About Me

A blog wherein a literary agent will sometimes discuss his business, sometimes discuss the movies he sees, the tennis he watches, or the world around him. In which he will often wish he could say more, but will be obliged by business necessity and basic politeness and simple civility to hold his tongue. Rankings are done on a scale of one to five Slithy Toads, where a 0 is a complete waste of time, a 2 is a completely innocuous way to spend your time, and a 4 is intended as a geas compelling you to make the time.

Thursday, February 13, 2014

The Missionary Impulse

So if all of the people who are so committed to the idea that the whole wide world of writers should be self-publishing their books on Amazon would devote just a wee bit of their energy to getting some more of the developers near our current office to shovel the sidewalks of their development sites so my employees don't slip and fall on ice sheets, I'd be very happy.

Where does one begin to dissect this incredible piece of self-publishing "science" by Hugh Howey...

First, the science doesn't rest on actual figures of how much anyone is making.  Rather, the starting point is to look at a list of Amazon bestsellers, and to determine the future from this list, and this list alone.  Ugh!  I had my first experience with bestseller list quackery in 1990, when a book that I knew wasn't selling very well in hardcover somehow managed to appear on the Locus bestseller list for multiple months.  More recently, Myke Cole has been aiming for the #1 bestseller in the Space Marines category for a book with no Marines in it.  I've seen books appear on the NY Times bestseller list with very little correlation, especially on the mass market side, to their hard sales numbers as reported on Bookscan.  So any article that starts out with breathless promises of answering all questions by analyzing a trove of Amazon bestseller information is looking a little dubious to me.

Then, there is a very beautiful chart putting the average review score of a book next to the average price for the book, with little bars based on whether the book comes from a big five publisher, an indie publisher, etc.

Even assuming that we want to consider Amazon reviews the be-all and end-all of qualitative analysis, this data is questionable.  For one, how do you categorize the many books that are currently from one type of publisher but used to be from another?

But Amazon reviews don't correlate necessarily with quality.  There are the one-star reviews because the e-book costs too much.  There are the one-star reviews because the book that says "graphic novel" in the description is a graphic novel.  I didn't know for sure until I got the manuscript, but I was a lot less surprised than a lot of the one-star review givers that Sookie chose Sam, because the vampires -- hate to break it to anyone -- weren't exactly princes of kind-heartedness and generosity when dealing with Sookie.  Yes, there are some cases where I'd like to take a client of mine, point them in the direction of their Amazon reviews, and say there are some lessons to be learned, but there are way too many cases where the Amazon reviews are not indicative of anything.

The article then jumps from there to saying that the better average reviews for books priced less expensively suggests that readers are grading on a curve and perhaps giving better reviews to cheaper books from self-published authors because e-book prices are too high.

There is a logical fallacy here.  One second, it says Amazon reviews are reliable.  The next second, it says Amazon reviews are graded on a curve where readers are more inclined to be generous to books that offer better value.  A reliable review shouldn't be given on a curve.  It shouldn't have the moral relativism of a politician that likes filibustering judges until either the majority party in the Senate or the party affiliation of the President changes, when all of a sudden night is day and day is night.  The logic is circular, fallacious or both.

Also, ebook prices are not too high.  Compare the value of reading a book to multiple other entertainment options.  The average price of a movie, of an album, of a magazine, of a ticket to a concert or a show -- all of these things are more expensive than books, and usually of shorter duration.  Yes, there are some things like getting Netflix for a month that are cheaper than the price of a book, but on balance, a book give solid value for the money in whatever format you buy it in.

Another thing to keep in mind -- this study basically starts out by saying e-book prices are too high without any underlying rational, other than to say that cheaper e-books get better Amazon reviews.

So we move on to Act Two of the essay.

A chart shows us that Big Five publishers account for just over a quarter of the bestseller days for the most popular e-book categories.  One thing I can agree with -- romance, sf/f and mysteries are among the most popular categories for e-books.  The chart shows that the Big Five publishers account for just over one-quarter of the bestseller days, that this is under-representative, and suggests that the Big Five publishers are therefore under-publishing in the most popular genres.   I might agree with this.  It would be good for my business if there were more sf/f markets, that's for sure.  But the implication that publishers aren't doing anything with this data is flat-out wrong.  In the UK, multiple new sf/fantasy imprints have started up in recent years, we have several clients who are selling in the UK only on account of those new options and imprints, and the e-book business to be had by doing sf/fantasy has to be the motivating force for those imprints, because it sure can't be the Bookscan sales for print editions of these books, which are often below 1,000 copies for the home market.

The next conclusion drawn is that publishers should lower e-book prices.  Which isn't a conclusion that follows automatically from anything else.  Maybe that is why I have seen publishers react to this news by publishing more sf/f in the global English marketplace, but not by lowering their prices.

Next chart.  Daily unit sales by category of publisher.  Again, the category of publisher is a hard nut to crack.  Every book published in the JABberwocky e-book program was once published by a bigger publisher.  I will concede that it is possible to get an approximate sense of sales by looking at Amazon rankings, but it is only approximate.  As an example, being #5 on an Amazon bestseller list on December 23 means more than being #5 on that same list on August 23.  There is then the "eye-popper" of a revelation that indie authors are outselling the Big Five.  Is this an eye-popper?  The Big Five aren't big because of the volume of titles they publisher, they are big because of the revenue they generate for the titles they publish.  In 2013, Simon & Schuster had sales over $800 million.

Then more breathless reporting of news that isn't news, which is that e-book sales in the major e-book categories are higher than the overall sales percentage for e-books.

Run this by me again.  You have one number that is an average, then you have the people that are above average, and you are shocked to find out that the above average people are above average.  This is like breathlessly reporting the discovery that the average GPA is a 2.5, and the Phi Beta Kappa students have a higher GPA than that.

This isn't a secret.  I don't take out ads in the NY Times, but I think I have mentioned in blog posts or on twitter or on panels or in conversation with people that e-book sales were reaching parity, then at parity, then surpassing.  Which isn't to say that plenty of people studying up on the e-book business won't find this to be newsworthy, but it isn't news, or isn't a secret.

From there, Hugh Howey's blog post goes on to discover that big publishers make more profit from e-book sales than print news.  Not news.  Hugh could have read a blog post entitled "Do The Math" that reported this news two years ago.  Two years ago.

After a lot of fuzzy math and bad statistics that occasionally intersect with the truth, Howey comes up with this conclusion:  "Our data suggests that even stellar manuscripts are better off self-published."

Sorry, Hugh.  There is absolutely nothing in your blog post that justifies that conclusion.  This is not the same as saying that your conclusion is wrong.  Maybe it's right.  But if it's right, it's not because of anything -- anything! -- in your blog post.

Your post fails to look at the revenue big publishers can generate from sales other than e-book sales.

It fails to look at the opportunity cost for the writer of having to self-market books rather than have a publisher do so.

It fails to look at the present value of a guaranteed advance vs. royalty money that may or may not come along down the road.

Your advice to publishers is for them to (a) lower e-book publishers (b) give a bigger share of their lower revenue to the authors they publish.  Obviously, the publishers are not going to take this advice.  There is no business model for them in taking in less money while simultaneously giving more to the authors.

I don't say these things because I am in bed with the major publishers.  I fight with the major publishers all the time, including fights to get reversions of rights so the authors can self-publish or utilize our e-book program to publish those same books.  JABberwocky offers e-book services to our clients in part because we want to demonstrate that there are alternative publishing models, and hope that those alternative models will lead to higher e-book royalties.  But that certainly won't happen if the publishers also price every e-book at -- well, what price?  The entire Nightside series by Simon Green is available for $5.99 per book.  Myke Cole's just-published Breach Zone is $5.99.  The entire Mistborn trilogy by Brandon Sanderson, under $14, and his Way of Kings $8.  Should that be $2.99, $4.99, what lower price?

And what then happens when everyone has lowered prices as you suggest?  If every e-book is $2.99, what price does the self-published author go to in order to present as a bargain?  $1.99?  $.99?

How elastic is the demand for books?  Yes, at the margins, you can increase sales some by lowering prices.  But after a point, that stops working.  There are only so many people who like to read with only so many hours in the day to do it.  You can't have a never-ending price war.

Comparisons to the music industry don't help.  The publishing industry has offered a wide range of products at a wide range of prices, and most of those prices reasonable.  The music industry tried to sell $14.99 albums to people who wanted $1.49 singles.  But most people want full novels, not the A side or the B side of the single.  And even in 2014, a typical paperback book costs half or just over what a CD cost in 1989.  Also, authors can't tour.  Unless readers want to go to pay-by-the-panel conventions, authors are stuck making most of their money from writing, so if the publishing business ever does become like the record business, authors are cooked.  All the $1.99 e-books in the world won't be able to keep the typical author going.

More e-book posts to come...

What does the sale of Richard Curtis' e-Reads to Open Road say about the e-book business, e-book marketing, and the costs and benefits to the e-published author.

15 comments:

Sean Cummings said...

Excellent assessment.

Crane Hana said...

Thank you for a sane and coherent analysis. I read the Howey article and said 'What? Waitaminute!' but didn't have the background to take it apart.

Don said...

Thanks for an honest takedown of what I agree is at best unknowingly incorrect interpretation of incomplete data and at worst, unadulterated bullshit.

Unknown said...

"It fails to look at the present value of a guaranteed advance vs. royalty money that may or may not come along down the road."

That "guaranteed" advance comes IF an agent picks it up and IF the agent persuades an editor to take it on, and IF the publishing house's marketing people like it and IF the editor doesn't get fired or resign before the book goes through the publshing house's various processes and IF the publisher doesn't go under in the meantime. That word "guaranteed"; I don't think it means what you think it means.

Steven Zacharius said...

Enjoyed the blog. I believe it's Hugh who talks about publishers being the gatekeeper.....could be wrong here....but there's nothing inherently wrong with being a gatekeeper. Just as literary agents are also gatekeepers in hopefully preventing poorly written books to a publisher so neither one of us is wasting our time. Publishers are a filter for the reading public. Sure there are books that get through that you might not like, but generally at least one talented editor has read the book, present it to an editorial board and a marketing and publicity staff and to the publisher....all of these people hopefully filter the good from the not so good.
As far as Unknown saying IF...yada yada yada, most legitimate publishers don't go out of business before an advance is paid out. If they do, the rights are reverted or the person acquiring the company in a bankruptcy has to make good on advance and royalties due.

Steven Zacharius
President and CEO
Kensington Publishing Corp.

J. R. Tomlin said...

LOL Well put, Unknown. Somehow I am not surprised at the highly defensive reaction to a look at Amazon sales. Now would I prefer to have Amazons stats from them instead of Hugh Howey having to reverse engineer them? Of course, but that's not going to happen. This is the only way to even come close to what is actually happening in book sales.

Of course, people who would rather not know can stick their fingers in their ears and sing 'la la la la'.

Anthea Lawson said...

"It fails to look at the present value of a guaranteed advance vs. royalty money that may or may not come along down the road."

You can find info about that here: http://www.courtneymilan.com/ramblings/2013/08/19/know-what-your-rights-are-worth/

"I will concede that it is possible to get an approximate sense of sales by looking at Amazon rankings, but it is only approximate."

Try these tools, proven to be fairly accurate: http://kdpcalculator.com/
http://www.theresaragan.com/p/sale-ranking-chart.html

"It fails to look at the opportunity cost for the writer of having to self-market books rather than have a publisher do so."

Really, your clients don't have to self-market, the publisher does all that? Your trad-pubbed clients don't have to buy their own ads, bookmarks, maintain their websites, twitter, facebook, blogs, set up bookstore signings themselves, or keep their own mailing lists? Wonderful!

"making money selling e-books isn't just a matter of putting them out there and watching money roll in."

Especially if an agent is taking a cut off the top and you can't control the most important aspects of your career.

John Brown said...

I can see the issue with looking at a snapshot and then assuming the writers or titles in that snapshot sell the same number of books every day for the rest of the year.

No title stays at the same ranking all year. So that's just a flawed assumption, as are all the projections based on it.

But what is not flawed is the breakdown of the top 7,000. The top 7,000 books in the snapshot are what they are. The indie percentages of those 7,000 are what they are.

This is only Amazon. And a freaking ton of books are sold outside of Amazon. So we can't generalize about the whole book selling world with this data.

But we can begin to speculate about Amazon, which is the biggest online retailer of books.

The BIG insight I take away is that trad publishers do not seem to offer any value to authors in the Amazon online distribution channel. Going through a trad publisher will not lead to more online book sales. Furthermore, you get fewer dollars per book you do sell.

Trad publishers may offer value at other online retailers. My understanding is that B&N and other sites have the old co-op going online, i.e. publishers can buy visibility. Whereas on Amazon the visibility mostly comes through the bestseller lists which cannot be bought.

Does the visibility publishers may or may not provide on other online retailers make up for it? Don't know.

Does the visibility publishers provide in brick & mortar channels make up for it. Don't know. But most midlist books don't sell all that many copies in the brick and mortar channels.

Anonymous said...

Couple of edits you might want to make:

any underlying rational*e*

(a) lower e-book *prices*

----------------

Love the article. I took advanced statistics in school, and felt that Hugh's assessment was a little blue sky mixed in with a little bit of trying to make his fuzzy data fit a pre-determined conclusion--and I say that as a self-published author.

All the best

Tabitha Olson said...

"It fails to look at the opportunity cost for the writer of having to self-market books rather than have a publisher do so."

Exactly. Not only the cost of the marketing required in order to give your work notice, but the amount of time involved.

Sure, traditionally published authors need to do marketing of their own, too, but I've never seen a true comparison between how much a self-pubbed author has to do vs. a trad-pubbed author. This article does nothing to address that. I would love to see a break-down of this sort, actually.

Asheville Cabbie said...

"Your post fails to look at the revenue big publishers can generate from sales other than e-book sales."

Revenue for whom, sir? Writers? Because that's all we're really talking about here. Revenue for publishers and agents doesn't factor into our thinking.

Anonymous said...

Another big problem with a snapshot is that the price captured for each book may or may not have been the price paid by an individual reviewer.

Anonymous said...

@John Brown and others, you may wish to take a look at the recent New Yorker article by George Packer on Amazon and the publishing industry. Specifically the part where it says that the 'also bought' lists and anything to do with visibility are in fact bought and paid for via promotional fees.

Amazon has increased the fees regularly over time, and publishers who don't pay get their buy buttons removed. In other words, visibility is not reliant on bestseller lists. They are reliant on Amazon's goodwill and money.

And for those who doubt whether a presence in books stores are worth it--well, ask the authors who chose to go with Amazon imprints how well not being in bookstores worked out for them in terms of mirroring their previous success with traditional publishers. 70% of the book market, give or take, is still print. That's a big market to stay out of.

And can I please say this is in no way a defence of traditional publishing. It's just that I think we need to stop taking a company we know nothing about at their word. They are a business, just like traditional publishers. They are just as capable of good and bad as traditional publishers. And every writer deserves the chance to make their own choice as to how they get their books to readers. So can we please stop acting like there's only one 'smart' way? Because that's really not true.

Brad Beaulieu said...

I think this post from Tobias Buckell is entirely appropriate here. It talks about survivorship bias, why you have to be very careful taking advice on writing/publishing from those who have made it. Their views of the publishing world can be very limited and potentially damaging to those that don't walk the same path and get (sometimes randomly) the same results.

http://www.tobiasbuckell.com/2013/05/27/survivorship-bias-why-90-of-the-advice-about-writing-is-bullshit-right-now/

Brad Beaulieu said...

@John Brown: I would take exception to this statement: "Going through a trad publisher will not lead to more online book sales."

I don't believe that to be true. If an author sells to a larger publisher, their books will appear in book stores. Those books showing up in bookstores, plus any sort of push this gets from the publishers via marketing/etc., will lead not only to physical sales, it will lead to e-book sales as well. This can be from people seeing the book, then going home to buy it online (or right their in the store with their mobile device), it can be from books being passed around or being talked about (those that bought the physical copy or e-copies). It increases the chances of wider adoption and broader word-of-mouth, which will help both e-sales and physical sales in the end.

So while it's not guaranteed, I think being with a Big 5 publisher increases the chances of a breakout novel significantly. How significantly? Who knows? But it's something worth considering. It can lead to you broadening your readership, which will help with the current book(s) being published, and also future books and backlist.

Joshua's mention of opportunity cost is also huge. I'm not against self-publishing. I think it's a viable option for some books and some authors, but the time (not to mention skill) required to push your books is considerable. It could easily cost a writer half their time, which might be better spent writing the next book.