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"Can't We All Just Get Along?" -- A Manifesto of Sorts

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"My advice, Stevie? Get the Hell out of this industry, 'cuz it's sinking like the Titanic."

This was said to me yesterday at lunch with a dear friend of mine who is also a prominent and enormously successful literary agent. There is no question there is trouble across the industry -- and here I will define "the industry" as the organization of major book publishing houses based primarily in New York City and owned by a handful of (primarily foreign) media conglomerates, a body of companies that 20 years ago numbered in the dozens and can now be counted on one hand, with maybe a few fingers on loan from the other. I've spent my adult life happily toiling at book publishing houses, feeling proud of the enduring significance of books and their ability to educate, inform and entertain. I have worked with hundreds of extraordinary people who gave up the prospects of more lucrative careers for the chance to work with authors to shape, package and promote their ideas to the best of their abilities, because these people love their work. I have watched the incremental troubles metastasize, while at the same time, I have noticed over the past few years a troubling trend entering the picture, a trend that is encapsulated in the blogs posted by Chip O'Brien and Mark Coker.

Both blogs are, to this reader, rife with fallacious thinking, faulty reasoning, and/or tunneled perspectives that ignore the complex realities that publishers face during this turning point for the industry. But at a time when it is in the best interests of everyone who loves books to help the major houses endure, they're being scapegoated, demonized and ridiculed for trying to survive with the crippling business model they've been handicapped with for decades.

Let's start with Mr. O'Brien's blog, titled "Why New Books Don't Sell on the Kindle". When Mr. O'Brien breaks down the costs of producing a book, the majority -- nearly 70 percent -- is in preproduction costs: editing, copyediting, design, the more-than-a-village it takes to produce a book. So when people complain that an e-book is little more than "an elaborate text file with the ability to show a few black and white pictures [and] has no visible production costs", he has his reasons for saying this isn't true. "Take out the costs of printing, warehousing, and distributing, and the only cost left seems to be the electricity needed to run Microsoft word," he writes, temporarily setting aside the stark financial realities he later cites as "intangible costs: preproduction (editing, graphic design, etc.), marketing, and author royalties and advances," citing Money Magazine that "these three made up about 77% of a hardcover's production costs...so maintaining the same profit means a fair price for a $27.95 hardcover in an e-book format would amount to $21.50." Faced with a $9.99 price tag set by Amazon and cemented by Dan Brown, this leaves a margin of slim to none.

The puzzling financial paradox for publishers is further exacerbated by the fact that, as I write, Brown's e-book rests comfortably atop the Kindle bestseller list, but the #2 bestseller carries a price tag of $0.00, the same price carried by #3, and #4, all the way to #10. Many of these e-books derive from major publishing companies, like HarperCollins or Random House, where the costs for creating the books were absorbed, and the responsibility for explaining the royalty structure for such e-book "sales" to the authors and agents is a perplexing mystery akin to a Dan Brown narrative, but without the tourism.

On the other side of the argument is Mr. Coker, who makes his point clear in his title: "Why We Need $4.00 Books". Mr. Coker is the founder of Smashwords, a website where it seems any aspiring author can publish his or her e-book, where the home page proudly declares "150,212,900 words published" and which includes such titles as Fifteen Stories of Female Domination: Bad Ass Office Bitches. I'm sure Mr. Coker is a pleasant enough gentleman and I have no truck with him personally. But when he states that "many publishers view e-books with a skeptical eye" I know we're dealing with someone who is operating from hearsay rather than relevant experience in the trenches of a large and established publishing company; thus he may not be aware that all the major houses I know of have been investing in the development of digital files for both frontlist (recent) and backlist (older) titles for many years, well before the impact of e-books was starting to become clearer and back when the costs to create these digital files were five or six times higher than they are now.

Mr. Coker runs a website that publishes e-books for titles that the major houses have either not seen or have passed on (much as his own book, according to his bio, was passed on by "every major New York publisher of commercial women's fiction"). While such services provide a helpful function for aspiring writers (and Bad Ass Bitches) everywhere, it's worth noting here that the overwhelming majority of e-book bestsellers, like print bestsellers, are books that were published, usually at great expense and with a concerted cross-departmental effort, by a major publisher.

The publishers have had to pay the agents and authors sometimes usurious rates at auctions for the rights to publish and sell these books. This is so for several reasons -- because agents and authors have managed to pit houses against each other in their need to fill inventory pipelines, and because of publishers' increasingly desperate search for anything that might carry the scent of a Big Or Important Book, and because of the audacious and perpetually unrealistic demands of the parent company for a 12 percent return on investments, and because publishers tend to be staffed by people of great passions serialized from one prospective project to another. I'm not a lawyer, but I've played in enough sandboxes with members of the bar to know that concerns about price fixing prohibit publishers from gathering to discuss their perceived valuation of a particular submission's worth -- a discussion that might help them the avoid the auction fever I've seen the strongest and most disciplined men and women fall prey to over and over again.

Permeating not only both blogs but the conversation they engendered on this site and elsewhere is the sense that publishers are resistant to e-books for some reason. But publishers want e-books to succeed because they have the potential not only to expand readerships but leapfrog us over the historically insuperable and tenacious cancer at the heart of the business model; returnable books. I know of no other consumer products industry in which retail outlets are free to return unsold merchandise to manufacturers and require manufacturers to absorb the costs of shipping and destroying the returned merchandise. Friends in other industries find this situation laughable, until they hear about how auctions are conducted and about coop fees publishers absorb and about the pressures of the parent company in an environment in which the competition for consumer attention and money is accelerating at a breathtaking pace -- at which point they tend to lower their eyes and steer the conversation toward law schools.

Why do we demonize publishers as greedy, monopolistic and backward when they are peopled by such idealists and lovers of literature trying their best to navigate a ship that was corroding from decades-old rust well before the economic collapse placed icebergs in the water? Why don't publishers defend themselves more vigorously -- or at all? Why can't we start talking among ourselves about the forces we face -- the burden of preproduction costs in the era of free or too-cheap e-books, the stranglehold of the returnable model, the hidden costs of the highest bidder auction marketplace, to name a few -- and share best practices and exchange ideas for the salvation of the industry and the perpetuation of Big and Important Books during this epochal period of transition? Perhaps we can. Despite having lost my own job in the recent economic collapse I remain an idealist about our industry, and invite publishers to arm themselves with that same idealistic spirit and start talking. There must be a middle road between the old model and Mr. Coker's $4 book, but to imagine what that road might look like requires brainstorming, community, open conversation. Without such conversation our "unsinkable" ship may not sustain the blows of the icebergs in its path. It seems to me that the Books Section of the Huffington Post serves as about as good a place as any I know of to begin that conversation.