Wednesday, December 21, 2011

What Publishers Don't Do

This week's tempest in a book-pot was sparked yesterday by the fine writer Michael Chabon, but it could easily have been any one of a thousand other authors. In an interview with the Washington Post, occasioned by the upcoming flood of his back catalog into electronic formats, Chabon complained about his royalty rates:
When it’s comes to royalties on a paper book, that rate (25 percent) is completely fair when you think of the expenses a publisher takes on — the delivery trucks and the factory workers and the distribution chains. But it’s not fair for them to take a roughly identical royalty for an e-book that costs them nothing to produce.
There have, of course, already been a dozen or more impassioned blog posts and hurt tweets, from various publishing folks, taking offense at that "nothing to produce." It is wrong, and horribly wrong, and all of us who work in the business know how much time and effort and agida goes into turning a manuscript into a readable ePub file, or its multifarious brethren. And that's only the beginning of the process -- merely making something exist is the simplest part. One might hope that we all could take that as read by this point -- that Publishing, as a verb, is much larger, and encompasses many more complicated, useful, necessary processes than the simple printing and warehousing of books.

We clearly can't take that as read: we might know it, but no one else does. It may be stupid to hope that readers will ever understand, because there's no reason for them to care. (How many of us care about the supply chains of the consumer products we use?)

But our authors should be different; they're our partners, friends, colleagues. More than that, publishing could not exist without them -- they're the ones telling the stories and making the arguments and explaining the details that we're here to disseminate. If they don't understand what we're doing, we've already lost the people who should be our closest allies.

I don't think it's those authors' fault, though: this is an inevitable result of how big, mainstream publishing handles authors, and the problem lies with publishing, not with them. The Big Six houses have built a system where most authors talk to their editors regularly, their publicists sporadically, and anyone else hardly ever. So those authors don't regularly confer with the marketers assigned to their books, might have only arms-length contact with the production editors who actually turn their words into books in bound and electronic forms, and see the entire rest of the publishing company, from sales to subsidiary rights to the web team, as a black box. Can you blame those authors for ignoring the hard work of people they never talk to, never hear mentioned, and never share ideas with?

The company I work for doesn't operate that way, and I originally came out of Editorial myself, so it took me sometime to realize this, but it's clearer and clearer from what authors and editors say -- and, more importantly, don't say. Certainly, the primary relationship of an author to a publishing house is through her work, and so the editor is the initial contact point -- but what too many big publishers fail on is by making that editor not just the gatekeeper, but the bottleneck of that relationship.

That kind of genteel aristocratic air worked reasonably well for a long time, but this is the worst time for that kind of relationship: authors know that they can self-publish, or do many of the other options that are called self-publishing, and they can see the advantages of those options: control, immediacy, speed, flexibility. If all traditional publishing can muster on its side are the cozy relationships with a nurturing editor, then we'll see many authors defect for the other side.

But that's not all we can offer; it's not what we do offer; it's not what we currently do. And we have to become much better at both telling authors what we are doing, and in involving them in those efforts. The head of my marketing group had a great presentation at our recent sales conference -- I wish someone had videotaped it and put it on YouTube, because it's exactly the kind of thing every publishing company needs to be saying to its authors -- that was a strong and inspiring defense of what full-service publishers really do, with some comparisons to other possibilities and one notable recently ended "experiment".

Dealing with authors isn't always easy, and it's rarely simple; it can seem much easier to let the editor "handle" them, and work encased in the bureaucratic cocoon of your company. (And I've certainly made cracks about authors in my day; I'll admit it.) But authors are demanding because they know their material better than anyone else. And the trick is to show them -- not just tell them; they know the difference! -- that we're equally strong on our material, on marketing and selling and forging relationships and getting books in front of the people who want and need them.

A publishing company that can't do that -- that won't let anyone else talk to authors but the acquiring editor, or maybe the VP of Sales & Marketing (for those top-of-the-list authors) -- is one that will lose writers to "self-publishing." Those writers might then find that doing it all themselves isn't easy, or even possible, and might discover that there are vast swaths of "it all" that they can't even come close to touching -- but learning that would take them time and energy and expense that no one wants to see wasted. We can, and we have to, show our authors that what we're doing for them is valuable, and extensive, and powerful -- that publishing is vastly more than printing books and stacking them high in the front of a storefront.

Update, 12/22/11, 4:00 PM EST:

Both comments so far have focused on the time and effort costs to create an ebook, which means that they've both utterly missed my point. (On the other hand, they both seem to be readers rather than publishing people, so I wasn't talking to them in the first place.)

So let me be blunter.


Even after the ebook is created, it's just a file on somebody's hard drive. It's not in the iBookstore, or the Kindle Store, or the Nook Store. It doesn't have co-op placements. It hasn't been advertised. It hasn't been publicized. It doesn't have cover art, or descriptive copy. There are no special offers attached to it. No one has marketed, sold, or promoted it.

Those are the things that a publishing company does. Those are the people at publishing companies that often don't get to talk to authors, and so authors -- and my commentors -- apparently don't realize that those people exist, or that their work matters.

There are a million people who can turn a word-processing document into an ePub or eMobi file. Only a tiny fraction of those people are embedded in organizations that can publish those books afterward. And even if a file is in up-to-date XML and recently copyedited to within an inch of its life, the resulting ebook files will still need to be published just as much as an ebook made from a handwritten 19th century manuscript.


Anonymous said...

With all due respect, I think you're both missing the point.

Mr Chabon's comments are accurate regarding books that (1) were already edited (etc.) for print publication; (2) competently typeset and produced using relatively modern software (etc.)*; and (3) contracts negotiated and signed after 2002. That is, after all, his experience set.

Hornswoggler's comments are accurate for works outside the field conditions of Mr Chabon's discussion — and in particular for books being converted from either raw manuscript form or "old" printed form. Those who've never done production have little appreciation for what it takes to make even a clean word-processor document into a commercial-looking electronic book or printed book... and very, very few author manuscripts qualify as "clean" (I've seen exactly two in the last fifteen years or so).

Mr Chabon's point is accurate for works that have already been through the publishing black box recently; Hornswoggler's objection is accurate for works that haven't. Those simply are not the same thing, and even the inelegance of Mr Chabon's logic and presentation do not undermine his unstated objection to the way publishers have violated antitrust law in imposing the compensation terms for e-books on authors.

* That explicitly excludes any variety of Quark. For all of the faults of PageMaker's later versions and InDesign, they produce useable SGML output that translates well to various e-book formats; Quark does not.

Anonymous said...

Also you talk about how much work goes into making an eBook that publishers do, which I've heard before but have yet to actually read in detail, and you don't really explain in your article. Do you have any recommended links where we can get this information to dispel this myth?

Andrew Wheeler said...

bookbanter: Michael Hyatt, CEO of Thomas Nelson, wrote about the ebook cost question last year. About a year earlier, I saw a more in-depth look at the costs from a woman who works in book production.

But I'll also add what we say at the company I work for: we don't sell books by weight or volume; we sell content, and we price that content at a level reflecting its value. For example: there are plenty of professional databases in this world, all of which are completely electronic and have no print component at all, that costs hundreds or thousands of dollars per user per year. We think that the stories and knowledge and insights in books are worth fair prices, and so we believe in pricing content, not formats.

(Note, as usual, that I do not speak for my employer -- but this is how I explain our pricing strategies to authors and others regularly.)

Andrew Wheeler said...

Jaws: I think, actually, that you've missed my point; production is an important function of a publishing company, but not the defining one, or the only one adding value to the final product. I've added an addendum to the original post to address this.

David Oakes said...

To be honest, I don't think that the Publishers see or appreciate all the work that gets done either. Give Books credits the same as Movies, and more people might actually start to think about how much goes in to making one.

(Not that they will care, any more than the man in the street has respect for "Key Grip" or "Craft Services". But at least they will have to admit they exist.)

Kyle Jelle said...

There’s plenty of missing the point to go around. Chabon is only referring to the marginal cost of production, that is, the cost of producing the next copy after you’ve produced the first. Everything Wheeler is talking about is a fixed cost.

In print, the marginal cost of production includes printing, binding, warehousing, shipping and the awful waste of the return system. A decent print run requires a substantial upfront investment, and even an author who can afford to pay for that does not get access to the publisher’s distribution network or the instant credibility a publisher imparts, which is crucial to convincing a bookstore to use some of its limited shelf space for a particular book. This allows the publisher to act as a gatekeeper, and extract a high toll from authors.

None of those costs or limitations applies to eBooks. I acknowledge that publishers provide many valuable services, and I don’t think anyone begrudges them fair compensation, but these are all fixed costs, and if the marginal cost of production is negligible—as it is for an eBook—then what remains after the fixed costs are accounted for is pure profit. If an author can afford to subcontract the services a publisher provides, then once those fixed costs are paid off, the author gets to keep 100 percent of the revenue. According to Chabon’s description of his contract, what happens when the publisher pays off those fixed costs is that the publisher keeps collecting 75 percent of the revenue, and the author only gets 25 percent, in perpetuity for the life of the contract. Unless the publisher paid the author a monstrously huge advance—which, as a rule, they don’t unless a title is a sure bestseller—the author is better off avoiding that deal.

Realistically speaking, the rates Chabon is complaining about are a legacy of print. Publishers may be able to exact that kind of toll as long as print publication has enough value to authors and readers to justify paying it, but print is fast on its way to becoming a niche market, and if established publishers fail to adjust their eBook royalty rates to something more competitive, they’ll find themselves shut out.

Liviu said...

This is one of the few good arguments from your side, but I think it misses the point on two counts:

- value per money; in other words why do you think your services require 75% or more of the net?

When you were practically the only game in town, yeah, monopoly power and all, but today, sorry, I think you are deluding yourselves you will be able to keep that much money from the author

- flood of content - while there are titles that people really want (and of course those vary from person to person) most books are actually interchangeable to a large degree and within some parameters (eg type, genre, style)

As a heavy reader for 38 years now since age 4, I remember myself many times reading something just to read and because nothing else was easily available that was of some interest at the point; today with so much content easily available, why do you think you (the publishers) will get away with high ebook prices outside niche areas or really popular authors?

Andrew Wheeler said...

Liviu: I don't entirely agree with you -- as you certainly realize! -- so let me quickly respond to your points individually.

1) Publishers don't get 75% of the net receipts; retailers get between 30% to 60% (depending on their deal -- and I've heard that in some instances in the UK, retailers can get as much as 70% of the net) off the top. Publishers get what's left after author royalties. The higher retailer percentages have historically been connected to dominant retailers taking huge quantities of physical books -- but retailers are always pushing for more money on their side, as well, so we may see the retailer percentage creep up more, even under the agency model.

Retailers are going to take at least 30% under all circumstances -- that's the current default for agency on ebooks, and even the Amazon "self-publishing" model includes that. So that piece of the revenue pie is not available to be negotiated between author and publisher.

2) If you really think "content" is that commoditized, then there's no reason to ever pay for reading material ever again. Besides thousands of years of works now in the public domain (vast quantities of which are available through Gutenberg), you're reading this right now on the Internet, which has more text than any of us could keep up with.

The reason people argue about prices is because they *do* want something specific...but would prefer not to pay the asking price.

And, if you'll notice, at now time have I actually been arguing about specific royalty percentages or arrangements -- I'm entirely agnostic on the subject. Authors and their publishers can, and do work out all sorts of different deals. My current employer pays royalties on a substantially different basis than most fiction publishers do, and I've seen revenue-share deals (usually 50/50) where proceeds from sale of a work, after the retailer's cut and the basic costs to produce that specific work are subtracted, are split between publisher and author.

All those things are reasonable, and negotiations will always go on.

What *I've* been saying is that a lot of authors are kept in the dark by their publishers, semi-deliberately, about what those publishers are actually doing to promote those authors. That's an old-fashioned model, and a deeply stupid one, and it leads to authors believing that all publishers do is create book-shaped objects in various formats.

Andrew Wheeler said...

Kyle Jelle: See my answer to Liviu, immediately above. Again, I'm not talking about royalty percentages in the first place.

Also, the advertising/publicity/marketing budget for a specific book is a "fixed cost" only in your mind.

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