The Fatal Flaws of Traditional Publishing (or: Why You Should Self-Publish)

In 2005, I left my job at a fancy consulting firm to start an online publishing business.  That’s when I started to go to publishing conferences, just to see how the industry worked (and to wander like a crackhead at a dealer’s convention, but that’s a separate story or two).

Trained as a physician and business consultant, my mind has a tendency to spontaneously diagnose problems and notice what’s weird.  For an industry that is presumably invested in its own perpetuation and success, the counterproductive practices I noticed about the publishing industry were very strange indeed. Some practices (like treating authors poorly) may work short-term, but are bad business in the long run.  Others are just plain dumb, now and forever.  Here’s some of the weirdness I detected in the publishing biz:

1) Publishers take away the rights to your own book.

Publishers buy your book from you, after which you no longer own it.  They’re putting in venture capital and gambling on you, killing trees, printing books, shipping ‘em and hoping they sell.

That makes some sense.  But it’s profoundly strange to me that if you wanted to quote from your own book, you would have to ask them for permission.  Because now the publisher owns your thoughts and words!  A licensing arrangement, whereby they purchase the right to create products from your intellectual property without owning it outright makes more sense to me.  Or the author retains rights and does a profit-sharing agreement.  Methinks authors should own their works for all perpetuity.

2) As an author, you get a raw financial deal.

As a first-time author, you usually get a piddling advance.  Then you get royalties, but only if you earn back your advance.  So if you got a $20,000 advance (pretty good these days) and get royalties of $2 per book, you need to sell 10,000 copies before you get a penny in royalties.

Also, your royalty rate is 10-15% of the cover price – about $2 per hardcover if you’re lucky.  You could make more selling pretzels on the street corner, brother.  Unless you’re amongst the very few authors on the planet (less than 0.001% of them by my estimate) who move books by the million, this is no way of making a living.

Contrast this with selling a book or ebook through your own website, where you would retain 100% of the cover price, or selling through the Amazon Kindle store, where you could retain 70%.  Those 10,000 copies you sold are now a healthy income instead of a prelude to it.

3) The arbitrary pricing of books disregards value.

People are used to paying a certain amount for books: about $25 for a hardcover, $10-$15 for a softback.  For a bigger book, you may pay more: by virtue of its thudding 957-page heft, Bill Clinton’s My Life was $35.  You pay by the pound.

This makes no sense.  A fancy gourmet meal costs more than a Subway sandwich.  A handmade Italian handbag costs more than a nylon sports tote.  Even stuff that’s sold by the pound – like produce – costs more when it’s good.  Just ask the heirloom tomato guy at the Santa Monica Farmer’s Market how many happy customers he’s got at $4/lb for mutant-looking but tasty fruit.

For quite some time, I also had many satisfied customers for my dating ebook for men when I had it priced at $70 (it’s less now).  70 bucks may sound like a lot to pay for a bunch of bits and bytes.  But my readers knew that not only could the information in the book save them more than its cost in just one night, but could also bring them benefits worth far more than $70, over and over again.  So it made a lot of sense for them to buy a copy.

So it also makes sense that a sweeping, epic, astonishing, potentially life-altering novel like Shantaram by Gregory David Roberts should cost more than all that Twilight dreck.  Price would also give the customers a gauge of the quality of a book – just like it works with meals, handbags, watches and almost anything else that’s sold.

4) Traditional publishing’s business model is wasteful and inefficient.

Most consumers don’t know that a bookstore is basically a consignment shop.  Publishers send books at their own expense and only collect money if the books sell. The bookstore sends back the books that do not sell — at the publisher’s expense — mostly to be pulped.  Unless they’re paperbacks, in which case the bookstore rips the covers off and sends those back to the publisher, tossing the rest of the book in the trash.

I was first struck with this monstrously wasteful practice as a teenager working at Waldenbooks, when we’d spend whole afternoons ripping covers off sci-fi and romance novels and tossing them in the dumpster.  These used to be perfectly decent trees, for godssakes!  The publisher’s guess at how many copies they need to print usually overshoots demand, so the feature is built into the system.  Add to that the two-way cost of shipping books and all the fossil fuel burned in the process, and it all starts to make even less sense.

5) The publisher’s the bitch of the bookstores.

A bookstore has a limited amount of shelf-space which it must allocate efficiently.  If it decides to push a book and give it prominent placing, the book does well.  If it shelves a book in an obscure corner, or worse, refuses to carry it, the book dies.  The bookstore also collects 50% of the cover price and does not pay for shipping to and from the publisher.

This is how a lot of retail works, and dealing with rent and salaries makes their business no walk in the park, either.  However, it still doesn’t make the publisher’s business model any less crappy.

6) Publishers have no identifying data on their customers.

Let’s say I want a copy of The Immortal Life of Henrietta Lacks by Rebecca Skloot. I can walk into the Barnes & Noble on 3rd Street Promenade, pick it up, pay cash for it, and walk out.  Nobody will know my name, email or phone number.  And they will never be able to reach me again to tell me about Skloot’s next book, or another medical nonfiction book like The Emperor of All Maladies by Siddhartha Mukherjee, which I just might dig.

If they did have a handle on me, they’d have a list of customers who are already interested in a specific author or genre.  Instead, they waste their marketing dollars on advertisements and book tours that mostly miss the customers they’d already spent money acquiring the first time around.

When someone buys an ebook from my site, they have to enter their email and phone number for the credit card to process.  I now have a handle on them and can send them free newsletters to keep them in the loop, and tell them about new products when they come out.

7) Traditional publishing is hopelessly slow. 

If you were to get a book deal with a major publisher today, your book would appear in bookstores 12-18 months from now – in April 2013.  If your book were topical – on current events, an economic trend, or science even – it could be old news by the time it came out.

This actually happened to a friend of mine who wrote a book in 1998 about the coming resurgence of the then-depressed American economy.  By the time it came out in 2000, the Dow had broken records, American prosperity was at new heights — and my friend’s book was utterly irrelevant.

Publishers are perfectly capable of ‘crashing’ a book to market when it’s called for – witness Penguin’s 12-week sprint to print Jill Bolte Taylor’s A Stroke of Insight on the heels of her TED talk going completely bananas viral in March 2008.  But that’s rare.  The other 99.9% of the time, they plod along at their glacial pace as if there are no predators and the Internet doesn’t exist.

Science books are particularly vulnerable to this delay.  The information in a science book based on the “latest research” will be 1-2 years old at the time of writing, since that’s how long it takes data to wend its way out of a lab into a peer-reviewed journal (with the exception of arXiv).  With the additional printing delay of 1-1.5 years, your science is 2-3 years old at press time, which is enough time to build an Extra-Large Hadron Collider and rewrite your field’s paradigm twice.

As a comparison, you can compose an ebook in the morning and have it for sale on your website before dinner.  Or submit one to Amazon and have it up in 24-48hrs.  Moreover, when revisions become necessary, you can update the manuscript or upload an entirely new one in a matter of hours instead of months.

8) Royalty payments come at starvation-inducingly infrequent intervals.

Let’s say you hit the jackpot, and you get a contract with a major publisher.  Woohoo!  Let’s say you hit the jackpot again as a result of dining on an exclusive diet of rabbit’s feet and fortune cookies, and your book starts to sell like bottled water to a bunch of people stuck in the Sahara desert with no water for, like, 30 days.  You’re rich, right?

Well – maybe.  Apparently royalty checks come to you once every 6 months, or once a year.  So you could be making bank, but with no actual money in the bank.  Contrast this with Amazon, which pays you monthly (better), or selling your own books, where you get paid daily (betterer).

9) There’s a lack of transparency of sales data in the book industry.

How many books do you have to sell to make it a “bestseller”?  Without real numbers attached to it, the term is essentially meaningless.  And smart cookies like Tim Ferriss can come along and figure out how the New York Times bestseller list score is computed and get (and keep) a book on it.  (From what I hear, it takes fewer sales than you think to hit the list, but they have to be sold in the right venues at the right time.)

In December 2010, publishers were up in arms over Amazon’s release of Nielsen BookScan data to authors.  Shouldn’t this have been the norm since Day 1?  Instead, publishers have been practicing a strange, cryptic hoarding of their book data – lest anyone find out the true meaning of “bestseller”?  Who knows, but disempowering your producers (i.e. authors) is crappy business practice.

10) Publishers and agents are remarkably bad at spotting genuine talent.

Have you heard the story of the diamond-in-the-rough manuscript from an unknown author that was immediately spotted by an eagle-eyed editor, shepherded through publication and turned into a blockbuster?

Neither have I.  The story of the biggest publishing successes of recent memory is the story of dozens of publishers and agents repeatedly being hit on the head by blazing meteors of talent but being too anesthetized to notice. 144 publishers turned down Mark Victor Hansen and Jack Canfield, creators of the Chicken Soup for the Soul series, the best-selling nonfiction books of all time, before Health Communications Inc agreed to publish them – but only if the authors paid for the first printing run out of their own pockets.  Tim Ferriss was famously rejected over 40 times, Louise Hay had to start her own company to publish You Can Heal Your Life, and J. K. Rowling’s first Harry Potter manuscript was serendipitously rescued from some slush pile because she couldn’t even land an agent, let alone a publisher.

From my encounters at Book Expo America over the past decade, I found people in big publishing houses to be risk-averse, protocol-driven conformists – basically, microcosms of the hidebound, antiquated, change-averse industry they work in.  As this is the antithesis of being entrepreneurial, it does not bode well for the industry.

11) Publishers have abandoned their sacred trust, publishing garbage and toxic dreck in the name of making a buck.

There is an opportunity cost to publishing a book: the time, money, effort, editing, publicity, marketing, paper, printing and shipping to bring one book to market occurs at the expense of another, potentially better book.  And every time you publish a book by ciphers like Sarah Palin or the cast of some brain-shrinking reality show, you’re precluding the publication of the next F. Scott Fitzgerald or Eckhart Tolle.

People!  There are poets out there, novelists, self-help authors, mystics, storytellers and scientists who shine a light that humanity desperately needs today.  Go find their light and amplify it for all of us to see – and make your megabucks that way, lord bless ya.

When you have a platform to broadcast words and ideas, when you have the power to select a few voices to broadcast via your platform, when you have an imprimatur that lends credence to those voices, when you have a megaphone for affecting a population’s hearts and minds, you have a sacred trust, like being a doctor, teacher, priest or chef.  You’re here to bring beauty into the world.  You have a responsibility to feed good things to human minds, like a restaurant serving brain food to humanity.  And if you serve them poisonous food, you deserve to be shut down and put out of business forever.

So when you publish the memoirs of a vice president who’s basically a war criminal, or like Judith Regan completely abandon conscience and decency to publish If I Did It, or disseminate the deranged frothings of some spite-filled TV host, you have violated your sacred trust and are automatically consigned to Dante’s Ninth Circle of Hell, where the arch-traitors abide (think Judas, yo).  There, like a cook condemned to eat his own contaminated food, your punishment should be to read only books you’ve cynically helped publish.

Of course, all of this is to say that no fire and brimstone will be necessary for the demise of traditional publishing.  For as the Bible said, there are two kinds of people: the quick and the dead.  Ebooks and Amazon are already on the case.  When your competitor has the emails of all its customers; knows what they like, courtesy of collaborative filtering algorithms; has no consignments, shipping costs or bulk returns; gives its suppliers a fairer deal; and can distribute worldwide at a fraction of your speed and cost, it’s probably a good time to look for a new job.

2 thoughts on “The Fatal Flaws of Traditional Publishing (or: Why You Should Self-Publish)

  1. Excellent thoughts. You really nailed pretty much everything. The industry is just changing so far, for the better and I couldn’t be happier about it. By the way, I have similar thoughts on my blog at http://www.nopublisherneeded.com Love for you to stop by.

    This new Amazon Select thing is really throwing a big wrench into the old machine, again, for the better. I am even more excited than ever to be self-publishing. The next few years are going to be great for people who can take their expertise and craft it into book form.

  2. Something I’ve been harping on for years now…

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