Special Guest: Guy LeCharles Gonzalez, Chief Content Officer at LibraryPass

Len: Hi I’m Len Epp from Leanpub, and on this episode of the Frontmatter podcast I’ll be interviewing Guy LeCharles Gonzalez.

Based in New Jersey, Guy is currently Chief Content Officer at LibraryPass, where he’s working to make digital comics more easily available to schools and libraries.

Guy has had many roles in the media business over the past 25 years, including being publisher and marketing director for Writer’s Digest, founding director of programming and business development for Digital Book World, and being the project lead on the Panorama Project, where he worked on a unique effort to determine the effect of library lending on book sales.

You can follow him on Twitter @glecharles and check out his website at loudpoet.com, where you can subscribe to his blog and read his latest posts.

In this interview, we’re going to talk about what Guy has been up to since his first appearance on the podcast, the ongoing lack of transparency around library sales, the US Department of Justice’s anti-trust case against Penguin Random House’s bid for the publishing company Simon & Schuster, and some of the latest issues being discussed in the book industry.

So, thank you Guy for being on the Frontmatter Podcast.

Guy: Yeah, thanks for having me back.

Len: I usually like to start these interviews by asking people about their origin story - but since you’ve been on before, I’ll just point people to a link to the previous episode where you appeared. But I was wondering if you could talk a little bit about what you’ve been up to since our first interview, which was at an - sort of ominous time, at the beginning of March, 2020?

Guy: Yeah. I think we literally talked right as things in the US started to transition from, “Huh, something’s happening,” to, “Oh this is serious,” and quarantine started.

So it’s been a busy two and a half years. At that point, I was about six months - a little more than six months into The Panorama Project. As we were talking - ironically, I had just started with a second client that I was doing some work on the side for - that turned out to be my current job, LibraryPass.

So in that period, they were just getting started. They had taken over this product, “Comic Plus,” from a previous owner. Had repositioned it as a library and school only product. Got rid of the consumer side. So I was helping them kind of position it for the library space.

And at the same time, the pandemic was starting to - it was becoming clear this wasn’t a couple of weeks or a couple of months, even, this was a, “Hmm, this is going to have a dramatic effect on a lot of things, and the timeline is unclear.” And a big part of my role in The Panorama Project was premised on my proximity to New York City, my ability engage in-person with key people in the industry, to really advance the mission of the project. And obviously, that was not happening anytime soon.

And at that point, if I remember correctly, Macmillan had moved forward with their embargo on library ebooks, which had become a critical flashpoint in the work we were doing at Panorama. And then I don’t think it took very long, I want to say less than a month into the pandemic, Macmillan lifted that embargo, and went back to their original library ebook terms. Libraries were shutting down. Physical access was, depending on where you were in the country, limited to not available at all. The demand for digital content was really growing.

And, so, on the one side, I had the Panorama Project, my main initiative that I was working on, that was in a weird place. We were on the verge of launching the consumer research study that we had put together. That ended up being delayed about six months, total. Because we’d certainly - we were planning to put it in the field, I want to say April. Like it was going to run April, May, maybe into early June? Depending on how long it took us to meet our sample targets. And obviously, we didn’t want to put this out there i what - in the middle of, we thought, a raging, global pandemic. Because obviously it was going to impact the way we frame these questions, which were all about how you’re engaging with digital content, where libraries fit in. Which was drastically changing at that moment.

So we ended up putting a pause on that, and reestablishing, “Alright, we know what our goal is with this research, but it’s becoming increasingly clear we can’t just wait out this pandemic, we’re going to have to factor it in to our survey. Otherwise, the results are going to be questionable.” Well, “You asked these questions, but you didn’t reference the pandemic at all.” Or, “You only asked about the pandemic, and it was over two weeks later.” Who knew? So that took a lot of retooling.

So there were a couple of things happening for me at that point. Panorama was both evolving a little bit, but it was unclear in what direction, because of the pandemic. And then LibraryPass was accelerating faster than expected. Because the demand for digital content made our product, “Comics Plus,” immediately, I’d say way more popular in the beginning than it had any right to be under normal circumstances. But because schools were closing, the demand for digital content was insatiable. They needed as much as they could find, even if it were comics.

Which, for some schools, comics are welcomed. And we have really progressive librarians, who see the value of reading, regardless of what the format is. And then you’ve still got old-school teachers and librarians who believe comics are not real books, and they’d rather kids not read them. So we didn’t see as much of that resistance in the first six months or so. Because schools just needed any digital content they could get their hands on.

So I ended up at this personal crossroads of, unclear which direction the Panorama Project was going. But definitely the main thing, I was brought on, that personal engagement, was on the backburner for an indeterminate amount of time. By then every major New York publisher went fully work from home. Offices were closed. And they stayed that way through the entirety of 2020. So, around the summer, and on a personal note, a month into the pandemic, my father died from COVID.

Len: Oh.

Guy: So he was one of the early - it now turns out, very early victims of the pandemic. So there was that personal dealing with - feels like those first six months, there were three groups of people. The people who had someone they personally knew die, or at least get sick. People who, by extension, knew of someone. And then people that it hadn’t affected at all. And I feel like that really influenced how serious you took what was happening at that point.

So, I, in the summer, LibraryPass was getting to a point where the CEO, who is my former boss at Library Journal and School Library Journal, from years ago, things were getting to the point where he was confident that the company was on the right track, and wanted to staff up, rather than rely on consultants. So he made me an offer. And initially it was like, “Alright, that’s interesting, but I’ve Panorama in this hand, which is pretty solid work I’m really into. But its long term future is very much in doubt right now.” There was no indication from OverDrive, the main funders, or the advisory board who helped guide things. There was no indication that they were like, “Alright, we’re going to shut this down.” But there was also no guarantee that they wouldn’t.

Versus a library startup, which are two of the scariest words to put together, in my mind. Startups are challenging enough. A startup in the library world is really challenging. And a startup in the library world that’s taking over a product that had a flawed history, added to the, “Hmm, is that something I want to hitch my wagon to, or do I want to stay over here?” But the things I was working on to get answers to on the Panorama side, LibraryPass was actively engaged in figuring out how to solve. So I was, “Do I want to debate and discuss and theorize about how libraries can better work with digital materials, and publishers can give better deals? Or, can I go work somewhere that’s actively trying to do that. How do we get libraries access to this digital content at affordable rates, with as little friction as possible?”

So it took several months for things to solidify, but ultimately I accepted the role. And so I’m actually, this is now my third anniversary. Because I officially started full time with them in October of 2020. So that’s what I’ve been doing professionally with them.

We have been getting it off the ground. We did a serious pivot to make it primarily a K-12 product first, public library second. Historically it was a consumer product with a public library diversion. And if you’re dealing in schools, you’ve got a lot of different concerns to worry about, versus public libraries. There’s a lot of concerns about age appropriateness and ensuring kids have access to the right content. And this was before all the current wave of book banning activity had blown up. We were just - you work with schools, you’re aware of these things. Anyway.

So a lot of the work we did to reposition, not just a product itself, but we had to re-assess 20,000 titles in the collection, which had been given a much more consumer-oriented edge rating. Which is basically teen. Everything is good for teens. And a lot of it is good for kids too, because it’s comics. When, in reality, that would not fly in schools. So a lot of what we had originally identified as - not us, but the previous owners as “kids and teen content,” it went up an age level. So that became “teen and young adult.” In some cases, there was stuff that they had as “teen” that was adult level, and wouldn’t be appropriate in schools at all.

So we put a lot of work into developing these age-appropriate guidelines. Putting in a process to ensure that, both the content we were bringing on met those guidelines, but also reevaluating content that we’d inherited, and ensuring that they met those guidelines as well. And we were about six, nine months into that process, and things were going well. And then suddenly, Gender Queer became public enemy number one. And that was an interesting title. Because we had it in the collection. And we have the ability, as a customer, you have the ability to basically weed out any content you don’t want.

It’s an unlimited-style, simultaneous subscription model. So you subscribe to a collection of content based on age tiers. So public libraries tend to take the full collection, and then make them available to patrons in different levels. Schools want what’s appropriate for the schools. But what you’re buying into is a large catalogue that you, as a librarian, have not individually evaluated every title. So you’re trusting our process to some degree. But we know that - I’m here in New Jersey. We’ve got customers in Texas, in Florida, in California, in Maine. The definition of “age appropriateness” is going to differ. Not just in every one of those states, but in every city, in every one of those states.

So we recognize that, “Here’s our guidelines. They’re publicly available. You can understand how and why we made our decisions. But as a customer, if you decide that book is too strong for your audience, you can just disable it from your collection. Your collection is yours to control. What you can’t do is tell us, ‘Oh, you’re wrong, that book should be young adult, and shouldn’t be available to anybody at this age level.’ Like, that’s not your decision to make for us and the rest of our customers. That’s a decision you get to make for your collection.”

So we were ahead of the book ban curve. And, fingers crossed, so far I have not been caught out by a book that caught us by surprise, where we’ve had objections. They’re either right on the margin, and occasionally we’ve agreed and said, “Alright. In context, upon further review, yeah, that probably should go up an age level.”

Manga is the most challenging. It’s super popular. They’re - I don’t know about you, but as a kid growing up, I don’t know any kid that read at their age level. I was in junior high school already reading Stephen King. And I remember the first time I read Flowers in the Attic, I was probably 11 years old. Ironically, that’s shelved in the “YA” section these days in Barnes & Noble. But as a kid, it was absolutely an adult book. So the - now and I’ve just blanked where I was -

Len: Oh no, that’s interesting. I mean, you’ve shared so much there. Thanks for all of that. It’s obviously been a busy two and a half years, in lots of different ways, for you. And particularly, for the book publishing industry, right? I mean, with the pandemic coming, there were like paper shortages, that delayed book launches.

There were huge spikes in sales, because people were at home and had more time. There were huge spikes apparently in book project ideas that people were pitching, and books that people were writing and submitting to publishers and agents where they could. Because they had more time on their hands. And, I mean, so many other things.

But one of the things I wanted to talk to you about, was, and I would really like to get into some of the details about Comics Plus. You mentioned “the flawed history of comics,” and the sort of different views that people have of their appropriateness for being in schools. Which is just a super interesting subject on its own.

But there is an ongoing lack of transparency around library and book sales data generally. And that is, just like, for those listening who aren’t aware of it, and aren’t in the weeds of the sort of book publishing industry news and blogs and stuff, it’s just actually a very fascinating thing. So, for example, you mentioned, at the beginning, what at the time was a huge controversy in the book world in the US. Which was Macmillan saying that it was going to not do library ebook lending anymore, I think, is basically what they were -

Guy: They were embargoing, yeah.

Len: Okay.

Guy: They were going to window for eight weeks, new releases. And they jacked up the prices -

Len: Yeah it was -

Guy: Of what they would make available.

Len: Exactly. It was complicated. And the CEO at the time, I believe his name was John Sargent?

Guy: Sargent, yeah.

Len: He sort of sent out these letters occasionally. Like announcing the plan, in response to the controversies that responded to it. And I remember him saying in one - it was sort of a throwaway line, but he basically - and I’m going to put this in a cartoonishly exaggerated way. He sort of said it was like Commie plo - like he didn’t say that. What he said was like, “There’s basically activists out there who are trying to turn Americans into a nation of borrowers rather than buyers.” [The quote is “active marketing by various parties to turn purchasers into borrowers.” You can read more about this here - Eds.]

And it was this very bracing, like, “Wow, it really is that simple.” Just the sort of top hat monocle capitalism that’s at stake here. And I say that, because, for a lot of people, the library is an ordinary, uncontroversial, and in itself, public good. A place where you go to find books you can’t afford to buy all of. Or to discover books that you then do go buy, because you want to have your own copy. It just seems straightforward that a library would be good for the book publishing industry.

But a lot of people actually really don’t think so. Then, when it comes to things like what the Panorama Project was trying to do, which was, look into it, and see, in the simplest terms, is it true that -? I mean, because it is an interesting question, and it is an open question. Is it true that public lending of ebooks, in particular, cannibalizes sales of books from book publishing companies, who then - to put it in the most charitable way possible, don’t have the money to fund new book projects, and things like that.

Guy: Right.

Len: Is it true? But it’s hard, how do you get the data, right? And that’s the huge problem. And one of the many tricky features of it, is, a), they’re competitive businesses, and b), a lot of the big publishers got done for collusion, right? So they’re like, “We don’t - well, if we’re now sort of participating in a project where we’re sharing all our data with each other to sort of figure out book pricing things, does that put us in a tricky spot?” And stuff like that.

But it’s now two and a half years since we spoke, and there’s been controversy after controversy about that kind of thing. I was wondering if you could talk a little bit about the current situation, and why there is this ongoing lack of data?

Guy: So I think you zeroed in on one of the legitimate obstacles that publishers justifiably have concerns about being accused of collusion. The entire structure of the AAP is built to - oh, and BISG as well, Book Industry Study Group. Both of those organizations have structures that allow publishers to engage and collaborate with clear guidelines and regulations, to ensure that they can avoid those issues. So, yes it’s the legitimate concern. But, no, you already have structures in place, that if this were a priority for you -

And that was one of my big complaints about the very existence of Panorama Project. In my mind, it was like, “This - if this was important to publishers, AAP could have printed this out. BISG could definitely be the central hub for collaboration. Because they are an industry group, not just a publisher specific group like AAP.”

So what I found during my time at Panorama, and then what I was able to observe more freely once I wasn’t at Panorama, is the logistics of aggregating and sharing that data in a way that publishers would be comfortable. Absolute serious legitimate obstacle.

On the Panorama side, some of the research we did into figuring out how Panorama might actually be able to facilitate that. So the guy that was running it before me, his mandate was to figure out, could Panorama build such a project? Whether it did a repository or a system. And they basically stopped after publishers were really leery about agreeing to anything that would see their data shared. But the price tag on it was pretty high. I saw estimates of about half a million dollar investment, just to build the infrastructure that would have the security and the capability to take in this data.

So that was a huge legitimate obstacle, that, again, no one was willing to - OverDrive was funding the Panorama Project as a starting point. They also were not looking to drop a half a million dollars into an effort, particularly when the partners they were trying to support, on the publishers’ side, were leery about it, to begin with, and weren’t willing to contribute to the effort from a financial perspective. So that was a legitimate obstacle.

The reality of - and, so you and I, before we started recording, were talking about the Public Books article on book data.. And one thing that article gets into, that usually you don’t see a lot of reference to, is, libraries - people forget that libraries, by design, are built for privacy. One of the advantages of using a library, is, you can go, read books that, for a variety of reasons, you might not feel comfortable buying at the bookstore or ordering from Amazon. It’s the information you want access to, but for legitimate or not legitimate reasons, you don’t want a paper trail to you.

And connect the dots to the book banning, it was one of the biggest arguments about Gender Queer. Is, there was a belief that that’s an important book, for teenagers, in particularly, going through their own issues. Being able to read a book that can speak to them about their experiences. And getting it at the library, privately, gives them the privacy, to understand that aspect of things, and not have to worry about the bullying that comes with being - depending on where you are, wondering if you’re transgender, or being transgender, and not knowing how to communicate that. So that goes back to -

Libraries have a lot of data that they can’t share, and don’t have the infrastructure to share, even if they were willing. To my annoyance, the one exception to that, is, it was libraries who pushed OverDrive to support Kindle back in the day. Because so many patrons had a Kindle, and wanted to read their ebooks on a Kindle. And this is my personal frustration with libraries. Is like, they take “The customer’s always right” to the worst extreme. So, yes, your patrons have a Kindle, but your privacy is a number one tenet in why you exist. And so you are choosing convenience and circulation numbers, over maintaining privacy.

So, and this circles back to Macmillan and data about ebook lending. So one of the things, I was, I couldn’t get anybody ever to go on the record. We did some limited experiments that, basically, in a very isolated way, proved, you could take a book, make it freely accessible in the library, beyond just the normal single user licensing, and drive consumer sales, in a very targeted way. And that’s usually through the Community Reads. The couple that we measured were Community Read programs.

So for a month, the library would make this book available. No holds, no waitlists, unlimited simultaneous access, as a community read. And the publisher would have to be involved, because the publisher is also going to be the one that has all the data. They were able to benchmark the book sales positioning, before the effort started. Before promotion of the effort even started. Then they could measure the impact of the promotion of the upcoming library offering. The period that the library had it available to everyone. And then after it went back to single user licensing. And in every instance that we were able to measure, the evidence was, at worst, neutral. At best, a sales boost before and after, never a negative.

Now, lots of caveats to go with that. I think all but one of those experiments were with one publisher. They were all midlist books. Not a major bestseller. And what you’ll hear from publishers anecdotally, who - so there’s the Macmillan who publicly declared, “Libraries cannibalize sales, and that’s why we’re making these changes.” There’s at least one other Big Five publisher who historically has enacted policies that expressed that belief, even though they’ve never publicly stated that. And then, the rest of the big -

Ironically Harper Collins, who, when they were the first to move to metered access back in 2010, 2011. Moving away from perpetual licenses. And they were the enemy. Like public enemy number one. They stuck to that. 26 or 52 checkouts, one year, two year period, but never windowed by a time, always by checkouts. And once though you hit that checkout limit, you had to relicense the book. That is now considered the best of the metered programs. They haven’t changed it to my knowledge. Everyone else has iterated on that.

So you’ve got hybrid versions of checkouts or time. And that was the criticism of Macmillan’s complaints, and OverDrive uncharacteristically released data that proved Macmillan - I’ll charitably say Macmillan’s math was wrong. I won’t outright say they lied, but their math was wrong. And OverDrive showed the data that said their average book was only checked out eight times, and expired, because Macmillan had a date expiration. So it is a two year, or 52 checkouts, whichever came first.

And on average, the books were expiring with eight checkouts. So my take on that, is, if eight checkouts of any book is hurting your consumer sales, you don’t have a library problem, you have a completely different problem. Because there’s no reason - eight checkouts in a library shouldn’t register a blip in your revenue, one way or another.

So if you pull all that back, the one thing I was able to get a couple of publishers off the record to admit, is, where they saw a measurable impact, was on bestsellers. On some key bestsellers. Either the big celebrities, or the long-term, well-known - I hesitate to use a name, because they’re - I’ll say James Patterson. He wasn’t one of the examples. But your James Patterson-level of author, who constantly is cranking out books. Huge backlist. If you’re a fan, he’s difficult to keep up with if you read anything else, that thing. Where there was anecdotal evidence of libraries hurting consumer sales, it was that category of author.

That tells me two things. In my analysis of that, what I saw was, okay, so you’ve got solid brand names, who generally speaking, are not considered great literature. But they have a strong fan base. You’ve got a library that allows you to read widely, without spending money, your own money on the books. And you’ve got more and more books being published every year. So if anecdotally, your only evidence is your major bestsellers are the ones where you’re seeing some softness in consumer sales, as their library activity increases - but even by Macmillan’s own admission, you’re also seeing overall ebook revenue from libraries increase.

And generally speaking, libraries are known to drive readership in two places. The bestsellers. The best-circulating books in libraries are always the bestsellers. They’re meeting demand. And then, the midlist, where publishers rely on libraries, particularly on the print side, to have decent print runs. Because those library orders are the ones that ensure a midlist book, at least, gets a 5,000, 10,000 copy print run. Because a lot of libraries will buy it. Where your average indie bookstore isn’t stocking it. It’s buried in the algorithm on Amazon. So libraries are a key factor in getting midlist any sort of attention and sales, that then, hopefully from the publishers perspective, gets picked up elsewhere.

So even that anecdotal evidence around the bestsellers, doesn’t justify Macmillan’s line-wide change to their policies. If anything, it would justify, “Alright, we’re going to window our - certain category of authors, or better yet, we’ll just charge more for them. So James Patterson, you’re going to pay $100 a copy for your license for the first three months,” whatever that window he chooses. And then the price goes down.

If they had done that, I think they would’ve been - there would have still been complaints, because they’re still charging libraries a lot, and libraries don’t like that. But I think that would’ve been more justifiable than a complete windowing, where libraries didn’t have access at all. Because now you’re attacking libraries core mission, which is equitable access.

If you take all that, and Macmillan’s quick retreat in the pandemic, where libraries were the only - one of the only places to get books. That said a lot. Like that they’d turned tails so fast. I want to say it was less than a month into the pandemic. And with the subsequent data that came out, that library circulation surged, digital library circulation surged in the first six months or so of the pandemic. And that library revenue overall surged in 2020.

All the indicators are, if library availability was really hurting consumer sales, 2020 would’ve been the year that libraries would’ve stuck a dagger in some publishers’ backs. And instead, 2020 turned out to be a pretty good year for publishers. 2021 turned out to be an amazing year for publishers. And 2022 is on track to be pretty good, and better than 2020, in the midst of continually increasing library digital circulation. So in the available data that’s out there, it’s really difficult to make an argument that libraries overall are bad for consumer sales. And even if you have a couple of isolated examples, you still can’t make the arguments that libraries are bad for consumer sales.

Len: I just want to pick up on a couple of things you mentioned there. And a great, great explanation. What a great sort of - at a higher level, representation of how complex this industry is.

But just in order to transition to the next part of the interview, we’re going to talk about the Department of Justice and Penguin Random House. You mentioned a couple of things there. One is that - the privacy issue is so complex when it comes to books and information. An example that’s come up on this podcast once in the past, that I’ve mentioned a few times, because it was so striking, was - a guest said that where she grew up, if you went to the local bookstore and got a book on how to get a divorce, you’d get a visit from the local priest within a few days. Because it would get around town.

I just bring that up, again, to ratchet up the complexity here. Because there’s this whole discourse about how, “Oh, why are you letting the anonymous algorithms that you can’t peer into, at giant companies like Amazon, use data to make recommendations for you? Why are you buying books online, instead of going to the local indie bookstore, where the bookseller knows you inside out?” And it’s like, “Well, there’s - there might be some things where that’s great, when it comes to, ‘Should I get the latest James Patterson novel?’”

But there might be other things where the anonymity and the discoverability of things that aren’t available to you locally, for maybe not so good reasons, because of, you mentioned regional differences earlier, in one of your responses here. Like sometimes things aren’t, the word “local” isn’t always good. And that’s just to say, that it’s so complex.

But then you mentioned, and so the other thing I wanted to draw on. You mentioned the James Patterson level of author. And that’s where I want to move on to talk about the sort of Department of Justice anti-trust case against Penguin Random House’s effort to buy Simon & Schuster. Because, in a sense, the whole thing was framed, in a just, almost, incredibly simplistic way. Around the issue being - like, basically the way it works, is there’s these - there’s this Big Four, Big Five giant book publishing companies, for people who aren’t aware. And one of them is tryin to buy Simon & Schuster, which is this huge, prominent sort of New York publishing house in the States. And everybody in the book world is bothered by this, for all kind - or excited by it, for all kinds of different reasons.

[Since this intereview was recorded, the DoJ blocked the merger. You can read more about this here - Eds.]

But the Department of Justice in the United States, is currently engaged in a broader effort around anti-trust issues, related particularly, like - the sort of proximate cause is actually the tech world, and dominance there, I would say. And trying to figure out what do you do when the giant monopsonies, like Amazon, really do drive down prices for people. Which was the old argument against anti-trust, is that the big - if someone gained too much market power, they’d raise prices.

But it turns out - Amazon figured out various ways to become the biggest, by offering lower prices, which makes sense, when you think about it. So that’s become a problem. Because monopsony or monopolies are still problems. And so, should the focus all just be on offering lower prices, basically, when it comes to anti-trust issues.

So then, anyway, this is just some sort of background, to the fact that - so there’s this giant book publishing company that wants to buy another big book publishing company, and merge them. And I would - people listening who aren’t familiar with this whole discourse, you might think, “Oh my God.” Along the Amazon monopoly lines. Instead, the Department of Justice’s line is basically, “We’re against this, because it’s going to bring down advances, paid, quarter-million-dollar advances paid to authors are going to be less frequent.” And that’s not really much of a caricature of the case, right?

Guy: Yeah, no that’s - it’s, I feel like the case, in a lot of was, is a Rorschach blot. And depending on where you are in the industry, and your perspective on things, you read it differently. I think that is a fair summary of the gist of it. And the approach the Department of Justice took.

I feel like I understand somewhat why they went that way. Because it’s - the real argument against the merger, in my mind, is, you’ve already got this one huge publisher, who’s pretty dominant already. Forget about advances, they’ve got their own significant distribution system. They are literally the biggest publisher, probably twofold over their number two competitor. They did a similar merger ten years ago that got them to be as big as they are.

So the impact on advances, in a lot of ways, in my mind, is the least important thing. And I think they made a pretty reasonable case that that might not even happen.

What got ignored - it got brought up on the fringes, but it wasn’t the center of the DOJ’s case. And I think ultimately this says more about capitalism and the government’s consideration of what’s okay. That in that testimony, there was a presentation around the amount of layoffs that were going to happen. There was some lip service given to midsized publishers, and the potential impact on those smaller advances, which are the vast majority of authors out there, are getting much less than a quarter of a million dollar advances.

Even at the Big Five, where there’s this myth, that if you’re a Big Five author, you’ve got at least a six figure advance. That’s ridiculous. Like your average - take out the hundred or so million-dollar advances that happen every year. Your average Big Five imprint publisher, probably getting a nice five figure advance. Which is paid out in four parts. Because that’s the other thing. People are like, “Oh, a million dollar advance, that person’s a millionaire.” No, they’re a quarter of a millionaire upfront. They get another quarter of a million when they deliver the manuscript. And then, by the time the book is out, I think they finally - in that first royalty period, I think is when they might get that last quarterly payment. So this belief that these big advances are the deciding factor in whether the creation -

So there’s the Big Four - Big Five. Which is a misnomer, because there’s a Big Three. There’s two that are not as big as those three, Macmillan, and is it Simon? Simon is hoovering right around a billion. Macmillan is notably lower than that. I want to say a little over half a billion. Whereas, you’ve got Penguin Random House, which is upwards of two and a half billion. So the framing of a Big Five, is flawed, to begin with. Because, at best, maybe call it a Big Four? Which includes Simon & Schuster. Really it’s a Big Three. Penguin and Random House acquire Simon & Schuster, you have an unequivocal “Big One,” and everybody else.

And I think that didn’t, that wasn’t the core of the Department of Justice’s case. They presented pieces of it, enough that, my hope is the judge sees all that. And while the ultimate decision is going to be based around this case they built around advances, I’m no lawyer, so I don’t know the nuances.

My one understanding is, PRH could still win this, even when all indications are the Department of Justice proved it’s bad. Because the letter of the law is not bad enough. And so it’ll go through.

Len: Yeah, I’m really glad you got into the sort of ambiguities around the sort of like “Big One,” “the Big Three,” “the Big Five,” “the Big Whatever.” And, again, these are like sort of conventional terms that are used in discussing the book publishing industry. But when you look into it - and that’s what the experts will use, these terms. But when you look into it, just like anything, things become questionable and contested everywhere.

But one of the remarkable things about it, that was like, I think very telling, and fitting at the same time, about the hearings and all that, was how much of it was hierarchy theater.

Because when it comes to the big publishing companies, well, where was Scholastic in the whole discourse, right? Which is something you’ve talked about. Where was romance writing? Like, where was, I mean, self-publishing, in all of this? Nowhere. Because it was hierarchy theater, which is what a lot of the conventional trade publishing world is all about, right?

It is about the big names. It is about the big stars. It is about the dream of becoming a great novelist or book writer, or something like that, and being fêted, and full page ads paid by your publisher for you. Big posters up in the subway, or whatever, about your latest book. It is about hierarchy theater.

But then this really hilarious thing happened. Which is that, the sort of people who run these companies, are really the guardians of that hierarchy. And they were, in an uncharitable way of explaining it, exposed as not really being able - let’s, again, to put it in a charitable way. Not being able to talk well in this particular circumstance about how their business works, and what they really are up to, and how well they really understand it.

So I’ll link to it, but Vox had an article about it saying, “Book publishers just spent three weeks in court arguing they have no idea what they’re doing. The Justice Department is suing to block Penguin Random House and Simon & Schuster’s proposed merger. The publishers’ defense hinged on their own incompetence.”

I was wondering if you could talk a little -? I mean, basically more or less, I think it’s that under oath, to counter the claim that this merger would bring down advances. They basically said, “We have no -“ It’s a totally finger in the air, which way the wind is blowing business, there’s no predictability to it at all.”

“…it’s built structures that support its own myth making”

Guy: Yeah. It was fascinating. Because the - you could come away from that, and be like, “Wow, this industry is run by a bunch of morons.” Or you come away from it, and, what I unfortunately think, is, the truer take on it is - it’s an industry that has evolved into - it’s built structures that support its own myth making.

So there is a degree of truth in, you can pay a million dollar advance for a book that absolutely bombs, and you can pay $10,000 advance for a book that funds bonuses for the entire company next year. There is some truth to the randomness of it.

But pretending that PRH doesn’t have built in systemic advances to offset some of that randomness, that was the part that was like, “Wow, I get you’re under oath, and so you’re trying to thread an awkward needle. ‘I can’t look completely stupid, because investors and our authors and our staff are all listening to what I’m saying. So I’ve got to be able to go back to the office, and still run this company, and have some modicum of respect. But I can’t look too savvy, because then it’s easier to prove that this merger’s a bad idea.’”

And then you also have to look at who got put on the stand. These are your senior-ist of senior executives. They’ve made their way up the ranks in the old systems of publishing. I think it’s Arrested Development, the joke about, “How much is a banana, ten bucks?” Like they live in that world. I think one of them even, on the stand, made a comment about the average royalty being something like $100,000. Which, there’s no math to support that. And, at best, if that’s true, it speaks to the number of exorbitant advances they’ve paid out to lift the floor to $100,000. But your average author, at, even your Big Five, is not getting $100,000 advance. You almost have to sift through the tea leaves and the testimony. I think some of the most interesting testimony is what was thrown out.

The analysis that the - I forget his name. But the guy for PRH who did the analysis around the merger that led to the numbers around potential layoffs and where those layoffs would come, and where there was overlap, etc. etc. There was a lot of interesting insight into the advantages PRH has over Simon & Schuster, that - PRH spun that as, “This is going to be great for Simon & Schuster’s authors, because they’re going to get X, Y, Z.” But at the same time, you look at that, and you’re like, “Wow -“ So I think Simon & Schuster’s either the number three or number four in that Big Five. I forget where exactly. But if the big one is saying, “Yeah, look at these cute little guys. They are bad at this. They are bad at that. But this is fourth biggest publisher in the US.”

In some ways, I can see it reinforces, “Oh, that’s how random it is.” But in other ways, it actually reinforces how strong PRH already is without this acquisition. And, for me, I think it comes down to, my ultimate frustration with the Department of Justice’s framing of the case. Is more about the rules around anti-trust, and how much capitalism gets to do whatever it wants to do.

And there was - this was the only way, I think they could attempt to make this case. Because if they had made the case around other areas, layoffs, midlist publishers, nobody cares. Because that’s capitalism doing what - “Oh yeah, merger two companies, 500 people will lose jobs, that’s what happens. Sorry, just give them a decent severance, and you’re doing your due diligence.” So I don’t think there was another way for the Department of Justice to really attack this case.

And the belief that - I think the other flaw is the belief that this is a trial balloon, for them to ultimately go after Amazon. In my mind, there is zero correlation between this and a case against Amazon. Unless, now you’re playing four-dimensional chess. They don’t actually care about this merger, this is their way to get data from publishers that they couldn’t, wouldn’t easily get from Amazon, to make a case against Amazon. I do not believe that’s what was happening here. But you could make the Galaxy Brain argument, that, “Well that’s the connection to going after Amazon. Whether they win or lose, they got all this great data.” I don’t believe that happened.

Len: Thanks for sharing that. My sense of why the Department of Justice chose to make a case out of this, was this sense of - that the giant, the big book publishing companies are the guardians and producers of high culture. And this was one of the reasons that there was this emphasis on the high bonuses, and stuff like that. Or not bonuses, what’s the term?

Guy: The advances?

Len: The advances. Sorry, yeah, the book advances.

Guy: Yeah.

Len: And like, without these very big companies, with lots of money at their disposal to pay rich people lots of money to write books for us, we’d lose something essential to our lives. And that the publishing companies are like composers and conductors at the same time, of our society. Which is why what’s left out of this sort of like representation of what counts, and what we really need to bring the government to bear to protect, is so interesting.

And, that, I’m going to use that - because there’s so much we could talk about here. I’m going to, link, one thing that I’m going to link to in the transcription, is this great piece you wrote for Jane Friedman’s Hot Sheet newsletter, about a very particular detail that came out of data that came out of the trial, or the testimony, I should say. Which was, that PRH was spending 2%. It’s marketing spend was 2% of it’s revenue, or something like that, right?

And if you’re a frustrated - just commonsense might lead you to think that’s a low amount of money to spend on marketing. If you’re from another - if you’ve done marketing in other industries, that might seem like a really low amount. I mean you can particularly think about like cars and consumer electronics, or something like that, right? Where it’s trucks and things like that. Where it’s just bombarding with marketing.

And if you’re a frustrated author, for example, who like didn’t get any money spent on your book. Or you’ve got an agent, you’ve got an advance, you’ve got got a book out with a Big Five publisher. Crickets. And no second book, because the first one didn’t succeed. And you’re like, “Well they didn’t spend any money on marketing for my book.” Of course, all those feelings are genuine and legitimate.

But, of course, the situation is actually more complicated. And you made this point particularly about PRH. You mentioned earlier that some of the advantages that they have, I think, particularly with like direct to consumer interactions and things like that. And of course one can’t - I mentioned sort of sarcastically “hierarchy theater.” But like that’s actually a really important way of getting attention to books, right? You’ve got a friend at The New York Times, who’s going to publish a review of the book. Or The New Yorker, or what have you.

Just, the fact that they might not even look at books, unless they’re from one of these big name publishing companies, already, there’s a lot of marketing going on, by the fact they’re attaching their name to your book in the first place.

So you go into a lot of the really great details about that. But with respect to this sort of bigger question of, “What was really at stake here was high culture, and what was left out?” I wanted to talk about that in terms of, particularly, Comics Plus. And you mentioned “the flawed history” of that product. And gaming. Which has a similar flawed history.

Now, people might not know this, but like, gaming, I mean, lots of people do know this. Gaming is an absolutely huge industry. Just in terms of money alone. It’s absolutely huge. It’s a big part of our culture. But as soon as you start talking about it, because of the history of these things, particularly being associated with children, for example, things kids do. There’s - a lot of people just have a natural - I’m going to call it, just, patronizingly, “An impulse to neglect the reality out there.” Which is just there for you to see. It’s there for you to see, if you just open your eyes. But these are very important things, comics, and video games. And they’re not just for kids. And even if they were, they would still be a pretty important part of our culture, which explains some of the sensitivity around it. But I was wondering if you could go into a little, just a little bit more detail? I mean, you spoke about it earlier, about what Comics Plus is, and what it’s mission is.

Guy: Sure. So Comics Plus itself, it’s a product for schools and libraries that makes accessible through an unlimited simultaneous access model, so no holds, no wait lists. To schools and libraries, to lend the digital comics that are in the collection. We work with nearly 80 publisher - a little over 80 publishers. Who make, in some cases, their entire digital collection, in some cases, significant chunks. And in some cases, limited selections from their catalogue, available in our model.

So you’ve got a couple of layers there. You’ve got, a), you need publishers willing to engage with libraries at all on digital content, b), on fair terms. And then, c), on fair terms tied to unlimited simultaneous access.

So it’s - fundamentally, it’s a subscription streaming model. Libraries sign up. They pay an annual rate. Their patrons have unlimited access to whatever version of the collection they sign up for. And as a patron, you, just like OverDrive or hoopla, you log in, and you can read whatever you want.

The difference being, it’s all accessible there at any time. You don’t have, we don’t do the single user license, so there’s no limitations around, “Oh, sorry Len’s got that book checked out Guy, you’ve got to wait a week until he’s done.” We can read it at the same time. Which allows libraries to incorporate it into programming. So you can do Community Reads, without hoping a publisher will make an exception, and make this book available for two weeks. You can be as flexible as you want. You can do book clubs, you can do, basically anything that requires not having limitations to the content you want to make part of that programming.

Len: And regarding limitations, actually, that’s really interesting you mentioned logging in. So to access, and this, we’re talking about digital material here. To access this, do you need to be at the library that you are a member of? Or can you log in from home as a member of that library?

Guy: As long as - libraries vary on which type of authentication method they use. But at a bare minimum, if you’ve got a library card you can log in with, yeah, it’s not geofenced. So you don’t have to be - if you’re at the Boston - I want to use a customer reaction we have. So Boston Public Library recently signed on with us. So if you’ve got a Boston Public Library card, you can read your content in Comics Plus, wherever you are.

The one limitation you would run into, and this is - I learned this firsthand, we went to Spain over the summer. Geo-restrictions for the content itself still apply. So if you’re a Boston Public Library customer, where you travel to Japan, let’s say, some of our content is not available in Japan. So even though, if you were in Boston, through Boston Public Library, you’d be able to read that. If you’re in Japan trying to access it, it’s not available in Japan.

So those are the limitations that - But for the most part, library patrons, especially schools are - schools are nearly 70% of our customer base. Public libraries are like 29, and academic is like 1%. We’re K-12 first, public libraries second. Academic, we are barely at the starting point with. And in a school setting, we find most of our activity is happening in schools. They have access outside of school, but we’ve seen now two summers in a row, our school, once school’s out, we see activity tank significantly for - particularly for the younger books.

And you remember the old days before Netflix offered profiles? So if you had kids, your Netflix recommendations were useless? That’s our “popular” page in the global collection. If you’re an adult looking for adult recommendations, you’re going to have to use the filter, to filter out the kids’ stuff. Because while kids are in school, they are driving our usage activity and the popularity rankings.

But I’d say by late July, school had been out across the country, we started to see young adult and adult books breaking into the most populars. Like, “Oh wow, right, kids are definitely offline, because these books never crack into our most popular.” Because we just don’t have the adult reader base that we do, relative to the younger reader base we have.

Len: That reminds me of something. It’s not so much a controversy anymore, but like book piracy was a huge issue when sort of ebooks became a thing. For people in the book publishing industry, just like music piracy was for people in the music industry. And the music industry sort of famously figured out how to monetize sales, initially through like iTunes, “Pay 99 cents a song.” People actually wanted to do that. They were okay with doing that, even though they could’ve gone on, to date myself, Napster, or whatever, to get stuff for free. And that’s still more of an issue, I think, that preoccupies people in the book industry, than it does in the music industry, which has streaming and stuff like that. Which is not very lucrative for artists. I just wanted to, at least in my understanding, I wanted to point that out.

But in the comic book world, I actually know next to nothing about the internal debates and controversies of that world. Are comic book companies -? I mean, obviously the ones participating in Comics Plus, see it as a revenue stream, sort of generating discoverability and popularity, and stuff like that. Is there a debate in the comics world? I imagine there is. About fears over people downloading stuff off Pirate Bay, and like making things available digitally is problem?

Guy: Yeah, I mean - for the publishing industry’s long term concerns about piracy, comics is the rare category, where that’s legitimate. Especially manga. Like manga’s notorious for pirate sites. Fan, there’s, what it’s called? Scan legions? Fan legions? Basically hardcore fans will translate the Japanese originals, before the American publishers even publish their translations.

Len: Wow.

Guy: And put them up online. So Len is, superfan, really into Naruto, and is not waiting for volume 38 to be available in America. He’s reading it in Japanese. He’s translating it, and then he’s putting it up online for people like him, who want to read it, and don’t want to wait for VIZ to publish the English edition. So piracy in comics has, I think, always been a steady concern. Comixology, Marvel Unlimited, DC Unlimited. Similar to music, books - some book publishers realize a viable consumer marketplace is ultimately the best answer for the majority of piracy.

And then there’s that category of piracy that Brian O’Leary - I forget what the specific term was. But basically, his argument around, there’s a category of piracy that, it’s not a lost sale, it’s a sale you never were going to get. At best, it’s discovery. At worst, it’s people who were never going to buy your book. Stop worrying about them.

The category of people you should worry about, are the ones who you don’t make it accessible. Either back in the day it was, you were delaying the ebook a year. They want to read it now. They’re going to go to the pirate site. Why are you windowing ebook availability at the point where ebooks are becoming a viable thing?

So, comics, piracy, is, I’d say an ongoing concern. Bigger in some categories of comics than others. When it comes to digital availability, these digital platforms have been around long enough, that - where publishers might have discomfort, is around the royalty models, not the accessibility.

I have yet to hear in my time here, a single publisher even ask any serious questions about DRM or anything. They take it for granted that the established platforms know how to manage digital content. And their worries are more about, “If I go into this program, am I getting paid fairly, or am I harming my consumer sales?” Well, we’ll still have some of those conversations.

But I hear, in the two plus years I’ve been doing this, I’ve heard no-one openly discuss piracy as a concern. And the success of Comixology, in particular, I think created that viable consumer marketplace. That gave your, “Piracy is the easiest way for me to get this thing. I would’ve bought it, if there was a way for me to get it.” It removed a lot of that. And now the pirates, I think, that are left, are the ones, like I said, were never going to buy your book anyway. So there’s programs established to - you don’t want to let it get out of control. But it’s not the concern I’ve seen that it was like 10 years ago, when, particularly in comics, it was a very legitimate concern.

Len: Speaking of established platforms, this is a selfish topic I’m going to bring up. Just because I find it interesting. But one thing we’re in the, right in the midst of right now, is, it appears Elon Musk is actually going to buy Twitter. And Twitter is very important. Like it’s very important in book publishing. Sort of, for an author, you can follow authors. You can discuss, have debates about things. Obvious, for journalists, and like news publishing and stuff like that, it’s incredibly important, in so many different ways. It’s so important for our politics, and things like that. And I was just - totally just wanted to give you an opportunity to say, what do you think Elon Musk is going to do with Twitter, if he indeed does just buy it?

Guy: What was I reading yesterday? The guy that does the newsletter, “The Platform,” where that covers the technology industry, he’s like one of the bigger sub stack guys, who went out on his own. But he covers this space. And he had an interesting comment yesterday. He’s like, “I’ve given up predicting what Elon Musk might do, because that’s the hallmark of Elon Musk. He’s unpredictable.” I extend that too. He’s unpredictable in the worst ways. As opposed to a positive form of unpredictable.

But the things he’s said publicly, my expectation is, Twitter gets worse, before it gets better, under his ownership. I’m not looking forward to it.

But the things he’s said publicly, my expectation is, Twitter gets worse, before it gets better, under his ownership. I’m not looking forward to it. The way it was going, up until yesterday, I was, I had forgotten. It was like, “Alright, that’s going to fall apart, and Twitter will continuing being the weird little platform that could, but couldn’t.” And then the news popped up yesterday or the day before, that, “Oh, it’s back on, he’s going to buy it, possibly as soon as Friday.”

I don’t know? I’m just, disclosure, not a fan of him on any metric. Not as a person, not as an innovator, not as a businessman. I think he’s very much what you get, when somebody has money and a strong personality, and maybe one good idea in their past. And that let’s the - I mean, the gap between him and Donald Trump, is, in my mind, very narrow. They’re cut from the same cloth.

So I don’t have a lot of positive expectations of Twitter under him. I’m not ready to shut my account tomorrow. But I’m - I’ve started mentally adjusting to, “What does my world look like, if I’m no longer using Twitter?” [Here’s a post Guy published after Musk actually took over Twitter, before this Frontmatter interview was published: https://loudpoet.com/2022/11/07/twitter-detox - Eds.]

Because Twitter is - I’ve been on Twitter since 2007 or 2008. Valuable platform for me. Met a lot of people. Got a couple of jobs back in the day, based on my Twitter presence and connections I was able to make. It’s probably my most valuable social network, just across the board, the overlap that happens there, is unique. I engage with people that, any other platform I use, only a percentage of them -

LinkedIn, it’s mostly publishing people I engage with there. Instagram, I’ve got a personal account that replaced my Facebook account, when I finally killed Facebook. And I’ve got a public one that’s just about cars. My blog is my blog. That doesn’t get that much traffic from Twitter anyway.

So three years ago, I’d be like, “Oh that’s going to kill my blog.” Now I’d be like, “Alright, whatever.” Twitter is quietly become the weird little porous walled garden. They’ve successfully, in some ways done, where, Facebook, I feel like went too far, and actively engaged in a walled garden. Twitter came up with this interesting porous model. Where, links still happen there, but conversation stays there. Like blog comments died years ago. They’re not coming back.

So, yeah, I was talking - I’ve tweeted about it today. I was going back and forth with some people, just getting different perspectives where they might go. And everybody I know is in a similar situation. Twitter is this unique overlap of worlds, that is irreplicable.

Len: Yeah, I agree with that, definitely. That I’ve been sort of wondering, like where am I going to follow journalists having their like internal discussions and debates about things? Like the stories that come out, you get to see the sort of background things that happen.

That, for me, that’s one of the - for other people, Twitter’s great for all sorts of other things. But for me, for some reason, it’s just like getting to see journalists talk about their research, and analyzing each other’s pieces, and stuff like that. And there’s just nowhere else -

Guy: No.

Len: For anything like that.

My view on Elon Musk, is, just sort of like, I do believe that one - with respect to electric vehicles, he realized no one was trying to make the best electric vehicle in the world. And that the car industry, was, there’s a lot of nonsense in it.

Guy: Yes.

Len: And if someone actually just tried to like build the best cars, they would have an opportunity there to succeed.

And particularly with the space industry, and stuff like that, there’s a whole bunch of nonsense going on there. No one was really just trying to build the best rockets the best way they could. And those kinds of insights are actually really, really useful.

Where, of course - well, I say, “Of course.” But like, where this anti-intellectual reactionary resentment part of him is the thing that I really, really personally don’t like, I’m not a fan of.

And that’s what led him to - Oh, sorry about the beeping. But that’s what led him to impulsively buy Twitter, right?

Guy: Yes.

Len: Like it was that reactionary anti-intellectualism that drove that. And by the way, I don’t say that as, that, I don’t use that term as an insult. There’s a history of anti-intellectualism in the United States that’s coherent, and sounds identical.

Guy: Right.

Len: And knows what it is, right?

Guy: Yeah.

Len: And mocking is a big part of that. “Hey four eyes,” like stuff like that. And, in particular, that whole discourse around Twitter, was around, “Oh, people are being excluded from it because of their political views.” And it’s like, “Well, that’s -“

Sometimes, I just want to take the opportunity to say, often people are making a category mistake, when they think that happens. So for example, if - I saw this on some comments somewhere recently, where someone said, “Oh, the Republicans don’t want to fund this veterans project in the same way that a cheapskate doesn’t want to use the fire extinguisher to put out the fire on their stove, because it’s a one-off expensive payment,” right? “But as a result, they let the whole house burn down.”

And someone replied, saying, “If my stove is getting too hot, I just turn the temperature down.” And it’s like, “You’re not replying to what the person actually said,” right?

When you do things like that, what you’re saying to the other person is, I’m either not - unwilling or unable to engage in good faith conversation. And you’re actually, when you find yourself excluded from certain conversations, it might not necessarily be because of the content. It might be because of the way you’re engaging with people.

I think that’s a huge issue, particularly with Twitter. And as, a, I’ve got to say, like I have a bit of a background in mergers and acquisitions, and stuff like that. And when it was like - this whole thing is hinging around the fact that he made an offer, without doing due diligence, or demanding it. And it’s like, “Well, then it’s actually - he’s fucked.”

And so, now he’s trying to make, my view, is he’s trying to make the best of it, by saying things like, “Oh I’m going to make basically an Alibaba, or something like that. And this is going to be -“ For those who don’t know, like there’s these sort of super apps in China, for example, that people use for everything, right? And he’s sort of saying, “This is going to be that.” And it’s like, “Well, good luck with that. I hope it doesn’t distract you from electric vehicles and solar panels too much.” My two cents.

Well, Guy, we covered a lot of ground. Thanks very much for agreeing to come on the podcast again. It’s great to hear what you’ve been up to in the last two and a half years, it’s just all so interesting. And, yeah, particularly I want to say, best of luck marrying startup and library together, and comics, as you go forward.

Guy: Now we’re on a good trajectory, and so far, so good. So -

Len: Awesome.

Guy: Also got my fingers crossed.

Len: Awesome. Thanks very much.

Guy: Alright, thanks Len.

Len: And as always, thanks to you for listening to this episode of the Frontmatter podcast. If you like what you heard, please rate and review it wherever you found it, and if you’d like to be a Leanpub author, please visit our website at leanpub.com.