Should Books Be Discounted?

I had a call the other day from David Streitfeld, who often covers the publishing business for the New York Times. He wanted to know if Amazon was discounting the books that IPG distributes at a lesser rate than they used to. There has been widespread concern in the publishing community that Amazons’ game plan is to steeply discount everything until the competition is wiped out, at which point they could put prices way up and start coining money.

It is true that Amazon has discounted very aggressively, and has been content to accept a very low profit margin if this would mean a rapid increase in market share—which it has. If titles are now being discounted less, this might signal that Amazon is turning to Part Two of its strategy, the part where the prices start to go up. In the article that Streitfeld published in the NYT on the 4^th of July, one of his sources expressed the view that the discounts were in fact decreasing, especially on independent press and scholarly titles, which would be disastrous for sales.

My take on this issue is quite different. I have no inside information whatsoever about Amazon’s game plan, but I know what I would be doing if I were in their position: I would be experimenting with discounts and mining the sales data to see what effect different levels of discounting would have on the sales of various kinds of books at each stage in their life cycles. Streitfeld quotes me as saying:

“‘They [Amazon] are wondering, “If we knock off only 10 percent as opposed to 35 percent, where do we come out ahead?”‘ Mr. Matthews said. ‘They don’t care how many books they sell. They want to know how many dollars they get.'”

My grammar is regrettable, but the idea is from Business 101: Find the place where the price and volume lines cross on the graph, the balance that yields the most dollars.

Many people are offended by the very idea of discounting books.  After all, books have a list price printed right on the jacket flap or back cover.  Almost no other products have the price printed on them during manufacture. Doesn’t this mean that, for books, the list price is somehow the right price? And aren’t discounted products usually cheap knockoffs of better things? Perhaps Amazon has done a disservice to the special stature of the book as a cultural icon; perhaps all this discounting has convinced many consumers that paying list price for a book means you are a bit of a chump, like the little old lady who pays full sticker price for a new car. Or, it may be that the book is not quite the cultural icon it used to be—for reasons that have little to do with discounting.

I will confess that I was a happier book buyer in the days before they were routinely discounted. The printed list price assured me that the title I wanted would cost the same in any bookstore, and that no one would get a better deal than I did. But perhaps a lower price justifies putting up with a little low-level anxiety of that kind.

3 Big Takeaways from Book Expo America 2013 for Independent Publishers

At the big book convention in New York, we saw old friends and made new ones against the backdrop of one of publishing’s biggest powwows. I also observed some very exciting things happening for the indie publishing community.

There were many more indie presses in attendance than has been the case for the last four years or so. At the IPG booth we had conversations with dozens of very promising publishers who have quite extensive and impressive publication lists. It is clear that an improving economy has brought forward a surge of entrepreneurial energy in the book business. The future is going to be a lot of fun.

The hall was alive with e-book and e-commerce solutions and propositions that are really beginning to make sense. The geeks now know enough about the actual business of books to go after some real problems and opportunities. For instance, a startup called Zola Books has developed a user-friendly way to deal with the issue of “showrooming”—the term we use to describe what happens when a customer at a bricks-and-mortar bookstore looks over the titles on display and then orders a print or e-book copy from a web retailer, often for a lower price. Zola Books gives a bookseller a well-earned piece of the action for its part in making such sales.

It is now clear that the e-book market will not be dominated by just a few huge web retailers. We were approached by 15 new ventures at the show, all offering very favorable terms for publishers and proposing innovative marketing strategies that could really work. By the end of this month, IPG’s e-books will be available through about 75 web retailers, and it’s great to see that many of the smaller ones are growing quickly. This means there will be plenty of healthy competition, no matter what the Department of Justice thinks have been the sins of the past.

These developments add up to a lot of promising opportunities for independent publishers.

IPG at BEA 2013

CEO Weighs In: “Authors Sue Self-Publishing Platform Author Solutions”

The big shoe that I was certain would drop just did:

Three authors have filed suit against self-publishing service provider Author Solutions, and its parent company Penguin, airing a laundry list of complaints and alleging the company is not a publisher so much as a “vanity press.” — PW May 1, 2013

I have no special insight into the merits of this suit as a legal matter, but the filing of it brings to light the obvious fact that there are companies out there exploiting the hopes and dreams of neophyte authors. More from the PW article, “Authors Sue Self-Publishing Service Author Solutions”:

The suit, which seeks class action status, alleges that Author Solutions misrepresents itself, luring authors in with claims that its books can compete with “traditional publishers,” and the company offers “greater speed, higher royalties, and more control for its authors.”

The problem here is easy to spot. No doubt in the literature that they show prospective authors, and in the agreements that they execute with them, such “publishers” are careful not to promise sudden authorial fame and fortune. But of course the prospective authors do want some degree of recognition, and they would like some remuneration too.

What most people think they know about publishing comes from the utterly anomalous success stories the media finds newsworthy. It used to be “first time novelist gets million dollar advance.” Now it’s “first book by self-published author sells 500,000 copies.” Getting hit by lightning three times on a sunny afternoon is much more likely.

So, aspiring authors have some expectations. What expectations do self-publishing services such as Author Solutions have?  Read between the lines of the following “prepared statement,” quoted in the same PW article.

In a prepared statement, Author Solutions pointed to the fact that it has “successfully enabled more than 170,000 authors to self-publish more than 200,000 titles,” and noted that it has received an “A” rating from the Better Business Bureau.

I am not sure that the 170,000 authors of those 200,000 titles are all that thrilled by their publisher’s “A” rating from the Better Business Bureau. They might have preferred a place on the best-seller list.

Perhaps the authors who are suing were a little naive. Let’s look at two publishing scenarios. In the first, the publisher pays an advance, covers the editing, designing, and printing costs, and will suffer a big financial loss if the book does not sell. In the second scenario the “publisher” charges the author for all of the publication costs and makes a profit even if the title does not sell a single copy. Which outfit will be motivated to sell books? To understand a business deal you need to follow the money.

And now this article, in Friday’s PW. The CEO of Author Solutions has, for some reason, been replaced by a Penguin executive. Here is how they are spinning the change:

Penguin chairman John Makinson said that the appointment of [Andrew] Phillips [the new CEO] will connect Authors Solutions more closely to Penguin. “Andrew’s impressive range of talents and experience equip him perfectly to extend the international development of Author Solutions, to build on our network of publishing partnerships, and to strengthen the ties with Penguin companies around the world.” — PW May 3, 2013

This statement looks like an attempt to blur the distinction between Author Solutions and Penguin—so that the cash register will keep ringing for Author Solutions. But no amount of corporate speak about building on a “network of publishing partnerships” or strengthening “ties with Penguin companies around the world” can bridge the apparently huge gap between these two enterprises.  The big question is why Penguin, one of the greatest publishing companies on the planet, is willing to wrap its name around a dubious proposition like Author Solutions.

Curt Matthews
CEO, IPG/Chicago Review Press, Incorporated

Curt Matthews is the founder and CEO of Chicago Review Press, Incorporated, which is the parent company of Chicago Review Press and of Independent Publishers Group (IPG), the first independent press distributor and now the second largest. Curt has served on the Independent Book Publishers Association (IBPA) board and has also served as its president.

Information Technology That Works

I have been drawing attention in this blog to new publishing-related software that over-promises and under-delivers: authoring platforms that are not actually going to make anybody into an author; self-publishing programs that will not turn an author into a publisher overnight; social media schemes that really just amount to fraud or deception rather than legitimate publicity.

The fact remains that there are some aspects of information technology which are revolutionizing the book business. Not the flashy, public-facing “solutions” I have been complaining about, but rather a quiet back-office capability to receive, broadcast, and interpret data—lots of data—that is making all the difference.

As recently as four or five years ago, even a quite sizable publishing company could get along just fine with a two-person IT department: one person to keep the server going and another to reboot employees’ computers when the things won’t cooperate. That was the case with IPG for many years.

Now, however, IPG employs fourteen highly trained computer specialists who can program, construct databases, write SQL queries, design websites and dashboards, mine data, generate reports, construct interfaces, and oversee highly complex management systems. Most of the time they are working so hard they have smoke coming out of their ears. Here are some of the technological capabilities, becoming ever more vital to the indie publishing community, that these people make possible:

Point-of-Sale Information. We are able to get information from the largest booksellers and wholesalers about the number of copies of each of our titles they have on hand, the number on order, the number on backorder, the number that sold through this week and last week, both by units and by the percentage of copies sold versus the quantity on hand. It used to be that publishers had little idea what was going on in the marketplace in regard to their titles at the store level. We sent them out and just hoped they would not come back. With point-of-sale data, the timing and quantity of reprints can be handled infinitely better than in the past. Access to this data revolutionizes the way publishers run their companies.

Metadata Feeds. Sophisticated publishing operations now send metadata to their major customers. (Metadata is just a term for electronic title data.) We send our data to 350 customers, formatted in ONIX as well as proprietary formats, once a week. Why is this important? We now have about 85,000 available products on our list. We make hundreds of revisions to our title database every week because of price changes, new editions, new forewords, new reviews, and changed statuses which must all be communicated to our customers. Metadata feeds enable the seamless, automated transmission of these changes to our customers’ servers and databases or else we would all go crazy trying to keep the data straight. At this point in the book business, any friction in the system costs everyone dearly.

Data Mining. IPG has a “data warehouse” that has recorded every sale of every title to every customer for many years. This data can be sliced and diced by any combination of hundreds of parameters. A few simple examples: BISAC subject codes, customer type or location or size, book format, and of course quantities sold over any date range. To this information we can add sales histories of comparable titles from other publishers. The big-box retailers—Wal-Mart, Costco, Kmart, and so on—require that we “model” the titles we present to their buyers. That is, we must demonstrate with data that the title we are pitching to them has the right attributes to perform well in their stores for their customers. No data, no sale.

Ebook Conversion and Distribution. IPG now produces hundreds of ebook editions a week. This would not be possible without automated procedures and work flows. Most weeks we send about 200 new files to our thirty-five ebook retailers, which adds up to about 7,000 ebook files with their related metadata. This would be unthinkable without an automated batch-mode delivery system, another information technology innovation.

Years ago, when my wife and I ran a small bookstore next to the Drake Hotel in Chicago, we used to keep track of the inventory on 3” by 5” cards stored in a little metal box. It is hard not to be nostalgic about those simpler times, and perhaps that nostalgia can help us to keep clear in our minds the truth that book publishing is really about intellectual content rather than the latest whiz-bang technology. Books were books back in those days too. Still, the right sort of IT is now indispensable: it enables publishers to reach an ever broadening audience at an ever diminishing cost.

Curt Matthews
CEO, IPG/Chicago Review Press, Incorporated

Curt Matthews is the founder and CEO of Chicago Review Press, Incorporated, which is the parent company of Chicago Review Press and of Independent Publishers Group (IPG), the first independent press distributor and now the second largest. Curt has served on the Independent Book Publishers Association (IBPA) board and has also served as its president.

Can an Authoring Platform Make You an Author?

At the recent Tools of Change conference a new program called Inkling Habitat, an “authoring platform,” was introduced. This new “authoring platform” does serve a purpose, because it helps authors easily add digital bells and whistles to their texts. This help is welcome. However, a Google search now turns up over 300 “authoring platforms,” most of which claim to make authors out of amateurs. Can they do it?

Let’s unpack that phrase, “authoring platform.” The term “authoring” is a very odd duck indeed. We used to think that writers authored, or wrote, books, a process that had an end and therefore required the past tense. Now we are to suppose that authoring is a sort of continuous daily activity, like eating, sleeping, or breathing. This is a sneaky way to suggest that a computer program can make being an author a straightforward, usual thing that almost anybody could do successfully.

The “platform” part implies two things. One is the familiar idea that computer programs can interact much better with one another if they sit on top of a common substrate, like Word, Excel, and so on perched on the Windows platform. This is fair enough. The other implication, however, is quite misleading: the idea that a speaker often stands on a platform when addressing a crowd, an image that appeals to the egos of some aspiring authors because it positions them at a level above their audience–gives them a bully pulpit.

Both of these connotations obscure the real issue—are intended to obscure the real issue—by suggesting that if an author just has the right support, the right place to stand, he or she will be freed from the organizational, structural, and inspirational problems that bedevil even the most gifted writers. Somehow software will eliminate such difficulties.

The truth, of course, is that good writing is very hard to do. The real problem most would-be authors have is a lack of training, or experience, or something to say, or talent. Will these issues be solved by using the right authoring platform? Microsoft Word is an early authoring platform that certainly makes many tricky editorial operations very easy to do. But Word has not led to an explosion of terrific prose. On the contrary, many people think word processing programs have made writers more verbose. There didn’t used to be so many 800-page books. Legal documents are certainly four times as long as they used to be. (Perhaps we now spell a little better.)

The authoring platform is just another example of the sort of “easy shortcut” that Americans fall for every time. When I was a kid, it was “get rich writing short paragraphs.” For years the internet has offered me advanced degrees with no need to study or attend a class. Now I can become a famous author by climbing up on an authoring platform and broadcasting my thoughts in all directions. Of course everyone has a book in them! It would be highly undemocratic to think otherwise. Too bad it is not true.

Self-publishing is just the latest bubble. Tens of thousands of people are being relieved of serious amounts of cash by charlatans offering quick publication fixes. It is entirely possible to publish your own book in a responsible way. There is, however, one tried, tested, and highly effective authoring platform: a publishing company.

The Writing On The Wall: What Publishers Can Learn From The State Of The Music Industry

Book publishing professionals have been interested, to say the least, in the evolution of the music business over the last decade or so: its sudden conversion to a digital delivery system, the easy availability of music over the web, the free downloads that crushed traditional sales, the small labels put out of business and the big ones merging and contracting. The final result is a burnt-out industry, now only a shadow of its former power and prestige. Too much of this story seems to presage current trends in the book business.

Now there is another ominous chapter in their distressing story. In the January 28 edition of The New York Times, there is an article by Ben Sisario entitled “As Music Streaming Grows, Royalties Slow to a Trickle.” The article describes how the new methods that are used to distribute music by companies such as Spotify,  Pandora, and YouTube are a lousy deal for musicians. Even iTunes is being left behind by these new services, and musicians can now expect nickels when their recorded songs are bought instead of the dollars they used to earn.

Here is the story of one such musician, a Ms. Zoe Keating, as reported by the Times: “After her songs had been played more than 1.5 million times on Pandora over six months, she earned $1,652.74. On Spotify, 131,000 plays last year netted just $547.71, or an average of 0.42 cents a play.” By now the sale of recordings to consumers, aside from the work of the superstars, only has meaning as PR to promote live concerts.

Is there a strong parallel between the plight of the musician and the likely fate of the book author?  I surely hope not, because it is hard to imagine author readings going very far to make up for negligible book sales. But the siren song that has so badly damaged the financial prospects of record labels and musicians might soon be sung to publishers and authors. It could go something like this: forget about selling books for $14.95 each to readers; instead put your books into a big pot to which subscribers, paying a low fixed fee every month, can have access. It is true that you will be paid nickels rather than dollars, but there will be so many nickels!

If the book industry, like the music business, adopts this subscription model, there may be—for a little while—a lot of nickels. But the demand for books is limited—or “inelastic” as economists put it. So many books, so little time!  Over time, more and more titles will have to compete for the fixed amount of money collected by the subscription services. And authors really will need to polish up their dramatic reading skills.

And now this just in from Publishers Weekly:  Amazon intends to create a market for used eBooks. A print book can be sold by its buyers to someone else with no royalty going to the author. But one copy of an eBook could potentially be resold any number of times. Thousands of times.  What would the author receive each time his/her work was resold? Zip.

What can be done? If this worst case scenario happens, publishers may have to consider delaying the release of eBook editions until the print editions have had a chance to earn the publisher and the author a reasonable return, similar to how the film industry times the release of movies to theaters, then DVD, and then later, streaming subscription services. This is a version of the old rule of thumb that suggests delaying the release of the trade paperback edition until the cloth edition has sold through. In any event, publishers must not let any seller of their titles use its market power to drive prices down to the point where authors and publishers cannot do their jobs. And it is always important to remember that when the subject is books, it is not just money we are talking about. We are also talking about sustaining the vitality of our culture.

Curt Matthews
CEO, IPG/Chicago Review Press, Incorporated

Curt Matthews is the founder and CEO of Chicago Review Press, Incorporated, which is the parent company of Chicago Review Press and of Independent Publishers Group (IPG), the first independent press distributor and now the second largest. Curt has served on the Independent Book Publishers Association (IBPA) board and has also served as its president.

Vivian Maier & Independent Publishing

Two seemingly disparate parts of your life can sometimes collide with a bang. I have worked in the independent publishing business forever. A decade into that career, my wife and I employed a nanny named Vivian Maier to help raise our kids. Years later, Vivian (sadly, only after her death) has burst into prominence as a street photographer of genius, and a book of her startlingly evocative images, Vivian Maier: Out of the Shadows, has been published by CityFiles Press, one of IPG’s client indie presses. Her work is appearing in shows all around the world. In a recent starred review, Library Journal said:

[The authors] show that Vivian Maier was a great artist—not simply “the nanny photographer,” as some have called her. VERDICT This book will be greatly appreciated by anyone interested in art photography, 20th-century art, and American cultural history. Highly recommended.

Of course, people have been asking me what she was like as a person and what it was like to employ a genius nanny. Well, she was no Mary Poppins, if what you have in mind is Julie Andrews in the 1964 Disney movie. But she was a lot like the original character in P.L. Travers’s 1934 novel: eccentric, opinionated, peppery. When she came to work for my family in 1982, our kids were eight years, six years, and five months old. She was businesslike and usually competent, but our children knew she was much more interested in taking photographs than she was in them. She never took them for a walk without her Rollei twin-lens reflex camera hanging around her neck (during her life she took over 100,000 pictures). My kids don’t remember her with any special affection, and I am afraid it is true that one time she wandered off somewhere during a walk and the kids had to get home by themselves.

Her terrific photographs of children shed light on her complicated attitude toward them. Some of her images show bright-eyed, confident-looking children, but something about the photo tells you that such confidence cannot last. More often, her images show anxious children in situations that look uncomfortable or dangerous. There is a fabulous shot of a woman standing outdoors behind a table; it takes a couple of beats before you notice the sad child sitting in the shadow under the table. Children made her uneasy. She was not afraid of them but she was certainly afraid for them—afraid for their safety, their chances for happiness in what she saw as a difficult and disappointing world. I think she wanted to stop time with her camera to keep them safe.

At one point, impressed with her intense picture taking, I asked Vivian to let me see some of her work. The half dozen prints she showed me were terrific. I asked her why in the world she had not made a career out of photography. She knew of course that she was a gifted artist—the geniuses know who they are—but she could not get past her deep paranoia. She told me that if she had not kept her images secret, people would have stolen or misused them. In our age of flagrant internet exhibitionism, her reluctance now seems quite strange…and honorable. As a result of that secrecy, the world might never have seen Vivian’s incredible works—were it not for the sharp eye and dedication of one small independent publisher.

CityFiles Press is almost as sui generis as Vivian was. The two gentlemen who run the press have been honing an uncompromising aesthetic appreciation of cityscapes and urban architecture for many years. They write and produce all of the books they publish—so far five beautiful titles. What a fine thing it is that the work of this highly idiosyncratic street photographer was discovered by people so well equipped to grasp and document her unique contribution. This is indie publishing at its best.

Curt Matthews
CEO, IPG/Chicago Review Press, Incorporated

Curt Matthews is the founder and CEO of Chicago Review Press, Incorporated, which is the parent company of Chicago Review Press and of Independent Publishers Group (IPG), the first independent press distributor and now the second largest. Curt has served on the Independent Book Publishers Association (IBPA) board and has also served as its president.

Making Indie Publishing & Social Media Work Together: Part II

“Social media has one foot in the highly commercial world of advertising and the other foot in the realm of human communication—hopefully sincere human communication. This combination might not always be a comfortable one; but it is now possible to glimpse some social media strategies that may be especially well-suited to the needs of indie publishers.”

Effective social media marketing has to at least appear to have a higher purpose than just selling a product. It needs to support the idea that community-building information is being exchanged. But can you really make an effective sales pitch, somehow hidden inside friendly communication, in a tweet or a blog or a Facebook post? I think authors and independent publishers can pull it off.

How? With the exception of bestsellers, marketing books has always been a question of bringing the right title to the attention of a buyer already interested in the book’s subject. It has always been a question of matching rather than convincing, a soft sell rather than a hard one. And traditional book marketing has long had a crucial social aspect: word of mouth—information passed among members of a community—is really what drives book sales. Since authors and indie publishers have all along aimed to create some degree of community rather than just driving sales, social networks present a new opportunity to further this goal.

I believe that social media marketing can be particularly effective at the author level. Authors can get away with a little obvious self-promotion. Writing a book is very hard work, often for little pay (again excepting the bestsellers), and most importantly requires a level of self-exposure and risk of failure that most of us simply shy away from. There is a heroic aspect to authorship that serious readers appreciate and admire.

This special connection allows authors to promote their own books, as well as those of their compatriots, without violating social media etiquette. They can inspire readers to buy books through tweets, blogs, and other forms of social media and can use those social outlets to steer customers to their publishers’ websites. After all, to the extent that their publisher is working a niche, that website will in itself amount to a sort of community where publishers, authors, and readers can connect over a shared interest. Over time, it is possible to build a bridge that leads from the author’s social media efforts to the publisher’s website.

What can a distributor do to turn the social media efforts of authors and publishers into sales? IPG has constructed sophisticated shopping carts, at no charge, for some of our client publishers’ websites. These shopping carts are customized to match the look of each website or meet the design preferences of the participating publisher, and they offer eBooks, print books, and streaming audio and video directly to consumers. IPG takes care of all of the back end processing and fulfillment services, as well as automating product and stock information and providing options for promotions. IPG is also developing a “buy button” which can easily be attached to author and publisher social communications, taking readers directly to the relevant book page on a publisher’s new shopping cart. These initiatives are still in beta, but they look very promising and will offer authors and publishers a chance to capitalize on the online communities they’ve cultivated through their social media efforts.

At a macroscopic level, every participant in the publishing industry can be a participant in the larger social conversation revolving around books and the people who love them. By engaging in these conversations, indie publishers (and distributors) can join vibrant communities of authors and readers, leading these groups to their websites, and thus, their books.

**Check out some of IPG’s new shopping carts here: Urban Land Institute Bookstore, American Cancer Society Bookstore, and Nomad Press Bookstore

Curt Matthews
CEO, IPG/Chicago Review Press, Incorporated

Curt Matthews is the founder and CEO of Chicago Review Press, Incorporated, which is the parent company of Chicago Review Press and of Independent Publishers Group (IPG), the first independent press distributor and now the second largest. Curt has served on the Independent Book Publishers Association (IBPA) board and has also served as its president.

Making Indie Publishing and Social Media Work together

I have been arguing in this space that successful indie publishing is largely a question of understanding and working a niche or niches. If that is truly the case, all of us in the indie book business need to be looking hard at the question of how to use social media to promote our titles. The internet is a terrific place to find and exploit niches; and social marketing looks to be fairly easy, relatively cheap, and, if cleverly executed, astonishingly effective. Every day we consume packets of digital information—video clips, sound bites, images, memes, news items, even books—that have “gone viral” on the internet.

If only it were that simple. Here is a list of concerns to consider when exploring the complicated world of social media as it relates to indie publishing:

	The number of blogs, Facebook pages, Pinterest boards–to say nothing of twitter profile and tweets—continues to expand exponentially. It is becoming harder and harder to be heard in this cacophony of voices.
	It is important to fully understand the analytics that purport to track the number of people who visit your website, read your blog, or “follow” you, as that information can be misleading. A high volume of visiting traffic, for instance, can occur for any number of reasons. Years ago, I discovered that over half the traffic to IPG’s first website was generated by a single title: a perfectly respectable book about nude photography. While the unsavory traffic to this page has since diminished, it presents an excellent example of an instance when quantity did not necessarily equal quality. Social media gives rise to new, much more complicated concerns regarding traffic. It’s clear that some visitors and followers interact with your site—therefore generating what looks like increased traffic—in order to distribute links to their own sites or to gather other users’ information. Understanding traffic and analytics is vital to gauging the quality of the audience we reach with our social media efforts.
	In addition to the questionable traffic that can muddy your website analytics, there can be outright deception associated with social media. At the last BEA conference, I attended a number of panels about how to make good use of these wonderful new promotional tools. During one panel I cannot forget, a panelist explained how she got her boss’s business book onto the New York Times bestseller list by hiring half a dozen interns to work full-time for weeks tweeting their hearts out. But, she cautioned, these tweeters had to preserve the fiction that they were acting as unbiased individuals, just plain folks who happened to love that book. Otherwise (she did not make this point but I will), the promotion might look too much like what it is: a sort of low-rent fraud. A marketing strategy built on deception cannot, in the long run, succeed.
	Businesses are still trying to figure out precisely what works or doesn’t work with social media. I recently attended a dinner, along with about a hundred other business people, hosted by Google. The point of the dinner, of course, was to sell advertising, but the main event was a very interesting panel discussion involving three big-time social-marketing gurus and two very sharp Google spokespersons. The first guru to speak painted a social marketing landscape featuring really awesome new possibilities. Wow. The second guru begged to differ with the first one. Actually, we had better stick to what we know, he said, and go slow. The third sharply disagreed with gurus one and two, but I can’t quite remember what his theory was. Finally, the Google spokespersons were in passionate agreement that the best course was to trust Google to give us great advice on how to spend our money on their advertising programs rather than on social media ventures. Given all the uncertainties surrounding social media, the Google approach has at least the advantage of being easy to understand and implement.

So what’s an indie publisher to do? If you take a step back from the perplexities of social media to gain some perspective on it, the issues I have raised are perhaps no more than what should be expected for a field so new and still so in flux. Social media has one foot in the highly commercial world of advertising and the other foot in the realm of human communication—hopefully sincere human communication. This combination might not always be a comfortable one; but it is now possible to glimpse some social media strategies that may be especially well-suited to the needs of indie publishers. That will be the subject of the second part of this post.

Curt Matthews
CEO, IPG/Chicago Review Press, Incorporated

Curt Matthews is the founder and CEO of Chicago Review Press, Incorporated, which is the parent company of Chicago Review Press and of Independent Publishers Group (IPG), the first independent press distributor and now the second largest. Curt has served on the Independent Book Publishers Association (IBPA) board and has also served as its president.

What Does the Random House/Penguin Merger Mean for Independent Presses?

Of course it is early to speculate about the effects of this merger, but if we think about it as the latest step in a process that has been moving forward for the last decade or so, it will not seem very surprising.

A place to start is with the lead sentence in last week’s article in the New York Times:

The book publishing industry is starting to get smaller in order to get stronger.

This is the sort of press coverage that drives indie presses crazy. It perpetuates the utterly false notion that the Big Six publishers are all that counts in the book business. In fact, they account for only about 50% of bookstore sales. I think many assume their share is much larger.

If we accept the spurious notion that the Big Six publishers and the “book publishing industry” are the same thing, then it is true that the book publishing industry is “starting to get smaller;”  actually has been getting smaller for years. Unit sales for the Big Six as reported in point-of-sale data are 23% less now than they were in 2007; these numbers actually understate the decline, because the number and kinds of stores included in the point-of sale data have increased over time.

However, the sales of all the other publishers captured in the point-of-sale data have only declined 18% compared to 2007, or 5% less than the Big Six publishers’ sales have fallen. This, of course, means that the market share of the “others,” the non-Big Six publishers, has increased. But how about unit sales in absolute terms? Indie presses depend more on sales made outside of the book trade than big publishers do, and these sales, which go mostly unaccounted for in the available point-of-sale data, have grown much faster than sales inside the regular book trade. Gift stores, museum shops, and specialty stores in general are natural customers for the niche titles independent publishers mostly produce.

Such sales are very hard to track on a national basis, but at IPG, we have seen dramatic increases in sales to such non-standard book trade customers—in actuality, much greater increases than in the regular book trade. So it may be that sales of indie publishers have increased, not just in terms of market share, but also in terms of total units sold.

There are multiple reasons to explain the growth of the indies, but a main one is that the big houses can no longer make a financial success of midlist titles. Their overheads are too high to even think of publishing a book that might only sell 3-5,000 copies—but such titles are the bread and butter of small and medium sized houses, and book buyers, who really want special interest and niche titles. So much so that the number of publishable niches is proliferating right along with the explosion of interest groups we see reflected on the internet.

The Random House/Penguin merger is just the first step in the consolidation of the Big Six and I think that their share of the market will continue to decline. Of course “the suits” say otherwise. According to the New York Times article, one spokesperson stated:

The merger would not result in closing redundant imprints and less editorial independence. The idea of this company is to combine the small company culture and the small company feeling on the creative and content side with the richest and most enhanced access to services on the corporate side.

Right—except every one of the things that will not happen will happen, quickly, right after the merger is completed. Heads and imprints will roll right and left.

Indie publishers do not have to pretend they have a “small company culture” or “editorial independence.” They come by these desirable traits naturally. As the room at the top contracts, there will be more room in more markets for us.

Curt Matthews
CEO, IPG/Chicago Review Press, Incorporated

Curt Matthews is the founder and CEO of Chicago Review Press, Incorporated, which is the parent company of Chicago Review Press and of Independent Publishers Group (IPG), the first independent press distributor and now the second largest. Curt has served on the Independent Book Publishers Association (IBPA) board and has also served as its president.