Insights from Penguin Random House CEO

Recently, the New York Times featured Madeline McIntosh, CEO of Penguin Random House. Wondering what such an influential member of the publishing industry had to say, I read the article twice.

Some  takeaways for me:

  • “The big [publishing] houses aren’t competing just against one another; they’re vying for the public’s attention against TikTok, Netflix, and Facebook.
  • “The company has grown even more dominant in recent months in part because Ms. McIntosh … foresaw a future in online book sales would vastly outstrip physical retail, but print books would continue to be a popular and lucrative format.”
  • The company invested in warehouses and distribution centres and ships seven days a week, which enables them to react to “upticks in demand for particular titles” – in other words, more of a just in time distribution model, which also cuts down on returns
  • “Penguin Random House has built what is probably the most sophisticated direct-to-consumer online marketing and data operation in the industry.” “This spring, the company upgraded its ability to sell directly from its own website.” Decisions are based on data, not hunches.
  • Alexandra Alter, author of the article, says that the industry has become “more profit focused, consolidated, undifferentiated, and averse to risk”. All of these factors have shifted dollars away from mid-list and debut authors and toward what publishers believe are ‘sure things’ like already proven authors of best sellers and proven topics like WWII. Expect more homogenization of what books are offered.
  • Publishing has “become increasingly reliant on blockbusters.”
  • Publishers have “less control over what readers see online”. Algorithms dominate the market. I wrote about the dominance of Amazon’s own imprints in that online retailer’s top sellers lists. You can check out those articles here and here.
  • Data and marketing control publishing houses, not editors. I encountered the same sentiment when working with senior editorial staff at Lake Union, one of Amazon’s publishing imprints.
  • Digital audiobooks are the fastest growing format in books.
  • “People are buying so many books, that the two biggest printers in the United States can’t produce enough copies.”
  • “The company’s best-selling novel of 2020 is Where the Crawdads Sing — which came out in 2018.” Other top 2020 sellers for Penguin Random House include Little Fires Everywhere (2017) and Becoming (2018). “Every dollar plowed into printing and marketing  older titles comes at the expense of discovering and promoting new writers.”

The turmoil and concentration within the publishing industry is a daunting challenge for authors hoping to break into the market. In some ways, it makes self-publishing seem like the best way to go.

DON’T MISS OTHER POSTS ON READING & WRITING HISTORICAL FICTION.  FOLLOW A WRITER OF HISTORY (using the widget on the left sidebar)

M.K. Tod writes historical fiction. Her latest novel, TIME AND REGRET was published by Lake Union. Mary’s other novels, LIES TOLD IN SILENCE and UNRAVELLED are available from Amazon, NookKoboGoogle Play and iTunes. She can be contacted on Facebook, Twitter and Goodreads or on her website www.mktod.com.

Selling Historical Fiction – Part III

Turns out understanding the dynamics of selling historical fiction is full of complexities. In an earlier diagram I attempted to present a dichotomy between traditional publishing and self-publishing. However, we all know that our world is muddier than that. Ruth Hull Chatlien reminded me that many writers work with small publishers to bring their works to market. Tony Riches mentioned the need for a hybrid approach to reach international markets. And, of course, the roles of traditionally published authors are changing too.

As with my other posts, the following diagrams are works-in-process. In tomorrow’s post I’ve attempted some preliminary advice.

DYNAMICS OF A TRADITIONALLY PUBLISHED AUTHOR

Modified traditional path

What’s different?

  • authors usually have to take care of their own platform. Often this involves blogging, being active on Facebook and Twitter, and interacting with readers.
  • readers expect to interact directly with writers (hence the double-headed arrow)
  • publishers are connecting with the ‘cloud’ of influencers, asking bloggers to review books, arranging author interviews, ensuring that their books are represented on Goodreads, traditional media’s online sites, and smaller book sites
  • readers interact with influencers by posting comments, participating in book chats, posting reviews on forums like Goodreads and Amazon, participating in online book clubs, posting on discussion boards, signing up for giveaways
  • readers themselves have become influencers
  • beyond what’s shown on this diagram are advertising campaigns, appearances at book stores, libraries, and other venues, interviews, and traditional reviews with various local and national papers

DYNAMICS OF A SMALL PRESS AUTHOR

Indie model

What’s different?

  • indie writers often hire their own editor
  • indie writers often sell directly to a small press while some sell to an editor within a small press
  • readers expect to interact directly with authors and may have more opportunities to do so than with traditionally published writers
  • like the big publishing houses, small publishers sell to bookstores (although the type of bookstores and coverage within bookstores may be different) and use online retailers like Amazon, B&N and others to bring books to the reading public
  • indie authors interact directly with the cloud of influencers

DYNAMICS OF A SELF-PUBLISHED AUTHOR

Self-Pub Author

What’s different?

  • like indie authors, self-published authors often hire their own editor
  • a self-published author uses online retailers to bring their books to market; in general, they do not sell to online retailers
  • building awareness and selling to readers occurs primarily through the ‘cloud’ of influencers
  • readers have more of a buy relationship with online retailers, having made the choice to purchase based on the new ‘word-of-mouth’ environment offered through social media

Tomorrow, I’ll offer ten insights based on these recent posts about social readers and selling historical fiction (or any fiction for that matter).

M.K. Tod writes historical fiction and blogs about all aspects of the genre at A Writer of History. Her latest novel, LIES TOLD IN SILENCE is set in WWI France and is available in paperback from Amazon and in e-book formats from AmazonNookKoboGoogle Play and iTunes. Mary can be contacted on Facebook, Twitter and Goodreads.

Another one bites the dust

And another one gone, and another one gone, another one bites the dust. Lyrics by Queen.

Douglas & McIntyre announced they are restructuring under the Bankruptcy and Insolvency Act. For Canadian writers, this event narrows an already narrow market even further. I have no idea whether D&M’s situation is a surprise but from a strictly business perspective the step reminds me of what occurred in other industries during the 80s and 90s as head offices were gutted leaving marketing and sales groups behind.

In an increasingly complex publishing environment, how can a smaller publisher expect to bear the costs of editorial, production, digital efforts, design, marketing, publicity, sales, rights management, distribution and so on? Particularly when profits are squeezed and demand is so unpredictable.

What could D&M have done?

  • merged with a global partner?
  • outsourced some of their business processes?
  • become more niche focused?
  • engaged with consumers differently?
  • reduced the number of imprints?
  • shifted to digital more aggressively?

Who knows … it’s a shame to see a 40 year old business head into insolvency. But then, many businesses don’t even last that long.