Monthly Archives: January 2011

It’s Monday & Borders has done it again

Borders Books has made the news again and not in a good way.   Last month, the bookseller declined to pay certain publishers for books it had already received from them and issued what amounted to an ultimatum that these publishers and others accept its offer of taking on up to 1/3 of its debt or it would cease doing business with them.  Well, to be honest, the refusal to carry these publishers’ books wasn’t reported in black and white but the implication was clear, at least in my mind.

Last week, Borders announced it had reached an agreement with GE Capital for $550 million in refinancing, providing it managed to meet certain requirements.  I outlined some of the requirements here.  I had my doubts about Borders being able to meet these requirements, but it was at least a somewhat hopeful sign for the troubled company.

Then comes the news from last night.   Imagine the reaction of landlords, vendors and publishers around the country as they wake up on this Monday morning to the news that Borders is “delaying” payments again this month.   What’s important is that last month’s “delay” was only to certain publishers.  Now Borders is refusing to pay some of its landlords and non-book vendors as well.  This is not, in my opinion, a move meant to encourage these creditors to help Borders meet the requirements set for by GE Capital.

According to Borders, it is taking this move in order “to help the company maintain liquidity while it seeks to complete a refinancing or restructuring of its existing credit facilities and other obligations.”  Their statement adds that the company “understands the impact of its decision on the affected parties.”

Gee, that’s nice of them.  I’m sure all those vendors and landlords and publishers — some of whom are not the major publishing houses — appreciate the fact Borders understands.  That understanding will be small comfort, however, as they now have to find ways to meet their own bills.

Borders may be trying to avoid bankruptcy, but it is clear at least some publishers expect that to be the final outcome.  The NY Times reports that, while certain publishers who met with Borders last week didn’t outright reject the deal Borders is trying to push, they also didn’t accept it.  In fact, Borders failed to address “the fundamental issues that drove the company to its current troubled position.”  In other words, it seems clear Borders wants to have its cake and eat it too, no matter what the impact might be on its creditors.

An executive with a major publisher who spoke to the Times, and who isn’t identified, noted that only half of Borders’ existing stores are successful.  I read that to mean these stores are making a profit.  50% maybe making a profit.  Or at least not losing money.  Where has the accountability been over the years for Borders?  They didn’t get into this situation overnight.

But what really gets me is the gall of Borders saying that their move in delaying payment is in “their best long-term interest”.   Okay, one one hand I can see what they’re saying.  If Borders were to go under, that would be one less source of income for these vendors.  Every business needs to look at not only short-term income but long-term as well.  Still, I have to wonder how many of these vendors are large enough to absorb the immediate loss of payment without it affecting their ability to meet their own bills.  How many people will lose their jobs, at least temporarily, because of this?

With their stock falling 11% after this announcement, how long can Borders continue to hang on?  I don’t want to see them go under.  However, I also don’t want the publishing industry, or any of the company’s vendors, to go under because of the problems Borders should have seen coming.  Maybe the solution is a court ordered restructuring.  It’s clear to me major changes in the executive suite, and in the company mindset, need to be made as well.  Borders cannot continue to exist until and unless this occurs.

 

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The Mystery of First Love by Sarah A. Hoyt

Most people remember when they got their first crush – that feeling that there was something special about the opposite (of for some people same) gender and that this person embodied it.

I’ve talked to people who remember their first crush coming in all sorts of ways. It doesn’t always have to be on someone who is flesh and blood. Sometimes it is, of course. I think the best literary description of this is Tom Sawyer seeing Becky Thatcher. It’s about the right tone and the right reaction. I have friends who fell “in love” with someone on the screen. The other day, apropos nothing I remembered the girl in my notoriously difficult eighth grade physics class, who went up to get a test she was afraid of seeing clutching a collector’s card of a character of Space 1999 (Alan Wassname.) Her name has long since disappeared in the mists of my memory, as has her face, but I remember her hand clutching the card behind her back as a talisman, because “he” had protective powers. And I remember we all teased her about her crush.

It is perhaps fitting that I would take this one step further. I first fell in love with a person composed entirely of words – a creature who had no form or shape except what the author could evoke in the reader’s imagination.

Yes, it was Athos, from the Three Musketeers. For years I’ve assumed I was eleven, perhaps because it’s the ideal age for this. Looking back, though, I don’t think so. I was somewhere between eight and ten. (We played at the Three Musketeers in elementary school. By eleven I was at the two year “preparatory school” where I never got anyone to play my games and instead used to walk around the playground daydreaming.)

I remember hiding in grandma’s potato-storage area. (Her house was up the road, so I spent my afternoons there.) I don’t know why, but I suspect I was hiding from my long division homework. If I’d been found out, I’d have been made to do it, as opposed to inventing a very important reason it hadn’t been done, which had served me fine so far, and was much more fun. I had the Three Musketeers with me. I started reading it not expecting much, because lately I’d been going through the “real literature classics” section of the family library and had learned not to expect much. Still, it was printed and it presumably was a story. I got past the whole thing with the horrible-looking horse fairly unmoved, but of course, I wanted to see if D’Artagnan caught the man who stole his letter.

And then… And then the musketeers come in, and are being chewed out, and … And Athos appears. Wounded, in pain, but coming here to save his friends from disgrace.

I think I read that passage five times in a row. I might have worn the ink off the page. The next few weeks were devoted to fervid day dreams where Athos got catapulted into my immediate vicinity through some sort of space time/reality disturbance (thereby probably making me fit only for science fiction.) The dreams never got very far, since my knowledge of love was reduced to what I could see of the people who courted my cousin Natalia – i.e. when you were in love you got to sit on the uncomfortable front room sofas, under the eagle eye of a chaperone, and make stilted small talk. But I knew I liked men – not boys, note. Most boys my age annoyed me – and I knew what did it for me was nobility and intelligence. (And perhaps a tinge of sadness, though I eventually grew out of that. Still, a tragic past is so romantic, provided you don’t have to live with the guy.)

Most first crushes fade, I guess, but this one remained. At first I re-read the book obsessively, eventually adding Twenty Years after, and later the wretched Viscount the Bragelonne (I still think Dumas Jr. wrote it. Either that, or his father had gone soppy in his old age.) I finally weaned myself to one re-read a year. But Athos remained my fictional crush.

Finally, in my thirties, I realized I was now a writer and I had the power to invoke him at will and spend however much time I wanted with him. About that time, my editor at Prime Crime asked if I wanted to do an historical mystery.

The result was the musketeers mysteries, written as Sarah D’Almeida. The first one, Death Of A Musketeer, has now reverted to me. I’ve made a deal for its publication with Naked Reader Press. I’m not sure of the exact publication date yet, but I think it’s February.

Give it a try, if you haven’t yet, or even if you have but would like an e-copy. It’s non-DRMed, so it will last you through changes of devices. And if this sells well enough for me to think it’s worth my trouble, I’ll be happy to write book six, and seven, and…

The continuation of the series is in your hands. Not to mention the enabling of my crush.

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Borders Redux and more

Let’s start with the “and more”.  Today’s guest post by Sarah A. Hoyt is going to be delayed a bit…possibly longer than a bit.  Sarah has decided to mirror my life for the past 20 hours or so when I was without internet service.  She called a few minutes ago to let me know that her internet is now down.  So, as soon as it comes back up, she’ll send me her post and I’ll put it up.  In the meantime, more news on the Borders debacle.

I’ve read two reports this morning stating that Borders has gotten a commitment from GE Capital for a $550 million credit facility.  Now, this isn’t a done deal yet.  Before receiving the lifeline, Borders is going to have to meet certain conditions.  According to Shelf Awareness, “the credit is contingent on Borders securing $175 million of senior credit facility with other lenders as well as $125 million of junior debt financing with other lenders or “certain vendors”–that is, publishers, who surprisingly enough do not seem interested in taking on Borders debt instead of being paid.”

In order to get this loan, there are certain things Borders will have to do.  One of the requirements is that it will have to close under-performing stores.  But wait, shouldn’t they have already done that?  This is a company that has been in trouble for years, not just weeks and months.  If there are stores that aren’t paying for themselves and don’t look to be able to recover, why are they still operating?  At some point, management has to recognize that you can’t continue operating in the red.

Other requirements are getting concessions from vendors and landlords.  But the most important one is convincing publishers to take on part of the debt load, something I wouldn’t expect them to want to do.  Why take on more debt from a company that, at the moment, is unable to pay you for stock you’ve already sent them?

Also from the Shelf Awareness articleBorders’s plan for the future has five key parts, it said, including expanding and enhancing the Borders Rewards Plus program; “aggressively growing” Borders.com and e-book market share; expanding the retail mix, “including non-book offerings”; “aggressively” reducing costs “across the business, including costs in the supply chain network and store portfolio”; and making “strategic investments in IT to improve the customer experience.”

So, let’s see, they want to expand a reward program that isn’t working because most people don’t want to pay to get discounts.  While I agree growing their e-book market share is a reasonable goal, it is probably too little, too late.  They waited too long to get into the market.  They don’t have an easily navigable site for e-books.

The expansion of their retail mix, “including non-book offerings” is what really boggles my mind.  Already when you walk into any of the Borders stores in my area, you are struck, not by the books they have to offer, but by how few books when compared to non-book items.  There are toys.  There are gadgets.  But there are fewer and fewer  books.  There is also a much smaller collection of music — if any — and it is the same with videos. Basically, when I walk into a Borders these days, it’s like walking into a modified Walmart or Target.  The only thing missing are groceries and diapers.

The last two items in their plan sound good but I am not going to hold my breath.  This is a company that has failed to cut costs as needed, running full tilt toward bankruptcy.  Now it wants those companies it owes money to to forget about bad business practices and to invest even more money into what is, in all likelihood, a failing venture.  This truly is a no-win situation, or has the potential of being one, for publishers and readers alike.

For more information on this, check out this article as well.

In other news, Amazon’s sales for the last quarter rose 36%, but their profits increased only 8%.  That sent stocks down last night but, iirc, they are back up this morning.  Amazon also reported that they are now selling more kindle e-books than paperback books.  This is despite the fact paperback sales continue to increase.  According to Amazon, they now sell 115 kindle e-books for every 100 paperbacks.   Amazon had predicted this would not occur until the second quarter of this year.  It is, in my opinion, another indication that the e-book revolution is here to stay.

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The Revolution is Here

I’ve spent a lot of time and blog space over the last month or so looking at what’s been happening with the big box bookstores, Borders in particular.  Today, I’m turning my attention to some news that came out of the second Digital Book World conference in NYC.  Some of the news isn’t surprising.  Some is gratifying and some just makes me want to scratch my head and wonder when the ostriches are going to finally pull their heads out of the sand.

A little background data to start.  AAP (The Association of American Publishers) announced earlier this month the sales figures for November.  Overall book sales were up 5.1% over a year ago and up 3.5% for the year-to-date.  Sounds good.  Not great, but good.  The adult hard cover sales were up 4.3% over the numbers for a year ago but — and this is a big but — down 6.1% for the year-to-date.  Adult paperback sales were down — 19% for the month and 1.4% for the year-to-date.  Adult mass market paperbacks were down 9.5% for the month and 14% year-to-date.  E-book sales, on the other hand, were up 129.7% for the month and 165.6% year-to-date.  With this in mind, let’s look at some of the comments coming out of the conference.

According to Forrester analyst James McQuivey, in a recent survey, 89% of the publishers responding said they were “optomistic” about how the digital revolution would impact the industry.  Of those, 83% said they were ready to compete in this changing market.  It is interesting to note that, even as he said this, he had to amend it by saying that not all of those proclaiming readiness had a plan yet.  Sorry, that sounds to me like they were trying to answer what they thought teacher wanted to hear, not answer truthfully. (Note in this same article that Shelf Awareness comments that e-reader prices have dropped close to the $100 mark a full 2 years earlier than Forrester had predicted.  A clear indication, in my opinion, that the revolution is not only here but is pounding on the doors of traditional publishers, demanding to be let in.)

Sarah Wendell, from Smart Bitches, Trashy Books, attended the CEO panel and asked what turned into the firestorm question.  Simply put, she asked McMillan president, Brian Napack, when McMillan would allow its e-books in libraries.  Instead of giving a direct answer, Napack said McMillan is still “making library borrowing a possible business model for them.”

I’m sorry, but WTF?  It’s called OverDrive and a number of publishers are using it for audio and e-book downloads through local libraries.  I think Jane Friedman, CEO of Open Road Integrated Media, had it right when she responded that library lenders are potential customers.  I’ll add to that and say that library borrowers are as well.  In this day and age of ever increasing costs for books — both dead tree version and digital — a lot of people will borrow a book from a library before buying it.  BUT, if they like the book, they will go out and purchase it and others by that particular author.  This is especially true, in my experience, with regard to new authors.

But wait, I shouldn’t be surprised by this head in the sand stance from Napack.  Anyone remember the Agency Model pricing scheme for e-books?  If you don’t know what I’m talking about, google “agency model” or just look at Amazon.  If you see “price set by publisher” when looking at a book for your kindle, you can rest assured that Amazon had nothing to do with setting the price and couldn’t put it on sale if they wanted to.  Nor can any other digital outlet. (Yes, you guess right, I abhor the agency model.)

Galleycat adds this from the conference:  Goldman Sachs’ Barnes & Noble analyst/managing director Matthew Fassler had some gloomy predictions: “The economics of the digital business for B&N today looks a lot worse than it should. eBooks should be making more money when you think about the lack of physical inventory and the agency model. The startup costs to enter this market are enormous, but we are concerned that it is not making enough money, which reflects a competitive marketplace.”

E-books have been available for download from public libraries for awhile now.  OverDrive, which I first became aware of through downloads of audiobooks through my library, also allows for the download of e-books in EPUB format to those libraries who subscribe to their service.  The books are DRM-protected and, like any library book, you check them out for a period of time and at the expiration of that time, they are no longer available to you.  It is an answer to a market demand.  A demand publishers like McMillan have been ignoring since the beginning of the digital “revolution”.

Like it or not, these publishers need to read the writing on the proverbial wall.  Sure, e-book sales are still a small percentage of the overall market.  But that percentage is increasing by leaps and bounds at a time when most of the rest of the market is falling.  This is the time for the publishers — and authors — to embrace e-books.  Authors who have backlists where the rights have reverted to them should consider either e-publishing the books themselves or finding a digital publisher to do it for them.  I say digital publisher not only because, gee, I work for one but because, as an author, I appreciate the fact that most digital publishers pay much higher royalties than traditional publishers do.  Conversely, those publishers still retaining the e-rights to these backlists should put them out.  There is a market for these books, if only they would tap into it.

Like it or not, the revolution is here.  Those holding the door against it will either be overrun and possibly lose the battle — and possibly their companies — or they will finally see the light and do their best to embrace it.  The only question then is if they’ve waited too long.

Viva la Revolucion!

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Recharging the Batteries

After a week or more of going over the facts and figures of the last 5 months, my brain decided it had had enough.  Every time I sat down before my work computer, the brain shut down.  It simply refused to work.  I’d stare at the computer screen and wonder what I was supposed to be doing.  I’d open an Excel spreadsheet to review the latest numbers sent by our accounting gurus and my eyes would glaze.  There simply wasn’t enough coffee or tea or caffeine in any form or fashion to jump start the brain.

Okay, I’ll admit it.  That’s usually my reaction to anything that has to do with numbers.  I’m not a number person.  Never have been and never will be.  But usually I can push my way through it.  Especially when the bosses are waiting for my report and recommendations.  Not this time.

Making matters worse, I couldn’t write.  Whether it was a blog post or on my current work-in-progress, it just wasn’t going to happen.  I finally had to admit it.  I’d hit the wall and needed to recharge the batteries.

We all hit this point from time to time.  For me, this time, it was a combination of real life issues hitting throughout the holidays, work, stress and trying to finish my current wip.  Fortunately, I realized it pretty quickly and knew exactly what to do.  In fact, I’d already started taking steps several weeks before I finally realized I was about to smash face first into that wall.

What was I doing?  Something I should have been doing all along but had let slide after an injury over the summer.  I was working out.  More than that, I was having fun working out.  I don’t know about you, but if I work out regularly, I feel better and I function better.  If I’m having fun working out, well, I’ll work out more often.

But last week when that wall suddenly appeared, I found myself falling back on my oldest and most reliable method of recharging — gaming.  There is something so very satisfying about battering Jar Jar Binks and watching him smash into dozens of tiny Lego blocks.  Okay, I admit it.  I play Lego Star Wars – The Complete Saga on my Wii.  But really, I only do it so I can beat up on Jar Jar Binks.  Is there anyone who has seen that “first” movie — you know the one I mean.  It came out fourth but is first in the story line and, imo, really, really bad — who hasn’t wanted to beat Jar Jar?

Yesterday I spent a couple of hours, while waiting for a tech to come do some repairs, playing Zelda:  The Twilight Princess and that started me thinking.  Mind you, just the ability to think was welcome.  But what surprised me was the path my thoughts went down.

A little background for those of you who aren’t familiar with The Legend of Zelda.  There are approximately 20 games in the series.  It has appeared on consoles ranging from the older Nintendo systems to handhelds.  To complete the game you have to be able to solve puzzles and fight.  But there is also a continuity of characters in the games.  So, as you move from one game to the next, it’s like you’re playing with some old friends.

But that’s not what started me thinking.  No, it was how Twilight Princess began.  The start of so many games begins with training, with learning how to use your character’s different abilities.  Often, there is little, if any story revealed.  Not so with Twilight Princess.  You are introduced to the hero and people who are important to him.  You are given hints about trouble brewing.  Then children he cares for are put into danger and he has to make the decision whether to go after them or not.  Of course, being the hero, he does and he rescues them.  But this is only the prelude to the real danger ahead.  The hero soon has to decide if he is willing to risk his life, and possibly the lives of his friends, to save the world.

This training period was the hook for the game.  It gave the necessary information so I knew how to use my hero’s abilities but it also threw me into a story where I cared about what happened to the characters and wanted to keep playing to see what was going to happen next.  It’s the story of the game, not the smashing of buttons, that has me wanting to do more.

And that is what the opening of a book should do.  Note that I said opening. Those first few pages of a book can be the make or break of it.  You have to hook the reader, convince them they want to read on.  That means giving them characters they care about — and that can be either a villain they hate and want to see brought to justice or a hero they can cheer for — and giving them enough of a hint about the plot to make them want to know what happens next.

So that’s my challenge as a writer and an author.  Does my book — or the book I’m considering for NRP — hook the reader quick enough to keep them reading?  Does it give the reader characters he can care about?  Does the story start in the right place?  If it doesn’t, it won’t matter how well written the book is.  Readers, on the whole, want to read something they care about, something they can enjoy.  If you don’t believe me, think back to some of the books you had to read in high school or college.  They were classics or written by the masters of modern literature.  But did you enjoy them?  Would you have bought them for recreational reading?

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Monday Morning . . .

and my brain is almost working.  So a couple of links and thoughts and then a reminder.

The first link is to Mad Genius Club.  This morning, Dave Freer is blogging about the potential of an e-book avalanche.  Not only does he discuss the signs he’s seeing, but also his plans and thoughts on the changing of the industry.

Of particular interest are his comments on Amazon giving authors access to their Bookscan numbers.  I’ve heard the same stories Dave has from authors who are convinced — and some probably rightly so — that the numbers they are getting from their publishers are, at best, mistakes and at worse works of fiction.  Amazon, by giving authors free access to data many hadn’t been able to afford before, is doing two things.  The first is simply giving authors a means of double-checking their sales numbers (which is a good thing.  I know authors who have had royalty statements reporting the exact same number of sales reporting period after reporting period).

But it’s the second thing Amazon is doing that I think is a brilliant piece of marketing.  They are building loyalty with these authors.  Especially since Bookscan will soon be reporting e-sales, iirc.  Simply put, Amazon is saying, “Here you go, authors.  We are on your side and we want to give you as much information as possible.  We have nothing to hide.  Can your traditional publishers say the same?”

(Of course, this still doesn’t deal with the problems inherent with Bookscan numbers because they don’t count all outlets where books are sold.  But it is still a tool that has not been available to a number of authors before now.)

The second link this morning is to agent Rachelle Gardner’s blog.  She has an excellent post on the dilemma faced by a prolific author, especially an author who has just signed a new contract.  As a writer, her comments struck home with me, especially those about publishers who insist on contract clauses tying the author to that house either through the right of first refusal or by not allowing an author to sell to another house until after their contract with the first house has been fulfilled.

From a publishing standpoint, I can understand the need to see how a book does before committing time and resources to another book by an author.  Even as a digital publisher, it’s an important consideration.  Most e-publishers — NRP included — don’t pay advances.  But that isn’t the only cost that goes into publishing an e-book.  You still have multiple people involved in the intake process, editorial process, conversion process, promotions, etc.  All that takes time and money.  If those expenses aren’t met and profit made — very important so you can pay the author and they can then write more for you — you can’t keep publishing.  Negative cash flow can only go on for so long before a company will fold.

But from a writer’s standpoint, it’s a frustrating issue.  This is especially true if you’re just breaking into the business.  It leads to having to decide between sitting on a manuscript — or three — while your first book is published and those first sets of numbers come in or not writing — ACK! — or finding alternative means of getting your work out there.

Can you can, “vicious circle”?

Finally, the reminder.  Our submission period is open for one more week.  We are currently looking for short stories, novellas and novels in all genres except erotica.  For more information, you can check out our guidelines here.  Or if you have any questions, you can e-mail us at submissions-at-nakedreader-dot-com (you know what to do to make it a valid e-mail addy).

Now, I’m off to find more coffee so I can dig into the work on my desk.

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B&N Shake-up

Well, it’s not only Borders that is shaking things up at their corporate headquarters.  According to Publishers Weekly, B&N has laid off approximately 100 employees.  What’s troublesome from a reader’s perspective is that it looks like the hardest hit area of the company in this round of “lay-offs” — I agree with one of the comments I’ve seen that what B&N has done is fire these 100 employees — is in their buying group.

From PWB&N wouldn’t confirm the number or names of people let go, but PW has learned that Bob Wietrak, the well-known v-p of merchandising, and Marcella Smith, director of small press and vendor relations, have left the along with a number of buyers, including cookbook buyer Lee Stern. Reports say about 45 to 50 positions in the buying group were eliminated.

What is most disconcerting for publishers, large and small, is there has been no announcement about how the responsibilities these 45 – 50 people once performed will be handled.   It is something that we, as readers, should also worry about.

But the real concern is that this puts publishers in an even more precarious position when it comes to the big chain brick and mortar stores.  Borders is demanding they take on up to a third of the company’s debt or they won’t carry that publisher’s books.  (at least that’s the inference).  Now B&N has laid off a huge portion of its buyers/merchandising officers.etc.  The only good news is that this past year was better for independents than in recent years

Perhaps my prediction that we’ll see more independents surviving and ultimately thriving as they carve out their own niche markets is coming true sooner than I expected.

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