First Madonna and Radiohead; Next, James Patterson: Part 3

What was especially fun for me in having bestselling thriller author Barry Eisler guest blog this week, was the chance to talk over some of these ideas with him and to see some of that thinking show up in part 3. Like Barry, I think there are serious shakeups coming and fascinating branding opportunities in the publishing area but they're going to take some guts to implement. - MJR

First Madonna and Radiohead; Next, James Patterson:  Part 3 by Barry Eisler

In Part 1 of this article, I argued that distribution is flattening, and in doing so is undermining the most important competitive advantage of media companies.  In Part 2, I discussed how flattening distribution will affect book publishers and booksellers.  Now let's see how authors and agents will turn out.

First, we need to talk briefly about brands.  Simply put, a brand is the emotional connection a consumer feels to a product or service.  It's what the product or service stands for in the consumer's mind.  What does Apple stand for?  Virgin?  Marlboro?  Harley Davidson?  Generally speaking, if you can easily and simply answer that question, you're talking about a strong brand.  If you can't, the brand is weak.

(More on brands here)

Let's perform the test on publishers:  Doubleday?  Putnam?  Random House?

Needless to say, with a couple possible exceptions (Knopf still stands for a certain kind of literary fiction and physical quality; Harlequin, for romance), publishing houses are weak consumer brands.

To put it another way:  is there anything that would influence a reader to buy a book from, say, Ballantine instead of one from Dutton?

I can't think of any.  The product lines are just too interchangeable.

What about booksellers?  Pretty interchangeable, too, I'd argue.  The big box stores, if they stand for anything, are only about prices (not a coincidence that Wal-Mart's slogan is "Everyday Low Prices").  Amazon does have a brand, mostly about the customer experience -- the links to related products, the comments, the recommendations, the ease of use, the immediate gratification.  Independents don't really have a collective brand (or if they do, it's not terribly relevant to their success).  But they do, or at least should have a brand in their community, a reflection of their individuality, you could say, related to expertise, enthusiasm, and personal knowledge of customer tastes, that should continue to offer them certain advantages in a flat distribution world.

So there are some factors beyond convenience and price that might influence a consumer to buy a book from one retailer rather than another -- loyalty to and the feeling of community at a neighborhood store, for example, or the chance to leave a comment on Amazon.  But between B&N, BAM, Borders, the big boxes...?  I don't think so.

No branding at all at the publisher level; weak branding among some retailers.  Are there any strong brands at all in the book ecosystem?  Today, only in one place:  authors.

I'd wager that the average reader doesn't know, and doesn't give a damn anyway, who publishes James Patterson, or where Patterson's books are sold.  The only thing a reader cares about is getting hold of a copy.  In other words, the only brand that matters, and it's a powerful brand indeed, is Patterson himself.

Of course, there are plenty of other immensely powerful brand names in the business -- Stephen King, Nora Roberts, the list goes on -- but for me, Patterson is the most interesting because he's done more than any other author to extend his brand.  I don't know how much Patterson contributes to his co-authored books, but I also don't think it matters.  Patterson's readers trust his brand.

A brief digression to illustrate the point:  the author's name on her own book is the innermost circle of branding.  The only thing the brand is standing for, and selling, is you and the product you yourself created.

Blurbs are a modest form of brand extension.  Blurbing a book implicitly says to a potential customer, "I've read this book [ha-ha] and I liked it.  You trust me, so trust me when I tell you you'll like this book, too."

The next wider circle is what you see with Tom Clancy's Op Center series.  Tom Clancy is a huge brand name, and you can think of Op Center as a systematic (and more profitable) extension of blurbing generally:  "Tom Clancy likes this book so much that he's made it part of an imprint that bears his name.  If you like Tom's books, you'll like these books, too."

James Patterson has simply extended his brand one step further still.  It's not James Patterson's Thriller Center; it's his name alone.  And it works -- I think he had five #1 NYT bestsellers in 2006.

The point is, Patterson's name sells books.  So in a flat distribution world, what's to stop one of the chains from approaching Patterson the way Live Nation approached Madonna?  An exclusive publishing deal and a 50-50 split (or whatever split it takes to make the arrangement more profitable for both parties than it would have been had they stayed with the traditional publisher approach).

Take it further.  As retailers seek to develop and differentiate their own brands in a flat distribution world, what better route than adopting their own version of the Tom Clancy's Op Center or James Patterson co-authored approach?  A chain tells Patterson:  "We'll publish you exclusively, and we'll also exclusively license from you the right to use your name on a new imprint of 20 titles per year."  If it works, other retailers will follow suit with other star authors.  The draw of an exclusive new Patterson imprint would be valuable beyond the Patterson-branded books sold, because the customers the brand draws into the store would buy other titles, too.

Of course, exclusive licenses are expensive, and the question remains:  could a single retailer offer Patterson enough to offset the sales he would give up by not having his books more widely available?  I don't know the answer, but the experiment will be conducted, and given the technology and publishing portents, probably sometime soon.

If booksellers become exclusive publishers, the customer experience will become more akin to what you face today in deciding between an Apple retail store versus a Sony.  It's the same generic product class, but the individual items are different.  If this level of differentiation does come about, it won't be a positive development for independents, who would likely lose their ability to offer the bestselling titles that bring customers into stores.

No matter how it comes about, when distribution goes flat, booksellers will increasingly become publishers, too.  Zero distribution cost probably means that even more titles will be published.  How will readers know what to buy?  Someone will have to cut through the clutter, the same as today:  reviews, advertising, in-store placement, etc.  I think of this cutting-through-the-clutter function as an element of marketing and sales, and I call it imprimatur value.  Someone you trust attaches her imprimatur to a book, and that trusted imprimatur encourages you to take a chance and buy it.

Today, publishers offer imprimatur value to booksellers:  Again, "We love this book and we're going to aggressively market it."  This message increases a bookseller's confidence and encourages the bookseller to take a chance.  Agents, on the other hand, offer imprimatur value to publishers:  "You know me and trust me.  I know your taste.  I believe in this new author enough to take her on; you should take a chance on her, too."

In a flat distribution world, retailers will need publishers less, perhaps, eventually, not at all (or rather, retailers will become publishers themselves).  But they'll still need someone to help them cut through the clutter.  And someone will still need to represent authors to buyers.  I expect agents will start selling directly to retailers, and that their business won't be nearly as affected by flattening distribution as will publishers'.

What should publishers do?  After all, they're the ones most adversely affected by flattening distribution.

I don't know for sure.  Media companies tend to look at technology as a threat rather than an opportunity (think Hollywood and Betamax, or Motown and Napster), and I wouldn't bet heavily on publishers' ability to adapt.

My guess is, as retailers become more like publishers, publishers will become more like agents.  Agents and publishers both seek to leverage their imprimatur value, albeit currently to different audiences.  Both have close relationships with authors.  Agents are already editing; they're even moving into packaging and marketing, as evidenced by Trident Media's hire of Putnam marketing maven Dan Harvey.  Take away distribution, and publishers and agents start to look an awful lot alike.

Another possibility:  if I were James Patterson's publisher, right now I'd be trying to deal myself in by merging with one of the chains.

We'll see...

P.S.  Thanks MJ -- not just for letting me guest blog here on BBH again, but for helping me refine many of the ideas in this series, and for providing others -- especially the idea of an exclusive James Patterson imprint at a retailer/publisher.

Comments

[Naomi]

Barry:

Very interesting series of posts, but I disagree with you on some of your conclusions.

POD printing will figure heavily in the future of publishing, I imagine, hitting colleges and universities first. I can see these Expresso instant machines in libraries and student bookstores, etc. Don't know how quickly or efficiently it will permeate places like chain bookstores and discount stores. For one thing, it's a machine, and as we can readily see at the post office or photocopy service bureau, machines break down. I imagine with an Expresso, there's even more complex moving parts than your average vending machine, so there needs to be some knowledgeable personnel on the premises who can fix these things quickly. Personnel means money. If there's only a few Expresso machines in a store, consumers won't want to wait--they will prefer the old model of books on shelves. (These instant Expresso machines might work best with obscure titles.)

I see e-books as more of "a threat" to traditional publishing. These e-readers are getting more attractive and affordable (I saw one at my local Costco recently). And with the current emphasis on "being green," more consumers might want to try this paperless alternative. It has a ways to go, but e-books are making headway among romance readers--consumers who enjoy their books in quantity. E-book manufacturers would be smart to target mystery readers next.

With e-books, the publishers could sell directly to the consumer, thereby becoming more involved in the retail market. Bookstores with highly developed websites like Powell's could play a larger role in selling e-books as well.

Authors will then face similiar challenges as musicians and moviemakers regarding illegal duplication, etc. That will be a problem for all of us.

I don't see retailers as getting that involved in becoming publishers. Publishing is a laborious process and I can't imagine them creating their own publishing arms. But I certainly can see retailers like Target and Costco partnering with existing publishers to create special book lines (in fact, that's already happening in the sense that certain books are published in a special format like trade paperback just for sale at Costco).

Looking at how technology is used in Tokyo is a harbinger of what is to come here. People reading novels on their cell phones? Yup, I can see it.

[Leila]

Thanks Barry. Interesting ending to this article. I think what you mentioned about the author's "brand" hit home for me, and is especially important to aspiring authors. You wouldn't believe the amount of writers I know who are still not on the bandwagon when it comes to selling and marketing themselves and creating the platform to sell their own work.

Thanks to MJ also.

[Mark Terry]

Interesting. On the other hand, today the news is that Radiohead's "experiment" is problematic (or possibly a failure, but that's up for debate, I suppose). Why? 62% of the people who downloaded the album paid $0 for it. Yes, 62%! The majority who did pay, paid less than $4, and less than 4% paid $12.

So the question becomes, If the general public is given the "option" of paying nothing, will they pay nothing. Apparently most will.

Here's a link:

http://breakingnews.iol.ie/entertainment/story.asp?j=236901124&p=z369xy83x

One of the things I find most interesting about the James Patterson phenomenon is that readers don't seem to care whether he wrote the books or not. It's got his name on it, so it must be a James Patterson book. This has applied to Ludlum and VC Andrews as well, as well as others. Readers just don't seem to care.

So what's to stop publishers from creating AUTHOR IMPRINTS. Isn't that essentially what Patterson has done, along with Clancy? And making them LARGER!

Why not? 100 books a year with Patterson's name on them, as long as they're crime thrillers about serial killers. Let's put books by JA Konrath in there along with dozens of other writers in the sub-genre.

Will Barry Eisler's John Rain novels sell better if they become part of the "Tom Clancy: Asian Op Center" series?

Why not go that route? Will readers care? Will publishers as long as they make money?

What about the authors? Would you care?

[Fran Toolan]

well done.

'flattening distribution' as you see it has been happening for some years now, and the smart publishers recognize it already.

the transformation from 'publisher' to 'author services company' has already begun. take a look at Random House, HarperCollins and Macmillan. All have stated this very plainly, and are developing more and more tools for their authors to create better brands for themselves.

but not necessarily for everyone. one major publisher i work with found that 88% of their sales come from 11% of their authors, so who do you think they will invest in?

[Joe Moore]

Good stuff, Barry. It’s obvious that changes are taking place throughout the entertainment industry. Two recent examples are Paul McCartney’s new album exclusively at Starbucks and The Eagles new one only at WalMart. Here are some questions that crossed my mind while reading your post.

What is the cost of POD technology?
Can the chains save enough money as distribution flattens to want to go into the “printing” business?
Who will train store personnel how to operate the tech?
Who will service it when it crashes at a major event?
How will the stores handle the onsite storage of materials needed to print thousands of books?
What about the comparative quality of POD books to traditional printing? Will the consumer see and feel a difference?
How will a store handle blockbuster novels such as Harry Potter?
What happens during the transition period when some chains have a particular title while others, perhaps in other countries do not?
How about the independent store? Can it afford the same tech as the chain?
Maybe the publisher should go into the POD tech business and supply the teck it to the stores? Even give it away in exchange for printing only certain brands?
What will happen to book distributors like Ingram? Will they go into the POD biz?
How about the traditional book printers? How will they adapt?
Will we see chains setting up publishing arms and recruiting new authors?
Thanks again, Barry, for sharing your ideas.
Joe

[Adam Hodgkin]

What a great series -- lots of ideas and propositions to ponder. Can't agree with you about the prospects of POD. In fact lots to disagree about, but the biggest quibble is that I reckon that you seriously underestimate the strength of the publisher in the new situation
http://exacteditions.blogspot.com/2007/11/blockbusters-and-brands.html
Publishers are well placed to grab a bigger share of the value chain. Especially if they learn to promote by giving shards, segments and snippets of content away. They need to loosen up and as you say start thinking like agents....

[M.J]

Mark, I think that's what Barry and I are saying - create author imprints and publish lots of titles under them written by other authors - a way to introduce new authors to the genre. Or am I missing what you're suggesting?

[Personanondata]

Publisher's found branding by accident with the advent of block buster authors but they don't seem to have learnt too much. You are right on the money here and one thing I think we will see is the progressive elimination of trade names (imprints)over the next five years.

I can't agree with you on retail brands however. The week posted a rant about The Eagles and their exclusive deal with WalMart and my comments argue strongly that retail branding can be very strong. Here is the link:

http://personanondata.blogspot.com/2007/11/building-imperfect-beast.html

[David J. Montgomery]

I've been saying for a couple of years now that James Patterson should start an imprint and release a Patterson-like book every month. He's practically doing this now with his current releases, but the concept could certainly be expanded. There appears to be a huge potential market there.

[Zack Weinberg]

Regarding Radiohead, the question I'd like answered is, did the band make more money on "In Rainbows" than they would have made on the same album distributed via a normal record contract? This might be hard to answer - maybe they didn't make as much as they'd have made if they had sold at retail as many copies as were downloaded, but I bet more copies were downloaded than would have sold at retail, so.

Regarding book publishing, there's got to be some role for professional editors in whatever model shakes out. I've given up altogether on authors when it became evident that they weren't getting the editorial assistance they needed.

[Frederick Glaysher]

Why shouldn't the author cut out all of your 2 - 10 criteria, contracting when needed? THAT is the future.... It's here, now.

A POD "printer," i.e., Lightning Source, provides worldwide
distribution of an impeccable product, right now. What's lacking? I would argue mature and competent online book blog reviewing, free of the pressures of the traditional controlling relationships to the publishers themselves, though the reviewing dynamics are beginning to change, beyond the still too often unsophisticated snippets.

Given the high cost *charged* per copy by Lightning Source,
the traditional 55% discount needs readjusting, but mutually
agreeable figures ought to be feasible. At the moment, in my
view LSI is attempting to acquire the lion's portion: 88%, not
a workable formula that is in its own long term interest with authors, who are also too liable to the impluses of excessive greed.

WORLDWIDE DISTRIBUTION - Available now:
http://www.fglaysher.com/order%20books.htm

See also my comments on the Grumpy Old Bookman (at the bottom):
http://grumpyoldbookman.blogspot.com/2007/10/miscellaneous-accumulations.html

And what's traditional in the new:
http://www.fglaysher.com/Mission.htm

Frederick Glaysher
www.fglaysher.com

[Walter Lewis]

What an interesting article. One thing that occurred to me is that flat distribution would lessen the prestige of authors who are not yet a “brand”. For example, I have purchased books via Amazon which I later realized were self-published. Generally these books (at least the fiction titles) lacked the polish and general quality of a major-house offering. As an avid reader I am often short of titles, and will take a chance on a book that sounds interesting, only to find poor plotting, editing and overall lack of professional presence. This is not limited to self-published titles, I often find errors and inconsistencies in mainstream works. However it is far more prevalent in the self or independent publishers.

With the playing field leveled and distribution no longer the obstacle to entry, will we see more substandard titles? Does the publisher provide a service of weeding out those without sufficiently developed craft?

Writers are among the most respected professionals today, albeit most often less visible than other artists. By any standard the publication of a novel is quite an accomplishment, whereas writing online is considered less prestigious (regardless of the quality). What does that mean for writers? Will finding quality work become a greater challenge as the POD becomes a reality.

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