Sunday, February 15, 2009

Response to a Comment

Nathan left a great comment to my post of Saturday. I took Valentine's Day off and wasn't planning to post today. However, I do want to address the points he raised.

Rather than try to answer in the confined space of the comments section, I am responding here.

Nathan, I hope you'll forgive me if I address your paragraphs out of order, but your second paragraph makes a better jumping-off place:
I think these posts, while very interesting, fall into a longstanding habit of blaming the publishing industry (and specifically publishing executives) for forces that are far beyond its control. Sure, mistakes are made and the eBook realm is a work in progress, but the people at the top in publishing are incredibly, incredibly smart people who aren't blind to the forces at play. You wouldn't believe the number of meetings and conversations I've had with publishing execs in the last couple of months about eBooks, digital audio, DRM, etc. etc. We're all planning for the eBook world.
Nathan, I've no doubt that the people at the top of publishing are very smart. That's how they got where they are.

Please note that I'm not accusing them of being blind to the "forces at play" as much as I am accusing them of responding poorly and ineffectively to those forces. I'll talk about that more tomorrow.

And I'm sorry, but taking the blame for poor performance is the burden the men and women at the top always bear. President Bush took the fall for the War in Iraq and the failed economy, and President Obama will carry the same stigma if he cannot prevent this recession from turning into a full-fledged depression. The heads of the Big Three automakers are being castigated for their companies' failure to adapt to a new world order in a timely manner. The same fate awaits the leaders of the publishing industry unless they act very, very quickly.

Remember: the big six houses are all owned by mega-corporations. The recent turnovers in publishing leadership teams suggest that their corporate owners are holding these execs responsible for what's going on in their industry.

Shakespeare said it best: "Uneasy lies the head that wears the crown."
The simple fact is that the retail climate is absolutely dismal, bookstores are closing, eBooks are still a tiny fraction of the market, and the vast bulk of the challengers are outside of the industry's control.
Yes, the retail climate is bad, but that's been a relatively new phenomenon over the past six months for most of retail. Don't fall into the trap of confabulating. The economic mess in the housing and lending industries just threw the rest of the retail segment into the sewer with publishing.

The retail climate for publishing has been languishing much longer. There have been troubling signs for as long as I have been blogging. In late 2005, the data coming out of the BISG's Used Book Study estimated that one out of every twelve books purchased in 2004 was a used book. Within five years (hello, 2009), that number was predicted to be one out of every eleven. The Associated Press said this was "a troubling trend when sales for new works are essentially flat . . ." (see blog post here)

In early 2006, I reported for the first time on bookstore sales. The entire retail segment's sales were up 7.4% in February at the same time bookstore sales dropped 1.7%. (see blog post here)

Let's say I buy your argument that the bulk of the industry's challenges have been outside the executives' control. Changing technology and changing reader taste is, of course, not something they control. However, for years, the response to those challenges has been . . . anemic.

My points is (1) that the industry was suffering long before the rest of retail felt the impact of the current economic crisis and (2) technology has been reshaping publishing for quite a while.

Just ask any newspaper editor in America.

As I said in my post on Friday, print publishing industry execs have responded in alternating waves of action (setting up digital warehouses) and inaction (treating technology--not just electronic books--as interesting rather than world-shaking). And I don't see that this has changed a whole lot. You're telling me you've been in lots of meetings over the past few months. I'm talking about the past five years.

eBooks look like an exciting new avenue, but they're still in their infancy and sure, there are kinks, but as many have pointed out recently, the eBook market is currently a fraction of the audiobook market alone. Yes, that's going to change, but let's not overstate it at the moment. And publishers can't vertically integrate as easily as Amazon because few consumers want to buy from publisher websites -- they want a one-stop shopping experience. Until that changes: advantage Amazon.

Of everything you've said, this statement probably frustrates me the most. "And publishers can't vertically integrate as easily as Amazon because few consumers want to buy from publisher websites . . . advantage Amazon."

For Pete's sake, because Amazon won the first couple of innings, are you saying New York should just pick up their ball and gloves and go home???

The New York houses still have a couple of HUGE advantages: (1) New York has stables of popular writers, who have intensely loyal fans. (2) New York vets for quality and has staffs of terrific editors. Amazon does not. Amazon slaps any old self-published novel up there on their website along with classic works of art. (3) New York has marketing expertise out the wazoo. They need to start using it.

Here are a couple of random thoughts:

Niche Marketing: Take a look at Harlequin. They have a vibrant, active publisher's website. Granted it is a niche for their own brand of romance books, but it is starting to pay off. As hard a pill as it was for Harlequin to swallow, they have begun the retreat from their formerly profitable book clubs and are going digital in a big way.

Social networking: The publisher websites I've visited are sterile, boring places. Take a look at the blogosphere where authors and review sites are creating their own networks of readers.
Start one. The catch here is that you have to allow the readership to "own" the site. You cannot (and should not) control it.

What if New York created a virtual book club in which the readers and the writer read the book online together? I am a huge fan of Tom Friedman. I would pay a premium to read one of his books with him answering questions from readers as I read along.

Partnering with Mid-Level Writers in a Viable Way: I'm not talking about asking a writer to occasionally blog for you. I'm talking about a serious partnership where New York surrenders royalty points to a writer who helps build the publisher's presence online. This is something to which New York needs to pay serious attention. I'll talk about this more tomorrow because there is a huge danger lurking ahead for big publishing here.

Pay Attention to Changing Reader Tastes: Flash fiction, novellas, manga. In today's increasingly stressful environment, we have less time for everything, including reading. Mix up your offerings and make it convenient for a reader to buy something short to read while s/he is standing on line or waiting for the kid to finish tennis practice. And to buy it immediately when s/he wants it. As an aside, I can't tell you how aggravating it is to me to stand in an airport bookstore during an unexpected layover and look at the expensive and limited supply of books they offer.

eBook pricing is still a work in progress because the sphere is changing so rapidly, but it will get worked out. And while Bob's estimation may or may not have included distribution and warehousing costs (can't speak for him), when you spread out those costs on a per-book basis they really aren't that high. eBooks cost less to make, but only incrementally less.

Nathan, I hope you know I adore you.

Having said that, please excuse me for pointing out that this statement is a total crock. I'm afraid New York has been telling itself that for so long that they are now believing it . . . which is really, really scary.

The cost is only incrementally less if New York continues to do business in exactly the same way it has for the last ten years. In the words of Dr. Phil, "How's that been working for them?"

My daytime job is as a management analyst. When I look at a division, nothing is sacred. We start from ground zero and build from there. Just because something has always been done one way doesn't mean it still has to be done that way.

And if the publishing executives cannot find ways to benefit from digitization, they NEED to be fired.

Good god. They've been nattering on about the way the returns system is strangling the industry and now they have the brass to say that e-publishing is only a couple of dollars cheaper??? Give me a break.

No manufacturing, no print overruns, virtually no distribution cost, no warehousing, no returns/shipping, no pulping.

I'm not going to belabor this point. This post is long enough as it is.

I want New York and the independent publishers to succeed. I think Amazon's vertical integration is a dangerous threat to the industry.

And as much as it pains me to say, I believe Google may be a negative influence as well. I was hugely disappointed to learn of the non-compete clause they were making universities sign in exchange for digitizing their collections. Isn't it enough, Google, that the cost of digitizing would keep most of your competitors out? What happened to "Don't be evil"?

A variety of publishing houses provides a more vibrant, diverse world of books.

However, we who are interested in literature and reading need to start working on real world solutions and not stand there spitting at the waves crashing around us.

Thanks for giving me a chance to say all this. I appreciate you and your positive spirit enormously.

Warm regards,



Stephen Parrish said...

You earned your blog pay today. I hope Nathan responds because this discussion (debate?) is timely and crucial.

Nathan Bransford said...

Well, I kind of feel like a lot of this misses the forest from the trees. Just a few things I'll address:

- eBooks. I love eBooks. You love eBooks. I think they're the future. You think they're the future. Lots of people in publishing think they're the future. But you know? Not many people want them yet. The devices aren't there yet. We can talk about what the publishing industry should do about them until we're blue in the face, but until the public comes around to them they're a tiny, tiny sphere. Look at the polls on my blog: even book lovers don't really want them yet.

- My statement about eBooks only being incrementally cheaper, 2hidh you've labeled a "crock." You can debate the cost of shipping and warehousing with Bob as long as you want, but the fact is that PP&B and warehousing is not that significant when you spread it out over millions of books -- if it were it wouldn't be possible to publish a $6.99 mass marketing profitably at all. If we're going to maintain the level of quality in book publishing, that takes staff. It takes editors, copyeditors, marketing staff, sales staff.... all of that goes into the cost of a book. And you say they should do it cheaper? What do you want to cut out? And meanwhile you're simultaneously listing a ton of new initiatives the publishing industry should embark upon to boost sales. Cut costs and drastically expand your efforts at the same time? Kind of tough to do.

- You mention the turnover at the top, and yeah, obviously the corporations are holding people accountable. You know what's kind of amazing though? The new CEOs aren't drastically changing the way anyone does business. They're reorganizing and consolidating, which has been happening since the big imprint mergers of the 80s and 90s, but they're not really drastically changing things. You can call this a failure of imagination or a recognition that there's not a gain in drastically altering course. I'll leave that up to you.

I don't think we're really that much in disagreement, and you bring up some good ideas for things that publishers can do to connect with readers and things they can do better. I'm always open to new ideas.

But what I'm trying to say is that there are huge and strong forces at play in our times that are outside of anyone's reasonable control. Bookstores aren't doing well. The retail climate is horrendous. There is competition from other media. The Internet is rendering whole categories of books like trade reference obsolete. To ignore these forces and ascribe too much blame to the industry itself misses the mark.

On the macro-level, the industry is making very rational choices to confront this new era. They're embarking on eBook sales. They're paring back their lists to only the books they can publish well and count on a good return. They're embracing POD. They're consolidating as a recognition of the fact that there's fewer shelf space for books, and thus only a few are going to break out.

So I guess my ultimate point is that yeah, we can all think of ways for the publishing industry to be better and improve. But to blame it for its own problems entirely or to claim that the industry is blind to the future ignores the huge forces at play that are impacting the industry in huge, groundbreaking ways.

Silicon Valley Diva said...

I adore both of your blogs and being an insider I don't have much to add, but I do think it's interesting to see how the trend in downloading ebooks on mobiles devices will shake out. It seems the people I know who own Iphones claim to prefer reading ebooks or articles on them, especially men.

Silicon Valley Diva said...

OOPs. I meant NOT being an insider LOL

Maya Reynolds said...

Nathan: Thanks for your response.

I guess we will just have to agree to disagree on this matter.



Maya Reynolds said...

Stephen: As always, thanks so much for stopping by.

Maya Reynolds said...

SVD: It's good to see you again.