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The End

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Publishers have been burned by e-book hype before. A few years back, analysts were predicting we’d all be reading novels on our Palm Pilots. Barnes & Noble even began selling e-books. Though it doesn’t quite look the part, Bezos’s chunky retro Kindle is the closest so far to being the iPod of books. In mid-August, a Citigroup analyst doubled his estimate for this year’s sales of the readers—to almost 400,000.

Why weren’t publishers elated? What’s wrong with a company that returns only 10 percent of the books it buys and might eventually eliminate the cost of print production? Well, it doesn’t help that Amazon, which has been on an intense buying spree (print-on-demanders BookSurge; book networking site Shelfari), lists publishers as its competitors in SEC filings. Editors and retailers alike fear that it’s bent on building a vertical publishing business—from acquisition to your doorstep—with not a single middleman in sight. No HarperCollins, no Borders, no printing press. Amazon has begun to do end runs around bookstores with small presses. Two new bios from Lyons Press, about Michelle Obama and Cindy McCain, are going straight-to-Kindle long before publication.

Amazon, in short, plays hardball. When Hachette Livre UK couldn’t come to terms over Amazon’s U.K. payments, Amazon removed the BUY NEW button from its listings for the company’s key books. Hachette’s CEO responded with an open letter, saying, “Amazon seems each year to go from one publisher to another making increasing demands in order to achieve richer terms at our expense and sometimes at yours.”

The ultimate fear is that the Kindle could be a Trojan horse. Right now, Amazon is making little or nothing on Kindle books. Lay down your $359 and you can get most books for $9.99. Publishers list that same Kindle version for about $17.99, though, and—as with all retailers—charge Amazon roughly half that price for it. Which means that Amazon keeps only a dollar on each book, while the publishers make $9.

But Amazon may be offering a sweet deal now in order to undercut publishers later. If their low, low prices succeed in making e-books the dominant medium, they can pay publishers whatever they want. “The concern is they want to corner the market,” explains one books executive, and then force publishers to accept a genuine 50 percent discount. “If they took over as little as 10 to 20 percent of the market,” says an agent, “publishers simply would not be able to exist.”

“We’re an industry more willing to watch the boat sink than rock it a wee bit.” —ONE FRUSTRATED PUBLISHER

While many in publishing wait in their bunkers, HarperStudio and a few others forge ahead. Back in February, Bob Miller and Jane Friedman met at the bar of the Omni Berkshire hotel for one of their freewheeling chats. “How would you do it differently if you could start all over again,” she asked him. He said he’d try to reduce advances and returns, put out only a few books, and focus on cheap Internet marketing. “Why don’t you do that?” she asked, and within a week they had a deal.

Miller has worked out separate contracts, co-op and all, with booksellers and authors—capping advances at $100,000 and reducing returns. Their list now includes not just 50 Cent but Michael Eisner, his former boss at Hyperion; John Lithgow (a memoir); and Isabella Rossellini adapting her short-film series on bug sex. All these authors will contribute to their own pre-publication marketing.

Miller doesn’t wait for agent submissions, instead accosting writers at conferences, telling them how much more a writer can make under 50-50 profit-sharing. He’s even throwing in something literary, 22 previously unpublished stories by Mark Twain, who, Miller points out, ran a profit-sharing publisher that made a killing on Ulysses S. Grant’s memoirs. “If he were alive, this is exactly the deal he’d want,” Miller says brightly.

Other industry folk, while supportive, note that precious few writers—except those with trust funds—would forgo advances, and that it generally works best for those who have a pre-existing fan base that will gobble up their books. As for Miller’s other key ingredients, profit-sharing is not a new concept, and online marketing is catching on everywhere. If there’s anything Miller shares with the departed Friedman, it’s a knack for making restructuring look like revolution. But in a business as illogical as publishing, maybe it is.

One indie publisher has been pitching an imprint around town that would go beyond what Miller’s doing—expanding into print-on-demand, online subscriptions, maybe even a “salon” for loyal readers. He envisions a transitional period of print-on-demand, then an era in which most books will be produced electronically for next to nothing, while high-priced, creatively designed hardcovers become “the limited-edition vinyl of the future.” “I think they know it’s right,” the publisher says of the executives he’s wooing, “but they don’t want to disrupt the internal equilibrium. I’m like the guy all the girls want to be friends with but won’t hop into bed with.”

Nearly all of these new ideas already exist in some form or another at independents like Dave Eggers’s brainchild, McSweeney’s. But can they survive inside a corporate, blockbuster-bound culture? “You can’t turn a camel into an alligator,” says longtime agent and former Grove editor Ira Silverberg. “I’d rather we have several soft years when investors get out and people who care about the values in the business reinvest.”

But going back in time isn’t an option. A hundred Bennett Cerfs wouldn’t save the current publishing model—not without a hundred Bob Millers puzzling out the way forward, unhampered by fear or complacency. The kind of targeted, curated lists editors would love to publish will work even better in an electronic, niche-driven world, if only the innovators can get them there. Those owners who are genuinely interested in the industry’s long-term survival would do well to hire scrappy entrepreneurs at every level, people who think like underdogs.

It’ll be rough going in the meantime; some publishers will transform, some will muddle through, some will die. And there will, no doubt, be a lot of editors for whom even this diminished era will look like the last great golden age, when some writers were paid in the millions, some of their books produced in the millions, and more than half of those books actually sold. Book publishing is still a big-league business, and that’s a hard thing to let go of. “There’s something terrible,” says an editor at a prestigious imprint, “about admitting that you’re not a mass medium.”


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