AAR & Publishers & Bookstores: Facilitators need to adapt, not defend

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

The AAR recently sent a letter to the DOJ unanimously supporting the Agency model.  I find it odd that the AAR has yet to send a collective letter to the Big 6 asking for higher, and fairer, royalty rates for their authors’ electronic rights.

Perhaps the focus of the AAR is misplaced?  As an author and a publisher, I wear two hats, so I see a couple of facets of this situation from different perspectives.

Perhaps the focus of publishers trying to defend their pricing model is misplaced?  Their business model is shifting much faster than they can adapt to from distribution to discoverability.

Here’s the deal.  For too long some agents and many publishers mistakenly believed they actually created the PRODUCT that readers consumed:  i.e. the book.  Even with print, that’s not true.  The PRODUCT is the story, the words.  The printed book was the medium by which those words reached the reader.  Thus agents and publishers and bookstores were, and still are, facilitators.  Not creators.  As an author I create content.  As a publisher I facilitate getting content to readers.  I literally have two different offices in my house for the two different jobs.

The subtle arrogance built from years of having their own form of monopoly on publishing is now costing many in the industry and it makes the AAR letter to the DOJ regarding Amazon somewhat ironic.  As I’ve pointed out:  Amazon didn’t exist except in one man’s mind in 1994.  How much have agents, publishers and bookstores changed and adapted in the past 18 years?  In 2011 I had to radically change my approach to publishing.  My old approach had served me very well for 20 years, but projecting forward and studying other parts of the entertainment business as they encountered the digital wave, it was apparent a radical overhaul was needed in my career.

When the music business crashed and burned because of digital in the early part of the last decade how many authors, agents, publishers and bookstores, invested time and money to prepare for an inevitable digital wave?  I shook my head at all the hoopla raised when Tor decided to go DRM free a few weeks ago.  To me it was another sign of how far behind the times the Big 6 are.  At Digital Book World in January, my estimate was at least a year (an eternity in the digital world) and it hasn’t changed enough since then.

The medium is shifting from print to digital much faster than most still understand and 99% of the pundits (who are still punditting and being believed even though they have been wrong over and over) predicted.  Thus agents, publishers, bookstores, and everyone else between the author and the reader have to adapt.  We have to prove our value as a facilitator in that connection.  Instead, what we’re seeing is an entrenchment to hold to being the “gatekeepers”; the “curators”; whatever you want to call it.  Even some authors have jumped on the bandwagon, such as Scott Turow; but those on the bandwagon, are those who’ve been on the top 5% bandwagon. Of course they want to see the established system stay in place.  It works quite well for them.

Back when the Amazon-MacMillan battle was fought over pricing and MacMillan “won” I was also shaking my head.  In my opinion, based on having studied warfare and been a soldier both in the Infantry and Special Forces for many years, Amazon clearly won the war, while ceding the battle.  Perhaps a brush up with Sun Tzu might help?

Amazon clearly flexed its muscles and showed its capability, let MacMillan raise prices, which consumers just love, and moved on (now moving into the fashion world, to the dismay of the facilitators in that medium).  Since then, what exactly has MacMillan done to facilitate the writer to reader connection?  Kept eBook prices artificially high, while not increasing royalties to their authors any significant amount.

To be honest, I want the Agency model to continue.  It gives Cool Gus Publishing a great pricing advantage over legacy publishers.  When readers have to choose between our eBooks at $2.99 to $4.99 and a legacy eBook at $12.99, more often than not, our book gets the nod.  Please, NY, keep your eBook prices high.

At Cool Gus Publishing, we had to write a four page fact sheet to give to authors when they ask why they should give up an percentage of what they could make on their own self-publishing by signing with us (and our percentage is very small, especially when compared to the Big 6 or even most smaller e-publishers).  We have to prove our worth as a facilitator.  If we can’t, then we can’t stay in business as a publisher.  We have to be honest and upfront about it.

The issue now for agents, publishers and bookstores is not fighting a futile battle against Amazon and the inevitable digital world, but rather this:  how to adapt to become a worthwhile facilitator between author and reader?  What value do I add to this process?  The standard answers are quality control, editorial, print distribution (not dead yet! To quote Monty Python), etc.  But readers are making the ultimate quality control decisions now with the buy button.  Editorial can be outsourced to freelancers (many of them fleeing the sinking Titanic in NYC).  We don’t care much about print distribution as we make a “very nice deal” each month on eBook sales alone and don’t have to assume the high overhead of printing, physical sales forces, distribution, returns, etc. etc.  Digital also means we can shift quickly when needed, such as recently completely redoing the covers for my entire Atlantis series based on reader feedback, marketing research, metadata, and studying daily, weekly and monthly sales figures.  We did that in a week.  It’s taken the first NY imprint years to remove DRM.  We used DRM on a few books when we started in January of 2010 but quickly removed DRM because it’s what our customers preferred.  Our customers are readers, not agents, publishers, sales reps, book buyers, or bookstores.  I believe we run a form of what some have now labeled “agile” publishing?  We called it flex publishing about a year ago.

Perhaps the AAR, and others, might better spend their time writing letters about how they can change and help readers connect with good authors and authors connect with readers?


4 thoughts on “AAR & Publishers & Bookstores: Facilitators need to adapt, not defend

  1. James Scarlett

    I think publishers are getting a worse reputation than they deserve. You couldn’t have reasonably expected them to pioneer a device driven marketplace for e-books the way that Amazon did. Publishers aren’t really equipped to suddenly become retailers, much less info-tech innovators, and besides I don’t believe the market was really demanding that they do so. Keep in mind the publishers were offering e-books before Amazon was. What they found was a very limited readership, mostly on Palm and Sony devices, and they probably lost more money than they made in pursuing those early distribution models. They’re not at all akin to the record companies who hung on to CDs for dear life, despite increasing evidence that the game had shifted wholly online. When Amazon came along they were happy to partner with the e-tailing juggernaut because it meant more sales. They didn’t know, at the time, exactly what Amazon had in mind.

    I also don’t see the publishers, or the AAR or the Author’s Guild acting against the interests of the their memberships, or of authors, or of readers in expressing outrage over the Justice Department’s decision to go after publishers for price fixing. What we should all desire is a healthy marketplace where competition make products better, makes companies more efficient, and thus makes prices lower. Amazon’s gambit has been to sell the products for less than it costs to make them. This isn’t a consumer driven reduction in pricing. This is a purposeful shortcut to low-prices that Amazon is manufacturing because it has the power to make it happen, and it spells bad news for everyone but Amazon.

    It’s bad news for consumers, because it means a glut of products of inferior quality. I’m not talking subjectively either (some people think all books are crap). Take a look at the most common complaints in your average KDP book’s customer reviews and you’ll find more complaints about poor editing, poor formatting, and poor design than from their “dead tree” counterparts (though to be fair there have been a few monstrous mistakes made by publishers in e-books, Stephenson’s REAMDE being just the tip of the ice-berg, but I digress). For every Bob Mayer, there are thousands of other “books” out there which will be essentially unreadable. As a consumer I don’t want to just take my chances with a bunch of cheap books and hope that some of them are good, and trust the algorithm to sort out the rest. Also, if Amazon is able to price out everyone in the marketplace, it’ll be Kindle or bust. That’s not exactly a recipe for innovation either in either e-reader device/software or e-book content.

    It’s bad news for authors, because a race to the bottom with regard to pricing is never going to turn out good for the content creators. Anyone who writes for Huffington Post knows that online the preferred price for content is free. Check your KDP terms carefully, that 70% is not a fixed royalty, and if it changes to the inverse (which is, I hear, the precedent for Amazon’s publishing branch) you’ll find that it’s a lot harder to live on selling books at a $4.99, especially if you’re doing it the right way and shelling out dough for freelance editors, cover and layout designers, and a few bucks extra for a publicist or ads.

    It’s bad news for publishers, sure, but its not that bad. The publishers have something Amazon can’t buy, and that the crowd can’t replicate: collective experience. You can say what you want about their talents as tastemakers individually (I think its greatly overstated) what’s really important is their ability to work as a team. You know what’s better than a really smart editor? Ten of them at a table together. Under what other paradigm are you going to find that sort of collaboration? You can’t match it an indie, you certainly can’t replicate it yourself, and as Amazon Publishing is probably discovering, its hard to build that sort of culture from scratch. That’s part of the reason why top talent is not rushing to join Amazon publishing, despite more favorable royalties. The other part of it is, print is still a viable business, and will likely remain a viable business for a while yet. Amazon doesn’t have (in fact, can’t get) distribution into the majority of that marketplace.

    As for agents, they want what’s best for their clients. What’s best for their clients is a wealth of opportunities. It is Amazon AND the big pubs. It is indies AND mid-sized publishers too. It is digital AND print. The more options the better.

    Furthermore, print isn’t dead, it isn’t even dying, but Amazon has the power to kill it. It doesn’t take a mass exodus of print readers deciding to buy Kindles, in order for Barnes and Noble to shutter, and every struggling indie-bookstore to follow suit. If about 30% of their customers disappear, however, that’s that. What about that other 70%? Well better get your Prime membership now, before they jack up the price!

    1. Bob Mayer

      You make many solid points and others not so solid. Yes, Amazon can change their royalty rates; but even if they go inverse it still beats what NY is offering.

      That collective experience around the table– that happens, but most publishers became book factories for all but the top of their line. I had books rushed into production with barely a read by the editor.

      Sure, the vast majority of self-published books are not very good. But I’m not sure publishers did that great of a job when the practice is to throw 100 titles against the wall hoping one sticks. Sort of a publishing lottery.

      I don’t know what the future holds for publishers. All I’m saying that for me, as a publisher, I have to provide value to my authors and readers. For too long publisher focused on the book as the product and the bookstore as the consumer; we really have to wrap our brains around the fact that the story is the product and the reader is the consumer. I just don’t get the feeling many people in legacy publishing truly appreciate that yet. It’s a fundamental shift in the paradigm.

  2. James Scarlett

    I think we should separate the idea of the quality of the product and the amount of sales. The publishers may have thrown 100 books against the wall, but they were all more or less good books. They might not have been the ideal book for a majority of readers, but they had been through a more rigorous vetting than KDP or Smashwords cares to offer. They may not have had any developmental edits requested or performed (not every book is Anna Karenina, if its the fifth book in a series by an established author, there’s usually not much tinkering an editor needs to do) but they were read with a critical eye, they were and certainly copy-edited and some thought was put into the design and the marketing. Sure, if you’re Scott Turow you’re bound to get more attention paid to your work than your average debut author, but that’s always going to be the way. Success is always random, it isn’t made any less so by self-publishing. In fact in many ways its even more difficult to be discovered.

    I also reject the notion that publishers don’t have the end user in mind. It’s true that they don’t directly retail many books, and the majority of their books go to distributors (online and IRL) and to bookstores, and their sales staff is designed mainly to sell books to those accounts, but the way they appeal to bookstore buyers is the same way they make appeals to readers in general. The jacket copy is not far off from the catalog copy. Publishing, more than any wholesale business, is attuned to the needs of the end user, because books (unlike most other products) are returnable. You can sell all the books you want to a bookstore, but if the readers aren’t buying them, they’re all coming back.

    Also, there are more considerations to make than royalty share when it comes to deciding whether to go with a publisher or to self-pub. There’s also the matter of how many units you can reasonably expect to sell, and for what price. 70% of zero is still zero, if you catch my drift. Sure publishers take a bigger share than Amazon, but they also do a lot more for authors. You’re not making as large a share as an e-book entrepreneur, but you’re also not paying out of pocket for editorial service and marketing. You’re also reaching the whole of the marketplace, and not just sizable segments of it. In addition your product can command a higher price, and some people may actually be inclined to pay it.

    1. Bob Mayer

      Quality is relative. I don’t disagree that publishers put out a much better quality than self-publishing. That’s implicit. It’s as difficult to succeed at self-publishing as it is at legacy publishing. The difference in self is that the failure is public, while in legacy it’s via the agent/publisher rejections.

      I’m fine with all that legacy publishers do. But the business model is indeed out-dated. They are changing, as everyone else is.

      One thing is I’m not as focused on units as profits. A big misconception that still pervades publishing is bestseller lists based on units sold. For eBooks that’s misleading. One million eBooks at .99 equals 166,000 eBooks at $2.99 in revenue.

      A tiny percentage of self-published people will succeed. As do a tiny percentage of legacy published in the long run. And even self-publishing isn’t really true– I started my own publishing company because to do it on your own is almost impossible. In essence, I built a new business model from the ground up.

      These are all valid points on both sides and everyone in the business has to evaluate it all based on their own platform, product and promotional capabilities.



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