My Boycott of Agency Pricing

My library card had expired.  Gasp!

I’ve been reading eBooks for the last few years, either on my ancient Sony ( two year old technology) or on my spiffy new Kindle, but thanks to agency pricing, I have renewed my card and started borrowing dead-tree books again. That’s right, me the big eBook fan, has had to crack open some weighty volumes to get all the information I crave.  But the publishers made me do it.

In an effort to fight the rising tide of eBooks, the Big Six publishers adopted the agency pricing model, where they set the price and no one is allowed to discount, and they’re setting the price of eBooks higher than paperbacks.  So an electronic download, which doesn’t require logging companies, pulp mills, trucks, printing presses, more trucks and heated bookstores are now priced higher than dead-tree books.  Let’s not even get into the incredibly environmentally unfriendly paperback returns policy, which sees the cover of an unsold book ripped off and returned to the publisher for credit, and the rest thrown into the recycling bin so that more trucks, pulp mills and trucks can get rev up their engines.

But what really gets me steamed is that great authors are being squeezed by the new “industry standard” on eBook royalties.  This cartel of six has decided that they will not sign a single contract that pays an author more than 17% of the list price of a novel.  Their stated claim that they must have this deal in order to make a profit on eBooks doesn’t ring true when you read Publishers Marketplace, which reports on each publisher’s financial statements as they’re released, and it turns out they’re all making a good profit on eBooks.  It’s reduced hardcover and paperback sales that are hurting them.  So they’re using eBook sales to subsidize the old industry at the expense of authors.

So I’m boycotting agency priced books, and it’s really easy to tell which books are subjected to this policy.  If it costs more than $9.99, and more than the paperback, it’s an agency priced book.  If Amazon can’t sell you a discounted copy, it’s an agency priced book.

For instance, a friend recommended The World Without Us as essential reading for all apocalyptic fiction authors.  Amazon’s  price for a Kindle version is $11.20, but the paperback is $10.20.  I’ve seen far more glaring examples, where the Kindle edition is near $14 and the paperback is around $10 dollars.

This won’t last, of course.  Someday one of the really big authors will say goodbye and indie-pub (or worse, sign with Amazon) so that they can collect the 70% royalty.  When that happens others will follow suit, and the publishers claim that they have the best authors will melt away.  Then they’ll want to lure someone like John Grisham back, and they’ll offer him a 35% eBook royalty, and every publisher after that will not be able to claim that 17% is the “industry standard.”

Meanwhile, out of the millions of indie-pubbed books, some cream will rise to the top.  These authors will keep selling under $9.99 to get the 70% royalty, and as they build their careers and become in demand, they’ll eat into sales of books from traditional publishers.  The only solution for the Big Six will be to lower the price of eBooks in order to compete.

But for now, I’m off to the library.  I got an e-mail notice that the hold I placed (via the library’s website) on The World Without Us has been filled.  Oh, and I’ve been loaning eBooks from the library too for my Sony eReader.  Thank you public library.  You’re a forward looking institution.

Apocalyptic Fiction Authors Beware

The Great Blackout of 2003 came without warning.  I was clacking away at my keyboard just wearing shorts because the mercury was high, and when a bead of sweat ran down my temple I  decided it was air conditioner time. But before I could even stand to head for the thermostat, my screen went blank and everything went silent.  That quiet was the eeriest part–no freezer or fridge hummed, the ballasts on the florescent lights no longer buzzed in the background.  My house and my computer had abruptly died.

My first thought was to call my wife–who was off with the kids visiting my mom far out in the suburbs–to tell her not to rush home for dinner.  My cell phone couldn’t find a signal–weird since I live downtown.   That was my first clue that this was more than a local blackout.  The landline worked, but after a quick chat with my wife I discovered the blackout was at least city-wide.  Now I was starved for information, so I dug eight C cells out that miraculously had enough charge left to operate a radio and got the next big surprise: static.  There wasn’t a single FM channel in operation, but I finally found an AM sports channel that had a working back-up generator, and the radio guy had all the excitement of a sportscaster as he described a multi-state, international blackout.  The whole north-east and a chunk of central Canada were suddenly living like it was 1799, except with cars–no traffic lights, just cars.  That was the day I learned that an electrical grid is a fragile construction.

Which is why it gets on my nerves when an author of an apocalyptic novel doesn’t understand that.  I’ve been reading a lot of them lately, since I write apocalyptic fiction myself, and I’ve been shocked by the ignorance.  In Hollowland most of humanity has been overtaken by a zombie plague, but some surviving humans  pump gas at a station in the middle of the desert.  Uh?  Just what’s powering the pump at this gas station?  Not electricity that’s for sure.

In another novel, Selection Event, 98% of the planet’s population dies from a flu virus while our lead character, Martin, is underground for a year-long psychology experiment.  When Martin comes back to the surface he heads to his parents’ house to see if they survived, and when he gets there he rings the doorbell and it works.  What?  Everyone died two months ago but the electrical grid is still up?

I tried to suspend my disbelief because areas around Niagara Falls continued to have power during the 2003 blackout thanks to smart power workers who isolated their section of the grid.  The Niagara Falls hydro-electric generation plants provide very reliable power.

But in Selection Event Martin discovers from old newspapers that environmentalists had lived long enough to blow up all the dams in the west in order to let “the rivers run free.”

Now if environmentalists lived long enough for tooling around with dynamite, surely nuclear power plant technicians had a little warning too.  Despite the Simpsons’ negative portrayal of nuke plant workers, those people actually take their jobs very seriously.  If they knew they were all dying of a flu, at the very least they’d put the plants into a safe shutdown mode.  Ditto for power plants fired by coal, gas or oil, cause you sure as hell wouldn’t want the explosions that go with unmonitored fossil fuel plants.  High pressure steam pipes just can’t be left unattended, and if they are things will go wrong very quickly.  These plants aren’t like the Starship Enterprise, which seems to need a massive crew but can be operated just by Captain Kirk in a pinch.

Don’t get me started on solar and wind, because these incredibly variable sources of power are destabilizing for a grid, creating unexpected power surges and deficits as clouds and wind vary.  They can’t provide a base load, and if other power sources are gone one surge will trip breakers everywhere on the grid, and there’s no one to reset them.

Now if just knocking one power plant offline could bring down the entire eastern seaboard, image what knocking out dozens of dams, nuke plants, coal and gas plants would do?  Hydro is probably the one source of power that could conceivably (although not likely) carry on for a few days without human monitoring, but that would have to be a section of the grid that is not interconnected with the national grid, and in this case the environmentalists had done away with that option.

So if you’re writing an apocalyptic novel, keep in mind that the first thing to go will be the electrical grid, and it will be gone in a matter of hours without human monitoring.  Once the power is gone the refineries shut down, so then you gradually lose the gasoline, and well, then it’s back to 1799, only with better guns.

Amanda Hocking is Not a Fluke

Amanda Hocking is an outlier and a fluke, writing only for flighty teenage girls.  I heard this many times and one day decided to find out for myself, so last week I downloaded a free copy of Hollowland through Amazon.  Right away I was impressed with Hocking’s business sense because she clearly knows that hooking an audience is more important than earning a few 35 cent royalties.

But I approached her novel with suspicion and preconceived bias.  The title seemed suspiciously close to The Hollow Men by T.S. Elliot, and a quick check on Wikipedia proved that Elliot chose the title of his poem by combining the title of William Morris’ romance, The Hollowland, with Kipling’s poem The Broken Men.

So did Hocking know what she was doing when she chose that title?  Then I read the opening line:

This is the way the world ends – not with a bang or a whimper, but with zombies breaking down the back door.

BANG!  What a great opening line.  She shows me right away that she knew exactly what she was doing when she chose that title, and she has a great sense of humor to boot.  From this point on only people in love with that sense of humor will keep reading, and they’ll love the novel too.

Now I’m not saying that Hocking has replaced Elliot, or  that Margaret Atwood should be fearful of the competition, but I read the novel and liked it.  I admit I’m big into post-apocalyptic fiction so I’m an easy sell that way, although there are a number of indie ePubbed books in that genre that I’ve started and given up on.  They were also cheap, but they just weren’t that good.  That’s why they’ll never sell thousands of copies.

That’s my point.  Hocking’s writing is actually good.  It pulls me along and has me wondering what’s going to happen next when I should be concentrating on my own work.  So in my estimation, she’s not an outlier or a fluke, she’s just a good writer.

The unfortunate piece of news is that the publishing industry rejected her many times, failing to see that she could make them money, failing to recognize that she was good.  I don’t blame them because the slush piles are huge and it’s difficult to sort the wheat from the chaff.  The happy news is that indie ePublishing allowed Hocking to prove herself.

If I were a publisher, I’d trim my acquisitions department and follow the Amazon bestseller list to find new talent.  This is great for them. Why sign a contract with an author if they haven’t proved themselves in the real world?

I can’t wait for the next “outlier” or “fluke” to sell a million indie ePubbed copies on Kindle.  I’ll buy their book.

Why I Chose Not to Get into a Fight at an SF Convention

What most people don’t know about science fiction conventions is that a lot of them are not about actors or TV shows but about SF writers, and the discussions at the panels are educational, lively and provide a lot of insights into the publishing world.  But yesterday I discovered that sf cons are not immune to the controversy over eBooks and indie publishing.

I attended a panel about “The Business of Writing” at SFContario in Toronto.  The con was winding down, and I settled in expecting to hear the usual advice for want-to-be authors: get an agent, write short stories, and don’t pay reading fees to agents.

But instead author Robert J. Sawyer inadvertently dropped a bomb on me.  When asked what the biggest business mistake a newbie writer could make he replied, “self-publishing or self-ePublishing.”   He might as well have said, “Michael McPherson has made the biggest mistake of his career.”  While Sawyer recognizes me at cons and remembers that he has mentored me in the past, he probably has no idea that I’ve indie-published.  The comment was not just directed at me.

What he said (forgive the paraphrasing) is that only outliers have been successful in self-publishing either in print or electronically, and that you will have “vanishingly few sales” and never succeed as a proper science fiction author if you go the self-publishing route.

Yet, as I listened to this I was surprised to discover that I was encouraged and even more certain that indie-publishing is the road I want to travel.  I know that sounds crazy, and I was reminded of a line from the movie Hoffa, so smartly delivered by Jack Nicholson.  When several different people told him he should call off a strike, he replied, “If everyone says I’m wrong, I must be right.”

I know that this is the height of arrogance and conceit, but I also know what Mr. Sawyer had said earlier at his Kaffeekaltsch: it will be increasingly difficult and perhaps impossible for a science fiction author to make a living just from writing.

An indication of the direction the industry is going can be found in the subscription numbers of Analog Magazine: at its peak back in the seventies it had 160,000 subscribers, but now it has around 28,000.  I’m also willing to bet a lot of those are older boomers, so as that generation goes on their ultimate adventure, Analog will probably also go down forever.

I’m sure Sawyer’s career will be fine because he’s so well known and has won every important science fiction writing award at least once, but a newbie like me–fighting to break into a dying industry–has nothing to lose by taking the road less traveled.  The big six are struggling to adapt to eBooks, and their desperate throes are creating market opportunities.

If I landed a contract today with any publisher, my debut novel would have to compete head-to-head with Robert J. Sawyer’s umpteenth novel–one $10 paperback versus another.  But I’ve checked the prices of Sawyer’s Kindle editions and discovered that they’re priced between $10-$13, with many of them more expensive than their paperback editions.

Wow!  That means Vampire Road at 99 cents is less than one-tenth the price of most of Sawyer’s novels, and when I launch the prequel, The Book of Bertrand, at $2.99 it’ll still be less than a quarter of the price.  This cut-rate is the only hope for a newbie author trying to seize a piece of the incredibly shrinking pie.

I considered putting my hand up and debating this with Mr. Sawyer–starting a lively old fight–but most of the authors were enjoying the last panel of the conference, and I knew there was little hope of swaying hearts and minds.  The proof will come in the next couple of years, but even if I have “vanishingly few sales,” I suspect it will be more than if I was still desperately waiting to hear back from a publisher.  And I’ll make this promise, if I haven’t had any luck by SFContario Four, I’ll volunteer for a panel: why ePublishing may not be for you.  I love being on panels.  Either way, it’ll be an interesting ride.

Thank You Publishers for Agency Pricing

Publishers are my enemies.  Okay, not really, but the obvious finally did occur to me the other day: publishers are my competition.  I’d never thought of it that way simply because those corporations are so big that they operate in a totally different league, one so stratospheric that I couldn’t imagine that little me and my eBooks were anywhere in the same ballpark.

But then agency pricing came along.  Those rascally publishers are forcing the price of eBooks higher than paperbacks, gradually moving away from the $9.99 price point that Amazon set and pushing prices up to twelve dollars and more.  What drove this home for me was seeing that Amanda Hocking’s new eBook, Switched, published by St. Martins Griffin, will be nearly $12 while the paperback is around $10.  Now my memory isn’t the best, but I’m pretty sure I missed a chance to buy Switched for 99¢ when Hocking first self-pubbed it.  She’s very popular, so I was surprised to see the whole Trylle series off the market until next February when the paperbacks are ready.  How many sales have been lost in the months since I first considered buying Switched?

That’s when it hit me.  As long as Hocking is with St. Martins, her books will be far more expensive than mine.  Thank you St. Martins.  It’s like opening a coffee shop across the street from Starbucks and finding out that the corp back in Seattle has decided to charge $12 for a regular coffee compared to my $1 price point.  You couldn’t ask for a more accommodating competitor.  It’s like they want me to undercut them and sell.

Great!  Thanks Big Six Publishers.  You’re helping many writers like me along the road to indie-publishing success.

99¢ Novels Versus 99¢ Music

An SF author surprised me at Ad-Astra last spring by stating that he’d never buy a 99¢ novel because obviously the author thought it was worthless and so it must be garbage.  A panel on e-books had just wrapped up, so in the confusion that followed I didn’t get a chance to ask him if he owned an ipod.

But he isn’t the only one to tell me that novels must be priced higher.  Rebecca M. Senese told me at a Sisters-in-Crime meeting (yes, I’m a dude, but somehow I became a ‘brother member’) that she charges $4.99 for novels, $2.99 for anthologies and only offers shorts for 99¢.  She warns me that some people might buy my 99¢ novels just because they’re collecting–like hockey cards–and they might never read the novel.

But I come back to itunes.  If a band can spend years playing in sleazy bars to make a name, record their music in an expensive studio, have it distributed, and not be ashamed to charge 99¢ for it on itunes, why is it that novels must be priced higher in order to be judged valuable?

It all comes back to price expectations.  In music, illegal downloads flourished before itunes because record companies did away with the single, forcing music lovers to buy an entire CD for $25 when all they wanted was one song, the rest was just filler.  $25 for one song!  Sort of like $25 for one novel.  No one would consider paying so much for a song now, and even the expensive songs on itunes are still under $1.50.  Apple changed forever what people expect to pay for music.

Traditional publishers are desperately trying to maintain the fiction (no pun intended) that a good novel must be priced above $15, preferably closer to $25, but this will not last.  Amazon and self-pubbed authors are changing forever what people expect to pay for novels.  There’s a huge 99¢ slush pile on Amazon and Smashwords right now, but it will fade away because many self-pubbed authors will become discouraged with low sales and give up.  Amazon will do a little house cleaning and sweep away anything that hasn’t sold in a few years.

That’s when readers will begin to hunt for 99¢ gems.  They’ll want to find them before everyone else does and buy them before the price is jacked up–like being the first to discover a new band or a new wine.

I confess, when I build a following I will raise the price of my novels to $2.99 so that I can get that 70% royalty, but in the meantime, I like being the cheap read in the store, and I don’t think there’s any shame in it.  If I can buy fantastic music for 99¢, I don’t see why I can’t buy fantastic novels for 99¢.

 

EBook Sales “Only” Double Over Last Year

It’s not often that I can say a newsletter has shocked me.

Publishers Marketplace has an e-newsletter I subscribed to last year at the advice of literary agent Stacia Decker.  While it’s really aimed at publishers, it’s good for authors to know what’s going on in New York too.

Of course I was more interested in e-publishing, so I was surprised that the newsletter tended to report about eBooks with a slightly condescending tone.  You could almost hear the moniker “upstarts” muttered in between the lines.

But as Barry Eisler publicly jumped into self-publishing and then into the arms of Amazon, as Amanda Hocking and John Locke hit the millions in sales, P.M. adapted quickly, holding conferences at BookExpo like eBooks for Everyone Else.

Yet, the tone of their updates on eBooks still occasionally has that disparaging taint, perhaps because it’s written for publishers.  Thus–because P.M. has tried to clamber awkwardly onto the eBooks wagon–I was stunned last week when I read their update on book sales.

They preface it by reminding everyone that the numbers are only from publishers who voluntarily report to the Association of American Publishers, so this is by no means an accurate measure.

P.M. then goes on to  trumpet how hardcover book sales recovered nicely in July 2011 compared to July 2010, going from $68 million to $91 million, certainly good news for publishers.  But what really made me slap my forehead was the next paragraph.  While appropriately reporting that eBook sales were $82 million, making them the second biggest category of sales after hardcover, P.M. states that this is “only double the total recorded last July.”

Only double?  I had to read it over twice to understand what great news this is because “only double” sounds like a failure.  In any other industry this would have been the lead statistic because it indicates a trend.  Could you imagine a stock broker telling a client that his portfolio had earned in July “only double” what it had earned the previous July.  The broker would be screaming from every advertising venue possible that he had doubled his client’s earnings rate.

When I first subscribed to Publishers Market place way back in 2010 ( oh yeah, way back) they were still reeling from the shock that e-books were getting close to breaking double-digits as a percentage of publisher’s sales.  Now P.M. blithely reports that eBooks are 20% of  publishers sales.  Nothing to see here.  Move on.  It’s only double from last year.

Of course I still like Publisher’s Marketplace because I get to read a lot of publishing industry gossip that I might otherwise miss, and it’s good to be updated on lawsuits involving agency pricing of eBooks, etc.  So I won’t be canceling my subcription because I don’t like their tone.

The salient fact is that eBook sales–even just those voluntarily reported to the AAP–are obviously still rising exponentially.  They may not be the biggest chunk of the sales pie, but they’re close and they’re headed in that direction.

Of course, these numbers do not include sales by indie-pubbed authors like Joe Konrath, Amanda Hocking or John Locke because they’re not members of the AAP.  I suspect when Amazon or Barnes and Noble release their sales figures we’ll get a better picture of eBook sales, but I can’t wait to read how Publishers Marketplace will describe the numbers.  Will they say that eBooks are now “only” half of all sales?

What if eBooks become 80% of sales.  Perhaps then Publishers Marketplace will drop the “only.”

Publishers Should Be Watching Kodak’s Bankruptcy

Kodak or Fuji?  Whenever I landed a gig as a camera assistant back in the 90s that was the first question we’d ask.  Which film stock would we be shooting for a TV show or a movie didn’t really matter because both products were essentially the same, although some camera assistants swore that Fuji was louder in the camera.

But the real difference between the two companies became obvious as HD video came online.  Fuji’s response was to dive deep into this new technology.  Kodak dug in their heels.

Now as a lowly camera assistant, I shouldn’t have been more tuned in to the future than Kodak executives, but apparently I was able to see from the ground floor what they couldn’t see from the boardroom.  At the end of the work day on a TV show like Due South, I’d hand off ten $800 rolls of film.  The production still had to pay to process this film and then pay again to transfer it to video for editing.

So imagine my surprise when I got a daily on Earth Final Conflict, which was shooting HD.  I walked onto the camera truck, took one look at their rushes on the HDTV and said, “Oh, oh.  That’s the end of film stock in television production.”  That wasn’t the half of it.  At the end of the day I handed off two $100 HD videotapes, all ready for editing–no processing required.

Kodak reacted to this new technology by pouring R&D into the old film technology under the mistaken assumption that if film was still much better quality than HD that producers would continue to use it.  Kodak churned out one fantastic new film stock after another, culminating in the amazing 800 ASA film stock.  But the problem is that the price differential between HD and film was just too great, and the average TV viewer didn’t care if the blacks were crisp.  Film is still used on feature productions, but the majority of TV has switched to the much cheaper HD video.  That is a big chunk of the film stock market.

Kodak eventually got with the program and moved into digital, but they’ve had to go through some gut wrenching reorganizations while Fuji’s CEO was busy collecting an award for leading one of the best managed companies in the world.

I thought Kodak had survived, but on Friday their stock dropped by half after it was announced that they’d hired a law firm that specializes in bankruptcy.  Oops.  Too little.  Too late.

The publishers should be watching because they’re making the same mistake.  Kodak believed it was in the film stock business, but in reality they were in the image capture business.  Fuji understood this, and when a better technology came along they simply began hunting for ways to profit from this innovation.  I know purists will argue that film is better quality than HD, but some people also argue that a vinyl record album is better quality sound than an ipod–just try to go running with a record player.

Publishers believe they are in the printing industry, but they are in the book industry.  Books no longer need to be delivered to customers in the form of dead pulped trees.

I’m not saying paper books are going away forever.  Film is still used to shoot major Hollywood movies, but how many people use a film camera for their family photo albums?  I can tell you that very few TV series still shoot film, but back in the 90s they almost all did.

Publishers–rather than resisting e-books by trying to artificially hold the prices high and offering authors pathetic e-book royalties–should be looking at how to profit from e-books.

I’m on the ground floor of publishing, like when I was a camera assistant, but I’ve got that same feeling that I had back in the nineties when I wanted to run up to Kodak’s boardroom and scream, “Don’t you guys see what’s happening out there?”

Today I want to do the same in the boardrooms of the six major publishers.  I want to scream, “Don’t you guys see what’s going on out there?”
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