Established authors from mid-listers to the ranks of NY Times bestsellers are increasingly mulling over a tough question: do I re-up with a big-six legacy publisher for a multi-book deal (assuming one was offered) or sign a one-off with a big-six to publish an E-Original or do I take control and launch an E-Original on my own? I’m so confused… and where’s my drink?
Why the ruminations? Well,… even rising mid-list authors are seeing advances dropping and the number of titles per contract falling –while other terms remain flat or slide even further in the publisher’s favor. Thus, basic market forces are causing some authors to consider E-Originals. Those who have been paying attention have known this for a lonnnng time.
In a recent blog post my industry colleague and kindred spirit Richard Curtis pointed out the challenges facing the big six publishers in this area. I agree with what he had to say.
Let me elaborate and do the math… suppose a mid-list author is offered a $10,000 advance for an e-Original by a big-six publisher. After much wrangling, the author accepts the deal despite feeling like Ned Beatty squealing like a pig in the movie Deliverance. Important note: you never ever want to be Ned Beatty. Anyway, the author collected the advance, delivered the manuscript and waited a year for the first statement. It arrived along with a check for $2.61 (rough estimate) which included the usual set of nefarious deductions.
Alternatively, suppose the author publishes an E-Original (full-length novel at 120,000 words) at let’s say, $7.99 retail, and earns approx. $4.00 net per eBook copy sold from a digital publisher. At sales of only 2,500 books, the author will earn approx. $10,000 – which is the advance and the party has only just begun! Assuming the author is at least midlist and regularly attends to their audience, these numbers are not difficult to attain.
We can talk all day about math, and it’s a good exercise, but to me there is a much greater question: control of the author’s content IP. A digital publisher (full disclosure: I am CEO of PDP) can provide a better royalty (PDP gives 75% to the author and pays monthly), better term (PDP gives 3 to 5 years vs. a life of copyright) and allows the author to keep my ancillary rights such as Audio, TV and Film (be sure you keep those gems). Content is where the value is – publishers are not purchased for their teams. An author with a reasonable level of success that controls his or her IP for the long term will be in a much better position.
So, to me, the answer to the question “To E or Not To E” is not as much about E-Originals alone as it is about the authors deciding to take in control of their content library and demand better business terms along the way.
Don’t be Ned Beatty.
Premier Digital Publishing recently launched Premier Baseball Scorecard. The application is designed exclusively for the Amazon Kindle (eInk), so a bright sunny day at the ballpark is no problem.
The application has been created for baseball fans that love watching baseball and keeping score along the way. Baseball fans can now keep score for their favorite big league team, or track their favorite little league or softball star. Fans can start a custom season for their little league teams and track stats for each game over the entire season, or download each day’s rosters for every daily professional baseball game and be ready to go when the ump calls out “Play Ball!”
Why did we build an interactive eBook? Simple – the consumer has a wallet relationship with Amazon for multiple forms of content and all apply similar core competencies. PDP is not an eBook publisher. Our team, vision and revenue base are wider than that. Today, PDP is a leading independent digital publisher and innovator of eBooks, enhanced eBooks, print-on-demand books and interactive content. We are a team of digital media pioneers, and we now rank among the top publishers of quality eBook entertainment to the industry’s leading tablet and eReader manufacturers and eBook retailers.
That’s how we Play Ball!
My industry colleague Mike Shatzkin hit the nail on the head in his recent blog post. Read this and then register for the conference on October 22, 2012.
Everybody in Hollywood Needs an eBook Strategy
Posted by Mike Shatzkin on May 14, 2012 at 7:50 am
As a result of spending my college days at UCLA, I had a handful of contacts in the Hollywood community when I came back East to live in 1969. When I started becoming familiar with New York publishing in the 1970s, I found myself, on occasion, shopping movie or TV tie-in projects. Armed with a script and a release plan, one could make the rounds of editors at the mass-market houses that had been assigned specific responsibility for this kind of acquisition.
At the time I was doing this kind of thing 30 or 35 years ago and more, the book business was growing wary of tie-ins to TV movies. They didn’t have the same promotional life as theatrical releases, even in those days when about one-third of the country was watching any network broadcast. Films that ran in movie theaters were definitely preferred as desirable book properties.
In the decades since then, the link between Hollywood and New York publishing has not exactly been severed, but it certainly hasn’t strengthened. One agent I spoke to told me that interest from Hollywood can definitely help raise the profile of a book project being peddled in New York, but the same agent agreed that the tie-in sale, where a script is novelized to just take advantage of the exposure the title and story will get through the movie, is all but dead.
Another agent, one with strong Hollywood connections through his office, had a slightly different point of view. He says it is still “humbling” to see how much being tied to a movie or TV show (“or even radio”) can “move the needle” on a book sale.
To the extent that the agent who believes in the power of Hollywood exposure to move books is right, the relative reduction in interest by New York publishers only increases the opportunity for Hollywood entities who exploit publishing through ebooks (and judicious and selective use of print) on their own.
(I recall two specific deals from my past relevant to this post. In around 1977 or 1978 I sold the book tie-in rights to a TV movie called “Cotton Candy”, which was produced by Ron Howard. In 1985, I sold the rights to two books to tie into the third “Nightmare on Elm Street” movie: one was a novelization of the first three films and the other a heavily-illustrated “making of…” book. I’d say the “Cotton Candy” deal today couldn’t possibly happen and “Nightmare”, which went to a major publisher, would be a real long shot.)
New York’s interest in Hollywood-originated content was, of course, centered on big properties. Hollywood’s enthusiasm about getting a book deal was often not very great. It didn’t add a ton of revenue (big publishing money for a big movie was small money to the movie producer) and the “promotion” done by publishers was trivial compared to what the movie studios did for the film.
In fact, there were often rights issues that got in the way. Even if the screenwriter had conceded the tie-in rights to sell the script, the studio might still be required to get clearances on the novelization, which would be a nuisance for a book project that often had annoyingly tight deadlines and not much benefit. If the screenwriter had held the tie-in rights and was the one selling to the publisher, it could become a bureaucratic nightmare to get art and logos from the film, which would be controlled by the studio, to promote the book.
New York’s incentives were often too limited to interest Hollywood. Hollywood’s unpredictability on things as basic as release dates, as well as the diminishing likelihood over time that any particular movie property would enjoy enough theatrical success to give real legs to the tie-in book, made systematic efforts unproductive for publishers. There haven’t been dedicated tie-in editors for decades.
But digital publishing changes many things. The relationship between Hollywood and the book business, because of the changes brought on by ebooks, will almost certainly be one of them.
In the digital age, what it takes to succeed as a publisher are access to commercial properties to publish and an ability to let an audience know an ebook of interest to them is available. Those are the core requirements. Everything else can be put together from services, and they can be put together one project at a time (although most people in Hollywood aren’t really aware of that yet.)
A Big Six CEO told me last week that the two core skills and competencies that publishers require are “editorial”, picking the books and developing them, and “marketing”, letting the interested public know the book is there. This CEO would be happy to outsource just about everything else. Starting where this executive wants to end up — with commercial properties in hand and an ability to tell an audience about them but with no overhead or organization to support — is essentially where Hollywood entities get the chance to begin.
Things have changed in Hollywood too. Digital tools make it cheaper and easier to make a movie, just like it is now cheaper and easier to make a book. But, just like book publishers, producers of Hollywood content find the growth in competition mushrooming. The corrolary to the fact that making movies can be cheaper is that promoting them is that much harder and, much more than decades ago, every revenue stream counts, even pretty small ones.
The change in both industries means that Hollywood has enormous opportunities through the digital publishing world, as soon as they figure it out (which we plan to help them do).
There are some early signs that this is beginning to happen.
The most ambitious project we’ve become aware of so far comes from Warner Brothers Digital Distribution. They’ve announced their Inside the Script series that will issue 300 classic scripts (think “Casablanca”) as ebooks, starting with a release of four titles. Doing an entire program enables them to take a templated approach to creating the ebooks, which will cut their costs of making really good products. Whether classic scripts will sell robustly is an open question, of course. But the cost of the experiment is low in a Hollywood context, and they gain the additional benefit that their classic films get a shot of recognition and reader-adrenalin which can only increase Netflix views and DVD sales.
NBC has established NBC Publishing to begin to exploit this opportunity. Michael Fabiano, the NBC VP who is the General Manager of this operation, says that “In general, text will come from titles already published, direct relationships with authors and, in some cases, from the staff of NBC News. We will also utilize a network of professionals as needed.” They make it clear that NBC will continue to work with established publishers. (Left unsaid, but I’d assume: they’ll work with established publishers for projects that have a big print component or where they can get substantial advances.)
ABC has a venture called ABC Video Books. This is being done in conjunction with the publisher they own, Hyperion. They position the initiative as “a new storytelling experience, enhanced with ABC video.”
Thinking about this has led me to believe that every network, every studio, every producer, every agent, and every screenwriter in Hollywood needs to have a digital publishing strategy. If fledgling novelists with no Hollywood presence can blog and tweet their way to commercial success, and some do, certainly a Hollywood-developed story would have an even better chance. Novelizing a screenplay (which is just one of a number of ways to do a Hollywood tie-in as an ebook) isn’t a trivial job, but it isn’t a massive one either. And publication as an ebook can be done for less than the cost of a few lunches. Even cheap lunches.
Broadly speaking, there are two categories of opportunity here. One is for legacy brands: all the stories (like “Casablanca”) that have been made famous over a century of film-making. Publishing scripts or novelizations are the simplest things that can be done. Why not publish all the Seinfeld or All in the Family scripts as ebooks? How would they sell? We don’t know, but the cost to find out is low and the availability of the book constitutes additional promotion, even of a long-established film or TV show.
The other category of opportunity is to build interest in a developing property. This will work better for projects that are about something substantial: a historical event or person or an issue (divorce, alcoholism, etc.) that people would search under looking for reading matter. If you’ve written a screenplay about Babe Ruth and Lou Gehrig and you’re trying to develop interest, you could do worse than publish the script or a novelization as an ebook. People searching their favorite ebook retailer for Babe Ruth or Lou Gehrig will find it (and this happens every day) and some will buy it. You can develop fans and a following. You can get revenue.
Of course, you can also get more creative. Characters can “write books” (an approach that has already been tried.) And successfully.
Discussing these ideas with players in Hollywood today, I have learned that there is a growing awareness of the ease of ebook publication with another motivation as the catalyst. It is apparently easier for the owner of a screenplay to keep ebook rights out of their movie deal if they’ve already published the ebook. There would seem to be very little risk in that strategy. As we’ve seen, movie studios don’t much care about book tie-ins so they’re not likely to walk away from a deal because these rights have already been exploited. And book publishers are increasingly aware of self-published ebooks as a farm system. No book publisher would decline to buy rights to a book becoming a movie because an ebook had already been issued. (The owner would almost certainly have to pull the self-published ebook off sale, but that would be painless if a publishing deal made it worth it. That precise strategy has been executed by indie publishing star Amanda Hocking and her new full-service publisher, St. Martin’s.)
The first step for networks and channels and producers in Hollywood is to learn how to utilize their new revenue and marketing tool: ebooks. We’re going to jumpstart that effort with a Publishers Launch Conference at the Hollywood Renaissance Hotel on Monday, October 22 called “FILM/TV-TO-BOOK: How Digital Publishing Creates New Revenue and Marketing Opportunities for Hollywood”. We’ll be co-located withF+W Media’s Story World Conference. We think this could be the start of a long-running conversation.
Publishers Launch Hollywood will emphasize what the Tinseltown players can do on their own, which is the big opportunity presented by digital change. But we’ll also present players from the publishing world: both new entrants from the “ebook first” world and established players. None of them want to do every pr0ject Hollywood should do, but when they want to be involved, they’re still almost always the best path to the biggest market.
Recently I was chatting with a well-established, successful literary agent at the London Book Fair. A sharp guy who has seem much come and go in the industry, he was nonetheless somewhat perplexed by the confusing calculations that hide among the reeds in the swamp that is eBook royalties. For the past couple years dedicated literary agents have been navigating mire as they negotiate with traditional publishers and take meetings with a new crop of eBook publishing enablers. Some agents and authors have also connected with Premier Digital Publishing, a multi-format digital publisher (full disclosure: that would be me).
Whenever I meet an agent, the conversation quickly turns to the fog of numbers and percentages that are flying around the industry and the resultant challenge in figuring out the actual royalty an author receives. I typically suggest a simple question, “Why don’t you just ask, ‘What is the net dollar figure the author receives on a $9.99 book and how often do we get a royalty report and remittance?” Before you know it, we are huddled over a white piece of paper deconstructing percentages into cash royalties.
First, traditional publishers. To understand how astonishingly bad these 75/25 eBook deals can be, one need only start at the beginning:
A traditional publisher employing a wholesale deal garners something in the neighborhood of 45% (+/-) of the agreed-upon suggested retail price. On a $9.99 book, this is $4.50. 25% of this is $1.14. Not too impressive. If the publisher is employing agency pricing (which is a whole other story involving conversations with government law enforcement), the publisher receives $7.00 on the $9.99 book and pays 25% which is $1.75… better than $1.14 but certainly not case for celebration.
There’s another category that fits between wholesale pricing and agency pricing in which publishers receive approximately 35% of the suggested retail price along with promises of certain promotional or merchandising benefits. In this case, the publisher receives $3.50 on the $9.99 book and pays 25% which is $.87. The obvious assumption here is that the publisher took this deal anticipating that the number of books sold will be higher.
Now, all of the foregoing assumes a $9.99 price point. At $.99 all the above numbers get cut in half. A 50/50 deal is better (and some publishers are offering such to decidedly Tier 1 authors) but it still does not address the key point:
Content is king and without good content there is no business (ask the movie studios). The creators of content must be properly rewarded for the content they produce. Inefficient business models, horrifying levels of overhead and legacy systems are, essentially, a massive tax pad by the content creator who waits at the end of the line for what’s left over. These creators are not assuaged with statements like “Oh, you need to understand this is just how it is.” How is that fair?
When discussing percentages with potential eBook partners (or your existing publisher), the numbers can be confusing. Authors, Agents and IP holders should ask this simple question; “What % of the retail price do I receive?” If the answer isn’t over 50%, give us a call. In our view, a “50/50″ or “70/30″ deal that yields the author or IP holder only 25% – 35% of the retail price isn’t such a good deal. Then ask how often you get paid. We pay monthly because we get paid monthly by eBook retailers. If you are not being paid monthly… who is being permitted to sit on your money?
“When the amount of time spent properly characterizing a problem approaches zero, the amount of chatter and Scotch employed solving the problem approaches infinity.”
Just ask “”What % of the retail price or net $ do I receive and how often do I get paid? If the economics are satisfactory, then it’s time to dive into deal duration (why lock-up for 10 or even 5 years?), ancillary rights (why give up non-eBook rights?) and recoupable or non-recoupable costs. Those conversations are irrelevant if it’s a weak financial deal in the first place.
At Premier Digital Publishing, we deliver 50% of the retail price to authors, estates, IP holders, studios and small imprints. That’s 75% of what we receive from our distribution partners.
I will now go answer my hate-mail.
I have always believed that in digital media accessibility is a key driver of consumption. Through that lens, I am not at all surprised to read that the Pew Research Center has found that there is a correlation between accessibility to quality eReader devices, available eBooks and increased overall consumption (reading more books).
- Consumers equipped with mobile phones with better user interfaces TXT more
- Consumers equipped with early dial-up Internet service read more about things they enjoy
- Consumers equipped with High Speed DSL or Cable Modems consumer more online video
It should not be such a newsflash that consumers equipped with easy to use, economically priced, connected eReader devices would, (OH MY!) read more books. The report is summarized in the today’s news:
More Americans are reading e-books than ever before, on more kinds of devices, a new reportfrom the Pew Research Center has found. That news won’t come as a shock, given the rapid spread of e-readers and tablet computers and the rise of e-content. What might be a surprise, though: The report contains good news for print lovers, too. Readers of e-books like to read in all formats, they favor print books for sharing and to read to children, and on average they read more books over all than print-only readers do.
“They’re heavier readers. They’re more frequent readers,” said Lee Rainie, director of the Pew Internet & American Life Project, the group behind the report. “These devices have allowed them to scratch that itch.”
The report, “The Rise of eReading,” analyzes findings from a survey of almost 3,000 people nationwide in November and December 2011, along with data from follow-up surveys of about 2,000 people in January and February 2012. Twenty-one percent of respondents reported, as of February 2012, that they had read an e-book in the past year. That figure was up from 17 percent in December 2011, before the holiday surge in purchases of e-readers and tablets. The average e-book reader said he or she had read 24 books (electronic and print) in the past 12 months. Those who didn’t read e-books averaged 15 books over the same time period.
This should surprise no one and excite everyone in the digital publishing space (such as me).
I was scanning this morning’s news when a summary by Frédéric Filloux, a Guardian-UK reporter / blogger (is there a difference anymore?) caught my eye:
In the past 12 months, I’ve never bought fewer printed books – and I’ve never read so many books. I have switched to ebooks. My personal library is with me at all times, in my iPad and my iPhone (and in the cloud), allowing me to switch reading devices as conditions dictate. I also own a Kindle, I use it mostly during summer, to read in broad daylight: an iPad won’t work on a sunny cafe terrace.
There you have it. A “fully enabled” 3 device eBook aficionado who is probably does not realize the automatic sync-to-location feature has single-handedly changed his left.
Are you a 3 device junkie?
I am now.
Stories are circulating today in the publishing universe regarding the fuss about low prices books and value. One story reports:
“Independent authors are rallying around the controversial 99-cent price point. Some authors feel the 99-cent price point devalues their hard work, while others feel that readers will not take a chance on new authors at a higher price point. To further complicate the matter, it’s not just new authors that are using the 99-cent strategy, and the issue doesn’t only affect independent authors, but publishing houses and agents as well.”
Uh-huh. The REAL iceberg below the surface is the volume of the profit dollars involved. Suddenly the old days of large advances and $20 fiction books don’t look so bad…
While it is fashionable to run to the town square hollering “workers of the world – UNITE!” and rail against the machine, the law of unintended consequences predictably kicks-in. Some members of the screeching mob are quickly caught out by what’s needed to survive and compete as the new status quo emerges. Well, that new status quo is this: free to $1.99 is the volume price point and it is not going away. Unless we all want to head to jail under the terms of the Robinson Patman act, a volatile market with low prices is here to stay. Some entity (author, agent, publisher) will awake each day and hang a sign that says “FREE – Today Only.”
Personally, I have no problem with this new paradigm because I saw it coming years ago. It’s capitalism driving the digital market. It’s reality. Yeah, it’s tough. But it’s not going to change so you need to orient your mind and position your brand accordingly and just deal with it. (Ahem, just as Barry Eisler and Joe Konrath have done. Go read “Be The Monkey.“)
You either defend the traditional business of publishing (a mostly closed system with publishers and large retailers being the gate keepers) or you embrace the open, accessible digital market with low walls – replete with the zits and emotional turbulence of its youth. Oh, and did I mention consumers who are clamoring for free books and books at $0.99 or $1.99.
You need to pick one and make your bet. You can’t have it both ways.
As Geddy Lee once said in song “If you decide not to decide, you still have made a choice.”
On March 28th of this year I posted a response to the question “What do you think Barry Eisler’s decision means for the publishing industry?” That post is here and also pasted below for easy reference.
Apparently that post hit the nail on the head – I was just told that my post was “One of the leading digital publishing thoughts of 2011.” While I was just being blunt and honest – and don’t see what the fuss is about for doing so – many thanks for the recognition!
Here is that post again:
“First, what do I think it (Eisler’s decision) means for the industry:
The simple truth is the publishing industry is undergoing the same digital evolution as seen in music, with the same disruptive, cataclysmic effects upon the incumbent gate-keepers. The proxy in music occurred in 2007 as EMI, one of the big-4 music labels, saw Radiohead go direct.
If it seems similar to the Eisler decision, well, it should. In my opinion, guided by experience in two previous digital shifts, the “tipping point” comments are correct. It has happened. For better and for worse you (the authors) and the publishers, respectively, are now on the other side of the tip. The rate of change that is being referenced in the comments is in fact “mainstream market momentum.” This momentum is not being driven by the ability to self-publish to digital. Technically, that has been here for over 10 years. It is being driven by device penetration (consumer purchase of Kindles, Nooks, iPads and Android tablets) and access to a large library of CONTENT created by YOU the AUTHORS. The same market momentum was seen with color phones in 2002 as mobile games and ringtones became a $2B+ industry almost overnight as a large content library was made available. It was also seen in the DVD market when DVD player prices hit sub $99 (December 2003) and the massive library of old movies on DVDs became available at $14.99 and $19.99 vs. $29.99? Goodbye tipping point, hello mainstream market.
Today, musicians and writers have been empowered. Yes, the door is open to self-publish and many are walking though it (Eisler, Konrath, Radiohead, Nine Inch Nails, etc). While many artists can self-edit, convert digital files, and submit to digital stores such as iTunes and Kindle, many artists simply desire to create their art in word or song. Some are capable or staffed to self-publish, while others are seeking partners to help with the process.
Second, what does it mean to me?
We have built Premier Digital Publishing, PDP, to help established authors successfully navigate the digital waters and garner their fair share of the pie. Our opinion and the mission of PDP is for the creators of IP (Intellectual Property, not Internet Protocol, ha, ha) to be deservedly rewarded for producing the art forms THEY created. Sure, the ebook storefronts (new retailers) do deserve a share of the pie, but the old publishing model and its revenue splits is fatally encumbered by the weight of legacy systems, overhead, bloated staffs and prevarications a.k.a. royalty reports (wicked wink).
As the story goes, I can go to Lowes and buy $500 worth of equipment to mow my lawn each weekend, but why not pay a “group of guys” to do it for a reasonable cost? (If you live in California – don’t translate “group of guys” into its politically incorrect term). You get the point.
“Readers need writers” – true that. Writers also need self-publishing expertise and weapons to wage war in the new era of digital distribution and reach their readers. This is not limited to clicking a mouse and converting a file. PDP is here to help those who want assistance in merchandising, marketing, etc. and don’t want to “mow their own lawn.”
Welcome to the other side of the tipping point. Radiohead and Eisler are now perpetually famous.
Or is it Infamous?
I guess the post hit the nail on the head… several times. As 2012 rolls into town, PDP will be there to help authors make their own “Eisler Sanction.”