Jon Reed notes: Taking technology into your own hands is a big theme of “Free From Corporate America.” Recently, I had a chance to listen to a thought-provoking podcast from MediaLoper.com on Print on Demand (POD) publishing. I have quite a bit of experience in this area, and while I agreed with the theme of the podcast, that POD is a powerful new medium, I thought there were a number of misconceptions in it. I posted the following response, which shares my view on not only POD, but the overall impact on “disruptive technologies” and the challenges those “upstarts” who embrace those technologies may face. Note: this is a web-only piece and will not appear in my upcoming book.

Hello – I enjoyed your podcast interview on POD publishing and thought it was thought-provoking. As the moderator of Yahoo’s POD group, as well as an experienced POD publisher who has put out both profitable and non-profitable titles, I’d like to offer my response to the podcast.

I thought some of the information in the interview, and the post-interview wrap, was very much on track. I also thought there were some misconceptions that should be cleared up.

Let’s start with what was right on target: what everyone said about fiction not being a good option for self-publishing is absolutely correct. Self-publishing works much better for non-fiction topics, and those non-fiction topics should be marketable “niches” focused around a platform that the author is developing that might include consulting and speaking engagements and most certainly includes a content-rich web site at the heart of the marketing effort.

You touched on the importance of platform in your interview wrap and that’s absolutely spot-on. Also, Timothy smartly mentioned Lightning Source, which is far and away the best POD option for a number of reasons, primarily because it’s a powerful inroad into Amazon and allows you to control your own discount. However, you must be a publisher with your own ISBN block, not an author publishing an individual title, to work with Lightning Source.

Now let me touch on some misconceptions in the interview. I think some of the misconceptions come down to some evangelical zeal about POD as some kind of “disruptive technology” that is going to revolutionize publishing and put power in author’s hands. It’s true that POD lowers the overhead and barriers to entry into publishing, but publishing is still a tough business.

It’s important to understand that just because a distribution channel changes doesn’t mean that the deep-pocketed players of the existing industry won’t be on the inside track. For example, just because music ends up being delivered online doesn’t mean that the major record labels that exist today won’t get the lion’s share of the profits from that medium.

I think Timothy will end up regretting his decision to turn down his five figure book deal, but with a couple of disclaimers. His motivations for publishing aren’t always clear to me in the interview. If making money on this one individual book is his primary motivation, then he should have gone with the book deal he turned down. On the other hand, if he truly has a passion for publishing and wants to roll out a serious of books and make it a life’s work, then he may love his decision.

Self-publishing is a great business for those who have a passion for publishing, who are incorporating publishing into an existing consulting/Internet business, and/or who like to “live lean” and have a “lifestyle business” that gives them a lot of creative control over what they publish and how they live. But if I was a millionaire looking to make money, and that was my prime motivation, I’d be in real estate, or financing initial public offerings, or some other more lucrative business for upstarts with money than publishing. Publishing is a business with a vanishing middle class, and I don’t believe POD will change that fundamentally.

POD will boost the “lower classes” in publishing though, and that can make a difference for people who know how to live with a lower operating cost, where a modest income somewhere on the long tail is good enough for them. Another appealing scenario: self-publishing helps someone solidify their “expert brand” and generates lucrative consulting engagements. The wealthiest self-publishers I know all fit that description, and leverage their book sales for their bigger ticket sales in something else. This was not discussed in the podcast.

Here’s a major challenge that did not get fully addressed in the podcast: getting into bookstores. I have experienced first-hand, and have seen many other examples, of major national publicity awarded to a book that is self-published and available on Amazon, but not available in bookstores. I think Timothy will be shocked at how few book sales he gets on Amazon after major interviews and publicity pushes.

In order to capitalize on publicity, you need your book in bookstores, and not just in the back somewhere, but up front, where there is a “stumble factor.” This is something that self-publishers cannot accomplish unless they become major publishing companies. Perhaps Timothy will pull that off. But he is likely to lose a lot of money paying a marketing firm to get huge exposure and then find that the books he sells off the exposure from Amazon don’t come anywhere near to justifying the cost.

That’s why all the successful self-publishers I know either have a more lucrative option for some of their PR exposure (like turning web visitors into high-paying consulting gigs), or have a more affordable, Internet-based marketing strategy that doesn’t involve paying a PR firm huge money for great ego-feeding publicity that doesn’t result in sustained book sales.

Successful self-publishing is not about big splashes but sustained, search-engine-driven sales momentum, year in, year out. And if a title starts to really take off, it often makes sense to work with a big player to really drive it across the airport bookstores and wherever else volume sales can happen. Sure, maybe you make less per book, but you sell a whole lot more books. And don’t forget, the branding value of that high volume exposure is a major market advantage also – another point that was not touched on in the discussion.

One thing I really disagree with is that idea that authors with an established following are ideally cut out for self-publishing. Actually, the reverse is true. It’s authors who have an emerging niche but not a huge following who are ideal candidates to break into publishing via self-publishing.

Once you have a nice following and an agent who actually returns your phone calls, you are in a much better position to leverage a good deal with the bigger publishing houses, and the real way to make money in publishing is through high volume sales. Timothy seems to have an appetite for the big bucks. You get there by doing Harry Potter or by being a Dr. Phil type of non-fiction person, and that is about selling a ton of books for less royalty rather than selling a much smaller amount on your own, albeit at a higher percentage.

Another misconception of your podcast is that the “long tail” is some kind of amazing opportunity for an entrepreneur. POD’s ability to extend the long tail by keeping thousands of books in print means great business for Amazon, and for big publishers who own thousands of titles, but for a small publisher, having a few books somewhere on the long tail is not a big money proposition, nor is it some kind of publishing revolution. It’s merely a new business opportunity – a great one for those who have a passion for creative control and doing things “their way,” but not for the next Bill Gates. If that’s what you want, you’re better off starting a software company.

I couldn’t disagree more about the comments regarding disrupting the music industry. I agree that the delivery of music will change more dramatically than books, it already has – simply because iPods are a lot more fun that portable electronic book readers. But the music industry is as “locked up corporate” as you can get. I have known a lot of promising local bands who tried to “do it yourself” and attempted to sell songs themselves without a label.

Very very tough road. Music is so subjective — you have to get your music out to a ton of listeners to build your percentage of loyal followers. At least book marketing can be driven by keywords, a more objective assessment. If you’re interested in SAP consulting, for example, there’s a pretty decent chance you might be interested in my book on that topic, but it’s much more difficult to establish a direct relevance through a musical description. People like what they like, and they won’t know it until they hear it. That takes marketing skill and muscle. The former can be learned, the latter takes big bucks.

The idea that there aren’t many big recording artists today is crazy. True, rock is struggling, but that’s not because the music business isn’t making money. Justin Timberlake, 50 Cent, Kanye West, Jack Johnson — the list of hugely successful recording artists goes on, and I haven’t even mentioned the American Idol success stories. Success in music requires big time marketing muscle. It’s hard for artists to do that themselves.

The scenario you described of an artist breaking away from labels to do it themselves was tried by Prince, and it was a recipe for obscurity. Without the marketing muscle of a label, his music died on the vine. And don’t think for a minute that a big artist can divorce their label and still get all the lucrative tour money as you suggested.

Labels control tours through their exclusives with companies like TicketMaster. Pearl Jam valiantly tried to fight this system and lost. I’m sure they have no regrets, but if Pearl Jam with all their power and conviction couldn’t change the system, we should at least respect the ferocity of entrenched corporate interests, rather than assuming that technical innovations will easily bowl them over.

Ironically, of the three entertainment industries you touched on, the one you mentioned the least, film, may be the one with the biggest financial upside in the short term — though the upfront investment is still the highest of the three. There are far more “break outâ” independent film success stories of films put out on a budget using new technology than we have seen in publishing and music combined. True, these successful films were picked up by established distributors, but technology does level some playing fields in film for those with creative vision, while at the same time promising a bigger financial upside to the creators who are successful.

I am all in favor of folks taking up new technology to change their world. I chose to get involved in POD precisely because of that. I believe in independent media and do believe we can have an impact on our world through such a commitment. I hope that Timothy has that same passion, because being a pioneer in an industry rarely means cashing out.

If you look at the history of the modern high-tech and Internet booms, many of the earliest and most important innovators did not cash out. Their ideas were leveraged by those with deep pockets who understood mass marketing. The same is likely to be true for many of these publishing and POD innovations.

It can be very rewarding and challenging, in a good sense, to be on the cutting edge, as long as you realize what you are up against. I know Timothy will find success as he has too many resources and skills not to. But I do hope he will come back and do a podcast in a year or two to share what he has learned. And I hope folks without Timothy’s resources who are thinking about POD will go into it appreciating its potential, but also with their eyes wide open.

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