Big 5 Publishers

May 2015 Author Earnings Report

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This post originally appeared on Author Earnings in 5/15.

Welcome to the May 2015 Author Earnings Report. This is our sixth quarterly look at Amazon’s ebook sales, with data taken on over 200,000 bestselling ebooks. With each report over the past year and a half, we have come to see great consistency in our results, but there is always something new that surprises us. Often, it’s something we weren’t expecting, like the massive shadow industry of ISBN-less ebooks being sold, or the effect Kindle Unlimited has on title visibility. This time, we went into our report curious about one thing in particular. But we were still not prepared for what we found.

If you’ve been shopping for ebooks on Amazon lately, you may have seen this new addition to many ebook product pages:

Nelson Book

This announcement can be found on ebooks from several of the largest publishers, and it appears to serve as both an apology from Amazon and also a shifting of the blame for high ebook prices. Amazon has stated in the past that they believe ebooks should not cost more than $9.99. Self-published authors are no doubt familiar with this price constraint, as their royalties are cut in half if they price higher than this amount. But after a contentious and drawn-out negotiation with Hachette Book Group last year, Amazon relinquished the ability to discount ebooks with several publishers. Prices with these publishers are now set firmly by them.

 

Read the full report on Author Earnings.

 

Do Publishers Deserve to Exist?

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This post by Peter Ginna originally appeared on his Dr. Syntax blog on 10/24/15.

This week’s screed against book publishers comes from Matt Yglesias at Vox.com, who proclaims, “Amazon is doing the world a favor by crushing book publishers”–a headline that shouts clickbait but fairly reflects his piece. Yglesias, whose work I have often admired, notes that he’s the child of two authors and has published a book himself, so his hatred seems to be honestly earned. Writing of the “fundamental uselessness” of publishers, he says they are going to be “wiped off the face of the earth soon” by Amazon “and readers will be better for it.”

Book-business types rolled their eyes at Yglesias’ hostile tone and ignorance of some key facts, but I saw it cited as smart and “thoughtful” by a number of media people and others who I’d have hoped would know better. So at the risk of repeating points that have been made many times before (but seem still to be widely un-apprehended), maybe it’s worth briefly reminding ourselves just how publishers do add value in connecting writers and readers. So, pace Matt Yglesias, here are some of the services publishers perform.

Curation. The function of choosing what work is most worth presenting to readers is derided by some as a retrograde, “elitist” notion. Why should publishers appoint themselves as selectors of what people ought to read, when everybody can put their work online and let readers judge for themselves?

 

Read the full post on Dr. Syntax.

 

Michael Cader of Publishers Lunch In Conversation With J.A. Konrath

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This post by J.A. Konrath originally appeared on his A Newbie’s Guide to Publishing blog on 8/1/14.

Joe: Yesterday I fisked Mike Shatkin, who openly brags he doesn’t read my blog, and has removed my comments from his blog because he felt them too long.

I also fisked Michael Cader from Publishers Lunch.

Cader, however, showed he doesn’t fear debate, and had no problem sharing his opinion in a forum where many have a contrary point of view. He responded to my points in the comment section, and that took integrity and more than a little bit of guts.

Michael Cader: Hi, Joe. I’m glad we have at least some points of agreement. Some of your other replies are tangential rather than on point.

Joe: Thanks for responding, Michael. While it isn’t unprecedented for people I blog about to respond, it is certainly unusual, and shows both an open mind and a willingness to engage. You have my respect.

Cader: Amazon is very careful with their words, even if not elegant. The post begins, “A key objective is lower e-book prices.” A lot of traditional media have written the post up as if it said “The key objective…” What are the other key objectives, Amazon? Why do your conversations with people in the trade talk about looking for your fare share of the “business efficiencies” produced by a rising ebook market and your investments, while your public words are only about pricing objectives.

Joe: Well, we agree that Amazon is careful with their words. It’s unusual to hear an observation like that leveled as a criticism. Does Cader prefer the Hachette approach, which is to clear English what a chainsaw is to a tree…?

 

Click here to read the full post on A Newbie’s Guide to Publishing.

 

It is Hard for Publishers to Apply Even Harvard B School Advice in Their Struggle With Amazon

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This post by Mike Shatzkin originally appeared on The Shatzkin Files on 7/15/14.

Harvard Business Review published an article recently by Benjamin Edelman called “Mastering the Intermediaries” which gives advice to businesses trying to avoid some of the consequences of audience aggregation and control by an intermediary. The article was aimed at restaurants who don’t want their fate controlled by Open Table or travel companies who don’t want to be beholden to Expedia. The advice offered is, of course, scholarly and thoughtful. It seemed worth examining whether it might have any value to publishers suffering the growing consequences of so much of their customer base coming to them through a single online retailer.

The author presents four strategies to help businesses reduce their dependence on powerful platforms.

The first suggestion: exploit the platform’s need to be comprehensive.

The author cites the fact that American Airlines’ strong coverage of key routes made its presence on the travel website Kayak indispensable to Kayak’s value proposition. As a result, AA negotiated a better deal than Kayak offered others or than others could get.

Despite some suggestions in the late 1990s that publishers set up their own Amazon (which they subsequently half-heartedly tried to do with no success) and a couple of moves to cut Amazon off by minor publishers that were minimally dependent on trade sales, this tactic has never really been possible for publishers on the print side. Amazon began life by acquiring all its product from wholesalers — primarily Ingram and Baker & Taylor — before they switched some and ultimately most of its sourcing to publishers to get better margin. But the publishers can’t cut off the wholesalers without seriously damaging their business and their relationships with other accounts, and the wholesalers won’t cut off Amazon. So for printed books, still extremely important and until just a couple of years ago the dominant format, this strategy is not worth much to publishers.

 

Click here to read the full post on The Shatzkin Files.

 

The War on Amazon is Big Publishing's 1% Moment. What About Other Writers?

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This post by Barry Eisler originally appeared on The Guardian on 6/4/14.

More people are buying more books than ever, and more people are making a living by writing them. Why do millionaire authors want to destroy the one company that’s made this all possible?

As an author of ten novels – legacy-published, self-published, and Amazon-published – I’m bewildered by the anti-Amazon animus among various establishment writers. James Patterson pays for full-page ads in the New York Times and Publishers Weekly, demanding that the US government intervene and do something (it’s never clear what) about Amazon. Richard Russo tries to frighten authors over Amazon’s “scorched-earth capitalism”. Scott Turow conjures images of the “nightmarish” future that Amazon, “the Darth Vader of the literary world”, has in store for us all. And “Authors Guild” president Roxana Robinson says Amazon is like “Tony Soprano” and “thuggish”.

These are strange things to say about a company that sells more books than anyone. That singlehandedly created a market for digital books, now the greatest source of the legacy publishing industry’s profitability (though of course legacy publishers are sharing little of that newfound wealth with their authors). That built the world’s first viable mass-market self-publishing platform, a platform that has enabled thousands of new authors to make a living from their writing for the first time in their lives. And that pays self-published authors something like five times as much in digital royalties as legacy publishers do.

I can think of at least several explanations for the strange phenomenon of authors – and an entity calling itself the calling itself the “Authors Guild” – railing against a company that sells so many books, that treats authors so well, and that has created so many new opportunities for writers. Basically: equating the various functions of publishing generally with the legacy industry specifically; blaming Jeff Bezos for technology; and experiencing judgment clouded by self-interest.

 

Click here to read the full post on The Guardian.

 

Tom Weldon: 'Some say publishing is in trouble. They are completely wrong'

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This post by Jennifer Rankin originally appeared on The Guardian UK / The Observer site on 4/5/14.

Ahead of the London Book Fair, the UK head of Penguin Random House insists his industry has coped with the digital revolution better than any other

The indie booksellers are shutting up shop, authors struggle to make a living, and more than 60% of 18-to-30-year-olds would rather watch a DVD than get their nose in a book. But as the publishing world gathers at the annual London Book Fair this week, one of the UK’s leading publishers thinks the notion of the book industry in crisis is just a cliched old story.

“Some commentators say the publishing industry is in enormous trouble today. They are completely wrong, and I don’t understand that view at all,” says Tom Weldon, UK chief executive of Penguin Random House, one of the biggest players in Britain’s book world.

As an up-and-coming publisher, he persuaded a teenage chef called Jamie Oliver to sign a book contract. He gets to edit Jeremy Paxman‘s prose and read the latest Ian McEwan manuscript. And since last July he has been at the helm of the UK division of the world’s biggest publishing house, after a mega-merger brought together Penguin, Random House and their 15,000 writers.

While a recent Booktrust survey showing that reading for pleasure is declining among young people might lead some execs to reach for the chablis, Weldon is convinced book publishers are doing better than other creative industries in adapting to a digital world.

“In the last four years, Penguin and Random House have had the best years in their financial history,” he says. “Book publishers have managed the digital transition better than any other media or entertainment industry. I don’t understand the cultural cringe around books.”

 

Click here to read the full post on The Guardian UK / The Observer.