One afternoon last October, VQR gathered innovative thinkers in the publishing industry together to talk about where, exactly, this business might be headed. In a space set aside for us at Poets House, in Manhattan’s Battery Park City, we delved into the risks and rewards of digital journalism, the tension between Internet giants and scrappy start-ups, and the opportunities at hand in a volatile industry. The roundtable included Andy Hunter, the publisher and co-founder of Electric Literature, which, upon its launch in 2009, became the first fiction magazine on the iPhone and iPad; Simon Lipskar, president of Writers House, a literary agency in New York; Amy O’Leary, a writer and editor with the New York Times who works across a range of sections, with a special charge to plan the digital application of journalism; Evan Ratliff, who is the co-founder and editor of Atavist, a media and software company that produces digital storytelling tools as well as a magazine dedicated to long-form narrative journalism; and John Tayman, the founder and CEO of Byliner, which commissions, collects, and curates narrative fiction and nonfiction by a variety of writers.
VQR: Let’s begin with where to begin. Is it fair to say that Atavist and Byliner are responses to breakthroughs in technology? One assumes that the e-reader and tablet had to be invented before your business models could truly flourish. But consumer demand must have played a role in their emergence. So what has driven this phenomenon? Is it the reader’s desire for a new experience? Is it the vision of an editor? Or is it all driven by the software developers?
John Tayman, Byliner: It’s bits and pieces of all of it. I began working on what became Byliner before e-readers existed, before the Kindle existed and the iPad existed, and it was driven, in part, by my frustrations as a writer and editor. The stories I wanted to tell were falling awkwardly between two existing forms, between a magazine piece and a conventional book. I was frustrated with the inability to tell a certain type of story at a certain length and get it in front of a reader. So together with a few editors and writers who would eventually join Byliner, I began talking and thinking about that form, a story that is 30,000 words or less. Before tablet devices there was no natural consumption tool for it, there was no natural discovery for it. We thought about everything from delivering PDFs to paginating the stuff in browser to print-on-demand. Happily, about halfway through all of that, the Kindle came out. Then the iPad came out. And then people became seduced by the notion of a story that you could read in a single sitting. So it was a combination of consumer demand and creator frustration, rather than the introduction of a device that created that category.
Evan Ratliff, Atavist: I would say the technology did precede the ability to form a business around it, to make money at it. You could always design. Back in the mid-nineties, you could design a website that had a long-form story on it. People did all sorts of clever things like flip-books, different layouts. You could always do that. But the question was, Why would you do that? The assumption was that you couldn’t make money at it, so it wasn’t worth the trouble to write anything long. Nor was there a way to sell it as a bundle. What the Kindle showed us wasn’t just a place where people could read a story, it delivered a device where you could sell an individual unit of a story, or a book, outside of the Web environment.
VQR: Part of the breakthrough in telling stories online was an explosion of approaches through multimedia. This led to more dynamic storytelling, but is it profitable? Or are the cost and effort of developing these types of stories still too burdensome?
Amy O’Leary, New York Times: Cost is a big issue. One of the great things about text is that it’s cheap to change. You can tear it up and rewrite it and it doesn’t require the same kind of intensive labor that tearing up a multimedia feature might. But we’ve seen a lot of people who are doing traditional kinds of journalism entering multimedia and looking for some kind of—and I hate this phrase—bells and whistles: Let’s throw some snappy stuff into this story and hope that it will somehow keep readers’ attention in a very competitive environment. But where multimedia gets interesting is when it becomes so integral to the story that you have to experience it to understand a key narrative moment. I hope that, as an industry, we’re moving away from the throw everything to the wall and see what sticks experiments to using new formats to tell specific parts of a story that you can’t really tell any other way. That’s when we’re going to see multimedia interwoven as a matter of course. You expect, in a blog post about a gaff on video, to see the video clip. In long-form writing, people should expect to see that kind of evidentiary media in the flow of a story’s telling.
VQR: That seems to be at the heart of what Atavist has been doing as digital publishers—to offer those visual and audio components as integral parts of the story experiences, which weren’t available before the technology became cheap enough.
Ratliff: Yeah, the idea is to integrate media. And remember, when we talk about multimedia, including photos in a magazine story is pretty much the same thing. A magazine layout is already fundamentally multimedia. So people who say that adding multimedia will ruin the experience of text must hate the cartoons that interrupt New Yorker stories, or the photography in any glossy magazine.
The question we had was whether there were ways to integrate things that actually helped move a story along—that, if they’re gone, it feels as if there’s something missing. And as for cost, we built our own software with the goal of making the process cheap. So for us, for each particular story that we produce, the functional cost of doing it is zero. We have to produce the media, but the actual integration of the media doesn’t cost us anything. That’s true across the Web. There are templates and designs that allow people to do this much cheaper than when you had to build the whole thing over and over again.
VQR: With regard to multimedia, there has been a lot of discussion—particularly on the book-publishing side—of what adds value to content, so that the reader winds up having his or her experience on the publisher’s turf. For instance, Sourcebooks recently launched the Shakesperience, an educational multimedia package. The idea is to deliver something to students exclusively on a platform that Sourcebooks owns. You can’t have that same experience outside of the world that they’ve built. It suggests that reading can be very social, enough that people have a reason to do it on your platform, in your universe, buying into that instead of, say, pirating.
O’Leary: There’s a remarkable example of this, something called YouVersion, and they’ve basically cornered the market on e-reading the Bible. It’s easy if you’re a pastor. You can create your own reading plan and your congregants can follow along and comment on passages that are meaningful to them. In a way, it deepens the social experience of reading the Bible, since you can see what kinds of comments others are making in real time. I’ve been in big mega-churches down in Texas, and 40 percent of the audience in a two-thousand-seat mega-church will be pulling out their iPhone or their e-reader to read the Bible this way. So it’s delivering the social component while simultaneously offering every possible translation—the New International Version, the King James Version, all of them. A good friend of mine, who’s a Christian, lives out in Montana. I asked him if he’d seen it, YouVersion, and he says, “Oh, you mean the Bible?” To him and his friends, it’s just now the Bible, forever and in the future.
Simon Lipskar, Writers House: One of the issues that comes up with multimedia, at least on the book side of things, is that not all ideas are going to be equally applicable to all kinds of reading. There are some things you don’t want to read socially and some things for which you don’t want any multimedia, just a complete immersion in the text. That’s one of the lessons we’ve learned early in publishing, that most of these experiences don’t work as multimedia. But what we end up doing is, we invent the technology, then we say, “Everyone is going to love this.” And every week a new reading platform is announced, a new company promises to radically transform the reading experience. And each one has the same exact idea: to make social reading easier. But absent a compelling book that lends itself to the experience, you’re not going to have social reading. So it’s important to remember that technology doesn’t necessarily make these things useful for artists, for writers, for creators. One of the questions I have with regard to multimedia in books is, if you’re reading a digital book and a multimedia experience happens, is it assumed that the author created it?
O’Leary: It depends on the author. With someone like Robin Sloan, absolutely. He’s coding apps, trying to tell stories on multiple platforms—but sure, there are authors for whom you wouldn’t assume that.
Andy Hunter, Electric Literature: It’s going to depend on the creator but also the nature of the work. There’s a huge difference between nonfiction and fiction. All of these elements we’re discussing work a hundred times better with nonfiction than fiction. In the case of fiction, a lot of the multimedia aspects are incredibly clumsy because the authors are trained in an older form, and they’re working within the constraints of the older form. They’re not writing books, in general, to become multimedia experiences. That aspect becomes tacked on at the end. But that’s a generational thing—the same way, for example, painting is still done even though painting is generally not where the cutting edge of art practice is right now. In the same way, people will still be writing novels in a hundred years. It’s a beautiful form and it’s valid in innumerable ways as an expression of human consciousness. But there’s going to be new generations of people who have grown up as amateur photographers, amateur video-graphers, who are perfectly fluent in social media and social aspects of reading and communication. And they’re going to begin to create their own works that seamlessly blend all these different elements. They’re going to be breakthrough creators. But those creators are probably not going to be people in their forties who grew up and spent twenty years mastering the craft of literary writing.
But underneath all of this, what we’re talking about is information. Information is going to follow the path of least resistance in the same way that water takes the easiest course. So we had the novel, which was basically information, and magazine articles, same thing, and the means of distribution were incredibly inefficient. We were actually cutting down trees and printing on them and shipping them out physically. CD-ROMs had the same issue. Even though they contain more information, and are lighter, you still have to put them in boxes and put them in stores. In 2000, you really didn’t have the Cloud and you didn’t have these portable devices that were wirelessly connected. Now that you do, information, including really large amounts of information in multimedia, can be distributed very rapidly to everybody in Western civilization. So to me, that’s the egg. That’s the driver of all of this change, and it’s irrevocably going to alter everything and continue to do so.
Ratliff: If there’s a generational difference in production, there’s also a generational difference in consumption. We have a generation that consumes information in a multimedia fashion. They’re bouncing from YouTube to reading something to Twitter and back. The question is whether you can provide a reading experience that will engage them for a long period of time. When we show multimedia stories to an older audience, a lot of them will bring up CD-ROMs. Like, “Oh, isn’t this just like CD-ROMs?” But if you show it to college kids, they know exactly what it is. So there’s a mode of consumption that we’re used to, that we grew up with, that will not be the same as the mode of consumption of the people who are growing up now.
Lipskar: I’m curious to ask Evan and John, what are your analytics telling you about the way people consume the books you’re publishing? Are people going into deep, immersive reading the same way in tablets that they do in physical form?
Tayman: Well, Evan and I do completely different books. Evan does enhanced books that have all of the richness that you’ve described. We skew to the opposite. We do very stripped down, straight, single narratives. What we see is that people are engaging with our content in different ways on particular devices. Typically in browser—you know, on a laptop or on your desktop—people are in “discovery mode.” They’re finding things, they’re learning about things, they’re saving stories to read later, whether it’s on Instapaper or Pocket or a specific queuing system. And then they consume when they’re in “lean-back mode.” For the most part, tablet consumption in the evenings is really high, phone consumption at commuter times is really high, discovery actions are happening during office hours. But what’s really interesting is the frequency with which a single purchase leads to multiple purchases. Once somebody buys a single, they almost inevitably go and get three, four, five, six, seven, eight more.
Lipskar: By different writers?
Tayman: Yes. And all our titles, by design, are consumable in two hours or less. So we see straight read-throughs almost entirely. And it’s when people are in lean-back mode with their tablet and they’re going to read the whole thing. And then they go hunting for whatever’s next. The simple way Byliner approaches it is that these are storytellers connecting with people who want a story. A strong storyteller will tell a great story whether it’s on a piece of paper or on a Kindle. It really is just the straight relationship between that master storyteller and somebody who wants to be moved or entertained or engaged or outraged.
VQR: That said, how do the two of you—Amy and Evan—determine what’s cost effective or even practical when it comes to enhancing a story? At what point do you determine it isn’t worth investing what it costs to include a video component, or a musical component, any auxiliary experience?
O’Leary: I’ve been at the Times for five years, and in the beginning we were doing so much more multimedia, in terms of sheer quantity. I probably worked on fifty audio slide shows in the first year I was there. And we learned very quickly by looking at our analytics that there wasn’t always an audience for that. People don’t come to a site and look for multimedia to click through, they look for the story. At this point, working as a reporter, when I’m tackling a story I ask whether there is something pivotal that another format can deliver better than I can write it. That’s the simplest way to look at it. One example is a story I did on how women who play online games are frequently sexually harassed by the people they play with. There was an incident where a coach had smelled a player on his team in a tournament. Now, I wrote it, but, man, there was a video link that popped up on the phrase “He leaned in over her shoulder and smelled her,” where you could see this happening, and it was a pivotal moment in the story. And everyone I spoke to who read the article watched that clip. We didn’t produce a giant documentary that would have taken a month of the video producer’s time. But that one-minute clip of that incident was crucial to the story. That was the smarter choice. That’s where editors can and should develop a healthy strictness about when to invest in multimedia. It should be at those key points in the story, not because they want to dress it up for the front page.
Tayman: I remember looking at Evan’s first title, “Lifted,” where the lede is essentially a video clip of the security cam capturing the crime. As wonderful a writer as Evan is, that lede was more powerful than trying to recreate it in his own words. And then to have it go directly into the narrative was a wonderful utilization of that platform.
Ratliff: Well, we look for that. One thing we don’t do is we don’t send long-form narrative writers out with a Canon 5D and a fancy digital recorder and say, “Okay, now do everything and come back with the perfect version.” We try to work with them to see what is available in their reporting. Occasionally they might get some audio or video. But really they’re focused on the story. Sometimes the multimedia probably feels superfluous, sometimes it’s integral. It varies. But we’re trying to navigate the business while pushing the boundary of what you can do. For instance, from the beginning we started doing full audiobooks—recorded versions of everything we publish. We record them ourselves, and they’re integrated into our app, so you can flip back and forth between listening and reading. A lot of people questioned the money we spent on that. We’re selling those as independent audiobooks now, so business-wise it’s good. And Amazon announced a month ago that they’d invented a technology for listening and reading at the same time, because they see that there’s a lot of value in giving people that option. So multimedia is not just about the stuff you jam into the story. It’s about how you conceive a digital story overall.
VQR: Speaking of the folks in Seattle, how much do you think the Googles, Amazons, Apples, Microsofts, Facebooks, whichever you like—how much are they controlling, driving, influencing the direction? Are they too powerful?
Hunter: Well, I think that the publishing industry has fallen into a kind of innovator’s-dilemma trap, where they had a profit pool that they didn’t want to disrupt. Social reading is a great example. I know people who founded social-reading companies in 2007 who weren’t able to get any decent-sized publisher to allow them to sell their books, and I know people who are doing publishing start-ups now—online publishing and selling and distribution—who can’t get a lot of major publishers to let them distribute their books. So publishers aren’t working with start-ups, and they aren’t hiring really smart developers who can create software solutions that might give them a little bit of longevity or allow them to disrupt the industry in the way that TV networks, for example, are doing with Hulu. In effect, they’ve handed over the future of the industry to the hardware and software companies like Apple and Kindle. And I think they should be incredibly concerned with Amazon, because things aren’t stable right now. They might feel more stable because three years ago people weren’t sure that e-reading was going to take off with consumers. Now that everybody’s making a ton of money, they might feel a sense of relief.
But Amazon is selling something like 80 percent of e-books in the US, and 50 percent of books being read are e-books—and that happened in what, four years? So what’s going to happen in the next three years? Are we going to have one company that is selling 85 percent of all books, and what kind of power are they going to have as a result? Amazon is also a publisher now. It’s a big issue, and it hasn’t been addressed because everyone’s afraid to cut off their revenue streams.
We started something which is similar to what the Atavist is doing now, licensing our technology. We had Electric Publisher, which we were trying to sell to a couple of major publishers, which would allow them to easily generate their own apps. We weren’t charging a lot of money for it. But in the end, we got pushback from the major publishers because they had agreements with Amazon that they couldn’t add value to their books—multimedia elements, for example—and then charge more money for those books. They weren’t interested in pursuing other opportunities because it might jeopardize their relationships with Amazon, and that’s where all their money was coming from. Only time will tell how it all plays out.
Lipskar: There’s so much juicy material in what you just said. Where do I start? I think publishers have a very complicated version of the innovator’s dilemma, and it begins with the fact that the publisher’s business is entirely based upon other people’s content, content that they’re borrowing. And even though the contracts sound extremely broad in their grant, there’s an implicit sense of responsibility on the publisher’s part, that they have a fiduciary responsibility to protect the interests of writers. That doesn’t mean they always succeed. That doesn’t mean that they don’t sometimes piss off writers in the decisions they make. But one of the complicated factors for them was, How do we preserve and protect the income of the writers we’ve promised to protect?
Hunter: That all sounds very altruistic, but if they’re giving the writer 12 percent royalties then that means 88 percent of the money they’re preserving is their money, as publishers.
Lipskar: Well, again, people get the math of publishing a little confused. The big publishers don’t actually pay that many authors royalties, as you probably know. Big Six publishers average out at about 80 percent unearned, which means that their actual business model has little or nothing to do with how much revenue is associated with the royalty. It has to do with how much revenue was paid through unearned advances. Another thing people don’t understand about publishing, they assume that those unearned advances are a terrible business error, they pay too much for the wrong books. That’s not it at all. The way publishers buy most books is to anticipate unearned advances, and what they’re really doing with advances is taking the total revenue pot and looking at how much is left over after the cost of publication and saying, “All right, if we give x number of dollars to this author, that’s going to represent x percent to the total value.” And depending on how much money is associated with that, they’ll give more or less. So multi-million-dollar authors who write commercial fiction will be paid staggeringly high percentages.
If you talk to a big publisher, they think of their author compensation as being much higher than we think it is. Depending on their mood and how they’re calculating it, they’ll say that they pay between an implicit 20 to 30 percent royalty to authors on royalty-paying contracts. I was on a panel at Digital Book World, and there were two things said that had never really been said in public before. Madeline McIntosh, who is now the COO of Random House, said she had done a five-year analysis of every fiction title at Random House. She looked at all fiction—commercial, literary, across all of her imprints. And over those five years the average author was receiving 40 percent of the sales revenue associated with those books. Michael Pietsch, the CEO of Hachette, said that at Hachette overall more than 40 percent of the marginal revenue goes to the authors. That’s pretty staggering, and it definitely changes some of the implications. And it gets to what I was saying before. It’s not purely altruistic. Their business model is based upon maximizing author income. It just is. Because if they stop maximizing authors’ income, authors are going to walk away, which is one of the reasons why we’re seeing so many authors of mid-list titles starting to think about self-publishing. Because the publishers are starting to no longer offer that maximization of their potential profit.
At least authors are now imagining that there’s a better path. Whether they’re right or wrong is a different and complicated question, but they’re starting to see it. I also think that Amazon’s power is probably a little smaller than you’re estimating. For most of my authors, Amazon is only selling about 65 percent of their e-books.
Ratliff: Actually, I think it’s worse than the innovator’s dilemma. It’s not as if book publishers invented something and someone invented something better. They didn’t invent books. They were always using a technology that they did not invent. But the problem doesn’t have that much to do with technology. Sure, there’s all sorts of e-readers and new ones coming out and who knows what will be the dominant technology next year. But the problem isn’t a technology problem, it’s a marketing problem. What Amazon has is marketing. They have an audience that they can tell, “Go read this.” And they use technology to do that, to say, “If you read this, you’ll like this.” What they have is an audience. With all due respect to publishers, with the exception of very, very few imprints, nobody ever walks into a bookstore and says, “I want the new HarperCollins.”
Lipskar: That’s what’s really smart about what you guys are doing. On a basic level, you’re identifiable. The first thing you think about Byliner is not which articles are in the archive. You’re thinking, “I was on Byliner.”
Ratliff: Byliner is doing it better than we are. What they’ve done is, they’ve created a look and feel that suggests you know what you’re getting.
Lipskar: Right. So what we’re really saying is that publishers don’t have effective brands, and you want to have a brand. The New York Times is a brand. That’s why it has survived amid this bloodbath for other newspapers. There’s so much content that’s so difficult to pierce through. Where do you start? Who do you trust? What’s going to be effective entertainment? What’s going to contribute value for my time and money? The Times has a leg up in that regard. And Byliner is doing something similar. You’re developing a brand that people can trust. And that’s something publishers haven’t been able to figure out. They’ve tried over the years. When I was in college, one publisher had that effect. You know, I would buy any book that Vintage Contemporaries published, any book. We’re all nodding our heads.
Tayman: And before that the Modern Library, Penguin Classics.
Tayman: There were those imprints where you knew what you were getting.
Lipskar: And yet those were monetizations of pre-existing content—you know, packaging them in a way that wrapped a new brand around stuff that had already been done. What was fascinating about Vintage Contemporaries was that these were entirely new titles. You didn’t know that they were good. It wasn’t Jane Austen, it was …
Tayman: Bret Easton Ellis.
Lipskar: Right. And why were people going to read it? Because there was this package that was very compelling, there was something strong about the graphic identity of the books, and it worked. But it’s a difficult thing to maintain for publishers.
O’Leary: You know, there was a recent Pew study on how young people between the ages of sixteen and twenty-nine are still reading at least a physical book a year. One participant said, “Well, if I really like a book, I want to be able to read it wherever I want, but I want that physical copy.” I wonder about that. I think about radio, and how there was always this fear that technology was going to wipe it out. First television, then the Internet. Who’s going to listen to radio? But radio has persisted, and similarly, books aren’t going to go away. They may simply thrive in the niche where they perform best. And you’ll have e-books and other kinds of publishing thriving among people who are on the go, who are on a trip, say, and can’t get to an English-language bookstore. There’s room for all of it.
Lipskar: Can we go back for a moment to the innovator’s dilemma? I just want to add something to what Andy said, before we lose that thread. This idea that people who create things should hold all the risk associated with their commercial activity, this is an invention of the technology business. And it’s a sad invention, from my point of view. There’s good reason to reduce the risk of the commercial endeavor for the greatest artists of all kinds. Whether they’re commercial or literary, the fact is that selling creative product is inherently risky. It’s very dangerous. Even past performance doesn’t guarantee future returns. So it makes sense for entities with diversified portfolios, who have lots of content to sell, that they should be the ones holding the risk. But this isn’t the case. Apple likes it when people spend a lot of money developing apps and hold all the risk for success. The Kindle Direct Publishing model is exactly the same thing. I’m not railing against self-publishing. I’m railing against the idea that there are companies that derive tremendous commercial benefits from foisting the risk for selling creative products onto the creators themselves, as opposed to the existing model we’ve had all these years—which, good or bad, is under threat, where you had big commercial entities that had interest in holding that risk and having diverse portfolios of intellectual content, creative property, and using that diversity to support the business of selling it. Writers, on the other hand, are going to be terribly, terribly exposed, just the way musicians have been exposed, the way app creators have been exposed. But the technology bug is such that we’re not looking back. So it’s a powerful, dangerous, complicated time for writers as a consequence.
VQR: Some would argue that technology has democratized the field. It’s not as if publishers were taking on the risks for the millions of writers who would like to have a book and were rejected.
Lipskar: My sympathy level for this idea that everyone who wants to write a book should be published is fairly low—so now I’m definitely getting in trouble. I’m a big old lefty, but I don’t really believe in the democratic value of removing all gatekeepers to content. I think we do well to have some level of curation.
VQR: Yes, but many of the people who use KDP are those who would never be touched by publishers.
Lipskar: Because their books were bad. One of the things about my job that is very specific is that I get to see just how bad all these books are, because I’ve been reading them in slush for twenty years. I know exactly how bad these books are. They’re terrible. And twenty years ago, we would reject those books because they were objectively bad, and they would go away.
Hunter: With digital self-publishing, it boils down to this idea that Amazon cares less about the writer, or the book, than it does the credit card. The authors and the books are interchangeable, what matters is that they’re selling. So the quality of the book is completely irrelevant, and the kind of lottery scenario of self-publishing a book that becomes a bestseller—the next Fifty Shades of Grey, or the woman who was in the New York Times for writing troll romance fiction, whatever—all of that is so alluring, it’s so exciting, but it’s fundamentally dishonest. But as long as there’s one or two of those a year, Amazon can say that they’re liberating authors, that there is this incredible opportunity, and meanwhile the vast, vast, vast majority of people are empowered to publish books that no one is going to read. So I agree that curation is important. That goes back to the idea of the brand. And smart publishers will become these curators that readers with taste will seek out in the future. But publishers who rely on blockbusters like Harry Potter are under threat by the fact that books of much less discriminatory taste could become the next massive seller.
VQR: Given the hostility of this marketplace and the burden on the creator, how important is the idea of Byliner’s and Atavist’s agreement to a 50/50 split of revenue with their writers?
Tayman: Evan and I arrived at it independently. I know from my experience in publishing books and being published that 7 to 18 percent for a hardcover and then maybe up to 25 percent for the electronic version were the thresholds. We tend to think of the authors as partners in the enterprise, so that they act on behalf of their books and have an incentive to do so. So if we’re treating them as partners, the 50/50 split makes sense. And when you sharpen the pencil and do the math on it, it also made for very good business. So it just seemed easy.
Ratliff: You also have to look at what it is you’re providing to these authors. Because you’re not providing them the whole infrastructure to print books and to get them distributed to Barnes & Noble. You’re providing them, on the construction of the thing, something they can’t do on their own—editing, marketing, maybe fact-checking if you go in that direction. So what percentage is that worth? What are we giving them that they can’t get somewhere else?
Tayman: Another thing is, we created these businesses to be digital from the bottom up. So what are we not spending on? We’re not spending on back office. We’re not spending on inventory. We don’t have the kind of overhead that necessitates something more aggressive than a 50/50 split. So to us it felt overreaching to suggest, say, a 70/30 split.
Lipskar: Well, I might suggest something in the opposite direction. We all have—what would you call it—a round-number bias, right? Why do we sell books for $250,000? If you’re a writer, wouldn’t you rather get paid $257,332? Yet we sell books for $250,000. Why? You see it in auctions and you see it on both buyers’ and sellers’ sides of the equation. We gravitate to round numbers. We also do it when we come to the percentage we pay. One of the things that Amazon has thrown down the gauntlet on is this idea of how much—by definition—you should get for creating something if you’re getting nothing in return. So we all agree that when you’re in Kindle Direct Publishing and you’re getting 70 cents on every dollar, you’re getting nothing except availability, right? You’re getting availability on their platform.
Tayman: Yeah, if you’re a no-name author and you’re not going to get into any sort of marketing program, then, yes, you’re getting nothing. You’re paying to be in their store.
Lipskar: And one of the things people get wrong all the time is, they talk about the 70 percent royalty that Amazon pays through KDP. That’s not a royalty—a royalty is when you get something from a publisher. Instead, it’s a distribution fee. Not insubstantial, not to say it doesn’t work. But a world in which authors are receiving no money for creating products is going to be way more complicated moving forward. We’re going to see different business models arise, whether it be fees on top of a percentage or advances that continue to guarantee risk and pay a percentage that’s not attributable to royalty. We’re right at the beginning of a revolution that’s going to have dramatic consequences for author compensation.
Tayman: And it’s not just in the book industry. We’ve published books that two years ago would have been magazine pieces—perhaps slightly compressed or, with some begging and pleading, they might have continued to live as ten-thousand-word stories. Think about the economics for the writer in those cases. They have a single sale. It might be the most popular magazine piece in the history of magazine pieces, and they still get their one fee—$10,000 or $15,000—and that’s it. In some way, what Atavist and Byliner are doing is attaching a royalty system to a magazine piece. So you create not only the potential for annuity for a magazine writer, but you attach the upside potential to that piece as well. We’ve now had multiple writers who have broken six figures on a story that two years ago probably would have been a fifteen-thousand-word magazine piece in a national magazine if they could convince the editor to open up their feature well to accommodate it. That’s a good thing for writers.
Lipskar: It’s a great thing.
VQR: Certainly among the writers we work with, they find this business model liberating. It’s a new opportunity to make a living in what they consider an increasingly difficult marketplace.
O’Leary: Sure, but these are best-case scenarios. As Simon mentioned, writers are still taking on more risk. So what does it look like when it doesn’t sell so well, and the writer is taking on more of the risk and isn’t getting the same fixed magazine fee he or she might have gotten otherwise?
Ratliff: It looks like less money. That happens to us for sure. People get the fee, they even lay out the expenses to go report in a distant part of the world, and then don’t make that money back. So, yeah, it’s a higher risk for a writing endeavor.
VQR: So is it an illusion among writers that there is this big new opportunity outside of traditional magazines?
Hunter: It’s a fledgling opportunity that might turn into something. Right now I think it’s very hard to sell enough of even one of these Kindle Singles to pay, say, $10,000. That’s a tall order if it’s 99 cents. We’ve been having some success with selling short stories on Kindle Singles. It certainly pays our rent and utilities. But we wouldn’t be able to pay any writer $10,000 based on those royalties. Maybe Stephen King could.
Tayman: I’m going to disagree, because we will sell more than a million singles this year. And we’ll have people earn from a single story what they would have earned in a year of freelancing. Some are big names, some not. One of the big successes in the first half of our list was a first-time author, a young woman with her very first book, nonfiction. She made a significant income from that one single.
O’Leary: Sometimes it’s a matter of how much marketing the writer is doing. This is a question even for us. I’ve noticed that sometimes you finish your story, and you have to set aside a day to be responsive in social media. And I wonder, especially when the writer has more of an economic incentive, to what extent are writers promoting their own stories?
Tayman: We encourage them to do as much as they can. We do traditional marketing and PR, so we’re booking them when we can on The Colbert Report and everything else. We do a lot of the stuff that Atavist does—digital, bottom-up marketing, seeding communities with advance review copies and going through distribution channels. But the ones who get involved and make themselves available, who do anything from an “Ask Me Anything” on Reddit to a radio interview or print or an author chat on Quora, the ones who get behind it: That combination of a good story well-executed and an author who works a little bit on marketing that story is gold.
Lipskar: So what we’re saying is that the evolution of the writer is that not only will they have to be skilled storytellers, they’ll need to be skilled at multimedia, they’ll have to be savvy marketers, they’re going to need to do all these things. All the while holding the risk. That’s what I keep thinking about. All of these things are such profound transformations for writers-—in terms of economics, in terms of what they do, how they do it, what their skill sets are. We are, in fact, demanding more skill sets every day from writers—
Ratliff: But I don’t agree with that.
Lipskar: That it’s a profound transformation?
Ratliff: Well, I just come from a perspective of being a freelance writer for a decade for magazines, and knowing a lot of freelance writers. And I think it would be a mistake to assume that nonfiction magazine writers or Big List book writers are just killing it financially. It’s a hustle. It will always be a hustle. Even starting a business is not completely dissimilar from what you have to do to make a living doing this. So it’s true that it’s putting more risk on the writer—and I worry about that—but at the same time, this whole endeavor of writing is a risk. It’s a terribly risky thing to get into, that you’re going to have to produce five, six features a year to make a decent living, especially if you’re going to live in New York or San Francisco. So it’s good to consider what we’re asking the author to do, but for the most part, I think authors are excited to have at least a new outlet and opportunity to try to make some money when other avenues are closing down.
Lipskar: Well, my bias definitely tends toward long-form fiction. That’s the heart of my list as an agent. And writing novels is even crazier than being a freelance journalist. But the ones who are good enough to succeed are now being put into positions where they’re being asked to do quite a lot more. That’s not necessarily bad, but it’s complicated. So the question is, are these writers not only going to have to be able to display beautiful turns of phrase, but also have a beautiful sense of cinematography?
VQR: And at what point do they begin to demand a different scale of compensation for possessing such multifaceted talent?
Lipskar: They’re not going to get paid a different scale. They’re going to be holding all the risk themselves and hoping that they can sell their app in a store that isn’t interested in holding risk for them. But that’s just a pessimistic way of saying that this is a challenging moment; writers are going to have to be flexible but also be cautious.
VQR: Is there anything you all are looking forward to, without hesitation?
O’Leary: I’m most curious to watch how the structure of writing changes as we figure out how to write better for the mobile audience. We know that mobile is growing incredibly fast, whether it’s something as simple as an essay or a serialized novel or a news app that’s been reconfigured for people’s swiping habits on mobile devices. There are experiments happening now that change the way a story is structured. For example, on the front page of the Times, there’s a way a front-page article is structured and written. It’s what we’ve been taught and it’s what we know. That works well for a piece of paper. But when you’ve got a little device—and this really hasn’t been figured out yet—how do we rewrite the story to be the most compelling, useful version of the story for a different-sized screen? There’s a new app called Circa that’s trying to do exactly this, where it gives you a visual snapshot of the story that you can dig deeper into. There’s an app called Fish, in which you tap through an essay, every sentence—a thousand words, ten minutes. The Silent History is a beautifully designed serial investigation about a fictional epidemic of silence. People are starting to get their fingers an inch deep into how our brains are taking in the information differently on these devices. It’s wide open right now for somebody to really nail that and figure it out.
VQR: Do you all as publishers feel that you need to be ahead of this technological curve, or just respond well to the technology that’s being introduced?
Ratliff: Well, part of our business is the technology. On that end of things, we have to pay close attention to what everyone else is doing. On the other hand, the most interesting development for me is that, when we started, people didn’t want to do long stories online. So here was this vacancy. Here we have unlimited space and no one is using it. Now companies have figured out that when you tell long stories, people stay on your website. So unless you’re just about paid views where people show up for ten seconds and leave, you want to have long pieces. So now you have BuzzFeed, Gawker, The Verge. The stories are getting longer and longer, which is actually scarier to me than anything that happened before because suddenly you have competition that’s free, often really well designed, that’s going up against what we’re trying to sell. You have to make arguments about quality of the reporting and fact-checking and so on. So I want to see where that goes. Another thing I’m looking forward to following is the way books are bleeding onto the Web in a way they weren’t before. The idea that you buy it once and then can read it everywhere—which is difficult, because you’re dealing with Kindle and different environments, but that seems to be where it’s all headed.
VQR: Is there any part of this territory that you all are seeking to mark for yourselves?
Hunter: You know, Electric Literature has gone through a number of transformations; we haven’t really been sticking to one thing. In 2009 we made a really big deal about putting out an iPhone app, creating a platform, and making our material available in every possible format, including audiobook. All of our apps include the author reading alongside the text and videos that were on YouTube; we published a story on Twitter three years ago. Now the New Yorker is doing it to much attention. So all the stuff that we did is totally commonplace now. It’s the kind of thing where, if I’m at a cocktail party and somebody asks, “Oh, so what’s Electric Literature?” and I say, “We publish books in every viable format and we use social media to promote reading”—it’s like, “Oh, duh.”
So we started Broadcastr, a narrative experiment where we’re using audio storytelling, where people could just tell stories to their phones and attach it to a location, and in some cases it was very successful—at the 9/11 Memorial, for instance, you can hear the stories of firefighters and first responders and victims’ families, and it adds this profound element to visiting the Memorial. Now we’re working on a new app, SPUN, which also uses location but takes all kinds of content that is basically journalism, mostly nonfiction, but is pertinent to places. We’re taking content, including the New York Times, and saying, Okay, where does this story live in the world? And we attach it to a venue, and over time it will evolve. In the beginning, SPUN might be a fun way to find out what’s going on in your city. But eventually we’re hoping to build up a database that contains millions of stories, published by a thousand different respected outlets, and creating an index of story and place, so that everything that’s published about a location can be retained there and then discovered by these mobile apps. Because the big difference between consuming content on a phone, as opposed to a book or a TV, is that the phone knows exactly where I am. So it can deliver content in context in a way that was never possible before. That’s where we’re interested in going. And I feel a little bit like, you know, years ago, maybe we should have pushed Electric Literature a little more because right now we’re still publishing great fiction but we’re no longer on the cutting edge of publishing technology. We’re kind of ADD in that we’re always trying to put something together that is more forward-looking, that asks the fundamental question of what is different about this medium than the prior medium? And what does this medium enable that couldn’t have been enabled before?
Ratliff: You’re like the Pied Piper of these [holds up iPhone]. I remember we looked at the Electric Lit app when we were starting out. It was the only thing we could find on the phone that represented what we wanted to do. And then you’re off doing something else, and now we all have to go chase that.
Hunter: Yeah, but you guys are having a lot more financial success than we ever did.
Ratliff: Hmph. We’ll see.