Tag Archives: business

13 Things You May Not Know About Agents

By Rachelle Gardner

Source: http://www.rachellegardner.com/2012/06/13-things-you-may-not-know-about-agents/

1. We really hate getting bad news and we hate sharing it with you, but we trust you’re adult enough to handle it.

2. If we say we don’t want to submit a particular project to editors, we’re probably trying to protect both of our reputations (the writer’s and the agent’s).

3. While many of us do a great deal of editing and polishing of your manuscripts and/or proposals, the bottom line is that it’s the writer’s job to provide a marketable book. Agents shouldn’t be counted on to make it sales-ready.

4. We are very invested in your book and often feel like it’s “our baby” too (even though we KNOW it’s yours!)

5. If it seems like we’re too busy, it’s because the economics of this industry demand we carry a certain amount of volume to make a living wage.

6. We prioritize taking care of current clients above the search for new clients. So typically, queries and writer’s conferences take a back seat.

7. We really are interested in your long-term career, not just the size of the next advance.

8. We hate the slowness of publishing just as much as you do!

9. We want to set you up with the publisher and editor who will be best for you, not just the one who’s offering the most money.

10. When we’ve tried to sell your book but we’re not successful, we’re probably almost as disappointed as you. Not only are we often emotionally invested, we’ve put in a lot of time for no paycheck.

11. When you send us a manuscript to read, we don’t do it during the work day. We read in the evenings (our “free time”) and on the weekends. With Kindles and iPads, we may even be reading your manuscript on the treadmill at the gym.

12. We’re aware of all the new options for writers these days, and we’re doing our best to help steer each client in the right direction.

13. If your writing career keeps you awake at night, there’s a good chance it has kept us awake on occasion, too.

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Filed under agents, Rachelle Gardner, writing tip

The Devil’s Dictionary: Corportion, Congress, Lobbyist

In our continuing quest to revisit a classic, or even a curiosity from the past and see how relevant it is, we continue with The Devil’s Dictionary by Ambrose Bierce. Originally published in newspaper installments from 1881 until 1906. You might be surprised how current many of the entries are.

For example, here is a definition for the words Corporation and Congress. The Old definitions are Bierce’s. The New definition is mine. From time to time, just as it was originally published, we will come back to The Devil’s Dictionary, for a look at it then and how it applies today. Click on Devil’s Dictionary in the tags below to bring up the other entries.

OLD DEFINITION
Corporation, n. An ingenious device for obtaining individual profit without individual responsibility.

Congress, n. A body of men who meet to repeal laws.

NEW DEFINITION
Corporation, n.The only think I could add to corporation is: An ingenious device for obtaining individual profit without individual responsibility. Peopled with overcompensated executives whose sole purpose is to privatize the profit and socialize the debt. In the vernacular: heads, I win (I get to keep the profit); tails you lose (You have to cover the bad debts).

Congress, n. A body of men and women who meet to repeal laws, generally at the behest of a corporation. This is now true of both the federal Congress and the state Congresses throughout the U.S.

Lobbyist, n. Paid influence peddler, bag man for the corporation, general thief in the night whose sole purpose on behalf of corporations is to see that Congress understands which laws are to be repealed or weakened, and how this should be done, particularly since too many lobbyists are former elected officials. Lobbyists can promote on behalf of other entities and not only corporations, but the goal is generally the same.
[Editor’s note: lobbyist was not a term long in use when The Devil’s Dictionary was created.]

Final word:
“It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress.” –MARK TWAIN

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Filed under Ambrose Bierce, Devil's Dictionary, Mark Twain, satire

E-book publishing and price fixing

Source: http://www.nytimes.com/2012/04/18/business/economy/competition-needs-protection.html?_r=1&smid=fb-share&pagewanted=all

April 17, 2012

Competition Needs Protection

New York Times

By EDUARDO PORTER

To believe publishers and authors, the government just handed Amazon a monopoly over the book market: The price-fixing suit against Apple and the nation’s top publishers filed by the Justice Department last week will free Amazon to offer ruinous discounts in the booming new market of electronic books, drive brick-and-mortar bookstores out of existence and kill off publishers’ lucrative business of ink on paper.

Yet there is a different reading to this story. Publishing companies — like bookstores — fear they are on the losing end of a technological whirlwind of digital distribution that will make much of what they do obsolete. They would like to stop it. But though publishers may be happy to subvert competition to protect their business, this can entail a heavy cost for the rest of society.

The media industry’s efforts to limit competition date at least as far back as the 1920s and 1930s, when the emergence of radio threatened newspapers’ stranglehold of local markets.

At a meeting at the Biltmore Hotel in New York in December 1933, newspaper executives offered what was essentially a plan to divvy up the audience between radio entertainment and newspaper news. The newspapers would stop their campaign against radio and reinstate radio listings if the major radio networks would limit their news offerings to a couple of short bulletins a day from the newspapers’ wire services.

The Biltmore Agreement, as their pact was known, soon fell apart, as independent stations not part of the deal started buying information from new radio news services and offering real news. Despite that cartel’s failure, the anticompetitive impulse survives to this day.

The Internet is walloping media perhaps like no other technology before. And the media establishment again looks upon competition as a hindrance to its survival.

Flailing under the loss of readers and advertisers to online competition, newspaper executives approached regulators three years ago floating the idea of an antitrust waiver. They wanted to coordinate on a strategy to charge readers for their online news and take steps against the aggregator Web sites that were republishing much of their content. Though they gained the sympathy of crucial members of Congress, the government rightly shot down the idea.

The top record labels, meanwhile, are facing a class action antitrust suit that accuses them of colluding to keep the price of online music artificially high to protect their lucrative CD business.

The suit filed last week against Apple and five of the nation’s six main publishers has a similar plot. Amazon had been buying e-books wholesale and selling many best sellers at a heavily discounted $9.99, taking the loss to encourage sales of its Kindle e-reader. Fearful that this discounting could destroy the $25-a-book hardcover business, publishers took advantage of Apple’s entry into the market to change the terms. According to the lawsuit, they colluded with the computer colossus to establish an “agency model” under which publishers would set e-book prices in a range of $12.99 to $14.99, and give the distributor — be it Apple or Amazon — a 30 percent cut.

It’s natural to feel some sympathy for old media firms as technology juggernauts bear down on them. To many of us, book publishers and newspapers are more than just businesses. They are the keepers of the culture, the guarantors of our democracy. And they are small compared with Amazon, which controls 60 percent of the growing e-book market, as well as a big share of the market for books on paper. Absent any collusion, Apple’s entry into the e-book market would be the kind of competitive challenge we should welcome in the digital world.

But the charges aren’t trivial. The kind of collusion alleged by the Justice Department is called price-fixing. It has been illegal for a very long time, even if one is fighting a very large rival. According to the Consumer Federation of America, it would cost readers about $200 million this year alone. More important perhaps, this behavior could arrest the development of innovative platforms to sell digital goods on the Web.

Competition in the digital domain doesn’t look like carmakers’ slugging it out for market share. In digital markets, dominant firms are almost inevitable. There is no other social media firm with anywhere near Facebook’s 850 million members. Almost two-thirds of all Internet searches in the United States happen on Google.

The concentration is driven by the economics of the Web. The cost to Amazon of selling one more e-book is pretty near zero. This increasing return to scale makes big digital companies much more profitable than small ones. It is compounded by what economists call “network effects”: If many programmers design apps for iPads, they will become more popular, which will encourage more programmers to write apps for them.

Competition is nonetheless crucial to keeping innovation alive. Think of Google’s successful move into the smartphone business with Android, or its less successful stab at social media with Google Plus. A lot of innovation is also built on top of the dominant platforms. That is perhaps where competition most needs protection.

European and American regulators are looking into Google’s behavior not to check how it treats Microsoft’s Bing, but to determine whether it abuses its dominant search engine to increase secondary businesses — like, say, its shopping guide — while pushing innovative rivals down the rankings. The Justice Department is interested in how Apple sets terms for media companies because it wants to make sure they have a shot to innovate on the iPad and Apple’s other platforms.

Just as important as ensuring that platforms cannot abuse their dominance is to ensure that the companies that make the products that flow on these platforms — book publishers, say — do not use anticompetitive tactics to benefit one platform at the expense of others. This is the kind of competition that the Justice Department’s civil suit against Apple and the book publishers is meant to protect.

Admittedly, the Justice Department’s case may be bad news for the established book industry. Amazon and other online competitors have squeezed Borders out of business. It is only a matter of time before cheap e-books put an end to hardcover tomes selling for $25. And with Amazon pushing into publishing itself, some publishers could become victims as well.

But what really matters to society is what the case means for the production and consumption of books. That might not be so dreadful.

For sure, if brick-and-mortar bookstores disappear, browsing will die with them. But writers and publishers will have plenty of other ways — think Amazon, Facebook or Google — of letting readers know about their books. E-books, moreover, can be profitable. Mark Cooper of the Consumer Federation of America estimated that producing, distributing and selling an e-book costs about 25 percent of the cost of a physical tome; a $10 e-book still gives publishers about $4 to cover overhead and profit. And in an e-book world, publishers’ costs are sure to fall.

While Amazon remains dominant, its share of the e-book market has fallen to about 60 percent from 90 percent. Barnes and Noble, which has about a quarter of the market, would suffer if Amazon discounts sharply. But it could shed costs by getting rid of bookstores. And publishers can recover pricing power. Apple and two of the five publishers decided to fight the charges in court. But three settled. Though they must allow Amazon to resume discounting, they must do so for only two years.

And even if every existing publisher were driven out of business, reading would probably survive. Without the middlemen, publishers might even pay higher royalties to creators.

Music offers perhaps the best parallel of what could happen to the written word online. Record labels that originally welcomed Apple’s iTunes soon realized it was a killer in disguise, allowing consumers to unbundle $13 CDs and buy only their preferred singles for 99 cents.

But it wasn’t generally terrible for musicians. ITunes offered a shot to garage bands that could never have signed with a label. And fans didn’t fare too badly. Last year, consumers bought 1.3 billion singles — saving about $5 billion by not having to buy entire albums. This is hardly chump change. Would we be willing to give this up to save endangered record labels? While we ponder this, why not consider reviving Blockbuster, Circuit City and Tower Records?

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Filed under e-book, opinion, publishers, publishing

E-book battles: writers pawns and prize

[Editor's note: while not directly related to the e-book lawsuit, it is related as it pertains to Amazon, probably the biggest seller of books and e-books. As before, to find out more about the e-book lawsuit, click on e-book in the "Filed under" section at the bottom of this blog post. Thanks for stopping by.]

Source: http://www.nytimes.com/2012/04/16/business/media/amazons-e-book-pricing-a-constant-thorn-for-publishers.html?src=recg

April 15, 2012

Daring to Cut Off Amazon

New York Times

By DAVID STREITFELD

TULSA, Okla. — Plenty of people are upset at Amazon these days, but it took a small publishing company whose best-known volume is a toilet-training tome to give the mighty Internet store the boot.

The Educational Development Corporation, saying it was fed up with Amazon’s scorched-earth tactics, announced at the end of February that it would remove all its titles from the retailer’s virtual shelves. That eliminated at a stroke $1.5 million in annual sales, a move that could be a significant hit to the 46-year-old EDC’s bottom line.

“Amazon is squeezing everyone out of business,” said Randall White, EDC’s chief executive. “I don’t like that. They’re a predator. We’re better off without them.”

It is an unequal contest. EDC has 77 employees, no-frill offices on an industrial strip here and a stock-market valuation of $18 million — hardly a threat to Amazon, a Wall Street darling worth $86 billion. But Mr. White’s bold move to take his 1,800 children’s books away from the greatest retailing success of the Internet era is more evidence of the extraordinary tumult within the book world over one simple question: who gets to decide how much a book costs?

The Justice Department last week sued five major publishers and Apple on price-fixing charges, simultaneously settling with three of the houses. The publishers say they were not illegally colluding but simply taking advantage of a new device platform — Apple’s iPad — to sell their e-books in a different way, where they controlled the prices.

The publishers wanted to stop Amazon from using what one of them called “the wretched $9.99 price point,” according to court papers. Selling e-books so cheaply, they feared, would solidify Amazon’s robust grip on the business while simultaneously building a low-price mind-set among consumers that could prove ruinous to other bookstores and the publishers themselves.

EDC does not produce e-books, but saw exactly this happening with its physical inventory. Amazon was buying EDC’s books from a distributor and discounting them to the bone, just as it does with everything it sells. This might have been a boon for readers, but it was creating trouble with other retailers who carry the company’s titles, as well as with EDC’s network of independent sales agents, who market its books from their homes.

“They were becoming showrooms for Amazon,” Mr. White said. “We were shooting ourselves in the foot.”

Amazon is generally reluctant to explain its business practices and declined to comment for this article. But its executives say it is shaking up an antiquated business model by eliminating middlemen and passing the savings on to consumers. Publishers that try to cling to the past, they have said, will die.

The retailer’s growing list of critics, however, argue that Amazon has $48 billion in revenue but hardly any profit, proof that its approach is opportunistic and unsustainable. When traditional publishers, booksellers and wholesalers are destroyed, these opponents say, Amazon will be left with a monopoly that will be detrimental to the larger health of the culture.

In recent months, the dispute over Amazon’s strategy of selling books below cost has boiled over from several directions.

During the holiday season, Amazon encouraged customers to use physical stores as showrooms before ordering more cheaply online, a move that infuriated bookstores in particular. Publishers and distributors say that Amazon, never exactly shy in negotiating terms, has been more assertive in its quest for ever-better deals.

In February, Amazon demanded better margins from the Independent Publishers Group, a Chicago distributor of dozens of small imprints. IPG balked, so Amazon removed nearly 5,000 of the company’s e-books from its site.

“Amazon wants the price of books to be very, very low — lower than the publishing community can support,” said Curt Matthews, IPG’s chief executive. “Making a book is still a craft industry. Books need to be edited, to be publicized. Someone needs to say this is good and this is not. If there is not enough money to support that whole chain, the system will break down.”

Publishers have often been ambivalent about Amazon. On the one hand, it offers an extraordinarily efficient method of distributing their wares. Readers anywhere can easily order the most obscure volume and have it delivered the next day. With e-books, access is even easier, but publishers’ vulnerability is compounded; Amazon controls not just the method of distribution but the actual device the text is consumed on.

“Last year was the best in our 37 years, mainly due to the way Amazon was pushing the books,” said Bryce Milligan of Wings Press in San Antonio, an IPG client. “Then Amazon cut us off because they couldn’t get a better deal. Now our e-books sales are down 50 percent.”

If publishers and wholesalers feel threatened, writers are caught in the middle — both pawns and prize.

Ted McClelland, a writer in Chicago, had two IPG e-books dropped by Amazon. He just got a royalty statement on one of them, “Horseplayers: Life at the Track.” Half of his modest income on the book came from Kindle sales on Amazon.

“I don’t know whether Amazon is being greedy or IPG is being cheap, but I’m caught in the middle,” Mr. McClelland said. “What matters to me is getting my books back on Kindle.”

Here in Tulsa, EDC operates out of offices on the eastern outskirts in a less-than-glamorous district of warehouses and auto supply shops. Like IPG, it is primarily a distributor, selling picture books developed in England by Usborne Books to toy stores and bookshops in the United States. Its publishing line, Kane Miller, produces the popular “Everyone Poops” book and its sequels.

EDC’s so-called consultants — a direct sales force of about 7,000 women — sell to friends and acquaintances as well as their local schools. For a while the party plan was successful. Sales more than doubled from 2000 to 2004.

In recent years, though, the consultants have found it rough going. They would pass around a picture book like “The Noisy Body Book” or “Guess How Much I Miss You,” talking it up, and then the customer would order it online. Sales fell about 20 percent. Frustrated consultants began quitting.

What happened in February to Christy Reed, a sales consultant in Pleasanton, Tex., was becoming all too routine. Her school district decided to order 16 copies of a science encyclopedia and a science dictionary but then completed the deal on Amazon.

“I worked so hard to sell those books,” Mrs. Reed said. “I had to talk to so many different people. Then I lost the sale to a couple of clicks on the computer.”

She acknowledged that the district saved a few dollars but added: “I’m here, in the neighborhood. I went to school here. My kids went to school here. Yes, they got the books for less. But my earnings go back into our community. Amazon’s do not.”

After Mr. White, EDC’s chief, heard about that episode, his exasperation with Amazon peaked. Several times in the past, he had grappled with the retailer. He tried to get it to lower its discount on his books three years ago, but a tentative deal did not stick, he said. He was outraged that the company did not collect sales tax, which had the effect of making its books even cheaper.

Two months ago, he asked his biggest wholesaler, Baker & Taylor, to stop selling all EDC books to Amazon. When Baker & Taylor refused, Mr. White canceled its account. Baker & Taylor declined repeated requests to comment about EDC.

Of EDC’s $26 million in annual revenue, Baker & Taylor was responsible for about 6 percent, most of which was because of Amazon. Mr. White, a trim 70, said that when he made the decision to bail out, his blood pressure soared. But he’s also reveling in the excitement, just a little. He commissioned a drawing of EDC in the role of David taking on the giant Amazon. “I’m Type A,” he said. “I don’t mind a fight.”

Somewhat to Mr. White’s surprise, EDC is doing better without Amazon, at least for the moment. (Some of its books are still available on Amazon from third-party sellers.) Sales in March rose, in part because of new accounts like a toy store in Round Rock, Tex., that placed an initial order for 61 books. And colleagues in the business have been congratulating the publisher, or at least expressing their admiration for Mr. White’s guts.

“I tell them, ‘You never had the chance to make 7,000 women happy in one day,’ ” he said.

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Filed under books, e-book, publishers, publishing