as consumers got used to buying on smaller sites.
From the Hot Sheet coverage:
Target and Walmart have performed well, and they even took away a small percentage of Amazon’s share in book sales (about 2.5 percent), according to Jess Johns, consumer insights manager at Ingram Content. This may come as a surprise, given the large increase in revenues that Amazon has reported, and it’s true that the pandemic has been very good to them. However, Peter McCarthy, director of consumer insights at Ingram Content, pointed out that the online retail marketplace has become more diverse during the pandemic, not less. People are willing to shop at many different types of stores; they pay attention to business and brand values as well as to the impact of their buying decisions on the community.
This is important for all of us, and I’ll deal with it in a future blog post somewhere down the line. But traditional publishing’s reactions to all of this is fearful and full of “yes, but.”
Backlist sells really well online because people discover books they missed in that short window at the bookstore. Rather than celebrating the rise of the backlist and sprucing it up for new-to-them consumers, publishers have gone into gloom-and-doom mode.
An April article in that company town newspaper, The New York Times, is filled with transitions like “publishers fear…” and “publishers worry…” Rather than quote from the article, I think you should just head over and read it. There are some interesting statistics in the article, but more hand-wringing than I thought possible.
As you read this, remember that frontlist in book publishing terms is prime time in television terms. And remember what JP Colaco said above: IP is the new primetime. Or in publishing terms, IP is the new frontlist.
Of course, traditional publishers miss this entirely.
From the Hot Sheet’s coverage of a panel discussion hosted by Publishers Weekly and Westchester Publishing Services comes this little nugget from Dominique Raccah, the CEO of Sourcebooks:
If the world that we are living in has moved from 65 percent frontlist to 65 percent backlist, then the fundamental infrastructure that we’ve all built into our businesses needs to shift to represent that. And that includes the efforts that we ask from our authors. We need to be talking to our authors in different ways and asking different things from them. That’s the question I think that’s fundamental, and I don’t know whether we have data on that. I certainly don’t. I don’t know if the shift that we’re looking at is going to be an ongoing one or whether we’re going back to having the same frontlist momentum we’ve had in the past.
Notice this: “I don’t know whether we have data on that. I certainly don’t.” And contrast it with all of that data-driven information at TV’s upfronts this year.
Traditional publishing has been terrified of data from the beginning. As long as I’ve been in publishing, publishers have fought against having accurate data—from sales figures to income levels. Even now, when data is easy to come by, traditional publishers have not hired data analysts to help them figure out what exactly is going on.
And Raccah’s statement about “asking different things” from their authors? The different things are weird. Because, with the exception of blog tours and increased social media presence, everything traditional publishing asks of its authors is in support of a system that developed over sixty years ago.
That system is dependent on brick-and-mortar bookstores to drive book sales and discoverability. Ask a traditional publisher how readers discover new books, and the publisher will tell you it’s through promotion and presentation in a physical bookstore. These people have no idea how to promote books in the digital space and they don’t want to learn.
Remember, these are the people who got sued by the U.S. Justice Department for ebook price fixing, so that they wouldn’t have to compete in the digital space. They want to “save” independent booksellers, but they’re not willing to make changes that would actually increase book sales.
In fact, many book sales have moved from the business-to-business model (publisher to bookstore) and become direct to consumer. No big book publisher is set up to do that and they should be. They’ve had more than a decade to set up those systems.
They’re actually complaining that backlist now makes up roughly two-thirds of book sales instead of monetizing that backlist, as the TV companies have finally learned how to do.
I should have compassion for the folks in the traditional publishing industry, but I don’t. The handwriting has been on the wall for a decade or more, and they’re refusing to look at the wall.
To be fair, most of the people who are employed at traditional publishers are young and new. The consolidation of the traditional publishing companies meant what it always means at corporations—the older, experienced people are forced to leave because they get paid the most, and in their place are young, new people who are credulous. They believe their bosses when someone says this is the only way to get things done.
And as I mentioned in earlier posts, younger people are even more terrified than their elders of rocking the boat and getting fired—partly because the younger person knows they lack experience and depth.
Last week, I mentioned that the TV/Film industry is the most fearful industry we’ll look at here because they deal with the largest budgets and the fact that each project needs to keep hundreds of people employed. Much as I dislike the fear in that industry, I understand it.
I don’t understand traditional publishing. The old ways of doing things have barely functioned in the 21st century. Publishers have gotten by because people love their product, but traditional publishers are like that old mom-and-pop restaurant on the corner with the best pizza. You don’t want to look in the kitchen to see if it’s up to today’s cleanliness standards, and you know that the equipment in there could catch fire at any moment.
Traditional publishing thinks we like it that way, when (to stretch the metaphor a bit too thin) all we care about is the yummy pizza. We don’t care how it’s made.
The pandemic proved to traditional publishers that people like and need books (well, duh) because book sales went up (fueled by the backlist). But as you can tell from the end of that Raccah quote above, traditional publishers are hoping things will go back to the way they were even though there’s a mountain of data that shows it will not.
For example, McKinsey & Company released a survey that showed that consumers will continue their pandemic behaviors into the post-pandemic world. In other words, even the most reluctant consumer learned how to navigate the digital space to buy things. Now, the ease and convenience of online sales has proven to be “sticky,” something consumers continue to want to do—particularly in the realm of books.
That’s bad news for traditional publishers, but their entire business model is based on the bookstore model. They doubled down on it—out of fear—when the Kindle started disrupting the publishing industry in 2008 or so, and they continue to double down on it.
Everything in this industry is based on fear. If a book doesn’t sell “well” out of the gate, then the traditional publisher pulls the marketing budget, hoping that something new will sell better. (In a world where backlist rules, that decision is beyond stupid.) Writers need to fit into certain patterns and trends, which is why we got so many billionaire sex books after E.L James and why there were so many Gone Girl clones a few years ago.
Just like in the movie-TV space, it’s easier to sell a book that’s Gone Girl only written in the style of James Baldwin than it is to sell something brilliant that is its own thing. This is why indie (self) publishing has done so well, but no one looks at that data.
I’ve never seen an industry more data-resistant than traditional publishing. And in a digital space, where data can enable greater sales, that’s a kiss of death.
The more I read about where traditional publishing is going in this new century, the more I wonder why any writer with sense would join traditional publishing.
But we’ll deal with that fear next time. Because it is a fear, and nothing more.
Unlike parts of the TV industry, the publishing industry did not use the time during the pandemic to accelerate its move into the future. If anything, traditional publishing seems to be doubling down on its relationship with the past.
That’s what terrified people do. They make clingy decisions out of fear rather than decisions that require a bit of risk that would lead to massive growth.
The pandemic proved that there are hundreds of thousands of readers out there who are hungry for books that are new to them, books they won’t discover in a brick-and-mortar bookstore. (In fact, studies have shown that most readers do not live in a community with a single bookstore.) Basing all of a company’s decisions on an outdated model that hasn’t really reflected consumer behavior in this century at all is willfully ignorant at best and stupid at worst.
The consolidation in this industry will continue until some parent company realizes just how much IP it has purchased—and somehow figures out how to organize the mishmash of files and bad contract storage to weaponize that IP.
But that’s in future—and judging by the behavior of the people in charge of traditional publishing, that’s far in the future.
I’d say too bad, but there are other parts of the industry that will step in. For those of you who didn’t see the 2019 blog posts on this from me, you can pick them up in Rethinking The Writing Business. Which all of us should do, now that we’re moving out of this pandemic.
We need to rethink everything.
Only some of us—and I’m looking at you, traditional publishing—are too terrified to do so.
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“Business Musings: Heads, Sand, And Traditional Publishing” copyright © 2021 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / khunaspix.
Good god it’s hard to read this if it’s definitely true. How can someone be so stupid… that said at least it’s good for indie pub if they stay so.
This post was incredibly thought-provoking and, in many ways, acute. But the problem for book publishers and bookstores is far more existential than you suggest. You’re right that sales have moved to online and therefore spread out across the backlist with little regard for what is “new”. But I don’t believe there is a business model that can save publishers from being in a business that is just more and more difficult. Publishing books is easier and easier (mostly thanks to Ingram.) Publishing books profitably, as in launching new titles profitably, is harder and harder. I tried to sum this up last October with https://www.idealog.com/blog/the-end-of-the-general-trade-publishing-concept/ but I am going to do a new piece now with another wrinkle. Publishing books will no longer be a “business”; it will be a “function” of MANY businesses. And only sometimes will it be intended to “make money”. Which, when you think of the tsunami of self-publishing we’ve seen in the past 12-15 years, isn’t a prediction. It’s a summary of recent reality. Thanks for your post.
Thanks, Mike. I saw your post last year, and thought it quite savvy. The traditional publishing model needs to change…and will change, whether the bigger companies like it or not. We’re watching the small nimble companies now. They’ll grow into the publishers of the future. But you’re right: publishing books will be part of a larger business, which focuses on story and IP.
It was fascinating to see you write “publishers have fought against having accurate data”, because it reminds me of a past change to another industry. In 1991, the music business introduced SoundScan to track albums sold from bar codes at point of sale, instead of just stores self-reporting. Suddenly, there was a huge change in who was up and who was down on the Billboard charts. Turns out Country and Rap were way more popular than companies believed. (Not that these got any more respect.) And sales of certain expected artists couldn’t be goosed as well as under the old system. But “it wasn’t like pure corruption… so much as mass delusion” for the major labels before. They didn’t have good numbers to work with before; now they did.
It’s a fascinating story. And sounds like a change the major book publishers are still waiting to go through.
Thanks for this. I hadn’t seen it.
“They’re actually complaining that backlist now makes up roughly two-thirds of book sales instead of monetizing that backlist, as the TV companies have finally learned how to do. …
I don’t understand traditional publishing.”
I think I might. At least a little. During the boom days of the late 90s, the successful corporation I worked for sold off its health insurance claims business because it was earning only 8% each year instead of the “sexy” 12-15% return the Board of Directors wanted. They ignored the recession proof part of things where health insurance claims would always need to be processed. The markets tanked, mistakes were made, and that corporation shrunk and condensed and exists now only as a tiny subdivision of another corporation.
The backlist isn’t “sexy.” Backlist is too many books earning too little each to let the people in charge shine and show that they’re “sexy.” Sure, it can make a lot of money, but only a little bit at a time, nothing to get the Board to give someone a huge bonus and a jump to Senior Editor someplace else.
I don’t KNOW that this is the way things are in traditional publishing, but as a corporate denizen for many years, this is the philosophy I keep encountering over and over.
Oh, that makes too much sense. Thanks, James.
I no longer get CBS or ABC over the air. I can only pick up NBC, and occasionally PBS. The transition to digital tuners has essentially failed. For some bizarre reason there are a huge number of bible channels that I don’t want to watch, but the “Major Networks” do not care about reaching Santa Fe. Cable prices in town are ridiculous. I barely have time to watch the free TV that I have access to and can’t justify the price of cable.
The transition in TV to streaming is annoying to a consumer that doesn’t have high speed internet.
I live in Santa Fe and the fastest my DSL goes is the blinding speed of 1mps. Friends in Albuquerque get anywhere from 100mps to a Gig, depending on the age of their neighborhood infrastructure.
I can only stream video on the small screen of my computer.
That’s not the way to watch TV.
NBC did not renew the series Debris.
I can only watch the episodes on my computer. I don’t have the network speed to connect a TV to the internet and stream the show. I will watch the episodes over and over until they cut off access. I could subscribe to Peacock, but why do that when I can only watch on my iMac.
That’s the problem with all of the streaming services. There are incredible shows that I do not have access to unless I can watch them on my iMac.
All the decisions are being made by people living in big cities, and they do not care about the rest of the country that does not have high speed internet access.
Grumble, grumble, grumble….
On your recommendation – off to try Debris while it’s still there!
I’m not an internet techie, but if you’re able to watch that TV show on your computer, just hook your computer to your TV set (I assume your set’s less than 10y old) . I use an old laptop from 2012 as my so called ‘tuner’ and feed it to a 50″ tv. There’s not a TV show out there I’m unable to watch, and I don’t have cable. Yeah, it took me a few days figuring out how to do it (I use a Windows PC we bought second hand), but my entertainment budget today is only my ISP fee of about $80 CAD /month.
Took a while to get used to it, (couple of weeks) but I’ve been doing it now 4 years (I’m 62). I only just learned my 35 y/o Son In Law has NEVER had cable. He’s been streaming since he went out & lived on his own.
Thanks for the informative blog post as usual, Kristine. It got me thinking about Wattpad who seems to have no fear when it comes to going for IPs first. Here’s a quote from their blog aimed at advertisers:
“Wattpad Brand Originals takes inspiration from the Wattpad Studios model. Together, we uncover content that our audience data has identified as significant among Gen Z. Simply put, if a story has hundreds of millions of reads, we know the audience’s attention is there. At that point, we’re able to take it chapter by chapter, word by word, and trend by trend to see what sticks. That information helps our Studios team adapt those big Wattpad stories into Hollywood hits like After and Light as a Feather. Our finished products then live on Wattpad for years to come.”
So in other words, you’ve got millions of readers every month from a very specific audience (Gen Z) sorting through the online only content for you. Add some AI to make it easier to match with advertisers who want stories that “resonate” with their product. Then you take all that content and publish it as print books and turn into movies and TV-series, as well. I believe games are also in the pipeline, if they are not already there. And then you feed that, well, engagement right back into the platform where new online stories are developed, including loads of fan fiction about the new properties that turned successful. And the circle is complete.
Their corporate blog is full of sugary sales pitches about how Wattpad will help advertisers build “authentic entertainment experiences that live at the heart of [their] brand”. Reading it – for me at least – takes some strong coffee to help with the digestion, but my mind says they are probably very much on to something.