HarperCollins’s Direct Sales Plan: Necessary or Futile?

If you can’t negotiate with Amazon, beat them at their own game of sales, or remove them from the equation entirely. Many industry experts and would-be experts like me have bandied this solution about, one where publishers will sell directly to consumers on their website. Now, HarperCollins is trying this strategy on a revamped website that sells both print and e-books directly to consumers, according to Publisher’s Weekly. While there will be some sales, most books will be sold at full price. The website does provide links to major retailers like Amazon and B&N, however.

I discussed this solution in a previous article, where I noted that publishers could improve their social media and marketing by having greater circulation on their websites, particularly considering most visitors to their sites are job-seekers. I also questioned whether publishers would be able to provide appealing prices to consumers when confronted with Amazon’s predatory loss-leader pricing. If consumers are going into bookstores only to buy the books they find on Amazon, you can bet that they will find it even easier to search for books on the publishers’ sites and then open Amazon in a second tab from the comfort of one’s home.

HarperCollins is clearly wary of the latter problem, which is why they are providing links to the Amazon page; it knows that it currently cannot compete with Amazon on pricing and that consumers may not end up buying their books on the site, but they want readers to at least start their search on the HarperCollins website.

The comments on the Pub Weekly article provide an apt summary of some of the problems of HarperCollins’s strategy:

  • Multiple readers are treating this strategy as the final nail in the coffin for indie bookstores, since publishers are trying to cut out the middle man distributors through direct sales. Frankly, I don’t believe that the website in its fledgling state will have that significant of an effect–people who shop at indie bookstores aren’t going to abandon them to use this website, and people who buy books online do not bring their business to physical retailers anymore anyway. What does matter is the abrupt shift in the public image of publishers, from the bullied, struggling victims of Amazon to callous, bottom-line businesses abandoning their indie partners to fend for themselves.
  • Some argue that publishers don’t know a single thing about retail and should leave this area to their long-time partners (an argument that ties into the idea that they are abandoning indie booksellers rather than exploring or expanding their options). I would argue that this argument also connects to the arguments made by self-published authors and their fans, who usually lambast publishers for being out of touch when it comes to marketing their books properly. People are losing trust in publishers to market non-major titles or properly exploit social media, and this website provides an opportunity for them to redeem their stodgy image by marketing smaller or backlist titles; or, conversely, to focus on major titles and reinforce that reputation.
  • Finally, some commenters mock the very idea that consumers care about publishers and will buy books based on something other than authors, genres, or staff/Amazon recommendations. To be honest, this assessment is fair to apply to most major publishers. Small publishers and imprints can create a focused website surrounding a certain genre or subgenre of literature, but a major house with dozens of imprints lacks a focused theme to bring in consistent readership. I would personally argue that HarperCollins would do better to focus first on revamping its imprints’ websites, then bringing readers from these disparate sites to one hub retail site for HarperCollins. These publishers are making themselves “too big to fail” but in doing so they are possibly diluting their brands from having much focus or meaning.

I think print-on-demand, direct sales from exciting publisher websites are a necessary part of publishers’ futures if they want to shake off their dependance upon Amazon; moreover, I believe this strategy does not in any way signal the death of bookstores, because publishers love having as many sales options as possible and would bend over backwards to keep these channels open. By creating backup sales options, they give themselves more negotiating power and increase profitability for books in general, which could in turn mean the return of more risky midlist and experimental titles.

I still believe that publishers have a long way to go before reaching that stage, however. I have to admit that I like some of the features on HarperCollins’s site, like search categories for series of books or award winners (i.e. Hugo, Nebula, ALA, etc. for sci-fi/fantasy). Still, I think publishers need to do more to get other people on their site, not just publishing nerds like me. Maybe publishers that do self-publishing services could make some of the best-rated self-published titles available through direct retail to boost circulation from authors. Or perhaps make a greater effort to support interactive author websites that link back to the publisher. Or some other strategies I haven’t thought of; anyone have any marketing ideas to get regular people interested in publishing websites?

Thanks for reading!

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What the Hachette-Perseus Merger Means for the Publishing Industry and You

The Hachette-Perseus Books Group merger is generating more buzz than it might normally—considering the 18-year-old Perseus is not as familiar a household name as Penguin or Random House—because journalists are connecting the merger to Hachette’s contract fight with Amazon. The New York Times article about the deal is titled “Hachette Adds Heft to Battle Amazon,” for instance.

But this deal marks a continued trend in the publishing industry that anyone interested in a publishing or writing career should watch closely, and maybe warily.

The trend I’m speaking of is one of consolidation, the most famous example being the Penguin Random House partnership last summer. Up until that point, most consolidation occurred when big publishers bought smaller pub houses and incorporated them as imprints: examples of this include Hachette buying Little, Brown in 2006 or HarperCollins’s recent purchase of Harlequin. But now the major publishers are reaching the size of giants, with PRH controlling 250 separate imprints and the other Big 4 trying to catch up. For instance, there are long-standing rumors since late 2012 that Simon & Schuster and HarperCollins were considering a similar merger to match PRH, and early this year Forbes reported that the talks may still be ongoing.

Now Hachette has purchased Perseus, which itself is the largest distributor of books in the nation, especially for small and medium-sized publishers. How did it become the largest? Through consolidation. In this interesting piece by the co-founder of indie publisher Melville House, Dennis Johnson describes Perseus’s purchase of Consortium and Publishers Group West, which gave Perseus control over 80% of indie publishers’ book distribution. Johnson describes a period of turmoil where books got lost while transferred between warehouses and many staff and warehouse members were laid off. Some publishers like Melville House ended up taking their business elsewhere, the Johnson claims that those that remained only stayed because they couldn’t afford to leave.

You cannot necessarily trust Johnson’s impartiality on the subject without hearing Perseus’s side of the story, and maybe those who stayed with Perseus would deny any dissatisfaction with their distributor. But you can’t deny that big mergers are a tumultuous time where jobs and livelihoods are put on the line, and things could easily go wrong.

Now Perseus’s warehouses belong to Hachette’s distributor, Ingram. Does this mean another period of turmoil for the indie publishers? Ingram’s CEO denies this—this Publisher’s Weekly article states that Ingram has “no plans to make major changes to the Perseus distribution operations.” It could be that the name on the door is changing, but that the business will remain the same. It could also be that Ingram will bring new policies that will change how these warehouses operate. But I don’t know enough about warehousing to make an informed comment on the likelihood or repercussions of this eventuality.

The small publishers who used Perseus as a client do know, however, and they’re worried. In a Publishing Perspectives article, one publisher at a conference expressed shock at the news, stating, “Well, looks like we just became [a] smaller [priority].” Another worried about having to learn to use a new computer system.

The consensus?

Each of the publishers expressed their concerns about their list and whether or not they would get the attention they deserve within a bigger organization. Some lamented the loss of yet another independent publishing institution to the deep pockets of a conglomerate. Most grieved the likely layoffs.

Doom and gloom from small publishers who simply don’t like their massive counterparts controlling their distribution, or legitimate fears about the compression of the industry and its jobs into a few “too big to fail” entities? It certainly appears from the article that the publishers like both Perseus and Ingram individually, but dislike them as a merged business, simply because it makes it less likely that individual clients will see their needs addressed.

That same principle may apply to the Perseus imprints that Hachette now controls. When a publishing group controls dozens or even hundreds of imprints, it makes any individual imprint more expendable should it become unprofitable. However, this system also allows the most successful imprints to provide financial insurance for the other imprints in the group; thus, arms of a publishing house that are temporarily struggling can have a few years of unprofitability without being forced to close shop. Thus, it is unclear whether the consolidation of major publishers will keep imprints and jobs afloat or make those jobs expendable in a crisis.

Conclusions

What does the consolidation of publishing houses mean for writers? Less traditional publishing options. In a New York Times piece describing the Penguin Random House merger, the author noted that “the persistent gripe of writers and agents” is that “companies either forbid (as at Penguin) or restrict (at Random House) their constituent imprints from bidding against one another for a manuscript.” Literary agents used to have dozens more options to sell their author’s manuscripts, but now have the five (maybe four soon) major publishing houses and some smaller competitors. That means less competition and fewer chances to demand higher advances for manuscripts. Self-publishing and freelance publishing services are becoming highly visible and profitable around the same time that publishers are continuing to grow and coalesce into a few massive entities. Publishers need to make clear that their services will not suffer and that each author matters when they are trying to service thousands of authors at a time, a tough sell to make.

What does this mean for readers? Ostensibly nothing, since Perseus’s imprints should continue to operate as they did before the buyout, which means the same quality of manuscripts and editing. But the above NY Times piece asserts that merged imprints lose their originality and focus and take on the acquisition strategies and mentality of their parent company. That could mean an overall reduction in the breadth and diversity of titles available for readers through traditional publishing avenues. It also means that, for readers, publishing imprints become more interchangeable or indistinguishable from one another. Publishers with 250 imprints may end up diluting their brands, which would hurt readers and publishers alike. With publishers becoming so massive, they need to focus on strengthening their individual imprints’ brands so that they still mean something to readers.

What does this mean for you, the current and future editors, eBook production experts, publicists, etc.? As I stated above, I really can’t be certain if this will lead to greater or fewer jobs in the long run. Nor is it certain if publishers will begin to lose their originality in the face of the overwhelming size and power of the companies they work for. Personally, I believe that the dedicated publishing professionals in these organizations would not let anything happen to sabotage their efforts in creating great books. But these concerns remain valid, and I hope that the publishers who are merging take these concerns seriously, for the sake of their employees, authors, and readers.

Do you think these super-conglomerates are bad for the industry, or just the natural progression in the face of Amazon and self-publishing competition? Feel free to leave your thoughts in the comments, and thanks for reading!

As a disclaimer, I have an upcoming fall internship with Perseus(/Hachette, I guess?), but I tried to remain as objective and analytical as possible without prejudice toward my future employer.

How Simon & Schuster’s New Imprint Saga Demonstrates How Exactly to Plan Your Own Publishing Business

One of the major questions sometimes asked in an editorial internship interview concerns your long term goals: are you someone interested in working your way up the chain of a publishing house within an established framework until you earn a leadership role, or do you intend to use your experience to start something of your own making? If your goal is the latter, then you should be prepared to explain such a goal with businesslike language and concrete details during the interview, as a way of showing your initiative and seriousness for the book pub profession. No one would expect you to have an innovative new model that redefines publishing or discovers an untapped market as a twenty-something college student, but it does benefit you to know the necessary rhetoric in terms of what it takes to start your own venture.

What is your starting list of titles? Will you rely more on acquiring new novels or purchasing backlist titles to start? How will you manage to pull authors away from the publishers they’re currently with to join an unproven venture? What thematic differences or production strategies would you employ to distinguish your publishing house or new imprint from those currently out there?

In an age when publishers are merging with one another, buying competitors, and dropping unprofitable imprints with rapidity, it’s rare to see too many new imprints created today. But Simon & Schuster has recognized the continued profitability of the sci-fi/fantasy market, and has likely observed how dedicated speculative fiction imprints like Ace Books for Penguin and Orbit for Hachette have achieved huge successes of late. S&S already has impressive science fiction writers on their list—Ursula Le Guin and Stephen King, for example—but they have chosen to progress beyond relying on big bestsellers in the genre. We’ll discuss here why their business model looks promising before it even begins, and the business lessons we can take out of their initial strategy for our own entrepreneurial plans in future.

Step 1: Find young, up-and-coming, award-winning authors: Of Saga’s first four original titles being released, three were written by nominees or winners of the Nebula and the World Fantasy Award. Two of the books are the authors’ debut titles. A third was written under the pseudonym of an award-winning speculative author, so in some ways the book is “his debut” as well. But the most important point in my mind is that these authors have won awards primarily for their short stories and novellas, not their books.

If you pay attention to major science fiction awards or speculative short stories, you know who Ken Liu is in particular. He has won two Hugos and one Nebula in the past four years, and has been nominated for several other pieces. Simon & Schuster acquiring his first novel is a major win for the imprint’s credibility, but for many readers his undoubtedly excellent first book will come as a pleasant surprise.

Pardon the upcoming baseball metaphor for non-sports fans, but think of yourself as Billy Beane and literary magazines and short story websites as the minor leagues when it comes to building a roster of authors. Certain authors will show the qualities you’re looking for in small doses, and they will be hungry for the chance to prove themselves with your assistance. Give them that chance, and you will have acquired new talent, and likely their loyalty when it comes to selling their sequels.

Step 2: Acquire these young authors: Other imprints are eying the same young authors as you, and they have the funds and established reputation to steal away these authors before your fledgling imprint can hope to reach them. One of my major duties as an intern for Heyday Books in California was updating an Excel document of “writers to watch,” from which the editors could search for new talent for the annual New California Writing anthology. Publishers are more proactive in finding authors than you’d expect from their huge slush piles, and it’s somewhat difficult to stake a claim on a new author without someone else having discovered her first.

But somehow, Saga found a way to not only claim Ken Liu’s rising star, but also steal Genevieve Valentine away from Prime Books. This publisher released her debut novel, Mechanique: A Tale of the Circus Tresaulti, which won or was nominated for several prominent awards. But Valentine has chosen to move on to S&S for her next book. Did S&S offer more money, or did the prestige of a Big Five publisher do enough to woo her away?

I have no insider knowledge to answer this question, but it remains an important issue nonetheless. You can’t simply decide that you want to kickstart a new fantasy or romance or mystery imprint without determining how independent you want your operation to be. Will you sell your business plan to a major publisher in order to have a monetary cushion and a name that draws authors? If so, you have to determine which publisher has a gap that your imprint can fill. If you plan to strike out alone for the sake of autonomy, then you need a stronger incentive to attract good authors to your new house, such as higher author revenue. Some independent publishers like Greywolf Press have achieved enormous success acquiring authors simply by paying them more money than the industry standard, but you have to determine if you can afford such a plan.

Step 3: Establish a distinctive style from the outset: Saga will not succeed on the strength of its authors alone, but must also create a brand of literature that will be familiar to readers, and to the booksellers who choose whether or not to place the books on store shelves. In a previous post, I discussed the clever business strategies that has allowed Orbit Books to succeed, including eye-catching covers and an emphasis on new paperback releases. They don’t focus on a single area of speculative fiction, however; their “About Us” page mentions their dedication to publishing “across the spectrum of Science Fiction and Fantasy – from action-packed urban fantasy to widescreen space opera; from sweeping epic adventures to near-future thrillers.” Saga also will not likely restrict its acquired novels to one area, and you shouldn’t feel pressured to make your proposed imprint overly specialized or limited.

But Saga’s first four books already have an interestingly ominous aesthetic: two ruined cities—one burning and another occupied by evil forces—a cracked helm, and a red snake as a symbol of the future. Orbit’s books, even its darkest dystopias like Feed, always seem to have a humorous, gleeful detachment from reality, but Saga’s initial list seems to be targeting the Game of Thrones crowd that craves solemn realism in its escapism. This choice isn’t just motivated by a trend, though; when I visited S&S’s offices in February and spoke with a couple of the editors there, they argued that the publisher has made its name on serious literature, and on seeking quality titles that establish trends rather than acquiring derivative copycats of the Harry Potters and Twilights that other publishers create. Thus, even S&S’s fantasy epics may be required to attain literary greatness. You have to determine whether your hypothetical house will have a similar culture that defines its acquisition or design choices.

Step 4: Don’t be afraid to break your own rules with the backlist:

Saga’s frontlist is deadly serious, yet its backlist mixes gothic horror and optimistic fantasy, with creatures ranging from dragons to vampires. The horror titles somewhat match with the contemporary titles’ aesthetic, but the Dragonsong titles by Hugo award winner Anne McCaffery don’t belong except for the fact that they are great fantasy novels. It doesn’t matter. The books have already sold very well, and don’t need to be matched up with new titles to keep selling well.

Conclusions: When trying to come up with an idea for your own future publishing house, the pressure is on to come up with some impressive niche subgenre, and that may be the necessary approach for founding a new literary magazine. However, your prospective employer should be just as impressed by a well-researched business plan that shows you thinking like they do.

In case you haven’t guessed, I’m an avid fan of speculative fiction novels, and would love the chance to found or run my own sci-fi/fantasy imprint in the future. I will be following Saga’s initial months very closely as a perfect case study for my own future goals. If you have an interest in a particular genre, be sure to follow PW and genre-specific publishing blogs closely for comparable news about new houses and imprints, because they may also provide invaluable information for your career.

Thanks for reading!

Source article: http://io9.com/take-an-exclusive-peek-at-the-most-anticipated-scifi-im-1591612349

 

Opinion: What the Amazon/Hachette Battle Means for Future Publishing Professionals

Many people have already read about the circumstances of the Amazon/Hachette feud, and other articles have summarized the issues better than I could in a blog. Read this NY Times opinion piece for a succinct summary of monopsony—”when a buyer of goods has the power to unlawfully lower the prices of what it buys“—Amazon’s predatory business practices, publishers’ legal woes with Apple, and an argument for a new distribution system for all publishers. If you want to read about how publishers’ refusal to raise royalties for authors for ebooks left them vulnerable to Amazon’s aggressive negotiations, peruse this Slate article. And if you have a lot of time on your hands to truly understand Amazon’s corporate attitude and to see more of its attacks on unprepared publishers, read this excellent New Yorker article by George Packer. Finally, you should check out this PW summary of the Apple legal case, where Judge Denise Cote decided in favor of the government (and Amazon in effect) by stating Apple and publishers had attempted to create a monopoly.

Finished doing your reading? I’ll wait!

Now that you’re an expert on Amazon’s relationship with publishers, it should be clear why publishers have become dependent on Amazon as their primary sales channel, and how any steps they might take to rectify that can cripple their business. So, what could this mean for your future career? Here’s some possibilities, and their likelihood:

A. Publishers band together to create a new digital platform for ebooks (not likely)— Imagine if you were put on a task force to help design a new commercial platform for books from the Big 5 publishers, and possibly some smaller publishers. Each publisher has so many books that this new site would need a system of curation and recommendations that shows the products from each publisher. Would Penguin-Random House get prime placement because they sell the most books, and would they accept anything less? Similarly, would smaller publishers demand equal placement in order to compete against their larger counterparts, and would the Big 5 allow this to happen? And who would decide which books are put on sale (by genre or publisher or authors); would there be a committee of staffers from each publisher, or a third party company trusted with making fair choices?

In either case, if publishers set up this site with this level of collaboration and withdrew their books from Amazon, Denise Cote and the Department of Justice might leap to Amazon’s defense again, declaring this action another monopoly that gives one site power over pricing of goods. If they merely created the site and continued to put their books on Amazon, then publishers would have the continued problem of competing against Amazon’s business model of selling for a loss. Ultimately, if you can figure out a solution to the Amazon problem, you can guarantee yourself a promotion and a raise at your company, so the problem is worth tackling, but I don’t agree with the NY Times that this is the solution.

B. Publishers create more dynamic individual websites (likely to happen, not to succeed)—It’s weird to think that publishers used to warehouse and distribute their own books, even own their own bookstores. Now, publishers can take a leaf out of the books of self-published authors who distribute their own books. Marketing their own books and bringing readers to their actual website (not just job-seekers), publishers can make huge profits by cutting out the middleman. A lot of smaller publishers have revamped their website to try and make their books more accessible, while others have tried making it a site of social media. Editorial or marketing assistants who find a way to bring more traffic to the site, or business employees who manage to improve sales on the actual site, would greatly raise their stock in the company. Unfortunately, the problem of Amazon’s predatory pricing won’t disappear anytime soon. If consumers are going into bookstores only to buy them on Amazon, you can bet that they will find it even easier to open Amazon in a second tab from the comfort of one’s home.

C. Publishers drop all risky, diverse, and mid-list titles in favor of guaranteed moneymakers (Already happening)–Publishers sell the majority of their books at a major discount to retailers: usually 60% discount to big box stores like Walmart and 47-50% to B&N and Amazon. Combine that with the fact that about 600,000 to 1 million books are published per year in the US including self-published books, publishers are struggling to make enough profit on books to even make back their royalty advances to authors. Partially a sign that publishers need to step up their marketing and publicity schemes to support their authors, these statistics also show why publishers are becoming risk-averse. If you plan on becoming an acquisitions editor trying to pitch a book to your peers, you have to prepare for the eventuality that books will become so unprofitable that you can only acquire titles that are “guaranteed” to sell. That means more celebrity titles, more books by the same authors with strong fan bases, and more derivative knock-offs of whatever sells (i.e. the influx of supernatural romance and dystopias after Twilight and Hunger Games); by logical extension, that means driving away new authors toward self-publishing or not writing at all, as well as a continued exclusion of writers and characters of color (see the recent BEA controversy for a sign of how publishing remains overly homogenized).

 

There are certainly other eventualities that could arise from this feud. Amazon and Hachette could end up maintaining the status quo for a few more years. Or authors could Kickstart their own website to sell their books, which could actually end up helping publishers and authors while avoiding any claim of monopoly. Or Amazon could drive more publishers to merge together in order to survive. But what this means for you depends on whether or not you are willing and able to help your future employer separate itself from Amazon and create a new system of bookselling.

Thanks for reading!