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True Lies 10: Reality Sucks

Back in 2004 my wife and I owned a house on Hilton Head Island.  Real estate was booming and it seemed everyone was a mortgage broker offering great terms.  A guy who did some painting on our house also offered to broker a mortgage for us.  Back in those days, being self-employed, I could get a no-income-verified loan.  I know—shocking in the current environment, eh?  I had to sign over my liver and kidneys and heart to get my current mortgage.  And pay well above the going rate.

My wife reads the NY Times every day.  The paper version.  All of it.  I mean everything in it.  And she remembers what she reads.  I keep track of numbers.  And we both started to notice some disturbing things in 2003 into 2004:

  1. Mortgages were way too easy to get.
  2. The Fed was at 0%.  It couldn’t go lower.  It could only go up.
  3. Variable rates were as low as they were going to go.  They could only go up.
  4. Like tulip mania (look that one up—Jen did), house prices just couldn’t keep going up.  Yet everyone acted like they would.

???????????????????????????????????????So we talked about it, and even though we liked our house, we put it on the market.  Even the realtor told us we were crazy (along with a lot of other people).  We showed it 72 times.  We sold it.  We then moved to the other side of the island and rented on the intracoastal (a great place to live and where I set my latest Green Beret book, Chasing the Lost).  We rented for eight years after that, because we felt things hadn’t yet bottomed out.  (BTW the way, the puppy shot is just for fun)

Not long after selling our home, the housing bubble burst.

We watched a special on HBO about a neighborhood where everyone’s prices nose-dived and they interviewed the owners.  And the one thing we heard again and again:  “We never though it could happen to us.”

My wife and I were quite shocked because we always think anything can happen to us.  Mine comes from my paranoid Special Ops background and my wife’s, well, let’s keep that to ourselves.

The ability of people to fool themselves into inventing their own fantasy world is phenomenal.  Because reality sucks.

But it is reality.

I prefer to live in reality, even though it is difficult at times.  At Cool Gus, we run our business on a reality base, not a wishful thinking base.  What brings this to mind is something I’ve been watching that, for me, is a harbinger of where the publishing world is headed.  Since 2009, Harlequin’s sales have steadily declined.

2009:  $493 million

2010:  $468 million

2011:  $459 million

2012:  $426.5 million

2013:  $362 million.

Doing math, which is part of reality, we see an accelerating decrease.  Those years coincide with the rise of indie/hybrid/Martian authors.  As a member of the Romance Writers of America and a lot of other writers’ groups, I can tell you that RWA, by far, is the most advanced and savvy group of authors around.  Surprisingly, SFWA (Science fiction, fantasy writers) is one of the least tech-savvy, business savvy groups.  Romance writers have been leading the way in embracing indie publishing.  Thus authors who might once have fought for a HQ contract are now doing it themselves.  And some very successful romance writers have jumped ship and gone indie.  Their defection has not been offset by successful indies going trad.

Add in a second factor:  the decline of print sales.  Spare me the numbers touted by publishing.  Take out your top 5% of authors whose books get brought in to COSTCO on pallets, and print sales are dropping fast.  Especially for mass market paperbacks, which is HQ’s bread and butter, much like garbage was the Sopranos bread and butter.  We still make a lot of garbage but there is less and less shelf space for print books and more and more readers are going digital.

Jeremy Greenfield of Digital Book World had a recent article in Forbes where he interviewed the CEO of HQ.  I found it a bit weird.  Which harkens back to reality.  At the end of 2013, people in trad publishing were breathing a huge sigh of relief, feeling they’d weathered the digital storm.  An exec at one trad house even said, “Anyone who is going to buy an eReader has already bought one” just before Xmas.  I get a sense of “things are going to be okay” from trad publishing.

That isn’t reality.

WEB_Section8The CEO of HQ first blamed the revenue on pricing.  He complained about eBook pricing.  Which is odd since HQ gives the lowest royalty rates around to its authors, so they keep most of that income for very little overhead.  I do agree that the .99 eBook is kind of low. But we use it for the first Atlantis book as a leader into the series and it works.  We also use free on Section 8 Shadow Warriors as a loss leader into my thrillers.  It’s been ranked #1 in Men’s Adventure and War on Kindle Free since we did that.

But, the point is HQ and trads can’t control how indies, who are their competition (which they don’t seem to take too seriously, yet complain about) price their books.

I thought years ago that HQ would be on the cutting edge of digital.  After all, they have their niches locked down.  Readers love their series, and are not particularly attached to specific authors. HQ did start Carina, but that looked like a step in the wrong direction.  It was as if they were relegating digital to red-headed stepson status.  I watched Carina bounce around, without much focus or direction.  Pretty much working under the “let’s publish a lot of stuff and make a little bit of money off it” instead of using the HQ brand to branch off established lines into digital.

Here’s what really strikes me about the article.  First, the CEO says that quality will allow them to demand a higher price.  Which insinuates that someone like indie author Bella Andre isn’t putting out quality, except her quality is good enough for HQ to give her a print only deal.  Hmm.

The closer was the most interesting part:  HQ is optimistic in its earnings report, predicting a stabilization in 2014.

Why?  What’s changed?  The wishful thinking that things are going to get stable kept people in houses that went further and further under water as the housing bubble imploded.

“We’re just in transition.”

How? The numbers say income is decreasing at an accelerating rate.  How will that change?  Of course, transition doesn’t always mean transitioning to something good.  We can also transition to something bad.

The reality we see at Cool Gus is things are going to get much harder.  The market is saturated and will get even more saturated.  While there are great benefits to digital, a downside is that every book is out there forever.  There’s no rotating on the shelves, so to speak.  Actually not the shelves, but the store.

We believe it’s going to get harder for all authors: trad, indie, hybrid and Martian.  The solutions are varied and somewhat different depending on each author’s platform and product (thus our focus on a handful of authors and tailoring our partnership to fit their needs).  But I do believe trad authors really need to take a long hard look at their digital royalty rates and question how much their publisher contributes in that arena to take most of the income.  I firmly believe an author must earn at least 50% of the price of the eBook.  And get paid at least every three months, if not every month.

Also, once an author is no longer frontlist at their publisher, but it still controls their rights, the lack of marketing and low digital royalty rates will destroy careers and livelihoods.  I can personally attest to how trad publishers deep six their backlist.

Yes.  Reality sucks but it can be dealt with.  The first step is to get past the denial.

*****Admin Note From Jen*****

Blog Contest for this Week: Sign up for Bob’s Newsletter and get your name put in for a drawing to win an AUDIO edition of The Kennedy Endeavor. Bob sends out a newsletter no more than 4-6 times per year. Besides interesting information about Cool Gus, Sassy Becca and Big Orange (Bob’s new Jeep), Bob also gives his newsletter subscribers exclusive content. You can sign up here.

Also, Bob is doing a Goodreads Giveaway. Here are the details.

Goodreads Book Giveaway

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Giveaway ends March 16, 2014.

See the giveaway details
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Enter to win

True Lies 9: “Say not ‘I have found the truth’ but rather ‘I have found a truth’.”

So says Kahlil Gibran Kahlil.  I made the error during Beast Barracks of buying off on the pitch from the brand new Arabic instructor at West Point—it was the first year they were offering the language and they needed enough bodies to fill a section.  So I signed up.

I had not yet learned the military maxim:  never volunteer for nothing.

Lots of numbers being bandied about in publishing now.  Lines are drawn.  Bayonets are being sharpened along with pencils and you know what?  Readers don’t give a crap.

Indie authors apparently make.  Whatever.  In all these surveys, I doubt my numbers are getting counted.  60 titles spread over a bunch of genres, most indie, some with 47North, some with the Martians.  I also have a nice revenue stream from Audible ACX.  Why does everyone suddenly care what I make?  They never did in traditional publishing.

One truth is that all the numbers are completely skewed in traditional publishing by a handful of mega-bestselling authors.  Take them out and the whole thing changes drastically.

Maybe that’s the key to all of this.  We need to clean up our own house.  Because that’s what we control.

Hugh Howey tweeted something interesting, something I’ve been harping on for a couple of years.  It’s not about who makes more money or how or whether they’re hybrid, inbred, or have two heads.  It’s about RIGHTS.

When music imploded digitally, the musicians who not only survived, but prospered, did it one of two ways.  On tour.  (Which aint likely for authors).  And/or controlling the rights to their music.

In case no one has noticed, author rights are being sold. E-reads was just sold.  Along with all those contracts.  I was with E-reads so long I got my rights back after seven years.  This selling of rights is going to happen more and more. Sort of like your mortgage during the bubble.  Remember that?  Authors could end up with the Russian mob owning their rights.  I watched a special where David Geffen talked about trading Poco’s contract to another agent for Neil Young’s.  Really.

And if I see one more indie author taking a trad deal and bubbling about how much is being offered them, how wonderful it’s going to be, I would make a gentle suggestion.  Let’s hear from them in a couple of years.  If you haven’t been trad published, you are likely in for a very rude awakening.  I cringe sometimes when I see someone who has been successful self-publishing, who signs away their rights for not just the up front money but what they think is going to be all the great distribution, marketing, yada yada yada.  I recommend any author who is thinking of going indie to trad, research back a couple of years and study the first authors to do that.  Where are they now?  How glad are they now they sold away those rights?  I might be wrong, but I haven’t heard much about some of them.  I can, however, check their rankings on Amazon.  I’m reminded of when a Roman consul/emperor returned to the city and they held a Triumph and there was a slave in the chariot whispering “Respice post te, hominem memento te.”

The flip side is that indie publishing is getting tougher and tougher. Take out the top 5% of indie authors and the numbers are also skewed.  The market is saturated.  Bestseller lists have very few consistent titles, even day to day.  What many indies aren’t saying is that the increasing competition is making it tough.   I know Hugh Howey thinks the pie can grow bigger, but Joe Konrath speculated that a couple of years ago, and it’s simply not reality.

For trad authors thinking of going indie, here is some food for thought.

  1. Where will you be in five years when print is mostly via POD? I’m seeing Createspace (Amazon) Kiosks in airports printing books soon.
  2. Where will you be in five years if you don’t own any of your rights and you are no longer frontlist with the publisher that does own those rights?  Think they’ll be pushing you?  Hahahahahaha.  Sorry.  Had to do that after looking at royalties for my three co-written NY Times bestsellers that are backlist with St. Martins.  I made more yesterday indie than I do in six months on those books.
  3. Percentage wise, the revenue you would receive from indie publishing will likely more than make up for the loss of what your traditional publisher is doing for you.  Seriously.  I can do the math of your royalty statement.
  4. Control.  How much do you have?  Date of release?  Cover?  Editing?  Pricing?  Library distribution?  Cover copy?  Marketing?  Running specials?  Most importantly creatively?  Can you write what you want to write?  What your fans want?
  5. You can’t really self-publish.  Not if you have multiple titles.  It’s so much more than just cover, formatting, etc.  The digital dance (trademarking that now, like I should have done hybrid author) is complex.  But I don’t think you need to give up 50% of the royalties for those services.  You need a partner who will do that for you, giving you more than they get.  A concierge service for authors where the creator of the content is valued more than the mode of delivery.

There’s another saying which is considered also a curse:  May you live in interesting times.

WP_MexicopsdAh yes– FREE for the next 2 days:  West Point to Mexico, the first part of my Duty, Honor, Country trilogy.  From West Point in 1842 into the Mexican War.  My West Point-Civl War version of HBO’s Rome.  Did you know the Mexican War was the bloodiest in our history percentage wise?

*****Admin Note From Jen*****

Blog Contest for this Week: Sign up for Bob’s Newsletter and get your name put in for a drawing to win all three Duty, Honor, Country books in AUDIO. The complete trilogy! Bob sends out a newsletter no more than 4-6 times per year. Besides interesting information about Cool Gus, Sassy Becca and The Big Orange (Bob’s new Jeep), Bob also gives his newsletter subscribers exclusive content. You can sign up here.

True Lies 7: There Are Three Kind of Lies: lies, damned lies, and statistics

TwainThe quote is attributed to Mark Twain, who attributed it to British Prime Minister Benjamin Disraeli. But that might be a lie.  I believe Mark Twain told a tall tale or two.  One of his tall tales is his brief service in the Confederate Army where he almost faced Ulysses S. Grant in the latter’s first Civil War campaign as Colonel of the 21st Illinois.  Or so Twain said and I wrote about it here.  It makes for good fiction; and good fiction often has to make more sense than reality.

I think this saying applies to the current world of publishing, but in my experience, the phrase encompasses a lot of my background, particularly as a member of Special Operations, where being paranoid was okay, because sometimes they were out to get you.  Even your own side.

wpcrest2When I was considering college, I thought I wanted to become an architect or some kind of engineer.  Going to West Point—well, when I went there you didn’t get much choice on studies until your junior year.  It’s said a Military Academy education is like trying is like trying to take a sip of water from a fire hydrant. I achieved a perfect score on the Systems Engineering final exam, which is focused on using numbers and statistics to determine solutions and make decisions. So apparently I was kind of good at numbers and using the system (both my sisters are trained actuaries BTW—talk about knowing numbers).  Yet, I didn’t buy into systems engineering as the final option for determining solutions.  I felt it left out something critical: the human element.  The gut.  Can you quantify quality?

One of my tenets of Who Dares Wins is that emotion is more powerful than logic. The same in a novel:  characters are more important than plot.  So when I finally got a chance to major (actually minor—we all got Bachelors of Science back then) in a subject at West Point, I didn’t pick the area I had been “perfect” in or had thought I wanted to go into.  I chose psychology.  After all, I was going to be leading soldiers.  I needed to understand them.  And myself. Still working on the latter.

Available Now!

Available Now!

Some military people think numbers rule.  During the Cold War we were constantly told how many tanks and artillery and helicopters and troops the Soviets had; how a lieutenant in the Fulda Gap had like a two minute life expectancy if those tanks rolled into West Germany; yada yada.  But I remember noticing something in the news that belied those numbers of tanks and divisions and etcetera that the Soviets had.  There was a large earthquake in the Soviet Union and the nation could not get adequate help to the survivors for weeks on end.  I thought to myself:  if they can’t deploy their military inside their own country on a natural disaster mission, how are they going to roll over West Germany in the face of some pretty fierce opposition?  Also, the Soviets didn’t do too hot in Afghanistan—something, as a member of Special Forces, I am a bit familiar with.

So.  Were the numbers of tanks and helicopters and soldiers the Soviet Union a lie?  Probably were inflated.  But even if they weren’t, the numbers didn’t take into account quality.

My background as an A-Team leader comes into play when I focus on quality over quantity.  Contrary to what most people believe, Green Berets are not Rambos with a knife gripped between our teeth. We are force multipliers.  Teachers.  A Special Forces A-Team of just 12 guys is expected to train at least a battalion of troops up to combat effectiveness. More if the team goes split.

Which leads me to finding it odd that everyone seems really interested in how much money I make as an indie author and how many books I sell.  Why do they care?  You gonna pay my mortgage?  I can assure you there is not a single author who has the exact template of revenue streams that I have.  I also am a partner in Cool Gus Publishing.  I also have a series with 47North, Amazon’s science fiction imprint.  I run a consulting business as well as running writer workshops at Write on the River. So why compare?

I remember an author touting selling a million eBooks back in the dark ages when such a thing was rare.  But at .99.  And I’d point out that I could sell 166,000 eBooks at $2.99 and make the same amount.  But no one focused on the fact I could sell 1/6th the number of books and earn the same.

NS3 Rift coverFrankly, I don’t know how many eBooks I’ve sold since I’ve gone off my own.  I know it’s over a million, probably close to 2 million but I don’t count.  My 60th title is coming out a week from today: Nightstalkers: The Rift.  My business partner, Jen Talty, will do her thing and look at numbers and data and all sorts of other things…but those things really only affect my personal publishing experience, not everyone else’s. Jen will do this for all our authors, and again, it’s for them, not everyone else. Many roads to Oz and Oz means different things to different people…as do the numbers…

After reading all these surveys, I realize that it’s a small picture of a vast industry and it’s being mined for different reasons and presented in different lights as each of these various blog posts show and people agree or disagree, often with a bias coming from where their own revenue stream comes.  I applaud the effort and I think for some, this might shed some light on which direction to take their career (with the caveat making sure you apply it to your current situation, not someone else’s), but I get a sense there’s too much a desire to be ‘right’ on both sides.  To be heard. To be seen. And again, to be right. This isn’t a right fight (although rights is most critical). I don’t have to be right for anyone else but myself and our authors at Cool Gus.  And each of our authors is in a unique situation. What is right for me, isn’t going to necessarily be the right path for Jen or Jennifer Probst, or Colin Falconer, or any of our other authors (and we just brought on two more!). So read the surveys, see if you can glean anything from them, but I suggest focusing on your unique business and situation and do what is right for you.

*****Admin Note from Jen*****

Bob will be giving away a set of autographed Nightstalker books to one lucky winner who signs up for our mailing list for our infrequent newsletter (sent out 6 times a year).  All you have to do is sign up! You can do that by following this link. Those already there and those who sign up by the end of the week are eligible for the random drawing done by Cool Gus.  As the year goes on there will be more giveaways and also exclusive material and first reads done through the newsletter.

Frak Publishing, Frak Agents, Frak Authors, Frak whatever

images-what-the-frak-lg_thumb_400x300It seems that cursing and acting like a bad ass as an author is in vogue.  I read blogs where authors curse up a storm and act like they just got back from a tour of Call of Duty.  Which is a game by the way.

It’s not real.  Just because we write fiction doesn’t mean we are the fiction.  There is no shortage of authors telling the rest of the world how to fix publishing, how to fix self-publishing, what other authors should do, yada yada I had the bisque.

Kamikaze-about-to-hit-USS-MYou know what?  No one is shooting at you, dude.  They say less than one percent of Americans have served in the military.  Growing up, all my uncles had served.  Whether drafted or enlisted, whatever.  My dad was in the Navy at Okinawa in WWII when he was 17 years old.  Can you say kamikaze?

Here’s my advice: . . . . .

Sorry. Go to my archives. I’ve given out enough free advice over the years.  Invented the term hybrid author a while ago on this blog.  You’re welcome all you hybrid authors.  And hybrid publishers.  And hybrid wookies.

I remember one year at the Maui Writers Conference, which attracted a lot of big name authors as presenters, one of the attendees, a very successful CEO, told me he was quite shocked at the caliber of presenters and the fact they weren’t being paid.  He said in his business, this level of expertise would command tens of thousands of dollars and people would be paying top dollar to attend.

Writers sell themselves cheap and their advice cheap.  Really.  I love Harlan Ellison’s rant about this.

I do business consulting and presentations outside the world of publishing using my Who Dares Wins concepts.  A couple of hours of my time doing that is equal the typical advance for a Big 5 author.  Why?  Because you’re paying for my sweat and blood equity in Special Forces and as a successful entrepreneur.  We took Cool Gus from zero to seven figures in 18 months.

I don’t give a frak about the Big 5 or Apple or Amazon or Fred.  I care about our authors at Cool Gus and helping them sell books.  Colin Falconer is finally starting to break out here in the States after being an international bestseller for years.  I like writing his royalty check (okay technically we wire him his royalties because he lives, crap, he moves around a lot, last location was Mars).  He recently was #11 paid on Kindle with Isabella: Braveheart of France.  All his books are selling better than ever.

We were recently queried at Cool Gus by an author.  I responded pretty negatively because I tend to be negative.  Nah. Because I’m a realist and I read what the author had to say about her situation and gave honest feedback.  But the author’s reply really inspired me, because I could tell she got it.  She wasn’t focused on where publishing is now, but on where it will be several years from now.  It’s the same reason in 2011, I decided to chuck my traditional publishing desires and go indie.  I was looking ahead, not down at my own navel.

Okay, I tend to be negative.

MaterSo frak, dadgum, dadgum, dadgum, dadgum (okay had to watch Mater like 20 times at Xmas with my grandson so those of you who had to watch that know exactly what I’m ranting about—and seriously isn’t Mater gaslighting McQueen?  And isn’t he a bit misogynist?)  But dadgum.  Lying in bed with a grandson and two yellow labs is my idea of heaven.  Even if we have to dadgum.

There. I can cuss so you better listen to me.

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