It didn't have to be this way

I was watching Hail, Caesar! the other day when it occurred to me I don’t really understand why Big Publishing is having such a hard time.

To your first, question, yes this is how my mind works.

To your second question—”what does Hail, Caesar! have to do with book publishing?”, I’m assuming—let me explain.

I really enjoyed Hail, Caesar!, which is a Coen brothers movie that came out earlier in the year to great critical fanfare and a short life in the box office. I paid for it by renting the film through my Comcast account and watched it from my couch.

About forty-five years ago, a quality film released by a major studio would have had an opportunity to enjoy a long run in the theaters, because about forty-five years ago a movie could start small and grow as more people heard about it. Then maybe it would go away for a while, as television networks bid for the televised airing rights, so if you didn’t see it in the theater you’d get another shot at an edited version (no swears) interrupted every twelve minutes by commercials.

About forty years ago was the beginning of the home video era, meaning at some point the whole movie—no commercials and with all the swears intact but still edited from a 13:9 aspect ratio to a 4:3 aspect ratio to fit on your television—would be available from a video rental store.

The way the film industry went about things changed at around that same time, to a standard that was (probably) less risky financially. The essential premise is that a film should open BIG, potentially big enough to recoup costs almost immediately. The plus side of this philosophy—let’s call it the blockbuster mentality—is that if everyone’s doing their job well, the film will effectively pre-sell its way to a profit, almost entirely based on the salient components: the film’s star, the director, the elevator-pitch concept, and so on. (The film’s quality wasn’t necessarily a factor, which is not an accident.)

This approach means movies that don’t open big disappear from the theaters within a week or two. But unlike the pre-home video era, the studios have more than just movie theater chains and network television channels available as viewing outlets to enable them to recoup their costs. There’s DVD sales, streaming rentals and digital purchases, and I don’t know, probably something injectable into the bloodstream at this point.

This choice of viewing methods makes it possible for me on my couch to watch a good movie on a Saturday night by spending a few dollars that will further contribute to the film’s bottom line costs.

And now you’re still wondering what this has to do with publishing.

The comparison I’d like to draw has to do with scarcity, and control, and also the blockbuster mentality.

Hollywood had near-total control over movie distribution from the dawn of the medium until quite recently. When a new distribution channel appeared in the form of home video, the studios could have reacted the way they did—oh, look, a new source of income!—or they could have seen it as a threat to their film distribution hegemony.

While I don’t know the numbers, I’m assuming the studios make more when a film is seen in a theater, because even though a cut of the take goes to the owner of the movie screen, every individual who sees the film pays a separate admission fee. Conversely, a home rented movie can be viewed by as many people as can fit in front of the television, and the fee is the same as if only one person were sitting there, alone.

For all I know there was discord and rancor when this new channel appeared, but at the end of it all, it had to have become clear to Hollywood that this was a valid way to continue to make money off of films that otherwise would have been sunk costs in the “let’s guess which movie will make money” sweepstakes they have going on out there.

If you’ve been paying any attention to the publishing industry in the past decade or so, the contrast should be obvious.

Ebooks are a new distribution channel for books. When Amazon came calling with a viable ereader in their hands, the publishing industry could have seen it as a way to make more money off their best-selling books, their not-selling-as-well-as-expected books, and on their back-catalog of books, which is simply huge.

That was not how things went.

So this is what I don’t understand.

I don’t think I’ll be able to find a single person in Hollywood who wishes I had been denied the opportunity to watch Hail, Caesar! in my living room less than six months after its initial release.

Conversely, the big publishers have made it clear, repeatedly, that if there were a button that killed ebooks for everyone, they’d hit that button in a hot second.

I mean… it almost makes sense. Without ebooks they have full control of the marketplace, which means there is self-imposed scarcity, which means they can dictate per-unit cost unchallenged—no pressure to lower prices!—and put out books in a non-competitive environment. They can even continue to employ the same blockbuster mentality as their film brethren: if a book takes off right away, great, but if it doesn’t they can get it off the bookshelves (in those brick-and-mortar stores with their limited shelf space) to make room for the next maybe-it’ll-be-a-bestseller.

But it didn’t have to be this way. Ebooks don’t need shelves and don’t have to go out of print. They don’t have to cost as much as the print versions for the same reason it cost me less to rent Hail, Caesar! than it would have for my wife and I to see it in the movie theater.

It would be a different world if big publishing saw the ebook as an opportunity when it first emerged. Yes, there would still have been a boom in self-publishing, but one of the reasons self-publishing took off like it did was that authors were filling a gap traditional publishing refused to fill. (Note: there are a lot of other reasons, too.)

Where are we now instead? If you look at the sales trends, traditional publishers are seeing their share of the ebook market dwindle every quarter. (Where am I getting this from? Here’s the latest Author Earnings report.) This is remarkable because it’s in a sales outlet that is clearly their most profitable, and because big publishing could own the market if they just stopped trying to make it go away instead.

Here’s three things they can do: price ebooks at $5.99-$7.99; start republishing books from an almost-literally inexhaustible back-catalog; and most importantly stop applying a business plan predicated on scarcity on a marketplace where that doesn’t exist any more.

Look, thanks to some rights-reversion, by the end of this year I’m going to be a 100% self-published author, so if the Big 5 never figure this out, I’m totally fine with it. The less competition, the better. It also may be that we’re about five years too late for anything they do to make a difference.

But it didn’t have to be this way.

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  1. Alicia Butcher Ehrhardt on June 20, 2016 at 9:52 am

    I for one am glad it is this way.

    The thought of the old ‘system,’ where it happened (so much information has become available) that even good writers didn’t make a lot of money, and the few mega-sellers made everyone think that writers were rich, turns my stomach. It and ‘abuse of writers’ are practically synonymous.

    And it’s getting worse in trad publishing – the rights grabs and draconian contract terms Kris Rusch keeps writing about – in a day when there are more readers.

    If they disappear completely, it will be like a pond with a stone sinking in the middle: a few ripples, and then peace. I’d hate to see ebooks and the new digital disappearing instead.

    But then, I’m a writer. And I’m not famous yet.

    • Gene Doucette on June 20, 2016 at 10:00 am

      Oh I agree. I’m happy with the current reality. And Kris Rusch is fantastic.

  2. Michael Giltz on June 21, 2016 at 2:38 pm

    I agree in general with what you say about ebooks! I get very frustrated at seeing books that are 40 or 50 years old (or older) and part of a series but not priced or marketed in the obvious ways they should. The Horatio Hornblower books? 11 books, all priced in trade for $15 (about $12 even from Amazon) and $8 each on Kindle. Any bundling of say books 1-3? The entire set? And god forbid a series of books that began in 1937 be available in mass market since publishers pretend we “prefer” bulkier and more expensive trade paperbacks. Ditto John Le Carre’s Smiley books, Robert Heinlein’s juvenile sci-fi series of 12 books and on and on. The missed opportunities are endless.

    But Hollywood studios are not any brighter. Not at all. First, Hollywood had near total control over distribution from the dawn of cinema to…1948, when anti-trust laws meant the studios had to sell off movie theater chains, which they owned. Ever since, studios and theatrical distribution have been two different businesses and studios are legally prevented from buying in.

    As for movies in the home, Hollywood freaked out and saw VCRs as the death knell of their industry. They fought it tooth and nail, from the ability to record TV shows (the end of television!) to renting and selling movies and TV shows to viewers. it was a long, long battle to have them come on board and realize renting and ultimately selling was a huge opportunity that expanded their business dramatically.

    Similarly, the music industry reacted with horror to digital music, absolutely refusing to make music available as digital files, literally forcing consumers to turn to third party criminals to pay for the music they wanted. The music industry also tried to kill the single, making the least expensive gate-way drug into getting the habit of purchasing music all but invisible for a decade or more…until digital and Apple with its 99 cent single came to the rescue.

    If anything, the publishing industry learned the lessons of Hollywood and music and actually embraced e-books at the start, which is a big reason that piracy — while books are widely available online — is not nearly the issue it might have been. When people can purchase entertainment at reasonable prices and easily, they are happy to do so. However, they have become more and more bone-headed, raising ebook prices waaay too high when given the chance and thus of course stalling growth a little. And yes, they miss all sorts of opportunities and opened the door for self-publishers. But I think that might have happened anyway given Amazon.

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