Blogger: Janet Kobobel Grant
Location: Sonoma, Calif, planning retreat
For those who read my blog post yesterday and scoffed at the thought of the disappearance of physical books, I wholeheartedly agree with you. Physical books will, I believe, continue to exist. Just as TV didn’t do away with films, and films didn’t do away with radio, e-readers provide the reading community an additional way to access books. But what are the trends in physical book formats?
Hardcover book sales up slightly
Nielsen Bookscan reports that hardcover sales thus far in 2010 are outpacing sales in 2009 by .3 percent. Yup, a measly .3. I’d say that increase is so slight that we could consider hardcover sales as holding their own.
Mass market sales down significantly
Sales for mass market fell 4.6 percent, the biggest change in any of the statistics provided. Readers seem to be moving away from this format and into either hardcover or trade paper–or not buying any physical books.
Trade paper sales down
Trade paper sales fell .8%.
The total result: Physical book sales fell .4 percent.
What does this mean?
Publishers are pleased that hardcover sales are holding their own because, at this point, this is the most profitable sector for publishing. That’s important because it means publishers have a little more time to figure out how to structure e-books to be significantly profitable.
This is also good news for writers. Having healthier publishers is important not only because most writers still want to catch the golden ring of being paid royalties, but also, as a society, publishers are an important conduit of information and as contributors to our culture. (People who think deeply about a subject or spend years researching a topic will write books that we all want to read, and therefore, society is affected by these writers. Think: Malcom Gladwell, Seth Godin, etc.)
A major force that is keeping physical books flat is reading devices. Surveys show that the owner of an e-reader will buy anywhere from 34-43 percent fewer hardback books. The pattern is the same for trade and mass market books.
With this downward trend in physical books, publishers are struggling to forecast how much to pay in advances. Currently advances are based on the projected sales of physical books. So how does a publisher decide how much to offer? Or what’s a fair e-book royalty? Or whether a hardback edition should be released first, followed by an e-book, followed by a tradebook? Or should the hardcover and e-book release simultaneously?
Obviously each of these scenarios can create a different fiscal forecast.
All this translates into a fluid situation. As publishing transitions to an e-book-dominated world, the publishers’ response is to be conservative–both in terms of advances and in terms of e-book royalties. But the danger, especially in being conservative in e-book royalties, is that authors and agents will begin to rethink allowing the publisher e-rights when more money can be made by withholding those rights.
Currently lots of jockeying is occurring between publishers and agents. A few months ago, a 25 percent royalty on e-books was settled on. But agents are chipping away at that number, negotiating better terms for high-profile clients.
Then last week the Wylie Agency “went rogue” and created an e-book publisher that took many of Wylie’s most esteemed, dead clients’ works and offered them in a two-year exclusive to Amazon. The publishing world rocked. Random House declared it would not consider any new projects from Wylie and that Wylie didn’t have the rights to offer e-books to Amazon. Wylie remains adamant that it does.
What will the reverberations be? I predict publishers will become increasingly open to paying higher e-book royalties to insure that more agents keep e-rights at publishing houses.
Ultimately that’s good news for writers. It means, with the eventual dominance of e-books, that more money will filter through to the author. That is, if the retail price for an e-book goes up, but that’s another story…
The bottomline for the writer
Writers need to realize how unsettled the publishing atmosphere is. The air is charged like it is just before a thunderstorm. Publishers are trying new and innovative ways to deliver a book’s text, and agents are pressing publishers on how advances and royalties are being determined. Add to the mix the volatile affects of so much changing so fast in a slow-moving industry, and thunder and lightning are bound to result. Grab your rain gear and prepare for a real show.