None of what I'm about to say is new. Lots of people have offered variations on this theme. This is my cover on the tune.
I'm going to start with a familiar refrain. In his post on Friday, Evan Schnittman chastised the British authors who recently suggested that e-book royalties should be calculated at 50%. He asked,"What kind of message is this sending to publishers? Is there a new willingness to explore new models and new ways of doing business?"
My response to Mr. Schnittman is to suggest he review the kind of messages about e-books the Big Six publishers have been sending to authors:
- Last year, Jane Friedman--former executive vice president of Random House, former CEO of Harper Collins, and current CEO of Open Road Integrated Media--was asked what she thought was a fair price for an e-book. Her response was that the value of the e-book to the reader was the same as the value of the book in any other form. Therefore, she felt the appropriate price point was around $14, the price of the trade paper.
- In December, Simon & Schuster told the Wall Street Journal that, "Rather than making the e-book editions available on the same date as the hardcover editions, ... it will publish the e-books four months after the official hardcover publication date." In the same article, David Young, chief executive of the Hachette Book Group, reported that Hachette would "delay the e-book publication of the vast majority of its titles for three to four months. 'We're doing this to preserve our industry,' Mr. Young said."
- And, of course, we have five of the Big Six (Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster) going with the so-called "agency model" where the publisher decides the retail price of an e-book and pays distributors like Apple a commission for each sale.
Alan Greenspan, the former chair of the U.S. Federal Reserve, criticized protectionism because it leads "to an atrophy of our competitive ability. ... If the protectionist route is followed, newer, more efficient industries will have less scope to expand, and overall output and economic welfare will suffer."
Publishers' power was based on the fact that, in the past, they owned the sole means of production of books: those big, expensive printing presses. Authors were forced to go to publishers in order to see their work in print.
I actually find it ironic that the printing press--the invention that democratized reading--is being pushed aside by a new technology that will democratize publishing. Digital files plus print-on-demand technology (not to mention e-books) will end the hegemony of the Big Six publishers by making it possible for anyone to become a publisher.
At last we come to the advice portion of this post:
Big Six, you've painted yourselves into a corner. Okay, you were able to bully Apple into accepting your agency model, but only because publishing is a side business for them, not their core business. They were just trying to enhance sales of their iPad.
And, yes, Amazon was forced to go along with you in order to maintain its position as the largest e-book retailer in the U.S. while Apple and Google nip at their heels.
But if you think you've regained control of the situation, you're deluding yourself. Nothing remains static.
Last week, Bank of America/Merrill analyst Justin Post cut his rating on Amazon's stock from "buy" to "neutral." One of the reasons he gave here to Barron's for doing so was "Increasing competitive pressures in digital media which could continue to impact headcount."
Two months ago, Amazon issued a press release that said:
That announcement provoked way more coverage than a mid-list mystery writer would usually expect. Even so, IMHO, Publishers Weekly was a lot more snarky than they needed to be. After some snide remarks about Konrath's sales numbers, they published a quote from agent Ira Silverberg who PW said "was more blunt about how uneventful Konrath's move was. 'Certain authors ... flip off the publishers who rejected them, claim new technology will support their career, and they get attention they never had before. Let's see if we remember who those authors are in a few years'."
AmazonEncore, Amazon's publishing imprint, will release the newest book in bestselling author J.A. Konrath's Jacqueline "Jack" Daniels series, "Shaken." The AmazonEncore Kindle edition of "Shaken" will be available in the Kindle Store ... in October, and the print version of the book will be available in February 2011.
As much as I like Joe and his gutsy self-promotional style, my attention was on Amazon. Look at how much press Konrath brought to AmazonEncore. Just imagine how much bigger the shock wave would be were he a New York Times best-selling author ... say like Janet Evanovich.
Last week, the publishing industry was agog with the news that St. Martin's Press (a division of Macmillan) had reportedly turned down Evanovich's demand for $50 million for her next four books. Last Wednesday, Deadline New York reported here that Evanovich's son Peter, acting as her agent, "is expected to shop the deal to other publishers shortly." Publishers Marketplace reported that "Of the Big Six, only Penguin and Random House have no prior business relationship with her."
Imagine how much attention AmazonEncore would get if they snagged a fish the size of Evanovich.
Maybe Evanovich doesn't go with AmazonEncore. Maybe she goes with the Mother of All Self-Publishers, Author Solutions. Or maybe she blinks and takes a lesser advance. Out of 242 reviews, her latest novel Sizzling Sixteen is only rated 2 1/2 stars by readers at Amazon.
I may be wrong about the players, but I'm not wrong about this prediction: Sometime soon AmazonEncore is going to snag a New York Times best-selling author. And then, as we say in Texas, "Katy, bar the door."
The bigger names in publishing will be able to make money self-publshing through AmazonEncore or Author Solutions because they already have a brand that readers will actively seek out.
The Big Six have been wanting to back off from big advances for a long time. Wouldn't it be ironic if the big name authors help them do so ... by leaving those publishers.
Big Six, instead of looking backward at the world that was, start looking forward to the world that will be. Evan Schnittman encouraged publishers and authors to work together for a "win-win" solution. I agree.
The path you are presently on will lead to failure. Stop and take a look around. You still offer value to authors. Your editing expertise and your knowledge of marketing and publicity are huge pluses. Capitalize on those assets. Quit trying to dominate, and start being a good partner. Otherwise, before long, your offices are going to be awfully lonely places.