I have come to accept that our species is not fond of change. Some of us know it is inevitable and take the pain now rather than later, some simply refuse to change (I have seen this and it is awesome in its execution. Also, ultimately futile.), and some pretend to embrace change while carefully manipulating “change” to look like “same as it ever was”. It is that final group, I believe, who face the biggest letdown.
How can authors leverage change to their best advantage?
It is surely the rare soul in the publishing ecosystem who believes the business tomorrow will resemble the business of today. Change, being change, is messy stuff, best managed through experimentation. You can design the best process in the world, but until real people get their hands in the system, you don’t really know what will work and how. Change is iterative.
Mike Shatzkin’s article on evolving role of agents, coupled with his piece on the publishing portfolio reshuffle, focuses on key aspects of this change: the economics. You cannot unsettle an entire industry without considering and preparing for the financial impact on all the players.
There is no doubt that the physical retail environment is shrinking. The news about stores closing for good unsettles people in the industry. And outside. Many factors are behind this loss, from changing consumer behavior to high rents in bad economic times to “redevelopment”. The choice throughout the industry is clear: hope for a business-as-usual miracle or make the necessary changes to thrive in a new (sometimes uncertain) environment.
The booksellers who remain standing — and there will be many! — will react to these losses by changing their retail mix to accommodate new customers while incorporating new sales channels, such as digital. In the physical sense, there is only so much shelf space, and booksellers will, necessarily, be more particular and more aggressive about fresh product. The sheer volume of annual releases, with new titles coming out weekly, leaves the bookseller little room for chancy purchases and backroom stock.
Inventory management will be elevated to an art form as booksellers try to balance the slower reactions of customers who rely upon word-of-mouth with those who chase the latest and greatest. Factor in the enduring popularity of catalog titles, and it’s not hard to see that booksellers will be leaner and meaner (oh, and leaner and meaner indicates that booksellers will be purchasing fewer units because, well, managing returns for credit or cash is not a cheap endeavor).
This will force (physical) distributors to better manage their inventory. Not surprisingly, the challenges facing booksellers will trickle back to the so-called middlemen. They will be more engaged in digital distribution (I am so waiting for the perfect solution for digital fulfillment at the indie bookstore level!) and more invested in print-on-demand technologies.
The new philosophy will be about getting books to customers in smart, efficient ways.
Tighter (physical) inventory on the customer side of the equation will change how publishers acquire books. Shatzkin’s article on the reshuffled portfolio contemplates at least one instance of publisher consolidation (where one house is acquired by another). Add in the inevitable decline in physical sales, and it’s clear that, again, we’re looking at a changing economic model.
Obviously, potential growth comes from digital sales. The numbers are increasing every month, year-over-year percentages being enough to cause spine tingling in the most hardened cynic. The question that remains is are these sales new, additive, or replacement? The answer is “Yes.”
The combination of new, additive, and replacement is a perfect recipe for experimentation. How can publishers increase the number of new readers, what do they want or need to remain in the reading game? How can those additive sales be increased, what do customers who buy multiple copies/versions of books want or need? How can publishers ensure the replacement sales, sales that might have gone to a physical book, keep on coming, what do customers who make the switch to ebooks want or need?
(This is why I’m particularly excited about two recently announced projects: We Make Stories from Penguin/Puffin UK and the Tor.com Store. The first, which follows the path — but not footsteps! — of last year’s award-winning We Tell Stories, is a story-building tool designed for kids [though this big kid wanted to play, too]. It’s a clever way to engage kids and their parents in both the creating and reading of stories.
And Tor, seeing the benefits of community over competition, built its store with an eye toward selling books by other publishers [an application of the vertical approach advocated by the previously mentioned Mike Shatzkin]. What they’re calling publisher-agnostic, some of us call making readers happy.)
One thing is for sure, the golden age of big advances is over (some would scoff at the notion that said golden age ever existed!). Though it’s surely naive, I like to think these changes mean less investment in high profile non-fiction — the kind of non-fiction subject to very large advances and disappointing sales due to the lack of compelling information. Hint: these are the books that often require embargoes because readers won’t plunk down good money for lousy insight. Smaller advances to dubious celebrities would also play into my fantasy; hey, if they have such a compelling story, let the sales prove its worth.
The realistic part of me knows many of these advances will continue to be paid. Just as avoiding change is part of our DNA, so is the thrill of competition, and large advances are the publishing equivalent of a gold medal (hey, we paid the most and won the author!). Costs must be cut somewhere, and the mid-list and below will, as always, take the brunt of the pain. This is the point Mike Shatzkin made in his piece on agents.
Advances, that large chunk of cash upfront, are the fastest, most cost-effective way to manage publishing house money, or, ahem, reducing advances is. Agents get this. Which means authors have to get this. They have to consider how change in publishing can be leveraged to their best interest. Counting on the same old distribution with the same level of sales meaning the same dollar figure (or more!) in advances is wishful thinking.
With this change comes, again, great opportunity.
It is my belief that the booksellers, distributors, publishers, and authors (and everyone associated) who embrace the messiness of change will succeed in the future. All around us — in every industry — business is changing. There will be winners. There will be losers. Models will be embraced yet ultimately abandoned. Crazy ideas will be seen as future no-brainers. Oh, and some of the stuff we consider hopelessly old-fashioned will survive and thrive.
Because there’s some truth to the adage “the more things change, the more they stay the same”. Or, as Francis Bacon said, “Things alter for the worse spontaneously, if they be not altered for the better designedly.”