Changes Afoot in the Publishing Industry

The publishing industry has been abuzz over two recent developments: one involving amazon.com and print-on-demand; the other involving Harper Collin Publishing.

Amazon.com and Print-on-Demand

Some Background on POD Printing. Print-on-Demand printing, or POD for short, is a method of printing by which you print one book at a time. I discuss POD printing in detail in Part Two of my blog series on the Ins & Outs of Self-Publishing .

While POD lowers upfront investment and financial risk, it increases the publisher’s costs of producing each book. That makes it difficult for publishers using POD printing to offer the 40 – 60% discount that is normally required for sales through bookstores and other traditional book distribution channels. Nevertheless, there are publishers who have built successful business models by combining POD printing, a short discount to wholesalers, and sales through amazon.com and other online bookstores.

Amazon’s Recent Actions. Lightning Source is the leader among POD printers. Amazon is requiring publishers to use a Lightning Source competitor, BookSurge, for the printing of all POD books offered through amazon.com. The consequence of not complying is loss of the buy button on the book’s amazon.com profile page. This means the book would be sold only through marketplace resellers and not directly by amazon.com – an action that will surely decrease the number of books sold through amazon.

And here’s the wrinkle. Amazon owns BookSurge. Many people view this move as amazon using its position as the top online bookseller to capture more of the POD printing market.

What Happens Next? Industry responses have ranged from talk of boycotting amazon, to filing complaints with the  Washington State Attorney General's Anti-Trust Division, and to an investigation by the Author’s Guild to determine whether amazon’s actions violate antitrust laws.

Harper Collins Publishing

Harper Collins is launching a new group with a new approach to book publishing. Rather than pay authors a large advance and then pay authors a percentage royalty based on the cover price, the new Harper Collins group will pay low or no author advances and split profits with authors 50/50. The group will also stop accepting returns of unsold books from bookstores and distributors. Motoko Rich's article in the New York Times discusses the new approach.

This new approach could be to the advantage of authors but we’ll have to wait for more details. While authors with names like Hillary Clinton and Stephen King frequently do get large advances, most authors receive modest advances. It’s not unusual for authors with low name recognition to receive less than $10,000 in advances. With respect to the 50-50 split, the advantage to authors really depends on what costs Harper Collins deducts prior to making the split. It’s conceivable that authors could be in a financially worse position if forced to share all the expenses of book publishing.