HarperCollins returns to Full Agency pricing

[HarryT]

Originally Posted by crane3

Now, there are also the hardback sized paperbacks which I buy; think that I had seen a ref to them as publishers' copies/size? Still easier on my eyes prior to my cataract surgery.

They're called "trade paperbacks".

[pwalker8]

Originally Posted by eschwartz

I think you have completely missed fjtorres' point...

You mean he has a point other than Amazon good, publishers bad?

No, I don't miss his point. He's saying that established authors are commanding higher advances. He's missing the rather obvious point that as long as the book sells out, the size of the advance really doesn't matter. So far, there has been no huge drop in the number of books that publishers put out and no rush by established authors to the indie pool.

[darryl]

Originally Posted by tompe

Then these people have to wait until the paperback is out and the price for the ebook will be lower.

No. They don't. They have other options, one of which is to read a pirate copy instead. It is not possible for us to know just how many will take this option or others (such as the library), but I think we can be certain that the number will be higher than if the ebook had been made available earlier at a reasonable price.

[fjtorres]

The new seven figure contracts are going to authors who established themselves on their oen, outside the tradpub establishment. These are newcomers who have effectively short circuited the entire traditional gatekeeping process and jumped right to the top tier.

When it comes go content acquisition, the process at the BPHs is a zero-sum game. Money that goes to one manuscript doesn't go to another. Given the disparity of contracts given to newcomers commonly run in the low 4-figure and occasionally as high as mid five figures, each author getting a million dollar contract is soaking up enough money to acquire a hundred manuscripts. A seven million dollar contract can easily mean a thousand other manuscripts go unfunded. And if those thousand manuscripts don't get published by the BPHs they will either go to other "lesser" tradpubs or go to the Indie side. Either way, the BPH footprint declines.

The issue isn't whether the BPH makes money of the million dollar contracts (they obviously expect to do so) but that as the size of their new release catalog goes down, their lose the chance to catch the next Nora Roberts or the next Patterson (or the next Wild or Wilder) on the cheap.

In 2014, the randy penguin was expected to publish over 14,000 titles, of which maybe a hundred became bestsellers. Very few of which actually got million dollar advances. If by 2018 the price for *potential* bestsellers runs in the million dollar range, of even in the mid 6 figure range, randy penguin is *not* going to be publishing 14,000 titles. They might not be publishing 7000. The other 7000 BPH-quality titles will be forced to find alternate wYs to market.

The BPHs are already operating on a Hollywood-style "blockbuster" economy where the big money comes from only a handful of new releases and from milking the backlist so there is plenty of incentive to reduce the number of new titles and consolidate their manuscript spending on likely bestsellers. Which is what seems to be happening.

The BPHs will remain profitable because remaining profitable is the only way the glass tower execs will retain their jobs. But the road to profitability requires that they publish less new titles, rely more on casual reader-driven bestsellers, pay bigger advances for the titles they do publish, charge more for new release ebooks, and trade off unit sales for profits.

Publishing 10,000 new titles a year is not an option; they need to concentrate sales on less titles to maintain the Premium pricing model.

This will inevitably make them a less viable market for mid-list authors and newcomers (less submissions) and make them miss out on the next generation of bestselling authors until *after* they break out on their own. The BPHs, like the Hollywood studios, will become a blockbuster-only, business. Kinda like Disney, if they're lucky.

It's a feedback spiral in the making...

[fjtorres]

Originally Posted by darryl

No. They don't. They have other options, one of which is to read a pirate copy instead. It is not possible for us to know just how many will take this option or others (such as the library), but I think we can be certain that the number will be higher than if the ebook had been made available earlier at a reasonable price.

Readers can also go read a *different* book. Or none at all.
Remember all the fuss over pre-order buttons last year?
A *lot* of bestseller buys are impulse buys.

More, bestseller rankings come from rolling in pre-orders with release window sales so if higher prices force consumers to wait for cheaper editions, the title may not actually get annointed as a bestseller.

And if it doesn't get bestseller buzz early, it won't get the casual reader sales to actually become a bandwagon title, which will in turn impact backlist sales down the road.

Piracy and library reads are the least of the perils of premium pricing and book release windowing.

[HarryT]

Originally Posted by fjtorres

Piracy and library reads are the least of the perils of premium pricing and book release windowing.

Publishers release high-price hardbacks (and Baen release their high-price eArcs) because it works, of course. For popular authors, there will always be people willing to pay more for early access to the book. Their goal is to maximise income, not maximise the number of readers.

[fjtorres]

Originally Posted by HarryT

Publishers release high-price hardbacks (and Baen release their high-price eArcs) because it works, of course. For popular authors, there will always be people willing to pay more for early access to the book. Their goal is to maximise income, not maximise the number of readers.

Correct.
But their own suppliers, the authors, need to manage *their* brands and *they* need to worry about the number of readers.

BAEN only releases eArcs with established series from top selling authors (Weber, Ringo, Drake, Correia), not newcomers. What they do with newcomers is slot their titles in monthly bundles with the high profile titles go get them readers that way.

Unit sales matter. And BAEN does seem to try to maximize unit sales for their authors, especially on the ebook side. This is not true for all publishers. BAEN, as a smaller genre publisher knows that volume is critical to margins and that ebook volume is very good for margins as well as building up the author's fan base.

And if bestsellers is your business, you need volume.

Litfic is different--it is *never* going to achieve high volume--and premium pricing for niche products is quite sensible (as I pointed out above).

Remember, we aren't talking about all publishers here; we're talking about a very specific subset of five American companies whose primary revenue stream is NYT-anointed "bestsellers".

This is an industry segment that has been seeing essentially flat sales and profits since before ebooks hit the mainstream and who have been propping up their individual balance sheets thfough higher prices and by buying up market share in the form of other smaller publishers, thereby hiding the fact that even their *dollar* share of the market has declined. I.e., if you were to break out the random house and the penguin sides of the randy penguin and compare them to inflation-adjusted numbers from a decade ago you would see declines in both.

Faced with a choice of making more money by taking readers away from other publishers, the BPHs are choosing to squeeze more money out of less readers. This is not a risk-free strategy in a business where you are a middleman instead of a creator. And a business where there is no shortage of alternatives for both the readers and the authors.

In most discussions of price versus volume there is all too often the implied assumption that what is good for the publisher is good for the author and that is simply not true for the vast majority of authors.

Edit: consider this well-established (by now) trick:

https://andyrossagency.wordpress.com...hats-at-stake/

By setting the list price higher the publisher can trigger the deep discount clause at a higher retail price and cut author royalties in half while making more money for themselves.

[mbovenka]

Originally Posted by HarryT

Publishers release high-price hardbacks (and Baen release their high-price eArcs) because it works, of course. For popular authors, there will always be people willing to pay more for early access to the book.

Yep. I'm one of them; I grabbed every David Weber eARC Baen put out

Then again, even at $15, Baen eARCs are only roughly the same price as English paperbacks are here in the Netherlands (to put it in perspective).

[eschwartz]

Originally Posted by pwalker8

You mean he has a point other than Amazon good, publishers bad?

No, I don't miss his point. He's saying that established authors are commanding higher advances. He's missing the rather obvious point that as long as the book sells out, the size of the advance really doesn't matter. So far, there has been no huge drop in the number of books that publishers put out and no rush by established authors to the indie pool.

Very well then, I will explain it for you.

Originally Posted by fjtorres

The only argument I've heard that comes close to making any sense for the Manhattan BPHs maintaining high book prices is to maintain the illusion that their books are Premium products.
Which is a valid strategy for low volume, niche products. If your total sales only appeal to a small portion of the total market anyway (say 6-7%) then jacking up prices by a third and sacrificing a quarter of your unit sales (to, say 5%) will result in higher profits. It worked beautifully for Apple with the Macintosh. It made a cash cow out of a marketplace also ran by heading up-market and charging higher prices on hardware and service packs. The same strategy works for plenty of other manufacturer's in cars and stereo equipment, cameras, and clothing.

Only one small problem with that: publishers aren't manufacturers. They don't actually create the product they market. They have to buy it first. (Well, technically they license the copyright in most cases but given the terms of the contracts, they are effectively purchases.)

And that is where the rubber meets the road.
The dirty little secret of Manhattan publishing is they are not getting as many good manuscripts as they used to get. Torstar said it openly just before they flipped Harlequin to the Murdochs. Reports from the RWA conventions confirm it. The sucess of indie publishing confirms it. The recent reports of seven figure advances for already-successful indie authors confirms it; those are all books that the BPHs never got to even bid on.
In the old days, those books might have come to them on a six-figure contract. More likely, mid five figures. Nowadays six figures get politely declined, five get laughed off.

Higher manuscript acquisition costs are already impacting the BPHs. And that is not going away. Just as the flood of quality backlist and indie titles isn't going away; it can only grow bigger because ebooks don't go out of print. And that is also impacting the BPHs on the other side of the supply chain. The monster hits they're not getting? That isn't a slump--that is the new normal. Look at the total sales numbers for bestsellers now and the numbers from a decade ago. They're lower. And they are lower for the same reason network TV ratings are lower now than in the days before cable and movie rentals and Netflix and HBO and Hulu. People are spreading their attention, and dollars, around instead on dumping it on the fad title of the day.
Higher manuscript acquisition costs means less manuscripts going out the door. Which means less tickets in the "blockster book" lottery, which when combined with the lower peak unit sales for the lottery winners means they have to raise prices (further reducing unit sales) to maintain their dollar sales numbers.

So, no; HC isn't going bankrupt any time soon.
But their importance to the market is going to slowly fade away as they trade unit sales for gross margins and their net goes down.

Expect the BPHs to publish less and less new titles and rely more on more on backlist until the beancounters pull the plug on the pbook side and the companies become IP management operations rather than distributors of new content.

The trends are there.
Sixty percent has become thirty and is headed for 25 real soon.
They'll probably stabilize at about 15% in a decade or so which means still more consolidation, more layoffs, more personnel forced into freelancing for Indies. And more high quality Indies...

Agency does mean higher prices because without the higher prices their overlords will get angry and they really don't want to see them angry.

Buried within that, there is indeed mention of advances. This was not, however, a rant about advances, this was a rant about less sales and fewer blockbuster hits.
Brought as supporting evidence is the fact that authors who once would have taken a 5-figure advance and been happy (because they finally got published) are now commanding 7-figure advances -- if they accept at all.

The takeaway is that publishers are finding it harder to get ahold of blockbuster hits, and more expensive as well.
No duh it's still worth it for them -- why would you think anyone would argue otherwise?
However, as fjtorres went to lengths to explain, BWMs are headed in a downward direction. </clue-by-four>

You might disagree with the conclusions that he drew, but please, if you do so, at least, well, do so -- rather tahn speak to a point which wasn't made...


This paragraph right here? :

The dirty little secret of Manhattan publishing is they are not getting as many good manuscripts as they used to get. Torstar said it openly just before they flipped Harlequin to the Murdochs. Reports from the RWA conventions confirm it. The sucess of indie publishing confirms it. The recent reports of seven figure advances for already-successful indie authors confirms it; those are all books that the BPHs never got to even bid on.

That was meant to be taken as a whole. </clue-by-four>

[fjtorres]

Remember this?

https://www.mobileread.com/forums/sho...d.php?t=251823

Referring to this:

http://www.publishersweekly.com/pw/b...e-advance.html

Nonetheless, Gibson acknowledged that the business has changed. For the Big Five, especially, the highly sought-after projects have become essential. “The game plan to make your budget, or exceed it, relies on having bestsellers. That’s always been the case, but it’s the case now more so than ever.” Because both midlist and backlist titles aren’t selling as well as they once did, Gibson explained, the big books, “are more important.”

That a number of the major deals of late have been for debut works—five of the six aforementioned acquisitions were for books by first-time authors—is also not surprising. One editor, who spoke on the condition of anonymity, said that since the advent of BookScan (which gives editors, sales reps, and retailers approximate print sales for any given title), having no track record is usually a plus.

Other insiders, who also spoke off the record, theorized that there is less of everything, which drives up the price for the most coveted projects. “The whole pool of talent is shrinking,” explained one source. “There are fewer publishers, fewer slots, and fewer submissions so… the higher the quality of the project, the more you’re likely to get.”

[crane3]

Change of thread name?

http://www.dailytech.com/News+Corps+...ticle37302.htm

Wonder who gave in..........

[HarryT]

Originally Posted by crane3

Change of thread name?

http://www.dailytech.com/News+Corps+...ticle37302.htm

Wonder who gave in..........

I see absolutely nothing in that story that contradicts the claim that HarperCollins have returned to using agency pricing. Would you be kind enough to quote the part of the article which you think does?

[DiapDealer]

Originally Posted by HarryT

I see absolutely nothing in that story that contradicts the claim that HarperCollins have returned to using agency pricing. Would you be kind enough to quote the part of the article which you think does?

The "Full" Agency pricing thing in the thread-title is just a tad misleading (but still not a big deal). It makes it sound as if HC went a different route than the other BPs. When in fact, the contracts all sound very similar. They have total control of the pricing, while Amazon retains ways to encourage them to keep those prices lower. Which to me, sounds more like Agency "but..." rather than "Full" Agency.

"Full" Agency suggests a system where the retailer has absolutely no way to influence pricing. Amazon clearly retained some sort of leverage in that department.

[murg]

Originally Posted by fjtorres

The BPHs are already operating on a Hollywood-style "blockbuster" economy where the big money comes from only a handful of new releases and from milking the backlist so there is plenty of incentive to reduce the number of new titles and consolidate their manuscript spending on likely bestsellers. Which is what seems to be happening.

Unlike movies, the costs/effort associated with both the production and the distribution are a lot less with ebooks.

The effort of production is about the same (BPH/self) other than editing, which can be had relatively cheaply. The cost/effort of self publishing is minimal at best, even accounting for marketing.

So, if the BPHs have picked up the Hollywood style, they are in a different marketplace, and may discover that it doesn't work for them.

[BearMountainBooks]

Originally Posted by murg

Unlike movies, the costs/effort associated with both the production and the distribution are a lot less with ebooks.

The effort of production is about the same (BPH/self) other than editing, which can be had relatively cheaply. The cost/effort of self publishing is minimal at best, even accounting for marketing.

So, if the BPHs have picked up the Hollywood style, they are in a different marketplace, and may discover that it doesn't work for them.

I disagree on cheap editing. Editing and covers are actually fairly expensive and have gone up substantially in the last 7 years. Even if you do your own cover, you are probably going to pay 70 to 100 dollars for various pieces of stock art--and that is at the low end.

While copy editing can be had for around 200 to 300 dollars, that isn't all that cheap for some budgets and it doesn't include storyline editing which is often more like 300 to 600. Marketing is becoming extremely expensive for self-published authors--check the prices at bookbub one of the most popular places to take an ad out these days. Some one-day ads are over 1000 dollars. I think the cheapest is 300 or so for a one-day ad. Book sites that used to take a percentage of the haul (Based on amazon numbers sold) now price such that they take nearly 80 to 100 percent of what they guess the profit to be. The author gets "visibility" and hopes for "sell-through" on a series.

Marketing USED to be cheaper because many sites relied on at least some income as an Amazon (or other) associate. But the cost of ads has skyrocketed, especially on a site that has the ability to drive sales. You can buy 5 and 10 dollar ads, but your results are usually zero. (Many ad sites spend too much time trying to reach AUTHORS rather than readers.)

Some of the low-cost advantages of being indie have receded as the cottage industry serving us writers has expanded and grown.

That said, we don't have employee costs such as paying out for healthcare or 401k or pensions or whatever benefits a large company might offer.


(These are not complaints. Just pointing out some of the costs of indie publishing.)