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Andrea Fleck-Nisbet (above) is CEO of the Independent Book Publishers Association, a massive trade organization representing 4,100 small-to-medium-sized publishers in the US. She recently told Publisher’s Weekly that the industry is “at an inflection point.”
I read the whole of her comments and came back to that phrase. In general usage, “inflection point” means a time of significant change, or a turning point. Is the change for the good? Or a turn to the bad? It doesn’t say. The phrase is qualitatively indifferent. I’m not saying Fleck-Nisbet was wrong to use it, but I’m not sure it captured her full meaning. To my ears, she was describing an industry in crisis.
There are two key components to the traditional publishing business model.
One is that the publisher assumes the costs and risks of a book project: this involves compensating the author for his or her manuscript (usually in the form of an advance against royalties), and paying as well to have the manuscript edited, designed, printed, and marketed, while hoping to recoup those costs through book sales.
Fleck-Nisbet says this component seems still to work for corporate publishers (the Big Five, who have their own trade association), but it is “broken for everybody else.” The costs and risks are too high: “we know that eight out of ten books are not actually profitable—that model can’t sustain a small business.”
Her answer is to evolve the business model: “What we have to look at is legitimizing different types of models like hybrid publishing.” In the world of hybrid publishing, authors share in some of the up-front costs and/or risks of producing a book.
She mentioned the new publishing house Authors Equity, led by former Penguin Random House CEO Madeline Macintosh, which is eschewing advances and giving its writers instead a greater share of net proceeds. There’s no sharing of costs at Authors Equity, but there is certainly a sharing of risk when most books will have no net proceeds to share.
Fleck-Nisbet also mentioned Forefront Books, a Nashville-based house run by former Simon & Schuster executive Jonathan Merkh. It’s been one of the fastest growing publishers in the US in recent years. It asks its authors to cover its costs, charging big upfront fees (mid-five-figures) to edit, design, produce, and distribute books, in return for 100 percent of net proceeds from sales.
There are many other examples at hand, including many US independents supplementing their traditional publishing lines with hybrid lines, running both out of one company, sharing costs.
Fleck-Nisbet acknowledges that hybrids “are still a long way from legitimacy in the marketplace,” but thinks that needs to change.
I suspect that her experience as head of IBPA has contributed to these views. I attended the organization’s big annual gathering last spring (I was going to go again this week but managed to contract what must be Canada’s last case of COVID). I was struck by the high-proportion of self-published authors and hybrid publishers in attendance. They appear to be contributing the lion’s share of new IBPA members, and they provided much of the energy at the conference.
In any event, this is an astonishing development. It was only six years ago that that the IBPA held its nose and let hybrids join the organization; now IBPA appears to see hybrids and self-publishers as the future, or at least a crucial component of it.
Tangent: The Canadian experience is somewhat different in this regard. We have a healthy number of hybrid publishers and hordes of self-published authors, but institutional barriers keep them separate from traditional publishing.
As discussed on many prior occasions, Canadian book publishing, like a lot of Canadian arts activity, is to an unusual extent a grant-farming exercise. Very few US publishers have access to grants; the vast majority of our publishers would be out of business without them. Our leading granting agencies—the Canada Book Fund and the Canada Council for the Arts—don’t support self-published authors or hybrid publishers.
It follows that the IBPA’s Canadian counterpart, the Association of Canadian Publishers (ACP), has membership criteria that effectively rule out both hybrids and self-publishers. It also follows that the ACP has 115 members, 2.8 percent of the IBPA’s total. By its own numbers, ACP member revenue is down markedly over the last fifteen years or so, despite the grants.
We discussed the pros and cons of grant-supported publishing in SHuSH 194, “The two solitudes of Canadian and US publishing.” One of the cons is that grants come with strict terms that lock you into a particular business model and discourage experimentation with new and perhaps more viable alternatives. When business gets challenging in Canada, the first response tends to be to request more public money. Grants are both lifeline and noose.
Second tangent: While Fleck-Nisbet is probably right that the conventional model is working at the moment for the multinationals, the growth of hybrid and self-publishing will inevitably cause huge problems for them, too. They’ve already seen an implosion of their once-reliable genre fiction business—romance, fantasy, etc.— as the action has shifted to self-publishing.
The other key component of the traditional publishing model is that the publisher accesses the book market through third-party sales-and-distribution agents. These firms warehouse the publisher’s books, pitch them to retailers, fulfil orders to interested retailers, receive the proceeds from in-store sales, remit those proceeds to the publisher (after taking a cut), and accept returns of (and give full refunds for) unsold inventory.
Fleck-Nisbet says that distribution services have become too expensive: “We have to find ways to fix the supply chain so that indie publishers aren’t always so reliant on a distributor who’s taking a large percentage of their net income per sale.”
Let’s be blunt: this is the Ingram problem. Ingram Content Group is a Tennessee-based behemoth that represents more than 37,000 publishers around the world, including the majority of Canadian and American independents.
Sutherland House is represented by Ingram in the US market. We signed with them mostly for the security of being with the largest and most stable distribution company available. When distributors go down, they tend to take publishers with them—the publisher’s inventory and cash are all tied up in the distributor. Jack Stoddart’s General Distribution Services filed for bankruptcy in 2002 and claimed or threatened the lives of a whole raft of publishing houses including Key Porter, House of Anansi, ECW, and Douglas & McIntyre. Just two weeks ago, Small Press Distribution, which distributed several hundred US literary presses and magazines, closed its doors. One expert quoted by the New York Times expects that 85 to 90 percent of those presses and magazines may now go under.
Ingram offers stability, but in return it sucks all the value out of the publishing supply chain. It is every bit as predacious as Amazon. It imposes an endless array of fees and charges on top of its basic commissions, and it negotiates horrendous Ingram-wide deals with Amazon and Barnes & Noble that give those retailers, respectively, 59 and 55 percent of the proceeds of each book sale. A normal retail discount is 45 to 50 percent. That may not look dire, but a 10 percent increase in the retailer’s share of each book sale can wipe out a publisher’s margin. I hear from more publishers all the time that it’s impossible to profitably sell a front-list book through Ingram. After you’ve covered its retail discounts, its commissions, all those fees, and paid your production costs and your author’s royalty, there’s nothing left.
Ingram is also a terrible sales agent. One firm, no matter how many divisions it has, cannot adequately represent each of 37,000 individual publishers. There are a lot of smart, capable, likeable people selling books on behalf of Ingram, but they are tiny cogs in a massive logistics machine. They are all representing hundreds of publishers and thousands of books at a time. Most books represented by Ingram aren’t sold into retailers so much as made available to retailers in a huge and cumbersome database.
Fleck-Nisbet says that it’s unreasonable to expect the big distributors to change their business models. She’s undoubtedly correct, but what’s the alternative?
“I know there’s been conversation in various quarters,” she says, “about some kind of cooperative that could be created among independent publishers who share a similar vision and have similar types of programs, where it’s not about generating revenue from distribution, but rather about helping to solve these problems of getting the books into the market…. I do think there are opportunities for independent publishers to potentially come together and create a solution through economies of scale.”
I’m not thrilled at the prospect of cooperatives. They’d likely be less expert at logistics and less financially stable than a monolith like Ingram. The upside is that they’d probably do a better job at sales and be affordable enough that a publisher could expect to earn a margin. At the end of the day, having a margin wins out. What good is stability in the absence of profit?
I don’t really know Andrea Fleck-Nisbet. I’ve met her once and I’ve seen her in action. She’s intelligent, well-spoken, understated, and cautious in the familiar way of leaders of non-profit trade organizations. I would think it took a lot to bring her to the point of declaring that independent publishing is at an “inflection point.”
I’m still puzzled by the phrase. Is she employing it as a euphemism for crisis? Or does she view these changes indifferently, having already made peace with the passing of the traditional publishing model?
Now available — Wells on Trudeau!
Sutherland Quarterly is pleased to announce that Justin Trudeau on the Ropes: Governing in Troubled Times by leading Canadian political journalist Paul Wells is now available to subscribers.
Launched in 2022, Sutherland Quarterly is an exciting new series of captivating essays on current affairs by some of Canada’s finest writers, available by annual subscription at the incredibly reasonable price of $67.99. Subscribe here. The books are also sold individually in stores for $19.95; this one will be available first week of May.
Justin Trudeau On the Ropes: Governing in Troubled Times
By Paul Wells
The worst decade in the history of the Liberal Party of Canada came to an end on October 19, 2015. Justin Trudeau swept to power, ending the ten-year rule of Stephen Harper’s Conservatives. Trudeau’s vision was relentlessly optimistic: the word "positive" was heard eight times in his victory speech, along with references to "sunny ways" and "hope and hard work." But the fates decreed that he would govern in darker times. His rookie government, itself mainly staffed by rookies in federal politics, had to learn on the job in an age of polarization, misinformation, and pandemic, while dealing with the rise of Trump and Brexit, a newly belligerent China, and wars in Ukraine and the Middle East. The moment needed more than a young PM's abundant charm. And almost from the outset, Trudeau has struggled to rise to the occasion.
A decade after he published The Longer I’m Prime Minister, the definitive portrait of Stephen Harper in power, Paul Wells, one of Canada’s all-time great political writers, turns his attention to Justin Trudeau, a man of talent, ambition, and trust issues in a time of mistrust.
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Our Newsletter Roll (suggestions welcome)
Art Kavanagh’s Talk about books: Book discussion and criticism.
Gayla Gray’s SoNovelicious: Books, reading, writing, and bookstores.
Esoterica Magazine: Literature and popular culture.
Benjamin Errett’s Get Wit Quick, literature and other fun stuff
Lydia Perovic’s Long Play: literature and music.
Tim Carmody’s Amazon Chronicles: an eye on the monster.
Jason Logan’s Urban Color Report: adventures in ink (sign-up at bottom of page)
Anne Trubek’s Notes from a Small Press: like SHuSH, but different
Art Canada Institute: a reliable source of Canadian arts info/opinion
Kate McKean’s Agents & Books: an interesting angle on the literary world
Rebecca Eckler’s Re:Book: unpretentious recommendations
Anna Sproul Latimer’s How to Glow in the Dark: interesting advice
John Biggs Great Reads: strong recommendations
Steven Beattie’s That Shakespearean Rag, a newsy blog about books and reading
Mark Dykeman’s How About This: Atlantic Canadian interviews and thoughts on writing and creativity.
J. W. Ellenhall’s 3-Page Book Battles: Readers help her choose which of three random books to review each month.
Donald Brackett’s Embodied Meanings: “Arts music films literature and popular culture.”
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Good column, Ken. Have been reading a lot about hybrid publishing lately, including Brooke Warner https://substack.com/@brookewarner; it is different for Canadian publishers for reasons you mention.
Enjoy your posts.