Sunday, December 16, 2012

Monopoly Money

The world of publishing is changing.  This should come as no surprise to anyone who has paid attention over the past few years, and definitely not to those who pay attention to this blog.  As further evidence, there's this article from The Atlantic, detailing the merger of Penguin Group and Random House.  That's right, the small world of traditional publishers is about to go from six to five(the merged company is called Penguin Random House...creative, isn't it?).

The new publisher is going to try and challenge Amazon for dominance in the digital marketplace.  Amazon controls about 60% of the market, so increased competition within that market should be good, right?  Let's just say that I have my doubts.

Amazon has thrived in the digital world by not narrowing itself.  It's a garden of wilderness that helped give birth to the indie publishing movement, and it's sales go beyond those of traditional authors who publish the so-called "normal" way.  Penguin Random House, on the other hand, is still just another traditional publisher, albeit one who is looking to expand into new areas, or at least create competition there.  The problem is that simply trying to expand more into the digital world doesn't mean that they're changing the practices they've been using over the years.  Their deals with authors will not improve(and might actually get worse, MTF below...), and their contracts will still contain the same red lines that drove authors to the indie world in the first place(non-compete clauses, ridiculously low royalty rates, dealing through agents instead of authors, etc.).

I don't think Penguin Random House understands what the digital marketplace is about - diversity and low prices.  One of the main reasons that traditional houses aren't dominating the ebook world is because they insist on charging the same price for ebooks that they do for print books(or close enough so as not to make a difference) from the same old worn out authors.  What Amazon has helped spur is an influx of those who never "got their shot" in the traditional world, and through indie, those free agents have kept prices low, with most indie books coming in between $2.99 and $5.99.  Yes, people have to sift through some garbage to find a jewel, but the market usually finds a way to elevate those with real talent.  Unless the new company is willing to really undercut its prices as well, something I'd be stunned at given the overhead they still have to maintain, they stand almost no chance.  It reminds me of the market for the Prius, a car that refused to drop its price and suffered when most folks realized you needed to drive it somewhere around 400,000 miles in its lifetime to make the gas savings worth the initial cost.

So what does this mean for writers?  One thing it should be guaranteed to do in time is drive more of them into indie publishing.  With fewer companies out there to publish you, pickings will get even slimmer.  Further, advances, the money shot for a lot of writers, will decline because...well, because they can.  As manufacturers shrink in total number, the rules they create get ever more burdensome and difficult for the consumer and supplier, and this is true of any monopoly.  With fewer traditional publishing houses out there, and this perception still lingering that writers can't operate without traditional publishers, the terms to get signed by one of the few remaining houses will become even more strict.

For me, however, I think this is continuing proof of an industry in transition as the power players get fewer and the leviathan of publishing gets harder to centrally control.  Larger publishing houses have tried for decades to consolidate their assets and further control the market, and it might have worked if not for the changing way technology is allowing books to come to market.  However, with multiple vehicles writers can now go through to reach readers, and multiple avenues readers can now go through to get their book fix, the further consolidation of traditional publishing reminds me of the Empire building the Death Star, as well as Princess Leia's response - "The more you tighten your grip, Tarkin, the more star systems will slip through your fingers."

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