Thursday, September 25, 2014

When books go viral: Can decades worth of work now be accomplished in 2 years?

In part five of this look at the book industry in the age of digital, we look back several decades, and then forward to now. And this isn’t just a nostalgic look back. Instead, this time boomerang will help us better understand the heady rate of growth that can happen when the traditional publishing industry provides a ‘bump up’ to a grassroots, viral phenomenon. And it all came about because of a conversation I had in passing about the previous blog post in this series. A connecting of the dots between then and now ensued, and in the process surfaced another interesting example of how differently the now operates.

First, let’s take a quick trip back in time...

In the mid 1970s two very different authors brought their novel-writing skills to the market. One was struggling with part time employment as a teacher, the other was a successful ad man who harbored authorial aspirations on the side. Both went on to develop two of the most lucrative careers in the book business, selling hundreds of millions of books…and making hundreds of millions of dollars. The two men in question are Stephen King and James Patterson. The first name likely doesn’t elicit a ‘who?’ but the second probably does. More on Patterson later. For now all you need to know is that the guy whose name you do know -- Stephen King -- has consistently been a top earning author each year, regardless of whether or not he actually writes anything new, and the guy whose name you probably don’t know -- James Patterson -- cranks out as many as a dozen books a year (with the support of co-authors) and has been the top earning author in the world for several years running. Oh, and his books account for one of every 17 hardcovers sold in the U.S.  If you don't believe me, eyeball the racks at places like airport bookstores, big box retailers, and supermarkets and you'll see that it's almost all Patterson, all the time.

There have been other blockbuster authors over the years, most notably, people like Dan "Da Vinci Code" Brown and JK "Harry Potter" Rowling. Though they both had breakout hits that were later turned into franchises, their stories were still more or less traditional 'industry' stories.

And then, came the events of 2011, and things changed dramatically. At first it didn’t seem like anything one would even know to pay attention to. A middle-aged woman in England makes her first attempt at writing a book. The genre was steamy prose for 30+ women (think 21st century Harlequin romance) and the book was a self-published effort, made available as an eBook and as print-on-demand for those into that sort of thing. No marketing plan or budget to speak of, just word of mouth, blogs, and yes, moms on Facebook

But then...

This thing that came out of nowhere briskly sold thousands, then tens of thousands, then hundreds of thousands, and then millions, and somewhere in there the major publishers came knocking. The book was 50 Shades of Grey, and in the space of one year its author, E.L. James, was breaking all sorts of book business records.

E.L. James: From self-published to world's top earning author in just 2 years

With the extra push into hard copy books, retail, and promotion provided by Vintage, the publishing house that ended up winning the bidding war, what was already an established indie hit became a bona fide blockbuster. And so, when the numbers were tallied for the top earning authors of 2013, E.L. James was at the top of the heap. James pulled in $95 million in earnings for the year , besting incumbent James Patterson, the guy whose name you probably hadn’t heard of until a few paragraphs ago, by $4 million. That’s right -- Patterson, who had been publishing books for more than 35 years, putting out eight, ten, sometimes as many as fourteen, books per year, lost the top spot to someone who was completely unknown just a year earlier.

How did this happen? Well, it’s a couple of things. It’s a case of how much faster things can go with Internet-powered word of mouth. To wit, think about the venerable New York Times, printing all the news that’s fits to print since 1851. In the intervening 163 years the paper has a daily subscriber count of just under 2 million. Then contrast with the digital world, where the time to 1 million users has, in recent years, sped up from months to weeks. 

There's also the issue of E.L. James coming to the table with a whole lot of negotiating power. Unlike other new authors who are potentially a huge money sink, she was an investment. If she could reach as many people as she had on her own, imagine where things could go with actual marketing, distribution, and promotion. That was the bet the publisher made, not knowing if things would actually go that way, and the bet paid off for them. It also paid off handsomely for E.L. James who, in absolute numbers, has sold about 1/3 as many books as the likes of Stephen King and James Patterson, but is already out-earning them with terms and royalty rates that bring proportionally more money to her and less to the publisher.  Ed. Note: This is not the usual set-up. See this earlier post on how the dollars are generally split between authors and book publishers.

As a way of thinking about the 50 Shades of Grey phenomenon, think of nodes like the ones below, variously representing blogs, moms on Facebook, and conversations at nail salons, and you’ll soon see how word, when located in enough places with enough amplifiers, travels quickly, and continuously. Imagine this diagram below stretching on and on and on and you start to get the picture. 

And this story is also a case of how, once a certain momentum is achieved, the apparatus of industry -- in this case the publishing house Vintage --  can swoop in and take what is already big and push it over the top. This is a lesson we first learned in the earliest days of this blog, when an unsigned musician named Macklemore rocketed to fame in a matter of months, fuelled by Internet pass along at first, and then, through an arrangement with a distribution company, ascended to international stardom.

Many questions arise when a newcomer emerges on the scene and eclipses the old guard with such speed and efficiency. But, at the same, it remains to be seen if a career with any sort of longevity can be built out of the supernova success story. When ‘big’ is achieved so quickly, and in an environment where content is overly abundant and every day it’s something new, can it sustain over a period of time? It's one of the head-scratching questions of our era -- specifically how, when, and under what sets of circumstances can the power of the grassroots, ground up network compete with the big boys?

And on a related note, in the next post here on Demassed… 

Eric Migicovsky, creator of the Pebble Smartwatch, who, after being turned down by dozens of VCs, raised a record-breaking $10M on Kickstarter and beat Apple to the market. But what happens now? Can the guy who had the idea early on, who had to build everything from the ground up, compete with some of the world’s largest and most powerful companies? Can the Pebble go to battle with the iWatch? I attended a talk Eric gave recently, and took five pages of notes, so with a bit of found time over the next few days or so I should be able to bring you some highlights and insights from that event. Set your watches, smart or not, and come on back for the full story of the Pebble, from hobby to hundreds of thousands slapped on wrists around the world. Check out that timely (get it?) tale here.