Tuesday, February 25, 2014

A Big Bestseller Weighs in on “Publishing Is A Lottery”

Yesterday, a big bestseller (really big) Barry and I know and respect emailed Barry in response to our post Publishing is a Lottery/Publishing is a Carny Game. The bestseller’s thoughts were so interesting we decided to post them here, anonymously, with our response. We hope the person in question will offer some additional comments, whether anonymously or otherwise, because this is exactly the kind of conversation we hoped our post would elicit. And we hope we’ll hear from many more people who can offer different perspectives based on different vantage points within the industry.

Big Bestseller: Barry, my friend, evidently the new world is already old enough to have grown zombie memes of its own.

Barry: Not just that, but many of them are already several years old!  In fact, Joe and I have been talking about doing a post of the Top Ten of them. We’ll let you know when it’s up.

Big Bestseller: You write, re publishing deals, "First, it’ll cost you your rights, which someone else will own for at least a very long time and in all probability forever ... " I have publishers in 98 countries and none of them own my rights. I own them all. You might say, come on, you know what I meant, or that it's a distinction without a difference, or that you were exaggerating for effect, or whatever—but be fair: you'd have ripped Turow for saying that. You'd have said, "A lawyer who doesn't know the difference between owned and licensed? Really?"

Barry: You’re right about the difference between own and control; I appreciate the correction and I have asked Joe to run a strikeout through the first and to add the second. You’re not right that I would have ripped Turow for the same mistake—precisely because I recognize that in this context it is indeed a distinction without any difference, and making a big deal of it would be pointless and petty (not only that, but I spend so much time addressing the egregious substance of Turow’s frequent mistakes of fact and logic that afterward I don’t have a lot of time left to nitpick him). That said, depending on my mood it’s possible I might have tweaked Turow for his harmless error, as you have me. A little tweak here and there can be good clean fun.

Now, if only Turow would crawl out from under his rock to engage his critics the way you and I are engaging each other…:)

Joe: I changed the word "own" to "control." But I'm okay with "own." You don't own a car you lease, but if you lease it for 70 years until it dies, you might as well have said you owned it. It isn't as if the owner is ever getting it returned, and possession is 9/10 of the law.

Big Bestseller: And earlier, that lame, tired, sad canard: "... hard work demonstrably does not guarantee success. If it did, then those hard-working publishers would produce nothing but massive bestsellers. After all, don’t they work hard on all their books?" That's like saying, "If the Yankees are such a great franchise, how come they don't win the World Series *every* year? How come they don't all bat a thousand?"

Barry: I know you’re fond of this analogy, and I suspect that fondness might be causing you to bring it up even when it’s not applicable. Here, it isn’t. One is an analysis of a lack of guarantees for purposes of arguing that a system functions as a lottery. The other is an analysis of whether something is good. These are not the same inquiries.

If what you’re trying to say instead is, “You can’t expect a guarantee from New York or from anywhere else, but you can expect the best possible odds, just like you can expect the best possible effort from a great team like the Yankees,” then although I wouldn’t entirely agree, I wouldn’t call it an incoherent argument, either. But I’m not sure if that’s what you’re trying to say.

Joe: Your comment that the Yankees can't be great unless every player bats 1000 and they never lose the World Series is (sort of) analogous to the Big 5 can't be great unless every book is a bestseller. That's not our point.

When legacy pundits refer to publishing as a true meritocracy, and they extol their ability to create bestsellers—much like you do later in this post—it is fair and approproiate to call them on that BS. How hard you work is no guarantee of success.

Baseball teams compete against one another, and statistics are carefully tracked and transparent. Book sales are not zero sum (authors don't compete with each other like baseball teams do), nor are book sales statistics known by the public. If I were to try out of the Yankees, my numbers would mean a lot, and everyone would be aware of them. The Big 5 doesn't release numbers, but I'm guessing not all their authors sell as well as you.

When Gottlieb gives examples of big publishing successes, he does so like a carny, pointing to the big stuffed Snoopy no one will ever win because the odds are so against it. And the thing is, the publisher will never tell anyone those odds. But I could find out exactly what numbers and odds I'd need to do to be a Yankee, and how well I'd have to perform to stay a Yankee.

All that aside, your analogy doesn't fit. Barry and I constantly talk about luck being a factor. Publishers can work hard, authors can work hard, or both can work hard, and none of it is any guarantee of success. But show me where publishers are admitting this.

So we're not likening the Big 5 working hard and making every book they release a bestseller to the Yankees working hard and batting 1000 and winning the World Series. The Yankees aren't claiming that will happen. They don’t suggest that if you become a Yankee, you’ll bat 1000 and win the World Series. The Big 5 are the ones being dishonest about a writer's chances.

Working hard does NOT mean you'll have a great batting average, become a Yankee, and win a ring (though hard work can affect your odds of getting lucky, which is one reason to work hard). Just like a big publisher working hard does NOT guarantee you'll sell like Nora Roberts or Dean Koontz.

Big Bestseller: You have to scale praise or criticism to what is possible, within the parameters of likelihood. And it's arithmetically impossible for every book to be a bestseller. The word "best", after all, has meaning.

Barry: Well, not arithmetically impossible (there are different ranks of bestsellers, after all—the New York Times even helpfully numbers them), but perhaps linguistically impossible. Beyond that, I don’t disagree. I just don’t see the applicability of your otherwise true statement to an analysis of systems as lotteries.

Big Bestseller: You betray your bias by blithely walking into it later, when you mention: "Amazon’s unmatched direct-to-consumer marketing power." To which I say, of course, "If Amazon's marketing power is so great, it would produce nothing but massive bestsellers." Right? See what I did there?

Joe: Actually, no.

Amazon does have unmatched direct-to-consumer marketing power, via its website and email lists. Publishers treat the bookstore as the customer, not the reader. Besides, Amazon isn't pointing to Barry, or me, or Hugh Howey, as something attainable, nor is it spouting BS about meritocracy or the importance of gatekeepers. Amazon is keeping mum for the most part, just like legacy publishers are keeping mum, about actual sales figures.

Amazon doesn't spout the BS or the ridiculous claims that legacy pundits have in the last dozen times we've fisked them. If Amazon did, I'd admonish Amazon—I've been critical of them before when they removed reviews, and Barry and I both don't like the amount of legacy legalese creeping into their current contracts. As we've said, this is a business, not an ideology.

My intent is for authors to be treated fairly. So far Amazon is much better for authors than legacy publishers on contract terms, royalties, control, and many things authors want... with the exception of paper book distribution. Legacy trumps Amazon on paper distribution. But I'm doing well enough that I don't need those paper distribution to make a nice living.

Big Bestseller: And seriously, it's a question worth examining. Why has no AP title ever even approached a million sales? Why has no KDP title?

Barry: This is a great point precisely because it leads to the kind of honest and productive conversation about payoffs, odds, and risks Joe and I hoped to elicit with our post. We could talk about what legacy publishing’s power is intended to achieve, what Amazon’s power is intended to achieve… things like that. We could talk about the ways these two lotteries differ, while being careful to scale our praise or criticism to what is possible, within the parameters of likelihood. This is useful.

So why hasn’t Amazon had a million-copy bestseller yet? My guess is it’s primarily because their strength isn’t in paper and because their digital editions are Amazon exclusives, unavailable in other retail channels. Their focus is on selling a lot of digital copies to Amazon customers, and at this they’re demonstrably great. For some people, this kind of lottery will be attractive (it’s working better for me than the legacy one ever did, both in terms of overall volume and because I make so much more per unit with Amazon in digital). For others, such as you, it likely wouldn’t make sense. The point is to understand the benefits, odds, and costs of all the available lotteries so we can make the choices that are best for ourselves.

Big Bestseller: Because a million is fairly routine for a BPH e-book. Even though BPHs have "virtually no such power at all ..."

Barry: A million copies of an ebook is “routine” for BPH? (I confess I’m not not familiar with the abbreviation BPH, but I’m guessing you mean Big Publishing House?) That sounds like a huge number to me, but perhaps that’s because we hobnob with what Donald Maass would call different classes of author?

Anyway, in the absence of verifiable data it’s hard to know for sure, but judging from my own experience and from that of the many other Amazon-published authors I know, Amazon is indeed using its unmatched direct-to-consumer marketing power to generate sales for its authors far larger than those their previous, legacy publishers were able to achieve. Sales as large as yours? Not even close, I imagine. But this brings us back to that interesting and productive conversation about benefits, odds, and costs, of the different natures of the different lotteries, about why some people would want to play one and some people another.

Joe: A million is fairly routine? No, it isn't. Not even close. Not even close to being close.

It perhaps is fairly routine that a paper book that sells a million will sell a million ebooks, but even then I'd balk at the word "routine". A million is a lot of books, and very few titles sell that many. I'd posit those that do are bolstered by the omnipresent paper distribution, which we'll get into shortly...

Big Bestseller: Problem is, you're viewing Amazon's marketing in a solipsistic way. An Amazon blast might indeed be a wonder to behold, compared to anything else you've seen in *book* marketing, or not, but consumers are just regular folk, not especially interested in books - and, crucially, they're all getting somewhere between thirty and forty e-mail offers every day. Not technically "spam", as defined by their ISP's spam filters, but certainly spam as defined by their frontal lobes. They pay less and less attention. Delete, delete, delete. Direct-to-consumer marketing is a losing proposition now. It usually takes the public the best part of twenty years to wake up to something, and now folks are beginning to understand: the Internet is all about selling them something, and they're starting to build resistance.

Joe: Based on... what sources? If you look at what Amazon does to sell books, compared to what the legacy industry has done (big ads, book tours, coop to booksellers) I'd say people are more apt to buy books based on an email than a billboard. My numbers, both via Amazon campaigns and BookBub, show that visibility through email can increase sales for a title by 3000%, and that those effects last for a bit after the promo has ended.

Moreover, all A-Pub authors get this treatment. Which is why there is a disproportionately high percentage of A-Pub authors in Hugh's data

Barry: Direct-to-consumer marketing involves a lot more than just email campaigns. For example, there’s also merchandising on the Amazon website and ads on the home pages of Kindles, both of which are also exceptionally powerful sales tools. True, legacy publishers can indirectly achieve something similar by buying coop, whether in brick-and-mortar stores on the Amazon website. But legacy publishers have virtually no contact with, and therefore very little knowledge of the behavior of, end-user customers. They have less ability to tailor such campaigns to make them as effective as possible.

Also, I’m pretty sure it’s a mistake to dismiss all direct-to-consumer marketing as “a losing proposition now.” That’s an awfully broad statement when you consider how much it must encompass, now and historically.

I’ve seen amazing results from Amazon’s campaigns so far, but it’s certainly not logically impossible that direct-to-consumer marketing could lose its mojo. The key question, I think, is how much of what Amazon does akin to what Seth Godin calls “permission marketing,” and how much of it is akin to spam? People like permission marketing (“You want fries with that burger?”). They hate spam. I think if Amazon continues to do the former, they’ll stay strong. If they drift off into the latter, agreed, they’ll get tuned out. Either way, it’s probably a bit early to make across-the-board pronouncements about the death of direct marketing.

Much of this comes down to the question of, “What do you primarily want from your publisher?” Which can be rephrased as, “What are you primarily paying your publisher to do?” In a paper universe, I think the answer is “distribution.” In a digital universe, I think the answer is “marketing.” Now, as the consumption of books becomes increasingly digital, if you’re right about direct-to-consumer marketing being dead already and right about New York being the best marketing game in town, New York will be fine, and authors will continue to be happy paying New York 75% of their digital royalties in exchange for all that great marketing. I don’t see things shaking out that way, but I’m not clairvoyant and I could be wrong. Regardless, as long as authors are asking themselves these questions (“What do I want from my publisher? How likely is it my publisher will provide it? What will it cost me?”), I’m happy. How individuals decide is their own business.

Joe: One of the things I'm keenly aware of, and caution others against, is believing that because something worked for me, it must work for others.

It certainly can work for others. I've been thanked hundreds (thousands?) of times by authors who gave self-pubbing a try because of my blog, or after seeing me speak. Just like there are more authors on the bestseller lists than just you, BB. But we have to figure out odd, payoffs, and costs in order to make informed decisions.

Big Bestseller: I have absolutely no beef with Amazon—I make a fortune from them, many times more than any AP or KDP author. They're definitely one of my Top 10 trading partners around the world. But I believe the desire to buy my books comes from third-party recommendation, either a trusted voice inside the national conversation, or a trusted friend. Or chance browsing. Not direct-to-consumer marketing by the seller.

Barry: I doubt it’s either/or. And you’re arguing as though New York has some ability to market indirectly that Amazon and others intrinsically lack. What New York has that no one else does is potentially massive paper distribution. If legacy distribution results in no more than your being spine-out in every third B&N, it’s just distribution and gains you little visibility. But if it means you’re in every big box store, every front table of every B&N, every airport kiosk, every drugstore, then distribution becomes its own form of marketing, and agreed, no one can do this the way New York can. But how many people get that treatment? And how many of your sales do you expect to be in paper vs how many in digital? And how long will the paper party rock on? These are precisely the kinds of questions authors need to ask when deciding whether the legacy lottery is right for themselves.

That said, I agree that the best advertising is "third-party recommendation, either a trusted voice inside the national conversation, or a trusted friend." But I think you might be confusing the match and the kindling, on the one hand, with the long-term fuel, on the other. The question is, how do the flames get fanned? Presumably you wouldn’t argue that advertising is useless, coop is useless, blurbs are useless, etc, for purposes of igniting and fanning a national conversation. None of these efforts is either/or.

No book can get beyond a certain point without going viral. But there are various tools that can help in that enterprise. If your response to this would be, “Yes, Barry, but direct-to-consumer marketing isn’t one of those tools,” I’ll respectfully disagree.

Joe: BB, your diehard fans benefit from direct-to-consumer marketing, because they're looking for your next book. But I'd argue that chance browsing is the real factor behind many NYT bestsellers, because their books are available everywhere. If there is a selection of 15 titles in a CVS or an airport kiosk, and one is yours, those looking for that kind of book are limited in their choice by what is available.
In other words, you sell a lot because you're everywhere. That isn't taking anything away from your ability as a storyteller. It's simple numbers. The more places a book is for sale, the more copies it will sell.

Amazon sells books on Amazon. It is one location. And its location is closer to an even playing field than authors have ever had. It is also a location with no barriers to entry, is a relatively even playing field, and is a place where authors have a measure of control.

When I was legacy pubbed, I had no say in distribution, marketing, coop, or discounting. Your books all have incredible distribution, marketing, coop, and discounting. Mine never did. And it isn't a quality issue. Some of my titles have more, and higher, Amazon ratings than some of your titles, even though you outsell me by an astronomical amount.

Big Bestseller: Again, no beef. Your main argument seemed to be that it's relatively a little easier to earn decent money through AP or KDP, and I don't disagree. Hugh Howey's guesses—while hilarious in their earnestness—back that up, because I believe them to be accurate in broad substance. But the "Stephen King!" response is also valid, I think. Why not shoot for the big win? So timid not to.

Barry: Now who’s being solipsistic? (And I want you to know, I find your earnestness is endearing, too. ;)). Someone prefers to play in a lottery that’s different from the one you prefer, and that means she’s timid?

How about if we play a nice game of Russian roulette. Five chambers in the cylinder, one loaded, a million bucks if you win. An eighty percent chance of winning a million dollars!  What, you won’t play? When did you get so timid, my friend?

Of course, there’s nothing wrong with swinging for the fences. Nor is there anything wrong with just going for a solid base hit. All I’m concerned about is that people understand the odds and the risks of each so they can make decisions that are best for themselves. Which, as I’m sure you know, won’t always be the same as the decisions you feel are best for you.

Joe:  The “Stephen King” meme is not valid. You're quite literally one in a million. And, as Barry's post correctly pointed out, the cost for taking that shot is high compared to the chance of it happening.
It is a fallacy to believe we got where we are because we deserve it. A whole lot of stars had to align to just reach my small level of success. But for a JK Rowling to happen, the odds are astronomical (for more, I recommend Leonard Miodinow’s The Drunkard’s Walk: How Randomness Rules Our Lives). To advocate that approach to authors is unfair, and harmful. It's okay to sign an unconscionable deal with shitty royalty rates and no chance of ever getting your rights back for the 1/1000000 chance of selling as well as you do? No thanks. Especially because I'm pretty sure, once B&N collapses, most NYT bestsellers will see lower sales than ever before.

I can't match Patterson's sales in the paperback racks, because he's in all of them and I'm in none. I'm not a giant bestseller who releases 25 titles a year and has movies and TV shows based on my work. I'm not a regular guest CBS and NPR and have full page newspaper ads and television commercials and radio spots. But from time to time, my ebook titles can outsell his.

Again, everyone's mileage may vary, just as everyone's goals vary. Writers should understand the odds, payoffs, and costs. If they want to sell as much as King, Koontz, Roberts, Child, Clancy, Cussler, Rowling, Steel, Patterson, Grisham, etc. then the only way to currently do that is by signing with a BPH and hoping for the star treatment. Nothing wrong with chasing that dream, as long as you're informed of your chances.

Big Bestseller: And the win is bigger than you suggest, I think. Even at my level, which is far from the very top, the win is ten times bigger than we're seeing with AP or KDP, and even on your estimates it's not ten times harder to get there.

Barry: I named some of the biggest winners I know of, acknowledged that there’s more to the potential payout than just those megahits, and called upon New York to share anonymized data to help authors make better choices. As I said: if New York has the best lottery in town, why not back the story up with evidence?

I know, I know…because they don’t need to, everything is fine, self-publishing is the new slush pile. Maybe so. It’s interesting to watch it all unfold.

Big Bestseller: But that last paragraph refers to today's status quo. Will it sustain itself? No, I think, not in any recognizable way on either side, but that's a different subject entirely.

Barry: A different subject, agreed, but I wouldn’t say an entirely different one. Because depending on how much your digital sales are growing relative to your paper ones, you might find self-publishing or Amazon-publishing an increasingly attractive kind of lottery to play, and that inquiry involves the larger questions of, “What happens if B&N closes? What happens if digital continues to grow relative to paper overall? How long can the current structure of legacy publishing endure?" These were all part of my own decision several years ago. Not that my conclusions will necessarily be instructive for other authors, but I think the framework will be.

You want to know my favorite thing about all this? That we’re talking about it at all. Five years ago, or certainly ten, there was only one lottery to play, and conversations like this would have seemed pointless. Now, no matter how grudgingly or implicitly, everyone acknowledges there are new games in town. Trying to dismiss their significance or even their existence is like that Samuel Beckett line: “God. That bastard… he doesn’t exist.”

The new choices are real. Sometimes I forget how monumental that is. Sometimes I take for granted that even the staunchest establishment insiders like Maass and Gottlieb now feel compelled to try to marginalize them. But then I remember how awesome it is that for the first time authors have meaningful choices. Thanks for adding your voice and helping more authors make the best choices for themselves.

And now if only Scott Turow would say something…:D

Joe: Thanks, BB. And again, feel free to add comments, or email Barry or me if you want to add anything lengthy

Saturday, February 22, 2014

Konrath on Patterson Deux

James Patterson, in an unprecedented act of good will, is giving $1,000,000 to more than 50 indie bookstores.

It's a generous act.

It's also a misguided one.

Last year, Patterson committed another misguided act, buying an ad in the NYT asking who will save our books, our bookstores, and our libraries, and then suggesting the government needed to step in.

He was wrong, and I explained why in great detail.

I'm going to quote Patterson from the recent NYT article, and from things he said on NPR, and show why he's wrong once again.

Patterson: We're in a juncture right now where bookstores as we have known them are at risk. Libraries as we've known them are at risk, publishers are at risk, American literature is at risk, as we've known it, and getting kids reading is at risk.

Joe: I agree legacy bookstores are at risk. They're at risk because people are buying their books online, and in different formats than paper. That doesn't equate to books becoming extinct. It indicates a change in customer preference, both where people buy their reading material, and what format they buy it in.

Libraries, like Bibliotech in Texas, are able to directly meet the new demand. For the link-lazy, this is what Bibliotech is doing:

Provide all Bexar County residents the opportunity to access technology and its applications for the purposes of enhancing education and literacy, promoting reading as recreation and equipping residents of our community with necessary tools to thrive as citizens of the 21st century.

Through BiblioTech, residents of Bexar County will be able to access over 10,000 current titles through e-readers that they can check out to take home or read on the premises.  Residents will also be able to use their own e-readers or tablets to access the collection.  

BiblioTech currently has 600 e-readers, 200 pre-loaded enhanced e-readers for children, 48 computer stations, 10 laptops and 40 tablets to use on-site.  Additional e-reading accommodations will be made for the visually impaired.  

Am I the only one who wants to live in Bexar County?

So, no, I don't believe libraries are at risk. Nor do I believe American literature is at risk. Books are written by authors, who are able to self-publish. More American literature is available to readers than ever before.

Patterson: (Via CBS Good Morning) If we don't have good publishers, who is going to find the next Infinite Jest or To Kill a Mockingbird?

Joe: The readers, Jim. You know, the ones who have embraced those books and made them bestsellers.

Patterson: The government has stepped in to help banks, automobiles, anything where money is concerned, but nobody seems to care about books and our bookstores. And I'm telling you, American literature is in jeopardy.

Joe: Jim, once again you're conflating brick and mortar bookstores closing with books no longer being available. Amazon is a bookstore. Ebooks are books.

Asking the government to bail out a business model that is no longer attracting enough customers to support itself is just throwing taxpayer money away.

I like bookstores. I've visited over 1200 of them. I also liked record stores, and my 35mm camera, and renting VHS tapes. But I didn't call for the government to save Tower Records, Kodak, and Blockbuster when customers' preferences changed.

Books are still selling very well. Authors are doing well. Middlemen such as publishers and indie bookstores are no longer needed to fulfill the public need for books.

I understand that brick and mortar bookstores and publishers helped make you very rich. It's nice that you want to help them out. But stop confusing the trouble they're in with literature being in jeopardy. Literature is not in jeopardy. The way customers acquire literature is changing. That's all.

According to NPR, Patterson will give up to $15k to each store on his list.

Patterson: It ranges from Andover Bookstore, where a son and daughter wrote and their father hadn't had a raise since 1988. ... Children's Bookstore in Baltimore, they give books to schools and they want the kids to be able to keep the books. Book Passage out in California will do more book fairs with it. Little Shop of Stories down in Decatur, Ga., they're buying a bookmobile.

Joe: You're doing a nice thing, Jim. But is it a smart thing?

If a store has been having difficulty since 1988, $15k won't do much to help it. I don't want to be cruel, but perhaps it is time to pull the plug. No one owes anyone a living. My father was a small businessman who owned several shops. It was his dream, and his passion. Not all were profitable, and he closed the ones that weren't. That's how business works.

Giving books to schools is noble. I've donated a few thousand dollars to www.firstbook.org, giving books to children. But I also bought my grandchildren tablets for the holidays. Let them download the ebooks they want. Ebooks they'll own forever (unlike my childhood books, which were read to pieces).

And bookmobiles? Driving paper books around in a truck to sell to people sounds labor intensive and expensive. With a Kindle, there are no dead trees, no fossil fuels, a much bigger selection, and instant delivery.

Perhaps that's why ereaders far outnumber bookmobiles.

Again, I'm not trying to be mean here. But perhaps we should listen to what readers want, rather than romanticize the days of old.

Patterson: I just want to get people more aware and involved in what’s going on here, which is that, with the advent of e-books, we either have a great opportunity or a great problem.

Joe: If you consider ebooks a problem and are truly concerned about the future of bookstores, you could always refuse to release your work in ebook format, Jim. I'm guessing you earn more on ebooks annually than the $1M you're giving to bookstores.

If you consider ebooks an opportunity, and want to help children learn to read, I bet www.firstbook.org would accept a donation of 100,000 Kindles from you, loaded with all of your children and YA work. I bet that will get kids reading.

Patterson: I’m rich; I don’t need to sell more books. But I do think it’s essential for kids to read more broadly. And people just need to go into bookstores more. It’s not top of mind as much as it used to be.

Joe: Why do people need to go into bookstores more, Jim?

I love booksellers. I thanked thousands of them, by name, in the acknowledgements of my novel Dirty Martini. I've been to a bookseller's wedding. I've gotten more than my fair share of booksellers drunk.

Sometimes, when you love someone, you need to let them go. Life support can be crueler than just allowing nature to take its course.

With the advent of tablets and ereading devices, there is effectively a bookstore in every person's home. And those who can't afford ereaders can borrow them from libraries. Ebooks are cheaper, easier to read (backlights and adjustable fonts), are delivered instantly without having to travel anywhere, and a much wider selection is available on Kindle than in even the largest brick and mortar bookstore.

I tried, years ago, to help booksellers, showing them a plan on how to compete. Not one took me up on my offer.

I've mailed signed books to bookstores, for free. I've signed thousands of bookplates for bookstores. I've signed used books and galleys for booksellers (which they can sell by don't earn me any royalties). But those days are in the past, and nostalgia isn't a good enough reason to invest in an archaic technology.

You're a generous guy, and your heart is in the right place, but you aren't going to change customers' buying preferences by throwing a bit of money around. Bookstores won't be saved by your $1M, or by a government bail out. They'll continue to exist only if customers continue to support them. And customers are voting with their wallets.

If I were a cynical man, I'd believe this offer of yours is a PR stunt. $1M is a nice, large number, but you reportedly make over $90M a year, so this isn't straining you financially. So you make this donation, get a lot of press, and both publishers and bookstores love you for it, while you slyly resuscitate the meme that ebooks and self-publishing and Amazon are bad--zombie talking points that further the legacy agenda. As a former ad man, you know how publicity works. And at the end of your CBS piece, you hawked your newest novel. I bet all those bookstores you're helping will be selling more of your backlist than ever before. You've certainly incentivized them to.

Maybe that isn't the point, and you truly are worried about the state of American literature. But you mistakenly believe indie bookstores are somehow the guardians of it.

They aren't. Good books, and good authors, will survive without bookstores. In fact, more than ever before are thriving in this new environment.

Your agenda is wrong, Jim. If your main concern was getting kids to read, and making sure American literature survives, there are much better ways to spend $1M. Like gifting Kindles to needy kids, or running your own book club or imprint. I believe these are just flowery talking points for your ultimate agenda, which is to make sure paper continues to remain the dominant format for your books.

See, you have a huge advantage over me in paper. Your books are available everywhere, often heavily discounted. You don't want to lose that advantage, because on Amazon, you and I have the same amount of shelf space. Naturally you want the status quo to continue, because it has made you wealthy. Of course you want as many outlets for your work to exist as possible.

Because if more and more bookstores close, and more and more readers switch to ebooks, all of that shelf space real estate you once owned becomes worthless. If spending $1M and doing a media tour helps bookstores stay around a bit longer, you're directly helping yourself.

There's nothing wrong with that. But let's tell it like it is, and drop the "save literature" and "it's for the children" talking points.

BTW, I predicted this in 2011. One day, Jim, you will be self-publishing your new release as a $2.99 ebook. The bookstores that still exist might complain, but when they're no longer a viable revenue stream for you, you'll go where the money is. Like any smart businessman does. Of course, that will also mean abandoning your publisher, but that's fodder for another blog post.

You can't stop technology. You can't change customer preference. And you're not going to get caught on the losing side of a revolution.

Friday, February 21, 2014

Eisler - Publishing is a Lottery & Konrath - Publishing is a Carny Game

Barry Eisler: Over the weekend, I gave one of the keynotes at the terrific San Francisco Writers Conference.  The framework of the talk (Surfing the Waves of Change) was broadly similar to a keynote I gave last year at the Pikes Peak Writers Conference; for the main ideas, here’s a guest post Joe kindly let me post here, and an article I wrote for the Guardian.

One of the key updates in the talk I gave at SFWC had to do with bullshit—specifically, the prevalence of bullshit being peddled by various fixtures in establishment publishing.  This was natural enough, because in just the last month or so quite a few publishing insiders have grown sufficiently concerned about restlessness among the peasants that they’ve ventured into the provinces to try to head it off.  I don’t think it’s a coincidence that industry analyst Michael Cader, literary agent David Gernert, literary agent Robert Gottlieb, literary agent Donald Maass, industry analyst Mike Shatzkin, and Kensington Publishing CEO Steve Zacharius have all seen fit to engage some of the arguments that are both cause and consequence of the revolution in publishing (“Authors Guild” president Scott Turow, unsurprisingly, remains in hiding, perhaps because he senses how he would come off if he tried to respond to his critics).  Along these lines, I was encouraged that one of the SFWC founders, literary agent Michael Larson, felt compelled to take the stage immediately following my talk to try to rebut some of its substance.  I think this level of dialogue is unprecedented in publishing and will be enormously healthy for the industry, and I salute all the insiders who’ve elected to engage even though I disagree with much of what they’re saying.

In addition to bullshit in publishing, another theme of my talk was that publishing is a lottery, but it was only after Michael’s rebuttal that I realized I could have been doing a better job of integrating that notion with my points on bullshit.  Here I’d like to talk about why, and to make that connection more explicit.

One of the things Michael pointed out was that my thoughts on the benefits of self-publishing don’t apply to everyone (I certainly agree with that, and hope I made clear that I don’t believe there’s any one-size-fits-all publishing solution).  After all, he said, ask Stephen King if he wants to self-publish, and King would almost certainly say he would not.

I thought about that point afterward.  And then I realized—respectfully, because I really like and respect Michael—that it was bullshit.

Now, by “bullshit,” I don’t mean untrue.  In fact, I think Michael’s point very likely is true: while Stephen King has in fact dabbled in self-publishing (he even said, “My friends, we have the chance to become big publishing’s worst nightmare”), this was a while ago, and today, given the treatment he gets and the money he makes within the legacy system, I don’t think it’s terribly likely King would be attracted to self-publishing (though potential fame and fortune aren’t the only considerations an author might have in mind when trying to decide which publishing route makes the most sense).  Regardless, note the following:

First, the “but don’t you want to be Stephen King/James Patterson/Nora Roberts/J.K. Rowling” meme is widespread and frequently deployed by the publishing establishment.  For some examples, just click on any of the links in the second paragraph of this post.  More often than not, it strikes me as much more of an article of faith than a deliberate dodge, and knowing Michael, I believe he was referring to it sincerely as the former, not the latter.  But it certainly is widespread, and for this alone it’s worth addressing.

Second, the meme implicitly acknowledges that publishing is indeed a lottery (unless anyone advancing this meme would also argue that Stephen King-levels of publishing mega-stardom are in some way guaranteed or foreordained, neither of which would be a logically or empirically easy proposition).  This implicit acknowledgment is of course, in my opinion, not at all bullshit, because as you know I do believe it’s extremely useful to conceive of publishing as a kind of lottery.

But despite the kernel of truth, and despite the useful implicit acknowledgement, the meme is still bullshit (and all the more insidious as a result).  I would even argue that “Stephen King!” has become one of the two primary dodges of the legacy industry (we’ll get to the second in just a bit).  Here’s why.

First, let me briefly explain why publishing is, in fact, a lottery.  It’s simple.  Hundreds of thousands of authors play it, and only a very few of them win.

Some people object to the analogy because they say it ignores the hard work of authors and publishers.  But hard work demonstrably does not guarantee success.  If it did, then those hard-working publishers would produce nothing but massive bestsellers.  After all, don’t they work hard on all their books?

Of course, hard work (and a variety of other factors) can influence your odds of success in publishing, which is why it pays to work hard.  But the ability to influence odds doesn’t makes something not a lottery.  In fact, I can tell you how to instantly double your odds—double them!—in a regular lottery.  Just buy a second ticket.  Congratulations, you just influenced the odds dramatically.  Is it not still a lottery?

No matter how talented you are, no matter how hard working, no matter how awesome and committed your publisher might be, statistically you are far more likely to lose the game of publishing than you are to win it.  This isn’t a bad thing.  Nor is it good.  It’s just the nature of the beast.  You could argue it’s the nature of life itself.  Our job is to do what we can to influence the odds, but it’s foolish at best to argue the odds don’t matter, or don’t even exist.

Okay, now you’re trying to decide whether a certain lottery is right for you.  Whether it’s worth playing.  If someone was encouraging you to buy a ticket, and that person wouldn’t talk about anything other than the potential monster payout, would you feel you were receiving accurate, complete, and useful information?

Or might you sense something was missing in the presentation?

Look, there’s nothing inherently wrong with a lottery.  Whether to participate in one is a personal decision.  But to make a good decision, an informed decision, you need three data points, not just one.  These are:

1.      What is the potential payoff?
2.      What are the odds of achieving that payoff?
3.      How much will a ticket cost me?

Two quick hypotheticals to illustrate the point.

Lottery #1:  This lottery offers a million dollar payout, a one-in-two chance of winning, and a ticket that would cost you only a buck.  A one-dollar risk in exchange for a 50% chance at winning a million dollars.  Who wouldn’t buy a ticket to a lottery like that?

Lottery #2:  This lottery offers a million dollar payout, a one-in-ten-million chance of winning, and a ticket that would cost you ten thousand dollars.  You’d have to have a hell of a lot of money, and a hell of an appetite for gambling, to want to play in a lottery like that.

The same big prize, but two very different lotteries—one sensible for almost everyone, the other insane for almost everyone.  And if the people promoting them gave you only that one piece of information—a One-Million-Dollar Prize!—while concealing the odds and the cost, how could you know what you were getting yourself into?  How could you make an informed decision?

Well, you couldn’t, of course.  It’s enough to make you wonder why the people peddling the legacy-publishing lottery only want to talk about Stephen King.

So here I’d like to talk about the aspects of the lottery that establishment types tend to omit (for what it’s worth, again, I don’t think these omissions are for the most part deliberately intended to mislead.  I think they’re more commonly caused by well-intentioned people having been so long and so deeply embedded in a system that they’re unable to grasp its actual contours.  A classic case of missing the forest for the trees).

First, let’s stipulate that the legacy publishing purse is not a myth.  It’s real.  J.K. Rowling became a cash billionaire in the legacy lottery.  I remember reading somewhere that James Patterson makes over $90 million a year.  The richest purses in the legacy lottery are almost obscene.

But now it’s time to talk about the odds of you being the next J.K. Rowling.  How many authors are there who achieved anything like a comparable level of fame and fortune in publishing?  We can quibble over the details, but in general I’d say there have been maybe a dozen in the history of publishing.  Though I’m happy to broaden the definition of mega-success and up the number of mega-winners to, say one hundred.

Now we have to measure those one hundred winners against the hundreds of thousands of authors who have tried to get into the legacy system and been unable to do so, or who have secured a legacy contract only to see their book underperform and their contract canceled, or their publisher otherwise decide not to do another book with them and cut them loose.

Okay, a hundred big winners; hundreds of thousands of losers (and some hundreds winning lesser prizes, which we’ll talk about in a moment).  Now we’re getting some sense of the odds.

Please note that I’m not saying these odds should make anyone either embrace legacy publishing, or flee from it.  Different people have different objectives, different appetites for risk, different inclinations.  There really is no one-size-fits all.  But regardless of differences, no one can make a sound decision about a lottery without information about the odds of success, and developing that information is all I’m trying to do here.

Finally, let’s talk about what that legacy ticket will cost you.

First, it’ll cost you your rights, which someone else will own control for at least a very long time and in all probability forever (have a look at a typical legacy-publishing page-and-a-half, nine-point font, opaque-as-the-Dead-Sea-Scrolls reversion provision, and you’ll eventually conclude that the gist of it is “You will never get your rights back, ever”).

Second, it’ll cost you time-to-market.  Most legacy books don’t see daylight until a year after manuscript delivery and acceptance.  Many take much longer.

Third, it’ll cost you a huge margin in digital.  Legacy publishing typically pays authors 12.5% of the list price of a digital book.  Self-publishing pays 70%.

Fourth, it’ll cost you control over pricing, packaging, marketing, branding, and all other business decisions.

Fifth, it could cost you a good deal in conference and associated travel fees, as you fly from one writing convention to another trying to meet editors and agents and get them interested in your manuscript.

And those are the unavoidable costs, the innate costs.  You pay these costs even if you win.  That’s the way a lottery works.  There are also the risks:  risks of crappy covers, risks of embarrassingly bad titles, risks of cargo-cult bios, risks that overall your publisher, upon whom you will be relying almost completely, will fail to do its job and will destroy your books chances as a result, and maybe destroy your career in the process.

But it’s also absolutely true that in exchange for those costs, the risks might be avoided and you will become the next Stephen King.

It’s also true that becoming the next Stephen King isn’t the only payout promoted by the legacy industry.  There’s also the possibility of good conceptual editing, line editing, copyediting, proofreading, cover design, packaging, promotion, marketing, and paper distribution.  Note that I say “possibility” of these things.  They are not guaranteed, neither contractually nor empirically.  The notion that “You write, we’ll expertly take care of everything else” is the theory of publishing, the publishing ideal.  It is not usually the reality.  The promise of receiving expert editing, awesome cover design, crack marketing, wide paper distribution, etc., is itself one of the things that makes legacy publishing a lottery.  Some people get it.  Most do not.  Conflating the theory of legacy publishing with the reality of legacy publishing is another central deceit of the industry.

Now, to be as fair as possible, let’s expand the idea of what constitutes a winner in the legacy system still further.  In general, I’d define it as the ability to make a living writing full time.  But even that might be an unreasonably narrow definition.  We could broaden it still further:  the ability to make enough money from your writing to pay some bills and to occasionally take a nice vacation somewhere.  It wouldn’t be J.K. Rowling nice, but it would still be nice.

Well, wouldn’t it be useful if the legacy industry could share some of that information, too?  You’d think they’d want to.  “Hey kids, not everyone gets to be the next Nora Roberts (but you might!), but lots of people get to quit their day jobs and write full time, or at least get to use their winnings to make car payments and periodically buy a vacation in Hawaii.”

But they never talk about any of that.  What you hear instead is only, “Stephen King!” and “We’ll take care of everything but the writing so you won’t have to worry!”

Look, if I’m full of shit on all this, then why don’t legacy publishers share the data?  If the story of their lottery really is so enticing, why not let us see how it really works?  Why not talk about the odds, the risks, the costs?  What’s keeping them from anonymizing the last decade’s worth of data:  the range of advances; the number of books published per author; the number that have broken even for the publisher and the number that have earned out (these are not the same thing, and the suggestion that they are is another legacy publishing dodge.  Publishers typically start to make money long before the author earns out her advance—precisely because author royalties are so low).  For every entrant into the legacy lottery, what has been the purse?  The number of manuscripts legacy publishers reject at the door would also be useful to know, because if you realize you only have a one-in-ten-thousand chance of even being able to play in the legacy lottery, you might rationally decide not to waste years trying (part of the cost of a ticket), and to start playing the self-publishing lottery immediately instead.

An intern with decent spreadsheet skills could do all this as a summer project.  Why hasn’t it happened?  If everyone really is a winner in the legacy lottery, why doesn’t New York get this story out?  Wouldn’t authors just swoon for it?

(Steve Zacharius did say in his exchange with Joe that he would “try to find answers to some of these questions,” but I don’t think he’s gotten back to anyone since then…)

Yes, that was a rhetorical question.  Because if authors were presented with the actual data—not just the purse, but also the odds and the cost and the risk—many of them might rationally decide they liked the self-publishing lottery better.  New York understands this.  So instead what we get is “Stephen King!” pixie dust tossed in our eyes, and all the rest omitted.

As long as establishment publishing is only willing to talk about the biggest winners in publishing, and as long as they deliberately continue to suggest that the ideal of legacy publishing is in fact the widespread reality, without also being willing to talk about the odds, the costs, and the risks of legacy publishing, you are being bullshitted.

Now, am I suggesting that legacy publishing is a lottery but that self-publishing and Amazon publishing are not?  Of course not, and in fact I’ve repeatedly referred to the self-publishing lottery throughout this post.  Let’s go into a little more detail now, first for self-publishing, then for Amazon.

What is the high-end payout of the self-publishing lottery?  So far, it seems to be in the low seven figures annually.  What are the mid-range payouts?  Hard to say, though over 150 KDP authors sold over 100,000 books in 2013 and certainly many more than that are for the first time making car payment and periodic vacation money.  Other benefits include a dramatically higher per-unit digital royalty; significantly faster time-to market; and control over all aspects of your books and business.

What are the odds?  Long.  Again, I’m not aware of any solid data on this, but my impression is that even getting the lower-end “car payment and vacation” money payout has statistically speaking got to be a thousand-to-one shot.

What are the costs?  A few thousand dollars in upfront fees for editorial, copyediting, proofreading, cover design, and formatting.  There are few material opportunity costs, unless you had a legacy offer you decided to eschew in favor of playing the self-publishing game instead (and in fact, if your self-published book does well, that itself might lead to legacy offers.  You’ll also be acting as the CEO of your own business, with all the time commitment and aggravation such a role can entail (but note again that the notion that you’ll be free of such commitments and aggravation in the legacy system is a promise customarily unfulfilled—legacy ideal vs legacy reality—and that therefore having to manage your own business is generally not a material difference between the two systems.  For the most part, you can expect to be quite busy with the non-writing aspects of the writing business in both).  Because you keep all your rights and maintain full control over all aspects of your books and business, your risks are limited only to your upfront costs.

What about Amazon Publishing, which I think can best be understood at a high level as a hybrid—higher digital royalties, faster time to market, and more control over business decisions, like self-publishing; the promise of outsourced business tasks, corporate-level marketing, and higher ultimate payoffs, like legacy publishing, plus, possibly a decent-sized advance.  The odds of hitting at least the medium-level jackpot within the Amazon lottery (assuming you can get in—as in legacy publishing, a ticket in the Amazon system is not guaranteed) strike me as higher than those of the other systems, but as for my impressions of the other systems’ odds, this is largely anecdotal.

The costs include:  as in the legacy system, long-term and possibly permanent loss of your rights (in my experience, Amazon’s reversion provisions are far more sane and certainly less opaque than those of legacy publishing, but the thresholds for reversion are still hard to hit); opportunity costs, in the form of the even higher digital per-unit royalties you would make in self-publishing and the even greater business control you would have there, and in the form of whatever you walked away from if you were presented with a legacy offer, as well.  As in legacy publishing, there are no upfront costs with Amazon.  As with legacy, there is the risk your book will be poorly published and die (though from everything I know firsthand and by knowing and talking with dozens of other Amazon-published authors, my sense is that this risk is statistically far lower with Amazon than it is in the legacy system).  On the upside, in my experience publishing with Amazon means the opportunity to work with a group of exceptionally smart, interesting, fun, innovative, risk-taking people, which I count as a benefit and one I haven’t heard of any Amazon author failing to receive.  On the downside, I would note that in my opinion and in the opinion of more than a few of my peers, Amazon legal is becoming increasingly corporate and legacy-like in its outlook and its practices.  It’s still not remotely as bad as what I’ve experienced in the legacy system, but the trends concern me and I hope Amazon will reverse them.

I also think it’s entirely fair to criticize Amazon for its own unwillingness to share more data about winners and losers within the Amazon system.  I would only note this possible difference:  in my experience, Amazon is so obsessed with secrecy that the company won’t disclose even data that I know is tremendously supportive of the value they offer authors, including the terms of their publishing agreements (though again, in some respects these have been getting more legacy-like; Amazon, why not keep playing to your strengths?), and including the details of some of their biggest publishing successes.  Knowing this, and being familiar with the impressions and stories of quite a few other Amazon-published authors, my sense is that Amazon’s reluctance to share aggregate, anonymized data about the details of its lottery are driven more by an innate (and, in my opinion, unfortunate) impulse for secrecy than by a desire to obfuscate, but you could reasonably draw somewhat different conclusions, too.

That said, note that when an author self-publishes, the legacy industry is cut out entirely.  Legacy publishers make no money on a self-published author’s books.  But Amazon does make money, by charging 30% for access to the KDP distribution platform.  In other words, legacy publishing is institutionally, unavoidably, financially invested in spreading FUD (fear, uncertainty, and doubt) about self-publishing.  But Amazon makes money either way.  Draw your own conclusions.  You can draw similar conclusions about whatever biases I and other authors who are vocal about the revolution in publishing might bring to the conversation.  Say what you will, but I don’t think you can argue that my bottom line is dependent or even in any way affected by how other authors choose to publish their own books.  The truth is, I don’t care.  What I care about is that authors have good information upon which they can make the decisions that are best for themselves.  Can an establishment publishing insider who is steering you in a particular direction make the same claim of disinterest?

Overall, the biggest difference between the Amazon lottery, on the one hand, and the legacy- and self-publishing lotteries, on the other hand, is this:  Amazon’s unmatched direct-to-consumer marketing power.  Legacy publishing has virtually no such power at all, though to some extent it can buy such marketing by paying Amazon to do it for them (in self-publishing, your direct-to-consumer marketing reach will be even smaller).  If your sales are primarily digital, the paper distribution legacy publishing will offer you is relatively unimportant (it may even be less important than that), and legacy will be able to offer you almost nothing to market your digital books that you couldn’t have done yourself.  Whereas Amazon will be able to use its unmatched data on its own end-user customers, including direct email and on-site merchandizing, to market your book to an audience that is both huge (tens of millions of people) and targeted (people who demonstrably want to buy books).  In my experience, that kind of direct-to-consumer marketing power is worth a lot.  But will you get it?  Not everybody does, at least not in the same caliber, and the question of, “Yes, Amazon can promote the hell out of my book, but how much will they?” is part of what an author needs to grapple with when trying to decide whether the Amazon lottery makes sense for her.

I believe the biggest shift we’re seeing in publishing is precisely this:  the foundation of the industry used to be distribution.  Now that digital has broken legacy publishing’s lock on distribution, new publishing will be built on direct-to-consumer marketing, which is replacing distribution as the item new authors most need and will have the hardest time outsourcing for a flat fee.  Companies that can offer real direct-to-consumer marketing reach will be well positioned in the new world of publishing.  Companies that can’t will be in trouble.

Way back at the beginning of this post, I mentioned a second major dodge of legacy publishing.  Sorry it took a while to get to it.  It’s actually a more general category, of which “Stephen King!” is in part a specific subset.  What I’m talking about is the tendency of the publishing establishment to suggest, whether implicitly or explicitly, that all the benefits of publishing are in legacy and all the risks are in digital.  This dodge is ubiquitous—have a look at the links at the beginning of this post and you’ll see what I mean.  And now that you know about the dodge, I promise you’ll see it wherever an establishment publishing personage makes a pronouncement.  And you’ll be aware also that if someone is trying to have an honest conversation with you, that person will start by acknowledging that there are risks and potential rewards, costs and benefits, disadvantages and advantages in both systems.  Anyone who suggests or even implies otherwise is bullshitting you, whether deliberately or otherwise.

To sum up:  if we’re going to have a useful conversation, it helps to start by acknowledging that all publishing systems are lotteries.  After that, we have to acknowledge not only the systems’ different payouts, but also their different odds, different costs, and different risks.  Only now we can start to grapple with matching that framework with our own objectives, talents, skills, preferences, and personalities—overall, with our own unique circumstances—to make decisions that are likely best for us.

So what are some of the questions a writer trying to decide between the various systems might want to ask?  I would include these:

How much is the advance?  How much do I need the advance?  Do I think that with higher self-publishing royalties, I can beat the contract (to see what I mean with that concept, follow the last paragraph in this Daily Beast interview)?  If so, how long do I expect beating the contract will take?  How important is paper distribution to me, and how important is digital?  Am I in a genre like romance or science fiction, which are doing exceptionally well in digital, or am I writing something like a children’s book, in which for now I could expect relatively few digital sales?  How important to me is control over things like pricing and packaging?  How important is time-to-market?  How much do I like, and how good am I at, running my own business vs. outsourcing business management to someone else?  How much do I trust my potential business partner to manage things well?  How much do I hate what legacy publishers are doing today vs how much do I fear what Amazon might do tomorrow?  Which system gives me more personal power to influence my odds of success, and how important is that power to me?  Etc.  If you make a decision without asking such questions, you're making a mistake, at least in your process (though you can still get lucky in your result).  If you are asking these questions, then regardless of the path you choose, you're making an informed decision, and for you, the right one.

It really is interesting to consider the way New York tries to obscure the nature of the legacy lottery.  The prize is never other than Stephen King.  The odds are never other than that the reality you receive will always match the ideal you were promised.  The cost of a ticket is never mentioned at all.

A Martian might find an honest and transparent conversation about the nature of the various publishing lotteries so entirely obvious and commonsensical that s/he would find it hard to understand why the publishing establishment is so intent on avoiding it.  Of course, the Martian might not know about how long New York protested that their costs of digital book production were similar to their costs of paper production, when logic and just baseline common sense made such a proposition nonsensical (every single paper book a publisher prints and ships costs additional money, whereas the marginal costs of distributing digital books are zero).  The Martian might not know that HarperCollins recently confirmed what any honest observer already knew (and what Joe knew at least as far back as 2010), which is that indeed New York has been making far more money from digital books than from paper, and sharing far less with authors.  The Martian, in other words, might not know of New York’s demonstrated habit of, shall we say, dissembling (in fairness, if the Martian had ever seen a New York publishing contract or a New York royalty statement, the Martian would understand that obfuscation is one of the traditions Traditional Publishing most assiduously honors).

So come on, publishing establishment.  I know Scott Turow is too afraid to come out from under his rock and have an honest conversation, but I know not all of you are that cowardly.  Some of you have been engaging already, as I’ve noted, and, as also noted, I salute you for it.  Please, the comment section is yours.  Prove that I’m full of shit.  Share your data on payouts, odds, costs, and risks.  I can’t think of a better way, or a better opportunity, for you to prove once and for all that the legacy lottery is the best damn game in town.

P.S.  I know this is a long post, and certainly not my first.  I’d have liked to make it shorter because shorter would save everybody time (me most of all, because it takes longer to write these posts than it does to read them).  But I find it’s difficult to be brief when it comes to exposing bullshit.  Bullshit tends to come with a ready-made and already generally accepted superstructure that allows the bullshit to act as its own automatic abbreviation.  “Stephen King!”  “It’s so hard to get discovered in self-publishing!” (as though it’s easy and guaranteed in legacy, or in any other business, for that matter).  “When everyone can publish, there will be so much crap no one will be able to find good books!” (AKA, The Tsunami of Crap).  “Self-publishing is so much work, you’ll barely have time to write!” etc. are easy sound bites designed to play to people’s fears.  At a high level, they’re a lot like “Death Panels!” “Socialism!” “National Security!” and other such political propaganda that’s used to cow and manipulate the populace.  Using logic, evidence, and argument to assuage the fears ginned up by propaganda requires a bit more effort.  For more, I recommend Noam Chomsky on “concision.”

Joe sez: I was talking about publishing being a lottery eight years ago, before the Kindle existed. It's an apt analogy.

And while I agree with Barry that luck indeed plays a part, and it is important to know payoffs, odds, and costs, more and more I'm looking at the bullshit many legacy pundits are spouting, and their unconscionable contract terms, and I think of it as less of a lottery and more like a carnival game. You know, the ones where you pay for three chances to toss a hoop around a stuffed animal, or to knock down a pyramid of blocks with a baseball.

See, those games seem like they're easy. But they are heavily favored toward the carnival. That hoop barely fits over the stuffed animal. Those blocks weigh a lot more than they look. And don't get me started on how impossible it is to lob a quarter onto a small glass tray or get a ping pong ball into a cup only a millimeter wider than its circumference.

Legacy publishing trumpets its bestseller successes, tempting authors to be the next John Grisham or Lee Child, without explaining how goddamn hard it is to sell in those numbers (unless you're John Grisham or Lee Child). They talk about big names and big advances like anyone off the street could get them. They talk about how essential they are. They say that if you're good enough, you'll be rewarded.

I find this pervasive attitude analogous to a giant stuffed Snoopy doll that you have three chances to win for just $1. The Snoopy doll is no doubt worth a lot more than $1. It's hanging right there in front of you, practically begging for you to win it.

But the carnies can offer that doll for $1 because few ever win. The number of losers more than pay for the occasional winner.

And I believe, like the carnies, legacy pundits know this. But they never come out and admit it.

For example:

Kensington CEO Steve Zacharius: If you look at the printed NYT list, how many of the mega authors are self-published?  ….if indie publishing is as good as you’re all making it sound…..why do you think that the biggest and most successful authors in publishing don’t go this route? Why isn’t Nora Roberts, Patterson, Lee Child, etc….going this route?

Carny: Look at this gigantic Snoopy doll! You're a Snoopy fan, I can tell. Well, the only way to get this doll is to throw a ring around it, and you get three rings for just a dollar. Don't you want to take home that doll?

Legacy Apologist Mike Shatzkin: Unearned advances are a substantial part of author compensation. I know of one Big Five house that calculates that they pay more than 40% of their revenue to authors

Carny: People win all the time, and look what they win! Look how big that Snoopy is! I tell you, the odds are so good you'll win one that we're going broke here. This is our last Snoopy.

Agent Donald Maass: Authorship is a true meritocracy. (Sorry, it is.)

Carny: You're good at this game. I can tell. You're the best. And the best always wins. Give it a try, only three rings for a dollar. I'm sure you'll win that doll.

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

Carny: You can't find a Snoopy doll like this anywhere else. We're the only ones that have it. If you want it, now is your chance to get it. Three tries for a buck.

Agent David Gernert: 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.

Carny: Knocking down blocks with a baseball? That game is rigged. And they don't have a giant Snoopy doll. Trust me, this is the game you want to play. The one you're good at, with the big reward. Just three rings for a dollar.

So you buy the three rings and fail to win the Snoopy, because the game is rigged, The odds were much harder than the carnies made them seem. But every so often--it is rare but it happens--someone wins a giant Snoopy worth a lot of money, and they only paid $1 for it.

But who really paid for that Snoopy? The one who won it? Or all the losers who didn't win it?

Who pays for the mega-bestsellers? Do they pay for themselves, and make so much extra that they also cover all the midlist books that lose money?

Or could the opposite be happening?

Let's do some quick and dirty math.

Phil the Writer gets a $5,000 advance. He sells 5,000 ebooks his first year at a Digital List Price of $6.99—a reasonable number for a midlist author. The publisher earns $2.62 per sale (selling to the etailer at 50% of the DLP and keeping 75% of net) or $13,100.  The author earns $0.88 per copy sold.  He's earned $4400—still $600 short of earning out his advance. So the publisher made $13,100, minus the $5,000 advance, so it actually earned $1.62 per copy sold.

Jack the Writer gets a $2,000,000 advance. He sells 1,000,000 ebooks his first year at a Digital List Price of $6.99—a reasonable number for a bestseller. The publisher earns $2.62 per sale or $2,620,000, and the author earns $0.88 per copy sold (assuming a 25% royalty—more on this in a minute) or $880,000—still $1,120,000 short of earning out his advance. So the publisher made $2,620,000, minus the $2,000,000 advance, so it actually earned $0.62 per copy sold.

In other words, in this scenario, it is arguably better for the publisher to publish a lot of midlist books that don't earn out instead of a huge blockbuster that doesn't earn out.

And how about those huge bestselling authors who make higher than 25% ebook royalties? That means an even smaller per unit profit for the publisher.

Of course, as the sales for both ebooks continue, the profit per unit increases. But some publishers offer advances so high they will likely never earn out, and they also offer some bestsellers higher ebook royalties.

So who is really paying for whom? If you were a publisher, would you rather have Jack the bestseller, or 400 writers like Phil?

Pundits like to say that legacy publishers—by offering advances and paying all the costs of publication—take all the risk. They're essentially giving authors an interest-free loan that never has to be returned even if the book fails to earn out.

But is this really the case?

I submit that the loan isn't interest free. In fact, the interest on it is huge; paying it back at 12.5% royalties takes a lot longer than the 70% royalties an author would make by self-publishing.

As I explained in a recent post fisking Mike Shatzkin:

If you were a genre author offered a $100k advance earning 12.5% royalties off of the digital list price (25% of net, and publishers sell to Amazon at roughly 50% off their digital list price), and your ebook is priced at $4.99, you earn $0.63 per ebook sold. You need to sell 159,000 ebooks to earn out your advance. And when you do, you're stuck with 63 cents per sale, FOREVER.

The same ebook, self-published, earns the author $3.49 per copy sold. If they sell 28,653 copies, they made the $100,000. Every copy they sell after that, they make 5.6x more money than they do on a legacy ebook.

Which seems like a better deal for authors?

And remember—even if the advance never earns out, the legacy publisher can still make money. The example of Phil the writer shows how.

And if Jack the writer had sold 1,000,000 ebooks via self-pubbing, he would have made $3,490,000, or $1,490,000 more than his advance (which he still hasn't earned out yet according to the figures I posted).

Isn't this looking more and more like a carny game where the publisher always wins? Especially when you include all the one-sided contract terms—non-compete clauses, next work option, term of copyright, etc.

Like carnies, publishers aren't in the business of losing money. They also aren't in the business of showing odds.

That's the distinction between a carny game and a lottery. Lotteries require the odds to be posted. Anyone who goes gambling has easy access to the odds in blackjack, roulette, and craps. It's simple math, and the gambler is aware of those odds.

With a carny game, the big fluffy Snoopy doll is hanging right in front of your eyes, promising itself as a huge reward for a simple ring toss. But the ring toss isn't simple, and the odds of winning aren't apparent. All you see is a big Snoopy—or a guest spot on Oprah and a #1 bestseller—without the carny or the legacy publisher actually telling you what your chances are.

As PT Barnum said, there's a writer born every minute.

Wait… I meant a sucker born every minute.

But as suckers, er… writers, we can arm ourselves with knowledge. We can share stories and read blogs and participate in forums and ask questions.

A few months ago, Brenda Hyatt updated her Show Me The Money! blog post, revealing average and median advances, royalties, and earn-outs for many legacy publishers. It's a must-read for any author considering a legacy deal.

It isn't up to me, or Barry, or anyone, to tell you what path to follow.

So why do Barry and I and many other authors blog about stuff like this?

Simple. Pain shared is pain divided. Joy shared is joy multiplied.

Share the pain. Spread the joy. Tell others what you've learned, good and bad.

And next time you go to a carnival, spend that five bucks on cotton candy, not on the ring toss. At least you'll get what you paid for.

P.S. A question that occurred to me after writing my bit was: If publishers are making so much less on bestselling titles, why do they keep offering huge advances?

I could think of a big reason: the long game.

The more copies a book sells, the less important an advance becomes because the publisher eventually absorbs it into total production costs. When enough copies sell, publishers are making almost the same amount on Jack's book as they are on Phil's book.

Carrie and Killing Floor and One For The Money and Along Came A Spider are first books (or first books in a series) by some mega-bestselling authors. These books continue to generate a lot of revenue, year in and year out, even though they no longer require marketing or advertising dollars. Backlist pays for the front list, in a sort of weird reverse-pyramid scheme. The old books front the costs for the new books until the new books become old enough to be money makers, which in turn pay for new books.

What a publisher makes next quarter is largely based on what they did years ago.

So a legacy publisher can afford to offer a 10 million dollar advance, because previous books by an author have shown, over time, to generate (or have the potential to generate) that kind of income.

There are also the instant hits, like Twilight and 50 Shades and Dragon Tattoo and DaVinci Code that also help to pay the bills.

A solid backlist and a few runaway hits, coupled with underpaying most authors with low advances and poor royalties, allow publishers to offer giant advances—even if those advances take years to pay for themselves.

As long as there is a steady supply of authors willing to accept what publishers are offering, the legacy industry will endure.

But 99.9999% of authors don't get the huge advance, just like 99.9999% of ring tossers don't win the giant Snoopy.

So what happens when authors wise up and realize they don't have to deal with publishers anymore?

Data Guy's nine-year-old daughter instantly understood what happens. She was reading The Passive Voice over her father's shoulder and said, "It's just like A Bug's Life. The ants are finally realizing they don't have to give the food they collect to the bullying grasshoppers anymore, while they starve."

Can't be more on the nose than that…