February 18   On 70% royalties

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One of my favourite TV shows is Dragons Den. A panel of multi-millionaire entrepreneurs (or businesses in marketing, branding and so on) sit in judgment as they get pitched business ideas, mostly for inventions. Some contestants have done prototypes and small-scale production runs. All are looking for cash investment and mentoring in marketing, branding and taking a start up to a fully fledged viable business. My favourite bit is when one of the Dragons decides there is a good idea that they think they could make fly and then they offer X cash to buy in to the company for Y percentage partnership. Almost without fail, the person will reject the offer of lots of money because the deal is for more than 50% ownership of the company.

Their thinking being that an idea is worth equal or more than its execution. Or that having an awesome idea is enough alone to make it successful. The Dragons usually smile serenely. To them, it’s easy come, easy go. They know that an idea is not enough. That there are more ideas in the world than can be developed. The negotiation also tells them a lot about what that partnership might be like. Are they going to be overly possessive and territorial? Are they going to be open to mentorship? Are they going to step aside to let others with experience handle things like packaging, branding, marketing, promotion and access to delivery channels? Where will they decide the line is between “mine” and “ours”?

I think a lot about this show as I watch the narratives about the evolving models of publishing. Publishing is (as always) in a state of flux, in a reinvention of sorts. Small press models don’t look anything like they did when I started my press back in 2007. And it’s not a risk to say it will look markedly different in five years time. I’m very passionate about speculative fiction and about writers. As a small press, we sit very decidedly outside mainstream/big publishing and our role is very distinct. We try to offer the best and fairest deals we can when we acquire manuscripts and we try to offer a value addition of personal care and interest beyond the publication date. I like to think there is a very clear narrative that runs through the books I acquire that embody the ethos, direction, and yes, branding, of Twelfth Planet Press. I’m gradually building an argument, a response, a discussion point and when I read submissions, I’m looking for pieces that will expand, broaden, deepen or emphasise that narrative.

Of course, the other aspect that I look for at acquisitions is whether I think a work is likely, or has the potential, to sell to break even, or, you know, one day, make profit. I’m running a business after all. So far, I’m still waiting for the long tail to kick in and kick back most of my investment dollars. The thing about the old skool publishing model is that it works across all the titles bought in a year – some you win (make profit), some you lose (make losses) and across the board you cross your fingers and hope you come out ahead. This approach is what enables publishers to invest in books they know won’t ever earn out or end up in the black but that they believe should exist.

It’s a different model to self publishing. And like self publishing, it works for some cases, and not others. But I saw a t-shirt the other day that said “What part of 70% royalties do you not understand?” and it took me back a bit. Sure, there is an element out there with a pretty strong hate on for publishers but it strikes me as a bit naive or deliberately simplistic. It comes back to the Dragons Den and the idea that the only person who works to create a book is the writer. And that the only costs are paying said writer. Or that the writing might be the most expensive/only part of creating a book.

I’ve run the maths of going to digital only publishing to play with the business model. I’ve also tried to look at offering our ebooks at that $0.99 or $1.99 price point. I really hope we don’t see this flux in the business model end up with books only costing 99 cents. It’s such a huge undervaluation of what it costs to produce the product. To think that you deserve 70% royalties means you think that the cover artist, the book designer, the layout, the editors, the proofers, the marketers and promoters, the promotion material including launch events, and overheads like electricity, software, website management, bank charges, fees for online sales transactions and so many other costs, as well as publisher reputation and branding should somehow be covered by that 30%. That’s one helluva turnover of book sales. It also suggests that all those people take almost no role in the success of your book. I mean, as we all know, no book of excellent quality has ever been overlooked or failed to succeed, since cream always rises to the top, all on its own.

Which is not to say that 70% isn’t a great deal. I don’t have anything against self publishing. It’s the obvious choice in some situations. But when considering all those choices, that 70% really needs to be viewed honestly – what costs will also need to be covered by that? Editing costs? Proofing? Ebook conversion? Buying a cover? Spending time learning layout and publicity? Advertising and promotion? How much time will be required to be invested in product awareness? There are outdated aspects of the publishing business model. And the changes we are currently experiencing will force that hand. But the changes that will happen, and need to, will happen within the realm of economics and viability.

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Today I found myself floating around a bit and ended up tagging along with my mum to her secondhand bookshop where she wanted to exchange some books. As we were browsing whilst the books were being valued I noticed a sign which said that due to the current climate in bookselling, she was no longer offering held credit. This piqued my interest and so I wandered over to talk to her about what she and her business were experiencing in the wake of ebooks.

She told me that times were hard, that she thought they’d be able to ride it through but that she’d had 4000 books in and no books out – I didn’t ask her specifically what timeframe that was but she clarified that she’d really been feeling it in the last 12 months. On probing, she felt that it was the ereader that was the main factor. She said that people were coming in and telling her they were getting rid of all their books and would never buy a paperback book again. I thought that was interesting and wondered aloud to her as to whether that would be a long term, permanent thing, noting that I had heard that (particularly in Australia) a lot of people were getting a Kindle and then downloading the free ebooks online and not much else. I have read elsewhere that classics are being downloaded the most because they are free and the Kindle offers a nice way to get that “should have read” reading done but that other parts of the book industry were not feeling it as much. She also told me that some people were coming back and citing that they missed reading physical books. She told me that the worst problem was that she felt people were cleaning out all their books at home, racking up like a $200 credit with no intent to ever by a book from her in exchange at all. That she felt like she was being used as a dumping ground.

It was a really sad conversation. Her secondhand bookshop is small but has always been a good one. It’s the one my mother frequents  – she’s a voracious reader and was bringing in some really good condition, recently released books to swap. And the owner of the shop was well read and wandering around recommending books and answering questions – I threw a few at her as well. And there were some great customers who came in and shared a few recs and talked to me a bit about a few writers too. It’s a great little bookstore.

It’s easy to talk about the predicted future of the book industry and how brick and mortar stores and secondhand bookshops will die but it’s another thing to look at an experience that you genuinely love and realise that that too will go. Secondhand bookstores are a great meeting place, a great place to find recommendations and to chat over books and writers. And I know online you can get forums, and reviews and recommendations, and it’s not like I don’t buy books online or find my way to new titles via online means (or run a reviews website for that matter). But I don’t want one to be at the total expense of the other. I love bookstores too.

I bought some books – she has a pretty good Australian science fiction/fantasy section. And I made sure to push our expenditure over the required credit usage. Because I don’t want bookstores to die.

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