Authors deserve better

Literary agent Robert Gottlieb was kind enough to leave a comment in response to an interview Porter Anderson did with me for The Bookseller last week. While the comment wasn’t particularly responsive to what Porter and I discussed, it did raise some interesting related points that struck me as worthy of a detailed response.

I thought I’d address that response directly to Robert, in the hope that further engagement might prove useful and interesting to authors, agents, and others in the book business. Robert, your comments in quotes; my responses interpolated.

 

"Early on in the e-book environment some authors thought it was the only way to go.”

Could you name the authors who were advocating e-books as “the only way to go”?  While many authors (I would include myself in their number) have over time devoted increasing marketing resources to digital rather than to paper because more and more of their sales are in digital, I don’t know of any author who has claimed paper should be outright avoided. Even Joe Konrath, as high-profile a proponent of the revolution in publishing as I know of, claims only that for many authors paper is becoming a subsidiary right, like foreign language or film rights (note that Konrath first blogged about this almost four years ago. He’s a prescient guy and I hope lots of agents read his blog).

But it doesn’t follow from this that anyone should abandon paper, any more than anyone should abandon digital, and in fact Joe (to stay with just this one example) makes tens of thousands of dollars a year from paper sales. Why would he or anyone else advocate giving up a potentially lucrative source of revenue?

I note all this because the very first sentence of your comment struck me as a straw man, and therefore not a productive way to introduce your thoughts. If I’m wrong, of course, and you can name some authors (citations and exact quotes would be helpful) who have declared digital "the only way to go,” I’d be grateful because I, too, would want to do what I could to push back against such wrong-headed advice.

 

"A problem with Thomas & Mercer is that they can't really do much on the print side of the equation. They are very good in the e-book publishing space.”

I don’t think anyone would much dispute that T&M’s strength is in online sales, and particularly in digital (I’ve published two novels and two short works with T&M myself, and have been extremely happy with the results). But it’s telling that you would describe T&M’s strength in online and digital as a “problem." Certainly for an author whose books sell in a ratio of, say, 99% brick-&-mortar/paper and 1% online/digital, T&M’s strengths and weaknesses would represent an unappealing mix.  

But for an author whose books sold in the opposite ratio, T&M would be a very attractive publisher, indeed, while a legacy publisher would be a terrible fit.  I’m sure you know that different authors sell in different ratios, with some more heavily represented in paper/brick & mortar and others more heavily represented in digital/online, so you should know that what you describe as a “problem” is for many authors exactly the opposite — a solution.

So the more relevant question — the question discussion of which is likely to prove most useful to authors trying to decide what form of publishing is best for them — is, “What are the various strengths and weaknesses of the various publishing avenues newly available to authors, and how do those strengths and weaknesses fit with your books, your goals, your needs?”  That’s a discussion I would welcome, and I’ll bet other authors would find it beneficial, too.

 

"Authors need more than distribution in one channel of publishing.”

Well, authors don’t really “need” any particular channel. That said, it’s certainly desirable to have more channels, because each additional channel represents a potential benefit, both in terms of direct revenues and in less direct ways, such as overall brand awareness. But this raises a question you don’t discuss, which is:  how much should authors pay for those benefits? An author whose sales ratio is heavily weighted toward paper might not mind much if she receives only 25% in digital royalties, because the low digital royalty would be an acceptable price to pay for the opportunity to leverage legacy publishing’s strength in paper channels.

But an author whose sales are primarily digital might legitimately wonder why she should give a legacy publisher such a large cut of digital revenues. After all, she doesn’t need a legacy publisher for digital distribution, a legacy publisher will publish her book much later than she would be able to publish it herself, and she’s not selling much in paper, anyway. Not to mention the various other reasons an author with a large digital-to-paper sales ratio might be leery of legacy publishing.

The thing to remember is this: there’s no one-size-fits-all solution for authors.  Different authors have different needs, and, depending on those needs, different publishing services will be worth different premiums. Assuming otherwise is apt to be a disservice for the thousands of authors who don’t fit the single mix you assume is right for everyone.

"I advise authors that the more channels of publishing you are in the greater your reading audience will be now and in the future. That includes the international markets as well."

True enough, other things being equal. But things aren’t equal. Access to the various channels costs different amounts in different places, and again for whatever reason you act as though these channels are available for free (or at any rate that cost is irrelevant) and that they all represent the same value to all authors.

 

"That is how opportunity is created for growth in publishing.”

That, and nothing else?  And again: why do you discuss only the opportunity, but never the opportunity cost? Discussing the potential benefits of a service isn’t particularly helpful if you don’t also discuss price.

This is just common sense, is it not? Telling someone how much she stands to benefit from a product or service without also discussing what that product or service is going to cost her is meaningless. If an insurance salesperson tried to sell you on a policy with such-and-such a payout, for example, would you immediately say, “Hell yes, sign me up!”?  Or would you need to first consider how much you yourself needed that particular policy, and how much you would be charged for that policy, before being able to make an intelligent decision?

 

"Nothing remains the same and the end of traditional publishers as articulated by many was dead wrong.”

I don’t know why you would claim that “nothing remains the same.” Countless things remain the same. Legacy publishers still pay digital royalties at the same lockstep rate of 25%, still pay their authors only twice a year, still insist on life-of-copyright licenses, still issue royalty statements as impenetrable as the Dead Sea Scrolls, still insist on draconian rights lock-ups and anti-competition clauses. Books are still sold through traditional brick-and-mortar channels, still bought and enjoyed in paper. A martian revisiting the earth after a ten-year hiatus might reasonably conclude that more is the same in the book business than has changed.

As for the end of traditional publishers being dead wrong, don’t you feel it’s a bit early to be sanguine? I certainly hope publishers will read and implement the lessons of Clayton Christensen’s The Innovator’s Dilemma and I hope they’ll listen to Hugh Howey and Joe Konrath, too (as I’ve said many times, when someone is sick, you don’t want them to die, you want them to get well). But so far I don’t see much evidence of an onset of progressive and enlightened business practices in the legacy world.

Moreover: Borders is gone and B&N is in trouble. Legacy publishing’s current health is largely the result of the industry’s practice of paying authors so little in digital and keeping so much for themselves (a practice that for me always calls to mind the image of Wile E. Coyote racing off the cliff and thinking all is well because he’s running on air… until he looks down). See, for example, this excellent breakdown of Harper Collins’ own numbers:

"$27.99 hardcover generates $5.67 profit to publisher and $4.20 royalty to author

$14.99 agency priced e-book generates $7.87 profit to publisher and $2.62 royalty to author.

So, in other words, at these average price points, every time a hardcover sale is replaced by an e-book sale, the publisher makes $2.20 more per copy and the author makes $1.58 less. If the author made the same $4.20 royalty on the e-book sale as he/she would have on a hardcover, the publisher would STILL be making an improved profit of $6.28.

We have all heard the additional argument: that for a very large percentage of authors this is irrelevant since their advances don’t earn out– effectively raising their per unit royalty. That may be true, but it logically leads to what seems to me the most unfair aspect of all: That, therefore, the only authors that are financially punished by this system are the ones whose books perform very well. The ones whose books earn out. The big name authors and the celebrities whose books don’t perform to expectation are untouched; the author who gets a reasonable advance and whose book sells much better than expected are the ones who suffer the greatest loss.

How can anyone in this industry see that as defensible?"

 

If publishers lose more paper retail sales channels, and if digital continues to grow (more thoughts on this below), the 70% digital royalty available to authors though self-publishing is likely to entice increasing numbers of authors to go the indie route. Will this happen? If so, to what extent? And when? I’m not sure, but dismissing concerns about the long-term viability of legacy publishing’s current business practices as “dead wrong” strikes me as whistling past the graveyard rather than pausing to take a close look at what’s going on inside it.

 

"Some publishers have thrived and made the adjustments to the new environment and others have indeed struggled. It took a while for most major trade houses to get their footing as e-books substantially changed the publishing landscape. It is more like a layering process as each format finds space within the publishing layers. Traditional publishers still have a ways to go but they are pressing forward.”

I don’t have any material objections to any of this, most of which strikes me as so general as to be anodyne. I will note that if "it took a while for most major trade houses to get their footing” in digital, it might be because their primary response to the advent of e-books was price collusion and double deletion of pesky incriminating emails. If collusion is your primary response to changes in your industry, then yes, you might find yourself swaying around on the deck for a bit before gaining some digital sea legs. I don’t really understand what it means to publish in layers, but that could be because I’m not a legacy publisher.

I don’t doubt that publishers are "pressing forward," though I think I’m less confident than you that they’re pressing in the right direction. Publishing revolutionary Hugh Howie has some excellent thoughts on the directions publishers might usefully press forward in; I highly recommend it. Certainly legacy publishers might have gotten their digital footing a lot sooner if, rather than attempting to fix prices, they had heeded what Joe Konrath has been advising for years. Here he is in January 2010, March 2010, September 2010, and even all the way back in 2007 at a speech at Google, offering free, potentially life-saving advice to publishers that’s still incredibly relevant.

 

"Now the stats show e-book sales slowing. That's maybe because the initial growth which started at zero had a one way trajectory. A lot in the ebook space depends on innovation with the hardware as well as pricing. As prices rise that will also have an impact on ebook sales and history shows prices do move up more often than down.”

There is so much in this paragraph that’s misleading or outright wrong, I’m going to take it one sentence at a time. So:

"Now the stats show e-book sales slowing.”

This is at best a highly misleading way of describing what’s really happening, which is that the growth of e-book sales is slowing. Put more simply and accurately:  ebook sales are not slowing, they are growing. Here, from Publishers Weekly: "Total e-book sales rose 44.2% in 2012, to $3.04 billion. The gain in e-book sales offset a flat performance by print sales which held virtually even at $12 billion between 2011 and 2012.” And here, from Futurebook:  "If we look at these particular stats from Publishers Weekly, for this segment, sales of e-books rose to $2.07 billion from $869 million as units increased 210% to 388 million.”

There’s more: in December 2013, Amazon revealed that a quarter of US e-book sales were by indies. The numbers for B&N’s Nook are similar. Hachette and HarperCollins both report that e-book revenues are increasing — indeed, by 40% for Hachette.

Most astonishing of all is that missing from these figures demonstrating a still dramatically growing market are indie figures, because data is collected only from major publishers. That’s right: the e-book market is still growing, even when measured without including indie published books.

Calling this kind of continued explosive growth “slowing” is like saying a car that went from 50mph to 100 and then to 130 is “slowing” because since it hit 100mph its speed only increased by 30 percent. Would you honestly describe a car that just accelerated from 100 to 130mph as “slowing”? Because that’s what you just did with the e-book market.

(In fairness, there is a rich tradition among establishments of changing the meaning of words to suit the establishment’s purposes. See, for example, this excellent guide to the NSA’s Humpty-Dumpty definitions of everyday words like Collect, Relevant, Targeted, Incidental, Inadvertent, Minimize, and even No. In describing continued dramatic growth as “slowing,” you are in august company.)

In fact, by the standards of any industry at any time, the numbers above represent continued hyper growth.  But because it’s slightly less hyper than it was in the previous year (as growth inevitably will be — it’s much easier to double your growth when you’re doing a million dollars in revenue than it is when you’re doing a billion — and again, even without including self-published books), establishment publishing is trying, whether out of ignorance or psychological denial or in an attempt at propaganda, to persuade authors (and perhaps themselves) that it’s all a “slowing.” For anyone who might be taken in by this false meme, here are two excellent articles with actual data, appropriate graphs, and sound analysis.  There are many more — they’re not hard to find and it’s difficult to understand why you wouldn’t be aware of them.

"That's maybe because the initial growth which started at zero had a one way trajectory.”

I’m not sure what point you’re trying to make here — that sales can only improve when they start at zero?  Doesn’t this truism apply to everything?  And if you’re trying to say that the tremendous growth of ebooks is slowing in percentage terms because as a market gets bigger and bigger, continued growth represents a smaller percentage of the overall market, well, yes, that’s always true, and there’s nothing “maybe” about it.  It’s a law of business, as well as of math. But it’s still growth — huge growth — and trying to frame such growth as “slowing” is unlikely to come across as honest and informed commentary.

"A lot in the e-book space depends on innovation with the hardware as well as pricing.”

On this we agree, but I think you might be misunderstanding the nature of innovation in the book world. Paper is a fully mature technology:  there’s very little that can be done to improve it (although if Espresso book machines ever become widespread, they could decrease the cost of paper distribution, which would certainly be a positive development for paper books). In contrast, digital readers are continually, dramatically improving in functionality even as they fall in price. In other words, paper represents a static defence; digital, a dynamic offence. And between a static defence and a dynamic offence, over time the outcome is never in doubt. I wrote about this in more detail four years ago (Paper Earthworks and Digital Tides), and since then I’ve seen nothing but confirmation of my view.

Also:  

"As prices rise that will also have an impact on e-book sales and history shows prices do move up more often than down.”

Can you cite even one technology or consumer product the price of which, adjusted for inflation and for increased features and other product improvements, has historically increased rather than decreased? What happens instead is that features and functionality improve and prices drop. Certainly this is exactly what’s been happening with digital readers and tablets, as anyone with even passing familiarity with the short history of the Kindle and the iPad knows. In the face of all this, it’s not easy to understand why you would argue that history suggests prices of digital readers are likely to increase.

Well, here’s one possible explanation: the one exception to the rule that consumer prices decrease over time is probably legacy-published books. But this is the exception that proves the rule, because legacy publishing functions as a cartel, exploiting its lock on paper distribution channels to artificially inflate prices.  In the presence of actual competition, prices decrease, as they have for digital readers and tablets, and as they have for self-published books. It may be your intimacy with the legacy publishing world that’s caused you to confuse its practices of artificially keeping consumer prices high with the fact that in normal consumer markets, prices tend to fall.

If so, you’re missing the most fundamental impact of digital on the publishing industry, which is that digital has broken legacy publishing’s lock on distribution and therefore its lock on pricing. If legacy publishers are betting their business on the price of digital reader and digital book prices increasing, they’re badly in denial. And as the saying goes, denial has no survival value.  Publishers need to approach the world realistically, and realism here means understanding that digital prices are not going to increase, and digital features are only going to improve.

 

"When an author is solely vested in one format it is like type casting.”

I suppose it could be, but really, isn’t this another straw man?  Because what author is vested solely in one format? Can you name even one such person?

Publishing is not an either/or world anymore, and I don’t know any author who isn’t trying to leverage all available distribution channels. So again, the question for authors isn’t, “Should I sell my books only in paper?” or “Should I sell my books only in digital?” The question is, “How much should I spend and invest in the various channels available to me? How much are each of the available channels worth to me?  What are my most effective routes into those channels?”  These are relevant, helpful, and important questions, and setting up a straw man about how no one should be solely vested in a single format does nothing but obscure them.

 

"I've heard publishers worry that if an author does well at $1.99 will the public ever pay more?”

Yes, “can I sell a low-priced product for more" is a legitimate concern for all books and for all authors, as it is for everything else.  Different brands will command different prices. A few years ago, I saw Ken Follett’s book Fall of Giants published in digital at something like $21.00 (no discount — that was the purchase price).  Presumably Follett, an exceptionally strong brand, is maximizing his income at a $21.00 digital price point. For most authors, a price like that would be way too high. Every author needs to consider what per-unit price multiplied by volume will maximize his income. Different authors will experiment in different ways with different books and arrive at different answers. Reducing this complex and critical issue to something as narrow as publishers worrying about whether the public will pay more for an author whose previous success was achieved at $1.99 is not a particularly helpful approach.

 

"It is hard to move into other formats successfully.”

I’m not sure what you mean here. Hard how? Hard why? What might make it easier?

 

"Some have done it. At Trident we represent authors who started as e-book original authors and have found great success in other formats as well.”

Good news for Trident and for these other authors. I’m not sure what it signifies, though, other than that Trident has had some success in getting self-published authors legacy contracts. Not that this isn’t a potentially positive thing for all parties involved, of course, but what can other authors learn from it?

 

"The more formats the greater the reach. The greater the reach the more desirable an author is to a publisher. Simply math.”

Or to put it another way: “If you achieve great success on your own, more people will then be motivated to help you succeed.” AKA, “Nothing succeeds like success.”  Okay, as far as truisms go. But why the assumption that the main metric and primary purpose of success in self-publishing is to become more desirable to a big publisher? This is an exceptionally parochial view, and a particularly odd one given that it starts from a straw-man premise — it’s better to have more sales channels than fewer — that is entirely axiomatic, that no one would dispute, and that is completely in keeping with what all authors are in fact doing in various individually customised ways.

In fact, as shocking as I know this will sound in some establishment circles, there are thousands of authors who actually prefer self-publishing because of its far higher royalties, faster time-to-market, and scope for controlling packaging, marketing, and other business decisions.  Assuming all self-published authors secretly long for a legacy deal when they’re making so much money and are so happy without one is as antediluvian as the cliche “pyjama-clad bloggers.”

 

"Thomas and Mercer has already pushed back on the range of e-book royalties they once offered in order to get to a better profit position.”

You’re doing it again. You discuss potential benefits without discussing real costs.  And now you’re discussing how T&M has lowered some of its royalties without bothering to compare T&M royalties with those of legacy publishers. And legacy publisher digital royalties are still much lower.

(Maybe this is like ebook sales “slowing”? Certain T&M royalties started at a higher number and are now lower, while legacy royalties started at an even lower number and have never changed, so the way to describe all this is as a “T&M pushback”?)

I don’t think these distortions are deliberate, by the way; rather, I think they’re likely a reflection of various biases of which you’re unaware. But that doesn’t make them any more helpful for authors who are trying to gather sound information on which they can build sensible business strategies. Wouldn’t it be more productive (and accurate) to say something like, “Amazon pays higher digital royalties than any other major publisher. Is that worth it to you? It depends on a lot of things — most fundamentally, how many of your sales are digital vs how many are paper. If most of your sales are digital, that higher digital royalty is going to matter a lot.  If most of your sales are paper, then it might make sense to fork over a higher digital cut to a traditional publisher for access to the traditional publisher's strength in paper channels. There are other factors, as well.”

 

"The risk of paying advances and primarily selling e-books alone is a challenge at best.”

I’m sure it is a challenge. But what is the paper-based system, a cakewalk? How many legacy-published books lose money? How many legacy published authors are dropped after a book’s performance disappoints? Are these questions not at least equally worthy of discussion? Why would you describe only one publishing approach as a challenge, when obviously all approaches, in any business, for that matter, have their challenges? Do you think a description like that is accurate? Well calculated to offer authors information they can productively use as they go about planning their careers and implementing decisions? Why not instead offer some data about how many authors are making how much money with T&M vs how many are making how much with legacy publishers — and why? Wouldn’t that discussion be more interesting and relevant as authors try to decide which route makes sense for them?

Recently, David Gaughran blogged about astro-turfing by the publishing establishment.  He quotes the chairman of the International Publishers Association as follows:

“We gathered all the communications people together to discuss the issues and create an action plan. We have a multi-faceted audience to address, and in the next 12 months you will see key messages delivered, compelling stories of our impact on society for culture and education. We’ll ask you to personalize that message. I’m very excited that there is a meeting of minds on this."

Robert, I don’t know if your comments were an example of this kind of key messaging — and I certainly hope not. But, respectfully, they feel that way. Don’t authors deserve better? Can we try?

 

Barry Eisler is an author who turned down a six-figure publishing deal with St Martin's Press to self-publish