Monday, October 26, 2009

Another Viewpoint

Okay, we talked last week about the book price war going on between Amazon, Wal-Mart and Target. This week we kick off with another viewpoint. This one from Marion Maneker, who writes for a website called The Big Money who provides articles for The Washington Post and other newspapers.

Maneker believes
Book people are easily spooked. And their first line of defense is to hyperventilate.
He then goes on to lay out a twisted tale of how publishers should be operating, something he calls “a Dutch auction on a distribution fee.” Then he concludes by asking himself if he thinks publishers will embrace this new business model. His answer is: “No. They're too greedy.”

Here’s his formula:
If the publisher is going to sell the book to Amazon for $9, it should offer to take $3 per book as a distribution and marketing fee. A fat hardcover book costs $2 in paper, printing and binding. The author would keep $4, which is basically what he would earn in royalties on a $27.95 book. But since this is a competitive situation, the publisher might bid lower -- say, $2 per book and a pass-through on the marketing costs.

If the book succeeds, the author makes a boatload of money: $5 million on a million copies sold. If it fails, the publisher isn't crushed by the unearned advance.
To do that, he recommends publishers drastically cut their overhead and develop new authors via e-books.

I don’t see anything offered to those in-between the mega sellers and new e-authors. New authors apparently will work, as always, to establish themselves, although they’ll be rowing in e-form rather than the print book boat, and the mega authors will sail away on their boatload of money.
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22 comments:

  1. I never seem to make that boat launch for the boatload of money! :)

    I keep thinking that anything that encourages people to buy books can't be all bad. Maybe people who would have given other kinds of gifts for Christmas will end up purchasing books now. Lemonade out of lemons.

    Elizabeth
    Mystery Writing is Murder

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  2. When does that boat load of money leave? I would like to be there in time to board it! LOL.

    But I agree with Elizabeth. whatever encourages people to buy books can't be all bad surely. :)

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  3. If only I understood all this...or better yet - could stumble upon that boatload of money from my book's publication!

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  4. Are you telling me there are boatloads of $$ to be made in publishing?

    Hm, the more I read, the more it seems publishing is so resistant to change and innovation. If anything, it seems to be one huge, slow-moving boat, sailing its own river!

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  5. It's difficult enough for an author to get published. And now this. Sheshh.

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  6. Hi Guys!

    You're in luck as I happen to be selling tickets for a ride on the boatload of money. Give me a second and I'll put up my Nigerian mailing address where you can mail me your cheques to reserve a berth.

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  7. Right. I read the article and it's an interesting idea but it has to be flawed.

    Out of that $9: $2 for printing, $3 for distribution and a fanciful $4 royalty to the big name author with a readybuilt audience. And the stack'em high store is presumably happy to sell these at cost or with a razor thin margin.

    The beginning author, without the ready made audience meanwhile, is going to require a greater distribution and printing charge due to economies of scale, and in order to satisfy the store wanting to make a profit on vastly lower sales, while keeping as close to possible to the $9 price tag people will be getting used to, all the difference will be coming from the author's royalty.

    So, as the article says, it shifts the risk and cost covering from the big name authors, and shares it more equitably with the newer and mid-tier authors.

    If traditional publishers are going to start paying lower royalties to their new acquisitions then it'll make self-publishing not just more attractive but virtually mandatory if you want to see any return at all on your investment in time.

    Publishers will be cherry-picking established self-made authors for promotion to the big leagues and ignoring everyone else. There's where your cost savings come from on the publishers side.

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  8. You wonder how anyone is going to figure this all out, when even the people who should know, like the publishers and experts on the book business, can't make sense of it.

    Anton, we need you to go to NY and kick some ... experts.

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  9. Historically, Helen, when change occurs--people resist. And the more they feel they have to lose, the more resistance, of course!

    And of course what's historically happened is that many businesses don't survive--a few who change do.

    As to what will happen? I imagine we don't really know as the electronic revolution is as big as the industrial, IMO.

    I'm just hoping not to be a buggy whip maker...

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  10. Love the buggy whip maker idea. I'm probably a dog paddler trying to catch up to the extreme surfers.

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  11. I'm just sorta taking all this in. I'm sure change is coming - how can it not with all the changes in technology and the economy. But right now it appears to me that not even the players really know where publishing will go. I'll keep writing so I have work to present when decisions are made.

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  12. "Sail away on a boatlaod of money?"
    I think you nailed that one, Helen!

    You know if it weren't for the fact wholesalers and distributors take 55-69% of the list price, physical books COULD be sold for much less...

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  13. Where is my boatload of money? Guss I need to become a mega-author.

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  14. Business has become so layered and so complicated that we authors could go nuts trying to figure it all ut. Especially with all the new publishing options. I'm glad that I am on the far end of my career and not just beginning.

    I'm not sailing off with a boat load of money, but I am doing okay and that is okay with me. Not worrying so much about the business leaves more time to write.

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  15. Boatload of money? Hmmmm. I'll hold my hands out and wait,,,

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  16. I'm so confused my head is spinning, but I think Anton has made some good points. I have a dreadful feeling that the boatloads of money will be there for those lucky authors who already own several boatloads.

    Elspeth

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  17. Just a very small boat? Just enough to convince my husband I'm not wasting my time and his money? Sometimes it looks like the boat's already sailed.

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  18. I'll take a canoe full of money to start. Then we'll move right along to a good-sized rowboat, then on to a speedboat that can then race me to the yachtload of compensation. I don't need a freighter, but if I did get to the freighter I wouldn't protest! I have all kinds of constructive ideas to put that money to use for many besides myself.

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  19. I'm beginning to imagine this lake with boats on it. The giant celebrity boats, the fast cigarette boats, sailboats, pontoons, rowboats, fishing boats, little one-person skidoos, party boats. Then there's me...RubaDubDub, one writer in a tub.

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  20. watch out for the narwals, they can poke a hole in your e-boat and leave you to sink or swim in waters rife with sharks

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  21. Basically and IMO, that proposed model sucks. Where does ebooks for new authors leave readers? Most of us buy paperbacks, the mass market variety. Or libraries, for that matter? Isn't the mainstay of the hardbound book the library system?

    Dunno, but it seems to me that proposing that publishers go cheap on new talent, they shrink their audience for said new talent and cause them to fail more than the current system does. And mid-list authors (most of whom are the ones I read) are going to disappear from shelves.

    I hope they just stop with the crazy advances for books that don't deserve it (like Famous Person/Politician's Trite Thoughts on Important Topics) and invest in a few more books with slightly smaller expectations and print runs.

    And when something sells out, print more...just like any other manufacturer.

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  22. I have to agree, Writtenwyrdd. I have friends who are considered mid-list and they're being canceled. It's not their writing that's hurting them, but their sales.

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