NPL Publishing Consultants

Another area of intense questioning comes from the issues surrounding pricing eBooks and other downloadables.

The main issue seems to be the Kindle. Since Amazon requires anything you want to make available as an eBook on the Kindle, be priced at $9.99 or less… publishers are trying to figure out how to achieve this price point. In my opinion, they should be more focused on an overall eBook pricing strategy, and if Kindle fits into it, fine; if not, then that’s one venue that won’t be available. It isn’t usually too bright to fit yourself into one possible distribution program at the expense of your own program, bottom line, and future dealings in eBooks.

Knowing that Kindle seems (and only seems) to have the retail eBook market wrapped up (for the immediate moment), it would be wise to find a way to get your materials on board. This might require offering a completely different, shorter, abridged, or condensed product to this market… with an offer to credit the customer’s Kindle purchase price against a purchase directly through you for the complete eBook product.

You don’t change your Strategic here… just the specific products you make available.

Pricing eBooks and related materials is a result of developing a strategic for these products. This includes answering questions about free content products, downloadables for which you charge, and full fledged eBooks for which you also charge.

I have found that a good starting point for pricing, once you have these editorial and marketing issues settled is to look at a combination of 50% of the current ink and paper price, with a ‘cap’ of $19.95 or $20. You can stretch the cap to $22 or $23 in some cases… like a $50 book… but beyond that, use another strategy (below).

If you have a $19.95 trade paper, it should sell eBook, for $9.95 or $10. This number does fit into the Kindle program, so this title could be tested in that market as well as on your own site.

If you have a $29.95 hardcover, it should eBook for $14.95 or $15. No, it doesn’t fit into the Kindle program and your Strategic will determine that it shouldn’t be on the program if you can’t price it within your structure. Possibly, once sales diminish a little six or twelve months down line, you’ll be ok with reducing the eBook price to $9.95… but you don’t make marketing decisions based on a single vendor.

Yes, there are exceptions, but this article is providing guidelines, not legal exceptions to the guidelines. Do whatever you want… my work here is to give you some roadmaps and help you make money.

As I mentioned above, if you have a $49.95 paper or hardcover professional book, it should eBook for no more than $22 or $23.

What can you do if you have a $60 or $95 or $145 professional, technical, or other reference work and you want to eBook it? Strongly consider ‘parceling’ it out in ‘pieces’. Find some logical way to divide the information into ‘books’, and make the books available for under or at $20 each. This lessens the burden to the customer, and makes you the appropriate amount of revenue.

For example, let’s assume you have a professional book on a general subject, 800 to 1,000 pages, hardcover, selling for $100. Within that general subject you have roughly five specific topics you cover, and each has about 150-200 pages. By dividing and combining, you now have five ‘eBooks’. Each would sell as paperbacks for $20 ( 20 x 5 =100 ) so you CAN eBook them at $9.95 or $10 each.

What’s the advantage? Well, customers may not want to pay $50 for an eBook, but would gladly pay $10 each for the two sections of your reference that applies to their work. You still get full value (50% of ink and paper price) for what you sell. Interestingly, in this case, your new eBooks would also qualify for Kindle marketing, if you were so inclined to market that way. And, if a customer wants the whole reference, you can get the whole $50 price (or maybe offer it for $40, one eBook free to buy the whole series).

You don’t change your Strategic here… you change your products and marketing to fit your program, not the other way around or someone else’s program altogether. No, I am not saying to be inflexible… just don’t change your program with every new vendor or ‘great’ idea. Most will fit within your program, and for those that don’t give them an extra think as to how you can blend their approach with your program.

And, finally, what about your $7.95 paperback, or a $5.95 booklet? Well, half would be $3.95 and $2.95 respectively. No change here except if the booklet is an item intended to sell in bulk quantities… then it likely would not have been included as an eBook qualified product in the first place. But if each is intended to be sold one a one at a time basis, why not eBook them? Last time I looked, $3.95 could buy you a small sandwich and tea at a local diner… so maybe there is such a thing as a free lunch?

This won’t take but a minute.

You know Google’s mantra… Do No Harm.

Well, I have discovered one that is even more to the point, even more honorable, and those of us in the real world might actually believe it if they used this one.

In my beneficence… no charge, no attribution, no copyright (as if that mattered to Google)… because I want a more honest, more trusting, more real world and believe Google will be a big part of it…

Here is Google’s new mantra:

“It is easier to ask forgiveness than to ask permission.”

Caveats and legal disclaimers here:

1. This is my personal opinion, thus, I am legally entitled to express it without threat of lawsuit from any of the current parties to the circus (oops I mean settlement).

2. I have not bothered to read one page of the settlement document. You’ll find out why a little later. I don’t have to for many reasons. But, I have read the statements of many of the for and against people. That information is also reasonably irrelevant, but does shed light on some of the more fun parts.

3. I am not, repeat, NOT advising any of you to do as I say, as I do, as I recommend, or as I think. For once in your lives, think through this thing for yourselves, don’t let everyone else tell you what you HAVE to do, and for God’s sake, don’t buy into the hysteria, one way or the other. Use your God given talent to determine your own path, your own fate, and your own destiny. I am simply exercising my right to have an opinion, as guaranteed by the Constitution, until Google challenges that too…

4. But, if you truly believe Lee Harvey Oswald was the lone shooter, because “THEY” told you so… I suggest you save some time, sign on, and move on. My point of view is of no use to you.

I have learned over my half century plus, that whenever something doesn’t make sense, there are two rules of analysis to follow:

First, as Francisco says in Atlas Shurgged, there are no paradoxes in this world. If it appears there are, check your premises, one of them must be wrong.

Second, when something in law, politics, or business, or almost anything else, doesn’t make sense… follow the money and it will point you to your answer.

And in this case, since we ARE dealing with Google here, allow me to add my own favorite:

There is no such thing as an unselfish act. Don’t even go there… even Mother Teresa in her wisdom agreed that there is no such thing as an unselfish act, and if you can prove otherwise, you will get my blog ‘platform’ to use for any purpose you so choose.

So, here we start… no paradoxes, follow the money, and no such thing as unselfish acts.

Whether it is graft and corruption, good business practices, shady deals, altruistic Google-speak, or anything
else that might make you stop and consider ‘why’… follow the money and it will lead you directly to the answer.

And Mr. Allen (see Part One) of the AAP has made it crystal clear to anyone who will listen… support this agreement since it is in the best interests of everyone. How altruistic! How unselfish! How logical!

OK… let’s go follow the money…

If this does go to court, figure whoever takes up the battle, AAP, Author’s Guild, or the government itself (who should be the one enforcing and protecting the laws of the country) will spend between 30 and 50 Million to go from end to end. Yes, sir. One trail of money.

And Mr. Allen makes it clear that even after spending this kind of money to reaffirm a law, odds are, they are going to lose to Google. So, now Google is more powerful than the people who make laws. That doesn’t make sense either… so we haven’t found the money yet… but we can smell the beginnings of it here at 30-50 Million.

And yet… somehow I get the feeling that copyright law hasn’t evaporated overnight…

The only logical explanation is that if Google is willing to spend upwards of 50 Million dollars to fight this thing, and they peg legal fees at 5% of revenue potential… then there must be AT LEAST a ONE BILLION DOLLAR revenue potential for winning this fight. AHA… now we’re starting to see the money. And we have to assume that since this a longer term project, ONE BILLION A YEAR is not an unreasonable estimate of potential revenue.

***** One last caveat and this is a great place to put it. I dislike Google. I am biased against Google. I don’t trust Google. I would not sign a contract with them to do business with them unless I had multiple exit points irrespective of law, agreement, or documents. That is, if I wanted out, i can get out without their agreement or permission. (For example, if I were to sign on to AdWords, I could cancel my credit card securing the deal, thus cancelling my agreement with them without their permission.)*****

It appears to me that if/when Google wins this settlement, this becomes the sign to them that they have succeeded in changing law without a vote. Bending the law to fit their needs. And what does that mean in round two? They will bully the law to what they require and bully everyone along with it, as necessary.

In my opinion, this is step one to eliminating everyone else from the process… in my opinion, Google is evil. Their tag line is ‘Do No Harm’. I am yet again convinced they mean ‘Do No Harm to Google’. They are willing to spend 50 Million Dollars to do harm.

They KNOW copyright law is law… but it isn’t convenient any more for them, so they have to eliminate it. They didn’t come and ask publishers to join in. They simply took what they wanted and DARED anyone to fight back. And with a BILLION dollar war chest… who is going to fight them in court? Certainly not the politically focused AAP or Author’s Guild, who loves to beat up on independent publishers… so who?

This fact isn’t lost on Google. They know once this is signed, they have everything. And when they do what they will inevitably do… who will stop them? It is a simple plan. No conspiracy here. If you don’t like what they are going to do in round two… sue them! This is one of their premier mantras. Sue us! And unless you have a 50 Mil war chest of your own… are you? No, so this one is over.

Google Street View violating privacy laws, trespass laws, and a raft of other state and local rules… tough shit. Sue us they say! We are Google and we’ll do whatever the hell we please. You don’t like it, sue us! We’ll wear you down and make you spend millions, for a principle! Then, we’ll go out and do it over and over.

Follow the money, people!

See why I didn’t bother to read 300 pages of horse crap? As far as Google is concerned, the documents are worthless. When it is time, they will be vaporized and a new lawsuit may have to be instituted to make them follow something… which, of course will be settled in Google’s favor… and so on, and so on… until Google gets exactly whatever it is they wanted in the first place.

In everything I have ever read about their legal issues, their public issues, and their position on things… I have come to the opinion that Google has never met a legal agreement it had ever cared about, except to hold the other party to it… which is their plan here.

The whole thing comes down to this… Google has figured out how to exploit the concept of copyright without allowing the US government to become the opponent in a lawsuit. THEY actually have more money than Google and could outlast them in court. AAP doesn’t have the money, the Author’s Guild doesn’t either… (but at least THEY could try bullying small publishers into paying 50% royalties and then raking half from their author members). So everyone has agreed to something and they hope noone will notice.

Just like telling the public if the shooter shoots from due south… there is every reason to accept that the bullet entered the victim’s head from the northwest. If you buy that logic… then sign off on this settlement. (And I have a bridge to sell you.)

Enough of my preaching… dancing with the devil will burn your hands at least, and maybe if you dance too close, you’ll start to sell your soul. The membership of AAP and Author’s Guild are, and want you to do it too! Tell me Random House gives a rat’s ass if YOU survive? Well, this Allen person is trying to pull the mouse ears over your eyes and make you believe make believe. Go to Disney World with your eyes open… at least you’ll KNOW you’re being taken for a ride!

Now for the pragmatic side of the argument.

If you believe Google and this settlement will do businss for you… then give them your books. You ain’t never gettin’ them back without a lawsuit… and if in the process they expose the entire contents of every book you have given them… you’re stuck and tough crap on you. SUE US! You have sold your soul for a few shekels and maybe not even that. Puhleezeee… don’t give me that pablum about giving the whole world access to your books… they can BUY them now, can’t they? And if they can’t afford them, isn’t that what libraries are for? Or did you just plant a big white flag on your building with a red cross on it? NO… it was just a big white flag! Surrender!

Google has a job to do… click click click.. ad words ad words.. click click pay per click… sell books… collect money… click click. You must remember their argument being ok with being restricted by the country of China to get access there… ‘well, we feel the benefit of Google outweights the censorship we have to suffer…”….

Bull pucky! Click click click one billion times times times times… click click click… follow the money and get to the truth… Do no harm to Google.

I am deliberately avoiding telling you what to do since shekels may be the name of your game… soul be damned.

Do as you see fit once you have thought this through.

ME?

My certified paperwork is on its way… I own and/or control numerous (in the hundreds) copyrights and publishing rights and all kinds of rights… Google is not going to get the opportunity to Google me… if I lose lots of money in my decision… it is still MY decision, and MY money. Copyright affords ME the right to do as I alone see fit with what I own and control. That is the idea behind it.

Rationally or irrationally, I don’t trust Google. It is a personal opinion based on my history and my research and my analysis and the rules I have learned to live by. No paradoxes. No unselfish acts. When things make no sense, follow the money to the truth.

Personally, I would quit the industry before having to trust Google with my copyrights. And considering the strange bedfellows this whole thing is creating… I might just have to…

Or, believe this one or not… figure out how to sell my copyrighted materials by myself directly to people who are willing to pay for them in a fair exchange of money for my products. … How quaint.

You really need to keep your powder dry this time… and your head up as you skate down the ice…

* * * * * *
Epilogue:

July 24, Boston Globe interview with Google Books executive Dan Clancy about the impact of the settlement:

“We’re going full steam ahead, no matter what happens with the settlement.’’

Well, well… there’s an honest guy letting the cat out of the bag. It doesn’t matter what the judge decides, or if the case goes to court instead of settling… here is a Google Book exec telling everyone what THEIR plan is. I’ll tell you all this… there is no shortage of grande kahones in that organization.

Conduct yourself accordingly.

Another short one.

Aha… got your attention didn’t I? But, unfortunately, the headline is true. I have it here in black and white. From an Open Letter from CEO & President of the AAP, Tom Allen, dated June 25th, 2009:

“If not approved by the court, the litigation between AAP, the Authors Guild and Google may continue for years, and with a great risk that authors and publishers will have no effective means to stop the widespread use of copyrighted material that is likely to follow.” (My bold.)

So, some ex-politician who now heads the A.A.P. has pronounced the concept of copyright dead.

Let me see… it is a law isn’t it? Has been for a couple hundred years? So, unless the law is overturned… it will still be a law for the foreseeable future, won’t it? Now, this ex-politician has no excuse. He made laws, he voted on laws… he can’t claim ignorance of the issue of laws….

So what has changed the law? Not Google. The law remains the same. Only the players have changed.

It smells funny… so it doesnt pass the smell test.

It makes no sense… and when that happens, the rule of thumb is…follow the money and you’ll find your answer.

And finally, “do no harm”? Who the hell does Google think they’re kidding?

Read Part Two and then decide for yourself.

Powder dry, head up, stick on the ice… or you’ll take a Google hit you won’t recover from, I guarantee it.

This won’t take long.

Dear Association of American Publishers:

Why do you keep hiring ex politicians to head your organization? Neither of the last two had any legitimate experience in the industry that their bios make reference to. Why not hire ex-publishers? At least they have a clue about what it is we do for a living.

If it is because you believe your primary function is lobbying the government or changing (or not changing) laws… the Google ‘thing’ is about to make horses’ hind ends out of your program. You might as well have hired ex-publishers for all these politicians helped the industry protect copyright.

But that is for my next blog.

Martin Foner

I mentioned in the last post that Amazon is not likely to keep a monopoly on e-readers or the book world for long… Wow… that didn’t take long… and so now we hear that a private company is preparing to market a Kindle type product e-reader that will be able to read and transmit in multiple platforms to multiple platforms. And Barnes & Noble is going to play with this company and have X hundred thousand titles available to start.

Nature abhors a vacuum… and you might as well say nature abhors monopolies… When one person looks like he might be making all the money from something… competitors will step in. Successful or not, the sharks swim in competitive waters looking to also make a killing. This isn’t a surprise… it is evolutionary economics.

So now everyone will have an alternative to ol’ nasty Jeff Bezos… so what are you going to complain about next? How about figuring it out now and getting off your duffs and getting into electronic publishing?

Keep your powder dry, your head up, and your stick on the ice.

Let me start, as always, by saying how much I respect Jeff Bezos. This post is NOT about Mr. Bezos, or Amazon, or the Kindle, really, but about what happens when people see a new technology or a company and pronounce it as the next closest thing to God, unbeatable, world-beating, paradigm-changing, …….. insert your own hyperbolic remark here. And what happens to the rest of us in the process.

Denny Hatch, a well known marketing guru (an odd word, maybe better to say, plain old ‘expert’?), sends out an enewsletter every week or so, I guess. I have been getting it for a few months now. He is, without question, sharp, insightful, and capable… using real world examples to make his points and reminding us all that we MUST be: insanely customer focused, innovative in our products and services, and fleet afoot as small entrepreneurs to survive.

In his enewsletter of today, his article,click here was a wonderment of the Kindle. While I agree that Mr. Bezos has taken the best parts of prior e-readers and conceptually improved on them with a huge library of eBooks, he was neither the innovator nor the risk taker here. What he did, as I like to say, was; “He sees the opportunity and the he seized the opportunity”.

If you get a minute, much of his article is of value, but as usual, as a non publisher, I believe he has missed the overview. After you read it, you’ll notice I took a few minutes to send him a comment. It is worth repeating here, but only in the context of his article.

Mr. Hatch:

May I suggest you take your own advice and not speak about things about which your knowledge or information may be limited. While I usually find your posts fascinating, extremely knowledgeable, and informative, I have been in this field for 35 years and have seen the evolution firsthand. And, I believe you are using what you see and hear to guide your opinions, instead of what has and is happening.

Mr. Bezos’ Kindle is not a new business model. Franklin, Sony, and a host of other players predate Mr. Bezos’ “invention”. What he has done has, arguably, taken it to a whole new level, but he did not ‘take the initial risk’. That was done almost 20 years ago with the first incarnation of e-readers.

You somehow see this as a bookstore vs. Bezos thing… it isn’t. Most publishers have already or will begin to, make their books available as eBooks on their own sites… likely partnering with other Kindle type companies, and offer ‘programs’, not unlike the old ‘book of the month’ clubs. Others simply will make their eBooks available and you as the buyer can download them to your own e-reader or to your computer, netbook most likely, or television if you so choose to read truly large type books. Think music downloads as a pretty close analogy.

While I predicted, going back to 2001-2, the demise of commercial ‘print’ publishing AND public libraries as we know them… I don’t see quite the ‘one player’ scenario you lay out. In fact, if I understand your general philosophy correctly, there will be others, faster and fleeter of foot, more innovative, and far more customer focused, who will compete and win parts of this potentially huge market from Amazon.

Keep up the good work, and if you need some expert insight into our pitiful but necessary industry, feel free to call on me. It would be my pleasure to work with you.

Martin Foner

But, here’s the point. Bookstores are screaming about Amazon, publishers are screaming about Amazon, seems like everyone is screaming about Amazon. And this is not unlike much of the noise about the growing pains of Wal Mart destroying small town business and taking over the world.

Amazon is only going to take over the publishing industry if the rest of us abandon it. And he won’t want it if that happens.

He needs content as much as you need wide distribution. This IS NOT a one sided deal. Don’t like his deal; DON’T do business with the guy!

Do we need to be reminded that there was an industry before Amazon, and with POD, eBooks, online magazines, and instant content… with the ability to send a chapter of a new title to every last customer on your mailing list, in seconds, by email, at virtually no cost (I pay roughly $150 a month for unlimited emailing ability to the 40,000 or so publishers on my mailing list)… and any number of other technological whiz bang concepts… notwithstanding we are one step closer to our customers than Amazon…

I guess I am asking why we rail at those who are successful at what they do, ifr their success impact us, or threatens us in any way? If you happen to be in the way of their steamroller, either get the heck out of the way, or get squashed. So, to avoid getting squashed, you have to innovate, change, morph, be fleet afoot……. insert equally compelling motivational change phrase here. Do you believe Mr. Bezos said, hey, Sony has one of these and I had better not compete with them… Sony… huge company, might kick my ass… Hardly. He innovated and competed with a better business model (not the only business model in the universe, as Mr. Hatch contends).

And now, since he has what seems to be temporary ‘control’ over our industry (according to publishers, bookstores, and who knows who else is complaining), our focus is “dealing with Amazon”. Why? Do business with the guy or don’t. But your focus IS NOT Amazon, or it had better not be!

Your focus in on making sales, doing more business, and doing profitable business. I don’t think there is anything else as important. Yes, yes, creating great works of literature would be nice, but, as a subsequent blog will address, University Presses are dropping like flies and not in a very dignifed way… so that idea is out the window. Maybe your profitable publishing can underwrite your “serious” publishing, but something had better pay the bills… or… rummbbbleeeee rrummmblleeeee… I think I hear a steamroller.

Keep your powder dry, your eye on the ball, and your stick on the ice.

Apparently a whole lot of people.

And the real question, that we’ll address in a minute, is what you could have done INSTEAD.

According to one BEA sponsored press release, roughly 12,000 attended, including exhibitors. Assuming a 20% decrease in exhbitor attendance from 2007, then roughly 7,200 held exhibitor badges… another 1,800 held miscellaneous badges… and maybe 3,000 were actual book buyers? While I have read offhand reports of anywhere from 10% to 30% decreased book buyer attendance, my quick count would suggest closer to 40%. But, I have been wrong before.

Does it matter? You spent close to $10,000 to rent a booth, promote your attendance, ship goods in and out, travel, eat, and work in a strange environment for four days. Does every last one of the 3,000 or 4,000 buyers stop at your booth, speak with you, or pick up your catalog, free books, or whatever you’re giving away? Half, maybe? Oh, you only spent $7,000 all told to attend… ok.

Let’s do the math (and you know I LOVE to do the math). Let’s be generous and say you actually had 2,000 buyers pass your booth and stop. If that was the case, I want to see the promotion you used to make 2,000 people stop by, but let’s be kind and assume 2,000 stopped at your booth. Assuming you never left the booth, no breaks, no bathroom, no food, no headaches… and the traffic was kind to you and they came one at a time, every minute, … you spoke for a maximum of one minute to each of the 2,000 people, taking up every second of the show’s hours… and you may never speak to a human being again.

Now, here’s the kicker… you SPENT $3.50 to make that one minute speech. It was rushed, you may not have gotten much more than ‘Hi’ out of your mouth for some… who knows how many actually listened or wanted that free book? Truth be told you more likely spent $7 or $14 to actually say more than five words to a book buyer.

Aha… here comes the ‘what you could have done INSTEAD’ part…

For that kind of money… or far less… you could have produced a ‘You Tube’ (registered trademark) quality presentation, had 2,000 DVD dups made of it, mailed them to your 2,000 leads with a letter and catalog… and gotten maybe 5 to 15 minutes of your buyer’s attention. EVERYONE wants to watch a DVD of something interesting… so you don’t get the whole 15 minutes… they watch five, uninterrupted, in their office, with a reasonably clear head, and then make a few more clicks on their computer and order your books… and move on their next project.

By the way, you now also have a DVD for book reviewers, news feature folks, interviewers, wholesalers, your current distributor and specialty distributors and wholesalers, your current bookstore customers… so the real cost of this exercise is spread among a half dozen promotional projects and sales efforts. Oh, and you can post it to You Tube as well… why not? And tell your customers, the retail customers… to come have a look at your link.

Why not just send everyone to the link… cheap, almost free… seems like the real answer?

NO. And we’re back to BEA for the answer to that…

The world loves gifts, presents, and freebies. BEA was founded on mountains of free books, autographed books, pens, pads, boxes of chocolates, flowers, knick knacks, (as my late mother used to say… chuzzerai) and other assorted trash. Why else would normally sane people carry TWO shopping bags full of it up and down aisles hour after hour searching for more, looking much like gorillas stalking their prey? So, taking the time to make this DVD, sending it out, with light sales letter (no catalog or ad sheet) and links to your website or distributor order page, would work? Yes, certainly better than trying to deal with people who are being bombarded by 500 other vendors simultaneously.

And the content… better make it interesting… your call… but consider short two minute interviews with three or four interesting authors of new titles… or strong backlist… or whomever you want to promote. Talk, yourself, about the promo on each upcoming title… why stores should BUY your books, and when, and how many they will sell, and maybe even tips for the indie store or chain on ways for them to promote it and make money.

You have to give value to get sales. Offer your author, just interviewed on the DVD, for their store within a 200 mile radius of the author’s home. Offer to underwrite an activity related to some other title. Help your buyers sell your books. Two minute interview and a one minute publisher speaks on each title… max of five or six new titles… ok if you have ten do ten… They become two minute separate pieces on You Tube. How about in your cover letter you tell your buyer that there is one very special cash offer on top of all the other offers on the DVD…

I don’t care what you have to do… it can’t possibly cost you more than $7 per person to get it done. And I am confident it will yield more than one very sore throat and the bewilderment of ‘what happened?’ as you pack up your booth and suitcase and go home and sleep it off for a day or two. YOU are in control of when you do it, how you do it, and you don’t have to fight 500 other people for the buyer’s attention at that moment. Notwithstanding all the peripheral uses and benefits of such a program.

Thomas Nelson figured it out… Random and some of the other big boys and girls have it half figured out… If you want to become one of the big boys and girls… you have to act like one. Next year, buy a day pass for $40, say hello to all your friends, have a drink or two after, and go home. Total cost maybe $500… no muss no fuss… and do what will make you real money… go SELL to your customers!

Keep your powder dry and your stick on the ice.

And now, before I tell you about wonderful new State and Local tax schemes designed to squeeze whatever is left after the USG is finished with you… a word from our long dead but ressurected sponsors, the Roosevelts:

“Every man holds his property subject to the general right of the community to regulate its use to whatever degree the public welfare may require it.”
–Theodore Roosevelt (Believe it or not?)

“The transmission from generation to generation of vast fortunes by will, inheritance, or gift is not consistent with the ideals and sentiments of the American people.” –Franklin D. Roosevelt (I can believe this one.)

Just remember this… the ghosts of the Roosevelts are walking the halls of the big house now. And if you thought, past tense, your own fortune, large or small as it is, is yours… think again. Then DO something about it!

I don’t really want to get into the details of the schemes, lawsuits, and other skullduggery currently being used and/or legislated into existence by State and Local governments to generate more tax money… mostly from businesses.

Just be aware that a National, Uniform Sales Tax Code/law is gaining steam… mostly, the media pitch goes, to level the playing field between the Internet business world (the bad guys, in case you don’t see their black hats) and the guys on Main Street USA (the good guys… but they are so broke they can’t afford hats).

Look up what’s happening… but now, the State of New York, also known as the State of Confusion, is going after Amazon to collect tax for every New York transaction, despite Amazon NOT having nexus in New York. Unfortunately, the State has never heard of the Supreme Court, nor their ruling on the same issue over thirty years ago, and it wasn’t how New York wanted it to work out. So, like all good governments, they ignore the law, and reality, and use their amazing wealth of free labor to sue everyone in sight, and figure 90% can’t afford to fight, and don’t.

I admire Jeff Bezos… you all know that, despite my frequent jabs at Amazon’s business methods… he said it; then he did it. Damn him, he’s good!

And I admire he is one who isn’t rolling over and playing dead. Unfortunately, the movement to have a uniform single sales tax nationwide is likely to blindside him, and particularly if he wins.

And this isn’t the only one. If the government who has spent BILLIONS of tax dollars on the War on Drugs, is willing to consider taxing marijuana sales, to create tax revenues… we have just stepped through the mirror, Alice.

So, between the prior article and this one… as I said… low profile, do business quietly, stay under the radar, but pay your taxes. If you can operate virtually, do it. No emplyees, no employee taxes. Contracts for services. Work from home if it is legal where you live. A few states GUARANTEE the right of its citizens to run any small business from home (no, no WalMarts in the cul de sac, but any small business).

Vermont is one. And close to Canada, as a bonus. And isn’t New York, thank goodness. By the way, Vermont has a wonderfully reasonable approach to Non Profit organizations too, if that’s in your crystal ball. And, believe it or not, true story, the State sent a delegation to Switzerland to study the Swiss ‘instant isolation’ program in the event of the next war, to replicate it for Vermont. You know, they blow up the roads at the border, tunnels are blown up, landing strips are destroyed, etc etc.. to isolate the country from attack. There is even a move afoot to secede from the US if things get worse, and join Canada. Yes, I spent almost a year there… Odd place to live, Vermont, but might fit your needs on a temporary basis.

Anyway, I know I have been far too funny and not serious enough, but every taxing agency and every governmental body is going to stick it to you if they can in the name of the economic crisis. Count on NEVER having any of these taxes and fees lifted or returned to normal.

Do what is right for you. Pay your taxes, don’t break any laws, but DO NOT get sucked into this, we ‘re all in this together pablum crap. You have as much in common with the Auto Workers Union as Obama does with Andrew Carnegie.

As long as they can take your wallet, they’ll tell you we’re in this together; once there’s nothing left to take, they will leave you bleeding in the street.

Look out for yourself first… then help the person next to you on the plane with their mask. Good advice.

Think I am onto something, feel free to comment… if it is printable, I will. Think I am nuts, keep it to yourself… no, no, I’ll print that too.

If you need to discuss this privately, just email me.

Powder dry, passport current, learn another language, money in a foreign bank, stick on the ice. You’ll survive, and then thrive to play another day.

Well…some things in the news motivate me to remind you to circle the wagons… watch the women and children… make sure your underwear is tightly in place… keep your powder dry and ready (which includes a current passport)… and watch your wallets.

They are at it again. Yes, THEM.

First they villify Mr. Rick Wagoner. You remember him,,, CEO of the ‘old’ GM. Useless executive… replaced by Mr. Obama who is now in partners with the Auto Workers Union to run GM… into the ground… Beep Beep! (New advertising slogan for GM: Buy a GM… we’re gonna make you pay anyway, so might as well get something for your money!) Ousted for his ‘capitalist’ way of thinking…you know, profits and all. The government didn’t like him and the union didn’t like him. I hope they like going out of business better.

Anyway, to gild the lilly and make their case, the media made hay with the golden parachute of $20 mil for old Mr. Wagoner. By the way, officially, there is no parachute… as you’ll see in a minute. Some wanted his head, others his parachute, still others, to tax him 90% on it. Bad news guys… as it turns out, in a fit of media hyperbole… there ain’t 20 Mil in the account to pay him… so when GM goes bust, he LOSES 19 Mil of the deal. Flat out, gone, unsecured creditor.

Ohhh but let’s not shed crocodile tears for him, so sayeth the government now that they have been ‘outed’ as to their scheme to make Mr. Wagoner out to be an AIG/Lehman clone. He still gets roughly $69,000 a year for life in his retirement plan. Read it again. CEO of a major company for 7 years, 31 years with said company, 31 years with one company!… 69K for 31 years with the company! Many of the workers in the CEO Workers Union… oh, I mean Auto Workers Union, will also get 69K a year in pension. And all they ran were picket lines.

Hey, what’s fair is fair. From each according to his abilities… to each according to his needs. Oops…wrong credo!

Anyway, what does THIS have to do with publishing? Plenty.

When combined with the upcoming Part II… it makes for a scary scenario. No, I’m no trying to scare you… the government is already doing THAT. My point here is to let you know who is reaching into your pocket, and what you can do about it, before it is too late.

Keep a close watch on your business. Cash out whatever benefits you have and YOU be in control of them. Many company based retirement plans allow you to take out pieces or the whole thing, to be transferred into an IRA, tax free. Called a rollover… check with your tax person before doing this trick… then YOU are in control (until the government seizes your IRAs and 401Ks). Deferred benefits, deferred compensation… NOW!

Pay the tax while taxes are still low! In fact, if you have plans of dying, do it before the end of 2010. The tax thing, seriously, is an issue. The plan is to raise taxes BACK to Clinton levels next year… not now while we are all in trouble, but once everything is all better. When will that be… whenever the media says so, that’s when.

Pile your ‘take’ into the wagon now. Pay the tax. Then push those funds out the door… somewhere safe. Hong Kong… anywhere in Canada… Switzerland, yes, of course, you’re not doing anything wrong… declaring your interest and investment income… just keeping it out of US banks and away from the… sticky hands of the US G. What they can’t touch, they can’t seize.

I noticed something neat just now trying to do an anagram for IRS… Obama has Mao inside it… how appropriate.

If you own a small or mid sized publishing company or any company for that matter, in the US… and you have a plan (exit strategy) at some point to either sell it or die in the chair… listen carefully. There is a way… quite legal… to ensure most of the profit on the sale vaporizes. No, no, not being bought out by the government, or having your money in US dollars… but by planning for the event maybe as long as five years before, while the company is worth far less. In fact this is a good time to do it, since your company is probably worth bupkis right now anyway! Structuring it carefully, legally, and then poof! If and when, big if and big when, everything appears to be back to capitalist system, you can repatriate the money, pay some tax on it… or can bring in a fixed amount each year through a vehicle like a Swiss annuity or other program, legal, pay the tax on what comes back. Leave the rest alone for the future… not your problem.

No, I am not joking… things have to get worse before they can get better. The government has told us that. Taxes ARE going up. Estate taxes ARE going to change. 401K and IRA funds may be seized to balance the Social Security books. These are NOT jokes despite my light way of approaching this subject.

Don’t believe me? Answer this, honestly: Who EXACTLY do you think is going to pay the SEVEN TRILLION DOLLAR bill that has been racked up in the last year? Remember my motto, if you can’t see the sucker at the poker table… it’s probably YOU.

If I may be of help, drop me an email.

Otherwise, as always, you are free to comment on my writing, and if it is printable, I will.

Keep your powder dry, your stick on the ice, and your hand firmly on your wallet.

I didn’t know him either.

I do plan to email him shortly and strike up a dialog… like minded souls we are.

He wrote the ‘back page’ editorial for PW on April 20th.

It’s free on their site. Just scroll to April 20th and click on “Soapbox”.

And do it!

He gets it. Maybe because he comes from the ‘dark side’, as far as publishers are concerned.

But he gets it.

Read, and you’ll get it too… or be very afraid of becoming extinct.

Wow… that was tough.

Hello my fellow eco-publishers… and apparently, there are a lot of us running around. Turning off lights, changing bulbs, using both sides of our copy paper, using recycled paper, using eproofs and egalleys, even down to recycled material for the lunchroom… eliminating bottled water, ‘teams’ of green employees researching how to be more green, recycling cell phones… My head is spinning.

Is it just me? It has to be. I must not ‘get it’.

Why don’t publishers just decide to only sell non return?

Instead of printing 50,000 books, 45,000 of which wind up in bargain bins and fireplaces of warehouse employees… why not just print, ok, be generous, 10,000 books… and, hold on for this one… if you see the title is selling, reprint it! Just like bestsellers do. Feel funny about having four printings to get to 40,000 in print?

Or is it just easier to keep doing what you have always done, and overprint by 200-300%? Sure faster than having to watch inventories, track sales weekly, and laborious and boring things like that… and oddly, once everyone gets on this bandwagon, all truly ’selling’ outlets will order 10% more, and those who aren’t as likely, will order 50% less… and instead of having 45,000 very un-green remainders floating around… you might have 4,000.

How about a 90% reduction in the “tree waste” we are creating as publishers?

(Sorry to upset all these industry committees and initiatives and programs and task forces who are looking at everything from dirty floors to bottled water to pens that leak…) Just print less books! Print what you need, and use what you print. (Same rules I had when I was a kid at my family’s dinner table… take what you eat, eat what you take.)

I have been advocating, and practicing, my GREEN position for thirty years now… twenty years a futurist you know… always out in front of the curve.

I guess I just don’t ‘get it’.

Be well.

Well, I am at it again.

I am sure Robert Gottlieb is a perfectly decent guy. Well known, properly credentialled in the industry, and likely with more experience than I in dealing with author negotiations and ‘big deals’. He is, according to PW, a couple years younger than I, and has been in the business about as long…

And I understand that, as an agent, his job is to get as much as humanly possible for his clients. The article profiling him speaks of fighting, confronting, being vocal, and battling. Apparently, his reputation precedes him… and that, my friends, is often a good thing.

Unfortunately, for us, as publishers, he does, indeed, represent the enemy. And maybe he speaks in hyperbole to get attention, or let his clients know he is working for them… but really now…

When did authors become “PARTNERS” in the publishing financial process?

His quote, the headline of my article, speaks to the concept that with eBooks, since it is cheaper to produce them, that publishers are going to have to “share” that additional profit with authors. (And you wonder why I avoided EVER taking on an author who had an agent.)

Despite the fact that the author and the publisher are NOT on an equal footing, no mater how much fighting Mr. Gottlieb does… and despite the fact that authors and publishers are NOT “partners” and never will be unless they BOTH invest… in any sense of the word… he is demanding that publishers share every nickel of profit with them… likely 3 cents to the author and 2 to the publisher.

I am just curious, Mr. Gottlieb… if I find a way to print my books less expensively… maybe a bigger press run, or printing offshore, do your agreements call for me to “share” those additional profits as well? Or is this a new area you simply haven’t started ‘fighting’ about yet? (If you do, I want 15% of whatever you get using this new method of revenue enhancement.)

As I have maintained for years… if an author is unhappy with her/his deal, by all means, just like buses, there’s another publisher coming down the road in ten minutes. I ONLY do business with authors who are happy, if not ecstatic, to be part of my organization. It is the only karma that works. If we’re busy fighting and confronting over every last nickel and dime… the relationship in my mind is dead in the water on day one. If I can’t make MY comfort zone profit in a deal, I won’t do it. I wonder how many authors wind up at their third or fourth or no choice publishing house because of this ‘adversarial’ stance?

Publishers: There is an abundance of quality material out there… authors are self publishing at a frenetic rate… just keep your eyes open, advertise for qualified authors to join your group, and keep away from agents. Now this irrational avoidance of agents may make Mr. Gottlieb happy, but somehow I don’t think it enhances the general relationship among authors, agents, and publishers.

Keep your powder dry and your stick on the ice.

In a recent edition of The Economist, a sidebar was kind enough to note that Atlas Shrugged, whose usual Amazon ranking was 542 over the previous two years, has spiked to 127 because of the recent economic upheaval. In fact, “On January 13th the book’s ranking was 33, briefly besting President Barack Obama’s popular tome ‘The Audacity of Hope’…”

One for the good guys… the people have spoken again… and this one isn’t quite so momumental or pretty.

People were already scared in January and February, despite the great promise of this new, game changing President. I promised I wouldn’t allow personal ’stuff’ to get into the business news (that’s what my personal blog is all about), so draw your own conclusions. Pirates hijacking everything from aid ships to commercial cargoes; famous minds “disavowing reason for political favor”…as in Alan Greenspan testifying about ‘flaws in the model’ and his thinking… government owning businesses by command… FDR’s heavy dose of socialism walking the halls of the White House again…

Imagine… Mr. Obama appoints a Mr. Fitzgerald as “Director of the Automobile Community and Workers”? There’s a job title right out of the book itself.

And GM is now owned as a partnership between the government and the Auto Workers Union, shutting out the investors who put up capital to invest in the company. The message is loud and clear… capitalist pigs are no longer welcome at the feeding trough. They simply provide the feed.

Well, as Atlas Shrugged made clear… THAT game only lasts so long as the producers allow themselves to be taken advantage of. What happens when the producers stop producing? Who will pay the bill? Who is John Galt?

Reminds me of a lesson I learned as a young man at the weekly poker table. If after a half hour sitting at the table, you can’t figure out who the sucker is… it is probably YOU.

Time for the producers in society to pick up our chips and leave the table.

Canada, Switzerland, Hong Kong…. anyone?

Global economy you say… no use running anywhere. That thinking will get you fleeced… bahhhhh. And by the way, who says so? The government and its media of course. My son has spent the last year in Hong Kong… I have spent the last 12 in Canada… there are places where the point of a gun option never enters your mind. Be diligent of course, but if you want to work unfettered, then go somewhere where that work ethic is applauded, not trampled and regulated to death.

Publishing companies can be run from anywhere these days… global economy, you know.

Canada, Switzerland, Hong Kong… anyone?

Keep your powder dry and your stick on the ice.

One more from my file of ‘things that have been around a while’.

When PW interviewed Peter Olson, retired chairman of Random House and headed to Harvard to teach at HBS, Mr. Olson stated that “publishers would find it difficult to compete with Amazon at the retail level…” referring to what he sees as Amazon’s undue influence on the future of publishing. He further stuck his neck out by suggesting “Publishers might be able to draw some customers (meaning retail customers) by selling special titles…” .

While this fine gentleman spends his golden years at Harvard… may I suggest one of his classes does a famous Harvard case study on what he said. Have you figured out the oddity of his comments?

He has forfeited the entire consumer market to Amazon, because, as far as his experience took him, publishers don’t market directly to consumers. They market to bookstores and chains and distributors, but not to end user consumers. It is, of course, one model for doing business in the industry, but, please, Mr. Olson, some of us actually DO compete with Amazon. We do have the kahones to sell books directly to people who buy them. I know it may seem like quite an amazing concept, but it works.

And here are two dirty little secrets that makes it work.

One-because we can. We can run a ’sale’ on a title or hundreds of titles and compete the heck out of Amazon. Amazon has a limit under which it can’t profitably sell books. As a publisher, my bottom line is far lower than theirs. I can sell books all day long on my website for 50% off retail and make plenty of money… Amazon can’t.

Two-while Amazon has some amazing powers, markets like an 800 pound gorilla, and has ‘the long tail’ of over 90% of the books in print available, it is the 800 pound gorilla part that makes them vulnerable. They still, like Ingram in wholesale, make you come to them. Smart marketers actually go out and SOLICIT customers. You are allowed to go to the customer, you know. And since you can choose which titles to promote, you can go and sell to the strong potential markets for books that have them, and make plenty of sales, tens to hundreds of thousands of sales.

As I said, just have one of your HBS classes do a case study… they’ll help you figure this one out.

Wow… that was tough.

I know this goes back a bit… but excuse my delayed reaction. I was reading over some clippings I keep from various publishing resources so that, when I need material for this news spot, or my monthly newsletters, or anything I write, or when I do speak to groups… I have things to refer to and speak about that are both of interest and importance to publishers.

Without one more shred of information, I can tell you without fear of contradiction, (in my humble personal opinion-just in case they have lots of lawyers!) that Stanford University’s Fair Use Project is the rough equivalent of Hugo Chavez let loose in publishing. One comment speaks volumes.

Anthony Falzone, the Executive Director of this project wrote in his blog after the J.K. Rowling/Harry Potter copyright infringement case victory last fall that “we think it is wrong”. How anyone with a brain and the civil understanding of copyright can believe this is beyond me. Then, I remembered… there is a move afoot all publishers need to be aware of. It is infiltrating academia and is trying to infiltrate society in general…

Copyright is a capitalist concept, serves only to line the pockets of the already wealthy, is a way for the wealthy to hold down the oppressed, and should be abolished.

Read that again. One more time if you are still upright in your chair.

The movement is a small and growing one.

You, as publishers, should do everything you can to spread the word among authors, media, and anyone else who will listen. If this movement gets a foothold, or as I like to say, has Velcro (and by the way, Velcro is a registered trademark of somebody and used with all due respect), the industry has breathed its last breath.

Unfortunately, the Fidel Castros of the copyright movement also believe that somehow, at the point of a gun, if necessary, publishers will be forced to continue publishing materials even though there will no longer be a profit motive, anyone can copy as much and as many of the titles of a publisher as they please for free, and basically, publishing will become a government sponsored public service.

I am admittedly sensationalizing, condensing, and leaning. Of course, I am a publisher in a publisher’s world. It is the only position I care about. Take away my income through some cry of capitalist pig, and I WILL take up arms against you if necessary.

Oddly, you would think AUTHORS of all people would be furious, opposed, fighting mad, and the like. But, as usual, maybe the Guild has told them to be quiet… who knows… maybe the Guild supports this form of publishing collectivism… or just maybe… nah…

Have a great one!

I have been asked by more than a couple folks what exactly I read every day/week/month. I don’t think my reading list is vastly different or superior to anyone else’s who considers themselves well read… Let me give you just a brief partial list:

What you must read every week to be informed: The Economist. What Time & Newsweek want to be when they grow up. Don’t be put off by the name… this is the world’s preeminent weekly news magazine. Period. For example, a recent ‘focus story’ was on offshore finance… everyone else would give you a page or two… The Economist devoted fourteen pages of text covering the subject from six different story lines. And no, I don’t get a new bicycle if I get twenty people to subscribe. (Pick up an issue before telling me what’s better.)

From politics, to a very interesting outsider’s view of the US, to an insider’s view of the UK and Europe, to spot on reporting on finance (they lean a skoosh to conservative), science, books, name it. They are truly worth every dime of the roguhly hundred dollars a year you pay for the privilege.

What you must read every week to be informed, and take with a large grain of salt: Publisher’s Weekly. What everyone in the industry would like to count on as gospel, but the magazine’s biases make it difficult. In the absence of anything else, read it. Let me know what you’re reading instead of PW, please.

Lately, I have been railing about the fact that PW doesn’t offer much “reading” in their read. Anywhere from 12 to 16 pages of ‘news’ and that word is used so broadly, as to be equated with politesse, per issue… really folks, what’s the point any more? The same editorial staff now covers three magazines that used to cover one. How much could they possibly care?

I am fast becoming a fan of Book Business and Publishing Executive. I get weekly and semi weekly email pages full of articles, and actually stuff of interest to those of us who are responsible for paying for things like printing, and advertising, and employees. As I read more, I’ll report back… maybe we can all migrate from PW to something that makes sense.

What you should read if you’re a marketing type: Catalog Age, DM News, trade publications about informercials, retail trends, and demographics; and at least some of the weekly/monthly business magazines. INC has been consistently good. Forbes is ideologically bent in my direction, and for a big business magazine, is simple to read, and covers lots of mid size applicable stuff.

What you should read to understand what’s next: I read hundreds of online and print magazines, writers, blogs, article series, and informational white papers and demographics, statistics, and trends studies every month. Since I have this moniker of being a ‘futurist’, I have to in order to be 12-36 months ahead of everyone else. Of course, I read a magazine appropriately entitled The Futurist for longer term trends in the world around us. While I am loath to have already chosen the next Stanley Cup winner, (Detroit looks good), I have been spot on about a number of publishing issues over the last four years, and if you keep reading, you’ll know what’s coming in the next four.

Books… do I ever read a book? I do my best to read two to four books a month, above and beyond the half dozen or so books I read every week in my regular daily workload. Since I am about a 99.5% non fiction reader, much of what I read is business, self help related, or humor.

The last three books I have just finished:

Atlas Shrugged – while this is my eighth reading and might not qualify as a new book for me, it rings far truer fifty years after it was written than when it first came out. Can I urge everyone to read it without being labelled a libertarian? I have been called worse. While I have some philosophical issues with Objectivism, the economics and politics are so frighteningly accurate, it is required reading… and I am not the only one who thinks so.

The Long Tail – I think I recommended this last month. If I did, read it again. If I didn’t, this is the one book that will give you the future macro about the Internet. Now you’re doing 2% of sales on the net… in two years, 50%… in five years, 100%, minus your special sales bulk sales. Here’s the why and the global how. You still have to figure out how the how applies to you, but here’s a big piece of the roadmap.

The Four Hour Work Week – Yes, it apparently can be done, and I have made copious notes and will be synthesizing them over the rest fo the year to see exactly how to apply this author’s structure to my organization. I’ll keep you posted.

Be well til next time.