Hugh Howey is obviously really smart. He is also an extremely fluent writing machine: he writes science fiction and has a vigorous blog on which he writes (and replies to comments) at length. He was interviewed by Len Edgerly on The Kindle Chronicles of 31 January. The interview begins about 20 minutes into the podcast. (Click on the sound bar icon near the bottom of the post.) They start off talking about Howey’s latest book The World of Kurt Vonnegut: Peace in Ambera Kindle Worlds Short Story, available for $1.99. I enjoyed it: fascinating on the 9/11 tragedy.

Howey recently signed a deal with Simon and Schuster, buying some publishing services from them but retaining much under his control. As an established publishing innovator he has imagined himself on his impressive blog as head of a major publishing company. He picked “New HarperCollins” (NHC). His ideas all look pretty good to me (though I don’t intend to move out of Manhattan). By chance I attended a meeting this week addressed by Jane Friedman (an ex-head of HarperCollins) and I asked her if she had read the Howey blogpost. She said she had seen it but hadn’t read it; but promised to do so. Her comment was that it’s always difficult to turn an enormous battleship: and this in broad terms is my main objection to the points he makes. Many are rather good ideas, but a large organization is almost impossible to change in anything other than a long long timeframe. Actually HarperCollins seem to be doing pretty well just now. Publisher’s Lunch reports on 7 February that their sales rose 4% in the 2nd quarter, with EBITDA up by about 1/3. NewsCorp’s overall sales were down 4% for the same period. Unusual for the book division to be ahead of the general media industry.

Howey has also written a second report on his time as imaginary CEO: I will comment on his suggestions point by point, reserving the second report for a subsequent occasion.

The first action point is 1. The first thing I would do would be the most important, and that would be to form a community among my stable of HarperCollins authors. No problem with this — of course the more varied a publisher’s list the less fruitful this might be, though you could have several overlapping communities. But communication among authors should yield results. Of course with self-published authors, what they have in common is much greater than what separates them. In a group of NHC authors, the opposite might be the case.

2. Related to the above, I would henceforth require that my publicity department spend at least an hour a day on the popular self-published forums. The implication that publishers are failing to pay attention to self publishing is just wrong. It may be the editors who pay most attention. Almost all publishers have got some form of social media presence now. Naturally improvement can be achieved, so really there’s no objection to Point 2.

3. Every format, as soon as it’s available. OK, but don’t think it hasn’t been considered (and done) before. Publishing is an old business, and it is true that many of the things we do have their origins in past market conditions. A publisher in the past would hold back on publishing a paperback so that the higher price (greater margin) hardback could have a crack at accruing sales. Next would come a trade paperback, to take advantage of another market slice, and then finally (if the book was a success) a trade paperback to clean up on a mass sale. Libraries are, however, perfectly willing to buy and circulate paperbacks (or to send a paperback off to a library binder for rebinding as a “prebind” — a hardback incorporating the paperback cover), so issuing hardback and paperback simultaneously carries the risk that you will sell even fewer of the higher-margin hardbacks. Outsiders often tend to have an overly rosy view of the sort of sales most books can make. I don’t know about trade publishing, but in academic publishing a book issued simultaneously in hardback and paperback may only sell about 250 copies in hardback. It is of course crazy to make the principal marketing push on publication of the hardback. But we do live in a world where review media and publicity outlets want to cover new stuff. Issuing simultaneous paperback gets around this it’s true, but gets you into cannibalization of hardback sales by the paperback. Like any compromise, the publishers’ one here is no doubt not perfect.

4. Related to this, we are bringing back the mass market paperback. Again, OK. Mass market paperbacks tended to be sold by a different distribution channel and were often published by separate companies. But there’s no reason of course why a publisher cannot publish the same title in a hardback edition at $50, a trade paperback at $19.95 and a mass market paperback at $9.95.  But not surely in conjunction with Point 3 above. Who’s going to pay $19.95 for a paperback on a better paper stock when they can get it for $9.95 (or of course less as an e-book)? But if you did the three editions each a year apart, there’s no reason why this shouldn’t be successful. I have often thought that publishers fall into the trap of keeping their book prices too stable. Variable pricing of e-books has proved so successful. The problem is that once the paperback is printed with a price of $9.95 on the back cover it is really hard to change it — at the very least you have to sticker all your inventory which can cost up to $2 per copy — obviously a strong disincentive to dropping the price. Nowadays when we are all aware of the desirability of printing for ever shorter periods, this objection has slightly less force, but systems problems remain. And as long as we remain a returns business, changing price becomes something you want to do as rarely as possible.

5. Hardbacks come with free ebooks. OK, but. It goes against the grain to give away something that you can sell. I know of publishers who have discussed doing this, but not of one who has done so. I did see an exchange on Reddit where the opinion was advanced “Since I paid for this paperback, I surely have the right to torrent it”. Not too many publishers or authors would want to agree. The big difference between being a self-published author and CEO of a big company is that as a self publisher, you are the boss, and have no responsibilities beyond maximizing the sale of your books. The head of a company has a duty to maximize the value of the company for the shareholders. (And in the case of HarperCollins, for Newscorp by whom they are owned.) If we assume that hardbacks are going to be bought primarily by libraries, then this proposal amounts to giving the libraries a free e-book. In the world in which we live many publishers are still reluctant to sell libraries e-books, so this is a radical step. I am however pulled by the claim that it is readers who make bestsellers, and that happy readers will recommend books to other readers. Having a million readers at $2 a pop is clearly better than having a thousand at $10, but the catch is of course making sure you get the $2.

6. We are tearing up the favored nation clauses. Tearing up contracts, however good the reasons for doing so, is likely to be expensive. There’s a vast difference between starting a new company and trying to redirect an old one. By all means change your future contracts — but of course be aware that clauses like this are not in there because publishers love to complicate; they are there because successful authors and agents have negotiated them. Howey acknowledges in his post this this will be a hard one to achieve, and attaches great confidence in the power of the New HarperCollins community of authors. Good luck with this one.

7. Hey, non-compete clauses. You’re history. This one the publisher can control. In the world of fiction it’s probably no problem to abandon it. If someone likes Wool, they’ll probably read Sand and vice versa, so if they are published by separate companies both will benefit, as of course will the author. Non-fiction is a bit more problematical: If you publish a successful book on how to make a will, seeing a similarly titled book by the same author being published elsewhere cannot have any effect on your sales but a negative one. Be careful with this one — HarperCollins has a varied list.

8. Same with release schedules. Surely this depends on circumstances. Should we be deprived of the first five volumes of George R. R. Martin’s A Song of Ice and Fire (the first of which was published in 1991)  just because there are two more volumes planned, and we hope being written now? Obviously not. Most authors don’t write as quickly as Mr Howey. For those who do, holding back on volume one while the next one is completed may not be too problematical, but I can assure you that publishers’ schedules are not “dictated by bookstores and sales reps” as opposed to “reader demands and buying habits”. They are in fact dictated largely by authors, the majority of whom  who tend to deliver late. I suspect Mr Howey’s schedule may have suffered some such adjustment when he brought his list to S&S, but he no doubt arrived with a body of work which the publisher wanted to offer to the trade on an extended schedule. A bookseller might reasonably think “I’ve ordered enough Hugh Howey this month”. Of course whether they are right or not, you cannot force them to buy stuff they don’t want to.

9. Speaking of sales reps . . . They’re gone. Unfortunately for all of us who work in publishing, this seems all too likely, though the sales reps will probably survive longer than most of us, at least until the bookstores all go under (though even Amazon does need to be sold to). But publishing is obviously already undergoing a contraction in staff numbers — or at least a realignment from book people to digital people, of whom fewer will remain after the shake-out is completed.

10. Finite terms of license. I’d make the same objection as under #6 above. These assets belong to the shareholders: I don’t think any CEO can just give them away. In new contracts, maybe — though I don’t really see what advantage a publishing company would gain from such a policy. The gamble is that authors would sign up inspired by the knowledge that they’d get their right back in a few years. Even with the support of the on-line community outlined in #1, I suspect that many authors might interpret this as a lack of commitment, rather than as a gesture of freedom and generosity. Moreover, all publishers aspire to be backlist publishers — if you can keep selling a five-year old book, you will be making a huge contribution to the bottom line, as almost all the costs will have been amortized already. Reverting rights after five years would not make for backlist publishing success. But if you were setting up a new company this would be an exciting risk to take.

11. No more advertising. Unfortunately for publications dependent on advertising revenue from book publishers this is already happening. Many/most publishing people have always believed that advertising doesn’t sell books — we would place ads because authors get upset if you don’t. If they don’t see adverts, they think you are doing nothing to promote their book. But obviously the future lies with the collection of data on your customers, and promoting new books direct to them (just like Amazon does).

12. Goodbye, New York City. A bit harsh. Publishers tend to cluster in New York City, not because there are good restaurants there, but because it has always had a large community of young (thus cheap), educated, literate people who were willing to devote their lives to furthering the cause — of literature initially, but later on, as cynical experience teaches, of the book business. But publishers are already dispersing — even HarperCollins is said to be transferring many functions over to New Jersey.

13. Monthly payments and speedy sales data. Authors do have a legitimate beef here: and many publishers have responded by paying royalties more frequently. In the olden days when everything was done manually, calculating and paying royalties was a huge task, so it was done once a year. Computer systems have made it easier, but it remains a substantial effort. Of course the fact that it involves paying out large sums of money which otherwise might be available for investment, does put a damper on any reform impulse. Is monthly feasible? For high-earning authors maybe, but (and here I really don’t have any facts) most authors are probably earning less than $100 a year from any given book, so dividing that into 12 checks is probably insane. Of course Howey wants to increase royalty rates, so this would change a bit — though of course this change is also one which affects shareholders fairly substantially. Quarterly royalty payment would be a reasonable target, or some sort of sliding scale based upon amount due.

See also Mike Shatzkin’s response at the Idea Logical Company.