Sunday, November 14, 2010

Is There a Future for Books?

In The Observer today, Victoria Glendinning laments the lack of appetite among publishers for serious biography nowadays. In particular, she points out that publishers no longer pay the kind of advances on royalties that they used to. Indeed, and a good thing too. The level of advances had got ridiculous, with publishers seemingly only too willing to throw good money after bad in their desire to get one over on their competitors. In the end the house of cards had to come crashing down, and it certainly did.

Take the David Blunkett diaries, for instance. OK, not strictly biography, but the book was symptomatic of the malaise that had afflicted the industry. Bloomsbury had decided it wanted to get into the political biography market so it bid a ridiculous amount of money for a book which was never going to be a huge seller. The advance was somewhere in the region of £250,000 and that didn't include newspaper serialisation rights. Blunkett trousered close to £400,000 in all for a book which sold around 5,000 copies. Work out the finances on that for yourself.

Victoria Glendinning makes the point that for professional biographers it is difficult to eke out a living nowadays. She got an advance of £10,000 for her latest book, a biography of David Astor. In 1992 she go £50,000 for a similar book on Cyril Connolly.

In part this is also due to the amount of money being thrown at celebrity autobiographies by the big publishers. They do it because some of them can sell serious numbers. But for every celebrity autobiography which becomes a bestseller there are another dozen which flop and lose their publishers a huge amount of money - not just the advance, but the massive amount devoted to marketing.

All this means that the bigger publishers, like Macmillan, HarperCollins, Penguin, Random House and Simon & Schuster, have decided that the non-celebrity biography is one to steer clear of unless they can be more or less 100% confident that they can sell at least 10,000 copies in hardback.

But all this means that publishers like my company, Biteback, are now being offered books by authors and agents which even five years ago would have been way out of our range. But we are not changing our business approach to accommodate them. I'm simply not prepared to try to compete with big publishers on advances. Indeed, we don't pay any advances at all on the majority of books we take on. We can't and won't, because the business model for a publishing company like ours can't cope with advances beyond a few thousand pounds. And I mean a very few.

It's not that we are being mean spirited. It's just that sales levels can't justify it. We'd all love to get that elusive best seller, but in the real world we all live in we know that it's unlikely to happen. The world of bookselling is a very different beast to that which existed even eight years ago. Then, there were a multitude of bookshop chains - Waterstone's, Dillons, Ottakers, John Smith, Blackwells, W H Smith and one or to other regionals. Now there is one - Waterstone's. Even W H Smith has more or less reduced itself to the lowest common denominator.

The simple truth is that if Waterstone's won't stock a book as core stock, and put it in each of its stores, you have virtually no chance of a book selling beyond a couple of thousand copies. Of course, Amazon is crucial too, but the fact that it doesn't really have a serious online competitor gives it enormous buying power, leading to smaller publishes feeling as if they have been bulldozed.

In addition, small publishers are forced to accept deals which they know are fiercely uncompetitive. But if Waterstone's, W H Smith or Amazon demand 60% discount there's little scope for negotiation. And in the case of the first two, they often demand a "promotional" spend too just to even stock the book. For many publishers it has become the economics of the mad house.

So we are all asking ourselves, if e-Books might be the saviour of the publishing industry? In theory they could cut out the middle man (i.e. the bookshop) and be sold directly to the public. But, in theory, that is also the same for physical books, and most publishers don't do much direct bookselling. At Biteback we are about to dip our toes into the e-Book market. We've signed a deal with Amazon who appear to about to be become a monopoly supplier of e-Books. But no one really knows the price level at which to pitch e-Books. The consumer is canny enough to work out that if there aren't any print costs, the price should be lower, but some of the bigger UK publishers continue to stick their heads in the sand and try to charge the full retail price. But the economics of e-Books appear to stink. Say we charge £5 for a paperback whose bookshop price would be £10. Amazon will take 60% of the £5, leaving £2 left, of which £1 goes to the author. That doesn't leave an awful lot for the publisher, does it? If sales levels of e-Books is higher than that for physical books, then it might all work, but at the moment it is unclear if that will be the case, and how long it will take to get there.

All of this means that small to medium sized publishers are having to become far more innovative in the way they market and sell their books. This ought to be a huge opportunity for independent bookshops to step up to the breach and fill the gap vacated by the big chains who have all merged into one or gone out of business. But so far they show few signs of doing so.

All of this might sound a bit downbeat and depressing. But for me it's not a threat it's a real opportunity. We know there is a tremendous appetite for reading and good, quality literature in this country. All we have to do is figure out how best to exploit it.

30 comments:

The Creator said...

The financial realities of publishing have always been close on prohibitive. That the major players still seem to feel that they are obliged to throw silly amounts of money after a tiny number of books, most of which bomb, only underscores this essential fact.

But there are two permanently encouraging facts, at least if you are prepared to act as a proper publisher rather than as an extension of an over-excited marketing department.

One: Never take any notice of anything the marketing department says: they are always chasing after the last book.

Two: Trust your instinct. You've either got this elusive sense for the right book and its market or you haven't. Either way, back your judgement. But do so understanding the fickleness of the market, the invariable cretinousness of your marketing department – and the clear realities of financial prudence: ie, that it much easier to lose money on books than it is to make it. Those who lash money around – almost always in an attempt to make themselves feel important – will always come a cropper.

Michael Heaver said...

Very interesting. Personally I already buy only e-books that I can read on my iPhone - having thousands of pages at the palm of my hand has destroyed any desire to buy printed.

James said...

Good post. I'm always hungry for inside information on publishing. But are things so bad? I don't think so.

Big publishers are suffering from bad decisions they have made. Authors are getting hurt by the small advances but it is the agents who are getting it in the neck. They need the celebs but that involves ghost writers and all sorts of other problems. But for readers, this is all rather good news. We get more books, more easily available and cheaper.

I'm a typical author in that my day job pays me far more than I get from writing. But my book, 'God's Philosophers: How the Medieval World Laid the Foundations for Modern Science' has actually done rather well despite my complete failure to interest Iain in it. I even get to dabble in journalism. As long as I except that I'll never make a living this way, I have a rather wonderful hobby I get paid for.

So I am afraid that my advice to the moaning Ms Glendinning is get a job that pays the bills. You are incredibly privileged to be a published author without also being expected to get a living from it.

The only downside is the need for constant and humiliating self promotion (see above).

Hey Iain! Any chance of an interivew on the LBC book segment?

Valleys Mam said...

bought 4 books today -I love books and buy them for presents
e books are not the same - what happens if the technology fails

Valleys Mam said...

bought 4 books today -I love books and buy them for presents
e books are not the same - what happens if the technology fails

trevorsden said...

there seems to be a lackm of appetite among publishers for any writers. They and agents only seem to want people who have actually published something!

When I go into bookshops I am amazed they have anything on the shelves and most of it looks rubbish to me.

Its possible to write your own book and send it straight to Amazon in kindle format as far as I am aware and they are allegedly willing to dole out 70% in royalties.

Publishers and bookshops are cutting their own throats. Mind you bookshops like all outlets are turning themselves into coffee shops as much as anything else

Simon Harley said...

How interested in serious biography is Biteback? I'm impressed that what appears to be primarily a political publishing house has a book on Dilly Knox.

Intentionally Blank said...

"That doesn't leave an awful lot for the publisher, does it?"

No but arguably, your costs should be significant lower as an eBook publisher so £1 per unit seems not bad at all - assuming of course, that you're not using that revenue to support your conventional, print publishing infrastructure (binding, shipping, design, storage, staff etc etc). Take that away and you have yourself a business model.

If I were in your shoes, I'd take a risk and cut out Amazon. For your niche, I don't know what value they add. £20 - £30K would buy you a rather excellent website where you could sell physical and ebooks direct - it would never work for mass market but for political, current affairs etc, you could own your sector, play off your reputation. A sort of touchy feely online book store where every book arrives with a little thank you card to the purchasers signed by you, that sort of thing. Have a really good CRM system to keep in touch with your customer base - biweekly updates, articles lifted from the mag and so on.

Basically, I'm suggesting you reinvent Politicos as an online brand I suppose. When you can publish, blog, go on TV and have a good magazine, why on earth do you need Amazon to sell things to your existing readers. Just a thought.

Alan Douglas said...

If BiteBack is effectively selling a £ 10 book for £ 4, is there a way you could direct-market this book to your loyal blog readership for that amount + say £ 1 for postage ?

Someone (incl me) could set up a simple mailing operation and print labels and post.

Alan Douglas

IvorBiggun said...

A few years back I bought both volumes of Hitler, Hubris and Nemesis, by Ian Kershaw, in hardback, when it they were first published. Now I'm finally getting round to reading them (I have far more books than I have time to read, sadly).

Recently I've been enjoying reading on an Amazon Kindle - I love the portability and the clarity of the text (at a size of my choice), so naturally looked into acquiring the books in Kindle format - a few weeks back they were £11 and £12 or so each - not a price I was prepared to pay for electronic copies of books I already own!

A couple of days back I checked the pricing on Amazon again - they're now both £14.99 each, now with a note stating:

"This price was set by the publisher"

WTF? I thought the Net Book Agreement and price fixing were long gone! Evidently not.

Even worse, to buy them as paperbacks, including delivery, would set me back less - a mere £10.13 and £12.45, respectively. Needless to say, I won't be paying Penguin or Mr. Kershaw this kind of money for books I already have!

Two things publishers need to remember:

1) ebooks can't be readily sold on or lent, so there is (currently) no second hand market or value (the Kershaw books, above, can be bought for about £15 for the pair, s/h).

2) you're also competing with free - through the nascent 'pirate' ebook market - both for those who are dishonest about rewarding authors, those who can't afford the asking price, and those who, like me, feel somewhat justified in not being ripped off merely to format-shift expensive hardbacks that we already own!

The future, for ebooks, is going to have to be along the lines of MP3 sales - pile it high and sell it cheap, ideally without the stupidity of (easily bypassed) DRM, to make it easy for honest customers to give you money for your products.

Bear in mind also that refusing to play in the ebook market is doomed to failure too - the Harry Potter books aren't available as ebooks, at least officially, but they and other books are scanned and OCRed by people who wish to read them in portable formats - wouldn't it make more sense for Bloomsbury and JK Rowling to make a few pounds a time on ebook sales, rather than lose out entirely? The future is happening, whether publishers like it or not.

IvorBiggun said...

Test - please ignore.

IvorBiggun said...

A few years back I bought both volumes of Hitler, Hubris and Nemesis, by Ian Kershaw, in hardback, when it they were first published. Now I'm finally getting round to reading them (I have far more books than I have time to read, sadly).

Recently I've been enjoying reading on an Amazon Kindle - I love the portability and the clarity of the text (at a size of my choice), so naturally looked into acquiring the books in Kindle format - a few weeks back they were £11 and £12 or so each - not a price I was prepared to pay for electronic copies of books I already own!

A couple of days back I checked the pricing on Amazon again - they're now both £14.99 each, now with a note stating:

"This price was set by the publisher"

WTF? I thought the Net Book Agreement and price fixing were long gone! Evidently not.

Even worse, to buy them as paperbacks, including delivery, would set me back less - a mere £10.13 and £12.45, respectively. Needless to say, I won't be paying Penguin or Mr. Kershaw this kind of money for books I already have!

Two things publishers need to remember:

1) ebooks can't be readily sold on or lent, so there is (currently) no second hand market or value (the Kershaw books, above, can be bought for about £15 for the pair, s/h).

2) you're also competing with free - through the nascent 'pirate' ebook market - both for those who are dishonest about rewarding authors, those who can't afford the asking price, and those who, like me, feel somewhat justified in not being ripped off merely to format-shift expensive hardbacks that we already own!

The future, for ebooks, is going to have to be along the lines of MP3 sales - pile it high and sell it cheap, ideally without the stupidity of (easily bypassed) DRM, to make it easy for honest customers to give you money for your products.

Bear in mind also that refusing to play in the ebook market is doomed to failure too - the Harry Potter books aren't available as ebooks, at least officially, but they and other books are scanned and OCRed by people who wish to read them in portable formats - wouldn't it make more sense for Bloomsbury and JK Rowling to make a few pounds a time on ebook sales, rather than lose out entirely? The future is happening, whether publishers like it or not.

IvorBiggun said...

A few years back I bought both volumes of Hitler, Hubris and Nemesis, by Ian Kershaw, in hardback, when it they were first published. Now I'm finally getting round to reading them (I have far more books than I have time to read, sadly).

Recently I've been enjoying reading on an Amazon Kindle - I love the portability and the clarity of the text (at a size of my choice), so naturally looked into acquiring the books in Kindle format - a few weeks back they were £11 and £12 or so each - not a price I was prepared to pay for electronic copies of books I already own!

A couple of days back I checked the pricing on Amazon again - they're now both £14.99 each, now with a note stating:

"This price was set by the publisher"

WTF? I thought the Net Book Agreement and price fixing were long gone! Evidently not.

Even worse, to buy them as paperbacks, including delivery, would set me back less - a mere £10.13 and £12.45, respectively. Needless to say, I won't be paying Penguin or Mr. Kershaw this kind of money for books I already have! (cont./)

IvorBiggun said...

(cont./) Two things publishers need to remember:

1) ebooks can't be readily sold on or lent, so there is (currently) no second hand market or value (the Kershaw books, above, can be bought for about £15 for the pair, s/h).

2) you're also competing with free - through the nascent 'pirate' ebook market - both for those who are dishonest about rewarding authors, those who can't afford the asking price, and those who, like me, feel somewhat justified in not being ripped off merely to format-shift expensive hardbacks that we already own!

The future, for ebooks, is going to have to be along the lines of MP3 sales - pile it high and sell it cheap, ideally without the stupidity of (easily bypassed) DRM, to make it easy for honest customers to give you money for your products.

Bear in mind also that refusing to play in the ebook market is doomed to failure too - the Harry Potter books aren't available as ebooks, at least officially, but they and other books are scanned and OCRed by people who wish to read them in portable formats - wouldn't it make more sense for Bloomsbury and JK Rowling to make a few pounds a time on ebook sales, rather than lose out entirely? The future is happening, whether publishers like it or not.

awkwardgadgee said...

Interesting. I've no idea about the business model involved, although I can certainly see why you wouldn't want to be paying advances. I know I buy loads of books, and judging by the book shops I am not alone.

I will always prefer a real book to an ebook. You can leave them on a bus or drop them in the bath. Leave them up the loft and then rediscover them later, or give them out or put them behind the bar in the pub. (mine is a good local!) They can be forced down the side of a bag and can generate conversation ,say on a train, when some one recognises what your reading.

And they feel good and smell fantastic when new. And I can work them!

sachab said...

Ebooks are probably the future, although please don't just issue them on Kindle. There are quite a few other ereaders which use epub which can be bought from the likes of Waterstones or Smith's.

I actually bought a ebook from Penguin's website at the weekend. It was quite frustrating to find that merely to transfer it to my ebook reader I had to setup an Adobe ID and download additional software (which was almost identical to the Sony ereader software I already had!). It reminds me of the impediments of early digital music when it was all DRM protected.

Presumably it must be quite cheap to issue the ebook; I mean its not as if there are copies to pulp if it doesn't sell

Richard Gadsden said...

Small publisher interested in eBooks but doesn't want to pay Amazon 60%?

Hmmm, why not talk to the most successful small eBook publisher? Baen.

Baen are a small US SF publisher who have been making a lot of money from a highly-successful direct sales ebook website for more than a decade.

Back before the Kindle, they were getting 30% of their revenue from ebook sales - it's higher now.

Whether you copy their model, or buy into www.webscription.net or whatever, at least it's worth knowing that there is another success story that isn't Amazon.

Thorpe said...

As others have variously said above, change the game. Biteback is a niche political publisher, you have a credible platform for publicity either online, on the airwaves or on the telly.

You can publish direct to Kindle without going through Amazon. The iPad will follow suit within the year. You've already got a website. I doubt the technology and hosting costs of converting to e-publishing and delivery would cost more than £10,000 per annum. Double that if you want (and why wouldn't you) to upgrade the site to include hosted publicity such as video interviews with the author. If a book takes off electronically, then perhaps follow it up with a printed copy. Don't start with the most expensive, least return format. Be agile.

That aside, I also agree with James: if Victoria Glendinning is moaning, she'd better look to her business model. She's looking like a dinosaur from this perspective.

asitc said...

If this means that you are now only going to be able to afford to ride a bicycle rather than that poluting beats of an Audi that you drive at a moment, then personally I think that's a good thing.

Chris Howell said...

The barriers to entry to the physical book distribution market these days are clearly formidable, and Amazon and few others have it sown up.

E-Books is another matter - it ultimately isn't that expensive to setup a shopfront and distribution network online, so there is a limit to how long the likes of Amazon can get away with ludicrous profit margins on this activity - other credible distribution channels will appear and the balance of power should shift back to those that actually own or control the content...

English Pensioner said...

I would never buy a book about a living, or recently deceased person, or indeed any history of recent events. Time has to pass before you can be objective about people and events.
The most recent biography that I have read was that of Enoch Powell, which I was given as a present.

Wrinkled Weasel said...

An eBook deal with Amazon means a tie-in with Kindle. That merely perpetuates the kind of garotting tactics that Apple tried (and failed) to do with iTunes.

The real book market is not dying, it is changing and responding to technology. We had trousers before the Spinning Jenny came along, and despite the efforts of luddites, we still have trousers.

You have to decide if you sell Primark trousers, or Anderson & Sheppard trousers.

Nicki UK (Trans Authoress) said...

I think everyone is missing the point, the biggest problem is not the market, it is the readers.

The readership is falling and to be honest with you I do not know what gets read in english classes now, but back in the 80s I was forced to read and line by line analyze Of Mice and Men and Lord of the flies. Neither book i would have touched with a barge pole if given the chance.

I am a author, unpublished at the moment with 3 cyberpunk/sci-fi books finished and a futher 9 well started and a further 5 in the basic stages of having written a few pages for. I am not looking at going to a traditional publisher as the content is not what they want as i touch on subjects that they would shy away from for the reason it is not "Mass Market". I love writing and would love it to be my main job but i also know the economics is not there for it. I am using the net and social networking sites to get the word out about them.

BrianSJ said...

Buying a paper book direct from a publisher has been a stupid way to buy. The publisher has usually charged postage over the cover price, despite not having a retailer to pay. This when many retailers would have 'got the book in' for no charge, or sent it postage-free.I don't see publishers less awake than Biteback coming up with any resistance to Amazon. I wish you well, but direct marketing and sales for books, music, film etc. looks hard to achieve on any scale.

Jane Griffiths said...

I have just been informed by Waterstones and WH Smith that they will no longer sell me ebooks (I have a Sony ebook reader) because I live outside the UK, "for legal reasons". WTF? Waterstones will happily sell me a printed book and charge through the nose for delivery. The market for books in English outside the UK is quite large, I know by the hungriness of the demand for second-hand paperbacks in English here in my French town. And ebooks are convenient. So please, publish them, and ignore Mr Amazon. I have an iPad but am still waiting for ebooks in English readable on there.

David said...

www.lulu.com is another option for physical books. I've used it and it works really well.

Professor Pizzle said...

With regard to what Chris said earlier, “the barriers to entry to the physical book distribution market these days are clearly formidable".

I've been publishing for 20 years since and it's the distribution part of that that is the problem, not the physical book part. It's never been easier to actually physically make a book. It's never been easier to actually get ‘published’.

Unfortunately, it's never been harder to actually get your book into a bookshop.

As Ian says the system is completely bottlenecked. Without Waterstones you are toast.

I work in the highly illustrated market. Children's picture books, coffeetable books etc. It costs a lot of money to put these books together. Far more than just a novel. I've lost count of the number of excellent projects which have been commissioned or accepted, raved about by marketing publicity and sales, produced (researched, written, edited, designed, illustrated) proofed, checked, and finally printed only to have Waterstones turnround and change their minds. Meaning the book no longer has any possibility of being put in front of the general public.

It's shocking how many of these projects go through all the stages and then just disappear. Anyone not in publishing would be amazed.

I, and many people I know are very excited about the concept of digital and downloadable books simply because we hope it will mean an end to the bottleneck in the distribution chain.

tory boys never grow up said...

The economics of this are interesting as they yet again demonstrate what happens when an increasingly large proportion of market supply is channeled through the hands of a small number of middlemen. The same has happened with UK supermarkets and with the same result i.e. both consumers and suppliers suffer as a result.

Even those who believe in free markets can sometimes see the arguments for government intervention when markets become so distorted. Although this is much more the case in the US where many on the right are supportive of anti-trust/monopoly legislation. In the meantime perhaps something can be learnt from the respeonse to supermarkets in terms of farm shops/farmer markets etc. As an idea I wonder if now is the time for a relaunch of an updated version of book/affinity clubs - that said I think the New Labour biography book club is something of an oversaturated market at present.

easleyweasley said...

Ebooks - let's see, author submits manuscript as a Word document. Publisher runs this through a program to convert it to an ebook. Then ... er, that's it, really.

Kingbingo said...

Iain, gentle sir, what have you done signing up to Amazon?

Just go it alone, put the epub and pdf format on your site and sell directly. That way a huge range of mobile devices and readers can access the book. Including people who quite sensibly don’t buy a kindle, but another ereader, especially to avoid amazons tied in format and rip off pricing. I use a Song PRS-350, a lovely little device and I can buy my books from whomever I want. If you buy a kindle you have to shop at the kindle store, and pay whatever they want. They do have first mover advantage, but it won’t last long. People will want to start reading books on their own mobile device of choice.

You’re in a niche area, so publish your ebooks on your site, and charge a great price point, I sort of doubt you margin on a £15 hardback is much more than £3.99/£4.99, so use that price point. If you really must do a deal, do it with people who use the epub format such as WH Smith or Waterstones. Amazon, are not like you say monopoly providers of anything other than their own rip-off format.

Avoid this stupid DRM, all it does is piss off your paying customers by making the accessing and storing of their books a total pain. If someone wants to pirate your books it doesn’t matter how good your DRM is, they will crack it. But I don’t think you will have that problem with your more niche books. Whenever I buy a book, I spend 10 minutes cracking the DRM protection, not because I am going to upload it onto a P2P site, but because I want to store my books and upload to my mobile them as I see fit and spending 10 minutes cracking the security is totally worth it to avoid jumping through flaming hoops forever after.

You may not be worried about my custom. But if you go with amazon I will sadly not read your books and I refuse to be ripped off by amazon, and I don’t read deadtree books anymore, this would be a shame because you have some great titles.

If you go through Waterstone, WH Smith or go it alone your get a better margin and a more sustainable model. Its a good deal for your customers, it’s a good deal for you. With Amazon, they screw you, and they screw the customers, everyone except Amazon looses.