Thursday, October 25, 2012

Merge. Be happy. Go under.

How many times have we seen this: An industry goes through a structural transformation, often as a result of disruptive technologies that cause it to lose its prior economic prominence.  The next stage is that two large players in the sector decide to merge, convinced that they will somehow obtain economies of scale that will enable their future well-being.  Government regulators, applying old standards of market dominance, fret but then allow the merger to proceed, for fear that the incumbents might go out of business otherwise.  The merger takes place.  It is only then that the world of finance discovers that the newly created company is composed of two leaky lifeboats strapped together, with no greater chance of success than the two antecedent firms.

Health care.  Well, maybe.  But right now I am talking about the proposed merger of Random House and Penguin.  As reported in the New York Times:

A merger of Random House and Penguin could help the publishing houses cut costs by combining resources, and it would give them more heft in negotiations with Amazon and Apple as readers increasingly abandon print for cheaper e-books.

But for authors and their representatives, news of the merger discussions . . . came as another potential blow in an already challenging profession.

Several literary agents said a merger would lead to a consolidation of publishing imprints, thus reducing the number of bidders vying for titles. They also said that combining editing and marketing resources would likely lead to layoffs and potentially put added pressure on authors, especially those who do not churn out mass-market hits.

All this folderol justifying a merger and expressing concern about it overlooks what is happening in this field.  Putting aside the really big authors and their agents, no one needs publishers any more.  To use the technical term, publishers have now been disintermediated.  Any author can self-publish a book.  There are several user-friendly platforms that not only walk you through the process of publishing but also handle distribution and get you in the marketplace within hours or days of completing your book.  For example, I wrote my book Goal Play! and self-published it on Createspace, an Amazon subsidiary.  I had no need for an agent to find me a publisher, but I did hire an editor to help me with the book, a designer to craft the cover, and an experienced typesetter to deal with formatting issues. 

But what about marketing and publicity? Again, you don't need publishers for that (not that they really help the majority of authors anyway.)  Once published, I started marketing the book using my various social media platforms:  This widely read blog, Facebook, Twitter, LinkedIn.  Friends and contacts using those media helped me “go viral” by re-tweeting or sharing.  Several bloggers kindly published their own reviews.  Other readers posted reviews on Amazon.  Several print and electronic newspapers published reviews.  I began a tour with speaking engagements across the country and in Canada and Europe.  Within a few weeks, I had documented well over 3 million “eyes” who had the potential to read about my book, and thousands of people who had heard about it directly from me.

About two months after I published my book, a business book publishing company contacted me to offer to republish it under its name.  They had read it and liked it a lot.  They asked how many I had sold.  I said that things went a bit slowly at first but were picking up, with almost 4000 copies sold.  They were stunned.  I learned that business books, on average, sell fewer than 3000 copies over their lifetimes.

Here's the funny part.  Notwithstanding my success to that date, the publisher immediately made it clear that they would want to change the emphasis of the book, employ a new title, redesign the cover, and re-set the interior.  In return for that, they would offer me royalties that were more than 80% lower than those I could receive on my own.  Also, they said that I would still have to do the bulk of marketing and publicity.  I demurred.

Any author today can do what I did.  The idea that publishers add value to the process is simply untrue for the vast majority of authors.  Let this merger go ahead.  It means nothing.

4 comments:

lymphomajourney said...

Nice piece on self-publishing. Having just started with my book Living in Cancer: A Journey, I enjoy the independence and freedom that it entails and, as you note, one can engage the services one needs to make it more 'professional'. Still learning the marketing side and congrats on doing so well.

Ross Martin said...

Thanks, Paul. I think this really points to the conundrum we're all in with most vocations these days: unique talent or skill is not sufficient; you also have to be a very capable project manager. My little ADD brain makes me a relatively lousy project manager, so for some efforts, the king's ransom of handing over most of the spoils in exchange for guidance and wrangling is worth it.

It also requires an ability to self fund through the duration (and to be willing to suffer a total loss) or to have a very understanding patron - a spouse or parent - who is willing to keep you afloat during the process.

For someone wanting to focus on just being a great writer, that may prove a losing proposition. The same has been true on the music side for some time now. I always marveled at the talent of those I shared the stage with at Boston open mikes, wondering why someone so incredibly gifted wasn't already Tracey Chapman famous. Then I realized that they weren't very good at promotion or balancing their checkbooks - they were too good at the one ingredient and not good enough at the fundamentals of the business.

I wonder if JK Rowling could have pulled it all off on her own or if the next Rowling can make it through self publishing. For me, as with many others with creative passions, I've concluded that it's good to have a day job.

Tim Cook said...

From Google+:

Thanks for sharing your own story regarding publishers. I guess it is pretty obvious what 'their' goal is in re-publishing your book. 

Anonymous said...

Merging is to be expected from large companies, but it's actually the exact opposite of how they should be moving-- splitting up, into smaller business units with more agility and less overhead. But if you do that, you the senior executive are essentially putting yourself out of a job and giving up your large salary and nice life, so instead you pursue this stalling tactic.

The better example would by AOL, with its foolish idea of nurturing community journalism through Patch.com. Small, local journalism can thrive quite well on its own, but as soon as you saddle that local unit with revenue demands to pay corporate's overhead and salary, it starts to die on the vine. Corporate's next step is to merge those local units-- which AOL has done-- to cut costs locally. But the reality is that nobody needs the top layer. Same thing here, just a somewhat different industry.