One of the things that makes Mark Cuban such a good business man is that he has not siloed himself into any one form of entertainment. He owns Magnolia Pictures, the Dallas Mavericks, and Landmark Theatres, and appears on Shark Tank as an investor in potential start-ups. With hands in many different pots, including Hollywood, sports, and the start-up/VC world, it’s no surprise that Cuban can offer candid commentary on where each of these industries is going.
He was recently quoted in Entrepreneur, with,
“There is a HUGE bubble in the Valley for tech startups. The valuations have gotten out of hand. When valuations go up beyond the reality point, the funding goes down.
It’s almost become like the movie business was 10 years ago. There was so much dumb money coming in and so few actually making money that the suckers finally wised up.”
The last paragraph is most interesting, because as an independent publisher of both this blog and the books sold through Spaulding House, I am always looking to other industries to figure out where publishing is going so that I can attempt to avoid major mistakes in my career. Here are some of the trends I’ve noticed in other industries that can help predict the future of publishing:
Short Form Fiction Makes a Comeback in Traditional Publishing
Sean Platt and David Wright are the Kings of Serial for good reason—they saw the trend toward short form content, particularly short form fiction, before anyone else did. And now they are killing it with 7 ongoing series and a rabid fan base.
But actually, the trend toward shorter is happening across all media. For example, television is more financially stable than movies, and movie stars have been shifting to television ever since Alec Baldwin joined the cast of 30 Rock. The trend is so widespread that Parade has put together a slideshow about it, and The Atlantic has covered the many failed dramas the trend has produced. The popularity of shows like Game of Thrones, The Walking Dead, Breaking Bad, and Mad Men have taught viewers to appreciate strong, slow storytelling that happens in chunks, which is probably why Amy Sherman-Palladino was finally able to land a new series deal for Bunheads with ABC Family.
So bestselling traditional authors like John Scalzi are getting into the serial game. And if you are a young adult author, you have been asked by your publisher, without a doubt, to create series-related novellas to tide your fan base over until your novel comes out. Lauren Oliver, for example, has three stories already for her popular Delirium Trilogy, which gives her six slots on the virtual shelves instead of three.
Furthermore, fall 2012 TV produced tons of pilots that were much of the same, adding Nashville for Revenge fans, The Mindy Project for New Girl fans, and Revolution for Lost fans. Which means that audiences, when given a choice, are demonstrating a preference for “same” or “similar” over “new.” For authors, novellas offer a cost-effective way to get a lot of work out into the world quickly, which allows them to take advantage of unlimited shelf space. And for readers, novellas offer a way to enjoy stories in between the behemoth novels that traditional publishing houses have been producing over the years.
With a move toward audience-based business models, rather than big box business models, short form fiction will be the most profitable form of literature in the future for the same reason that the number one Kickstarter fundraising category is music. Music is much easier to finish than most other mediums. Words, TV shows, video games, and movies are harder to finish, which means it takes exponentially longer to get reviews and get word-of-mouth going.
What this tells me is that writers, both traditional and indie, who want to build audiences, must move toward creating at least some shorter content that’s easier to consume in order to build and periodically reactivate a fan base.
Literary Agents Become Consultants, Editors, and Publishers
Nike recently moved their social media in-house, presumably because it’s cheaper, faster, and more authentic to communicate their story without the middle man. Digital agencies are beginning to see themselves not as doers or middle men, but rather as advisors and consultants to large companies who need help managing their social media presences.
I think this is where literary agents are going. So when Melissa sent me this link on yet another literary agent live-tweeting about a slush pile, I was prepared to be annoyed. But actually, I was not annoyed so much as bored, because the tweets were incredibly vague and useless. There was no snark, there was no deep insight—it was like watching someone who is supposed to be famous read their email. You’d think it would be fun to see what’s in their private inbox, but actually, it is probably just work stuff. And it is boring.
I think and hope that agents in the future will work harder to prove that they can be great editors. This agent is bored by the process of finding good manuscripts, and we are bored watching her, and her tweets about the subject are really, really boring. (She explains why they are so boring here, and to be fair, I think she has some interesting points.)
However, I wouldn’t mind working with an agent who tweeted useful links and tips related to publishing and acted as an editor/consultant to authors, working with them to turn their book into the best it could be, and hopefully a bestseller.
I know this is absolute heresy to suggest to the publishing world, where agents are gods and writers like myself are lucky to get on their radars. But agencies and agents are transitioning, and there has to be a new business model if they want to survive, and there is a ton of documentation to support that. If I were an agent, I’d be trying to figure out how to feed my family in the next ten years. And if I were not apt to creating my own work, I would find something where my editing talents and knowledge of the industry could be of use.
Most first-time authors will self-publish to get a publishing deal
Tyler Shields, one of the most controversial photographers alive today, is famous for convincing the hottest young celebrities in Hollywood to let him photograph them, for free (no money exchanges hands either way). My favorite images are these recent ones with the Revenge cast:
He is also famous for dating Francesca Eastwood, Clint Eastwood’s daughter, and forcing her to destroy a $100,000 Birkin bag in the name of art (which some say is not a real Birkin).
He started out publishing his images on MySpace, but his work was recently acquired by Tate Modern, one of the most prestigious art galleries in the world. It’s not surprising, because Shields is sometimes compared to Andy Warhol, so why wouldn’t a major museum acquire him? The point is that he had to prove himself first. He had to work his way up.
And if agents are no longer going to handle the slush pile in the future, because it is fairly unprofitable, someone else will have to, and that will be readers. We have seen this happen with many popular indie authors this year, including Bella Andre and Samantha Young, all of whom were in print less than six months after inking a traditional publishing deal.
Big book launches will go away for all but a few authors
The same way Amazon entered book publishing, Netflix has taken on the likes of premium channels like HBO, Showtime, and Cinemax with its exclusive new series, House of Cards. What’s interesting about this is not that they have added content creation to their distribution business model, but that all 13 episodes are available now.
Which is funny, because this shows that Netflix completely gets how people consume media today. For example, I told Han Solo that The Americans, a new show on FX, would be a good fix for us in between Homeland seasons, and he said, “let’s wait a few years to start that so we can catch up all at once.”
This seems to mirror what is happening in publishing, anecdotally; there are more books to read and more ways to discover new books, so even the most avid readers don’t have enough time in the day to finish everything they want. This creates an environment where people don’t need most books on their release date; books are waiting on readers rather than readers waiting on books. Which means that while some books, like the seventh Harry Potter book, or the new James Patterson book, might get a huge push from a big launch date, most books will build a readership slowly, steadily, and over time.
Furthermore, Cory Doctorow has made an argument that the way entertainment companies release content to multiple countries, by tying in with that country’s holidays in an attempt to build buzz, Is actually creating more piracy. And Michelle Obama was so frustrated by the delayed release of Downton Abbey’s third season, that she figured out how to get them to send it to her ahead of time.
Ironically, in the midst of the new Netflix show, HBO’s biggest series, Game of Thrones, is one of the most pirated shows in television history precisely because HBO won’t make it available on Netflix.
Amazon algorithm manipulators will lose
When I worked at Brazen Careerist (a very long time ago), we paid an SEO specialist to use his Digg account to drive tons and tons of traffic to our website. Our traffic numbers spiked with every post that hit the front page. But really, all of this was just padding that protected us from creating content that was really great instead of trying to profit off of unsuspecting bloggers, like the entire internet was doing at the time.
And I think there’s truth in that for indie publishers today—it’s much easier to redesign a cover to get featured on Pixel of Ink than it is to write a better novel that generates word-of-mouth and builds an audience. Too many authors are obsessing over tactics as a way to pad themselves from the harder work, which is writing breakout books. If you don’t believe me, troll the Kindlebaords for a day—you will quickly find a small group of authors who perseverate in sharing how freaked out they are that their books suddenly went from selling 100 books a day to one or two due to a change in Amazon’s algorithm.
Also, there are people right now who study the Amazon discoverability algorithm the same way bloggers studied the Google search algorithm 5 years ago. While the underlying details are fascinating, it’s unlikely that the minutiae will be fruitful 5 years from now. For starters, Amazon is already correcting a lot of the inequity that indie authors used to subvert the bestseller lists with freebies through KDP Select. More recently, Amazon got rid of tags (temporarily? we don’t know), which caused a bunch of independent authors who relied on keyword discoverability to lose sales.
I love this quote from my friend Penelope Trunk on my friend Matt Gartland’s blog, about why she chose Hyperink as her publisher (bolded parts are mine):
“Hyperink has by no means cracked the code on the publishing industry, but what they are good at is SEO. And I’m completely convinced that if a publisher is partnering with an author, the author’s core competency is going to be content and probably some sort of audience ownership. But the author is never going to be good at SEO. It’s too specialized a skill set that’s too time consuming to learn and that changes all the time.”
Discoverability may matter right now, while Amazon still owns 60% of the ebook market; but if that’s all an author has, he or she probably won’t be around in five years. In the end, it will be the writers and publishers who learned to tell better stories who will win. I know this because the SEO specialist from Brazen doesn’t specialize in SEO or Digg anymore. He has since moved on to creating some of the best online marketing content in the business, because that’s where the money is.
So while I think there will be room for a few dedicated experts in the REO (recommendation engine optimization) space (I am amazed by Edward W. Robertson’s ongoing analyses), for most authors, digging into the gritty details is not worth it. Just like the blogs with the best writing have withstood tweaks in Google’s algorithm, the books with the best word-of-mouth and the authors who have steadily built their email lists will dominate the bestseller lists in the future.
Writers, both bloggers and authors, will hold on to their copyrights
Chicago Mayor Rahm Emanuel is extremely outspoken against the parking meter deal that his predecessor, former Mayor Richard Daley made in 2008 with a private company — turning over control of Chicago’s parking meters until 2084 for a one-time payment of $1.15 billion. The money is gone already, but Emanuel has inherited a complete shit show that will continue to plague the city for the next 60 years. What’s worse, the private company is said to have underpaid by nearly a billion dollars.
That’s why when I was looking at the Small Biz Trends guest posting guidelines and was blown away that they expect guest posters (who, by the way, are writing for free) to grant them exclusive, unending rights to anything they post. But they are not alone; lots of websites require this. It doesn’t make sense to me at all, from a writing perspective, especially when the amazing and informative Carol Tice is teaching the blogging world that hey, what we write is valuable. She started a revolution of paying writers for their guest posts on her site, and others have quickly followed suit.
As more and more bloggers turn their writing skills into income, and as more and more companies jump into the game of creating branded content, I’m sure we’ll see more writers questioning the tactics larger websites and blogs are using to gain content. Contently, a content platform for brands, explains:
“The future of content on the web – content that gets discovered, creates value, and builds audiences – is not cheap text cranked out by content farms. It’s high quality, editorial and entertainment created by experienced journalists and passionate bloggers. The future is a social media world, where humans are the arbiters of quality, and search algorithms reward sharing and human readability.”
So yes, the world has an excess of writers, but a shortage of good ones. Which is not to say I would never write free stuff for publicity; my issue with Small Biz Trends’ guidelines is that if I’m writing for free in order to gain publicity, that should be enough. I still want to be able to cross-post, sell, or reuse the work at a later date.
This is also not to say I would hang on to copyright for a client; when I freelance for companies that need blog and website content, I sell them the full, exclusive rights to everything I write for them. It’s how I make sure they are getting value, because they can publish the content on their blog, in a book, in a white paper, in their slides, in their newsletter, and more.
But for smart stuff that I could be posting on my own blog—no. My copyright is becoming more valuable. And the number of opportunities in which I would give up my right to use my own words in order to gain a couple hundred traffic hits is dwindling.
Permission, Piracy, and Copyright violation will fade
It is funny that I am so crazy about holding on to my copyright, because I am also an advocate of piracy. We have seen this happen with 50 Shades of Grey, which is 89% fan fiction of Stephenie Meyer’s vampire series, and which was originally published online. Meyer’s reaction to E.L. James’ success is one we should all learn from:
“I’ve heard about it; I haven’t really gotten into it that much. Good on her — she’s doing well. That’s great!”
As I was researching this post, I asked Han Solo what he thought of software copyright, and he looked at me like I was insane. Then, I found out that much of the service his start-up is building uses open-source software.
Software engineers are so pragmatic that they think in terms of efficiency, not copyright. The attitude is, “Why build it again?” We are starting to see this in other mediums, particularly music, with classical music going open source via Kickstarter and Girl Talk’s continued domination of the remix space.
Also, the idea of permission is fading away. The LA Times recently covered a fascinating story about how screenwriter Randy Moore filmed an entire movie, Escape From Tomorrow, at Disney World. Without their permission. And it was accepted to Sundance 2013.
So what does written media look like with both piracy and non-exclusivity? Basically, copyright disappears, at least from a commercial standpoint. Authors control their work and aren’t limited by gatekeepers in what they can do with it. No one else is limited by it either—characters, worlds, and concepts are there for the remixing.
I had been considering doing something like this with the Socialpunk series, which is free on Amazon right now. My vision was that people could take the text, world, characters, and more and create their own work for sale without my permission. I would still have my own versions of the story, the “official” versions, the ones that only I, Monica Leonelle, could write. But I would welcome commercial fan fiction and even help promote it.
I was going to do this, and then I found out that Hugh Howey was already doing this, brilliantly. His post brought tears to my eyes, because he is clearly so passionate about his fan base and so grateful that his fans are passionate enough about his work to dabble in his universe.
The only thing that is holding me back is looking into the legalities to make sure it doesn’t limit the reach of my work in crippling ways. What I can see so far is that Hugh Howey is not limited with what he can do—he has a print-only deal with Simon & Shuster and has sold the movie rights to Wool to 20th Century Fox. But there are few case studies and I know I need to dig further; so if you’re interested in hearing more, enter your email address below and I’ll email you when I post my research and decision.
I’m really excited about the possibilities. Because it’s clear that the software industry is flourishing with open source, and the music industry is flourishing with open source, and even blogs have flourished with open source. There is plenty of room for new business models to emerge, that do not require copyright policing.
New payment models for publishing will emerge
This, I think, is probably the toughest one to swallow on this list, which is why I saved it for last. Because as an author myself, I don’t want to try to figure out how the heck I’m ever going to make money with fiction in the future.
But we all need to. And I’m not sure I completely buy Dean Wesley’s Smith’s argument about passive income in the long-tail of publishing, because that assumes that ebooks will continue to be sold primarily a la carte. There is evidence to contradict that, particularly when you look at other industries, which indicate:
Private patrons will begin funding start-up costs for books
Kickstarter, which I have already mentioned at least 500 times in this post alone, is leading this charge. If you look at many of their projects, several of the most successful ones are variations of “give us start-up funding, we’ll create this, then we’ll set it free on the internet.”
In 2012, $15MM went to publishing books alone. This indicates that there is at least some money out there to make the model of “give us money and we’ll set this free” work with books.
Furthermore, so many other industries already do this in some form. Venture capitalists do this, record companies do this, film producers do this, and the Art Institute of Chicago does this. Even traditional publishers sort-of already do this. Andrew Sullivan of The Daily Beast recently did this so he could go completely independent with his writing. (You can still pre-order a subscription here: http://tinypass.com/andrewsullivan/)
Now, the patron amounts will get smaller and smaller, and crowdfunding will become a norm. To learn more about this, check out how Wikipedia and National Public Radio use crowdfunding to keep the doors open, or get started yourself by grabbing my free Kickstarter Book Campaign Guide.
Books will be sold via bundles and subscription services
Spotify, the most recent media darling of the music industry, has found a business model in bundling music as a subscription service. Before you think this may never happen with books, note that Amazon is already trying to do this, with its yearly Prime subscription where it lets Kindle users rent e-books for free and pays authors ~$2 a borrow on the backend.
Kobo is also making a play at this, subtly, with their claim, “A million free ebooks.“ I wouldn’t have noticed it in the slightest if I hadn’t seen the page through the eyes of a reader, who bought a Kobo ereader specifically because they advertised they had a million free books available and implied that you only need a Kobo ereader to access these million free books.
There are differences in offering books by subscription compared to music, television shows, and movies, primarily in terms of time of consumption. How many books would someone have to read to make a subscription worth it, after all? The average American only reads 16 books a year (average cost: < $250 to buy them), and 19% of Americans read none. Still, I have little doubt subscription services will happen in the publishing industry within the next 5-10 years, as long as a large company with lots of sways starts training consumers to consume books in this way. My bet right now is on Amazon, due to their aggressive promotion of exclusivity through Kindle Select to authors.
Of course, like Spotify, any subscription service for books is likely to only benefit the companies that are doing the aggregation, and not the individuals who are just cogs in the long tail. Still, it feels inevitable, because the economics of bundling is good for almost everyone—readers, publishers, aggregators—the only people it is not good for is artists.
One option to combat this is to sell your own subscription, like Colin Wright’s Exiles. Another great example is Bruce, who offers a short story subscription that goes for a buck per month. You can also pull together your own Humble Indie Bundle, like the indie developers who brought in $1.3MM by bundling together a bunch of PC games (they have raised roughly double this with each of their more recent campaigns).
Books will have ads, product placement, sponsorships
In other entertainment industries, you can hardly tell who is paying who for what. Take music videos: Adam Kluger estimates that about 5% of brand mentions in videos are product placement. And Forbes writer Zack O’Malley Greenburg thinks that Jay-Z’s alliance to Coke, which he rapped about with the line, “Shorty like Pepsi, me I’m the Coke man,” kept him from performing with Beyonce in the 2013 Super Bowl.
Non-fiction authors are well-versed in creative financing, but I’m interested to see these monetization strategies happen in fiction. A part of me would love books to stay somewhat unadulterated, while another part of me feels product placement in books is inevitable. Shows for the under 30 crowd, like Hart of Dixie and Pretty Little Liars, regularly partner with companies to subsidize the production of their shows. And it’s been done before in fiction, though not with significant success.
Then, there are ads. Ads in books have been done before, and Amazon has already started the process by offering an ad-based Kindle. And while readers loath the idea of ads in their books, Digital Book World reports on a survey that shows most of them would be happy to have ads in their books in exchange for getting books for free.
It makes sense; all media suffers from the network effect, where they are worth more with each additional person that consumes them. Plus, books need critical mass to develop word of mouth, which supports the idea of an ad-supported publishing model.
Books will have some version of “in-app sales”
A more promising idea is the strip tease approach, giving away 90% of the work for free while charging fans for the best 10%. Some of the best gaming apps are doing this with great success. Candy Crush, for example, is an addictive free game that offers in-app purchases, including additional levels, extra lives, and special types of candy that help players beat the level. It’s at the number one spot on iTunes; and while most players will probably never purchase a thing, those who want to advance faster will.
In-book purchases could be expert interviews or premium content for non-fiction. For fiction, it could be exclusives, such as deleted scenes, author notes, or interactive sections. For example, JK Rowling created Pottermore, an entire website to extend the Harry Potter series beyond just the books, and it’s fantastic.
Pay What You Want for add ons
This approach of offering exclusives is most pronounced in the music industry, where most prominent-but-not-mainstream musicians have all but given up on trying to charge for their work. Techdirt provides a number of examples of other ways musicians make money, from Trent Reznor who releases all his music as singles instead of albums, and for free on his website, to Amanda Palmer, who raised a million dollars through Kickstarter for her newest album, despite offering it for Pay What You Want (with the option to just download) through her website. And apparently, Pay What You Want pricing even works on physical merchandise that is sold at live concerts.
Techdirt puts forth the following formula for making this work: Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model.
It seems to have worked for Louis CK, the comedian who made over $1MM on a $5 one-hour special he offered direct to fans through his website. And Cory Doctorow attempted and documented a PWYW book called With a Little Help on his blog. Though he hasn’t seen a smashing success with it (yet), it’s still a brave and fascinating experiment.
I think Pay What You Want could do well as a sole business model, if all sales were in-person, where someone was less likely to look you in the eye and hand over a dollar bill for your hardcover book. And while I wait to see where Amazon lands on its quest for publishing domination, Pay What You Want an interesting idea to explore online, which is why I’ve committed to an experiment of offering all my work direct to fans this year via my website. There isn’t much there, yet, but I’m hoping a recommitment to this blog is a good way to get started.
The Bottom Line: Audience-Based Business Models
Amid all of these changes and predictions, there are a few things that seem to be emerging: writing addictive books (content, really) and building a rabid audience of dedicated fans.
And maybe, at the end of the day, writing addictively is primarily about building a rabid audience of fans.
This is what no one in publishing is talking about very honestly. Because cultivating a fan base is so hard to do for so many reasons and it doesn’t come as easily as writing for so many people, including myself. In some sense, we are not writers, but customer service reps. I feel like I need to install CSR insulation around myself, to pad my work and take it from being a product to an experience, if I want to turn this into a career.
And this is the real challenge of being an author: to touch people’s lives in such a way that they will miss you when you’re gone. Like Rev. John Graham, who concealed his terminal illness in a crossword puzzle. It’s getting harder and harder to be everything that fans want, but we should all strive to someday be able to announce our inevitable deaths in such an impactful way.
Do you know any writers, authors, editors, or publishers who need to hear these publishing trends? Send them a personal email with a link to this post. Your thoughtfulness may help them sort out how to earn a living in publishing in the future.
What people are saying about this post:
— Carol Tice (@TiceWrites) February 6, 2013
— Ryan Stephens (@ryanstephens) February 8, 2013
— Winning Edits (@WinningEdits) February 27, 2013