The View From Here:
The Long Tail Swats the Indies

by Scott Flora, SPAN Executive Director

The interests of giant corporations and individual writers collided a few weeks ago when Simon & Schuster tried to hijack writers’ “reversion rights.” Reversion rights in a writer’s contract include the timing of when rights to the book revert back to the author—usually when the book goes out of print. S&S began including wording in writers’ contracts that included print-on-demand, audiobook, and e-book versions in the definition of “not yet out of print.” Called “electronic warehousing” by the Authors Guild, the contract change would give S&S rights to an author’s books virtually forever.

With corporate arrogance, S&S initially said the contracts were nonnegotiable and accused the Authors Guild of “overreacting.” As of my deadline, S&S took a step back from the brink and indicated they will look at contracts on a case by case basis. They will also work to develop a revenue-based system for triggering the reversion of rights to authors.

What interests me in this story is the trend of “the long tail” and how it affects authors and independent publishers. This concept comes from Chris Anderson’s book The Long Tail (Hyperion, 2006), which describes the phenomenon of selling more of less. Amazon, iTunes, and Netflix have all capitalized on selling more of less by making it easy for the owners of content to list, and customers to find, books, music, and movies that sell but are not on the bestseller list. (Anderson’s ideas were published in an article in Wired magazine and can be found at www.wired.com/wired/archive/12.10/tail.html.)

Why the Long Tail Is Good for S&S

With 1.5 million total U.S. titles in print today, even if S&S owned only 3% of those titles, or 45,000 titles, and they only sold an average of 20 copies of each per year at a wholesale price of $7, they would generate revenue of $6,300,000. You can see why S&S wants to keep the electronic rights forever. Internet shopping and digital printing make all of these books available for a very long time.

Why the Long Tail Is Good for the Indies

The long tail is good for independent publishers because they can find national and international markets for their books. The long tail allows Amazon to exist. Chris Anderson writes in The Long Tail: “The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon's book sales come from outside its top 130,000 titles.” Amazon is selling tons of independently published books in those remaining million-plus books.

The long tail is also good for independent publishers because the electronic warehousing of books allows the distribution channel to make money from fewer books. Once files are set up on the digital printer’s computer, the cost of storing books is very low. Certainly much lower than storing and shipping books in a traditional warehouse. Using services like BookSurge and Lightning Source, independent publishers can get their books into distribution at almost the same discount as with offset printing and traditional warehousing. (Lightning Source’s program allows publishers with fewer than 10 books to get into Ingram’s catalog, avoiding Ingram’s 10 book minimum. BookSurge distributes only to Amazon.)

Why the Long Tail Is Bad for the Indies (Or At Least Not Necessarily Good)

Most publishers need a large number of books in their backlist to make money. Using similar numbers from the S&S example, even if a publisher has 100 books in the backlist and sells 20 copies of each per year at a wholesale price of $7, the company would gain a revenue of $14,000. Certainly an independent publisher could do a better job of marketing the 100 titles than S&S would do marketing their 45,000, so my numbers are probably a little low. At the same time, a long tail of 15 books won’t add up to significant income.

Ryan McMurtry, sales rep at Lightning Source, told me some publishers increase the retail price of many of their backlist books in Lightning Source’s program and call them “Limited Editions.” Because most of these backlist books are found through Web searches, the hope is that customers will pay a little more for books they really want.

The long tail is also not necessarily good for independent publishers because backlist and out-of-print books could flood the market in a publisher’s niche, increasing competition for that area. Independent publishing usually works best in special interest areas. Old classics in a niche just make it that much harder for the indies.

Finally, the long tail is not necessarily good for independent publishers because whatever is good for S&S is bad for the indies. Much of the growth of independent publishers has come at the expense of the conglomerates. Electronic warehousing of backlist titles makes S&S and the other major publishers that much stronger—with that much more money.