Monday, September 27, 2010

More Things Writers (might!) Need from Publishers

Steve writes:
I recently posted here my response to an article in the Huffington Post by writer Philip Goldberg. In his article, Goldberg champions writers continuing need for publishers in the ebook and print-on-demand (POD) age, where self-publishing has become an attractive and available option.  Goldberg based this on two major points, functions the publishers provide, and that he regarded as indispensable, namely advance payments and editing.

I agreed that writers need editing, but questioned what form this editing should take, and that it necessarily had to be provided by editors.  As for advances, well, go back and read the first post if you haven't already...

But these are hardly the only important functions provided to writers by traditional publishers, and it didn't take me long to think of three others that Goldberg's article didn't mention, including one that I (for a while, anyway) considered a possible deal-breaker, a function so important and irreplaceable that it made self-publishing, at best, a highly calculated risk.

Well, turns out I was wrong.  The more I look, the more I see that for every "indispensable" function of traditional publishers, there are alternatives.  They may not be the best options, and they may not even be advisable options for many writers, but they are there for those with the desire and the will to use them.

But I'm getting ahead of myself.  Here's my short-list of additional vital functions provided to writers by publishers:

Publicity/Advertising/Sales Support
Copyright Enforcement
Legal Protection from Nuisance Lawsuits

Let's look at each of these in turn, and see how they have to be reexamined in this new digital age of publishing.

Publicity/Advertising/Sales Support
The clear advantage to writers in selling their own work through electronic and print on demand self-publication is a return of 40-70% of retail vs. the 10% or less (often far less) provided by traditional publishers.  The problem is that this is not a zero-sum game.  Does this dramatic change in royalties mean 4 to 7 times the income for writers?  Not unless the sales and retail prices remain the same, and that seems very unlikely.

We'll get back to this "new equation," but let's deal with the obvious: Traditional publishers have marketing and sales resources available to them that small publishers, much less individual authors can never touch: magazine advertising, trade publications, trade shows, catalogs, television ads, radio.  They have the ability to push a book into the public eye with a force and speed that small-source publishing can never match.

Does this make the question a no-brainer?  Must authors stay with traditional publishing as the only way to maximize their income, no matter how small it currently seems?  Not necessarily.  First, let's look at the weaknesses in the traditional marketing behemoth.

The first problem with the traditional marketing machine is that it isn't applied equally to a publisher's line.  Only a few lead titles get the full marketing push.

While nobody has an infallible way of telling which books will sell and which won't, it's a curious fact that the success of a book is, to some extent anyway, defined the moment the contract is put on the table.  The reason?  A spreadsheet called a "Profit and Loss" statement.  Really, it all comes down to the "advance," the advance payment against future sales royalties.

Negotiations aside, the advance amount is set by the anticipated sales of the book.  The intent of the P&L is that the publisher doesn't lose money on the book, and hopefully makes a profit.  If that projection doesn't work, the publisher has a Bad Day, and possibly so do some of the people who made the decision to go forward with the project.  Asses are on the line.  No matter what the projection of the P&L statement is, most everyone at the publisher has a vested interest in making it come true.

What that means is that, when the advance is plugged into that P&L, a lot of things are predetermined: the print-run size, minimum promotion budget, catalog placement, ad placement, and on down the line.  A book with a huge advance goes to the top of the promotion list because it has to.  It will sell a certain number of copies because the machine will make it sell a certain number of copies.  It will get the best cover, the best cover copy, the best advertising, the best placement, and the biggest push to the stores from the sales department.

Of course, there are limits to the machine.  Once the books are stacked in the front of every major bookstore in the country, the machine can't make people buy them.  Suggest, remind, nag, yes, but they can't be made to buy.  But still, the books are there, right where they can't be missed.  They're there in such quantity that they aren't likely to sell out (and if they do sell out, the promotion department goes into overtime).  And if you build it, usually, they will come.  A good number of them anyway.

But what about books with lower advances?  Well, if the advances are just a little lower, the print run is smaller.  Maybe the display doesn't go right at the front of the store, or maybe it's shared with another book of equal stature, or maybe it ends up on the bottom of a display under that month's lead title.  Maybe it's featured on page two of the catalog, but not the cover.  Maybe there's no TV or radio ad budget.  Maybe it shows up in a house ad rather than having its own magazine ads.  The machine knows that this book needs to make a little money, sell some copies, but not that many copies.  So long as the P&L is satisfied, so is the machine.

At this level, the small publisher simply can't compare.  Not only can't they afford to throw money at electronic media and slick ads, not only can't they position their books in stores, they're at a huge disadvantage getting their books in stores at all.

But what we're described so far covers only the top few percent of a major publisher's catalog.  For the great majority of books, the machine hardly works at all.  In fact, what service it offers is mainly a side-effect of its service to bigger books.  Most books can only hope to surf the wake of the big-machine's passage.

Just to be in the catalog, just to be at the bottom of a house ad, just to have the publisher's logo on the spine offering some endorsement of average quality and professionalism; those things have value.  With those things behind them, it's hard for a book not to sell a few copies.  A few.  Usually enough to satisfy the meager numbers on a P&L.  Usually.

Really, it doesn't concern the machine much.  It isn't likely that anybody's job will hang on the success of a little book with a $5,000, and a major publisher spits out a lot of books like that every month.  The risk on each is low, and what risk there is, is easy to spread around.  One little book is pretty much the same as any other little book.  The machine doesn't care.  Only the author of the little book cares...

Well, they care a little.  Which is why publishers are now increasingly expecting authors to do their own promotion.  In fact, it's a purchasing criteria.  See, traditional publishing has heard about this new thing called the interwebs -- or something.  Anyway, they've heard that Tweety pages and Facespaces are important, and they like authors who have lots of followers and friends.  Because while they understand that social media is now important, they aren't very good at doing it themselves.  That's the author's job.

So for most authors, they're mostly on their own for publicity and promotion.  Does that mean publishers are completely useless unless you're one of the lucky few at the top of the food chain?  Well, that depends on what you consider important, because traditional publisher have one huge advantage that small publishers can't match: the ability to place books in bookstores.

Yes, that door has cracked open a bit.  Small and self-publishers can get print-on-demand books into some of the major distributors that stores order from.  But does that mean they will order books?  No.  No it does not.  If publishing in print books, and selling through traditional stores is your goal, then there's still just one choice that makes a lot of sense.  (Talk to me again tomorrow, this situation is still in flux.)

But if, on the other hand you're willing to go after a different model, if you're willing to look at ebooks rather than print as a primary outlet, or you've got a plan to sell your own print-on-demand, then the picture is much different.  Not only might it be possible to do without traditional publishing's publicity machine, that machine might actually be doing the wrong thing for the non-traditional publishing model.

A Question of Velocity
How can that be?

Well, what do you think publicity is about?  Sales?

When we're talking about traditional publishing, the answer to that question is no.

Well, yes, but...


Actually, it's about velocity.

That's the important part anyway.  Sure, they're hoping they'll sell a lot of books, but to some extent, the number of sales is predestined, by that P&L sheet, by the initial print run, by the publicity budget.  If it sells less than this "destiny," then it's a failure.

If it sells more, it's good, but it means that somebody make a mistake.  It's a mistake which they have limited short-term ability to respond to.  It's a mistake they'll try to correct.  When they print the paperback.  When they print the sequel.  Anything they can do now is just damage control.

What they want to do is sell the predestined number of books very quickly, because that's all the time a book has.  It's only in the stores a short time. The machine of publishing is always running.  It waits for no book.  Each book must march forward at its appointed time, sell its appointed number, and then get the hell out of the way for the next thing.

Everything in traditional publishing is about velocity.  Even best-seller lists, even the sales rankings on Amazon, they aren't about numbers of sales so much as they're about velocity of sales.

Velocity is a necessary part of traditional publishing's business model.  But as a writer, it doesn't have to be a part of yours.  Ultimately, what the writer wants, especially the career writer, is numbers, not velocity.

When you don't have to worry about velocity, the game changes.  You don't necessarily need reviews in major publications.  You don't necessarily need ads.  You can work small, with social media, with readings, with web-presence, with web reviews, with sale-site reviews, with word of mouth.  You've got the luxury of letting sales grow, of letting good work rise on its own merits.

That can be bad, of course, if the book doesn't have those merits, or at least, if it doesn't find an audience.  But that's okay, because then at least you know.  It isn't a matter of some destiny rubber stamped by a sales manager with a crystal ball that doesn't work.  And if it doesn't work, then nothing is lost.  If the book isn't good enough, you still have a change to fix it another day.  If it doesn't find an audience today, maybe that audience will come along later.

In this world, books don't go bad like grocery-store tomatoes.  Time isn't your enemy.  It's your friend.

Books, all kinds of books, need promotion.  But the kinds of promotion that the small and self-publisher needs, even the goals of that promotion, are different than the ones needed by traditional publishing.  The worst mistake a small publisher can make, the worst trap they can fall into, is to dump money and effort in an attempt to emulate traditional publishing's promotional model.

Small publishers and self publishers should play to their strengths, not their weaknesses.  Personal interactions with readers, social media, and small-scale publicity that builds over time, not all at once by brute force.

Leveraging the Numbers
Small publishers also have one other sales tool that traditional publisher can't (over the long term, anyway) match: Price.

Logic would seem to dictate that since a small-source published book might sell less than a New York book, it has to be priced at least as high in order not to make far less money.  But that's not necessarily the case.  It's been demonstrated again and again that low priced ebooks with no publicity can compete effectively with high-priced New York offerings, frequently appearing on Amazon's Kindle best-seller list.  But even if the sales are the same, a cheaper ebook makes for less money, right?

No.  It should be obvious, but it isn't to a lot of writers.  Get three times the royalties, cut the price by 2/3, sell the same number of copies, and you're even.  Get seven times the royalties, cut the price by 5/7ths, sell the same number, make twice as much.  Even if you sell half as many, you still break even.

The point is, the small-source publisher has lots of cost-based promotional room to play with if they don't get greedy.  Probably you've heard the old story of the monkey and the jar.  The monkey reaches into a jar full of treats and takes a whole handful, making their fist too big to take out of the jar.  If they just took the treats one at a time, they could empty the jar, but because of their greed, they get nothing (not even their hand).  That's how too many self-published writers and small-source publishers approach pricing.

That doesn't necessarily mean cheaper is always better.  It just means you can discount over traditional publishers with no strain at all, and you have lots of room to play beyond that.  There are many options and strategies open to you (for example, making the first book of a series very-low-priced or free, while putting the rest of the series at higher price points).  Don't hamstring the strongest promotional tool at your disposal because you're locked into obsolete ideas about pricing.

Okay, this post has run long again, leaving me with two remaining functions provided to writers by traditional publishing: copyright enforcement, and protection from lawsuits.  We'll save those for another post, coming soon.

Stay tuned.

Thursday, September 2, 2010

What Do Writers REALLY Need?

Steve writes:

In an article in the Huffington Post, writer Philip Goldberg champions writers continuing need for publishers in the ebook and print-on-demand (POD) age, where self-publishing has become an attractive and available option.

His premise is based on two main points.  The first, that writers need advances.  The second is that writers need editing.  Here's the link so you can read the article yourself if you'd like

I don't totally disagree with what he has to say.  There are some valid points in the article, but I think they're used to support a very flawed conclusion. Traditional publishers offer many things in their deal with writers.  Some of those things we'd rather not have.  Some we might want, but don't really need.  And some we definitely need, but publishers may not be the only, or the best, way to get them.

I think it's important when thinking about publishing these days to deconstruct it and try and rebuild the system from scratch. Just because we need Thing-A and Institution-B does Thing-A in the current system does NOT mean we NEED Institution-B unless Institution-B is the BEST and most cost-efficient way of doing Thing-A. This applies strongly to both of his points.

Let's go to point two first, that writers need editing, since this is far-and-away his strongest argument.

And actually, I'm going to skip to the past part of the second point, just to get it out of the way...

The need for editing, fact-checking, etc. in general applies much more strongly to non-fiction books than to most novels. Sure, novels need editing and fact-checking as well, but if a novel trips over a fact it's usually just an embarrassment (and usually one that most readers will completely miss). If it happens in a non-fiction biography of a contemporary person, then you might just have a lawsuit on your hands, or at least something that necessitates (as has happened several times in recent years) a recall or cancellation of a book.

In fact, in general the requirements for a non-fiction book are so much different than the requirements for novel that I'd argue that the two are FUNDAMENTALLY DIFFERENT PRODUCTS. In the physical-book world, the two share so much infrastructure and production commonality they they're usually done by the same companies in overlapping facilities. But other than that, there isn't any logical reason to cram them together than there is to combine a company that makes corn-flakes with one that makes soap-flakes, just because they both come in upright cardboard boxes of similar proportions.

Now, many of us, maybe most of us, will be writing non-fiction books at some time or another, but I'm assuming that MOST of the writers reading this blog consider themselves primarily novelists. In any case, I'd simply say that the lesson here is not automatically to think the same assumptions apply to a non-fiction project as one of your novels. They are different beasts, and as the market evolves towards ebooks and POD, those differences will become far more obvious and important. Consider their requirements on their own merits.

Now, getting back to the first part of the second point (confused yet?), I think he's made a very good case. But it isn't a case that we need a publisher, it's that we could almost always use some editing, and those two aren't the same at all. Books aren't edited by publishers (speaking of the company, and not the job-title here), they're edited by editors, and editors are just employees of publishers. Editors could be employed by anyone: themselves, the author, a temp agency, the Geek Squad at Best Buy. It doesn't matter. They're still editors, and if they're good ones, can still provide the same function. A publisher is NOT required.

And any of us who have been around the business for a while know plenty of good editors that we've enjoyed working with who are currently out of a job (or at least, an editing job).  If I want a good, experienced editor, and I'm willing to pay the right price, I'm certain I can get one.

But let's deconstruct this some more. What IS an editor? What is a GOOD editor? What element or elements separate a good editor from the average Joe/Jane on the street? Is it a matter of education or experience? Talent? Love of books? To be honest, I'm not sure, and I'd be interested to hear what people have to say about it.

The article describes a typical copy editor as "an underpaid English major who loves books." But that describes a lot of the baby editors most experienced writers have dealt with as well.  For those of us a of a certain age, it can be disconcerting meeting our editor and learning they're young enough to be our child (or grandchild!).

Yes, if they work for a New York publisher, they presumably have had the benefit of training and advice from more experienced editors. Maybe they're worked on many books in a support capacity before stepping up as a solo-editor. Presumably even a typical junior editor has had the experience of doing a good number of books (though SOMEBODY has to be their first book, and it might be you).

 Still, I keep thinking of that basic description. Underpaid (or underemployed) English Majors who love books aren't hard to find in most any town in the country. In fact, there's almost always an excessive supply. If you need an editor, how difficult would be be, really, to recruit and train your own?

For that matter, what level of editing is necessary for a given writer and project? Does a person who has written a dozen novels or a hundred need the same level of editing as one publishing their first book? (My thought is, usually not.) And if an experienced author needs less editing, do they need a full-fledged editor at all? Maybe what they need is that copy editing (I sure do!) and fact checking, plus an objective voice to spot weaknesses in the work. Maybe all they really need is a good first reader, or a couple of good readers. Is it even possible that, at some level, a strong and involved editor working with an experienced and confident writer becomes more of a hindrance than a help?

So, I agree that most all of us can benefit from editorial assistance. But I think it's quite open to debate what form that assistance should take for a given writer or project, or where it can (or should) be obtained.

Now, let's go to his first point: Advances.

As writers, we're used to advances, and who doesn't like getting big checks (commas!) in the mail? But do we NEED them? I'm not so sure, and in fact, I think we might just be far better off without them.

First of all, what IS an advance, anyway? It's a loan. It's a loan against presumed future earnings (or actually, royalties on future earnings) on a book that the publisher has purchased rights to. In general, the terms on this loan are pretty terrible. In general, the term where the bulk of the loan will be repaid (or not) is generally no more than a few years, often not much more than a year. But during that period, we can expect to pay no less than 90% of earnings on the book.

Okay, okay, that's not fair. The total income on the book isn't yours, and never would be. The publisher is taking their production expenses, retail mark-up, overhead, profit, etc., out of that 90+%, PLUS the usual interest and cost of a loan, so maybe it isn't as bad a deal as it seems. But actually, what kind of deal it is really depends on the book.

We presume that the publisher is smart enough, based on their long and vast experience, not to advance more than they expect to make on a given book, but that isn't always the case. We know that a lot of books don't (at least as far as our royalty statements are concerned, we really don't know about the publisher's internal P&L) ever make a profit. The loan isn't repaid.

Of course, that happens with conventional loans too. Some loaned money doesn't get repaid. There's risk, and presumably the cost of that risk is generally understood and built into the cost of the loan. (Not always, as the current financial crisis shows, but it SHOULD be that way, and most of the time, it is.) Some loans will not be repaid, but enough will, and with enough associated interest and fees to make the system profitable.

So, if your book earns back its advance, and not much more, than maybe it isn't a terrible deal. If your book doesn't come close to earning out, then quite possibly it's a GREAT deal. But the more successful the book, the more questionable the deal becomes in some ways. The more books you sell, the less significant the production costs and overhead become. Printing, warehousing and shipping costs should also benefit from scale. But you're still getting charged a relatively huge rate against the income you're generating.

Worse, while the advance money presumably shows up before the income stream starts, royalty income is often long-delayed. The nature of modern publishing is that the fate of most print books is decided within a few weeks, or at most a few months after it hits the shelves. But the byzantine nature of the publishing and bookselling business is such that the income may lag YEARS behind. The publisher loans you money on the front side, but on the back side, you're loaning money to THEM, and the writer is STILL paying a high interest rate on every bit of return!

That's probably part of the push amongst established best-sellers for huge advances. (Sure, there are a LOT of other factors, but...) I'm assuming that agents, and may authors, have decided that it's a far better deal to get the money up front, even if you know the publisher is going to lose out on the back-end of the deal. But that moves the problem around, because when the publisher loses money on a project, it comes from somewhere else, probably a worse deal for smaller writers who don't have as much clout.

But let's look at the other end of the spectrum. There are lots of reasons a book doesn't earn out, and as I said earlier, you'd presume that the publisher manages this risk and would never INTENTIONALLY buy a book they don't expect to pay its advance back. Unfortunately, I don't think that's always the case either. I think publishers buy a lot of "quality" books that they don't expect to earn out, books that feed someone's ego rather than the bottom-line. I think they sometimes buy vanity projects from successful authors that are far less commercial than their typical projects. I think they sometimes buy bonehead books that don't have a chance-in-hell of commercial success because somebody in the company had the clout and ego to push it through. Maybe I'm overestimating how often these things happen, or how significant the losses are, but I'm pretty confident they DO happen.

And when they do, the books have to be balanced somewhere. It won't be off the best-seller with the inflated advance. No, it will probably be in the big, gray, middle-area where most of us live.

Whatever is going on, publishers have the ability to slide risk (and profit, and loss) around a vast range of books, both in terms of volume, profitability, and type, and while I think it's safe they'll do this in a why to offer maximum benefit to themselves, there's no reason to assume that they'll do it in a way to benefit YOU, as an individual.

There's also the issue of how "advance" the advance is, anyway. If you're getting money for a book not yet written (either one you sold on proposal, or a follow-on book in a multi-book contract), that's good. At least some of the money may show up well in advance. But we know, publishers have always tried to minimize this, and they're squeezing it harder than ever. Smaller advances, broken up into more and smaller payments, coming later in the publication cycle. Even when the trigger for a payment occurs, we have to wait. Even assuming business-as-usual, the check may not be paid for weeks or months. It may have to clear through an agent. Our banks may sit on the checks for two weeks before releasing the money. If you see actual money within two months of "on signing" on "on delivery," or the dreaded and vague "on approval," then its a red-letter day.

If things AREN'T as usual, you may not see the money until months or even years later, if ever. We've all been there.

Okay, let's just assume I went too far up the crazy-tree on that rant and put it aside. Let's just agree that it's a loan, and that the terms are, at best, somewhat somewhat questionable. Now, in what business school do they tell you go borrow money for your business from the first loan provider that makes an offer, and not even INVESTIGATE other options? Yet, that's exactly what we do when we take an advance. At least we (or our agents) have a chance to negotiate the terms, but we all know that our ability to alter them is pretty limited. The basic assumption is fixed, even that we take the advance. From what I've heard, several successful authors have tried to negotiate away their advances in return for a larger and more immediate royalty payout, and I've never heard of a publisher welcoming those terms. They LIKE the way things work now. They WANT you to take an advance, so they can game the system the way they always have. They just want the amount of the advance to fall within a narrow range provided by their own P&L.

So: Loan required. Terms of loan only marginally negotiable. The only loan provider is the same guy who sets the terms for all other aspects of the agreement and reports all the costs and incomes to you. That describes a company-town setup to me, and company towns are rarely favorable to the workers.

For pretty much every writer I know, and I suspect even for people at the top of the field, publishing is a world of feast and famine. Even for people at the top of the game, it seems to be long stretches of nothing between large and unpredictable paydays.

That's just not a good way to do business. It makes it difficult to plan, and difficult to manage cash-flow. Failure to manage cash-flow can get VERY expensive, as you're often forced to borrow MORE money at outrageous fees (and yes, late fees on your utilities and overdraft charges at your bank are just a VERY expensive way of borrowing money). It makes it even harder to keep health insurance in place. It makes it hard to make cash-outlays (both personal and business) at the most advantageous times, under the most advantageous terms. And for all but the most disciplined of us, I think there's a natural tendency to go splurge-crazy when the big checks show up.

Currently, publishing is all about what my friend Kristine Rusch has quite-wisely called "the produce model." When we write something, it's produce. It's polished up, put on the shelf, and it either sells quickly, or not at all. After a few weeks or months, it stinks up the place. You sell what you can at huge discount, then dump the rest and move on to the next fresh thing. This is fine for publishers, who have no shortage of fresh things. Not so good for writers who usually would be content to ride the slow-boat of income as long as it continues to sail.

The more we move into ebooks and POD, the less we're forced to be tied to that model. We can write a book in the anticipation that it will earn money (a lot, or a little) over a long time. Write more books while still getting income from the first. Write sixth and tenth books while you still get a little income each from ALL your earlier projects. The more you write, the quicker you write, the smoother and more predictable your paydays become. If you need to borrow money, shop for a loan. Don't take whatever deal the company store will offer you.

Yes, we'll miss the big checks. Yes, it's wonderful after a long time as a starving writer to get your first advance check. But in the big picture, do we NEED that advance? Probably not. Would most of us, on most days, be far better off with a smaller, steadier flow of cash? I think we would.

This post originated as a message I posted on a private writer's message list, and has been revised slightly for blog use.  But in doing so, I've thought of several additional important functions for writers currently served by traditional editors, and which were not covered in Goldberg's post (including the one I think is most compelling of all as a reason to stay with traditional publishing).  After some thought, rather than appending discussion of them to this post and muddying the waters, I've decided to deal with them in a follow-up message.  Look for it soon.  - Steve