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  1. #1
    Registered User Carlyle Clark's Avatar
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    Is Indie publishing a bubble destined to burst ala the housing market?


  2. #2
    As can be expected, I have some gripes w/ the logic presented.

    1. Yep. Lots of people are going to fail. As the numbers of people increase, the amount of failures will increase exponentially. Will it hurt the publishing model? Not really. People who buy books... shocker, BUY BOOKS! I own a Sony e-reader. I also have a shelf full of paper books. Why? Because I caught them at the libraries sale and it would be cheaper to buy it there than buy it online. Because I found them as I wandered through the bookstore. Or just because...! Am I becoming the minority? Yeah, probably, but these things go in spurts anyway. Anyone remember how reading had died w/ children before Harry Potter? Yeah, me too.

    2. Stars are leaving the e-publishing world for mainstream publishing. Yep. And? We have a member of this very site that did so. And I bet, if that contract went away, because he is a WRITER, he would go right back to e-publishing.

    3. When I read this, I found it strangely similar to the b&w comic boom that followed Teenage Mutant Ninja Turtles. With that success, tons of b&w books hit the market, saturating it in search of easy profit. When it was over, only a few (GOOD) survived. Comics continued, though some shops that hedged their bets on the B&w craze didn't, and actually entered another boom - the Image boom where everything was collectible and people bought multiple issues to sell in 10 years for millions of dollars. Some of those books survived too, but most (I'd dare say 95%) died a quiet death that hardly anyone noticed. And comics continued. Where shops hurt again? Yep. But strangely enough, you still can find a comic shop in most major cities. Why? They have a fanbase. Even if paper dies and electronic takes over, it'll move online (and some already have). Are books the same? In their nature, largely so, w/ their own problems and strengths, the greatest of which being... us. The readers. Who help good product that we find out about grow. And who kill whatever we don't like.

  3. #3
    Palinodic Moderator KatG's Avatar
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    Quote Originally Posted by Carlyle Clark View Post
    This guy's really starting to annoy me. He has some good points in these things but wraps it up in his own hype, which apparently is, thanks to the Guardian, getting him a lucrative speaking career among the business folk who pay well for supposed gurus.

    Look for instance on how he announces that "paper" books are down 53.4%. What the actual figure tells you is that mass market paperback sales were down 53.4%, not all print books, and only in the U.S. and only in September. The figure he quotes for e-books at 138% growth were for nine months, not just September. Why did mass market tank? Economic factors, rising gas prices (trucks) and a little thing called Borders going bankrupt and closing up stores all over the country (which as we previously discussed had nothing to do with e-books.)

    It's that kind of shading that messes up other, clearer facts. The reality is that e-books aren't a bubble, unless Amazon suddenly decides that they don't want the self-publishing folk no more or want to charge them huge prices, which is possible, but not likely on the incentives front at this point. Even if Amazon did decide to drop the self-publishing market, at this point, it would likely develop elsewhere, probably at a slower rate but certainly not the equivalent of a financial recession.

    What is on a bubble are the e-readers, but everyone knew that going in. That's why they are all shifting over to having tablet products. The Kindle was just the warm up kindle to the Fire. E-books are not restricted to e-readers -- any communication tool with a screen will do. Eventually, you'll be able to read books on your t.v. screen if you like in giant print. Holographic displays of text in the kitchen will definitely be a boon to the cookbook market. As long as we have words and writing, we will have books, which, again, are simply long pieces of text. How much money anyone can make off them is always up in the air.

    What he's not wrong about is the predatory practices going on to make money off of the folks trying to do self-publishing. This always happens and we've been talking about it for some time. Paid book reviews. Publicity services. E-book formatters and distributors. Some of these can be helpful services, legitimately priced. But even established companies may try to take advantage, and so that is a process that occurs in the establishment of a new market. That's why I feel the hype that self-publishing is a rebellion warring against the supposed Evil Empire of large publishers is so damaging and companies that do have something to offer, like Smashwords, should not, in my view, resort to it just to increase sales.

    The reality is that a lot of people will rush into self-publishing hoping to make money, they won't do so well on that and they'll drop out. But self-publishing is entirely too useful for it to be damaged from this. People still have mortgages, dot.com companies still exist (and Facebook stock will sell for billions.) The only reason a "bubble" matters is that people gamble on it in the stock markets. I am not aware of massive stock speculation on companies solely in regards to self-publishing operations. Self-publishing for all the enthusiasm is, like the rest of publishing, a really low money industry. It's not of more than passing interest to the financial world and then mostly in terms of the electronic gadgets people read e-books on.

    That seems to be the big problem in these discussions of the intersection of tech and publishing -- people think the e-books are as important as the gadgets and software programs and so will create some sort of fantastic new world. They aren't; they're just the frosting. But you always want to have frosting around, at least some people do.

  4. #4
    KMTolan kmtolan's Avatar
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    That's why I feel the hype that self-publishing is a rebellion warring against the supposed Evil Empire of large publishers is so damaging and companies that do have something to offer, like Smashwords, should not, in my view, resort to it just to increase sales.
    Heh, Kat, the publishers earned that title the old fashioned way - they worked for it. The damage is self-inflicted, and continues to be this way as these folks fight to keep their antiquated business models alive. Can't say the other side of the coin is particularly sparkly white, either. Amazon, Apple, these guys are true wolves in sheep's clothing as far as author's are concerned. Pray neither gets full control of the marketplace. These days it's hard for an author to trust anyone but themselves, so no wonder the sentiment.

    Kerry

  5. #5
    Palinodic Moderator KatG's Avatar
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    Quote Originally Posted by kmtolan View Post
    Heh, Kat, the publishers earned that title the old fashioned way - they worked for it. The damage is self-inflicted, and continues to be this way as these folks fight to keep their antiquated business models alive. Can't say the other side of the coin is particularly sparkly white, either. Amazon, Apple, these guys are true wolves in sheep's clothing as far as author's are concerned. Pray neither gets full control of the marketplace. These days it's hard for an author to trust anyone but themselves, so no wonder the sentiment.

    Kerry
    The damage I referred to was damage to authors, not publishers, as you very well know. As you also know, I disagree with you that publishers are fighting to keep antiquated business models alive and their amount of interest in keeping others out of the marketplace. I also disagree with those who believe Amazon is trying to take over all of publishing. And Apple could care less. All of these hyped up claims obscure the actual business issues involved and lead authors to make bad business decisions on the philosophy that the whole market, including other authors, is out to get them. Consequently, they ignore real pitfalls they have to deal with to rail at phantoms, in my opinion. This guy is presenting yet another phantom instead of dealing with the real problems that self-publishing authors face that are the rationale for the article. And he's going to make more money off of it, as he himself says he did by saying that authors will all die off, unable to make a living, and he's done so by using a medium -- newspapers -- that tech people have already declared illogically to be dead. He's using standard marketing techniques, creating an imaginary paradigm.

    All I'm saying is, the guy plays very loosely with facts and I don't think comparing e-books to housing mortgages makes a lot of sense. But that's not a business friendly message, is it? Can't really sell anything if you're saying that we're dealing with neither Armageddon nor impending utopia.

  6. #6
    and I like to party. Seak's Avatar
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    J.A. Konrath thinks differently: http://jakonrath.blogspot.com/2012/0...ok-bubble.html

    1. People fear change. When change happens, they dig in like ticks and try to defend their long-held and closely-cherished beliefs. (BTW, another term for long-held/closely cherished belief is prejudice. And prejudice ain't good.)

    2. The same memes about ebooks keep getting circulated again and again and again because folks are too lazy to do any kind of simple research to inform their opinions.

    3. Ebooks are going to follow the examples set by the music, movie, and TV industries. The future is digital, and anyone who disagrees with that is seriously out of touch with reality.
    He also just made 100k from Amazon in selling his ebooks.
    Last edited by Seak; February 4th, 2012 at 01:27 PM.

  7. #7
    Peckish hippokrene's Avatar
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    Quote Originally Posted by KatG View Post
    I also disagree with those who believe Amazon is trying to take over all of publishing.
    I don't believe Amazon is attempting to take over 'all of publishing.' I do think they're trying to corner the e-book market and that e-books will only increase in popularity. I think that in time, they're going to expand their publishing side and will eventually merge with one of the traditional publishing houses.


    At that point, they'll have the world's largest book distribution network, be one of the world's largest publishers, and the largest producer of e-reader devices. (Unless Apple takes over that, which is still possible.)

    I don't see that scenario as being one that's good for the industry or consumers.

  8. #8
    LaerCarroll.com
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    Hysteria sells.

    Reporters and commentators know this and some pander to those who get orgasmic over disasters. And if there isn't a disaster they'll balloon a tiny bump into a cosmic crash, or just flat make one up.

    Tabloids are more blatant about it. But even respectable publications like the Guardian can't resist a story well-written enough that it hides the fact that the writer is bending or inventing the "facts" which supports their thesis.

    And on Konrath's points.

    "1. People fear change. When change happens, they dig in like ticks..."

    An over-simplification. Some dig in - and die, which in business means "go out of business." Some fewer rise to the challenge. The larger the business the more often they resist change, which is why smaller businesses tend to be the ones who adjust. But even the large businesses sometimes change.

    Often larger businesses adapt by buying up the smaller businesses. Some then suppress or cannibalize the smaller business. Some instead use those businesses to invigorate themselves.

    We've seen both effects in the publishing world.

    "3. [Publishing's] future is digital, and anyone who disagrees with that is seriously out of touch with reality. "

    Another over-simplification. A working engineer for over 40 years who's helped CREATE the future, I know that every tech product has advantages and disadvantages.

    This is the case with ebooks and "pbooks." The two have complementary advantages and disadvantages. Smart publishers will use that potential synergy. I'd guess that we've only begun to see how such publishers will creatively do so.

    One example I've already seen at Baen Books, which has a big chunk of tech-smart readers and editors. Baen will often put a CD in the back of a new book by an author which contains all that author's backlist and out-of-print books. Some magazines have also begun putting digital media inside their mags to supplement the mag content.

    Bookstores can also be creative. In fact they already have, in several ways. For instance, at checkout some stores scan the bar code on the back cover of all books when receiving them. This automatically adds them into their electronic inventory systems. Then on checkout an individual book is subtracted from inventory. This also has the benefit that books are rung up even faster, making customers happier and more willing to come back to that bookstore.

    My favorite bookstore has now gotten a recommendation program in their pay stations which gives its checkout clerks advice. I had one say today (after glancing at a readout) "You know that author just came out with a sequel you might like."

    Readers are also creative. I've a friend, for instance, who usually buys both the ebook and the pbook of a novel. Then she'll switch between reading it depending on her circumstances and mood. Waiting in line and in the car wash she'll read from her tablet. At home she'll read the printed book. Sometimes she'll also switch because reading an ebook is (for her) more tiring than a pbook.

    A lot of publishers also use digital methods in non-obvious ways which hysterical pundits ignore. Everyone has a desk computer, and probably a digital phone as well. This is used for routine communications, as in every business.

    They also have publishing-specific uses. Book queries are increasingly digital. Book submittals also. Books can be edited digitally by everyone concerned - agents, purchasing editors, copy editors, authors proofing their copy-edited books. Artists often create book covers digitally, and send them to publishers digitally. Type setting and printing has been digital for a long time now.

    Dinner and my evening warm-up writing is done. Now back to my heroine Dr. Sylvia Connelly as she flies to the South-American tri-state area. She's finally discovered what group of white slavers killed her while trying to kidnap her and force her into whoredom. This is very bad luck for them. She's now an immortal shapechanger who has a sea monster alternate form. And she is really pissed.

  9. #9
    Palinodic Moderator KatG's Avatar
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    Quote Originally Posted by hippokrene View Post
    I don't believe Amazon is attempting to take over 'all of publishing.' I do think they're trying to corner the e-book market
    That's a little backwards. Amazon started the e-book market. They owned the whole thing nearly for three years. They knew that this would not continue, but they are trying to slow market share as much as possible, yes. But again, not so that they can play king of the e-book market. It's so that they can establish themselves as a software and hardware gadgets producer. E-books are not the money makers again for e-readers -- magazines, databases, documents and web content are. E-books are the frosting.

    I think that in time, they're going to expand their publishing side and will eventually merge with one of the traditional publishing houses.
    Absolutely not. They're using the publishing operation as leverage in the industry with publishers, rival booksellers and again most importantly, with rival gadget makers. They don't need to merge with anyone, just partner up, which they've already done.

    At that point, they'll have the world's largest book distribution network, be one of the world's largest publishers, and the largest producer of e-reader devices. (Unless Apple takes over that, which is still possible.)
    They don't care about having the largest book distribution network, they don't want to be one of the world's largest publishers, and they aren't that concerned with being the largest producer of e-reader devices. The e-reader device was just a warm-up that allowed them to build infrastructure and get the lead in multiple countries to being an electronic content gadget supplier, and will settle into being a small niche part of the overall product line. The money is in the tablets. Look also to Amazon probably developing a smart phone and possibly a social network of some kind. Amazon is aiming at Google, Apple, Verizon and other much larger companies than anything in publishing. And Apple doesn't have an e-reader, nor do they want to have one. Apple is launching their tablets and smart phones. E-books was just one more thing to add to the pot in their iStore. That's why they had no problem agreeing to an agency contract with publishers for e-books. They honestly don't care what e-books are priced at. It's just extra content.

    Again, all these fancy claims about the e-book market are based on the idea that e-books and book publishing is a big money, big importance business. It's not. It's useful, but it's a blip in the bucket. The big money is in electronic text and video content, like from Rupert Murdoch's media empire, and the equipment to play them on a pay for each item basis. It is the monetizing of the Web, which all these industries have been after for the past two decades and which is way more important than turning print books -- a backwards, nowhere business -- into electrons. Amazon can certainly mess things up and will ruthlessly undercut what it sees as rivals while at the same time partnering up with them in lucrative business deals (normal business practice,) but it doesn't care about publishing (and will probably eventually sell the publishing operations it's starting.) Bezos picked books as Amazon's starting product out of a hat. He can afford to do anything he wants and lose huge sums of money on publishing to do it because the money comes from a massive retail and advertising empire, not books. It's the Web, not the e-books, and downloading bits of the Web into devices, downloading that people will pay for in devices that they will pay for and expand on and continually upgrade, that is the money tree.

    Facebook is about to do its IPO for billions of dollars. Do you really think that Stephen King is of any importance next to that? It's like a bunch of minnows talking about how they own the ocean while the whales sail over them.

    E-books are neither vital to the universe nor doomed. Self-pubs are neither important nor are they shut out of some of them making money. And the electronic elite do need to step out of their bubble once in awhile. Regardless, self-publishing is not like the housing market, and it's not the Fountain of Youth either.

  10. #10
    Creator of Worlds sullivan_riyria's Avatar
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    Quote Originally Posted by KatG View Post
    As you also know, I disagree with you that publishers are fighting to keep antiquated business models alive and their amount of interest in keeping others out of the marketplace.
    I'm not sure why people think traditional publishers are some sort of evil overlords sitting in their offices twirling their waxed moustaches. But they do have a problem...and it's a big one. Their business model is essentially one of venture capital. They pony up huge somes of money to get a new title out and many (most) will fail. Because of this, they need to take a pretty big cut on the sucessful projects, and they will want to try and keep control and exclusivity on those that prove out.

    Practices in the industry are slow to change but they MUST in order to compete with the allure of self-publishing.

    1 - Long release cycles
    2 - Ebook royalty inequities (52.5% to publisher 14.9% to author)
    3 - Restrictions on publishing "other works"

    All authors should be grateful to self-published authors as they are putting an incrased demand on changing the above, each of which can have a substantial impact on author income.

    For the most part the playing field is pretty level for self-published books and traditional books in the ebook space. In that environment, an author has to consider whether it might make sense to make 100% of the profit and have full control. In the future we may see differentiation....The equiavelent of co-op space may come into play which may shift the scales in favor of traditional publishing that has deep pockets to pay high placement fees. But for publishers have to keep in mind that authors do have another choice and if they want to keep and attract prime talent then they have to do better on 1-3 above.

  11. #11
    Palinodic Moderator KatG's Avatar
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    Quote Originally Posted by sullivan_riyria View Post
    I'm not sure why people think traditional publishers are some sort of evil overlords sitting in their offices twirling their waxed moustaches.
    They are told they are, plus people think book publishing operates like the film industry or the music industry (an understandable view given that some media companies own some of the publishers.) Fiction authors tend to get glamorized as a profession, well outside of their actual earning power. So they're viewed as oppressed artists being taken advantage of, just like musicians and others in film. People tend to lump artistic businesses together as the same, even though the practices of those industries and the product and all the rest are completely different.

    But they do have a problem...and it's a big one. Their business model is essentially one of venture capital. They pony up huge somes of money to get a new title out and many (most) will fail. Because of this, they need to take a pretty big cut on the sucessful projects, and they will want to try and keep control and exclusivity on those that prove out.
    Well no, not exactly. It is a form of gambling and it is an investment of sorts, but it's not just like venture capital. In venture capital, the venture company buys an ownership stake in the company by loaning the company money and they retain that stake, often for the life of the company and the company has to pay back the investment with interest and profit shares. The venture capital firm can shut the company down, etc. because it owns a controlling stake and is providing most of the financing. The venture capital firm does not produce any product and it does not sell any products. It's just acting as an investment banker of the firms that do make products or services.

    That's not what the contract is between the publisher and the author. Instead, the publisher contracts for a license from the author for agreed upon means of production. The publisher then can produce a version of the author's product and sell that version, taking all the financial risk of that particular production and sales. The author retains all ownership stake in his product, but has to honor the terms of the licensing agreements. The publisher does not own the author's work and gets no money from the author. In return for granting the license to the publisher to produce a version of the author's work in the agreed upon form, the author gets a percentage as the owner of the property of the sales from that license. The author has numerous licenses that can be granted to different companies -- publishers in different countries, audio publishers, film companies, magazine excerpts, etc. and receives monies back from those licenses, sometimes in advance.

    The amount of after cost profit the publisher keeps in the case of a bestselling author is less than the cut they take from a midlist author because the bestselling author usually has negotiated higher royalties for the license. So they don't seek a bigger cut from more successful properties because they'd lose the licenses on the future properties from the author. They take a loss on bestsellers' front lists because they have to heavily discount the bestsellers in price, but try to make it up first in volume of sales, and more importantly, by selling the author's backlist, using the frontlist title as a draw-in. They do want to keep as much exclusivity on the licenses as they can, but the better an author does, the less exclusivity the license deals will have and the fewer rights that will be licensed to the publisher as part of the deal.

    The payment of monies in book publishing was constrained by the returns system (which is why advances came into being,) and by the fact that publishers are dealing with say 200 different vendors on even a regular list book and so have to get the numbers and money from those vendors in order to account the author's royalties. (Whereas self-publishing people are dealing with a handful of vendors who have set up a straight individual account -- which can't be done with publishers, and the authors don't necessarily have to go chasing the numbers or the money, which all makes the accounting much faster.)

    Practices in the industry are slow to change but they MUST in order to compete with the allure of self-publishing.
    Not really. (Bear in mind, publishing with Amazon's new imprint is not self-publishing.) The allure of self-publishing relative to working a license with a publisher is being highly overrated at the moment.

    1 - Long release cycles
    There are numerous reasons for this and not all of them have to do with print issues. Release cycles for publishers are much, much shorter than they used to be. Shortening release cycles to immediate is not necessarily going to help authors. This is actually one of the things that the article writer touched on that might have relevance. Getting a lot of product out into the market is not a guarantee of long term effectiveness for authors, especially as a lot of that product may have been rushed and not really ready for market yet. Publishers have their whole lines to work with, positioning no-names to get exposure and bestsellers to sell backlist and support the list. Expecting publishers to act like individual authors is not going to happen, nor does it need to.

    2 - Ebook royalty inequities (52.5% to publisher 14.9% to author)
    Part of the license that authors gave to publishers was electronic rights. Now those electronic rights that were hardly ever utilized have become something else -- though still not the majority of the market. So rights are being readjusted, contracts are being renegotiated, new contracts with different terms are being negotiated, new accounting practices are being set up as infrastructure, etc., the nature of agreements with electronic vendors is constantly in flux. So e-book royalties are going to change over time. There may be a different, not royalty set-ups to how electronics rights are handled in the future. It's not an instant process because it is about hundreds of different contracts in the works.

    3 - Restrictions on publishing "other works"
    "Restrictions" vary widely and often by market. Right now the author doing self-publishing and licensing publishing is common, but it can get complicated for publishers trying to develop the licensed product. There are going to be arguments, as there have been with Amazon on the self-publishing side as well. It's an emerging market and everyone is trying to figure out what shape it will take. It is still only 8-10% of the publisher's market.

    Authors do not necessarily want to have 100% control over production and marketing to vendors. The licensing agreements that they have with publishers are not going to be identical to the distribution agreements that self-pubs have with vendors like Amazon. (And that's a good thing perhaps as Amazon takes an ownership stake of sorts without paying for it and has total contract leverage.) What we are more likely to see is the same thing you're doing, Mike, which is a mix of self-pub and licensing pub.

    The good thing about self-pub is that it's increased the market for books. The downside (though it's not solely self-publishing,) is that the utopia only has interest in customers with the money for electronic access. Increasingly, we're being told that if you can't be an electronic consumer, you don't count -- and more and more people can't afford regular electronic access, much less e-book purchases. One of the reasons Amanda Hocking made a print deal with St. Martin's is because she knew she had a lot of kids who wanted to read her work who did not have electronic access. Another main reason is that she wanted to reduce the amount of entrepreneurship she had to do, at least for some of her titles, in handling all business, production and marketing duties. We have many types of authors with different concerns and needs, so there isn't going to be a one size fits all set-up here. We've still got about three years to go to standardization and stability in the e-book market. So that will probably be the real test of things then.

  12. #12
    Creator of Worlds sullivan_riyria's Avatar
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    Quote Originally Posted by KatG View Post
    What he's not wrong about is the predatory practices going on to make money off of the folks trying to do self-publishing. This always happens and we've been talking about it for some time. Paid book reviews. Publicity services. E-book formatters and distributors. Some of these can be helpful services, legitimately priced. But even established companies may try to take advantage, and so that is a process that occurs in the establishment of a new market. That's why I feel the hype that self-publishing is a rebellion warring against the supposed Evil Empire of large publishers is so damaging and companies that do have something to offer, like Smashwords, should not, in my view, resort to it just to increase sales.
    Absolutely. In many respects its like the guys who sold picks and shovels during the gold rush that got rich off those trying to strike it rich. Self-publishing is going into business for yourself and every businessman knows to watch ROI (Return on Investment). If a "service" costs you $2,000 how many books do you have to sell to cover that cost....for most A LOT. Will that service sell that many books? Probably not. Authors should be particularly leary of services on the promotions end. Do your homework. Have they proven they can do it with others? Unlike other businesses where you can't know if they are successful or not books have a good metric - it's called the Amazon Sales Rank. If someone "marketed" book xyz you can chck out their sales rank. If their print book is in the 500,000+ ranking and their ebook in the 100,000+ ranking - guess what - they aren't selling much at all!! Now if they have multiple clients doing 5,000 and under in books and 1,000 and under on ebooks...that would be worth hearing a pitch for.
    Last edited by KatG; February 9th, 2012 at 10:04 PM.

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