Known commodities

As furniture chain MFI enters administration, it looks as if Woolworths will follow suit. According to the BBC News site tonight, the troubled retailer has buckled under the strain, after weeks of uncertainty, placing 815 stores, and countless jobs in jeporady. The board of Woolies, one of the UK's oldest chains, have been in talks since 1800 hours to make the formal decision and announcement, which will no doubt come by morning.

Thankfully wholesaler Bertrams is unaffected by this decision, and for them at least, it is business as usual.

In the meantime, and just to underlie how volatile the publishing business it, US publisher Houghton Mifflin Harcourt has closed its doors to any new acquisitions, in a move that has rattled agents throughout the industry. At the other end of the spectrum, it has emerged that the Hachette Group, whose stable encompasses names as Little Brown and Grand Central Publishing, are giving a bonus equivalent to one weeks salary to each of their employees.

If things were already bad for first time authors, struggling to find a deal, they were dealt an ever bigger blow when literary agent Esther Newberg said “It is seriously going to be a time for known commodities,” in case anyone might consider self publishing instead, she went on to say "I would hate to be starting out in the business.”

Even Google is not immune. The company is reducing its 10,000 strong army of contractors, in an effort to cut costs. A spokesman for the company admitted that they had been considering this for some time, since such staff, who make up a third of their workforce, are easier to shed.

News from the publishing world this week

There are several interesting stories circulating around the publishing world at the moment, not least of all that concerning the Amazon versus Hachette Livre dispute. The Times reports that the dispute is showing no signs of diminishing, and looks likely to drag on til at least Christmas, if not longer.

None of this is really news at all, since we all saw this happening a long time ago. It started with the abolition of the net book price agreement in 1995, and has got steadily worse since. Those within the industry warned at the time that this would bring nothing but disaster, so I am told (this was long before I began to write), but as per usual, no one listened.

The Times reports that back in the 1980's, a man with a background in the grocery business told a group of publishers: “In the trade I come from, if the retailer says, ‘Jump’, the supplier asks, ‘How high?’,” and the audience looked at him as if he were talking rubbish. Twenty years later, they know exactly what he meant.

Publishers admit that they should never have allowed discounts to get so high, but hindsight is a wonderful thing. The fact is that when an order from a retailer makes the difference between hitting and not hitting targets, and the consequences of rejecting that order is to see the business go elsewhere, then it is very hard to so no, even on such unfavourable terms.

This situation is not confined to publishing, as we see it throughout the retail trade - especially with the supermarkets and the shameful way in which they treat their suppliers - some of whom are forced to sell at a loss. Still, it is heartening to see such support from authors, across the board, it is in our interests really though, as the lower discounts become, the more money there is to pay us with.

It is as usual all about market forces - and what consumers are prepared to pay. It is the same old story, that the public want good quality goods and good service, but are not prepared to pay for it. I see this in my own job on an almost daily basis; it is why my company were forced to equalise shop and Internet prices earlier this month. The result of this has been that there is now so little profit on certain items, that it is hardly worth selling them at all without at least 2 add ons.

It is we are told business, and nothing personal. Tell that though to the members of staff at branches such as mine, who are being forced to close because they are no longer viable. Tell that to the children and dependents of those who work there. The Times states that any negotiator wants to screw out of the market as much as the market can take, but the fact that this happens does not mean that it is morally or ethically right, as everyone has the right to earn a living and maintain a certain lifestyle, where at least their basic needs are met (and beer and cigarettes are not basic needs). Book selling, in fact, publishing in general, makes very little money - Waterstones made a profit, so The Times says, last year, of 2.9 percent, while Hachette’s profit margin was 11.2 per cent. Are they then in a position to negotiate and dictate terms? Maybe not. I do know though that if we do not stop this slide, in retail in general, and not just publishing, then we will be hearing more about Amazon in the months to come, and it will not be long until they drive us all out of business.

Against this backdrop, it is somewhat depressing to read that Amazon has almost doubled its net profits over the last three months (ending June 2008) to $158 million. Sales of books, CDs and DVDs rose 31 percent, while electronics and general merchandise sales were up by 58 percent. City analysts report that the company are benefitting from high fuel prices, since consumers have less money for shopping trips and prefer instead to shop from home. Those consumers should try living here in good old blighty, where our petrol costs almost twice what theirs does!

On a happier note, it seems that the Espresso printing machines, which I mentioned on here some time ago, are finally set to arrive in the British Isles, being rolled out to larger Blackwells stores in the autumn. The machines - nicknamed the ATM for books, are capable of printing and binding books, while customers wait, in a matter of minutes, with a choice of over 1 million titles, many of which are rare or otherwise out of print.

The Espresso Book Machine’s backers claim that it combines the virtually unlimited choice of the Internet with the packaging of a conventional book, which has the potential to make the most obscure of titles easy to buy.

Many readers, especially students, and remember that Blackwells is the leading academic chain, complain that book stores are top heavy with piles of heavily hyped best sellers and celebrity dross from the big publishers, while the independent and small presses,including self publishers do not get a look in. This then will help to equalise things as never before, and can only be a good thing, for both authors and book buyers alike.

The machines, which are 9 feet long and 5 feet high (as I am also- high that is!), allow customers to type in any title that they want, and after seven minutes out pops the book, neatly trimmed and bound, for the same price as the equivalent book off the shelves.

The finished product is like any conventional paperback, although critics say that the illustrations are poor quality, and the books have a rubbery feel. As time goes on, I am sure these problems will be ironed out, and I am also sure that customers will be more than happy with the speed and convenience that these machines afford.

Other chains are less circumspect, stating that they will wait to see how the technology develops and improves, and how popular it proves to be with Blackwells customers.

Good news indeed, and one to watch. I for one will eagerly anticipate the arrival of the first machines, and if I find one near me, will willingly pay for a copy of my own work just to see how it does work, and what these books are like. I will report back on what I find.

Amazon in meltdown?

The great Amazon debate has at long last made it on the pages of one of our national dailies, in this instance, The Daily Telegraph. An article on the online edition, written by Nick Allen says the online retailer could be facing a strike by authors and publishers as it becomes embroiled in an increasingly bitter dispute with publisher Hachette Livre.

All the groups titles have seen their buy buttons removed in a dispute over terms. These books are still available via Amazon marketplace through re-sellers and third parties, but as the article states, the publisher does not earn a bean from these sales.

Actually this is not strictly true. It is true that they earn nothing from the sale of second hand books, but not true when it comes to third party sellers, since these have to buy the books from somewhere, and it is not other retailers. No, they get their stock direct from the publisher, or through the usual wholesalers, whose terms are just as high as Amazon's. Amazon has been singled out not because of what they have done, but because of the dishonest way in which they have done it, by going from one publisher to the next, lying about the terms negotiated with rival publishers and using this as a battering ram to get others to comply. This is not something that wholesalers do, as their terms are equal across the board and totally transparent.

This move then is aimed at forcing Hachette to sell to Amazon on terms which are simply put, unacceptable. As CEO Tim Hely Hutchinson said: "In Britain the terms publishers give to retailers are the highest in the world and more than half of the price of a book goes to the retailer. We have collectively been too soft in our negotiations and we are trying to make a stand. "Amazon put pressure on us and took the 'buy' button off a number of prominent authors' books on their website. We don't like it and our authors don't like it."

As Amazon continues to grow, Mr Hely Hutchinson warned that independent book sellers, as well as authors, would be the victims. Given their current state of growth, it is entirely possible that within five years readers outside the major city centres may face the prospect of having no choice but to either buy online, or obtain books from supermarkets, which do not exactly carry deep range.

While it is true that Amazon has helped authors, in particularly the self published and independent ones whose books are not stocked by the larger chains, this dispute has the potential to seriously undermine their sales and credibility.

To punish the authors, without whom Amazon would have no business, is seriously not on, and they would be wise to remember that without us to write the books, there would be no business. There is after all, only so much we can and will take, and Amazon have pushed just that little too far. It is heartening then to see such support for Hachette, with authors standing firm alongside and backing them all the way, even if it does affect their sales.

Of course none of this is really new though, since like I have said, so many times on this blog, the British publishing trade does sell their wares at much higher discount than any other country in the world. I never have thought it fair or reasonable that 40 percent of the cover price from my own book goes to the retailers who sell it, when all they do is press a few buttons and place it on the shelves. In contrast to this, in return for my five years of work writing this book, I earn the princely sum of £1.39 per copy. This is why I had to return to work, and this is why I am no longer around to help promote it, by telephoning book stores and being there to drive business. This is also why in February, those 71 books arrived back on my doorstep from Gardners.

That though is hopefully about to change, as at the time of writing they have just 18 copies in stock. Since they re-order when the level drops to 15, I am hoping and praying for 3 more orders before Thursday, so that I can despatch the 40 remaining copies that are still in my loft on to them before I depart for Lundy on Friday morning. So, if you wish to buy a copy then you know what to do - get down to your nearest friendly bookstore (or Amazon if you really must) and get ordering!

This will be an incredibly busy week for me, since I also have a missing parcel to track down, which was inadvertently sent to our old address (don't ask me how), and the village newsletter to finish. In between all of this I have to work every day between Monday and Thursday, go to the gym, get all my laundry done ready for the off, back up my computer files, fill up the car with petrol, check my tyres, lights, oil and water, pack my bags and collapse in a heap of exhaustion. It is just as well that I am owed five hours from work, as at least it means (with any luck) that I can go home early some days and make a start on all this 'stuff'. By the time I do get the island, at this rate, I will be fit to drop. Still, it will be worth it when I see her sailing into view.

I am so looking forward to this holiday, as it has been one hell of a stressful year. A year that has seen my hopes and dreams come crumbling down, as I have finally had to concede that despite my best efforts, I will probably never achieve the level of success of which I have dreamt. Still, I have achieved an awful lot, far more perhaps than most POD authors, since the books are stocked in an increasingly high number of Waterstones stores and independents, where they are selling very well indeed. Somehow though it has never felt enough, and so this year, I have had to learn to be happy with what I have got and stop beating myself up quite so hard.

This has entailed facing many demons and destructive belief systems, but with Corans help and support, and some good books written by some very talented authors, I am getting there.

What do horses and Amazon have in common?

The Hachette Livre versus Amazon debate continues apace, with it featured on the Radio Four programme Today earlier on, from what I have been told. I did not hear the progamme myself, since I only listen to local radio, but I will try and find the link later on on the BBC website, since it is bound to still be there.

The author and agent community appears to be backing Hachette's stance, no doubt to the chagrin of Amazon, with leading agents leading the backlash against the online retailer.

It was reported earlier this week that Hachette CEO Tim Hely Hutchinson had sent a letter to authors affected by the dispute, whose books have been removed from Amazon's site, asking for their patience and understanding. According to The Bookseller online, the response has been overwhelmingly positive. In his letter, Hely Hutchinson said that he would stand firm against conceding any additional trading terms, adding that Amazon's sanctions were creating a breach of trust between the online retailer and its customers, which could prove to be a catalyst for them starting to lose their popularity with book buyers.

Despite advantageous terms, far better than most chain stores get (when buying direct from publishers anyway), Amazon seems to go from one publisher to the next year on year, making increasingly high demands in order to get rich at everyone else's expense.

Of course the cynic in me says that all retailers do this, and this is not confined to the publishing industry. Amazon though are by far the worst example of this that I have come across, and from what I have seen and heard in recent months, will stop at nothing to gain almost total control of the marketplace until they are the dominant book retailer and traditional book stores are driven out of business. This is then the thin end of a very long wedge, and is exactly why the publishing industry needs to make a stand. If we are not careful then given its current rate of growth, Amazon could become the largest bookseller in Britain within the next three years, and if they are not stopped now, then they will be able to dictate any terms that they like.

Curtis Brown MD Jonathan Lloyd commented that the entire industry is 100 percent behind what Hachette are doing, and that someone somewhere has to draw the line as using authors as what he terms 'a financial football' is disgraceful.

Clare Alexander of Aitken Alexander added that 'this is a disturbing glimpse of the iron in Amazon’s soul. I think its ruthlessness in bargaining is extremely disturbing'.

The MD of a unnamed rival publication said that removing buy buttons is akin to walking into a High Street bookstore and asking to buy a book, only to be told no. The irony of course is that until quite recently, this is exactly what did happen with some POD books, since inexperienced booksellers were unaware of how the system works. When they saw that the POD book was not in stock at the wholesaler from where they obtained their stock, they assumed that it was not available at all, unaware that there was such a thing as special orders. This though is changing, as the publishing industry wises up to what POD is about and how it works.

An spokesperson for Amazon said that they continue to be committed to offering the broadest range of titles possible, through both their own retail offering and re-sellers (Amazon Marketplace - where Hachette titles are still available). Amazon.co.uk is also committed to ensuring we offer our customers the lowest possible prices.

What they fail to understand is that by making this move, and alienating the largest book publishing group in the UK, they are failing to honour those principals and cutting off their nose to spite their face, as they are not offering the broadest range possible at all. All that will happen is that readers wishing to buy these books will go elsewhere to bricks and mortar stores, or to other online retailers such as Play.com, Book Depository or Bookrabbit.

The online community upon which Amazon's business is built will turn against them, and ultimately prove to be their undoing. This is I think, the beginning of the end, and one never knows, the backlash against discounting and ever increasing terms may also be applied to traditional book stores as well, with firm sale, on back list titles at least, becoming the norm. How this would affect the indepedent and print on demand author is very much open to debate.

In the meantime, if we are not careful, then in the US at least, Amazon may soon be invading the High Street as well. Associated Press reports that Pershing Capital Management's William Ackerman, a major stakeholder in Borders Group in the US, said that the troubled book chain should consider approaching Amazon about a possible acquisition.

Borders, which was put up for sale in March has around 500 stores throughout the US. One possible incentive to Amazon to buy the Borders stores may be the some 18 states are considering the introduction of sales tax to online businesses. Once Amazon lose this tax advantage, then they may be keen to move into bricks and mortar book selling.

In an interview with the Wallstreet Journal earlier this week, Amazon founder Jeff Bezos compared books to horses, stating that the industry faced the challenge of improving something which like the horse, had been around for many years and was difficult if not impossible to improve. From my perspective, there is one more thing that Amazon and horses have in common - their ability to produce s*** in copious quantities !

The bigger you are, the harder you fall

The Bookseller online edition reported about 2 weeks ago that the now infamous Amazon had removed the buy buttons on books published by the UK's largest publishing group, Hachette Livre, and now it seems that Hachette CEO Tim Hely Hutchinson has upped the ante by sending a strongly worded letter to authors affected by the embargo.

Amazon are reported to be doing to Hachette what they have been doing for some months now to print on demand publishers in America, namely demanding extortionate terms, and when the publisher refuses to give in, using Peter to rob Paul by going to the next publisher, and claiming that the first has given in, in order to make sure that the second one follows suit. Their plan has though been rumbled, as in publishing news travels fast, and it is if nothing else an industry built on communications, communications which I feel will ultimately prove to be Amazon's undoing.

Hely Hutchinson's letter, a copy of which has been sent to the Bookseller (although not published on their site) explains Hachette's position in regard to this dispute, which has seen Amazon remove the buy buttons from key front and back list titles published by Hachette, including Kate Mosse's Labyrinth, Stephen King's Duma Key and James Patterson's The Sixth Target.

The letter reportedly tells authors that Amazon's actions could "prove to be a catalyst for Amazon starting to lose its popularity with the public" because it is reducing its range and service to customers. It goes on to say that despite advantageous terms, "Amazon seems each year to go from one publisher to another making increasing demands in order to achieve richer terms at our expense and sometimes at yours", before affirming Hachette's intention to stand firm against these bullies.

The response from Amazon was predictably lukewarm with them refusing to comment and insisting as always, that they are committed to offering the broadest range possible to their customers at the lowest possible price, through a range of outlets, both direct on their own site and through re-sellers.

Agents are also expressing their angst, since this affects the careers of many of their authors, whose careers they oversee. It also of course affects their own income, since they take a proportion of what their authors earn. Anthony Harwood, who represents Chris Manby, said his client has been dealt a "double whammy", as both her new hardback Spa Wars and her first book written under the name of Olivia Darling, were affected. Anthony said "It's incredibly frustrating; the author suffers while these disputes rumble on."

The Economist, which has had some interesting articles on publishing in recent weeks, pulls no punches when it says that those in the publishing industry are running scared because of the rise in new technology brought about by the Internet, but also through the rise in print on demand and electronic publishing (e-books). Amazon is of course also at the forefront of this, in America at least, with the Kindle e-book reading device and their attempt to control the print on demand sector through demanding that print on demand books be printed by their own printing arm, Booksurge in order to be listed directly on Amazon's site.

From the outside, to the author at least, book publishing seems like a closed shop, which is impossible to penetrate. The author has to jump through many hoops and pass through many gate keepers on their journey to publication, and on the way, most of them do not pass go and do not collect £200. 411,000 new titles were published in America last year, and more than 3 billion books sold. The industry saw a growth rate of 4.3 percent in the adult sector, yet reading as in other westernised countries, is actually down. Since 1985, books' share of entertainment spending has fallen by some seven percent.

Paper book sales may well be in decline, but sales of e-books are reported to have tripled since 2005. Some say that they may eventually surpass printed copies, although personally apart from academic titles, I cannot see this happening. There are though advantages to this method, especially to the author, least of all, the removal of all the middle men who are all too keen to take a slice of our hard earned cash. E-books after all are a direct route to customers that have the potential to bypass both traditional book stores and online ones, as the author can publish them for relatively low cost and sell direct to the public via either their publishers website, or their own, as indeed I do. All books published by Authors OnLine are also available as e-books; that is why they chose the name Authors OnLine, as that is how their business began. The paper copies came later, after the introduction of print on demand into the UK 10 years ago.

It is in my opinion, print on demand that has the potential to change the industry much more than e-books could ever do, for not only does it enable authors to publish their own works at low cost, circumnavigating the gate keepers, but the costs also continue to come down. The cost of paper and shipping has gone up so much in recent months that it is now cheaper to print 1200 books via print on demand that it is by traditional means.

The article in the Economist wisely says that publishing has only two indispensable participants: authors and readers. Like the music industry, any technology that brings these two groups closer makes the whole industry more efficient, but hurts those who benefit from the distance between them. Those that stand to gain the most are therefore the small players traditionally left out of the loop by practises that prevent their books from being stocked on the same terms as those issued by the larger publishing houses. Those that stand to lose the most are those who have helped to support a system that encourages this to happen, which seems to include just about everyone except the independent authors and publishers themselves. Our time it seems has finally come, as the big boys are now learning that what goes around does come around, and what you do to others does have an effect that comes back to you in hard lessons to be learnt. Whether they will see this and understand remains to be seen. For what it is worth, the response from Hachette does seem to be encouraging, and I applaud them for taking the stand that they are. I just hope that it doesn't come back to haunt them, as the bigger you are, the harder you fall. Amazon would be wise to remember this.

Taking the Hachette to firm sale

Writers Guild strike in America is intensifying - apparently an unnamed Hollywood studio has lost a $3 million contract because of it to make a film - that will teach them to honour writers a bit more won't it! I am afraid I do not have much sympathy for these people at all, who get rich on the backs of my colleagues across the pond and give them absolutely sweet fa. It is about time these people realised that contrary to popular belief, they need us far more than we need them .... Without writers they would all be out of business fast.

Support from the strike though seems to be coming from all quarters. USA Today reports that motorists driving past Universal Studios on Tuesday afternoon (yesterday) were treated to a cavalcade of stars almost as impressive as the Golden Globes ceremony. These stars were picketing in support of the Writers Guild strike which is now in its 9th day. As long at the strike continues the actors after all cannot work either, and they too are losing money. Mind you, most of them can afford to ...

The entire cast of Brothers and Sisters were there along with Executive Producer and writer Greg Berlanti as well as Matthew Perry from Friends and stars from The Office. Tonight show host Jay Leno rode past on his motorcycle to add his support and Ben Stiller walked down the hill from Universal Studios where he has been directing comedy show Tropic Thunder with a week of shooting still to go. He said, "As a DGA, SAG and WGA member, this is a very tough time. Movies that are in production get affected because no script changes can happen. We had to make sure any rewrites were done before the strike, but changes happen every day. So, I'm saying right now, if this movie's not funny enough next year, it's because of this strike. The writers have always been the ones who didn't get respect. In a way, I wish all the unions could have gone out at the same time, because it would have sent an even stronger message. Studios need to take this seriously." Good for him ! Perhaps writers in the UK should get together and refuse to allow their books into the chain stores until we get a better deal as well ...

This may not in fact be necessary, since environmental issues seem to be coming very much to the forefront in publishing this week, and one of the most overriding issues is of course the vast amounts of books which are pulped each year as publishers print far too many of them. Publishing News reporrs that the book trade's cross party Environmental Action Group, which is chaired by Penguin General MD Helen Fraser has agreed a target for the industry to reduce its carbon emissions by 10% by 2015. The group also believes that environmental initiatives should form part of the criteria for publisher and retailer of the year categories at the British Book Industry Awards, as organised by Publishing News, and also the Bookseller Retail Awards.

A working party is apparently satrting to look at issues such as transport, packaging and paper, as well as perhaps more cruciallym, long term issues connected to the supply chain, in particular, returns.

Last weeks Publishing News reported that the UK's largest publishing group, Hatchette Livre has released an ethical and environmental policy in which it has pledged to start selling its backlist consumer titles on a “firm sale basis”, in consultation with its customers (for this read book sellers) by the end of 2008. The policy document explains as I have said so many times, that the printing and multiple transportation of books that may end up being pulped is both costly and environmentally damaging and they are committed to reducing this practice. They go on to say that the estimated cummulative saving in terms of printing, paper, processing and transport will be in excess of one million books a year.

By the end of 2009, the group also hopes to have moved most all its trade publishing onto Forest Stewardship Council (FSC)-certified paper, and to have made major progress in the same direction for their educational and illustrated publishing. The policy will be introduced gradually across the company's UK publishers starting with Little Brown at the beginning of 2008 and then other UK publishers, including Headline, Hodder & Stoughton, Hodder Education and Orion. I wonder how many of these backlist titles will then be maintained via print on demand. It will be interesting to see what happens here.

The response from book sellers, according to The Bookseller has been mixed. One more enlightened soul indie bookseller Clive Keeble, says that he hopes other publishers will follow suit, as the current system of sale or return is 'archaic and wasteful'. He goes on to say that it is poor business to expect others to subsidise one's business. I like this man and must find out what book shop he runs so that he can stock my book!

However, other booksellers expressed misgivings about what it would mean in terms of range. Waterstone's are said to be circumspect, stating that while they are committed to investigating ways of reducing returns, they had to ensure that any action the industry takes does not threaten specialist booksellers' ability to stock and sell deep range. That is rich I must say, since it due to the business activities of the chain store demanding more and more discounts so that they can have 3 for 2 promotions and so on that the majority of independents are going out of business in the first place!

The downside is that it may lead book sellers to be more wary of stocking back list titles, including mine. As Sheila O'Reilly, owner of indie Dulwich Books says, book sellers have two ways of buying stock - from wholesalers or direct from publishers. If they buy from the publishers direct they get less discount, usually with sale or return; if they buy from from wholesalers we get more discount and the right to return between 5% and 10% of the previous three months' sales. What this in practise means is that they have to have a 5 percent error rate. If firm sale comes in across the board, such book sellers then will be a lot more cautious about ordering such back lists (and books like mine) that do not have a provemn sales record.

Is is fair though to expect as Clive Keeble said, others to subside your business. Personally alhtough I take Sheila O'Reilly's point, I think not. Nobody else has a 5 percent error rate written into their supply contract, so why should book sellers be any different?

More worrying, book sellers may start to demand higher discounts to compensate for this loss, whihc is a move that small presses would strongly resist. Chris Rusbhy, Director of Bertrams, the UK's second largest wholesaler made the point that it is all very well to have green credentials, but there would be a saving that goes along with that, and book sellers should be able to share that saving. They are though missing the point - yes there would be savings in terms of less books being printed, but the books that are printed still have to shipped to the wholesaler, packed and then shipped off again, and this costs the same regardless. Personally I think the book sellers are just being greedy - I mean my book cost me nearly £5000 to write over 5 years, during which time I was not earning money elsewhere as I was writing full time. As it stands, who gets what can be broken down as follows:

book seller £6.00
print costs £4.06
wholesaler £2.25
me £1.60
publisher £1.08

This is why I would strongly then resist such a move and why I see parallels between this and the Writers Guild strike, since it is about the writers right (write!) to earn a decent living wage from doing what they do best. Call me old fashioned, but I believe the lions share should always go the person who created the work and not the one who is selling it.