Their struggles in the old model have been well documented (of course, we should have expected them to write about their experiences): the starving writer up in the garret who uses rejection letters from publishers for wallpaper is an established literary hack. In the new world of print on demand, e-books and social media marketing, the author takes center stage. Those with an appetite for it can really take control of their work and commercial fortune.

In Part 1, we looked at the three big waves crashing down on the traditional book publishing business: Google Search, e-books, and print on demand. In Part 2, we tried a bit of science fiction, speculating on how this might play out for all participants: readers, authors, printers, publishers, retailers, and e-book device vendors. In Part 3, we looked at the economics of returnability and the impact of the Espresso Book Machine on the supply chain. In Part 4 here, we focus on authors, without whom we would have nothing to read.

Narrative or Reference?

The impact of digitization depends on the type of book you're talking about:

1. Narrative books, such as novels, biographies and other stories. The printed book is an ideal format for narrative books. Amazon had to recreate the print-reading experience to make the Kindle work for narrative books. Using an e-book device scores on many counts: choice, delivery, price (possibly), storage; but whether it beats the experience of reading a good old fashioned book is still unclear. In any case, narrative books are not well suited to typical online or mobile devices. Reading a novel on a laptop browser or iPhone is a degraded experience.
2. Reference books, such as education, scientific/technical/medical, and business books. Historically, these have been squeezed into the book format because no better alternative existed. The online experience could be far better than print in this case. Online, you can search, link to related works, drill down into details, see and hear rich media, etc.

Thus, we expect the impact of digitization will be much bigger and more immediate on reference books than on narrative books. Both will be affected, but reference books may see a music industry-style wave of change, while the change to narrative books may be slower and more nuanced.

New or Established Author?

This is another huge factor. This quote from an excellent report by Gilbane on "Beyond E-Books" says a lot about the business from the author's perspective:

"During the 2009 O'Reilly TOC Conference, Jason Fried of 37signals described the book that he and his colleagues had written based on lessons learned from creating and servicing their successful project management and collaboration product named Basecamp. They published their book with Lulu.com and report sales of almost $500,000 in the last several years. This enabled them to reach number three on the Lulu bestseller list at one point. Ideally, this story would have a happy ending, and they would publish their next book with Lulu.com. Alas, the success of their previous book motivated a traditional publisher to offer them a significant advance for their second book. The offer was too tempting to refuse. They now have to hope that the traditional economic model, with 10 to 20% royalties, will generate more than Lulu.com's 80-20 split. In essence, they are wagering that the traditional publisher will be able to sell at least four times the number of books that Lulu.com would have sold.

"When asked about this, Young was nonplussed. He simply stated that his goal was to publish their third book and to make them loyal authors in the future. It is his number one goal to help his authors become successful."

This will be music to the ears of traditional publishers. They can leave first-time authors to self-publish via print on demand (POD), because once the authors are established, they will want the kudos, branding, and distribution that only traditional publishers can deliver.

Well, perhaps. We are still in the very early stages of this wave of change.

Get Me Into the Book Store

Publication doesn't feel real to an author until they see their book in a traditional bookstore. Seeing it on Amazon.com is nice, but everyone knows that shelf space is unlimited online. The real prize is occupying scarce shelf space at Barnes & Nobel and independent bookstores. What the author wants to know from their publisher is, "How are you going to get me into that bookstore?"

Pure online players will respond with something along the lines of, "Well, if a lot of readers find you online, then enough of them will buy your book for a traditional publisher to become interested in you, and then that publisher will get you into bookstores." That is a relatively weak answer.

But the traditional model of stuffing shelves with "returnable" books, many of which end up getting shredded by the publisher, is clearly unsustainable, as we explored in Part 3.

How this will play out is far from clear. But one thing is clear: the landscape will look quite different.

And Do It NOW!

If you are writing a timeless classic, then the traditional three- to four-month lag between the completion of the manuscript and the book's appearance in bookstores is fine. If you are writing about something timely, that just won't cut it anymore. Bloggers and online writers will steal your thunder before your book hits the shelves. The immediacy of print on demand and e-books eliminates this time lag.

Write About What You Know

Writers do love to write, so it is not surprising that some are starting to document their experiences in the new world of POD and e-books. One that caught our eye is Literary Adventures in POD, but there are many more.

Literary Agent 2.0

In the old model, first-time authors usually had to find an agent, who then found a publisher. This site has good FAQs on the process and on deals.

These relationships -- between author and agent, and agent and publisher -- are often very personal. As such, they can be totally wonderful or totally awful, and there are plenty of tales of both. They are typical "Let's do lunch" relationships. So, bringing Web technology to this match-making experience is logical; one venture that has done this is Creative Byline.

Four Big Changes for Authors

1. Fewer advances. The lack of an advance will be compensated for by...
2. A bigger share of the pie. We expect this to grow from 10% to 30% (or more) of the retail price. The retail price will likely drop, too, and so authors will have to...
3. Create the finished product themselves. Authors will have to pay for cover art and editing out of pocket, as well as...
4. Become savvier about online marketing. A lot of tools are out there: social media, affiliate networks, email lists, SEO/SEM, and so on. Some authors will leave this up to intermediaries (the next form of publishers), and some will do it themselves.

The future of authors can thus be summed up as: do more of the work, get a bigger percentage of the retail price (which will be lower), and hustle online.

We would love to hear from authors about their experiences.

We outlined the practice of "returnability" in Part 1, but it took a pioneer in print on demand (POD) from Canada to help us see the scale of the issue. Bruce Batchelor is a successful publisher and author. Back in 1995, he created the world's first POD publishing service, Trafford Publishing, which was recently acquired by US competitor Author Solutions, Inc.

So he knows this game from the inside. Through some emails exchanged with him, we began to see that eliminating this business practice was critical. Eliminating it may seem radical and impossible to book industry veterans who have never known an alternative. But change may now be feasible: necessity is often the mother of invention.

Further down, we'll look at new technology that could change the supply chain even more radically.

The Problem

Bruce describes the problem very well on his site. There, you'll find a 7-minute YouTube video for people who need the basics. Those in the book industry already know this, but for outsiders, here are the basics:

• Publisher says to retailer, "Here are some books. If you don't sell them, we'll take them back."
• According to Bruce, "Returns (and eventual shredding) reportedly run between 40% and 80%." That is massive waste.
• How can publishers afford this? By charging the retailer more. In most other markets, retailers get 50% off the retail price. For books, they get 40% off.

Bruce's mission is to get publishers to change this 70-year-old practice (it started in the Depression of the 1930s). That would save publishers a ton of money.

What About Retailers?

Our question to Bruce was, "Nice idea for publishers, not having to deal with returns. But retailers are already struggling. How will they survive if they have to deal with this added risk of inventory?"

Bruce told us:

"The answer is to give the retailers a deeper discount [which he explains in his video and on his website]. If retailers now get 40% and are barely surviving, think how much better off they would be getting 50% off. That's a 10% (of gross sales) reduction in expenses and would go directly to the bottom line.

"The sad truth is that small booksellers already order carefully and are not rewarded for doing so. It is the chains that grossly over-order, according to every publisher I've ever talked to. And the chains are already getting 50% to 65%(!) off simply by bullying the publishers. So, the smaller stores are subsidizing the wanton waste of the chains".

Retailers do pay higher prices, then. They pay to return books, and that cost is significant. It is not a free lunch for them, and it is a disaster for publishers.

Without this practice, what would happen? There would be inventory sales and discounts: i.e. the normal functioning of free markets.

What Other Industry Has this Practice?

Music retailing engages in returnability as well, and that industry seems to be doing just fi... er, nevermind.

If Trees Could Vote

Trees would vote to change this business practice. This is an ecological disaster. If consumers knew the environmental cost of those stacked shelves, they might change their behavior. Yes, it would accelerate the trend to e-books and many would see that as a positive, but it would also cause terrible hardship to all who work in the industry and would deprive people the inexpensive pleasure of the good old-fashioned book.

Can technology deliver a solution that totally eliminates waste from the physical book supply chain?

Is the Espresso Book Machine the Answer?

We are all techies here at ReadWriteWeb, so we tend to look for answers in technology. In Part 2 we described something we thought was science fiction:

"We can even imagine digital printers setting up shop in the back of coffee shop/bookstores."

What we thought was science fiction is already a reality called the Espresso Book Machine. It is POD in the retail store. You order something that you can't find on the shelves and, 20 minutes later, voila: a freshly minted book!

Ah, the wonders of technology. We love this stuff. Because Bruce is a pioneer in POD, we had to ask:

"Do you think something like the Espresso Book Machine is a part of the solution? Could it really remove the costs, risks, and inventory from the supply chain?

"Or is that a techie's pipe dream?"

Bruce responded:

"A decade ago, a small company called Sprout.com tried to introduce similar devices to bookstores. They even managed to get Borders to buy into the concept and install one machine. But the enterprise died because of many factors that are still around today. The machines work only for some formats of books: no color or oversized books, no hardcover or coil bindings, a lot of dust, fumes, and production issues, and s-l-o-w. Lack of demand is the real kicker. No one seems to want these out-of-print books very much.

"So, my answer is no, I don't think Espresso machines will make a significant difference to the situation."

We would take issue with his response. He is on a mission, and it is a good one, so he is probably smart to stay on message and not get sidetracked by this technological wonder. He talks of retailer POD as being only for out-of-print books. But there is no reason this could not work just as well for the latest blockbuster. If retailer POD became widespread, we would get an Amazon-like long tail for physical books at the retail level. That would eventually change both author and reader behavior.

Perhaps 20 minutes is too long to wait for a book in our rushed ADD world? My advice, of course, would be to "Chill out, dude!" But there are times when 20 minutes might really be too long; say, when you are rushing to catch a flight. But mobile devices could help with that. You could browse the catalog on your mobile device while waiting in line to pass security, order the book, and then pick it up as you head for the gate.

We are also likely at an early stage with this technology. These devices may be comparable to the IBM mainframes of the 1960s: amazing that they work at all.

This is a potentially big market for printer companies. It is hard to imagine HP, Canon, and Xerox not wanting a piece of this action.

The two approaches (eliminating returnability and retail POD) are complementary, not competitive. They are two approaches to a supply chain problem that is really hurting the industry. Whoever holds the inventory carries the old curse of "May you have much inventory on you!"

Eliminating returnability could trigger faster adoption of retail POD. Knowing that retail POD is feasible might make retailers more willing to accept the change in practice.

Just-in-time manufacturing worked for Dell in the PC industry, and book printing is a bit simpler.

Part 4 Returns to Regularly Scheduled Programming

We had planned for this Part 3 to focus on the author's point of view. We got diverted down the supply chain. Tune in to next week's thrilling installment to find out how our starving genius who hacks away at a typewriter in the attic might be able to prosper in this new world...

MagCloud is another project to emerge from HP Labs. Earlier this year, HP Labs launched BookPrep, a print-on-demand service for out-of-print books. Now, they're delivering MagCloud, a project devoted to providing small independent publishers the ability to publish digitized magazines as well as economically print on demand. Using HP's Indigo technology, the magazines are printed when ordered in full color on 80 lb paper with saddle-stitched covers.

How To Use MagCloud

To get started with creating a custom magazine, you must first create a PDF of your content using a tool that outputs high-resolution PDFs, like Adobe InDesign. You'll also need to have a PayPal account in order to sell the magazines with the markup you choose. Since the service is in beta at the moment, orders must be sent to a U.S. shipping address. Publishers can request an invitation here.

Browsing the MagCloud Selections

For those just interested in reading the MagCloud produced zines, you can create an account and then browse the selections of magazines available or subscribe to receive email notifications from the publisher as to when new issues are available. You can also choose to subscribe via RSS, but the feed does not contain the magazine's content as posts, only notifications when new issues are released.

There are already tons of magazines to browse through in diverse categories ranging from Art to Food to Literature to Finance and so much more. For example, RWW readers might be interested in the soon-to-launch magazine "The Rubyist" (for Rubyists, by Rubyists), which will focus on technical content and happenings in the world of Ruby, Rails, and Merb. Or for the more business-minded, the magazine "Professionally Speaking" may appeal, which gives tips on public speaking, giving presentations, etc.

Another great thing about a self-published magazine is that you can just purchase the issues you're interested in - the same as buying from the newsstand. You don't have to commit to a full subscription.

Previewing a MagCloud Magazine

A Great Addition To The POD World

As we noted earlier this year, the print-on-demand industry has really been heating up. Amazon launched CreateSpace and another Lulu-esque service called Wordclay began offering paperback publishing. Even casual publishing outfits like CafePress and Blurb have continued to offer options for less serious writers. Now, MagCloud seems to be a perfect addition to join the POD space. If you want to join MagCloud yourself, the signup page is here.

Then in January of this year, Author Solutions, Inc., who own AuthorHouse and iUniversere -- both POD publishers on the full-service end of the spectrum -- launched a new Lulu-esque service called Wordclay. Wordclay offers a menu of do-it-yourself and premium services including, printing, distribution, editing, and design (or, the iUniverse package offered a la carte). Wordclay currently only offers black and white paperback publishing, with hardcover and color publishing coming later this year.

Earlier this month, Lulu made waves by announcing a partnership with Borders -- the second largest bookseller in the US -- to power kiosks in new concept stores where customers can upload and sell POD books. They'll also provide the muscle for an online print on demand service called Borders Personal Publishing. Participants in the program may have the option to take part in in-store activities, such as author readings and book signings.

It is also probably worth mentioning that along with the release of their Kindle eBook reader (our coverage), Amazon has provided a method for authors to self publish books to the Kindle Marketplace, which has prompted some authors to take rather innovative approaches to the publishing process.

Why all the sudden movement in the POD space? Wordclay president Dave McCauley equates it to the evolution of the music industry. "Really, it's like music," he told me. "10 years ago it was all about big labels, now it's all about the independent artists, with MP3s and MySpace." The book publishing industry is just a little behind the times.

"I think what the industry is trying to do is remove all the barriers," he said. According to McCauley, in the traditional pubishing industry publishers put in a lot of time and money to overcome barriers to get to market -- things like editing, layout, design, distribution, and marketing. What POD publishers are doing, is using web 2.0 tools to try and break down those barriers and put publishing tools in the hands of authors.

For less serious writers, who don't want to get their books on store shelves but rather just want to publish a few copies for family and friends, there are casual POD publishers as well. CafePress has offered print on demand books since 2003 without all the bells and whistles of more author-centric services, and Blurb, which launched at DEMO in 2006, specializes in more visual books and books based on blogs and photo sharing sites.

While there is still a certain negative stigma associated with self publishing, the tools to do it cheaply, easily, and effectively are continually getting better. It's also nice to see that even though, as Steve Jobs says, people don't read anymore, at least what people are writing is being given more of an opportunity to be read.