Monday, June 01, 2009

Publishing trends and the Net Book Agreement

I have been pleased to receive a large amount of e-mail and other comment on yesterday's article about the publishing industry. Interestingly, some of the views seem almost irreconcilable. Hopefully I'll be able to compile some of them for a future post - (I'm still waiting for permission from a couple of people.)

However, my understanding of the situation is as follows:

The publishing industry can been seen to have three elements - writers, publishers and sales outlets.

The writers are producing novels. More novels than ever before. I'm an example of this. I would not have been able to attempt to write a novel if it hadn't been for the advent of the word processor. My dyslexia would have been too great a barrier. I may be an extreme case, but I recon other people have been enabled by technology in similar ways.

Contrary to popular belief, the publishers are producing more titles a year now than they used to. I've failed to come up with detailed statistics for the last couple of years, but from what I read the trend seems to be growth.

What has happened to buying patterns since the end of the Net Book Agreement? I sketched the following 2 graphs to illustrate what I believe the change to have been. They are not based on any real data. Rather they illustrate a change in pattern that corresponds to what I have been told is happening.

The x-axis on these graphs represents all the books published in the year, from the #1 best seller on the right, all the way down to the 10,000th seller on the left. The y axis represents money made by each title. Thus, the best selling book made lots of money and the worst selling book made little.

Here we have a picture of the market during the prime of the Net Book agreement:

And here we have a picture of the market now:

The total number of books being published is dazzlingly large. But the number of books being sold in any volume has reduced. (I understand the value of the market in total is not growing or shrinking at present.)

The big sellers are selling more and being promoted more. The small sellers are selling less and being promoted less.

Now - with the arrival of the e-book - the number of novels being published each year is likely to increase at a huge rate.

My question is - how will a reader know what books are worth looking at? The top selling couple of hundred novels will be easy to identify. They are being promoted. They are given prominence in Waterstones, Tesco etc. But what of the rest - the mid-list and below? Here we have a huge expanse of publications in which the excellent has a problem making itself seen above the mass of frankly poor writing that is now finding its way into print.

This is my impression of what is happening. I have no real data to justify it and, as always, am open to being told I am wrong!


Anonymous said...

I think that's a pretty fair summary, from all I gather. And the advent of the e-book, print-on-demand and online publishing isn't really going to change anything, except to make it even harder for people to find the books they want among the ever-increasing noise. You could argue that it'll make the dominance of the few, big-name books even more complete, because marketing spend and muscle will be ever more essential.

Dave M said...

Rod, I think you're graphs are the right shape but the x-axis is in the wrong place. If we are referring to money made (i.e. profit, then most books make a loss, so your x-axis needs to move about two-thirds of the way up the graph; only the top few percent of books published lie above it. Of course in the case of the second, post-NBA, curve the slope is very steep, so that books that do make money really make money!

Print on demand publishing will make very little difference to the balance of the market, because the production costs of such books (per unit) are high compared to the main stream books they compete against. However, ebooks will have an enormous effect on this balance, if and when consumers get themselves equipped with suitable readers. You can argue whether Amazon's Kindle and Sony's Reader really have this technology ready, but they don't yet quite have the cost structure yet to put lots of them in the hands of the book buying public.

When this happens,effectively, ebooks will remove two of the three big costs in publishing (book production and distribution). Marketing will still remain. What effect this will have is hard to anticipate, but here are a few you might expect:

1) The decline (though not necessarily the demise) of bricks and mortar retailers.
2) Real power sitting in the hands of brand name authors. They can sell their own books through their own web-sites, or dictate terms to the likes of Amazon.
3) etc co-marketing book downloads next to the the 'DVD of the movie of the book'.
4) Lots of small ebook retailers springing up selling rubbish titles online, using almost the same business model as the psueudo- vanity publishers that currently pollute the print-on-demand market.
5) Expect a few specialists that manage to establish a brand name and a reputation to rise to be the 'mark of quality' in the on-line industry. As an author, if you can get these guys to brand and sell your book, you'll get a better deal than you will from traditional publishers. I expect most new authors of any talent to get their 'start' through this route in the future.

You can already see the big publishers circling to establish on-line reading communitites with their various Internet projects; I don't doubt that these are their early attempts to create critical mass for their own on-line ebook operation. They know that the 'retail chains' they traditionally sell into are losing their competitive advantages (foot fall in high street shops, monopolistic buying power and large scale, low cost distribution logistics).

Niki M said...

I'm not sure the graphs are incorrect if we are just looking at the top 10 000 selling books. That's actually a smaller section of the entire market than it might seem. It's also not actually true that most books make a loss. Many fail to earn out their advance for the author, maybe, but that's another thing altogether. A book doesn't have to earn out its advance to avoid making a loss; far from it. The writer only gets a small percentage of the cover price to contribute to royalty earnings. The rest goes to the publisher to recoup their costs and then as profit. A few sums and it doesn't actually take breathtaking sales figures for a book to break even.

If we expand the graph to include the huge number of titles that is produced, include print on demand and self published titles, very few of which would make this particular graph as defined, then we would see a picture more like the one you describe Dave.

Interesting topic Rod. Generating lots of discussion, innit?

Lizzie L said...

While I'm not sure that e-books will take over from printed books in the near future it will be an interesting trend for authors to watch. Especially novice, unpublished authors who are looking for an agent. Interestingly, at the RNA [romantic novelists' association] Conference in July there is a seminar on E-books. There is also the opportunity to book a one-to-one with an E-book editor. In the romantic fiction market there is already a well established E-book readership [altho, I think its chiefly American and publishes erotica and paranormal more than romance]. I know of several RNA members who haven't been able to get published in the UK but who are selling very well indeed in USA with E-books in various formats. If the RNA has identified and tapped into this publishing phenomena I think it will be a trend worth watching.

Charles Lambert said...

A very interesting post and some excellent thought-provoking comments. I just wanted to add an aside to Dave's remark about brand-name authors, which reminded me of the case of Timothy Mo, whose literary star plummeted when he left Vintage, I think, and decided to publish himself. This was before the internet had become the force it is now, and maybe Mo wasn't quite a brand-name author, and there may also have been a falling of in the quality of his work - but what level of sales would be required to ensure that single authors had the same clout as a major publisher? Big publishers, in any case, invest a vast proportion of their promotional budget in a handful of safe names, and very little in mid-list authors as it is. So those with the most to gain are already, in terms of promotion, in the strongest position.

My word verification is hospital!

Anonymous said...

Re - Siobhan's comment on the blog about what she meant about the internet not being the small publishers friend....I thought she was referring to companies like Amazon who sell at a discount compared with bookshops of olden times who charged the price on the back and you had little chance of finding the book by cheaper means.

Otherwise, I seem to have plenty of books to read for the next decade, so with a few exceptions I've stopped buying them thus saving me lots of money and I get to read my choices of five years ago! Also, in whatever form, the marketplace seems to provide me with all the books I do want to read, I'm not sitting here wishing more books were published. Loads of books are published every week.
(I'd put this on the blog but you've got to register etc and I want my dinner!)

Ian A