Wednesday, February 2, 2011
Bob Mayer of Who Dares Wins Publishing recently did a Skype interview with Randy Ingermanson. Randy earned a Ph.D. in physics at U.C. Berkeley and is the author of six award winning novels and one non-fiction book. He publishes the world largest electronic magazine on the craft of writing fiction and the FREE monthly Advance Fiction Writing E-zine. The interview is long, so Bob broke it up into sections. Here is the first portion of the interview.
Randy: Our subject for today is “New Directions in Publishing”. This is wide open, of course. Nobody has any clue what’s going on. Except the few people who do, and nobody knows who they are.
Bob: Reality is going in a new direction — I’m not sure publishers are. My take is it’s pretty much business as usual in NY. But the retail end is changing, which means they have to change or die.
Randy: It looks like the wheels are coming off of the publishing industry. What’s the current status of the business, as you see it?
Bob: Confusion and fear. Traditional publishers want to hold on to the hardcover and mass market paperback. They say that eBook sales are 10%. If true, that’s a 300% increase from the beginning of this year. I think they’re ‘juking the stats’ because every author I talk to says their eBook sales as reported on royalty statements are 40-60% of total sales. The immediate effect is that publishers are dumping their midlist and going with the 10% of their authors who make 90% of the profit.
Randy: Which means that a lot of midlist authors are suddenly finding things a tough go. And they don’t have any idea what to do next.
Bob: To an extent. If the author is established, they have more opportunities than ever before.
Randy: What I see are two groups of midlisters: Those who say, “Oh no, the sky is falling!” and …
Bob: And those who see opportunity! The Big 6 held a stranglehold on distribution. That’s no longer true.
Randy: Talk to me more about the Big 6. What’s been their market share in past years? And how is that changing?
Bob: The Big 6 Publishers control 95% of print publishing. Starting in 1995, the print business began contracting. The decline of the book chains is the biggest problem for traditional publishers. Borders will soon be gone. I believe Barnes and Noble won’t be far behind. This means the selling of print books will fall more and more to places like Target and Walmart (besides the growing digital market). To me this means midlist authors are in an even worse bind than ever as far as print, because those places are only going to rack Brand Name authors. We’re going to miss Barnes and Noble’s huge shelf spaces. On the bright side, the eBook market is wide open. There are only 300 indie bookstores left and they’re dying off too. 10 years ago there were 4,000. 7 out of 10 books printed by the Big 6 lose money. 10% of their titles generate 90% of their revenue. Those two facts indicate a reality: the focus for the Big 6 is going to be more and more on the Brand authors and less on midlist. The problem is: where are the next generation of Brand Name Authors going to come from?
Randy: Right. And my view is that they’re going to come out of the ranks of e-book authors who have an entrepreneurial spirit.
Bob: Right. And the Big 6 will try to scoop up the successful ones. Except their royalty rates for eBooks have to increase. It’s a Catch-22. If someone is succeeding on their own, why give up 70% royalty for 25% of 70%?
Randy: Exactly. An author would be crazy to do that. I have a theory that authors will e-publish themselves at 70% royalties and then hold onto the e-rights when they sign contracts for p-books with publishers.
Bob: Publishers won’t go for that. I’m fighting Random House right now for e-rights on some books.
Randy: Publishers will hate the idea. So there’s going to be a period of war before things settle out. But the authors actually hold more power than they imagine.
Bob: The overhead for the Big 6 operating out of the Big Apple is way too high. Heck, even Who Dares Wins Publishing, which we started up this year and operates out of my office in WA and Jennifer Talty’s office in NY, has overhead. We could never operate brick and mortar out of a NY office. So that’s something that’s going to have to be addressed. I see further major contractions occurring in NY and more out-sourcing of jobs to people digitally. The acquiring editors will still be in NY with the agents, but a lot of the other parts are going to be out-sourced. We control content. Readers buy content. Everyone else needs to either help connect the two or they’ll fail.
Randy: Right, and with e-books, we can control our distribution to an extent. Do you think publishers are going to lower prices on retail copies of e-books?
Bob: They have to. They can’t right now because their overhead is too high. So they’re in a crunch.
Randy: Which is why they’re going to continue shedding people. An author can self-pub on Amazon and do fine at a $2.99 price point. Can a major publisher survive at that price point?
Bob: Actually, what Wylie tried to do, may be the future. Random House blacklisting him, told me how scared publishers are. Agents are going to start wondering why they need publishers too. Since they are essentially the quality control for the Big 6.
Randy: That raises another issue — the future of agents. Some people think that agents are becoming superfluous. But I’m not so sure.
Bob: I think they could become more important if they change. I see agents sort of merging with smart publishers.
Randy: Agents have been reading the publishers’ slush pile for years. What else will they do in the future?
Bob: They’ll become publishers. Screen the slush, pick the books they think can make it, then outsource all the editing, uploading, covers, etc.
Randy: An agent is intrinsically a much lighter and more nimble business than a publisher. So they can do that. And authors can be nimble too. But it could make traditional publishers obsolete. The big corporations with big buildings.
Bob: Yes. We’ve changed our business model at Who Dares Wins six times in just this past year. A large corporation can’t do that. Agents can.
This is a good place to break up the interview. Bob would like your thoughts and reactions to the topics discussed in this interview.
Posted by Ruby Johnson at 8:53 PM