Joe sez: I'm trying to get some writing done, and I really feel like I've said all there is to say about the publishing industry and going indie. But then several alert readers emailed me to say Hachette created an internal memo to explain to its employees and customers why it’s still relevant.
I was published by Hachette, and for the most part I enjoyed working with them. They're good people and dedicated professionals.
But boy, their memo is a giant bowl of steaming fail. And they dropped the ball when it came to me, too. More on that below.
So I called up my friend Barry Eisler and begged him to convince me to just let it go and not do a blog post about how silly the memo is.
Instead, Barry read the memo and said, come on, we should just fisk this sucker together.
Barry: You knew I would! You sent me a link to the memo because you knew it was so stupid it would draw me in, you bastard.
Joe: I wanted you to talk me down from the ledge, and instead you climbed up there to jump off with me. You're a bad, bad man.
Barry: Sure you wanted me to talk you down. That’s like an addict coming to his dealer for help getting clean!
Joe: All right, regardless, now I'm all in, so let's do this. Hachette's memo is likely indicative of what many major publishers are thinking, so it’s worth examining closely, both for newbies and old pros.
Here's their memo, in italics, and our responses.
"Self-publishing” is a misnomer.
Barry: Whenever someone begins his argument by trying to redefine a popularly understood term, your bullshit detector should start tingling.
Joe: Unless bullshit is also a misnomer.
Publishing requires a complex series of engagements, both behind the scenes and public facing.
Barry: Well, okay, but what business doesn’t doesn’t require a complex series of engagements etc? When someone fills the air with platitudes like this one, it’s fair to ask whether he has anything meaningful to say -- and what he might be trying to conceal.
Digital distribution (which is what most people mean when they say self-publishing) is just one of the components of bringing a book to market and helping the public take notice of it.
Barry: Um, no, that’s not what self-publishing means. Unless Hachette is also a self-publisher? Because they distribute books digitally, too.
In fact, self-publishing has a pretty simple definition: it means you keep the rights to your book and publish it yourself using distributor/retailers like Amazon, Apple, B&N, Kobo, Smashwords, and Sony, typically retaining 70% of the cover price instead of the 17.5% offered by legacy publishers (for digital editions). This isn’t what “most people” mean when they say self-publishing; it’s what everybody means when they say self-publishing. If Hachette really doesn’t know what self-publishing is, its executives are in worse trouble than even their memo reveals.
Joe: Digital distribution is quickly becoming the dominant means of reaching readers. To distribute digitally, you need:
1. Something you've written.
2. Editing and proofreading.
3. Formatting for various platforms.
3. Cover art and jacket copy.
Now, you can cross your fingers and send out queries and hope to find a publisher to assist you with these tasks, in which case they’ll keep 52.5% from the ebook list price (a price they set) and give you 17.5% . Or you can do these things yourself (or hire out) and keep 70% of the list price (a price you set).
But digital distribution is not the only thing a self-publisher does. I also make my books available in paper, and my agent sells subsidiary rights (audio, foreign, film). My agent gets to do that because I keep the rights, rather than licensing them to a publisher.
So what else are publishers doing that justifies them getting three times as much per ebook sale as the author gets?
Let's read on and see.
As a full service publisher, Hachette Book Group offers a wide array of services to authors:
Barry: Again, is there, or has there ever been, a service business that does only one thing? Is this “wide array” claim in any way remarkable, or even relevant to anything? Let’s see...
1. Curator: We find and nurture talent:
Barry: The more accurate way to state this would be, “We try to find talent. Sometimes we miss talent. Sometimes we nurture what we find; sometimes we let it whither. We’re a big publisher -- for us, it’s a numbers game. Think spaghetti sticking to the wall. Some of it sticks; most of it slides down behind the stove.
• We identify authors and books that are going to stand out in the marketplace. HBG discovers new voices, and separates the remarkable from the rest.
Barry: Again, for the sake of accuracy: “We try to identify authors and books we believe we can sell. Sometimes we discover new voices; sometimes we make mistakes.
Joe: Were the authors they dropped or who were allowed to go out of print unremarkable?
If so, I volunteer to be unremarkable so I can get the rights to AFRAID back.
• We act as content collaborator, focused on nurturing writing talent, fostering rich relationships with our authors, providing them with expert editorial advice on their writing, and tackling a huge variety of issues on their behalf.
Barry: There’s a remarkable amount of bullshit in that sentence.
“Content collaborator?” What does that mean? Why is this publisher shying away from plain English?
Shit, you and I are collaborating right now, on this post. ZOMG, that means we’re acting as content collaborators!
Joe: Does that mean you're taking a 52.5% cut?
Barry: Maybe I should, ’cause we know that’s what Content Collaborators do.
Joe: If you take that much, can you at least nurture me a little?
Barry: Hah, right, that “nurturing” claim, and for the second time, too. Sure, sure, me nurture you long time, sailor.
Joe: By "long time" you mean "forever", don't you?
Barry: Yes, of course. I’m a Content Collaborator, after all. That’s very important.
Joe: If you say so. (long, dramatic pause) I'm never going to get my rights back, am I?
Barry: No. But I'll make sure I price your book at $12.99 so sales stay poor.
Joe: Thanks for nurturing me!
Look, if I were to say, "I'm a good parent", that statement needs to be backed up with all the reasons I am a good parent, and all the specific things I do for my children. Or else the statement is empty. Or worse, an affirmation based on ignorance and hope instead of facts.
Barry: Yes, if you can back up a claim with evidence, you should do so. When the evidence isn’t presented, could it be because no evidence exists?
Joe: Now, a bad parent might do a lot of things that could negatively affect the child. Much like a bad publisher can drop authors who are making money, provide poor cover art, make bad editorial suggestions, leave marketing promises unfulfilled, charge too much for ebooks, offer too small a royalty, insist on “windowing” and “the agency model,” mess up distribution, not exploit sub rights they bought, make contracts overly complicated and one-sided, make royalty statements indecipherable, grab erights on old contracts, refuse to return rights to the author, and so on.
Is a publisher engaging in such behavior finding and nurturing talent?
And what if all publishers acted like this?
Hint: they do.
Barry: I love those euphemisms, by the way. “Windowing” means “Making people who like to read in digital wait an extra year because we favor paper.” The “agency model” means “forcing Amazon and other digital retailers to charge customers more for books than the retailer wants to.”
As we’ve argued many times elsewhere, these euphemisms and the practices they’re intended to obscure are aimed at two things: retarding the growth of digital, and preserving the position of paper. A few days ago, in a moment of uncharacteristic candor, a top publishing executive confirmed this:
“‘We hoped that a handsome object [Stephen King’s latest novel, 11/22/63, which BTW is awesome] would slow the migration to e-book for King and, in fact, we are now in our fourth printing,’ said Nan Graham, the senior vice president and editor in chief at Scribner.”
Joe: Right, the purpose of the special effort they put into the packaging wasn’t so much selling more paper as it was slowing the adoption of digital. And if the only way legacy publishers tried to slow digital adoption was by making paper better, it would be great. But instead, they’re doing it primarily by making digital more expensive and by delaying the release of digital titles.
I don't hold out much hope for any company that actively refuses to give its customers what they want.
Barry: Let's go back to the specifics of that bullshit-redolent memo sentence. What does it mean to foster a rich relationship with an author? How is it accomplished? Glittering generalities like this one are usually intended to conceal an absence of underlying substance.
Joe: You and I have a rich relationship.
Barry: We don’t.
Joe: Okay, but that’s only because we don’t charge for these Content Collaborations. If we wrote short stories instead, we could have a rich relationship -- without a legacy publisher!
Barry: We should really do that. I loved your latest with Blake Crouch -- STIRRED.
Joe: Thanks. Blake did all the verbs with that one. If you and I do a story together, you can do the adjectives.
Barry: Excellent!
Joe: Try to come up with some better adjectives than that.
Barry: Now, provision of expert editorial advice -- finally, something real. Yes, publishers do provide editorial services. I can’t speak for other authors, but the three editors I’ve worked with at two publishing hours have all been excellent and I’ve learned a lot from working with them. Whether editorial services are worth the 52.5% publishers charge, however, and whether editorial services can be secured elsewhere at lower cost, are topics worth considering.
Joe: You're being too kind. As I mentioned earlier, 52.5% is three times 17.5%. So unless an editor spent three times as many hours editing your book than you did writing your book, they really don't deserve that much.
Hell, if I had an editor who worked on my book, cleaned my house once a week, gave me sex on demand, and drove me around, that still wouldn't be worth 52.5%.
Barry: Hard to argue with your math. For anyone who’s curious, we talk more about most of these issues in our profoundly offensive book, BE THE MONKEY: A CONVERSATION ABOUT THE NEW WORLD OF PUBLISHING. Free download here.
Joe: That book is far too offensive for everyone. If you do read it, I suggest it's with an eye toward objecting to every little thing we said that might offend the sensibilities of some delicate soul, while totally ignoring the major points.
Barry: Finally, let’s consider this claim that publishers tackle a huge variety of issues on behalf of authors. Do I even need to say it?
Joe: Probably not. Glittering generality, devoid of specifics; applicable to every single service industry ever invented, so meaningless with regard to publishing specifically.
Barry: Thanks for that. I hate repeating myself.
Joe: But, to be fair, they do tackle some issues on our behalf. I mean, didn't they create your website?
Barry: No. I did that myself. Well, I hired someone to do it. I don’t know much about website design.
Joe: But they helped you get all those Facebook friends and Twitter followers and blog readers, right?
Barry: That was me.
Joe: They must have paid for you to attend those dozens of conferences over the last nine years.
Barry: That was pretty much all me.
Joe: Certainly they helped you accrue your mailing list of fans?
Barry: Nope. I did it myself, one at a time.
Joe: But they did pay for your tours!
Barry: That they did do.
Joe: And they drove 12,000 miles right along with you, assisting every step of the way while you did signings in over 30 states.
Barry: Uh...no.
Joe: Neither did mine. And BTW, I did signings in over 40 states.
Barry: We're so lucky to have had them as Content Collaborators, though.
Joe: Indeed.
Now let's get specific.
Hachette published my novel AFRAID. They then rejected two subsequent novels of mine. I self-published those novels.
Hachette has earned me $60,000 in two years with AFRAID.
In one year, I earned $170,000 on the two novels they didn't take, all on my own.
Barry: So much for them nurturing talent, fostering rich relationships with authors, and being a content collaborator.
Joe: Their expert editorial advice helped them miss out on a whole lot of money, because they didn't publish TRAPPED and ENDURANCE.
Now I do give them credit for publishing AFRAID when no one else would. My agent had that book on submission for six months before getting that offer. AFRAID was rejected by everyone.
What does that tell you about this industry? A book that went on to earn triple its modest advance was rejected by over a dozen top editors. Then the follow-ups made even more money.
But that was back in 2008. Now I cringe when I think about all the money I'm missing out on because Hachette still has AFRAID. Funny how what was once a blessing can become a curse.
2. Venture Capitalist: We fund the author’s writing process:
• At HBG we invest in ideas.
Barry: I don’t mean to be harsh, but this memo is really beginning to play like a game of Bullshit Bingo. Nurture Relationships... Tackle Issues... Invest In Ideas... Bingo!
Joe: Dammit! They invest in ideas? Why the hell did I bother spending six months writing a book for them? Then six more months promoting it? I should have just given them an idea and let them run with it!
Barry: Here’s an idea they might have invested in: an online bookstore!
Joe: Here's another one: a damn ereader!
Barry: We’re being half-facetious, but the thing is, an online bookstore, and ereaders, and an online lending library -- those are real ideas. And someone certainly is investing in them, big-time. In the face of this, when Hachette plays Bullshit Bingo and bleats, “We invest in ideas!”, you have to wonder... do even the people who wrote this thing believe it? If asked, could they even explain what they’re referring to?
Joe: It's also worth noting that I've been offering free advice to publishers for several years on how to succeed in this new publishing climate. I know they must be reading my blog, because they keep doing the exact opposite of everything I suggest.
Seriously, for an industry to get so much so wrong, it's gotta be intentional.
In the form of advances, we allow authors the time and resources to research and write.
Barry: An advance can definitely be critical in this regard. What would make the claim meaningful would be a breakdown of what advances Hachette provides. They don’t need to name names; they could just provide a chart showing averages. I’ve heard many times that the average legacy advance these days is $5000. If that’s true, it’s a hell of a stretch for Hachette to suggest they’re providing authors enough to research and write. No one can quit her day job for a $5000 advance, 15% of which goes to an agent and the balance of which will be paid out in installments over the course of a year or more.
Once again, you have to wonder why Hachette provides no meaningful data to back up their claims of how relevant they are to authors.
Joe: Averages wouldn't work. They could say their average advance is high because they give James Patterson millions. In reality, the majority of their authors probably need a second job or working spouse to support themselves.
Barry: I didn’t do well in college statistics. Mean, median... that kind of thing.
Joe: I got lucky. They gave me a $20k advance for AFRAID, and I get royalty checks twice a year. That's better than what many authors get.
But with self-publishing I get paid monthly. I'd rather get paid promptly than receive a small advance.
As for investing in ideas, perhaps they should have invested in the two books of mine they rejected...
In addition we invest continuously in infrastructure, tools, and partnerships that make HBG a great publisher partner.
Barry: I know I’m being repetitive, but only because the same logical shortcomings keep cropping up in this memo. So: what are the infrastructure, tools, and partnerships Hachette continuously invests in? How, specifically, do these investments benefit authors?
Joe: Yes, I'm really curious to know about their investment in infrastructure, tools, and partnerships. I don't invest in any of those things, but my ebooks outsell theirs. Perhaps their actual investment is in buzzwords and bad rhetoric.
I'm kind of disappointed they didn't mention synergy.
Barry: Strategic partnerships... Inflection point... Bingo!
3. Sales and Distribution Specialist: We ensure widest possible audience:
• We get our books to the right place, in the right numbers, and at the right time (this applies equally to print and digital editions).
Barry: Is this a memo intended to convince people of Hachette’s continued relevance, or is it some kind of personal empowerment seminar? “Gosh darn it, I’m good enough, and smart enough, and right, right, right enough...”
All the things they claim to do right apply equally in paper and digital? The right place in digital is wherever self-published authors get their books to -- again, generally, Amazon, B&N, and Smashwords. So you don’t really need to pay 52.5% to a Collaboration Partner for that.
The right numbers? Hachette, how many digital copies of a title do you typically upload to a retailer? (Um, that’s a trick question.)
And the right time? The right time is now, because you can’t make money from a book until people can buy it. But legacy publishers don’t publisher digital titles now. They publish them a year later, when the paper version is ready. When Hachette says “the right time,” they mean, “much later than you would on your own.”
We work with retailers and distribution partners to ensure that every book has the opportunity to reach the widest possible readership.
Joe: Hyperion, which published my last Jack Daniels novel, Cherry Bomb, didn't ship a single copy to Borders until the book had been out for two weeks.
I've also done signings my publishers set up where there weren't any of my books for sale. And I'm far from the only author who has had distribution issues.
Still, I can't complain. My publishers have done a pretty good job of getting my paper books into stores. That's the main value they offer.
But they offer no value at all when it comes to getting ebooks onto online retailers. After formatting, it doesn't take more than a few hours to upload an ebook to all the major sellers. Which is one of the things that drove me so crazy about Penguin's Book Country.
Barry: This is such a key point that I’m going to repeat it even though we’ve been saying it elsewhere: in digital distribution, legacy publishers offer no value. Zero. None. A self-published author, working alone, has exactly the same distribution reach in digital as a multi-million-dollar New York publishing conglomerate.
I’m going to say that one more time, because it’s critical to the revolution in publishing and it’s so big and far-reaching it takes a moment to grasp:
A self-published author, working alone, has exactly the same distribution reach in digital as a multi-million-dollar New York publishing conglomerate.
Yes, legacy publishers provide various value-added services, such as editing, marketing, etc -- at least some of the time. But distribution is what authors have until recently really needed from publishers, because without a distribution partner, an author can’t cost-effectively reach a mass audience in paper.
Joe: I'd say they offer negative value. Taking a long time to upload titles, a long time to make changes or fix problems, controlling pricing, doing poor formatting (Hachette did a fine job with AFRAID, but I've gotten scores of email about formatting issues in my Hyperion titles), and not making ebooks available on all platforms in all markets directly hurts sales. High ebook prices do not ensure a book has the widest possible readership. Quite the opposite, in fact.
If a publisher is hurting your digital sales, that's negative value.
Barry: So yes, Hachette is still relevant in the world of paper distribution (yea!). The problem is that paper is shrinking and digital is exploding -- and in digital, the Hachettes of the world have no distribution value to offer. That’s why they’re writing bizarre, obfuscating memos like the one we’re discussing.
By the way, because digital distribution is flat -- equally available to everyone -- digital publishing is increasingly going to be built on direct-to-consumer marketing. As I said in a recent piece at Writer Unboxed:
“In a digital world, the primary value a publisher can offer an author is direct-to-consumer marketing. This is why Amazon is so strongly positioned to succeed in digital publishing: its book business is built on its ability to reach tens or even hundreds of millions of readers directly by email. Amazon marketing is both exceptionally focused (book buyers) and exceptionally broad (tens or even hundreds of millions of customers). Entities that can offer authors compelling direct-to-consumer marketing value will be in a good position to take a cut of the profits. One recent example is the L.A. Times. Think of entities that fit the bill, and you’ll be able to predict tomorrow’s publishers.
“Interestingly, there’s one particular group of companies that lacks any meaningful direct-to-consumer marketing ability. That group is New York publishing. Draw your own conclusions.”
Joe: You're so right about this. As authors, we need to be able to reach readers. In the past, we needed publishers to get our work into bookstores (we also needed bookstores) so readers could buy us.
Today, we can be bought -- both in paper and in digital -- with the press of a button. So if a middleman wants to add value to this equation, they can either create the ereader and the store we sell our titles on (Amazon, Sony, Kobo, Apple, B&N), or they can help us reach a broader audience than we can on our own by giving us marketing advantages.
If the L.A. Times wanted to publish me, I'd give them a percentage of my royalties, because they could advertise the hell out of my book to their existing readership of several million people.
I'd also sign a deal with a TV station who would produce commercials for my book, or a guy who owned 10,000 billboards that he wanted to use to promote it, or Charlie Sheen as long as he mentioned it to the media every time he got arrested.
Distribution was the key to success in paper. Now that we're all getting equal distribution in digital, there’s value to partnering with companies that can help our books get noticed.
What is Hachette doing to help their authors get noticed in a digital world? All their methods and means are paper-based.
• We ensure broad distribution and master supply chain complexity, in both digital and physical formats.
Joe: Ah, distributors. One more middleman taking potential royalties away from the author's share.
I can't wait for a day when books can be printed on demand, so there’s no need for giant warehouses and distributors who take a huge cut.
Or better yet, maybe someday there will be a distribution system where books cost zero to copy and zero to send to readers.
Oh, wait a sec... we already have these things.
Fail.
Barry: I just have to add... again, look at that “master supply chain complexity” sentence. Like so much else in this memo, it’s gobbleygook. Here’s Orwell, in Politics and the English Language:
“The great enemy of clear language is insincerity. When there is a gap between one's real and one's declared aims, one turns as it were instinctively to long words and exhausted idioms, like a cuttlefish spurting out ink.”
The irony. Publishers, those richly nurturing Content Collaborators, purveyors of top-flight editorial services, finders of Remarkable New Voices... penning such prolix prose.
Joe: Maybe they forgot to richly nurture the person who wrote the memo.
Barry: They did find a remarkable new voice, though.
Joe: I'd make a joke about being mentally challenged here, but then the Dudgeon Demons would whine about political incorrectitude rather than acknowledge our relevant points.
Barry: Okay, glad you didn’t go there.
And finally, again -- they ensure distribution, and have mastered supply chain complexity... in digital?
Come on. Digital distribution is ubiquitous. It’s available to everyone, and a legacy publisher claiming to supply it is like me trying to sell someone air. And there is no digital supply chain. Claiming otherwise is like pretending uploading a photo on Facebook requires supply chain complexity mastery. It’s just embarrassing bullshit.
Hey Hachette, invite either of us to a conference. We challenge you to debate any of your claims in a public forum of your choosing. If fact, I’m keynoting the Writers Digest Convention in NYC this January; if you like, we could do it there.
Joe: I'll be at the Romantic Times Convention in April leading a discussion about ebooks. Stop by and say hello. Or get in touch sooner, and I'll get you on the panel.
• We function as a new market pioneer, exploring and experimenting with new ideas in every area of our business and investing in those new ideas – even if, in some cases, a positive outcome is not guaranteed (as with apps and enhanced ebooks).
Barry: In case you missed it the first time... they really, really do invest in new ideas! It’s like Double Secret Probation, but better.
I won’t even mention the entirely unsupported glittering generalities. Whoops, I guess I did.
And it’s awesome that they invest even when there is no guarantee of a positive return! That’s so bold and really distinguishes them from everyone else. As everyone knows, most businesses, and all people, only invest when returns are 100% certain. Anything else would be imprudent.
Joe: I am 100% certain you are correct.
Barry: Finally... I’m sorry, I know I’m being a little hard on them, but the claim that Hachette or any legacy publisher is a “pioneer” is so demonstrably absurd as to be laughable. Again, think of the most pioneering changes in publishing -- online bookstores, digital distribution, ereaders, lending library subscription programs -- and ask who pioneered them.
Joe: (Hint. It wasn’t Hachette or any other legacy publisher.)
Barry: The truth is that, to the extent legacy publishers are experimenting with anything, it’s because far more innovative new market entrants are forcing them to.
Joe: All that pioneering, and exploring, and experimenting, and investing. I bet Hachette has a 100% sell-through and a 0% return rate, and that every book they publish turns a handsome profit.
If not -- well, I guess they can pay for their inefficiencies by taking 52.5% and giving authors 17.5%.
• We act as a price and promotion specialist (coordinating 250+ monthly, weekly and daily deals on ebooks at all accounts).
Joe: The AFRAID ebook has been on sale twice in two years. When this happened, sales were up 10x. So, naturally, Grand Central raised it back to $6.99 after a week of lower prices.
The effort it takes to put a book on sale takes no more than a few minutes. I do it myself all the time.
Why don't legacy publishers do it all the time?
Barry: This word “specialist”... I do not think it means what they think it means.
Seriously, where is all the dynamism and innovation in pricing?
Joe: In self-publishing, and at Amazon.
Barry: Exactly. A “sale” in the legacy world means the remainder table in a brick-and-mortar store.
Joe: To more and more authors, paper distribution doesn't matter much anymore. And as a New Market Pioneer, Hachette should price my two-year-old ebook more competitively than $6.99. My ebooks are priced at $2.99, and they've made me more money than any of my legacy books. Value isn't in a book's cover price, but rather how much money the book earns overall.
With plummeting paper sales, and vastly increasing ebook sales, Hachette does very little to deserve the royalties they're taking.
4. Brand Builder and Copyright Watchdog: We build author brands and protect their intellectual property:
Barry: In my experience, publishers know almost nothing about building a brand. If they did, they would brand themselves. Listening to a publisher hawk its brand-building cred is like listening to the proverbial 98-pound weakling tout his awesome strength-training program.
Joe: I gotta disagree with you here. I don't care about authors, or individual titles, or even genre. But I do buy and read every single book Grand Central publishes, because I am sooooo brand loyal. It's all about the logo on the spine. That's why so many fans stopped reading Lee Child when he switched houses. Stephen King, too. Betcha Janet Evanovich’s readership deserts her, now that she’s left SMP.
Barry: You’re right. I’m being unfair. Why, just the other day I was in a Barnes & Noble, asking if they could direct me to the latest Random House title.
Joe: I'll read anything Random House publishes! They published you, so everything else they publish must also be perfect for me! Brand brand brand!
Barry: Okay, maybe we’re wrong. Maybe legacy publishers really are expert brand-builders.
Joe: Sure. Hachette really helped me build my brand, dropping me after one title.
I personally visited 200 bookstores in 19 states to promote AFRAID.
Hachette took out a small one-off ad in USA Today.
I did a blog tour, posting new content on 100 blogs in 30 days.
Hachette sent out some galleys.
I sent out a newsletter to 10,000 people on my mailing list.
Does Hachette even have a mailing list?
• We protect authors’ intellectual property through strict anti-piracy measures and territorial controls.
Barry: Let’s translate this. “We protect authors’ (and by authors’ we mean our) intellectual property” is code for “we insist on DRM and other anti-piracy measures that customers hate, that are ineffective against piracy, and that diminish author profits.” “Territorial controls” means “Your book will not be available in many markets where people would like to buy it.”
Joe: Congrats that Hachette learned from the RIAA and the woes of the music industry, and has figured out that DRM doesn't work and piracy doesn't hurt sales.
Oh, wait a second. They HAVEN'T figured that out.
I'm widely pirated, and I currently earn enough money via self-publishing to be in the top 1% tax bracket of the US. Compare that to the eight years I spent in the legacy publishing world, making $40k a year and spending half of that on self-promotion.
• Publishers generate and spread excitement, always looking for new ways make our authors and their books stand out. We’re able to connect books with readers in a meaningful way.
Barry: When I first read that initial clause, I thought it said, “Publishers generate and spread excrement.”
Joe: Ha! That would have been a shitty thing to say.
Barry: I’m sure that reveals my biases. But -- let’s be honest -- it’s a more credible claim than “Publishers generate excitement.” If I’m missing something, maybe readers could tell us about the last time their excitement was generated by a publisher.
Joe: How about this one? And guess what? The Kindle edition is priced higher than the hardcover. :P
Barry: Okay, an excitement exception. :D
But seriously, could a “We are relevant!” memo get any more meaningless, over-general, and aspirational than this? “We don’t just connect books with readers -- we do it in a meaningful way.”
I mean, for realz this time! We’re meaningful, damn it!
Joe: From now on, my job will be to remind people what my job is.
Now hold still while I spread excitement.
Barry: It’s all part of the nurturing.
Oh, and by the way, legacy publishers don’t connect books with readers, and in fact this structural deficit is essential to the increasing irrelevance Hachette is protesting against. Publishers connect books with intermediaries.
Joe: And now those intermediaries, like Amazon, can directly reach and target readers.
Is it any wonder we can sell so many more books with Amazon as our publisher?
Barry: You know, I’m starting to wonder if someone wrote this to play a joke on us, to see if we could be fooled into taking it seriously and responding. It’s not April Fool’s Day, is it?
Joe: Don't use the word fool. You might offend someone.
Barry: For God’s sake, Dudgeon Demons, do not watch this extremely offensive Carlos Mencia skit!
Joe: I'm only picking on Hachette here because they wrote that silly memo, and because I have personal experience with them. I discuss book deals with my peers. Hachette actually did a lot more for my book than most publishers do, and I appreciate their efforts.
But I've never relied on publishers to promote my books because publishers actually do very little promotion. A press release and catalog inclusion aren't worth the 52.5% royalties they take.
By contrast, I signed a deal with Amazon's imprint Thomas & Mercer for STIRRED, my latest novel, co-written with Blake Crouch.
Barry: Didn’t you just hit #1 on the Kindle Top 100?
Joe. Yes, and thanks for the shill. STIRRED has sold more ebooks in two weeks than Hachette has sold of AFRAID in thirty-two months. And Amazon pays me a much better royalty than Hachette did.
Not to put you on the spot here, but I know you signed a decent six-figure deal for RAIN FALL, your first John Rain thriller. It's had, what, a dozen printings since 2002?
Barry: It's up to fifteen or sixteen.
Joe: So you must have earned out that advance a long time ago, right?
Barry: Not yet. But close now. To the extent I could decipher Putnam’s royalty statements. I’m thinking about calling in a Dead Sea Scrolls specialist.
Joe: You also got a comparable six-figure advance for THE DETACHMENT, which you released through the Amazon imprint Thomas & Mercer.
Barry: Yes. We've discussed the deal before.
Joe: Do you think you'll be able to earn out that advance faster than the one for RAIN FALL?
Barry: THE DETACHMENT has already earned out.
Joe: Holy shit! What’s that, two months from the pub date?
Barry: Something like that. I wasn’t supposed to say anything, but my wife didn’t know it was under wraps and inadvertently mentioned it at a conference, so I guess it’s public domain now.
Joe: Congrats! When THE DETACHMENT was in the Top 10 on the Kindle Bestseller List, it was really buoying your backlist sales. Hopefully RAIN FALL will earn out soon...
• We offer marketing and publicity expertise, presenting a book to the marketplace in exactly the right way, and ensuring that intelligence, creativity, and business acumen inform our strategy.
Joe: Well, it's certainly reassuring that their strategy isn't informed by laziness, bad ideas, stupidity, and a profound ignorance about how their business works.
Barry: Seriously, when someone claims to be or to do something the opposite of which would be unthinkable, you are being bullshitted. The only question is, does Hachette know they’re bullshitting? Or do they really believe it’s remarkable that their strategy is supposedly informed by intelligence instead of stupidity, creativity rather than dullness, and business acumen rather than business ineptitude?
And come on, presenting a book to the marketplace in exactly the right way? There are so many examples of legacy publishing marketing disasters it’s hard to know where to begin. So why don’t I just point to: The Green Garage Door (viewer discretion advised).
Joe: I gotta say, with so many books losing money, so many authors being dropped, so many titles going out of print, perhaps expertise isn't quite the right word.
Barry: No, maybe something more along the line of... Whistling Past The Graveyard? Or Hoping Against Hope?
Joe: Publishers should stop trying to convince themselves and others that they're relevant, and start actually being relevant. Here's how:
1. Offer much better royalties to authors.
2. Release titles faster. It can take 18 months after a book is turned in to be published. I can do it myself in a week.
3. Use up-to-date accounting methods that are trackable by the author, and pay royalties monthly.
4. Lower ebook prices.
5. Stop futilely fighting piracy. Hint: all such fighting is futile. Piracy can only be made redundant with cost and convenience.
6. Start marketing effectively. Ads and catalogue copy aren't enough. Neither is your imprint's Twitter feed. Especially if your author has more Twitter followers than you do.
Did I miss anything?
Barry: Legacy publishing’s contracts are a disaster. Substantively, they should reflect 21st-Century realities, among those realities the fact that for the first time, authors have real alternatives to the legacy route. So absolutely, the ridiculous current 52.5%-publisher and 17.5%-author digital split needs to be massively adjusted. Again, in a digital world, publishers are unnecessary for distribution, and the fact that they’re still trying to charge for a benefit they no longer provide is an untenable state of affairs.
They also need to stop with the crazy land grabs -- the first looks, the last refusals, the character and series and “anything remotely competitive” lock-ups and other non-compete clauses.
On a less substantive level, they need to make their contracts readable and understandable. Why do publishers still use antediluvian 14-inch legal paper for their contracts and 9-point font? Because it’s off-putting. It discourages anyone from reading or arguing about the contents. Why do they use such monumentally opaque and impenetrable legalese? Because they don’t want people to understand what the contract is doing -- what rights are being forfeited and what obligations imposed.
If there’s one thing I wish Amazon would do differently, it’s use their publishing contract as a sales tool. It’s the best I’ve ever seen -- clear, short, and understandable (just like their every-60-days royalty statements, in fact), and if they’d be more aggressive about publicizing how remarkably clear and fair their contract is, it would put some pressure on legacy publishers -- sorry, on Experimenting, Excitement-Generating Pioneers -- to follow suit.
Joe: I've been telling publishers how to improve since 2009, and not one has listened.
Except for Amazon. Amazon listens. Amazon listens closely.
That's why Amazon doesn't need to create silly internal memos about how they're still relevant.
Barry: Seriously, can you imagine Amazon putting out a memo like that? “We are still relevant” is not a good sign for Hachette, or for legacy publishing generally. It’s like when the government says, “The war is still winnable.” Surest sign it’s lost.
Joe: Yeah, hard to imagine a memo like this one from Amazon. Because every book Amazon has published actually makes a profit.
Barry: I want to say one last thing, about our tone.
Joe: Okay.
Barry: We’re pretty disrespectful here toward Hachette, aren’t we?
Joe: Yes. But not unfairly.
Barry: Exactly. Not unfairly. A lot of people get uncomfortable when small-fry like us criticize big, august institutions like Hachette. Up to a point, I understand that reflex, but I don’t share it.
Joe: This dialog could anger or hurt people who work at Hachette, or authors with Hachette. In fact, it could anger or hurt anyone working for legacy publishers.
But instead of getting hurt or angry, how about figuring out how to fix your broken business model?
This is a business. Business isn't personal.
At least, that's what my agent said when my last two publishers dropped me. Two publishers who are making money off my backlist hand-over-fist.
Barry: For me, respect isn’t something to which anyone is entitled (courtesy is different); it’s something that has to be earned. And when someone -- anyone -- writes a memo as weak, unsupported, and full of obvious bullshit as Hachette’s, there’s nothing wrong with, and indeed there’s everything right with, calling them on it.
Joe: Ultimately, I decided to spend some time doing this fisk because I see too many authors still crossing their fingers, holding out for legacy deals.
Seriously? You really want to work with a company that does stuff like this?
Barry: Was our tone sometimes derisive and mocking and otherwise harsh? Yes. Was that deserved? Again, yes.
Joe: Didn’t you just get into it with the Pentagon’s spokesperson?
Barry: Yeah, I wrote a blog criticizing Secretary of Defense Leon Panetta for being full of shit -- which he is -- and his spokesman responded with the usual, “Why do you hate the troops?” dodge. If anyone’s curious, you can read about it here. But yes, there are a lot of people who believe individuals have to defer to authority, including being terribly civil even while the authority in question pisses down your back and assures you it’s just raining. I’m not one of those people. If someone tries to bullshit me, I think it’s a public service to call bullshit and explain why.
Joe: You're anti-American and unappreciative of the opportunities this country has given you. You're also anti-legacy publishing and unappreciative of the opportunities the Big 6 have given you.
Barry: Hah. You see right through me.
Joe: But at least we've both managed to avoid any incendiary analogies this dialog. Good thing, too. I was getting really tired of dealing with overreacting, hypersensitive pinheads.
I was published by Hachette, and for the most part I enjoyed working with them. They're good people and dedicated professionals.
But boy, their memo is a giant bowl of steaming fail. And they dropped the ball when it came to me, too. More on that below.
So I called up my friend Barry Eisler and begged him to convince me to just let it go and not do a blog post about how silly the memo is.
Instead, Barry read the memo and said, come on, we should just fisk this sucker together.
Barry: You knew I would! You sent me a link to the memo because you knew it was so stupid it would draw me in, you bastard.
Joe: I wanted you to talk me down from the ledge, and instead you climbed up there to jump off with me. You're a bad, bad man.
Barry: Sure you wanted me to talk you down. That’s like an addict coming to his dealer for help getting clean!
Joe: All right, regardless, now I'm all in, so let's do this. Hachette's memo is likely indicative of what many major publishers are thinking, so it’s worth examining closely, both for newbies and old pros.
Here's their memo, in italics, and our responses.
"Self-publishing” is a misnomer.
Barry: Whenever someone begins his argument by trying to redefine a popularly understood term, your bullshit detector should start tingling.
Joe: Unless bullshit is also a misnomer.
Publishing requires a complex series of engagements, both behind the scenes and public facing.
Barry: Well, okay, but what business doesn’t doesn’t require a complex series of engagements etc? When someone fills the air with platitudes like this one, it’s fair to ask whether he has anything meaningful to say -- and what he might be trying to conceal.
Digital distribution (which is what most people mean when they say self-publishing) is just one of the components of bringing a book to market and helping the public take notice of it.
Barry: Um, no, that’s not what self-publishing means. Unless Hachette is also a self-publisher? Because they distribute books digitally, too.
In fact, self-publishing has a pretty simple definition: it means you keep the rights to your book and publish it yourself using distributor/retailers like Amazon, Apple, B&N, Kobo, Smashwords, and Sony, typically retaining 70% of the cover price instead of the 17.5% offered by legacy publishers (for digital editions). This isn’t what “most people” mean when they say self-publishing; it’s what everybody means when they say self-publishing. If Hachette really doesn’t know what self-publishing is, its executives are in worse trouble than even their memo reveals.
Joe: Digital distribution is quickly becoming the dominant means of reaching readers. To distribute digitally, you need:
1. Something you've written.
2. Editing and proofreading.
3. Formatting for various platforms.
3. Cover art and jacket copy.
Now, you can cross your fingers and send out queries and hope to find a publisher to assist you with these tasks, in which case they’ll keep 52.5% from the ebook list price (a price they set) and give you 17.5% . Or you can do these things yourself (or hire out) and keep 70% of the list price (a price you set).
But digital distribution is not the only thing a self-publisher does. I also make my books available in paper, and my agent sells subsidiary rights (audio, foreign, film). My agent gets to do that because I keep the rights, rather than licensing them to a publisher.
So what else are publishers doing that justifies them getting three times as much per ebook sale as the author gets?
Let's read on and see.
As a full service publisher, Hachette Book Group offers a wide array of services to authors:
Barry: Again, is there, or has there ever been, a service business that does only one thing? Is this “wide array” claim in any way remarkable, or even relevant to anything? Let’s see...
1. Curator: We find and nurture talent:
Barry: The more accurate way to state this would be, “We try to find talent. Sometimes we miss talent. Sometimes we nurture what we find; sometimes we let it whither. We’re a big publisher -- for us, it’s a numbers game. Think spaghetti sticking to the wall. Some of it sticks; most of it slides down behind the stove.
• We identify authors and books that are going to stand out in the marketplace. HBG discovers new voices, and separates the remarkable from the rest.
Barry: Again, for the sake of accuracy: “We try to identify authors and books we believe we can sell. Sometimes we discover new voices; sometimes we make mistakes.
Joe: Were the authors they dropped or who were allowed to go out of print unremarkable?
If so, I volunteer to be unremarkable so I can get the rights to AFRAID back.
• We act as content collaborator, focused on nurturing writing talent, fostering rich relationships with our authors, providing them with expert editorial advice on their writing, and tackling a huge variety of issues on their behalf.
Barry: There’s a remarkable amount of bullshit in that sentence.
“Content collaborator?” What does that mean? Why is this publisher shying away from plain English?
Shit, you and I are collaborating right now, on this post. ZOMG, that means we’re acting as content collaborators!
Joe: Does that mean you're taking a 52.5% cut?
Barry: Maybe I should, ’cause we know that’s what Content Collaborators do.
Joe: If you take that much, can you at least nurture me a little?
Barry: Hah, right, that “nurturing” claim, and for the second time, too. Sure, sure, me nurture you long time, sailor.
Joe: By "long time" you mean "forever", don't you?
Barry: Yes, of course. I’m a Content Collaborator, after all. That’s very important.
Joe: If you say so. (long, dramatic pause) I'm never going to get my rights back, am I?
Barry: No. But I'll make sure I price your book at $12.99 so sales stay poor.
Joe: Thanks for nurturing me!
Look, if I were to say, "I'm a good parent", that statement needs to be backed up with all the reasons I am a good parent, and all the specific things I do for my children. Or else the statement is empty. Or worse, an affirmation based on ignorance and hope instead of facts.
Barry: Yes, if you can back up a claim with evidence, you should do so. When the evidence isn’t presented, could it be because no evidence exists?
Joe: Now, a bad parent might do a lot of things that could negatively affect the child. Much like a bad publisher can drop authors who are making money, provide poor cover art, make bad editorial suggestions, leave marketing promises unfulfilled, charge too much for ebooks, offer too small a royalty, insist on “windowing” and “the agency model,” mess up distribution, not exploit sub rights they bought, make contracts overly complicated and one-sided, make royalty statements indecipherable, grab erights on old contracts, refuse to return rights to the author, and so on.
Is a publisher engaging in such behavior finding and nurturing talent?
And what if all publishers acted like this?
Hint: they do.
Barry: I love those euphemisms, by the way. “Windowing” means “Making people who like to read in digital wait an extra year because we favor paper.” The “agency model” means “forcing Amazon and other digital retailers to charge customers more for books than the retailer wants to.”
As we’ve argued many times elsewhere, these euphemisms and the practices they’re intended to obscure are aimed at two things: retarding the growth of digital, and preserving the position of paper. A few days ago, in a moment of uncharacteristic candor, a top publishing executive confirmed this:
“‘We hoped that a handsome object [Stephen King’s latest novel, 11/22/63, which BTW is awesome] would slow the migration to e-book for King and, in fact, we are now in our fourth printing,’ said Nan Graham, the senior vice president and editor in chief at Scribner.”
Joe: Right, the purpose of the special effort they put into the packaging wasn’t so much selling more paper as it was slowing the adoption of digital. And if the only way legacy publishers tried to slow digital adoption was by making paper better, it would be great. But instead, they’re doing it primarily by making digital more expensive and by delaying the release of digital titles.
I don't hold out much hope for any company that actively refuses to give its customers what they want.
Barry: Let's go back to the specifics of that bullshit-redolent memo sentence. What does it mean to foster a rich relationship with an author? How is it accomplished? Glittering generalities like this one are usually intended to conceal an absence of underlying substance.
Joe: You and I have a rich relationship.
Barry: We don’t.
Joe: Okay, but that’s only because we don’t charge for these Content Collaborations. If we wrote short stories instead, we could have a rich relationship -- without a legacy publisher!
Barry: We should really do that. I loved your latest with Blake Crouch -- STIRRED.
Joe: Thanks. Blake did all the verbs with that one. If you and I do a story together, you can do the adjectives.
Barry: Excellent!
Joe: Try to come up with some better adjectives than that.
Barry: Now, provision of expert editorial advice -- finally, something real. Yes, publishers do provide editorial services. I can’t speak for other authors, but the three editors I’ve worked with at two publishing hours have all been excellent and I’ve learned a lot from working with them. Whether editorial services are worth the 52.5% publishers charge, however, and whether editorial services can be secured elsewhere at lower cost, are topics worth considering.
Joe: You're being too kind. As I mentioned earlier, 52.5% is three times 17.5%. So unless an editor spent three times as many hours editing your book than you did writing your book, they really don't deserve that much.
Hell, if I had an editor who worked on my book, cleaned my house once a week, gave me sex on demand, and drove me around, that still wouldn't be worth 52.5%.
Barry: Hard to argue with your math. For anyone who’s curious, we talk more about most of these issues in our profoundly offensive book, BE THE MONKEY: A CONVERSATION ABOUT THE NEW WORLD OF PUBLISHING. Free download here.
Joe: That book is far too offensive for everyone. If you do read it, I suggest it's with an eye toward objecting to every little thing we said that might offend the sensibilities of some delicate soul, while totally ignoring the major points.
Barry: Finally, let’s consider this claim that publishers tackle a huge variety of issues on behalf of authors. Do I even need to say it?
Joe: Probably not. Glittering generality, devoid of specifics; applicable to every single service industry ever invented, so meaningless with regard to publishing specifically.
Barry: Thanks for that. I hate repeating myself.
Joe: But, to be fair, they do tackle some issues on our behalf. I mean, didn't they create your website?
Barry: No. I did that myself. Well, I hired someone to do it. I don’t know much about website design.
Joe: But they helped you get all those Facebook friends and Twitter followers and blog readers, right?
Barry: That was me.
Joe: They must have paid for you to attend those dozens of conferences over the last nine years.
Barry: That was pretty much all me.
Joe: Certainly they helped you accrue your mailing list of fans?
Barry: Nope. I did it myself, one at a time.
Joe: But they did pay for your tours!
Barry: That they did do.
Joe: And they drove 12,000 miles right along with you, assisting every step of the way while you did signings in over 30 states.
Barry: Uh...no.
Joe: Neither did mine. And BTW, I did signings in over 40 states.
Barry: We're so lucky to have had them as Content Collaborators, though.
Joe: Indeed.
Now let's get specific.
Hachette published my novel AFRAID. They then rejected two subsequent novels of mine. I self-published those novels.
Hachette has earned me $60,000 in two years with AFRAID.
In one year, I earned $170,000 on the two novels they didn't take, all on my own.
Barry: So much for them nurturing talent, fostering rich relationships with authors, and being a content collaborator.
Joe: Their expert editorial advice helped them miss out on a whole lot of money, because they didn't publish TRAPPED and ENDURANCE.
Now I do give them credit for publishing AFRAID when no one else would. My agent had that book on submission for six months before getting that offer. AFRAID was rejected by everyone.
What does that tell you about this industry? A book that went on to earn triple its modest advance was rejected by over a dozen top editors. Then the follow-ups made even more money.
But that was back in 2008. Now I cringe when I think about all the money I'm missing out on because Hachette still has AFRAID. Funny how what was once a blessing can become a curse.
2. Venture Capitalist: We fund the author’s writing process:
• At HBG we invest in ideas.
Barry: I don’t mean to be harsh, but this memo is really beginning to play like a game of Bullshit Bingo. Nurture Relationships... Tackle Issues... Invest In Ideas... Bingo!
Joe: Dammit! They invest in ideas? Why the hell did I bother spending six months writing a book for them? Then six more months promoting it? I should have just given them an idea and let them run with it!
Barry: Here’s an idea they might have invested in: an online bookstore!
Joe: Here's another one: a damn ereader!
Barry: We’re being half-facetious, but the thing is, an online bookstore, and ereaders, and an online lending library -- those are real ideas. And someone certainly is investing in them, big-time. In the face of this, when Hachette plays Bullshit Bingo and bleats, “We invest in ideas!”, you have to wonder... do even the people who wrote this thing believe it? If asked, could they even explain what they’re referring to?
Joe: It's also worth noting that I've been offering free advice to publishers for several years on how to succeed in this new publishing climate. I know they must be reading my blog, because they keep doing the exact opposite of everything I suggest.
Seriously, for an industry to get so much so wrong, it's gotta be intentional.
In the form of advances, we allow authors the time and resources to research and write.
Barry: An advance can definitely be critical in this regard. What would make the claim meaningful would be a breakdown of what advances Hachette provides. They don’t need to name names; they could just provide a chart showing averages. I’ve heard many times that the average legacy advance these days is $5000. If that’s true, it’s a hell of a stretch for Hachette to suggest they’re providing authors enough to research and write. No one can quit her day job for a $5000 advance, 15% of which goes to an agent and the balance of which will be paid out in installments over the course of a year or more.
Once again, you have to wonder why Hachette provides no meaningful data to back up their claims of how relevant they are to authors.
Joe: Averages wouldn't work. They could say their average advance is high because they give James Patterson millions. In reality, the majority of their authors probably need a second job or working spouse to support themselves.
Barry: I didn’t do well in college statistics. Mean, median... that kind of thing.
Joe: I got lucky. They gave me a $20k advance for AFRAID, and I get royalty checks twice a year. That's better than what many authors get.
But with self-publishing I get paid monthly. I'd rather get paid promptly than receive a small advance.
As for investing in ideas, perhaps they should have invested in the two books of mine they rejected...
In addition we invest continuously in infrastructure, tools, and partnerships that make HBG a great publisher partner.
Barry: I know I’m being repetitive, but only because the same logical shortcomings keep cropping up in this memo. So: what are the infrastructure, tools, and partnerships Hachette continuously invests in? How, specifically, do these investments benefit authors?
Joe: Yes, I'm really curious to know about their investment in infrastructure, tools, and partnerships. I don't invest in any of those things, but my ebooks outsell theirs. Perhaps their actual investment is in buzzwords and bad rhetoric.
I'm kind of disappointed they didn't mention synergy.
Barry: Strategic partnerships... Inflection point... Bingo!
3. Sales and Distribution Specialist: We ensure widest possible audience:
• We get our books to the right place, in the right numbers, and at the right time (this applies equally to print and digital editions).
Barry: Is this a memo intended to convince people of Hachette’s continued relevance, or is it some kind of personal empowerment seminar? “Gosh darn it, I’m good enough, and smart enough, and right, right, right enough...”
All the things they claim to do right apply equally in paper and digital? The right place in digital is wherever self-published authors get their books to -- again, generally, Amazon, B&N, and Smashwords. So you don’t really need to pay 52.5% to a Collaboration Partner for that.
The right numbers? Hachette, how many digital copies of a title do you typically upload to a retailer? (Um, that’s a trick question.)
And the right time? The right time is now, because you can’t make money from a book until people can buy it. But legacy publishers don’t publisher digital titles now. They publish them a year later, when the paper version is ready. When Hachette says “the right time,” they mean, “much later than you would on your own.”
We work with retailers and distribution partners to ensure that every book has the opportunity to reach the widest possible readership.
Joe: Hyperion, which published my last Jack Daniels novel, Cherry Bomb, didn't ship a single copy to Borders until the book had been out for two weeks.
I've also done signings my publishers set up where there weren't any of my books for sale. And I'm far from the only author who has had distribution issues.
Still, I can't complain. My publishers have done a pretty good job of getting my paper books into stores. That's the main value they offer.
But they offer no value at all when it comes to getting ebooks onto online retailers. After formatting, it doesn't take more than a few hours to upload an ebook to all the major sellers. Which is one of the things that drove me so crazy about Penguin's Book Country.
Barry: This is such a key point that I’m going to repeat it even though we’ve been saying it elsewhere: in digital distribution, legacy publishers offer no value. Zero. None. A self-published author, working alone, has exactly the same distribution reach in digital as a multi-million-dollar New York publishing conglomerate.
I’m going to say that one more time, because it’s critical to the revolution in publishing and it’s so big and far-reaching it takes a moment to grasp:
A self-published author, working alone, has exactly the same distribution reach in digital as a multi-million-dollar New York publishing conglomerate.
Yes, legacy publishers provide various value-added services, such as editing, marketing, etc -- at least some of the time. But distribution is what authors have until recently really needed from publishers, because without a distribution partner, an author can’t cost-effectively reach a mass audience in paper.
Joe: I'd say they offer negative value. Taking a long time to upload titles, a long time to make changes or fix problems, controlling pricing, doing poor formatting (Hachette did a fine job with AFRAID, but I've gotten scores of email about formatting issues in my Hyperion titles), and not making ebooks available on all platforms in all markets directly hurts sales. High ebook prices do not ensure a book has the widest possible readership. Quite the opposite, in fact.
If a publisher is hurting your digital sales, that's negative value.
Barry: So yes, Hachette is still relevant in the world of paper distribution (yea!). The problem is that paper is shrinking and digital is exploding -- and in digital, the Hachettes of the world have no distribution value to offer. That’s why they’re writing bizarre, obfuscating memos like the one we’re discussing.
By the way, because digital distribution is flat -- equally available to everyone -- digital publishing is increasingly going to be built on direct-to-consumer marketing. As I said in a recent piece at Writer Unboxed:
“In a digital world, the primary value a publisher can offer an author is direct-to-consumer marketing. This is why Amazon is so strongly positioned to succeed in digital publishing: its book business is built on its ability to reach tens or even hundreds of millions of readers directly by email. Amazon marketing is both exceptionally focused (book buyers) and exceptionally broad (tens or even hundreds of millions of customers). Entities that can offer authors compelling direct-to-consumer marketing value will be in a good position to take a cut of the profits. One recent example is the L.A. Times. Think of entities that fit the bill, and you’ll be able to predict tomorrow’s publishers.
“Interestingly, there’s one particular group of companies that lacks any meaningful direct-to-consumer marketing ability. That group is New York publishing. Draw your own conclusions.”
Joe: You're so right about this. As authors, we need to be able to reach readers. In the past, we needed publishers to get our work into bookstores (we also needed bookstores) so readers could buy us.
Today, we can be bought -- both in paper and in digital -- with the press of a button. So if a middleman wants to add value to this equation, they can either create the ereader and the store we sell our titles on (Amazon, Sony, Kobo, Apple, B&N), or they can help us reach a broader audience than we can on our own by giving us marketing advantages.
If the L.A. Times wanted to publish me, I'd give them a percentage of my royalties, because they could advertise the hell out of my book to their existing readership of several million people.
I'd also sign a deal with a TV station who would produce commercials for my book, or a guy who owned 10,000 billboards that he wanted to use to promote it, or Charlie Sheen as long as he mentioned it to the media every time he got arrested.
Distribution was the key to success in paper. Now that we're all getting equal distribution in digital, there’s value to partnering with companies that can help our books get noticed.
What is Hachette doing to help their authors get noticed in a digital world? All their methods and means are paper-based.
• We ensure broad distribution and master supply chain complexity, in both digital and physical formats.
Joe: Ah, distributors. One more middleman taking potential royalties away from the author's share.
I can't wait for a day when books can be printed on demand, so there’s no need for giant warehouses and distributors who take a huge cut.
Or better yet, maybe someday there will be a distribution system where books cost zero to copy and zero to send to readers.
Oh, wait a sec... we already have these things.
Fail.
Barry: I just have to add... again, look at that “master supply chain complexity” sentence. Like so much else in this memo, it’s gobbleygook. Here’s Orwell, in Politics and the English Language:
“The great enemy of clear language is insincerity. When there is a gap between one's real and one's declared aims, one turns as it were instinctively to long words and exhausted idioms, like a cuttlefish spurting out ink.”
The irony. Publishers, those richly nurturing Content Collaborators, purveyors of top-flight editorial services, finders of Remarkable New Voices... penning such prolix prose.
Joe: Maybe they forgot to richly nurture the person who wrote the memo.
Barry: They did find a remarkable new voice, though.
Joe: I'd make a joke about being mentally challenged here, but then the Dudgeon Demons would whine about political incorrectitude rather than acknowledge our relevant points.
Barry: Okay, glad you didn’t go there.
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| Carlos Mencia - Special Treatment | ||||
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And finally, again -- they ensure distribution, and have mastered supply chain complexity... in digital?
Come on. Digital distribution is ubiquitous. It’s available to everyone, and a legacy publisher claiming to supply it is like me trying to sell someone air. And there is no digital supply chain. Claiming otherwise is like pretending uploading a photo on Facebook requires supply chain complexity mastery. It’s just embarrassing bullshit.
Hey Hachette, invite either of us to a conference. We challenge you to debate any of your claims in a public forum of your choosing. If fact, I’m keynoting the Writers Digest Convention in NYC this January; if you like, we could do it there.
Joe: I'll be at the Romantic Times Convention in April leading a discussion about ebooks. Stop by and say hello. Or get in touch sooner, and I'll get you on the panel.
• We function as a new market pioneer, exploring and experimenting with new ideas in every area of our business and investing in those new ideas – even if, in some cases, a positive outcome is not guaranteed (as with apps and enhanced ebooks).
Barry: In case you missed it the first time... they really, really do invest in new ideas! It’s like Double Secret Probation, but better.
I won’t even mention the entirely unsupported glittering generalities. Whoops, I guess I did.
And it’s awesome that they invest even when there is no guarantee of a positive return! That’s so bold and really distinguishes them from everyone else. As everyone knows, most businesses, and all people, only invest when returns are 100% certain. Anything else would be imprudent.
Joe: I am 100% certain you are correct.
Barry: Finally... I’m sorry, I know I’m being a little hard on them, but the claim that Hachette or any legacy publisher is a “pioneer” is so demonstrably absurd as to be laughable. Again, think of the most pioneering changes in publishing -- online bookstores, digital distribution, ereaders, lending library subscription programs -- and ask who pioneered them.
Joe: (Hint. It wasn’t Hachette or any other legacy publisher.)
Barry: The truth is that, to the extent legacy publishers are experimenting with anything, it’s because far more innovative new market entrants are forcing them to.
Joe: All that pioneering, and exploring, and experimenting, and investing. I bet Hachette has a 100% sell-through and a 0% return rate, and that every book they publish turns a handsome profit.
If not -- well, I guess they can pay for their inefficiencies by taking 52.5% and giving authors 17.5%.
• We act as a price and promotion specialist (coordinating 250+ monthly, weekly and daily deals on ebooks at all accounts).
Joe: The AFRAID ebook has been on sale twice in two years. When this happened, sales were up 10x. So, naturally, Grand Central raised it back to $6.99 after a week of lower prices.
The effort it takes to put a book on sale takes no more than a few minutes. I do it myself all the time.
Why don't legacy publishers do it all the time?
Barry: This word “specialist”... I do not think it means what they think it means.
Seriously, where is all the dynamism and innovation in pricing?
Joe: In self-publishing, and at Amazon.
Barry: Exactly. A “sale” in the legacy world means the remainder table in a brick-and-mortar store.
Joe: To more and more authors, paper distribution doesn't matter much anymore. And as a New Market Pioneer, Hachette should price my two-year-old ebook more competitively than $6.99. My ebooks are priced at $2.99, and they've made me more money than any of my legacy books. Value isn't in a book's cover price, but rather how much money the book earns overall.
With plummeting paper sales, and vastly increasing ebook sales, Hachette does very little to deserve the royalties they're taking.
4. Brand Builder and Copyright Watchdog: We build author brands and protect their intellectual property:
Barry: In my experience, publishers know almost nothing about building a brand. If they did, they would brand themselves. Listening to a publisher hawk its brand-building cred is like listening to the proverbial 98-pound weakling tout his awesome strength-training program.
Joe: I gotta disagree with you here. I don't care about authors, or individual titles, or even genre. But I do buy and read every single book Grand Central publishes, because I am sooooo brand loyal. It's all about the logo on the spine. That's why so many fans stopped reading Lee Child when he switched houses. Stephen King, too. Betcha Janet Evanovich’s readership deserts her, now that she’s left SMP.
Barry: You’re right. I’m being unfair. Why, just the other day I was in a Barnes & Noble, asking if they could direct me to the latest Random House title.
Joe: I'll read anything Random House publishes! They published you, so everything else they publish must also be perfect for me! Brand brand brand!
Barry: Okay, maybe we’re wrong. Maybe legacy publishers really are expert brand-builders.
Joe: Sure. Hachette really helped me build my brand, dropping me after one title.
I personally visited 200 bookstores in 19 states to promote AFRAID.
Hachette took out a small one-off ad in USA Today.
I did a blog tour, posting new content on 100 blogs in 30 days.
Hachette sent out some galleys.
I sent out a newsletter to 10,000 people on my mailing list.
Does Hachette even have a mailing list?
• We protect authors’ intellectual property through strict anti-piracy measures and territorial controls.
Barry: Let’s translate this. “We protect authors’ (and by authors’ we mean our) intellectual property” is code for “we insist on DRM and other anti-piracy measures that customers hate, that are ineffective against piracy, and that diminish author profits.” “Territorial controls” means “Your book will not be available in many markets where people would like to buy it.”
Joe: Congrats that Hachette learned from the RIAA and the woes of the music industry, and has figured out that DRM doesn't work and piracy doesn't hurt sales.
Oh, wait a second. They HAVEN'T figured that out.
I'm widely pirated, and I currently earn enough money via self-publishing to be in the top 1% tax bracket of the US. Compare that to the eight years I spent in the legacy publishing world, making $40k a year and spending half of that on self-promotion.
• Publishers generate and spread excitement, always looking for new ways make our authors and their books stand out. We’re able to connect books with readers in a meaningful way.
Barry: When I first read that initial clause, I thought it said, “Publishers generate and spread excrement.”
Joe: Ha! That would have been a shitty thing to say.
Barry: I’m sure that reveals my biases. But -- let’s be honest -- it’s a more credible claim than “Publishers generate excitement.” If I’m missing something, maybe readers could tell us about the last time their excitement was generated by a publisher.
Joe: How about this one? And guess what? The Kindle edition is priced higher than the hardcover. :P
Barry: Okay, an excitement exception. :D
But seriously, could a “We are relevant!” memo get any more meaningless, over-general, and aspirational than this? “We don’t just connect books with readers -- we do it in a meaningful way.”
I mean, for realz this time! We’re meaningful, damn it!
Joe: From now on, my job will be to remind people what my job is.
Now hold still while I spread excitement.
Barry: It’s all part of the nurturing.
Oh, and by the way, legacy publishers don’t connect books with readers, and in fact this structural deficit is essential to the increasing irrelevance Hachette is protesting against. Publishers connect books with intermediaries.
Joe: And now those intermediaries, like Amazon, can directly reach and target readers.
Is it any wonder we can sell so many more books with Amazon as our publisher?
Barry: You know, I’m starting to wonder if someone wrote this to play a joke on us, to see if we could be fooled into taking it seriously and responding. It’s not April Fool’s Day, is it?
Joe: Don't use the word fool. You might offend someone.
Barry: For God’s sake, Dudgeon Demons, do not watch this extremely offensive Carlos Mencia skit!
| Jokes.com | ||||
| Carlos Mencia - Hospital Show | ||||
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Joe: I'm only picking on Hachette here because they wrote that silly memo, and because I have personal experience with them. I discuss book deals with my peers. Hachette actually did a lot more for my book than most publishers do, and I appreciate their efforts.
But I've never relied on publishers to promote my books because publishers actually do very little promotion. A press release and catalog inclusion aren't worth the 52.5% royalties they take.
By contrast, I signed a deal with Amazon's imprint Thomas & Mercer for STIRRED, my latest novel, co-written with Blake Crouch.
Barry: Didn’t you just hit #1 on the Kindle Top 100?
Joe. Yes, and thanks for the shill. STIRRED has sold more ebooks in two weeks than Hachette has sold of AFRAID in thirty-two months. And Amazon pays me a much better royalty than Hachette did.
Not to put you on the spot here, but I know you signed a decent six-figure deal for RAIN FALL, your first John Rain thriller. It's had, what, a dozen printings since 2002?
Barry: It's up to fifteen or sixteen.
Joe: So you must have earned out that advance a long time ago, right?
Barry: Not yet. But close now. To the extent I could decipher Putnam’s royalty statements. I’m thinking about calling in a Dead Sea Scrolls specialist.
Joe: You also got a comparable six-figure advance for THE DETACHMENT, which you released through the Amazon imprint Thomas & Mercer.
Barry: Yes. We've discussed the deal before.
Joe: Do you think you'll be able to earn out that advance faster than the one for RAIN FALL?
Barry: THE DETACHMENT has already earned out.
Joe: Holy shit! What’s that, two months from the pub date?
Barry: Something like that. I wasn’t supposed to say anything, but my wife didn’t know it was under wraps and inadvertently mentioned it at a conference, so I guess it’s public domain now.
Joe: Congrats! When THE DETACHMENT was in the Top 10 on the Kindle Bestseller List, it was really buoying your backlist sales. Hopefully RAIN FALL will earn out soon...
• We offer marketing and publicity expertise, presenting a book to the marketplace in exactly the right way, and ensuring that intelligence, creativity, and business acumen inform our strategy.
Joe: Well, it's certainly reassuring that their strategy isn't informed by laziness, bad ideas, stupidity, and a profound ignorance about how their business works.
Barry: Seriously, when someone claims to be or to do something the opposite of which would be unthinkable, you are being bullshitted. The only question is, does Hachette know they’re bullshitting? Or do they really believe it’s remarkable that their strategy is supposedly informed by intelligence instead of stupidity, creativity rather than dullness, and business acumen rather than business ineptitude?
And come on, presenting a book to the marketplace in exactly the right way? There are so many examples of legacy publishing marketing disasters it’s hard to know where to begin. So why don’t I just point to: The Green Garage Door (viewer discretion advised).
Joe: I gotta say, with so many books losing money, so many authors being dropped, so many titles going out of print, perhaps expertise isn't quite the right word.
Barry: No, maybe something more along the line of... Whistling Past The Graveyard? Or Hoping Against Hope?
Joe: Publishers should stop trying to convince themselves and others that they're relevant, and start actually being relevant. Here's how:
1. Offer much better royalties to authors.
2. Release titles faster. It can take 18 months after a book is turned in to be published. I can do it myself in a week.
3. Use up-to-date accounting methods that are trackable by the author, and pay royalties monthly.
4. Lower ebook prices.
5. Stop futilely fighting piracy. Hint: all such fighting is futile. Piracy can only be made redundant with cost and convenience.
6. Start marketing effectively. Ads and catalogue copy aren't enough. Neither is your imprint's Twitter feed. Especially if your author has more Twitter followers than you do.
Did I miss anything?
Barry: Legacy publishing’s contracts are a disaster. Substantively, they should reflect 21st-Century realities, among those realities the fact that for the first time, authors have real alternatives to the legacy route. So absolutely, the ridiculous current 52.5%-publisher and 17.5%-author digital split needs to be massively adjusted. Again, in a digital world, publishers are unnecessary for distribution, and the fact that they’re still trying to charge for a benefit they no longer provide is an untenable state of affairs.
They also need to stop with the crazy land grabs -- the first looks, the last refusals, the character and series and “anything remotely competitive” lock-ups and other non-compete clauses.
On a less substantive level, they need to make their contracts readable and understandable. Why do publishers still use antediluvian 14-inch legal paper for their contracts and 9-point font? Because it’s off-putting. It discourages anyone from reading or arguing about the contents. Why do they use such monumentally opaque and impenetrable legalese? Because they don’t want people to understand what the contract is doing -- what rights are being forfeited and what obligations imposed.
If there’s one thing I wish Amazon would do differently, it’s use their publishing contract as a sales tool. It’s the best I’ve ever seen -- clear, short, and understandable (just like their every-60-days royalty statements, in fact), and if they’d be more aggressive about publicizing how remarkably clear and fair their contract is, it would put some pressure on legacy publishers -- sorry, on Experimenting, Excitement-Generating Pioneers -- to follow suit.
Joe: I've been telling publishers how to improve since 2009, and not one has listened.
Except for Amazon. Amazon listens. Amazon listens closely.
That's why Amazon doesn't need to create silly internal memos about how they're still relevant.
Barry: Seriously, can you imagine Amazon putting out a memo like that? “We are still relevant” is not a good sign for Hachette, or for legacy publishing generally. It’s like when the government says, “The war is still winnable.” Surest sign it’s lost.
Joe: Yeah, hard to imagine a memo like this one from Amazon. Because every book Amazon has published actually makes a profit.
Barry: I want to say one last thing, about our tone.
Joe: Okay.
Barry: We’re pretty disrespectful here toward Hachette, aren’t we?
Joe: Yes. But not unfairly.
Barry: Exactly. Not unfairly. A lot of people get uncomfortable when small-fry like us criticize big, august institutions like Hachette. Up to a point, I understand that reflex, but I don’t share it.
Joe: This dialog could anger or hurt people who work at Hachette, or authors with Hachette. In fact, it could anger or hurt anyone working for legacy publishers.
But instead of getting hurt or angry, how about figuring out how to fix your broken business model?
This is a business. Business isn't personal.
At least, that's what my agent said when my last two publishers dropped me. Two publishers who are making money off my backlist hand-over-fist.
Barry: For me, respect isn’t something to which anyone is entitled (courtesy is different); it’s something that has to be earned. And when someone -- anyone -- writes a memo as weak, unsupported, and full of obvious bullshit as Hachette’s, there’s nothing wrong with, and indeed there’s everything right with, calling them on it.
Joe: Ultimately, I decided to spend some time doing this fisk because I see too many authors still crossing their fingers, holding out for legacy deals.
Seriously? You really want to work with a company that does stuff like this?
Barry: Was our tone sometimes derisive and mocking and otherwise harsh? Yes. Was that deserved? Again, yes.
Joe: Didn’t you just get into it with the Pentagon’s spokesperson?
Barry: Yeah, I wrote a blog criticizing Secretary of Defense Leon Panetta for being full of shit -- which he is -- and his spokesman responded with the usual, “Why do you hate the troops?” dodge. If anyone’s curious, you can read about it here. But yes, there are a lot of people who believe individuals have to defer to authority, including being terribly civil even while the authority in question pisses down your back and assures you it’s just raining. I’m not one of those people. If someone tries to bullshit me, I think it’s a public service to call bullshit and explain why.
Joe: You're anti-American and unappreciative of the opportunities this country has given you. You're also anti-legacy publishing and unappreciative of the opportunities the Big 6 have given you.
Barry: Hah. You see right through me.
Joe: But at least we've both managed to avoid any incendiary analogies this dialog. Good thing, too. I was getting really tired of dealing with overreacting, hypersensitive pinheads.
As for authors, I'll repeat my mantra. Set appropriate goals, and figure out realistic ways to reach those goals. If you really want to publish with a legacy house, fully understand what you're getting into, and why.
If you go into it all doe-eyed and hopeful, you can’t complain about whatever happens.
Barry: Hachette, go back to the drawing board and write a real memo, devoid of bullshit and dodges and glittering generalities that apply to every business that’s ever existed. Write something built on actual evidence instead of relying on a narcissistic and unmerited “trust us” attitude, and I promise we’ll examine it as carefully as we’ve reviewed this one -- though perhaps with a different result. Fair enough?
Joe: Did you do the wrap-up yet? I was too busy molesting this frog.
Barry: LMAO... Let the Dudgeon Demons descend!
Joe: Be the monkey!