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I just received Flea’s memoir. This is the first volume (a teaser for volume two in the book) before co-founding The Red Hot Chili Peppers. Looking forward to reading about his formative years and what shaped him into one of the best rock’s top bassists. At the back of the book, Flea lists 10 books that changed him. It is quite an eclectic list and I am sure informs his writing.

 

BOOKS THAT BLEW MY MIND LIKE WHEN YOU

MAKE TWO HOLES IN EITHER END OF AN EGG

TO BLOW ALL THE INSIDES OUT OF IT

 

THE MASTER AND THE MARGARITA – Mikhail Bulgakov

OF HUMAN BONDAGE – W. Somerset Maugham

JANE EYRE – Charlotte Bronte

THE GOD OF SMALL THINGS – Arundhati Roy

SLAUGHTERHOUSE-FIVE – Kurt Vonnegut, Jr.

THE SLAVE – Isaac Bashevis Singer

AGAINST OUR WILL: MEN, WOMEN, AND RAPE – Susan Brownmiller

JAZZ – Toni Morrison

COMING THROUGH SLAUGHTER – Michael Ondaatje

TRUE HISTORY OF THE KELLY GANG – Peter Carey

“There’s just too many damn books so I gotta stop but those ones really had an impact.”

Amazon is a bellwether of what is happening in the nation. The country is enthralled with politics and everything Trump.

Above is a snapshot of the top selling Amazon titles.

  1. A WARNING – Anonymous — the writer of the infamous NYT piece that was an early indicator of what was to come.
  2. DIARY OF WIMPY KID – Jeff Kinney — great kids lit. I think adults should read too. Good to get away from it all.
  3. TRIGGERED – DJT2 — a book by someone that is as close to the President as anyone.

Seems right. in between the two polar opposites, is the latest in a tremendous book series that unites us.

Then a few hours later, I was delivered this package from Amulet (division of Abrams). It was a promotional copy of the new WIMPY KID! Thank you. I love the shiny. silver packaging. It makes a statement.

Oh by the way, WIMPY KID is now #1 on Amazon.

Also – both Anonymous’ book and Don Jr’s book are published by imprints at the same corporation, Hachette Books.

 

 

Publishers for Sale

06.17.2019, No Comments, Uncategorized, by .

Penguin Random House made two acquisition announcements over the past few weeks, they purchased 45% of independent publisher Sourcebooks, and they also bought the assets (2,000 titles) of bankrupt publisher F+W Media. These purchases are not unusual, as over the past five years, more than 150 publishers have been absorbed by other publishers. The majority have been bought by the corporate giants (PRH, S&S, HarperCollins, Hachette), but smaller publishers are buying others and even investment firms like Trustbridge are picking up publishers.

Why is this happening In an industry that is flat and distribution to the market continues to consolidate? What is the value of a publisher?

Intellectual property — as the saying goes, “content is king.” That is true to a degree, because that is ultimately what the consumer wants. There is a mentality to acquire as many titles as possible. Take the best and keep selling them, look for the underserved gems to repackage, and clean out the titles that no longer have an audience. Not all content has value. Some of the content is junk and needs to be sorted through. The 80-20 rule applies to publishers also — in that 80% of the sales come from 20% of the titles.

Vertical integration and ownership — dominance in a category leads to power. By “cornering the market” on a specific genre, the publisher can control the message and own the community. The publisher can have a more direct relationship with the consumer, control the distribution and message, and use as leverage against Amazon dominance. Many formally independent publishers were successful by focusing on an area. Now those publishers are being scooped up by the corporate ones.

Economies of scale — big publishers have a lot of overhead expenses. By adding hundreds (or thousands) of titles at once, the publisher can chip away at their costs. This is especially the case in the warehouse, sales, finance, systems, production, shipping, and any other area that is not specifically tied to the creation of the content. PRH and S&S have expanded warehouse space over the past few years and the closer to capacity they are running, the more they can make.

Founders getting older — successful independent publishers were/are created by powerful personalities who were able to transform their vision into reality. These publishers are driven by the leader. But after 25+ years, many of these entrepreneurs are ready to cash in. Publishing is a low margin business with constant threats from Amazon’s power and B&N’s decline. Generally there is unlocked value in the assets of a publisher that has been ready to sell for a few years. These founders are (well-deservingly) ready to cash in. Corporate publishers are ready to oblige. A “win-win.”

This consolidation is nothing new. Publishers have been combining and buying one another for a decades. Bennett Cerf started Random House in 1927, two years after he and Donald Klopfer acquired the Modern Library imprint that became the foundation for the new publishing venture. Today, that company is part of Penguin Random House and is made up of at least 250 formally independent publishers.

Will it continue? Sure.

Consolidation of publishers is the wave of the past, present, and the future.

“The Mueller Report – The Redacted Edition” is one of the most discussed and debated titles of the day. This is not a political review. This is a perspective on the publishing of this document and how the words get to the readers.

Typing in “Mueller” on Amazon, almost 50 books come up. Most are self-published and appear to be a direct copy of the report with no extra effort to make it more reader-friendly. These editions are available in both Kindle ebook and a POD paperback.

The top two titles that show up are both sponsored. The publishers have “won the phrase” in the Amazon Ads marketplace.

The top sponsored title is from Skyhorse. They were the first traditional publisher to announce and have an introduction by Alan Dershowitz. The paperback is listed at $9.20 ($12.99 retail).

The second sponsored title is completely different. It is a self-published novel titled ADALINE by Denise Kawaii. The copy reads: Enter the world of Adaline, where humanity has been made perfect. An advanced A.I. has made sure that every person is in their place, living in harmony within the community. Everyone is equal, living in the contented bliss of a structured life where every need is attended to with mechanical precision. That is, until one of the cloned children discovers that he is remarkably different. It is $0.99. I’m buying it. I applaud her for grabbing this second spot. I don’t know the sales spike, but it is getting her title in front of hundreds of thousands of readers. 

The rest are not sponsored but based on the Amazon algorithm. The aforementioned Skyhorse title comes up again. This time both the paperback and the ebook ($7.99). Skyhorse has their title twice in the first three spots. That is also smart and positions them well. The next title is from Scribner (S&S) in conjunction with The Washington Post ($10.50 pb with a $15.00 list and $7.99 ebook) followed by the mass market version from Melville House ($7.40 pb with a $9.99 list and a $1.99 ebook). The sixth listing (but fifth title since Skyhorse is listed twice) is the audio version from Amazon-owned Audible. It is free with an Audible subscription. Then there are four self-published versions with unique cover art on them. One of the editions is split into two volumes.

The next two entries are not books at all. They are knee and back braces from Mueller Sports Medicine. I wonder if their sales have increased?

Then the entire list starts to get chaotic with dozens of self-published editions. I can’t imagine anyone buying these.

Outside of the Amazon world there has been smart plays by independent bookstores (Shakespeare & Co in NYC and Harvard Book Store in Cambridge) with the Espresso Book Machines. They have been using the technology of print-on-demand to have copies available immediately in the stores. It takes about 10 minutes to print and bind the 440 page report. Skyhorse, Scribner. and Melville House editions won’t be in stores for a few more days. So these stores have been selling copies 10 days ahead of others.

My favorite is still the searchable PDF available everywhere. Here is a link to Slate’s version on Scribd.

One note – the Amazon lists are fluid and change hourly. So, my results may differ from yours. But, what has been consistent since the announcement of the report, is the Scribner, Skyhorse, and Melville House editions have all been in the top sellers and current sit at #1, #4 and #10 overall.

Another note – there is an edition listed from Random House with introductions from three huge names, Jon Meacham, Michael Beschloss, and Evan Thomas. But it is only listed as a $1.99 Kindle edition and is unavailable.  Probably a metadata feed that went awry. But I would love to read the perspectives of these three award-winning historians on this “living history.”

 

Wattpad just announced the creation of Wattpad Books with an inaugural list of six titles in Fall 2019. Callisto Media is a publisher that scrubs Amazon data and publishes books to fit niches. Swoon Reads (Macmillan Children’s) builds their list from readers submissions. Inkitt helps self-published authors with feedback and then publishes the most popular.  Amazon has been using reader data for a decade to influence their publishing. These are just five examples of data-driven publishing.

Wattpad Books states they will be “combining human editorial expertise with Wattpad’s Story DNA Machine Learning technology.”  Quite a phrase! They then go on to quote some impressive statistics; 565-million story uploads and a global audience of over 70-million. Wattpad signed up with Macmillan (US) and Raincoast (CA) so there is distribution muscle behind their product. They are focusing on YA titles because that is the biggest part of their audience.

Callisto Media has been in business for almost a decade. Their mission statement is “Big Data is disrupting the world’s largest media industry, ushering in a new age of predictability, profitability, and explosive growth. Consumers no longer have to choose among products that only partially meet their needs. Authors can expect consistent success. This is the new world of publishing. This is Callisto Media.” They started selling via Amazon and now have expanded into bricks and mortar. Their success has been driven by cookbooks and self-help. In some ways, slicing categories into even more specific areas has been a winning formula.

Swoon Reads is a bit different in that they were created within a massive corporation, Macmillan. Their model is also crowd sourced. They don’t push the data angle as much as the others, but have been effective in crowd sourcing this information. They recently signed a deal with A+E to develop programming.

Inkitt has had success turning self-published books into Amazon best-sellers. They state they are “the world’s first reader-powered book publisher, offering an online community for talented authors and book lovers.” They select the titles that get the most action from the community.

Amazon is all about using data to publish books. Driven by the largest single source of self-published sales data, they have used that to influence their various imprints. Other publishers can not get at this information and this has given Amazon a competitive advantage in many genre categories that drive self-publishing – Romance, Thrillers, Mystery and Fantasy.

I am sure there are others that fit this “data-driven” publisher category. In many ways, all publishers are driven by what sells and research. Every title today has comp titles that help drive the distribution and promotion.

There were also numerous companies established at the onset of ebooks that promised reader data and information. But, most had difficulties makingthe model work. Two that come to mind are:

  1. Hiptype was a startup in 201x that promoted themselves as the “Google Analytics for eBooks.” But a year later, they went bankrupt. Apple disabled the code implanted in the ebooks that would allow them to track reader’s habits. Amazon and B&N never let them in at all. A key component of using the data, is to own the platform in which the reader is consuming the data.
  2. But Apple didn’t sour on probing into reader’s habits, for is 2013 they purchased Book Lamp. They had created a project called Book Genome that was scanning books for what the consumer liked and suggesting others. many called it “the Pandora of eBooks.”  But there has been little news on how it has impacted Apple ebook sales. Amazon continues to dominate that realm..

Technology allows this to happen. In many ways, it is not much different than what Reader’s Digest did 50 years ago. At one time, Reader’s Digest was the largest and one of the most profitable publishers in America. Through the monthly magazine and reach to their millions of readers, RD was able to create books based on interests like Sewing or Home Repair. They would then sell millions direct (data – they had the customer’s names) and also did quite well in retail.

I teach a course on publishing at NYU. One of the assignments is to come up with a publishing related project. Over the years, there have been suggestions for Buzzfeed Books, Scribd Books, Gawker Books, Youtube Books, etc. As publishing moves ahead, I am sure there will be more websites that look into their readers and decide it can be done. That they can publish books and have an inside scoop on what the reader wants.

I am sure there will be successes, but readers are fickle and many times what looks good in the data, fails when consumers have to put down real $$$$.

 

 

One night last summer I couldn’t sleep and was surfing the internet. I stumbled across a few articles on POTTERMORE, the start-up web site founded by J.K. Rowing. After five years, they announced their first profitable year. I thought, if it takes five years to break even for one of the strongest brands ever, then what chance does anyone else have?

I then started to think back to the previous decade and all of the start-ups entering publishing. The rise of digital (in ebooks, audio, marketing, publicity, data, etc) has created untold opportunities. But, opportunity does not always lead to success. Frankly, the majority of the start-ups failed. I focused on some of them, but I actually wanted to look at the success stores more. I had consulted (formally or informally) with dozens after I founded 38enso Consulting. So, I had insight to the mentality of various publishing start-ups.

I wrote up a rough outline and sent to Andrea Chambers, head of the NYU SPS Masters Program in Publishing. She liked the idea but had some suggestions to the format to make the class fit better with NYU standards. We went back and forth 6-7 times to get it right. I enjoyed the collaboration as the class was being built.

The class was offered as a 7-week elective in Fall 2017. Not enough students signed up. So, it was postponed.

It was offered again in Spring 2018. This time, 19 people signed up. I had planned for less than 10. So, immediately pivoted and changed aspects of the course.

The first class was in late January, and the last class was this week. Final papers are graded and will soon post the grades.

So what did I learn?

It is an enormous amount of work preparing 2.5 hours of lecture on a weekly basis. It is necessary to create at least and extra hour of material.

  • Video is effective – show a clip of the founders describing their vision.
  • The pitch decks for some of the most successful companies are not that profound, but were effective.
  • Started with 200 companies as possible discussions, and selected 20 (two were suggested by students):
    • Oyster; Scribd; EPIC!; The Atavist; Book Riot
    • Goodreads; BookBub; Open Road Integrated Media; Bookish; Wattpad
    • BookBaby; Smashwords; Callisto Media; the Skimm;
    • Mail Chimp; Uber; Casper; Slack; Warby Parker; Humble Bundle
  • Have great guest lectures. Learn from those who have the experience / who have done it. Our class was blessed to have four:
    • Thea JamesBook Smugglers (also Workman and currently PRH) – a ten-year old company that just ran a successful Kickstarter campaign.
    • Evan Schnittman — OptiQly (also Hachette and Oxford) – his story of how fast things can move in start-ups.
    • Brendan Cahill — Open Road and NatureShare (now at PRH labs) – did a brilliant job discussing funding and process
    • Anthony ZaccardiPost Hill Press (also S&S and PRH) – his two-year old publisher is one of the fasting growing in the industry.
    • I also asked Josh Shanker (BookBub), Molly Barton (Serial Box), John Kilkullen (Callisto Media and many other start-ups) and Thad McIlroy (The Future of Publishing). Other committments didn’t allow them to speak – but maybe next time. Josh, Molly and John all have great stories to tell about running a start-up and Thad has done some excellent research on start-ups in publishing.
  • The final paper was for each student to select a publishing start-up over the past decade and do an analysis. There were some great profiles. One of the better ones was about Aer.io (started by Ron Martinez and sold to Ingram)

We also did a very-deep dive on Amazon. Given that they were a start-up just 20 years ago. Plus, Amazon is involved as a competitor, partner or parent to every one of the 20 start-ups . Amazon is everywhere — as most in publishing know, but their depth and expansion into so many areas is amazing

One of the pieces used to evaluate Start-Ups was from a TedTalk by Bill Gross, founder of IdeaLab:

IMG_3996-2The New York Times Bestseller once upon a time had no separate Children’s book lists. Occasionally a book for children would pop onto the list. But for the most part, the book would hit low on the list and go away quickly. But, as with almost everything else Harry Potter related, things changed once J.K. Rowling’s titles hit the USA.

It all started innocently enough on the December 27, 1998 list. HARRY POTTER AND THE SORCERER’S STONE debuted at the bottom of the list at #16 (with an asterisk that it was tied for #15 – the list only goes 15 deep). The synopsis: “A Scottish boy, neglected by his relatives, finds his future attending a school of witchcraft.”  The description was later changed to “A British boy finds his fortune attending a school for witchcraft.” 

Throughout 1999 –  January, February, March, April, May and most of June, STONE remained on the list bouncing from #6-#10.  A long run for any hardcover on the list, but not unprecedented.

On the June 20, 1999 list HARRY POTTER AND THE CHAMBER OF SECRETS debuted at #1 on the NYT List. STONE was #7 and had been on for 26 weeks. Both books remained on the list in the #3-#7 range for a few months. The third book had been released in the UK and the demand in the US was rising steadily although it wasn’t available stateside.

On the September 12, 1999 list, STONE hit #1 on the list and CHAMBER was #3. Both books would remain on the list until the Times created a separate Children’s book list.

On the September 26, 1999 list, HARRY POTTER AND THE PRISIONER OF AZKABAN debuted at #1. CHAMBER was #2 and STONE was #3. This pretty much lasted throughout the rest of the year. The December 26, 1999 list has the titles at #1, #2 and #3.Screen Shot 2017-10-17 at 10.12.34 PM

It has always been a goal of most writers to make it onto the NYT list. There were author bonuses, bookstores would discount and promote books on the list, and publishers gauged success and celebrated when making the list. But now, there were three Harry Potter titles at the top, and there was no sign of them ever leaving.

It was announced that the fourth book, HARRY POTTER AND THE GOBLET OF FIRE would be released in July 2000. Unlike the first three, this was when the launch parties started. This was the first book to published after the enormous sales had been established. This title would be one more book “clogging” the list and keeping other titles off the list. What is to be done?

The New York Times solution was to create a Children’s only bestseller list. The debuted on July 28, 2000 with the top four titles Harry Potter.

JK+Rowling+JKBut that is not the end of the impact. Because the Harry Potter titles (eventually seven) dominated the Children’s list, the Times created a separate list for Children’s Series.

The amazing success of Harry Potter has had a major impact on the world. The books are record setting, brilliant and a story for the ages. The books were so impactful that they altered the way the New York Times, the most prestigious list in the book world, reported on books and forever changed the way the NYT Bestseller list looks like.

bruceJust finished Bruce Springsteen’s masterful memoir, BORN TO RUN. I am a fan of his music, but am not a “super-fan” and didn’t know a lot of his life. Springsteen is one of the most successful musicians of a generation. Besides his incredible talent and his will to perform, I found many valid business lessons in his story.

  1. There can only be one leader — Springsteen discusses how he wanted to avoid decision-making squabbles and confusion as to who was in charge. He made it clear from the onset that the “buck would stop here, if I could make one.’ (page 149).
  2. You have to get rid of the weak links — A couple of times, Bruce fired close friends who were in the band. In one case, he let go his drummer Vini. It was a combination of things, but ultimately “…it all came down to the fact that my music was changing and I needed someone with a more sophisticated palate.”  Although close friends, Springsteen still fired him to make the band better. (page 199).
  3. Team chemistry is critical to success — Springsteen, when putting together The E Street Band, “You’re not looking for the best players. You’re looking for the right players who click into something unique.” (page 235).  As in business, it is important to have a team with varied strengths that all work together. Success is achieved by everyone knowing their roles and performing them.
  4. Be aggressive and proactive — After one of the band’s legendary performances, he says “at the moment I learned that unless you are very aggressive, very proactive about what you want, what you’ve created can be co-opted and taken away from you.” (page 231).
  5. Contracts are important to set expectations— Although he signed a bad one to get started, it helped launch his career. But once successful, Springsteen let “everyone knew where everyone else stood, and was given and what was asked. Once signed, those contracts left us free to just play.” (page 375).
  6. Look for advice outside your usual group — Later in his career, looking for new inspiration, Springsteen writes “the need to look for direction, input and some guidance, outside of yourself, can be healthy and fruitful.” (page 397).
  7. Some times you have to strike a bad deal just to get in — As with so many musicians, the agents screwed them. The same is of Bruce’s first contract. “In the end, I would’ve signed Mike’s jockey shorts…but in the end, I just said fuck i, I had to get in.” (page 169).
  8. Read books to get a sense of history — Ok, maybe not as much a ‘business lesson’ but still important. Bruce mentions reading “Henry Steele Commager’s A POCKET HISTORY OF THE UNITED STATES, Howard Zinn’s A PEOPLE’S HISTORY OF THE UNITED STATES and Joe Klein’s WOODY GUTHRIE: A LIFE all provided me with a new view of myself as an actor in this moment in time.” (page 291).
  9. Be true to yourself and your mission –This is the basic theme of the entire book and his life. There are dozens of examples where Springsteen did things the way he wanted and what he believed. Even if it was risky and not the obvious path, it was his path. Maybe it could be called “Zen and the Art of Springsteen.”

More than just a rock bio, this is a lesson is business and living a good life.