Thursday, February 2, 2012

Grand Central vs. Konrath: Fight!


So Hachette's Grand Central imprint currently holds the #1 spot for trade paperback bestsellers. They publish names like Stephen Colbert, Ted Kennedy, Mario Puzo, and Nicholas Sparks. In an interview on Media Bistro, Grand Central's head, Jamie Raab, filled us in on where she thinks traditional big house publishers fit in the shifting paradigm that is the modern book industry:
There was much ado about the leaked Hachette memo that explained why publishers are still relevant. Some saw that as a real indication that publishers must feel threatened by the new wave of eBook authors. What is your take on that letter?

I agree with absolutely everything in that memo. We’re not just a distribution chain. I do believe curating is important. And I really do believe that we nurture talent by working hard, and we pay advances that offer writers the time and luxury they need to write the book they want to write. The truth is writing and putting a book out into the world is only a small part of it. If, as a writer, you want to spend the time going to the different distribution channels and marketing and doing publicity yourself, that’s less time you have to write. Look, we’re aware that many authors are choosing to e-publish, that they can make money quickly. We know there’s a lot of competition and whenever there’s competition, you’ve got to prove your value.
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The standard Grand Central contract for eBooks for most authors is 25 percent. How is that the best rate when authors can hire their own editor and cover designer and do the bulk of the marketing themselves?

I guess I don’t buy that at all. I wish that people could come in and see what goes on in a publishing house day by day. Some of the books that you think are so-called small books, I’ve got to tell you, we spend a lot of our time meeting about the books, big and small, and making people in-house read them. We have big marketing meetings and small. We’re not just throwing books out there. That’s so far from the truth. Anyone who thinks that, I wish they could be a fly on the wall at least in the house I work for. There is a whole company working for you. We start marketing, in most cases, a year in advance before a book comes out. The most important thing an author can do is have his or her book in on time.

There are a lot of people in this kitchen. We have an infrastructure that we have to support. You still need the editors, production department, marketing resources, and the artist who designs the book. Everyone thinks that there isn’t a lot of manpower involved in putting out an eBook. There’s more to it than most people ever consider.

If you want to make money quickly and put a book out there and price it at 99 cents so that it becomes enticing, I understand! You can build an audience. Some authors are climbing the Amazon list but, when a publisher approaches them, more times than not, they choose to go with a publisher.

Do you see that royalty rate increasing any time soon?

That’s being discussed all the time. I don’t have a crystal ball, but I think that as the business changes, that could be one of the things that change too. Some people say that 70-90 percent of all books will be eBooks. Is it somewhere in between? I don’t know. There is certainly going to be enormous growth over the next four to five years, and that’s going to affect everything. For now, people forget that 80 percent of books are print books. An author on his own cannot get his book into bookstores and, if he does, can’t get the attention to display it. The publisher can.
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Nicholas Sparks is known to be very loyal, but are you concerned that big authors such as him will opt to keep their eBook rights and publish on their own?

I think about that a lot because I know it’s on authors’ minds. And I think it’s incumbent on every publisher to do a better job than they’ve ever done before — more creative on marketing and eBooks, working in partnership more closely with their authors, keeping them in the loop, publishing more strategically. We have to work harder than ever to prove there’s a lot of value in an editor and publisher and their relationship with an entire publishing house. You can’t underestimate the importance of editing. I have seen books go from mediocre to good and from good to great because of the relationship between the editor and author. Nothing annoys me more than when I hear them say, “Oh, editors don’t edit anymore.” That has never been my experience with the editors on my team. We owe it to the authors to make the books as good as they can be.
Here is the link to the rest of the interview on Media Bistro. (Thanks to The Passive Voice for the heads-up.) I'd recommend reading the whole thing, as Ms. Raab may very well be running the tightest ship in New York right now.

Now then, on to the fun part...as you can see at the bottom of the MediaBistro interview, comments started flying fast and heavy. You can see some of the highlights from industry heavyweights such as Seth Godin, Mark Coker, and Peter Riva on this page. But I think I can speak for everyone else when I say that I was really hoping everyone's favorite beer-dieting thriller writer might weigh in.


Joe Konrath has a history with Grand Central. It was the imprint he abandoned when he ran off into the indie wilderness, and he spent a lot of time tearing apart the original Hatchette Memo when it leaked. Well, our prayers were answered quickly. He left this detailed counterpoint a few hours later. (It is reposted here by Media Bistro.)

Buckle your seat belts people. I hope you enjoy the ride:
I have nothing but respect for Jamie Raab, and for the most part I enjoyed working with Grand Central. They’re a group of dedicated, talented professionals. But they’re dedicated, talented professionals in a broken, outdated, and increasingly irrelevant business model.
Curation is no longer important. Readers are very capable of finding ebooks that interest them (the same way they can find YouTube videos, websites, and TV shows that interest them.) They no longer need to be told by a publisher, “This is worthy.” They can make that call on their own. 
Publishers vet books, and they do a good job keeping out the low quality. But they also miss some good quality. Grand Central published my horror novel AFRAID (under the pen name Jack Kilborn) in 2009, and it was simultaneously released in the UK and Australia. The combined print/ebook sales in all three countries has netted me over $60k in three years. 
They passed on my books TRAPPED and ENDURANCE, so I didn’t benefit from the “nurturing talent” that Raab says is one of Grand Central’s beliefs. I released those titles on my own. 
Those ebooks have netted me $240k in two years. 
Grand Central did some marketing for AFRAID, and I’m grateful for that. But I toured for twenty-three consecutive days and signed at 206 bookstores in 12 states to promote AFRAID. I also did a blog tour, providing exclusive content to one hundred different blogs in a month. Grand Central no doubt worked hard to promote AFRAID. But I put in more hours than all those who worked on it, combined. 
With TRAPPED and ENDURANCE I did no touring, no advertising, and a very tiny bit of internet marketing. So Ms. Raab’s comment “If, as a writer, you want to spend the time going to the different distribution channels and marketing and doing publicity yourself, that’s less time you have to write” really amuses me. I spent a lot more time promoting my Grand Central title than any of my self-pubbed titles, and even with Grand Central’s marketing machine behind me, I was able to make a lot more money in less time on my own. 
I have no doubt that Grand Central employees work hard, have lots of meetings, and are selective about what they publish. That doesn’t mean they’re worth the 52.5% they currently make from each $6.99 ebook copy of AFRAID they sell. I only make 17.5% per copy sold. Why should a publisher earn $3.67 when I wrote the book and only make $1.22? Curation and editing weren’t factors–I was already a professional novelist with six other published books to my name, and the editing on AFRAID was minor. While Grand Central did some marketing, that has long since been paid back. I received a $20k advance for AFRAID (hardly enough to live on), and quickly earned that out and made an additional $40k, and I’d point to my efforts as the reason. 
I understand Grand Central has overhead. But as an author, why should I care? I can hire out for editing, proofreading, formatting, and cover design, and those are fixed, sunk costs. Once those are paid, I can earn 70% on a self-pubbed ebook. Plus, I can set my own price. Lower prices sell more copies. The value of a book isn’t it its cover price. It’s how much money a book earns. Lower priced ebooks earn more. I’ve been proving this for the last three years. 
Ms. Raab said, “Some authors are climbing the Amazon list but, when a publisher approaches them, more times than not, they choose to go with a publisher.” 
Which authors? Inexperienced, newbie authors who have never been traditionally published. They still have the stereotypical Author Dream: book tours, interviews, seeing their book on a bookstore shelf or in their local library, being validated by a major publisher. Many of them, even if they are bestsellers, can benefit from working with a professional editor. 
But I haven’t heard of a single experienced author who has re-signed with a legacy publisher after finding self-pub success. I know dozens of authors who have had a lot of books published by New York, and they won’t ever take another Big 6 contract since they’ve gotten a taste of the freedom, control, and money self-publishing offers. If I was offered a million bucks to sign with a New York publisher, I’d laugh at that. I made $150k on my own in the last two months, and ebooks haven’t even become widely adopted in the US yet. What happens when there are as many ereaders as mp3 players? What happens when ebooks become a global market? Why would I give away 52.5% of my royalties to a publisher? 
As for getting paper books onto shelves, legacy publishers do excel at that. Grand Central got AFRAID into all the major bookstores. It was even in Wal-Mart. 
But the ebook of AFRAID has sold more copies than the paper versions of AFRAID (hardcover, trade, and mass market combined). And AFRAID was released in 2009. If it were released today, I wouldn’t doubt if the ebook outsold the paper version at 10 to 1. I’m okay with forsaking paper sales when I can make four times the ebook royalty on my own. But I don’t forsake paper sales. TRAPPED and ENDURANCE are available in paper through Amazon’s Createspace program. 
Grand Central, and publishers in general, were once essential. They controlled the paper distribution network. But in digital they aren’t needed. I can reach just as many ereaders on my own as Grand Central. In fact, I can reach more, because I can reach foreign markets. 
So what value do publishers give authors to justify them taking 52.5%? Curation? Not needed. Editing? I can hire out. Covers? I love my cover for AFRAID. I believe my covers for TRAPPED and ENDURANCE are just as strong. Marketing? What marketing? A quarter page in the Ingram catalog, a PW review, and some tweets? 
Originally, the purpose of a publisher was to connect writers with readers. Lately, publishers are more concerned with selling as many pieces of paper as possible. Ebooks are priced high to protect paper sales. The agency model was forced on Amazon is to protect paper sales. Windowing is to protect paper sales. If publishers truly wanted to connect writers and readers, there is no better way to do it than digitally. No printing costs. No shipping costs. Instant delivery straight into the readers’ hands. 
But publishers don’t want to sell ebooks. If they did, they’d lower the price of AFRAID from $6.99 to under $3.99, as I did with TRAPPED and ENDURANCE. The ebooks of TRAPPED and ENDURANCE have each outsold AFRAID, and they did so in less time. But Grand Central keeps AFRAID at $6.99 because that is the price of the paperback. Focusing on paper sales is like selling drinks on the Titanic. 
If Publishers want to survive this brave, new digital world, they need to offer authors higher royalties and more value, and lower their ebook prices. More and more seasoned authors are doing what I’m doing. More and more newbie authors aren’t even bothering submitting their books to publishers. 
Writers are essential. Readers are essential. Publishers are not.
Well then.

My reaction:

The original "Hachette Memo" can be seen here.

Konrath & Eisler's response to the memo can be seen here.

I'll be posting my own thoughts on publishing with the big boys/girls very soon. I've received a couple of offers, and I've been forced to do a lot of soul searching as a result. To add to the mess, John Locke just sorta kinda reinvented the publishing deal as we know it, and the two of us seem to be of like minds...

B.

5 comments:

Clinton Lewis said...

Interesting. I read a lot and by that I mean well over 2000 pages a week. Sometimes I look for good stuff and can't find anything so I will go back to a good book I have read before. Case in point I have read both your books 3 times each and have found the plot both more enjoyable and the characters more interesting. So given that I have not bought a paper book in at least a year. Why? I can find it online either through ebooks or other venues. So for my reading I have found that I spend a lot of time browsing amazon and other site looking for books in the genre's I like. Now am I everyone? No but I am a possible future of hardcore readers. E-book is the way to go and price yourself carefully if you are 99 I will give it a shot no problem as you increase your price you go further down my list of potentials. As in I will read other stuff before I get to you, if I get to you. Thanks for posting the articles and response.

B. Justin Shier said...

The only paper book that I've bought in the last four months is 1Q84, and that was only because I needed to read the novel pronto and refused to spend more for the e-version. I don't think I'll do it again, though. Carrying that beast around was a major hassle. As you said, I'm not everyone, but I think I'm done buying hardcover fiction.

B.

Anonymous said...

I haven't bought a paper book in over a year. My E-Library is accessible via PC, tablet, or cell phone. Overall, I'd say my reading has gone up a lot since I went with E-books. Obviously, I'm not alone since Borders is now gone and Barnes and Noble is struggling to survive. The Retail Publisher can't be doing well in this environment. It seems to me that the Retail Publisher offers an indie author access to the people that haven't switched to E-books and while this is a large audience it is a quickly diminishing one.

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