Posts Tagged PubIt

Big Six Publishing is Dead–Welcome the Massive Three

The Reader of the Digital Age–Trust me, he won’t miss paper.

Ah, the times they have changed. The year was 1983 and life was good. Summers filled with trampolines, swimming pools and evening walks to the snow cone stand. Cartoons were only on Saturdays, and if we stayed up too late playing Bloody Mary and toilet-papering the neighbor’s trees and overslept, we were out of luck for another week.

Music stores were a rare treat, a place to spend birthday money or blow our allowance, and a Fox Photo Hut graced virtually every grocery store parking lot. My mother would always turn in the film and then the car would break down and we’d run out of money. No one knows how many of my brother’s baby photos were lost.

What did they DO with all those pictures people couldn’t afford to pick up?

Who would have thought that one day, everyone would walk around typing messages on a phone? Or taking and then sending pictures with that phone?  Who would have believed that a computer company would be a larger distributer of music than Tower Records? That car stereos would stream tunes from satellites floating above the Earth’s atmosphere? No more cassette tapes. Who could have envisioned a day that Kodak would be a memory and a home telephone an anachronism?

It is an amazing time, and I can say that Star Trek fans did envision a lot of these changes. Yet, even when we see it coming, it is very surreal to see it actually here. As an avid Trekkie, I do like to think of myself as a Futurist, so today we are going to indulge my future vision.

The Big Six have a new problem…Microsoft.

Yes, it does look like Microsoft is what is going to save Barnes & Noble’s tails. From this article by Felix Salmon on WIRED:

Barnes & Noble has sold a 17.6% stake in its digital and college businesses to Microsoft, for $300 million — a deal which values B&N’s remaining 82.4% stake at $1.4 billion. And while the $300 million is staying in the new joint venture and therefore not available to help the bookstore chain with cashflow issues, the news does mean that Barnes & Noble won’t need to constantly find enormous amounts of money to keep up in the arms race with Amazon. That’s largely Microsoft’s job, now.

So why is this a problem for the Big Six?

The same reason that Apple (a computer company) was a problem for Tower Records, that Sprint (a cell phone company) spelled death for Kodak and that Amazon (an on-line distributor of everything from camping equipment to push-up bras) gave Border’s its mortal blow.

The Big Six are dead. Welcome the Massive Three. More on this in a moment…

The past ten years have been nothing but market Darwinism. The slower species who refused to adapt to the new climate after the comet strike (birth of the Internet coupled with an affordable personal computer) are now being devoured by the faster, hungrier and more agile creatures.

Notice Tower Records, how it defended how music-lovers, “would always want CDs and music stores.” Instead of realizing it was in the “music business” not the CD business, it stood there, dumb and immobile…..*munch* then the Appleosaurus Rex ate it whole.

Then Kodak stood looking at the shiny black hole that was its business plan. It put both feet in and got stuck. Sprint flew out of the sky and took chunk after chunk while the Kodak beast cried foul. “People will always want film pictures!” it wailed as it bled.

All the Kodak beast had to do was grab the digital stick, but it was too stuck. Soon the other digital predators smelled blood and the parsed the Kodak beast until it finally died in a pool of red.

Now we come to the book distributors and publishers. “People will always want paper!” they cry, even as they can smell Border’s bloated, dead storefronts rotting in the sun.

I think the metaphor is clear.

Amazon took out Borders and gave Barnes & Noble a nice flesh wound. The Amazonasaurus also took a nice chunk out of the Big Six. B&N and the Big Six need to ask the hard question.

Will people really always want paper? Did they really always want records and CDs? No. Did they really always want film? No. The view from the cave is nothing but a graveyard of former giants, bleached bones from the rulers of an age that has passed.

Adapt or die is the message. Ah, but the Big Six could have a problem.

See Barnes & Noble has proven it can scrabble with the best of them and even get in some sucker punches below the belt. They had no problem devouring the indie bookstore when it suited them to claw their way to the top of the food chain. Now that it has partnered with Microsoft, should the Big Six be worried?

My opinion? YES.

Barnes and Noble likes being an apex predator. It got a taste for being on top in the 90s, and, make no mistake, it longs to revive the glory days.

Who can blame them?

If I were the Big Six, I would worry big time. Why? Because, the only disposable part of this relationship is…the publishing houses.

I have to say, my hat is off to B&N. That company has moxie. I’ve blogged a number of times how the Big Six should have revisited its relationship with B&N. Once books went digital and e-book sales took off, propping up a paper distributor was just a bad plan.

In my blog Bracing for Impact–The Future of Big Publishing in the New Paradigm I said there was really no reason that the Big Six couldn’t sell directly to the consumer and just distribute the books themselves. I advised that they make the move and go digital. For paper? Focus on POD technology, the consignment model was too inefficient.

Hmmm, a fan of this blog sent the link to that post to the CEO of B&N. Curiouser and curiouser…

I LOVE NY publishing. I have consistently tried to help them. With the model I proposed, New York would never again have wasted money on books that didn’t sell. They could have ruled the Digital Age well. The Big Six would have only sold books that, well…sold. And in my model, they could have partnered with Barnes & Noble and done it together.

Ah, but B&N has a new friend, and you know the saying, “Two is company and three is a crowd.”

Some see Microsoft’s investment as a good thing for publishing. Finally, Amazon is going to get a run for its money. Not only does the Nook now have the backing of the Windows giant, but now consumers don’t need to buy an e-reader to have one.

Now an e-reader will be built into every Microsoft operating system. Kindles and Nooks will eventually be for only the die-hard fans, because readers won’t really need them (kind of like cameras were replaced by our cell phones).

Amazon has been able to gain market share by capitalizing on its Kindle. Ah, but that was before the Microsoftisaurus decided it wanted to get into the publishing business, and, Barnes and Noble, being the crafty survivor, made a big new friend a bad new digital world. Microsoft is investing because it just makes sense.

Amazon shouldn’t be the only one reporting record gains each quarter. While the Microsoft-B&N deal is serious bad juju for Amazon, I think they will weather just fine. Amazon is the very definition of “adaptable.”

I have consistently wondered why New York didn’t grab hold of e-publishing. Why couldn’t the Big Six open digital divisions? Why didn’t they seek out Microsoft? Why couldn’t Random House have a self-publishing division that allowed authors to upload e-books for sale (um, like B&N’s PubIt). Then they could vet out authors, and only “officially” represent those authors who’d met a certain standard (X amount of sales).

I know this new world seems very strange, but it seems as if computer companies are destined to rule the Digital Age, which I suppose only makes sense. It has a bit of poetry to it if one thinks about it.

The Big Six, in my opinion, are in big trouble, because they really are no longer…necessary. This doesn’t make me at all happy to predict. I’ve tried and tried and tried to help, but to no avail. The Big Six might remain for a few more years, but frankly, what advantage do they hold? What do they really have to offer other that a crap load of overhead?

Sure they have a love for the written word that the new giants don’t possess, but then again, Kodak held an unrivaled passion for photography and that didn’t save them from the iPhone.

No matter what way I look at it, I can’t see how the Big Six can remain relevant. The Windows has closed, pardon the pun.

Literary agents and editors have home mortgages to pay, and they’ll go where the money is (and NY is hemorrhaging cash). No one can fault them for wanting to eat and be able to put braces on their kids’ teeth. Cover design? I think Microsoft can handle finding a graphic designer or two.

Oh, and then Microsoft doesn’t have to build in stratospheric Manhattan rents and horrific costs of shipping paper into the book price.

NY once had a sole lock on distribution. Well, that went away. Then, they were the Gatekeepers who offered us the promise of a certain quality (just ignore the Snookie book deal).

Yet, indie has really changed. Some of the best books are coming out of this movement. Additionally, some of NY’s best talent has defected (Bob Mayer, Joe Konrath, and Barry Eisler to name a few) and more are bound to follow. Authors are getting tired of the depressing odds of success in the traditional paradigm, and instead of NY offering its authors a bold new plan for the future (like partnering with Microsoft FIRST), it comes up with brilliant gems like “agency pricing.”

Oh, and then there is the new talent, the fresh ranks. Unpublished writers are seeing their friends self-publish and make thousands of dollars a month and that is very appealing. Logic dictates that some of the best writers who work the hardest and who are the most professional might just try it alone first.

Writers now don’t have to keep querying and hope for gatekeeper approval. We can go to the reader and try our luck there. We might not make enough to live off at first, but, frankly, the slush pile doesn’t give us gas money.

*waves to Amazon*

What I don’t understand is that these companies don’t seem to grasp that the nostalgia card only plays so far. Microsoft understands what the Big Six doesn’t. People won’t always want paper. They want to push a button and a have a book delivered quickly and cheaply from outer space.

In a world where gas is $5 a gallon, why would we want to fight traffic across town to go to a physical bookstore? In a world where we can have hot yummy pizza delivered to our doors in 30 minutes, why would we wait a week for a book in the mail?

Really.

So what do I see? Instead of Big Six, we now have the Massive Three–Apple, Microsoft and Amazon. Amazon likely will open physical bookstores (probably in old Borders storefronts). And Microsoft will just use B&N to sell paper and maybe some Nooks. Yes, paper will always be around, it just won’t be the lion’s share like it used to be.

And writers? We are artists and they will always need us to produce the content. We have to adapt as well and this is why I have dedicated the last few years of my life training writers for the Digital Age. It is a WONDERFUL time to be a writer.

Welcome to the future. Beam me up, Scotty!

Okay, so what are your thoughts? Does someone see what advantage the Big Six still holds? How can they pull out of this tail-spin? Do you think I am wrong about the Massive Three? Is this a good thing for writers? Is this bad for writers?

I LOVE hearing from you!

And to prove it and show my love, for the month of May, everyone who leaves a comment I will put your name in a hat. If you comment and link back to my blog on your blog, you get your name in the hat twice. If you leave a comment, and link back to my blog, and mention my book We Are Not Alone in your blog…you get your name in the hat THREE times. What do you win? The unvarnished truth from yours truly.

I will pick a winner every week for a critique of your first five pages. At the end of May I will pick a winner for the grand prize. A free critique from me on the first 15 pages of your novel. Good luck!

Note–Will announce the winner Friday. Thanks :D .

I also hope you pick up copies of my best-selling books We Are Not Alone–The Writer’s Guide to Social Media and Are You There, Blog? It’s Me, Writer . And both are recommended by the hottest agents and biggest authors in the biz. My methods teach you how to make building your author platform FUN. Build a platform and still have time left to write great books.

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