Battle of the Book Business: Publishing Cold War is Ending
Ah, the book business. So many shifts and changes since the day I set out to become a novelist…and ended up a social media expert, blogger, teacher and self-appointed author crusader. I’ve dedicated millions of words and countless hours of research to guide y’all through the massive changes in the publishing industry.
My goal was (and is) to do everything I could to shelter you (writers) from predators I knew would prey on your fears. Three books and thirteen hundred posts later…
It’s been an honor to serve and shepherd you guys through the largest changes in human history and in publishing. Frankly, without you guys, I might have given up ages ago. Thank you so much for being there for me! We are not alone, right?
After years of upheaval, good news is…I think we’re almost there.
The Long Road Unknown
Deep down I knew the little guys would win if we just held our ground. It’s why I’ve gone to the mattresses time after time against predation, fraud, usury, deception, and greed. Why I’ve created strategies that empowered authors in branding, social media, and platform building.
The only side I’ve ever taken has been the writers’.
I think it’s fair to say most of us (writers) have been in a perpetual state of terror (peppered with brief windows of hope) for far too long. If you’re like me, maybe your sparkle’s been dimming.
Would we really ever taste freedom? Was writing even worth it anymore? This ‘new age’ that was supposed to be so wonderful had only managed to crush our childhood dreams.
Don’t know about you, but I dreamed of book signings, launch parties, my novels on pretty displays in an actual store. I imagined a real book signing with devoted fans I’d be able to meet face-to-face. Those were the dreams that kept me going in my darkest hours when it made no sense to keep on writing.
I don’t think a single one of us fantasized about favorable algorithms, a massive mailing list with a solid open rate, or a depressing spot for ten copies of our book on a Costco bargain table. And I sure as hell never dreamed of working like an organ-grinding spider monkey for fractions of KU pennies.
None of us did.
I kept wondering how we could possibly be in a Golden Age for creatives when it FELT like an Ice Age. How was this possible? Now? I believe I know that answer.
It’s because a Publishing Cold War has been raging…and it’s all about to play out.
Clash of the Titans
Since the birth of Web 2.0, two superpowers have been gridlocked in a Publishing Cold War: Amazon vs. Traditional. There have been major upheavals, great wins, and massive casualties. Meanwhile, a lot of writers huddled under our desks doing drills. Here’s how to kiss our @$$es goodbye!
It’s all on the verge of playing out and it’s an incredibly bright future for writers who can position properly (high-quality books, large vested platform, solid brand). Great news is we writers control all three of these factors ;).
Last time we discussed The Success Paradox, and we’ll continue those lessons. But I can’t help you win a game if I don’t show you the whole board. I think by the end of his post, you’ll see why I believe writers finally have MUCH to celebrate. Bear with me. I’m cramming 20 years of publishing changes into this post so you can fully appreciate the vista we never thought we’d live to see.
I know you’re going to LOVE IT!
Why Listen to Me?
I’ve called virtually every major market shift in publishing years before said ‘shift’ happened. Among too many other predictions to mention (which came true) I forecasted the contraction of the Big Six and that Amazon would open brick-and-mortar stores on May 2, 2012.
I reiterated this Amazon prediction at the end of 2012 .
Amazon has become a name to be feared when it comes to e-commerce, but there are still limitations to selling on-line. Also, in my opinion, Amazon Publishing is the woman in the red dress who finally wants a ring. She wants to be legit, and the only way to do this is to have a physical presence in a bookstore.
Commenters called me crazy. But just because I was crazy didn’t mean I wasn’t also correct. Amazon opened their first brick-and-mortar in Seattle in November of 2015, three and a half years after I blogged this would happen.
*gets cramp patting self on back*
Know the Business of Our BUSINESS
Now, do I have magical powers or some under-the-table deal with Satan that allows me to see with this kind of accuracy? Nope. My degree trained me as a political analyst then my early career in industrial paper sales taught me to think like a business analyst. I never could have imagined how this job was preparing me for a future I’d never considered.
Back in the day, I had a nine-state territory that also included Northern Mexico, which I drove…in a CAR. On top of that, I had to meet a minimum yearly sales quota of two million dollars. That is a LOT of freaking paper, by the way. A lot of driving, too. I’ve logged more miles than most truckers. Eighty thousand miles in one year.
My job required that I be able to look at the market as a whole then, using countless data points, hazard good guesses. The better my ‘guesses’ the greater my chances of making or exceeding quota. Unless I wanted to waste a lot of time and even more gas, I had to be able to predict where the best business would be that month, in six months and the following year(s).
When It ALL Goes Horribly Wrong
I’d just about hit my stride and figured out my new job when the cost of steel skyrocketed, which shot our largest customers’ operational costs through the roof (the shipping industry). Back then, these companies used our cardboard to protect and stabilize inventory, which they then secured with steel banding.
Super cheap steel banding meant these customers had always been able to purchase regular truckloads of paper. Alas, those big bread-and-butter orders vanished literally overnight.
Dutifully, I redid my forecasting to account for this…setback. I could do it. Keep…pressing….
Then the 9/11 attacks.
I could still forecast, but maybe too well. All my predictions ended with plant closures and me out of a job. With war imminent in the Middle East, it was only a matter of time until the price of gas skyrocketed.
Paper is heavy, meaning it burns a lot of fuel. Didn’t take a genius to see trucking our heavy @$$ product was going to plunge us deep in the red.
This all does a lot to explain the stress illnesses that effectively ended my career in sales.
This experience taught me countless painful but priceless lessons—blood lessons—which I’ve been applying to the book business since 2004. It’s true. Sometimes there are factors we can’t control which will impact our capacity to sell, but that’s no excuse.
To be successful in business, even the book business, it’s critical to do as much as possible to limit the impact of outside forces that control or limit earning ability. I learned this in paper sales and it’s how I could see why and how Amazon eventually was going to take over.
One major reason Amazon has been kicking legacy tail for years is that legacy publishing had/has too many outside forces beyond their control that impact profit. Namely, they’re business model depends heavily on the big-box bookstores.
In the late 90s, Borders and Barnes & Noble, in an act of unrepentant greed, obliterated the small indie bookstores. This move also wiped out the author middle class. The Big Six was all for these giant stores reinventing the book business because literacy and choices and…literacy!
Or maybe it had to do with all the 26,000 square foot stores crouched on every corner that required a crap ton of physical inventory. Megastores meant massive preorders and unprecedented control over which authors/books were positioned where. I’m not judging. It was a sweet business move for the time.
Heavy hitter household names obviously garnered premium displays/locations and the largest guaranteed preorders. Didn’t you ever wonder how some mega author’s book could be a #1 New York Times Best Seller when the actual book wasn’t even yet available to READ?
I know I did.
The megastores also made sure to carry these authors’ backlists. Essentially, authors who were already multi-millionaires made even more millions. To be clear, I love it when writers make millions, even if they’re making more millions. My main gripe has always been this ‘success’ came at the expense of those authors who were not yet household names.
And, under this big-box bookstore model, they never would be.
Hell, Tom Clancy DIED in 2013, but ‘Clancy’ is still putting out books as of November 2017.
Let Them Eat Cake
If one happened to be a mid-list author or a new author? Sucked to be you. Mid-list authors who’d been making a good living wage had to get a day job because, in the spirit of a ‘browsing experience,’ most backlists were mothballed (taken out of print).
Readers could get copies but only in secondary markets (used books) where the authors made no royalties. Since the mid-list authors’ backlists were no longer gracing shelves in the primary market (new books), these authors suddenly were struggling to make a decent living.
Also without the market saturation that goes part and parcel with having a robust backlist in circulation, there was little to no chance of ever making mega status the old fashioned way.
The Author Homecoming Court had already been chosen, and apparently even death can’t free up space.
New writers? Spine out on a shelf and pray your last name didn’t start at crotch level or lower. Tragically metaphoric.
Reap What You Sow
In the 90s, gas was super cheap which contributed to the rise of the big-box store boom. Problem is, what happens when karma catches up?
Was it really necessary for Borders and Barnes & Noble to drive virtually every last mom and pop store and small chain out of business? The answer is NO. No it was not.
Remember, I mentioned paper is heavy? #Irony
Apparently folks in charge forgot Business 101. Markets are not static and operational costs can change in the blink of an eye. Physical books have to be shipped to physical stores. Gas prices go up? Profits plunge.
Then there was this thing board members of Borders and Barnes & Noble probably should’ve paid better attention to in the late 90s: the imminent rise of a user-friendly Internet and the very real threat of viable e-commerce.
While the bookstore moguls might have dismissed these ideas as science fiction Jeff Bezos, Steve Jobs, Larry Page, Sergey Brin, and Bill Gates took it all very seriously.
*has mental image of these guys coming together like those robot lions that form Voltron*
Borders’ death wasn’t a shock to me. It’s hard for me to be anything but frustrated watching Barnes & Noble continue to bleed out. Oh, and trust me, they are. I ran the numbers and from 2008 to 2017 B&N was forced to close an average of 21 stores a year. In 2008, they had 798 stores and as of September 2017 B&N was down to 634 stores, according to Forbes.
The latest CEO in a string of failures has come up at least one answer to what ails them. Barnes & Noble needs…smaller stores.
Also, the newest plan to save the Barnes & Noble bookstore is to sell mostly everything BUT books (vinyl records, toys, gifts, etc.).
The Publishing Cold War
Earlier I mentioned one tenet of business success: Do as much as possible to limit the impact of outside forces that control or limit earning ability.
Amazon did this. By mastering e-commerce, they controlled overhead, were highly maneuverable, and outside forces had limited and manageable influence over them. Borders and Barnes & Noble failed to do this, as mentioned earlier.
Another tenet of business success is to never take on your competition in the area where they hold major advantage.
Amazon also understood this, which is why they waited until 2015 to open their first brick-and-mortar store. Barnes & Noble, however, decided to duke it out with one of the world’s largest e-commerce companies in the very arena Amazon built.
Barnes & Noble forgot it was in the book business, and not a tech company. They launched the Nook which has been nothing but a black hole sucking in millions and tanking stocks…a financial hemorrhage that’s been a major factor driving so many store closures.
Barnes & Noble got target fixation and bought Amazon’s feint…hook, line and sinker. Amazon had them (and a lot of other people) wholly convinced most consumers preferred to shop on-line.
Consumers are People
People. Not numbers or data points. Readers are flesh and blood humans. Humans like to browse, touch, hold, feel, etc. We are social and tactile by nature. I knew that, which is why I wagered Amazon had a very different game plan than most folks believed.
All of this is purely conjecture, but I think I make a solid case.
Amazon convincing B&N they had no choice BUT to compete on-line reminds me of Reagan convincing the USSR that America could nuke them from space.
The more money B&N shoveled into e-commerce, the more their physical store presence shrank to cover losses. All of this played right into the Amazon’s long game. From what I can see, I believe Amazon’s objective was to force the competition to cannibalize itself…and vacate the precise market they WANTED.
Once the big-boxes were down to a certain number, then Amazon would open their own small bookstores. A lot of them. And they wouldn’t have to cater to the Big Five’s demands or worry about any big-box competition.
***Oh, and they used the time bludgeoning megastores to perfect algorithms to prepare for smart-stocking their future stores.
Humans Never Change
What Barnes & Noble never realized is that humans generally prefer what’s easiest. If there aren’t any bookstores close to us, then we’ll shop on-line. Again, in 2012, I wrote a post I’d hoped B&N would read and heed, regarding small being the new big.
I pointed out that consumers wanted bookstores that were convenient. We wanted physical bookstores, but we weren’t willing to drive to the next fricking city for a ‘browsing experience.’
Especially since these big guys haven’t been an experience since about 2001. They were Applebee’s…but with books and no french fries. Same look, same books *yawns*. Displays weren’t curated by passionate and autonomous sales clerks. Every inch of real estate was pre-negotiated and mapped out.
Anyway, I’d say Amazon counted on Barnes & Noble’s hubris. The best way B&N could have kicked @$$ years ago was to open up small bookstores in strip malls…just like the ones they’d obliterated.
But, alas, pride comes before the fall.
In the October 21, 2016 article in The New Yorker, What Barnes & Noble Doesn’t Get About Bookstores, Leonard Riggio, the man who bought Barnes & Noble forty-five years ago and turned it into a giant finally conceded this mistake:
The No. 1 consideration of where someone will shop is how close it is to where they are. It has nothing to do with pedigree or branding. If there’s no bookstore close to them, they’re more likely to buy online. If there’s one close, they’re more likely to buy if it’s a block away.
Amazon & The Long Game
Why would I bother trying to help Barnes & Noble time and again despite how they’ve hurt writers? Again, let’s hop in our blog DeLorean and visit—you got it—2012. Something about that year. Mayans maybe? *shakes head*
I wrote a post called Amazon: Beware of Greeks Bearing Gifts. Feel free to go read the post in its entirety, but to save you clicking over, I’ve copied the salient parts from a post that is SIX years old.
I really hope New York gets its act together, because, once the competition falls away and Amazon burns New York to the ground? What happens to the writer? What happens when we fall asleep and it is safe for Amazon’s Trojan Horse to unleash the gorilla?
Amazon right now is in the courting phase with writers, and it is using us (writers) as a weapon to kill our former masters. Ah, but if Amazon really gets its way…what then?
When NY is razed and Amazon has no real competition, do they have to keep giving us the same sweet royalty rate? What happens when it’s Amazon’s turn to hold all the keys to the kingdom? Will they use them any differently than those they crushed to gain them?
Still a good question, which is why that platform is so vital. If Amazon goes cray-cray, we have the power to walk away. Yet, for the record, I support legacy publishers and I’m cool with Amazon. I love great books and don’t care how they’re published or by whom. I buy a lot of books from both of them.
It’s monopolies that give me hives.
Back to Book Business
While the masses screamed Amazon was killing the bookstore, I was betting differently. Frankly Amazon couldn’t kill something that was pretty much already dead.
Borders and B&N had already decimated indie bookstores and small chains. Amazon wasn’t out to kill bookstores, it was out to kill the big-box bookstores…then replace them.
Why writers need to pay attention to this new shift is that Amazon is about to be top dog in e-commerce as well as brick-and-mortar. This means that platform/branding thing becomes a whole lot more important. So does the writing really amazing books 😉 . But, if Amazon is not your beer, I have wonderful news!
You’ve Got Mail (Alternate Ending)
Who would have guessed the end of You’ve Got Mail wasn’t the end of The Shop Around the Corner?
Nature abhors a vacuum and while Amazon was doing it’s big power play, little guys slipped in and did what entrepreneurs do best. They got creative. Independent bookstores are exploding in popularity and readers are thrilled to have their local bookstores back…only way better.
The Indie Bookstore 2.0 is a very different creature. Some have wine bars, cocktail hours, flower shops, cafes or even microbreweries. The imagination knows no bounds. There are culinary bookstores dedicated to cookbooks that hold cooking classes and have fully stocked kitchens so customers can try out merchandise.
Some stores are architectural works of art, their owners passionately vested in creating spaces humans want to gather and hang out. Hubs for communities to come together and klatsche.
We agree, Kathleen. Whatever anything is, it ought to begin by being personal and enterprising new indie bookstores concur.
Shoppers have wanted bookstores all along (and we’d long ago lost our fascination with cheap). Heck, Amazon has a bazillion crappy books we could download free. No, these next-generation indie stores handcraft their selections. Salespeople are well-read experts who love books, who are empowered regarding book placement. In many of these stores, premium spots are non-negotiable and not for sale.
The books readers want and salespeople love grace the best spots. Don’t know about you, but I’m giddy. It’s like the Chess Club finally has a real shot at the Homecoming Court, LOL.
Raise Your Glass!
Readers and writers win! This new generation indie bookstore is not chained to the Big Five or beholden to Amazon, though very friendly to both. These bookstores don’t care about pedigree, they care about what books readers want to read. The give no figs if authors are published via legacy, traditional, small press, indie or self-pub. Their sole loyalty is to their customers (readers) and to the authors their customers love.
Kind of like the good old days only now we have nibblies, and wine 😀 .
I LOVE Hearing From YOU
What are your thoughts about the changes ahead in the book business? Me? I’m almost giddy! Imagine all the creative types of independent bookstores. Bookstores with only fitness and nutrition, healthy living and wellness books that hold yoga classes and bootcamps in the parking lot. Science fiction and fantasy bookstores that carry gaming and D&D supplies, Cosplay costume classes, or demonstrations on sword fighting. Mystery bookstores that include a Mind Maze experience, too?
Now THIS is a bookstore future I can get fired up about! Vindication! Good books win! A social media platform that is social and focused on people and relationships matters! (Told you guys to ignore all that newsletter algorithmic alchemy crap). This is fantastic news. Unlike the B. Dalton days, we can cultivate passionate fans willing to pay retail ahead of time instead of relying on BLIND LUCK. *does cabbage patch dance*
I love hearing from you and am not above bribery!
What do you WIN? For the month of JANUARY, for everyone who leaves a comment, I will put your name in a hat. If you comment and link back to my blog on your blog, you get your name in the hat twice. What do you win? The unvarnished truth from yours truly. I will pick a winner once a month and it will be a critique of the first 20 pages of your novel, or your query letter, or your synopsis (5 pages or less).
Taught by Kristen Lamb AND Cait Reynolds…together…in same room. It’ll be fun! Class is NEXT FRIDAY January 19th, 7-10 PM EST in our W.A.N.A. Digital Classroom. $75 for a three hour class of intensive education and lots of shenanigans.
A free recording is included with class purchase…though we reserve the right to edit out anything that can and will be used against us in a court of law.
Friday, January 26th 7-9 PM EST in the W.A.N.A. Digital Classroom with USA Today Best-Selling Author Cait Reynolds. Class is $65 and a free recording is provided with purchase.