Thursday, December 18, 2014

OPEC is the new Amazon

A little historical background

The first time I ever consciously thought about oil supply was 1973. On October 6, 1973 Egypt and Syria launched a surprise attack on Israel, kicking off the Yom Kippur War. The U.S. sided with Israel and the Arab members of OPEC retaliated by first imposing price increases and then an oil export ban on the U.S.

At the time the U.S. produced less than two-thirds of its oil needs; OPEC accounted nearly two-thirds of imports. Consequently, almost 25% of our oil came from OPEC. Prices skyrocketed, refineries didn’t have enough oil, which quickly led to supply shortages. The price of oil jumped from $3 to $12. In New Jersey, we were subjected to odd/even gas rationing with long lines.(1)

During the early 1980s, OPEC used its new pricing power to set target market prices. However, because of politics, cheating and other factors, only Saudi Arabia had sufficient excess capacity and financial reserves to modify production to cause supply to match demand at the target price. Since places outside of OPEC producers were not constrained by OPEC policies, it required considerable effort by Saudi Arabia to maintain prices, and at times they were unable to do so. Price volatility was high. Eventually, even Saudi Arabia was unwilling to cut production sufficiently to maintain prices and the price of crude collapsed.


In the 1990s Asian oil demands increased substantially and prices again began to rise until a combination of increased OPEC production and a severe recession in 1997-8 caused another huge drop in prices. OPEC responded by cutting production and maintained a somewhat higher price. Demand continued to rise and for the period 2005-2008 OPEC found itself in the unique position of having no excess capacity. The 2008-9 recession solved that problem by cutting demand. Prices dropped over $100 from a peak $145.



And then came fracking

At $40 a barrel, very few investors were drilling new wells. But with increased demand came increased prices. The higher prices of oil are, the greater the number of producers that can make money. Even high-cost production becomes cost effective—like shale oil and horizontal drilling.

Oil is pouring out of North American shale oil fields. It is expensive oil. Estimates vary, but seem to average around $60 to produce a barrel of shale oil.

Over the last twelve months, the price of crude oil has dropped from almost $115 to nearly $70. Shale oil is now a whole lot less profitable than it was.

The Saudi play

Unlike some of its neighbors, Saudi Arabia doesn’t need high oil prices short term to support current budgets. Iran, Iraq, and Venezuela do. They would like the world supply of oil to decrease, forcing an increase in prices. And, they want Saudi Arabia to cut production as they have in the past.

Saudi Arabia recognizes that high prices both encourage additional production and prod consumers to find ways to save energy. Neither is good for Saudi Arabia’s long-term position as the oil power broker. With the advent of U.S. and Canadian shale oil production, Saudi Arabia has already lost most of its pricing power. However, because shale oil production from any one well dries up after only a few years, in order for the U.S. and Canada to keep producing shale oil, producers must continue to drill new wells. If the price of oil drops, they won’t drill them.

After a short period, Saudi Arabia will again be in the driver’s seat, having caused many of its smaller competitors to drop out of the market.

And doesn’t that remind you of what Amazon has done to the book market? Allowing books to sell inexpensively, and even selling ebooks below cost, Amazon drove a large number of brick and mortar stores bankrupt and increased its market share (and therefore power).

Saudi Arabia will have less success than Amazon, but that doesn’t mean its tactic won’t work. Because of the threat, investors will require a higher expected return on their investment to reflect the added risk that just as their wells enter production, prices will plummet because all the other producers are doing the same thing. This bust and boom cycle can help Saudi Arabia since they are the ones around when prices are high.

There you have it, Saudi Arabia taking a page from Amazon’s playbook.

~ Jim

(1) Consumers could only buy gas on alternate days depending on the final numerical digit of their license plate (with rules for all-letter license plates)

Friday, November 7, 2014

Protecting Your Identity in a Cyberworld

The headlines continue to shout examples of major retailers, banks and insurance companies whose databases have been hacked, providing the hackers with your personal information. What can you do about these breaches of security?

Short of dying or cutting yourself off from all commerce, you can’t do anything to stop the security breaches, but by preparing you can limit their damage to you when they occur.

It will happen; your credit card information will be stolen.

The most important first step to protect yourself is to assume your credit card information will be stolen.

It is going to happen. It may happen the old-fashioned way and someone steals your wallet and grabs your credit card. Maybe a restaurant worker has a magnetic strip reader and necessary tools to duplicate your card. Maybe the bank is hacked, or the retailer or insurance company. Maybe your computer is stolen or someone snags your userID and password while you are online. Or your “safe” cloud backup is hacked. It doesn’t matter how it happens; what matters is how prepared you are for it.

The best way to limit the damage is to have strong safeguards in place before your information is compromised.

Create Strong Passwords: 

Yes, you’ve heard it a thousand times, but if you haven’t already done it, do it now: create unique, strong passwords for every online account. Strong passwords include at least one capital letter, one small letter, one number, and one symbol and are a minimum of eight characters long. You can use a program that develops long unmemorizable passwords and keep track of them for you. Alternatively, you can develop your own, based on a system that you remember, but that will not be obvious to someone who comes across your written list.

Of course you keep a written list; you’re human, aren’t you?

You can develop a system that you will remember given a password clue. Here’s an example. Your password list has “4T” next to Chase.

Your actual password is aHc16@jmj#X arrived at by taking the first three letters of the company (cha), writing them backwards (ahc), capitalizing the 2nd letter (aHc) adding a standard (to you) 7-digit group (16@jmj#) and then (the code part—4T) which means the letter at the end will be 4 after T and since T is capitalized, so will be X (the 4th letter after T).

If you lose your list of passwords, no one is going to figure out that Chase 4T means aHc16@jmj#X and BOA 2c would convert to aOb16@jmj#e. Yet after just a few days, you’ll know your passwords for almost all websites without having to look them up. With such a coding scheme, you should keep a note detailing your conversion key in your safe deposit box so upon your demise your executor can sort out what your passwords are and access your accounts.

Also note that however a thief/hacker obtains your information for one account, they won’t be able to figure it out for other accounts.

Set up Credit Card Alerts

Most major credit cards and many retail cards allow you to set up alerts so whenever your credit card is used, you get an email. For example, Chase allows alerts for the following transactions:

  • Any charge on the card over a specified amount (I use $1.00, so I see them all.)
  • Any international charge.
  • Any online, telephone or mail charge.
  • Any gas station charge.

They have a number of other alerts available (credit limits, bill paid, etc.) I chose to receive an alert for any balance transfers (since I don’t transfer balances, I’d learn of the fraud immediately.)

The point of these alerts is to catch a problem early. Thieves often put through a small charge to make sure the credit card information is working, and, if successful, follow up with a series of larger charges. If you spot any suspicious activity, immediately contact the credit card company’s fraud group. Usually, they will cancel your card and issue a new one. Once, (years ago with a corporate card) they asked to keep the card active so they could follow the merchandise and attempt to apprehend the criminals. They issued a new card for my purchases.

Utilize a single credit card for automatic payments

Designate one credit card for use in automatic payments: utility bills, cable, newspaper, whatever recurring payments you set up. This isolates your automatic payments from your every day credit card use.

It’s a pain to have to change all your automatic payments. Making this division means that when the card you use for regular purchases is compromised (in my case usually because I left it somewhere), you don’t have to bother with notifying other companies.

Credit Rating Agencies

The three credit rating agencies, Equifax, Experion and TransUnion, have tools to help you protect your credit. You should request your annual free credit report from each as a matter of course. (I suggest spreading them out every four months to give yourself the best coverage.) Should you spot any incorrect or suspicious information, follow-up with the company and make sure to keep all documentation.

The agencies also have methods to limit access to your credit information. Putting them in place will make it much more difficult for you to get new credit and in some cases will make it hard to obtain new services (cable for example) because the provider checks your credit before agreeing to sign you up and that check is blocked. However, if you are concerned about unauthorized persons or companies accessing your credit, a freeze will solve the problem.

If you suspect your personal information has been compromised, you can have the three companies put on a Credit Fraud Alert, which notifies companies to contact you before approving any credit. Experian’s, for example, lasts 90 days – unless you have been a victim of fraud—in  which case they have a seven-year extension with proof of the fraud.

Summary: (1) Recognize your information will be stolen (2) Implement strong passwords (3) Set up credit card transaction alerts for early warning (4) Make sure to utilize free credit rating agency tools.

~ Jim

Monday, November 3, 2014

Jim Goes Hollywood



I confess the blog title reeks of hyperbole, but what better way to announce that I am now in the video business? In a day and age where three-year-olds post selfies to Facebook and kindergartners make YouTube videos from their smart phones, I am perhaps a bit behind the curve. I decided to rectify the matter and create YouTube videos of me reading the opening scenes of my Seamus McCree novels.

While my son, Brad, was vacationing at our camp in the U.P. in September, he and I experimented with taking videos using my Nikon camera. Our first attempt used the lake as the background. That produced a fine picture of the lake with trees on the far shore in high color. Unfortunately, I was so underexposed as to look like black death.

We tried the woods, which fixed the exposure issues, but the microphone picked up each leaf as it crashed to the ground. Too distracting.

Next we tried the screened porch of our cabin (backlight problem again). Finally we waited for a day with no wind and recorded a great take of me reading the first chapter of Cabin Fever out in the middle of our woods. By then, Brad had figured out the optimal distance to maximize hearing my voice and minimize background noise; he’d figured out the zoom so I was not too big and not too small. He had it nailed—except the budding videographer neglected to focus the shot. The tree behind me was in exquisite focus; I appeared as if painted by Monet.

I put the project on the back shelf, and we enjoyed the rest of his vacation exploring the woods on our ATVs. In mid-October, Jan was gone for a few days visiting family and I had the camp to myself. What better time to try this again? The opening picture of this blog is a still taken from me reading Bad Policy.

It took a few test shots for me to figure out the framing, focus, etc. I had already decided I would need to edit out errors and had some simple software to accomplish that task. A few hours later, I had two movies—but they were huge space hogs. (The Nikon takes HD video.) YouTube does its own compression, but whenever I tried to load one of the videos, it would almost complete the process and then return an error message.

So, I downloaded free video compression software, squeezed the file to manageable size, and performed the YouTube uploads. Here are the two files if you are interested:

Cabin Fever Reading: http://youtu.be/75BG_G16NdU
Bad Policy Reading: http://youtu.be/fVo6590rnmc

Will having YouTube videos available on my website bring me more readers? Who knows, but they are available if someone happens to stumble across them.

A time/value analysis would undoubtedly indicate I would have been better off spending the time writing the next book. But hey, who said everything in life should be about the most efficient way to use my time? I had fun and who can resist the fire in the background?

~ Jim

This blog was first published 11/2/2014 on Writers Who Kill

Saturday, November 1, 2014

Two months left for 2014 Goals

I am using the fear of ridicule as part of my motivation to realize two of my 2014 goals: weight loss and exercise. To make that fear real, I need to periodically publish my results. After a few rocky months, I appear to still be on target, but all will not be easy in the last two months. Here is what I have accomplished on the weight goal:


The original 2014 objective was to lose and keep off twelve pounds. When I lost fifteen pounds, I knew that if I gained three pounds back I would still meet the goal, but I would not feel good about it. As a result, I modified the objective to keep off the whole fifteen pounds through year's end. It's an important modification because my weight has followed a yo-yo trend over too many years, and on average I gained three pounds during the last three months of the year.

I figured that if I am going to permanently keep the weight off this time, I need to start by not gaining weight in October through December. The green line represents the revised goal and I have stayed underneath it.

And the exercise goal in a chart:


Even with a bridge tournament and bad weather I met October's exercise goal. November will take concentrated effort. We'll be up north for half the month and the roads will not be good for running. (As I write this it is 16 degrees, so the road is frozen and slick.) Then we'll take a week visiting friends along our way south to Georgia for winter. Those are the challenges. I expect to return next month with another red bar that reaches the green goal.

In thirty days we'll both know how I did.

~ Jim


Tuesday, October 14, 2014

Blocking Political Spam

With the midterm elections three weeks away, political “advertising” is heating up. Thankfully I’ve found a way to stymie the system. Note I do not claim to have beaten them; it’s just one battle in a long war.

I have met no one other than a politician who thinks that when you sign your phone up for the “No Call” list that politicians shouldn’t be barred from robocalls and the like. However, since politicians pass the laws, they exempted themselves.

I found an app for my cell phone that now allows me to avoid their robocalls and pitches for contributions. “Mr. Numbers” works on Android phones. I’m sure there are equivalent apps for Windows and Apple operating systems. I’m not even claiming Mr. Numbers is the best Android app. But here is what it allows me to do:

I set the app to block all restricted callers. These are folks who do not display a callback number. My theory is that if they don’t want me calling back, I don’t want them calling in. I originally did this to avoid telemarketers who get around the no-call list because they have some superficial link to a provider I have or had in the distant past. What I discovered is that as a bonus I no longer get political advertising or calls for contributions.

It’s a blessing I am passing on to you, unless you enjoy stringing folks along, in which case I don’t want to ruin your fun.

My only concern is that the politicians will outlaw software that restricts their “first amendment right to harass me” – er –their “free speech.” It’s a war and like any war the instruments of battle will escalate. Right now, I have the advantage and I am enjoying it.

~ Jim

Wednesday, October 1, 2014

2014 Goals Progress

Another month has dashed by, and it is time to fess-up to how I did with my twin goals of exercise and weight. Good news all around. I met my exercise goal for the month and reduced my weight below the 12-pound weight loss goal for the year.



The key for the last quarter of the year is to maintain exercising and keep off the lost weight through the end of the year. Overall on exercising, I now have had more months of success than failure and have the opportunity to end on a solid note.

Keeping weight off after losing it has been a continual problem for me. On average I've gained three pounds in the last three months of the year. If I were to do that this year, I would still technically meet my original goal, but it would not feel like a success. Therefore, I'm mentally resetting that goals so success means that I continue to maintain the current 15-pound weight loss.

Check back in a month and we'll see how I've done.

~ Jim

Thursday, September 25, 2014

Authors United Next Tries DOJ

After deciding Amazon’s Board of Directors might not understand Amazon’s business practices, [see my previous blog] Authors United now thinks they can educate the United States Department of Justice on antitrust issues as reported by The Bookseller in this article .

According to Douglas Preston, the leader and spokesperson for Authors United, “They (DOJ) are expecting this letter and they have told me that they welcome any information we can provide.”
Well, sure. The DOJ is always interested in information about any company’s anticompetitive actions. However, unless Authors United can provide specific actions Amazon has taken and document their competitive consequences, Authors United has nothing. And, given the lack of details in anything they have so far produced, I am so far past skeptical as to be disbelieving.

Here’s a suggestion for Authors United: Work with your publishers to provide consumers alternatives to Amazon. Have your publishers offer your books at significant discounts. Offer free shipping on all hardcover purchases or orders of paperbacks that exceed, say $35. Figure out a way to sign those books. Encourage your publishers to offer larger discounts to independent bookstores so they can provide lower prices to their customers.

While the Amazon/Hachette dispute continues each of the A-listers (regardless of publisher) could schedule joint bookstore appearances with Hachette debut authors garnering them more than sufficient publicity to offset Amazon’s antics and make positive news in the bargain.

Be creative in ways that have a real chance for making a difference in the future of publishing and in the lives of your fellow authors. Put on your grown-up clothes and act as adults, rather than continue your recent antics, which remind us of spoiled children asking any and everyone else to make a “bully” play fair.


~ Jim

Wednesday, September 17, 2014

Latest Authors United Letter Misfires

The group Authors United spearheaded by Douglas Preston intends to send (or has sent, depending on when you read this) a letter to the Amazon Board of Directors regarding the Amazon/Hachette dispute. Given the dispute has been going on for months, it seems unlikely any director is unaware of the situation, so what is the purpose of the letter? Perhaps the group is trying to put pressure on the directors in their other working capacities? It will be interesting to see what (if any) reaction this letter brings from the directors.

My concerns are not with writing a letter to the Directors, but with the content of the letter. If the drafters would stick to facts, they could make a more powerful argument. But they stray from facts into justification, and that negates the power of the facts.

Potent charges:

“About six months ago, to enhance its bargaining position, Amazon began sanctioning Hachette authors' books. These sanctions included refusing preorders, delaying shipping, reducing discounting, and using pop-up windows to cover authors' pages and redirect buyers to non-Hachette books.

These sanctions have driven down Hachette authors' sales at Amazon.com by at least 50 percent and in some cases as much as 90 percent. These sales drops are occurring across the board: in hardcovers, paperbacks, and e-books. Because of Amazon's immense market share and its proprietary Kindle platform, other retailers have not made up the difference. Several thousand Hachette authors have watched their readership decline, or, in the case of new authors, have seen their books sink out of sight without finding an adequate readership.”

Had the authors next provided specific data to back up their statements—for example, screen shots of pop-ups, a case study of a debut author whose debut was ruined, and perhaps made pre-dispute post-dispute comparisons—they could have cemented in their readers’ minds how Amazon was harming specific authors. Putting faces on the problem would invoke wider sympathy. Authors who have “sold more than a billion books” should know about proper characterization.

Where the wheels fall off their arguments

The wheels fall off their battering ram in their attempt to storm Amazon’s gates when they stray from facts and wander into attempts at wider justification. The collapse starts with the patently false conclusion of this sentence, “We'd like to emphasize that most of us are not Hachette authors, and our concern is founded on principle, rather than self-interest.”

These authors make their living (multiple millions of dollars a year for some of them) based on a traditional publishing model. Threats to that model, including Amazon’s tactics and marketplace power, are threats to their individual welfare. Amazon is negotiating with Hachette today, but soon it with be negotiating with the other four of the big five publishers. Those signing authors with contracts with the other big publishers want Amazon to back off now before their publisher suffers similar negotiating tactics.

“Efforts to impede or block the sale of books have a long and ugly history.” Reading this sentence, I conjured piles of burning books in the streets and school boards banning books because their content was “anti-religious,” or “smut” or “Devil-worshiping.” Is this what they would have us believe Amazon is doing? Where is their angst about independent bookstores refusing to carry books published by their competitor, Amazon? Perhaps I missed it or it’s coming soon. I’m not holding my breath. This dispute is more akin to Walmart deciding to not stock any P&G products, but carry those of Unilever instead, than banning the sale of toothpaste.

But these authors disagree, and state, “Amazon has every right to refuse to sell consumer goods in response to a pricing disagreement with a wholesaler. We all appreciate discounted razor blades and cheaper shoes. But books are not consumer goods. Books cannot be written more cheaply, nor can authors be outsourced to China. Books are not toasters or televisions. Each book is the unique, quirky creation of a lonely, intense, and often expensive struggle on the part of a single individual, a person whose living depends on his or her book finding readers. This is the process Amazon is obstructing.”

How wrong can they be?

Their analysis is wrong on several accounts: Books are indeed consumer goods—who do they think buys their books if not consumers? Books can and are written more cheaply than those accepted by major publishers. Most fiction authors (based on numbers of authors, not sales revenue) write on speculation. They put their heart, soul and countless hours into creating their manuscript. Many will give their work away or sell it for $0.99 just to have others read it. That each book is unique is immaterial.

No person has a right to demand society pay in order for the individual to follow his dream, nor to specify how that dream should be funded. “Publishers provide venture capital for ideas. They advance money to authors, giving them the time and freedom to write their books.” Is the implication here that, if Amazon is successful, publishers will no longer use advances as a selling tool to entice authors to sign with them?

They would have us believe that because of the additional risk caused by Amazon’s negotiating tactics, publishers cannot afford advances? In 2013 the big five publishers had record earnings (over $1 billion), according to Publishers Lunch with gross profit margins of almost 11% on sales of almost $9.3 billion. The letter’s authors need to document any decline in advances that has occurred after (and therefore perhaps because of) disputes with Amazon.

At best, it is too early to tell the effect this dispute will have on advances, and ignores the change in large publishers’ practices regarding advances for midlist authors—a topic too large to address here.

Amazon’s purported responsibilities to the current system

The letter goes on to ask, “What will Amazon replace this process with? How, in the Amazon model, will a young author get funding to pursue a promising idea? And what about the role of editors, copy editors, and other publishing staff who ensure that what ultimately ends up on the shelf is both worthy and accurate?”

The publishing arm of Amazon pays advances to some of its authors; but more to the point, why is it Amazon the retailer’s responsibility to devise a solution to a postulated problem of declining advances? And what does the role of editors, copy editors, etc. have to do with anything relating to Amazon’s tactics in negotiating with Hachette?

Amazon (the retailer) is a middleman, selling content—in this case books. If the quality is high (however consumers define quality), people will buy it. If they don’t like the product they don’t buy it unless they have to, and books are not (for most people) a required purchase. Consumers don’t much care how the product is made; they only care about the overall level of satisfaction the product provides.

Furthermore, if venture capital is so important to authors (especially nonfiction per the letter), are publishers the only source? Today crowdsourcing funds a variety of businesses and some authors are selling pieces of their future revenues. In times past, individual patrons sponsored artists; perhaps aspiring authors need to find angel investors for the 21st century. My point is that even if advances are important for authors, publishers, while the current source, are not the only source, and it is unlikely Amazon is the only cause of their demise, should that happen.

My advice to the authors of these letters intending to get public support for publishers in their disputes with Amazon: use your talents to paint rich pictures of how regular folks have been devastated by Amazon’s practices. Give us a debut author whose books gathered terrific advanced reviews, whose sales at Barnes and Noble and Independent Bookstores are gangbusters, but because they are not listed on Amazon, the publishers will consider the book a flop. Find a single parent author whose spouse died fighting in Iraq and who is the sole support for three small children. Imply Amazon has ruined this family’s lives, even if it’s not strictly true. Stick a petition on Change.org and get a hundred-thousand signatures. Have Michal Moore make a documentary. Then, maybe you can put some pressure on Amazon.

This letter? An embarrassing misfire.

~ Jim

Monday, September 1, 2014

Update on My 2015 Goals

I have periodically posted on Facebook my progress or lack thereof on two of my current goals: Losing 12 pounds and keeping that weight off and exercising sufficiently each month to earn 250 “Cooper Aerobic Points.” Commentary and graphs follow.

 Commentary on Weight:

As of today’s weigh-in, I have lost 9.5 of the 12-pound goal. I’ve discovered two main factors determine the daily variations: (1) salt—eating something salty at dinner or for a later snack retains a ton (well, 1-2 pounds, actually) of water. That’s great if I don’t want to get up in the middle of the night to pee, but I feel bloated the next morning. I can even see the difference in how fat my fingers look (although I can’t scientifically prove that last observation). (2) How full my large intestine is. A couple of days of cheese dishes and Mr. Regular clogs up. Both phenomena are temporary, but evident in the one to two pound weight changes on a daily basis.

The long flat stretch in the graph illustrates when we were on vacation and I did not have access to a scale. I did, however, have access to too much food, especially desserts, and too little willpower, with the result that I gained five pounds during the month of vacation. I’ve removed that weight again and so as September appears, I am back to where I was in early June.

Commentary on Exercise

I find it very difficult to exercise when traveling. I know this is also a matter of willpower and better planning. I need to recognize that while in hotels I must use the treadmill (I much prefer being outside) or settle for a short walk outside at a reasonable clip. I can’t run on cement (shin splints) and in many places running on the streets is too dangerous. And, I will have to do that exercising in the early morning before we start our day’s journey. Waiting until after dinner, which often occurs later than normal, is a recipe for diminished will.

In August I pulled my left hamstring while jogging, which created an awesome bruise at the back of my thigh. For a change I worked hard at treatment and even with a lost week and a half I was able to still reach the 250-point monthly goal with some to spare. I’ve discovered the usefulness of compression shorts and tights to encourage my muscles to behave themselves.

Future

September in the U.P. is generally cooler (good) but wetter (bad) than the summer months. Cooler temperatures makes it more enjoyable to exercise. The rain makes it less attractive, and so I have set my bicycle on the cabin porch to act as an exercise cycle for rainy days. I tried it out once rainy day in August and it worked fine.

Everything is in place for success. Now, as the old Nike commercial says, I have to JUST DO IT.

~ Jim

Monday, August 25, 2014

The Chosen and the Wannabes

I’ve recently read three books by bestselling mystery authors. If I had written any one of them, they would not have been published by a big five publisher. Sour grapes? I don’t think so; I think it reflects the reality of the hoops a wannabe author has to go through today to be published by the Big Five.

One of the bestsellers started with a bang and then proceeded to give not one, not two, not three, but four solid pages of backstory. In order for me to win a Big Five publishing contract, I first need to have an agent agree to represent me. I can (almost) guarantee that no agent would ask for the full manuscript if I presented them with a terrific page and a half followed by four pages of backstory.

Anyone disagree?

Oh, by the way, it was a decent story once we finally got to it. However, the only reason I could see for forcing the backstory down my throat in one huge chunk was laziness. It would have taken more time and effort to break it into smaller chunks and provide it as/when needed. I kept reading because I was committed to reading the book and taking notes on what this author did well (and there were a number of things).

The second bestseller drove me crazy with mid-scene POV shifts. No white space between character A’s POV and character B’s POV. One paragraph it was A, the next it was B. Most were clearly intentional, illustrating a style I find often in literary works, but less frequently in the mystery genre.

Okay, I thought, when you’re rich and famous, you can push the envelope. I’m good with that—until I came to several POV hops: a quick intraparagraph POV shift from A to B to A. If intentional, I wondered why. If not, I wondered where the editors were.

And yet, those POV switches didn’t faze Jan a bit when she read the book, which she liked. When I pointed out the “errors,” she acknowledged she had read through them because she was into the story. Fair enough, I thought. I’m too critical because I write to avoid those types of POV shifts, and so they jar me when I do read them.

However, I do think agents would pitch my submission into the reject pile as illustrative of poor writing technique.

Number three had me going from page one. It continued strong through the middle and kept me reading one night much later than I had intended. Really good stuff. The ending was a total disappointment. It felt as though the author hit his word count target, added one final chapter so there was some conclusion, and wrote THE END.

The beginning sure sold the story. The ending convinced me not to read the next one, which I doubt was either the author’s or publisher’s intention. I am of the “fool me once, shame on you; fool me twice, shame on me” camp. There are too many good stories to waste time if I can afford it, so this author is off my preferred list.

Which is what agents say as they go through their submission piles. I’ve come to the conclusion that wannabes must write well. Bestselling authors must write quickly. The best of the best can do both.

I was at the Mystery One bookstore in Milwaukee earlier this year speaking with the owner, who said something to the effect that, “The best writing today is being done by midlist authors.” To which I might add, and some of the wannabes.

~ Jim

[First published 8/24/14 on Writers Who Kill]

Thursday, August 14, 2014

Understanding Differing Author Views on Publishing

Here is my claim: anyone who purports their views to be totally independent either (1) has no skin in the game, (2) is honest, but fooling themselves, (3) is dishonest and trying to fool you.

Harsh, I know, but I do believe it to be true and a useful guide for reading anyone’s opinion.

Your immediate question should be, so Jim, in this blog are you representing (1), (2) or (3). Unfortunately, my earnings as an author qualify me as having almost no skin in the game. However, I do have a worldview that causes me to want to convince you to look behind rhetoric to understand what drives the presentation of stated facts. I guess that means you’ll need to decide if I am fooling myself with my purported independence or fooling you by cherry-picking facts.

The Amazon/Hachette business dispute is acting as a lightning rod for authors. Amazon and Hachette are negotiating over contract terms; and as part of their attempt at economic leverage, Amazon had been giving Hachette titles poor treatment as compared to books from other large publishers. Two competing forays by authors into the public discussion of the Amazon/Hachette negotiations are the letter paid for and signed by 900 authors, and a petition on Change.org asking authors and readers to back Amazon’s position (8.400 signatures). Let’s take a peek at each.

What 900 Authors Want You to Know

Here is the full text of the “Authors United” letter published in the Sunday edition of the New York Times. The biggest complaints (all true from what I can tell) from authors revolved around four issues. 
  • Amazon has chosen not to list all pre-order books from Hachette in their online bookstore
  • Amazon has chosen not to stock some Hachette books at normal levels, leading to longer than normal delivery dates
  • Amazon is not discounting Hachette books as much as they normally do (and are still doing for other publishers)
  • Amazon is suggesting alternative, less expensive books on some pages for Hachette books.

The signatories include Hachette authors, who naturally have an economic interest in hoping Hachette prevails. To the extent they are losing sales by Amazon’s tactics, and some clearly are, they are being economically disadvantaged in the dispute. Publicity for this letter has made hay over the fact that Hachette does not publish most of the signing authors. The trumpeting would have you believe those authors are signing in solidarity.

However, those authors at other large publishing houses have almost as large a stake in the outcome of the Hachette negotiations as do Hachette authors. Their publishers will shortly have to deal with Amazon on the same contract issues, and they presume Amazon will continue to use the same negotiating tactics. After all, Amazon is using them on others, such as the recently reported dispute with Disney. (Blu-ray titles are experiencing the same issues)

Their letter goes on to state that, “we feel strongly that no bookseller should block the sale of books or otherwise prevent or discourage customers from ordering or receiving the books they want.” Yet there has been no equivalent angst by this group toward Barnes and Noble and many independent booksellers for refusing to carry Amazon Publishing titles. Why? Because that is not an economic issue for authors published by big publishers.

They suggest they are not “taking sides on the contractual dispute between Hachette and Amazon” and then go on to ask Amazon to give up its bargaining advantages, as if that request is not taking Hachette’s side.

One last point on the Authors United letter: they close by requesting readers to tell Jeff Bezos what they think and provide his email address. Bezos can tell what readers actually think by looking at Amazon sales – emails aren’t going to cut it.

8,400 sign Change.org petition

Now, let’s look at the petition to Hachette on Change.org to “Stop fighting low prices and fair wages” created by Joe Konrath, Hugh Howey and others and signed by 8,400 people to date.

A key line is “Amazon, in contrast [to big publishers who purportedly control what you can read], trusts you to decide what to read, and they strive to keep the price you pay low. They allow all writers to publish on their platform, and they pay authors between 35% and 70% of the list price of the book.”

The interesting thing is that the dispute is between Hachette (the publisher) and Amazon (the retailer, not Amazon the publisher). There is no doubt that many people are published today because Amazon has let anyone inexpensively self-publish and market their book. To the promoters of this petition, that “freedom” means we should give Amazon a free pass on the rest of its operations. Amazon is good, other publishers are bad. Therefore, support Amazon as it fights against the other publishers.

Authors and readers alike would do well to separate Amazon the publisher from Amazon the retailer. It is Amazon the retailer who is battling Hachette for profit margin.

The petition itself regards a proposal made by Amazon to create a fund jointly funded by Amazon and Hachette to keep authors whole. How generous of Amazon. While they continue to try to cripple Hachette sales they cause Hachette more pain by making them pay for the decreased sales! A small price for Amazon to pay to help solidify its bargaining position.

The petition is short; the “explanation” is almost 2,500 words. It is a full-out apology for Amazon. So why are these authors so enamored with Amazon? Because their livelihoods depend on it. Self-published authors make most of their sales as ebooks and Amazon sells the most ebooks, by far. If people stop using Amazon and turn to independent bookstores (very few ebook sales) or Barnes and Noble (either brick and mortar or electronic), their sales will plummet. Of course they are in Amazon’s corner.

The 900 might have done better to simply notify the public that because of Amazon taking a hardball approach to the protracted negotiations, readers might find it difficult to buy certain authors’ books from Amazon. While this is no different than what big stores do to their merchants, it is affecting authors. Readers need not be inconvenienced; they can find the books elsewhere. Including QR Codes to Barnes and Noble and a few favorite Indy Bookstores (who might have helped foot the bill) in the notice would help readers easily buy from the alternative stores. If Jeff Bezos saw a decrease in sales, he might reconsider whether his negotiation tactics were working.

The 8,400 should try to take advantage of Amazon’s making it difficult to buy some books by running promotions of their own books.

And we readers should realize that Hachette is looking out for Hachette, Amazon is looking out for Amazon, and we can any book we want even if Amazon isn’t carrying it.

~ Jim

Monday, August 11, 2014

Driving Lessons

Beastette & Little Red
We’ve just had our family from Minnesota for a visit: two parents, two kids (almost 10 and almost 13) and dog (2+). One advantage of living deep in the woods is that kids and dogs are permitted a level of freedom unavailable at home. A great deal of learning comes from that freedom. The dog ditches her lead for the duration, roams the woods, drinks from mud puddles, swims in the lake and barks at critters without being yelled at (too much).

Children enjoy many of the same loosening of rules: they too can roam the woods, swim in the lake (under supervision), make lots of noise, sleep on the screened porch or out in a tent, and they can learn to drive years before the socially accepted, legally enforced standards.

First it starts with ATVs—all terrain vehicles. We have two: Beastette (a powerful yellow Polaris; at the time of its purchase I owned “Beastie,” a Ford Expedition) and Little Red (a slightly lower horse-powered red Honda). A sticker on Beastette indicates no one under age 16 should operate it. Another indicates you should not ride double. Both of these are important considerations if you operate an ATV off road or on slopes where an ATV can tip over. (When clearing our house site of trees, I managed to back Beastette into a hole and tip it over on myself. It hurt.)

When the kids are small we plop them in front of us and take them on ATV rides. They have to wear their bike helmets (the better to dent my chin with) and we never go superfast. The kids like bumps, so I make a point to run over all the rocks in the road. Starting around age 8, I let them do the driving, with me sitting behind them and early on with hands also on the steering bars—it takes some muscles to turn an ATV, and in case of danger I can knock a thumb from the throttle and squeeze the brakes.

They learn to steer; they learn to anticipate places where they need to go slower. I even teach them how to use hand signal turns. And once the older one was strong enough (roughly age 12) I allowed her to drive the ATV on her own, but only on “decent” trails, and I’m right there with the other ATV. They learn to drive responsibly. In a couple more years, I’ll let her go off on her own—as long as we have an agreed route and expected time of return.


Red Rover
This summer we tackled driving the car. The older is almost 13 and taller than her grandmother. There is no physical reason she can’t handle a car. She’s reasonably mature, and I’m in the passenger seat to coach, praise and if necessary throw the car out of gear and apply the emergency brake, since unlike a driver’s ed car there is no dual set of brakes. Our roads are dirt, not smooth, which inhibits going too fast—helpful when driver reactions are not yet honed.

I have been driving for almost fifty years. Much of driving becomes habit or muscle memory, both of which form from practice. I don’t have a how-to driving manual I can pull out to teach my grandkids, and the lessons I gave my younger son at camp are almost fifteen years old. And some things are entirely new.

When you first get into a car, what do you do? If you are like me you adjust the seat and then check the mirrors, first rearview mirror and then side mirrors. When I taught my son, the only seat adjustment was forward and back. Maybe you needed to adjust the tilt of the seatback if someone really tall had been in the car and cranked the seat backwards to make up for long legs. Now, in addition to those two adjustments, my car seat has up and down, tilt of the front of the seat, lumbar support – and everything is power. What used to take one minute of explanation and experimentation, this time required me to crouch next to the open driver’s door and guide her fingers to the right places to push various buttons to provide the correct seating for her.

Because of driving ATVs, we could foreshorten training about which way to turn the ignition key, but I forgot until the third time out to tell her to use the same foot for accelerator and brake – and interestingly when she converted to the right foot only approach, her braking became smoother.

When you first start to drive there are so many things to learn and many tasks must be done sequentially or simultaneously: accelerate smoothly, brake smoothly, learn where the right and left sides of the car are, learn where the tires are, signal turns, make turns without over- or under-steering, how to execute a k-turn, how to adjust windshield wipers, turn on/off lights (radio is forbidden during driving lessons).

We used rocks in roads to learn about where the tires are (try to run over that rock with your left tires), where the front bumper is (try to stop just before that rock), where the middle of the car is (drive so the rock will be in the center of the car), the space of the side mirrors (drive so the mirror just touches the evergreen).

My kids did a lot of backing up. I discovered with a rearview camera, backing up became much easier for children of the video game era, and we didn’t need to spend proportionally as much time as I had with a previous generation.

An hour a day seemed to work well. With plenty of skills to practice, we could keep it interesting and fun given I really didn’t want to go too far off my property given the illegality of the activity.

Mama Blue
The capstone activity for year one was moving from an automatic to manual transmission. I’ve always preferred manual transmissions (except in rush hour traffic), but I taught my children how to drive with automatics because it was one less thing to worry about. However, I insisted they learn to drive standard transmissions because that knowledge might save a life in case of emergency.

So for the last day out, we switch from my car to Jan’s, a basic Subaru Forester with manual transmission. I start the lesson by demonstrating all the things she will do wrong. As I’m explaining, I purposefully stall the car. It startles her and I laugh and explain what happened. I next do the airplane takeoff routine: applying lots of accelerator while keeping the clutch engaged. “Whoa!” she says. We discuss how to fix that problem. Lastly I get the car to do the herky-jerky when it’s in too high a gear with too little speed.

I explain what the clutch is doing in terms of her multiple-speed bicycle. I don’t know why I never thought of that analogy before, but she catches on quickly to what happens in a stall, airplane takeoff and the herky-jerky. Then it’s her turn. We switch seats and after she adjusts the seat and belts herself in, she figures out how to adjust Jan’s mirrors. Next we go through the gear box shifting up and shifting down, and I describe differences she might find—in that case of emergency—like some cars require you to push down to get into reverse.

She’s ready and goes to start the car, but has forgotten that she needs to depress the clutch before the ignition will work. A lesson reinforced is a lesson learned. We’ve talked about the “friction point” of every clutch: that the secret is to find that point and then you can start the car without using the accelerator. That is what we practice: clutch only starts, braking to a stop without stalling, starting again. I have 3/8ths mile of road before reaching my property line. Along the way are some hills, so we learn that starting on hills we have to involve the accelerator. This allows her to experience her own airplane revving moment and one short stretch of herky-jerky before stalling. We start and stop and occasionally stall our way to the end where we need to use reverse to turn around.

Bless her: she remembers to signal the left hand turn from which she’ll back out.

No more backup camera. She learns to loop her arm over the back seat and that reverse is a bit higher gear than first and with the wheels turned she’ll need a bit of gas. The turn made, we start and stop ourselves back to the driveway, turn around and switch drivers so I can demonstrate shifting. First I do several upshifts for her, describing the process, the timing of gas pedal release, clutch, shift, gas pedal and clutch. Then downshifting with a very quick history lesson about synchromesh should she happen to meet a car that requires a full stop to engage first gear.

She’s back to driving and now she has to accelerate fast enough to allow second gear. The first time she operates the pedals and I shift. Next she operates pedals and puts her hands on mine when I shift. Next her hands are on the gearshift, mine on top. Last she’s on her own. We make it to second gear several times before reaching our turnaround. A couple of times she didn’t engage the gear and the airplane returned. Once we met the herky-jerky man. On the way back we repeat: start, second gear, stop; start, second gear, stop.

I decide she’s ready.

“This time,” I say, “we’re going to get into third gear and you are going to have to go fast enough to do it.” She nods, wary, a bit worried, I think, but I know she can do it. I point to a spot by which I want her to be in second gear. We’re off and she accelerates smoothly, shifts into second gear and eases off the accelerator. “More gas,” I tell her and she responds. I allow her to stay in second around a bit of a curve with a threatening boulder on the left side. “Now,” I say, “accelerate and shift to third halfway down the hill.” She does, and I see the creep of a smile, but again she doesn’t continue with sufficient gas after the shift and we’re starting to climb the hill.

“Okay,” I coach, “now a downshift.” She complies, chugs up the hill, around another curve and I have her accelerate, shift to third, apply the brake, downshift to second. She remembers on her own to signal her left turn, making the turn she comes to a smooth halt.

She sits back in her seat. “That,” she says, “was overwhelming.”

I give her a big smile. “Oh no, my dear, you did it all! So, it wasn’t overwhelming. But, I’ll give you that it was whelming!”

She drives home, obtaining and staying in third, downshifts before the left turn into the driveway and comes to a perfect stop before the house. School starts in a couple of weeks and she’s earned her bragging rights for the start of eighth grade: “I drove a stick shift!”

“Yes you did,” I say. “Yes you did.”

~ Jim

[This blog originally posted on Writers Who Kill 8/10/14]

Wednesday, July 30, 2014

How to Game Amazon Unlimited

Today’s blog is courtesy of Seamus McCree, who has always had an interest in how people can scam any financial transaction. Since he is a fictional character, take his advice with a pinch (no, make that a saltshaker) of salt. ~ Jim

Mr. Jackson’s recent post demonstrated that Hugh Howey needs a course in remedial math, given the faulty design and interpretation in his Author Earnings Report. I have some good news for Howey on how he can afford to take a little time off for coursework.

If he follows my advice, he will accrue two benefits. He’ll earn substantially greater profits from Amazon Unlimited than he otherwise would. And, because Amazon apparently uses loaned-book data from Amazon Unlimited as part of their bestseller determination, it will have the added benefit of maintaining or improving Howey’s ranking on Amazon’s bestseller lists, which should help drive further sales.

It's FREE!


Howey (or any KDP Select author) needs to rally his fans to take advantage of the 30-day free trial of Amazon Unlimited. Here are the actual Amazon Unlimited Terms of Use, and they don’t appear onerous. Remember to cancel to avoid the $9.99 a month charge.

Gallons of e-ink have been spilled (a decent summary that includes links to other articles is this from CNET) either decrying the difference between the way Amazon pays KDP Select authors and those with standard publishing contracts, promoting what a good deal it is for everyone, sounding the death knell for books as we know them—or something in between. For authors, it comes down to how they are paid, and this is the key to helping Howey (or your favorite KDP Select author or even a legacy published author who has been included in the program to make it look good.). Every time a member of the Amazon Unlimited program reads at least 10% of a book under the program, the author is credited with a sale.

Now, if you happen to be a nonKDP author and your publisher has agreed to have your book included in Kindle Unlimited, when the reader hits the magic 10% mark, your publisher is credited with a sale at whatever price Amazon is charging to the Kindle ebook. The author will get royalties based on the sale. Good deal, huh? Unfortunately there aren’t many traditionally published novels currently available as part of Kindle Unlimited; most of the 600,000 titles are from the self-published folks using KDP Select.

So, back to helping Hugh Howey. When I was writing this article, Howey had 20 books listed in Kindle Unlimited. Here are the steps to give Howey some extra money, whether or not you like his books:

1. Register for your 30-day free trial.
2. “Borrow” Howey books (you can borrow a maximum of ten at a time).
3. Take your favorite print book (or a second e-reader) and start reading. Every time you turn a page, click page turn in your borrowed Howey book until you get to 10%, then close that book and start another. (To be safe, go to 11% or 12 % since there may be some junk in the beginning that Amazon won’t count.) Howey will be credited for a book sale for every book on which you reach the magic 10%. This approach should at least temporarily fool any Amazon algorithms to avoid counting any speed-readers who just flip through books.
4. Once you have “read” the ten books, borrow the next ten. If more have appeared, do it again.
5. With twenty books available on Kindle Unlimited, all you have to do is read two or three print books in your 30 days, follow procedures in item #3 and Howey gets credit.
6. Cancel your subscription before the 30 days are up if you don’t want to continue.

Because Amazon isn’t giving KDP authors the same deal as legacy publishers, it is not clear exactly how much Howey will make with every book your “borrow” and “read.” Anecdotal evidence I’ve seen indicates for books borrowed as part of Amazon Prime, KDP Select authors have been paid around $2. If the same amount holds, you can give Howey $40 of Amazon money just for having your reader open and flicking pages in a method that won’t tip Amazon off that you aren’t actually reading the book.

Oh, and if you are a fan of the Hunger Games or Harry Potter or Lord of the Rings, you can do the same thing and make sure Suzanne Collins, or JK Rowlings or the estate of Tolkien (and their publishers) receive some of Amazon’s largess.

There is an added bonus. Amazon is counting any book “read” in Amazon Unlimited as a sale for purposes of their various bestseller lists. This should help keep the KDP readers on top of those comical compilations of cosmic content curation, which will help justify Howey’s claims that independent authors are making more money than those published by Big-5 publishers. Except, that while KDP Select authors may be credited with a couple of bucks for each read, the Big 5 publishers will be paid full ebook list price for any of their books you read.

Buying Your Way to an Amazon bestselling author


We’ve learned how authors and their agents can buy their way onto and even to the top of the major bestseller lists (here and here are two articles). There’s a way KDP Select authors can get in the game with a little help from their friends. Let’s say a new company forms. Call it Bestsellers-Guaranteed (B-G for short). B-G’s plan is to collect a cadre of “readers”—people who are willing to have B-G control their ereader between (say) midnight and six every day.

Aspiring Bestselling Author Ian Desperate hires B-G to propel his sales to the top of the charts. For every book read by one of B-G’s “readers,” Amazon pays Desperate (say) $2.00 for each book “read.” He turns $1.00 over to B-G. They in turn pay their “readers” fifty cents for every book “read.” [Actually, B-G will require upfront payment and guarantee Desperate a certain number of “reads.”] Utilizing the app placed on their cadre of robot ereaders, B-G turns the page at the actual reader’s normal pace. The app reads a book a night, earning about $15 each month for the owner of the ereader and for B-G. Since the monthly subscription costs only $9.99 the ereader owner makes $60/yr. for leaving their reader on and connected to a network overnight. B-G makes $360/yr./device less expenses. The author makes plenty of money they wouldn’t have gotten before, offset by the few sales they would have gotten anyway from this group of people.

Presumably, an author who wants top bestseller status will have to pay extra for Bestseller-Guaranteed’s services, but I’ll leave the contract terms to the fictional enterprise and author to figure out.

CAVEAT


You heard it here first – but you heard it from a fictional character, who can’t be sued or brought to trial for aiding and abetting fraud. My creator, James M. Jackson, disavows this get-rich scheme. He’s not suggesting it as a strategy for any author or for any individual or corporation. You do it, he is not responsible.

Do I think some people will try to game the system? Yes, I do. It is something Amazon will need to combat, because if a fictional character can figure this out, some human will as well. And while I have a decent set of scruples, many humans don't.

Of course, if Howey wants to send me (Seamus, that is) on a fully paid (fictional) holiday for bringing this to his attention, that would be okay.

~ Seamus McCree

Monday, July 28, 2014

Author Earnings 3rd Quarter Report: Making an Iceberg from an Ice cube?

Howey sees an ice-cube, and shrieks 'iceberg'." ~ Philip Jones, editor Bookseller


Hugh Howey (author of the Wool series published by Kindle Direct Publishing) published his July 2014 Author Earnings Report. Howey is an unabashed promoter of self-publishing and of Amazon, and why not, he’s done very well by both. However, his success does not mean he is an expert on publishing in general.

Many people have questioned the methodology in his previous reports. Essentially, he pulls data from Amazon’s eBook “bestseller” lists. Given Amazon's "bestseller" lists currently contain around 120,000 books, [and doesn’t that say something about Amazon’s marketing?], Howey estimates that covers about half of Amazon’s ebook sales. Using an ebook’s Amazon ranking, he projects the number of sales for each book. He then uses those figures to “prove” self-publishing is much preferred over traditional publishing.

Looking at sales from 120,000 books sounds impressive. However, of those books, only 40,000 had any sales on July 14, 2014, the day the data was harvested. Of those 40,000, roughly 10% sold a single book that day. Only 15,500 books sold more than 10 copies on the chosen day.

I’ve taken two claims from the latest report and analyzed them:

CLAIM: This makes indie authors, as a cohort, the largest publisher of ebooks on Amazon.com in terms of market share.

Facts, as taken from his report: Indies sold 31% of eBooks on Amazon, Big 5 sold 38%, Small and Medium Publishers sold 20%, and Amazon Publishing (segregated from other small publishers because of its relationship with the Amazon online sales) sold 6%. By calling the collection of thousands of Indie authors a cohort, he asserts they are the largest publisher. EXCUSE ME? Are Indie authors in a profit-sharing plan so they can be combined and share their wealth? How is it possible to consider traditional publishers separately at the same time Indie authors are lumped together? This construct is a fiction of the greatest order.

Malarkey such as this gives truth to the statement that “There are lies, damn lies, and statistics.” Talk about a bad use of data!

Adding the Big 5, Small and Medium Publishers, and Amazon Publications from Howey’s data (no matter how flawed), here’s what he should have concluded: Even on Amazon, ebooks from Traditional Publishers Still Outsell Indie Published eBooks almost 2-1 [64% to 31%].

CLAIM: We can now say that self-published authors earn more in royalties than Big 5 authors, combined.

First, let’s put some (implied) qualifiers in here: (1) we’re talking ebooks only, and (2) we’re restricted to Amazon sales. Now, to the facts from Howey’s report. To determine royalties, he takes the imputed sales data based on Amazon ranking, applies the known book price to the sales, and imputes author royalties based on assumed rates. Although self-published authors can choose from two royalty scales, for eBooks most will choose the 70% rate, and that is what he uses. For the big 5, Howey assumed a 20% royalty. (His calculations show Amazon takes 20% off the top, the publisher pays a 25% royalty on the remaining 80%). While 25% is an “industry standard,” I have read that some best-selling authors (just the sort of people included in Howey’s report) have negotiated higher rates. Therefore, it is possible that the Big 5 author royalties are understated, but I have no way to quantify by how much.

I know some small publishers pay higher royalties than 25%. My own royalties for Kindle books have averaged 33% of list price—that’s 165% of Howey’s assumption . I feel quite confident when I say the royalties computed for small and medium publishers are understated.

Howey’s calculations show Indie authors earned 39% of total royalties paid, the Big 5 authors earned 37%, authors with small and medium publishers earned 16% and Amazon published authors earned 6%. Depending on how understated the big 5 royalties are, the report might have been reasonable to claim that “Self-published authors earn more in royalties from ebooks sold on Amazon than do the Big 5 authors,” although even that could be a stretch.

Using even this modified statement to crow about Self-Publishing’s superiority misses several large points.

Point one: Many self-published authors only publish ebooks and limit their distribution to Amazon because of certain marketing advantages Amazon offers them for exclusivity. Howey’s reported royalties for these authors represents their total royalties for the book (with the possible exception of audiobooks). Big 5 authors sell across multiple ebook platforms. I am not a Big 5 author, however Amazon only accounts for 70% of my ebook sales. Not that this is appropriate, but if we do as Howey does and project from one instance to impute the whole, we take my 70% and apply it to all the Big 5 authors and get significantly different results. Instead of producing income at a level equal to only 95% of Indie published authors, Big 5 authors would be earning 135% of what Indie published do. [This is wrong on so many levels, but it does highlight the point that for many Indie authors Amazon is the whole enchilada, and for Big 5 that is not the case. Also, between writing this and its publication, I found an article that indicates that in the U.S. Amazon represents 60% of Hachette’s ebook sales. In the UK it’s 78%.]

If Howey took into account all ebook sales regardless of vendor, his beloved comparison falls flat. When we also realize that all Big 5 authors are selling hard covers or follow-on paperbacks that generate royalties as well, not to mention what might be happening in international sales, to make any statement about royalties for Indies vs. Big 5 is specious.

One further point: Howey’s purpose of these studies is to highlight to individual authors why Indie publishing is superior to traditional publishing. An individual author is not a class of authors, and it is important to disaggregate the numbers. Here’s a different way of looking at some of Howey’s results.

Average Author Revenue per “best-selling book” based on Amazon ebook sales:

Big 5     $27.26     Indie     $17.58     Small and Medium    $3.96     Amazon     $122.18

Of course, if we removed the 80,000 books with no sales from the equation, results change and voilĂ , now Indies do beat Big 5.

Big 5     $49.87     Indie     $53.22     Small and Medium     $15.18     Amazon     $163.60

However, Amazon tops both Indie and Big 5 by a 3-1 margin. So, shouldn’t the real story be that Amazon knows how to promote its own or knows how to pick ‘em or something trumpeting Amazon’s superiority?

I am not saying Indie is better or worse than traditional publishing. Nor am I saying that having Amazon publish your book is the best of all worlds. I am saying that Howey’s data shines a narrow beam of light on one small area of author income. It is an ice cube in an ocean of data. Howey’s conclusions are flawed and unusable.

~ Jim
(Originally Published on Writers Who Kill 7/27/14)

Friday, July 18, 2014

UK Author Income Survey: Much Ado About Nothing?

Since the Authors’ Licensing & Collecting Society (ALCS) published the summary of their UK Author Income Survey, much angst has been displayed in the blogosphere about this study claiming that one more nail has been driven into the coffin of aspiring authors.

The survey summary troubles me, not for what it says about author incomes, but about whether it has any validity. Consider the following:

The publication provides no footnotes or link to detail the mechanics of the survey. Proper surveys provide sufficient information about their methodology so readers can judge the quality of the results. The sample size appears large with 2,454 participants, but how were people selected? Do they represent a fair cross-section of the purported population of all UK writers? Are the methodologies consistent with previous studies? Don’t know.

Where did the full-time writers go?

The summary compares current results to those from a 2005 study (which I have not researched). Are the samples actually comparable, or is there a bias because of the sampling process? This might seem esoteric, so let me make a quick point before I lose you. In their 2005 study 40% of responders earned all their income from writing. In 2013 they found only 11.5% earned all their income from writing.

  • Does this mean that over 70% of writers who formally earned all their income from writing now must take part-time jobs?
  • Or does it mean the populations surveyed are substantially different?

I don’t know because they have provided no details on survey construction. The summary implies the former, but I suspect the two populations surveyed are not the same. AND if that is the case, then the reliability of any comparison between 2005 and 2013 is seriously jeopardized.

But wait! There’s more!

Their conclusion (p. 4) is nigh on dystopian, to wit: “If unchecked, this rapid decline in the number of full-time writers could have serious implications for the breadth and quality of content that drives the economic success of our creative industries in the UK.”

Purported Income Decline

They then go on (p. 5) to report that those who are full-time writers have median incomes of only £11,000 (approximately $18,800 at current conversion rates), fully 29% below the 2005 real monetary value reported and, 35% below the Joseph Roundtree Foundation’s calculation of a “socially acceptable standard of living,” whatever that means. The report then suggests that “Given that typical earnings from writing as a profession fall way below that standard, it is not surprising that the number of full-time writers is also declining sharply.”

Really? I am unconvinced. In the United States the number of fast food workers has not declined despite the fact that full-time earnings rarely come up to poverty levels. Perhaps these writers are taking supplemental employment, but show me the graphs and charts that illustrate the number of people who considered themselves full-time writers in the past and now work extra jobs to make ends meet. Where’s the graph showing how many people used to have full-time writing jobs whose employers cut hours so they now only work part-time as writers? The lack of those graphs implies to me that the survey either did not ask the question (why?) or the answer is not persuasive.

One last thing about their report of the purported decline in all writers’ income: the summary report does provide statistics about the age of the respondents (P. 3). Fully 29% were over age 65; only 17% were under age 44. Given all the other comparisons they provided, why not ones about the change in ages from the prior survey? Perhaps because it illustrates different groups of responders?

Rights Reversion

The study also includes a number of statistics about digital versus print, rights reversion, etc. Here’s an interesting one: “70% of [those exercising a reversion clause in their book contracts] went on to earn more money from the work in question.” The real question is why 100% didn’t? Why did 30% revert their rights and then do nothing with them? And why is it important to report that 70% earned more – as if that were some knock on the industry?

Self-publishing

Another statistic blared by the summary (p.10) is “Just over 25% of writers have self-published a work, with a typical return on their investment of 40%.” What does this mean? How do they measure investment? Does it include only out-of-pocket expenses, or does it impute an investment value for hours spent writing? And what does “typical return” mean? In all my statistics courses I never learned the mathematical meaning of “typical.” Mean—yes. Median—yes. Mode—yes. Normal and Student’s T distributions—yes. Typical—no.

Conclusion

If the ACLS wants this study to have relevance, to shed light on the writing industry, they need to provide methodology information to demonstrate results are comparable between 2005 and 2013 and that the selection procedures provided a population that represents the whole universe of UK writers.

~ Jim