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Electronic Dilemma

September 13, 2011 by Ethan Ellenberg Leave a Comment

Here, I’d like to offer a different perspective on the relentlessly optimistic pronouncements regarding the electronic publishing of full-length books.

It’s too big a subject to really tackle at length in so short a piece. I’m going to approach it like a large ball of yarn, just pulling at the largest and most obvious threads, the ones that stick out the most. The threads I’m going to consider are readability, availability and pricing.

Readability

Whether we are talking about electronic books readable on personal computers or dedicated reading devices or reading directly off the net, all models touting the benefits of electronic publishing have one fundamental assumption in common. People will read as easily off of computer screens as they do the printed page for their pleasure reading. It’s not clear how true this fundamental assumption is presently and it’s not clear how true it’s going to be, but it’s important to keep this assumption in mind at all times when one considers electronic book publishing.

If it’s not true that people enjoy or will come to enjoy reading off of computer screens, than an important element of consumer appeal is lost. If electronic reading will always be work reading or information gathering and pleasure reading will predominantly remain the paper book than far less of the electronic book revolution makes sense.

Sampling the currently available electronic devices and software programs and sifting through the claims of enhanced functionality that electronic publishers make, when it comes to pleasure reading at least, the electronic publishing industry is intent on offering a far inferior product (books that are less enjoyable to read) to the public. The book electronic book publishers talk about is not the book you enjoy reading or owning. For other forms of reading and for certain consumers, it may well be a superior product but for pleasure reading, it’s not currently true. If the electronic book is an inherently inferior product, it will have limited appeal. And, in order to survive as a business, it will have to compete against printed books in other areas.

Availability

Beyond the readability question, let’s look at another fundamental assumption behind electronic books. A great deal is made out of their availability. Because they are available as some form of download, they are theoretically available over any Internet connection, anytime, anywhere in the world. That does make electronic books far more available than any traditional book.

Yet, how great an advantage is it in practical terms? Would anyone’s chief criticism of the publishing industry be that books are unavailable? This needs to be considered.

Books are one of the chief beneficiaries of the Internet revolution. Amazon allows online ordering 24 hours a day and books can arrive as early as a day later. Amazon has become a gold mine of information about books, generating many more sales. Nothing remotely like it has ever existed before. For those who like to shop in an actual store, mega-stores have enormous inventories, and it’s less likely now to go home from such a store without the particular book you are looking for. So, over the last decade there have been some positive developments in book availability that mitigate the availability argument.

There have also been some very negative events regarding book availability. The consolidation of the wholesaling industry and the closing of mall bookstores has reduced the availability of books in the marketplaces we all frequent. More and more locations that display and sell books are a fundamental need of the whole industry. If electronic books are available in everyone’s home, school and place of business, you could make the case that they represent a solution to the problem of book availability.

Yet, I’d like to make the following distinction–the difference between being available for sale electronically and being available for sale physically. Having millions of books available for sale over the Internet in the form of downloads won’t necessarily lead to increased sales. Book sales, like all other sales, need to be promoted. One of the key components of most sales has been the physical presence of the item for sale. The Internet has changed that, but it hasn’t eliminated it. The theoretical availability the Internet provides without a concomitant sales promotion apparatus in place, may not lead to many additional sales.

This is something I can’t stress enough. Internet availability will not correct the lack of books available for sale offline. Online availability vastly increases the potential for sale and delivery, but it doesn’t necessarily close those sales. There’s another issue that needs consideration. If electronic book publishing is so inexpensive, then thousands and thousands of new and old books are going to crowd the information and sales systems that are offering books to the public electronically. If there isn’t concomitant growth in some selling and intermediating presence to handle the growth in books for sale, the very volume of electronic books could undercut the entire enterprise.

There is a difference between 50,000 new books reaching the public each year and 500,000. In any other business, creating more product doesn’t necessarily create more demand. It can even have the opposite effect. This is something the electronic model must look at far more closely. We also can’t forget that unlike Amazon, which sells and delivers the paper book, the electronic book delivered is an electronic file: an item it’s not clear the public will accept for pleasure reading.

Price

Price is another area where the electronic book is expected to revolutionize publishing. I would agree that theoretically, here is where its greatest advantages lie. If the book is downloaded from a server, its hard costs across the board are greatly reduced. The old paper, print and binding have become bits of electronic code whose cost is minimal. If we are going to compare the cost of maintaining a server, checking a credit card and downloading an electronic file to the system of having books delivered to book stores and often returned, here again we have staggering price advantages. If the consumer does want this form of book on paper, they can print it on their own printer, thereby transferring the cost of printing from the producer to the consumer.

It would seem that here is where the full potential of electronic books is realized. If the publisher retains all the cost savings itself, all other things being equal, this would be a bonanza for publishers, the same revenue, at perhaps half the cost if we focus on production and distribution expenses. However, there is one fundamental hidden assumption here. That assumption is that e-books will simply be an additional revenue stream, like audio books. If e-books represent no more than an additional revenue stream and they can support the same cover prices as p-books with a far lower cost structure for the publisher, they will obviously be a publisher’s dream.

But is this likely? I think it’s hard to credit this model for the long term. There is a profound difference between the e-book and the p-book in value for most people. They won’t feel they are getting the same item when they buy the e-book and if they are being asked to pay the same price they are going to feel cheated. If there is no saving by buying the e-book instead of the p-book, it’s hard to see many people buying the e-book. In this scenario, they will most likely ignore the e-book. The consumer is very aware of the difference between a hardcover book and an electronic file, I don’t believe you can justify this model for publishers that publish both.

This would mean that if e-books were to work the real calling card of the electronic book would be a greatly reduced cover price. What would the impact of large price differentials be on both the e-book and p-book markets?

If there’s a 50% price differential between the p-book and e-book, the publisher would run the risk of siphoning off readers from the p-book to the e-book. The e-book might not be as much fun to read, but at half price, you may find some takers.

It seems to me this is a dangerous strategy. Publishers who publish both p-books and e-books can’t simply shed the whole infrastructure and sales distribution systems that make this possible. They will have to have all the same overhead necessary to print and ship books even as they create the infrastructure to sell e-books. If they begin to convert $20 hardcover sales into $10 e-book sales, it’s not clear the cost savings on individual e-books will make up the revenue loss. It seems at best it will be a zero sum game. We also have to consider the fate of the trade paperback and mass market paperback formats, which command smaller cover prices than hardcover books. What will be their fate in the face of inexpensive e-books?

A secret assumption of e-book publishing seems to be that the increased potential availability in the form of downloads and the lower prices will per force lead to more unit sales. I don’t believe this can be counted on in numbers great enough to shift the whole economics of book publishing to the e-book model. If e-books lead to significantly less revenue per unit and the savings from manufacture and distribution cannot make up this loss, publishers will simply be losing revenue.

Only by selling considerably more new units of e-books will they be able to make up their revenue losses from the sale of e-books if e-books undercut their p-book sales. If e-book sales represent new, unduplicatable sales that never would have occurred in the p-book, the publisher has a new income stream with its own economic pluses and minuses. That would be great. Like the audio book, it would just be an add-on. But the danger would be that the e-book is too close to the p-book not to cannibalize it and so the e-book will undercut the publisher’s other, primary business, the p-book.

If the economic forces I’ve described play out this way, it would mean that one sound publishing strategy would be for a publisher to only publish e-books. Some already exist. Yet they’re a small, untested minority. They don’t provide an answers to fundamental questions: can e-book publishing succeed on its own merits and can mainstream publishers who must maintain their core businesses of paper book publishing successfully integrate e-publishing into their financial structures?

Conclusion

Boosters of the electronic book hail it as the wave of the future. I believe the landscape is much more problematic than that. I believe that for pleasure reading, the e-book is inherently an inferior product compared to the paperbound book and that concerns me. It will most likely have its place but it’s not clear how appealing it will be to the large public that enjoys reading books for pleasure.

The great potential availability of electronic books seems to have triggered in some minds the fantasy that this alone will automatically create new sales. It will in some cases. But it’s not a cure all. Demand is the key to new sales and availability alone does not create demand. If electronic book publishing is limited to making thousands of books available for download and nothing else, it will add little to publishing revenue for publisher or author.

Price may well be the most perilous part of the integration of electronic book publishing into the present landscape. If e-books are marginal, their impact will be small. If they are to be successful, they may have to be much cheaper than printed books. If they are much cheaper, they could well undercut both publisher and author incomes. Only a substantial increase in additional unit sales will pay for what e-books may well do to p-books.

Are we really going to be winners if the new Grisham can be had for $10 instead of $20?

Filed Under: Articles & Features on Book Publishing

Targeting Agents

September 13, 2011 by Ethan Ellenberg Leave a Comment

I know many writers believe that their submissions are routinely discarded without being considered by many agents. Based on my knowledge of the business, this isn’t true. Though I am a busy literary agent with an active list of more than 80 writers I still consider everything that arrives in my office. As I sit down to write this in May of 2000, I see five important new sales from my agency this year with first time writers who we took from the slush pile — including one from our first email query letter. It’s true the overwhelming majority of submissions are returned with a form rejection, but we are looking for books that excite us and when we find them, we pursue their authors vigorously. We’re not the only ones.

A lot of things go into finding an agent. Nothing is more important than the level of talent and accomplishment that are displayed in the actual book you are selling. Beyond that, however, you are trying to connect with another human being, a professional who earns his or her living selling manuscripts. How can you better your odds of finding that person? You must carefully target the agents who are most likely to respond to your work.

A fair amount of information is available on literary agents, including the information in this book. If you do your homework — and you must do your homework — you will better your chances of finding an agent and hopefully a good one. How can you best target an agent? Here are some of my recommendations:

Shares your interest

This is obvious, but fundamental. Target an agent who actively sells the kind of book you are shopping. Read the listings carefully. Don’t send a novel to an agent who specializes in nonfiction. Don’t send a children’s book to an agent that never represents them. Be thoughtful about it. An agent who has sold a children’s book for a celebrity author is not necessarily a children’s book agent — that agent may only represent celebrities. Sometimes there are subtle elements you have to consider. If you’ve written a Civil War novel does the agent of the top selling Civil War novelist really make the best match for you? There’s a good chance that agent won’t be interested. They need to concentrate on their top writer in this particular micro-niche.

If an agent doesn’t list or seem to have a specialty, try to discover some actual sales and see if you think they’re a match for your work. If other elements of the agent’s profile suit you, you may want to try a query. There are a number of guides to literary agents you can consult, including the industry “bible” Literary Market Place. There are also sites on the web that can be consulted. If you are querying one of the larger agencies which has multiple agents, you may need to call them first and ask which agent does such and such. Hopefully, you’ll get a name in this fashion. If whoever answers the phone isn’t willing to divulge any information, that may be a sign the agency really isn’t interested in unsolicited work.

Years in the business

This is an important indicator of a number of things. You really have to use your judgment here. Someone just entering the business may be hungry for clients, but they may lack contacts, experience and knowledge. Our industry has been plagued with a number of fraudulent agents, so you have to be doubly careful. A long established agent may have great cache, but may be taking very few clients, if any. Try to size up the whole picture of an agents current situation — can you locate news of recent sales and new clients, are their listings welcoming, do they have associates who might be looking for new clients, do they write articles for any writing magazines, do they attend conventions, etc.? Get a feel for exactly where this agent is in his or her career. I think membership in writers organizations (Mystery Writer’s of America, Romance Writer’s of America, Novelists, Inc., etc.) are important indicators of commitment. I also think membership in the Association of Author’s Representatives, a trade association that has an ethics code, is significant. I think convention attendance and article writing are also indicators that this agent is working full time at building their agency and selling books. All of these small, but important things are indicators of who you are really contacting.

Another fundamental indicator is the actual sales the agent has made. Make a serious appraisal of the sales they list. Are they sales to major publishers? Agents who are only selling e-books or to small publishers you haven’t heard of, may well not be actively selling books. Are they all for one or two clients or do they cover a number of clients? If a single client dominates all the sales information you have, it may be that this agent isn’t selling a lot of new talent. See if you can see how many sales are for brand new clients. This would be an important indicator that this agent takes unsolicited work and sells it. Quantity is a factor as well. An agent who only lists one or two sales may not be active enough or successful enough. At my agency, we’re making more than a hundred sales a year (books, audio, movie, etc.) It is not a challenge to list 6 or 7 new book sales for established or new clients. All of the good agencies I know could easily provide similar credits.

Responsiveness

This comes into play once you’ve begun to actively approach agents. Whatever an agent’s reputation or credentials, you are most concerned with how this agent is going to treat you. When you solicit an agent, how long does it take for that agent to get back to you? A quick response is usually a sign that the agent is excited about your work. It also means this agent has available hours to work for you. How personal and intelligent is the response? Is the agent really focused on your work? Have they a thorough understanding of your manuscript? It’s very important that they do. This is a tough business and an agent’s personal commitment to the work and you the client, is often the only thing you have going for you early on. They must believe in the book and you. If they don’t, it’s very likely they’ll lose heart after a few submissions. Is the agent willing to answer your questions and spend some time with you over the phone? This is also an indicator of how available the agent is and how committed.

One thing that always strikes me is that there’s a huge gulf of knowledge between author and agent. There has to be, one is a specialist immersed in the business and the other a newcomer who is entering the business as “talent,” not as a business person. Being a doctor, lawyer or entrepreneur doesn’t give you any knowledge of publishing. So most clients want to have their comfort level raised. They need to ask questions, however so called “obvious”. If the agent doesn’t comfortably answer them or claim that they’re too busy or unimportant, that agent may not be willing to do the hard work necessary to maintain the relationship.

If the agent wants to represent your book, does he or she have a game plan? A lot of the exact marketing plans will come later, but I rarely take a book without considering who I can send it to and how many truly viable submissions I can make. There’s no reason why an agent should say never mind about that, I like your book. This is your business; you don’t want a fan, but a business representative.

How does the agent handle some of the important fundamentals of the author/agent relationship, e.g., does he or she offer a contract, are there any fees, how soon will your book be offered for sale and to how many houses? As I said previously, our business has had a problem with fraudulent agents. These are agents who have no real intention of selling any books, but live on “reading” or “marketing” or “editing” fees. I charge none of these fees, I never have. I don’t believe they are legitimate. If you have to pay an agent, I take this as a bad sign, period. I would avoid agents that request payment. They’ll get paid, when they sell your book.

I also offer a contract to all clients, a simple agreement that spells out our mutual rights and obligations. I think it’s wise to enter into an agency agreement, so you know more where you stand legally. Written documents are often very revealing of a person’s sense of fair play. For instance, I offer contracts as short as 6 months. If I can’t sell your book by then, you have the option of terminating the agreement and finding another agent. My contract obligates me to pay all monies received promptly, no later than 10 days after receipt. These are just examples of what I consider important indicators of fair play. All the good agencies follow these practices and I’ve seen similar provisions in their agreements.

Another final, very compelling factor is speed. Does the agent feel your book is ready to go? Are they ready to put it on sale? Are they willing to multiple submit the book or do they insist on sending it to one house at a time? We often hear from people who claim their current agent has made 3 submissions in two years. This would not be acceptable behavior to me.

Additional Strengths

Though the basics may well decide things, let me mention a few other things to consider. Most agents and agencies have certain strengths. You may want to ascertain what a particular agent’s strengths are, because they may be what you specifically need. For instance, some agents consider themselves “editorial” oriented agents, they like to work with authors to improve their work and direct their careers. Others see themselves as sales people, people who will find the deal. Still others see themselves as primarily deal makers, people who will maximize an opportunity for a writer, but aren’t particularly interested in starting someone out. I put a great deal of emphasis on my editorial skills, I like coaching storytellers; I believe this has been a key to my success.

If you are fairly along in your career or you believe you have a “big book” you may want to find an agency with a strong subsidiary rights department. By subsidiary rights, I mean the rights that are sold off the book–movie rights, audio rights, translations in foreign countries, etc. If you feel you need a lot of attention, you may want to target agents with small lists or agents who advertise their desire to concentrate on only a few people. Perhaps you believe your book especially needs promotion and publicity and you may want to try and locate an agent whose background is in these areas.

All of these small, important facts can help determine your search.

If you follow this basic course of action you will soon have a number of names of agents that fit these criteria in one way or another. Prior to the submissions process, how should you proceed?

I recommend you organize your list and start at the top — the agents that you would most want to have regardless of the odds. It’s very hard for a writer to know the value of their work, so there’s no reason to undersell yourself. Let’s say you have 30 names. Choose the top ten — the agents you think have the skills, reputation and track record to successfully market your book. Don’t assume they are too busy for you or that your book isn’t good enough. Approach these top 10 following the protocols they ask for and see what happens. If one or more of them is interested in you and you’re impressed with their willingness to work with you, you’ve found the opportunity you were looking for. If your book is rejected by this first ten, analyze what might have gone wrong. Did you get any personal responses or were the only responses form letters? If you did get a personal response is there any way you can learn from it and incorporate what you learned in your next batch of submissions? After you consider that, re-read your work, your introductory letter and consider the whole package of material you are sending. If you are happy with it, it’s simply time to try again.

Re-consider your list of targets. If you think that you were rejected because you simply approached too many agents who were too busy, construct your next list from people who have smaller client loads and fewer years in the business. Let’s say your first list included only agents with 50 or more clients, who’ve been in business 10 years or more. Now maybe it’s time to try agents who have 20-40 clients and have been in business 3-7 years. You may also want to try an agent with a strong professional background, for example, someone who was a successful book editor, who has just begun their business. You should get the idea by now, continue this process until you’ve landed an agent or until you realize it may be pre-mature to look for one.

At the beginning of this article, I sounded an optimistic note. Agents need good writers. Many agents are still growing their businesses and many agents treasure the joy of discovering a new talent, as I do. With the right targeting and the right property, even though it’s a long, arduous process, you can find the agent who will help you. That said, I also want to add a cautionary note.

A bad agent is worse than no agent at all. These are my thoughts on what makes a bad agent. First, you should never pay a reading fee or marketing fee or any other kind of fee to a literary agent. You should only pay the direct cost of the expenses to market your book when you are signed with an agent who is actively marketing it. You should never work with an agent who directs you to a vanity press or an editor who you must pay to “fix” your book. It’s true some professional editors can make a huge difference and these people do charge, so there are situations where this is legitimate. Unfortunately, the large amount of abuses in this situation have forced me to warn against this practice unless you are certain you know exactly what you’re getting into. Finally, make certain you and the agent agree on exactly how many submissions and to whom they are going, and in what length of time. An agent who makes no submissions and performs no work is much worse than no agent at all.

Good luck in your search.

Filed Under: Articles & Features on Book Publishing

The Industry’s Real Challenge

September 12, 2011 by Ethan Ellenberg Leave a Comment

I don’t know if business is good or bad right now. I do know that the publishing landscape has changed dramatically over the last five years and we will continue to go through a wrenching adjustment to these changes. I hope after reading this short article you will better understand the nature of your readership and the impact of the changes that have occurred.

As a general rule, there are two kinds of book readers. The first is the fan or avid book reader. This person is committed to reading books. This person visits bookstores, borrows books from friends, asks for books as gifts, and stops when they see books exhibited in airports or discount stores.

The second book reader is the impulsive book reader. This person is not committed to reading. It’s not that they don’t like to read; it’s just reading, like a lot of other pleasurable activities, is a catch-as-catch can experience. This person doesn’t visit bookstores and doesn’t have a mental list of books that they are just waiting to buy. But, if cruising by an airport newsstand or stuck in the mall for an hour or two, they will wander into a store, get hit by lightning and buy a book. And they will read and enjoy that book.

I recommend you always keep these two readers in mind. They are your audience. They represent all that’s gone right and all that’s gone wrong in the last 5 years.

For the committed book reader, paradise has landed. The committed book reader has watched deep discounting by competitive book chains drive down the prices of top selling books. The committed book reader can go to mega-stores that stock fifty or even sixty thousand titles, including lots of bargains and hard to get books. The committed book buyer can go on-line and shop 24/7/365 and have books delivered right to the door. The industry has done a masterful job of creating a book selling environment for the committed book reader that is almost unrivaled by any other industry.

Unfortunately, the impulsive book buyer has not shared in this bounty. What the impulsive book buyer needs most is a good mix of books that are appealing to every interest and every pocket book and are available at many and diverse locations, so that the impulses we all pray for can happen. The odds of this happening have decreased dramatically. Let me try to explain why.

There used to be hundreds of small book wholesalers in this country. Their main business was distributing magazines and newspapers, but they also carried books. They were often locally based and, because they were servicing many small retail establishments (think where you buy a newspaper or a magazine), they also put books at all these small retail locations. A short time ago, a large chain store with many stores in many states decided it no longer wanted to work with this host of small wholesalers that were feeding its many stores. It consolidated the business, turned to the largest wholesalers and demanded they bid for the whole thing. Someone did bid and this launched a massive consolidation that wiped out scores, even hundreds, of small wholesalers as many large chains followed suit. From a business point of view, over night the small local wholesalers interested in maintaining these small retailers of books were gone and were replaced by large wholesalers working across tremendous territories, who were mainly interested in only the largest accounts.

Some people estimate that somewhere between 100,000 and 200,000 “pockets” capable of holding a mass market book were lost. Whole racks of books that used to sit at a Rexall’s or a small supermarket or a country store simply disappeared. You’ve heard the expression an accident waiting to happen, well, for the impulsive book buyer, this was a case of an accident that could no longer possibly happen.

To compound the problem, both selection and price worsened for the consumer. With large companies focusing on making the pocket stuffing process “simpler” for low level employees putting books out in far off locations, the selection of titles shrunk. Why work with 300 titles, when you can work with 200? Why work with a $5.99 paperback by some newcomer when you can sell the backlist from a bestselling author with a cover price of $7.99? The entire mass market paperback business became bestsellers and romance – marginalized were westerns, war books, mysteries, fantasy, science fiction, et cetera.

To complete the picture, let me share with you an old rule of thumb that you can only learn from the few gray haired paperback veterans that are still around: one out of every two paperback books sold is an “impulse” buy. The impulsive book buyer is like Pavlov’s dogs before the training. He needs to see the meat to start salivating. Take away the meat and forget the salivation.

This is the real, essential problem of the book business today, especially the mass market paperback book business. We’ve lost our pockets. We’ve lost our racks. We’ve lost our physical presence in the marketplace that remains the fundamental, number one secret of retailing. We need to focus on getting it back through fair means or foul.

It infuriates me to hear that “people don’t want to read anymore” or that “there are so many other things people would rather do.” The impulsive book reader does like to read. But, he or she acts on impulse and you are not going to capture those impulses without the proper stimulation: a book, up close and personal.

The single biggest criticism I would level at the industry as a whole right now is that instead of addressing the fundamental issues of rebuilding distribution networks, finding new venues, retaining old accounts and reviewing the mix of discounts and terms to maintain its reach to the impulsive book buyer, it is focusing on the emerald city of electronic distribution. They may be adding another course to the feast for the committed book buyer, but the impulsive book buyer won’t be able to buy a frankfurter soon. If impulse buys do account for half our business, what kind of strategy is that. This may come as a shock to many people, but not everyone comes home from work and spends the night surfing the net for new exotic books at attractive prices.

I only hope a house doesn’t have to land on anyone before we take this issue more seriously. If it does, it’ll probably be a publishing house.

Filed Under: Articles & Features on Book Publishing

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