mike shatzkin

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How to build an empire.

[Amazon] started as a “book retailer” and nothing else. They leaned on Ingram’s Oregon warehouse to enable their business model, which was to take an order for a book and accept payment, then procure the book from Ingram and send it to the customer, and then a little later pay Ingram’s bill. This positive cash-flow model was so brilliant that Ingram could have readily enabled lots of copycats, and they formed a division called Ingram Internet Support Services to do just that. So Amazon killed that idea by cutting their prices to no-margin levels and discouraged anybody else from getting into the game. That was in the late 1990s.

They could do that because the financial community had already accepted Amazon’s strategy of using books to build a customer base and to measure future business prospects by LCV — the “lifetime customer value” of the people they did business with. And it became clear pretty rapidly that they could sell book readers other things so no- or low-margin sales were simply customer acquisition tactics. This was a game Barnes & Noble and Borders couldn’t play.

Now book and ebook sales are almost certainly no more than a single-digit percentage of Amazon’s total revenue. Kindle Unlimited, like their publishing enterprises and self-publishing offerings, are small parts of a powerful organization that has many ways to win with every customer they recruit.

Mike Shatzkin on no-margin, no-profit.

2016-02-11T07:47:55+11:0012th February, 2016|Tags: amazon, bookstores, mike shatzkin, publishing|

Extraordinary success.

[T]he clear prevailing opinion is that publishers don’t know how to interpret independent publishing efforts and, most of the time, trying it does an author’s chances of selling that book to a publisher much more harm than good. Most agents responding said they really don’t want to try to peddle a book that has already been self-published unless it has achieved pretty extraordinary success.

(What’s “extraordinary”? One UK agent suggested that it would take at least 50,000 sales to get the attention of a British publisher. An American agent said in that market the number is about 100,000.)

–Mike Shatzkin on going trad.

Note that he’s talking here about getting an existing selfpubbed work picked up by a publisher, not someone who’s previously been self-published selling a new work to a publisher.

2015-04-16T07:49:13+11:008th May, 2015|Tags: mike shatzkin, publishing, self-publishing|

Public utilities.

But elevating books that favor your political friends — even when you’re fighting their publisher — and burying political books that promote ideas you don’t like is not something that society can comfortably accept from a retailer that is the principal book retailer in the country. (No other retailer has ever had comparable market share so this “problem” has never arisen as a public interest question ever before.) Whether they like it or not, Amazon (like Google) has virtually become a public utility, providing a service most of us depend upon to be objective and catering primarily to the interest of the individuals it serves, not its own.

–Mike Shatzkin on public utilities.

While I’m not sure I agree entirely with the notion that services like Amazon and Google are “public utilities” per se, there is still… something to this argument. That is, we’re at the point where single private entities have massive scope over the information we consume, either overtly (e.g. how pretty much every newspaper in Australia is owned by one of two companies), or covertly (e.g. the subtle ranking/filtering systems of Google and Facebook). When Amazon and Google and Facebook and Twitter decide to censor particular information–and this isn’t even an “if”, it’s already a “when”–what, if any, impact do we feel it has on the operation of our society? Are we okay about the opaque private censorship of data? Because we sure as hell don’t seem to be okay when the government does it… so what happens when it’s private enterprise shutting down discourse and suppressing ideas instead?

I don’t have an answer to this one, but I do think it’s something we’ll be seeing more and more of over the next decade or so.

Welcome to the dystopian cyberpunk corporate future, and all that.

2014-10-27T08:11:39+11:0015th December, 2014|Tags: amazon, media, mike shatzkin|

Mike Shatzkin is bad at motivations.

Shatzkin, book business maven,1 is confused over the motivations of self-published authors who attack traditional publishers. Shatzkin is right in asserting that:

publisher-published authors definitely lose if Amazon gains strength in relation to them. But Amazon-published or KDP authors (and the publisher-bashing seems to come from both flavors) lose nothing if legacy publishing remains strong. They are, allegedly, fighting for the “good” of those authors who are signing “exploitive” publishing contracts, but their own interests are not served.

Or, in other words, why do self-publishing ideologues attack “legacy” publishing so hard when the relative business strength of said “legacy” publishers has no bearing on them?

Putting aside the obvious,2 the error Shatkzin makes is that he’s a savvy, pragmatic analyst who assumes people act in rational ways according to their own business interests. Except it’s blindingly clear to anyone who’s spared even a sideways glance at blog’s like Joe Konrath’s or The Passive Voice that the venerated gurus of selfpub and their multitude of followers don’t exactly subscribe to the Church of Latter Day Pragmatism so much as they’re adherents of the Revelation of Ideological Revenge. Publishing is a holy war, and success in selfpub a divine weapon against an industry that spurned or burned them (or both). It’s not business, in other words; it’s personal.

To be honest, Shatzkin is a smart guy so I’m sure he knows this and his “question” is more of the rhetorical sort. Still doesn’t stop the replies like this one from Nate Hoffelder, gushing about “socially aware indie authors”.

“Socially aware”? Please.

If the vitriol towards tradpub that comes out some corners of the selfpub scene (ref. this) is “social awareness” then so is the constant harping of That One Family Member who’s always pinching your muffin top and asking when you’re going to lose weight. (Or the one who’s asking when you’re going to get married, have kids, eat more, drink less, et ceteraet ceteraet cetera.)

Protip: “social awareness” is not mindless One True Path evangelism, despite what a lot of people nowadays seem to believe…

  1. I’ve just been hearing that word a lot recently and really, really wanted to use it… []
  2. Which is: the strength of legacy publishers does indeed have a huge impact on many of the biggest names in self-publishing, particularly when it comes to signing seven-figure distribution deals, generally either in “foreign”, i.e. non-US, territories or with regards to subsidiary rights. []
2018-05-22T08:55:21+11:0021st November, 2014|Tags: mike shatzkin, publishing, self-publishing|

Units of appreciation.

A few years ago, trying to explain the difference between how books had weathered digital change compared to other media, I formulated the paradigm of the “unit of appreciation” and the “unit of sale”. The music business was roiled when the unit of appreciation (the song) became available unbundled from the prevailing unit of sale (the album). Newspapers and magazines presented individual articles that were appreciated within a total aggregated package that were the unit of sale. The ability of consumers to purchase only what they most appreciated shattered the business models built on bundling things together.

[…] For novels and narrative non-fiction, where the unit of sale equaled the unit of appreciation, simple ebooks have worked. That’s been great for publishers, since the ebooks — even at lower retail prices — deliver them margins comparable to, or even better than, what they got from print books.

But there is a big challenge related to this paradigm that the industry hasn’t really tackled yet. The “unit of appreciation” for many books is the author. And the “unit of appreciation” is also the “unit of marketing” and therein lies the problem. Because the industry hasn’t figured out how to bring publishers and authors together around how to maximize the value of the author brand.

–Mike Shatzkin on units of sale.

“What do you want to be when you grow up, Alis?”

“I want to be a unit of appreciation!”

Oh day, lil’ Alis. One day…

2014-09-05T07:44:37+11:0027th October, 2014|Tags: books, marketing, mike shatzkin, publishing|

Mike Shatzkin on the history of the paperback.

This starts talking about the Hachette/Amazon1 negotiations but the fun part is a bit further down where Shatzkin goes into the history of the paperback book. Specifically, have you ever wondered what the difference between a “trade paperback” and a “mass-market paperback” is? Have you ever wondered why there’s a difference?

Well. The short answer is “book publishing is fucked up”. For the longer, more interesting answer, start with this post.

  1. I still want to call it “Forest Axe”. []
2014-08-18T08:33:14+11:0026th September, 2014|Tags: mike shatzkin, publishing|

Rethinking the Long Tail.

As usual for Mike Shatzkin, this is a dense read. But an interesting one all the same.

The somewhat tl;dr version is that, thanks to the rise of ebooks and PoD in particular (and big box bookstores before them), a new book title launched today has to compete in a market that’s greater by at least an order of magnitude compared to a book a decade or two or three ago. The point is that the main beneficiary of this Long Tail effect aren’t authors, they’re the aggregators; the Amazons (and Ingrams) of the world.

For authors, Shatzkin proposes that, increasingly, any advantage they can leverage to bring their works above the “flood” in the self-published market is going to become exponentially more important. Even if this is something as basic as being included in a catalogue of one of the Big n (however many of them there are at the current moment).

Basically, paradoxically, increased market saturation will result in a greater concentration of attention into fewer products. For the record, I think you can see evidence of this in other areas where disruptive long tail effects have already occurred. Music is the one everyone trots out, but see also (and perhaps more relevantly) the way print magazines and newspapers have been disrupted by their online equivalents. A decade ago, it was still possible to “get big” as an independent blogger. Nowadays, not so much; power has been re-concentrated into a handful of aggregate sites (the GigaOms and Daily Dots and Gawker subsites and whatever). Yes, there’s arguably more diversity now than there was in the heyday of print conglomeration… but that doesn’t mean it’s easier for an independent nobody to “get big” without first having an established platform to shout from.

On that note, back to Shatzkin for one final dig:

So far, the commercially successful self-published authors overwhelmingly, if not entirely, fall into two categories. There are authors who have reclaimed a backlist of previously published titles and self-published them. And there are authors of original genre fiction who write prolifically, putting many titles into the marketplace quickly. Successful self-publishing authors are often in both categories but very few are in neither.

Mmm. Indeed.

2014-07-17T09:10:23+11:0019th August, 2014|Tags: long tail, mike shatzkin, publishing, self-publishing|