Last year we blogged about the success of Radiohead’s pay-as-you-wish album In Rainbows. Looking to the music business as a model, publishers and authors are also starting to grapple with the concept of giving content away for free. It was a nice surprise to see in PW Daily the other day that Robert Kiyosaki has done a similar experiment with his upcoming book Rich Dad’s Conspiracy of the Rich. 

While not exactly a pay-as-you-wish scheme, what he did was release the book in one-chapter installments as free downloads on his website over the course of a year. Now that all the installments are in, the book will be released as a paperback by Grand Central on September 8 with a first printing of 150,000. The jury may still be out until real sales numbers come in, but so far, with over 90,000 registered readers on his website, it sounds like Kiyosaki may end up as the next Radiohead success story.

We enjoyed Preface publisher Trevor Dolby’s article in BookBrunch, questioning the traditional advance/royalty agreement. Indeed, HarperStudio’s model makes the author a full partner—if, that is, they are willing to take less up front (we pay advances of $100,000 or less; the author gets fifty percent of the profits, with no “Hollywood accounting” along the way). The good news is that we’ve acquired more than fifty books we’re enormously excited about on this basis, from a wide range of authors including business leaders like Michael Eisner, Tom Peters and Gary Vaynerchuk; chefs such as Emeril Lagasse and Mollie Katzen; anthologies edited by Toni Morrison, Harold Bloom and Erica Jong; single-topic studies by Eric Asimov, Stanley Fish and Roy Blount, Jr.; books by a wide range of people we like from the performing arts (Fifty Cent and Robert Greene, Isabella Rossellini, John Lithgow, Philippe Petit), not to mention ambitious narrative non-fiction from dozens of brilliant young journalists. The bad news is that most of trade publishing continues to work on the advance/royalty model, in spite of skyrocketing unearned advances and adversarial author relationships. As John Lennon sang, “We hope someday you’ll join us…” Come on in, guys, the water’s fine!

 
Alice.com is a new site that offers household supplies with free shipping on all items and, unlike Drugstore.com or Amazon Grocery, they don’t take a slice of the profit. Alice is still in Beta but they’ve already gotten a ton of press (fan videos are popping up all over youtube; see below). The promise of big box store pricing and free shipping without having to get in the car is indeed very appealing. I’ll be interested to see how Alice.com evolves-

We’ve talked a bit about advertising on this blog,  — and I still maintain that there’s a huge opportunity for “great” advertising. As I’ve said a million times, why do the rest of us have to be fabulous all of the time but advertising only has to be great once a year for the Super Bowl?

I stumbled upon these great ads that Penguin Books did, which gives me hope that great ads do exist, even in the summer.

Aubrey Lynch from Tor arranged a little get together last Wednesday night at Lily’s in the city. I had such a great time talking books and publishing with passionate book peeps. One of the many topics covered was why Aubrey loves Prairie Lights. I asked her to write a a post explaining what makes it such a wonderful place:

A few weeks ago I made a trip out to Iowa–the order of business, meeting my boyfriend’s parents for the first time–daunting, to say the least. But one of the things I was most excited about doing while I was in Iowa City was visiting the infamous Prairie Lights Bookstore. Infamous in that it has a reputation for putting on great author events and for being a conscientious and passionate bookseller. How could I resist? I am a booklover to the core and was, at one time, an aspiring writer. Of course I had heard of the Iowa Writers’ Workshop and the fact that Iowa City is the world’s third City of Literature (as designated by UNESCO). With so much to recommend the city as one of the world’s centers of literature, I was hoping to find the bookstore I’d always been looking for—and wow, did I find it. Here’s what I found.

• Prairie Lights Bookstore felt homey—almost like I was walking into a room in my own house (well, that is, if I had a nice big house and not a “cozy” apartment in Brooklyn)—I can’t explain it—something just felt familiar, comfortable and safe about it. Maybe it was the warm colors or the carpet. Maybe it was the lighting. It was quiet without being a library and the people who worked there seemed very happy to be right where they were.

• What was most impressive was that scattered throughout the store—in places where people would be most likely to see them, were lists of book awards and the titles of the books that had most recently won those awards. Talk about making things easy for a casual browser who might have thought about reading mysteries in the past but didn’t want to risk spending money on a book that wasn’t that great and that would forever be their first impression of the genre (I say this because I am often that cautious browser).

• When I went to find the science fiction and fantasy section, right there, right smack dab in the middle of everything, was an announcement for the release date of the Robert Jordan and Brandon Sanderson book in the Wheel of Time series that fans have been anxiously waiting for! Here was the exact date that the book would come out—in November! And no one is paying them to do this. No one asked them. It wasn’t a sponsored announcement—they did it because they love the books and they are fans. Honestly, these are the types of people I want to sell me books—people who are anticipating the next book in a series, just like I am—people who love the work of authors and who love to tell the world about it!

• Cubes of bookshelves that you could see over—it opened up the room a lot—I never felt like I had to wonder about what was around the next corner—everything felt very open—the perfect word for the way the books were laid out, to me, would be “organic”—like following the paths your mind would naturally take.

• A café in the bookstore—not a bookstore in a café which is how I sometimes feel when I walk into a store that’s trying to do both. The focus is on the books, not the drinks they are going to sell you. It was tucked away on the 2.5th floor. It was quiet, without obtrusive music blasting—leaving readers to quietly sip and read.

• The people—Wow—the people who work in that store really know their stuff—they are fans as well—they love to read the galleys so that they know what books they can recommend to people before they come out—they have very specific tastes and even if they don’t read the types of books that you do, someone very close by will be able to help you.

• The owner works on the floor. This is important. The owner talks to readers/customers every day—the owner knows what the customers want. The owner cares about you, the books, the authors. The employees and the store.

• A newsletter from the store and community postings. This bookstore is all about the community—but not in a “self-serving, we only want to sell you stuff” kind of way.

There is so much more about this store that’s incredible but I think you should check it out for yourself to see:

Prairie Lights Bookstore

15 South Dubuque Street

Iowa City, IA 52240

http://www.prairielights.com/

I’d love to hear from others about what makes a bookstore great for them — , and then I’ll compile a list of the top 50.

And Juliet Grames — I want a post on “Why I’m a Borders Girl.”

“Someone is going to sue the Huffington Post” said Joshua Benton, director of the Nieman Journalism Lab at Harvard University. “It’s not just about the volume of the content that it appropriates, it’s about the value.” Since March when that article ran in Time magazine, Benton’s position on “distributive journalism” has been a subject of great debate online (and in our office! Our own author Gary Vaynerchuk takes on the subject in his book Crush It!). Today the Nieman Lab points to UCLA IP Law Professor Doug Lichtman’s podcast on fair use in which he interviews NYT General Counsel Ken Richieri. Diverging from other large media companies in his assessment, Richieri concludes that aggregation may constitute “unfair competition” but it really isn’t about copyright:

I mean, I think the big issue online and the pressure publishers are feeling is that publishers online are having a hard time replicating the economics that they saw offline. And many of them are looking at that through the lens of copyright…. I think where I would just draw a distinction is I am not so sure that copyright is really the culprit in a lot of this…that that’s an imperfect lens and an imperfect remedy.

Listen to the podcast here.

NPR’s piece about the 20th anniversary of indie record company Merge is fascinating and possibly instructive. While large record companies (and book publishers) have overextended themselves and now need to scale back, Merge has succeeded by choosing new artists carefully and marketing them frugally.  And even when they have hits (Spoon, Arcade Fire) they continue to warn their artists to keep expectations in line with reality. The result is credibility with critics, music fans and artists alike. 

 So the question is: can Book Publishers follow suit?  In a time where creative ideas are welcome, perhaps we need only look at Merge Records to realize that trust, cautious decision making and staying grounded may lead us in the right direction.

Click here  to read the article or here to listen to the intriguing piece.

I really enjoyed meeting Kristin McLean at BEA and invited her to post this essay on our blog:

A New Way Forward

Is it just me, or did anyone else notice the new glasnost at BEA? Gone is the Henny Penny panic we were all feeling in January, and in its place there is a palpable sense of problem solving and openness to change. What the change is, no one completely knows, but it seems that everyone is on board with the fact that it’s no longer business as usual. 

It’s quite refreshing, actually. Very few industries have the opportunity to revisit the business model in the way publishing is. There’s nothing like a hole in the boat to get the serious creative juices flowing.

John Foster Dulles, Secretary of State under Eisenhower, once said “The measure of success is not whether you have a tough problem to deal with, but whether it is the same problem you had last year.”

Ironically, this new era of creative problem solving might allow us to tackle one of the biggest problems we’ve had for many years—our distribution system. Quite literally, it is the most inefficient system in all of retail, and it’s costing us billions in labor, fuel, materials, and environmental karma. No wonder our margins are so low at every level of the industry. We’re subsidizing this system with duplicated effort, overprinting and un-saleable stock, wild swings in inventory, and lost opportunity because billing pressures force returns before books have had a chance to gain traction.

I came to the book business from the toy business about a decade ago after spending many years managing an indie toy chain. In each of our three stores, we had a full children’s book section—a store within the store. We carried a comparable amount of stock per square foot to a bookstore, and averaged a respectable 3-5 turns per year on each SKU. 

The section was twice as profitable as the average bookstore. 

Why? Because the buyer chose about half as many new titles, and went twice as deep on the ones she knew staff and customers would love. Key backlist was always in stock in two copies, and every effort was made to stock best-sellers and staff favorites. It was highly edited, full of personality, and well respected. Proof that you don’t need to have everything, just the right things.

And the stock was bought direct from the publishers, non-returnable. 

If it didn’t sell, it was just marked down and moved out. I must say, returnability seemed like a pretty screwy way to do things then, and I haven’t changed my mind much since.

I understand why our model developed as it did. I understand why, when general interest bookstores were the only outlet, returnability made sense. However, the general bookstore model is under heavy pressure, and I believe one of the most viable ways forward is to develop a retail model that emphasizes a strong curatorial eye, narrower choices, and a deeper commitment to our stores as unique places carrying a selection that isn’t duplicated anywhere else. You don’t need to have everything, just the right things. The Special Markets departments at many publishers already know this. Niche is the new black.

Moving to a non-returnable model will demand changes throughout the chain: Publishers will need to start publishing less frontlist and do more to nurture backlist; Authors will need to give up large advances in lieu of a higher cut of sales; and Stores will need to trim some space, wean themselves off the psychological comfort of returns, and commit to a different way of operating. 

Am I saying that all stores should start buying everything non-returnable tomorrow? Perhaps not, but I bet a percentage of buying from particular publishers could be shifted to non-returnable for a nice bump in the bottom line right away. I applaud forward-thinking publishers like Harper Studio who are trying to shift the paradigm. 

Do I think going non-returnable is going far enough? Frankly, when I look further down the road, non-returnability is neutral compared to other innovations like a pure consignment model—you pay when you sell the book, the potential of local print-on-demand,  focusing on selling the consumer a shopping experience as opposed to an object, and as yet unforeseen technological and consumer innovations.

All I know for sure is that we can’t evolve to our next model before we figure this out. Books aren’t going away, but they way we handle them needs to. I am hopeful that we can use a little of our bountiful creativity to re-imagine and reinvigorate our way of doing business.  If BEA is any indication, we seem to be heading that way.

Kristen McLean is the executive director of The Association of Booksellers for Children (ABC), a national non-profit trade association for the children’s book industry.

Borders UK has started an online dating service.

The Wall Street Journal had a fascinating article about Netflix on Tuesday (“Netflix Boss Plots Life After the DVD“). It’s instructive to anyone trying to adapt to changing technology, including book publishers. Netflix’s ceo, Reed Hastings, has great business lending out DVDs, but it’s a business he predicts will begin to die off as early as four years from now. How should he make the move to online distribution without hastening his own core business’s demise? And what does this imply for book publishers who want to build an e-book business without destroying their print revenues any sooner than they have to?