One year ago, reporting trade e-book sales statistics for the first quarter of 2009. we wrote “We’re running out of superlatives.” What inspired our hyperbole were $26 million in sales, exceeding 2008’s first quarter by 131%. Having exhausted our purple prose a year ago, what’s left for us to say about the $91,000,000 first quarter sales posted in 2010, 3 1/2 times those of the same period a year ago. How about this: Q1-10 almost matches the total sales for all of 2006 ($20 M), 2007 ($31.2 M) and 2008 ($53.5 M).

And March 2010? $28.5 million, almost three times that of the same month one year ago.

These statistics compliments of the Association of American Publishers in conjunction with the International Digital Publishing Forum, which reminds us that:

* This data represents United States revenues only
* This data represents only trade e-book sales via wholesale channels. Retail numbers may be as much as double the above figures due to industry wholesale discounts.
* This data represents only data submitted from approx. 12 to 15 trade publishers
* This data does not include library, educational or professional electronic sales
* The numbers reflect the wholesale revenues of publishers
* The definition used for reporting electronic book sales is “All books delivered electronically over the Internet or to hand-held reading devices”

Richard Curtis

Asked to free-associate with the name “Bowker” most publishing people think of such publishing services as ISBN book-identification numbers and similar tedious but essential data.  But, in a surprising announcement emailed to publishing professionals, Bowker today announced a service for authors, and one guaranteed to raise some eyebrows.

“I am writing to inform you of the exciting release of Bowker Manuscript Submissions,” writes Natalie Piccotti. “a new online service allowing authors to submit their manuscript ideas to a number of publishing houses from one central location.

“BowkerManuscriptSubmissions.com will be featured at Book Expo America in May 2010, and will officially launch in June 2010.”

The initiative is designed to “streamline the process of sorting through an overwhelming volume of unsolicited manuscripts publishers receive. Built off the success of Christian Manuscript Submissions, Bowker will now provide a similar service to the trade and higher education publishing communities.”

For an annual fee of $295 the program will…

* Sort by subject of choice and submission date
* Search by keywords in title, description and topic
* Identify proposals that have been professionally edited
* Cut down on wasted time – our system remembers your last date of entry so you do not read previously reviewed manuscripts
* Contact the writer directly
* Find proposals by author’s name
* Review an author’s publishing history, book summary, and writing style in one step

Before literary agents’ noses go out of joint, the announcement reassures them that the submission program will enable them to promote their services and match their clients’ ideas to the best possible publisher.

Our nose remains in place (though permanently deviated 5 degrees by a football injury), but we suspect many an agent will wonder if the program can substitute for or even supplement a lifetime of knowledge and wisdom, experience and cultivation of relationships.  Will Bowker Submissions know if the science fiction list of Publisher A is inventoried, or the romance editor of Publisher B just jumped to Publisher C, or if Publisher D just acquired the same idea from another author six months ago?  Will Bowker Submissions buy us lunch? Will it hold an author’s hand when her idea has been shot down at ten houses?

These mean-spirited observations aside, we welcome the program as an interesting attempt to offer vital information for authors and agents.  And here’s the best part – if Bowker makes a match between an author and a publisher, it won’t ask the agent to split a commission.

Richard Curtis

When the publishers of #1 bestselling hardcover Game Change windowed the e-book edition rather than issue it simultaneously, Kindle owners protested by deliberately downgrading the book in their Amazon reviews. Their action, which fell somewhere between populist revolt and temper tantrum, elicited an editorial by Publishers Lunch’s Michael Cader urging publishers to do a better job educating the public. “Publishing people who care about these pricing discussions need to get in the online forums and start issuing press releases and find other ways to address readers honestly about price,” he said. We agreed with him.

We’ve changed our minds.

What made us change our minds was the confrontation between Cablevision and ABC over how much the cable provider should pay ABC to carry its programs. Held as hostage was the Academy Awards, one of the most watched shows on the annual television calendar.

The reaction of subscribers was identical to that of Kindle owners deprived of Game Change. They didn’t understand the issues, nor did they give a damn who was in the wrong. They wanted their Academy Awards, and they wanted them now. Senator John Kerry, chairman of the Senate Commerce Subcommittee on Communications, Technology, and the Internet, said this about the blackout: “When pulling a signal becomes the nuclear option in negotiation, it inflicts collateral damage on consumers who pay their bills and have done nothing wrong. Someone needs to be speaking up for them in this dispute and those like them, and make no mistake, this is the latest example of consumers getting caught in the middle because the high stakes incentives created in these negotiations are not working for the average customer who just expects their programming to be there when they want it.”

Fortunately for the average customer, the dispute was settled in time. (Actually about 18 minutes late, occasioning the wry observation by New York Magazine’s blogger that subscribers blessedly missed the egg laid by co-hosts Steve Martin and Alec Baldwin.)

The moral of Cablevision vs. ABC as far as the publishing industry is concerned is that consumers have no patience for such arcane issues as windowing, loss leader pricing or agency business models. They expect their book when they hit Download and they want it at a reasonable price. Educational initiatives are a waste of time. We need to get our pricing act together. Though there is no Academy Awards show to bring us to the brink of catastrophe, the e-book industry will not realize its full potential until we provide our products reliably and at prices that makes sense to customers.

Richard Curtis

John Sargent, admiral of the Macmillan fleet, has charted the course of his company to meet the challenges of modern publishing, traditional and digital. In a memo to Macmillan authors, their agents, and their readers, Sargent spelled out a host of initiatives and policies. “It has become clear to me,” he says, “that there is far too little accurate information available in this time of unprecedented change. The issues we all face together are complex, and no news story or 140-character snippet can adequately address them.”

Some of the content of his message had been explicitly announced in the last turbulent months, other policies are fully articulated for the first time. You may read the announcement in its entirety here, but in essence:

• Starting at the end of March, we will move from the “retail model” of selling e-books (publishers sell to retailers, who then sell to readers at a price that the retailer determines) to the “agency model” (publishers set the price, and retailers take a commission on the sale to readers). We will make this change with all our e-book retailers simultaneously.
• All the new adult trade books for which we have the rights to publish in e-book format will be available at the first release of the printed book. We will no longer delay the publication of e-books (read: no windowing).
• We will price our e-books at a wide variety of prices. In the ink-on-paper world we publish new books in different formats (hardcover, trade paperback, and mass market paperback) at prices that generally range from $35.00 to $5.99. In the digital world we will price each book individually as we do today. Generally e-book editions of hardcover new releases will be priced between $14.99 and $12.99; a few books will be priced higher and lower. This is a tremendous discount from the price of the printed hardcover books, which generally range from $28.00 to $24.00. E-book editions of New York Times hardcover bestsellers will be priced at $12.99 or lower while they are on the printed list. E-book editions of paperback new releases will be generally priced between $9.99 and $6.99.
• For physical books, the majority of new release hardcovers are published in cheaper paperback versions over time. We will mirror this price reduction in the digital world.
• There has been a lot of concern from e-book readers that $9.99 books will no longer be available. Most Macmillan e-books will still be priced below ten dollars.

Sargent says he has not addressed illustrated books or books for young children, nor the long-term or author royalty consequences of the change. He will save those and other topics for future posts. But he does state categorically that “these changes will apply to every e-book retailer with whom we do business.”

RC

A few years ago a pair of reporters for a now-defunct publication called Inside ran an interview with three men from the old world of publishing who were in the process of reinventing themselves.

The article was titled “Publishing’s Grumpy Old Visionaries” and the three were depicted as “wundermenschen of the brave new book world”. One of the three was former Random House editorial director Jason Epstein. Another was literary agent John Brockman. To understand my reluctance to reveal the third, you’ll have to click on the article. (And incidentally, one of the two reporters was none other than Sara Nelson, who went on to become editor in chief of Publishers Weekly.)

Though their projections differ in a number of particulars, the Grumpy Old Visionaries accurately foretold the place where we are now and the rock-strewn path that led us here.

The three ageless hotshots are still working their visions and walking both sides of the publishing street – the dusty, decaying old one and the gleaming but bewildering new one. One of these three caballeros, Epstein, has tried to fix his coordinates in both past and future in a reflective article in the New York Review of Books. Like the rest of us he has mixed emotions about the two worlds but he lets his predilection show in this poignant summing-up:

“I must declare my bias. My rooms are piled from floor to ceiling with books so that I have to think twice about where to put another one. If by some unimaginable accident all these books were to melt into air leaving my shelves bare with only a memorial list of digital files left behind I would want to melt as well for books are my life. I mention this so that you will know the prejudice with which I celebrate the inevitability of digitization as an unimaginably powerful, but infinitely fragile, enhancement of the worldwide literacy on which we all—readers and nonreaders—depend.”

Read his elegant and elegiac essay here.

RC

After two intense days of speeches, panels, presentations, celebrations and debates, breakout sessions, networking and exhibits, there was so much to take away from the Digital Book World conference that my head swam. But after contemplating it all in tranquility I was able to reduce the takeaways to one simple but powerful impression: the paradigm shift in publishing from a tangible culture to a virtual one has finally begun to take hold, and its grip will endure.

The moment I beheld a CD-ROM I knew that a day would come when I would behold an electronic book reader. For years I have chronicled the evolution of digital technology, noting its incremental but inexorable trajectory toward a tipping point. I cannot say that we have reached it – indeed, Impelsys’s Sameer Shariff told an audience at DBW that the industry is where the primitive video game Pong was in the early 70’s. Nevertheless, the conference attendees clearly grasped that the gravitational pull on their home planet has weakened and the tug of a new world has become palpable.

How to characterize that new world? It’s no longer about the product. It’s about community, the impossibly tangled, virally sprawling, thrillingly energetic, intoxicatingly imaginative web of writers, editors, readers, entrepreneurs, aggregators, curators and technologists in the service of authors and books, utilizing tools of staggering complexity and power. It’s bigger than any of us but publishing people, even old timers (over 40), have lost their fear and accept the new medium and its tools not just as inevitable but as benign.

Indeed, it took an over-40 veteran, publisher-turned-agent Larry Kirshbaum, to remind the assembly that however dazzling the delivery systems may be, the real magic of books is produced by authors and publishers, and it always will be. Good for you, Larry! And a big shout-out to Mike Shatzkin, F+W Media and the other sponsors for creating an event that would enable us to grasp how vast and wonderful our community is.

We are told that “May you live in interesting times” is a curse. I cannot remember a more interesting time for publishing than today, and I feel blessed to witness and be part of it.

Richard Curtis

If you’re a sales rep for a publishing company, you can be replaced by a telemarketer. At least that seems to be the message communicated by Simon & Schuster.

Michael Cader reports in Publishers Lunch that S&S has cut nine field representatives, leaving but seven to service the book buying needs of a nation. An adjunct to this action is the establishment of a telemarketing group that will presumably service the needs of far-flung independent bookstores around the country.

S&S justifies its decision on “the changing nature of the market place.” That phrase should be nominated for the Understatement of the Year Award. The marketplace served by publisher field reps twenty or even ten years ago is all but unrecognizable, and what’s left of it is melting away like an ice cube in a teapot.

Up until the mid-1990s rural bookshops and paperback outlets like drugstores were serviced by traveling sales reps or independent distributors. These people not only understood the reading tastes of the communities on their routes but knew many of the readers personally. They knew that this bookshop catered to lovers of western fiction and that one to historical romance.

The system worked wonderfully well, but it suffered a major hammer blow in 1996 when several influential paperback distribution agencies let go of most of the independent driver/rack jobbers that covered all those rural bookstores. The reason was that the growing power of computers enabled these agencies to stock stores by remote control instead of employing human beings driving vans and station wagons. It wasn’t long before stores in Tuscaloosa or Paducah were being stocked from agencies in Chicago or Toronto who knew little if anything about what they liked to read. And actually it didn’t matter, because Chicago and Toronto simply shipped those stores the top fifteen or twenty New York Times bestselling titles anyway. (I’ve detailed this crucial moment in publishing history in The Rise and Fall of the Mass Market Paperback, Part 1 and Part 2.)

So much for mass market paperbacks. But there were still hardcover books being sold in mall bookstores, right? Wrong. As the 1990s progressed, closing of mall stores reached epidemic proportions as the major chains, especially Barnes & Noble, realized that store traffic simply didn’t justify keeping them open. At the same time the rise of Amazon shifted book buying patterns from the car to the armchair. Why drive into town when you could handle the transaction at home?

Given the withering of the rural bookstore market, why should we be surprised to hear S&S declare that “new field sales team will focus on the geographic regions where our sales are strongest–urban areas with a large base of key independent retail, wholesale, and educational accounts“?

The fact that it makes perfect economic sense doesn’t palliate the pain that independent bookshop owners and their customers feel to have one more tie to the publishing community severed. One store owner said it all in a tweet: “SO pissed to see my rep go. My one link to you is now someone who has NO idea about my store.”

In fairness to Simon & Schuster, this erosion of bookstore culture outside of the big cities is reflected in strategies pursued by every trade publisher. But that will not mitigate the sense among our country cousins that they’re having a lot of undesirable and inappropriate books shoved down their throats by (to use Dave Barry’s phrase) a bunch of “godless unpatriotic pierced-nose Volvo-driving France-loving left-wing communist latte-sucking tofu-chomping holistic-wacko neurotic vegan weenie perverts.”

Richard Curtis

Adam Pennenberg, writing for Fast Company, has discovered that books don’t find their way to the front of bookstores by themselves. Someone puts them there, and that’s because money has crossed hands. “The practice is known as Co-op,” Pennenberg writes in Bookstore Baksheesh: The Real Estate Deals That Sell Books,”and each book on each table costs publishers anywhere from $3,000 to $30,000, and even up to $50,000 depending on placement. The closer a table is to the front of the store, the more expensive the real estate.”

Pennenberg’s depiction of the seamy side of bookselling will come as a revelation to newcomers to the book industry, and some of you will feel the same poignant disillusionment as the discovery that it was mommy and daddy who slipped the dollar under your pillow to compensate you for that tooth that fell out.

For older timers, however, Pennenberg’s article is just an update of an age-old practice that reveals the ugly underbelly of our glamorous book business. More than ten years ago I wrote about it in a piece called Incentives? Or Shmears? For those of you who understand a shmear to be helping of cream cheese spread on a bagel, it also has a second connotation in the Yiddish lexicon, namely, a bribe or payoff. “It is somewhat disconcerting,” I said, “to learn that such elegant phrases as ’sales incentives,’ ’slotting allowances,’ ‘co-op contributions,’ and ‘display fees’ may be euphemisms for something more akin to what was done in the garment business than to the way ladies and gentlemen conduct business upstairs in Editorial.

“Bismarck said that it is unwise to look too closely into the way we make our laws or our sausages. You may be able think of some other things that don’t bear up too well under intense scrutiny. High on my list is what publishers, particularly mass-market paperback publishers, have to do these days to get their merchandise displayed in and promoted by bookstores. It might be described as publishing’s dirty little secret, except that it’s not so little. In fact, it’s become so pervasive that it touches everybody in publishing.”

If you’d like to descend into the sewer system that runs beneath your local chain bookstore, click here.

Richard Curtis

“At least one major publishing company will be acquired by a retailer,” predicts Richard Curtis in Galley Cat. “For instance (and this is NOT a prediction, just a for-instance), Amazon could acquire Random House or Apple could buy Simon & Schuster.”

That is one of eight prognostications offered by Curtis in a response to an invitation by Jeff Rivera to share his vision for the publishing business in the next ten years.

“A combined publisher/retailer solves many problems for both.” Curtis amplified on his prediction of a publisher/retailer hybrid. “The retailer owns the content and doesn’t have to pay a premium for it. The publisher does not have to pay a premium to distribute its books. There would be huge efficiencies of manufacturing and distribution.”

You can read all eight here.

In a New York Times op-ed piece, Jonathan Galassi, president of Farrar, Straus & Giroux and one of the preeminent figures in the editorial world, has issued a stirring defense of the publishing industry. Without the thought, energy, and passionate dedication that originally bring books to us, the raison d’etre of e-book reprints would disappear.

Citing William Styron, focus of a controversy involving e-reprint by another company of books originally published by Random House, Galassi reminds us that “An e-book version of Mr. Styron’s ‘The Confessions of Nat Turner’ will contain more than the author’s original words. It will also comprise [Random House editor Robert [Loomis’s] editing, as well as all the labor of copy editing, designing and producing, not to mention marketing and sales, that went into making it a desirable candidate for e-book distribution. Mr. Styron’s books took the form they have, are what they are today, not only because of his remarkable genius but also, as he himself acknowledged, because of the dedicated work of those at Random House.

Among the tasks performed by Random – tasks performed by every publisher to bring books into the world – are:Line-by-line editorial attention

• Extensive copy-editing and proofreading
• Book design
• Selection of appropriate typeface
• Commissioning of cover art
• Writing of cover copy
• Talking-up by publicity department
• Submission of bound proofs for review
• Sales staff efforts to obtain advance orders
• Pitches by rights department to magazines, book clubs, film agents and foreign publishers

Curiously, Galassi omits an item that may be the most significant of all: the investment of money. The omission only reinforces his defense of traditional publishers: without a heavy outlay of money, none of the other tasks listed above could be performed. For a publisher to issue a book with even a modicum of attention requires tens of thousands of dollars. To go out large requires hundreds of thousands. By contrast the cost of producing an e-book (by my own calculations at least) is not much more than one thousand dollars.

“An e-book distributor”, Galassi concludes, “is not a publisher, but rather a purveyor of work that has already been created. In this way, e-books are no different from large-print or paperback or audio versions. They are simply the latest link in an unbroken editorial chain, the newest format for one of man’s greatest inventions: the constantly evolving, imperishable book — given its definitive form by a publisher.”

To get the full flavor of Galassi’s statement, read There’s More to Publishing Than Meets the Screen.

Richard Curtis