Wednesday, June 01, 2011

Ebooks and Self-Publishing Part 3 - Yet Another Dialog Between Authors Barry Eisler and Joe Konrath

Joe: Many exciting (and some strange) things have been happening since we chatted about ebooks in our first and second online conversations.

Barry: Something with monkeys and frogs?

Joe: The frogs are losing, man. Losing bad.

Barry: Might be worth mentioning here that for anyone who’s interested, in addition to the blog posts linked above, in about a week (around June 7), the whole three-part conversation, fully edited and with headings and a table of contents, will be up on Amazon, B&N, and at Smashwords under the new title, Be The Monkey: A Conversation About The New World Of Publishing Between Barry Eisler and Joe Konrath. We wanted to make it free, but because it’s self-published, we can’t charge less than 99 cents. Which is still a pretty good deal for a 35,000+ word conversation containing so much interesting commentary, much of it made during intervals of sobriety.

Joe: And also containing so many monkey and frog links. In the interest of keeping this installment under 10,000 words because we both have deadlines, let's curtail the monkey business for a moment.


IS IT HYPOCRITICAL FOR AN AUTHOR TO SELF-PUBLISH AND ALSO PUBLISH WITH AN AMAZON IMPRINT? AND WHAT’S IN THAT CONTRACT, ANYWAY?

Joe: You made big news at BEA with your announcement that you've signed with Thomas & Mercer, the new Amazon.com mystery imprint. The same imprint I just signed with for Stirred (with Blake Crouch).

Barry: Yes! I’m thrilled about the deal. And fascinated by some of the commentary on Kindle Boards and in the Twitterverse.

Joe: Seems like a lot of people have responded without thinking things through.

Barry: The most common complaint goes something like, “Eisler said he was going to self-publish, but now he’s just with a legacy publisher again! Hypocrite!”

Joe: Funny how they were quick to jump on that without having read your contract.

Barry: From what people were claiming, you would have thought they’d read not just the contract, but my mind, too.

Joe: Why don’t you give a quick rundown of what’s in the contract?

Barry: The gist of it is, it’s the best of both worlds, legacy and indie. The advance and marketing muscle you (might) get in a legacy contract; the kind of digital royalties, creative control, and time-to-market you get with indie.

Joe: I think this is a good place to give everyone a friendly reminder of what our goals are, because a lot of people seem to think that going with Amazon means our goals have changed.

Barry: Let me take a crack at that.

I've said many times that "publishing is a business for me, not an ideology" and that the right deal could certainly lure me back to the legacy world. That remains true. What's more important, though, is the nature of what could conceivably lure me back. And what could lure me back is precisely what I've never been able to get from any legacy publisher--not the two who have published me; none that I've negotiated with, either. Specifically:

1) A much more equitable digital royalty split.
2) Full creative control (packaging, pricing, timing).
3) Immediate digital release, followed by paper release when the paper is ready (no more slaving the digital release to the paper release).

As it happens, all these terms are available to a self-published author, so I decided to self-publish. What some people might be missing in that simple statement, though, is that it's the terms that are important to me, not the means by which I achieve them. If these terms are a destination, self-publishing is undeniably an excellent vehicle for getting there. But it isn't the only vehicle. And if another vehicle comes along that offers all these terms, plus a substantial advance, plus a retail wing that can reach millions of customers in my demographic... then, as a non-ideological businessman, I'm going to change rides.

But "change" is a somewhat misleading word under the circumstances, implying as it does an overall either/or dynamic. And here's another misconception I've been seeing a lot: this notion that authors must somehow be classified into indie, legacy, or whatever. Reminds me a bit of apartheid South Africa's obsession with classifying citizens by their race--equally strange, though admittedly the authorial version is less invidious. Anyway, here's the thing: what really matters is that we're not living in an either/or universe. I now have four low-priced, self-published digital works, and if Amazon blows out the marketing for The Detachment, those other works (and the ones to come that I plan on self-publishing) will benefit enormously. In the face of all this, why would anyone want to argue for some sort of either/or approach? It would certainly foreclose a lot of potentially lucrative business opportunities.

For a single title that doesn't incumber my ability to self-publish or otherwise publish anything I want, Amazon offered me all three of the items I list above (except for pricing, but regardless of what the contract says, we agree that digital books should be priced far lower than legacy prices), plus a massive, uniquely Amazon marketing push to its retail operation and otherwise, plus an advance comparable to what SMP had offered me (note, though, that the Amazon deal is for one book; the SMP advance was predicated on two books. When I say "comparable," I mean on a per-book basis, and sorry everyone if I wasn't clear about that in my announcement at BEA). In exchange, I've given up certain digital retail channels because the Amazon deal is exclusive to Kindle platform devices. And Amazon will sell paper versions through its retail stores and through wholesale channels to other retailers. Anyone who thinks this sounds like a legacy deal has been talking to legacy publishers I've never heard of.

Okay, your turn.

Joe: It's a brave new world, and someone has to be first.

But it's more than that.

I wasn't the first person to upload my ebooks to Amazon using DTP.

However, I was the first person to start posting my royalty figures. This helped to inform other authors so they could make their own decisions. I've lost count of the number of people who have thanked me (over a thousand) because I was transparent in what I was doing, and because I actively disseminated the information.

Still, my main goal has been to sell books. That doesn't mean I can't help some authors along the way.

We owe no one explanations. While the self-pub culture has become pretty open about sharing figures, the legacy-pub culture is still closed-lipped.

Closed-lipped doesn't help anyone. The more information we all have, the better off we all are. Which is why we continue to talk numbers and disclose what we're doing.

My goal isn't to save the world. My goal isn't to take down the Big 6. My goal is to make a good living doing what I love.

But if I can also help a bunch of writers, and help destroy a greedy, bloated, ignorant industry, it's an epic win for writers and for readers.

Be the monkey! Remember the old saying, monkey see, monkey do? Monkeys tend to teach each other what they've learned.

The first thing you did, mere minutes after signing the Thomas & Mercer deal, was do a live interview and talk at length about contract terms. You didn't say, "sorry can't discuss that" over and over again. Instead, you broadcast (and continue to broadcast) how this deal is better than any you’ve ever had before. Not because of money. But because of the great terms it offers you as an author.

Barry: Just to be clear, it’s not just the substance of the agreement that I think is so excellent. It’s also the structure and style. It’s an amazingly clear, easy-to-understand document, and it’s free of the kinds of punitive provisions legacy publishers use to maintain dominion over writers. I love that Amazon gets that its publishing contract is a key sales tool.

Joe: Which will no doubt bring more authors to them.

Barry: Yes. Exactly the kind of competition we need in the industry, but that we’ve never had.

Joe: If the Big 6 were smart, they'd begin offering authors similar terms. For decades, the only way they competed with each other was through bidding wars, offering the largest advance. But Amazon's author-friendly contracts are about more than just the advance. Wouldn't it be great for authors if every legacy publisher suddenly realized, "We're going to lose our authors! How do we woo them back?"

Which is what will happen, but I haven't seen any wooing. I haven't even seen any acknowledgement that there is a problem.

Barry: A last thought about what one author owes others. While I certainly am guided by self-interest, I’m also profoundly motivated by the desire to make publishing a better industry for readers and authors (for anyone who doubts me, see the For Writers section of my website). During the course of our negotiations, I worked hard to persuade Amazon to jettison various legacy provisions that gain publishers little and that authors loathe. It's a huge credit to Amazon that they listened to my arguments and changed their template accordingly, and it's satisfying for me to know that other authors will get the benefit of the more enlightened template I helped forge--both from Amazon directly, as it expands its publishing wing, and from legacy publishers, who will be forced to compete with Amazon's more enlightened terms.

Joe: What about the fact that your deal with T&M is exclusive?

Barry: Right, it’s a world deal for digital, paper, and audio rights. The ebook, again, will only be available on Kindle-format devices. My calculus was: on this one title, I’m giving up something like 20% or 30% of my digital retail channels, but Amazon’s marketing muscle will mean I sell more Kindle copies with them than I could have sold all-format copies on my own.

IS EXCLUSIVITY BAD FOR THE INDUSTRY?

Joe: You don’t think format exclusivity is bad for the industry?

Barry: I love when you play devil’s advocate.

Though I think I understand why they’re doing it, I think Amazon is making a mistake with the format exclusivity. I also think they’re going to change the practice and allow Nook and other devices to download books from the Amazon store. The store itself offers a first-rate customer experience, so I think they’d make more money giving more devices access to it. Plus it would be good for authors, too.

But on balance? I would argue that the kind of pressure required to improve legacy publisher performance and practices can better be exerted by Amazon and self-publishing together than by self-publishing alone. Because I believe legacy performance and practices are a much bigger hindrance to readers than the unavailability of this or that title on this or that platform, I do think that on balance readers will be better off in the presence of deals like mine than they would be in their absence.

Joe: Exclusivity is the new currency. Look at the videogame wars. Each system (Wii, PS3, 360) has exclusive games that help the customer determine which system to buy. This is good, not bad, for consumers, because it promotes competition. The more competition, the more technology improves, and the more prices drop.

Thomas & Mercer will allow us to reach more customers, even though it isn't an epub release. The paper distribution will be much farther reaching than we could achieve on our own, and the level of marketing Amazon does will let us peak higher on the Top 100 list, selling more ebooks (at least initially) than we could with a self-pub release, even taking into account fewer sales to Nook, Sony, and Kobo customers. I say fewer rather than zero because we're releasing without DRM, meaning the files can be formatted to epub for free.

But let's think farther ahead. Technology has become disposable. When we upgrade a cell phone or printer or iPod or TV, we dispose of the older one. We suffer from abundance.

When I was a kid, we had one black and white television. Now my family of three has seven flat screen monitors in the house, plus two laptops. We each have an iPhone. We have five iPods. I just got an iPad. And we have a Wii, a PS3, and a 360, so exclusivity doesn't matter to us. We buy the games we like.

I can see a day where it isn't a choice between a Kindle or a Nook. People will own both a Kindle and a Nook. The concern of many who haven't bought an ereader yet is exclusivity, and losing purchased ebooks if the format changes.

But ebooks are digital. While you can't play an 8 track on your iPod, right now, using free software, you can format Kindle mobi files into epub files, playable on Nook, Sony, and Kobo. You can also strip DRM and format epub into mobi, if you know what you're doing.

Exclusive is more good than bad, and there are ways around the bad.

A WORKING DEFINITION OF “LEGACY PUBLISHING”

Barry: You know one thing I think has been missing in all the online conversation?

Joe: More monkey/frog video links?

Barry: Don’t tempt me. A simple definition of what “legacy publisher” means.

Joe: We were both at BEA this week. I heard the term dozens of times. Which amused the hell out of me, since you coined it.

Barry: And you popularized it. It’s really a perfect descriptive term (and by the way, there’s a great discussion about it going on right now on Lee Goldberg’s blog). This is Wikipedia’s definition of “Legacy System:”

A legacy system is an old method, technology, computer system, or application program that continues to be used, typically because it still functions for the users' needs, even though newer technology or more efficient methods of performing a task are now available. A legacy system may include procedures or terminology which are no longer relevant in the current context, and may hinder or confuse understanding of the methods or technologies used.

Joe: Amazon doesn't fit that definition. They're innovators. They pretty much single-handedly popularized ebooks, which had been around for years without taking off with the public. Funny that publishers complain Amazon has too much power in this area, when nothing prevented them from inventing a popular ereader, or selling ebooks from their websites.

Barry: Also, have you ever heard of a traditional publisher with a powerhouse retail wing?

Joe: Or a traditional publisher who actually listens to their authors? I've been screaming about how legacy publishers need to step up their game, and have even told them how to do it. For years. None listened. Except for Amazon.

So let's put this misconception to rest: Amazon is NOT a legacy publisher.

Barry: Reasonable people might differ and we can argue at the margins, but here’s what a legacy publisher is to me. It’s a publisher that offers authors a shockingly low digital split--17.5% of retail, or 14.9% after the agent’s cut--while keeping 52.5% for itself; that insists on controlling packaging, pricing, and timing decisions; that slaves the digital release to the paper release because its business imperative is to retard the growth of digital and preserve the position of paper. Am I missing anything?

Joe: The legacy system is based on an ineffective, archaic business model. The shelf life of paper titles is getting shorter, it's getting harder for authors to make money, returns are a terrible waste, and not all books are treated equally. The few with large coop budgets and widespread distribution don’t enhance reader reader choice; they restrict it.

Barry: That’s the gist of it, anyway. If your business model revolves around: (i) maintaining the primacy of paper (in significant part, by delaying the release of digital books and pricing them too high); and (ii) offering punitive financial, creative, and other terms to authors, you’re probably a legacy publisher.

We should come up with a ten-part questionnaire or something: “If you answer more than four of these questions ‘yes,’ we’re sorry to say that you’re probably a legacy publisher.”

Joe: Another one I'll add is the inability to deal with change. It's the music industry all over again. They should be embracing new technology and innovating ways to improve their business model. I'm not seeing this. I'm seeing fear, anger, and denial.

Barry: Agreed. Anyway, I wanted to have a working definition to be clear that whatever else anyone might claim about my decision to publish The Detachment with Amazon, one thing I haven’t done is gone back to legacy publishing. Not that I wouldn’t, by the way; I’ve always been clear that for the right terms, I could go back (assuming they’d have me, and assuming there’s anything to go back to). But the right terms are what Amazon offered me. That’s the point. That, and the fact that legacy publishers, because they’re trapped by their own infrastructure and mentality, seem incapable of offering those terms.

IS AMAZON A LEGACY PUBLISHER?

Joe: Here are some quickie comparisons between legacy publishers and Amazon's Thomas & Mercer imprint.

Legacy publishers set their prices for ebooks. Amazon went with the list price I desired.

Barry: Gonna chime in here to say that in my contract, Amazon has the power to set the price.

Joe: Yes they do. No publisher will ever give up pricing control. But so far they've honored my wishes.

Barry: Based on my discussions with them; on the dynamic of their battle a year and a half ago with legacy publishers over ebook prices; and on your experience with them, I know we’re philosophically aligned: ebooks should be priced far lower than the legacy norm. So I have no problem with their contractual right to set the price. I understand why they want it and they’ve demonstrated they’ll use it wisely.

Joe: Legacy publishers demand DRM. My Amazon ebooks have no DRM.

Barry: That’s good to know. Someone just asked me that today on Twitter and I wasn’t sure. Agreed that DRM is stupid.

Joe: Legacy publishers pick the cover and the title. At Amazon, I pick the cover and title.

Barry: Right, same here. This one is huge for me. Too many olive-green garage door covers in my past. Amazon was fine with my choosing the cover and making all other packaging decisions, though because they’re smart, experienced, and thoughtful, we’re already organically collaborating on what would work best. If your publishing partner is smart, you want to collaborate with them, regardless of what’s in the contract. And if they’re enlightened, they want to collaborate with you.

Joe: Legacy publishers insist on windowing the ebook release until after the print release. With Amazon, the ebook can be released first--as it should be, because it's easier to create than a paper version.

Barry: Again, same here. Thomas & Mercer and I talked about timing and they were totally game for releasing the digital book first.

Joe: Legacy publishers take from six to eighteen months to release a book after it is turned in. My next Thomas & Mercer book is due in August and coming out in November.

Barry: I think my turnaround might be even faster than that.

Jeez, better turn in that manuscript.

Joe: Legacy publishers offer lousy ebook royalties. Amazon's are much better.

Barry: I don’t want to get too into specifics, but my new digital royalty split is nothing like what legacy publishers insist on. And the paper splits are all comparable. Though even there, Amazon is showing their innovative DNA--we’re discussing a lower cut of paper sales for both of us as a way of boosting brick and mortar paper margins. As you have blogged and as Mike Shatzkin has pointed out, paper is becoming a subsidiary right--but a special kind of subsidiary right, with a lot of advertising value.

Joe: Yeah, I was talking about that a year ago. Whoever gets their name on the most pieces of paper, wins.

Barry: So there’s a great play in here for smart bookstores and authors: sell paper rights for less, achieve more paper volume, and sell more digital via the advertising value of paper.

Legacy publishers, by the way, would find such a notion heretical. Amazon looks at it and says, this could be good.

Joe: Legacy publishers have convoluted royalty statements and cut checks twice a year. Amazon has easy-to-understand royalty statements, and pays quarterly.

Barry: I’ve noticed that. I have two shorts up (The Lost Coast and Paris Is A Bitch) plus a political essay (The Ass Is A Poor Receptacle For The Head), and the royalty statements are completely transparent.

Joe: The imprint statements are also transparent. And the payments are on time. I know several authors whose legacy publisher royalties have been delayed, and the delays are getting longer.

Barry: The timing of advance payments is terrific, too. Execution and publication, half and half. Simple, fair, easy to track.

I have to emphasize again the fact that these entirely sensible and obviously better business practices have never emerged in legacy publishing is further evidence (as though further evidence were needed) that legacy publishing has always functioned as a quasi-monopoly. If there were competition in the industry, new entrants would force improvement.

Joe: Well, that new entrant is Amazon.

Barry: Indeed.

Joe: Legacy publishers often do little promotion. Amazon promotes like crazy.

Barry: That’s the bet I’m making. Fundamentally, I’m giving up certain retail channels in exchange for Amazon making a huge push on all its retail platforms and through the paper wholesale channels its developing.

Joe: Legacy publishers have one-sided contracts. Amazon's are the smartest (and best) in the business.

Barry: The contract they sent me was the best publishing agreement I’ve ever seen: short, transparent, easy to understand. And the really bitchin’ part? Former licensing attorney that I am, I had a ton of suggestions for how they could make it even better, and they listened. They get that treating authors well confers on them a significant competitive advantage. I’m telling you, their new template is a wonder to behold--substance, structure, and style. A lot of authors are going to benefit--directly, as Amazon expands its publishing business; and indirectly, as the Amazon contract pressures legacy publishers to do better or die.

Joe: I just spent a few days talking at length with various members of the Amazon team at BEA. They're smart. They're efficient. They understand what they're doing.

Barry: And man, they like beer.

Joe: All smart people like beer.

Also, as you said, they listen. Really listen. Having a publisher who actually pays attention to what I'm saying, and acts on requests I make, is incredibly fulfilling. Especially after years of my raging against the machine.

Barry: We could have included “ignores author input” as one of the definitions of legacy publishing.

Joe: Timecaster, my sci-fi novel with Berkley/Ace, was released yesterday. I signed a two-book deal with them, and pretty much begged for them to concede on a few marketing and pricing issues I had. They flat-out refused. So I bought back my second book and am releasing it myself (for $2.99 and without DRM).

The "my way or the highway" attitude has sent me to the highway, where I'll sell a lot more books and make a lot more money.

Barry: As you’ve said before, if you're selling eggs, don't piss off your chickens.

Joe: Amazon treats their chickens well. The Kindle Digital Platform and Createspace programs are expressly for self-publishing, so there are no more barriers to reaching readers. And their various imprints now give authors some of the benefits of the legacy system (advances, no author costs, widespread distribution, marketing) without the many disadvantages we've discussed over and over.

When each of us signed with Thomas & Mercer, we weren't turning our backs on self-publishing and embracing legacy ways. Instead, we were getting much of the same control we have with self-pubbing, but with a powerhouse behind us that will ensure we sell more books than we could have on our own.

That said, I'm still self-pubbing like crazy. I'm not going to give that up.

IT HAS TO BE EITHER/OR... AND OTHER EXAMPLES OF ERRONEOUS THINKING

Barry: This is another widespread misunderstanding. It’s not either/or, everyone! I’m still self-publishing short stories and essays and I don’t know what I’ll do with future novels. But every low-priced, self-published digital work I have available will get a huge boost from Amazon’s promotion of The Detachment. Again: publishing is a business for me, not an ideology. And self-publishing is a means, not an end. The end is fortune--the financial kind and the happiness kind both. For that, a mix of self-publishing and the Amazon models seems perfect to me for now.

Joe: Seems obvious. But there are a lot of people out there who don’t get it.

Barry: Some of the most misguided thinking I’ve seen on this issue came from an otherwise good editor I’ve worked with myself, who said of my deal with Amazon, “So much for self-publishing.” But... I’m still self-publishing lots of other works, all of which will benefit from the Amazon deal! And suggesting that because I’ve decided to publish The Detachment with Thomas & Mercer rather than self-publish it means self-publishing isn’t real... come on. What’s most significant about everything I’m doing now is what’s missing: a legacy publisher. Thinking that one author’s decision to publish a single title with Thomas & Mercer means he’s turned his back on self-publishing, or that self-publishing isn’t real... well, let’s just call it wishful thinking.

Joe: It’s not about either/or--

Barry: Wait, I gotta tell you one more amazing comment I came across.

Joe: Go ahead.

Barry: This one’s from Susan Petersen Kennedy, president of Penguin Group USA. The New York Times quoted her this way: “‘There’s a tendency to think that the other guy’s piece of the pie is so much easier, and you can just jump in and do it,’ Peterson said on Tuesday afternoon with a hearty laugh. ‘It’s good for Amazon to go into publishing. Maybe they’ll develop some respect for how hard it is. Come on in, try it. Go ahead. It’s not so easy.’”

Joe: That's similar to something you often say, in a slightly different context. Just because someone knows something, doesn't mean she can execute.

But here's a newsflash, Susan. Amazon CAN execute. They published my Jack Daniels thriller Shaken as an ebook in October 2010, and in paper this past February. I've made more money on that book that I did on my last two legacy books, and soon Shaken will make more money than any of my other legacy novels.

So I don’t know about easy, but they are doing it in a way that's smart, efficient, and beneficial to the author.

I've worked with Penguin. I don't anymore, because I left. I paid them so I could leave.

I don’t see myself leaving Amazon anytime soon.

Barry: Again: treating the chickens right... not a bad practice if you’re in the egg business.

Joe: Or to use another food analogy: Smart businesses don't try to take your piece of the pie. They make the pie bigger for everyone.

Barry: The thing that struck me was Peterson Kennedy’s thinking, or purported thinking. I mean, is it true that people go into new businesses because they think it’ll be easy? Is that why Amazon got into book retailing, because it looked easy? Is that what drew Peterson Kennedy to publishing?

My take on why Amazon is getting in to publishing? The same reason Michael Dell got into computer retail: they recognize legacy publishing’s quasi-monopolistic practices are so screwed up that a better way will create a devastating competitive advantage. That, and the fact that through their “agency model” pricing policy, legacy publishers were forcing Amazon to charge too much for digital books. It’s like Del Monte insisting on pricing a can of green beans for $10.00. Sure, the grocery store will stock it, but they’ll sure as hell also develop a store-brand canned green bean, too, because they know there will be a bigger market for the lower-priced option and they’ll make more money with it.

I’ll tell you, if publishing looks easy, it’s probably because legacy publishers are so screwed up they’re making it hard.

And wait, as long as we’re on the subject of denial, here’s another one--a tweet from a Curtis Brown literary agent: “so the Eisler story meant nothing. he eats at Amazon table for his supper instead of St Martin's.”

Joe: What the hell does that even mean?

Barry: You have to deconstruct it a little. I think he’s saying my decision to leave legacy publishing is meaningless because ultimately I decided to publish The Detachment with Amazon.

Joe: Sounds like he needs to turn Amazon into something comparable to what he's used to dealing with (St. Martins) in order to fit it into his worldview and dismiss the threat. Weird terminology, though. Makes you wonder what’s going on in his head.

Barry: Yes. It’s another instance of an apparently powerful urge to believe, “Amazon’s just like a legacy publisher! So if an author decides to publish a book with Amazon instead of self-publishing it, it means self-publishing is no threat to legacy publishing after all!”

Joe: Denial.

Barry: In fairness, it’s not just him. Here’s another, this one from an author: “So Eisler isn't really going it alone, he exchanged one corporate master for another. Better terms, apparently, but not a revolution as such”

Joe: You have a corporate master? Does he have a leather hood and make you wear a ball gag?

Barry: When I ask nicely. And all this time, I thought I ran my own business and was hiring distribution partners who worked (albeit often ineptly) for me. Who knew?

The comments about supper tables and corporate masters reveals a lot about the worldviews of the people who are making them. The first suggests a kind of serf mentality; the second, one of self-slavery. But aside from the psychological projection at work, which is interesting, the substance of these arguments is just silly. I depend on Amazon, Barnes & Noble, and Smashwords to distribute my self-published works. I depend on my web hosting company and on PayPal to fulfill orders through my website. Am I therefore eating at the “supper tables” of these companies, and are they my “corporate masters,” in this context, too? Why the one but not the other?

Joe: As I’ve heard you say in related contexts: when the voices in someone’s head get too loud, he can’t hear what’s actually being said.

Barry: Yes, and he loses the ability to tell the difference.

We’ve talked in our earlier conversations about how some publishers are in denial, some agents are in collusion, and some authors are in the grip of a weird combination of Stockholm Syndrome and a peasant mentality. The quotes above are evidence--anecdotal, yes, but still suggestive.

Joe: I can’t get over the “exchanged a corporate master” one. How about: “Exchanged a crippled horse for a new Ferrari.” That works better.

I used to call working with legacy publishers a partnership, back when I thought they were smart enough to know how to make money. My take was that if I made money, they made money, and we'd help each other to that effect. But then I started to realize how hidebound they were, that there was this whole set of infrastructure and a worldview that was actually inhibiting them from making money. Then I began to think of them as backers or investors, but with too much say so and power. The one thing I never thought was that I was working for them. Usually when you work for a company, they show a minimum concern for your base needs and future security. An editor works for a publisher, and as a result get things like an office and health care and a 401k plan.

So now I think of them as assailants who force you to thank them after they beat you up.

Barry: The terminology reveals the mindset. A lot of writers think of themselves as employees of the publisher, not as CEOs of their own companies, with the publisher as their customer/investor/distributor.

Joe: Well, at least those folks offered some humor value. And the psychology is interesting, too.

Barry: There is that. Mind if I mention just one more?

Joe: Fire away.

Barry: This one is from a literary agent. She says, “I'm keeping a very close eye on a couple things: the reaction from Minotaur; the reaction from Dan Conaway; and what term Eisler will now use to describe Amazon since ‘legacy publisher’ appears to describe everyone else.”

Joe: Dan was your agent, right? With Writers House?

Barry: Yes. We parted ways after I decided to self-publish The Detachment because we couldn’t come up with a model for self-publishing that worked for both of us. And Minotaur was a reference to St. Martin’s Press, the publisher that offered the deal I walked away from--Minotaur is an SMP imprint.

Anyway, I thought, “That’s it? Your big concerns aren’t about these seismic shifts in the industry and how they’ll affect your clients, but are instead about gossipy, personal stuff? Are you a literary agent, or a staff writer for Us Magazine?”

Joe: She writes that blog to impress her existing clients and attract new ones, presumably?

Barry: Presumably.

Joe: Wow. Hey, isn’t this the same agent who when you first announced you were going to self-publish said she wasn’t optimistic and people should see how it was working out for you in a year?

Barry: That’s the one. Apparently she thinks the appropriate finish line for measuring whether an author has been successful in digital self-publishing is one year, as though after the first year you stop making money or something.

Joe: Does she maybe have a personal issue with you?

Barry: Not that I know of. Anyway, I’m just responding to the substance of her thinking--not because it’s unusual, by the way, but rather because it’s representative of other erroneous thinking I’ve come across. And there’s a tendency out there to treat the personal stuff as more relevant than broad industry dynamics, just as there’s a tendency to think a self-published book only makes money for a year or something, when in fact it makes money forever.


BRIEFLY RETURNING TO THE QUESTION OF: IF THE BIG SIX ARE LEGACY PUBLISHERS, WHAT DO WE CALL AMAZON?

Joe: So what do you call Amazon?

Barry: That’s a good question, and I haven’t come up with anything that feels entirely right. Again, there’s a good discussion on Lee Goldberg’s blog on this topic and I’d be very interested to hear anyone’s thoughts on what would be the most appropriate nomenclature. Speaking of which, I think the right way to approach the question is this:

Are Amazon and, say, Random House, which are clearly both publishers, the same in all relevant aspects?

If not, what are their relevant differences?

And how can we reflect those relevant differences in the nomenclature we use to categorize them?

Trucks and sedans and sports cars are all just types of automobiles. Yet no one would say, "Why do we need all this new nomenclature? They're all just automobiles, right?" And before the Internet, stores were just “stores.” But then we had online stores, and the previous variety became known as “brick and mortar” stores, so that we could distinguish.

At a sufficiently high level of generality, everything is the same. All matter is, in the end, made of molecules. Yet we don't refer to people and chairs and trees as "molecule conglomerations"--and that's because the similarities are less relevant in everyday conversation than the differences. So noting the presence of similarities isn't really the proper way to approach the nomenclature question. The nomenclature question exists because of the presence of differences.

If you believe that Amazon and, say, Random House are in all relevant respects identical, then you won't find any use for a system of nomenclature that distinguishes them. If you believe that in various relevant respects they're different, you'll search for a nomenclature that conveys those essential differences. For the reasons I note above, I think "legacy publisher" perfectly conveys the essential differentiating qualities of what are also colloquially known as The Big Six. I haven't come up with an equivalent for what Amazon's doing. But I'm working on it, and again would love to hear anyone’s thoughts on the topic.

Joe: For now, I'd just call Amazon "much better than anyone else."

Barry: Can’t disagree with that.

AND NOW BACK TO OUR REGULARLY SCHEDULED ERRONEOUS THINKING TOPIC

Joe: Getting back to that literary agent’s quote, if I were an agent, my thinking would be: “Great! I now have another publisher, Amazon, to whom I can sell my clients' work.” But I suppose watching and waiting to see what other people say is safer than acting.

Barry: Anyway, sorry for interrupting. Just had to mention those. You were talking about the thinking behind your overall publishing strategy.

Joe: Yes. Right now, self-pubbing has incredible advantages over the legacy system.

That does NOT mean I'm a "self pub or die" evangelist.

Self-pub was a terrible business model prior to 2009. It may someday be a poor choice once again.

I change my opinions as new facts come in, and I change my tactics as new opportunities become available. Anyone married to a single ideology, who doesn’t constantly test it and question it, is an idiot. A big idiot.

Barry: Let me approach the either/or issue this way. If Thomas & Mercer wanted to release all your books, would you do it?

Joe: No. I like self-pubbing too much, and I dislike deadlines. I'm thrilled to be working with Thomas & Mercer, and a book a year fits perfectly into my schedule while still allowing me freedom to do whatever I want, when I want.

Barry: Plus T&M’s marketing push for the book you’re doing with them boosts all your self-published books, too. In the face of all this, only an ideologue would suggest an author’s approach should be either/or.

HOW DO BRICK AND MORTAR BOOKSTORES SUCCEED IN THE NEW PUBLISHING LANDSCAPE?

Joe: Let's veer slightly and talk about bookstores.

Barry: Good. We haven’t been veering enough.

Joe: When Amazon announced the launch of the Thomas & Mercer imprint, some independent bookstores in a Yahoo group refused to carry my titles. Blake Crouch and I recently blogged about it, and our post has gotten close to 400 comments.

Barry: Hey man, one of those was mine.

Joe: I'm disappointed that some bookstores would rather blame authors for signing with Thomas & Mercer and point fingers at Amazon for hurting their business instead of responding to some of our suggestions as to how they might improve their sales.

Barry: Yes, what people need to understand is that a lot of the problems bookstores are having are caused by legacy publishers. I know this will sound cold, but in business you have to identify opportunities. And right now, there’s a huge opportunity for retailers to disintermediate the publishers who are inflating the costs of books. Amazon is already doing it. If B&N is smart, it will, too. And, as you and Blake suggested (pleaded, in fact) in your blog post, there’s no reason indie booksellers can’t buy direct from authors, too. Promise to sell a lot of our books and we’ll even sell ’em to you cheap, knowing we’ll make it up on volume and in the advertising power of paper.

Joe: Capitalism is about competition. But indie bookstores (or all bookstores, for that matter) need to realize Amazon is only doing well because they're giving customers what they want. The customers are the ones who are changing their buying habits.

If you're a young bride and your husband is cheating on you, you don't blame the other woman. You blame your husband. He's the one who should have been loyal. The other woman doesn't owe you any loyalty, and doesn't have to play fair.

Don't want him to stray? Make him want you more.

There is a lot of talk about "unfair business practices." Is business fair? Is life fair?

Barry: The frog would say no.

Joe: The frog should have said no.

Barry: Um, I don’t think it could say anything, under the circumstances.

Joe: Hard to talk when your mouth is full.

Barry: Mmmmmmph, maybe?

Joe: Well, the monkey wouldn’t have listened regardless.

Barry: Hey, let’s not include a link this time. I think we’ve done enough damage.

Joe: How about just this one? This isn't about a monkey taking advantage of some poor, helpless amphibian. It's about thinking outside the box.

Barry: I have to admit, I clicked on that link with substantial trepidation. But it was totally safe for work. And interesting.

Joe: And therefore probably disappointing to anyone who’s clicked on any of the other monkey links. Sorry, guys.

The thing is, customers are speaking with their wallets. The one who gives the customer what she wants is the one who gets that customer dollar. That means thinking, and innovating, and listening. You don't make money pointing fingers.

Barry: You make it by solving problems and adapting to situations, like the monkey in the link.

AND HOW DO LITERARY AGENTS SUCCEED?

Joe: But you don't have to figure this stuff out all on your own. There are folks who can assist you.

Dean Wesley Smith recently had a blog entry about how some unscrupulous agents are adopting the estributor model and charging clients 50% to perform publishing services (cover art, formatting, uploading) that Dean insists should be one-time costs.

Barry: I just want to jump in here and beg anyone who’s reading to come up with a better term than “estributor.” That is one butt-ugly word.

Joe: You know you love it.

Barry: I know we need something to distinguish the “agent helping authors self-publish” model from the “agents helping authors sell publishing rights” model, but please... not that.

Joe: Heh. I think it’s too late, my friend.

Anyway, I respect Dean, and understand his argument, but I don't agree with him. Here are some reasons why.

I know a few agents who are becoming estributors. They cover all costs, and only take 15% (and they don’t recoup their investment first).

Right now I’ve got 32 self-pubbed books available on 8 platforms (soon to be 10). It’s a full-time job just dealing with properties that already exist.

I just released a new ebook, which took dozens of hours to launch–hours I could have spent
writing.

I don’t have a problem giving an agent 15% for negotiating a contract. That’s worth it to me.

Doing the cover art, formatting, and uploading, along with all of the potential benefits of a vetted imprint, is a lot more work, and also worth 15% to me.

It isn’t worth 50%. That’s a rip off.

But I already hire folks to help me: My cover artist, and formatter, and proof reader, and then I upload them myself. This is a time suck. More importantly than that, even though other people are doing the work, I was still forced to learn an entirely new skill set in order to understand who I was hiring.

I wish I didn’t have to deal with all of that. I wish I could just write the book then pass it on to an estributor.

Which, in fact, I’m going to do. And the time it saves me should more than make up for the cost.

One day, I plan on building a house. I have a specific idea in mind of what I want to build. But I DO NOT want to micromanage the building process and hire/oversee every individual contractor. The thought of spending all that time doing mundane things like picking out PVC pipe or getting permits would make me want to shoot myself.

Barry: One thing I know you will micromanage is the choice of bidet.

Joe: Inside joke, people. I just bought a bidet (because I tried one at Barry's--monkey see, monkey do) and am now experiencing a level of clean that I never knew existed. It even has a blow dryer.

I love my life.

Getting back to building a house, I’ll hire someone I trust to do the overseeing. It’s worth it to me. That way, I don't have to immerse myself in doing the hiring myself and learning the construction business.

Of course, you could do it all yourself, and take even more time away from your writing (as well as hurt your sales because you won't do as good a job as an expert.

Barry: Definitely there are estributors who charge an unreasonable amount, take advantage of authors, do a poor job, etc. That doesn't mean some aren't worth what they charge. You don't avoid going to a doctor (and you certainly don’t perform surgery on yourself) because a certain number of them are quacks.

Joe: Right now, I’m making so much money, I’ll gladly pay someone to do the things I hate and that eat into the most profitable use of my time, which is writing. And just as there are unscrupulous agents who will rip you off, there are most certainly unscrupulous independent contracts who could wind up costing you more money. It's not as if all agents are bad and all cover artists are honest and know what they're doing.

It's also worth noting that there isn't a conflict of interest if an agent becomes an estributor. Agents are there to sell rights to books that their clients write. Is there any difference between selling to a Big 6 publisher, or helping the client upload to Amazon? As long as the agent does what her client wants, it's all about offering a service.

I know agents who have hundreds of authors with projects they couldn't sell, or backlists that are out of print. If publishers don't want those books, Kindle and Nook and Smashwords and Kobo and Sony and Apple and Google and Createspace and Scribd do. An author could do it herself. But an author could also negotiate a deal with Random House on her own.

Barry: For me, the way to put to rest the suggestion that authors should never pay anyone a percentage is this. What about an excellent estributor who charges only one percent? Still too much? Even if that one percent would come to less than a flat fee for the same service? What about if you could clone yourself and hire the clone for 15%--not worth it? Okay, but then I'd say this is starting to be a matter of an ideology against percentages, which means there’s no room for further discussion. But if the problem is the amount of the percentage, then, to paraphrase Churchill, we're just haggling over price.

Joe: I suppose I could hire someone full-time to oversee the freelancers and run the ongoing business, but I believe the estribution model will allow for greater ongoing opportunities and ultimately higher income. Group advertising, imprimatur, excerpt exchanges, marketing, and a centralized author hub, to go along with continued subsidiary rights sales and translations, is worth 15%.

If you don’t think it is, don’t do it. But understand you’re taking time away from your writing to do it on your own, which is a very high cost indeed.

Barry: For me, the argument really comes down to, “Don’t pay more than you have to.” If you can pay a low flat fee instead of a percentage, jump on it. If the percentage is 50%, don’t touch it. If it’s one percent, jump on it. If it’s somewhere in between, maybe. It’s all just a matter of, “Make sure you’re getting value for the price, and don’t pay more than you have to.” Not really so controversial, I think.

Joe: Also, like any business relationship, know who you're dealing with and what you're buying. Get recommendations and references, ask for samples, become informed, don't be afraid to negotiate terms.

Barry: One more thought about agents and... damn, I really wish we had something better than estributors to call them.

Joe: Muwahahahaha. I coined that a few years ago and it seems to be gaining traction.

Barry: If Amazon’s approach--an easy-to-understand and fair contract; simple, transparent royalty statements--becomes the standard, some of the value traditional agents have offered as interpreters in these areas will diminish. Smart agents will find ways to offer new value to offset what’s been lost. So the move to an estributor model will become even more important for agents.

Joe: This is all happening pretty quickly, so don't feel bad if you don't know what you're doing. Just try to avoid snap judgements and acting without thinking. Right now the publishing world is in a state of transition.

Barry: AKA, “State of Confusion.”

NEXT STEPS IN THE EVOLUTION OF EBOOKS

Joe: Which leads me to something else I noticed at BEA. Though ebooks are now outselling paper, the ebook section of the convention was minuscule--by my rough estimation not even 1/10 of the overall floorspace.

If I were a Big 6 publisher, I would have put an extra booth in the ebook section. There were tens (hundreds?) of thousands of paper books being given away, yet I lost track trying to count all the ereaders and iPads in the hands of attendees.

Why wasn't there an ebook signing booth? The technology exists. Why weren't publishers pushing this new ebook format, which on Amazon is now outselling paper?

But then again, if I were really a Big 6 publisher, I wouldn't have blown all that money attending BEA in the first place. It was like Mardis Gras, but the currency was denial instead of beads. The gigantic booths (meant to broadcast prosperity?) seemed to me more like whistling past the graveyard. What a waste of money and manpower.

However, in the Digital Book section, Blake Crouch and I met with several smart, hungry start-ups in small, modest booths. Among them Overdrive, Kobo, Vook, Autography (where authors can sign ebooks), adboku, Bookrix, and Smashwords. They see where the future is headed, and they're innovating to ensure their place in this future.

These are the companies working to make the pie bigger.

Ebooks are by some measures now outselling paper, but they’re still an early adopter product. The general masses haven't embraced them yet, as they have with DVD players and iPods, though all signs point to that happening.

When a technology reaches that tipping point and becomes a "must buy" for folks, innovation increases dramatically. Right now, ebooks are basically text in an electronic format. They don't do much more than print books do.

Barry: The car was known as the horseless carriage. Initially, television was talking head radio.

Joe: Soon, ebooks will be more than just a replacement. We've talked about what the future of ebooks might be. I believe it will change the way people think about fiction, and bring people to fiction who might have avoided it in the past.

What's your opinion about the book as a social network?

Barry: I think it’s another example of you thinking so far ahead of the current state of affairs that initially a lot of people won’t understand what you’re getting at. But yes, I think it’s a great idea, and I was knocked out by the way Amazon not only listened to it over those disco fries, but by the way they refined and expanded on it, too--all while taking notes. Again, can you imagine a legacy publisher ever having a skull session like that with its authors? Let alone listening and adding value along the way?

Joe: I could imagine a legacy publisher doing that. But it would remain strictly in the realm of imagination. Also, for the uninitiated, disco fries are poutine--French fries with cheese and gravy. I'd been searching my whole life for a way to make fries unhealthier.

Barry: Heh. I swear, you want to get Amazon’s attention? Say, “I have a new idea.”

Joe: Years ago, I proposed that ebooks would someday be free, supported by ads. But whenever I mentioned ads in ebooks on my blog, I got a lot of resistance from people, just as I did when I proposed that books could be social networks. Well, this is exactly what adboku is trying to do.

BE THE MONKEY

Barry: One thing I’m learning from the whole changing publishing landscape is that a lot of people just don’t like change. Their arguments--their perceptions--flow from that.

Joe: The legacy publishing world seems to offer up similar resistance to change, and makes a lot of the same excuses as to why the old ways are the good ways.

It's natural to dislike change. Change is scary. It's also natural to assume that because you don't like an idea, no one will like an idea.

But the reason we live in such a cool world now, and why our lives are so much better than our grandparents', is because of change.

So here are some parting words for authors resistant to ebooks, booksellers resistant to Amazon's imprints, and even Big 6 publishers who want to survive the next five years.

Barry: Assuming you’re going to offer fewer than a thousand parting words, I just want to congratulate us for getting this bad boy in at under 10,000 words.

Joe: Yeah, at 9400 this one is a little short. But I think it covers what needed to be covered.

Barry: We probably should have included a few more monkey links. Maybe next time.

Joe: Here’s the thing. Change will happen. The more you fight it, the more you'll fall behind to those who embrace it.

Your goal shouldn't be to fight over a larger piece of the static pie. Your goal should be to make the pie bigger.

That means paying attention to what readers--and writers--want. It means innovating. Experimenting. Learning. Embracing change, and thinking up ways to utilize all of this incredible technology that's coming at us.

You don't want to be the last dinosaur. You want to be the first primate.

You want to be the monkey.