Lots of links this week, so let’s get to it.
First up, there has been a huge controversy sparked by Harlquin’s announcement that they would be forming a self-publishing arm called Harlequin Horizons. Victoria Strauss at Writer Beware wrote a very helpful initial roundup of the plan and controversy, Kristin Nelson wondered if it was exploitation or empowerment, and How Publishing Really Works had similar questions. Following the uproar, the Romance Writers of America took the pretty drastic measure of revoking Harlequin’s “recognized publisher” status, and Harlequin announced that they are dropping the Harlequin name from the self-publishing program in order to distinguish the two.
Setting aside this controversy for a moment and the specifics of Harlequin’s operation, let me just say that in principle I don’t think publishers facilitating self-publishing is necessarily such a bad thing. However, there should be complete transparency, fair pricing, total disambiguation between traditional publishing arms and self-publishing arms, and every good faith attempt made to educate writers about the difference between the two. This industry obviously needs new revenue streams, and provided that the publisher’s program is genuinely nonexploitive and transparent I don’t see the problem, and I don’t see why publishers should continue to cede ground to self-publishing companies when they have every capacity to provide the same service. It just has to be done correctly.
Now then. Other news!
Mike Shatzkin has one of the most brilliant blogs on the future of publishing out there, and this week he had a great post about some conversations he’s had with agents about how our role will be changing in the new publishing landscape. He explores a possible change in the way agents earn money, the challenge of facilitating self-publishing, and his opinion (which I share) that “power is moving from ‘control of IP to control of eyeballs.'”
In e-book news, the NY Times noticed that quite a few people are reading on their smart phones, and raises the question about whether the future of e-books is with dedicated devices or devices people already have (my guess: a mix of both). And in gadget news, a (satiric?) beta tester of Apple’s iTablet spilled the beans to HuffPo/blew my mind, and Engadget released a helpful holiday gift guide for all the different e-readers.
My awesome colleague Sarah LaPolla passed along a really cool ode to the e-book in comic form. And HarperStudio posted a video ode to making a physical book.
Meanwhile, with all of our recent talk about efficiency and self-publishing and e-publishing, Rachelle Gardner had a really interesting post that worries about what will happen if every novel ever written is published.
Over at Upstart Crow, Michael Stearns noticed an interesting thing about the new Stephen King book UNDER THE DOME: it doesn’t have any jacket copy. He sees this as a sign that instant word of mouth is quickly becoming paramount, and it’s eliminating the browsing process.
As I’m sure you’ve heard by now, Oprah is ending her daily talk show, which had quite a few book people gasping with panic. C. Max Magee at the Millions has a terrific recap of the history of Oprah and books.
Reader Eric Laing pointed me to this amazing post by Lynn Viehl where she shares her ledger publicly and shows the financial reality of a NY Times bestseller After taxes, commission, and expenses, Lynn made about $24,517.36 on her mass market bestseller TWILIGHT FALL.
Brace yourself for a month of decade retrospectives and best of lists. Quickly out of the gate is the Times UK, which has a list of the top 100 books of the decade, which is, incredibly annoyingly, spread out over 17 pages. Geez louise, Times UK, I don’t need to click 16 times to know that Cormac McCarthy won.
The National Book Awards were held, and congrats to the winners! And, your nominee for best sign of the times: Google sponsored the after-party.
For all of you needing help with your last NaNoWriMo push, there’s a pretty hilarious widget called Write or Die that punishes you in various forms when you stop typing. (via Neil Vogler)
And finally, as I’m sure you know the second Twilight movie New Moon came out this week. Writing in the Millions, Emily Colette Wilkinson examines the role of wealth aspirations in the TWILIGHT series. io9 has a pretty unreal gallery of the worst/most disturbing TWILIGHT products, and the Daily Beast has a gallery of the best TWILIGHT tattoos, including one of a woman who had an entire paragraph tattooed on her back. Wow. I’d just like to say right now that if anyone gets a tattoo of a corndog I’ll send you a signed copy of JACOB WONDERBAR.
Have a great weekend!
Marilyn
Exactly. When I talked about overhead, I didn't mean workforce reduction – that's the last thing that's needed. I was talking about higher end expenses and Manhattan real estate.
Who owns these companies? How invested in the business are they? If they have other lucrative businesses, can't they send some money toward publishing to get it back on it's feet?
I have to leave for now…..
Thanks for the wonderful converstation.
Anon – just saw your comment. I'm late, I'm going to get in trouble. Later.
Nathan, you're amazing. Thank you.
"There are small press eBook authors making $40,000 and more per year from sales of multiple romance books WITHOUT having to pay anything at all for publication."
This is true. I'm one of them. But it's a lot more complicated than just submitting books to an e-publisher. You must have books out with multiple e-publishers. You have to absolutely love doing it. You have to be experienced and dedicated enough to know how to produce a book a month. And you have to promote endlessly to build a fan base (and not on comment threads like this). It consumes your life, and like I said, you have to LOVE doing it otherwise it won't work.
Mira,
My impression is that they don’t perceive a need to get publishing "back on its feet". My impression is that they worked hard to make publishing what it is. Making billions of dollars (over $100 billion for one of the companies) was and continues to be the goal. Here’s an interesting Media Ownership Chart.
Anon @12:27 PM,
Congratulations on your success!! I understand completely that that’s what’s involved. I belong to EPIC, and discovered that some of EPIC’s romance authors were earning that much money in royalties from multiple small press romance eBooks. Writers who work just as hard in other areas of publishing don’t often earn enough money to quit their day jobs, with some dropped by their publisher if their first book doesn’t sell enough copies, so I found the information about authors in your situation rather enlightening. Congrats, once again!!
Anon 12:12,
What do you mean by "supply chain risk"? The author was paid an advance of $50,000. She keeps that regardless of how well the book does. If it had flopped the publisher would have eaten a large loss and the author would still have the $50,000. Publishers keep reserves against returns to play it safe… and some of that reserve will probably reach the author eventually when further sales figures are confirmed (ie. less books will be returned than they're guarding against). And if the book earns out the author will receive royalties (and might already be receiving royalties on earlier books).
Is that what you're asking about? Or something different?
Some firmer numbers;
Viehl states she earned a $50,000 advance and had $24,500 net off it. So that's what, 20% for Writers House, LLC? $10,000. Leaving $40,000 gross, so 15,500 in taxes and expenses. At 32% income taxes, including self-employment tax, that would be about $12,800 and allow for $2,700 in expenses, probably promotional expenses, travel and lodging for events and so forth. Not unrealistic.
However, I don't find her claim that Penguin grossed $453,839.68 realistic, nor her supposition that they netted $250,000. In order for 61,663 copies to earn that much, the average sale revenue per copy would have to be $7.36. Condsidering the cover price is $7.99, that means the distributed wholesale discount is only 8%. Not realistic.
Most of a publisher's mass market paperback sales are at 60% of cover price, allowing 5% for disributor rake, and 35% for retailer markup. The realistic numbers are $5.45 average revenue per MMPB copy, for a publisher revenue on 61,663 copies of $281,563. (10% MMPB direct retail sales at 100% cover price, 20% wholesale sales at 80% cover price, 70% wholesale sales at 60% cover price.)
One other point of interest, most returned paperback books are not physically returned. They're remaindered, meaning the cover is stripped off and returned for credit and the book block is sent off to be pulped. And of late, more and more booksellers are merely filing an affidavit for returns rather than stripping off covers and mailing them back for credit, ripe for abuse. One stat I encountered suggests that remainder fraud runs between 20 and 40%.
Anyway, that means that returns are not available for restocking. At 40% average remainder on MMPBs, and Viehl's royalty statement bears that out, that's a cost of publishing that no one legitametaly makes revenue from. I project there were 100,000 books printed. A paperback costs about a buck to make and another 35¢ for handling, so that's roughly $135,000 in production costs, add in Viehl's $50,000 advance, $185,000 out of $281,563 revenue. $100,000 gross for the publisher for distributed operating costs, like payroll, utilities, Internet, postal expenses, etc., rent, if they don't own, but Penguin largely does own it's work space. Then there's distributed overhead costs, interest on mortages, capital expenses like computers, office furniture, carpet, vehicles and so on. I don't think there was a whole lot of net profit on the novel.
Whoops, I slipped a digit. I calculated on 51,663 copies, actual61,663 copies times $5.45 equals $336,063. Minus $185,000, maybe Penguin did realize a little net profit.
That HuffPo article on the iTablet sounds like a joke to me.
iDrive? iTrim?
iDon't think so.
word ver: wings
no thanks, I'll stick with beer and pretzels
Seriously, this was a big week, right? I mean, my mind is reeling with ideas!
The self-publishing debate always drives me insane.
In the music world, if someone believes she has talent, she will form a band, record a CD, play local clubs for pennies, post the music online, and hope to hit it big.
In the art world, if someone believes he has talent, he will buy some supplies, paint some pictures, open a gallery, post his work online, and hope to hit it big.
Why should writers be denied the same opportunity? If the work is crap, oh well, it would have never been published anyway. But if it's good, now writers can establish themselves without assistance from traditional gatekeepers.
The publishing industry reminds me of a grumpy old man yelling at the neighbor kids.
Nothing happening is good or bad, it's just different. Those who embrace the new reality will thrive. Those who don't will fade away.
The Penguin Group is doing fine, though, making money on its books. I did some research tonight to add to the interesting conversational thread going on about Penguin here in the comments section. Interesting article written in March 17, 2009: Penguin Posts Record Profit in Down Economy. According to the article, "Nearly every segment of Penguin Publishing showed improvement in 2008 helping the company achieve a growth of 26% over 2007 and a profit margin of 10.3%. Sales were up 3% not withstanding the increased value of the dollar." In addition, Penguin is owned by Pearson PLC. Pearson PLC operates through three primary groups: FT Group, Pearson Education, and the Penguin Group. According to the Pearson PLC Profile, Pearson PLC’s overall sales for 2008 amounted to $6,963,000,000.00 with a net income of $467,500,000.00. And here’s information on the earnings of their top executives.
In today's Sunday paper there is an article about how many more people are reading now, but they borrow from the library instead of buying their books. In this economy they can't afford such high prices so many towns are building huge new libraries while book stores are closing,
Does this not pose a difficult situation in a few years=for everybody?
Marilyn, your research is amazing, and fascinating! So, that raises the question of just how much publishing really is struggling?
Maybe it's not. Maybe it's just cost-cutting.
Cost cutting that the author, in part, absorbs. And yes, Anon 12:12, I agree with you. I think that writers have bought into the idea that they are incredibly lucky to be published. They should be grateful and accept anything they are offered.
I noticed, though, that Nathan is out of town, so I just erased the rest of my post. 🙂
I'm reluctant to get too controversial on his blog, while he's off in another State.
But maybe when he gets back…..
That NY Times article brings out my delimma exactly regarding the purchase of an e-reader (kindle or nook) or just getting the iPhone with all the added extra applications.
One of my supervisors at work has the iPhone and allowed me to sample the "notes" kindle features. The trouble with the iPhone is simply the size of the screen.
I can't imagine reading an entire novel on a space no bigger than this comment window. It would work short term – as in standing in a long, long supermarket line – but would cause headaches and eyes strain, I'm sure over a long period of time.
And when I sit down with a book, I intend to spend serveral hours if not several days with it. And who needs the distraction of the internet while reading. I get mad enough during the last few chapters of a good book if my family interrupts for for silly things like dinner and rides to their friends. Getting an IM or blog update would frustrate me.
Thanks for the links Nathan. I really enjoyed that the general public outcry was able to change the mind of a conglomerate like Harlequin. Nice to know purchasing power has its influence still.
……..dhole
Mira,
I don't know… what does it mean that one publisher out of many is doing well? I mean, if there's any publisher with a "brand" in the public consciousness it's Penguin. Because they've made wise investments doesn't mean everyone else has. And if Penguin is doing well, that means Penguin's authors are doing well, too. That's the whole point of royalties – the author shares in the success of their book. If the book exceeds expectations they'll make money on top of their advance. And those advances are a protection for the writer – they don't share in the same risk as the publisher if the book fails to garner an audience (except in the long-term career sense).
Now, if publishers were raking in big money and authors never saw any of it… then I might see a case for exploitation.
Thanks, Marilyn P.
I'm anon @ 12:27
It ain't easy 🙂 But it's a lot of fun.
"Does this not pose a difficult situation in a few years=for everybody?"
The newpapers (and the mainstream media in general) aren't taking everything into consideration and they aren't giving out all the info. Many people buying five – ten e-books a week from e-publishers at one time. And it continues to increase instead of decrease.
Bryan, I just wrote up a response to you, but then I took it down.
I really don't want to talk about controversial things while Nathan is out of town.
Let's wait until he gets back, okay?
@ Steve Fuller:
I have to say I agree with your basic argument. Afterall, it is rare for a music group or artist to be recognized nationally if they are not producing work locally and making a name for themselves. Creating groupies – followers.
It would seem to reason that aspiring author who have a large following on their personal blogs would also attract the attention of an Agent once the work comes across their desk (in the form of a query).
It seems to me this is the only artistic/entertainment business where self promotion is a detriment, not an asset. Over at Pub Rants last Monday, Kirsten posted that she sent a rejection letter to an author who not only had talent, but was previously published and had a very good manuscript (https://pubrants.blogspot.com/2009/11/really-good-might-not-be-enough.html).
I think this sort of rejection happens a lot. My question is: what are the chances of this talented author remaining unpublished because she/he recieved enough of that type rejection that the Author gives up and remains in a less fulfilling profession? Does the Author self publish and thereby ruin the chances of ever attracting the notice of a Big House?
I attended a workshop with an agent who said an author with a poor track record is harder to sell than an unknown author. Does that mean if you sold 150 copies of your self published novel an Agent is still unwilling to represent you with another project because you flaunted tradition and self published?
Many inde presses were started by people with the drive to search out markets for their impatient authors.
Not that I'm saying "all" self published authors are decent writers; but I'm guessing a good part of them may be at least mid-list if given the chance.
And then there's that self published guy recently in the news (Scott something, or something Scott, I forget his name) who is now a national best seller.
Your comment Steve just brought up a lot of my own questions on why it is so wrong for an author to put their wares – so to speak – out in the local markets for public opinion. Like local bands, artists and theater actors do.
………dhole
Wow, I'm so excited to have found your blog. I'm going to read every scrap! Thank you for the insights into this much desired world..
Nathan,
I was just wondering if you have stopped visiting AbsoluteWrite?
https://www.absolutewrite.com/forums/showthread.php?t=53863&page=51
anon-
It's been a really busy couple of weeks. I hope to stop by soon.
Nathan,
You're forgiven. We miss you ti all.
Joisin (hope I spelled that right)
It is offered only to Americans
Canadians are not eligible for Published by You, or I'd have used it. I am trying iUniverse now to see if it's better quality product, and keep my ISBN.