An American Editor

April 17, 2012

Worth Noting: One Small Publisher Says Enough!

An article in yesterday’s New York Times is worth noting: “Daring to Cut Off Amazon.” It seems that Amazon is squeezing where it can. At least this one small publisher, who only has pbooks, offering none of its titles as ebooks, is taking a stand. This article, combined with the recent expose in the Seattle Times about Amazon’s tactics, and the revelations regarding the squeeze on the Independent Publishers Group, make me think that the Justice Department has its head in the sand.

Also worth reading in the Times is David Carr’s article, “Book Publishing’s Real Nemesis.” At least one other person, aside from me, thinks the Department of Justice is trying to slay the wrong dragon.

I know that the popular view is that consumers will have lower prices, but (a) that is not assured once Amazon gains monopolistic power and (b) it ignores the loss of jobs to fellow Americans, jobs that will be either eliminated or foreign-sourced, depriving local communities of revenues and increasing the costs to those who are employed.

I’ve noted that it is easy to be for low prices at all costs as long as one is still employed, but that low prices at all costs mantra rapidly fades when one’s job is lost to a third-world country because labor costs are so much less.

Anyway, I highly recommend both articles to you.

April 16, 2012

eBooks vs. pBooks: A Lesson in Value

Filed under: Books & eBooks,On Books — Rich Adin @ 4:00 am
Tags: , , , , ,

This past weekend, my son and I traveled to New York City for the annual Antiquarian Book Fair sponsored (at least in part) by The New York Review of Books, which is the one magazine about books that I highly recommend. As a subscriber to the Review, I was given a complimentary pass and because my wife advertises her art (see her website for beautiful paintings of the Hudson River Valley and portraiture) in the Review, she was able to get a second complimentary pass.

I mention the complimentary passes because the cost of admission to the Fair should have given me a clue as to what to expect. A daily pass cost $20 per person, so I should have known this wasn’t like going to the local used bookstore. In addition, I am familiar with several of the vendors and know that they sell truly rare manuscripts. But none of the clues clicked and we went to the Fair.

The Fair demonstrated to me why pbooks are so much more valuable than ebooks. I’m not talking about convenience or that pbooks lack the interactive capabilities of some ebooks. I’m talking strictly money value.

eBookers know — or should know — that when they buy an ebook, they are buying a license; they are not buying the book in the sense that they buy a pbook. The ebook is intangible, a collection of bytes that are infinitely duplicable, which means there is no such thing as ebook scarcity. In contrast, there are limits to the number of pbooks produced. Even if, as in the case of the Harry Potter books, hundreds of millions of pbooks are produced, there is still a finite number that bear the first edition-first printing seal of scarcity.

I am a collector of first edition pbooks. As much as I prefer to read a book on my ereader — the book is easier to hold; when I finish I can easily move on the next; I can adjust the type size for easier reading; etc. — I still get enormous satisfaction out of being able to let my eyes scan across my library shelves and pause on a book that reminds me of the pleasure I had reading the book. There is an aesthetic beauty to the physical book that ebooks cannot duplicate. Scanning across my ebook library is a very sterile process.

As a collector, I am always looking for a “bargain.” I initially thought that although there would be some expensive items for sale at the Fair, there would books that interest me and that would fit in my collection that I could afford. One of my favorite authors to collect is Sinclair Lewis, an American author from the early to mid 20th century, best known for his books Elmer Gantry, Main Street, and Babbitt. I have for years desired to add a fine copy of Main Street to my collection and have expected to pay several thousand dollars for such a prize.

This was my first shock at the Fair. Staring back at me from a display case was a wonderful copy of Main Street with a wonderfully preserved dust jacket, something that is not often seen. So I asked the price: $165,000. I assure you, $165,000 is not a typographical error. Needless to say, I didn’t buy. Nor did I buy several of the outstandingly gorgeous “art” books that depicted drawings of birds and plants and that cost between $225,000 and $300,000. Alas, my budget was significantly more modest.

But that made me take a closer look at price expectations for other more recent books that were for sale. Before going down that path, however, let me say that if you ever want to see — and touch — books that have price tags in the $200,000 and $300,000 price range, this is the Fair to attend. Dealers came from Europe and the United States and had a vast array of beautiful manuscripts — the books that make editors so pleased to be editors — for sale in prices that easily climbed from a few thousand dollars to hundreds of thousands of dollars.

But back to the more recent popular books that were for sale. Familiar with Suzanne Collins’ Hunger Games Trilogy? The books are only a few years old in hardcover, with the first book originally published in 2008. They were for sale — first edition, first printing — for $3,000. John Kennedy Toole’s 1980 book A Confederacy of Dunces was available for $8,000. And the list can go on.

The point is that we often talk about the used book market being available for pbooks but not for ebooks, but the used book market is simply a way to recoup some of the purchase price; it isn’t the same as the collector’s market. I never thought that a good argument for a lower ebook price was that unlike pbooks, I can’t resell ebooks on the used ebook market. But after visiting the Antiquarian Book Fair, I realized that the collector’s market is a market that should not be ignored in the argument about value.

The bottom line is that an ebook is less valuable than a pbook. It is less valuable because it cannot be collected; it cannot provide the visual gratification that a physical library, like a piece of art, can; it is licensed rather than owned; and, most importantly, it has no ability to increase in value over time if properly cared for and curated because it has no rarity. The ebook versions of the Hunger Games Trilogy will never have an intrinsic collectible value of $50, let alone of $3,000. There will never be a scarcity of the ebooks.

I suppose one counter to this argument would be that a limited electronic edition could be created. I’m not sure what could be included that would make such an edition more valuable than a standard ebook or make it collectible, but one thing is for certain: even a limited edition could not become scarce because of the ease of duplicating bytes. It is so much more difficult, if not near impossible, to duplicate a first edition-first printing of a pbook. Ink and paper, for example can be analyzed and dated; pretty hard to do with bytes.

For the book lover, the person who not only has an insatiable appetite for reading but also wants to collect beauty and rarity, the pbook garners all of the value. The ebook is a loser in this battle. I expect that the collectible market will sustain pbooks for decades to come, especially as the number of book collectors is growing, not decreasing.

Do you agree?

April 4, 2012

eBooks: Is Agency Pricing Good or Bad?

Recently, there has been a lot of focus on the “conspiracy” between 5 major publishers and Apple regarding agency pricing and whether these 6 entities have violated antitrust law. The focus is not on whether agency pricing is good or bad, but whether the parties colluded. That question I’ll leave for the US Department of Justice.

I’m more interested in whether agency pricing has been good for me as a consumer. Various forums have been discussing this and Mark Coker, president of Smashwords, has written an excellent piece defending agency pricing (see Does Agency Pricing Lead to Higher Book Prices?) Mark Coker makes several salient points, but they are points from the author and distributor perspective, not the consumer perspective.

(Mark Coker does make, however, one interesting observation: Before agency pricing, there was the wholesale pricing model. A publisher would set a book’s list price at say $30 and wholesale to booksellers for $15. The booksellers were free to sell the book for any price they wanted, be it $5 or $10 or $25 or $30. The reality was, however, that no bookseller could sell all books at less than cost and survive, not even Amazon. At some point, a bookseller has to turn a profit or at least cover costs. Consequently, the wholesale price was, in effect, an agency price; that is, a minimum price at which a book could be sold without putting the bookseller out of business. In other words, there really isn’t much difference in effect between the wholesale scheme and the agency scheme as far as consumers are concerned. For retailers, the agency scheme ensures that the retailer makes a profit on every ebook sold.)

But what about from the consumer perspective, and even from the indie author perspective?

In the days before ebooks (i.e., my participation in the ebook marketplace), I spent, on average, $5,000 a year on pbooks, mainly hardcover. I am now into my fifth year of ebooking and each of those years has seen a steady decline in the amount of money I am spending on books overall. Combined, my pbook and ebook spending doesn’t exceed $2,000 in a year, and is often quite a bit less.

One reason, if not the major reason, for this is agency pricing. The traditional publishers, namely the Big 6 (Random House, Hachette, Simon & Schuster, Penguin, Macmillan, and HarperCollins), are overpricing their ebooks via the agency pricing. Consequently, I am simply not buying agency ebooks published by the Big 6. The newest James Patterson novel simply isn’t worth $12.99 or higher to me. They are good reads, but let’s face it — classic literature that I would read again and again and savor each phrase they aren’t. They are formulaistic books that provide entertainment but do not evoke a lasting passion.

Consequently, I consider agency pricing to be a positive for the consumer. It helps dissuade ebookers from spending excessive amounts of money on books that in an open marketplace, and without publishers setting a retail price that bears no correlation to the true value of the book, would not command such high pricing in perpetuity. It might command it for weeks or months, but not years.

Agency pricing has had another benefit for the consumer. It has made the rise of the indie ebook distributor, like Smashwords, possible along with the rise of the indie ebook author. It is not that these entities didn’t exist before; they did in the form of vanity presses for the pbook crowd. Rather, they have become legitimized, something the vanity presses never were able to accomplish.

Because the Big 6 agency pricing is so high, readers like me began to explore alternatives. And now I buy primarily indie authored ebooks at places like Smashwords. The competition among indie authors to get noticed and read has been such that ebooks are often priced at $2.99 and less, all the way down to free. Even here, however, agency pricing is beneficial because I can buy those books at Smashwords or Barnes & Noble or Books on Board or any number of outlets and not worry about price — it will be the same at every store.

I’ll grant that if my only interest in reading is today’s popular books by big name authors, what we used to call the New York Times Bestsellers but which name is no longer appropriate, agency pricing is a problem. After all, Amazon demonstrated that it was willing to sell those ebooks at a loss in order to gain market share. (Which raises another interesting observation: When Amazon was able to sell the bestsellers as $9.99 or less ebooks, it cornered nearly 90% of the ebook market. With the advent of a more level playing field, introduced by agency pricing, its market share has dropped to about 60%.) Amazon had the fortune to be able to sell at a loss because other product lines were making a profit and could support the ebook losses; most ebook sellers did not have that option if they wanted to remain in business.

Agency pricing doesn’t ensure the lowest price; the Big 6 demonstrate that daily. But from my perspective as a consumer, the advent of agency pricing has made ebook selling more competitive. Not because the ebooksellers are being price competitive but because the indie authors are being price competitive. Agency pricing has also ensured that there won’t be one supplier of ebooks, which is also important to me as a consumer.

In balancing the scale of good or bad, I think agency pricing is good for me as a consumer. It has saved me scads of money by limiting the number of expensive ebooks that I buy to a handful. It saves me money because I no longer spend as much on pbooks; I have too many ebooks to read in my to-be-read pile, so I buy fewer pbooks. It has broadened my reading. Before agency pricing I did as many readers and bought reasonably priced ebooks by name authors. Since agency pricing, I browse the indie author ebook offerings and buy indie ebooks at very reasonable prices.

One last observation: Even if the Department of Justice pursues the collusion matter, there appears to be nothing inherently wrong with agency pricing. I expect that at worst the 6 parties being investigated will pay large fines but I think agency pricing is here to stay.

What do you think? Is agency pricing good or bad for the consumer?

March 26, 2012

The Business of Editing: To Post or Not to Post Your Fee Schedule?

Recently, colleague Katharine O’Moore-Klopf gave a link to an article that appeared at The Freelancery blog, “Should you post your fees? Publish your pricing? Hit yourself with a stick?” Having read the article, I am not certain I agree with the author that there are only two reasons for posting a fee schedule: (1) “To make people quit calling” and (2) “When you sell mostly to first-time buyers, one-time clients.”

I am not an advocate of posting a fee schedule, but then the type of work I do doesn’t really warrant a fee schedule. Yet I can see situations in which posting a schedule can be valuable. Afterall, does it matter whether you tell a potential client through a posted schedule that you charge $100 an hour or in a live conversation? If the client is willing to pay that price and wants your services, either method should work; if they are unwilling to pay that price for your work, either method should turn them away except that the latter method required your spending time to lose a client.

There are several issues to consider. First, you need to be knowledgable about your clientele and about the clients you want to attract. Are these the type of people/clients who would expect to see a fee schedule?

Second, what is your reputation for the work you do? Is your reputation such that if you charged a premium the client would hire you anyway? Or is it such that price will overcome your reputation?

Third, you need to be aware of what the “standard” price points are for your services. For example, if you charge $100 an hour for copyediting but most of your competition charges $20, in the absence of a reputation that provokes the feeling of must-have-at-any-price, posting a schedule is a sure way to not get a client, although as noted above, the result would be the same face-to-face. The more your schedule is in line with what the market rate is, the less harm that can occur by posting your schedule. But posting such a schedule can tell clients that here is an editor with a stellar reputation whose fees are in line with what the client expects to pay (or is willing to pay).

I think the third point really is the key to the answer. If clients expect to pay $20 an hour and your schedule, whether posted or not, is $20 an hour, then posting the schedule may well draw in additional clients.

The more I think about it, the more I believe that the answer lies in first evaluating your fee schedule against the “norms” for what you do and then in light of the clients you wish to attract or retain. Another factor that needs to play a part in the decision-making process is how you calculate your fee.

We have been talking about a schedule in terms of dollars, but a schedule can be vaguer than that yet be equally informative. For example, in my case, if I were to post a schedule, I would say something like: “Freelance Editorial Services does not charge an hourly rate. We charge a per-page rate for copyediting with a page calculated as…” or “Freelance Editorial Services does not charge an hourly rate. We charge a project rate, which is calculated as follows: …”

However, posting a schedule by itself is not helpful to you or even to the client. There needs to be a justification for the schedule. For example, I might write something like this: “Over the 28 years of my editing career, my focus has been on medical books written by doctors for doctors. My specialty within that medical community is multithousand-page manuscripts and multiauthor manuscripts that require the use of multiple Freelance Editorial Services editors to complete in a timely and accurate fashion.” Perhaps I would write another sentence or two and then give my fee schedule.

The point is that combining a rationale with a fee schedule can be a fruitful way to generate additional business. Posting a schedule that stands alone, that isn’t surrounded by reasons justifying the schedule may do no harm but is unlikely to do much good either.

As with everything else we do, posting a fee schedule can be turned into a marketing tool. There are so many variables to be considered, that it is not possible to blanketly say never post a fee schedule or always post a fee schedule. The correct answer has to be: it depends on what you want to accomplish and whether posting a fee schedule can help you reach that goal.

A failing of myself and my colleagues is that we seek rigid answers to business questions and problems because we want to focus on what we do and like best: the editorial function. But to succeed, we really need to wear multiple hats and we really need to change hats depending on whether the question is an editorial question or a business question. Although both require analyzation, the type of analyzation process required is different for each.

What reasons do you have for either posting or not posting your fee schedule?

March 21, 2012

The Business of Editing: Reducing Fees

One of the hardest subjects to address in the editing world is that of fees: How much should I charge? The variables that go into the answer make a pat answer difficult.

Perhaps equally vexing is the included-but-unasked question: Should I ever reduce my fee? It is this question that I attempt to tackle here. (The final answer has to lie in your individual circumstances; there is no always-true answer.)

If I were to survey colleagues and ask the question, I have no doubt that very few, if any, would respond that yes, there are times when fees should be reduced. I expect most would say that fees should be raised and if that is not possible, at least held steady. Of course, in an ideal world this would be 100% sound advice, but few of us edit in an ideal world.

When considering the answer to the question, you should consider what kind of work you do and for whom do you work. I think the answer may be different, for example, if you work only for publishers, than if you work directly with authors. It also may depend on whether you work alone or as part of a group; whether volume is important; and myriad other variables.

Regardless, however, every editor should be asking and considering the question, especially if they have unwanted downtime.

I recently had to address this question in my own business. I admit that I didn’t struggle too long with the pros and cons.

I was offered the opportunity to have enough volume to keep myself and several editors very busy for many months. In exchange, the client wanted a lower per-page editing rate. Although it is very rare for me to have any downtime, it is not that it never happens. During the height of the recession, we did well, but I was still unable to keep all of my editors busy all of the time.

So, faced with the prospect of a large volume of work that conceivably could keep all of us busy year-round, I had to decide whether to lower my per-page rate. In the end, I did, because the economics were such that the exchange would be well worth accepting. So far, this has been true.

But I work in a narrow area (medicine) and for publishers and packagers only. I do not work directly with authors. Because of what my editors and I do, we are able to use techniques to increase efficiency and speed, and we are always searching for new ways to increase both without decreasing accuracy.

A willingness to consider reducing fees requires an understanding of your marketplace. When it comes to editing a book that is being translated from Chinese to English, an editor who is fluent in Chinese can probably charge more than an editor who knows no Chinese. Consequently, simply knowing what the Chinese-fluent editor is able to charge is not an indication of what you can or should charge if you are the non-Chinese-language editor.

On the other hand, if you are a Chinese-fluent editor with time on your hands and you know that you are competing with other similarly fluent editors, it may be in your interests to negotiate a volume contract at reduced prices. There is no medal for stubbornness when it comes to fees.

Colleagues will often argue that low-price editing lowers the price for all editors and, thus, we need to stick together at the higher price level. I know that they want me to take this argument seriously, but that is not possible.

First, the entry to editing is easy and the bar so low that virtually anyone can hang out a shingle that says “professional editor.” Every day, hundreds more “professional” editors appear, and these new editors have prices all over the rainbow. Granted that, once hired, their lack of skill may become apparent, but they still get hired first because a key factor in the hiring process is price.

Second, colleagues who ask you to hold the price may not themselves be doing so. When faced with the prospect of no work and thus no money to pay bills, they often work for less. The reality is that our business is not a cooperative business; we compete all the time with each other and, in doing so, we tend to look out for our own best interests.

Finally, we face the problem of establishing what should be a base price for all editors. In my 28+ years as an editor, although numbers have been tossed about, no one has been able to come up with a universal minimum price — or universal method for calculating the same — that is good for all editors and all situations.

Which brings me back to the question of whether lowering fees should be considered. The answer is so dependent on so many variables that there is no correct, universal answer. In my case, the resolution of the question was easy. Because of how I charge (per-page), how I work (i.e., the use of macros and other efficiencies), what I want (to know that I will have no downtime and that I will not have to constantly market), and because the amount in question was nominal on a per-page basis (although it would add up to a significant sum over the long-term), coming to the answer that I should agree to lower my rate was easy.

For you, the answer may be much more difficult or may be no, but it is a question that should be addressed and analyzed, not simply shunted aside with no as the foregone conclusion. This question is one that every business has to face regularly, and our business is no different.

March 14, 2012

Amazon’s Assault on Intellectual Freedom

Several weeks ago, I wrote Breaking News: Amazon vs. IPG, which was followed by Worth Noting: Amazon is an Author’s Friend — Or Maybe Not. The first article was picked up by other blogs and at one of those blogs, Bryce Milligan, publisher and editor of Wings Press, as well as an award-winning poet and author of books for children and young adults, posted a comment that caught my eye. I asked Bryce to write a guest article expanding on his comment. That article follows.

_______________

Amazon’s Assault on Intellectual Freedom

by Bryce Milligan

There is an undeclared war going on in the United States that threatens the linchpins of American intellectual freedom. In a statement worthy of Cassandra, Noah Davis wrote in a Business Insider post last October, “Amazon is coming for the book publishing industry. And not just the e-book world, either.” When titans battle, it is tempting to think that there will be no local impact. In this case, that’s dead wrong. Amazon’s recent actions have already cut the sales of the small press I run by 40 percent. Jeff Bezos could not care less.

One recent battle in Amazon’s larger war has pitted it against a diverse group of writers, small publishers, university presses, and independent distributors. It is a classic David-and-Goliath encounter. As in that story, however, this is more than just pitting the powerful against the powerless. In this case, the underdogs have the ideas, and ideas are always where the ultimate power lies.

Wings Press (San Antonio, Texas) is one of the several hundred independent publishers and university presses distributed by the Independent Publishers Group (IPG), the second largest book distributor in the country, but still only a medium-sized dolphin in a sea of killer whales. In late February, IPG’s contract with Amazon.com was due to be renegotiated. Terms that had been generally accepted across the industry were suddenly not good enough for Amazon, which demanded discounts and practices that IPG—and all of its client publishers—could only have accepted at a loss. Yes, that does mean what it sounds like: To do business with Amazon would mean reducing the profit margin to the point of often losing money on every book or ebook sold.

IPG refused to accept the draconian terms and sought to negotiate further. In what can only be seen as a move to punish IPG for its desire to remain relevant and healthy, Amazon refused to negotiate and pulled the plug on all the Kindle ebooks distributed by IPG, marking them as “unavailable.”

Not a big deal? Imagine that Walmart controls everything you eat, and Walmart decides to stop selling fish because it thinks that fishermen are making too much profit. Amazon is the Walmart of online bookselling. The dispute between Amazon and IPG will affect every literate person in America. It is a matter that goes to the heart of what librarians have termed “intellectual freedom.” In other words, the resolution of this dispute, one way or the other, will affect every individual American’s access to certain books. It will affect your ability to choose what you read.

Restrictions on access to literature generally have more politically motivated origins. The banning of certain Native American and Mexican American authors and books in Arizona, for example, is purely political. Attempts in the past to ban literature based on its “moral content” were largely political in nature. This dispute is purely capitalistic, and is much more difficult to fight.

A single practical example. Wings Press had offered up one of its Kindle titles, Vienna Triangle by California novelist Brenda Webster, for the Amazon daily deal— a limited time offer of 99 cents per download. The book zoomed to the top ten of one of Amazon’s several bestseller lists. While it was still listed as a bestseller, Amazon suddenly marked the title as “unavailable.” The trail of loss increases in impact as it descends the food chain: Amazon doesn’t notice the loss at all. IPG sees it as one of its 5,000 Kindle titles that vanished. Wings Press sees it as one of its 100 Kindle titles that vanished. The author sees it as the loss of her book, period.

Lest one think that eliminating a single ebook novel is a loss of little consequence, Wings Press also publishes the works of John Howard Griffin, including Black Like Me, one of the most important works of the civil rights movement and widely considered an American classic. Amazon’s refusal to sell the ebook of Black Like Me should be of serious concern to every American.

Ebook sales have been a highly addictive drug to many smaller publishers. For one thing, there are no “returns.” Traditionally, profit margins for publishers are so low because books that remain on shelves too long can be returned for credit—too often in unsalable condition. No one returns an ebook. Further, ebook sales allowed smaller presses to get a taste of the kind of money that online impulse buying can produce. Already ebook sales were underwriting the publication of paper-and-ink books at Wings Press.

It has been increasingly obvious to independent publishers for the last two years that Amazon intends to put all independents out of business—publishers, distributors, and bookstores. Under the guise of providing greater access, Amazon seemingly wants to kill off the distributors, then kill off the independent publishers and bookstores, and become the only link between the reader and the author. The attack on distributors like IPG and on some larger independent presses is only part of the plan. Amazon has also been going after the ultimate source of literature, the authors.

Having created numerous (seven or more) imprints of its own, Amazon has begun courting authors directly by offering exorbitant royalties if the authors will publish directly with Amazon. Among the financial upper echelon of authors, Amazon is paying huge advances. Among rank-and-file authors, not so. Here they are offering what amounts to glorified self-publication. The effect is to lure authors away from the editors who would have helped them perfect their work, away from the publishers and designers and publicists and booksellers who have dedicated their lives to building the careers of authors, while themselves making a living from the books they love. Even the lowly book reviewer has been replaced by semi-anonymous reader-reviewers. All these are the people who sustain literary culture.

For Amazon to rip ebook sales away from independent publishers now seems a classic bait-and-switch tactic guaranteed to kill small presses by the hundreds. Ah, but predatory business practices are so very American these days. There was a time not so long ago when “competition” was a healthy thing, not a synonym for corporate “murder.” Amazon could have been a bright and shining star, lighting the way to increased literacy and improved access to alternative literatures. Alas, it looks more likely to be a large and deadly asteroid. We, the literary dinosaurs, are watching closely to see if this is a near miss or the beginning of extinction. Fortunately, this generation of dinosaurs is a little better equipped than the last one to take measures to avoid such a fate.

One can choose to buy ebooks from Barnes & Noble (bn.com) or from almost any independent bookstore rather than Amazon. One can buy directly from IPG. A free app will allow one to read those books on a Kindle. The resistance has already begun, and it starts with choice. I invite you to sign the petition at Change.org.

February 24, 2012

Worth Noting: Amazon is an Author’s Friend — Or Maybe Not

Filed under: Worth Noting — Rich Adin @ 4:00 am
Tags: , , , ,

An article worth reading about one author’s travails with Amazon and its KDP program: Who Controls Your Amazon E-book Price? by Jim C. Hines.

Hines’ experience is one of the problems that authors — and consumers — will increasingly face as Amazon’s control over the ebook market grows. The more authors think short-term, the more they will hurt themselves long-term. Similarly, the more consumers think short-term and refuse to worry that today’s consumer-friendly Amazon may not be tomorrow’s Amazon, the more likely consumers will be the recipients of the treatment Jim Hines received — and other authors, as well — from Amazon.

Particularly worth noting is the following recent change Amazon made to the terms and conditions of the “contract” with KDP authors:

KDP relies on complex systems and processes. We strive to make our systems and processes error-free, but we cannot guarantee that they will be, and we will have no liability arising from system or process failures, interruptions, inaccuracies, errors or latencies.

Just remember — Amazon is my friend and will do me no harm! Like Fantasyland at Walt Disneyland, as long as you believe…

February 23, 2012

Breaking News: Amazon vs. IPG

In today’s business section of the New York Times, I read “Amazon Pulls Thousands of E-Books in Dispute.” Then, at Nate Hoffelder’s The Digital Reader blog, I found a link in his “Morning Coffee” column to an article at PaidContent about the controversy, “Update: Amazon Yanks 5,000 Kindle Titles In Fight Over Terms.” Page 2 of the PaidContent article reprints a memo IPG sent to its publishers about the controversy. Both articles are worth reading and thinking about.

As you know, it is not my habit to run more than two articles (plus an occasional Worth Noting) each week, but this is an exception.

Recent news from and about Amazon has been disturbing. (Watch for tomorrow’s article, Worth Noting: Amazon is an Author’s Friend — Or Maybe Not, and for Priming the Pump: Amazon’s Prime Program, which is scheduled for March 5.) For quite sometime, I’ve been saying that the rosy picture painted of Amazon can’t last, and I think we are beginning to see that prediction come true.

I think the New York Times sums up the dilemma neatly: “Amazon is under pressure from Wall Street to improve its anemic margins. At the same time, it is committed to selling e-books as cheaply as possible as a way to preserve the dominance of its Kindle devices.” These are two conflicting goals and there are limited ways available to Amazon to meet them.

Exclusivity is one way. If consumers want certain books, make them available only on Amazon and ebookers will come. Most ebookers will buy a Kindle because they do not want to deal with stripping DRM (Digital Rights Management) and the conversion process, not matter how easy to do; most consumers want to buy and go.

The second available method is putting the squeeze on distributors and publishers, then authors, then consumers. The lost agency fight (remember how quickly Amazon capitulated?) demonstrated that as powerful as Amazon was, it wasn’t yet powerful enough to win a battle with the Big 6 publishers (Penguin, Macmillan, Simon & Schuster, Random House, Hachette, HarperCollins). Amazon has begun striking back at the Big 6 with the establishment of its own publishing arm and its exclusivity deals.

But Amazon is probably powerful enough to win the fight against the mid-tier and low-tier distributors and publishers. It is testing the waters with the battle with IPG. If Amazon wins, especially if you combine the win with how cavalier Amazon is in its dealings with exclusive authors (see tomorrow’s Worth Noting), Amazon will not only dominate the ebook marketplace but be in a position to squeeze lower-tier publishers and distributors, and, ultimately, perhaps the Big 6’s margins to the point that they will not be able to survive. When that squeezing is done, the next in line has to be the authors, followed by the ebookers.

A monopolist is not anyone’s friend. The ebooker mantra that “Amazon is my friend and will do me no harm” is as false today as it was yesterday and as it will be tomorrow. Amazon is not anyone’s friend — it is a business that has to ultimately satisfy its investors by giving an acceptable return. There is nothing wrong with Amazon being a business; what is wrong is that so many ebookers are lulled by the way things are today and fail to look at the long-term implications of Amazon’s success in moving toward becoming a monopoly.

I am aware that many ebookers would be happy to see every publisher and distributor disappear, thinking that when that happens authors will flourish by directly dealing with megacorporations like Amazon and that the consumer will benefit from even lower prices. Unfortunately, history proves that such expectations, in the absence of government price regulation, simply do not come to fruition. Monopolies ultimately result in price rises for consumers and the continual squeezing of suppliers.

Once authors have to fend for themselves, they will be even more susceptible to being squeezed because they will have to stand alone against the 800-lb behemoth. I hope IPG stands firm; I hope it can stand firm. Other small distributors, like Publisher’s Group West, should think about their own vulnerabilities. Will they be next if IPG fails? Should they support IPG?

My questions are these: Once Amazon has squeezed the publishers and distributors dry, and once many authors have decided that they are better off self-publishing and dealing directly with Amazon, how long will it be before Amazon starts squeezing authors dry? And once authors are squeezed dry, how long will it be before Amazon starts squeezing consumers?

Contrary to ebooker belief, neither a monopolist nor a wannabe-monopolist like Amazon is the consumer’s friend.

January 25, 2012

The Publisher’s Search for Savings

The current issue of The Atlantic has a very interesting article, “Making It in America,” which asks a very difficult question: The article explores manufacturing jobs and wonders what will be the future for the unskilled laborer. The article is well-worth reading and thinking about, even though the professional editor is skilled labor, because just as manufacturers seek cost savings, so do publishers, especially in the Internet Age.

One problem with publisher attempts to save costs is that much too often the effort is focused on editorial costs, the so-called hidden costs, which generally means reducing the compensation paid to freelance editors. I would be less concerned about taking a cut in my compensation if my compensation had risen over the course of years. However, it hasn’t; the rate being offered by many publishers today is the same rate publishers were offering in 1995. Another way of saying it is that publishers have been the beneficiaries of editorial cost savings since 1995 because they haven’t increased the rate of pay in the past 17 years commensurate with the increases in costs of living.

But advocating that is beating one’s head against a reinforced brick wall. Why? Because editorial costs are hidden costs in the sense that, unlike a book cover that buyers see immediately and that can either improve or lessen chances of a sale, editorial matters are not noted until after the book is already purchased, usually weeks after purchase, when the return period has already expired. We may curse the publisher of a book riddled with editorial errors, but whereas we might “blacklist” an author, we don’t “blacklist” a publisher. Consumers simply do not shop for books by publisher; publisher brands are weak brands. When was the last time you asked a bookseller for the latest book published by Harper & Row?

Regardless, recently, I received a communication from a major publisher with its latest idea for lowering costs. I applaud the publisher for thinking about ways to save costs and for experimenting; this is something that too few publishers do, yet need to do in the ebook age. But I’m not convinced that the approach being taken will result in any significant savings.

The underpinnings of the approach is that there is a difference between editing and reading: the former is time-consuming, the latter less so. I have been thinking about this division and have asked colleagues for their view of whether the reading effort while editing differs from the reading effort when looking only for errors such as misspelling and homonym misuse, but not “copyediting.”

The colleagues I spoke with regarding whether the “copyediting read” differed significantly (or at all) from the “error read,” were similarly minded — amongst themselves and with me. Their was universal agreement that the reading effort remained the same and was equally time- and effort-intensive. Asking an editor to read for errors but not copyedit is like asking a fish to swim in air — the editorial skills are not so easily shunted aside.

In my case, there could be no cost savings even if there was a difference because I charge by the page, not the hour. Fifty pages are still 50 pages, whether thoroughly read or not. Consequently, while I think the publisher has the right idea — look for cost savings — this attempt is unlikely to result in significant savings. The publisher would likely save more by simply switching from an hourly based fee for editing to a per-page rate. Such a move, although many editors cannot see it, also would greatly benefit editors. (For a discussion comparing hourly and per-page rates, see Thinking About Money: What Freelancers Need to Understand. You can also search past articles using the search term per-page rate.)

Let’s begin with human nature. If I am paid by the hour, I have no incentive to do a job either faster or more efficiently. (I assume that the quality of the editing would not differ regardless of how the editor is paid.) If I am happy earning $21/hour, I am as happy earning it for 40 hours as I am earning it for 50 hours; after all, what I am happy with is the $21/hour, which is constant, and having the work in an increasingly competitive environment.

But think about if I am paid by the page. If I am paid $3.50 a page, I can earn my comfortable $21/hour by editing at a rate of 6 pages an hour. Imagine how luxurious it would feel if I could edit at the same level of quality but at 10 pages an hour — I would then earn $35/hour. There is now an incentive for me to increase my efficiency and speed without sacrificing quality.

For the publisher, the per-page rate sets a maximum fee for a project. There is no more budget speculation about what a project will cost because hours are no longer part of the formula; instead, the focus is on saving time by getting the project completed sooner — a shorter turnaround. The costs are controlled because an editor can’t dally over the manuscript in the belief that the longer it takes to edit, the greater the editor’s income.

It also gives the publisher an opportunity to weed out from its stable of editors those who are inefficient and more costly because of their inefficiency. Remember that savings are not only gotten by reducing payout to an editor; even greater and more important savings can be had by shortening the time from manuscript to published book, especially in the eBook Age when faster-than-instant gratification is demanded.

Shifting to a per-page payment also frees a publisher to evaluate ways to increase accuracy, efficiency, and productivity. A colleague who was discussing EditTools with me (trying to find out what enhancements are coming in the near future :)), told me that as a result of using tools like EditTools, she has been able to increase the number of pages she can edit in an hour by as much as 50%, with an even higher level of quality than previously, both of which have resulted in increased work opportunities. Whereas many publishers and editors currently have little incentive to experiment with these types of tools, switching to a per-page rate from an hourly rate would provide that incentive. The ultimate results would be cost savings for the publisher and increased income for the editor.

Unfortunately, in the cost savings game, win-win situations are rare. Neither publishers nor editors are willing to break the traditional path. One of my clients told me that they are unwilling to insist that editors accept a per-page rate; in fact, the client expressed reluctance to use editors who want to work on a per-page rate, saying that they fear editors would make less money and thus exacerbate the problem of finding quality editors. The client went on to say that even after 15 years of my working for them on a per-page rate, they consider me an exception and the per-page rate experimental; additionally, few editors have asked for a per-page rather than an hourly rate. Similarly, no matter how many presentations I have made over the years demonstrating why the per-page rate is better for editors as a general rule (as with anything, whether it is better depends on what you do; there is no universal rule that applies in every circumstance), many editors refuse to try it and of those who do, a goodly number have told me that “they lost their shirt” on project X on a per-page rate and thus refuse to use it ever again.

I am at a loss how to convince publishers of the benefits of the per-page rate for their bottom line; corporate thinking runs in hourly segments, and, as one client noted, there are too many “approvals” required. But those publishers I have talked with who have moved many of their freelance editors to the per-page rate tell me that they can see overall cost savings.

As for the editors who “lost their shirt” on a project, the answer is this: First, you cannot evaluate the profitability of a client based on a single project. Similarly, you cannot evaluate the profitability of a payment method on a single project. You must evaluate both on the basis of at least three completed projects. There are lots of reasons why the shirt could have been lost on the single project, not least of which was the editor’s continuing to approach the project as if it was hourly paying. I can tell you from my own experience that it takes time to learn how to efficiently address a manuscript and that even today, I occasionally get a project on which I lose my shirt. But if I lose my shirt on one out of 100 projects, the other 99 more than makeup for the one’s loss.

Perhaps a discussion of the factors that can cause you to lose your shirt should be another day’s topic. Until then, do you stick with hourly only projects, do a mix, or per-page/project fee only? Why and what is your experience? Why are you reluctant to move from an hourly based fee to a per-page fee? Are you really satisfied with the hourly rate publishers pay?

November 14, 2011

Does the Future of Editing Lie in Tiers?

One of the things that struck me about the “saving” of the American auto industry was the new union contracts that created two wage tiers. The idea of tiers is also invading public employee contracts.

Then a new project came to me that was conditioned on my accepting a lower per-page rate than I customarily charge. The tradeoff was the size of the project and the extra long schedule. Yet that made me wonder: Does the future of editing lie in tiers?

We have already seen the changes in pay that were brought about by globalization of the editor’s job. Whereas when I first started in editing, 28 years ago, I had to overcome publishers wanting editors who were very local, that is, editors who could pick up and deliver the hard copy manuscripts, today I have to overcome publishers who are price focused and globally oriented. That global orientation has already caused a depression in rates that publishers will pay.

I thought that the rate pressure had hit bottom until this project was offered. Now I see it hasn’t and that it may be taking a more insidious form — the form of tiering.

I called the client to discuss the pricing and discovered that the rate they were offering was their new top-tier rate given only to very experienced editors and only for the most problematic projects. I was informed that most of the freelance professional editors who worked for this client were in one of two even lower-paying tiers.

I understand the pressure that publishers are under. Competition is getting keener with agents starting their own presses and with booksellers venturing into the publishing end of the book process. Yet the race to the bottom means everyone loses.

Right now the bulk of the competition for American editors lies in India-based editors and in newly minted American editors, both of whom are willing to work for low wages (i.e., low based on the American lifestyle). Newly minted American editors think that taking a job at any price is better than not having any work at all and also that it gives a foot in the door. That was reasonable thinking a few decades ago, but not today with globalization and with publishers viewing editorial services as being of questionable value for their bottom lines.

Alas, although such thinking is no longer reasonable, I am unsure what reasonable thinking is when it comes to pay. I am also wondering what the effect would be should I decide to accept this project at the proffered price. I am weighing multiple factors as I consider the effects.

First, even at the proffered price, the project would be profitable to me. Because of efficiencies in how I run my business, the proffered price is not a breakeven or worse price, yet it is not as good a price as I expect for a project with the problems this one has.

Second, I wonder if acceptance would set a precedent. Would I be more willing to accept lower-paying projects in the future? Will this client expect to pay even less next time?

Third, I wonder how this will impact other facets of my business. Will I be able to accept projects from other clients or higher-paying projects while working on this one? How will it interfere with work over the next few months (the proffered project is expected to last 6 or 7 months of near full-time editing).

There are other concerns but perhaps the most important concern is this: Is this project a portent of the future of editing in which low and tiered pay will become the norm, with editors having no control over the tier to which they are assigned? This may seem farfetched now, but the future is not so far away that we can ignore what is or may be coming. The time to plan counterstrategies to these possibilities is now; waiting until they are universal is too late.

It is at times like these that I lament the lack of a useful, viable, forceful national association for professional editors that is something more than a social club. The one lesson that publishers have absorbed, and that freelance editors shore up by their actions, is the divide-and-conquer lesson. American editors stubbornly refuse (generally speaking) to coalesce into anything that smacks of giving up some independence. Ultimately, that reluctance to give up any of our freedom will be our downfall.

Sadly, I think tier pricing for editors will be the norm in a few years, not a few decades. I think when that occurs, it will be too late for editors to join together to fight it. The ease of entering the field — all one need do is hang out a shingle that proclaims he or she is ready for work — and the very minimal financial investment needed to do so, works against us in this time of globalization, just as it worked for us when we started our own careers.

How many of us would choose this career path today should we be given the opportunity to restart our career lives? I know I would have to think carefully about my choice.

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