Assumptions and Disintermediation

“To think that the publisher’s plan for the book doesn’t include all forms is mistaken. The cost of producing a book–editing, acquisition (ie paying the writer and his or her agent), design, marketing, overhead–is spread out over all the forms, the hardbound, the paperback, the ebook, the audiobook, large print, etc.”
— Author Janet Fitch

“You also have to take into consideration the price of the hardcover. Yes, it’s cheap to make a digital book but it’s expensive to present a book in hardcover.”
— Roxana Robinson, Authors Guild President

“Their “total pie” is really just a piece of the pie. “Total revenue” on an ebook is only part of the “total revenue” for a new release book.”
— Michael Cader

Here are three quotes framing the industry’s treatment of digital as but one part of an overall picture. The statement is true but (and here’s the kicker) it’s only true for the author, not the publisher unless the author allows it. The assumption that a book is one product with varying delivery mechanisms is wrong. It’s actually three products. I know this because the only way a publisher can have those full range of offerings to spread costs across is if the author sells them those rights. Separately.

There are three basic sets of rights involved (many more if you get all granular down into translations, overseas markets, what have you. I think it was Lee Child who said Amazon represents something like 11 of the 97 markets he sells his books in). At its root, there are three basic products the author is selling as a bundle: print rights, digital rights and audio rights. Everything else, for the most part, stems from these three forms. The question I have is why do so many writers feel it’s not only necessary to sell them as a bundle to the same entity, but to operate under some illusion that it’s not even a bundle at all? There is no reason whatsoever (other than publisher obstinance) why you can’t sell the print rights to one place, digital rights to another and audio rights to a third. Not one.

My take on this has been pretty clear; I do not believe inextricably tying print and digital together is the correct course of action. Further, I absolutely do not want the same entity handling both my print and digital products. That will inevitably result in handicapping one format to benefit the other, as many publishers are doing right now by trying to stifle ebooks to some degree in order to support their print infrastructure. It doesn’t support print because it doesn’t address the online commerce issue which is what’s really hurting bookstores. And it damages the growth potential of your digital business by anchoring it within the far-more-expensive print cost structure. Newspapers cut their own throats by trying to do this exact thing.

I understand why publishers would want the full range of rights for a book, and that made some sense when print was dominant to the point of largely being all there was. What I don’t understand anymore is why writers would still want one entity to have all those rights? Sell the print rights alone and say this is your one job, focus on generating sales for print only. Do the same with digital (or handle them yourself).

Publishers won’t willingly go along with this but tough. Don’t give them the option unless they’re paying a premium for the full bundle. But to accept contracts that are tangibly identical to what they’ve always been with potentially extremely lucrative ebook rights thrown in at largely no additional cost is just not smart. Writers need to quit assuming that a “book” is one product in multiple formats and see it for what it is; multiple products, each needing a different cost structure and level of expertise to properly exploit. Stop just tossing digital rights in with a deal from a company with print expertise. Likewise, don’t toss print rights into a deal with a company with digital expertise. Find the best party for each specific product (or do it yourself).

The buzzword of the 21st century is disintermediation. Bundled arrangements produce inefficiency now. You’re willingly undercutting yourself by selling all your rights to one entity. There’s also the matter of rights reversions. If a publisher is producing print sales for me but their digital sales are lagging, why should my digital rights not have its own separate threshold for reversions? If this were the case, a publisher couldn’t effectively hamstring one format to help another without risking losing the rights to that format. And vice versa, if digital is booming but print isn’t producing, those print rights should revert on their own merits without regard to the performance of other formats. Publishers will hate, hate, hate this, which is all the more reason why we should demand disintermediation of different categories of rights within any publishing contract.

The next writer who so easily spouts the line that the publishers’ plan is spread across all formats should stop and think how that can even come about. They can only do it if you willingly sell them all those rights as a bundle. Your choice to sign a contract like that is what creates an environment where these divergent products are intertwined. It’s not a foregone conclusion out of necessity but a willful business decision by you. And it’s very likely not even in your best interest or the interest of maximizing revenue across all formats. Stop assuming and start looking at what’s actually possible. I think you’ll find things are no longer as the industry at large would like them to appear to be.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

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Published in: on September 25, 2014 at 11:58 am  Comments (5)  
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A Hazy Future Can Make For Strange Bedfellows

Let me start by saying I like Mike Shatzkin. I see his work as a view from the other side. He’s very much entrenched in the traditional worldview but, unlike some, that doesn’t mean his thoughts are ignorant and should be discounted. Certainly, he falls into some of the same traps of assumption and false narratives that others do, but who involved in following any of this and voicing opinions on it doesn’t occasionally, in some form or another, including myself. I find Shatzkin to be a fairly vocal critic of publishers. Certainly, his point of view can sometimes be very Inside Baseball, as it were, but there’s value in seeing and understanding that point of view. Everyone on all sides have reasons for what they believe, and I’ve always thought the underlying reasons for those beliefs are more important than the beliefs themselves. That’s why I tend to be far more harsh on people voicing opinions based on faith rather than fact, assumption over analytics. You can’t argue with someone who has no sound basis for what they believe. Logic doesn’t work on people whose beliefs are formed without it.

Anyway, here’s an article by Shatzkin from back in May where I think he asks four very pointed and cogent questions, not only about the future of publishing, but what the nature of that future will be. I’ll first state the question he presented, then a short quote from Shatzkin on each point before expounding in my own rambling way…

1. How persistent an activity is immersive long-form reading?

“As my generation is replaced with digital natives, a decline in the market for novels would seem to be a very likely consequence. Or, at least, novels as we know them now.”

I agree to a point. The novel, perhaps more than other types of writing, fit the form of the printed book extremely well. But if it was the pinnacle of the form for fiction, digital “books” open up new channels of possibility with the potential for new forms to emerge. I am confident the novel in its traditional form has legs, be it digital or print. But I’m not as convinced it will remain the dominant form for fiction in the long run. What it will be ursurped by, now that’s a question I’m not sure any of us can answer at this point.

2. How persistent is the demand for printed books for long-form reading?

“My hunch is that ebooks will continue to take share from print for long-form reading, in fits and starts, but inexorably.”

I’m not going to call it a hunch, I’m absolutely certain digital will take share from print over time. I think hardcovers will transition into a boutique market, likely a larger one than what has developed for vinyl albums, but a much smaller niche than it maintains today. I think trade paperbacks have a niche of their own, largely because of the efficiencies and portability of POD technology. This niche will be larger than the hardcover one, cheaper and less ornamental but, however limiting it may be, paper is a great form for static work. And I suspect the conceit of books used basically as furniture and/or expressions of your personality may hold on longer than widespread numbers of people actually reading on paper. At the end of the day, though, I think digital is going to account for 85-90% of the industry’s sales in the not too distant future.

I have one caveat to this, it’s dependent on attracting younger readers and that’s dependent on being available when, where and for how much they want. The only way I can see print maintaining anything close to even 50/50 market share is if we all fail to bring in younger readers, print sustains through the older audience and the industry as a whole contracts greatly as that audience dies off (see: newspapers). But for this to happen, it would constitute an epic failure of the big houses as well as the smaller ones, the indies and retailers both large and small. Possible buy not likely.

3. How well do informational illustrated books compete with alternatives?

“My candidate for a Black Swan here is some industrial-strength attempt to curate the vast amount of video and other Internet-based content into ‘packaged’ competition for books that teach skills.”

I can’t say as I disagree with this either. I think it’s only natural that the vast amount of information available at our fingertips will be packaged in such a way as to maximize it’s use and, ultimately, revolutionize the way we approach education. Anybody looking at the mind blowing costs of college these days can’t help but think of it as an area in dire need of revolution. This will not be good for publishers of textbooks, however, who control a vast, extremely lucrative, captive market of students. But as time goes on, it will become more and more apparent that they no longer control any kind of monopoly on information. What’s available to all of us instantly will end up as the death knell of their exploitative business model. Couldn’t happen to more deserving group, either, in my opinion.

Some forms of book haven’t yet translated in any kind of peak form to digital alternatives. But it’s only a matter of time before they all do. The technology isn’t just going to stop progressing at today’s level. It will keep getting better and better.

4. How much of the creation and selling of books spreads beyond the book business?

“I’m sure that in less than five years every multi-million dollar marketing plan will have an ebook component: sometimes free, sometimes freemium, sometimes paid. Over time the businesses that do this work will learn, probably faster than many book publishers, how to use the online discovery mechanisms to drive the attention of relevant consumers.”

Why this isn’t happening more already is a bit of a surprise to me. Despite what publishers may tell you, it’s not that expensive to bring a book to market. Much of their expense comes from the model they developed to do so in the conditions that it developed. Things have changed, barriers for entry are little piles of rubble in most places now. Individual people can and do access this market regularly and to good success. If you’re a company of any size or bankroll, the cost of diving into this type of product is miniscule.

But more than just using them as a marketing add on, I can see all sorts of businesses using digital writings to supplement their brands. You see a business like Chipotle already experimenting with things like short stories on cups and their own miniseries television show released directly to Hulu. Producing entertainment or informational media and distributing that to an audience is no longer the sole purview of media companies. Everyone can be a publisher now and over time, everyone will.

So there’s Shatzkin, a person whose opinions I often disagree with yet I find I’m in near total agreement (to some extent) on these four questions, all of which forward-looking beyond the present day conditions of the publishing industry and it’s nascent battles with Amazon and the digital revolution. Just because someone seems to be on the other side of the fence today doesn’t mean they’ll always be there. Look at the underlying reasoning for why people believe what they do and you may find more commonalities than you expect.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Published in: on August 28, 2014 at 2:51 pm  Leave a Comment  
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Predictions

Prognosticating the future is always a tricky business. Easy to do, far less easy to actually be right. Fortunately, we don’t often call out folks for being horribly wrong in their Nostradamus impersonations after the fact. You can argue maybe we should but relatively few who make public predictions are going to jump all over someone else’s bad ones because they know only too well how many of their own are way off base. What goes around, comes around so don’t go around in the first place.

But predicting things is fun! Hell, I spent 40 or 50 tweets predicting the NBA season back in the fall, then used another 20 to predict the playoffs last month even though my regular season picks were so hit or miss as to be nearly random. The only pick I’ve got left is Indiana winning the title. I also may be the last person not named Larry Bird who’s riding that particular bandwagon, and I’m not too sure Larry didn’t tuck-and-roll his way outta there a while back, too. But if they win, you bet your ass I’ll be doing some gloating. Albeit without mentioning the other dozen predictions I made that didn’t come through, of course.

My point here is take any and all prognostications you see with the biggest grain of salt you can find. Not usually something you see a writer say in a piece about to make a prediction, I know. But I find the value in prognosticating doesn’t so much come from whether the final prediction is right or wrong, it comes from the process of evaluating circumstances and evidence and extrapolating that out to a conclusion. When I read predictive pieces, the reasoning why the writer is making the guess they’re making is more important to me than what that guess is. You could be completely correct with your prediction but the reasoning leading to it could be so flawed as to be useless, or you can be completely wrong in your prediction but dead on in the circumstances leading you there. You have to evaluate those circumstances and how they relate to your individual situation. It’s impossible to know for certain how things will turn out in a complex environment like the publishing industry, but it’s very possible to understand the conditions and act accordingly for your personal ends.

That being said, here’s my extrapolated prediction: book publishers, even huge conglomerate ones like Random Penguin, will be non-existent or so altered as to be unrecognizable as present-day publishers in less than 10 years time. Easy to say, no way to prove. In fact, you can’t even prove I’m wrong at the moment, only after the fact. You can try, and state evidence opposing my viewpoint all day long, if you like, but guess what? All you’re doing is making predictions to try and counter my prediction. The same flaw that makes my prognostication far less than a certainty is also making your counter-prognostication far less than a certainty. So my final word, as it were, isn’t really the point, only a guess as to where things are heading, exactly like your theoretical counter is really only a guess.

What matters is why I’ve extrapolated that publishers are screwed (or why you’ve extrapolated that they aren’t.) Here’s the basis for my reasoning, in five handy points: Hatchette is reportedly trying to reinstitute some flavor of Agency pricing in its deal with Amazon now that it’s prohibition against such is almost up. The other major publishers will likely take similar action as their DOJ-imposed limits expire. What does Agency pricing do? It limits discounting by retailers and raises the price of books. Point one.

One of the major arguments in favor of Agency pricing (and against, to be honest) is that it works to protect hardcover sales and sales in brick and mortar bookstores from ebooks that are “too cheap.” That’s great and all, but ebooks aren’t what’s hurting brick and mortar retailers, online commerce is. Doesn’t matter if someone’s buying a print book or an ebook, if they’re buying it online, that’s a sale a physical store didn’t make. Certainly, ebooks are native to online but trends show print sales are increasingly migrating there, too, for a number of reasons. Online commerce is exposing the inefficiencies of brick and mortar retail in virtually every business that doesn’t ask if you want fries with that. (I also predict it’ll be exposing their inefficiencies sooner than later, too, but that’s a different article.) Does Agency pricing affect that deeper societal trend in any way? No, not really. Point two.

The book publishing industry hasn’t had the classic disruption drop off in sales that all disrupted industries have suffered. Napster and it’s ilk exposed the holes in the music industry’s model and set off the demand for digital music that caused massive, rapid declines in cd sales. (Not that downloading killed cd sales, mind you, consumer demand for digital music did that.) Craigslist (and later, eBay) virtually wiped out newspaper classified advertising almost overnight. For those that don’t know, classifieds were the most profitable advertising per column inch in the newspaper business. The sudden loss of great chunks of it was catastrophic.

It’s tempting to say ebooks were that force and the industry avoided the huge losses. But think about it for a second. Ebooks have been a decided gain for publishers, the extra profits they reap from ebooks have made their bottom lines look better than they should. Ebooks didn’t work against publishers’ interests, they were extra money dropped into their laps. They were the best positioned of anyone to take advantage of this when a market was firmly established. And they did, albeit while bitching all the way to the bank. Ebooks themselves have never been a threat to publishers, so unless they were braindead stupid, they were bound to benefit from them like everybody else. The fact that they haven’t benefitted more from them is something they’ll soon come to regret, I believe. Point three.

Barnes and Noble is circling the drain. We all know it. It’s just a matter of when. I would argue that if not for the college bookstores (a different, less disrupted to-this-point market) they might already by a ghost. They just reported a 10% drop in sales the third quarter of 2013 over the year before. Immediately after, they suffered about a 10% drop in their stock value. This corresponds rather neatly with a recent U.S. Census report that shows bookstore sales in general have dropped by 10% from last year, illustrating that this isn’t a B&N-centric problem but an industry-wide issue. Their online commerce effort is an epic trainwreck. And, they’re a brick and mortar retail store at their core no different from Borders or Best Buy or Circuit City (remember them?) or Blockbuster or any number of other chains that used to be mainstays in strip malls everywhere. Those pressures aren’t going to go away and they really have nothing to do with ebooks or even the publishing industry itself. Higher education is in many people’s crosshairs as a ripe market to be disrupted. When someone finally breaks through, and they will, those college stores aren’t going to be life lining anything. Barnes and Noble is doomed. Point four.

Ebook sales are slowing down. The market is maturing, establishing a ground floor somewhere around 20% of the industry and is growing at a slower rate as its marketshare rises. Now you could argue if that’s even true, given the nature of the data available and the invisibility of many self published works in that data. But what’s not really disputable is that the data we have is unquestionably reflecting traditional publishers. So, while you can argue whether ebooks on the whole are slowing down, you can’t really dispute that they’re slowing down for traditional publishers. On top of that, inexplicably, many of those same publishers seem to be under some impression that this is a good thing. Point five.

So that’s the five elements I see as the present conditions I’ve made my prediction from: the biggest publishers are likely going to try to reinstitute Agency in some form; the results of that will handicap retailers and raise prices in a market struggling with online commerce already undermining brick and mortar retail; we’re still waiting for the classic steep decline in legacy product sales caused by disruption; Barnes and Noble is a dead man walking; and the growth rate of ebook sales for traditional publishers is slowing. Now that I’ve identified what I believe are the current applicable conditions publishers face, I’ve concluded that their long-term prospects aren’t particularly good.

Here’s how I think this goes: Say you’re a big pub CEO and you sit down at your desk one morning to headlines reading “Barnes and Noble files for bankruptcy. Remaining stores to be shuttered.” As you drop your head into your hands considering the 65 different ways this screws you, there’s a knock at your door. It’s Walmart, Target, Sam’s Club and the other warehouse stores.

“We’re so sorry to hear about Barnes and Noble. It’s a terrible tragedy. We’d like to offer our condolences. Here’s a cookie bouquet.” You nod solemnly and they turn to leave, but Walmart stops short, looks to you and says, “By the way, being that we now represent the last mass-market retail space you have, we’d like to have a discussion about the discounts you give us, when you feel better, of course.” He then leaves, closing the door behind him.

Your mind races. “Well, we can probably absorb a bit of an increase in discounting. Maybe we can hire more interns or move to more freelancers.” As you snatch up one of the cookies from the bouquet and start munching, feeling somewhat ok, your office door suddenly flies open and in storms Amazon. “Hey bozo, guess who’s responsible for 70% of your business now? I’d suggest you get ready to open that checkbook of yours or we might happen to have some technical difficulties with your buy buttons. See ya, loser!” Amazon storms back out, slamming the door so hard the picture of you and a smiling James Patterson falls off your office wall.

“Ok,” you think to yourself, “maybe if we cut advances by 30%, we can get through this. We’ll be alright.” Just then, there’s another soft knock at your door and a finely dressed, lawyerly gentleman strolls in. “Hi, I’m from the Independent Bookstore Alliance. We represent 1500 independent bookstores in the U.S. Given as we are now the last bookstore shelf space in the country, we’d like to discuss the types of discounts you can give to our members at your soonest possible convenience.” He softly lays his business card on your desk, next to the half-eaten cookie from the bouquet, and leaves.

You lean all the way back in your fine $10,000 Italian leather desk chair and mutter to yourself, “Oh fuck…”

Or something like that. B&N’s gone, brick and mortar bookstore sales start dropping 10-20% year-over-year, quarter after quarter for years until what was 50% of your business is now 15%. What’s worse is that the sales you’re still making, both online and physical, print and digital, are less profitable than they were before due to being squeezed by retailers of all stripes. Ebook sales growth, while inexorable, isn’t keeping pace with the losses that are mounting. It’s the book industry version of the print dollars to digital dimes problem. On top of that, you’re losing writers from two camps: the upper echelon superstars who you’re not producing results for like you were before, and the entry level writers who scoff at the increasingly miser-like contracts you’re foisting on them. Midlist writers would likely join them in the exodus, too, if they hadn’t already fled in large numbers by this point. Both groups of writers are moving on to either do it themselves, to better adapted publishers or to some new concoction of collaborative publishing or author collectives that cut you out altogether.

At that point, there’s two choices: change to become a different kind of company, one that can handle these new market realities where you and your ilk are no longer at the head of the food chain (a process you may already be too late for) or fade to obscurity in the corporate sell-off/bankruptcy/vanity buyer process that has chewed up most newspapers. Either way, what publishers are today, and especially what they were 10 years ago, will be largely no more.

So that’s my theoretical timeline. Am I right? I don’t know, ask me in 10 years. What I do know is that there are likely more protectionist actions coming from publishers that don’t actually protect anything. I do know that Barnes and Noble is struggling mightily from the same reasons in the same ways other similar businesses didn’t survive. I do know publishers have lost a great deal of their control of the distribution system, and with it, their principle means of discovery and a chunk of their leverage with retailers over discounts. I do know, for whatever reason, ebook sales growth is slowing for traditional players and maybe everybody. I do know that writers have more options to make it to market than ever before, many of them outright replacing the essential positions publishers were anchored in. Whether all this means what I think it means is open for debate. Whether you agree with all of my five points, a few of them, just one or even none at all, there’s elements within each that can have profound impacts on the choices we have to make as writers.

Maybe you don’t think publishers are in serious trouble but you agree B&N is, so you set up a short-sell deal on their stock. Maybe you agree publishers are heading for a period of great upheaval and don’t want to sign an open-ended contract with one, or go with a publisher willing to work with contracts with a 5 or 10 year expiration date. Maybe you’ve been considering striking out on your own and the struggles of publishers are the last push you need. Maybe you think reinstituting Agency will protect the print side of the industry and put your efforts there. Maybe you agree B&N is toast but you think it’ll lead to a resurgence of independent stores rather than the start of a deep brick and mortar downfall and seek out a publisher better integrated with that community. Interpretation is in the eye of the beholder and should always be based on achieving your own individual ends. Making my prediction led me through a long cycle of circumstances, patterns and considerations to reach what I think may happen. Reading this likely led you to consider the same things, even (maybe especially) if you were breathlessly hollering at your screen how full of shit you think I am as you read. Whether I’m right about the end result or not doesn’t really matter. There are several factors in play here that will impact what I ultimately choose to do, and that’s the real value in predictions. It’s not a right or wrong thing, but a process of understanding and examining smaller elements in order to extrapolate out to a conclusion. Progress doesn’t just happen in big, sweeping pronouncements. It occurs from within the smallest details. And nothing you choose to do will be very effective if you don’t have a better understanding of those diverse yet interconnected details. I predict that’s the case, anyway.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

The Death Throes of a Small Town Newspaper

Regular readers of my ramblings here will recall that the trials and tribulations of my hometown newspaper, The Cecil Whig, was a regular topic of conversation a couple of years ago, before I moved out of Cecil County and, honestly, I finally lost interest in watching what was a staple of the community I grew up in crash and burn as spectacularly as The Whig was.  It reached the point where I simply had to avert my eyes from the carnage. 

Well, in the time since I last mentioned anything going on with the formerly-distinguished, nearly two century old newspaper, things have actually gotten worse.  The Whig has now dropped from printing five days a week to three, a shift, I’m told, was horribly unpopular with many of their regular subscribers.  More than that, layoffs have continued periodically, including another region-wide purge reportedly shedding somewhere in the neighborhood of 80 people from Chesapeake Publishing’s (The Whig’s immediate parent company) payrolls in the past few weeks.  Their long-standing office in Elkton is up for sale, nearly vacant as it stands after the printing facility that operated from there was shuttered nearly two years ago.  The office itself, where something like 200 full time workers were employed not that long ago, has been pared down, unbelievably, to less than a dozen, reportedly.

With the sorry state of the newspaper industry these days, what’s happened at the Cecil Whig isn’t really surprising.  It is, however, difficult to watch a once-venerable institution be picked to pieces like this.  Sometimes, I almost think bankruptcy and an outright shutdown would’ve been preferable to this death by a thousand cuts.  At least that way, the paper’s legacy would’ve remained relatively intact.  When the doors do finally shut on them now, will anyone really miss the wispy, hollowed out shell that was left during its final days?  I kind of doubt it.

At this point, it serves no purpose to rehash what went wrong.  Like many in the newspaper industry, good decisions in the face of technologically driven change were virtually nonexistent at Chesapeake and The Whig, overwhelmed as they were, and continue to be, by the poor choices of those who never really came to grips with the disruption that shredded their business model.  None of that really matters anymore, with the Whig down to a skeleton crew, soon moving to a smaller office, then, very likely, oblivion sometime later.

No matter how difficult times have become for them, it does seem like the hits just keep on coming, taking away a little more of what was once their sole domain. Earlier Today, I read this piece on the Cecil Times website about a battle going on within the Cecil County government about where its sizeable (for a small town) legal ad business will go in the future.  Legal ads are one of the last bastions of classified revenue still flowing into newspapers’ formerly dominant positions in communication, made so by local laws that generally require publication in a region’s “paper of record.” It’s also one I happen to believe is in dire need of reform. Frankly, in a time of shrinking tax receipts and shriveling municiple budgets, there is very little justification in sending good money after bad by continuing to pay monopoly rents to a fading, formerly only-game-in-town newspaper business. According to the Cecil Times piece, the county government spent upwards of $150,000 on legal ads with the Whig last year, a sum that strikes me as massively wasteful, particularly considering how the newspaper itself has continued to decline in relevance and readership.

A few years ago, when I was publishing Pet Companions Magazine, I put out about 20,000 monthly issues for a year between 32 and 52 pages each, with a full color glossy cover and my print bill for the entire year was less than a third of the county’s legal ad bill. The glossy cover alone accounted for about a quarter of that amount, too. So, what’s stopping the county government from publishing its own legal ad magazine monthly in regular 8 x 10 size or so on newsprint? They could put out 20,000 to 25,000 a month and bulk drop them for free everywhere in the county where the Whig is available. They could also post everything freely on the county’s website, provide a pdf file free for download or, if they’re especially adventurous, put in a little extra effort to format it into an ebook and make that available freely as well. The county could pay someone to compile the info, typeset it, layout the publication, get it to a printer, have the finished print run delivered, bulk drop the entire county and create the pdf and ebook files for, at most, half of what they pay The Whig for position in its rapidly thinning classified pages, if not significantly less.

As many have learned over the past few years, it has become much cheaper and more efficient to communicate directly with the public than to go through the traditional path of an intermediary like newspapers. With the local paper losing its influence, we see more and more advertisers, writers, and even readers circumventing the old ways altogether. With the crush of needed funds in localities all over the country, it really doesn’t track any longer for governments to pay exorbitantly for newspaper advertising. Crucial government information can be passed along to the public in any number of formats, print and digital, without that traditional large expense.

The fight in Cecil County shows another interesting issue with governments supporting those who’s job it is to cover them with advertising revenue, as well. Cecil County Commissioner Diana Broomell obviously has a problem with the content of The Cecil Guardian, a competitor of the Whig who put in a much cheaper bid on the legal ad business and got legal approval as a qualifying newspaper from a judge. She clearly wants no part of shifting that business The Guardian’s way, savings be damned. The Whig’s coverage of county business, on the other hand, has either been pared down to non-existent or is outright positive. Do we really want to have a situation where local newspapers, struggling for revenue, have to softball their coverage of the local government for fear of losing that ad money?

With the current and constantly improving technology, there’s no reason at all why local governments can’t communicate cheaply and effectivly with the people they represent on their own in matters like legal ads. The laws about “paper of record” are becoming more and more costly to follow, and have lost much of the justifications for their existence in the first place. If the paper was donating the space out of a sense of community, that would be one thing, but a $150,000 annual advertising bill seems to me to be a harbinger of a past better left to history.

This illustrates why it’s both sad and inevitable that newspapers will soon meet their demise. Sad because we are leaving a rich and storied element of our past behind us. Inevitable because there is virtually no single element of a newspaper’s role in the community that can’t be done better, cheaper, and more efficiently by any number of alternatives. Newspapers have always been intermediaries between the public and institutions, be it government, private or business interests. The digital shift going on now has very effectively removed the necessity of intermediaries from much of open communication.

I am sorry to see a classic element of society like the newspaper struggle and fall, but, as with all of us in our day-to-day decisions, needs must win out. That means the county government and the people they represent are much better served now and in the future by going directly to the people and using the extra $80,000-$100,000 they save on things like infrastructure, firefighters, teachers, and what have you. To do anything else in this day and age with these present conditions, is a level of wastefulness we can no longer afford. Tradition doesn’t pay the bills.

Truth Be Told: Five unalterable realities of the approaching publishing landscape

After a week or so of reading, writing and ranting about the Amazon-Big Six-Apple-DOJ battle for the fate of the publishing universe, I’m a little sick of it. Besides, at this point, what the hell else can be said that hasn’t already been said bunches of times over? Amazon is an evil monster hellbent on destroying the publishing world or they’re not. The Big Six minus one and Apple colluded illegally to fix prices or they didn’t. The DOJ is over-reaching and doing more harm than good or they’re not. Agency Pricing is a racket used to shield print and slow ebook adoption or it’s not. Everybody’s got an opinion, and many of those overlap depending on which side of the old/new debate your sensibilities reside. Either we’re cheering on the damage publishers inflicted on themselves or we’re bemoaning the inevitable end of literature, culture and the publishing industry.

The thing I’ve finally realized is that none of this really matters in the grand scheme of things. There are a few basic realities that will carry on regardless of what any of the parties involved in this debacle decide to do. Amazon will become a monopoly or it won’t. The publishers will see their preferred business models smashed to pieces from the fallout of the various lawsuits or they won’t. Doesn’t matter either way in either case.

Truth #1– Digital Publishing and eBooks are here to stay

There’s no turning back now. The massive print infrastructure that roadblocked so many writers from reaching the marketplace for readers is no longer a real obstacle. The so-called Big Six can no longer stop anyone from selling their wares on equal terms. They can no longer steer customers to the limited options they prefer at whatever price points they want. Protectionist actions like the Agency Pricing deal that got them sued are ineffective and counter-productive.

Digital publishing hasn’t just kicked open doors that were long shuttered, it has blown the whole side of the building wide open.  Trying to stack up some boxes or slide the dresser in front of the gap of their gatekeeper controlled entry points won’t work. The passage is clearer now than its been in a long time, maybe ever, and we’re only at the very beginning of the changes yet to come. Things are going to get a whole lot worse for those who formerly controlled the industry before they get better, if they get better at all. Digital reading will become ubiquitous sooner than later, and it will dominate the market no matter how many warm, fuzzy memories of the past we conjure up.  Nostalgia is not a business model.

Truth #2- Amazon’s perceived dominance is fleeting

When discussing Amazon, the conversation almost inevitably turns to monopoly and now its first cousin, monopsony, too. This is a mistake because it superimposes economic conditions of the physical world onto digital. Long standing monopolies are exceptionally difficult to build and maintain in the virtual realm, and that’s only going to get harder to achieve over time. Amazon may hold most of the cards right now, maybe even the entire deck, but the thing about digital is that there are infinite decks from which to draw your hand. They’ve built up their position today because they have all their bases covered–cheap prices, overwhelming choices, a reasonably priced device most people find unobjectionable and the single best store interface in existence for both consumers and sellers. But that’s the rub. They may have the bases covered right now, but the instant they leave one unguarded, someone somewhere is going to jump all over it. To make matters worse, it might even be a base (or several bases) they didn’t even realize was on the field. We haven’t even scratched the surface of the changes yet to come.

One nice idea from some other quarter has the same potential to pull the rug out from under them that they’re innovations had for the traditional industry. And companies, as they get bigger and more complacent about their positions tend to miss important things. Amazon today may not ignore a game-changing reality, but what about tomorrow? Or the next day? Amazon is currently competing with an old school industry stuck in an industrial manufacturing, physical goods past. In that regard, they look for all the world like an unstoppable force. The next generation of competitors, however, won’t be tied to a bloated and inefficient past. They’ll be digital natives building from the advancements of Amazon itself. When the disruption has finished chewing up traditional publishers, Amazon is next on the hitlist.

Truth #3- Bookstores are doomed in every possible circumstance

How many record stores do you see around these days? How many video stores are left? Bookstores are the next to fall. As digital reading inevitably continues its ascendancy, eventually becoming the default manner in which people read, the notion of a shop specifically catering to an outdated product will seem quaint. Physical books in the future are far more likely to be found in antique stores rather than their own dedicated shops.

We will soon reach a point where the physical bookstore becomes a losing financial proposition both from the customer and the retailer standpoints. Nothing that can be achieved by a trip to the bookstore won’t be done faster, cheaper, more thoroughly and efficiently online. Barnes & Noble and what’s left of the big box book retailers will fall first, followed by a steady stream of independents until all that’s left are a smattering of tiny shops, very likely willing to lose money on books just to keep the doors open. I’m not reveling in their demise, I love bookstores, but I loved music stores, too. It would be nice to see them thrive, but it’s unrealistic. When every service you offer can be done better and more conveniently by your customers from their own living rooms, your days are numbered. Talk about literary culture and their place in publishing history all you want, but it’s not going to alter anything. Again, nostalgia is not a business model.

Truth #4- Publisher’s whining about ebook prices is irrelevant

Traditional publishers are stuck between the rock of their expensive print-centric business models and the hard place of cheaper, more efficient digital-centric changes to the industry. Given how quickly digital is eating away print’s market advantages, that is a very bad place to find yourself. Many small publishers and independent writers know that ebooks are almost insanely cheap to produce and distribute. They have direct, first hand experience selling ebooks very profitably at half or less of the price traditional publishers claim is too low for the industry to survive ($10). They, and everyone else including readers, know it. When the head of a Big Six publisher says that ebooks are only 10% less expensive to produce than print, it sounds like bullshit because we know it doesn’t have to be that way.

Print’s share of the overall market is as high today as it’s ever going to be. There’s nowhere for it to go except down. If you’re a publisher who’s business is built on a print infrastructure packed with layers of middlemen trying to squeeze ebooks into the identical framework, you’re screwed. As digital continues to grow, bookstores die off and other physical retail outlets discard large book sections, that print-first dynamic will become ever more untenable. Publishers are making a crucial error in trying to unilaterally increase ebook prices in the service of supporting print infrastructure. If they can’t profitably sell ebooks today at $10 or less, they need to make changes to their businesses so that they can. Whining about market forces and taking actions in opposition of your own customers’ desires and beliefs isn’t going to magically turn things around, and will very likely make it much worse for those that do. Yes, publishers have built virtual empires on the back of expensive print-based models. But the market is moving away from that model. If publishers don’t follow it, their predictions of doom will become self-fulfilling prophecies.

Truth #5- Writers who succeed in the future will be their own publishers whether they like it or not

Conventional wisdom suggests that publishers will eventually adapt and reclaim their positions as the principle gateway for authors to get their works to market. I don’t agree, unless, and this is a big one, their adaptations convert them into a service industry catering to writers. Thus far, I’ve seen nothing to indicate that’s going to happen. So, a far more likely outcome is that writers will, in most cases, be small businesses responsible for producing, marketing and selling their own material. This entails developing relationships with editors, designers and other services, essentially becoming micro-publishers each representing one writer–themselves.

As digital continues to threaten traditional publishers, we’ve seen more hard line stances taken with regards to writers. Rights grabs, revised contracts, shrinking royalties, non compete clauses and more efforts undertaken to mitigate their risks by cutting compensation and snatching more value from the writers under their collective umbrella. As print’s importance fades, eventually we’ll hit a point of no return where a traditional publishing contract does far more harm than good for a writer. Some have suggested that we’re already at that point for the vast majority. There may be other businesses emerge that service the essential activities of publishers, but I don’t expect their agreements to be significantly less one-sided. This means that the primary means for writers to reach publication will be essentially do-it-yourself.

“I just want to write,” is by far the most commonly used excuse by authors to place themselves under the endentured thumb of publishers, and, from a business standpoint, it’s not a very good one any more. The thing is, if a writer just wants to write in the future, they willingly will have to subject themselves to egregiously one-sided agreements where they’ll be fortunate to earn a pittance of what their work actually produces, even less than is currently the case. The current fight over the ebook market contains only occasional lip service from publishers about the benefits of writers. They seem to be treating it as a battle over who amongst the corporate giants gets to reap the rewards from writers’ efforts. The far more viable, and sound business choice for writers will be to become publishers themselves. The control, creative freedom and ability to earn the lion’s share of revenue from your efforts will make it worthwhile. It will also pose a greater risk, but that’s a tradeoff. No matter how much digital changes things, you still don’t get something for nothing.

There will be a contingent of writers who ultimately will bristle at the notion of having to expand their skill set and devote more time, effort and resources into pursuing their own success, but that’s the breaks. Traditional publishing seems to be trying to establish a pattern of poaching independent writers once they reach a certain level of success. That may make some sense, depending on who you ask, given the benefits they can potentially bring in the physical print market, but as print declines, those justifications from going indie to traditional will evaporate right along with it. If a writer puts in the time and effort to reach a level of success independently, the benefits of signing a traditional contract in a principally digital world are almost exclusive to the publisher. Sure, you might be able to no longer worry about things you don’t want to, but you will pay dearly for that “convenience.” It’s also highly debatable you’ll get the benefits you think, particularly when it comes to marketing, which is a burden already being shifted to writers today.

We may well develop a two-tiered writer system–those who are essentially lowly paid employees of publishers and those who become publishers themselves. In that environment, the big winners will come from the second group. Some writers may not like things going in that direction, but just as everyone is so keen on the notion that publishers will have to alter their conceptions and business practices, writers must also adapt to the new realities. No one on any side of the disruption is immune to having change thrust upon them.

Published in: on April 20, 2012 at 9:20 am  Leave a Comment  
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The Defenders of Literature and Cultural Heritage? Ha!

In the past week, there’s been several long-winded screeds written about the end of days for publishing at the hands of the exploding supernova that is Amazon.  This isn’t altogether a rarity, but I’ve noticed, as print sales continue to decline, ebook sales continue to pick up, and the traditional ways of doing business continue looking more and more like a quaint remnant of a past soon to be forgotten, the bile and vitriol thrown around at those who are at the vanguard of this vast cultural shift have gotten more pressing and severe.  First there was Scott Turow’s “Grim News” letter defending big publishing’s (alleged) collusion and price fixing.  He followed that up with a somewhat more tempered but still massively slanted and misdirected interview on Salon a few days later.  I myself, along with several others, took a swing at the hanging sliders Turow threw into all of our wheelhouses here.  After that, there was Harper’s Magazine publisher John MacArthur’s rant on what he calls the “internet con-men who have ravaged publishing”.   I fully intend to expound upon his comments a little later, as I did find myself agreeing with bits and pieces of what he had to say about the newspaper business’ futile  addiction to elusive web ads, but his overall missive was still very much misplaced.  Finally, I ran across this piece by Bryce Milligan, publisher of Wings Press, on what he calls Amazon’s assault on intellectual freedom.  It’s been a pretty busy week for the dinosaurs of the publishing industry.

None of this is particularly surprising to me.  I’ve seen a lot of this before, watching the legacy newspaper industry’s response when the internet first started to really take a bite out of their once whole-ly locked down apple.  The newcomers were usurpers, illegitimate, doing nothing but stealing their hard-earned positions and work.  The folks heading the industry at that time were so caught up in the belief that the mechanisms they had been in charge of were the pinnacle of their business, and virtually omnipotent, that they failed to see the handwriting on the wall.  It was much easier to lash out and demonize the agents of change than to actually admit to themselves that they had to change as well, or be left on the scrap-heap of history.  So bitch, moan and complain they did.  For years while their revenues shrank, their marketshare plummeted and their customers–both advertisers and readers–moved on to bigger and better things.  The newspaper industry today is roughly 40% the size it was only a half-dozen years ago and still contracting.  Their big plans for the future are website paywalls, an argument that really should have been settled somewhere around 1998.  They slipped, ignored the reality of change by spending too much attention to the quirks of those bringing it right to their doorsteps and, in the process, doomed themselves to a slow, wasting death.  Look closely and you can see the same thing happening to parts of the book publishing segment.

So this isn’t exactly an unheard of development, the disrupted lashing out at the disrupters, and it is more than predictable to see their points of view on the precise business aspects of the issue.  Obviously, they will violently defend the status quo mechanisms while disparaging the strange, new and different ways others have found to achieve the same ends, that being to put written works in the hands of readers.  That, I expected.  It still strikes me as living life with blinders on, but at least it makes sense from a business perspective.  After all, the new digital revolution is barely a few years old.  The legacy bookselling model has existed, pretty much as is, for decades, if not centuries.  You don’t make money that well for that long without developing a nearly-religious belief in your business model.  That faith won’t save them, but it is understandable.

One thing, however, that has begun to emerge in these anti-Amazon (truthfully, more anti-future and anti-change) rants is the notion that legacy publishers, editors, distributors, agents bookstores and the authors entwined with them aren’t simply defending a means of doing business; they are beginning to position their plight on a higher plane.  They aren’t simply disrupted business people, they are pious defenders of literature, heritage and the very culture itself.  Every time I see one of these comments, I can’t help but snort.  I’ve even taken to putting down my drink whenever I get the slightest hint I’m reading one of these for fear of shooting some of said drink out of my nose, a fate I’d like to avoid if at all possible.  It’s one thing to defend your business and how it operates, even if you do so in absence of facts, reason and rationality.  It is quite another to pretend to be martyrs on the cross of literary heritage.  Of course, it’s entirely possible they’re not pretending and that would be telling in and of itself.  I’ve always approached these types of backwards defenses as willful blindness by those so worried about losing their meal tickets that they refuse to acknowledge the validity of the opposing arguments.  But, perhaps, what we are dealing with here are actually “true believers” so indoctrinated by legacy publishing’s dogma that anything challenging its preeminence is immediately treated as heresy.

When a Konrath, an Eisler or any of the other outspoken proponents of the changes that have torn through the industry advocate their positions, is it possible that these true believers don’t see a reasoned argument supported by observation, statistics and facts?  Does Turow look at Konrath the way the Pope looked at Galileo when he challenged the notion that the Earth was the center of the universe?  Did he consider the matter at hand, looking at all the available evidence and make a reasoned judgement or does he simply launch into an inquisition-style defensive assault that twists logic like a Philly soft pretzel to suit his preconceived beliefs?  I sincerely hope it’s the former because, even though I believe he’s wrong, at least he would still retain the possibility that further evidence and reason could have a positive effect.  If it’s the latter, no amount of reason will have any effect, except to make the vitriol even stronger because if there’s any one trait that defines true believers of any stripe, it’s that they almost always double down against things that challenge their faith, no matter how logical or reality-based they are.

Read each of the four pieces I linked to above and look for the similarities in their arguments.  Far from simply a discussion about the difficulties of transitioning from a print-centric business model to a digital-centric one, they each pine for the glory days of yore, nostalgia for the way things have always been done literally drips from their words.  And they each, at various points, make the proclamation that, as the new digital frontier continues to spread over the old physical one, our culture and even literacy itself will suffer for it.  The literacy point is somewhat inexplicable to me.  How, exactly, can literacy decline through the act of more people reading more than ever?  It’s seems a lot like Barry Eisler excellently pointed out on Turow’s allegation that Amazon is trying to destroy bookselling, apparently, by selling lots of books.  I guess when logic, reason and facts fail to produce a convincing argument, scare tactics are a consistently easy fallback.

“The end is near!  If our business fails, the world will be consumed by hellfire!  The people will become illiterate slugs if we’re no longer around to tell them what’s worthy of reading and spending their money on!  Without us, our culture will collapse into an horrific hodgepodge of things regular people actually enjoy, without having a gatekeeper like us to tell them it’s okay to like it!  What about our heritage?  Won’t somebody think about the children and how they’ll be able to learn of their heritage on their own, god forbid, without the facts they’re exposed to being vetted and approved by we professional keepers of what’s right and just!  It’ll be the end of days!  The horror…the horror…”

Publishing is a business, folks, not a religion.  They operate, as they always have, on a business model that allowed them to make money on the written word.  Technology has changed the ways in which people can access those words, undermining publishing’s long-standing business model.  Now, if they want to survive, they must transition to a model that fits today’s (and tomorrow’s) readers.  That’s all this is.  The world won’t end.  Great masses of people won’t suddenly lose the ability to read.  The written word will continue on as it always has, only now with the means of reaching more people more inexpensively and efficiently than ever before.  Our culture will not suffer.  Our heritage will not evaporate.  In fact, they may well be greatly enhanced by what’s coming.  The fact that a relatively small number of people who used to make a living putting words in ink on blank sheets of paper and selling them could possibly be out of work isn’t going to doom civilization as we know it.

Print publishing has had a good run.  They’ve existed as an industry largely undisturbed for numerous generations, far more fortunate than many, much more successful industries before or after them.  Change in life is inevitable.  How we deal with that change is what separates the people who keep moving forward, whatever the obstacles and the people who just whine about how much better things were back in their day.  Some of these old-guard folks sound to me like they’re desperately in need of a rocking chair, a tall glass of lemonade, a quilt to keep the evening chill away and a nice front porch to retire to.  Put enough of them together, and they should have plenty of tales to share amongst themselves about how great things were back in the good ol’ days.

As for the rest of us?  We’ve got things to do.  There’s a disruption going on, don’t you know?

MacArthur: Print shall return!

In following the plight of the newspaper industry over the past few years, I’ve seen many, many illogical defenses of the fading print segment from people often with vested interests in maintaining the status quo. However, the one I read last week from Harper’s Magazine publisher John MacArthur may well take the cake. It wasn’t so much that he was totally and completely wrong about everything. He wasn’t. In fact, there were entire sections that echoed sentiments I, myself, have voiced numerous times. No, the problem I found was in his tone.

MacArthur’s pontificating came across as certainty. In his mind, it’s a settled issue that print has been proven far superior to the internet, and that this whole web craze will blow over soon enough, returning print to its rightful position at the top of the communication food chain. While some of his points have merit, particularly with regards to publications giving away the farm with no specific plan on how to monetize that, and the very real problems with web ads on newspaper sites, the notion that print isn’t really failing and that digital doesn’t possess some very strong and pertinent advantages over print seems extraordinarily naive. If anyone hasn’t caught on just yet, digital is very much a replacement-type of technology for print, not a supplemental one, and readers in consistent, vastly increasing numbers know it.

Here are a few of the comments from MacArthur, starting with his anecdote of a conversation he had with a group of internet folks he met in a restaurant one day. When asked how they, too, could get in on the internet boom, here’s his description of the exchange:

“It depends,” one of them said smoothly, “on what kind of platform you want to establish, how you want to present your content.” I said that I wanted to publish a magazine filled with sentences, not build a tree house, and the conversation came to an abrupt halt.

I wonder why? Here you are discussing the future with some people clearly excited about the possibilities of the web, and when they make a very pointed inquiry about how you’d want to exploit your material online, you reply with a dismissive crack that shows not only arrogance but ignorance of some of the fundamental points of internet media. If I was discussing the possibilities of online content and was faced with a similar attitude, I don’t think I’d continue the conversation either.

MacArthur may well believe his crack about “platforms” was pretty clever. In fact, later on he notes how much he hates the term “platform” when he mentions that Harper’s is available across several of them. Of course, his obstinance makes me want to run right out and sign up for the internet experience from a publication run by a man with such an obvious contempt for the medium. I’ve got news for him, though. Your beloved print magazine is a type of platform, too. Always has been, and was long before anyone even imagined the transistor, let alone a computer, smartphone or tablet. Magazines, newspapers, catalogs, fliers, etc, etc are all types of platforms, no different than websites, blogs, ebooks, apps or anything else someone can dream up as a means of communicating with people.

I told them the internet wasn’t much more than a gigantic Xerox machine and thus posed the same old threat to copyright and the livelihoods of writers and publishers alike.

This one really got me. His notion of the web as a giant copy machine is simply asanine. Sure, it does have some of that capacity in spades, but it is far more diverse and to label it as such dismisses the massive volume of material created and posted by regular people and professionals alike every minute of every day. Then he went on:

Photocopying had long been the enemy of periodicals…so I had good reason to beware.

Maybe I’m too new to this game, given the fact that I have no recollection of a world before photocopiers, but I have never, ever, not even once, for even the tiniest fleeting second considered copiers as enemies of publishers. I am, apparently, totally incapable of even comprehending such an accusation. I have never, at any point in my life, encountered a situation where I saw a copy machine used as a weapon against publishers. The only possible way this makes sense is if what he really wants here is a world where the only way to access the information in a printed work is to buy a copy. Imagine, for a moment, how incredibly destructive such a practice would be in actual widespread practice. It would also be massively counterproductive to people like MacArthur, too, but I wouldn’t hold my breath waiting for that particular point to sink in with him.

Of course, it could be that there’s an enterprising young pirate in MacArthur’s part of town who got himself a copier and runs off copies of each new issue of Harper’s, stapling them together and selling them out of a backpack on street corners. Because, you know, that kind of thing really happens, right? But it does speak to his mindset. Here’s an advancement in technology that has made things infinitely easier and more efficient in so, so many ways, and all he sees is a potential enemy. It explains quite a bit. If this guy still sees copiers as an enemy of publishers, then the web must look to him like a giant, roving, 500 ton beast, spewing fire from its six heads and crushing everything in its path. Somehow, though, I suspect Harper’s offices probably have a copier or two on the premises. And an internet connection, most likely.

It turned out that while web sites might be great for classifieds, they are in general a poor medium for display advertising.

Here is an example of his line of thinking that I actually agree with, to a point. I, too, believe that websites are lousy vehicles for display advertising, particularly when the advertising you’re pushing there is simply a replicated version of the exact type used in printed publications. He’s totally correct that ads like this are very easy to ignore, they’re a waste of time and money for publications to chase after, and, no matter how low the price, they’re not terribly effective for advertisers, either. I have never believed that display ad supported publication websites are the way to go for the long run.

That being said, this doesn’t mean that the web isn’t an effective vehicle for advertising and promotion, it undoubtedly is. Just not for trying to duplicate the exact process and mechanisms that have historically worked in print. The problem with his argument, to me, is that he seems to be saying that, because the one way they’ve tried to generate ad revenue online (the simplest and least imaginative way, not coincidentally) has been largely a failure, that means that ads on the web will never work and they should just give up. That’s the kind of thinking that has greatly contributed to the newspaper industry losing 60% of its revenue in less than a decade. Keep up the good work on that.

As the ever-more-demanding Internet God continues to bleed writers and publishers…the advantages of advertising in print become more obvious.

More obvious to whom? The advertisers who are fleeing print in droves? The readers who are doing likewise? The print salespeople who have increasing trouble earning a living on lessened commissions? I understand that this is what he believes and, in some respects, he’s right about things like inavoidability and adjacencies in printed material. But just because he believes it, doesn’t make it so.

The problem with this is that, even if he’s right, it doesn’t matter. The digital transition is well underway. No matter how great he thinks his print platform is, readers and advertisers are the ultimate judge and they’re speaking with their feet, walking away from print in steadily growing numbers. You simply can’t ignore that fact. While it may be true that he believes print is better, the people ultimately holding his purse strings don’t necessarily agree.

This is the crucial issue with why so many former print titans seem to have lost their way. There is no simple answer to how to generate needed revenue online, and they just can’t understand how something they believe is inferior can continue to grow while they languish. The pool of money is moving to digital, from advertisers and readers alike. We’re past the point of no return. You can have the greatest, most effective print platform in the world, but if all the money isn’t in print any more, you’re doomed to failure. You have to go where the money is and find a way to get people to spend it with you. And nobody cares how great you think print is if that’s not where they want to put their dollars.

Patrick de St. Exupery insists that the internet, whether paid or unpaid, doesn’t just reduce the value of writing, it destroys value. This may stem from a whole generation growing up never learning to distinguish between a blog and an edited, thought-out piece of writing.

Hmmm…maybe I’m suffering from this. Was MacArthur’s piece that I’m talking about here an edited, thought-out piece of writing? Is this? I’m writing on a blog, so does that mean this is simply a slap-dash collection of incoherent sentences? That’s ridiculous. It’s a totally dismissive opinion toward any and all writing that exists outside of the publishing gatekeepers. If your works appears outside of the established publication websites, then it simply must be inferior. Beside that, regular folks are apparently too stupid to distinguish genuinely quality writing approved by the gatekeeper class apart from the ground up mush produced by the rest of us.

I, personally, don’t underestimate readers like that. I wonder if he’s ever considered the possibility that, if readers can’t distinguish between his publication’s work and the work of people like me, maybe that’s an indicator there isn’t actually that large of a gap in relative quality, if one exists at all? Probably not, I’d imagine. Just to clarify things, by the way, I’ve thought out writing this over the past several days. I’ve also copy edited it, something I believe my 15 years of experience working for various publishers as an editor, no less, qualifies me to do. Does that mean I’ve cranked out Pulitzer Prize winning material here, or made certain every last syllable of every word in each sentence of every paragraph is a model of perfection? Of course not. But neither is his self-proclaimed edited, well thought-out piece.

The difference is that I’m not claiming that only pure gold drips off of my keyboard. This is an opinion piece where I’ve used my knowledge, personal experience and beliefs to contest what I believe was a shoddily constructed argument from an old guard print protectionist. His was exactly the same, only from a different point of view. I think his real problem is that his piece and my humble effort exist on the same plane, with the same availability to the same readers, and can have the legitimacy of his positions and mine judged not by editors, publishers or other gatekeepers, but by actual readers on equal footing. It’s an entitlement mentality, truthfully, one that stems from the internet undermining not only publishers’ ability to control who gets on the playing field, but their control of the very field itself.

He claims that the internet is undemocratic and exclusionary, but what institution could be more of those elements than the locked down print world of the recent past? These guys who make arguments like this one ultimately reveal the same bias in the end. They always show a contempt for the capacity of their audience to determine quality of material on their own. I think they secretly fear that the works they push really aren’t that superior and, given increasing opportunity, the readers they depend upon will see through their sham. Otherwise, if you truly trusted your readers to know quality when they see it and gravitate towards it, why would you have any issue with pitting your work against the supposedly inferior ramblings of us outside-the-gates barbarians?

To close, here’s another refutation of MacArthur’s opinions by Alexis Madrigal on The Atlantic’s website. I wonder if MacArthur considers it a well thought-out, edited piece? If I had to guess, I’d say probably not. After all, as he claimed at the very end of his screed, he is planning to translate his piece into a speech which he’s being paid to give later this year, so it must be of higher quality. I wonder if he realizes that paid speaking engagements are a type of platform, too?

Looking Ahead: Predictions for publishing in 2012 and beyond

This year saw the emergence of several factors that could have a profound impact on the publishing industry in near future.  Newspaper revenues backslid into more losses, increasing through the first three quarters of the year, and digital revenues, while improving somewhat, are still far short of making up the difference.  A few papers found some success with semi-porous paywalls that encouraged more of their brethren to make the leap into subscription based sites, for better or for worse.  Ebooks moved up to nearly 20% of the overall book market in the U.S. and all signs point to a steady upswing in that sector.

Amazon encroached further and further into traditional publishers’ domains, and started a drive to lower prices and increased saturation in the tablet market.  Millions of new digital customers are set to enter the ebook market after Christmas thanks to robust pre-holiday tablet sales.  Traditional publishers, in conjunction with Apple, forced the agency pricing model on ebooks, driving their prices up 50% or more in many cases.  That effort also brought some backlash in the form of civil lawsuits and antitrust investigations in both the United States and Europe.  Finally, self-publishing and independent publishers made great strides toward establishing themselves as a viable player and overcoming long-standing industry bias.  All in all, 2011 was a year of great transition, and one that has served to set the stage for what’s yet to come.

Following the industry as closely as I have this past year, I’ve reached a few conclusions about what will happen now, and where the industry as a whole goes from here.  It’s nearly impossible to accurately predict the future, even the most educated guess is still just a guess.  All it takes is one new technological break-through and everything is thrust right back into a state of flux.  Some people don’t like that kind of uncertainty but, for me, I find it invigorating.

Newspapers Are Finished

I’m still amazed that there are people out there who believe that print newspapers have any kind of future at all.  I’ve even come to seriously wonder if news websites really have any kind of future, either.  The primary problem, as I see it, is that they are entirely too dependent on advertising revenue to support their business model.  We are only one more advertising shift away from this entire industry segment getting wiped off the face of the Earth.  I believe that shift will come soon, and the era of advertising supported newspapers will end abruptly.

There is not one single trait of the physical newspaper that gives me any belief that they have even the slightest capacity to survive long-term.  They are expensive, inefficient and extremely limited.  In short, they are an anachronism.  The most recent surveys I’ve seen indicate that the percentage of people in this country who get their information from newspapers is down to 14% and falling precipitously.

News websites are also at severe risk of obsolescence.  Paywalls, ultimately, won’t be anything more than a temporary block to stave off the inevitable.  I’m just guessing here, but I suspect we’ll see a combination of elements pick up the slack when the inevitable finally happens, including mobile apps, easily accessible streams and standalone digital publications.  All of this will be dependent on finding customers to pay for the actual content, and the innovative and best quality content will win out in the end.  It’s a shift that will decimate the larger industry players because total revenue numbers will plummet with the loss of advertising.  I also anticipate that we’ll see the rise of truly independent journalists producing and selling their own wares under their own banners rather than working for a New York Times or a Wall Street Journal.

I believe the long-view will see a reversal of sorts of the consolidation run that happened in the last few decades of the 20th century.  The industry will fragment back into many smaller and even individual entities that will create an extreme diversity in viewpoints, products and delivery mechanisms.  I suspect the small local newspaper will likely have a slightly longer shelf-life than the large metros or nationals, but even they will be on the clock eventually.

Basically, my belief is that, as bad as things have been for newspapers over the past decade, we haven’t come close to seeing the worst of it yet.  But out of that Armageddon will emerge the potential for a far greater, more independent, more democratic news and information ecosystem.

Print Books Aren’t Quite Finished, But Close

The way elements are lining up heading into 2012, if I were a book publisher who depended on 75% or more of my revenue coming from print sales, I would be scared to death.  Digital reader sales across all devices are up 200-300%.  Amazon alone has been selling over a million new Kindles every week leading up to Christmas.  Ebook sales were in the miniscule single digits as a percentage of the overall book market just two years ago and now, some estimates have that up to as high as 20% in the U.S.  Through agency pricing, major print publishers have pushed the prices of their ebooks up to three or four times that of the growing self-published sector and, simultaneously, brought antitrust investigations and civil lawsuits in both Europe and America down on their heads.

The big-box retailers they used so effectively are gone (Borders) or at risk (Barnes & Noble) after having weakened independent bookstores to the point that a rapid drop in print sales could be the final straw in wiping most of them out.  Christmas of 2012 is poised to see literally 15-20 million new ebook customers entering the retail market.  And none of this even speaks to the digital expansion into foreign markets that is coming but yet to really kick into high gear.

I suspect that losses in the print book sector will happen quicker and more severely than those of newspapers.  They won’t have 8 or 10 years to map out a gradual digital transition; more like 2 or 3 years, if they’re lucky.  All this being said, print books will not vanish entirely.  I expect there will continue to be a high-end boutique market for very high quality printed material.  The overall market share, however, will be miniscule in comparison to traditional levels.

What we have here is the beginnings of a vicious downward cycle.  Declines in print book sales will cause a loss of book stores and physical retail outlets which will cause more losses in print book sales which will cause more losses of bookstores which will cause more losses in print book sales, etc., etc., until this segment of the industry is virtually unrecognizable.  In the end, I suspect bookstores will be winnowed down a great deal, 80% or more forced to shut their doors.  The ones that are left will cater to the boutique end of the consumer spectrum, and will convert to more of a literary cultural gathering place generating revenue through principle means outside of strictly print book sales.

At the end of the day, I believe that we will end up with the creative destruction of the long-standing print book industry replaced by a much larger, vibrant, much more independent industry that exists principally in cyberspace.

Amazon Won’t Be The 10-Ton Guerilla For Long

Read any blog, news site or publishing industry pundit and you’ll hear all about how bad Amazon is.  I, as an independent writer, am perplexed by other self-pubbed writers frequently ripping Amazon and their business practices.  They have done more for us than any other entity in recent memory, possibly ever.  The argument that self-published writers should somehow support traditional publishers in this perceived battle with Amazon simply defies logic.  If traditional publishers could squash all of the developments and advancements Amazon has brought about for us in the past few years, they would do it in a heartbeat, make no mistake.  To now turn and ridicule them for continuing to press their advantages against traditional publishers is not only hypocritical, it’s short-sighted and potentially self-destructive.  Big Six publishers aren’t really our friends, and they don’t deserve our unquestioning support in this conflict.

Amazon itself, no matter how large or powerful they get, is not any more immune to the disruptive forces that exist than the traditional publishing industry.  This isn’t simply an age marked by a sudden dramatic shift from one paradigm to another.  We’re at the very earliest stages of an era of constant, ever-present disruption.  No one in the internet age is too big to tumble.  Long-term monopolies, like the traditional publishing industry maintained, may well be nearly impossible to establish in this new era, and the only way in which they would keep that control and influence is to represent the values of the people they aim to serve as best as possible.

I believe that retail alternatives will emerge as the ebook market continues to expand and mature.  Formats will become more standardized, or at least easily transferable from device to device.  They will have to; customers will ultimately demand it to be so.  I expect we’ll see some specialized, genre specific retail and self-publishing outlets emerge over time.  Take romance fiction, for instance.  Imagine a retail site that caters specifically to readers and authors in that genre.  Or mystery.  Or horror.  Or science fiction.  Or historical non-fiction.  Or journalism.  The possibilities are endless.  As long as writers and publishers maintain the ability to publish across all retail outlets and platforms, there truly are no limits to the retail alternatives that could and will come about.  Today, they may well be the dominant player, but the history and nature of the internet itself suggests that will not always be the case, especially if they get too large or too onerous in their business practices.

In the end, I expect what we’ll see is a few large retail ebook stores in the vein of Amazon, and many, many smaller, very targeted retail options all over.  I also fully believe that, as authors themselves fully realize the potential of maintaining connections to their own fan bases, there will be an array of direct sales possibilities developed, as well.

Following “The Rules” Will Be Even Less Important

If you read enough online about publishing on any side of the spectrum, you will see that nearly everyone is going to tell you about “the rules.”  There are rules for breaking into the traditional side and rules for breaking into to the independent side.  There are rules for how you should write, what you should write and what you should do with your material afterwards.  The main problem is that if you read enough of those, you’ll find most of the rules stated out there conflict with other rules somewhere else.  The thing is, we are well on the way toward a time when, basically, there are no rules.  There are an ample variety of ways to go about getting what you want done, and the only thing that matters is what you find works for you.  And even then, things are changing so rapidly that something that works today may not work tomorrow.  Hard-and-fast, overly rigid ways of thinking can hang about your neck like an albatross, wherever you stand in the current publishing ecosystem.

As I said earlier, we now live in an era of constant disruption.  Flexibility, adaptability and experimentation are today’s ultimate keys to success, and that will only get more important, whether you aspire to traditional print publishing or independent digital publishing.  The great thing is that writers are generally pretty creative people.  Who could be better poised to take advantage of a circumstance where all the lines have been blurred and there are multiple paths to your desires than the creatively minded?

The next few years will likely see the final death of the old, established ways of doing business.  The transition will continue and we’ll eventually have a system that is very different than what we’ve been conditioned to expect.  The future, in many ways, is very bright.  Change can be frightening, but it can also be liberating and exciting.  Don’t weep for the things lost to the shifting sands of progress, revel in the new and innovative possibilities instead.

Read more about the digital disruption to the publishing industry and what all the changes mean for the future with author Dan Meadows’ new book The Decline and Fall of the Publishing Empire, available now.

Published in: on December 24, 2011 at 7:58 pm  Comments (2)  
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