Thursday, September 16, 2010

Four Meetings on the Future of Books

In the course of about 24 hours, I met in New York this week with four book publishing professionals. Not in symposia or conferences, mind you, but one on one, old friends across the table.

Nor was this an academic exercise. I have completed two novels and hope to have more on the way. Yet current business models — the “old” business models, if you will — look more and more like castles made of sand. The tide of technology is lapping at their foundations. Is this the time to build another sand castle in the same spot or should I strike out in search of firmer ground?

The Director
My first meeting took place over Indian food with the director of a small division within one of the large houses. The division has a spectrum of products, not all of them books but all in support of a branded worldview. Despite being earlier to market than a startup competitor, this division has had its clock cleaned by that competitor, a company with no prior baggage and with a tendency toward innovation.

The product line of the older company — the one owned by the big publisher — suffers from brand confusion and a stultifying business model. Despite — according to studies — offering a superior product to its competitor’s, the company has been viewed as a niche product within the corporate parent. As a result, their startup competitor now does about 30 times more business than the older firm. That’s right. It’s gone from zero to 30 times bigger.

The director of the big loser in this competition, a sharp character who is a relatively recent addition, observed that in general the big publishers are so busy playing defense that they have no offensive strategy to deal with e-books and the like. They’re trying to cut their way to profitability rather than reinvent themselves, and the knives of the accountants have already begun hitting bone. Meanwhile, innovative deals that might grow this director’s market share languish in the legal department for months because they’re not like the usual publishing deals.

The Agent
I met with an agent friend over soft drinks. She has a terrific publishing pedigree and leveraged that into a successful independent agency, but, as with all agents, both her deal flow and cash flow are suffering as publishers pull in their horns.

The agent told me an interesting story. One of her authors had a pretty good success with her first novel, but her publisher was offering as an advance about half what the prior novel has earned so far in royalties. The agent noted that it’s a pretty good offer, given the times we’re in, but the author said, “I wouldn’t sell a house in this market, so maybe I shouldn’t sell a book in this market, either.”

Regardless of what she ultimately decides, this strikes me as the kind of thing a person says who believes the near-term future may present other options. More than that, it implicitly reflects a growing belief (particularly on e-book royalties, but in other ways, too) that publishers have staked out an unfair position with regard to their content suppliers. As anybody knows, if one party to a contract thinks that contract unfair, the relationship may go on for awhile, but it will not last.

A second thing occurred to me when I heard this story. Could it be that we are moving to a time when agents’ interests, when built on old business models, will conflict with the interests of their clients? For many years, the best strategy (with a few exceptions) for agents and authors has been to go for the highest advance. But if we are tending to smaller advances — and authors may choose to pass over advances completely in exchange for better terms — how does the agent survive long enough to get her cut of the back end?

Keep in mind that book agenting is a time-consuming business. An agent can’t just quadruple her client list and — voila! — make up the lost income. And, in support of that conundrum, other writer friends of mine report that agents have become more discriminating than ever about taking on new clients.

The agent I met passed along the names of a few people doing interesting things, one of them an author who had self-published a second novel with very high production values and another an editor who had started an e-books imprint.

She said, “I never stop thinking about this, yet I don’t know what the answer is.”

The New-Media Maven
From there I went downtown to meet with a woman who had gone from mainstream publishing to a new media startup — not a publisher exactly, but a company that she hoped would work with authors and publishers. She thinks paper books are heading for near-extinction, and quicker than anyone would have imagined. She lamented how slowly traditional publishers are moving and expressed dismay that — so far — while authors were embracing her company’s approach, publishers had given it the cold shoulder.

“There’s never been a better time to self-publish,” she said, passing along the names of several start-up publishers and others that are also doing innovative things.

The Editor
Next morning, I had breakfast with a former high-level editor who now works freelance. He believes printed books still have a future, but repeated a prediction he’d heard elsewhere that the book superstore will soon be dead. Ironically, he noted, independent bookstores, which have taken such a beating for so long, may persist in close to their current numbers.

The editor thinks publishers will have to learn how to sell more directly to consumers, to promote themselves better as those who discern what’s worth reading in a noisy world.

The question we left hanging was whether they still have time to do that.

NOTE: I have intentionally obscured the identities of these four professionals, who spoke to me privately and not for attribution. But their stories are real.