Monday, January 24, 2011

Comes the e-book Avalanche?

You know with your average avalanche, just before it happens, nothing much seems to be amiss. Maybe a little slip here or there, but generally those tens or hundreds of thousands of tons of snow or rock or mud that will move in a chaos of destruction look as mobile as the mountains themselves (yes I know, they move. All things are relative, including my relations).

There are, of course, signs that it is possible, and others that it is probable and immenent. People make judgement calls on these little signs... sometimes they get wrong and nothing happens, and sometimes they get it wrong and lives and property are destroyed forever.

And in the world of publishing, I am seeing little landslips, hints of a possible chaos under that appearance of stability with the advent of e-books. Of course some of them we've been seeing for years, and some of them we've been calling for years. There has been a fair amount of mockery from the senior figures in publishing and their well-established authors (one of whom I found was actually mocking in public and readying his backlist in private). Still... there have been a few temblors which say to me the face of the publishing mountainside is about to change fast. I have a feeling a few vast edifices will survive, but I think the medium-small - authors, publishers, booksellers, agents - who stay on the slope will be swept away. Of course the prime culprits who have made the slope so unstable with their activities are the megaliths who will -- at least some of them, in some form -- survive -- but that's the way of things. The best we can do is to behave wisely ourselves.

So: what are these temblors?:
Well, the Bookscan data which Amazon made available to all authors is one such. This may of course be pure generosity from Amazon, and kind support to authors to refine their efforts at self-promotion. Or it could be a serious shot across the bows of publishing. I don't, honestly, think there is an author alive who does not at least HOPE is publisher has been cooking the books - and that they are selling a lot better than the publisher claims. Many are quietly certain they've been screwed, but too afraid of losing the work they do have to say a public word. If I've heard one story about authors signing (or getting fan letters from), more readers than they have apparently sold copies to... I've heard twenty. Maybe all of them are wrong. Maybe it was just wishful thinking. Self deception. In which case Amazon will have done us all a vast favor, which, logic then states, publishers ought to have done years ago. Otherwise the department of creative sales accounting - shifting sales from one book into another, to justify the advance / promotional spend has just been changed into the department of re-alignment and great care... Anyway, whether this paranoia turns out justified or not (and I suspect a few true and some false, and some just plain sloppy accounting involved) the Bookscan data exposes one thing: It has always been that Publishers control access to retail space and without them, we authors are helpless. That - and the physical cost of the product and distributing it, justifies the fact that publishing, distribution and retail get 92% of a midlist paperback's cover price and the author 8%. What I am seeing is just what I get for that. Sales of DRAGON'S RING in Florida (to pick on one example)... zero, zero, zero week after week. The book is selling elsewhere - although there is no direct relationship with population or any other factor that I can discern. Some lower population areas are outselling New York... where I see what is hard to interpret as anything but, ‘stocked very few, mostly sold out and not restocked'. Florida - to pick on Florida again - is a market of 18 million -- just a little smaller than Australia (where I personally know I've sold at least eleven copies -without it being in a single shop). Let's run some wild guesses here. Assuming that 5000 copies is more-or-less what one might expect to sell (I'm being conservative here, my worst figures have run at well more than that- but for a noob that's quite good, these days) -- and as my distribution is widely distributed (I don't just sell in NY, or the Deep South or to Hawaii) then, at about 1 copy for every 60 000 people (A bit ridiculous, but that's what the publishers would rate a newbies appeal at, it appears), Florida should reflect around 300 sales... not zero. Even leaving out the non-restocking problem in NY... it's pretty obvious that the distribution to retail (handled by one of the US's largest publishers and their distributors) is shall we say, underwhelming.

I can turn around and say that even if those figures reflects my real popularity, then I'm losing at least 30% to non-distribution and more to non-restocking. A lot of authors are going to be looking at their figures and getting quite angry, I think. Historically, they would have had Hobson's choice. Now... I think a lot are going to be saying ‘just what do we lose not having a publisher and just going straight to e-book sales online?' Of course one does lose(sometimes with editing and proofing and even marketing), but it is not, as was historically thought, everything. Actually, you might do better in Florida. You could hardly do worse. And you won't be getting 8%, but as much as 70%. So I think we can say authors are unstable ground.

Secondly: signs of it are everywhere: retail is taking a pounding. In recessionary conditions cheap entertainment flourishes... except it is NOT for bookstores. We could talk about why, but the point is, they aren't. Borders we know about, and that has knock ons throughout the industry. They must owe many medium-small publishers a fortune, which they in turn owe their suppliers. One has to wonder if they can survive that level of non/late payment. And that's just one large group. Many independents and even the Gargantuas are not booming. What publishing has a stranglehold on is access to this retail space. It's a stranglehold on a shrinking resource. So I think we can say brick-and-mortar are unstable ground too.

Finally there is the sudden desire by publishing houses who have sneered for 10 years at the Baen business model -- which was to create a brand identity for the publisher -- to abruptly start to imitate Baen. Historically publishers ‘farmed' the marque of the author, and no reader had any idea who the publisher was. As the author -at least at the bottom and midlist - had little or no choice but to be loyal to their master, there was no need for the expense and effort of a company run chat-forum (like Baen's Bar) and as for e-book sales to the public (shudder) who did they think they were? Suddenly, the publishers are attempting to do Baen's Bars -- because in the electronic marketplace readers search by author name, not publisher. Expect direct e-book sales next. More little landslips...

Three months ago, when I had once again been paid (late) by check, and not as agreed by electronic transfer - meaning a further 6 week delay, I spoke to Eric Flint - my co-author - about other ways of raising money, such as Kindle books. He was, as always, supportive and said why didn't I give it a try? Suggested I talk to Mike Resnick about his experience. Now, Eric is far more successful than I am, and a canny fellow. He is also far more involved in the regular machinery and politics of publishing than I am. Back then (quite recently really) he was not really thinking about doing it himself. Three days ago he contacted me and suggested we put our joint shorts into a collection, and he's doing his own too. Now this joint collection includes the RATS BATS & VATS prequel - A 30K Novella GENIE OUT OF THE VAT and a Novelette set the sequel to that universe CRAWLSPACE. RATS BATS & VATS sold fairly well and has a sold fan base. The prequel just hasn't been available to most people, as it came out in a rather obscure collection. CRAWLSPACE - in JBU 6 - even less so. So I think they have a market. I expected to try to expand them and sell them as books, and Eric and I had talked about it (and it could still happen). But it shows changing perceptions.

So I think things are heading for interesting times soon. I'm thinking of myself and my writing career. These are my list of what I think of as precautionary: 1)I am not signing any long term deals. 2)I am readying e-copies of all my work. 3) Any new contracts will be as much as possible upfront -because that is good practice anyway, but also that's good in uncertain times. 4) I am trying to build my own web presence up. 5) I want to get my website selling - or at least linking to selling my own work.

Any more ideas? Or am I being chicken little?

24 comments:

Jvstin Tomorrow said...

I don't think you are being chicken little, Dave.

When I hear about interesting books, my first reaction these days is to check to see if there is an electronic edition, first.

Rita de Heer said...

Another thing I worry about, though I am not published yet, is the avalanche of ebooks that will follow the disaster you describe, Dave. The time when there are many more ebooks than ereaders and I'm talking people who read ebooks here.

In my book club we count about a dozen readers and one kindle owner. Probably two more of us read on our laptops and i don't think we are unrepresentative.

MataPam said...

The more I hear about how poorly book distribution and stocking are handled, the more I think e-publishing is necessary for anyone not on the Best Sellers list. And a good idea for them, as well.

Because readers are spreading, and becoming popular. I think by next year anyone who doesn't e-pub will be at a distinct disadvantage.

For midlist writers, the author's percentage is so much higher that even selling fewer copies results in a larger income. And I don't think the good writers will be selling fewer e-books than paper books for very much longer.

Jason Cordova said...

I agree with Pam. I've been trying to figure out why all these oublishers get discouraged when print version of the book they shelled out bucks for doesn't get picked up in stores (where it's not even stocked, usually).

But when customers want to buy the ebook, they go and buy it in many different (non-DRM) formats, whichever fits their reader or if they it on their desktop. The downside? You really have to work your tail off to get some sort of following so people know when your next book is coming out electronically.

EvMick said...

Dave:

"Every well dressed lady needs a chain saw"....sound familiar?

The same might be said of "midlist" authors.

I really, really like your crawlspace universe. I'd read more of it. Lots more. The concept of genetic manipulation needs to be explored in fiction the better to ready us for reality.

I am,however, not into fantasy much. Sure...I can be dragged, kicking and screaming into a series and will eventually like it. I resisted, mightily, the 1632 universe for years.....then I feel for it. So it CAN happen....but each time the process is the same.

I'm more "into" hard science. You, being a scientist, are just the man.

I also no longer read dead tree. I can carry ghu knows how many non DRM (the onliest kind I'll spend money on. DRM is a challenge, like waving a red flag in front of a bull. I personally (no, no, no, no) would NEVER "steal and break" a DRM copie...but why would I need too? So many others do it so I don't have to)...

All that said....go EBooks!!!

Anonymous said...

Go, Dave, go! I love entrepreneurs. I think any author with any sort of reputation could do well in the oncoming e-book avanlanche. You know how to write a story, have command of the language and are adept at the business side of things.

My biggest concern would be quality control for new authors. I do read 90% of my material on an e-book reader. I see that B&N has opened up direct publishing from authors. I see them listed alongside name authors. Only after checking for the publisher do I know if it's been through any sort of quality control for writing and formatting. I usually don't buy one that is self-published because of the poor formatting and usually ineptness of the author to be able to put a story together. That's not to say that all who self publish are inept, certainly not, but it's a playground for those who are.

This leads me to my question of how will the reader be able to tell, out of these new authors, which ones will be worth spending their money on?

I see that as a great opportunity for freelance editors and formatters. Whereas previously, they would've had to be employed by publishers in order to work with any good authors, maybe not true now. For example, maybe I, from my home, can work with authors to help ready their stories for e-book consumption. My challenge would be to become known to quality authors as a quality editor or formatter. Yes, I would cost money, but if the author was making 70% of the money from their books, they'd be willing to invest.

I believe that there will be awesome opportunities in the new e-book publishing world. The publishing world will have to adapt however in order to bring that to fruition.

Linda

Brendan said...

I have been considering Sarah's idea of selling her work for a year to 2000 people for $20 but wondered how much they would pay for similar access for 10 authors?

With similar output to Sarah they would get 10 novels a year and 2 short stories in their in-box a week. Perhaps the deal could be sweetened with two limited edition printed anthologies of the best stories as voted by the subscribers(but sell them the T-shirts and mugs etc at a huge markup;-) ).

If you could get your 2000 subscribers to part with $15 a month some really, really rough calcs suggest the writers could take ~$30,000 a year after expenses.

Anonymous said...

I've bought hundreds of ebooks and am busily working my way through them.

After the Big 5 fiasco and Geographic Restrictions I now get a lot of ebooks from Smashwords. Yes, there is a lot of junk, but also some treasures to be found. I read the blurb first. If that has spelling or grammatical mistakes I pass. After that I'm willing to give any new author who charges $2.99 or less a go if the story line interests me.

I've enjoyed some books and bought the author's whole list.

You can download a sample free so it's not that bad a risk really.

I've enjoyed some of my $2.99 ebooks more than some $65 hardbacks. Publishing houses also release crap .... but it's expensive crap.

I also like the fact that the author will actually get more of my money.

Laine

Dave Freer said...

Jvstin - that's why I want my books as e-books... and available on every platform I can get them onto. Because that's going to be the reaction, increasingly.

Dave Freer said...

Rita, a good point. But I suspect the avalache of cheaper readers is also coming.

Dave Freer said...

Matapam - at a back of the envelope calculation - for a new author paperback to earn out the fairly generous these days 5K advance, they have to sell about 10500 copies (if they get the 6% accorded to most newbies, at the 8% accorded to midlisters that is 8000 copies). If you put the e-book price at $5, of which they get $3... if they can sell more than 1666 copies, they're winning. If they sell less than 1666, they're losing.

Dave Freer said...

Jason - see my figures above for MataPam. If you have the following/personality and hard work to get a following which exceeds your advance - ebooks will reward you better. But yes, you will work your tail off getting it.

Dave Freer said...

EvMick :-) designer chainsaws are SO chic! ;-). My output will be split more or less 50:50 I'd guess. I'm more drawn towards sf, but fantasy has more readers. Crawlspace is, conceptually anyway the first chapter of a book. I've wanted to write a final (after RATS BATS AND UGLY) RBV book for years, and properly turn genie into a book. This may give me chance to do this. I won't be complaining!

Dave Freer said...

Linda:
"This leads me to my question of how will the reader be able to tell, out of these new authors, which ones will be worth spending their money on?"

1)New mechanisms will have to evolve. They just won't leave the Author with a mere 8% of cover price!
2)Names are going to get even more valuable.

and yes - big gaps for editors, proof readers, quality imprint of some sort. Co-ops, co-authorships too

Dave Freer said...

Brendan - some new models are definitely coming. I forsee author co-ops becoming common. I can also some weighted bargains being reached. ie. I fred bigname with a following of 5K readers a day on my blog, and sales of 20K e-books, will bundle one of my books for sale with joe newbie. The book won't cost the reader any more (or maybe a trivia). Joe has worked hard and has a following of 500, and could sell 2000 books. By the joint offering, Joe gets 20000 new readers, and Fred gets 2000. Now inevitably they won't all learn to love Fred or Joe, but it's probably worth something to both of them. If I was Joe, I'd be perfectly happy with half my 'normal' income. If I was Fred I'd be happy to give Joe his 2000 readers worth. It's still an area for thought.

Dave Freer said...

Laine -I think it is really important letting readers know that authors will get far more money from each sale. Most readers actually get very upset when I tell them just how little I get from the book. I've lost count of the number of readers who have told me 'I've just bought your book' - with the subtext, "I like your work so I just gave you... 7.99 - $50 (hardcover austalia) it better be worth it.'
I really appreciate the vote of faith... but people are taken aback to find they just gave the author small change. Australians particularly tend to outraged when they find I got 64 cents from the book they paid 25 dollars for.

And price DOES matter. I'll gamble on $2.99. I have a fixed idea of how much I can spend on books, and baulk at anything but a sure good read at $25. I will - without thinking buy it at $2.99. Probably buy 10 thereby spending more...

Kate Paulk said...

Jeez. Not only is my crystal ball busted, the internet decided to go on the fritz as well.

I honestly think there's a tipping point, and soon. When it hits, the change is going to be breathtakingly fast, and when the dust settles... there'll be a whole flurry of new models competing for the gaping hole left by the shells of the establishment.

A few random thoughts: the mega-corps that own most of publishing (there's maybe 2 or 3 multinationals with massive "entertainment" holdings, and all the main line publishers are either owned by or locked into contracts with one of them - Baen is in the latter case, being locked into Simon and Schuster for distribution). In a deep recession with none of the entertainment industries doing well (Gee, I wonder why that is. I'm sure it couldn't have anything to do with the relentless shoving of message and prepackaged pap down people's throats), the big boys won't hesitate to shed their non-performing divisions. Unless - and I count this as a bad thing - they can use them as a tax dodge.

(Side note on tax laws and things here: no matter what the tax law, it never gets the people you want it to get. The mega-mega-big corporations can afford to pay ridiculous amounts to hide their profits so that their official income is minimized. The smaller outfits can't. Same with individuals. Multimillionaires can invest in all sorts of interesting schemes not available to mere millionaires, much less the rest of us, and not pay much in tax at all. The only thing I've ever seen come close to working is to acknowledge that, keep tax rates medium low and the tax system simple, and encourage the buggers to become angel investors. At least that way you don't end up using a sledge on the tadpoles because the toads are too smart to get caught.)

Short version. Interesting things are happening right now, and will keep happening and get more interesting. What's still standing when the dust settles is anyone's guess, but I hope everyone here is in the "still standing" group and not the "shelled out corpse" group.

Brendan said...

I just found out that Readings have opened an 'e' only webpage. It looks like they are maintaining their independent status by prominently featuring books by the Australian small press network SPUNC.

Welcome to Readings Ebooks

Dave Freer said...

Brendan - that's interesting - what is most interesting to me is the prices. As a local would you care to comment?

Dave Freer said...

Kate -I believe the megaliths will retain control if not of all of it, of a lot, by means fair or foul. The tax issue is really a seperate debate, but there is actually an easy solution - which would be good for tax revenue, good for employment, good for the country - and never happen in a million years. Simply set the amount deductable for accountancy and legal services by any single tax entity (individual, company, megacorporation) at a certain number of hours at a certain maximum per hour rate - adequate for a small enterprise - and watch bigger business fragment, providing far more employment, more competition, and less 'free' tax evasion.

Not going to happen.

Sarah A. Hoyt said...

Dave, I can honestly say this is the first time I am seeing tech move faster than I expected. IF rumors about rising gas/energy prices are true, it's about to get another shot of speed, too. Why? Physical books are manufactured. They take power to produce.

Long term contracts... I'm about to sign one with a medium company. It's part of my strategy, actually. Some work with big companies, some with medium and some with small... NRP -- which is what I do instead of publishing them myself (no time for the tech) -- will be bringing out Death of A Musketeer and, if it does well (should, lots of people have asked for it electronic.) will bring out number six and seven and... Well... (smile) we'll see what we shall see, shall we?

Well, long term... it's for three books, one of them already written. We'll see how THAT shakes out.

Meanwhile, I'm putting out a bunch of short stories, in bundles, also with NRP -- starting with "Five from the past" -- my historic stories, two unpublished. There will be other various "Four from the Future" "Five For Love" Probably once a month. The idea is a price point of 2.99 for maybe 25k words. And... we'll see.

Sarah A. Hoyt said...

Dave,

I think you're wrong about the megaliths holding on to power. There are two reasons for this, one structural, the other generational.

But FIRST you must UNDERSTAND that the money coming in from books, to the megaliths, is considered so piddling as not to matter. So, it's the weak point of the entertainment industry.

The structural reason is that they are SHAKING -- large corporations are much like communists regimens (no, seriously. I've seen this from the inside.) They simply don't have the "give" and will start shedding the "piddling stuff" like books FAST. Music went first and they lost control fast. If they're going to try to hold on, it will be onto movies. I wish them luck. It's a GREASED slippery slope.

This is actually not good news. If they could retain SOME control, they'd soften the landing some. As is, we're going down hard, I expect within the year.

The generational reason is that 90% of the people with decision power are older boomers. They obtained and held the power in all of publishing. They are now either hitting or past retirement age. Once the turning point is reached, their first concern will be "retire with pension" and they will leave ANYONE younger to swim for it. I've seen this in other companies with that generational gap.

I'm just saying.

Dave Freer said...

Sarah the age factor is one I had not considered. The odd thing is however though publishing is supposed to be so non-profitable and small, looking at he sale prices of publishing companies - they've been very profitable to buy and sell (the reasons for the profits are often not good for writers, or readers.) And huge amounts of money (even by movie standards) have passed through publishing - the fact that much of this doesn't show as a profit notwithstanding. Often this has come by screwing the copyright holders (scientific publishing being an example). There is also a lot of percieved power in publishing, and that, to some of the ultrawealthy, is valuable. And while middle class America is suffering - the very wealthy in NY (who are the role models for my Shavian socialists in RBV) are actually doing well, as evidenced by split in earnings in department stores in the US. (Walmart et al are down, Big upmarket NY stores are enjoying record growth).

Sarah A. Hoyt said...

Duh. Dave, I'm sorry. I wasn't thinking. What I expect is that the megaliths will drop fiction like a hot potato. Sorry. I tend to think of "publishing" as "fiction" which of course it's not.

Right now, your common, average, not very pushed non fic sells ten times your average bestseller in fiction. Unless it's specialized and a "hot" subject that will only be hot for a limited time. ALL the money in publishing is in: non fiction, celebrity books AND TEXTBOOKS. They'll fight tooth and nail for textbooks (you wouldn't believe the cost of college textbooks. TRULY.) But fiction? We've always been the ugly stepsister and heck, right now I suspect they're taking in water over our side (not our advances, unfortunately.) So... That's what I meant. Yes, they'll hold on buckle and tongue to the non fic, how to, computer books, travel books, etc. Buckle and tongue. But to our purpose, nothing.