In the last issue, I recapped the most notable stories of 2022. In 2023, I’ll be closely watching these ongoing developments.
Publishing workers fight for better pay and benefits
The HarperCollins union remains on strike, and the workers have widespread support among agents, authors, and other industry figures. The union appears ready to hold out for the long haul. In the UK, most big publishers have already offered financial support of some kind to employees, especially in light of inflation. Penguin Random House UK has given its lowest paid staff a pay “award” of 9 percent, which includes a 5 percent pay increase and a 4 percent one-off payment. Simon & Schuster UK, Hachette UK, and Pan Macmillan have also offered one-off payments of support to workers. Especially if the economy trends downward, look for increased pressure and demands alongside a groundswell of community support for the workers.
Big publishers versus The Internet Archive: a landmark case for copyright
More than two years ago, several large US publishers filed a lawsuit against the Internet Archive, which operates the Open Library. In a nutshell, the Open Library (some say it is not a library at all) pushes copyright-law boundaries through a controversial concept known as controlled digital lending (CDL). Controlled digital lending involves lending one digital copy at a time for each hard copy that’s been scanned and digitized. No payments are made to publishers/authors for CDL.
Your average local library pays for ebook licenses and rarely, if ever, engages in CDL-based lending. So CDL is not a norm by any stretch—and publishers are fighting to ensure it does not become one. The legal battle now underway will likely affect the future of copyright law and fair use. Publishers have convincingly argued that CDL does not fall under fair use and that the Open Library is little more than a pirate site.
CDL seems unlikely to hold up in today’s courts as a legitimate practice, but if readers are increasingly attracted to libraries for ebooks (despite long wait times and sporadic availability), publishers need to ask themselves why and what that means for their business model in the future. Across all media, consumers are becoming accustomed to subscription-based services where they can experiment and try new things without a commitment, abandon books without any concern for sunk costs, and of course read as much as they like without pulling out their wallet each time.
Related, publisher David Wogahn wrote us, asking, “A topic I keep thinking about is whether larger publishers will (can?) continue to price their ebooks as high as they have been pricing them relative to print. Printing and distributing physical products is only getting more expensive—in real dollars and in costs to the environment. There seems to be evidence that some of these publishers are losing market share to lower-priced books. And I’m sure returns factor into print format profitability as well. Related, I wonder if anyone has looked at how high ebook pricing impacts author royalties. Between family and friends, six of us read one print copy of The Thursday Murder Club. And when it’s given away or sold as used, the reading continues without royalties to the author. It seems like authors are, in a sense, subsidizing the cost of publishers helping bookstores compete with Amazon. (As worthy an objective as that may be.)”
The creator economy cools off
The pandemic saw the growth of countless efforts to help creators earn more money, whether through tipping and donations, advertising, subscription sales, or outright financial bonuses for posting content. We saw the launch of Kindle Vella and Wattpad Yonder; the phenomenal growth and publicity surrounding Substack; social media sites battling each other for first dibs on the best creators (TikTok, Instagram, Facebook, YouTube, and others); and the frenzied speculation surrounding NFTs. But across media and tech businesses in particular, companies have been tightening their belts (cutting workers) and modifying their business to focus on return on investment. Terms for creators may become less favorable, with bonuses discontinued.
A number of media prognosticators see clouds on the horizon for creators who have gone solo over the last couple years. Brian Morrissey commented, “When I started [my newsletter] the Rebooting in October 2020, I saw the shift taking place from institutions to individuals. That was one reason why I wanted to start on Substack. That shift will continue, only I believe much of the creator economy will face a reality check. The connection audiences feel to individuals is powerful, without a doubt, but the fallout from endorsements of crypto show how that can work against individual creators. I expect we’ll see a correction as more individuals begin to build out micro-media companies. Running a solo media business is hard and not for most people.”
Amazon falters
In 2022, it was already apparent that Amazon was faltering. Recent headlines have noted its layoffs in the books and devices divisions, so the question is how deep the cuts will go and how much change is ahead that will affect authors directly. Will Amazon stick with Vella? Will they pull back on their support and involvement in the self-publishing community? Several years ago, Amazon shuttered a range of programs in quick succession (Kindle Worlds, Kindle Press, Kindle Scout, Write On); I would not be surprised to see the ground shift significantly once again this year. Tim Carmody has an explication on the decline of companies such as Amazon; professional author Kristine Kathryn Rusch has an item in her year in review that stresses the importance of diversifying away from Amazon.
AI will be the center of conversation and controversy
There are three separate areas to consider in publishing: AI narration, AI-generated art and illustration, and AI-generated text. The most straightforward of these in legal terms is AI-narrated audiobooks, which Google and Apple have already started to support. Both publishers and authors are eager to make use of the technology, especially for backlist and nonfiction.
Things aren’t as straightforward for AI-generated art and text as they raise so many copyright and intellectual property questions, not to mention ethical concerns. No one can say with absolute certainty who owns AI-generated material, and current copyright laws are sure to be challenged. I expect things to move fast, as the technology is moving fast. Canva—very popular with authors—already offers AI-generated art as part of its service; Notion already has built-in AI writing assistance; Microsoft already uses AI in Microsoft Office; and so on. TechCrunch rounds up what we can expect to see in generative AI next year, and here’s a look at AI and Hollywood.
TikTok falls from grace, at least a little bit
This is a gut feeling based on years of observing the rise and fall of social media platforms. For a number of reasons, I think the bloom will come off the rose this year, especially for the book publishing industry. I predict TikTok won’t be boosting sales the same as in the past; I think TikTok itself will put its thumb on the scale in a way that isn’t helpful to BookTok; and I think we’ll see darker issues emerge, as they always do with social technology. Ted Gioia also thinks TikTok has peaked (subscription required).
Related: It’s the end of the mass social media era
I’m stealing this one from Brian Morrissey’s look ahead to 2023. He writes, “Connecting the world in one massive room—or town square—seemed like such a good idea. … The picture has changed. … Already people are dispersing to private texting groups and more niche gathering places.”
Was The Hot Sheet’s 2022 outlook accurate?
Here’s what I discussed a year ago.
- The battle over digital lending. It’s not over yet (see the Internet Archive mention above), but the libraries lost a major battle when the state of Maryland’s ebook licensing law was struck down by a judge. At the time, I said the libraries’ case looked weak. However, libraries have not given up the fight and are exploring all their options.
- Copyright Claims Board begins operations. It was launched on time and in an organized fashion. So far, it’s going well.
- Increased AI narration. It’s hard to go wrong on this one; expect it to continue growing for years.
- Books as intellectual property: Yes and no. I wasn’t strictly wrong about the increasing profitability of books as foundational IP driving sales of other products (movies, podcasts, etc.); it’s just that nothing splashy occurred in 2022. That said, one glance at the new publishing efforts launched last year shows that media businesses love to partner up with publishers on new imprints, and publishers benefit from the sale of licensed content: MTV Books, Sugar23 Books, Random House Worlds, Seuss Studios, and more.
- The PRH-S&S merger: I thought it would happen. Big miscalculation!
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
