Judge Pan's Decision on Randy Penguins

I still haven't read Judge Florence Pan's decision, but Publishers Weekly copiously quoted the judge in their article this week about the matter. It will be interesting to see what happens with PRH's planned appeal.

The whole case is unusual in that the DOJ took the side of the product producers (i.e. the writers) instead of that of the consumers. However, Judge Pan was quick to point out that Apple was slapped with $450 million fine after its trial back in 2013 because the Big Five idiotically admitted to the price-fixing during the course of their settlements with the DOJ. She essentially stated the Big Five were using the same type of collusion between themselves with their product producers.

It will be interesting to see how far Randy Penguins get with their appeals, considering Apple failed with their appeals in the 2012 price-fixing lawsuit.

PRH Takeover of Simon & Schuster Blocked

I haven't read the actual order from the judge yet, but the DOJ issued a press release Monday, stating they received their request for a permanent injunction on the Randy Penguin's takeover of Simon & Schuster.

So what does this mean?

As of right now, not much. Randy Penquin has requested an expedited appeal of the decision, which might go all the way up to the Supreme Court.

If Judge Florence Pan stuck with her same concerns she displayed during last summer's trial, her decision will focus on what authors are being paid to license their manuscripts and not what consumers are paying for the actual books.

So here's the conundrum for the Appellate and Supreme Courts--which rich people are they going to side with? The rich authors like Stephen King or the rich owners of Randy Penguin and the execs at Simon & Schuster who want their golden parachutes?

It ain't over yet by any means!

Randy Penguin Is Shooting Blanks

Since I'm a recovering attorney, other writers asked me about the trial in U.S. v. Bertelsmann SE & CO KGaA et al.

A lot.

Except that's not how the other writers describe the above case. It's all about Randy Penguin's attempt to buy Simon & Schuster, and the Department of Justice's anti-trust lawsuit.

So, what do I really think?

After Penguin's purchase of Random House, we were down to five major book publishers left in the U.S. Only one of these five publishers was completely owned by a U.S. company--Simon & Schuster.

In my limited knowledge of anti-trust law, I figured if any of the remaining publishers (all owned by foreign interests) tried to buy Simon & Schuster, the DOJ would have something to say about the merger/buy-out. Besides, it doesn't look good if the U.S. and its precious First Amendment allows all major publishers to be owned by foreign interests.

After three weeks of witnesses, both lay and expert, the bulk of Randy Penguin's defense is "We're incompetent."

WTF?!

Basically, Randy Penguin give one line to the writers (without whom they wouldn't have a product to sell) and the opposite of that one line to Judge Florence Pan. And it sounds like Judge Pan doesn't like their Kool-Aid.

For a decent lay article on the trial, check out Vox's summary. Publishers Weekly has a detailed run down on their website.

As I write this on Thursday evening, I could not find a final ruling on the trial by Judge Pan, which is not unusual in a Federal bench case. It will be interesting to see where the final decision lands, but I'm putting my money on the DOJ.

The one thing that amused me out of all the hullabaloo was Randy Penguin trying to introduce evidence that the indies sell more books than Randy Penguin does. However, where do they get the numbers to prove it? LOL

The Great Resignation Hits the Publishing Industry

Traditional publishing ("tradpub") is cannibalizing itself. As more and more writers are bypassing tradpub and publishing their own books, the book audience is finally fractioning into niches much like the TV, movie, and music industries did.

Bigger publishing companies are losing income. The reasons for this are among the following:

1) Not only are the mass market writers leaving tradpub, the bigger writers are starting to leave, wooed away from their old publisher by another one of the Big Five (or Four depending on how the DOJ antitrust lawsuit goes with the Randy Penguin-Simon & Schuster merger). So the tradpubs are having to cough up more money to keep their cash cows happy.

2) New writers are doing a better job investigating opportunities. If they do take a tradpub offer, they are seeing lower advances from the tradpubs who want more rights. Furthermore, the tradpubs are doing a smaller print runs for unproven authors. So, it's a catch-22. The tradpub are putting out enough books to break even, but aren't putting the money into promoting a new writer with a small print run so then they get bitchy when the new writer doesn't catch fire instantly.

3) Thanks to the COVID-19 pandemic, the surge in new independent bookstores crashed. We're back to bookstores going under because couldn't browse in-person for the last two years.

4) The big chain bookstore like Barnes & Noble are suffering from the same lack of foot traffic as the independent stores. However, they have the added problem of the decline of shoppers in their home malls.

Like nearly every other company in the U.S., tradpubs are increasing the workload of their staff without any commiserate increase in salary or  benefits. The corresponding burn-out leads to employees abruptly quitting.

One of the issues is the lack of stability across all industries. Why would any employee fear losing their job when they know they could lose it on a random whim anyway? At a certain point, it's a matter of survival for any employee, including those in tradpub, to quit the abusive environment and take their chances somewhere else.

I say this because I've been there. Burnout and it's corresponding effects on my health is part of the reason I stopped practicing law and started writing and running my own publishing company.

All I have to do is look at my Fitbit and see the decrease in my blood pressure and heart rate while I write to know I made the best decision for me. I hope those people leaving the tradpubs find something equally relaxing and gratifying.

DOJ Sues Randy Penguin over Simon & Schuster Merger

The big news in traditional publishing is the Penguin-Random House merger with Simon & Schuster. CBSViacom, Inc. has been seeking a buyer for their publishing arm for a while now, and Randy Penguin slapped $2.18B on the table and said, "SOLD!"

No, that is not a typo. B as in billion. The deal would make the Big Five into the Big Four. A lot of publishing observers have been expecting this even before CBS put their little brother up for sale.

Then the DOJ stepped in and said, "Noppity no," and they slapped an anti-trust suit on the deal.

A big part of Randy Penguin defense is "Look! Indies! We wouldn't control that much of the market." Some writers are grinding their teeth to nubs and other are laughing their asses off since the Big Five have refused to see indie publishing as even real publishing for the last ten years.

Here's my observations and thoughts on the matter:

1) Randy Penguin's defense is a back door jab at Amazon. As in PRH is trying to claim Amazon is the indies' publisher. There's a big difference between Amazon publishing a writer through one of their imprints and the rest of us to whom Amazon is one retailer (out of many around the world).

2) The DOJ is more than a little short-sighted in that they have no fucking clue of how the book industry works as a whole. They made the same mistakes with the tech industry when they were going after Microsoft thirty years ago.

3) While it's nice the DOJ is concerned about writers, the protections of anti-trust law are for the consumers. If the DOJ actually gave a fuck about the consumers, they would have tackled ebook pricing long before now.

4) Simon & Schuster are the last wholly American-owned large book publisher. You'd think CBS would be parading that around or the DOJ would. Nope, no one gives a rat's ass with $2.18B on the table.

5) How much longer will the increase in book sales be trending up? With the pandemic still ongoing, TV and movie production has been delayed and is finally getting back to a semi-normal pace. During that lull between late 2019 and late 2021, people were reading, but will they continue to do do with new video on the rise?

6) If the DOJ stops the sale, it is likely CBS will spin Simon & Schuster into its own company where it could die a slow quiet death. Unless someone with a fucking clue can rebuild it. But that would mean changing the cultural mindset of the company, which is unlikely.

So how will this all shake out? I don't know, but I'm popping some corn and melting some butter because it's going to be entertaining as hell to watch.

The World Is Mad I Tell You! Mad!

DH's dad is still in the hospital (complication from his surgery Wednesday) so this is a round-up of stuff y'all may be interested in.

First off, my self-editing post got a few comments yesterday. Just a reminder that there is no "right" way to edit. If you can proofread your own stuff, more power to you! Honestly, I proof my own short stories. However, it's the only area of where I think money can be wisely spent, just like it's overall cheaper and faster for me to hire out my formatting these days.

Ironically, Kris Rusch posted about the nightmares of dealing with trad publisher editors.

In that same blog, Kris also talked about the recent bloodbath at Penguin Random House. The layoffs included several editors.

And that led to this little bon mot my friend Angie e-mailed me this morning. Just how bad are things at PRH that la Nora jumps ship?

Are publishers in that much trouble? Yeah, they are. Data Guy's recent talk at the Digital Book World Conference shows trad publishers are sort of acknowledging that they sail in iceberg infested waters, but they still believe the icebergs pose no danger. *sigh*

On the other hand, anything that improves DG's scraping and analysis of book sales can help us indies in the long run.

Have a wonderful weekend, everyone!

Vanity Publishing Is Making a Comeback

WARNING! Angry Sheep rant dead ahead!

Before this rant gets started, let me be clear on what my definitions of the various types of publishing are:

Legacy/Traditional Publishing is where the writer licenses her story's copyright to a third party for an advance, advance plus royalties, or royalties alone. The third party is responsible for costs of producing a book, regardless of the final format(s) of the item, i.e. digital file, bound paper, etc.. The third party then seeks to recoup costs and make a profit by selling the licensed final product to the public or certain sections thereof.

Indie Publishing/Self-publishing is where the writer assumes the costs of producing a book, again regardless of the final format(s) of the item. The writer may do certain production tasks herself, or she may subcontract production tasks. The writer then seeks recoup her costs and make a profit by selling her product to the public or certain sections thereof.

Vanity publishing is where a third party charges a writer for ALL production costs. These charges are often well above the market rate. The third party may or may not produce a book. If the third party does produce a book, they may or may not try to sell that book to the public or certain sections thereof. The third party relies primarily on charging the writer for any profit it makes.


In any gold rush, there are people who have no interest in the hard work of mining, but have no problem finding ways to make money off the miners, i.e. scamming them. The same is true as the publishing industry shifts from a primarily legacy publishing model to a self-publishing model. New companies are popping up everyday to take advantage of the naive writers who are unsure of what to do or the lazy writers who want to be taken care of.

The following rant is for the naive writers. I already know the lazy writers won't listen and will be taken advantage of.

My #1 rule when a new writer asks me for advice: Writing is a business. Treat it like one.

If you've stumbled across my blog accidentally, looking for the secret of the publishing universe, that's it. It means lots of research and hard work. If you're not willing to do either, then you will be taken advantage of. Hell, even my husband suggested I start publishing other writers who were too scared to do the research and learn new techniques; we could make some serious moola off their insecurity.

As much as I found that idea abhorrent, I knew there were others whose scruples were not...how do I put this...as mired in legal ethics classes as mine were. Since that discussion with DH, Penguin Random House bought Author Solutions. If you don't know who AS is, go read David Gaughran's blog.

Part of the reason PRH bought AS was to prop up their own sagging profits. They believed their name would counteract AS's negative reputation. However, in the U.S., the opposite has been true. Also, as writers become more educated in the working of the publishing industry, AS hasn't been bringing in as much money as PRH thought they would.

AS's growth is flat partly because they've become notorious in American writers' circles. If you're a visitor and a writer from outside of the U.S., please spread the word far and wide to your friends and colleagues. AS uses high pressure tactics on writers because this is where a majority of their income comes from. Writers.

Not book sales.

Writers.

Now, with more and more writers taking a chance with indie publishing, especially the growing e-book market (Don't let news reports of stagnate sales fool you. Most news outlets are owned by the same conglomerates that own the biggest legacy publishers.), a new breed of vanity publishers are popping up. These companies prey on the writers who aren't tech savvy. The ones who write long-hand because they don't understand or are afraid of their computers. The ones who don't know the difference between HTML and WORD.

(If you're one of them, your education starts now. HTML is a programming language that is the basis for most e-books. WORD is document processing software produced by Microsoft Corp. See that wasn't so bad, was it?)

What scares writers the most is formatting an e-book or creating a cover. These are not difficult tasks, but they are time consuming if you haven't done them before.

I strongly suggest that you try doing it yourself first, preferably on a short story or novella. Why? You don't go out and run a marathon when you've been a couch all your life, do you? By learning the basics, you'll know when you're getting ripped off.

If you still don't feel comfortable, ask for referrals. Seriously, the indie publishing community is very supportive. You'll get recommendations for knowledgeable editors, formatters and artists who charge reasonable prices.

By reasonable, I mean even if you subcontract every task, it shouldn't cost you $1000 to publish your book. Nor should any of your contractors EVER have control of your retail accounts!

I'm starting to get e-mails from companies doing exactly. Like DH, they see the money-making potential of growing self-publishing movement. The latest was from a firm called Publish Wholesale. They format a print book, create a cover, purchase an ISBN, send you one proof copy, list your book under their Amazon, B&N, etc., accounts, and a staff member to hold your hand through the process. All for the bargain price of $959.

That's right. You're handing them control of YOUR book and YOUR money for a measly $959.

And that doesn't even include e-book production.

Please understand something. I'm not saying don't get help if you need it.

For example, I'm way behind in my own writing and production schedule thanks to the move from hell. I've already talked to a formatter who will do the e-book and print formatting for the last three books in the Bloodlines series, as well as redo the e-book formatting and format for print the first six books in the series.

That's right. I'm getting nine books done, both e-book and print, for what the bozos at Publish Warehouse will charge you for one.

Think about it for a minute.

I'm getting books formatted, no one's holding my hand, and I control the money. Not my subcontractor. ME!

That's the difference between self-publishing and vanity publishing.

So, as the day shift briefing sergeant, Phil Esterhaus, would say before his people left the police station on Hill Street Blues, "Let's be careful out there."

Angry Sheep signing off.

Hatchette Can't Keep Their Stories Straight

In an article released last Thursday, American publishing industry magazine Publishers Weekly claimed Hatchette Book Group's sales rose 5.6% despite their current lack of a contract with Amazon in their headline. The next day, British newspaper The Guardian claimed a 1% dip in sales in theirs. So who's telling the truth?

Actually, both are once you dig through the respective articles. But the headlines are the amusing aspect.

It shows the difference in how Hatchette and the rest of the BPHs are twisting their PR campaign against Amazon in the U.S. The PW article plays into the David succeeding against Goliath meme that is extremely popular in American culture.

Just one little problem with that. Hatchette Book Group is owned by Lagardere Group, a French company whose 2013 revenues exceeded 7 BILLION euros. Compare that to Amazon, an American company, whose 2013 revenues were $74.5 MILLION U.S. dollars. Exchange rates aside, who is exactly the Goliath here.

Hatchette isn't the only foreign player in this game. Most of the Big Five are owned by non-American concerns.Penguin Random House is co-owned by German corporation Bertelsmann and Pearson PLC, a British company. Harper Collins is owned News Corp., whose primary shareholder Rupert Murdoch is Austrailian. Macmillan in controlled by Holtzbrinck, another German concern. Simon & Schuster is the only American player, and it's a teeny, tiny part of media giant CBS Corp.

In Europe, the BPHs don't have to worry so much about getting the news media on their side. A huge chunk of the news outlets are already owned by the parent companies of the Big Five, and they consider Amazon a snotty little American upstart.  But the sad part is the newspaper outlets are facing the same problems as their American counterparts--a loss of readership as more people switch to the internet and other electronic media for their news. And this is why The Guardian had an alarmist headline. "The American are coming! The Americans are coming!"

So what does this all mean?

In the end, not a damn thing. One of my great-grandfathers was fond of the saying, "The only constant in the universe is change."

The Big Five may think their conspiracy and now their little PR war with slow adaptation of e-books, but they're wrong. Not when e-book sales have jumped from less than 1% to over 40% in the last five years. It's time for the Big Five to jump on the change train before they get run over.