Sunday, January 26, 2014

A Longwinded Screed for Mike Shatzkin

I recently read a post by Mike Shatzkin on his blog called The future of bookstores is key to understanding the future of publishing.

Go read it. I'll be here.

In the comments, I had two exchanges with Mike that are worth repeating, because I'd like to expand on them and Mike self-admittedly has no patience to wade through "someone else's lengthy dialectic" and has a policy on his blog against "longwinded rants" such as mine.

Joe: Hi Mike.

I wanted to comment on some of the points you made in this post.

You said:

"One distracting fact for analysts considering this question has been the apparent slowdown in the growth of ebook sales, suggesting that there are persistent print readers who just won’t make the switch."

The analysts you refer to don't have access to all the data, and the data they have isn't being interpreted correctly.

First of all, the shadow industry on self-publishing accounts for tens of millions of sales (if not more) that aren't being counted. Ebook growth may be slowing for legacy publishers. It isn't slowing for self-publishers.

Second, the idea of "growth slowing" was nicely refuted by Barry Eisler in his conversation with agent Robert Gottlieb.

Barry: This is at best a highly misleading way of describing what’s really happening, which is that the growth of ebook sales is slowing.  Put more simply and accurately:  ebook sales are not slowing, they are growing.  Here, from Publishers Weekly:  “Total e-book sales rose 44.2% in 2012, to $3.04 billion. The gain in e-book sales offset a flat performance by print sales which held virtually even at $12 billion between 2011 and 2012.”  And here, fromFuturebook   “If we look at these particular stats from Publishers Weekly, for this segment, sales of e-books rose to $2.07 billion from $869 million as units increased 210% to 388 million.”

There’s more:  in December 2013, Amazon revealed that a quarter of US ebook sales were by indies.  The numbers for B&N’s Nook are similar.  Hachette and HarperCollins both report that ebook revenues are increasing — indeed, by 40% for Hachette (of course, now we know why).

Most astonishing of all is that missing from these figures demonstrating a still dramatically growing market are indie figures, because data is collected only from major publishers.  That’s right:  the ebook market is still growing even when measured without including indie published books.

Calling this kind of continued explosive growth “slowing” is like saying a car that went from 50 miles an hour to 100 and then to 130 is “slowing” because since it hit 100 mph its speed only increased by 30 percent.  Would you honestly describe a car that just accelerated from 100 to 130 mph as “slowing”?  Because that’s what you just did with the ebook market.

Joe: You also said:

"The physical book has uses and virtues that a CD, a vinyl record, a DVD, or a videotape don’t, not the least of which is that a physical book is its own “player”. But it also provides a qualitatively different reading experience, whereas the other “physical” formats don’t change the consumption mode at all."

I talked about journey value and destination value four years ago dismissing the qualitatively different reading experience of print.

And while books may be their own "player", show me someone who doesn't have a device that can read ebooks. Besides ereaders like Kindles and tablets like iPads, smart phones and computers abound. A book being its own player isn't important when so many consumers already own devices that ebooks can be read with.

CDs are still around because they can be ripped to mp3s and put on digital players. The CD is simply a hard copy of digital info. When was the last time you saw a CD Walkman?

Books can't be digitized without scanning. So while I can buy the new Tom Waits CD and put it on my iPod (or Kindle Fire), I can't buy a hardcover and read it digitally.

You said:

"But the fate of almost all trade publishers is inextricably connected to the fate of bookstores."

Actually, it is inextricably connected to authors.

Years ago I realized that unconscionable publishing contracts and low royalties would lead to authors leaving legacy publishers and self-publishing. This will happen more and more. We don't know how much it is already happening, because there is no data available, but B&N reported that 25% of Nook ebook sales were from indie authors, and I suspect the percentage on Amazon is larger.

You said:

"It is still true that putting books in stores is necessary to get anywhere close to total penetration of a book’s potential audience."

I agree. But I don't care, and neither do a lot of self-pubbed authors. Yes, it would be nice to have my print books in all bookstores and Wal-mart, but I made a million dollars in 2013 without that happening. I don't need those sales to make a nice living. You go on to say as much in the next paragraph, but you may not realize this is happening right now.

Don't discount self-publishing as a Big 5 killer. For every publicized story of a self-pubbed writer taking a legacy deal, there are many who refuse deals, or don't even bother submitting to publishers. What happens when publishers run out of good submissions?

Mike: I think I personally have been a) fully cognizant of the possibility that what is in view isn't totally taking indie publishing into account and b) clear about the fact that is *slowing *is the *rate of growth*, which would necessarily be the case as the market got so much bigger.

Joe adds: Yet your blog post focuses on how the future of bookstores--not authors--is the key to understanding the future of publishing. In your economical 1600 word post, you focus on authors for 117 words. You present the possibility that publishers may have to offer authors higher royalty rates, shorter contract terms, and more frequent payments, then immediately say the marketplace hasn't been forced to do that yet, and if bookstores hold their own they may not need to for a long time.

This, as David Gaughran says later in the comments (repeated below) is dismissive.

As for the ebook rate of growth slowing, since it is still growing there are apparently are not as many "persistent print readers who just won’t make the switch" from paper to ebook as you believe. Either the whole pie is growing (paper readers are the same numbers, ebook readers are getting larger), both segments are growing, or ebooks are cannibalizing paper sales. Which, incidentally, is why those sneaky price-fixing publishers were slapped by the DOJ; they wanted to slow the growth of ebooks and protect the sales of print, where they controlled distribution.

Mike: But the effect is not really as big as you make it, because such a high proportion of the indie units are at very cheap prices and such a high proportion of the Big Five units are at prices you'd probably consider extortionate (although, thanks to both self-publishing and the DoJ, the prices for the Big Five books are coming down, probably to the detriment of fledgling writers who are losing their opportunity to make noise at the low end of the market.) So if 25% of Nook sales are indie authors, I'd hunch that the percentage of dollars they represent is closer to 10%. It might be less.

Joe adds: And it might be more. Neither of us know.

Mike: And while I'm not in their number and obviously you aren't either, there are still a very large number of print book readers, many of whom (as you point out) MUST have a perfectly serviceable reading device in their possession, who just DON'T WANT to read digitally, they want to read print. They may actually still be a majority of the people, all these years into the digital revolution! And a big chunk of *them *really want to buy their books in a store. Stubborn luddites though they may be, they do exist in substantial numbers. And they aren't all geriatrics.

Joe adds: Or those print readers MIGHT be shrinking, both as a static group and percetnage-wise in relation to the growing number of ebook readers, and some of them MIGHT eventually switch to ereaders (you know those late adopters and laggards Evert Rogers talks about) and some MIGHT switch to buying their paper online, since going to a local B&N means half the selection it had five years ago.

Mike: I think the demise of the establishment happens a bit more slowly than some enthusiasts for the future may expect. I am sure you have the humility to reflect on that fact from time to time, even though it would probably be a bad strategy to admit it out loud (and I've never known you to do that.)

Joe: You said:

"(although, thanks to both self-publishing and the DoJ, the prices for the Big Five books are coming down, probably to the detriment of fledgling writers who are losing their opportunity to make noise at the low end of the market."

We're still making noise, Mike. Ebooks aren't zero sum. A $2.99 Hachette ebook doesn't compete with mine. Instead, if gives readers the ability to buy more of my ebooks, because Hachette is no longer charging $15.99.

You said:

"So if 25% of Nook sales are indie authors, I'd hunch that the percentage of dollars they represent is closer to 10%. It might be less."

Dollars for whom?

Think about that. Those are authors making higher royalties than they can through legacy, and that's 10% of all ebook revenue that legacy publishers are missing out on.

An author can sell one $30 hardcover from a legacy publisher and make between $3 and $4.50.

If I sell $30 worth of $3.99 ebooks, I make $19.75. And it is much easier to sell a $3.99 ebook than a $30 hardcover.

You said:

"there are still a very large number of print book readers, many of whom (as you point out) MUST have a perfectly serviceable reading device in their possession, who just DON'T WANT to read digitally, they want to read print."

That's fine. Writers don't need those readers to make a living. And their may be a lot fewer paper readers than you believe, since the shadow industry of self-publishing isn't being counted.

You said:

"I think the demise of the establishment happens a bit more slowly than some enthusiasts for the future may expect. I am sure you have the humility to reflect on that fact from time to time, even though it would probably be a bad strategy to admit it out loud (and I've never known you to do that.)"

All signs are pointing to it happening faster than I expected. Amazon released a statement saying it sold more Kindles during the 2012 holiday season than any previous year. Borders is gone. Random Penguins merged. Dorchester is gone. 150 self-pubbed authors sold over 100,000 ebooks each on KDP last year (I'd love to get the data on how many sold over 10,000 copies--I suspect lots.) Rowling opened Larry Block self-pubbed his latest (at $9.99, which means he keeps $7 per ebook sold, and he's ranked respectably at #1200. I could go on.

I'd love for you to address the facts brought up by me and Barry Eisler in my last three blog posts, which all came down to "Why do publishers believe authors are going to continue to submit to them when they can make 70% royalties on their own, keep their rights, and don't have to sign unconscionable contracts?"

You mention that "so far the marketplace hasn't had to offer higher ebook royalty rates, more frequent payments, and shorter contract terms."

But I'm guessing you suspect they will have to, at some point. Because authors aren't idiots. And we talk to each other. A lot.

When I first started making money self-publishing, I was labeled an outlier.

How many outliers does it take before they aren't outliers anymore, but a trend? In the past few days Brenna Aubrey turned down a six figure legacy deal to self-pub, and self-pubber Theresa Ragan admitting to making over a million dollars.

I've been in touch with many other successful self-pubbers who make hundreds of thousands per year. It isn't my job to out them, but I suspect you'll hear about them sooner or later.

My ebooks are invisible to the NYT list and the USA Today list, even though I could have made both several times. And mine aren't the only ones.

I don't have your faith that B&N will be around in five years. Bookstores will never go away, and paper books will never go away. But the book business only needs two parties: authors and readers. Everyone else involved in the bookselling process is a facilitator.

Facilitators need to justify their cut, be they publishers or bookstores. Especially since authors today don't need either.

Mike: Joe, I have two pretty firm policies which we're running up against here.

One is that I don't allow my comments space to be used for other people's longwinded rants. I guess you're used to having people read you at great length; I strive for an economy of words in my posts and in my responses. I don't really have the patience to wade through somebody else's lengthy dialectic and I make the self-serving assumption that my readers don't either.

So I'll leave it with the answer to your prior post. That one will serve for this one too.

Joe adds: Then David Gaughran joined in.

David: Hi Mike,

You might dismiss the threat posed to large publishers from self-publishing by (rightly) pointing out that the portion of the dollar pie they have grabbed is significantly smaller than the unit sales pie. But I don't think you should dismiss it so quickly.

Unit sales could be viewed as a leading indicator here. By my calculations, self-publishers (and other non-traditional actors) have grabbed about a third (in unit sales) of the US ebook market.

As I said there, talking about market share in dollar amounts might be important to publishers – who are anxious to replace falling print revenue with new digital income – but it’s way less important to self-publishers (who price at the lower end of the range and don’t really care if readers are paying less for digital editions).

Talking about market share in terms of unit sales is, in my opinion, a much better metric for seeing where things stand and where they are headed – but I’m happy to debate that.

Mike: I am not quite sure how a post intended to wake publishers up to the real changes they will face as self-publishing grows turned into the "dismissal" you characterize it as being, but...

Joe adds: Your post wasn't about publishers facing changes as self-publishing grows (hint: reread your title). That was 1/16 of your post, and you did dismiss it.

Mike: All I was doing by pointing out the dollar metric in addition to the unit metric was trying to put things into a more realistic context than anybody who waded through Konrath's screed might have absorbed. Here's a bit more. He starts with Nook saying 25% of their ebook sales are indie, to which I say their sales volume might be 10% or less (almost certainly less.) Add this. They *also *don't get any print sales! B&N's print sales still exceed their digital sales on most Big Publisher books. So now we're saying that the importance of the indies isn't not-as-much-as 10 percent of dollar volume, but is actually LESS THAN FIVE!

Joe adds: Or it could be 25% of dollar volume. Or 35%. We can all keep guessing at actual percentages, numbers, figures, data, etc.

I think we call all agree that David and I and a lot of self-published authors making money believe the shadow industry of self-publishing is larger than you do.

I'd also like to take this opportunity temper some of my beliefs and predictions. My work, and the work of many of the writers who visit my blog, is in genre fiction. When I make pronouncements and predictions, it is about genre fiction. I dunno anything about non-fic, or childrens, or lit-fic. I have zero idea how big a chunk of the publishing industry genre fiction is. I know it makes up most of the NYT and USA Today bestseller lists, and most of the Top 100 Kindle bestseller list, but I'm only guessing that the migration of Big 5 genre authors from legacy publishing to self-publishing would indeed destroy the legacy industry.

That said, I believe authors will migrate, and that it will hurt the legacy industry greatly, and while publishers need bookstores, they need authors more. A mass author exodus will be devastating to publishers.

You advised publishers to increase author royalties way back in 2011. In your economical 2300 word post Paying authors more might be the best economics for publishers in the long run you stated that "if the authors don’t play along, they (publishers) have nothing to sell. Making deals with authors is the publishers’ price of admission to the game."

You were right. And because publishers have elected to not pay authors more, a shadow industry has grown which is probably bigger than anyone imagines. In the comments to my previous post, Paul Draker opined.

Paul: How big is Amazon self-publishing's shadow industry?

I did a back-of-the-envelope calculation of what "25% indie" means.

To weed out the "fire-and-forget" one-offs, I only considered the Top 50,000 Amazon ranks (or books selling more than 3 copies/day each, which is 1000 copies/year).

In math terms, I integrated 25% of the area under this curve...

...which maps Amazon rank to average sales/day.

Here's what I came up with as a minimum estimate:


So that's 100 Million self-published books sold a year by just the 12,000 indie authors who can, at a minimum, out-earn the "entry level" traditional-publisher advance.

Mike: That doesn't mean there isn't a threat. That doesn't mean that the indie share isn't going to continue to grow. That doesn't mean that publishers aren't going to have cognizance of it and adjust to it, over time. But it does mean -- to me -- that any suggestion that indies are on the verge of taking over the world is either delusionary or self-serving crap.

Joe adds: Sort of like the delusionary and self-serving crap that the Big 5 will continue to thrive? :)

Actually, no one is suggesting indies will take over the world. We're suggesting that more and more writers will leave legacy publishing, and that is it happening faster than you and publishers think.

Mike: All that said, I agree that the unit numbers are worth taking seriously, not ignoring. But, you know what? So are the dollar numbers!

Joe: No, Mike, they're not nearly as important to self-pubbed authors, who are getting poor royalties off those numbers.

Would you rather get large royalties from a smaller figure or small royalties form a larger figure?

It depends on the figures, of course. But I'd rather have 70% of $10,000 than 6% of $100,000.

But that's apples to oranges. Apples to apples is a backlist legacy book that sells a handful of paper copies per year, but is kept "in print" by a publisher because it continues to sell 1000 copies a year in ebook so the author cannot get their rights back.

A $3.99 self-pubbed ebook that sells 1000 copies per year earns an author $2790.

A $5.99 DLP (digital list price) legacy pubbed ebook that sells 1000 copies per year earns an author $748 per year.

A $3.99 DLP legacy pubbed ebooks selling 1000 per year earns an author $498.

For a legacy published author to make the same $2790 per year that a self-pubber makes selling 1000 copies at $3.99, she would have to sell 5600 copies at $3.99.

Let me repeat that point. On  ebooks with the same price point, a legacy published authors has to sell 5.6x as many copies as a self-pubbed author.

The continually observant William Ockham whom I've seen comment here and on Passive Voice (who is this guy?) responded to Shatzkin:

William: The factor that folks seem to be overlooking is that the need for shelf space is determined by the number of titles which benefit from offline distribution more than it is by the number of books sold offline. I have been spending some quality time with the raw data from Pew Research when they asked people how many books they've read in the past year. Pew releases their raw data about six months after the survey, so the latest data I've looked at is Nov 2012. Their 2013 summer survey was in August, so we should get that data next month. In any event, the data is telling.

Just like the bestseller list accounts for a substantial portion of immersive books' sales, a relatively small part of the adult population is responsible for a large portion of the total books read. People who read 20 or more books a year make up 15% of the population and read 65% or more of all the books that get read. The folks who read 50 or more books a year probably read 40% of all the books. Online stores are the only ones that have the breadth of selection to satisfy folks who read a book a week.

Think about where the power curve of mass sales intersects with the power curve of number of books read. Bestsellers are made by the buying habits of people who read 6 books or less per year. We are fast approaching the point where the number of titles that really need mass offline distribution is less than a hundred. There will a lot of specialty bookstores (for non-immersive reading), but the megastore (and thus B&N) is doomed. The current system has a large amount of inertial momentum, but the end is clearly visible.

The consequences of this are pretty clear. Big publishers should be cutting midlist authors as fast as possible (which seems to be happening). By trimming the number of books they publish, they can cut costs and kill the return system. Publishers need to concentrate on the books that are evergreen (don't get stale) or books that have broad appeal (Patterson, King, Grisham, et. al.). Bookstores that survive will create a niche that Amazon can't replicate, e.g. by hand-selling like a jewelry store. More books will get sold in other types of retail (gardening books at the garden store, etc.).

Joe: Mike hasn't responded to William (which is odd, because this was days ago and Mike has responded to every other comment.)

If William is correct with his numbers, how is legacy publishing a sustainable business model? I have big doubts that booksellers will ever stop using the return system (Bob Miller tried doing this years ago). If you add shrinking shelf space in bookstores to the startling concept that less than 100 titles yearly require mass offline distribution, and then stir in unhappy authors seeking higher royalty rates by going solo, what conclusions can be drawn?

I'll add that Borders closing was not a "Black Swan" event as you stated in your original post. It was foreseeable and understandable. At one point they operated 686 bookstores.

When they disappeared in 2011, wouldn't it make sense that in the absence of one of their biggest rivals, B&N would have absorbed their customers?

And yet, less than two and a half years later, B&N is closing stores.

When B&N disappears, will that be a black swan too? Authors who self-publish hurt potential bookstore sales the same way they hurt potential publisher sales. There could be hundreds of millions of dollars annually that publishers and bookstores could have made, but don't.

Or maybe it's only tens of million of dollars. Or two million. Or ten bucks.

The actual number isn't the point. The point is, do you see the trend reversing? Are people abandoning ebooks? Are print run averages getting bigger? Are publishers putting out more print titles than ever before, and if so, how are those titles doing? Are bookstores booming (with special attention to bookstores where the percentage of the profits are from new books, not used books or toys and games, etc.)? Are more and more authors seeking out legacy deals? Are more and more self-pubbed authors getting pushed off the Amazon Top 100 lists by legacy ebooks?

Mike, I understand you probably didn't have the patience to read through this lengthy dialectic, and that you strive for an economy of words in your responses, but you're welcome to reply to this blog post with as many words as you like.

Friday, January 24, 2014

Questions for Literary Agent David Gernert

Yesterday I saw a link on The Passive Voice (I gotta stop reading Passive Guy's blog because he's interfering with my productivity) that was to a Poets & Writers feature interview with literary agent David Gernert.

I did a quick reply in the comments on PV's site, then immediately emailed the editorial department of Poets & Writers:

My name is Joe Konrath. I've sold over a million self-published books, so I took exception to some of the ridiculous things David Gernert said about the subject in his recent feature interview by Michael Szczerban.

I'd be more than happy to cobble together 1000 words explaining why Mr. Gernert is blatantly incorrect in several of his archaic assumptions.

I'd be doing this on behalf of your readers, who need better information on the topic, and since I'm already rich I'd be happy to do it gratis.

If you find that approach too confrontational , Mr. Sczcerban or someone else from P&W is more than welcome to interview me on the topic. 

Looking forward to your reply.

I haven't gotten a response. Sure, it's only been 30 hours, but I'm an impatient little bugger. So I figured I'd just fisk some of the ridiculous things Gernert said in the article, because the BS he's spreading is no doubt reaching some impressionable authors who don't know it is BS.

Before I begin, let me say I don't know David Gernert, never met him, but I found the majority of the interview contained decent information about how agents work, and anyone who reads my blog knows I have an agent and recommend that authors find a good one. But three points PG zeroed in on are the same ones I had issues with, and I'd like to invite Mr. Gernert to my blog to respond to my retort.

When publishing professionals continue to show how out of touch they are with the current publishing climate, I find it necessary to take them to task for it. I'll continue to do so until they actually bother to learn about the shadow industry of self-publishing, and stop referring to memes that have been debunked years ago.

David: There are some very gifted writers who start out self-publishing and grow from there. Hugh Howey is a really good example; Wool is a terrific novel. But those writers are few and far between.

I am not a fan of self-publishing in general. It removes the gatekeepers from the process, and if we come to a point where every person in America who is writing a book can “publish” it, it becomes much more difficult for readers to find the good ones. A lot of what is self-published is awful.

I would cite Malcolm Gladwell as a particularly eloquent speaker on this, but many people have made this point: At a time when we are bombarded with information from all sides, we need more gatekeepers, not fewer. What you need as a reader is someone to find and tell you about the best books, whether it’s a diet book or a crime novel or a book about Thomas Jefferson.

Joe: So much here to debunk here.

First of all, why do legacy folks keep insisting they have somehow been endowed to be the sole bastions and protectors of what good writing is?

The gatekeepers David refers to are, not coincidentally, agents and publishers. Of course he wants to stick up for his profession and those he works for. Yes, David, you work for the publishers, not writers. They're the ones you see regularly, at lunches they pay for, and at NY parties, and they are the ones who ultimately pay you.

I was extremely disappointed with the AAR's response to the DOJ lawsuit, and it very much showed how agents are aware of who butters their bread.

So I understand why you want to defend your peers and colleagues in the legacy publishing industry and poo-poo self-publishing.

But I don't understand why you feel that gatekeeping is required. I know this might be your knee-jerk response to the idea that some authors (gasp!) can reach readers without agents and publishers, but before you say things like this publicly perhaps you should ask yourself a few questions:
  • Have the gatekeepers you speak of ever been wrong?
  • Do agents and editors ever reject books that become big hits?
  • Have you ever read books that were crap but were legacy published anyway?
  • Have you read thousands of self-pubbed books in order to reach your informed opinion that "A lot of what is self-published is awful"?
  • With 300,000 books released by legacy publishers every year, weren't we "bombarded with information from all sides" long before the self-pub revolution kicked in?
  • Are readers so stupid they can't figure out what to read without your help?
  • Would you agree that 99.99999% of the Internet is crap? If so, how are you able to find that .00001% that you surf regularly? Do you need gatekeepers to help you? Or just a search engine (like Google's, or Amazon's)?
  • When gatekeepers are removed from a system, do you believe that nothing fills the vacuum they leave? (Hint: customer reviews, book blogs, Goodreads, anywhere people talk about books on the Internet, website algorithms that recommend titles).
  • What gives you the right to tell readers what the best books are? Since when did your subjective opinion become objective truth? 
  • Does every book you represent sell a million copies? What is your batting average? What is your industry's batting average in regard to how many copies are sold of every title released?
  • Would you like me to be your gatekeeper? I'd be happy to tell you what you should read and should avoid.
  • Didn't you read my blog post debunking the Tsunami of Crap? I did it three years ago. Your concerns here are hardly new. Or at all realistic.
Now, you may be a fabulous agent with your clients' interests at heart, and maybe I'm wrong and you indeed work for writers and not publishers. If that is the case, I'd love to hear where you fought on your clients' behalf for the following one-sided boilerplate contract terms:
  • Term of copyright. Do you really think it is fair that the publisher gets the rights to a book for the author's life plus 70 years? Have you had a lot of deals that were for limited terms?
  • How successful are you getting rights reverted back to a client when you feel the publisher is treating them unfairly? (Do you ever feel that way?)
  • When a publisher buys subsidiary rights and doesn't exploit them, do you attempt to get them returned? What's your success rate?
  • What's your success rate in removing joint-accounting and basketing clauses? You understand these don't benefit the author, right?
  • What's your success in removing non-compete clauses?
  • What's your success in removing next-option clauses? 
  • What's your success in getting higher ebook royalties for your authors?
  • How often do you get advance money in one lump sum, prior to publication, rather than spread out in bi-monthly payments, sometimes over years?
  • How often do you help your clients audit their publishers?
  • How often do you get your clients cover and title approval?
  • What's your success in removing Unsatisfactory Material Clauses? (If the Material for a given Book is not, in Publisher's sole judgement, satisfactory in all respects, Publisher may terminate this Agreement upon written notice.)
  • How often do you fight for any or all of the above?
I call the above terms unconscionable, and have written about them at length. 

Now if you are truly on the side of your clients, you must understand that self-publishing:
  • Allows authors to keep all rights.
  • Has no joint accounting or basketing.
  • Has no non-compete.
  • Has no next-option.
  • Pays monthly.
  • Doesn't require audits because sales are transparent, updated hourly, and easy to understand.
  • Allows full cover and title approval, and the ability to instantly change both if needed.
  • Has no unsatisfactory material clause.
  • Pays 70% royalties.
If you're pro-writer, surely you see the advantages to self-publishing from the writers' point of view.

I made a million dollars last year from self-publishing. I've found that, without gatekeepers, I can reach readers much easier. And readers are much more eager to buy me when I control cover, cost, and jacket blurbs, as evidenced by the fact that I've made 8x as much as a self-publisher as I did with my legacy contracts.

Readers don't care who the publisher is. They don't care if the work is agented. They care about quality and price, and are able to find books they like without any gatekeepers other than each other and the increasingly adaptive ability for websites like Amazon to understand readers' tastes.  

As an agent, you could be helping your clients make important decisions about self-publishing. That is, if you are pro-client. That might mean advising them to pass up a bad deal and go solo.

Would you ever advise a client to pass up a bad deal and self-publish?

If your answer is yes, then I applaud you, but wonder why you publicly stated you aren't a fan of self-publishing in general.

If your answer is no, well, then we all know who you really work for.

David:  if B&N doesn’t stay healthy, the publishing industry will change phenomenally. Bookstores are incredibly important—not just as retail outlets, but as places where people go and commune with other like-minded individuals, many of them strangers, and talk about big ideas and compare notes on what they’ve been reading and what’s going on in the world. That is a tremendously important and valuable part of our culture. It’s much bigger than just selling books. I find it appalling that our society is turning a blind eye—maybe through just a lack of awareness—to the fact that the number of bookstores in this country is declining all the time. It’s really serious.

Joe: I agree that if B&N doesn't stay healthy, the publishing industry will change phenomenally. And I don't believe B&N will stay healthy.

But you make it seem like bookstores are the only places people can go and commune with other like-minded people. They aren't. And if they disappear, something will probably take their place.

Society isn't turning a blind eye to bookstores. Consumers are deciding for themselves where to buy books, and what about the book-buying experience is most important to them.

Anytime I hear about the serious impact to our culture the absence of bookstores would cause, I like to point out that culture consists of people, and they dictate the culture through their actions. If people no longer have a need or want for something, how can you claim that particular something is culturally relevant?

Part of me misses record stores. I liked browsing cut-outs, and checking out new releases, and special ordering imports.

But the greater part of me appreciates how easy it is to find and buy music these days. I prefer the download experience. It's faster, easier, and cheaper.

Does this have a corollary in the book industry? I believe it does.

Lack of awareness isn't the reason bookstores are closing. Changing customer habits are the reason. And what business succeeds by betting against the consumer?

David: An e-book often takes sales away from a hardcover edition when a book is first published, and the author makes less money from the e-book than from the hardcover. In that regard, authors’ incomes have gone down, and their agents’ incomes go down too. On the backlist side, sometimes an author makes more money from an e-book than from the paperback edition. But in general authors’ incomes are declining a little bit.

Joe: Yikes.

I encourage you to read two recent posts, where author Barry Eisler and I discuss publishing with agent Robert Gottlieb and Kensington CEO Steve Zacharius.

Hardcovers are luxury items. $30 for eight hours of entertainment is a lot of money. That's a month of cable, or three months of Netflix, or an entire season of a TV show on DVD, or three albums on iTunes that can be listened to over and over and over, or seven of my $3.99 ebooks.

If a hardcover sells well, the author gets 15% of the hardcover price. On $30, that's $4.50.

On seven $3.99 ebooks, at $28, I make $19.50.

If you're approaching ebooks as simply something that are hurting hardcover sales, you're not listening to what customers want. Ebooks aren't just cannibalizing hardcovers. They're allowing authors an unprecedented revenue stream where they can make more money, not less.

Perhaps your clients' incomes are declining, and yours is as well as a consequence, and perhaps that's the real reason you're not a fan of self-publishing.

I'm working with my agent to help me self-publish. My agent is making me (and her company) a decent amount of money selling my foreign and audio rights to my self-pubbed books.

I believe that's the kind of agent that authors need. Not the kind worried about B&N going away.

If you'd like to respond, Mr. Gernert, you can do so in the comments and I'll tag it on to the blog post, or you can email me directly. I won't edit anything you write, and I'm happy to provide a forum where you can answer these questions and maybe clarify your point of view.

Wednesday, January 22, 2014

Author Barry Eisler and Literary Agent Robert Gottlieb and an Open Invitation to Debate

Scroll down to see the update.

Joe: Barry Eisler posted this on The Bookseller recently. It's a back and forth with Trident Media chairman and literary agent Robert Gottlieb, and I felt it was worth sharing here.

Before we start, I want to praise Mr. Gottlieb for commenting on this topic in a public forum. It's rare for a prominent industry professional (and Trident is inarguably one of the best and most prominent literary agencies on the planet) to actually engage someone on the topic of ebooks and publishing, which many seem afraid to do. 

Barry: Literary agent Robert Gottlieb was kind enough to leave a comment in response to an interview Porter Anderson did with me for The Bookseller last week.  While the comment wasn’t particularly responsive to what Porter and I discussed, it did raise some interesting related points that struck me as worthy of a detailed response.  I thought I’d address that response directly to Robert, in the hope that further engagement might prove useful and interesting to authors, agents, and others in the book biz.  Robert, your comments in italics; my responses interpolated.

Robert: Early on in the ebook environment some authors thought it was the only way to go.

Barry: Could you name the authors who were advocating ebooks as “the only way to go”?  While many authors (I would include myself in their number) have over time devoted increasing marketing resources to digital rather than to paper because more and more of their sales are in digital, I don’t know of any author who has claimed paper should be outright avoided.  Even Joe Konrath, as high-profile a proponent of the revolution in publishing as I know of, claims only that for many authors paper is becoming a subsidiary right, like foreign language or film rights (note that Konrath first blogged about this almost four years ago.  He’s a prescient guy and I hope lots of agents read his blog).  But it doesn’t follow from this that anyone should abandon paper, any more than anyone should abandon digital, and in fact Joe (to stay with just this one example) makes tens of thousands of dollars a year from paper sales.  Why would he or anyone else advocate giving up a potentially lucrative source of revenue?

I note all this because the very first sentence of your comment struck me as a straw man, and therefore not a productive way to introduce your thoughts.  If I’m wrong, of course, and you can name some authors (citations and exact quotes would be helpful) who have declared digital “the only way to go,” I’d be grateful because I, too, would want to do what I could to push back against such wrong-headed advice.

Robert: A problem with Thomas & Mercer is that they can’t really do much on the print side of the equation. They are very good in the ebook publishing space.

Barry: I don’t think anyone would much dispute that T&M’s strength is in online sales, and particularly in digital (I’ve published two novels and two short works with T&M myself, and have been extremely happy with the results).  But it’s telling that you would describe T&M’s strength in online and digital as a “problem.”  Certainly for an author whose books sell in a ratio of, say, 99% brick-&-mortar/paper and 1% online/digital, T&M’s strengths and weaknesses would represent an unappealing mix.  But for an author whose books sold in the opposite ratio, T&M would be a very attractive publisher, indeed, while a legacy publisher would be a terrible fit.  I’m sure you know that different authors sell in different ratios, with some more heavily represented in paper/brick & mortar and others more heavily represented in digital/online, so you should know that what you describe as a “problem” is for many authors exactly the opposite — a solution.

So the more relevant question — the question discussion of which is likely to prove most useful to authors trying to decide what form of publishing is best for them — is, “What are the various strengths and weaknesses of the various publishing avenues newly available to authors, and how do those strengths and weaknesses fit with your books, your goals, your needs?”  That’s a discussion I would welcome, and I’ll bet other authors would find it beneficial, too.

Robert: Authors need more than distribution in one channel of publishing.

Barry: Well, authors don’t really “need” any particular channel.  That said, it’s certainly desirable to have more channels, because each additional channel represents a potential benefit, both in terms of direct revenues and in less direct ways, such as overall brand awareness.  But this raises a question you don’t discuss, which is:  how much should authors pay for those benefits?  An author whose sales ratio is heavily weighted toward paper might not mind much if she receives only 25% in digital royalties, because the low digital royalty would be an acceptable price to pay for the opportunity to leverage legacy publishing’s strength in paper channels.  But an author whose sales are primarily digital might legitimately wonder why she should give a legacy publisher such a large cut of digital revenues.  After all, she doesn’t need a legacy publisher for digital distribution, a legacy publisher will publish her book much later than she would be able to publish it herself, and she’s not selling much in paper, anyway.  Not to mention the various other reasons an author with a large digital-to-paper sales ratio might be leery of legacy publishing.

The thing to remember is this:  there’s no one-size-fits-all solution for authors.  Different authors have different needs, and, depending on those needs, different publishing services will be worth different premiums.  Assuming otherwise is apt to be a disservice for the thousands of authors who don’t fit the single mix you assume is right for everyone.

Robert: I advise authors that the more channels of publishing you are in the greater your reading audience will be now and in the future.  That includes the international markets as well.

Barry: True enough, other things being equal.  But things aren’t equal.  Access to the various channels costs different amounts in different places, and again for whatever reason you act as though these channels are available for free (or at any rate that cost is irrelevant) and that they all represent the same value to all authors.

Robert: That is how opportunity is created for growth in publishing.

Barry: That, and nothing else?  And again:  why do you discuss only the opportunity, but never the opportunity cost?  Discussing the potential benefits of a service isn’t particularly helpful if you don’t also discuss price.

This is just common sense, is it not?  Telling someone how much she stands to benefit from a product or service without also discussing what that product or service is going to cost her is meaningless.  If an insurance salesperson tried to sell you on a policy with such-and-such a payout, for example, would you immediately say, “Hell yes, sign me up!”?  Or would you need to first consider how much you yourself needed that particular policy, and how much you would be charged for that policy, before being able to make an intelligent decision?

Robert: Nothing remains the same and the end of traditional publishers as articulated by many was dead wrong.

Barry: I don’t know why you would claim that “nothing remains the same.”  Countless things remain the same.  Legacy publishers still pay digital royalties at the same lockstep rate of 25%, still pay their authors only twice a year, still insist on life-of-copyright licenses, still issue royalty statements as impenetrable as the Dead Sea Scrolls, still insist on draconian rights lock-ups and anti-compeititon clauses.  Books are still sold through traditional brick-and-mortar channels, still bought and enjoyed in paper.  A Martian revisiting the earth after a ten-year hiatus might reasonably conclude that more is the same in the book business than has changed.

As for the end of traditional publishers being dead wrong, don’t you feel it’s a bit early to be sanguine?  I certainly hope publishers will read and implement the lessons of Clayton Christensen’s The Innovator’s Dilemma and I hope they’ll listen to Hugh Howey and Joe Konrath, too (as I’ve said many times, when someone is sick, you don’t want them to die, you want them to get well).  But so far I don’t see much evidence of an onset of progressive and enlightened business practices in the legacy world (for example, see the list of some of the countless things that a Martian would find the same in the paragraph above).  Moreover:  Borders is gone and B&N is in trouble.  Legacy publishing’s current health is largely the result of the industry’s practice of paying authors so little in digital and keeping so much for themselves (a practice that for me always calls to mind the image of Wile E. Coyote racing off the cliff and thinking all is well because he’s running on air… until he looks down).  See, for example, this excellent breakdown of Harper Collins’ own numbers:

$27.99 hardcover generates $5.67 profit to publisher and $4.20 royalty to author

$14.99 agency priced e-book generates $7.87 profit to publisher and $2.62 royalty to author.

So, in other words, at these average price points, every time a hardcover sale is replaced by an e-book sale, the publisher makes $2.20 more per copy and the author makes $1.58 less.  If the author made the same $4.20 royalty on the e-book sale as he/she would have on a hardcover, the publisher would STILL be making an improved profit of $6.28.

We have all heard the additional argument:  that for a very large percentage of authors this is irrelevant since their advances don’t earn out– effectively raising their per unit royalty. That may be true, but it logically leads to what seems to me the most unfair aspect of all:  That, therefore, the only authors that are financially punished by this system are the ones whose books perform very well.  The ones whose books earn out.  The big name authors and the celebrities whose books don’t perform to expectation are untouched; the author who gets a reasonable advance and whose book sells much better than expected are the ones who suffer the greatest loss.

How can anyone in this industry see that as defensible?

(If the link above is broken, try this one)

If publishers lose more paper retail sales channels, and if digital continues to grow (more thoughts on this below), the 70% digital royalty available to authors though self-publishing is likely to entice increasing numbers of authors to go the indie route.  Will this happen?  If so, to what extent?  And when?  I’m not sure, but dismissing concerns about the long-term viability of legacy publishing’s current business practices as “dead wrong” strikes me as whistling past the graveyard rather than pausing to take a close look at what’s going on inside it.

Robert: Some publishers have thrived and made the adjustments to the new environment and others have indeed struggled.  It took a while for most major trade houses to get their footing as ebooks substantially changed the publishing landscape.  It is more like a layering process as each format finds space within the publishing layers.  Traditional publishers still have a ways to go but they are pressing forward.

Barry: I don’t have any material objections to any of this, most of which strikes me as so general as to be anodyne.  I will note that if “it took a while for most major trade houses to get their footing” in digital, it might be because their primary response to the advent of ebooks was price collusion and double deletion of pesky incriminating emails.  If collusion is your primary response to changes in your industry, then yes, you might find yourself swaying around on the deck for a bit before gaining some digital sea legs.  I don’t really understand what it means to publish in layers, but that could be because I’m not a legacy publisher.  I don’t doubt that publishers are “pressing forward,” though I think I’m less confident than you that they’re pressing in the right direction.  Publishing revolutionary Hugh Howie has some excellent thoughts on the directions publishers might usefully press forward in; I highly recommend it.  Certainly legacy publishers might have gotten their digital footing a lot sooner if, rather than attempting to fix prices, they had heeded what Joe Konrath has been advising for years.  Here he is in January 2010, March 2010, September 2010, and even all the way back in 2007 at a speech at Google, offering free, potentially life-saving advice to publishers that’s still incredibly relevant.

Robert: Now the stats show ebook sales slowing.  That’s maybe because the initial growth which started at zero had a one way trajectory.  A lot in the ebook space depends on innovation with the hardware as well as pricing.  As prices rise that will also have an impact on ebook sales and history shows prices do move up more often than down.

Barry: There is so much in this paragraph that’s misleading or outright wrong, I’m going to take it one sentence at a time.  So:

Robert: Now the stats show ebook sales slowing.

Barry: This is at best a highly misleading way of describing what’s really happening, which is that the growth of ebook sales is slowing.  Put more simply and accurately:  ebook sales are not slowing, they are growing.  Here, from Publishers Weekly:  “Total e-book sales rose 44.2% in 2012, to $3.04 billion. The gain in e-book sales offset a flat performance by print sales which held virtually even at $12 billion between 2011 and 2012.”  And here, from Futurebook   “If we look at these particular stats from Publishers Weekly, for this segment, sales of e-books rose to $2.07 billion from $869 million as units increased 210% to 388 million.”

There’s more:  in December 2013, Amazon revealed that a quarter of US ebook sales were by indies.  The numbers for B&N’s Nook are similar.  Hachette and HarperCollins both report that ebook revenues are increasing — indeed, by 40% for Hachette (of course, now we know why).

Most astonishing of all is that missing from these figures demonstrating a still dramatically growing market are indie figures, because data is collected only from major publishers.  That’s right:  the ebook market is still growing even when measured without including indie published books.

Calling this kind of continued explosive growth “slowing” is like saying a car that went from 50 miles an hour to 100 and then to 130 is “slowing” because since it hit 100 mph its speed only increased by 30 percent.  Would you honestly describe a car that just accelerated from 100 to 130 mph as “slowing”?  Because that’s what you just did with the ebook market.

(In fairness, there is a rich tradition among establishments of changing the meaning of words to suit the establishment’s purposes.  See, for example, this excellent guide to the NSA’s Humpty-Dumpty definitions of everyday words like Collect, Relevant, Targeted, Incidental, Inadvertent, Minimize, and even No.  In describing continued dramatic growth as “slowing,” you are in august company.)

In fact, by the standards of any industry at any time, the numbers above represent continued hyper growth.  But because it’s slightly less hyper than it was in the previous year (as growth inevitably will be — it’s much easier to double your growth when you’re doing a million dollars in revenue than it is when you’re doing a billion — and again, even without including self-published books), establishment publishing is trying, whether out of ignorance or psychological denial or in an attempt at propaganda, to persuade authors (and perhaps themselves) that it’s all a “slowing.”  For anyone who might be taken in by this false meme, here are two excellent articles with actual data, appropriate graphs, and sound analysis.  There are many more — they’re not hard to find and it’s difficult to understand why you wouldn’t be aware of them.

Robert: That’s maybe because the initial growth which started at zero had a one way trajectory.

Barry: I’m not sure what point you’re trying to make here — that sales can only improve when they start at zero?  Doesn’t this truism apply to everything?  And if you’re trying to say that the tremendous growth of ebooks is slowing in percentage terms because as a market gets bigger and bigger, continued growth represents a smaller percentage of the overall market, well, yes, that’s always true, and there’s nothing “maybe” about it.  It’s a law of business, as well as of math.  But it’s still growth — huge growth — and trying to frame such growth as “slowing” is unlikely to come across as honest and informed commentary.

Robert: A lot in the ebook space depends on innovation with the hardware as well as pricing.

Barry: On this we agree, but I think you might be misunderstanding the nature of innovation in the book world.  Paper is a fully mature technology:  there’s very little that can be done to improve it (although if Espresso book machines ever become widespread, they could decrease the cost of paper distribution, which would certainly be a positive development for paper books).  In contrast, digital readers are continually, dramatically improving in functionality even as they fall in price.  In other words, paper represents a static defense; digital, a dynamic offense.  And between a static defense and a dynamic offense, over time the outcome is never in doubt.  I wrote about this in more detail four years ago (Paper Earthworks and Digital Tides), and since then I’ve seen nothing but confirmation of my view.


Robert: As prices rise that will also have an impact on ebook sales and history shows prices do move up more often than down.

Barry: Can you cite even one technology or consumer product the price of which, adjusted for inflation and for increased features and other product improvements, has historically increased rather than decreased?  What happens instead is that features and functionality improve and prices drop.  Certainly this is exactly what’s been happening with digital readers and tablets, as anyone with even passing familiarity with the short history of the Kindle and the iPad knows.  In the face of all this, it’s not easy to understand why you would argue that history suggests prices of digital readers are likely to increase.

Well, here’s one possible explanation:  the one exception to the rule that consumer prices decrease over time is probably legacy-published books.  But this is the exception that proves the rule, because legacy publishing functions as a cartel, exploiting its lock on paper distribution channels to artificially inflate prices.  In the presence of actual competition, prices decrease, as they have for digital readers and tablets, and as they have for self-published books.  It may be your intimacy with the legacy publishing world that’s caused you to confuse its practices of artificially keeping consumer prices high with the fact that in normal consumer markets, prices tend to fall.  If so, you’re missing the most fundamental impact of digital on the publishing industry, which is that digital has broken legacy publishing’s lock on distribution and therefore its lock on pricing.  If legacy publishers are betting their business on the price of digital reader and digital book prices increasing, they’re badly in denial.  And as the saying goes, denial has no survival value.  Publishers need to approach the world realistically, and realism here means understanding that digital prices are not going to increase, and digital features are only going to improve.

Robert: When an author is solely vested in one format it is like type casting.

Barry: I suppose it could be, but really, isn’t this another straw man?  Because what author is vested solely in one format?  Can you name even one such person?

Publishing is not an either/or world anymore, and I don’t know any author who isn’t trying to leverage all available distribution channels.  So again, the question for authors isn’t, “Should I sell my books only in paper?” or “Should I sell my books only in digital?”  The question is, “How much should I spend and invest in the various channels available to me?  How much are each of the available channels worth to me?  What are my most effective routes into those channels?”  These are relevant, helpful, and important questions, and setting up a straw man about how no one should be solely vested in a single format does nothing but obscure them.

Robert: I’ve heard publishers worry that if an author does well at $1.99 will the public ever pay more?

Barry: Yes, “can I sell a low-priced product for more” is a legitimate concern for all books and for all authors, as it is for everything else.  Different brands will command different prices.  A few years ago, I saw Ken Follett’s book Fall of Giants published in digital at something like $21.00 (no discount — that was the purchase price).  Presumably Follett, an exceptionally strong brand, is maximizing his income at a $21.00 digital price point.  For most authors, a price like that would be way too high.  Every author needs to consider what per-unit price multiplied by volume will maximize his income.  Different authors will experiment in different ways with different books and arrive at different answers.  Reducing this complex and critical issue to something as narrow as publishers worrying about whether the public will pay more for an author whose previous success was achieved at $1.99 is not a particularly helpful approach.

Robert: It is hard to move into other formats successfully.

Barry: I’m not sure what you mean here.  Hard how?  Hard why?  What might make it easier?

Robert: Some have done it.  At Trident we represent authors who started as ebook original authors and have found great success in other formats as well.

Barry: Good news for Trident and for these other authors.  I’m not sure what it signifies, though, other than that Trident has had some success in getting self-published authors legacy contracts.  Not that this isn’t a potentially positive thing for all parties involved, of course, but what can other authors learn from it?

Robert: The more formats the greater the reach.  The greater the reach the more desirable an author is to a publisher.  Simply math.

Barry: Or to put it another way:  “If you achieve great success on your own, more people will then be motivated to help you succeed.”  AKA, “Nothing succeeds like success.”  Okay, as far as truisms go.  But why the assumption that the main metric and primary purpose of success in self-publishing is to become more desirable to a big publisher?  This is an exceptionally parochial view, and a particularly odd one given that it starts from a straw-man premise — it’s better to have more sales channels than fewer — that is entirely axiomatic, that no one would dispute, and that is completely in keeping with what all authors are in fact doing in various individually customized ways.  In fact, as shocking as I know this will sound in some establishment circles, there are thousands of authors who actually prefer self-publishing because of its far higher royalties, faster time-to-market, and scope for controlling packaging, marketing, and other business decisions.  Assuming all self-published authors secretly long for a legacy deal when they’re making so much money and are so happy without one is as antediluvian as the cliche “pajama-clad bloggers.”

Robert: Thomas and Mercer has already pushed back on the range of ebook royalties they once offered in order to get to a better profit position.

Barry: You’re doing it again.  You discuss potential benefits without discussing real costs.  And now you’re discussing how T&M has lowered some of its royalties without bothering to compare T&M royalties with those of legacy publishers.  And legacy publisher digital royalties are still much lower.

(Maybe this is like ebook sales “slowing”?  Certain T&M royalties started at a higher number and are now lower, while legacy royalties started at an even lower number and have never changed, so the way to describe all this is as a “T&M pushback”?)

I don’t think these distortions are deliberate, by the way; rather, I think they’re likely a reflection of various biases of which you’re unaware.  But that doesn’t make them any more helpful for authors who are trying to gather sound information on which they can build sensible business strategies.  Wouldn’t it be more productive (and accurate) to say something like, “Amazon pays higher digital royalties than any other major publisher.  Is that worth it to you?  It depends on a lot of things — most fundamentally, how many of your sales are digital vs how many are paper.  If most of your sales are digital, that higher digital royalty is going to matter a lot.  If most of your sales are paper, then it might make sense to fork over a higher digital cut to a traditional publisher for access to the traditional publisher’s strength in paper channels.  There are other factors, as well.”

Robert: The risk of paying advances and primarily selling ebooks alone is a challenge at best.

Barry: I’m sure it is a challenge.  But what is the paper-based system, a cakewalk?  How many legacy-published books lose money?  How many legacy published authors are dropped after a book’s performance disappoints?  Are these questions not at least equally worthy of discussion?  Why would you describe only one publishing approach as a challenge, when obviously all approaches, in any business, for that matter, have their challenges?  Do you think a description like that is accurate?  Well calculated to offer authors information they can productively use as they go about planning their careers and implementing decisions?  Why not instead offer some data about how many authors are making how much money with T&M vs how many are making how much with legacy publishers — and why?  Wouldn’t that discussion be more interesting and relevant as authors try to decide which route makes sense for them?

Recently, David Gaughran blogged about astro-turfing by the publishing establishment.  He quotes the chairman of the International Publishers Association as follows:

We gathered all the communications people together to discuss the issues and create an action plan.  We have a multi-faceted audience to address, and in the next 12 months you will see key messages delivered, compelling stories of our impact on society for culture and education.  We’ll ask you to personalize that message.  I’m very excited that there is a meeting of minds on this.

Robert, I don’t know if your comments were an example of this kind of key messaging — and I certainly hope not.  But, respectfully, they feel that way.  Don’t authors deserve better?  Can we try?

[Robert left a comment in response; which Barry also fisked]

Barry: Robert, thanks for having the integrity to reply — rare in establishment publishing.  If Scott Turow hunkers down for much longer, for example, I’m concerned his photo might start showing up on milk cartons.

I do wish you had chosen to address my points, rather than simply repeating your straw man arguments and misunderstandings.  The good news is, regardless of what either of us thinks of the quality of the other’s thinking or command of the facts, authors reading this exchange will be able to make up their own minds and come to their own informed conclusions.

Robert: Mr. Eisler has chosen to be an original ebook author.  Nothing wrong with that.

Barry: What’s wrong with it is that your statement is factually incorrect.  All my novels are available in digital and paper.  Neither format is “original” for me; neither is exclusive. My short stories are available only in digital, but this is because there’s no cost-effective way to distribute short works in paper.  When I write one or two more, I’ll put them together in an anthology and then they, too, will be available in paper.

Robert: The misconception sometimes made by some authors is not what you give up but rather what you get that is better and grows your overall publishing audience.

Barry: The authors I know have no misconceptions in this regard at all.  But the misconception you continue to try to peddle is that legacy publishing offers only benefits and represents no costs.  Doesn’t it make more sense, as I argued earlier, to discuss publishing in terms of what benefits the various publishing systems might offer different authors and how much authors will have to pay (cost) and give up (opportunity cost) in exchange for those benefits?

It’s not easy for me to understand why you don’t recognize that discussing potential benefits without also discussing real costs is incoherent.  When someone is trying to sell you something in any aspect of your daily life, do you not typically ask, “What’s it going to cost me?”

Or do you believe the benefits you see for all authors in the legacy system are available free-of-charge?  If so, you should say so plainly.

Robert: When an author lives in a specialized eco-system as long as that environment does well the author’s sales do well and if it doesn’t then like any life form extinction is always a possibility.

Barry: Are you talking about the tens of thousands of authors who over time have been dropped by their legacy publishers?  For tens of thousands of authors, the legacy-publishing environment “hasn’t done well” and their contracts have then gone “extinct.” Is this not the case?  Why do you discuss “extinction” as though it can only happen in self-publishing?  Especially given that extinction actually *can’t* happen in self-publishing or in digital.  Sales might be low but they are forever.  And no one is going to outright cancel your contract and remove your books from shelves — which is what happens all the time in the legacy system.

Do you not know this?  Why don’t you mention it as a demonstrable risk to authors inherent in the legacy system?  Why do you pretend that it’s only a risk in self-publishing?

Robert: As we have learned at the DNW conference in New York City recently and as publishers are noting ebook sales are flattening out.

Barry: You’re still trying to argue that a car going from 100 to 130 miles per hour is “slowing down.”  Considering the detailed data and links I included in my previous post debunking this misleading claim, your repetition and refusal to discuss or even acknowledge your earlier error is beginning to sound less like accidental misinformation and more like deliberate disinformation.

Robert: It has become difficult for authors to raise prices in the present economic conditions.

Barry: Can you name a time in human history, under any economic conditions, for any product at all, when it has been other than difficult for sellers to raise their prices? Why do you say things like this as though they’re peculiar to publishing and unique to the year 2014?  These aren’t insights; they’re cliches.  Again:  don’t authors deserve better?

Robert: The 99 cent model is not making authors more than when they would have made with traditional publishers.

Barry: I don’t see how you can fail to understand that tens of thousands of self-published authors who offer their books at 99 cents and at whatever other price points they find maximize their overall income would have been making zero in the legacy system.

And I don’t know why you would pretend that many authors who have left the legacy system, myself and Joe Konrath to name just two, are making more with their low-priced digital works than they ever did in legacy.

It’s just a simple fact that many authors are indeed making far more on their own at 99 cents or whatever other price point they choose for their works than they were or would have been in the legacy world.  Pretending otherwise is either deliberate disinformation, or evidence of psychological denial.  As the saying goes, you’re entitled to your own opinion, but you’re not entitled to your own facts.

Joe adds: The 99 cent model may only make an author 35 cents (or 70 cents on a KDP Countdown deal) which is about equal with the royalty rate in many legacy contracts. But there's a difference--those legacy ebooks are $4.99. I bet more ebooks would be sold at a 99 cent price point than $4.99, so I bet those 99 cent authors are making more than they would on a $4.99 Digital List Price ebook with a legacy publisher.

Robert: The ebook original space has been great as a farm team is to baseball.

Barry: You keep saying “ebook original” as though self-published authors don’t also offer their books in paper.  Do you mean that many originally self-published authors were subsequently offered legacy contracts?  If so, that’s indeed the case.  But isn’t this an argument *for* self-publishing rather than against it?  For authors so inclined, self-publishing has proven one possible route to a legacy contract.  Many other authors prefer the actual benefits of self-publishing and find the potential benefits of legacy publishing not worth the cost.

Robert: Many terrific authors are coming out of the ebook original space.  Again that is one of a number of reasons to be in as many format tributaries as possible as an author and a means to grow an authors reader ship globally.  It also impacts the authors perception in the film and TV business.

Barry: If you want these sorts of assertions to be taken seriously, you might try backing them up with actual evidence.  What “impacts perception in the film and TV business” isn’t whether an author has a legacy deal.  It’s how many books the author is selling. Otherwise, Hugh Howey would never have been able to do a film deal with Ridley and Tony Scott for his self-published WOOL series.

Suggesting that what makes Hollywood take interest is who’s publishing a novel rather than how that novel is selling is as wrong-headed as it is narcissistic.  Claims like that make you sound like a rooster taking credit for the dawn.

Robert: Every day traditional publishers are becoming more savory [savvy] about the ebook space and they are making investments in this space.

Barry: These are nothing but glittering, unsupported generalities, which sound like they’ve been cribbed from a certain notorious Hachette memo.

Can you describe the ways in which traditional publishers are getting more savvy? Can you name the investments they’re making in this space?  Would you be willing to discuss what they’re charging for this new savvy and these new investments, and how specifically the new savvy and the new investments will benefit authors?

Or is your argument to authors more akin to, “You don’t need any actual evidence or even anecdotal examples.  Just trust my self-interested general pronouncements.”

Robert: Authors who are published by them greatly benefit from this evolving investment and the relationships they have with ebook retailers.

Barry: Again, please provide examples of authors who are greatly benefiting from this evolving investment, and how.  Please explain how the relationship a legacy publisher has with an ebook retailer like Amazon greatly benefits an author, and why that benefit is worth legacy publishing’s lower digital royalties and other real and potential costs and risks.

In fact, as I’ve said many times, a legacy publisher trying to sell me digital distribution is like someone trying to sell me air.  It’s already available to me and I don’t need to pay for it from a third party.

Robert: Mr. Eisler took a chance early on and went digital only.

Barry: Again, this is simply factually false.  Every one of my novels is available in paper and digital.

Robert: My point is by doing so one risks the possibility of never reentering the traditional trade in today’s very tough retail market.

Barry: There are so many invalid assumptions in that one little sentence.  Many authors (myself included) have no desire to “reenter the traditional trade.”  Regardless, one’s ability to enter or reenter that trade will be determined by one’s sales (though regardless of my sales, I doubt I’ve made many friends in the legacy world in the course of frequently calling out legacy bullshit).  Most importantly, every author who enters the traditional trade risks having to leave it because of publisher screw-ups and resulting poor sales.

Do you not know all this?  Why do you not mention it?  Why do you continually imply that self-publishing is fraught with risk, while the legacy route is magically risk-free?

Oh yes, and “today’s very tough retail market.”  As opposed to yesterday’s retail market, which everyone knows was easy.

I don’t think you’re aware of it, Robert, but again and again you make pronouncements as though they’re somehow unique to self-publishing when in fact they apply to everything.  Again:  don’t authors deserve better?

Robert: Again, as I have pointed out in a number of blogs Trident believes authors should be in as many tributaries as possible or an author to loses potential opportunities.

Barry: I’m glad Trident believes this, especially since no one on earth would argue otherwise. Although some people might believe it’s also worthwhile to ask what access to those tributaries is going to cost, rather than pretending such access is cost- and risk-free.

Robert: Retailers order to net and if an author has no recent hardcover track record publishers more often than not won’t buy the author’s work because they simply won’t succeed in convincing the retailers to take the books.

Barry: Do you really not understand that what you just said applies at least as much to legacy publishing as it does to self-publishing?  What do you think happens to orders of an author’s new hardcover book if her previous sales numbers were disappointing?

And how did Hugh Howey and Bella Andre secure their paper-only deals with legacy publishers?  How did Amanda Hocking ever get her legacy deal?  None of them had hardcover sales of their self-published books.

I don’t mean to be harsh, Robert, but the things you keep saying are consistently wrong both logically and empirically.  Instead of just making assertions, why not try backing the assertions with evidence, as a way of testing whether the assertions are sound?

Robert: We at Trident feel an author should have success in as many formats as possible therefore ensuring future grow and opportunity.

Barry: That’s nice.  Do you at Trident also believe in motherhood and apple pie?

Robert: Our recommendations are not solely based on a “higher ebook royalty” as was the war cry by some many in the beginning of the ebook revolution.

Barry: Why on earth would you put scare quotes around higher ebook royalties?  Do higher ebook royalties not exist?  Are they impossible?

And you’ve succeeded in making me wonder… are your recommendations based on higher ebook royalties *at all*?

Anyway, once again, you’re just arguing via a straw man.  I wish you would do better. No one I know advocates higher ebook royalties as the “sole” determinant of what publishing route to take.  There are obviously many other factors, including time to market, control over business decisions, the importance of paper channels, etc.

Robert: Sometimes sharing opportunity with a publisher, wherever possible, creates greater opportunity for an author’s career.

Barry: My God, who would dispute something so obvious, indeed, something so axiomatic?  I mentioned Hugh Howey and Bella Andre above as just two examples.  And every author who’s ever made it really big via the legacy route presumably has experienced that “greater opportunity.”  But as I keep having to point out to you, it’s incoherent to discuss opportunities without also discussing costs, or to pretend that those opportunities are automatically available in equal amounts to all entrants.

Contrary to what all your arguments imply, legacy publishing isn’t done for free. Legacy publishers take 75% of digital royalties in exchange for the benefits they promise.  And those benefits work for only a tiny portion of legacy authors overall.  Is that irrelevant to you?  Unworthy of discussion?  Not something authors should weigh and consider?

Robert: The purpose of my response to Mr. Eisler’s story is that as a company we represent over 700 authors with many different experiences in all the formats and I wanted authors to be aware of the risks of living in one eco-system.

Barry: It might be helpful to translate that into plain English:  “The purpose of my response to Mr. Eisler’s story is to advertise Trident’s services and to try to scare authors away from forms of publishing through which Trident currently has no way to profit.”

Robert: Change is good but one should always be well prepared to adapt and to make sure all options continue to be available in the management of authors careers.

Barry: This is so obvious and axiomatic that it’s veering dangerously close to self-parody. Remember the motto of Animal House’s Faber College?  “Knowledge is Good.”  That’s about the same level of potential controversy inherent in the statement above, and in so many other of your pronouncements.  When you offer such obvious, entirely uncontroversial, applicable-to-every-era-and-every-facet-of-life-Mom-and-Apple-Pie generalities, who are you helping?

Robert: Solely being an ebook author is not the panacea many first thought it would be.

Barry: And thank God for that, since contrary to your repeated assertions I’m not solely an ebook author, nor is any other self-published author I know.

Robert: That is not to say I and Trident don’t value the format.

Barry: Thanks for clearing that up — I wouldn’t want to think a literary agency doesn’t value a format that for even many legacy-published authors now represents over half of overall book sales.

Robert: We work closely with all the book retailers through our ebook program at Trident and have a lot a solid business relationships with them.

Barry: Well, if your true purpose wasn’t clear enough already, you close with another plug for Trident.  I wish you’d show as much concern for sharing useful information with authors as you do for trying to reel them in as paying clients.

Again, Robert, I appreciate that you at least tried to engage here.  Though if the substance of your response is the best the publishing establishment has to offer, I can understand why Scott Turow figures he’s better off remaining in hiding.

[Robert then replied with this]

Robert: Mr. Eisler, we can agree to disagree and still respect one another and our differing view points.

[I responded]

Joe: I'm not sure he respects your view point, Robert. I certainly don't. You haven't defended any of your statements (which were ludicrous), or responded to any of Barry's questions, and he took you apart line by line.

Props to you for bowing out gracefully in a bout where you were outmatched. Failsies for posting in the first place without a single substantive thing to say.

[Robert responded]

Robert: Thank you Mr. Kornath for telling me what I should and should not do.

My comments reflect mine and Trident's experiences and knowledge in the business of publishing globally. We represent authors over a wide spectrum of formats and markets. We have an outstanding ebook department and we know the markets well. For the past decade Publishers Market Place has rated us the #1 Literary Agency in sales in North America for the past decade. In Britain in fiction we are in the top three and in non-fiction as an American firm we are in the top ten.

Those results are due to the our wonderful authors and putting our knowledge and ideas to work for all our authors regardless of any book format(s) they are being published. I am more than happy to stand behind Trident's results.

[I responded]

Joe: Thank you, Mr. Gottlieb, for not taking my advice.

The larch tree is a conifer from the genus Larix, and can grow up to 45 feet tall. Even though it is a conifer, it loses its leaves in the autumn. They are prone to fungal canker disease, and their wood is waterproof. Dendrologists are undecided as to how many species the larch there are, but the accepted range is between 10 and 15.

And now I've wasted as much of your time as you've wasted of mine, as neither of us have contributed a single relevant thing to this discussion, and have instead wasted space on needless information.

The difference, of course, is that the larch doesn't give me 15% to talk about it in public forums.

I'm sure Trident authors are pleased you stand by their results, but what does that have to do with ANYTHING Barry mentioned in his original post, or his rebuttal to you?

You take the time to respond, but without anything substantive to add. Why?

What in Barry's post do you disagree with? He explained, in great detail, why you are wrong. In return, you plugged Trident. I goosed you to defend yourself and reclaim a bit of face (and perhaps actually join the conversation), and you plugged Trident.

Please, if you respond again, for the love of all that's good, for the sake of all those on the sidelines watching this exchange, for all of your wonderful clients at Trident Media Group LLC who no doubt have the best possible representation in the history of the universe, can you actually say SOMETHING in response to Barry's many points?

This isn't a case of different viewpoints, Mr. Gottlieb. It's a case of you misunderstanding Barry, misunderstanding the current state of publishing, saying a lot of things that were flat-out wrong, and then plugging your company.

Now if you were to blog about something you know a lot about (something other than self-publishing and ebooks), and then I were to respond in the comments with misinformation, and then you corrected me, I believe I'd take that as a learning experience, retract my silly comments, and thank you for enlightening me. Or, if I truly believed I was right, I'd make at least a token effort to defend my point of view.

You did neither. And yet you continue to engage.

Putting ego aside for a second, Trident is indeed a major player, and you no doubt have helped countless authors get great deals. Kudos to you on that, no sarcasm at all. Good agents are worth their weight in gold.

But good agents should also stay in step with what is currently happening in the publishing world, rather than make assumptions, spout uniformed opinions, and act like sound bites.

You actually have an opportunity here to learn something that Trident and your clients could benefit greatly from. Other agents have.

I really do wish you continued success, and I'm sure you're a smart, likable guy with a lot of friends and a great many stories to tell.

If you want to continue with this discussion, it needs to be a true back-and-forth, where points are addressed and questions asked and answered and facts introduced and logic applied. I think it could prove valuable if you had a go at it.

Joe sez: Mr. Gottlieb hasn't responded. But if he chooses to, I'll be happy to post it, unedited, here.

I, for one, am encouraged to see pros like Robert Gottlieb and Steve Zacharius engage in open debate about these things. Ebooks are here to stay, and self-publishing is a shadow industry that legacy publishers either ignore or dismiss, but the fact remains that tens of millions of books are being sold outside of the legacy system.

This isn't an us vs. them debate. It's a way for everyone to become more informed about the changes happening within the industry, and how we can all benefit from them.

Writers now have choices they never had before. There's a lot of money in play, here.  Let's discuss it.

I'm talking to you John Sargent (CEO of Macmillan). And you Gail Hochman (president of the AAR). And you Craig Swinwood (CEO of Harlequin). And you Jamie Raab (President of Grand Central). And also authors Scott Turow and James Patterson and Richard Russo.

You've all said some really outrageous things (and I'd be happy to repeat them if you want me to). I'm giving you a popular forum to voice your points of view. And if you don't want to debate me and/or Barry Eisler, I bet I could get Hugh Howey or Bob Mayer or Kris Rusch or David Gaughran to fill in for us. We can even send you questions beforehand, and you can pick and choose the ones you'd like to answer. 

I extend this open invitation to any literary agent, legacy publishing editor, or legacy executive. Come to my blog and say whatever you'd like to say. I get anywhere from a few thousand to tens of thousands of hits per day. This is your chance to share your knowledge with the people who allow you to have a job. You know... writers. 

I promise to be respectful, not to edit you, and you can even be anonymous if you wish. My house is your house, feel free to speak your mind. Naturally we'll respond, but you'll have as many chances to reply to our responses as you'd like to, and I'll even give you the last word.

Email me if you're interested. 


Mr. Gottlieb posted an update on The Bookseller thread.

Robert: More Information reported by Publisher's Weekly concerning formats that authors are published in:

87% of e-book readers also read a print book in the past 12 months, and 29% listened to an audiobook.

84% of audiobook listeners also read a print book in the past year, and 56% also read an e-book.
A majority of print readers read only in that format, although 35% of print book readers also read an e-book and 17% listened to an audiobook.

Overall, about half (52%) of readers only read a print book, while just 4% said they only read an e-book, and just 2% only listened to an audiobook. Some 9% of readers said they read books in all three formats.

The survey was conducted for Pew by Princeton Survey Research Associates International over four days, January 2-5, 2013. It is based on a representative sample of 1,005 adults ages 18 and older living in the continental United States. The margin of error for the full sample is plus or minus 3.4 percentage points.

This goes to the core issue of why it is good for authors to be published in as many formats as possible in order to garnish the largest reading audience for their work by readers.

The majority of ebook authors who are only published in that format only earn on average a year $1000.00 or less. This information is from DBW.

Ebooks are a wonderful way to publish and can be a stepping stone to success as Trident has found with our ebook program and from authors we have been able to move into mainstream trade publishing from the ebook format. As I said above ebook publishing is not a panacea but it is a valuable layer in the publishing landscape.

Joe: Mr. Gottlieb, thank you for this response, but you hardly refuted anything Barry posted earlier. 

I'll repeat Barry's rebuttle: "Could you name the authors who were advocating ebooks as “the only way to go”?  While many authors (I would include myself in their number) have over time devoted increasing marketing resources to digital rather than to paper because more and more of their sales are in digital, I don’t know of any author who has claimed paper should be outright avoided."

Could you be conflating "ebook publisher" with "self-publisher"? If so, they aren't the same. Self-publishers and legacy publishers both publish ebooks, and both also publish paper. I don't know of any ebook-only self-published authors. If they have something novel-length, they use Createspace or Lightning Source to get it into print.

The DBW survey you reference states that nearly 80% of self-publishers earn less than $1000 per year, not "ebook authors who are only published in that format."

It also said that 54% of “traditionally-published” authors earn less than $1,000 a year.

But as Hugh Howey says at the end af that article: “This survey does not capture the fact that self-publishing is going through a renaissance. It expects a group of authors with two or three years of experience and market maturity to line up against the top 1% of authors who have had several generations’ head start…"

Also, we have to consider the source you're citing. This was a survey of over 9000 authors conducted by Digital Book World and Writer's Digest.

Writer's Digest is notorious for its many ads touting vanity publishers such as AuthorHouse and Xlibris. These companies charge a lot of money. 

Lots of self-pubbed authors who read WD go the vanity route, and I've been against vanity publishing for a decade. It's a rip off, and it doesn't lead to sales. I'd be inclined to throw out the data from self-pubbed authors who use vanity services, as they don't represent what the rest of us are doing.

Then there is what Beverley Kendell said on my blog:

"That Writer's Digest survey of 9210 "authors" is very misleading. Only 32% of those authors were actually "authors" in any real sense as I pointed out to Steven on The Passive Voice post. 

That BIG number includes aspiring authors who a) have yet to START and FINISH a manuscript. I really hate that that number is being thrown around like that in terms of earnings because it leaves the wrong impression."

That leaves only 3000 authors left. 

Now, 3000 authors may seem like a decent amount, but no one except Amazon knows how big the shadow industry of self-publishing is. I know there are tens of millions of ebooks that don't exist to the NYT and USA Today bestseller lists. They aren't counted by Bookscan, or in any accurate poll I've seen. There are 70,000 writers who self-publish on Smashwords, but no one on SW is in KDP Select (KDP Select is exclusive). So I'd guess there are hundreds of thousands of self-published authors--a fact easy to estimate considering there are almost 2,400,000 ebooks listed on Amazon Kindle.

I also want to mention a point brought up by h lynn keith (aka antares) in my blog comments: "9,000 is a statistically valid sample IF AND ONLY IF the members of the sample were randomly selected from the target population."

To quote author Jude Hardin, "if the worst sellers are moving 100 units a year, and there are 1,000,000 of the worst sellers... Well, do the math."

Also, check out Beverley Kendall's own self-publishing survey:

She polled 822 writers, and found over 48% of self-published writers earned over $10,000 in 2013.

You said that ebooks are a "stepping stone". While some authors may move into trade publishing after self-pub success, the vast majority do not. Nor do they desire that. You are incorrect in saying that "ebook publishing is not a panacea". In fact, more authors than ever are making money by self-pubbing, and they have no desire to take a legacy deal even if offered. I've spoken to many bestselling self-pubbed authors who have turned down legacy deals, or done print-only deals with the Big 5, keeping the ebook rights for themselves.

It would be benefit Trident and your clients if you developed a better understanding of ebooks and self-publishing. 

Barry and I await some actual substantive response to our comments.We'd prefer for you to actually consider our points before pointing to surveys that we're well aware of and have dismissed, and I encourage you to define the difference between "ebook publisher" and "self-publisher" in your mind and in your statements, because you seem to be using them interchangeably when they are anything but.


Robert: Mr, Konrath, I'm not in the business of refuting and arguing. I have laid out facts that I Trident believes and has insight through many years of successful business operations in publishing globally. Experiences by individual authors can certainly vary. The information I share is important for authors and publishers to take under consideration. They are entirely free to follow their own paths. If some one disagrees with me they have every right to do so. I certainly respect freedom of speech. As I have said I stand behind our decades of success, knowledge and experience.

(note: for some reason Mr. Gottlieb's reply above no longer appears in The Bookseller comments.)

Joe: Mr. Gottlieb, you're in the business of selling rights. Rights to stories written by authors.

If you don't understand how what Barry and I are saying here is relevant to your livelihood, I'm astounded.

Your years of insight will soon no longer be relevant. And you aren't sharing any pertinent information. What exactly have you said that authors need to consider? That ebooks are a stepping stone to mainstream trade publishing? Perhaps they are, to .00001% of authors. To the rest of us, they are how we pay our bills, or make our living, and how some of us are making a lot more money than we ever could in trade publishing.

My agents actively search for, and find, movie, audio, and foreign deals for me, on books I've self-published. They don't look for trade publishing deals for me, because I make more money self-publishing. As do a great many authors that you seem to be dismissing.

Can Trident thrive selling only subsidiary rights for its clients? Because unless you can convince the Big 5 to offer more than 25% ebook royalties, you're going to have more and more clients choosing to self-pub. Even major clients.

BTW, I certainly hope, on behalf of your clients, that you are in the business of arguing. I hope you argue on their behalf on each and every contract.

Robert: Mr. Konrath, This is the end our conversation from my standpoint. I wish you luck in all your endeavors.