Houghton Mifflin Harcourt Files for Chapter 11

The Wall Street Journal reported last week that publisher, Houghton Mifflin Harcourt has filed for chapter 11 bankruptcy protection after reaching a deal with creditors to wipe out more than $3 billion in debt.  This will be the second major restructuring for Houghton in two years.  http://mediadecoder.blogs.nytimes.com/2012/05/11/houghton-mifflin-harcourt-enters-bankruptcy-process/

The Journal calls Houghton a major textbook publisher, and the company says it’s been hurt by state and local budget cuts to K-12 education programs.

Fans of Tolkien know Houghton as the American publisher of The Hobbit and The Lord of the Rings.  Several books I treasure are Tolkien  editions illustrated by Alan Lee, artistic director for Peter Jackson’s movies, whose drawing and paintings shaped the films, and in some cases, served as the the actual backgrounds for outdoor scenes.

These are kind of books I treasure as print editions.  At the same time, it’s easy to imagine a transition to ebooks could be a business saving move for the textbook division.  Industry watchers knew Houghton was in trouble as early as 2008, when it temporarily suspended new book acquisitions.  It’s hard to believe they are the only traditional publisher that is struggling for survival.

A Bookstore Expedition

Lego Indiana Jones

I called it an expedition to motivate myself.  “Bookstore” these days means Barnes & Noble, and I don’t like to go there very much.  I think you’ll see why in the course of this post.

I went to look at their middle-grade fantasy books.  It’s time for summer reading, and some of the classics in this genre weave just the right spell of imaginative escapism:  books like Inkspell, Spiderwick, and  The Emerald Atlas.  Imagine my dismay when I got there and found the middle-grade section gone!  For years these books lived in the right-rear corner of the children’s section, but now all the signs said, “Young readers, grades 3-6.”  I looked through the children’s section and found a few familiar titles, but the group as a whole was no longer on display.

“Explorer” by Stephen Noble, http://www.stephennoble.com

The rationale became clear when I left the children’s section. Right at the entrance were two large racks of “Teen Paranormal Romance,” sporting the best display of any genre in the store – trade paperbacks with covers, not spines, showing. Marketing must have decided that closing the middle-grade commons would motivate younger girls to move up to a more lucrative market. Apparently books like Garth Nix’s Arthurian stories for boys, or Newberry winners like Lois Lowry and Madeline L’Engle, no longer warrant shelf space. A book or two might have been stuck in between the 3d grade readers, but if so, I missed them.

I don’t begrudge Barnes & Noble its marketing efforts, but it’s been many years since I discovered anything new in their stores.  Discovery used to be part of going to bookstores.  “Browsing” once was the order of the day, and some of those discoveries changed my life.  Like the time when I was 18, and on pure impulse, bought a copy of Folklore in the English and Scottish Ballads.  The spark that title ignited still burns.

Now I make most of my book discoveries online.  This morning, Amazon sent me an email, based on my search and reading preferences:  “Best Middle-grade books in May.”  Where am I likely to go to read sample pages and shop?

I went on my expedition a week ago, two days before Barnes & Noble and Microsoft announced their partnership to champion the Nook.  As I sat down to write this post, their merger seemed huge.  It’s not about the big six publishers anymore, is it?  The future belongs to the big three – Amazon, Apple, and B&N / Microsoft.

The big six had their chance to open ebook divisions, or even join ranks in a partnership, but sticking to rear-view vision, that boat has sailed.  Now its hard to imagine any business model that can save them.  Their mantra has been, “People will always want paper,” but will they?  I don’t know.  What follows is speculation as I look at the books on our shelves.

Books that are read only once – meaning the vast majority of paperbacks, will do fine as ebooks.  Most textbooks for most grades of school should do well as ebooks too, and lighten the load of student backpacks.

Coffee table books might warrant larger readers, which will probably soon be embedded in coffee tables.  You see desk mounted touch-screen computers on shows like Hawaii Five-O.  I bet it won’t be long until they appear in furniture stores.  Same with fine art prints for the walls – think of a blend of existing digital picture frames with wall mounted HDTV’s.

So what books do I really value in paper?  Books like Lord of the Rings and Wind in the Willows, books I treasure and read again and again, yet those are pretty rare purchases and won’t keep printers in business.

Spiritual books of all sorts, for I underline those and fill them with post-it notes.  How-to books, on subjects from  gardening to computer programming texts.  I used the latter until they fell apart at work.  Any book where I write notes in the margin.  Right now, ereader bookmarks and margin notes are inadequate, but this should be an easy fix in the future.  Software that lets me use my laptop keyboard when I plug in on USB will fix much of the problem.

I don’t want print to go away.  I don’t want to see used bookstores close or raise their prices to “antique” levels.  There’s magic in turning pages, in the smell of ink and paper.  I’ve read so many stories that begin when someone finds a mysterious, yellowing book of lore, that I can’t go into an old bookstore without wondering if “today will be the day.”  It’s hard to imagine those stories with mysterious, yellowing, kindles!

No, I don’t want print to go away, but it’s hard to imagine any other future for the printed word.  Can you?

Mark Coker on the Justice Dept. vs. publishers

Mark Coker, the founder of Smashwords, is probably the best known advocate of ebooks as an alternative to traditional publishing, yet he doesn’t want those publishers to disappear.  He made this clear in an article on cnn.com on Sunday entitled, “A dark day for the future of books.” http://www.cnn.com/2012/04/15/opinion/coker-book-publishing/

Mark Coker

The Justice Department launched an anti-trust suit against Apple and five large publishing companies for adopting “agency pricing” and allegedly forcing Amazon to comply.  At the time, Amazon was pricing many books below cost, a move the other publishers feared would harm their print book sales. Three of the publishers have settled, while the remaining two, plus Apple, are going to court.

Coker seldom sides with big publishers, but in this case his reasons are clear:  he fears the Justice Department’s intention to protect consumers could actually harm them by harming the publishing industry by “forcing them to comply with onerous conditions…including restrictions on collaboration with fellow publishers and increased federal auditing and reporting requirements — [which] will increase publisher expenses and slow their business decisions at the very time when publishers need to become faster, nimbler competitors.”

Coker says that although agency pricing raises ebook prices, it “prevents deep-pocketed retailers or device makers from engaging in predatory price wars to harm competitors or discourage formation of new competitors. It would enable the marketplace to support more retailers, which would mean more bookstores promoting the joys of reading to more readers. And it would force retailers to compete on customer experience rather than price. Customers are best served when we have a vibrant e-book retailing ecosystem.”

As I understand Coker’s argument, if ebook prices drop too low, print publishing, the staple of brick and mortar stores as well as libraries, will become a money losing proposition.  I think we all know a certain “deep-pocketed retailer or device maker” who isn’t above “predatory price wars.”  Much as I love my kindle, I don’t want Amazon to become the only game in town.

I suggest everyone with an interest in writing, publishing, and ebooks read Coker’s article, the latest installment in a very convoluted drama.

Justice Department Goes After eBook Price Fixing

The Wall Street Journal reports that the Department of Justice warned Apple and five major publishers that it plans to sue them for “allegedly colluding to raise the price of electronic books.” http://online.wsj.com/article/SB10001424052970203961204577267831767489216.html

The publishers include Simon & Schuster, Hachette Books, Penguin, Macmillan, and HarperCollins.  The suit centers on Apple’s plan to move ebook pricing from the “wholesale model” to the “agency model,” as it prepared to release the first iPad.  Biographer, Walter Isaacson, quotes Steve Jobs:

“We told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway,'”  

The publishers were then able to impose the same model across the industry, Mr. Jobs told Mr. Isaacson. “They went to Amazon and said, ‘You’re going to sign an agency contract or we’re not going to give you the books,'”

William Lynch, CEO of Barnes & Noble, testified in a deposition that abandoning the agency model would effectively transfer even more power to Amazon, since they can afford to sell ebooks below cost to build market share.

Everyone who intuitively knows that an ebook is not “worth” as much as a physical book must wonder why the two are so often priced within a dollar of each other.  If ebooks were “fairly” priced, would traditional publishers fall farther behind?  Would more brick and mortar stores disappear?

I don’t know…

But I do know that everyone who has a stake in the issue, or is just curious about the upheaval in publishing, should read this article to keep up on the latest events in the ongoing drama.

An Author’s Guide to Publishing in 2012 – A Guest Post by Amy Rogers, Part 2

This is the second part of a guest post outlining ways writers can understand and respond to the rapid changes in the world of publishing.  If you haven’t read Part 1, I suggest you start with that post, which immediately precedes this one.

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An Author’s Guide to Publishing in 2012 – Part Two, by Dr. Amy Rogers

Part 2: Indie Publishing

Take all of the above and add another, less glamorous tech advance: print-on-demand publishing.  What you get is a slew of new publishing options.  Traditional New York-based publishers (now consolidated into six major houses with many imprints) used to be the only game in town.  What was once derisively called vanity publishing has become “indie”, and indie publishing encompasses a wide range of approaches.

Self-publishing:

This is the buzzword on everyone’s lips, but what does it mean?   I find that many people use the term “self-published” to broadly describe any book in any format that does not have the imprimatur of a Big Six publisher.  This fails to account for the various degrees of self-publishing and also the new professional indie publishing options out there.

1.  A truly self-published book is written, edited, designed, formatted, and distributed all by the author.  The main advantages of this approach are total control and minimal financial expense (though the investment of time may be substantial).  Some writers create their own publishing company to do this.  However most self-pubbing authors hire out at least some the non-writing tasks.  In fact, the majority of “self-published” titles were published by a subsidy publisher chosen and paid for by the author.

2.  Subsidy publisher

A subsidy publisher is a company hired by the author to turn his text file into a paper or digital book.  In most cases, the subsidy publisher provides online distribution but NOT to bricks-and-mortar bookstores.

With subsidy publishing, the author pays out of pocket for all expenses.  The cost and services provided vary a lot, so it pays to shop around.  Unlike old “vanity” publishing, print on demand technology frees the author from having to pay in advance for a print run of books that might never sell.  This keeps the costs low relative to the old days.  In this model, the author is the publisher’s customer.

The next step closer to a traditional publishing arrangement is assisted self-publishing where the author does not pay the costs upfront but rather shares future royalties with the service provider.  This means the book has to be good enough that somebody is willing to take a modest financial risk in publishing it.  Several literary agencies are now offering this type of “consulting” service to their existing clients in exchange for a commission.

3.  Not self-pub: Small presses

A small press is any traditionally-structured publisher that is not owned by the Big Six.  University presses, regional presses, niche publishers and others fit in this category.  Such companies may only publish a few titles per year.  The key distinction that makes this “not self-pub” is the publisher, not the author, pays the costs of getting the book out there.  In this model, booksellers and readers are the publisher’s customers.  Unlike self-publishing, the author must provide a manuscript that is deemed commercially viable on at least a small scale.

4.  Digital-only full-service publishers

This category didn’t exist until a few years ago.  Digital-only publishers operate like small presses but release their titles only in e-book formats.  This keeps their costs lower and allows them to take on riskier projects—such as first novels—that may not sell enough copies to catch the attention of a Big Six imprint.  My own publisher, Diversion Books, is a leader in this category.

With Diversion, the author retains the right to self-publish in paper.  This creates an interesting situation: my science thriller Petroplague is currently on sale with two different covers and two different publishers.  One cover is for the professional e-book with Diversion; the other cover is on the paper books I produced at my own expense with the help of a subsidy publisher.

One size does not fit all in publishing these days.  Indie authors can choose to learn a variety of non-writing skills and publish their books themselves, or they can hire others to do it for them.  If the book is marketable and the author is willing to split royalties, a small press or a digital-only publisher may be an alternative to the Big 6.  For the first time in the history of the book, barriers to entry are low and every writer has the power to bypass the gatekeepers and put his or her words in the hands of readers.

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Amy Rogers is a Harvard-educated scientist, educator, and critic who writes science-themed thrillers. Her debut novel Petroplague is about oil-eating bacteria contaminating the fuel supply of Los Angeles and paralyzing the city.  She is a member of International Thrillers Writers Debut Class (2011-2012).  At her website ScienceThrillers.com [there’s a link on thefirstgates blogroll], Amy reviews books that combine real science with entertainment.  You can follow Amy on Twitter @ScienceThriller or on her Facebook fan page http://www.facebook.com/pages/Amy-Rogers/202428959777274

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Please stop by Amy’s blog, ScienceThrillers.com, to leave a comment if you enjoyed this series.  While you are there, take a look at the features, sign up to receive the newsletter, and enjoy the reviews of a number science-related thrillers, ranging from The Hound of the Baskervilles to Jurassic Park.  

An Author’s Guide to Publishing in 2012 – A Guest Post by Amy Rogers

Last September, I wrote an enthusiastic review of Petroplague by Amy Rogers http://wp.me/pYql4-1ep. With a PHD in microbiology, Dr. Rogers is uniquely qualified to bring her considerable writing skills to bear on a thriller in which an oil-eating bacteria ravages Los Angeles.  Airplanes fall from the sky.  Millions of cars stall on the streets and freeways.  No food deliveries.  No ambulance, police, or fire service as a greedy corporate criminal and deluded eco-terrorists strive to suppress a solution.

On two occasions, New York agents represented Amy Rogers’ work but were unable to sell it.  With a keen understanding of the turmoil in traditional publishing, Amy decided to take matters into her own hands.  After I posted my review, I invited her to write a summary of her experience for us.

Last week I received an email saying she’d finished a “5,000 word treatise” on current publishing options for writers.  This will form the basis for her presentation at the June meeting of the Sacramento California Writer’s Club branch.  She graciously sent a 1500 word, abridged version, for thefirstgates.  I am delighted to be able to share her account, for I think her observations and experiences can serve as as Ariadne’s thread as we work our way through the current publishing maze.

Because of the length, I am going post this article in two parts.  Meanwhile, I invite everyone to visit Amy’s blog, Science Thrillers.com (listed on my blogroll), and to follow her on Twitter at, @ScienceThriller.  Also, check out her Facebook fan page, where you’ll see that she has been invited to participate in the New Author’s Breakfast at the Left Coast Crime 2012 conference in Sacramento at the end of the month. http://www.facebook.com/pages/Amy-Rogers/202428959777274

And now, without further delay…

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An author’s guide to publishing in 2012 by Dr. Amy Rogers

Part 1: What’s going on with publishing today?

Book publishing is undergoing a revolution unlike anything seen since the invention of moveable type, an explosion of diversity in the paths leading to publication.  After centuries in a desert of limited choices, writers now have a rainforest of options to get their work in front of readers.

But the changes are so profound and happening so rapidly, many writers can’t keep up with the business.  We’re writers, so we write, but what then?  The simple formula—write book, sell rights to a print publisher, collect royalties—doesn’t apply to the majority of published books today.  Is this a bad thing?

The big changes in publishing are both challenge and opportunity.  Whether the changes are “good” or “bad” depends on where you stand.  In this series, I’ll first summarize some of the major trends in the book business that are affecting the way books get published and sold.  In the second, I’ll discuss how writers seeking “publication” of their work can navigate the path that’s right for them.

So why does the publishing business feel like a Kansas farmhouse in a tornado?  Simple: technology.  Digital disruption devastated the music industry; now it’s rolling over publishing.  The end results for various stakeholders (authors, publishers, readers, retailers) are far from certain.

1.  Ebooks

Top of the list of disruptive technologies: e-books.  Amazon’s Kindle e-reader is now in its third or fourth generation.  The critical $100 price point has been breached (a Kindle now costs as little as $79).  Barnes & Noble’s Nook e-reader and tremendous numbers of Apple’s iPad plus various smartphones (which can also be used as e-readers) give millions of Americans easy access to e-books.  (Not to mention ubiquitous laptop and desktop computers, which can be used to read e-books, though uncomfortably.)

How rapid is the rise of the e-book?  The Economist reports that in the first five months of 2011, “sales of consumer e-books in America overtook those from adult hardback books” and “amazon now sells more copies of e-books than paper books”. http://www.economist.com/node/21528611 Granted, Amazon’s experience does not represent the entire bookselling business, but it is significant.  In my own genre—thrillers—over half the books sold are now in digital formats.

2.  Distribution

Digital technology is changing the way books are distributed.  Obviously, e-books can be sold online—from anywhere in the world, to anywhere in the world, no neighborhood bookstore required.

But it’s not only e-book sales that are affected by digital tech.  The emergence of amazon as a global book retailer with no physical presence in communities has also changed how paper books are sold.  People are shopping for paper books over the Internet and getting them shipped.  Neighborhood and mall bookstores are struggling.  Browsing is nice, taking your book home with you on the spot is nice too.  But amazon’s price advantage is killing these stores.  The giant online retailer subsidizes much of its bookselling business, has smaller fixed costs, and still dodges sales tax in most states.

3.  Publicity

The best way to get a person to buy a book is word of mouth: a trusted source, whether a friend or a reviewer, mentioned the book.  Digital technology—the Internet and “social networking”—is truly revolutionizing word of “mouth”.  Successful book marketing is increasingly based in this virtual world.  Book bloggers, readers’ collectives like GoodReads and LibraryThing, Facebook, Twitter, book trailers on YouTube—this is what sells books.  Reviews remain critical, but the traditional venue—newspaper sections devoted to in-house book reviews—is vanishing.  Only a few papers still publish their own book reviews, and generally these reviews are few in number.  So authors and publishers must go online to get reviews and build “buzz” around a title.

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Section two of Dr. Amy Rogers, A Writer’s Guide to Publishing in 2012 will be featured in my next post.

Ann Patchett Interviewed on the Colbert Report

By a happy coincidence, I was channel surfing Monday night at just the right moment to catch author and indie bookstore owner, Ann Patchett, on the Colbert Report.  In an earlier post, I discussed Ms Patchett’s bookstore venture. http://wp.me/pYql4-1qW.

Author and owner of Parnassus Books, Ann Patchett

Colbert played devil’s advocate, arguing that brick and mortar bookstores are obsolete, and besides, Amazon’s Jeff Bezos is no one to mess around with – didn’t he bludgeon the owner of Borders to death with a tire iron?

Patchett said, fine, stay indoors, never talk to anyone, live your life online, “But you’ll wake up one day and find you’ve become the unibomber.”

“A strong argument,” Colbert conceded.

From the sound of it, Patchett’s Parnassus Books has become a community gathering place – not just a bookstore, but a literary salon, a poets corner, a venue for local musicians, and a place where the staff is composed of avid readers who can make suggestions for every taste.  If I were an independent bookstore owner, I’d be tempted to travel to Nashville to look at this model of success.

The full episode is available online: http://www.colbertnation.com/full-episodes/mon-february-20-2012-ann-patchett.  The Patchett interview is about 2/3 of the way through the show, though with a cup of coffee and a slightly twisted sends of humor, you may enjoy listening to it all.

An Interesting Take on the Publishing World

I’ve been following Kristen Lamb’s blog for a while.  I’ve picked up some useful writing tips, like the recommendation that led me to Save the Cat. http://wp.me/pYql4-1BC.

Ms. Lamb is also a keen observer of changes roiling the publishing industry, and her latest post is worth a look by anyone with an interest in that world.  The post is called,  “Bracing for Impact – The Future of Big Publishing in the New Paradigm.” http://warriorwriters.wordpress.com/2012/02/15/bracing-for-impact-the-future-of-big-publishing-in-the-new-paradigm/

The author makes several key points:

  1. The music industry was the first to get steamrolled by new technology.  They buried their heads in the sand and thought their customers were music stores when they really were music lovers.  I don’t buy CD’s anymore, do you?
  2. Kodak went bankrupt because management thought they were a film company.  They forgot the vision of George Eastman, their founder, who knew their customers cared about pictures, not film.
  3. Finally, Ms. Lamb quotes a startling line in an Author’s Guild report:  “For book publishers, the relevant market isn’t readers (direct sales are few), but booksellers.”   I read this a few times and found the analogy to a car wreck very appropriate. 

Ms. Lamb offer suggestions to traditional publishers – the same message she sent to their headquarters in the past, to no avail.  For instance, what if the Big Six developed their own ebook divisions where new authors could get a launch, and a print contract later if online sales were strong?  Why couldn’t they design apps for smart phones and e-readers, and set them up so that indie bookstores could help customers with downloads and get a commission in the process?

There’s much in this post of interest, including a link to another blog that details the latest turf war between Amazon and everyone else.   Everywhere you look are signs that traditional publishing has hit an iceberg.  Kristen Lamb, among many other things, does an excellent job in helping us sort this out.