What Hugh Howey Won't Talk About (but Should). The Publishers and Amazon, Part IX. The Last Part

(A quick note to those of you who have been following this series. On January 15th I'll be appearing on a panel at Digital Book World in New York entitled  "Authors Facing the Industry: Data and Insights From Authors on the Publishing Business, Author-Publisher Relations, and Marketing." 



Click here or on the image to view the full DBW agenda. Time is 3:00 to 3:50PM. You can save 5% on your attendance with Speakers Code DBWSPEAKERS; make sure you register today. The agenda is very broad and provides extensive coverage of issues of interest to both traditional and self-published authors.)

In the last article of this series, I continue  my look at how the publishers can push back against Amazon. If you've not been following this series, I urge you to read it from the beginning as it provides you with a concise but accurate explanation of the fundamentals of distribution in the book ( (and other) channels.

While the publishers have their work cut out for them, there are significant things they can do to remain a force in the industry. The most important factor working in their favor is that they are still the primary managers of content. As a channel entity, Amazon's core expertise is not in producing things, but in selling them. As a distributor/reseller, Amazon wants to sell products that are uniform in structure and whose sales easily scale if/when they catch the public's fancy.

Books meet the above criteria only partially. While both printed and E-books scale easily in terms of sales, their creation is often idiosyncratic and halting. Every book ever written or published by definition is unique. Books that aren't are called "copyright infringements."

A practical example of this is a Sci-Fi series by David Gerrold (famous for his "The Trouble with Tribbles" screenplay for the original Star Trek). I started reading in 1984 his series called the "War Against the Chtorr." The last book in the run was published in 1992 ( A Season for Slaughter ) and three more have been promised since then. I'm not holding my breath for the next release, don't think he'll ever finish up the tale, and feel a bit cheated.

The problem with a channel attempting to also become a content provider is evident in the struggles Amazon has had in establishing its house imprints. ( Click Here for More Info .) Currently, the paper channel won't sell Amazon's house books because they conflict with the interests of the book channel (outside of Amazon). And the thought of dealing with hordes of cranky, emotional authors probably makes the teeth of Amazon's internal management ache. And the whole Hachette dust up may have have excited some bright-eyed, long-nosed legal beagle at the DOJ to start sniffing through the case archives and read up on the fed's successful monopsony case against the film studios decades ago. That thought gives Amazon's attorney the hives.

In high tech, there are examples of suppliers successfully integrating their operations with their channels. Apple is the most notable case. In the late 90s, Apple pulled most of its computer products out of the stores, shut down its OEM and licensing operations, and opened its own retail chain. But Apple is the exception that proves the rule. Apple closely controls its product production scheduling and planning. Apple sells its most popular products via a strict agency pricing regimen. Apple has always attempted to integrate its hardware and software technologies into unified products. And Apple is slowly edging away from the PC market as its focus turns increasingly to smartphones, tablets, and the upcoming new generation of flexible devices.

This is in sharp contrast to Microsoft, which has always relied on channels and third parties to grow and whose attempt to build a retail channel has been far less successful than Apple's.

A final point to keep in mind is that in most markets, channels do not sell. Channels exist to service demand. In software, company after company made the mistake of thinking that because a distributor had ordered X number of boxes of product into their warehouse they had sold something. They were always wrong. It was always the responsibility of the software publisher to create product demand and pull products out of warehouses. In E-books, nothing has changed except the cost of warehousing and shipping has dropped to near zero. Plow those savings back into your marketing.

A Change of Mindset Would Do You Good

Publishers must rethink their relationships with the author community and give up their traditional gatekeeper mentality while repositioning themselves as author facilitators and as writing coaches. The Amazon-Hachette battle uncovered the fact that there was a great deal of pent up resentment towards publishers. Many writers perceive them as an unfriendly blocking force that takes away opportunity from people who are certain they have a book or books in them. Publishers need to understand this and proactively reach out to this community and to the future revenue and profits they represent.

Gatekeeping makes no sense in the age of the electronic shelf. There is no limit to the amount of inventory the system can carry. There is no genre or market segment that cannot be served by the electronic shelf. There are no returns and shipping issues. The long tail is eternal.

In this milieu, rethink publishing as an analog to the baseball system, where different levels of talent are segmented into different circles and encouraged to improve their skills until they’re ready for the big leagues. With this model in mind, start to learn how to market into niches and genres, and build new imprints and product lines to service them. Leverage community to help manage these minor leagues and promote talent to the first rank. Both authors and publisher will benefit. This model also has the benefit  of helping publishers break away from the blockbuster mentality that dominates their thinking. You may never find another World War Z zombie apocalypse best seller, but lots of people love the genre and you can probably make money by serving up a steady stream of well-written E-titles to people who like to settle down to a quiet afternoon reading about the rotting undead and mall massacres.

I also strongly recommend publishers turn away from the types of services packages offered by such groups as Author Solutions. They have been tainted by their use of tactics traditionally associated with exploitative "vanity press" businesses and are a growing sore on your business.

Mentor the Market and the Next Generation

One of the most powerful arrows in the publisher's quiver is their relationship with existing,well-known authors. For example, in this blog post, Hugh Howey is verklempt over a few nice words of affirmation from Stephen King (yes, that S. King) towards Wool. I find this a bit ironic as Stephen King was one of the "one percent" who signed that awful, awful, awful petition from Authors United criticizing brave, plucky, $75B Amazon for screwing around with the Hachette authors in its search for more margins on books and MDF (expenses ultimately paid for by the writers). Heck, King's wife signed the damn thing. How awful is that? But, nice words from the master of horror and suspense are very bankable and I guess all is forgiven from the self-publishing pioneer who introduced the concept of "incentivized agency" and author punishment if you want to price your book above $9.99 on Amazon.

My suggestion is that if Stephen King's ready to make Hugh Howey's day, perhaps he and his compatriots might want to help make some self-published authors' days as well? How about a reach out program sponsored by the publishers that encourages their authors to:

Write a few reviews of self-published works they find intriguing?
Some "coaching" classes where a famous author takes a writer or writers under their wing for some tutelage and tips?
Perhaps an "Author's Award" that recognizes rising new stars in self-publishing. (And, coincidentally, uncovers new bankable talent the publishers can sell?)Perhaps manage some genre communities? If you're an author, this will probably help sales.
There are more ideas you can develop along these lines, but you get the idea.

Explore the New Venues Open to You

In the previous article I mentioned that paper is a trap for publishers. I stand by that statement, but I'm not only talking about the inevitable demise of print at the hands of digital. I'm talking about missing and experimenting with new venues and ways to sell books while focusing too deeply on managing a legacy business model (which the major publisher do need to do).

Here's an example of what I mean. I went to see Edge of Tomorrow this summer and loved it. The movie is based on a well-written manga, All You Need is Kill . I wondered on Mke Shatzkin's blog the other day why you shouldn't offer the manga, or perhaps a novelization of the book, to people who went to see the movie. I call this "Point of Event" distribution. Walk in the theater, download the publication to your smartphone and read the book after seeing the movie. This adds more value to your movie ticket and potentially offers new marketing awareness for both the book and the movie derivative. Or perhaps when you visit William Sonoma, offer a copy of a hot new recipe tome when you buy that latest, can't resist rubbing sauce? How about an art book during a major touring exhibit at your local museum?

These are just some ideas. There are more opportunities out there. But, of course, this concept can only be executed if you're thinking digitally. Won't work with paper. Too much risk.

Provide Your Own Service Layers to the Authors and Writers

In the last article in this series, I described the various service layers Amazon is controlling within the world of E-books. Experts such as Mike Shatzkin think it's beyond the grasp of the publishers to create a competing E-commerce platform for their own use a la the airline industry's SABRE system and he's probably right. But there are services the publishers can provide to existing and aspiring authors. These include:

Website hosting. Every author and their books needs a website.
Marketing services, including E-mail and social platform management.A standardized book submissions system that covers the publishing industry. I, personally, may throttle the idiot, if I ever find them, that outlined to the eighth of an inch where I had to place an epigraph in the paper manuscript of my novel. Screw that stupidity. That type of behavior is why so many people are angry at the publishers. And stop asking for paper manuscripts and prepare for the future. And don't whine at me that you can't read all the submitted manuscripts. That's what the minor league system I describe above is for.Crowd sourced agenting. You should be able to compete with Amazon in this area if you leverage your communities.Community enabled E-books is something worth looking at. IOW, allow people to communicate and share opinions, information, and suggestions about a book from within a book. I actually created what may have been the first book to possess this capability in 2002, but was way ahead of my time. Companies such as Digerati do offer this type of technology for periodicals, but it can be easily adapted for E-books.
I'm not saying that publishers shouldn't charge for the above services where appropriate, but pricing should be reasonable and not predatory. Publishers should remember that the above ideas and suggestions will ultimately provide them with far more information about their readers, writers, and markets than they currently possess and help them compete against the Amazon data juggernaut.

This brings this series to an end. My next article will take a closer look at the Amazon $7 roach motel and why's it's bad for indies. After that, I'm going to post up an article entitled "What Is Your Time Worth," along with a spreadsheet, that helps you compare the value of your time against the sales needed to ensure you don't end up working at Home Depot during the holiday season to make ends meet.