Is the publishing industry in a mess?
In recent weeks, the interwebs has been burning up with articles and blog posts about the demise of the traditional publishing industry. I’m not sure what sparked the current crop of death notices, but I find it fascinating that so many people now find it newsworthy. The truth is the publishing industry hasn’t been very proficient at selling books for decades now. To give you an example of this, according to bookstatistics.com, “Simon & Schuster, Random House, and Penguin Putnam wrote off at least $100 million in unearned advances in 1996.” And from the same website, “Harper-Collins lost more than $250 million in a single year just on returns.” (This is actually pulled from a March/April 2002 New York Times article).
Don’t get me wrong, I love traditional publishers. They can design the hell out of books, and the editing is as close to flawless as you can get in most traditionally published books. They even have an eye for talent (keep in mind; they’ve repeatedly turned me down). Granted, they do make a lot of bonehead moves, like signing, Jay Leno, Johnnie Cochran, Dick Morris, etc to book deals with advances so large they couldn’t possibly earn them back in sales. Statistically, traditional publishers only earn back the advances on 30% of the titles they publish. There is a Hail Mary pass mentality in traditional publishing. Meaning, they publish every book with the mentality that they only have one chance to score and win. If the Hail Mary fails, they move onto the next book. If the Hail Mary succeeds, they celebrate and get the book ready for the next phase of the marketing strategy. They invest in books that succeed. They do not invest in books to help them succeed.
In my humble opinion, in order for traditional publishing companies to survive in a time when it is increasingly easier for authors to get books to market without them, they are going to have to make the following changes:
1. Abandon mainstream media advertising now. Stop spending money on print, television, and radio. It costs too much money, and gets little to no results. I don’t care who the author is.
2 Do not sign one more author who has never had a book on the market. Whether the author has been previously traditionally published or self-published, the experience and devotion they bring to the table will far outweigh the current risk you take on writers who just have a manuscript. Let’s face it; you don’t do a very good job of developing talent. You can spot it. You just don’t know what to do with it once you have it. A publishing deal for a first time author really amounts to nothing more than on the job training that they can put to good use for their second book. It’s not a great business practice for you.
3. Hire all the editors back you’ve laid off lately. They are your greatest asset. Letting them go is kind of like an army deciding to give their soldiers guns without bullets in order to save money.
4. Stop printing large quantities of books. Forty percent of all books never sell. That’s a lot of money wasted, not to mention a lot of trees sacrificed for nothing. Here’s an idea, try cutting initial production by 40% and then shift the titles to a print-on-demand rotation.
5. End the returns program. The publishing industry adopted a strategy of taking books back from retailers no matter what during the depression in order to survive miserable economic times. The problem is they never ended the program. Retailers can send books back for a full refund or credit. It’s a policy that costs the publisher more than the cost of the book; man hours, storage, and management of the returns program all cost real dollars. In addition, it costs retailers money to send books back. No one wins in this scenario.
6. Stop trying to create news with outrageous deals. When you sign an author to a seven figure deal, you make a big deal out of it by drowning the media in press releases. And it is news for about a week. The problem is it takes you 18 months to get the book to market. The size of the advance is no longer news. The marketing value of the big paycheck is gone.
7. Decrease the size of advances on the top end, and stop paying your authors a measly 7.5% to 15% royalty. Give your authors “benchmark” royalty contracts. That’s right, reward them based on performance. Start them off at a 20% royalty for the first 10,000 books. From there, bump them up to 25% for the next 10,000 and so forth and so on until the author earns 50%. Instead of the big advance, give them a large post market bonus. When they sell 1 million books, give them a newsworthy 6 or 7 figure payment against future sales. Send out your press-releases, get your coverage and sell more books immediately.
8. Your authors should be at the forefront of the marketing efforts for their books, but they should not be the only one marketing their books. Using my plan, you’ve cut your production by 40% so that means you can cut the number of people on your sales team. I’ve also cut your advertising budget by totally eliminating mainstream media advertising. Shift some of these people and resources to create a web 2.0 branding team. Instead of begging (and paying) for space in brick & mortar stores, their job will be to manage volunteer sales forces (what used to be called fan clubs). Their sole job will be to ignite word of mouth campaigns through blogging, social media and online video. They will help the author create and maintain their brand.
9. Don’t just publish books. Produce films based on your books. Manage a speaker’s bureau for your authors. Develop video games based on your books. Create workshops and seminars for your authors. Become a packaging company. Negotiate various rights as needed with authors.
10. Make books available for sale quicker. There is no reason it should take 18 months for a book to make it to market. You can get it done in 6 months at the latest in most cases.
11. For books that don’t have time sensitive material, there is no reason to give up on them so quickly. Be in it for the long haul. Let the accumulative effect of branding take hold. Look at books as a long term investments.
12. Publish fewer books for the brick and mortar market. Physical stores are having a tough time with the inventory they have now. They don’t need more books. Reserve the brick and mortar sales channel for those authors who have proven themselves online. Go ahead and make this a benchmark, too. If they sell 30,000 books, open up the brick & mortar channel to them.
13. Train your authors in marketing, public speaking, online video production, the market place, their genre, etc. Help them help you. Distance learning is a wonderful thing. Use it to get your author’s up to speed.
There is plenty more that could be done and should be done, but this is the kind of thing that will take baby steps. Work on these 13 things, and get back to me.