Why Traditional Publishers Will Go The Way Of Travel Agents

Over the last six weeks or so, we have examined the various aspects of the publishing industry, and assessed how the different parts are functioning (or in most cases, malfunctioning) in the face of the changes brought about by the internet.

As any travel agent will tell you (if you can find one), the internet is an unstoppable force which revolutionizes every single business it comes into contact with. In publishing, change hasn’t seemed as quick, but the internet has been quietly eating away at all the pillars of traditional publishing.

Online Shopping

The first big change was the advent of online shopping. Amazon revolutionized the way people buy books.

And while people might have missed the personal touch in their local bookstore, for most this was trumped by much cheaper prices, the enormous selection of books, and the convenience of having them delivered to your door (often for free).

Obviously, this has stolen a lot of business from booksellers, but it has also chipped away at the notion of “curated selection” – that someone else would decide what books you could buy. If it’s in print, then Amazon sell it. If it’s not, then they probably have a used copy.

People often refer to “gatekeepers” in traditional publishing, usually referring to agents and editors in terms of what books got published and what didn’t. But there are lots more “gatekeepers” in publishing than that, as a book must get “sold” several times before it gets near a reader’s hands.

Marketing teams and salespeople decide which titles to push hard to booksellers. Publishers vie for coop spots in stores, but only for certain books. And even whether the book is “spine out” or “face out” is for sale, and publishers will decide which books get what kind of backing.

At the tip is the bookseller who decides which titles to stock and in what numbers.

All of these gatekeepers have less power to curate when people are bypassing bookstores and choosing the convenience, price, and near-infinite selection from Amazon. When you can buy everything online, that curating power passes to the readers.

Freedom of Information

The linking up of computers across the world, tied with the ability of people to share all kinds of information instantly, and make it universally accessible and searchable, has changed the way everyone in publishing does business.

Booksellers can access up-to-the-minute sales data in all their stores. Publishers can get a reasonably accurate picture of how all of their titles are doing at any given time. And writers can get some idea of how their book is going to perform before it even goes on sale.

However, this has intensified the problems that publishers have with returns. Now, more than ever, a book is under pressure to perform in its first few weeks on sale. Titles are no longer given an opportunity to slowly build an audience.

Booksellers know straight away which books are selling and which aren’t, and can return the under-performers and replace them with newer titles from bestsellers every week.

As I have detailed before, returns are killing publishers (and the environment). The amount of returns must be calculated into the cost of producing a book, which has knock-on effects in how much a writer gets paid for each book.

E-Books

E-books have been around in one form or another since 1971. In the 1990s, the internet made transferring files a lot easier, but e-books were still mostly limited to niche subjects, scholarly texts, or technical manuals.

This all changed in November 2007 when Amazon launched the first Kindle. Despite industry skepticism, it sold out in five-and-a-half hours and remained out of stock until April 2008, while Amazon frantically produced more.

By April of this year, Amazon announced that they were now selling more e-books than all print books. Traditional publishing played down these figures, (correctly) pointing out that this included a lot of cheaply priced titles.

However, this misses the point. E-books are outselling print books! The cost of producing e-books is much lower, so it makes sense to charge less for them. And, publishers have much higher margins on e-books. The only reason publishers are pricing them so high is to both to shore up print sales and to put a check on Amazon’s power.

Plus, this matters little to self-publishers, who make more royalties from a $2.99 sale than they would through a publisher at $9.99.

Email Submissions

Any agent or editor will tell you what the effect of accepting email submissions has on the number they receive.

Before the internet came along, writers had to go to the trouble and expense of printing something out, buying envelopes and stamps, hunting down the address of the agency or publisher, and then sticking it in the mail (along with an SAE), and waiting.

Now with email, you can send your manuscript to every agent and editor in the country and it will cost you nothing. Agents and editors have to expend significant resources and manpower just to deal with the fire-hose of submissions.

Usually the first reader is an intern who may or may not have the skill or judgement to assess your submission accurately. This isn’t a complaint, it’s a fact: most agencies simply cannot afford to have full-time, qualified, experienced agents reading all submissions. If they did, they would go out of business.

But a side-effect of that is many good writers get lost in the shuffle. Until recently, they had no real viable choice but to press on and keep submitting and keep hoping.

Digital Self-Publishing

But now they have another choice: self-publishing. While self-publishing has always existed, it only become a realistic option for most writers with the boom in e-readers.

For the first time, writers who couldn’t crack traditional publishing could publish themselves and match the distributive power of a large publisher. While they would still struggle to get print books into bookstores (not impossible, but hard), they could make up for those lost sales with the increased royalties from digital.

As e-books exploded towards the end of 2010, and that growth continued into 2011, many trade published writers began to realize that they could make more money from self-publishing.

If we take a typical advance of $10,000, that’s all that most trade-published writers will see from that book. However, if they self-publish, and price at $2.99, they only need to sell 5,500 copies to cover costs (assuming a production cost of $1,000) and beat the advance.

Any copies sold over that amount and they are ahead. And e-books never get pulled from the shelves.

In February 2011, e-books became the top-selling format, capturing 29.5% of the market. This was a watershed for many writers, and even those with successful careers in trade publishing are running the numbers and seeing what they could make.

Even more writers are continuing with their traditional contracts and digitizing their backlists, which have long fallen out-of-print. And once writers do that, and realize how much they could make, their traditional publisher has to work harder (and spend more) to keep them happy.

The Case Against Traditional Publishers

A traditional publisher brings a lot to the table: expertise, experience, editing, marketing, and design. However, these are all things that a writer could outsource for a flat fee (and publishers often do themselves anyway).

The USP of a trade house is their ability to print lots and lots of books cheaply and get them into lots and lots of bookstores. That’s the real reason a writer hands over a huge chunk of their royalties to a traditional publisher.

However, with print in terminal decline, and bookstores on the way out as a result of both that and fierce online competition from Amazon, this USP is becoming less and less valuable each month.

In other words, when everyone is buying print books online, what’s the point of a trade deal? Anyone can have a print book listed on Amazon.

And when everyone is buying e-books instead of print books, why would you sign away a percentage of your royalties for producing one? If you don’t want to do the work yourself, there are many companies out there who will take care of everything for less than $1,000.

To those who say they can’t afford the upfront cost, consider this: can you really afford to give a publisher 52.5% of your royalties forever? For something you could get done for $1,000?

Now, we aren’t at this point yet. The majority of sales are still in print, and the majority are off-line. But it’s coming, and faster than you think.

Why They Will Go The Way Of Travel Agents

Travel agents never thought they would go out of business. They always thought the public would require them to sift through all the information and find them the best packages.

They thought that airlines, hotels, and resorts didn’t want to deal direct with the public and that they public needed the reassurance of an expert to guide them through the process.

It turned out that travel agents weren’t such experts after all. Flights were often subbed out to charter airlines with terrible service and awful punctuality. Hotels that were so pristine in the brochure turned out to be cockroach-infested building sites.

Once online booking engines and review sites became popular, people could search for the cheapest deals (not the one the agent was getting kickbacks for), and read what other people – real people – thought of the products. Travel agents were blown out of the water.

Sound familiar?

Publishers have had a near-monopoly on the production and distribution of books. Not anymore. But they are resisting change, and succumbing to a number of fallacies.

They think people want them to curate selections.  They think people rely on their expertise. They think people are willing to pay extra just because one book has a certain logo. They’re wrong.

Aside from certain imprints in certain genres, the average reader doesn’t know – or care – who published a book, all they care about is if the book is good or not.

If a self-publisher has a good cover, good editing, good formatting, good blurb, they are indistinguishable from a traditionally published book.

The only real difference is that a trade publisher, with all those overheads, will never beat a self-publisher on price.

The Future

I don’t think trade publishing will disappear completely. Travel agents still exist, but in highly specialized niches.

I see the ultimate future for trade publishers in a similar role: dealing with print as a subsidiary right – spinning off print deals for the more successful self-publishers – and producing beautiful, limited edition hardbacks for collectors and super-fans.

I think smaller presses have the ability to react to change quicker (and they have), and will prosper. But for the major publishers, the future is bleak. Some will survive in one form or another, but many won’t.

In case you missed the news over the weekend, I released another e-book: Transfection – an old-school science fiction short story. You can read all about that here, and read a free sample here. Tomorrow, I will be hosting another fun competition. Don’t miss it!

13 Replies to “Why Traditional Publishers Will Go The Way Of Travel Agents”

  1. Spot on as usual!

    In my day job, we do use a travel agent. One that specializes in corporate travel, and specifically corporate travel to Brazil (It’s a Brazilian company.). It’s an essential service due to the high volume of travel our company does each year. We simply don’t have time to look things up on the internet. We want someone else to do the dirty work and be there to support us if something goes wrong. And believe me, the company we use is REALLY good.

    However, for personal travel, NO ONE at the company uses them. We all hop on the net and do our own thing, finding cheap flights to wherever we want to go. I know a couple people who’ve used specialized agents to travel to India, but that’s about it. Everywhere else it’s Expedia or Skyscanner or LastMinute.

    I really do believe the publishing industry is headed that same way. Fast.

    I love that I have the freedom to pursue my writing goals in my own way and the possibility that, with a little luck, my writing dreams can come true. The very idea of accepting $10,000 now for my hard work is downright laughable.

    Believe me, I’m spending nowhere near $1000 on my novel. I’m spending $240 for a cover, professional substantative editing and a formatter. I only have to sell 118 books at $2.99 to make back my costs and half of that 118th book will be profit. 🙂

    1. Oh I know that it can be done for a lot cheaper than $1000, I just wanted to pick a figure that couldn’t be disputed. It’s also what a lot of the companies charge to do everything for you.

      I think you are going the right way, for sure. And the way you look at it is spot on. 118 copies, then you are in profit. And you want to get there as fast as you can, that will be a big motivator for you. I’m 56% there after 19 days, and it’s great – way ahead of expectations.

      I’m sure you will get there pretty fast, you know what you are doing.

      Dave

      P.S. Do you get to go to Brazil? I love Brazil! I should do a booksigning in Brazil! Ok, if there is anyone reading from Brazil, if you buy my book, I will come and sign it for you personally.

      1. They don’t let me go to Brazil. Rude, huh? I keep trying to convince them, but so far they just laugh at me. And start yammering in Portuguese. Something about “Americana” and “loca”. No idea what they could be talking about. 😉

        I love, love working with the Brazilians, but unfortunately the job ends in 5 weeks. 🙁 Sooo sad.

        If you do go to Brazil for a book signing, do you think I can fit in your suitcase? lol

  2. Another great article, Dave.

    What I find interesting is how the very technology that has made e-books a viable option (ie. the internet) is also largely responsible for making the traditional route less viable. I submitted work to two new agents in the US via e-mail (both specifically requested that you do so) and discovered later that the first agent had received 3000 query letters in her first week alone. Needless to say, I haven’t got a reply yet – and I sent my query before Christmas. In that sort of context, e-publishing isn’t just one of the many choices open to the budding author. It’s his or her only choice. This may generate some problems in the long run.

    It does seem a bit cheeky on the part of publishers to charge the same amount for the e-book version of a particular work as they would for a hard-copy. Like you say, this is all about protecting demand for hardcopy. I fancied buying a few Dashell Hammett novels recently – the author of ‘The Maltese Falcon’. I’d read all his books before but thought they’d be a nice addition to my kindle. They were priced at ten euro each, more or less what they’d cost to buy in my local bookshop.

    1. Aonghus,

      One agent in Ireland requested my manuscript in February last year, and I posted to them straight away. A few months later I checked with them, but they didn’t answer. I tried a couple more times over the next few months before I eventually heard back. They’d lost it and asked me to send it again. That was in September. Haven’t heard anything since.

      There are three agents in America that have had my manuscript for nearly eight months. I checked in with them after three months – no reply. I’ve checked a couple of times since. No reply. And they requested the manuscript from me.

      Dave

  3. You know what the craziest thing about that is? They are actually losing huge amounts of money to do it.

    Amazon only pay out the 70% royalty rate at prices between $2.99 and $9.99. So if a publisher prices their new release at $11.99 (which many do), they will only make $4.19 a copy. If they sold it at $9.99, they would make $6.99 a copy.

    They are willing to lose $2.80 PER COPY (above and beyond whatever sales they lose at a higher price point).

    Crazy way of doing business.

    1. “They are willing to lose $2.80 PER COPY (above and beyond whatever sales they lose at a higher price point).”

      I think maybe it’s a case of cutting off one’s nose to spite one’s face? Nuts, but who ever said the corporate world was at all sane?

      “In that sort of context, e-publishing isn’t just one of the many choices open to the budding author. It’s his or her only choice. This may generate some problems in the long run.”

      It’s a huge part of the reason I decided to self publish. Along with everything else that’s going on in the publishing world, it just seemed silly to sit around waiting for some magical day when an agent would say “yes”.

      1. I think that’s the motivation for a lot of people. And as e-books grow and self-publishing grows, things get tighter for book shops and publishers and agents. They will take less and less risks and probably spend more trying to hang on to existing talent that could be tempted to go it alone.

        On the other hand, all those threats are opportunities for the self-publisher.

  4. I think I mentioned on my blog at some point that it was a discussion with a major agent that finally tipped the scales in favor of self-publishing for me. He certainly didn’t tell me to go out and self-publish, but he did talk about the problems getting contracts back from publishers who seemed to want to sit on their hands and about the fact that the industry is in the worst condition he’s seen in 30 years of working with them.

    Could there be a better time to at least try out self-publishing?

    1. Exactly.

      And you lose nothing by trying, especially if you start out with a trunk novel, a short story, or a novella.

      In any event, all writers are going to have to get to grips with the ins and outs of digital publishing. If they don’t they could get screwed. And what better way to learn than by doing it yourself – taking a backlist title, or an old short story, and just seeing how it all works.

      There’s no reason why you can’t self publish and trade publish. In fact, I think the smartest writers will look to combine a little of each.

  5. “They are willing to lose $2.80 PER COPY (above and beyond whatever sales they lose at a higher price point).”

    Wow, that IS crazy! I never thought about that. What’s wrong with them? That’s also less for the author then. But then again, I’m sure all of it makes perfect sense to publishers/traditional authors who are more than happy with that. Ha ha.

  6. “They are willing to lose $2.80 PER COPY (above and beyond whatever sales they lose at a higher price point).”

    Wow, that IS crazy! I never thought about that. What"s wrong with them? That"s also less for the author then. But then again, I"m sure all of it makes perfect sense to publishers/traditional authors who are more than happy with that. Ha ha.

  7. This conversation thread is probably long dead, but I’m with a small press that is looking at stratetic planning and moving away from traditional publishing, but what I find is that many of my self-published, self-marketed friends barely sell any books at all, even with lots of passion and effort. Such a huge amount of content out there.

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