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I've finished my current book, so a rather long post: an exercise in economic comparison and predictiveness.
"There's gold in them thar hills..." And the old coot gets trampled in the rush. After a while he gets up and heads very sensibly in the other direction.
Oh yes... it's the dream-chase, and sometimes it wise to step back and look at those dream chases and work out... just who did get rich (or successful) and who actually made them rich.
Is it miners? Staking a claim and striking it rich... it happens. In the first two weeks. After that the incidence slows and eventually the only finds of mining riches come from very large companies. Oh, individual miners find the gold nugget/ diamond but the claim is owned by the company. The finder may get a generous reward, but it's the company that gets rich.
And the of course just after the miners comes the traders, offering all you may need from floosies to flop-houses. At a price naturally. They're giving their chance of getting rich to serve you! Oddly they get rich, and the miner just goes right on dreaming and getting nowhere. Actually, quite a lot of the money going to the middlemen is from elsewhere and not the little gold they find, anyway. The miners and their other, previous jobs, are subsidising the middlemen.
Which brings me to a study done the economics of crack selling gangs in Chicago. Oddly , yes the two have a lot in common... You see: Selling drugs must be a way to get rich...
Except its not. Turns out that the gang-foot-soldiers are earning... around $3.50 an hour, and it was twice as likely you'll be killed as it was for a soldier in Iraq at the height of the insurgency. For which they got... About the same as at the time they could get for flipping burgers at MickeyD. And, um, it turned out that quite a few of them were moonlighting at MickeyD...
Of course the higher tiers of gang hierarchy do get rich. Well, in the middle not really rich. They do as well as an engineer... and the top end got VERY rich.
So: why are they doing this...? It's quite simple really. They hope to get to the top. And once this was possible. If you got in with the first bunch. Turns out just like the gold-rush miner, the time to get rich and move up in the hierarchy was 30-40 years back, and this is what people still believe may happen (and um, the upper parts of hierarchy, who hand down their power and mantle and money... to... not one of the foot soldiers - go to some length to foster the dream). The crack-selling gang members are living on dreams (and not quite in the way you might expect).
This obviously has parallels in many industries, including our own.
Along with Gutenberg we had gold rush. And then again I suppose with the cheap paperback. And then again with the Internet and social networking (Cory Doctrow and Charlie Stross being good examples of early adopters). And on each occasion the equation worked very similarly. The miners/writers who got in quickly and were hardworking and lucky too were successful. The chances were not great, but they were a lot better than they became (where moonlighting at MickeyD also became a necessary survival strategy). Like the gold mining industry, or the crack-selling one... it's not that very large amounts of money (as measure of success) don't come into the business, it's just that most writers don't end up getting it. In actual fact, just like the parallels, many of them are subsidising the industry by working for less than they can live on.
We're in the middle of a new paradigm shift right now. A new prose-spectre just rode into town on a swayback mule with a few bags of ‘ooooH! Shiny!' in the shape of e-books and net-distribution.
And the new gold rush is on. A few people like Baen Books got in early, staked a claim and have a ‘mining company' working the new reef. The rest of the traditional publishers -- the Anglo Americans and Billitons of the publishing world -- see the new reef and the possibility that their dominance may be lost and are trying to decide what to do. They have started by trying to block or at least slow the access of other middlemen. In the meanwhile new entrants are pouring in to scene. Soon the market is (as Amanda pointed out) going to be very full of hopeful self-pubs, and small houses/co-ops.
Some of these are going to be much better than others. Some of these will be running slush disasters. Some will be typo central. Others will be 'good story needed editing'.
And a handful will be the new leaders of the writing world, really there on merit, loved by readers, unique, fresh and wonderful. Um. And selling books and making pots of money And other miners... authors, with experience and skill but who have always been the ‘workers' making a living - possibly by cross-subsidising their publisher by working at MickeyD - will arrive from the old companies to try and do the same.
And this gentlefolk, is when the fur really starts to fly. Because... their present employers are effectively middlemen. They used to do lots of the jobs in the middle but these days they do one very powerfully: they gate-keep access to retail space - or in crack-gang comparison, they control access to the turf and you're not gonna sell anything much without them.
The turf just got a lot bigger. And there is a _lot_ of bad sh*t going to be sold... Which was fine when THEY were selling it, because it was the only stuff to be had. A few companies had carved out a reputation (brand) for ‘their' stuff being good, but mostly publishers relied on not their reputation, but their ‘dealer'/authors reputations. The author couldn't go anywhere but to the territory of rival publisher -- where the deal was pretty much the same. The author was, to a large extent, dependent on the publisher for quality control (and promotion, and size of turf he was allowed to operate in) - although of course he did have some control over how good it was to start with. These publishers didn't bother with brands. They had a stable of trademarks (authors names) they controlled. You don't search Amazon for a Harper Collins or Warner Aspect or Bloomsbury book. You search the Author's name. Most readers don't know who the publisher was anymore than a jewellery buyer knows her gold ring was made from gold ore dug up by Newmont. Of course the exception proves the rule - Baen established themselves as BRAND that did quality trademarks. And promoted the brand along with the trademarks... which means in the new expanded turf, where anyone can play, their brand has value and recognition. Harper Collins has, for example, to readers, far less - but HC has deep pockets and a stable of relatively captive well-known trademarks.
So: I don't see business-as-usual trad-pubs being threatened by self-pubs or trying to stop them much. I don't see them willing or able to really build brands (that's hard expensive work) What I DO see is them getting very aggressive about 'keeping their trademarks' ie. their established authors. You see, these authors have a reputation to trade under already. If they fulfil their last contract, and go to Kindle... or a Co-op - they have an audience buying from electronic booksellers and possibly from their own web-sites. And it doesn't take a degree in higher math to work out that even if e-books (which sell mostly online, and not in the exclusive access turf) sell 1/3 of the volume of their traditional paper sales, but they earn 70% (or 60% less the cost of editing, proof and cover) as opposed to 10% (if they're lucky) they're going to double their income. And what's more they'll have CONTROL of quality, which means a lot to us. Actually, as I work it out, break even point is 16.5% of present volume. Depending on who you believe - that's either next year, or four at the most.
So: If you're unpublished... now is probably the time to get in. Quality is only going to get worse, you need your audience established soon before the slush flood puts them off. And make sure it is edited, proofed and has a quality cover. If you are published and have an audience: I think you will find restrictive clauses in contracts wanting your name in perpetuity. Don't do it. Don't sign these sort of deals - not unless they put up your share of e-books 50% + of retail. In the meanwhile do your best to establish either your own brand or join a co-op. Otherwise... your situation will remain as is, or get worse
Otherwise, if you just want to do well financially it's probably a good time to start a publishing venture, or co-op or offer proof reading. Remember who did well out of the Gold-rush.
OK - am I out of my tree again?