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26 posts from March 2005

Free WiFi?

I spent yesterday at the first-round NCAA tournament games in Indianapolis. Being a curious technology geek, I took my iPAQ 4355 PocketPC along for the ride. In addition to being an all around great portable device, it also serves as my wireless connection when I don’t have my laptop. I wondered if it would be possible to tap into an open wireless connection while watching the games…

There were at least 4 separate signals strong enough to use from my seat. Unfortunately, all but one were private and password protected; the other one was available for a daily fee. I’m a tightwad, so I didn’t open my wallet, but it got me thinking…

Why doesn’t someone start a free WiFi service that’s totally advertising supported? My goal was to keep up on scores from other games. Why not dedicate the top half of my PocketPC’s screen to the browser page with the scores and the other half to advertisements? I guarantee you I would have scanned that connection throughout the day, providing advertisers with lots of impressions.

Would advertising really generate enough revenue to support the cost of providing the WiFi access? Who knows and who cares? The gear is already in place. This would simply be a way to generate a bit of advertising revenue to help offset the cost of the system that’s already set up.

This sounds like a business opportunity for Yahoo, Google or one of the other online advertising experts. Google’s AdSense program would be a natural fit for this: context sensitive ads constantly appear on your screen, tempting you to click for more information.

Would enough people use the service to make it worthwhile? What if it didn’t really cost the service provider anything, other than some of their existing bandwidth? The system could be configured so that only a certain percentage of available ports and/or capacity could be available for this at any given time – that way, the people who use the connection for real work (e.g., facility staff, reporters, etc.) would be guaranteed a speedy connection.

I’m sure there weren’t too many other fans there with WiFi devices. The way SmartPhones, Blackberry’s, etc., are going, maybe this sort of content will simply be part of your service plan with a commercial carrier. In the mean time, I wish there were more places like Panera Bread, where you can get a free WiFi connection with no strings attached.

Selecting a Publisher: Areas of Expertise

This is the first of several posts I plan to make on how an author might go about selecting a publisher. I’ll try to pull from my experience not only as a former author but also my current job as a publisher. Additionally, I’ll do my best to speak fairly, without a bias to my employer.

Every publisher is currently waging a war for shelf space. They’re fighting with competing publishers and competing topics: A topic area that’s not performing will see its shelf space reduced in favor of one that’s showing growth. Although a publisher venturing into a new area can sometimes be successful, my advice is to go with one of the existing leaders in that segment.

It’s pretty obvious why you’d want to sign with a publisher who has a great reputation with readers in that topical space, but what about the buyers at each of the major bookstore chains? (The buyers are the ones who decide how many copies go on the shelf, which ones get promoted, etc.) Can the publisher’s reputation in a particular topic area make a difference to them? Absolutely. If a publisher is a leader in one area, they’re highly likely to have a strong working relationship with the bookstore buyers for that topic. That’s critical. After all, buyers are extremely busy people and it’s hard for some of the smaller players to even get significant face time with an account.

You might be tempted to go with a smaller player, figuring that your book will be an important experiment for them as they look to expand into new areas. Good luck. I’d be skeptical until that publisher provides specifics on how they intend to gain share in this new area. How certain are they of getting a meeting with the buyer for that topic at each of the key accounts? What sort of steps are they going to take to compete with the leaders?

The leaders in each area are used to doing a variety of promotions to help maintain their leadership position. Every book doesn’t get promoted, of course, but you’re more likely to ride the coattails of a broad promotion with a leader than you are with someone else. There are exceptions, of course, but I’d insist on promotional details before buying into the promises of someone other than one of the top 2 or 3 publishers in the segment.

OK, you’re dealing with a publisher who claims to be a “leader” in that area. How can they back that up? Do they have data they can share with you? If not, how do their claims come across in the store? What percentage of the shelf space do they have on that topic? Are they doing any promotions? If they’re not doing one now, when was their last promotion?

Don’t forget about the online accounts. What sort of relationship do they have with them? How actively are they promoting online? Amazon and some of the others offer bestseller lists by topic area. How does this publisher fare on those lists? What are some of their top titles and what’s the overall ranking (Amazon, B&N, etc.) for those titles? Can they really be a “leader” if they’re not on the bestseller lists, their “top titles” have low rankings, etc.? Probably not.

I respect a publisher who knows their limits and avoids trying to be everything to everyone. Even the largest conglomerates have certain topic areas they don’t experiment in. That’s a good thing, considering the importance of building and maintaining a strong reputation in the minds of readers and buyers alike.

In Search of the Perfect Computer Book

I’m going out on a limb here to say that the “perfect” computer book has yet to be published. Code errors, incorrect steps, typos, etc., somehow manage to infiltrate the book no matter how meticulous the development editor, copy editor and tech editor are. Everyone involved in the project generally works hard to eliminate the problems. It’s human nature to want to do a good job, right? It’s also human nature to make mistakes.

Some publishers don’t like to promote the fact that errata exist – they feel it’s an unnecessary admission of a less than perfect system. I don’t like to see errors in my books any more than the next publisher, but:

  1. I’m willing to admit they happen,
  2. I want to get corrections to customers as quickly/easily as possible, and, most importantly,
  3. I want to continue looking for ways to improve the system.

I think every book page on a publisher’s website should have an errata link. Shouldn’t we go further though and offer errata via RSS feeds so that customers won’t have to hunt for the corrections? Is this something you would like to see? What other suggestions do you have?

Advances and Royalties – The Risk/Reward Decision

Let’s say you’re an author and you’re about to sign a deal for a $10,000 advance against a 10% royalty. Would you consider a lower advance in exchange for a higher royalty rate? You can think of it as a “share the risk, share the reward” option – I encourage editors and authors to consider it from time to time. Here’s why:

  1. It shows the author really believes in the project. Authors often come to an editor with what they think will be the industry’s next bestseller. If an author really believes that, why not take on more short-term risk (lower advance) in exchange for the possibility of greater long-term wealth (higher royalty rate)?
  2. It helps reduce the publisher’s risk of author advance write-off’s. I’ve mentioned this before but it’s worth repeating: Author advance write-off’s are painful for the publisher! The goal is to pay an advance that does not exceed the amount the author is likely to earn in royalties. If the publisher pays a $12,000 advance and sales of the book result in only $10,000 earning out, the other $2,000 must be written off. The publisher’s overall profitability just dropped by $2,000.

You might assume the publisher has nothing to lose by pushing this option on an author. Although it reduces the initial risk the publisher takes on, every royalty point the author earns comes right off the publisher’s bottom line.

To keep the numbers simple, let’s assume a $30 cover price, an average discount of 50% and a flat 10% author royalty. How much does the author earn on sales of 10,000 units?: $15,000. How much does each additional point of royalty above 10% represent to the author?: $1,500. If the publisher offers you two options, a $10,000 advance against a 10% royalty or an $8,000 advance against a 12% royalty, which would you take? The first one generates $15,000 for every 10,000 units sold and the second option generates $18,000 for every 10,000 units sold.

Maybe you figure it’s not worth giving up that $2,000 portion of the advance just for the opportunity to earn $3,000 more in the long run. But what if the book sells considerably more than 10,000 units? Although it’s easy to assume that a point or two of royalty isn’t going to make a huge difference in an author’s income, simple math says it’s all relative: At the end of the day, you’re making 20% less with the $10K/10% option than you are with the $8K/12% one…unless the book sells so few copies that the author advance doesn’t earn out. That’s where the author has to decide if they really believe in the project.

For the publisher, every percent of royalty paid above the original deal comes right off the bottom line. In the example above, the publisher makes $3,000 less on the title if the book sells 10,000 copies and the author opts for the higher royalty rate. Even though I’m making less in the long run, I appreciate the fact that the author chose to be more of a risk-bearing partner (by accepting a lower advance) and I’m fine paying out a higher royalty…sometimes! There are plenty of cases where the book is such a strong title that the author advance will easily earn out – in that case, there’s no incentive for the publisher to put an alternative advance/royalty model like this on the table.

I also realize that an author needs a certain minimum amount of money up front to justify their time investment in the project. They simply can’t accept a number below that point regardless of the upside that might come with a higher royalty rate. If the author is already at their acceptable minimum level with the advance on the table, there’s obviously no point trying to sell them on this option.

Finally, there are other ways for authors and editors to share the risk and share the wealth. For example, would you be more inclined to accept that $8K advance against a 12% royalty if the royalty jumped to 15% after 20,000 copies are sold? Or, is there some other type of escalating royalty offer that would enable you (the author) to accept a lower advance? If you’re not already having these types of discussions with your editor/publisher you don’t know how much you might be missing out on in the long run.

Mark Cuban’s The Sport of Business

Mark Cuban’s blog is one I keep a close eye on. As a Purdue grad, I used to think he was just a lucky guy from IU who timed the dotcom bubble right, bought the Mavericks and now makes a spectacle of himself at games. OK, maybe I’m right on one of those points, but there’s no debating this guy is a genius.

His latest post is called The Sport of Business and features a list of reasons why he feels “success is about the edge.” Here are my favorites, but be sure to read the entire list on his blog:

The edge is getting so jazzed about what you do, you just spent 24 hours straight working on a project and you thought it was a couple hours.

The edge is knowing that you can fail and learn from it, and just get back up and in the game.

The edge is being able to call out someone on a business issue because you know you have done your homework.

The edge is recognizing when you are wrong, and working harder to make sure it doesn’t happen again.

The edge is being able to drill down and identify issues and problems and solve them before anyone knows they are there.