Over the last six weeks or so, we have examined the various aspects of the publishing industry, and assessed how the different parts are functioning (or in most cases, malfunctioning) in the face of the changes brought about by the internet.
As any travel agent will tell you (if you can find one), the internet is an unstoppable force which revolutionizes every single business it comes into contact with. In publishing, change hasn’t seemed as quick, but the internet has been quietly eating away at all the pillars of traditional publishing.
The first big change was the advent of online shopping. Amazon revolutionized the way people buy books.
And while people might have missed the personal touch in their local bookstore, for most this was trumped by much cheaper prices, the enormous selection of books, and the convenience of having them delivered to your door (often for free).
Obviously, this has stolen a lot of business from booksellers, but it has also chipped away at the notion of “curated selection” – that someone else would decide what books you could buy. If it’s in print, then Amazon sell it. If it’s not, then they probably have a used copy.
People often refer to “gatekeepers” in traditional publishing, usually referring to agents and editors in terms of what books got published and what didn’t. But there are lots more “gatekeepers” in publishing than that, as a book must get “sold” several times before it gets near a reader’s hands.
Marketing teams and salespeople decide which titles to push hard to booksellers. Publishers vie for coop spots in stores, but only for certain books. And even whether the book is “spine out” or “face out” is for sale, and publishers will decide which books get what kind of backing.
At the tip is the bookseller who decides which titles to stock and in what numbers.
All of these gatekeepers have less power to curate when people are bypassing bookstores and choosing the convenience, price, and near-infinite selection from Amazon. When you can buy everything online, that curating power passes to the readers.
Freedom of Information
The linking up of computers across the world, tied with the ability of people to share all kinds of information instantly, and make it universally accessible and searchable, has changed the way everyone in publishing does business.
Booksellers can access up-to-the-minute sales data in all their stores. Publishers can get a reasonably accurate picture of how all of their titles are doing at any given time. And writers can get some idea of how their book is going to perform before it even goes on sale.
However, this has intensified the problems that publishers have with returns. Now, more than ever, a book is under pressure to perform in its first few weeks on sale. Titles are no longer given an opportunity to slowly build an audience.
Booksellers know straight away which books are selling and which aren’t, and can return the under-performers and replace them with newer titles from bestsellers every week.
As I have detailed before, returns are killing publishers (and the environment). The amount of returns must be calculated into the cost of producing a book, which has knock-on effects in how much a writer gets paid for each book.
E-books have been around in one form or another since 1971. In the 1990s, the internet made transferring files a lot easier, but e-books were still mostly limited to niche subjects, scholarly texts, or technical manuals.
This all changed in November 2007 when Amazon launched the first Kindle. Despite industry skepticism, it sold out in five-and-a-half hours and remained out of stock until April 2008, while Amazon frantically produced more.
By April of this year, Amazon announced that they were now selling more e-books than all print books. Traditional publishing played down these figures, (correctly) pointing out that this included a lot of cheaply priced titles.
However, this misses the point. E-books are outselling print books! The cost of producing e-books is much lower, so it makes sense to charge less for them. And, publishers have much higher margins on e-books. The only reason publishers are pricing them so high is to both to shore up print sales and to put a check on Amazon’s power.
Plus, this matters little to self-publishers, who make more royalties from a $2.99 sale than they would through a publisher at $9.99.
Any agent or editor will tell you what the effect of accepting email submissions has on the number they receive.
Before the internet came along, writers had to go to the trouble and expense of printing something out, buying envelopes and stamps, hunting down the address of the agency or publisher, and then sticking it in the mail (along with an SAE), and waiting.
Now with email, you can send your manuscript to every agent and editor in the country and it will cost you nothing. Agents and editors have to expend significant resources and manpower just to deal with the fire-hose of submissions.
Usually the first reader is an intern who may or may not have the skill or judgement to assess your submission accurately. This isn’t a complaint, it’s a fact: most agencies simply cannot afford to have full-time, qualified, experienced agents reading all submissions. If they did, they would go out of business.
But a side-effect of that is many good writers get lost in the shuffle. Until recently, they had no real viable choice but to press on and keep submitting and keep hoping.
But now they have another choice: self-publishing. While self-publishing has always existed, it only become a realistic option for most writers with the boom in e-readers.
For the first time, writers who couldn’t crack traditional publishing could publish themselves and match the distributive power of a large publisher. While they would still struggle to get print books into bookstores (not impossible, but hard), they could make up for those lost sales with the increased royalties from digital.
As e-books exploded towards the end of 2010, and that growth continued into 2011, many trade published writers began to realize that they could make more money from self-publishing.
If we take a typical advance of $10,000, that’s all that most trade-published writers will see from that book. However, if they self-publish, and price at $2.99, they only need to sell 5,500 copies to cover costs (assuming a production cost of $1,000) and beat the advance.
Any copies sold over that amount and they are ahead. And e-books never get pulled from the shelves.
In February 2011, e-books became the top-selling format, capturing 29.5% of the market. This was a watershed for many writers, and even those with successful careers in trade publishing are running the numbers and seeing what they could make.
Even more writers are continuing with their traditional contracts and digitizing their backlists, which have long fallen out-of-print. And once writers do that, and realize how much they could make, their traditional publisher has to work harder (and spend more) to keep them happy.
The Case Against Traditional Publishers
A traditional publisher brings a lot to the table: expertise, experience, editing, marketing, and design. However, these are all things that a writer could outsource for a flat fee (and publishers often do themselves anyway).
The USP of a trade house is their ability to print lots and lots of books cheaply and get them into lots and lots of bookstores. That’s the real reason a writer hands over a huge chunk of their royalties to a traditional publisher.
In other words, when everyone is buying print books online, what’s the point of a trade deal? Anyone can have a print book listed on Amazon.
And when everyone is buying e-books instead of print books, why would you sign away a percentage of your royalties for producing one? If you don’t want to do the work yourself, there are many companies out there who will take care of everything for less than $1,000.
To those who say they can’t afford the upfront cost, consider this: can you really afford to give a publisher 52.5% of your royalties forever? For something you could get done for $1,000?
Now, we aren’t at this point yet. The majority of sales are still in print, and the majority are off-line. But it’s coming, and faster than you think.
Why They Will Go The Way Of Travel Agents
Travel agents never thought they would go out of business. They always thought the public would require them to sift through all the information and find them the best packages.
They thought that airlines, hotels, and resorts didn’t want to deal direct with the public and that they public needed the reassurance of an expert to guide them through the process.
It turned out that travel agents weren’t such experts after all. Flights were often subbed out to charter airlines with terrible service and awful punctuality. Hotels that were so pristine in the brochure turned out to be cockroach-infested building sites.
Once online booking engines and review sites became popular, people could search for the cheapest deals (not the one the agent was getting kickbacks for), and read what other people – real people – thought of the products. Travel agents were blown out of the water.
Publishers have had a near-monopoly on the production and distribution of books. Not anymore. But they are resisting change, and succumbing to a number of fallacies.
They think people want them to curate selections. They think people rely on their expertise. They think people are willing to pay extra just because one book has a certain logo. They’re wrong.
Aside from certain imprints in certain genres, the average reader doesn’t know – or care – who published a book, all they care about is if the book is good or not.
If a self-publisher has a good cover, good editing, good formatting, good blurb, they are indistinguishable from a traditionally published book.
The only real difference is that a trade publisher, with all those overheads, will never beat a self-publisher on price.
I don’t think trade publishing will disappear completely. Travel agents still exist, but in highly specialized niches.
I see the ultimate future for trade publishers in a similar role: dealing with print as a subsidiary right – spinning off print deals for the more successful self-publishers – and producing beautiful, limited edition hardbacks for collectors and super-fans.
I think smaller presses have the ability to react to change quicker (and they have), and will prosper. But for the major publishers, the future is bleak. Some will survive in one form or another, but many won’t.
In case you missed the news over the weekend, I released another e-book: Transfection – an old-school science fiction short story. You can read all about that here, and read a free sample here. Tomorrow, I will be hosting another fun competition. Don’t miss it!