Guest Post by Robert Gregory Browne

SCARED SHITLESS - Robert Gregory Browne

Several years ago, Joe, Barry Eisler, Brett Battles and I all met at Thrillerfest Arizona, when Brett and I were probably two of the greenest guys in the room. We were both flush, however, with the success of finally being accepted by big-time New York publishers after years of trying to get through the gates. And, for me at least, Joe and Barry were far enough ahead of us that I felt a little intimated by them.

Come to think of it, I still do.

Flash forward and here were are, all seasoned veterans of the publishing world, facing the challenges of a new form of delivery which Joe, Barry and Brett have embraced wholeheartedly.

I, on the other hand, have been lagging behind. But when I told Joe that I had finally decided to take the indie plunge, he suggested that I sit down with Brett for a conversation about my current state of mind, which is an equal mix of elation, confusion and abject terror.

Brett Battles: First, I want to congratulate you on finally making the leap into Indie Publishing! Your first indie published book just came out last week, if I'm not mistaken. A mystery thriller called Trial Junkies (currently free on Amazon.)

Robert Gregory Browne: Last Tuesday. So it's been up for a week.

B: Well, it's about time! It's not like I haven't been pushing you to go independent for... well... forever.

R: I know, I know. I've been watching all of you guys jump in—first Joe, then Barry, then you and countless others. There's this great party that's been going on for a couple years now and I'm finally crawling out of bed, getting dressed and hoping I'm not too late for all the fun.

B: So what took you so long?

R: Well, until late last year there was this carrot dangling in front of me called fame and fortune that I wholly bought into. Not that anyone ever promised it outright, but I was told that the book I had coming out soon—after a year of waiting—would likely be my big breakout book that would launch me from the midlist into the big time. This was probably MY fantasy more than anyone else's, but I had high hopes for the book.

B: Right, I remember that.

R: So, while you and everyone else were trying to get me to join the party, I was still stuck in a contract and wedded to the old ideas and the old dreams, relying on other people to make them come true. The problem was that despite all this hope of breaking out big, I wasn’t even remotely convinced it would actually happen. Especially after I went to the RT Writer's Conference last April.

B: Why is that?

R: You were there. Barry. Lee Goldberg. I remember is you and Barry and Lee hovering around your iPad while you were showing them some cover art for your upcoming indie release, and all three of you were rhapsodizing about self-publishing. I mentioned that I had a book coming out in hardcover and you all groaned and gave me this "you poor guy" look that got me thinking, yep, the writing is on the wall.

B: I remember that. But you still waited. How did the hardcover do?

R: About as well as you could expect for a midlist author in this economy, with ebooks starting to dominate the marketplace. I won't deny that The Paradise Prophecy got me some of the best reviews I've had and certainly raised my profile—and who knows, when the mass market comes out next week it may raise it a bit more, but let's just say I'm no longer dreaming of fame and fortune.

B: All right, so that book didn't hit as you expected. Still, that was last summer. What happened between then and now?

R: A lot of soul searching. At that point in my career, I was also writing short legacy books under a pen name, had done a ghosting job and had a couple more potential ghosting assignments lined up. I suddenly realized that I was making a living writing books that I had no real emotional investment in. It was grunt work, I was burned out, and there were times I thought about quitting the business altogether—simply because I wasn’t having fun anymore.

B: We talked several times while you were working on those projects, and it was clear you were very frustrated.

R: Frustrated and depressed. And maybe a little crazy.

B: A little?

R: Okay, a lot. Just ask my agent.

B: Or anyone else who was around you. Trust me, I was one of those on the other end of the line trying to talk you off the edge. Anyway, so you did all this soul searching, and…?

R: All this time, guys like you were taking the digital original world by storm.

B: Digital original—trying to get fancy and coin a term?

R: You know me, I’m always trying to get fancy, but for some reason I’ve never liked the term ebook. But I guess we’re stuck with it. Still, digital originals is kind of how I think of them, because I often compare this current evolution to the fifties, when Fawcett started publishing paperback originals—which were brand new at the time and sold in dime stores—and the publishing establishment screamed that these books were destroying publishing and devaluing the work. Sound familiar?

B: Very.

R: So anyway, I could see that your books were climbing the Amazon charts and you were having great success, so I finally decided I needed to stop fooling myself, stop buying into the ridiculous notion that if I trust others to control my fate, I'll be just fine. It was finally time for me to take that leap.

B:And the result was Trial Junkies.

R:Right. When I sat down to write that book, I was beholden to no one but my readers and myself. And you know what?

B: What?

R: I've never had a better time writing. This wasn't a story that had been "approved" by an editor or a publishing staff or my agent, but one that I had been wanting to write for a long time.I felt free, and I really had a blast writing it.

B: Yep, writing for yourself has a way of making an author feel that way. So now that it's out, how do you feel?

R: Uh, you would ask that. To be frank, I'm scared shitless.

B: And that’s because…

R: Because now that I've finally dragged myself out of bed, hopped in the car, driven across town and joined the party, I'm suddenly petrified that nobody will ask me to dance. Despite all the success you and Joe and Barry and Lee are having, that doesn't guarantee success for me, and despite moments of elation—when I think I've made the right choice—I have periods of panic where I wonder if I've just cut my own throat. Remember how you felt when Little Girl Gone was first released?

B: Oh, yeah. Not something I’m likely to ever forget. I thought I was going to have a stroke pretty much everyday for two months. Have I done the right thing? Have I ruined my publishing future? Will I make any money? Have I gone insane?

R: Exactly.

B: There were a few nervous months there when I wasn’t sure if I was even going to be able to make my rent (not an exaggeration), but sales continued to grow, and now I don’t worry nearly as much as I use to.I'm sure this stage will pass soon for you, too.

R: I think part of the problem is that, as traditionally published authors, we're kind of trained to "listen to mommy," because she'll always take care of us. We feel we need to follow her lead. But now suddenly mommy's gone and we're on our own and as crazy as it sounds, it's a little unnerving. Until, of course, you look at the situation logically and realize that mommy didn't always know best. Far from it. In fact, mommy is probably far less interested in the relationship than you are.

B: Absolutely. A lot of things changed at Bantam Dell between the release of my third and fourth books—the most important being my two biggest supporters were no longer with the company, and the new folks made it pretty clear I was not a priority. When they passed on my new book proposal, once my contract was fulfilled, it was the best thing that could have happened to me. That book, btw, was Sick, which has gone on to become my best reviewed and one of my best selling books, and has spawned two sequels so far.

R: That seems to happen to a lot of people. Books getting passed on that become great sellers or even bestsellers on Kindle.

B: The key, at least in my mind, is to write the best books you can, AND get as many titles up on your virtual shelf space as possible. Last year I released almost twice as many books as I had in the previous five. The more books you have—as long as they're good—the less any single title has to carry the load. You know this, too. We've talked about it before. I believe you have several books you'll be releasing soon, right?

R: That's the plan. It took forever for me to get my backlist, but we finally got the reversion letters a couple days ago, so that's four books I'll have in addition to Trial Junkies. And I’m already working on Trial Junkies #2.

B: You mentioned what a pain it was getting the rights to your backlist. You want to elaborate?

R: Let's just say that it took a lot of cajoling on my part and from my agent and his assistant to finally get those letters in hand. It was like pulling teeth with slippery fingers. Surprisingly, they approved the reversions fairly quickly—for which I give them tremendous credit—but then it took months and months to finally get the letters themselves. But I remained patient.

B: Why?

R: Because I'm a nice guy.

B: Since when?

R: Okay, since never, but don't tell anyone else that.

B: It’s our secret. So now that you have the rights back, are you planning to release them all yourself?

R: Absolutely. With Trial Junkies going free on Amazon Select starting today, I decided to also release an updated version of Kiss Her Goodbye. And I hope to have the rest out early next month.

B: Kiss Her Goodbye was the one CBS made into a television pilot.

R: Right. A wonderful experience all around, which I wrote about in the new afterword in the book. They did a great job.

B: Yes, they did. So the big question is, are you all-in now? Or are you just dipping your toes?

R: In all honesty, I'm not sure. I was raised in this business with a certain mindset that I'm still fighting against. Like I said, I'm scared shitless because I have no idea how it'll all turn out. Not that I ever knew before.

B: Sure, it's back to the "mom" thing. It's the comfort level and the way we were brought up to think about traditional publishing versus self publishing.

R: Exactly. But with indie publishing I don't need mom's permission. I'm no longer begging her and dad to let me take the car out for a spin.

B: It's a kind of brainwashing. I don't mean that in an evil way. It's just that traditional publishing was the only way to get a novel out there for, well, like forever. Until ebooks came along. It takes a while to deprogram.

R: And I'm still deprogramming.

B: It probably took me six months to get to a point where I was no longer thinking, have I done the right thing?Six, nerve racking, stomach wrenching months.

R: I remember you telling me you couldn't sleep.

B: Yep...for a LONG time.Now, I don't even think about it. I'm just constantly excited about getting my next book done and out.

R: Plus you're writing like a fucking maniac. Book after book. And I'm envious as all hell. How many books have you written over the last year or so?

B: When PALE HORSE comes out in June, that'll be nine in fifteen months... three of which were written prior to 2011, but the rest since then. But the thing is I'm not writing any faster than I did when I had my contracts with Bantam Dell. I just had a lot more down time then…which I now wish I had used to write other books. Lost opportunity.

R: Like I said, I’m envious. And you not only write fast, but you write WELL.

B: Thanks. I think that's one of my favorite things about indie publishing. When I was with Bantam I was on a one-book-a-yearrelease schedule, and it was killing me. What that really meant was that sometimes it was up to a year and a half or more from the time I'd actually finished all the edits on a book before it hit the stores. Now I’ve hired my own editor andI just put them out as I finish them. I LOVE that. I actually remember what the book is about when people talk to me about it.

R: And it doesn't hurt that you're making very good money at it.

B: Good money. Working toward very good.

R: Which, of course, gives me hope. I was talking to my financial guy a few days back and telling him how much my friends are making through self-publishing. I said, "Some of these guys are pulling in 30-40K a month."

He says, "I'm not surprised."

I said, "Really?"

He said, "Sure, because that's the cut the publisher usually takes. You just never see it."

B: That pretty much sums it up. And ebooks are forever. Traditional publishing is ALL about that first month. But with ebooks, you don't have to fight for shelf space, and even those that have been out for a year just keep going and going.

Even if you have a bad month, or a bad year, next month or next year could be fine.

R: And the playing field is fairly even. Contrary to what some people believe, most readers don't give two hoots who published the damned book. They just want a great read.

B: Yep. And the stigma of "self-publishing," while still there, is quickly disappearing as more and more of authors jump in, and I’m not just talking about previously traditionally published authors, but also authors who’ve bypassed that path altogether.

R: But I suppose we're preaching to the choir here. Joe's been saying this for years.

B: Yes, he has.

R: And I'll be perfectly honest. When Joe first started talking about this stuff, I thought he was nuts. I really thought he'd taken a left turn into looney-ville. Shows you how much I know.

B: Many people thought that. What Joe was saying made logical sense, but it was playing against our brainwashing.

R: But Joe was a visionary and I wish I had even half the foresight he had. Okay, I'm done stroking him now.

B: Thank God.

R: But seriously, he saw something the rest of us were too blind to see. The future. And he seemed to know it was coming fast, and was prepared for it, while the rest of us—especially me—were still thinking about that dangling carrot. We were letting emotion override our common sense.

B: So what are you're expectations now that you're one of us?

R: I'm just hoping I'll make it through the next six months.

B: Don't worry. You'll eventually look back on this moment and think "that wasn't so bad."

R: Promise?

B: I promise.

R: I sure hope you're right. In the meantime I'll think I'll go puke.

Rob’s eBooks

TRIAL JUNKIES—First in a new series

KISS HER GOODBYE

BOTTOM DEAL—A Nick Jennings Digital Short

Brett’s eBooks

THE DESTROYED—Jonathan Quinn Thriller #5

SICK

LITTLE GIRL GONE

BECOMING QUINN

EVERY PRECIOUS THING

EXIT 9

THE PULL OF GRAVITY

HERE COMES MR. TROUBLE

Joe sez: Both Rob and Brett are terrific writers. If you like crime fiction, get them while they're cheap (or free.) I'm going to reiterate some of the advice Brett gave Rob, and add a bit more.

1. I've lost some of my faith in the Kindle Select program since it originated, and as a result I've opted my titles out. Select requires exclusivity, and I found I was making more money via Smashwords, Kobo, B&N, Overdrive, Sony, and Apple than I was through Select lends. 

The other advantage of Select--being able to make your ebook free--used to result in a nice bounce from the free list to the paid list. Lately, the bounce isn't nearly as dramatic. 


Two weeks ago Ann Voss Peterson made her thriller ebook Pushed Too Far free for a week. She gave away 70,000 copies--which is impressive, even beating many of the giveaways Blake Crouch and I had done (giveaways that got us in the Top 100 paid list and made us lots of money.)

Ann never hit the Top 100 paid. She's currently at #158. This is great, and she's thrilled, but she's only allowed to do this once every 90 days, and I don't believe the benefit corresponds to the loss of income from the other retailers.

If you do decide to make your ebook free, go all in. Use the 5 full days allotted, contact as many websites as you can find who announce freebies, and enlist everyone you know to help you spread the word.

2. Get as much content up there as possible. Virtual shelf space is like physical shelf space--the more titles you have, the more chance you have of being seen. The best advertising for your writing is your writing, so write a lot. Also, don't be afraid to experiment. If you write three books in a series that isn't selling well, try something else. Ebooks are forever. You can always go back to your series, or it could always get "hot" a few years from now and start selling like crazy. Until then, try new things.

3. Experiment with pricing, product description, and covers. Change stuff. Analyze data. Share what you've learned with your peers.

4. Bundle. Shorts can be compiled into collections. Novels and be bundled into sets. You and Brett and two other authors could each put a book into a four-novel collection and split the royalties. This is an easy way to increase shelf space without writing more.

5. Don't worry about advertising or marketing--I haven't heard of any instances where it has worked. My rule of thumb is: if it makes me buy a book, I'll try it for myself. I've never bought a book because of a  book trailer, pop-up, Facebook page, postcard, email spam, or print or online ad. I'm also not a big fan of marketing. I've never seen my sales jump because I did a print interview, radio show, or any other type of publicity. Fewer public appearances and money spent to self-promote, and more time at the desk writing. That's the best bang for your buck.

6. Pay attention. The more you know, the better off you are. Subscribe to the free daily versions of Publisher's Lunch and PW Daily even though they are biased toward the legacy industry. Read Passive Guy, Kris Rusch, Dean Wesley Smith, David Gaughran, Bob Mayer, and Mike Stackpole to understand how the industry is changing. Read Mike Shatzkin to see how some people are fighting to keep the industry how it is. 

7. Ignore the pinheads. It was brave to take this leap into the unknown. Most people aren't brave. So they will ridicule, deride, debase, vilify, disapprove, mock, judge, and even lie because the are desperate for you to be wrong. Fuck 'em. The best defense is being right and living well.

8. Do for others what others have done for you. Be successful, and teach other writers who to do the same.

The world needs heroes. Be one.

Pricing Books and Ebooks

Some authors still seem to be confused about Agency pricing, what it means, and how does it compare to wholesale pricing on ebooks and paper books. They somehow think Amazon is a bad guy for trying to lower ebook prices.

Here's a deeper explanation.

Wholesale Paper Model:  This is the general pricing model for paper books. On a hardcover book with a $25.00 price printed on the cover, at a 15% royalty based on cover price, the author made $3.75. The publisher sold the book to retailers at a 50% wholesale discount, and so collected $12.50 on each sale.

Of that $12.50, I estimate about $4.25 went to the costs of paper production--printing the books, boxing them, shipping them to warehouses, the distributor's cut--leaving the publisher $4.50. So under the wholesale paper model, the author's profit ($3.75) and the publisher's profit ($4.50) on a standard $25.00 hardback book were pretty similar.

Both paper and ebooks have overhead costs. Employees, utilities, rent, advertising, etc. Some publishers may work these costs into the price of a book and claim they are making a smaller profit. As an author, I also have costs for advertising, utilities, rent, etc. That's just the cost of doing business.

Wholesale Digital Model:  This is the original model the Big 6 used when they began selling ebooks. On an ebook with a $25.00 cover price, the publisher sold the book to retailers at a 50% wholesale discount (same as for paper), and collected $12.50. The author then received 25% of the net amount the publisher collected, so 25% of $12.50, which comes to $3.12. That left the publisher $9.38 ($12.50 minus the author's $3.12.) In digital, there are no paper costs to deduct from the publisher's share of net amounts collected from retailers. So the publisher went from making a little more than the author in paper to making almost triple in digital--for no justifiable reason other than greed.

Publishers like to say that an ebook costs as much to produce as a paper book. This is bullshit.

Certain costs are comparable, like editing and proofreading. I don't know if typesetting a paper books costs as much as formatting an ebook (my gut says typesetting costs a lot more.) An ebook requires only front cover art, a paper book also requires spine and back covers, which costs more. But these costs are fixed. The more books that are sold, paper or ebooks, the more these costs are absorbed.

The main price difference between paper and ebooks is in copying, shipping, and distribution. A paper book has a tangible value. It costs money to print, and to ship, and a distributor often takes a cut. Ebooks have none of these costs.

Publishers may say that the cost of printing, shipping, and distribution is a fraction of the retail price. But it isn't. Those costs account for as much as a third of the wholesale price. Printing, shipping, and warehousing a hardcover may be a higher cost than the royalty an author gets.

If you're wondering why you never saw a digital book selling for $25.00, it's because the ebooks you see on Amazon and elsewhere are usually heavily discounted from cover price, just like paper books are. My guess is publishers knew Amazon would discount a $25.00 ebook, but not as drastically as Amazon did, in some cases selling under wholesale cost. This frightened publishers, who wanted to have some control over the selling price because it protected their paper sales where they had a quasi-monopoly. So the publishers (allegedly) colluded to make Amazon accept the Agency model.

The important thing for authors to remember, though, is that the publisher made $9.38 on wholesale whether Amazon or any other retailer charged customers $25, $15, $10, or $5 for a digital book, because no matter what the retailer charged, the publisher always collected 50% of cover price, and the author's cut was always 25% of what the publisher collected.

So the wholesale ebook model may look like the wholesale paper model, but somehow the publisher makes almost triple what it did before. It did raise author royalties slightly (from 15% to 25%) but hardly enough to justify the extra money its making.

Agency Model:  For comparison's sake, let's look at how much an author would make on a $25.00 ebook under the agency model. Under the agency model, the publisher sets the actual retail price for the retailer, and collects from the retailer 70% of that set retail price. The author then receives 25% of the net amount the publisher collects. So, with a $25.00 ebook under the agency model, the publisher collects 70% of the $25.00 from Amazon, or $17.50, of which the author gets a 25% cut, or $4.38, leaving the publisher $13.12.

But I haven't seen any $25 ebooks under either pricing model. The price publishers seem to be trying to enforce for new front list ebooks is $12.99, sometimes as high as $14.99. For a $14.99 agency-priced digital book, the publisher collects $10.50, of which the author gets $2.62 and the publisher keeps $7.87. At a $12.99 price point, the publisher collects $9.10, of which the author gets $2.28 and the publisher keeps $6.82.

Under the wholesale model, an ebook that retailed for $9.99 was earning the author $3.12. Under the agency model, an ebook that retails for $9.99 earns the author $1.75.

Do you see now why the wholesale digital model was so much better for authors? Publishers switched to a model (and apparently colluded to do so) in which authors, agents, and publishers all make less money than they made under wholesale--with publishers taking a dramatically bigger slice of the shrunken agency pie.

That's bad enough. What's worse is, the Authors Guild and the Association of Authors' Representatives want you to think this is good for you. Whose interests do you think the AG and the AAR really represent? Do you understand why I called my last post Exploited Writers in an Unfair Industry?

The Agency model that the Big 6 embraced is the worst one overall for authors. I go into more detail why in my post The Agency Model Sucks.

Publishers are also making less under Agency. So why do it?

Because publishers want to control retail price. And, in fact, they've been doing so for decades, long before the agency pricing model.

I'd like to direct you to a blog post by Mike Shatzkin called There's no level playing field without agency pricing.

This got me to think about--perhaps for the first time--why books have prices printed on them and if that's a good thing.

Off the top of your head, name ten other products that have prices printed directly on them.

I couldn't name any off the top of my head, other than books. Then I remembered magazines and newspapers.

Why do magazines and newspapers have prices on them?

If I had to guess, I'd say it is to make it easy for the retailer. Newspapers come out daily (years ago they came out twice daily) and magazines are weekly or monthly. They are disposable (they aren't normally kept forever and are thrown away after reading them) and those that don't sell are discarded. Magazines and newspapers aren't discounted either (at least not with the regularity that books are discounted.)

Having a price on something disposable that comes out in new editions frequently, like magazines and newspapers, makes some sense. Since these are constantly being replenished, and are sold in bulk to retailers, they don't have to be individually priced with stickers. And since many are still sold at newsstands--which up until recently were cash only--the price made it easy for merchants to sell to customers without extra work or extra thought. By extra thought I mean making the retailer set the price based on wholesale models.

In other words, the retailer doesn't have to think, "Let's see,  I paid 40 cents for this newspaper, and I mark up my goods by 50%, so I'll sell the newspaper for 60 cents."

But I believe the newspaper and magazine publishers had another reason for printing prices on their products. By doing so, they controlled retail price.

There are obvious benefits to controlling retail price. Doing so circumvents supply and demand. It also prevents discounting. It doesn't matter which newsstand you get the Chicago Tribune from, it's the same price universally. Have you ever heard of a case of, "Naw, I can't buy People Magazine on this street corner because they're charging full price, so instead I'll walk three blocks to another newsstand that has it 40% off."?

Should books be sold this same way? Unlike newspapers and magazines, books are pretty much permanent. I've met a few people who throw away paperbacks when they're done, but mostly books are held onto. Or given away. Or sold, as evidenced by the number of used bookstores in the world. (I've never seen a used newspaper store.)

I don't know the history of putting prices on books. I don't know who started it, or when it started. I can assume (perhaps erroneously) that back in the day, books, newspapers, and magazines may have had the same distributor, or were sold at the same retailers, so it made sense to print the price on all paper goods.

But is this still necessary today?

Books are more expensive than mags or papers. They aren't disposable. And, most importantly, they are discounted all the time by retailers.

Think about how harmful that is.

One of the reasons so many indie bookstores have been driven out of business is because of discounting. We've heard stories of a mom and pop store buying copies of the latest Harry Potter hardcover at Sam's Club because they got it cheaper there than through their distributors. But it goes deeper than just the wholesale cost. It's the price on the cover that signals to the consumer what the book costs, and because of that price, indies get screwed.

What if good old Harry Potter was like practically every other product sold in the world? What if it didn't have a price on it, and the wholesaler let the retailer price it according whatever mark-up they deemed profitable?

Except for a select few products that are the same price everywhere and never go on sale (Wii, Bose, Apple, Xbox) everything has a variable price. Things are cheaper or more expensive depending on who is selling them. Things go on sale. Retailers can discount, or they can jack up the prices dependent on location (the same bottle of Budweiser can cost you 50 cents or $10 based on where you bought it.)

This is how almost everything is sold. And this is how products find their natural retail prices. Supply and demand, market fluctuations, and locations all play a part.

So who ends up determining the price of a product? The customer.

Not so with books. With books, the publisher determines the price.

Does this sound familiar for some reason? Perhaps because the DOJ is currently investigating the Big 6 for price-fixing?

Why is publishing the only business so concerned with setting the retail price of its products?

Consider Harry Potter again. What if it didn't have a cover price? What if readers weren't conditioned to looking for prices printed on books, and instead they sold like everything else sells?

DVDs do not have prices printed on them. I was just at a Best Buy, and new DVDs ranged in price from $2 up to $25 (more for multiple DVD sets or limited releases.)

Then I went to a FYE. It also had DVDs in those price ranges, but often the same title sold for different prices. A $10 DVD at FYE was $15 at Best Buy. Or a $3 DVD at Best Buy was $7 at FYE.

Prices varied. Retailers put things on sale. That encourages competition, which ultimately benefits the consumer.

I'm suggesting that Harry Potter without a price on it would have made readers less price conscious. When the retailer sets the price, the price seems fair, because there is nothing to compare it to. When I went DVD shopping, I didn't look at a $10 DVD and think "I wonder if Best Buy has it for $8. I think I'll go and check before I buy." If I wanted the DVD, I bought it.

But if the DVD had $10 printed on the box, and I knew that Best Buy always discounts by 20%, I'd buy it at Best Buy because I knew I could get it for $8.

In other words, a printed price on that DVD can hurt retailers. Printed prices on anything hurt retailers.

That's why no products have prices printed on them.

Except for books. Publishers could do what all manufactures do, and have a suggested retail price without it being printed on the product. But because they are so gung-ho about setting the retail price, they continue to print it on their books, and I believe this keeps the price of books artificially high, hurts competition, and hurts consumers.

I'm pretty sure of this. And so is Amazon.

When I got some advance reader copies of my thriller novel SHAKEN, published by Amazon Encore, it said on the back cover" On Sale February 22, 2011, Fiction, 270 pages, $13.95.

Then I got the final copies, and I thought, "Amazon screwed up." Because SHAKEN didn't have a price on it.

I chalked it up to Amazon being new at this and making a mistake. I forgot about it until a few weeks ago, when I went to the Romantic Times conference and had to sell my books via consignment. The bookseller needed to have a price on the books in order to pay the authors. So I had to make labels for SHAKEN.

I also had to make labels for STIRRED, because that also lacked a price. I'd never noticed it before.

Hmm. So this isn't accidental on Amazon's part. It's intentional. And it's smart. It allowed me to price SHAKEN and STIRRED as I saw fit. Instead of selling them for the $13.95 suggested on the galley, I priced them at an even $10. Not having a cover price gave me the power of pricing my books my way. And that's a power booksellers have never truly had. I believe that lack of power put a lot of them out of business.

If you have a true fixed retail price, you can't allow for discounting. Bose speakers and Wiis and iPads never go on sale. (They don't have prices stamped on them, either, even though every retailer who sells them must sell them for a set price.)

But Big Publishing wants it both ways. They want to set the price and print it on their products, yet they also allow discounting.

At least, they allowed discounting until they forced the Agency model on Amazon.

This incident made me remember KDP. Back in 2009, when I first got started self-publishing on Kindle, I put in my product descriptions "On sale for $1.59." Amazon made me remove that, because KDP didn't allow prices in product descriptions.

Again, I didn't really consider questioning why Amazon wanted it this way. Until I read Shatzkin's recent post.

Much of what Amazon does is smart. Not having a printed price on their published books, and not having prices in product descriptions, means Amazon can change prices when needed. They can put things on sale, price-match, and allow retailers to find their own price point depending on supply and demand, location, and market fluctuations. The customer doesn't ever feel like they're paying too much. It wouldn't be immediately obvious if a book is discounted or not, just like it is with all goods.

I propose that no books should have prices on them. I think it would benefit everyone.

But that goes against what publishers want--control over retail prices. They want to condition customers to pay more. That's always been their game plan, and it still is.

That isn't good for customers. It isn't good for retailers. It isn't good for authors.

But if you're a regular reader of my blog, that shouldn't surprise you.

Exploited Writers in an Unfair Industry

exploitation: The act of using another person's labor without offering them an adequate compensation.

Are writers being exploited? I'm talking about writers working for what I call Big Publishing (Hachette, Macmillan, Penguin, HarperCollins, Random House, Simon & Schuster, Harlequin, Hyperion/Disney, Scholastic, Tyndale, John Wiley & Sons, Thomas Nelson, and others.)

Here are my thoughts.

Back in the pre-ebook days, paper was the dominant way to deliver media. This is worth repeating, because it is very, very important. Paper was the delivery system.

Years ago I explained this delivery system in great detail. In short, the book exists in the mind of the reader. It doesn't matter if it gets there via paper, or e-ink, or audiobook, or a pill that will someday burn the story into your memory. The method of getting the story to the reader is nothing but delivery.

Without anything to deliver, the deliveryman goes broke. We need writers, because they create the book. We need readers, because they consume the book. The deliverymen are middlemen.

The middlemen, pre-ebook, were publishers. If you were a writer who wanted to reach readers, you needed a publisher, because you couldn't get into a bookstore on your own.

I believe wanting to write is a natural extension of wanting to communicate, which is something all people do. It's an art, a talent, and a learned skill. There are an abundance of people who want to write books. This results in more books being written than books being published.

Since the publishers decided and controlled what would be published and what wouldn't, and since there were many writers who desperately wanted to be published, this put publishers in a unique position. It gave them an unprecedented amount of unchecked power.

Unchecked power never turns out well. With no competition comes no evolution. Then, when a true competitor emerges, it kicks the status quo's ass.

Take railroads. They replaced the horse and wagon as a cheap, fast way to ship goods and people. They rose to dominance, and that dominance went unchecked for decades.

Then trucks and cars came along. Railroads lost vast amounts of business to trucks and cars, and still do.

That's because railroads forgot what business they were in. They thought they were in the railroad biz. Instead, they were transportation business. When a cheaper, faster way to transport goods and people came along, railroads lost market share.

I bring up railroads for another reason. Anyone who knows a bit about American history, or who has seen Blazing Saddles by Mel Brooks, knows that early railroad workers tended to be exploited. Work was back-breaking and sometimes dangerous, and the pay was meager--so meager that minorities were hired because they were the only ones who would work so cheaply.

Getting back to publishers, they erroneously believe they're just an extension of the printing business. Their goal is to sell paper. The reason the DOJ brought a collusion suit against 5 of the Big 6 was because the 6 were frightened that they'd lose their quasi-monopoly on selling paper, so they artificially kept the prices of ebooks high to retard ebook market growth and protect paper sales.

Why do I say "artificially"?

Paper books have a built-in cost structure. They cost money to print and to ship, and the distributors and retailers get discounts that are pretty standard. I'd guess this standardization developed after years of data and experience. With each sale they pay for printing, shipping, and corrugation, and the distributor, retailer, and author get a cut. On a $25 hardcover, the author makes about $3.75, and the publisher makes around $4.50 after everyone is paid. (See my math here.)

Then ebooks come around. No printing, shipping, corrugation, or distributor. Do the publishers figure out a way to lower prices and pay authors a better royalty? No. Based on ZERO real world data they begin to sell wholesale ebooks at 40%-60% of the hardcover price. So an ebook on a $25 hardcover cost Amazon around $12.50.

Publishers didn't price ebooks according to data and experience. Nor did they price according to supply and demand--I knew years ago that supply and demand didn't apply.

Instead, publishers priced greedily. Rather than be fair with authors, they took a much bigger slice of the profits. Rather than lower prices, they fought to keep them high so they didn't cannibalize paper sales.

How did publishers universally agree that 25% of net was what authors should receive? Where did they get that number, and how did they all seem to adopt it at once?

Isn't that a bit... odd?

Even worse, why didn't anyone protest this obvious land grab? Where was the AAR? Where was the Authors Guild?

The Chinese protested exploitation by the railroad industry by striking. In Hollywood, writers have the WGA. In 2007-2008, the WGA writers went on strike. In fact, they'd been on strike several times before. The latest was to improve the dismal residuals they got for DVD sales, and compensation for new media.

New media? Digital sales? Does this ring any bells for anyone? Why didn't anyone fight for us when this happened in our industry? Why didn't we fight for ourselves?

I've been thinking long and hard about that. When I look at other industries where workers were exploited, unions formed. Strikes occurred. Movements arose to defend the exploited. But that has never happened for book writers.

I believe I understand the reason why. The answer is all around us. It is evidenced in agents who belittle and condemn writers, and show support for the Big 5 in the DOJ's entirely justifiable lawsuit. It is evidenced by the publishers themselves, who have schemed to keep ebook prices high (and I'd bet they also schemed to keep royalties low). And it is evidenced by writers, who defend publishers and agents and continue to accept the meager crumbs thrown at them, even though they are the only essential component in this trinity.

Publishers are middlemen. They curated work from the suppliers (authors) and funneled it to the retailers (bookselling outlets). For decades, they controlled what was published and widely disseminated to the readers. It became such big business that they couldn't possibly handle it all alone, so more middlemen arrived. Distributors, which housed paper books and handled orders, and agents, who simplified curation by (supposedly) weeding out the crap before the publishers got it.

Writers, like many types of artists, are driven to create. Go to any party and mention you're a writer, and no doubt you'll get the response, "I want to write a book someday" or "I'm writing a book now."

Because books are made of words, and everyone uses words, a disproportionate number of people want to write. And because writing is more subjective than painting or music, it is much easier to deceive oneself that one is a good writer. Because of this, there are a LOT of writers and wannabe writers. Though success depends on an individual's goals, in my generation the only way to become a successful writer was to sell a book to a publisher.

This is a system ripe for exploitation. A lot of hungry, eager artists, and a limited number of slots for big publishing to fill.

Because of this, publishers had all the power. And bargaining from a position of power usually works out well for the powerful, and not so well for the opposing party.

Decades of this unfair advantage lead to our current Publishing Culture. Here are the rules:

1. As long as publishers control distribution, publishers have a lot of power.
2. As long as there are more writers than slots in publishers' lists, writers have limited power.
3. As long as writers consider writing to be a dream rather than a job, writers have limited power.
4. As long as agents have more requests for representation than they can handle, agents have a lot of power.
5. The powerful naturally develop a sense of entitlement.
6. The weak naturally develop Boxer Syndrome.

What is Boxer Syndrome?

Consider Animal Farm by George Orwell. In it was a horse named Boxer. Boxer worked his butt off to appease the pigs in power. The pigs got rich off of Boxer's efforts, but never amply rewarded him. Boxer continued to support his own exploitation, steadfastly believing in the pigs, even after the pigs ultimately sold him for slaughter and bought whiskey with the profit.

That, in a nutshell, is the mindset the majority of newbie writers, and a great deal of professional writers, have adopted. We're Boxers.

In the meantime, the publishers (pigs) have developed a sense of entitlement. They see books, and authors, as fungible. If a book or author doesn't succeed, drop it and try another one.

When ebooks arrived on the scene, and key costs could be removed from distribution (delivery, printing, corrugation, distribution) did the publishers accept their previous profit margins and give the authors more of the pie?

No. The publishers made a land grab and kept the money they would have otherwise paid out, taking 52.5% of net and leaving authors 17.5%.

On a $25 hardcover, the author made $3.75 and the publisher made $4.50.

On a $25 ebook, the author made $3.12, and the publisher made $9.37.*

The authors' share went down. The publishers' share doubled. And authors didn't complain. Agents didn't complain. No one complained.

Then Amazon created the Kindle.

After decades of no competition, publishers are now faced with a tiger of a competitor. One that doesn't ascribe to Publishing Culture. One that's smart and fast and has deep pockets and keenly understands all the things publishers are doing wrong.

Publishers can't compete with Amazon. They can't even come close.

Amazon understands that its customers--readers--want low prices and great service. Publishers don't even know who their customers really are--they always thought that retailers were their customers.

Amazon understands that it is a middleman, and that ebooks can connect writers and readers faster and cheaper than paper can, without the need for shipping or a distributor.

Amazon understands that everyone wants to write a book, and decided to give all writers a chance to reach Amazon's customer base. It did so without exploiting writers. Instead, it treats writers like customers it wants to keep.

So the first blow by Amazon was inventing the Kindle. Publishers were oblivious to this. They couldn't see the future, because they were too busy dominating the present. No publisher thought to create an ereader, or and ebook store.

The second blow by Amazon was allowing authors to self-publish. Publishers didn't care. These were books they didn't want anyway, and publishers were so smug they didn't think anyone else would want the books they rejected.

The third blow by Amazon was listening to customers, who wanted lower prices. Publishers never listened to readers. Has a publisher ever done a focus group? Has it ever tried to unilaterally lower prices rather than raise them? Instead, publishers tell readers what to read, and charge whatever they see fit.

If a retailer like Amazon wanted to sell books below cost, no problem. In fact, this was a good thing for publishers.

Let's say I sell widgets. I sell them wholesale, to retailers, for $5. Retailers are welcome to sell them for whatever price they want to. If they sell them for $10, they can. But I'll sell my widgets to as many retailers as possible because I want them to compete. Some of those retailers will sell them for $9, or $7, which is good because I make the same wholesale price no matter how much they sell them for, and the lower price means more buyers.

Now say a retailer decides to sell my widgets for $3. In other words, they take a $2 loss each one sold.

Why would I be upset over that? I'd be thrilled! Many more people would buy my widgets because of the low price, and I'd be making a lot more money.

That's why publishers didn't complain when big box stores began discounting. Did you hear one peep out of the Big 6 when hardcovers were being discounted? Nope. Mom and pop bookstores were buying their books at Sam's Club and Costco because it was cheaper than they could get through their distributors. Publishers didn't care. They were making money.

But the Big 6 didn't want any retailers setting the price on ebooks. Because as bloated, lazy, ignorant, and ineffective as they are, publishers saw how quickly readers were flocking to Amazon and the Kindle, and they finally recognized the threat. Publishers had a lock on paper distribution. Ebooks didn't require that.
If ebooks became the dominant media, publishers would no longer have any power.

Publishers assumed that Amazon would sell ebooks above wholesale prices, because that's how Amazon (and all retailers) make a profit. This high price would not only protect paper sales, it would also boost profits (since publishers were taking a much bigger chunk of the net.) Readers? They'll be trained to accept higher prices without the publishers justifying those prices (no tangible product, no supply and demand). Writers? They'll continue to take the crumbs publishers offered them, like always.

Amazon, however, had a different agenda. They lowered the prices on bestselling ebooks below wholesale.

This worried publishers. For the first time, they could see the future. Low ebook prices will cannibalize paper sales, and publishers don't have a monopoly on ebooks. Even the higher profit margin on ebooks (that they gave themselves, uncontested by agents and writers) won't be able to sustain their infrastructure if customers come to expect cheap ebooks.

So what could publishers do? They didn't have an ereader or an ebookstore of their own.

But one of Amazon's competitors did. Apple. And Apple had the perfect solution to the publishers' problem. The Agency model.

Apple likes Agency because they make a fortune selling devices (iPads, iPhones, iPods). They feel 30% of whatever price the supplier wants to set is fine. It's a smart way to encourage developers. The more developers, the more people will want the devices, the more everyone makes.

Amazon's business model isn't geared to Agency pricing. They are a retailer who sells a lot of tangible goods alongside the intangibles (downloads.)

I would guess Amazon doesn't make a big profit on Kindle Ereaders (I've heard rumors they might even lose money on them). A Kindle serves a different purpose for them--it's a storefront in the customer's lap. So Amazon can lose money on the Kindle Reader, then make money on everything else. For example, I just used my Kindle Fire to buy a magnetic knife holder from Amazon. It was easier than going to the store.

The Big 6 fear (rightfully) that Amazon is using ebooks to sell Kindles and Prime memberships. This is scary because people are becoming conditioned to buy directly from Amazon using their devices.

That doesn't give the Big 6 a reason to collude. It gives them a reason to compete. But they can't compete, because they treat authors poorly, treat readers poorly, don't innovate, and are only familiar with an archaic business model.

The AG and AAR, worried they won't have publishers to pay them, are supporting the Big 6 because they don't want to innovate either.

But, as I've said in the past, ereaders won't put publishers out of business. Neither will low-priced ebooks.

The thing that will ultimately destroy publishers is the fourth blow by Amazon. One that publishers, in their hubris, haven't comprehended yet.

Authors are going to destroy publishing.

Amazon is now courting professional authors. They're paying higher royalties than publishers. This is not going unnoticed. More and more authors are going to be published by Amazon, or by Amazon's ebook competitors.

In order to survive, publishers will have to abandon the shrinking paper market, pay authors higher royalties, and drop their ebook prices.

To do this, they'll need to restructure and radically alter their business strategies. But they won't be able to. Because they are bloated and ignorant and inefficient and arrogant. They dominated for too long, and came to think of their lock on distribution as a God-given right. The AAR, the Authors Guild, and many writers have a sense of entitlement they won't be able to shake off. The system worked for them. So of course it will keep working for them.

But fighting to keep the status quo never works. And I, for one, am happy for the mantle to pass. Publishing Culture is diseased. It's a deep-seated disease, where writers are exploited so badly they expect to be exploited. Writers even look forward to it. They dream of exploitation and defend the ones exploiting them. Agents claim to work for writers, but clamor for publishers' approval, while at the same time running their own fiefdoms. Publishers have such a strong sense of entitlement that they feel perfectly justified in breaking the law to keep things how they are. They abuse their power. Worse, they think their power is deserved, that they alone can deliver rich literary culture to the unwashed masses because their insights are so keen and their judgement so ubiquitous.

All the players in this little drama don't seem to realize how sordid and unhealthy it is for everyone. But no one recognizes it because it has gone on for so long. This culture infantilizes writers, teaching them to be needy, dependent, insecure, and willing to accept a pittance for their hard work. A pat on the head and a membership card to the old boys' club is not the same as a living wage, but we've been conditioned by those in power to believe that it is.

We've been so browbeaten that we get pissed on and told it's just rain and we eagerly believe it.

Amazon (and Kobo, BN, Smashwords, Sony, Apple) have empowered writers. We've never had effective unions, never had strong defenders, but now we do have outlets where we're paid fairly and given the thing all writers want: a chance to reach readers without some NY pinhead gatekeeper getting in our way.

Instead of celebrating this, many writers are defending Publishing Culture. I've called this Stockholm Syndrome in the past, but its something deeper than that. When you are an exploited writer in an unfair industry, and you can't see it, you're beyond simple delusion, ignorance, blind faith, compliance for self-preservation, or a need of acceptance.

To have so much of your self-worth be dependent on the arbitrary whims of demonstrably unfair gatekeepers, and so much of your potential income unjustifiably taken from you, and then to defend those exploiters and vilify those who are truly on your side--that's a textbook case of stupid.

My advice to writers: stop being stupid.

Publishing Culture is guaranteed to end, and when it does everyone will be better off.

Well, everyone except the gatekeepers. But don't cry for them. They never cried for you.


*Addendum: A few folks have asked me to got into more detail explaining the numbers, so here it is.


On a $25 hardcover, the author made $3.75 and the publisher made $4.50. This is after the costs directly associated with paper books--printing, shipping, distribution, corrugation--are paid by the publisher. So the author profit and publisher profit are pretty similar.

On a $25 ebook, the author made $3.12, and the publisher made $9.37. Publisher went from making a little more than the author, to almost triple, for no justifiable reason other than greed. This is based on the wholesale model, where a publisher would sell an ebook to Amazon for $12.50 which would have a suggested retail price of $25, same as a hardcover. But Amazon discounts, rarely charging the recommended retail price. The publisher would make $9.37 whether Amazon charged customers $25, $15, $10, or $5.

On a $25 ebook under the agency model (for comparison's sake). the author made $4.37 and the publisher made $13.12. But under the agency model, publishers control retail price, and I've never seen them price a single title at $25. They do price at $14.99. At $14.99, the author makes $2.62, and the publisher makes $7.87.

So under the wholesale model, a $9.99 ebook was earning $3.12 for the author. Under the agency model, a $9.99 ebook earns $1.75 for the author. Ouch.

Guest Post by Tom Schreck

Tom and I collaborated on a short story featuring my Chicago cop Jack Daniels and his boxer-slash-social worker Duffy Dombrowski. His latest Duffy novel, The Vegas Knock-Out, is being released today by Thomas & Mercer.

Risk and the Mystery Writer by Tom Schreck

I started following this blog seven years ago while working on my first manuscript. When Joe did his cross-country tour visiting over 500 bookstores to promote his third Jack Daniels book he posted that if anyone wanted to take him to dinner on his way through to let him know.

I did and we hit it off. He asked me to send him my manuscript because he wanted to read it, and he did and got right back to me and wrote my very first blurb.

Right there, I knew Joe was not a bullshitter.

I like, thousands of others, have followed this blog for years to stay on the cutting edge of marketing, publishing, and other career stuff. Along the way Joe and I even teamed up and wrote Planter's Punch, where Jack and Duffy meet up to solve a crime. It was a ton of fun.

Since then Joe has, of course, gone on to huge success in many ways.

I just signed with Thomas & Mercer, (Joe was nice enough to write an introductory email for me) and The Vegas Knockout gets released today while Getting Dunn gets released July 31. Before that my series was with Midnight Ink for two books, Echelon for one book, and I self published a collection of short stories.

I’ve tried to do the things that Joe does with one exception—and it’s a big exception. I don’t take the level of risk Joe does. I could say we have different temperaments, are in different places in life or, more simply put, that Joe is nuts. I could also add Joe is lucky or Joe came along at the right time. The last two never feel right because I have an idea about how hard he works.

Joe worked as a waiter and wrote all day long when he wasn’t working. He had nine unpublished manuscripts. I work a full time job, teach at night, judge professional boxing a dozen times a year and do freelance magazine stuff pretty consistently.

My “regular jobs” limit my writing time. I admit I like the consistent safety of regular paychecks. There’s something else that comes with this, though. My “regular jobs” give me the convenient excuse of never totally going for it. I can set mystery writing to the side and say “Well, of course I don’t have Konrath’s success, he has all day to do this shit!” My other jobs are safe and I don’t worry about my mortgage but I don’t have Joe’s glory…or, now, his checking account.

Joe suggested I self publish my latest two but also said if I wasn’t going to do that that the folks at T&M were wonderful and he’d give me a referral. The T&M people ARE wonderful. Self-publishing has risk to it and it was a risk I chose not to take. To do it right with covers, editing etc I figured I would’ve laid out a few grand and I didn’t want to do that. I have the money mind you (after all I work a bunch of jobs, remember) I didn’t want to risk it.

So, I’m kind of Joe Konrath lite.

I don’t roll the dice too much and so my novel career doesn’t keep me up too much at night. Sometimes I wonder what life could be like if I put aside the 9-5 office grind and the 6-9 twice a week teaching gig, skipped magazine writing, and just wrote what I liked.

I’m good for a little more than a book a year, writing in between other things, which is actually a pretty fair pace. I think Joe does a book in a month.

I’m more polite than Joe. I speak my mind less than him and I’m less likely to enter a hotel bar in a bathrobe at a Bouchercon. Probably all has something to do with risk.

There’s also another intangible and again, it’s an important one—talent. Even if I took the chances Joe did there’s far from any guarantee I would have the same success.

Finding that out would involve taking some risks.

And that’s something I have to take a closer look at it.

Soon.

Real soon.

Tom Schreck writes the Duffy Dombrowski Mysteries and his newest release THE VEGAS KNOCKOUT, is now available. Visit  www.tomschreck.com and “like” his fan page on Facebook at http://www.facebook.com/DuffyDombrowski for a chance to win a Kindle Fire.

Joe sez: First of all, go and buy The Vegas Knockout. Shreck writes with the kind of easy-going style as Robert B Parker or early Robert Crais (more contemporary comparisons would be Jeff Shelby, Jude Hardin, Harry Hunsicker.) Tight and fun, with some action and some laughs at the heart of the mystery.

 I think Tom brings up an interesting point about risk-taking that's worth exploring. I tend to seek out creative people, and my close circle of friends all tend to be artists of some sort. But my writing peers, the ones I seem to talk with most often, have another commonality.

Bravery.

Both Ann Voss Peterson and Blake Crouch began to self-publish full time with no guarantee they'd make it. Barry Eisler turned down a half a million dollar deal to go it alone. These are gutsy people who took big chances. With Blake and Barry, it paid of big time. With Ann, it's paying off at a steadier pace.   

They all should be commended for taking a shot. It ain't easy. They fought self-doubt, worry, and fear, and they went for it anyway.

I started this blog seven years ago, and I've long preached that is important to take chances, to experiment, to try new things. I'm also a believer in going all-in. This isn't a Newbie's Guide to Leading a Balanced and Happy Life. It's A Newbie's Guide to Publishing. If you want to get lucky, you have to gamble first.

Gambling in this case means devoting time and effort to something that may never pay off. It means devoting your energy to something beyond what the world says you should be doing. 

This isn't simply following your dream. It's chasing after it, full speed, until you catch it.

We're all, to a certain degree, risk-averse. It's scary to fail. Failure can mean a loss of time and money. It can mean bad feelings and disappointing others. 

But if you aren't failing, you aren't trying hard enough. You aren't taking enough chances.

A lot of people dislike me. They dislike my tone and attitude. They dislike my opinions. They dislike my writing.  They dislike my blog.

I. Don't. Care.

We could all benefit from caring less about the opinions of strangers. Especially since, let's face it, there are so many pinheads in the world.

That's a learned behavior, as we all grow up seeking approval. 

Taking risks can also be learned.

It'll be difficult, because it is unnatural and uncomfortable. It requires unlearning many of the coping mechanisms you've learned. It requires failure, and in many cases ridicule, monetary loss, and depression.

But no one ever became successful without taking chances. If you think about it, many of the important things in your life--the things that you're proudest of and that define you--are all about taking risks. Things as ordinary as asking or agreeing to a date that ends up in a long term relationship. Going to that job interview. Making an offer on that house. 

Self-publishing that novel.

Risks are risky. True. But they can also be rewarding.

So what chances have you taken today?

Agent Fail

This morning I was alerted to a big mistake lit agent Scott Eagan made, and then his humorous attempt to cover it up by deleting it, all documented nicely here at Passive Guy's blog. (See, Scott? It's important on the Internet to LINK to posts you reference.)

I was going to spend the morning excoriating the moron, but the commentors at Passive Voice have done an admirable job already, meaning I didn't need to draw extra attention to the stupid things he said.

So instead I'm going to draw attention to the stupid things agent Steve Laube says in his post Goodbye to Traditional Publishing?.

Steve's nonsense in italics, my responses in bold.

Recently Ann Voss Peterson wrote of her decision to never sign another contract with Harlequin. One major statistic from the article is that she sold 170,000 copies of a book but earned only $20,000.

Multiple clients sent me Peterson’s “Harlequin Fail” article and wanted my opinion. My first thought is that this was the typical “a publisher is ripping me off” fodder. But that would be a simplistic and knee-jerk reaction and unfair to both Peterson and Harlequin.

Joe sez: Hmm. What if I said this was typical "agents siding with publishers" fodder?

Well, I'd be right. More and more agents are siding with publishers. Because publishers are who pay them, and if all authors begin to self-publish then agents will be out of business. So, as much as it is a conflict of interest for an agent to side with a publisher, I can understand why agents are doing so, wrong as they may be.

If the plea of "a publisher is ripping me off" is fodder, I'd like to see links to those posts you're alluding to so I may scrutinize their veracity. Because publishers ARE being very unfair to writers, as I've shown many times. 

As an agent, shouldn't you care that this is happening? Why are so many authors saying this? With all that fodder, should this be a topic you casually dismiss?

Yes, Harlequin pays a modest royalty that is less than some publishers. Since when is that news? That has always been their business model because it is the only way to create and maintain an aggressive Direct-to-Consumer and Trade publishing program. Their publishing machine is huge and they are a “for profit” company. For Profit. If they are unprofitable, they go away.

Joe sez: See this? Everyone look closely! This is a rope! Everyone look at this rope that I'm holding up! Now watch what happens next! 

If an author is uncomfortable with the terms, then don’t sign the contract (which is Peterson’s decision going forward). I urge each of you to be careful not to sign a contract and then complain about it later. Unless you were completely hoodwinked you agreed to those terms and should abide by them.

Joe sez: I agree. Ann could have refused to sign the contract, and instead gone to work in a factory with unsafe conditions where employees have no benefits and are paid pennies.

This is called exploitation. It happens when companies try to make profits at the expense of another person's labor without paying them adequate compensation.

I think we can all agree that exploitation is a bad thing, whether the person signed up to work in an unsafe factory, or promised to work off their passage to America from a foreign country, or got 2.4% royalties on a book that sold 180,000 copies. 

Understand that I am not being critical of this lady’s decision. It is her choice to do so.

Joe sez: This is called Blaming the Victim. It's when people are partially blamed for their own maltreatment. Because you ARE being critical. That is the point of your blog post.
For the record, Ann didn't complain. She simply expressed sadness. Like I can express sadness about the 600,000 homeless people in America. Sure, there are homeless! Since when is that news? Why should we try to change anything or do anything about it?

BTW, click here to donate to a charity to help end homelessness. 

But my issue is not with the money (although it is important) it is a larger question. She says she has sold 170,000 books but not made that much money. For the record Peterson has signed with Thomas Mercer which is one of the publishing divisions of Amazon.com…a traditional publisher of sorts, so she may still reach a 100,000 plus audience. So is it all about the money and not about number of readers? If Peterson had chosen to go Indie (solo) and published using the e-book option (like the Kindle Direct Program) and sold 10,000 copies she would make the same amount of money. BUT she would have 160,000 fewer readers! One Hundred and Sixty Thousand.

Joe sez: Everyone remember that rope from earlier? This is what happens when someone brings a noose to their own hanging. It's funny, and sad, all at once.

Steve, you said earlier that Harlequin's publishing machine is a huge "for profit" company. 

I may be wrong, but it's my guess that many writers, Ann included, cite writing as their job. A job is "for profit" isn't it? That's why they list it as such on their income taxes, and have to pay the IRS. It certainly isn't for altruism, or to help mankind, or to fulfill some hidden inner fetish to lick a piece of paper with her name on it.

Ann is in this for the same reason Harlequin is: to make money. That's what professional writers do.

Are you a professional agent, Steve? I've never heard of you before, but a cursory surfing of your website shows you do accept queries. So here is a serious question: would you represent a writer for 2.4% commission?

Maybe you would. Maybe you wouldn't. But what if every writer you repped demanded that you only accept 2.4%? What if the only writers you could work with were those who said, "You get 2.4% and that's all. If you're uncomfortable with those terms, don't sign with me."

Then you'd have zero clients. Would that be your fault? Would it be a case of being  bullied out of the business because you couldn't afford to make a living? Or would you accept it because you were forced to and had no one on your side to help you get better terms?

See how a choice isn't really a choice?

Consider the stadium where the Arizona Cardinals (NFL) plays seats 63,000. So, in essence this author’s choice could mean walking away from three stadium sized audiences for her stories.

In Peterson’s case it does not appear to be a dollars vs. readers issue because she has signed with another publisher. But for many who are frustrated with their publishing experience it is a good question to ask.

Joe sez: No, Steve. It's a loaded, terrible question. It plays on a writer's desire to be read, to be accepted. It treats us as hobbyists who are to be satisfied with pats on the head rather than fair pay for hard work.

Would you trade your commission for a pat on the head and a good feeling that you reached people? If so, how about representing writers for free? You'd sure make a lot of them happy. And that's what it's all about, right? Making as many people happy as possible, regardless of getting paid for it? Don't walk away from all those writers, just because they don't pay you!

Reaching 170,000 readers is a rare place in this busy industry. And don’t forget that the success of those numbers made her an attractive acquisition for Amazon.com . That is not the case for most writers whose midlist numbers can be depressing. (Read CBA fiction author Eric Wilson who laid out his income while publishing with traditional publishers over a ten year period and has chosen to go a different route with his new books.)

If you wish to wave goodbye to traditional publisher and go Indie (independent) I believe the first question to ask is whether or not you want to start a small business. Just like an entrepreneur.  Those authors who are entrepreneurs are ideally suited for the self-publishing route. The understand the energy it takes and pitfalls ahead.

Joe sez: After all, if you sign with a legacy publisher, all you have to do is write the book. You don't have to spend any time or money promoting it. You can be lazy and do nothing and those legacy dollars will come rolling in anyway.

Have all the writers reading stopped laughing yet?

I spent a great deal more time and money promoting my legacy career than I've spent on my self-pubbed titles, and anyone who reads my blog knows my numbers. I'm not the only one. I urge those who agree to post in the comments section.
The second question is whether they can sell enough copies to make it all worthwhile. And are also are willing to take responsibility if a book fails.

Joe sez: Huh? Self-publishing is free in many cases. Covers and formatting can be self-taught, with the only expense being time. Personally I pay $350 for an ebook cover, and around $200 for formatting, and then I made 70% forever, as opposed to Ann, who makes 2.4% forever and still does things like travel to conventions to promote her Harlequin titles. She just went to Romantic Times. And she spent more than $550 to sign a dozen copies of her Harlequin titles.

But if Ann's book fails, she gets blamed by Harlequin, who refuse to publish any of her new titles. Just like every legacy publisher. The authors gets blamed and dropped.

A self-publish ebook can't be dropped. A self-published ebook is forever. Forever is a long time to recoup that personal investment.

But not all artists are entrepreneurs. I know of many authors who have gone this route. One sold 1,000 copies of their e-book in a year. Another is averaging about $1,000 in revenue each month…but had to self-publish ten books to reach that threshold. Another has sold about 2,500 e-copies in a few months but the numbers are slowing considerably. Each of these writers can get much more guaranteed income from going the traditional route. Their indie effort is nice income (in this business any income is nice) but it is not a replacement.

Joe sez: More than a thousand KDP authors now sell over 1000 ebooks a month. In some of those cases, it IS a healthy replacement for the piss-poor advances and low royalties of legacy publishers.

Writers and readers are essential, Steve. The industry can't exist without them. But you know who isn't essential? Agents. Especially agents who spout bullshit such as a writer can get a much "more guaranteed income from going the traditional route."

Every author who tries to self-publish can self-publish, and they'll earn something. Last I checked, not every author who tries to land a publisher, or an agent as adept as you, succeeds. Something is always more than nothing. Earning 70% forever is a better bet than a tiny advance that may never earn out, but you'll still never get the rights back.

And how do you explain the fact that Ann earns more money on her self-pubbed ebooks--two novels and three short stories--than she does on over 25 Harlequin novels still in print?

How do you explain me, who made $100,ooo in a three week period last December and January, on books NY publishers rejected?

How do you explain Bob Mayer, Lee Goldberg, Barry Eisler, Scott Nicholson, Blake Crouch, and dozens of other legacy authors who have chosen to publish works as indies because they're not only making more money, but selling more copies (something you seem to be weirdly fixated on.)

P.S. In my opinion it is wrong to compare Amazon’s traditional publishing divisions (like Thomas Mercer) with other publishers. 

Joe sez: I agree. Amazon pays authors more, and treats them like customers, not like fungible factory workers. And I'm not talking about factory workers who have a union and get benefits. Writers don't have a single organization that stands up for them. The AAR and the Author's Guild both failed miserably.

Amazon is so incredibly large and diversified that they could lose money on publishing for five years and still be profitable elsewhere. For a company like Harlequin they are solely vested in publishing (not Zappos shoes, or used books, or electronics). Thus their cost structure is different. Amazon has brilliantly used their economic model and created one that takes advantage of their infrastructure without having to build from scratch.

Joe sez: So it is entirely okay for a company to exploit authors, as long as their cost structure requires it?

Why am I extremely happy you aren't negotiating any publishing contracts for me?

Is that a defense of traditional publishing? It could be seen that way. But it is more a reminder not to compare oranges with apples. They are not identical.

Joe sez: Your service is to your clients, Steve. Defending Harlequin is appalling, but coming from an agent, it is unforgivable. 

Your clients would best be served if you were trying to make deals with Amazon, which offers the best pay in the business, and if you were vilifying Harlequin, which could begin the process of change. If enough agents did that, Harlequin would be forced to improve their royalties, because they'd have no authors left.

But you'd rather pick on Ann in an obviously self-serving manner, when Ann has more guts in her little finger than you have in your whole body.

Shame on you.