I want to emphasize something from last week's post: While I see this as a widespread continuation of the "sea change" that hit publishing with the advent of viable self-publishing, I don't see this is a burst bubble or even a major issue for most indie writers. What we're seeing is a maturing of the systems, so there aren't so many "get rich quick" cracks to exploit.
And I hope it doesn't sound like I blame those who have suffered a bigger loss recently for their own problems: Their only fault, if they have one at all, is if they thought things wouldn't change and they didn't leave themselves an out. Quite frankly, most of the writers I'm going to talk about below, didn't think it was going to last forever (though they might have hoped), and they aren't just sitting around crying "woe is me" -- they're scrambling to rebuild other options they may have let lag.
I also apologize if this post comes out a bit rambling -- I see things changing around me pretty fast, and my points kept changing on me too.
Is There An Indie Shake Up?
I'm not 100 percent sure we're actually seeing a shake up so much as we're seeing people's perceptions and expectations are adjusting to the realities of life. When we start out on something new, we look forward, make our best guess as to what we are getting ourselves into, and then jump in. Our first guess is always going to be a little wrong, but it takes a little time for it to prove out and show us how it's wrong.
If there is anything going on right now in indie publishing, it's that we all started around the same time, and the first big wave of first and second guesses are just reaching their expiration date.
One of these "First Best Guesses" that is common not only in publishing, but in every new wave of business and finance, is The Pareto Principle. And, imho, it's a principle that tends to slam people against the wall pretty quickly.
The Pareto Principle Holds The Seeds of Its Own Destruction
The first couple years of Indie Publishing were very much like what we saw when the web went mainstream, and the subsequent sub-economies that rose from it.
It began with a lot of enthusiasm, creativity and experiment. And people took common sense advice (know your audience, produce more, specialize) and used it to succeed. But because the system was new, people were basically trying everything. And then they narrowed it all down to what worked best. That process is what the Pareto Principle is about.
The Pareto Principle is the concept that 20 percent of your efforts will bring in 80 percent of your profits. And 80 percent of your problems and costs will come from 20 percent of your business. So the idea is that you cut off that twenty percent that gives you more trouble than income, and focus on that 20 percent that gives you the most return.
The problem with the Pareto Principle is that it ignores the facts that:
1.) Usually there is a big overlap between the 20 percent that gives you trouble and the 20 percent that gives you profits.
2.) Sometimes that highly profitable 20 percent is dependent on some of the margin created by the other 80 percent. One would not exist without the other.
3.) Sometimes that top 20 percent is a temporary situation or fluke. It's a bubble, and can kill your business when it bursts, if you depend to much on it.
The publishing industry has long been in the thrall of the Pareto Principle. Or to be more exact, the Big Book Distributors (such as Barnes and Noble, and Borders) were in the thrall of it. That's why they killed the midlist to focus on the best sellers. Their only margin, then, was provided by new writers, whom they treated like cannon fodder.
(What is "margin"? It's room for error. Elbow room. Room to maneuver. It's that little bit extra -- the safety margin -- that keeps you from disaster, and also allows you to move more quickly and easily when something changes or goes wrong. Some people mistake it for "waste.")
Many indies have optimized their business model just like the big publsihers did. And just like the big publishers, some are now finding that the world is continuing to change, and they have to scramble for alternatives.
Luckily, indies have a MUCH more flexible business model. They can change course almost instantly, if their emotions, preconceptions and financial planning allow it. (For us, "emotions, preconceptions and financial planning" are our margins.)
But what they're finding is that it's harder and harder to find "hot spots" to exploit. Either the area is saturated or the audience moves on or the opporutnity gets cut off.
Recently the erotica market experienced a big shake up, and it makes for a good example. (Largely because some of the writers involved are generous and open people who have shared a lot of details.)
The Great Smut Disaster
(First off, I want to say that I'm not singling out these authors as having done something wrong. They're just an example of something that happens in smaller, less dramatic ways to all kinds of writers and business people -- especially small operators on the internet.)
A little over two years ago, Dean Wesley Smith speculated on a business model that could provide a writer with slow steady income just writing short stories. If you wrote a short story a week, just on any genre, and submitted the most marketable ones to commercial magazines, and self-published the rest at premium prices, in a couple of years you'd have a nice, tidy -- but slow -- income.
Several people on KBoards decided to try this. And soon they were reporting phenomenal results -- maybe not superstar level, but far beyond what Dean had predicted. So a few more people joined in, and others started watching the experiment closely and considering it.
But as more and more people reported in, I started seeing red flags waving. People would start this process writing all different sorts of genres, but they would discover that one or two genres were the ones that made them all the money. They started applying the Pareto Principle to what they were writing.
And in nearly every case that was being reported, they were focusing on the same couple of closely related genres: erotica or erotic romance.
Those who were reporting success with other genres were much more in line with what Dean first speculated about. And while that might be cool, the erotica writers were reporting ten times the return. (That's a guestimate.)
Which is to be expected and not that alarming in terms of the future of the strategy. Sex has always sold. There was no reason to think it wouldn't continue to be. (And also no reason to think it wouldn't be very competitive.)
But then I began to learn more about what the most successful people were writing. They were writing fiction that emulated very taboo subjects -- subjects which were downright forbidden by Amazon and other vendors. These writers were staying within the letter of the rules... but pushing the boundaries as hard as possible, and frankly, not staying within the spirit of the rules.
I'm not going to argue against the rights of these artists to create and publish what they choose. However, I can't believe they didn't see it coming that Amazon and other retailers would crack down on this.
I understand Kobo went so far as to remove ALL Indies from their UK store, at least temporarily. Amazon has been combing through the works, unpublishing things that have too extreme of a cover, or title or blurb. (Last I heard, they were letting the works themselves stay as long as they adhered to the letter of the rules -- but they couldn't be advertised or described in any way that appeals to those who would like the rules broken.)
And the writers have been scrambling to fix their books, or take them down before Amazon does. They're taking a second look at their business model. Most of them are flexible enough to go back to writing less troublesome works. But they have to adjust their expectations -- because the less troublesome works are also less lucrative.
Most of these writers -- at least the ones I know -- are smart people who can adjust. A few probably had a good idea this was coming and were just taking advantage of a great market while they could. And even those who are unprepared haven't been at it long enough to have dug themselves into a rut.
It's Not Really About Smut
It's easy to pretend that what happen was an anomaly just because those people were writing smut. The fact is, what happened to the erotica writers happens all the time. For instance, web businesses often use the Pareto Principle to totally optimize their business into the most lucrative niches and to select the most lucrative strategies.... and then Google changes the algorithms. And those websites saw their great income completely dry up.
I remember when I was writing articles for eHow, a situation very much like this happened. Everyone started writing articles all on the same lucrative subjects with the same lucrative take on it. They were making a good living. They started writing books to help each other do the same thing. And eHow decided they no longer wanted 25 million articles on How to Refinance Your Home and How To Lose Weight With (Ingredient of the Month) -- and they started deleting duplicates. And now these authors saw their income dry up.
In both of these cases, there were lots of warning signs, and lots more discussion about the problems than there were to warn the erotica writers. But if you're making money, it's kinda hard to listen to warnings. (And if you do, a lot of the time you listen to the wrong warnings and regret it.)
So.... What Does This Mean?
Things are changing so fast that I no longer think that my original conclusions to this post are relevant.
I think Scott William Carter has got it right when he said that the long tail is getting longer and more spread out. I think that opportunities are continuing to crop up, but they aren't the low hanging fruit any more.
I know for sure that I can't presume to tell anybody how best to make a big best seller -- and if that's what you want, don't come here for your advice. However, I also know that the opportunities for the small operator, the niche writer, the artist and artisan and homemade fiction writer are growing.
They're growing in number and variety, though, not in size.
And that's part of why I decided to start writing about business from the Artisan point of view on Mondays. I think the time of the small operator is rising, and maybe we need more points of view out there on what's happening in the publishing world.
Next week I want to take on the latest controversy about writing more. There seem to be some people who feel betrayed by the advice to write more -- they aren't making more money. Was the advice wrong?
See you in the funny papers.
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