The Future of Publishing version 10.7.3*

In case you missed it yesterday (on account of not normally listening to NPR), here’s a link to the story on Morning Edition about an “upstart” e-publishing company lead by a former HarperCollins CEO called “Open Road Media”

I don’t really have anything to add to that, except that, yes, the publishing world is changing.  And, frankly… I don’t know where it’s going, yet.  I just hope it’s someplace where authors can make a decent living doing what they love.  (It’d also be really cool if it was someplace where more people were reading, but that’s an unrelated and perhaps unrealistic wish.)

*Note: the version number on “The Future Of Publishing ™” is wholly fictional.

A Surplus of Quality

So, there’s this article over on Salon.com by Laura Miller.  You may have read it.  You may not – but go ahead and do so, and then come back.  I’ll still be here.

The gist of this article is a point that’s been talked about before (though perhaps more eloquently in Miller’s article) during the whole Great Death of the Publishing Industry apocalypse that’s been going on since the eBook thing  and self-publishing took off: that there is a veritable flood of poor-quality, un-edited or badly-edited manuscripts waiting in the wings ready to deluge you, the fair reader of fine fiction, in an unending wave of crap, in the aftermath of the publishing industry’s final death throws.  It will then be your job to discern the good from the bad (a  job you can only do by reading everything) – either that, or new gatekeepers will arise from the ashes of the old to tell the reading masses what’s good and what’s bad for them, as the editors and agents and publishing industry execs used to do.

Now, of course, the point of the piece is speculative in nature.  Certainly, publishing is undergoing some seismic changes, but it’s still a bit early to sound the death knell, and I think Laura Miller subtly suggests that in her peice.  And while I largely agree with her thesis, I think there’s a subtle correction that might need to be considered.

Certainly, there is potentially a lot of crap the writers of which want to get it published (present company not necessarily excluded, unfortunately, until proven otherwise).  But, I suspect there is another problem that compounds this.  Right now a very precious few ever succeed in getting their work past the various gatekeepers of agents and editors and marketing execs to get their work in front of the eyes of readers.  Most of these who do are good writers, some of them even great.

But for every good writer who succeeds at getting published, right now, I’ll grant that there are dozens of bad writers, but I hypothesize that there  are also a few more good writers who don’t manage to break in.

Which means that not only is there a flood of crap waiting in the wings; there is also a surplus of quality waiting to rain down on us. Continue reading

Beat to the Punch

Regular readers may recall a few weeks ago this post, in which I go on about a possible “successor model” to the way publishing is done today.  Well, a friend from class clued me in late last week to this:

http://springwise.com/media_publishing/tenpages/

I’ll give you a minute to go check that link out.  Okay.  Done, now?

So, for those of you who didn’t click the link, here’s the gist: Dutch website “Tenpages.com” has created a partnership with several publishers (presumably Dutch ones) in a venture that allows the users of the site (who act as investors on a virtual market) to decide which books sourced through the site will get published by buying “stock” in that book.

Sound familiar?  If you were here a few weeks ago when I posted about my “Novel Venture” concept, you might be thinking “yeah, that does sound familiar”.  The ingenuity of this site, it turns out, is that, well, it’s a website, and takes that whole “building up a community of investors” problem out of the “Novel Venture” concept I proposed by establishing a virtual place for that community to gather.   Frankly, though, I’m surprised that someone else (albeit in Holland) had almost the same idea, and is actually finding a way to make it work.  I was ambivalent enough about the chances of my idea proving successful that I wasn’t sure anyone would ever try it, so imagine my surprise to learn that someone already has.

The biggest drawback that I see to this site, however, is that it offers writers and investors only a 10% royalty/share of profits each.  In normal publishing contracts, the writer gets roughly a 20% royalty rate (actual rates vary, but 20% seems about average), so a 10% rate is pretty low.  In other words, this is only going to attract brand new, unproven authors.  And those authors, if they grow successful, are going to want to renegotiate their contracts.

From the investor’s perspective, the 10% rate is also too low.  These are the people putting up the seed money to get the venture started.  Although, to really analyze whether that share is really too low or high, I suppose, the amount of the seed money will need to be compared to the amount the publisher is kicking in.  The investors need to be justly compensated for the degree of risk they’re taking on, and it matters which party is bearing the majority of that risk.

Overall, I think the idea is a very intriguing concept.  I wonder if it can work here in the States.  And I wonder how long it will take someone here to try.  I think the idea has to work a few kinks out if it’s going to prove successful: the amount of seed capital needed to get a book off the ground and get a publisher on board, the royalty and returns offered to writers and investors, etc. will all need to be fine-tuned.

Thoughts, dear readers?

A Novel Venture (A Publishing Successor Model)

On Saturday, I alluded to the possibility of posts on some ideas I have for possible “successor” models to replace the existing “traditional publisher” model that predominates publishing today.  Market forces are whittling away at that dominance, and publishers are struggling to find new ways to survive.  Eventually, they will more than likely have to change to remain viable.

Today, I present the first (and possibly only, as so far this is the only idea I’ve come up with for an alternative) Publishing Successor Model.  The format is this: I will begin by describing the Model, giving it a name and detailing the basic function.  Then, I will offer an argument for why it will succeed.  Finally, I will conclude with an argument for why it will fail.  (If there are any future Publishing Successor Model articles, they’ll follow the same format.)

What it is:  The Novel Venture Capital Model

How it Works:  The model is based loosely on the way many small businesses in America today get funding, and how they are primed for success.  The idea is that the mechanisms by which novels are screened and edited (and financed) are decoupled from the printing and publishing process.  Instead of sending off query letters to publishers, novelists in the future will prepare short business plans (including a short summary of the novel, sample chapters, reviews of the finished work when available, an explanation for why the novel will succeed, target audience analysis, that sort of thing) for review by “Novel Venture Capitalists”. 

NVCs, as we’ll call them, are a decentralized, loose network of angel investors and avid readers of some means who organize together to fund “Novel Ventures” for publication and distribution in exchange for an equity share in the business venture (potentially anywhere between 20 and 60 percent stake).  Working with an NVC group gives an author access to that group of NVC’s network of distributed, experienced, and vetted freelance editors, artists, designers, proofreaders, and so on, as well as to established relationships between NVCs and the large, old-school printing, distribution, and marketing firms (today’s traditional publishers will become these, and will make their profit on a per-book-sold fee).  An NVC group may work with a number of different printing and distribution firms, depending on the specific distribution channel (for e-Books, Hardcovers, etc.). 

Because the primary role of the NVCs will be to screen and vet novels and novelists for publication, finance the venture, connect the novelists to skilled and experienced professionals who will manage the process, and then get out of the way and let the system work, the NVCs will develop a talent for, well, recognizing talent.  Everyone else gets to do the part they’re good at, and nobody has to support the overhead of trying to cram all that talent together under one roof (most of these jobs can be done from freelancers’ homes).

Why it Will Succeed:  Today’s new mid-lister authors will be tomorrow’s old guard, blockbuster novelists, replacing the current group as they pass away or retire.  And these mid-listers/future-blockbusters will be increasingly disloyal and disillusioned with current traditional publishers even as their own names increase in brand recognition with the reading public.  As the traditional publishers try to demand more and more rights from writers and offer ever-diminishing royalty rates in a bid for their own survival, these established and experience authors will revolt, seeking new opportunities in the open marketplace.  They’ll seek ways to maintain all of their rights, bundled together and closely held, and only sell out shares of the potential profits: a business model that ties easily with existing network of angel investors. 

Bereft of their big-name, tent-pole authors, the current business model of traditional publishers will suddenly implode as the reading public abandons them in droves.  They are forced to divest unproductive assets and imprints in order to lean up and compete with the smaller printers that are lapping up the new business.  The old publishers still have the means to do large-scale print runs the most economically possible.  Their divested imprints have the marketing and distribution relationships needed to manage the book, the publication process, and ultimately success. 

Writers get to keep the rights to their own work and keep on writing (even if they sometimes have to write business plans).  NVCs reap huge hordes of cash when Hollywood moguls purchase licensing options for film adaptations.

Why it Will Fail:  Typically, novelists are terrible at writing business plans, and have a general lack of business acumen.  Real-world Venture Capitalists demand huge returns on their investments, on the order of 30% or more over a couple of years (for comparison, the stock market historically returns something like 8% in the long term).  It’s uncertain whether the chance to fund (and get a share of) the next J. K. Rowling or Stephanie Meyers will be worth the risk of funding (and getting no return from) the next John. Q. Nobody (who is a more populous animal than the J. K. Rowlings) to business-savvy VCs.  Plus, the idea is predicated on groups of VCs who love books and reading simultaneously coming up with this same idea and spontaneously forming networks.  Heavy industry consolidation in publishing means the remaining players have a lot of power to manipulate the market for their own mutual benefit and to prevent their own demise.  It will take some heavy defection from some really major tent-pole authors (we’re talking tomorrow’s Stephen Kings et al.) before all the old publishers will be in any serious trouble.

What do you think?  How do you think the market and industry will evolve to solve today’s market and industry inefficiencies and problems?  Let me know in the comments.

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.  Amazon.com 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 Lulu.com 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.