The Seedy Underbelly of the Digital Self-publishing Revolution

So, I’ll start by saying that I see the arrival of the Digital Self-publishing Revolution as largely a good thing.  It’s more confusing than the old world – now instead of a comparatively straight-forward process of submitting to agents and editors and hoping for the best while expecting the worst, you’ve got a thousand different possible levers you can try and pull.  (Some of them you can’t actually reach.  Some of them don’t actually do anything when you pull them.  Some of them have an effect, but it’s hard to figure out what that effect is.)

But, largely, it’s a good thing because it gives writers and readers both new options that they didn’t have before. 

Still, I’m put off by the revolution’s cheerleaders who shout hurrahs: “The Revolution has come! Publishing is disintermediating! The Traditional Publishers are dying, and good riddance for they were made of EVIL and soon it will be complete freedom for writers and readers and puppies and kitties will rain from the skies forever! Amen!  P.S. And we’re all going to get so rich by writing!”

That’s hyperbole.  But the basic message is the same.  If you move in writing circles, you can’t help but read one or two such blog posts on various blogs per week. And that’s if you don’t actively follow Joe Konrath or Dean Wesley Smith or others like them.  But their message puts me off, not only because I think it’s an unrealistic vision of the future, but because something about this vision seems a little off to me.

In the past few weeks, I’ve come to understand a little better why I’m vaguely uncomfortable and unsettled about the digital self-publishing revolution.  There is something dark, something unspoken, something critically unexamined staining the underbelly of the Digital Self-publishing Revolution.  I don’t think these are things talked about enough, yet. Continue reading

Cross-posting: Amazon and the Big Squeeze

In one class I’m taking this semester, called “Strategic Decision Analysis”, we have a course blog where we, the students, are keeping track of things we notice in the news and in our lives that reflect the course topics, which largely revolves around Game Theory.  Earlier this year I posted an entry in this blog about the infamous “Amazonfail” event, otherwise known as the “Kerfuffle”, and what I was then learning about the future of publishing.  Well, recently, the Boston Review published an article that details the whole sordid history of how Amazon has put the squeeze on the publishing industry, and what that means for the future of the industry.  And I noticed that there were a lot of Game Theory aspects to this whole story.  So, I wrote about that for the course blog.  You can find my original entry hereContinue reading

Update from PM Class

It’s time for my weekly update from the Project Management class, for want of anything better to talk about.  Which, this week, is a pretty big want.  In other words, there wasn’t much interesting about the most recent PM class.  This class we had a guest speaker who talked a lot about Microsoft’s Project Portfolio Server program.  I wasn’t really inspired by it.  Certainly, it made organizing large numbers of projects into a single view easier, and easier to do some cursory analysis on them.  But, with the analytics essentially obscured to the user, I didn’t feel confident that it was a good platform for decision analysis when considering multiple projects against constrained resources.  What I’m learning in my Decision Modeling class is much better for that, I think – and there, defining the parameters becomes a much more transparent process.

We also were given our group assignments, and I’m still waiting on feedback from my boss about whether there’s a project here at work that we can use.  If not, one of the other group members may have a project.

Tangentially related, as I was thinking about projects – both for this class and for the Decision Modeling class – I came up with what I think may be a great project idea for Decision Modeling.  In that class, we’ll need to model a complex and non-trivial decision with lots of constraints and uncertainties.  I don’t know all the details of the project’s requirements, but I was reflecting on the A & M Kerfuffle when this idea struck me.  I left a comment on John Scalzi’s blog a few days ago (scroll down to comments #43 and #44) about one of the factors that I thought was entering into the psychology of consumers regarding e-book prices (one which I hadn’t seen really brought up much, that being that physical books, even having the same content as e-books, can be valued higher simply because they have physical, concrete, and tactile existence).  Later, I thought about my comment, and thought: “Stephen, you’re smarter than that.  There’s more that enters into pricing, and perception of price, than any one factor.  It’s a complex interplay of Supply, Demand, Break-even, Equilibrium, and Consumer Psychology, all in one package.  Heck, it’s a complex, non-trivial nut to crack.”  That’s when I thought: “Complex!  Non-trivial!  Nuts-to-crack!  These are the features of the sorts of problems that I’d want to use my new decision modeling ninja skills on.”  Besides that, the prof had mentioned finding a project about which we were interested.

I’ve already reached out at work on that project, too, to see if there was a complex decision problem requiring ninja-level-analysis there.  And that will take precedence if I find one.  But I’d be much more interested in exploring the complex problem of e-Book pricing, if nothing at work pans out.  If I proceed with it, I’ll next have to consider how I’d frame the question, and what, precisely, I’m trying to “decide” and from who’s perspective.  Probably, I’d think that both Amazon’s and Macmillan’s positions on the issue are well vetted within their organizations, so the tack I’d have to take would be: from an author’s perspective, what is the ideal e-Book price?

If this goes forward…

STAND BACK!  I’ll be doing SCIENCE!

New Media & the Future of Publishing

So, I had a very interesting discussion with a writer named Cliff Burns a few days ago in response to my post about the challenge the future holds for new writers like myself.  And I’ve been thinking (and reading) a lot since then about the state of the publishing industry today, and what the future holds.

Thanks in large measure to the AmazonFail/Macmillan Kerfuffle, a lot of writersmany of them published (especially those published by Macmillan and its imprints) have written a lot about the state of the publishing industry right now.  Frankly, it’s not pretty, but there are a few common themes.  I’m going to try to walk through some of the insights I’ve gained by following these blogs in recent weeks.

Lesson 1: The World has Changed

There’s not a lot of consensus on this issue, but there’s a certain economic reality to it.  The Information Age Revolution happened without asking authors (and especially without asking aspiring authors) their opinion. launched in 1994 when the internet was still in its infancy.  But in time it has grown to become a major player in the bookselling world.  Meanwhile, blogging began to grow in popularity between 1997 and 2000 (the word “blog” was coined in 1999).  Shortly on the heels of blogging came the new wave of Social Media: Friendster launched in 2002, MySpace in 2003, Facebook launched initially in 2004, and expanded to include everyone in 2006.  (I finally got on Facebook in 2008.)  And then, there were e-Books and POD. 

The first dedicated e-Readers were launched in 1998 (the SoftBook and Rocket eBook), but the market wouldn’t start to be noticed by the publishing world until the advent of Amazon’s Kindle in 2007 (and to a lesser degree, Sony’s Reader in 2006).  Amazon quickly followed up with an improved version of the Kindle in 2009.  As the e-Book market began to grow, the old-media publishers had to take notice.  A burgeoning monopoly was in the birthing stages: today more than half of all e-Books are sold through Amazon.  As for POD printing: Amazon offers a service for this, as I understand it, and I mentioned others in my prior post on this subject (like and Virtual Bookworm). 

What the advent of e-Books and POD did for struggling writers was open up a tantalizing golden road of self-publication.  Vanity press is nothing new: they’ve been in existence since as long as writers have wanted to break into print.  But you could never achieve a wide distribution with an old-fashioned Vanity press.  You’d be left with an expensive bill, and a lot of books you couldn’t possibly sell to make up the difference.  Self-publishing via e-Books and POD offered a huge advantage over old-school vanity press.  Both have relatively low set-up costs compared to the old vanities.  E-Books allow you to reach a potentially “limitless” online audience.  POD allows you to defray the printing costs one-book-at-a-time by only printing and delivering books to readers as they order them.  Both were only made possible thanks to widespread adoption of the internet.  The old writer’s adage on the subject is that “Money flows to the writer”, meaning that in a legitimate, traditional publishing enterprise, the publisher buys rights from the writer: they pay the writer for the right to publish their work.  If a company asks the writer to pay the company to print the books, that’s a classic warning sign of a scam.  But these changing paradigms mean that, as attracting the attention of a traditional publisher is increasingly difficult, these paid “services” to writers become a viable option for writers with an entrepreneurial spirit and a certain amount of confidence in the salability of their work.

The market was again shaken (not stirred) in the last few weeks, with the advent of the great messiah of e-Books and the announcement of Apple’s iPad device (I say that with tongue-in-cheek; I have neither ill-will nor particular best wishes for the success of Apple’s new venture; I know only that I cannot afford one).  The details aren’t clear, but the story seems to go something like this:  Apple wanted a piece of Amazon’s action (they’d been steadily building an online media distribution monopoly of their own, in the form of iTunes).  They needed something they could market as an e-Reader, but better.  Ergo, the iPad.  And they needed publishers to get on board with their platform.  But publishers were already wary of Amazon’s growing monopoly power, and the damage Amazon’s $9.99-all-the-time price point was putting on traditional publishing models.  There was a point of pain, there, and Apple exploited it: offering publishers a deal that allowed them a flexible pricing model (a deal Apple never offered to music producers on iTunes, but only came about after what were, by all accounts, intensive negotiations).

On the face of it, there’s one flaw in Apple’s plan: if publishers can sell books for more than $9.99, why would they buy on Apple when Amazon sells them for less (vice versa, though, theoretically Apple would have some for less than $9.99, but let’s put that aside for a moment).  The flip side: the iPad’s virtually inevitable success (I’m not making any actual judgments here about the iPad’s potential for success, but looking at this from an market/industry perspective) gives publishers a new lever to pull: they don’t need Amazon anymore, to sell to the e-Reader market; Apple’s iBook store has a decent chance of superseding Amazon.  With that potential leverage, Macmillan felt the time was right to broker a new deal with Amazon to get a more favorable arrangement.  (Rest assured, the other major publishers are right behind Macmillan; some are probably kicking themselves for letting Macmillan do it first, others are content to let someone else be the guinea pig.)

What all that boils down to is this: all of these factors are part of a perfect storm of changing winds in the way books will be bought-and-sold in the future.

Lesson 2: The Old Publishing Model is Broken

For someone like me, who’s lifelong dream is to break into the traditional publishing world, this is a hard concept to realize.  But it’s not traditional publishing, per se, that is broken: it is their business model.  It’s antiquated, and maladapted for success in the changing, increasingly digital world.  Much has been said on the various blogs out there about the hordes of costs involved in producing a book that are fixed, regardless of the number of books that are sold.  These costs are relevant even if the publishers sold only electronic versions of their books, and nary a single hardcover.  But there is a persistent image among consumers that most of the costs of a physical book are tied up in the physical printing and binding process, and the rest is just gravy for the writer.  To these consumers, e-Books don’t incur the expense of printing, and their is no physical product to own and to hold.  For these reasons, consumers value an e-Book much less than they value a physical book.  This image is a false one, but it hints at something that’s fundamentally wrong with the business model of traditional publishing: there are a lot of fixed costs tied up in the business that have nothing to do with bringing good books to readers.  Most publishing firms are housed in New York, a land of notoriously high real-estate costs.  They have a byzantine and expensive-to-maintain distribution system that doesn’t add value to readers (allowing “remainders”, or unsold books, to be returned to the publisher, and other strange practices).  These practices are predicated on the idea that the publishers produce only blockbuster novels, allowing them to spread some of these high fixed costs over as large a print-run as possible.  But they’re not set-up to succeed in the new, fractured-media-landscape that has evolved.  What’s increasingly challenging this model is that the base of regular readers is shrinking (even as the base of irregular readers – those who will pick up a blockbuster novel from time-to-time – is growing).  And deep discounting at the big bookstore chains and online at Amazon are hurting the value of their product in customer’s minds.  It’s created an unsustainable cycle.

Over the past twenty years the industry’s answer to this has been consolidation.  Consolidation means cutting down on the number of extra publishers, allowing them to cut out the duplicative costs associated with having so many of them (like duplicated New York real estate; duplicated marketing & finance departments, etc.)  But the industry has nearly consolidated as far as it can go without becoming a monopoly itself – there are now only 6 remaining traditional publishing houses.  So, using the consolidation model, there’s just only so many more costs the industry can squeeze out.  What’s need, for long-term survival, is radical change.

The problem is, book publishers don’t act anything like other consumer products manufacturers.  Nor do they act like other media producers.  They try to act a little like both, but fail to successfully tap either model.  If they shift toward a focus on e-Books, they would need to act more like a media company.  If they remain focused on physical books, they need a model more like successful and acclaimed CPGs companies (like Coca-Cola, Proctor & Gamble, etc.)  Right now, they don’t know what they want to be, and until they do, their model is going to continue to fail.

Lesson 3:  The Signal-to-Noise Ratio Means Traditional Publishers Are Still Necessary

And here’s a lesson that’s a hard one for the new breed of young writers feeling empowered by the weakness of traditional publishers and the rash of new tools available to them: you are not alone.  You are so not alone, that there are too many of you for dedicated readers (and even more so for casual readers) to ever find your voice among the din and cacophony of the internet.  Yes, I am in this same boat.  My voice is one of thousands.  But readers don’t have time to sift through thousands of voices to find the few that will truly shine for them.

What’s more, while what a writer does is one of the most important parts in the telling of a finished, polished story – what they do is the part that adds the most value – what a writer does produce is not a finished product.  What comes hot of the keys from a writer is unedited manuscript.  It’s the story, the characters, the world, the meaning, the theme.  But it’s also bad grammar, plot holes, dropped characters and deus-ex-machina.

Traditional publishers have two huge advantages, from a reader’s perspective, that really do add value.  The first is that they employe editors.  Editors fix all those things that are wrong with a rough manuscript that I mentioned above (or at least point them out to writers so they can fix them).  Editors also, at least in theory, screen out the unsalvageable crap from the diamonds-in-the-rough.  And make no mistake: there is a lot of unsalvageable crap out there.  This one advantage means that traditional publishers have an opportunity to build a lot of good faith and trust with consumers, by ensuring that they publish only high-quality books.  The second advantage that traditional publishers offer is marketing power.  The author is really integral to a successful marketing plan for a new novel, but the writer alone cannot hope to do everything that needs to be done to properly market a new book to a reading public heretofore uninformed about the book’s existence.  And don’t underestimate the value of effective marketing.  It is, in no uncertain terms, the be-all and end-all of getting your book into reader’s hands, for a reader will never want your book in their hands in the absence of good marketing.

Besides these two critical functions, traditional publishers do a lot of other work to help make a novel successful.  Besides editors, you have copyeditors, proofreaders, typesetters, interior designers, cover artists and cover designers, and so on.  A lot of people seem to believe that novel writing is a solitary affair – and with good reason: the content of the novel springs mostly from the mind of the writer himself.  But there is this small army of behind-the-scenes crew that are applying the spit-and-polish.  In this sense novel writing is really a lot more like making a movie, one in which the novelist is writer, director, and the stars of the show, but for which we also have producers (the editors), cinematographers, soundtrack composers and performers (like the interior design and type design), and so on.  You know, the Oscars have a whole host of technical categories that regular people almost never see, because they’re not flashy and glitzy but which are every bit as important in the production of a good movie.  So it is with good books.

For writers with investment money to burn, savvy business chops, and a dynamite book on their hands, there are paid services that can and will, for a hefty fee, do much of this for you.  Through one recent commenter, I discovered the services of iUniverse, a self-publishing services outfit.  But their basic package, with editing services, a cover design, and ISBN, costs almost $600.  Their full service, with all of that plus other services like the ability for bookstore to return remainders, an internet marketing campaign, and promotional materials will lighten your load by more than four grand!  And the author will still have to do the lion’s share of the actual marketing work.  I can only imagine how much an actual, full-service not-just-email-only campaign will set you back.  Add to that the cost of finding a good artist for the cover, type-set and interior designers, and so on.  That’s a pretty significant risk – with that large of a financial investment, this is considerably more than your average struggling author can afford for a minimal chance at returning that amount in terms of sales.  Again, as I suggested at the head of the paragraph, a writer with the money to burn, the know-how to succeed, and a book that is dying to be read by the masses (oh, and tons of free time on his or her hands) this is, technically, a realistic option to success.  Some of this a writer can even learn to do him or herself, competently (and at the expense of spending time writing, of course).  But the chances of succeeding in this route are, even by the best estimates, realistically no better than succeeding through the traditional route (which, granted, is also very very poor).

The fact is, at the end of the day, writers need traditional publishers if they want to achieve widespread, mainstream success.  And readers need traditional publishers as a filter for the noise and unlimited number of choices available on the internet.  These two facts mean that traditional publishing, in some form or fashion, can, will, and must continue to exist – at least until a better model is devised.

What neither the writers nor the readers need is to subsidize expensive New York real estate, costly organizational structures on the back end that aren’t in the business of adding value to the reading consumer, and byzantine distribution channels that are not optimized for the customer.  Unfortunately, what the state of publishing is today means that you get a mixed bag of the good and bad together.  And besides that, one of the core promises of publishers having editors in the first place – that editors filter out the crap – isn’t even remotely true.  Editors can realistically only filter out the crap from what they have time to read.  The signal-to-noise ratio right now is so bad, it seems your average editor doesn’t have anywhere near the time to actually review everything that comes his or her way.  That means that tons of real gems never even make it to the editors’ eyes to get caught in their garbage filters, recognized for what they are, and polished to perfection for mass distribution.  They make sure that we don’t get crap, but they can’t possibly guarantee that they’ve given us the best-quality gems.

But back to Lesson 1: the world has changed.  Whatever else we may say about this, that change is real, and it’s permanent.  And nobody – I’m convinced, nobody – really knows how this thing is going to pan out, yet.  It’s a market that’s far more dynamic than ever it has been in the past.  It’s in flux, but one thing we do know is that the successful publishing model of the future looks very little like the model of today.  The shifting tides lend a certain air of inevitability.  E-Books will grow in importance in the market.  Old-fashioned physical books will never fully die away (especially hardcovers) but mass-market and trade-paperbacks will be increasingly supplanted by e-Books.  But how this transition will be managed, and how publishers will succeed and how writers will break out and gain the fame and notoriety they crave: these things are as yet unknowns.  Some traditional publishers may fade away into the dust, or get absorbed into larger companies until their are only two or three left, or the distribution channels may get refined, or… well, who knows?

What does this mean for me, as a writer, and undiscovered author?  I don’t know yet.  I’m simultaneously excited and scared.  I’ve never been published.  Will I ever be published?  Will I find a way to succeed and thrive in this new environment?  Frankly, I just don’t know.  But what I do know is this: I am a writer.  And there is one thing I must do.  I must write.  I must write the best dang stories I can possibly write.  And… someone will read them.  Someone will read them because they are good stories.  (Are they the best they can be?  Without editors, probably not.  But for what I can do without editors, yes.)  Until I can make a name for myself, that may not be many someones.  I might only count them on a single hand.

But I cannot be discouraged.  I will write on.

Happy writing.