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Word Buckets in Meatspace

A Talk on the State of (e)Books & Publishing

Delivered at the Highlights Foundation Writers Workshop at Chautauqua

and
the Vermont MFA in Writing for Children and Young Adults

Stephen Roxburgh
President & Publisher
namelos

Everyone agrees that books are good. Am I right?

Okay, then, BOOKS … ARE … GOOD. Right!

Do any of you remember that Bill Cosby routine where he pretends to be Noah.
God: “Noah, I want you to build an arc.”
Noah: “Right, What’s an arc?”
God: “I want you to build it 300 cubits x 80 cubits x 40 cubits.”
Noah: “Right. What’s a cubit?”

Books are good. …

Right. What’s a book?

I am going to talk a little about what is in books, but more about das Ding an sich, the thing-in-itself.
When we think about the concept “book” we mean words printed on paper bound in codex form, i.e.
separate sheets gathered together and bound on one side with a cover.

Let’s take a quick look at words.

Nobody really knows when spoken language (as distinct from mere sounds) emerged but some
speculate it was probably about 400,000 years ago, perhaps earlier. Speculation is based on the
evolution of bones in the jaw and the inner ear in homo sapiens. Writing systems didn’t emerge until
the early Neolithic period, approximately 9000 years ago. Alphabetic writing emerged about 4000
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years ago Egypt.

So, what did people write on? Lots of things. Early writing appeared carved on tortoise shells, painted
on or carved in wood, chiseled in stone, scratched on clay tablets, and hand printed on papyrus sheets
and vellum scrolls. Scrolls were the first form of the book in Eurasian cultures. The codex form, which
we are so familiar with, largely replaced scrolls, and was a Roman invention.

Early books were expensive, tedious and time-consuming to manufacture, and, of course, only
available and of interest to the minuscule segment of the population that could read. Books were very
much a niche market. They still are.

The biggest innovation in the history of the book occurred in the mid-15 th century with the invention of
movable type and the printing press. Gutenberg gets the credit but it is worth noting that moveable type
actually originated in China in the 11th century using ceramic tiles, and metal type was introduced in
Korea in the 13th century. Gutenberg published his bible in 1455. It is a straight line from his first press
to the presses of today. If you think about it, the modern offset printing press, while technologically a
substantial improvement over the Gutenberg press is effectively the same. It puts words on paper.
Here’s a story to make my point.

According to the Gutenberg Museum, 48 known copies of the Gutenberg Bible exist today, out of a
possible 180 copies originally printed. The Pierpont Morgan Library in New York owns three of the
extant copies. The story goes that when new guards are hired at the Library, they are told “If someone
puts a gun to your head and says they are going to steal that Gutenberg Bible on display right over
there, go ahead and let them take it … but don’t tell them about the other two in the back room.” In
1995, a single leaf containing the Ten Commandments (Exodus, 20:1-17) was sold for $75,000.
However—and here’s my point—Gutenberg Bibles are worth a fortune because the things themselves
are so rare, not because of what’s in them. The same content is free for the taking in the Gideon bibles
found in any hotel room.

So why was the printing press such a big deal? It enabled words to be printed more efficiently and less
expensively. In and of itself, it didn’t cause any big changes. Production and distribution of books
increased, albeit slowly, until another big force came into play: namely the industrial revolution. Then
print technology enabled big changes. The growth of the middle-class and the social reforms it
demanded led to a vast expansion in public education and a dramatic increase in literacy in the 18th and
19th centuries. Printing fed that expansion and increase.

John Newbury, whose name you all know because of the award named after him, in many ways
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represents the new publishing industry that emerged.

Newbery had a bookshop under the sign of the Bible and Sun in St. Paul's Churchyard in London.
Newbery's firm published children's stories, ABC books, children's novels and children's magazines;
his children's books constituted about one-fifth of the five hundred books he published. In 1744 he
published A Little Pretty Pocket-Book. The full title was A Little Pretty Pocket-Book intended for the

Amusement of Little Master Tommy and Pretty Miss Polly with Two Letters from Jack the Giant Killer. 
For convenience it has often been called the “first children’s book”. It contained the hallmarks that
came to characterize his imprint. The books were bound in Dutch floral paper and contained
advertising for other products and books. Newbery and others on the continent were the progenitors of
the juvenile publishing industry today.

Once there was an efficient means of manufacture, a system for distribution, outlets for sale, and a
literate populace with a few extra pennies in their pockets, the publishing industry as we know it was
born. For the sake of simplicity, think of 1500 as the birth of the modern book and of the publishing
industry and book trade. So, it took about 400,000 years from the origins of language and about 8000
years after the first appearance of writing for the book, as we know it, to be invented. The modern
book, has been around for about 500 years. James Gleick, who explores the cultural ramifications of
science and technology, wrote “As a technology, the book is like a hammer. That is to say, it is perfect:
a tool ideally suited to its task. Hammers can be tweaked and varied but will never go obsolete.” (NYT,
11.29.2008) I agree, but let’s face it, in terms of how long words have been around and humans have
been communicating with each other, 500 years isn’t a very long time. The codex-form book that we
know and love so very much is a relatively recent innovation in communication technology.

So where does the book business stand today? Anyone who is paying any attention at all is aware that
the publishing industry is going through major turmoil right now. For those of you who haven’t noticed
(because you live in caves without Internet access) the publishing industry is struggling. Sales are
down, publishers are contracting, reducing staff, cutting back on what they are buying and on how
much they are willing to spend on what they do buy, and, generally, moving very slowly in an effort to
be cautious and weather the storm. What caused the storm and how big is it?

Three forces have aligned to feed this storm or, perhaps, tsunami is the more apt metaphor. Two have
been gathering for a long time, building strength. One is very much of the moment. The three
combined are overwhelming.

The first is technology. The second is competition. The third is the economy.
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Technology. Getting from the printing press to the computer took half a millennium, but the transition
from lampblack and cellulose to bits and bites has taken only a generation and it has reached a critical
stage, but I’ll save this discussion for last because it is where most of the good news comes in.

Competition. In the beginning publishers like John Newbery were one-stop shops. Newbery
commissioned and sometimes even wrote the books. He manufactured the books. He published the
books. He sold the books. A friend of mine, who is an expert on the history of books and publishing,
jokingly says that freedom of the press is a right reserved to those who own a press. That was certainly
true of Newbery and his ilk. The entrepreneurial model worked for publishing then and works for
publishing now. I founded a publishing house in 1994 and am about to launch another one. It’s easy:
anybody who owns a computer can do it. If you own a computer, you own a press … but that’s part of
the technology discussion. The last quarter of the 20th century saw the disappearance of many, many
venerable publishing houses that were started by entrepreneurs … mostly rich white men who named
the company after themselves. Most of those were subsequently acquired by publicly-owned, multi-
national, media conglomerates. This story is old and so tired that I won’t revisit it here. But the bottom
line is that half a dozen companies now dominate the US publishing industry. The Big Six are, in
alphabetical order: Hachette, HarperCollins, Macmillan, Penguin, Random House, and Simon &
Schuster. [Since we are talking just about books for young readers, I will add Scholastic to that list,
although Scholastic is considerably smaller than the top six.] They are all massive, they all publish
everything for everybody, and they all compete for the same thing, i.e. properties that will generate the
kinds of sales necessary to support their organizations and make profits for their shareholders. To that
end, they invest vast amounts of money and resources in a relatively modest number of properties,
“franchises” are what successful books and authors are called these days. And to acquire them
publishers will pay enormous amounts of money, going head to head in direct competition with the
other goliaths. When giants fight, the earth trembles. That’s one reason why the publishing business is
so shaky.

Another is that all of these conglomerates compete with themselves across their businesses. Many own,
or have very close ties, to movie studios, newspapers, radio stations, and magazines … in other words,
to competing forms of entertainment. As I said, they want to be all things to all people, or more
precisely, to sell all things to all people. The reasoning, solid and indisputable, is that if you extend the
franchise across multiple channels you will grow your market and increase your profitability.
Understandably they want everything to be portable, i.e. convertible to another embodiment, another
saleable commodity. This is good capitalistic synergy and strategy. But it doesn’t work for everything.
Here’s an example, I’ve worked with two companies that have direct-mail-catalog businesses in
addition to book publishing companies. I naively thought that it would be neat to put the books I was
publishing in the direct-mail-catalogs. I was told in simple one-syllable words that catalog sales can be
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broken down into dollars of income per square inch of catalog page, and that selling mugs and T-shirts
generated lots more dollars per square inch in sales than the fiction and poetry I was publishing. So, to
maximize the sales venues available, it makes great good sense to select product that lends itself to as
many of those platforms as possible. [Harry Potter: books, movies, games, merchandise, etc. American
Girl: dolls, accessories, clothes, books, magazines, parties, etc.] When you get it right, you’re golden.
It’s hard to get it right.

Finally, in conglomerates of the size I’m discussing, the businesses are all profit centers that are
constantly compared to each other. In hard times, those businesses that don’t generate their fair share
of profit are in jeopardy. And these, ladies and gentlemen, are hard times. In hard times, competition
gets fierce.

The economy. I don’t need to tell you how bad things are these days. You can’t be sentient and not see
and feel the impact of these parlous times. The point I want to make about the economy is that it came
down very fast and very hard and by many accounts is still headed in the wrong direction. No one is
expecting a quick recovery. Books have always been thought to be relatively recession proof. There’s
evidence to suggest that, if the recession bites deep, this is not the case. Book sales have plummeted.
Unless a book is about pubescent vampires there’s not a lot of action out there. -— It used to be
adolescent wizards. If you can extrapolate from those two dots to the next one, you should leave the
room immediately and start writing! — Book sales are off and they aren’t likely to improve soon …
unless a lot of celebrities turn into vampires and take up their pens. Think about it! Brangelina, the
Undead.

The economy alone did not cause the current crisis in the publishing industry. We’ve had tough times
before and muddled through. We will again, albeit not without casualties.

Now I’m going to talk about Technology, specifically the ebook phenomenon, although there is more to
the impact of technology than ebooks. The development of photography, film, movies, radio,
television, computers, and the Internet are all technological developments that have impacted on
books, competing for the attention and dollars of consumers. But I’m going to focus on ebooks because
their impact is most direct and relevant today.

E-books became inevitable one day in 1746 when a French scientist, Abbot Jean-Antoine Nollet,
gathered about two hundred monks into a circle a mile (1.6 km) or so in circumference, with pieces of
iron wire connecting them and connected it to a battery [in those day, Leyden jars]. He observed that
each man reacted at pretty much the same moment to the electric shock, showing the speed of
propagation to be very high. (W)
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You know, we think our work is hard, but I’m telling you, being a monk back in the day was really
hard!

People have been communicating electronically for over 200 years. First via telegraph: Morse
telegraphs (not the first by any means) were ubiquitous by the 1850’s—then telephone (1875)—and via
computers for 50 years, ever since Al Gore invented the Internet in 1969. A lot has happened in the 220
years since those monks got zapped.

The electronic book is another stage of technological progress, just another way of shocking monks. In
terms of communication, it is just another mousetrap, possibly a better mousetrap. Just as the codex
form book was a better bucket for conveying language than clay tablets and papyrus scrolls, the ebook
may be a better bucket than the codex form book.

You know, I can’t say “better bucket” without thinking of Betty Botter. You remember, [recite poem].

Betty Botter bought some butter.

But, she said, this butter’s bitter.
…

Well, for today I’ll adapt it.

Betty Botter bought a bucket

Because, she said, this bucket’s better.
If I put it in my bookcase
it will make my bookcase bigger.

Although the electronic book is being regaled by some as the game changer, the paradigm shift, and,
by others, as the beginning of the end, I think it is easier to grasp it’s significance if we acknowledge
that it is nothing more or less than a new bucket for words.

It has generated considerable hysteria in the literary community and reminds me of the reaction to
early word-processors, which writers, editors, critics, and educators all predicted would have an
insidious and corrosive influence on creativity. That didn’t happen. Incidentally, in my experience, the
people with the strongest adverse reaction to ebook readers often haven’t actually seen one or read one.
It’s the concept that they find off-putting. Zealots wax eloquent about the wonders of ink on paper and
rage against reading on screens even though the content of electronic books is no different than the
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content of ink-on-paper books. In terms of the publishing business, of “intellectual property”, ebooks
represent “unenhanced, verbatim, word for word electronic reproduction.” That is, the text reproduced
as it appears in the print book, with no interactivity in the form of links, or audio or visual
enhancements, or any other bells and whistles. Just words on a screen vs. words on paper. The same
words. Different surface.

ebooks have been around for almost 40 years. Michael Hart founded Project Gutenberg in 1971 with
the mission “to provide as many eBooks in as many formats as possible for the entire world to read in
as many languages as possible.” However, it is only recently that ebooks have registered in the public’s
and publishers’ consciousness because of the Kindle, the Sony Reader, and the iPhone.

ebooks   are   a   commodity,   a   consumable   commodity,   just   like   hardcover   and   paperback   books. 

Consumers will determine their success or failure. Early signs are suggestive. According to recent 
statistics released by the Association of American Publishers and the International Digital Publishing
Forum ebook sales in May nearly tripled to $11,500,000 from $3,900,000 in the same month of 2008.
[$12,100,000 in April, 2008, which amounts to a 327% increase over the $3,700,000 figure posted the
previous April.] Here’s what the chart looks like:

And these numbers don’t capture all the ebook activity out there because a vast number of ebooks are 

available for free. 
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Publishers sold $40.3 billion worth of books in 2009, a one percent increase over $39.9 billion in 2008
according to Book Industry Trends an annual report that analyzes sales in the United States, an
increase based on higher retail prices on lower unit sales (-1.5%). So ebooks, at $12 million, represent
a minuscule portion of sales for publishers. But no other segment of the market is growing even
remotely as fast as ebook.

So   what   is   the   publishers’   response   to   the   enormous   growth   in   sales   triggered   by   Amazon’s 

introduction of the Kindle a little over a year ago? You would think they would be receptive to the new 

venue and the new sales channel. But, that doesn’t seem to be the case. Publishers are late coming to 

the game and they aren’t warmed up. They seem reluctant to step up to the ebook plate and swing for 

the fences. Amazon is one of the fastest growing customers of the publishing industry. And sales to 

every   other   major   customer   from   Barnes   &   Nobles,   to   Baker   &   Taylor   and   Ingram,   are   flat   or 

declining. Consequently they have begun releasing ebook editions of their titles, but not for all of them 

and, curiously, when they do release an electronic version, they price it the same as the hardcover 

edition. Consumers don’t see why they should pay as much for something they can’t hold in their
hands and put on their shelves or give away as for something they can. There is no paper, not ink, no
shipping, no handling … and no discount!

I’m telling you, that makes Betty Botter’s butter bitter.

Listen to this lead from an article in yesterdays’ (7.14.2009) New York Times by Motoko Rich and Brad
Stone, “No topic is more hotly debated in book circles at the moment than the timing, pricing and
ultimate impact of e-books on the financial health of publishers and retailers.” So why do publishers
price the electronic editions the way they do? What is their thinking? It’s not because they think the
price is reasonable. From the traditional publisher’s perspective, the problem with e-books isn’t
technology, or aesthetics. It’s the business model and publishing is first and foremost a business.

A publisher’s primary revenue source comes from selling a lot of copies of books that have low unit
costs. The difference between what those books cost and what the publisher gets paid, enables
publishers to pay the author, recover their expenses, contribute to their overhead, and show a profit for
shareholders. There are other sources of revenue, primarily licensing, but sales make up most of the
income. Manufacturing costs typically run between 10 and 15% of the suggested retail price of a book.
Overhead and acquisition costs are the real killers. Overhead is bodies and buildings. Acquisition costs
means advances. In the current environment, the big publishing houses have too many buildings, too
many bodies, and pay too much in advances. They have to sell a lot of books at substantial multiples of
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the manufacturing cost in order to generate recover those expenses. The crux of the matter is that
publishers need substantial margins in order to support their business model — Bodies and buildings
and advances — and even though they can often get more profit from selling an ebook edition, they
can’t generate the same levels of cash from ebooks. So, aren’t ebook sales extra, found money as it
were? Most publishers think not because they fear that ebooks sales will cannibalize their hardcover
and paperback sales. In short, they fear a dramatic (perhaps catastrophic) reduction in revenues. The
amount of money they will get won’t be sufficient to meet their needs. So the price they put are
currently putting on ebooks is a kind of protective tariff supporting the traditional formats that generate
the level of revenue necessary to stay in business.

Practically speaking, this pricing strategy isn’t working because one player, Amazon, dominates the e
ebook market, controlling 43%. Amazon knows a thing or two about selling stuff. Although the
publisher sets the suggested retail price and Amazon has to pay them a fixed percentage (roughly half)
of that price, Amazon can discount the price to whatever they want.

Subsequently, Amazon has established $9.99 as the default standard for a new ebook (older books sell
for less) and ebook customers have latched on to that price as the maximum they will pay for all but
very specialized ebooks, staging virtual boycotts when prices are higher. Amazon is subsidizing the
sale of ebooks, taking very little margin, or actually, taking a loss on ebook sales. Why would Amazon
do that? To capture market share. You can’t buy any newly released ebook cheaper than on Amazon
and most people don’t bother looking elsewhere. They get a Kindle and they shop at the Kindle store.
Everything works, the prices are good, the experience is gratifying. Case closed. And the publishers
have abdicated de facto control of pricing to Amazon. This is not a good business plan but publishers
haven’t been able to come up with a better one.

So, to say the publishing industry is struggling to come to grips with the digital present is an
understatement. And they’ve got a lot of other issues on their minds right now. In the new introduction
to his prophetic 2007 book, Print is Dead: Books in our Digital Age, Jeff Gomez says most “digital
activity is happening at the edges of the larger publishing galaxy; eBooks are still only a miniscule
profit center, a tiny star against a backdrop of big names and paper formats.”

Still, things are happening. In one significant initiative, Simon & Schuster just released 5000 titles to a
competing web store called Scribd, the so-called “on-line social publishing company” where anyone
can post anything and sell it to anyone who wants to buy it. The company was founded two years ago
and currently purports to have 60 million readers per month in 90 languages. Simon & Schuster allied
with Scribd because Scribd offers 80% of receipts versus Amazon’s between 40 and 50% of the
suggested retail price. Competition. This will enable S&S to reduce the price to the customer and still
receive as much as they would from Amazon. The only problem is that Scribd can’t offer the delivery
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system that Amazon has in place, instantaneous download to your e-reader, anytime, anyplace. Still,
it’s a start.

In another significant development, ScrollMotion, a software developer of applications for smart

phones has partnered with LibreDigital, the leading provider of digital content platforms that drive
distribution and marketing through digital stores and eBook devices to market content comes from
dozens of the world’s top publishers and distributors, including HarperCollins, Hachette, Houghton
Mifflin Harcourt, Simon & Schuster, Baker & Taylor, Random House, Tribune Company and Wiley.
Let me state that simply, these folks will deliver approximately 100,000 books, newspapers, and
magazines to cell phones!

Finally, and to demonstrate that the ebook phenomenon is not a local event, here’s Monday’s
(7.13.2009) headline from Publishing Perspectives, an industry newsletter detailing international
developments: Spain’s Big Three to Form New Digital Distributor

Planeta, Random House Mondadori, and Santillana, which together make up some
70% of the [Spanish] market, are joining forces to set up a digital distribution company
for ebooks. This initiative will go hand in hand with a major marketing effort starting
with a splashy launch of e-books and e-readers this holiday season through at least one
major retailer. They have set a goal of having every frontlist title able to be published
simultaneously in both print and ebook form by mid 2011.

Clearly some publishers are seeing traction in ebook sales, and are getting much more serious about
their digital plans.

However, the forces behind the tsunami are not diminishing. The economy continues to sputter:
another 465,000 jobs were lost in June, unemployment is at a 26-year high of 9.5%, California is
paying vendors with IOU’s, etc. And technology is enabling three major new competitors to enter the
publishing arena, two covertly like thieves in the night, and one, like Attila the Hun, by full frontal
assault. Those competitors are (1) self-publishing, long an option but now energized by ebook and
print-on-demand technology, (2) Amazon via their new publishing imprint named Encore, and, (3) the
heaviest hitter, Google via their book scanning and Partners program, and, a new
publishing/bookselling enterprise called Google Editions. In boxing terminology these three amount to
a potentially decisive combination punch to the stomach, to the heart, and to the head of traditional
publishing and bookselling.

Let me quickly say, before you lapse into despair, that although these three forces are formidable
challenges to traditional publishing houses, they represent tremendous opportunities for writers and
readers.
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Self-publishing has always been around and it has always been perceived as the last refuge of
desperate writers bent on disseminating their own work. It is not mentioned in polite company, or
invited to the best parties. The books are not reviewed, nor are they, generally, carried by bookstores,
acquired by libraries, or eligible for major awards. Basically self-published books are viewed with
disdain by almost everybody in the mainstream publishing community, and lumped in with that other
shady endeavor, vanity publishing.

There’s some justification for this disdain. Many self-published books aren’t aren’t published by a
general trade publisher because they don’t meet the minimal standards for successful publication. They
aren’t well conceived, written, edited, designed, or produced. However, this is not true of all self-
published books, however. Keep in mind that the “minimal standard for successful publication” in
today’s publishing environment is “will it make money” not “is it good enough.”

Let me quickly say that I am not disparaging the efforts or standards of editors and publishers when I
assert this. I am describing the financial goals they are expected to achieve.

Some books that are self-published are eminently publishable but were simply overlooked by trade
publishers, or were deemed too special or to have too small a potential audience to recover the
investment of overhead (buildings and bodies) and costs (e.g. manufacturing, shipping, sales,
distribution, etc.).

Many years ago, I was talking with the head of a very large, highly respected juvenile publishing
division of one of the Big Six. We were grousing about the industry and my colleague said that we
were all publishing way too many books. Her own division published hundreds a season. She was
going to cut back and I asked how. She said “We won’t take on anything that doesn’t look like it will
sell at least 10,000 copies.” Well, at the time I was just starting Front Street, my own lunatic fringe
publishing house, and the notion that I might publish a book that sold any where near 10,000 copies
was pretty heady, so I asked her to please send some of her rejects my way. The difference between
Front Street and the nameless conglomerate was not out quality standards, it was the level of revenue
that each book needs to generate in order to cover the overhead and generate profit.

The harsh reality is that the larger the company, the higher the level of sales necessary for a book to
carry its financial load. Smaller companies can manage with fewer sales. Really small companies, i.e.
self-publishers, can get by with very modest sales. And, as I suggested earlier, technology now enables
anybody with a computer and an internet connection—that’s pretty low overhead—to be a publisher
book, i.e. “publish” means to “make public” — without having to have the resources that traditional
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publishers have. Freedom of the press is a right reserved to those who own a press … and everybody
owns a press.

What about the editorial guidance that a major publisher offers? Surely self-published authors don’t
have access to that. In fact, yes, they do. Read Publishers Weekly every week and you’ll see how many
experienced editors are readily available these days, editors who have been jettisoned for one reason or
another as publishers demonstrate they value sales and marketing acumen more than editorial skills.
I’ll leave it at that.

Publishers have never worried about the competition from self-publishing option. They had the
resources to finance the manufacturing process and controlled the sales and distribution channels.

As far as manufacturing goes, another technological development has made it possible for a customer
to place an order and have the book printed and bound and shipped overnight. Or, if you’ve seen the
newly developed Espresso Book Machine, while you wait! Ironically, this is the way books were made
pre-Gutenberg: one at a time and as needed. Technologically it’s way quicker and cheaper and it is
ideal for books that sell in small quantities over a long period of time, the so-called “long-tail” model
in which “The distribution and inventory costs allow businesses to realize significant profit out of
selling small volumes of hard-to-find items to many customers, instead of only selling large volumes

of a reduced number of popular items.” (Wikipedia) This option has been around for at least 25 years
but the quality has improved dramatically so that now, for one-color books, most of you would be
hard-pressed to tell the difference between a POD edition and a traditionally manufactured book. It is a
different model from the traditional publishing practice of printing large quantities of books, thereby
achieving reduced unit costs, distributing them around the country, and then marketing them, counting
on customers to find and buy them. Here’s the interesting news:

Bowker projects that 285,394 On Demand books were produced [in 2008], a staggering 132%
increase over last year. This is the second consecutive year of triple-digit growth in the On
Demand segment, which in 2008 was 462% above levels seen as recently as 2006. This is an
historic development in the U.S. book publishing industry: On Demand and short-run books
exceeded the number of traditional books entering the marketplace. (Bowker press-release)

That’s pretty startling. It means that anybody now has a viable means of manufacturing and
distributing books. This used to be the privilege of publishers and rich people. You no longer need to
fill your garage with books in order to get a viable price. Nor do you need to spend nights and
weekends stuffing envelopes and running to the post office to fill your orders. For a price, companies
like Lightning Source (owned by Ingram) and Book Surge (owned by Amazon) will list your book,
take the order, print and ship the book to the customer, and, after deducting their fee, mail you a check
for the balance.
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The mainstream publishers still control the major sales channels, e.g. Barnes & Nobles and other
national chain stores, and the major marketing venues. But things are changing. Barnes & Nobles CEO
has acknowledged they are facing the worst economic environment in the history of the company. The
New York Times, along with every other newspaper in the country is facing major challenges. The
New York Times Book Review is still going but a number of significant book review media
(L.A.Times Book Review and the Washington Post Book World to mention only two) have been cut
back or shut down. The fact of the matter is that review coverage of books in traditional print media is
disappearing at an alarming rate.

Okay. So self-publishers have access to editorial support and to the means of manufacture, sales and
distribution, but how does an individual market his or her own work? The Internet, which is not
controlled by mainstream publishers, has provided extraordinary tools and most of them are free. How
many of you have websites? How many have pages on Facebook/MySpace/LinkedIn? How many of
you have blogs? How many of you use Twitter? For those of you cave dwellers who don’t have or do
any of these things, how many of your friends do? (If you have friends …) How many of your children
do? The fact is that no matter what your personal relationship with these Internet based networking
systems is they have become enormously popular and powerful marketing tools. Many people have
thousands and some have tens of thousands and some have millions of followers who listen to their
every post and tweet. You don’t need that many. But if you’ve written a dog-training manual and your
network includes other dog-lovers (and it probably does), or if you’ve written an historical novel on
the Ottoman siege of Vienna in 1529 and you have tapped into networks of people interested in 16th
century Europe, you have a major marketing tool in your hands. Again, Jeff Gomez, on the subject:
“Before the Web, whenever anyone’s book appeared, it was the critics and the mainstream media who
had the power to make or break an author or a book. But now, there’s a whole new online world that
has the power to either amplify a book’s message or else an author’s profile.” Moreover, as Mike
Shatzkin, a well-respected industry guru, recently wrote: “Publishers are increasingly insistent that a
prospective author have an internet platform to build on before they sign a book. Editors always
wanted credentials to back up a writer’s authority on any subject; now they’d like to see that the writer
has a following on that subject as well.” (6.29.09) Shatzkin believes in what he preaches. He is co-
founder of FiledBy, Inc is “a digital marketing company providing membership sites, web tools and
community building solutions to content Creators - authors, writers, illustrators and photographers –
and their fans” — for free! And that’s just one. New self-publishing sites abound: including
Smashwords, Scribd, Wattpad, Shortcovers, Bookglutton, etc. etc. etc. These sites are multiplying like
rabbits and they provide an unprecedented opportunity for authors to build support for their work.

My discussion of self-publishing may lead you to believe that I am recommending it as an alternative

 14

to seeking a traditional publisher. I most definitely am not recommending anyone do that. It is a very
tough row to hoe. But so is seeking a traditional publisher. So, for that matter, is seeking an agent.
What I am saying is that self-publishing is more respectable than it used to be and for the right book
and the right author it can be a viable path moving forward. All content has an appropriate audience.
The trick is to find the most efficient path to that audience. Self-publishing is a path. Traditional
publishing is a path. My grandfather used to say never use a $2 tool for a $10 job or a $10 tool for a $2
job. Traditional publishing is a $10,000 tool. Self-publishing is a $1000 tool. Some very good and
worthy books are $5,000 jobs. Which tool would you use? Arguably both can do the job well. Only one
can make a profit.

So, do these new marketing tools work? There is some evidence to suggest they do.

A 16-year old named Cayla Kluver wrote a fantasy titled Legacy when she was 14. What then
happened is described on her Web site:
Once the manuscript was finished and revised, the road to publication was not easy.
With no credentials to her name, getting the attention of a major literary agent or
publisher through conventional methods was proving impossible. So, her mother, a
lawyer and business professor, eventually decided to create her own publishing
company (Forsooth Publishing), and put the book out herself.
Through heavy online promotion, and the touring of schools, libraries, and
bookstores, Cayla spread the word about her novel to a small readership, for whose
support she is everlastingly thankful. The book was submitted to several awards
programs, resulting in a first place win in the Reader Views Literary Awards 2008 for
young adult fiction, and a bronze medal in young adult fiction in the Moonbeam
Children's Book Awards 2008, as well as being a finalist in two categories (young
adult fiction; literature & romance) in the National Best Books Awards 2008
sponsored by USA Book News. Legacy also received numerous positive and five-
star industry reviews.
In March of 2009, almost a year after Legacy's release by Forsooth, the book was
submitted to Amazon for publication for their new Encore program, and the deal was
signed at Amazon's offices in April.

This introduces the first of the new competitors to traditional publishers: Amazon. And I’m not talking
now about their Kindle ebook reader. I am talking about their publishing program, Encore, which they
describe as “a new program whereby Amazon will use information such as customer reviews on
Amazon.com to identify exceptional, overlooked books and authors with more potential than their
sales may indicate.” In short, Amazon is using its databases to identify potential bestsellers and then
putting the full weight of its multi-channeled organization behind those titles. They simply identify
books that their customers (who vote with their $ and reviews) are telling them are saleable, and throw
their considerable clout in the marketplace behind them. They are working from data, not instinct. And
more often than not, data trumps instinct.

Moreover, listen to this analysis from Time Magazine (6.22.2009): “Amazon has a presence in almost
 15

every niche of the book industry. It runs a print-on-demand service (BookSurge) and a self-publishing
service (CreateSpace). It sells e-books and an e-device to read them on (the Kindle, a new version of
which, the DX, went on sale June 10). In 2008 alone, Amazon acquired Audible.com a leading
audiobooks company; AbeBooks, a major online used-book retailer; and Shelfari, a Facebook-like
social network for readers. In April of this year, it snapped up Lexcycle, which makes an e-reading app
for the iPhone called Stanza. And now there's Amazon Encore, which makes Amazon a print publisher
too.” Authors and agents will take notice. How long do you suppose it will be before some authors
explore partnering with Amazon and sidestepping traditional publishers altogether? Mark my words:
not long.

Finally, though, I don’t think Amazon is the big Kahuna. I think another company is the Attila that will
sweep across the face of publishing. That company is Google. Some years ago, Google announced
their intention to scan vast numbers of books and make their contents available for searching. They had
the cooperation of a number of major libraries, including the University of Michigan, Harvard
(Harvard University Library), Stanford (Green Library), Oxford (Bodleian Library), and the New York
Public Library. (W) Google has currently scanned about 7 million titles. And last month, at the annual
BookExpo convention in New York, Google signaled its intent to introduce a program that would
enable publishers to sell digital versions of their newest books direct to consumers through Google.
I’m not going to address the deeply controversy surrounding the Google Book Settlement because it
would take more time than I have and, short form, I think it’s a tempest in a teapot. What I want to
focus on is a geeky concept that I believe (and I’m not alone in my thinking) is the future of
publishing.

The concept is called “cloud computing, i.e. when resources are provided as a service over the internet
(the “cloud”) rather than owned. Google, Microsoft, Amazon, Yahoo, IBM are major providers of
“cloud” services and content. It is particularly suitable for delivering intellectual property, i.e. virtual
rather than physical stuff. It’s not so good for lawn mowers and toaster ovens. For example, for most of
you, your email comes from a cloud called Yahoo, or Hotmail, or G-mail. Wherever you can get on a
computer, you open a web browser (Internet Explorer, Safari, Firefox, etc.), go to whatever email client
you use (Yahoo, G-Mail, Hotmail, etc.), log in to your account and, bingo, your private email is
waiting for you. That’s a simple example of cloud computing. Rather than customers owning the
resource it is provided over a network. So, to apply this to my subject, instead of owning a physical
book, or even having a file download onto your hard drive, content is sent to whatever device you have
on-line at the moment.

Think of the way you get weather information on the internet now and pretend that’s how you could
read THE BROTHERS KARAMAZOV. You read it but don’t own a physical or virtual copy. If you
 16

want to read it again, you just access it again … and again … and again. The files reside in the cloud,
available at any time and any place for your perusal. It’s never overdue at the library, never on your
bedside table when you’re waiting in the dentist’s office. You don’t have to buy a thing, you subscribe
to the service. If you want to buy a thing, you can, customized for you. I will always have my leather
bound, letterpress edition of MIDDLEMARCH by George Eliot, my hand-worn blue cloth bound copy
of THE COMPLETE POETRY OF T.S. ELIOT, the exquisite brick colored block of THE ANIMAL
FAMILY by Randall Jarrell, and many tattered paperback copies Grahame Greene’s novels. I will also
want all of these regularly when I don’t have access to my leather armchair, lap cat and physical book.

Let me offer one brief aside. Some people argue that if you don’t have a physical copy you don’t
actually “own” the book. I submit that no one ever actually owns THE BROTHERS KARAMAZOV,
or MIDDLEMARCH, or THE FOUR QUARTETS, or … any book. What you own is a word bucket,
nothing more, nothing less.

What does cloud computing have to do with the future of publishing? It levels the playing field.
Everybody can reach everybody everywhere at any time. So if you write a poem, an article, a short
story, or a novel about iguanas and upload it to the cloud service provider, then anybody who is
interested in iguanas can access your work. Your job becomes making sure that your work is the best it
can be (i.e. substantial enough to compete with everything else available on iguanas) and bringing it to
the attention of anyone who is interested in iguanas. In other words, quality control and marketing.

This is not great news for traditional publishers. Think about it. When you go looking for a book or,
really, for any information, do you type the publisher’s name in the search box? Never, unless, of
course, you’re looking for information on the publisher. You enter the author’s name, or the title, or a
bunch of words that describe the subject, what are now know as “tags”. You use that information to
find other information. You use words to find words and you will have access to those words whether
you are in your favorite chair in your living room, the main reading room at the New York Public
Library, a train to Budapest, or a cave in Afghanistan. Living the dream! Great for the consumer of
words but where does the traditional publisher fit in? They used to be the gate keepers, selecting
content, packaging it, and controlling the distribution and sales channels. That’s history. They used to
control content by virtue of controlling the manufacture of the package (codex form ink-on-paper) and
its sales and distribution. And they still do have that control … IF the package is physical. They no
longer have that control if the package is digital because manufacturing becomes irrelevant and
distribution is open to all. So publishers now control a particular, pricey niche commodity: the
cellulose and lampblack word bucket, an ink on paper brick, otherwise known as a book.

Quite a few of you are looking at me in horror! Please, don’t shoot the messenger. This is not a bad
 17

development, folks. Let’s go back to basics. Readers are readers. They seek words that mean
something.

I want to impress on you is that this is not a science fiction scenario. It is not a projection of where we
will be in a decade or two. Everything I’ve talked about is here now. Using my laptop or this (Kindle)
or this (Kindle DX) or this (iPod Touch) I can access almost any book that anyone in this room can
think of … from Gilgamesh, to the Upanishads, from GREAT EXPECTATIONS to Barack Obama’s
Inauguration Speech, from Julia Child’s recipe for chicken cordon bleu to the transcripts of Nixon’s
final days in office. Right here! Right now!

Charles McGrath, former book review editor for The New York Times, writing specifically about
reading on a Kindle spoke to the heart of the matter:

The … experience is reading reduced to its essence: deciphering marks on a

slate. To say you appreciate written language more when it’s transmitted this way,
without the familiar delivery mechanism of paper, print and binding, would be a
stretch, but after a while you don’t appreciate it any less.” (The New York Times,
05.29.09)

On that note then — ebooks aren’t good or bad, they’re just different — where do things stand and
where does all of this leave us?

To review, I’ve discussed the three forces that I feel have combined to deliver a hammer blow to the
business of books: (1) competition, (2) technology, and (3) the economy. And I’ve discussed three new
developments that are changing the publishing environment: (1) self-publishing enabled by print-on-
demand, (2) technology most significantly represented by ebooks, Amazon’s entre into the publishing,
and Google’s virtual coup d’état with Google Books and the recent Google Book Settlement, and (3)
social networking. Here is a concise summary of the situation as describes by Giles Slade in The
Huffington Post two weeks ago (7.1.2009) entitled “The History of Future Publishing”:

According to the current growth curve, electronic books will dominate world-wide
book sales by 2018. (This is the book industry's own prediction, and is extremely 'safe.'
It does not anticipate a watershed or 'tipping point'). In any case, Kindle-Amazon and
Google will continue to make good money. Traditional print media will continue to
lose money as long as they stumble around wondering how to accommodate
themselves to what happened yesterday.

In the words of the apocryphal Chinese curse, surely we are living in interesting times.

Here’s what a few other people have had to say about all of this. Not surprisingly, authors are often the
most rabid defenders of physical books.
 18

In 1994 the highly respected author E.Annie Proulx asserted, “Nobody is going to sit down and read a
book on a twitchy little screen. Ever.”

Ummmm … unless they do.

As reported in The New York Times, at a recent book signing, author David Sedaris was handed a
Kindle to inscribe. Sedaris wrote, “This bespells doom.”

Somebody asks him to sign a $350 piece of hardware and that’s what her writes? Nice.

It get’s worse. As reported in The New York Times (5.31.2009) by Motoko Rich,

“At a panel of authors [at the BEA] speaking mainly to independent booksellers,
Sherman Alexie, the National Book Award-winning author of “The Absolutely True
Diary of a Part-Time Indian,” said he refused to allow his novels to be made
available in digital form. He called the expensive reading devices “elitist” and
declared that when he saw a woman sitting on the plane with a Kindle on his flight to
New York, ‘I wanted to hit her.’”

My wife insisted that I document this because she really, really respects Sherman Alexies’ work and
didn’t want to credit reports that he’s said anything quite this stupid.

Finally, Mark Helprin, in his new book Digital Barbarism: A Writer’s Manifesto, rails against
technology:

“The new digital barbarism is, in its language, comportment, thoughtlessness, and
obeisance to force and power, very much like the old [barbarism]. And like the old,
and every form of tyranny, hard or soft, it is most vulnerable to a bright light shone
upon it. To call it for what it is, to examine it while paying no heed to its rich bribes
and powerful coercions, to contrast it to what it presumes to replace, is to begin the
long fight against it.
Very clearly, the choice is between the preeminence of the individual or of the
collective, of improvisation or of routine, of the soul or of the machine. It is a
choice that perhaps you have already made, without knowing it, Or perhaps it has
been made for you. But it is always possible to opt in or out, because your
affirmations are your own, the court of judgment your mind and heart. These are
free, and you are the sovereign, always. Choose.”

“The choice is between the preeminence …of the soul or of the machine.” Wow! Sounds like it’s time
to take to the streets and man the barricades.

I really don’t understand why some authors have such irrational responses to devices that put their
work in the hands of readers who otherwise, by choice or not, might not read them.

So what should publishers do?

 19

In an article entitled “How to Publish Without Perishing” in The New York Times (11.29.2008), the
author James Glieck, who I referenced earlier, expressed the sentiments we all share in a more
balanced manner. Addressing the question of what publishers should do in these transitional times: “Go
back to an old-fashioned idea: that a book, printed in ink on durable paper, acid-free for longevity, is a
thing of beauty. Make it as well as you can. People want to cherish it.”

That’s a lovely, true sentiment … but as a strategic plan it is a recipe for disaster.

In a recent issue of THE NATION [05.20.09], Elizabeth Sifton, a legendary editor who now has an
imprint at Farrar, Straus, & Giroux, expresses some skepticism about publishers ability to address the
situation:
It is a confused, confusing and very fluid situation, and no one can predict how
books and readers will survive. Changed reading habits have already transformed
and diminished them both. I, for one, don't trust the book trade to see us through this.
Wariness is in order. Three centuries ago, John Locke agreed that we shouldn't base
our freedom to read books on the proclaimed good offices of the business itself.
"Books seem to me to be pestilent things," he wrote in 1704, "and infect all that trade
in them...with something very perverse and brutal. Printers, binders, sellers, and
others that make a trade and gain out of them have universally so odd a turn and
corruption of mind, that they have a way of dealing peculiar to themselves, and not
conformed to the good of society, and that general fairness that cements mankind."

Clive Thompson, a former Knight Science Journalism Fellow at MIT, writes on the cultural impact of
science and technology for The New York Times, Wired, and New York Magazine. He asks,

Can books survive in this Facebooked, ADD, multichannel universe? … Sure they
can but only if publishers … provide new ways for people to encounter the written
word. We need to stop thinking about the future of publishing and think instead
about the future of reading.” (Wired, 05.22.09).

George Weidenfeld, interviewed recently in the Guardian about the 60th anniversary of his venerable
publishing firm, Weidenfeld & Nicolson, is remarkably sanguine:

“I believe the electronic book has a future. But that is the case for reading for
information—some genres will, broadly, disappear in paper format. There will still
be beautiful books, though, ones you'd want on your library shelves. They will
remain as works of art or in the case of a book you want to have constantly in front
of you. It will, of course, have an effect on the number of publishers."

A very smart fellow named Michael Nielsen, commenting on the state of science publishing, recently
wrote,

“[T]he nature of information is changing. Until the late 20th century, information
was a static entity. The natural way for publishers in all media to add value was
 20

through production and distribution, and so they employed people skilled in those
tasks, and in supporting tasks like sales and marketing. But the cost of distributing
information has now dropped almost to zero, and production and content costs have
also dropped radically [4]. At the same time, the world’s information is now rapidly
being put into a single, active network, where it can wake up and come alive. The
result is that the people who add the most value to information are no longer the
people who do production and distribution. Instead, it’s the technology people, the
programmers.”

Karen DeGroot Carter of The Know Something Project, a new blog on Literature and Law, Poetry and
Politics, summarizes the new world order well: “All commercial print publishing industries (i.e., those
that produce books, newspapers, and magazines for sale to the general public) are facing some of the
same facts the recording and film industries recently had to accept: 1) The true value of every created
work lies in the interaction of consumers with the content of that work, and 2) consumers can best
interact with content when it is presented in the most simple, fast, portable, least expensive, and
enjoyable manner possible.”

I agree. That’s the deal. That’s where it’s at. That’s the bottom line. There’s no good or bad here.
There’s just writers and readers. People like what they like and want what they want when they want it.
And this is all good news because it is getting easier to get them writing that they like and want when
they want it.

So, let’s go back to the big three factors: the economy, competition, and technology.

The economy will stabilize and, eventually, improve. That’s good. Or it will deteriorate further. That’s
bad. Either way, there’s not much you or I can do about it and for most of us the best plan is to keep
doing what we know how to do as best we can. That includes writing books. So you write the best
book you can write. I and my colleagues who are editors and publishers will publish the best books we
can find as best we can with the resources we have available.

Competition will increase. Content will appear in new and varied forms via new channels of
presentation and distribution. The strongest and smartest companies will emerge. Some companies
won’t make it. More jobs will be lost as a host of changes take place internally. I believe it will be
significantly more difficult for authors and artists to get their books published by the traditional paths.
It hasn’t exactly been easy but it is harder now and will continue to be so. The publishing industry is
going through a sea-change. It will come out the other side.

Technology will continue to provide challenges and opportunities. I strongly believe that for every
traditional channel that is closed off, several new ones will open. Listen to what Michael Hart, Founder
of Project Gutenberg, has to say about the future.

“There aren't even a million [ebook machines out there], but there are now 4 1/2
billion cell phones — which means the possibility of reading readers via cell phones
 21

is larger than any other media…. The cell phone is the wave of the future, not, I
repeat, NOT the Kindle or Sony approach, for they are only targeting millions, and I
should like very much to reach billions of people.”

I say amen. Who wouldn’t like to reach billions of people?

In conclusion, for those of you who fear the machines, I’ll offer this consolation posted by the Robert
Nagle on his blog Idiotprogrammer: Musings on Technology and Culture:

In meatspace there is a new chat protocol—it’s called face-to-face

conversation. Commenting on this promising new technology, Charles Dickens
writes:

O, what a thing it is, in a time of danger and in the presence of death, the shining of a
face upon a face! I have heard it broached that orders should be given in great new
ships by electric telegraph. I admire machinery as much is any man, and am as
thankful to it as any man can be for what it does for us. But it will never be a
substitute for the face of a man, with his soul in it, encouraging another man to be
brave and true. Never try it for that. It will break down like a straw.

As for the business of book publishing, I don’t know whether the cell phone or a chip inserted behind
our ears or in our corneas is the future. What I do know is that the means of communicating are
expanding and that, in spite of that, words are still the best technology out there. They are small,
lightweight, and infinitely available — a truly renewable resource. They are resistant to global
warming, impervious to Wall Street’s gyrations, and thrive on competition. Words have been around
for 400,000 years. The buckets for carrying them come and go. No one has come up with technological
improvement on words.

Earlier I quoted James Gleick’s assertion that “As a technology, the book is like a hammer. That is to
say, it is perfect.” I’ve already suggested that I think the book is more like a bucket than a hammer.

As for the contents of the bucket, words, I say that as a technology, words are like nails. And, yes, they
are perfect.

Writers, not books, are like hammers. You place the nails. You drive the nails. You make something
with words.

Remember, the line goes, “In the beginning was the word…” not “In the beginning was the book…”
and in the end, words will still be there.

And that, my friends, is only good.

Thank you.
 22

N.B. My thinking has been influenced by any number of smart people out there who are commenting
about the publishing industry and the impact of ebooks on the business model. I owe a debt of
gratitude to these bloggers, some of whom I’ve quoted here.