Wednesday, February 23, 2011

Are You Ready?


My dear fellow Crusaders and all bloggie friends:

I am SO glad to have this chance to have your ear. I have this *very important message from David Farland:





David Farland’s Daily Kick in the Pants—Changing Times
 

As I’ve been forecasting since last April, we’ve seen some huge changes in the publishing industry this year.

In the latest news, Borders has filed for bankruptcy here in the United States. Borders of course is the second largest bookstore chain in the United States, but they failed miserably at keeping touch with the changing times. The mistake? They didn’t respond to the online threat from Amazon.com, and they didn’t put together a program to sell electronic books.



As a result, in the fourth quarter of last year, the busiest season for bookstores, Borders group saw sales drop by a whopping 18 percent. So they’re filing for bankruptcy and will be selling about 200-250 stores. Since Borders stores are built, usually, near a Barnes and Noble, one must assume that customers will migrate to the competition.

Meanwhile, Borders doesn’t seem to have a viable plan to stay in business. Instead, some goofball decided to help wannabe authors self-publish their books electronically through a program called BookBrewer. Stay away from Borders’ stock, and stay away from their self-publishing model. Both are poison, in my opinion, and I’m not the only one to think that dealing with them is gonzo.

Borders has a plan to restructure which will pay only about 20 cents on the dollar to its debtors. This is going to hurt a lot of publishers and distributors—to the point that Ingrams, the nation’s largest book distribution company, has ceased providing them with books.

Meanwhile, we’re seeing similar news around the world. A day after Borders announced that it would go into bankruptcy, a major bookstore chain in Australia announced that they were going bankrupt, too. Last week in Canada, a bookstore chain tied to a major distribution company announced that both were filing for bankruptcy, while we see the same happening in England with one of their major chains on its way out.

In short, we’re seeing the dinosaurs all die off. Those businessmen who haven’t adjusted to the way that books are being sold will soon be gone. Whether they’re small private bookstores, major chains, book distribution companies, or publishers, those who don’t adjust will die.

Meanwhile, many publishers are actually showing higher profits right now. With electronic book sales up by 118% for the last year, publishers that take a chunk of electronic rights are actually seeing higher revenues with less in costs, thus increasing their profit margins. So the publishers are healthy. Barnes and Noble is feeling giddy over its sales of e-readers and the accompanying surge in electronic sales. Simon and Schuster, along with a number of other publishers, are seeing a big rise in profitability.

But this leads to a new problem for authors. Those same publishers are finding that the hardcover book market for bestsellers is shrinking. Many of the most active readers, the people who read ten or twenty novels per year, are now reading them on Kindles or iPads. As a result, some authors who were selling three hundred thousand copies in hardcover are finding that more than half of their sales are now made electronically—and that under current contracts, the publishers actually get to keep a larger percent of the author’s income. Thus, an author who might have made a million dollars on a novel last year is finding that he’s losing a couple hundred thousand dollars of that money to the publishers this year.

So now we’re coming to the next big battle. How much of the money on a new release should go to the author? I think that we’ll see some heavy contention—with agents and writers groups lining up to battle the publishers this coming year.

The real battle, perhaps, might re-shape the industry. The argument should be whether “electronic publishing” is really “publishing” at all. Under old-fashioned copyright law, when a publisher buys the right to publish a novel, he’s buying the right to make a physical copy and distribute it.

But with electronic publishing, there is no physical book being created and shipped. The book exists only as an electronic file, in the same way that music files are being downloaded and sold. So the question arises: is the selling of electronic copies in violation with the intent of the copyright law?

At least one judge has ruled that “electronic publishing” should be handled as “electronic licensing.” There is a huge distinction here as far as the author is concerned.

For example, a publisher in today’s world can publish your book, and then hold onto it indefinitely by claiming that he’s still publishing it electronically a hundred years from now, even though he has no other interest in it. The rights to the property would never revert, and the old contracts that are in the books in some cases give very little of the money from those sales to the authors. It creates a perpetual windfall for the publishers, and makes the writer wish that he’d never published the books in the first place.

So authors under the current system basically handle control of their work over to publishers for eternity. Savvy authors don’t want to do that, and if you understand that we see the emergence of a major new market over the next few years, where the control of electronic rights are all-important, it makes you as an author wonder if publishing a book right now is ultimately a mistake. In the long run, an author might make far more by self-publishing his works electronically.

A year ago I would have told you that you should stick with the traditional publishing route. Right now, as we move into a new age, I’m still going to tell you to stick with the traditional route. But here’s the thing: self-publishing electronically looks like a better alternative every day, even to someone like me who is a New York Times bestseller.

So when do you give up on the old system? So much depends upon you as an author. I’m an old guy in my fifties. For me, the old system still makes a lot of sense. But if I were eighteen or twenty, and I was looking at giving up thirty percent of my income on a book for life, just to have it published by some sloppy New York Publishing company that probably wouldn’t do anything to push my books anyway, I’d be giving New York the evil eye right about now.

Think about it: is an extra $20,000 in your pocket right now worth a loss of 30% in income on the sales of your book for the next fifty years? That’s the gamble you’re taking on publishing, and increasingly new authors are saying “No. I’m not getting enough of a push from existing publishers to make up for the long-term losses.” They may be right.

_______________

What are  your thoughts?

*this has been reposted with permission by the author

22 comments:

  1. There is a "space between." New independent publishing houses are starting up that publish only e-books, but use an author-centric model while still functioning much like a traditional publisher. Disclaimer: I'm a co-founder of one of them, Puddletown Publishing Group. We pay high royalties, only take good books, edit them carefully, and do the marketing for you. And we don't charge our authors anything. For some writers, self-pub is a no-brainer. But for some it's overwhelming. That's where folks like us come in. Mosey on over to my blog if you want more info.

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  2. Wow, thought provoking stuff. In fact here in Australia it's even worse than it was when this article was written--we lost a major chain AND our local Borders to voluntary administration in the same week, so now the market is very limited indeed.

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  3. Thanks for this... it's hard to keep abreast of everything, it changes so quickly!

    I have an award for you at my blog.

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  4. "We're seeing the dinosaurs all die off."

    So true. We live in very interesting times!

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  5. You said, "A year ago I would have told you that you should stick with the traditional publishing route. Right now, as we move into a new age, I’m still going to tell you to stick with the traditional route. But here’s the thing: self-publishing electronically looks like a better alternative every day, even to someone like me who is a New York Times bestseller." and I agree.

    I think a writer's focus should be on what the publisher is offering as regards to ebook rights and sales percentage. We all know that the younger generation does not have the love of books like our generation does and those that do will read on an electronic device so I would try to make sure your set in that regard.

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  6. I just think it's great that there are many options for authors these days when it comes to publishing. Being old too I'm more inclined to prefere the good ol fashione route - only personal reasons!! I'm the most insecure and vain person I know and having a and extablished industry want and pay me for my writing is something that would really really mean so much to me. That's just for me though!!!

    Other writers are confident enough and not as needy as me to try all other routes on offer - I truly wish them all the very best!! Take care
    x

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  7. p.s. sorry about all the spelling mistakes, my pc is slowing right down!! x

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  8. It is all so overwhelming right now. It makes me glad that, even though I'd love for my stories to be in book form, I write them because I like to write.

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  9. This both an exciting and a confusing time for a new author. I hope the dust settles with the eBook market benefiting both the publisher and writer for the positive.

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  10. A friend recently had me look at her contract, mostly because I HAVE ONE and she didn't know what to look for, and the 'for perpetuity' thing was one of the red flags I pointed out, too. A third friends suggested she put a time on it (5 years?), but my gut feel was for as long as people can actually purchase a physical copy as well. I like the first comment here about small, new specialized publishers stepping in--self publishing just doesn't have the quality control I want as a reader, but alternatives to the big guy sound good.

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  11. Maybe there need to be some adjustments to the e-book licensing question, but I still think that electronic copies are inevitable. So maybe there have to be time-contracts or whenever they stop printing, the rights for online go back as well.

    Also the income has to be the same percentage. I mean, you don't get much as a writer anyway, so at least they can give us that.

    I think you still need a publisher though, even for e-books only, They read, edit, decide, give it a cover and should also promote it in ways you alone can't usually do. There are book fairs and different routes to release even an online book on ibooks and so on. You get my point.
    Nahno ∗ McLein

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  12. How come Borders didn't get a bailout O.o... too small equals FAIL.

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  13. Wow - interesting post. There is so much to think about in here. It's a tough decision to decide in which direction to go. I'm not at that stage yet, but I'll be doing lots of researching and thinking before I am. :)

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  14. Susan, thank you for that info! :)

    Deborah, talk about writer's evolution!

    Amie, I'm so sorry to hear that. :( I hope it gets better soon.

    Alison, no kidding! Thank you for the award! <3

    Shirley, it makes me wonder where they're leading too! :O

    Clarissa, that is so true, and a wise choice! :)

    Jennifer, choices, choices, choices! It's so wide an avenue, I might get lost in them. :/
    Btw, don't worry 'bout your typos--I understand! I only edit if ya want me to! ;)

    Shari, yes, me too! <3

    Raquel, tell me about it. Let's see what the future has for us, right?

    Hart, you're SO awesome for mentoring your friend. Every aspiring author needs a mentor! *hugs*

    Nahno, true. We can only hope for the best!

    Michael, it's sad, isn't it? :(

    Jemi, I so agree with you. You're one smart cookie! ;)

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  15. This really has me thinking. Great post!

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  16. Hi from a fellow Crusader! Excellent post. There is much to consider theses days and much to be worked out. The rate of change is amazing. I love e-books, and am glad to see the revolution that has been created, although I mourn the loss of so many bookstores.

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  17. I don't like the idea of bookshops being made to close down because of the threat of ebooks though. :O)

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  18. That's some good food for thought. That being said, there is still a major stigma amongst the book buying community (as there should be until things are better sorted out) about self-published books.

    There are some very well done self-pubbed books, but the large majority is drivel. Tough to bust through in that realm.

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  19. Awesome post! I agree with Susan, who talked about independant publishing houses. I am working with one right now, and the contract is simple and straight up, and that includes all electronic and e-book formats. The industry is indeed changing, and that's OK as long as authors keep electronic sales in mind when signing on the doted line.

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  20. Kari, you're welcome! It is very thought-provoking, isn't it?

    Alex, I know. I'm not sure how I'm going to do it, but I'll worry about that when the time comes. :)

    Susan, I know what you mean. I, personally, love the feel, look and smell of books in my hands. How will my bookshelves look like? :( I hope both options will always be available!

    Madeleine, I hear ya! I think there should be room for both! :/

    Tracy, I wonder how the readership will go with both good and bad self-pubbed books. It's going to be very interesting, isn't it?

    Silvina, I've thought many times about doing that, but I've seen so many authors being taken advantage of without an agent to speak on their behalf. How does an author protect her/himself?

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