Pierre Salinger

Amazon as a threat to steal big titles from big publishers is still a ways off

When Larry Kirshbaum, the longtime head of TimeWarner Publishing (purchased right after he left in 2007 by Hachette and now the company called Hachette Book Group USA) joined Amazon many people thought — I among them — that Amazon was about to become a threat to take big titles away from the major publishers and, by doing so, also put pressure on competing retailers who would either have to buy from Amazon or do without major books.

An article last week in The Wall Street Journal spells out just how futile have been Amazon’s efforts so far to upend the Big Six. Their two biggest headline acquisitions — a celebrity bio from actress Penny Marshall and the latest from bestselling non-fiction writer Tim Ferriss — are achieving paltry sales outside Amazon as measured by BookScan.

Michael Cader does some deeper digging to suggest that the high-profile books are not the place to be looking for the successes in Amazon’s publishing. They’re publishing lots of genre fiction and buying up some backlists.

Yet, I can’t believe that the high-profile output from the New York office meets Amazon’s original expectations or Kirshbaum’s. If they miscalculated the impact they could make, maybe it was for the same reason I did. An abrupt slowdown in ebook switchover took hold at about the same moment the Kirshbaum era at Amazon began. Big publishers are reporting that ebook sales are now approaching 30% of their revenue, which is about a 50% increase from what they said last year. That follows several years when ebook uptake increased by 100% or more.

(It is important to note here that the reported figures are a percentage of all revenue. Many titles are not “ebookable”: they’re illustrated books or little kids’ books and, if they have ebook equivalents at all, they don’t sell nearly that percentage. So the digital sales of immersive reading would constitute a somewhat higher percentage than that.)

Amazon as a publisher has advantages and disadvantages against more traditional competitors. They have the advantages of direct customer contact, which pay off in two ways. They can send you an email pitching a book as the logical next one to the one you just read; general publishers can’t do that. And, as the publisher, they have more margin to either pay the author more or charge the customer less, which, either way, increases an author’s revenue through online channels.

But their disadvantages are also significant. For most books, and particularly non-fiction (as both of which the high-profile releases the Wall Street Journal wrote about are), more than half of the sales still come from brick-and-mortar stores. Despite their attempt to secure that exposure by a licensing deal with Houghton Harcourt, the resistance to Amazon from Barnes & Noble and many independent stores and mass merchants has curtailed that distribution.

Apparently Amazon led at least some people to believe with their success on the recent Barry Eisler book that they could sell more copies through their own channels than big publishers could through the entire network. The claim that they had outsold all his previous NY Times bestsellers was made to literary agents in a letter that also cited other great successes, all with genre fiction. Without questioning anybody’s numbers, I was skeptical about the significance of the relative Eisler sales because, it seemed to me, whatever they could do for Eisler (whom they published) they could do for any other book they wanted to, whether they published it or not. So it seems illogical to me that they would somehow magically sell more than the whole trade combined on a book because they were publishing it.  It seems apparent that Amazon isn’t succeeding at persuading agents that the Eisler case, even if it is as portrayed, is replicable.

I saw reports of bitter comments from Tim Ferriss, complaining about Barnes & Noble’s apparently-effective boycott of their competitor’s publishing program. Maybe he would be doing that even if Amazon is selling more than his conventional publishers did before. But I doubt it.

This is not a final answer. Amazon’s share of the trade market — ebooks and online print combined — is still growing and shows no sign of abating. Most publishers would still report that Amazon is their fastest-growing account.

But shelf space erosion — a metric with no reliable index anywhere — seems to have slowed down. That means that, at the moment, we have a more stable book trade than we’ve had for at least five years. It is smaller, but it is more stable. In the US at least, our market of three big ebook players (Amazon, B&N, Apple) and two sturdy and persistent upstarts (Kobo and Google) is still welcoming some new entrants. Zola eBooks, promising some interesting merchandising innovations, and Bookish — the repeatedly postponed effort from three major publishers — are expected to join the fray soon. Sony and Copia and Blio are still trying to gain traction, but they’re also still here.

Amazon definitely has the most advantages. Their Kindle ecosystem is still the best-functioning, deepest in title selection, and benefits in numerous ways from having more readers and selling more ebooks (and books, for that matter) than anybody else. The growth in their genre title base that Cader points out increases their market share of dedicated genre readers, who read other things too. They have the most self-published titles and the best ecosystem for self-published authors to make money. And the big title growth enables them to build subscription or subscription-like capabilities like KOLL (Kindle Owners Lending Library) which do take customers out of the game for everybody else.

As their share of the market grows — as long as it continues to grow — their argument to authors to cast their lot with them gets stronger.

But, for now, it would seem that B&N definitely did the right thing for their own good by boycotting Amazon’s titles. And, for now, it would seem that most of the authors Amazon will get for their general list will be those who are annoyed at the publishing establishment like Konrath and Eisler or curious about working with a tech-oriented publisher like Ferriss.

Authors who want bookstore exposure or to maximize their total sales across the US bookselling universe will remain hard to persuade for the forseeable future. But probably a little less so with each passing day.

I note with sadness the passing of Senator George McGovern. I am proud to have worked on all three of his presidential campaigns: 1968 at the Democratic National Convention working for Pierre Salinger, two years on the 1972 campaign, and a weekend in New Hampshire trying to light a fire in 1984.

What motivated us to join Senator McGovern was primarily his opposition to America’s involvement in Vietnam, but his personal and political appeal went far beyond that. He was extraordinarily decent and straightforward. In my stretch of two years working for him in the early 70s, it was remarkable how consistently he took issue positions we young idealists could be proud of. A poorly-vetted choice for vice-president will always be part of the explanation for why he was crushed, but my friend Professor Wade — one of McGovern’s top strategists — told me years ago that it was the assassination attempt that crippled George Wallace that actually was responsible for the defeat. 

Nixon had won the 1968 election with a little over 40% of the vote. Wallace had taken a share in the high teens. The McGovern planning from the beginning assumed a similar race in 1972. When Wallace was eliminated by the assassination attempt, Nixon’s “Southern Strategy” made him the heir to the Wallace vote and a landslide victory.

In the end, of course, it was Nixon’s vice-president, Spiro Agnew, who went to jail and his administration that ended in disgrace. McGovern was always gracious and never bitterBut, as a country, we’ve never spent enough time contemplating how different things could have been if Bobby Kennedy hadn’t been shot in 1968 or if McGovern had won in 1972.


Merchandising ebooks is a problem not really solved yet

I have always been in the process of reading at least one book since I was about 8 years old. When I was a little kid, I’d find them in the house (Dad was in publishing) or at the library in my home village of Croton-on-Hudson or in the school library. Sometimes extraordinary measures delivered a lot of reading material. On the fourth to the last day of second grade, I got the chicken pox and was in bed for a couple of weeks. I had already developed an affinity for a Random House series of children’s books on American history called Landmark Books, which are still available. Dad knew the person at the printer responsible for the Random House account and a box of 40 of them arrived the day after I was diagnosed and was completely read through by the time I was back on my feet.

When I was in junior high school, I found that a big drug store in the retail space at 42nd and Vanderbilt in Grand Central Station had a massive selection of mass-market paperbacks and that became a shopping destination for me for a while.

As an adult, the shopping and discovery moved to bookstores. And although I did occasionally get my ideas of what to read next from book reviews or friends’ recommendations, usually I just shopped. I would go browse American history or biography or sports (baseball always had its own shelves within sports).

It never took me much time to find what I wanted to read next until I started reading ebooks.

In the pre-Kindle ebook era, I was a captive of the Palm Digital store, because I read on a Palm and their commercial approach was to not allow other retailers to sell their format. The choices were limited because the publishers before the arrival of Kindle were reluctant to make the investments required to deliver ebooks to me and the four other people who read them at the time. That changed immediately when Kindle arrived and, because of Kindle and the other major formats that have hit the marketplace since then, the choices are robust. Just about every new book I’d want to read is available for my device of choice (the iPhone) and the digitization of the backlist just carries on going deeper and deeper into publishers’ repositories.

But the merchandising, at least for somebody who shops on the iPhone (it’s a bit better through the ereading devices or PCs), leaves a lot to be desired. My shopping experiences are actually a bit of a random walk. I ask my ebook retailer to show me books by category and, since my categories don’t change much (and haven’t since I was a kid) I tend to see the same books over and over again, far too many of which I have already read (perhaps in somebody else’s format.)

A short time ago I was shopping for my next read on the iPhone. I started out shopping with Kindle and then Nook and a few minutes on each of their mobile sites didn’t turn up anything that moved me. Then at Google Ebooks I found “Making of the President 1968” by Theodore White. That was definitely one I wanted to read. I bought it and I’m in the middle of it.

There is no particular guarantee that I’ll find my next book on Google. I haven’t found any clear pattern yet among the four stores I shop regularly (Kobo being the fourth). Obviously, if I know I want to read another James Patterson or John Locke thriller, any of them would deliver it to me quickly and painlessly in response to a search. It is when I am hunting by subject that the search returns seem to be pot luck. I’m probably not making it any easier on the retailers by spreading my shopping around; if any of them actually did have a good engine to take my purchasing and reading profile and make the next great recommendation, I’d be screwing it up by spreading around my data.

All of this underscores how difficult is the challenge being faced by Bookish in the US and aNobii in the UK, two “find what to read next” sites financed by major publishers. And they join a long line of sites that have tried to build recommendations and community conversation around what people are reading: Goodreads, Shelfari, Library Thing, and the new ebook platform, Copia.

It happens that our office is now going through the exercise of placing the book of “The Shatzkin Files” on platforms other than its originator, Kobo. (Kobo’s 60-day exclusive is about up.) When we encountered a limit of seven keywords in loading process for Kindle, I inquired about it. Why limit this, I wondered?

I got a good answer when I asked. It turns out that any author or publisher’s inclination would be to put in lots and lots of keywords. That was my intention. I was going to take every keyword from every post and put it in for the book. But, on reflection, as my friend at Amazon pointed out, that really wouldn’t be helpful to the reader who was searching. The fact that one blog post is about a holocaust survivor doesn’t mean that somebody searching under that topic would want my book, of which more than 99% is about things totally unrelated.

It turns out that Amazon uses algorithms created by full text searching to enhance what they can deliver in response to searches in ways that the publisher and author would not necessarily think about when creating metadata. As an example, he pointed to a book that you’ll discover on Amazon if you search  for “erasure coding”, a term of art that might very well not have been included by any author or publisher inserting keywords but which their more sophisticated methods enable you to use for discovery.

My friend at Amazon didn’t say this, and maybe I’m reading too much into what they do, but it almost seems like the keywords we put in could be superfluous and the capabilities they have through full-text analysis and algorithms actually govern what is discovered. Of course, if the solicitation of keywords from authors and publishers is a placebo, that’s not something I’d expect them to reveal.

I was just looking for “American history” when I found “Making of the President 1968” on Google (and didn’t find it anyplace else in the time I allotted to look.) So Amazon’s sophisticated capabilities didn’t deliver it to me and now their engine doesn’t know that this was a book I wanted because I bought it someplace else.

But I’m really glad I found this book, which was probably pretty recently made available in ebook form. I was active in that campaign and at the Democratic Convention in Chicago, where I was Pierre Salinger’s assistant on the first McGovern campaign. (George McGovern declared late to give the Bobby Kennedy supporters who couldn’t abide Gene McCarthy a place to go. I had been one of those; I left the Ambassador Hotel an hour before Kennedy was shot on June 4, 1968 because the security was tight and I couldn’t get into the party. Ironic.) The author of the Making of the President books, Theodore White, was a friend of Salinger’s and I met him at the convention. But I’m saving the stories of that campaign for another post on another day.


I thought I was writing a blog, but it turns out I wrote a book!

An ebook of the first two years of The Shatzkin Files is now available and will be linked for the forseeable future from our left nav bar. This post is the introduction to the ebook, which explains how it came about.

My friend, Joe Esposito, first told me about blogs in the early part of the first decade of the 21st century before just about anybody else I knew had heard of them. I am not sure why it took me many years to start one of my own.

I’ve been training for this gig for a lifetime. My Dad insisted that I learn to touch-type when I started fooling around with a typewriter at the age of 8. (As he said, “either we teach him the right way, or he’ll teach himself the wrong way.”) Three months of twice-weekly lessons got me up to 42 words a minute on a manual typewriter, but trained my fingers to do the right thing so that today on a computer I can do about 3 times that speed. By the time I was 11, I was filing copy on a weekly basis on the Little League games for our local newspaper. I got paid too: 15 cents a column inch. The newspaper job actually continued for the next several years as I moved on to covering high school sports.

In my junior year of college, I started writing a weekly column I called The View from Underneath for the UCLA Daily Bruin. I don’t know how good it was or how many people read it, but it got me a certain amount of notoriety. Because of the column, I networked my way into the Bobby Kennedy presidential campaign and, after his death, a slot as an assistant to Pierre Salinger on the 1968 McGovern effort at the National Democratic Convention. (That was the one in Chicago that featured police against protestors in the streets and which villainized Chicago’s first Mayor Richard Daley to that generation of young liberal activist Americans.)

Between the end of The View from Underneath and the commencement of The Shatzkin Files blog, 40 years passed. I did plenty of writing in the meantime: some books (mostly about baseball), a bunch of articles about publishing in trade publications in many countries, and, starting in the mid-1990s, speeches on publishing and digital change delivered at industry forums and then preserved on my website. The posted speeches were a great boon to my professional career, making it possible to build credibility (and “brand”) among people who never attended these live events.

Others I know had blogged daily, or almost daily. Richard Charkin, now Managing Director of Bloomsbury, wrote every day when he was head of Macmillan. My friend Gwyn Headley, Managing Director of the stock agency fotoLibra, told me that when he started blogging, he did so with a list of 365 topics in hand so he’d always have something to choose from on a day he wasn’t feeling creative. Richard gave up his blog when he changed jobs and I don’t think Gwyn kept up the daily habit very long either.

In my case, I blogged six times the first two or three weeks, then five times the next few weeks, and it diminished from there to what is now a one or twice weekly post. It seems like it usually takes me about 1500 words to get in and out, although some posts run a bit longer. I find that I need to review what I’ve written at least three times a few hours apart after I think I’m done to make sure I’m happy with it. Occasionally, a post gets to that point and gets scrapped.

As I think must be normal with these things, the audience for the blog just grew. As of this writing, The Shatzkin Files has about 1700 subscribers who get the blog delivered as an email to their inbox. A number generally ranging from half that to twice that (and occasionally, quite a bit more) reads the posts on the site. The comment strings keep getting longer.

Fortunately, one of my regular readers is Cameron Drew, who, like me, came into the book business through the most honorable possible path: working for his father. I knew David Drew, one of the great book sales reps of my generation, long before I ever met Cameron. Since Cameron has gone to work for Kobo, the global ebook retailer spawned by Canadian retailer Indigo, he and I have seen each other at conferences and trade shows. He told me from the very beginning that he was a loyal Shatzkin Files reader.

Early in 2011, Cameron told me he often found it useful to refer back to previous posts of The Shatzkin Files but that doing so through the website was clunky and difficult. “Your stuff should be collected into an ebook,” he said. “If we did it at Kobo, would you give us a 30-day exclusive?”

I was extremely flattered. “I’ll happily give you 60 days,” I said.

And thus we have this ebook.

If you live in the world of trade book publishing — the publishing that has reached its audience primarily through bookstores for about 100 years — you know we are all in a different world than we were in when I began The Shatzkin Files blog in February, 2009. One of the early posts speculated that it might be  harder for Amazon to hold onto their stranglehold on ebook sales than their hegemony on online print sales. At the time, Kindle was extending its dominance of the ebook marketplace by enabling the Kindle owners to access their ebook content through the iPhone and other devices. And Amazon’s pricing policy of selling below their cost was beginning to scare publishers.

Then, around the first anniversary of the blog, Apple’s iPad and the iBookstore arrived on the scene, offering publishers the opportunity to implement the so-called “agency model,” under which the discounting of ebooks is effectively stopped. I attribute to that tactic, along with the introduction of the iPad, the Nook, Kobo and Google Editions, the stabilization of ebook distribution in a multi-retailer market with evolving global competition. So, two years later, it looks like that early post was right.

We’re going to see a lot more change in trade publishing in the years to come. I expect the next two years to present even greater challenges and more drastic change than the last two years have. Since The Shatzkin Files began, the extremely challenging times we’ve expected for bookstores have become very evident. Over the next two years, the extremely challenging times it has seemed to me must follow for general trade publishers will probably become equally evident.

One thing worth using this introduction to say is that I take no pleasure in the big publishers’ pain. It is a matter of professional pride to me to not allow my preferences to color my predictions. I love bookstores and libraries and consider the top management of the big trade houses to be intelligent, ethical, and creative people. I consider many of them friends. The fact that the transition from reading and distributing print to largely reading on screens and distributing print online makes much of their skill sets and business models obsolete is not their fault. Nor is the fact that preserving their old business, and the cash flow it still yields, sometimes interferes with inventing the new one.

There are serious initiatives in the big houses to acknowledge the importance of verticalization (mostly in genres), to create direct contact with audiences, and to employ scale in search engine optimization and in locating customer clusters online that it is hoped will enable a new version of the horizontal, big book publisher model to leap the chasm of change. At the same time, the big publishers are figuring out how to step back from the enormous overheads associated with doing business the way they have for the past 100 years. How much change is sufficient, and how fast is fast enough, are questions we’ll only know the answers to with the passage of time.