Evidence continues mounting that indie authors publishing with Amazon have sent the Big Five traditional publishers into a death spiral.
An inexorable reality of today’s commercial book publishing world is that it is shrinking. Although there have been no obvious signs yet that actual long-form book reading itself has declined (even though that would seem a likely consequence over time of the changed ways we get our reading inputs), the self-publishing and indie segment of the market keeps growing at the expense of the legacy commercial business.
Although it would take data I don’t have to prove this, it certainly appears anecdotally that the big houses are cutting back their investment in midlist titles, perhaps actually cutting future title count (which, over the years, has been an often-espoused but seldom-pursued strategy) but also offering smaller advances for all but the very top books.
Sales seem to be drifting away from the established publishers as their title outputs shrink or remain static and are shifting to Amazon’s own titles and indies, which is where the title base is expanding.
Translation: legacy publishers are losing market share to indies, thanks to tradpub’s failure to compete with Amazon. And the big trad publishers are trying to shore up their revenue hemorrhage by slashing the midlist and jacking up the A list’s already bloated advances.
You don’t need any further evidence to prove that the people in charge of big New York publishing are equally stupid and out of touch. On average, each midlist book has a 50/50 chance of earning out its advance. By way of contrast, it’s an open secret in the publishing world that big name authors almost never earn out their seven-figure advances.
In short, legacy publishers are cannibalizing their profitable midlists to sign more rock star authors whose advances are subsidized by that same shrinking midlist.
Tradpub is like an alcoholic who’s gotten so desperate he’s drinking turpentine.
Big publishers aren’t the only ones who are circling the drain. The nation’s last big brick and mortar book retailer is also on death watch.
Meanwhile, the whole legacy industry worries about the future for Barnes & Noble.
Last week a significant Barnes & Noble shareholder called publicly for the chain to offer itself for sale, apparently calculating that new (and perhaps “private”) ownership would see paths to profits that aren’t being followed right now. This follows continuing evidence that B&N’s overall sales track the legacy business, and are therefore declining. Amazon, of course, is not just the principal creator and beneficiary of the new competitors, primarily independent authors. They are also moving from being an online-only retailer to competing in B&N’s milieu: physical locations offering books.
The big traditional publishers are wholly dependent upon their paper distribution monopoly. When Barnes & Noble goes, they’ll go down with it.
Amazon is now beating B&N at that same game. Amazon’s supply chain, built on a scale that the book business alone could never support, is now the gold standard. It will enable them to continue rolling out smaller stores, which is the kind of outlet that can succeed in today’s book marketplace. The stark fact today is that more than half the sales are online (and despite BN.com and the increased frequency of online book peddling from authors and various vertical organizations enabled by Ingram’s Aer.io and its competitors, almost all of those go to Amazon).
Big in-store inventories have become a pointless anachronism.
It is cheap sport to ridicule Barnes & Noble’s performance in the Internet age. They’ve made many of the standard incumbent mistakes in the face of upstart competition. They dealt themselves out of the online business by not pursuing either of the two most likely paths to success. They should either have made their dot com a stand-alone business, with pricing and growth aspirations beyond books that competed with Amazon, or they should have tightly integrated the online and store offerings to produce a hybrid that had its own appeal. They did neither.
The Big Five and B&N have no one but themselves to blame for their impending demise. Like the music and news industries before them, they allowed themselves to be disrupted by arrogantly refusing to change as changing market conditions demanded.
B&N could have been more accommodating to indie authors.
Legacy publishers could have worked with Amazon instead of fighting them by pricing eBooks competitively and offering authors something close to a reasonable royalty rate. Instead the Big Five pressured Amazon to restore agency pricing to protect their paper distribution channels. Meanwhile, they slashed midlist advances and threw huge advances at wasteful would-be blockbusters.
I’ve heard that the standard tradpub advance for new midlist authors has fallen as low as $2500. Who in his right mind will sign away all rights to his book forever in exchange for such a pittance–especially when there’s even odds he won’t earn out, or his contract will be cancelled next quarter?
Before, there remained a narrow set of circumstances in which publishing with the Big Five might have made sense. Now it’s not even a choice anymore. Traditional publishing is dead. The future is indie.
Brian,
Thanks for commenting on this post I sent you.
Could you address Mike's statement in the comment section that the traditional publishers won't sell ebooks from 99 cents to 4,99. My question is on what business grounds do publishers deny those price? In other words what evidence convinces them that customer will pay 10$÷ foe ebooks?
There's no ink,paper and storage is ultracheap and distribution too.
So what gives?
xavier
You're welcome.
"what evidence convinces them that customer will pay 10$÷ foe ebooks?"
None. They don't want customers to buy eBooks. Trad publishers rely on their paper distribution monopoly for survival. They gambled that charging ridiculously high prices for eBooks would drive customers back to buying print books. The publishers lost, and now they're screwed.
"They gambled that charging ridiculously high prices for eBooks would drive customers back to buying print books. The publishers lost, and now they're screwed."
Your average 7-year old is smarter than this. The Big 5 are Brain Cancer.
Brian,
Thanks! This explains the really stupid strategy that the Spanish publishers are engaging in. For example, there's a book I'd like to get as it's the updated and expanded version. The paperback cost 6,99 euros but the epub is 3 euros more expensive?!
Further,a lot of Catalan classics are impossible to find as ebooks. Geez even as paper book is also tough.
The problem is that Planeta is such a juggernaut that it needs to be broken up but it won't happen. It's good to see indpendents pop up but they too are stubborn to offer both formats.
I've tried to contact the Catalan publishers lobby group (aka El Gremi d'editors catalans) but their website has no contact us link.
xavier
I've pretty much given up on traditionally published books, at least for fiction. Too many friends who publish indie to support. Nonfiction is a different matter.
And you're far from alone.
The last time I was in B&N was two years ago. We had ordered a book for the grandson (who won't go the e-book route yet) and I was there to pick it up. There were two clerks, one with a customer and one doing nothing. I went to the not busy one and told her why I was there. She pointed at the other clerk and walked away. That is just one reason Amazon is cleaning their clock. If you can't even offer good customer service to me, I might as well be in my underwear in my living room when I order the book.
It's been about that long for me, too. Did your B&N turn into a toy and coffee store selling books on the side, too?
Sure did. The same grandson had given me a type 2 phaser miniature for my birthday from there.
Brian well you Americans have been lucky and spoiled with good bookstores in the past. Where I lived in Canada the WH Smith book store was a really annoying place to order books. The customer service just couldn't be bothered and I really disliked their attitude. And I was a kid at the time
When Amazon came I had no hesitation to buy from there and I helped put the bookstore out of business despite being changed to an Indigo
The French bookstorres give much better service and one sells educational tos and high end stationary. It's well integrated as cultural/educational products. The staff is friendly and helpful.
xavier