Wednesday, August 25, 2010

Dorchester’s Digital Gamble


In the newest installment of that painful saga known as the Continuing Convulsions of the Publishing Business in the Twenty-First Century, Dorchester gobsmacked the industry this month by announcing that they are getting out of the ink and paper business. As of September, all Dorchester titles will be available in e-book format only.

Dorchester was the oldest independent mass-market publisher in the United States (“mass-market” is the industry term for a standard-sized paperback). We’re not talking about a small press: Dorchester regularly releases about 30 new books a month. Some 65% of their releases are romances, but they are also significant publishers of horror, Westerns, and thrillers. Their Leisure Books imprint is all horror and thrillers.

So why did Dorchester do this? Well, according to CEO John Prebich, their retail sales fell 25% in 2009, and the figures for 2010 have been even worse. As shelf space for mass-market titles in retail outlets like Walmart shrinks, publishers are having a harder time simply getting their books into stores. About the only part of their business that is doing well is e-books which, according to Prebich, have been showing “remarkable growth” and are expected to “double again” in the next year.

But getting rid of all print books does seem a bit extreme, given that digital sales accounted for only 12% of their total. And while that is significantly higher than the industry-wide average (said to currently be 8%), we’re still talking 88% of their customers who choose to read their books on paper rather than on electronic screens.

Prebich has admitted that the company will be looking at lower revenues, but hopes to make up for that with improved margins. No more warehouse fees. No more printing costs. No more sales force (seven Dorchester sales reps are out there right now, looking for new jobs.) Dorchester is making noises to the effect that e-books that do well may be released later in trade paperback size on a print-on-demand basis, but no one is holding their breath.

In researching this posting, I read that Prebich claims their authors have been “receptive” to the move, which sent me into hysterics. Every author I know who has books with Dorchester and every agent who has a client with books at Dorchester is in fits over the situation. You see, this development also hits authors who have moved on to other houses but whose backlist is still with Dorchester. Part of the concern comes from the perception that Dorchester is teetering on the brink of financial insolvency. There are rumors that many royalty and advance checks are not arriving. I’ve been told that under the terms of Dorchester’s contracts, in the event the company goes under, rights to books will not become part of any bankruptcy settlement but will revert to the individual authors. But the fact is, no author likes to see their books go out of print—or never make it into print in the first place.

Apart from the trauma felt by authors who have books with Dorchester, this development is troubling for the entire industry. Dorchester was known in the business as a house that didn’t pay large advances but was willing to take a chance on books that were “different.” If you were a new author who’d written something “weird” like a romance set in India or ancient Rome, it didn’t matter how wonderful that book was, the fact remained that the big houses were unlikely to even look at it. Dorchester would. Dorchester was publishing paranormal romances when no one else was. Dorchester is the only major publisher that still has a line of horror. Many of today’s bestselling authors, like Sabrina Jeffries, got their start at Dorchester.

If Dorchester goes under, the biggest losers will be the reading public.

(And if you're curious about the picture at the top, it's a photo Amazon's UK warehouse.)


Pax Deux said...

Crazy Times.

Both Borders and Barnes and Noble, those evil empires, destroyers of the local bookstore, are also now in financial shambles. And academia, abandoned by its presses, its trying to figure out how to re-imagine the publish or perish track.

At least Amazon (UK) seems to have a healthy inventory... though books stopped being its primary product long ago.

E-readers are not as of now a solution for authors (or readers): not only are the number of ebooks still limited, the platforms for reading are often not very compatible. I have both a kindle and an iPhone and I still encounter glitches.

Perhaps we can take comfort in the fact that your books, very good books, are still holding strong, and finding the publishers we need to read them.

orannia said...

I'm still not sure I'm clear on the reasons behind Dorchester's move to all would think they have crunched the numbers, but...

I am glad that the author will retain their backlist in the event of bankruptcy, although obviously fingers crossed that doesn't happen. (I seem to remember a nightmare scenario when I first came online about a publisher holding on to an author's backlist...and not publishing it.)

Lainey said...

I'm just not ready to let go of my dead tree books. When I first read about Dorchester's move a few days ago, I was disheartened. There are three authors there that I read, two of whom may not survive.

liz fenwick said...

Sobering news...

Charles Gramlich said...

Does this mean that all their imprints will go digital too? I'm wondering about Zebra in particular.

cs harris said...

Pax Deux, crazy times, indeed. I'm thinking about doing another post on e-readers. I don't have one myself, but my last royalty statement was a real eye opener.

Orannia, I suspect it was do this or die. They may still die. I'm told the Anderson News debacle had a lot to do with their financial troubles.

Lainey, I'm with you. I don't like reading on a screen. Your favorite authors may move houses. Many are.

Liz, it's really been a shock to everyone in the industry I know.

Charles, yes, it's their entire list.

Queen Lizz said...

Being in the IT industry, I must say that eBooks have a certain allure. My husband, who is an aspiring fantasy author, himself, keeps asking me if I would like a Kindle for my birthday. I keep vacillating, and mainly because I love the feel of a REAL book.

I have several of your novels, and they are all Hardcover editions. Oddly enough, I spend all of my day on a computer for work, and I cannot bring myself to look at an eReader in my spare time... but yet... ah, to eRead or not to eRead. THAT is the question. By the way, how do eBooks affect the royalties of authors?

Steve Malley said...

Candy, the further unsubstantiated rumor is that sell-through on paperbacks may be as low as 20%. I'd imagine having to print five books to reach a single reader made reaching that 88% less attractive...

Charles, I know one imprint, Hard Case Crime (my favorite!) is refusing to die quietly: they're out right now shopping for a new publisher!

and Queen Liz, you just asked one heckuva question:

the Big Houses are struggling to figure out how to deal with this 'crazy ebook thing', and for the most part their answer has been to charge printed-book prices and pay a standard 15% royalty to their authors.

This despite not having to print, warehouse or distribute an ebook and not needing a reserve for returns.

Self-published ebook authors get 70% royalties.

There's a lot of pressure on the Big Houses right now to justify the extra money they take, and a lot of tug-of-war over ebook rights. Most recently, Mega Agent Andrew Wylie declared his intention to 'self-publish' his clients' backlist. We're talking about writers like Salman Rushdie and Philip Roth.

His arm-twisting seems to have worked. Random House sued him, then caved. I can only assume they were forced to admit they had no reason *not* to share more of the ebook royalties... :)

Steve Malley said...

Wow. It's been *forever* since I had that much to say!

Pax Deux said...

Well, then Steve, do not keep to your self so much! Very informative post...

And Candy, I would love to read a post on your take on eBooks. I am extremely ambivalent myself. I obviously have bought many -- and read them when I know I will travel distances on commuter trains, metros, etc. I also buy them when I find that I have gone through my new book pile too quickly, and start jonesing for novelty. But I make sure to buy print books of the authors I know I will want to re-read, or share...

cs harris said...

Queen Liz, I'm with you; after staring at a computer screen all day, I want to curl up with a real book. I'm hoping to do a posting this coming week on ebooks and authors.

Steve, I've heard that rumor, but in my experience any author with less than a 50% sell-though rate will find themselves in serious danger of not having their contract renewed. (Sell though for the hardcover of What Remains of Heaven was 91%, but that is virtually unheard of and says that NAL seriously underpublished the book.) And don't get me started on Random House and ebooks of backlist titles! I asked for the rights back for 4 of my out-of-print romances, and they turned around and slapped them up as ebooks themselves, without my approval or even negotiating a royalty rate. Grrrr.

Pax Deux, it's coming!

Jen said...

I welcome more ebooks... I love Candy's books - but I find myself thinking 'do I love them enough to buy hardcopy?' Even three quarters of an inch of shelf-space is an issue, when the only room in the house with no books in it is the bathroom - and that's AFTER over a thousand paper books got replaced by electronic. eBooks are friendly on the eyes when read on a proper eInk reader, easier to read than paper while in bed, in the bath, and while eating, and I can carry my whole electronic library with me wherever I go. And maybe I'm getting old, but I find myself thinking 'It'll all go electronic eventually... I can wait.' So the authors, and publishing houses, who publish fiction in electronic format get my money, and the rest... don't.