*Yesterday, because of an hilariously stupid comment about US health care over on MGC, I went looking through the old posts for one in which a person of the same nationality as the commenter had written a chapter about HER idea of our health care. In the process I found this post by my friend Dave Freer.
It struck me because of how right he was… 9 years ago. How right he still is, and how impossible most publishing houses find it to consider even ONE of these changes, even in the face of tech change so profound their entire world is up-ended.
Humans are creatures of habit, and habit will not be broken. The images in our heads are “sacred.” Which explains how many people think communism can now be “done right” or why traditional publishing would rather die than adapt.
This was originally posted at Mad Genius Club September 5 2011– SAH*
Publishing advice I won’t ever be asked for… – by Dave Freer
…which won’t be appreciated (but I would love it if someone listened).
I don’t, per se, hate the legacy publishing industry and wish for its extinction. I do think it’s in troubled and uncertain circumstances right now. There are, just as in the music industry A&R example here people I like, can identify with, inside it. And there seems a sort of inverse correlation here — the smaller the company is, the more likely the editor is to be doing his or her absolute best, and getting shafted nearly as badly as the writer by the rest of the system.
I think it has blundered down an evolutionary path which it took because there were no major selective pressures to force it to go elsewhere. Like the dinosaurs, getting bigger seemed a more natural course than worrying sudden cold snaps or a shortage of food because an asteroid impact might cause mass volcanism, which might block out the sun and cause years of winter. Some creatures survived that event. Some came to flourish afterwards — with major changes. Before it happened the dinosaurs were the very top end of vertebrate life. Head honchos that got invited to all the fashionable parties… Now the distant descendants are crocodiles and chickens, and no-one knows their ancestors ruled the earth, and if they go fashionable parties it is on the buffet table.
Just so before the advent of e-books (the asteroid), the vast cold-blooded publishers ruled the earth, or at least reading. They fed like… well, dinosaurs, wastefully, destroying the plants, rather than taking the few leaves they needed, but it didn’t matter… well, it was starting to, but bigger was still better. A few nimbler little proto-mammals scampered round the edges making a better living than the behemoths thought plausible out of the scraps they were allowed to access, but still having a rough time.
Then… Amazon’s KDP (principally as a result of the large publishers forcing the agency model on Amazon – to get it back in line, upstart!) caused a major eruption – of self-publishers, some of them mid-list authors with followings, many of them complete newbies, pricing aggressively (which they could afford to do, more so than the behemoths) enough doing well to draw in more ‘Indies’. And more… and thick and fast they came…
Suddenly the behemoths started realising there wasn’t much lunch about. When the news got down to the hind-brain, the little neural knot that controlled the tail, it sure thrashed that about good! That used to work real well on other littler dinosaurs…
Legacy publishing faces some unenviable choices. It still has a substantial paper business, where it controls (almost absolutely) access to retail space (This too is being attacked by Amazon’s CreateSpace, although I don’t think this has been realized yet). But retail space is dropping year by year, and so are paper sales. At the moment paper is still big enough (maybe) to force suppliers and retailers to allow them to retain that monopoly. They have two businesses with entirely different requirements, often in direct conflict in one organisation.
Now, as my fiend Ori pointed out to me once (and I paraphrase) “If you out-source your core competencies, your company will become irrelevant.” For years legacy publishing has been out-sourcing their original competencies – often making this an extra burden for their suppliers to carry, especially the smaller suppliers. They could force the smaller suppliers to do almost anything. Of course the small suppliers often couldn’t do it well, but there were 100 wannabes, so if they failed, legacy publishers simply replaced them with someone who could do publicity, who could write cover copy. The cost of slush trawling was handed to the agents. Proof-reading, covers, even editing, got neglected or farmed out, often (for new or midlist authors) to the cheapest possible. But they retained their absolute core competency: they, and only they, could get an author’s book onto the retailer’s shelf. It actually didn’t matter if you were a best-seller or not, authors had to accept terms – just as the musos did. Between publishing and retail, they could force the author to accept minimum wage. And to thank them publicly for it, to kiss their feet, and wash their dog’s bum if they were told to. That began to change with the Internet (a truly bestselling author – Rowlings or Meyer for example- could actually threaten to print and market herself, and would be able to do so.) With e-books, Amazon KDP and the other retail outlets (B&N for example, and a list of smaller ones) following suit, that core competency just didn’t exist any more.
The big legacy publishers won the agency battle with Amazon… and forced them into a move which lost the legacy publishers the war, and, possibly, their existence.
The problem of course is that legacy publishers have lost a great deal of the other competencies which are still of value in e-books. And they still have a valuable and powerful stake in paper publishing.
Naturally they want to stay at the top and continue to get invited to all the fashionable parties.
So what could they do, if they were determined, clever, ruthless? Hmm. That’s a tough one. You can still buy buggy whips. But they’re something of a bespoke item in a niche market. Not dominant. Buggy whip makers almost never get invitations to the fashionable parties.
The short term best option to return to the status quo would be call Amazon and negotiate the terms for surrender. And then hope that Apple, Google, B&N etc are less mighty than Amazon plus legacy publishers. Putting the genie back into vat is going to be tricky. Probably impossible, because authors and readers have tasted the alternative, (and as I’ll explain next week, they won’t take this lying down) but it might, at the most optimistic, hold off the evil hour for five years.
At worst, instead of the big 900 pound gorilla dominating the Internet retail space, they might end up with twenty 600 pound chimpanzees who will, sooner or later, decide that whoever wins access to the prime sources, will win the war, and the possible cost (including a profit margin of 15%) of retail Internet e-books is 16%… if you leave the Legacy Publishers out.
The other option is to abandon territory they can’t defend, and move into dominating niches that they can. To specialize. To build themselves a brand trusted by an ‘assured sale’ group. Like Harlequin does for Romance, as an example. Where people buy on the PUBLISHER’S brand (of e-book), and that brand means people in the market for exactly that product. Where customers who want that product will buy an unknown or even a known author, by many multiples more than they would without the brand.
It’s quite simple: Pick your niche, identify yourself strongly and publicly with it, choose a cover that identifies ONLY your brand, stick to the formula rigidly, and it’s pretty much business as usual in that predictable market. Authors can suck it up, or try to compete, and fail. BUT… You have come out and clearly say (pick your criteria :-)) ‘this is Shavian socialist/Chinese American/ GLBT/East coast- city-dwelling, fashion-shopping-and-sex fiction… or Democrat/ white/ hetrosexual-with-4-kids/ Flyover country farmer/ shootem-up-and-punchem-inna-mouth-fiction’ or whatever, and combinations of the above for people who are interested in most of the category. You don’t even try to sell outside your captive audience. Now, I’d be among the first to point out that legacy publishers has been publishing niche-tailored, formulaic fiction for at least thirty years now. And that it’s been an unmitigated disaster area, where reading has proportionally declined as a pastime for the literate public. And no, I’m not going to blame movies, TV, the Internet, the cheese monster or a mindwave directed by aliens from Alpha Centauri. It was choosing books which would appeal to (at most) 20% of the population and selling them (and only them) as of general appeal to the other 80%. They sure ‘educated’ those barbaric readers. Yep, educated them right out of buying.
Mostly, the above strategy would work, but cost legacy publishers about 70-95% of their present market share. It’s better than being extinct. But say they really wanted to stay in the game, and not become niche players? Well, that would mean considering BIG changes. I’m fairly certain none of these will appeal or happen…
First and foremost success would require an entire paradigm shift. Forget educating the public. Forget what you, the editor, like. That proved a complete fustercluck when you had absolute control of access to retail. Now it is deader than a fossil Ammonite that’s been dropped in liquid helium, and then boosted into the heart of the sun. You need to go to what your customers–readers (not retailers)– like, and just how you can add value to that. If you can add substantial value, beyond that which others can add, you have a core competency and you’re not going to go extinct. You might actually do far better than in the past, and still go to all the good parties (of course there will be different people there).
The answer is really easy: readers like stories by authors that appeal to them. They identify them largely by author, secondarily by sub-genre, thirdly by cover. Oh and they really don’t like feeling ripped off or exploited. In this they really are no different to anyone else. So: authors names are possibly valuable property. Historically, the legacy publishers editors picked authors, controlled their access to readers and readers access to them, and if authors wanted to be published… they swam through any sh1t and put up with any extra demands that publishing or retail wanted. If there was a saving to be made, well, the authors could carry that cost, or if there was extra work to be done… you know who did it. If it didn’t work, it was always the author’s fault. I hate belabouring this point, but it is key to the way publishing can survive. It’s not a gatekeeper anymore, and it has to add more value than the author can get by walking through the open gate themselves. Look at what they get without you, and start that point, not the point of what you used to offer. Oh AND you have to persuade the buyer that he’s not being ripped off, especially not by the author.
They get 70% of the cover price without you. And they get quarterly settlement. They get complete sales transparency, day-to-day. They can do as a good a job of getting a book to the shelf as most publishers do right now for as little as $2500, without calling on friends or doing it themselves (when that figure drops to zero, although quality may suffer). That is what the services the legacy publishing house are worth, excluding paper sales. For a new to midlist author those are worth 3-10K advances… at the moment.
Therefore: To compete, as a legacy publisher, you need to match that, either in cash or kind or push up the volume of sales, to earn the author more. The down-side of legacy publishing is it has, well, legacy expenses. No, a publisher’s net profit isn’t very high. It’s just carrying a lot of historical overheads which are meaningless in this paradigm. It has NY premises. It has a legal department, it has an accounting department, it has a marketing department. It has an administration centre where they dealt with orders and returns. It has an HR department. In the stuffy little office with no windows has an editor who actually edits (and does the post and blurbs and…), and in a plush corner offices it has editors who acquire, edit a tiny bit (too busy) run meetings and play business and office politics, meet the CEO, talk to marketing and Accounting. Proof-reading and actual cover layout and art are out-sourced. There are secretaries, expense accounts, and, um, a vast debt to service, to pay the really big advances to keep the best-sellers… Or the bestsellers might go elsewhere. Those costs are carried by everyone, equally. No wonder a book costs 100K or some fantastical sum to bring out.
Most of that has to go. Legacy publishing can only afford to keep the bits that add value to author for readers, for the author’s benefit. The job can be done from an office in upstate Texas. From an office the size of a postage stamp, or a mailbox, because…
1) The legal department is worthless. Hire an IP layer to draw up very simple clear contract just to avoid confusion. The author doesn’t need a contract with you any more. Why should he sign an evil one? Yes I know. They’ve written contracts that screwed generations of authors for you. Made you millions and millions. They’re busy writing contracts right now to bind the author and e-rights until the heat death of the universe, let alone the sun. Which is about as dumb-ass as you can get. Throw them–and the lawyers–away. Screw an author — just one, and word will get out, now that there are alternatives. And then the legacy publisher will find itself competing hard with Publish America for clients. And losing.
2) Fire the accounting department. Yes, I know, their creative accounting in the opaque morass that is royalty records has kept the chair under the acquiring editor-in-chief’s butt. He’s going too, so it doesn’t matter. The labyrinthine payments and returns system, running up 16 months after the fact is very difficult to handle. But it’s also useless. You need to match and equal Amazon in transparency and speed. Authors want to be able to log in and see what sold ten seconds ago, not ten months -because that’s what they get, as a KDP customer. Basically, that means you HAVE to computerise and automate. And this where you have an advantage over Newstartup e-publishers, because you have the resources to pay for the programming. [Weirdly, publishers won’t take the accounting software when it’s offered for free. Not traditional and established publishers, at least. Trust me on this. It’s been tried. It’s almost like… they don’t want to know – SAH]
3)Fire the marketing department. Try not to enjoy it too much. There is a need for marketing but it is of a type so foreign to those who promoted the product that didn’t need to be sold for readers to buy it, and ignored the product that needed help, that they’re worthless. The kid off the street has more skills and experience than they do in this new world. He understands facebook, twitter, flashmobs, the blogosphere. You need a social marketing arm, not a sell-best-sellers-that-don’t-need-any-selling-to-bookstores marketer.
4) Admin, with no returns and merely e-placement of books needs to exist… but a lot less people can do the job. And it needs an attitude transplant.
5)A company with 10 employees instead of 500 probably doesn’t need HR. Yeah, I know. It’s easier to prise limpets off with your toes. Everybody goes before HR. But they have to.
6) The editor in the inner office can work at home, and really, their work has to add that much in value that they’re worth having. And yes, actually the new author or midlister will expect serious input. Or they’ll walk. And talk. And there goes your company. Every crash will now be a publisher/editor crash, which brings me to the last and worst job.
7)Acquisitions. The editor in corner office probably may as well go, because this is a very different job. It means back to the slush, back to picking up jewels out of the muck. Only it needs a very special kind of jewel. Ones where a bit of polish (not too much, time is money) and facet-work by the editor, will multiply its value. And he’ll probably be reading 99 cent slush on line to find it. No corner office looking onto Central Park needed. The massive deals and the advances will be gone. And no doubt their recipients will threaten to walk. Well. They can. They won’t get much more of a deal than the new Legacy Publisher needs to offer anyway – Which- for bestsellers, will be 70% of cover price. Yes. Every cent they get from Amazon. The New Legacy Publisher will of course also sell through its own website, and that will be 30% gross.
Of course, despite all these losses the legacy publisher needs some new staff. A social media marketer, a proof reader, a good cover/layout staff, and someone to do formats and do visual checks on them. And the staff need a new ethic, where they start taking care of the cents, especially where these cents belong to the guy who’ll walk, and complain, loud and angry… because suddenly it becomes necessary for staff to listen to customers and suppliers. And these are not bookstores and agents. A couple of examples here. A popular series I co-authored… when the last hardcover came out, the previous paperback was out of print. Normally that sells around 2K So we authors lost $1200, the publisher about $7000 in turnover, and our records are weaker than need be. I’ve just discovered SLOW TRAIN (via Amazon) was reprinted about 5 months ago. No one told me, so I told no-one. So that was probably another 500 sales wasted. I usually find out when a book is released by looking it up on Amazon. It’s been years since I had copies or even cover flats in time to promote before release. Almost all of these problems are quick to fix, translate directly into money (far more for the publisher than me) and would often take about 30 seconds of e-mail time. If they’re going to survive and flourish this sort of thing is an easy start. Take care of cents and the dollars mount up.
The author who gets her work taken on will get: everything she’d get going direct, less ( depending on her sales profile) a percentage. Not a very big percentage, or she’ll walk. She’ll also get a cover, social media marketing, editing and proofs.
And one more thing. Remember that bit about the public needing to feel they’re not being ripped off?
She’ll get public transparency. When the agency model kerfluffle came up, the publishers were powerless. Their books were simply delisted from Amazon.
And their authors rode to the rescue. The public love their authors. When the authors told them that Amazon were the bad guys, the customers went ballistic. They want their books. They demanded them, threatened Amazon with boycott. Amazon caved. Publishers chortled in their glee… and put e-book prices up and Hardback prices up.
And the boards were full of “GREEDY AUTHORS!”
And not a single solitary word in their defence was said by their publishers. Not anywhere. The legacy publishers were perfectly happy, despite just having been rescued by their authors, to let them carry the can. Which was short-sighted, greedy and outright stupid. They sold their author’s long term credibility and help for… a few more months of gouging. Why shouldn’t they do so? There are lots more authors.
The trouble is there are lots more people prepared to nick things from greedy gougers than there are from battlers. The Robin Hood syndrome lives on. So publishers, rather than admit that, well, authors got the smallest share, and were often struggling stay afloat, let them take the blame for truly exploitative pricing… making ‘piracy’ Okay by a lot of people. Because to admit they took in excess of 90%, would make publishers and retailers look bad, and to show gratitude to those gullible readers and authors for the rescue would have meant giving more to the authors, and have meant keeping prices low.
So now… self-published authors have every incentive to keep their prices low, and to be open about what they earn and what they spend. Because if they earn well, people think they’re rewarding the good guys. If they don’t look greedy, the readers are more likely to chip in…
And the legacy publishers are in direct competition. Which leaves no space for the historical squirming, ducking, diving and secrecy and letting authors carry the can, that typified publishing.
There is still good money to be made — as publishers can and should retail directly from their own websites (offering perks, ARCs and freebies with the books) and charging perhaps as much as 15% for newbies off Amazon rates for providing services which take the hassle out of it for authors, letting the author write and not waste time on publicity or admin or covers and finding good proof-readers and editors.
It would end up leaner, and a lot more profitable. And very very different. Kind of like jacking up the radiator cap and the hood ornament, and replacing the entire rest of the vehicle, but still calling it the same make of automobile.
However, I’ll bet the legal department and HR and accounting stay… and the real editor gets the push.
Or what do you think?