Authors’ Positioning in the Emerging Publishing Paradigm

A a number of aspiring authors have spoken to me relative to their fears concerning the current price wars in the marketplace, and their concerns authors will be the ones to absorb the price reductions spreading over the publishing landscape. If you are fortunate enough to already have an established position in the industry, you’re fine for now, but you still should look to the future and how best to put it to your advantage.

My advice to aspiring authors? Fear not.

Yes, the authors’ landscape is changing in an unprecedented manor, fueled by price wars and technology for the most part. It is these price wars that seem to have everyone in the greatest state of furor.

First, let’s consider the changing publishing topography. In the past, publishers have had domain over three major aspects of the writer’s life. They controlled distribution, payouts and production. Their powers are under dramatic assault by authors with business sense, the Internet and POD. Technology is changing everything in its path.

Let’s focus on authors getting paid. How is that going to happen in the future?

In one word, “eBooks.”

Here’s what I see happening.

Wally World and others are now selling first run, major names well below the wholesale price. For now they are absorbing the financial disparity and using books as a loss leader. So far, so good. But mark my word on this, Wally will soon knock on a publisher’s door and demand, not request, deep discounting at the wholesale level. How is the publisher going to make money? He cuts his expenses or increases his sales. He has already relinquished his hold over marketing to individual authors and so does not control sales. Therefore, the publisher’s only avenue is to cuts expenses. What part of the P&L is going to take that bite? Since he’s already cut marketing expenses, he’ll slash payout to authors. He has little choice but to do so.

What do authors do to protect their paycheck? They sell their books elsewhere. It’s all fundamental action vs. reaction. Everybody in this chain protects their paycheck.

At some point, the publisher starts to lose his best authors and faces the peril of going out of business. In response, he’ll move toward selling via the web where his costs more rationally match his pricing structure. What is it the publisher will sell on the web? EBooks.

In the mean time, the author has had his payouts cut to the bone, so he either stops writing or moves somewhere else. Where does he go to make the most money? EBooks and the Internet.

Why do I say this? Let’s look at two comparatives. Let’s say a publishing house pays you three dollars for each of your books it sells. He soon cuts this to $.50 per book to cover his discounts to Wally. You’re already a self-marketer, and as self-publisher, you might make $2.50 per book sold. Would you rather sell a book for $.50 and do your own marketing or $2.50 and do your own marketing and production? To each his own, of course, but many of the best and brightest among writers will go for the bucks.

So, with the changing paradigm and price wars, an author under contract to a publishing house moves toward eBooks where the publisher can reduce his costs and payout more to attract first rate writers. If he’s self-published, he moves toward eBooks, for cost, marketing and distribution reasons.

Fear not, kind readers, embrace the future and you’ll be fine.

May all your books be best-sellers.

C. Patrick Schulze