Change: Are You Initiating or Avoiding?

July 6th, 2009 · 14 Comments
by Kassia Krozser

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 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.”

File Under: Square Pegs

14 responses so far ↓

  • Edward Champion // Jul 6, 2009 at 4:26 pm

    Please clarify this for me if I’m wrong, but are you seriously advocating, as Shatzkin is, the death of the midlist writer? Where is the “great opportunity” if everything comes down to the bottom line? I’m all for digital revolutions and books in multiple formats, but I’m not so keen on leaving the author freezing in the cold.

    Without the author, you don’t have the book. Without the book, you don’t have your revenue stream. Without the revenue stream, you don’t have your business model. I am deeply uncomfortable with this “information wants to be free” model of thinking — or, more specifically, this “publishers can collect off the hard labor of authors because the information wants to be free” line of thinking. I may be misreading here, but please explicate how these attitudes are in any sense different from the Huffington Post model, whereby free content is used to generate profit and the author is left freezing with his limp naked dick flapping, awaiting the gustatory maneuvers of fish who long to sleep with the authors.

  • Kassia Krozser // Jul 6, 2009 at 6:25 pm

    No, I’m not advocating for the death of the midlist writer (neither is Mike Shatzkin). It would be an impossible feat, as midlist is where most authors live, and would destroy a good 90% of my own reading. But I am saying that, as is always the case, the midlist author will be squeezed when it comes to advances. For some, this will come as a huge shock — there is a swath of authors who manage a comfortable, not grand, living based on their writing, and those advances play into the mix. These are the authors who will need to learn (or rediscover, as the case may be) that the business has changed.

    It’s possible some of these authors will earn as much in the long run as they do via their advances, but that money will be slower coming. These authors at the very least need to change how they budget.

    I don’t see a scenario where, in the print world particularly, physical retail outlets will increase dramatically, at least not in the form of bookstores as we know them. Amazon or Barnes & Noble will likely increase market share as more consumers move online, and it’s possible — I hope it happens — that independent publishers will find a way to compete in this space in a way that makes all sides happy (store and customer). Acquisitions will decrease, and, sadly, the so-called copycat nature of publishing will probably rise. When you don’t know for sure what will make money, the closest thing to a sure bet is to model what has come before. This won’t eliminate the midlist, but it’s going to make it hard for authors who don’t fit a specific commercial mold to find opportunity.

    So where is that opportunity? One example is publishers will be more inclined to release digital first, see how it goes, then maybe move to print (or move to print earlier in a limited way). This levels the playing field (most traditional publishers do not have an advantage when it comes to digital distribution), opens new markets (think language-specific instead of country-by-country rights), and, in some cases, a lower initial investment in a title will allow publishers to take more chances than they would if they had to manage a large print run. In this scenario — which will co-exist comfortably with the current way business is done — the financial model for authors will shift slightly as well. Higher royalties will be flowing their way and actual payments will happen sooner. Opportunity for authors comes as they weigh advantages of model a versus model b versus model c.

    I am not a huge proponent of the free model, in the “information wants to be free” sense of things. I see a place for free in an author’s decision-making process (or a publisher’s), but I firmly believe that authors should be paid for their work (remember, I don’t even buy *used* books because of this). I think people will pay for content — music, books, movies, information — as long as basic criteria are met: value to the consumer, a reasonable price, and ease of access. There are some who refuse, on rather shaky principles, to pay for entertainment. They will always exist. Most people, and maybe I’m ascribing too much goodness to our species, will pay for books. They get the underlying reasons and accept them.

  • nicola griffith // Jul 6, 2009 at 8:31 pm

    EC said:

    Please clarify this for me if I’m wrong, but are you seriously advocating, as Shatzkin is, the death of the midlist writer? Where is the “great opportunity” if everything comes down to the bottom line? I’m all for digital revolutions and books in multiple formats, but I’m not so keen on leaving the author freezing in the cold.

    and KK said:

    No, I’m not advocating for the death of the midlist writer (neither is Mike Shatzkin). It would be an impossible feat, as midlist is where most authors live, and would destroy a good 90% of my own reading. But I am saying that, as is always the case, the midlist author will be squeezed when it comes to advances. […] There are some who refuse, on rather shaky principles, to pay for entertainment. They will always exist. Most people, and maybe I’m ascribing too much goodness to our species, will pay for books. They get the underlying reasons and accept them.

    The midlist, the way I define it–really good writers who have never hit a national bestseller list–is already dead. It’s just that most people haven’t figured it out yet. In four or five years, when the people who should have been writing those great books are too busy with their full-time jobs, or half-dead from lack of healthcare, readers will be saying, ‘Huh. Why aren’t there any good books anymore?’ Then it will get interesting. Then things will change. Maybe. Or perhaps readers will shrug and settle for less. It happens.

  • Kassia Krozser // Jul 6, 2009 at 11:17 pm

    I think (no surprise!) that we have to define our terms here. I’m thinking of midlist in terms of finances and placement — authors who aren’t quite entry level when it comes to advances, catalog placement, marketing support, but definitely not those authors who get a full-court (or even 3/4 court) press. They’ve moved up the ladder, but aren’t quite there in terms of great publishing support. These are the authors who tend to make or break their careers with hard effort, a little good luck, and that one novel that propels them to the top of the list.

    (I will note that when speaking of “list”, it’s a subjective concept as you have to factor in house/imprint/genre).

    Nicola’s benchmark is part of this, but, depending on how you define these lists, you can hit one and still be considered midlist from the financial/marketing standpoints I noted. But yeah, that’s where the squeeze will be. And we will ask the “why aren’t there any good books anymore” question. In this era, however, I believe the answer will not be a shrug. Because authors have new opportunity and because readers have new ways of connecting. I don’t think I’m being overly optimistic. It’s not going to be easy for these authors find audiences (but has it ever been easy?), but the readers are there.

  • Edward Champion // Jul 7, 2009 at 2:00 am

    Thanks for clarifying, Kassia. The readers may be there, but if the publisher can’t be bothered to share the meager profits with the author, and the author is midlist according to Nicola’s definition, does it not amount to a content charnel house in the end? We’re talking about giving authors event the shadow of a sustainable income. Say $4-5K for a book after costs. If you slice into that meager figure further, this is hardly an “opportunity.” It amounts to the same business model that you’ll find with the Huffington Post, where authors are asked to write essays for free while Arianna and company get the VC money. Readers can “connect” with an author’s dessicated and impoverished form all they want, but if the author can’t keep the bills paid or food on the table, then the information that wants so desperately to be free can’t be easily generated.

  • Colby Williams // Jul 7, 2009 at 7:43 am

    Related article at TechDirt:

  • nicola griffith // Jul 7, 2009 at 8:08 am

    It’s hard for me to not rant on this subject. But I’ll do my best. Please remember I’m generally a reasonable person…

    Writing a good novel (the kind readers like to reread, not only for comfort but the intellectual challenge, the visceral thrill, the sense of living another life) requires enormous focus. Yes, a novelist can do it once or twice while holding down a Real Job–if they’re really lucky, and very talented, and have a lot of support, and boundless energy–but more than that will suck them dry. Really good novels come from full-time writers.

    This means writing full-time. Not writing for an hour and then blogging/Tweeting/Facebooking/conferencing/mailing out ARCs/giving interviews for two hours and then fretting over the receivables spreadsheet for an afternoon.

    In a perfect world, the writer gets to write. When they’ve finished the book, yes, they can spend a few months doing the social networking and commercial rounds–but then they have to withdraw and find the Still, Quiet Place–the wellspring of good books. I have never been able to find the SQP while dropping comments on blogs and doing five readings in a week. (Or writing introductions for other people’s novels, or essays on provocative topics, or any of the other signposting activities midlist novelists must engage in to maintain name recognition.)

    Right now, I’m not seeing a golden age of opportunity. I’m seeing a rock and a hard place (and lottery tickets). I’d love–love love love–to be proved wrong, though.

    So how can we do this?

  • Kassia Krozser // Jul 7, 2009 at 11:28 am

    Nicola — I wish that Still, Quiet Place were a reality. I do. We both know that authors fight a constant battle between the art of writing and the business of writing. Every author balances those elements differently, but the author who refuses to acknowledge the business had better hope for a lot of good luck to make a successful career. I often think about the dueling priorities of publishers and authors: publishers are very much focused on the book at the moment, but they are also focused on many books; authors are focused on their careers — not only the current release, but those that come before and those that come after.

    In this perfect world, authors make enough money to pay the mortgage/rent, eat regularly, enjoy heating and cooling, and more. The actual economics of the publishing business mean only a few (out of the entire population of authors) enjoy this luxury without holding down some sort of day job. I think this has been true since the dawn of writing, even for those who benefited from the patronage system. Ah, there’s a system that needs to come back in fashion.

    (I am far less opposed to lottery tickets than I should be. If only I worked them better).

    But the how, that is the question (and I will note that due to my own recent leap into this business via Quartet Press, I have a specific bias here). In my perfect world there are some elements: first, getting books to more readers by increasing ways for those readers to get books. I am thinking of an English-language reader in Singapore who, for the decade or so I’ve known her, has paid top dollar to have books shipped to her. She buys in bulk when she travels. She cannot get books easily because of where she lives. Opportunity for authors comes when they take active steps to make sure people can *buy* books easily. The current system doesn’t readily support this ease of purchase outside the United States (I am also reminded of a tweet from a Canadian reader who, upon hearing good things about a book, said, “Wanted to buy xx-title, but not available in Canada, paper or digital. Lost sale.”

    Making sure the author royalty is more in line with the author contribution — writing a book is damn hard work and while the publishing house puts skin in the game, there is a seeming disparity. In the print world, margins are thin and I’m not sure how to increase author compensation there. On the digital side of things, there is a definite growth trend (with the noted sales mix). There are definite cost savings for publishers. There are also definite costs (editorial and marketing, for example, don’t go away). From my perspective, the biggest investment for the publisher is infrastructure. It’s not easy changing how you do business. Authors are, for better or worse, helping to fund this investment by accepting the print royalty in the digital realm. I won’t say if that’s the right move (because there are good arguments for and against), but I’ve long thought that playing hardball with digital rights (to the point of taking them elsewhere) is a good thing.

    Okay, that’s looking at it from publisher perspective. From the author perspective, the idea of a co-operative (which I know you’re already exploring) is viable. Figuring out how to ensure everyone in the community gets something back (and that’s not necessarily a financial thing, but it does need to offer some sort of value to each member. There is much to be said about the sense of ownership and satisfaction a person receives from participating in a community endeavor). There is the shares concepts. Heck (and I’m probably only being half-facetious) there is the itinerant worker concept.

    Opportunity comes from markets that are opening, new readers coming into the mix, and using technology to tell stories in a mix of ways. For some, sticking with the traditional approach is both safe and practical. It’s a good way to survive. For others, taking a risk is the way to go. For some, it’s a mix of traditional and risk (call it the Cory Doctorow model).

  • Kassia Krozser // Jul 7, 2009 at 11:47 am

    Ed — Publishers do share the meager profits with the author in the form of royalties. There is split risk (author writes book, publisher fronts all costs, eats losses). As we’re having this discussion, I am thinking of all things traditional publishing and I’m not sure how to make the margins for books increase dramatically. Would fewer books published per year help? Possibly. Probably. As readers, we barely have time to keep up with our reading piles. There are far more books we *want* to read than we can read, and the constant influx of new doesn’t help — even the most diligent list-maker will have things slipping through the cracks because of the next bright and shiny book. A lot of spaghetti is thrown at the wall in publishing, and while authors often disagree, less might be more.

    Even if an author goes the self-publishing route, keeping all profits for himself, there are great costs (from printing to distribution to marketing), but, if the book hits (and we know it’s happened), there can be big gains. But those early risks are tough going and, again, rising above the noise is hard.

    This is why I’ve been thinking long and hard about small press for the past few years. Again, risks versus opportunities. I’ve also been thinking more about regional distribution. I think about all the ways possible to connect readers and books. There is no single good answer. We know the business is changing, we know aspects are shrinking, we know aspects are growing. To what extent the growth will make up for the losses, that’s an unknown. The music industry is still reeling (ha!) from the disparity between lost CD sales and digital sales. I have my own theories on this (first being, the huge CD numbers were, partially, due more to additive sales than new sales as people replaced their vinyl/cassettes; this wholesale library turnover isn’t happening as CDs are already digital).

    Knowing that big publisher slots will decrease, knowing the physical retail space is shrinking, knowing that advance dollars (rarely if ever a livable wage) are growing smaller, what does an author do? Sit back and wring his hands or try new things? These past few years, I’ve watched a trio of authors (Scott Sigler, Seth Harwood, and JC Hutchins) make their own success via podcasting their books. I’ve watched authors who couldn’t get published in New York turn to digital publishers, finding the kind of readership that had NY houses knocking on their doors. I’ve seen some self-published authors find and develop their niches with reasonable success. These are not routes for every author, but they are examples of authors seeing opportunity and going for it.

  • nicola griffith // Jul 7, 2009 at 1:50 pm

    Quartet looks great–best of luck.

    The Still, Quiet Place is real. It is. (Author rocks, hands over ears…)

    As for the co-op, Ozymandias is on hiatus–I found I couldn’t focus on both the 7th century (i.e. my novel) and the 21st (i.e. the biz of community/co-op building) without the book suffering. But it’s an idea I have not abandoned.

    As readers, we barely have time to keep up with our reading piles. There are far more books we *want* to read than we can read, and the constant influx of new doesn’t help — even the most diligent list-maker will have things slipping through the cracks because of the next bright and shiny book.
    Ah, here’s where we’re different (sadly). I can’t find enough books, not good ones. Oh, there are lots (way too many) that are okay, but none that are edged with brilliance, none that set me afire. Why? Too many authors thinking with their fingers and not spending enough time in the SQP…

  • Sean Cranbury // Jul 8, 2009 at 11:04 am

    Kassia, Ed, Nicola, et al.

    Great conversation and right on time, too.

    I just spent the weekend up here in Vancouver speaking to the British Columbia Booksellers Association about social media, blogging, other technologies for community building, outreach, engaging their customers wherever they may be.

    I gave them explicit instructions to follow this blog and your posts on twitter and this entry here – which is the first one that many of them will read – is perfect. Timing is everything.

    One hat that I’d like to throw into the ring is that the silo’d/overly compartmentalized world of the publishing industry needs to change for any mid-list writer to increase their chances for success.

    Everybody – editors, publicists, booksellers, writers, et al. – is overworked, short on time and challenged by ongoing change. The temptation is to rely on tried and true traditional methods to get the job done which increasingly doesn’t work the way that it used to if at all and only adds to the sense of frustration.

    Deep breath time. Look out the window, push everything off your desk and go for a walk in the sunshine time.

    Answers, I don’t have. Better questions? Maybe occasionally.

    But I think that publishing has always been about patience, investing time and ingenuity into a project, luck and integrity. Publishers, booksellers, writers all need to use their time creatively, they need to use the technologies available to them to build communities, to support each other and help to guide each other with ideas that work.

    All points in the above posts are well made but let’s not lose sight of the fact that everybody must roll up their sleeves and experiment and turn what used to be the most de rigeur tasks into opportunities to explore new ways.

    If we don’t do it now, someone else will and no amount of hand wringing is going to prevent that.

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  • Richard Hargis // Jul 9, 2009 at 7:08 am

    Gee! Great synthesis, oh my, in 140 bytes, what is the word for a million things?

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