PUBLISHED MAY/JUNE 2020
Compiled by Alexa Schlosser, Managing Editor, IBPA Independent magazine —
Four publishing experts discuss how the global crisis has affected every aspect within the industry.
Robin Cutler, Director, IngramSpark
As many of you have read in online posts and media reports, Ingram, as one of the world’s largest book wholesalers, is still very much in business, having been deemed essential. Apparently reading is considered essential to human growth, development, and happiness, so we should all applaud and support this as authors and publishers. The functions that Ingram serves is that of book distribution into the trade, meaning that we supply book content created by authors and publishers to bookstores and libraries, as well as directly to readers. We do this by having stock publishing inventory in our warehouses and through our print-on-demand company, Lightning Source—which is able to manufacture and ship orders in a timely fashion all over the world—and also through our digital services that supply content directly to e-book vendors such as Kindle and Apple, and directly to students through our educational platform.
As of today, all of this capability is still working, and we are in business. Ingram is protecting our workforce, many of whom have been working from home for some time. For our distribution and print-on-demand business, our associates’ health is our primary concern, and we are taking every precaution to make sure they’re safe while they’re doing the traditional business of distribution for us.
So, what does this all mean for an indie author and author publisher? I think everyone, no matter how well established they are with social media platforms and online engagement with readers, have probably already seen a decline in their usual business. The world’s population of readers are adjusting to this new normal that we’re all having to adjust to. For those authors who already invested for years in their own platforms—into their social media and website—they are best positioned for what we are facing in the near future. If you haven’t been selling primarily online before, now would be a time to spin the effort to shore that up. Everyone is online now.
Question: How is Bookshop different from Indie Bound?
Answer: Bookshop is the new Indie Bound. It works in a similar way, but there is different (and better) functionality that’s incorporated.
Bailey Davis, Content Acquisition Strategist, Ingram Content Group
I work with smaller publishers in the small press realm and a few larger publishers who are all seeing various impacts of what the market is dealing with right now. I wanted to break down what I talk about into two sections: what we at Ingram are starting to see, and what our publishers we’re talking to are starting to see.
We are starting to see a significant shift to more online ordering. Brick-and-mortar stores are seeing a block right now in business, but, fortunately, we’ve seen an article recently where they’re starting to position online retail stores through different tools that are available to them. They’re starting to take those audiences they have with their community bookstores and try and keep that as much alive through online retail. One of those tools they’re using is Aerio, which allows anyone to create a retail site and sell books online. They’re positioning and pivoting as much as necessary to continue to keep that audience engaged with them as a brand.
We’re also starting to see, especially for larger publishers that rely on inventory in warehouses, concern with the supply chain and availability to be able to ship out of their own inventory to wholesale warehouses so that their books can be available. We’re seeing a big shift from physical inventory to virtual inventory. One program that we’re seeing a lot of success with right now for our larger clients is our GAP program (Guaranteed Availability Program), which allows publishers to maintain a hybrid model so they can still have their inventory but also have the ability to digitally print and drop-ship as demand increases and their inventory is held up somewhere.
We’re also seeing some sales trends, specifically activity books, and we’ve seen an increase in cookbook sales since everyone is stuck at home and they have to do their own cooking. Also juvenile nonfiction. Another thing we’re seeing from our publishers—small, medium, and large—is they are diversifying their formats. Right now, our consumers of content are relying on being able to have content delivered to them, and part of that is through drop-ship for physical inventory or e-books for digital delivery.
Right now, a concern that we’re seeing is event cancellations. One thing that independent bookstores have always done so well is supporting their local author community and helping host events, and so because of the current environment right now, those are being canceled. A lot of publishers are being creative in how to do virtual events. Social media has proven to be a great tool: live events, Instagram, Facebook. One question we’re going to see a lot is in terms of publishing schedules. I think it comes down to reviewing your content and what you can do to invest in your marketing strategy right now. You want to make sure you’re discoverable, so make sure if you’re going to continue on the path of releasing that you’re investing in discoverability. Invest in enriching your metadata, and not even just your new stuff. Make sure you’re keeping engaged with your clients. If you already have that platform, continue to use it to build that platform.
Question: From the Ingram side, you talk about the GAP program, how quickly can you put your book into the Lightning Source or IngramSpark program and it’s on the catalogue and ready to be ordered by the trade community?
Answer: On IngramSpark, it’s free to create an account. You can upload within hours, minutes even. It takes a day or two for the content to get processed. Once live in the system, it goes into the catalogue that night. In terms of GAP, it’s offered to publishers who are already traditionally stocked. If Ingram has an inventory of five copies of your book and an order of eight comes in, that would allow us to digitally print at Lightning Source the three that were lacking. We would consolidate and ship all eight of those together to the retailer that purchased that book. From start to finish, setting up a title in GAP, you would create a Lightning Source account, set the title up, we have two to three days of file processing time, then once approved for production, we would only order that digital printing when there was not inventory on hand. We encourage you to add international pricing at the same time.
Maggie Langrick, Publisher, LifeTree Media LLC
What we’re doing right now is communicating with our authors a lot. I held a virtual town hall via Zoom last week to update our authors. They’re all clamoring for advice on what they should be doing to market their books and prepare. Every publisher should be pushing information out to authors as much as possible. We’re also in close communication with our distributor. It’s been helpful to get time with them to see what’s going on at the retail level. We were relieved to learn book distributors are considered an essential business.
Our focus right now is thinking not just about availability, but everyone’s bandwidth is really stretched. People are distracted. The book should be offering critical information or escapism. That’s what readers need right now.
We’ve also been advised that our international orders have basically been halted. That whole side of the business is in wait-and-see mode. We’ve all heard a lot about Amazon and deprioritizing things that aren’t basic household goods or medical. They are still fulfilling books orders, but there is a delay.
We’re encouraging our authors to communicate with their audience that their book is coming out, etc. Double down on content marketing. Strengthen your bond.
We’re also looking at our media outreach and our publicity team to find angles that are relevant and will cut through the noise. Your book can be newsworthy in this environment. Mental health, DIY and craft, career changes, etc. We’re getting creative with promos and giveaways. We’re setting up our upcoming titles in Lightning Source now. Think about a relaunch/revival. Scaling back the planned media outreach and putting some of that budget away for later to come back when people have found their feet and things come back to normal.
As a hybrid publisher, we’re also concerned about loss of revenue from our service side of our business. Our authors engage us as our clients, and we have seen some project cancellations—people who are either delaying or putting off doing a book project with us. However, we’ve also seen something of an uptick in inquiries. “I’m grounded, stuck at home, and it’s a good time to write my book.”
We want to be thinking about what we’re putting in the pipeline for next year. We are really thinking hard and carefully—trying to see around the corners and think about what kinds of things people are going to be interested in reading next year. Just as we’re competing and clamoring for attention and we want to be hyper relevant, we also want to think about what will be the knock-on effects of society weathering this crisis together. Some of the topics that our team is anticipating will be part of the ripple effect of how it will shape us and how we’re thinking and feeling and living and working a year from now after we have gone through a potentially prolonged period of quarantining with loved ones or alone. We’re thinking about depression, anxiety, grief, and recovery from trauma. That is something people are going to be coping with, especially if there are widespread casualties. We’re thinking of multigenerational living as one of the trends. I predict an interest in living in an eco-friendly manner and not overconsuming resources.
We’re also considering doing some quick turnaround e-book releases. What does it look like to put an e-book out in the summer?
Question: I’ve heard caution in delaying pub dates. Won’t we just shift the problem to tomorrow? How far do you kick the can?
Answer: Our philosophy as it’s developing right now is to ask the question about suitability of the title type and also the prominence of it. If everyone delays their pub date to the fall, we’re going to have a huge glut that will make discoverability difficult. Look at the nature of the titles that are coming out and ask whether this is the type of book content that will cut through the noise. There are some titles that are really needed right now. In particular, we’ve heard about the trend toward children’s books and cookbooks. I wish that I had a book coming out right now about creating a kitchen garden. For those topics you think are likely lost in the shuffle, it may make sense to delay, but I wouldn’t do it across the board.
Jonathan Kirsch, IBPA Legal Adviser
The temporary solutions we’re discussing today and publishers are implementing are an investment in the future. I think we’re at a tilting point; when coronavirus is in the rearview mirror and we’re no longer worried about the health threat, I think we will have acquired skills and infrastructure that will serve the publishing industry well going forward. It’s a learning and growing opportunity as well as a public health emergency.
The first and most important legal advice I can give is that although it is vital and positive to stay in touch with authors and vendors and customers—as companies all over America have been doing—as a lawyer, I do want to issue a caution: You should avoid saying anything verbally or over the internet that manifests your intention not to perform your contractual obligations. Everyone is in a good frame of mind now in terms of working out business arrangements, but not everyone will be in that state of mind on an ongoing basis. You don’t want to put yourself in a position where you have announced to your customers, vendors, or suppliers that you’re not able to and don’t intend to perform your business obligations.
The phrase I wrote down in my notes and commend it to you is “It remains our intention to fully perform our obligations.” That sentence should be in any communication that goes out where you say you are not paying your royalties, holding the author event, etc. It should be in that communication, so you’re expressing that you intend to honor your obligations, and that has legal significance down the road. If there’s anything that comes up where you are extending, forgiving, suspending an obligation of someone else, or someone else is suspending an obligation of yours, it would be a good practice to confirm that in writing. Let’s say you need to postpone a publication date and you have an author-publisher contract that requires you to publish by a certain date, and you’ve discussed it with the author and the author agrees to the extension of time, it would be prudent to confirm that in an email. It doesn’t have to be a lawyer letter; it can be more informal and upbeat than that. It’s worth making a record of what people have agreed to.
You should also look in your contracts for something called a force majeure clause. These are contracts under which you might have acquired rights from an author or contracts where you’ve acquired services from a printer or anybody you’re doing business with. A force majeure clause, as a general rule, excuses performance of an obligation due to circumstances beyond the control of the contracting parties. The issue is coming up all over America. Some are being positive and constructive about the clauses, and some are not. If you do have one, you’re able to delay or suspend obligations that you may have otherwise been obliged to do. There is a positive value in partial performance of your obligation even if you cannot fully perform them. There are concepts in the law known as “substantial performance,” which may not be perfect performance but it means you’ve done a good-faith effort. And then there’s “mitigation and damages” where you’re required to take steps to lessen the damages the other party may be suffering. An excellent example of mitigation and substantial performance would be partial payment of royalties even if you aren’t able to make the full payment.
Question: Does the presence of the virus in the world count as a force majeure for contracts, or does something else have to come into play?
Answer: A force majeure clause must be in the contract for you to be entitled to relief for circumstances of force majeure, and what it actually says is significant, but it’s not an open-and-shut case. Force majeure just means a superior force. A force beyond the control of the parties. Contracts often use specific words and phrases—strikes, riots, martial law, interruption in transportation. I have not yet seen one that says “global pandemic,” but I am absolutely confident that no court would look at a force majeure clause and say a global pandemic that has resulted in a lockdown order doesn’t reach the threshold.
Kelly Peterson, Director of Digital Strategy, Independent Publishers Group
I spend most of my time thinking about Amazon, and one of the things I originally thought when everyone was starting to sequester at home was that we were actually going to be in a better position than we ever have been as publishers to survive this. In the past, book distribution was all boxes on trucks to bookstores. Now that more than 50% of the revenue that we earn is coming from online sales—and from Amazon in particular—and it’s even more when you add in the other retailers; it’s about 60% of our sales coming in from online, we thought “Oh, this is going go to be a small dip.” And then Amazon announced that they were cutting orders or ceasing orders altogether, depending on what publisher it was. I realized that we now don’t have just a COVID-19 crisis; we have an Amazon crisis. Because Amazon is such a big percentage of all of our business, in all different ways, that having Amazon take a stand where they’re not ordering books suddenly became monumental for our clients. And it could have even more effects than us just being locked in our houses.
When that happened, we started looking at other places that we make money. One of those is digital audiobooks and e-books. The e-book trend, a lot of people think it is flat. People who read PW probably think it’s decreasing because the Big Five are decreasing, and they’re submitting all their sales information. Personally, I think it’s increasing because so many people are going indie and taking backlist indie and Amazon doesn’t report those sales.
For our publishers, we immediately put our direct from the warehouse ordering at a 30% discount. Two of our bigger publishers, Chicago Review Press and Triumph, which are in-house publishers, did their discounts at 35%. We have that little bit going out from print, and that business is getting bigger every day. We always are stocking Ingram; it’s been a bellwether for us.
We focused a lot of attention on e-book sales early. We thought “Libraries are closed, but online libraries are still open.” As people discover these online sources, they become online readers. It’s going to create a whole new opportunity for publishers to leverage e-books. We sent 34,000 titles to our library services and said you can have these at 30% off. We went to retailers with a list of 2,000 books and said these books can be between 99 cents and $2.99. We let publishers pick their own price. Having opportunities like this and maximizing the value to the recipients has created a huge list in our digital sales to offset the decrease in regular Amazon ordering.
There are already virtual book tours set up for genre fiction. Mommy bloggers are great sources for cookbooks. You have a lot of ways to get the word out about your book. And you can do fun giveaways with digital copies.
We’ve talked to people about doing non-simultaneous releases. Releasing the e-book and digital audiobook now and the print book later. It’s not all doom and gloom. We have a lot of chances to reach out to clients and send people to new places. Diversity has always been key in our industry.
Question: How delayed is the reporting of Amazon Digital sales?
Answer: Part of that is the way your distributor relationship is set up. If you’re doing it directly, if you’re doing it yourself, you can see your daily sales. But that’s only for indie authors. Everyone else has a delay built in. In general, you can expect a 45-day wait for your payment of sales. Daily trend sales are not always accurate and often come two to three days later than we expect them.
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