Amazon and book industry

[Rrty]

I just read a very fascinating article over at Vox about Amazon's power over publishers of physical books. It's entitled "Amazon is doing the world a favor by crushing book publishers." Check it out if you can.

Given Stephen King has weighed in on this issue, I found author Matthew Yglesias' summary and perspective on the conundrum quite useful, and in fact, compelling.

His basic thesis boils down to this: publishers basically add one function of value to the author: to serve as a venture capitalist that forward an advance that the author does not need to pay back (except as it concerns not being paid royalties until the publisher recoups the advance).

A very smart observation. But, it seems as if publishers are fighting a losing battle, and as he points out, it may simply be another step in the evolution of the industry.

I don't believe that publishers will disappear entirely. I think instead that the business models will have to change and that new revenue sources will need to be explored. As an example: why can't a publisher also buy movie rights to every book and actually make movies from them? (I assume there is nothing legally preventing publishers from doing that, but I do not know; perhaps someone here does?)

There is one simple solution to the problem that maybe I haven't thought all the way through but that seems, nevertheless, doable: publishers should simply publish some books exclusively in the physical world and some books exclusively in the world of the e-. What might be even better is for some authors to experiment with publishing just short works of fiction at Amazon; that would differentiate their distribution paradigms even further.

It's interesting because, someone like King doesn't even need to do e-publishing, but it frankly is such a huge potential source of income that it is difficult to ignore; it almost exerts a sort of economic gravity from which there is no escape.

Yet, if publishers want to fight Amazon, why not publish just Amazon-only products from its authors?

Most likely, the big, name authors won't get hurt, this is more a story of the little up-and-coming women and men of letters who won't have access to advances, and it will make the lives of literary agents increasingly difficult.

Still, in an age where people can self-publish and crowd-source capital, I would imagine that's how they will ultimately gain access to advances. And once they do, they will always have access to them. Just as King does. And publishers will only be able to work with blockbuster authors and blockbuster books that break away from the self-published slush pile to which Amazon happily caters.

 

[Moderator]

If an author is smart they would never turn over their film rights to a publisher. Steve found that out the hard way as when he first started out in the publishing business, he did not protect his rights and lost out on a lot of income as a result.

 

[Lord Tyrion]

Is the bookstore truly dead? Barnes and Noble is the only retail bookstore in town, but there is also Target which sells books at a bargain price. It's hard to imagine losing the experience of browsing through books and picking one that you think you would enjoy. I would hate to have to buy books online because they couldn't be sold in stores. I hope it never gets to that point.

 

[Rrty]

Lord Tyrion, I'm afraid the bookstore as we knew it is in fact dead. Examples of the old model are rare, at least. My local B&N has become a curious hybrid of bookstore, Toys R Us, and museum gift shop. Target can't really replicate that model.

You'll have to forgive me, Ms. Mod -- when it comes to King, I do want him to have all his rights. In fact, I've asked several times "does he make money off this" when new filmed projects come up. Very odd that he doesn't seem to participate in, for example, "Children of the Corn" sequels. And very disappointing.

However, I'm pretty objective, and I have to say, generally speaking, that in the digital age and in the search for new revenues, publishers need to get those rights. I wouldn't be honest if I didn't say that that is how I would do it if I were a publisher. I'm a big believer that most businesses that distribute entertainment-related product need to become producers as well. Even Barnes & Noble -- that company could help itself by producing its own movies and TV shows. So could a Toys R Us. If Amazon can have an Amazon Studios, why shouldn't Barnes & Noble have a B&N Studios and produce low-budget fare? Saw was made for less than $2 million, I think. That's worth a corporate bond, I think.

 

[Ebdim9th]

I was listening to a financial guy on the radio the other day, Clark Howard, and he was saying that independent book stores are actually booming right now relative to the big chain book stores....

The primary reason I do my shopping at brick-and-mortar stores is that, when I pay cash for something, I know that a hacker/identity thief has zero chance of tracking that transaction.

 

[Mr Nobody]

Publishers might 'need' to get those rights, but what of the author? Writers need to eat too, you know.
Advances from publishing houses have been becoming smaller (to the point of vanishing entirely) for some time now and average annual earnings are ridiculously low - most writers, even those at or near the top of the game, have to supplement their income in a variety of ways. Most mid-listers will hold 'proper' part-time jobs. Below that, the odds are that they're reliant upon a full-time job, and/or some arrangement with a very understanding partner/spouse. Holding onto potentially lucrative rights is key to some authors' survival, with the majority plugged on more in hope than expectation.
Furthermore, whatever traditional publishers do, Amazon will follow suit, so to self-publish with KDP you'll agree to sign over certain rights in exchange for simply being allowed to publish on their platform.
In that scenario, publishing houses don't win, but authors lose big-time (potentially, since not every book will be turned into a film or TV series).
The real problem that publishing houses have is that they have not sufficiently moved with the times, whilst simultaneously becoming increasingly risk-averse. There are reasons for that - marketing and accounts ruling over commissioning, and the dominance of the 'cult of celebrity', for example - but the end result is that a lot of writers have had to seek alternative avenues. (About those advances again: they've shrunk for most, but for the 'name' - usually not a writer by trade and whose books are 99.9% certain to have been ghosted - they regularly reach six and seven figures. The story of SK's response to a certain phone call isn't likely to be repeated by a newcomer, anywhere, anytime in the future. Of course, the houses lose their shirts on most of these 'celeb' deals, but still they go on, and on.)
Now, I'd argue that we do need traditional publishers. The worst possible outcome is for Amazon to become the only game in town (their royalty rates are very generous and their pricing policy is friendly to readers, but if the traditional book trade goes down the gurgler, prices will rise and royalties will be severely squeezed...on top of the rights grab that'd come in). But if traditional publishers want to survive, they have to wake TF up and start taking a few punts again. These are educated people; it's not like they'll run with just anything.
When I read about SK being part of the 'letter to Amazon' thing, I cringed a bit. I did so because I asked myself if, had the industry (and technology) in 1970-odd been as it is now, that sometime teacher, sometime laundry worker from Maine would have been given his break. The answer I came up with was 'No'. He'd have been left with Amazon and self-publishing. Generals just forget how it felt to be a grunt, sometimes, so while I can understand why he (and others) felt the need for the letter to Amazon, they should also be writing to the folks in charge at Hachette, reminding them that, once upon a time, someone took a big chance on an newcomer and it came up trumps.

 

[Ebdim9th]

Personally, I wouldn't quit my day job until I started making royalties... advances become a trap, you spend your advances and end up owing the royalties... then you ask for another advance, they give it to you, the royalties stay just out of reach, and so on....

 

[Rrty]

Mr. Nobody, you bring up a lot of great points (I have to be honest: a few sentences I did not understand, but for the most part, I get what you are saying; although, please explain the Stephen King phone-call thing, I didn't get that at all). The situation is in fact very complicated.

Now, to be completely honest, I have to say that writers shouldn't be overly exploited, but I don't believe it is the job of a publisher to make them rich. If an author wants to be rich, she should look at it as a small business and self-publish. Because publishers are taking the risk, they and their shareholders should be compensated first, and at a maximum rate (remember: we are all shareholders through our investments, so we all benefit from this line of thinking).

The counterbalance could possibly be found in reforms to contract law. The definition of unconscionable contracts should be broadened. As an example, maybe no one should ever be forced to sign a multi-book contract (the benefit of this and the transfer of power from publisher to author is obvious). And perhaps there should be some sort of mandated minimum for sales to publishers.

But I must disagree that authors should have access to certain amounts of wealth because, otherwise, they are being mistreated. I know that's not a popular thing to say, and I think there is room for compromise, but I look at writing as no different than the job of a social worker or of a home health aide -- they make small amounts of money and probably need multiple sources of income, yet they provide a much more important service than a storyteller. If one goes into writing, maybe one should accept the fact that, even if they are successful on some level, they won't be able to buy a second house, one that is on a lake -- if one wants to do that, maybe one could be a college professor or a postal employee. And simply put there are more important things in the world than stories -- and I love stories. I would actually rather see more capital allocated to finding a cure for cancer that is no more harsh than an antibiotic treatment for a bacterial infection as opposed to finding the next Stephen King, as an example (and I would love to see social workers make more).

I agree that the generals are overpaid and greedy. And I agree that authors should be paid fairly. I also want to see as many authors as possible make a ton of money. I wish everyone who wrote a segment of this year's Halloween story gets a publishing deal and makes a ton of cash. I just don't know if these wishes make economic sense these days. It's like the music industry: it's been so disrupted the mid-level guys have to tour like crazy. I don't know what the equivalent is for writers...

 

[skimom2]

If an author is smart they would never turn over their film rights to a publisher. Steve found that out the hard way as when he first started out in the publishing business, he did not protect his rights and lost out on a lot of income as a result.

It's almost impossible for a new author to have those types of stipulations in a contract, unfortunately. The 'stock' type of contract for smaller publishers (in my experience, they're all pretty much alike) automatically include something about the publisher owning some portion of subsidiary rights. The bigger your name, the more pull you have in negotiations; little guys sometimes have to take what they can get to get a foot in the door.

 

[skimom2]

Personally, I wouldn't quit my day job until I started making royalties... advances become a trap, you spend your advances and end up owing the royalties... then you ask for another advance, they give it to you, the royalties stay just out of reach, and so on....

And royalty set ups vary widely, so that isn't a solution, either. Most little guys need to hang on to that day job even after royalties kick in. Advances... not many of those out there (or not much, anyway) anymore.

 

[Ebdim9th]

The readers will pay the writer what they think he or she is worth... a writer can have the vision to bring inspiration to a more technical thinker to explore avenues they would not have thought of going in on their own. But once inspired to go there, they apply their peculiar skills to the new opportunities in ways the writer cannot. Yet they would not ever have gone there had the writer not illuminated the way... be it a social worker, a doctor, an astrophysicist or what have you.

ETA Ski... I agree about how slow royalties are to come in... my rule still applies, work the day job, manage the royalties, accept few if any advances on principle...

 

[Lord Tyrion]

I was listening to a financial guy on the radio the other day, Clark Howard, and he was saying that independent book stores are actually booming right now relative to the big chain book stores....

Did they say why they were becoming successful?

I would think it's due to the sense of community that you don't find in the large chains. The independent bookstore I go to has book clubs in which each member purchases a book and talks about it every month with the club. It's one thing independent bookstores offer that I appreciate. However, independent bookstores charge full retail for for their books which is hard to deal with since Target and B&N is often a lot cheaper.

 

[Lord Tyrion]

Lord Tyrion, I'm afraid the bookstore as we knew it is in fact dead. Examples of the old model are rare, at least. My local B&N has become a curious hybrid of bookstore, Toys R Us, and museum gift shop. Target can't really replicate that model.

The B&N in my area are the same way, but they do seem to be attracting enough business. It's funny that B&N is almost like the little guy trying fight to stay viable with large online chains taking over. Twenty years ago B&N was the villain that was a threat to independent bookstores.

 

[Mr Nobody]

Rrty: Sorry about that. It'll be because the situation is so complicated that total clarity gave me the slip. The SK phone call thing: he tells it better than I, perhaps most notable in On Writing, but the short version is, after completing Carrie, he was waiting to hear about a deal for the paperback rights. The call comes in telling him they've gone for a six-figure sum, half of which is his. It's a bit of a shock, to say the least. It drops him on his arse (literally).
It's a great story. It may even be 100% true (hey, he has warned us, elsewhere, about trusting the things fiction writers tell you about themselves ). But whether it is or it ain't, it's not likely to happen again 'cause the landscape's changed. The generals and grunts thing was about writers, btw. SK was a grunt back then. He's a general now. He remembers some of what being a grunt was like and may still see himself as one, but he maybe doesn't realize how much has changed at the front, let alone down in the mud of the trenches.
Now...

I'm not talking about publishers making writers rich. I'm talking about authors - without whom the publishing company would make precisely nothing, meaning it's ultimately a symbiotic relationship - getting a fair crack at earning a living. As Ebdim9th points out, you can end up owing money if you don't earn out your advance (excellent point, Ebdim9th!), though a decent advance can make all the difference and, in all fairness, they've only ever offered what they expected to recoup. Doing anything else would be madness.
The problem these days appears to be that they withhold advances for the many in order to seduce the 'celeb' few. A $1 million advance often goes to the 'celeb', who then fails to earn it back. A couple of horror stories I've heard about involve 'famous' folks who got the seven-figure advance, earned less than a tenth of it back, but got to keep the rest under the terms of their deal...because they can afford very good lawyers and there's usually some kind of bidding war going on to land them, which plays entirely into the celeb's hands, every time. On this side of the pond, a couple of publishers have got stung very badly 2-3 years in a row...yet still they persist.
Now, I'm not suggesting giving the same amount to a newcomer - the PR investment required to raise public awareness would be prohibitive, for a start. But instead of $1m/£1m advances to one person (who recent history has shown is very unlikely to earn it back, let alone bring in a profit), newcomers could be offered 5-10k and they'd run away happy. PR would have to get a bit busy, but that's what they're paid for. Why have them, otherwise? Makes no business sense to employ people who do nowt.
The 'celebs' would have to accept less, but what of that? How many sequinned phone cases does a person need, anyway?

I agree that social workers, nurses, teachers, cops, firefighters, et al deserve more for what they do*. But, playing devil's advocate, your argument also contains the counter: if they wanted more, they too could go and be college professors and the like. (Research doctors earn a ton, relative to those in other groups. Some of them are likely to be at the lake-side with the college professors - in fact, some of them will also be college professors.)
But again, I'm not talking about getting rich (most authors don't even earn the equivalent of the minimum wage, and find holding 'regular' jobs difficult because of the needs/demands of the publishers or the requirements of the job). I'm talking about earning a living, paying your taxes, using your ability to diversify the economy and free up jobs for people who might not have the same skills, abilities and opportunities that you, as a writer (or singer, artist, actor, sculptor, musician...) have and probably take for granted. The living may be modest or it may be lavish**, but as long as you're earning enough to put food on the table, clothes on your back, and keep the lights burning through winter, it's a win. And if you're earning a load, you can always do what SK does and support charities, fund local/community projects, and so on. (You'd also be paying a good whack in taxes, so everyone wins that way too, and I wouldn't even like to guess at how many people SK has brought to parts of Maine as tourists. Nice little boost to the local economy, there.)


* Those jobs are more important than storytelling. But then, the same is true when measured against the activities of merchant bankers and hedge fund managers. However, these kinds of jobs used to be called vocations, or 'having a calling', the implication being that half (or most) of the reward came from doing the work itself. And yes, you can put writing in that bracket as well.

** Personally, I don't want to be rich. It'd be too much hassle. £20-25k a year would do me...which is roughly what I'd earn from being a teacher, a social worker, or going back into accounts.

 

[GNTLGNT]

 

[Moderator]

Lord Tyrion, I'm afraid the bookstore as we knew it is in fact dead. Examples of the old model are rare, at least. My local B&N has become a curious hybrid of bookstore, Toys R Us, and museum gift shop. Target can't really replicate that model.

You'll have to forgive me, Ms. Mod -- when it comes to King, I do want him to have all his rights. In fact, I've asked several times "does he make money off this" when new filmed projects come up. Very odd that he doesn't seem to participate in, for example, "Children of the Corn" sequels. And very disappointing.

However, I'm pretty objective, and I have to say, generally speaking, that in the digital age and in the search for new revenues, publishers need to get those rights. I wouldn't be honest if I didn't say that that is how I would do it if I were a publisher. I'm a big believer that most businesses that distribute entertainment-related product need to become producers as well. Even Barnes & Noble -- that company could help itself by producing its own movies and TV shows. So could a Toys R Us. If Amazon can have an Amazon Studios, why shouldn't Barnes & Noble have a B&N Studios and produce low-budget fare? Saw was made for less than $2 million, I think. That's worth a corporate bond, I think.

Children of the Corn is exactly one of those examples I was referring to as having the rights held by the publishing company early on in his career. He has nothing to do with them because he was never involved in the process and does not get any money from them. He also didn't have anything to do with the Pet Sematary sequel, sequels?, because it wasn't written into the original contract that no sequels could be made. It had seemed at the time that there was no need because what could the sequel possibly be about? Lesson learned. A lot is changing in the film industry, though, with how payment for the rights is negotiated and that can go on a case by case basis. For one project it might make sense to get all the money up front whereas for another it would be better to negotiate a percentage of the proceeds. That's another reason why trying to build that into the publication rights does not make sense.

 

[Lily Sawyer]

I think instead that the business models will have to change and that new revenue sources will need to be explored. As an example: why can't a publisher also buy movie rights to every book and actually make movies from them? (I assume there is nothing legally preventing publishers from doing that, but I do not know; perhaps someone here does?)

No, there's nothing stopping publishers from legally optioning film rights to a book. But publishers produce books, not films. It's a completely different industry from start to finish.

 

[Ebdim9th]

Rrty, I still believe a storyteller can be just as important as those other fields, cases in point: In his novels Arthur C. Clarke invented the communications satellite, through his storytelling the technology was developed, as were other ideas and concepts for the space program, both small and large, from the writing of Larry Niven, Gene Roddenberry, Harlan Ellison, J. Michael Straczinsky and others.... concepts are often first brought to light in works of speculative fiction. Love her or hate her, Ayn Rand's philosophical novels such as the Fountainhead and Atlas Shrugged inspired entire economies... ETA: Isaac Asimov supplied the science definitions to the 1978 edition of the American Heritage Dictionary of the English Language...

Mr. Nobody, Larry Underwood in The Stand ran afoul of the same problems with overspending royalties into deep debt... I've learned quite a few life lessons reading Stephen King and other authors, who use their stories to teach, everything from wise spending habits to theories of teleportation....

Lord Tyrion, I think used book stores were included in that estimation as well.

 

[misery chastain loves co.]

I'm confused. It doesn't take much.
I sifted through this thread and gathered it's about the publishing industry which seems to be struggling lately. Is Stephen for or against e-books? I bought a Kindle a few years back because he has written stories that you can only get on the kindle, at least as far as I know. UR, In the Tall Grass, Face in the Crowd etc. Granted all short stories but does he regret doing them e book only?
We have a Books A Million and a Mr. Paperback here in Bangor and I love looking through them still. It has gotten to a point where I do purchase a lot of e-books if it's a one off or something I don't need on my limited shelf space. Pretty much the only physical books I purchase anymore are Stephens, his son Joe(bought Owens on the kindle), and various horror reference books.

 

[skimom2]

I'm confused. It doesn't take much.
I sifted through this thread and gathered it's about the publishing industry which seems to be struggling lately. Is Stephen for or against e-books? I bought a Kindle a few years back because he has written stories that you can only get on the kindle, at least as far as I know. UR, In the Tall Grass, Face in the Crowd etc. Granted all short stories but does he regret doing them e book only?
We have a Books A Million and a Mr. Paperback here in Bangor and I love looking through them still. It has gotten to a point where I do purchase a lot of e-books if it's a one off or something I don't need on my limited shelf space. Pretty much the only physical books I purchase anymore are Stephens, his son Joe(bought Owens on the kindle), and various horror reference books.

In a nutshell: the book publisher Hatchett and Amazon are having a feud. Amazon wants the right to limit price on books, Hatchette says no, let the market set the price. Mr. King and several other big names have come down on the side of Hatchette. There are pros and cons to both arguments (and there is thread somewhere here where we hashed some of them out).

Mr. King was one of the first writers to publish in the digital sphere, so the likelihood that he's anti-tech is pretty slim.

Most of this thread has tussled over whether Amazon is killing physical book stores (though we wandered a bit, as we are wont to do--lol), and whether that is a good idea. Also, a little bit about what rights authors need to hold on to, and whether that's even possible for little guys.