Explore Jane Friedman's 2018 Year in Review—her take on the latest trends and shakeups in the book and magazine realms, and what those mean for writers in the coming year.
For better or worse, current events continue to drive attention, sales and subscriptions across all sectors of publishing this year. If 2017 was best remembered for “fake news,” then 2018 was the year of #MeToo, with a surge of groundbreaking revelations about sexual harassment rippling throughout all categories of the media, from Harvey Weinstein to Charlie Rose to Sherman Alexie. For book publishers, political books contributed to sales growth, while newspapers saw digital subscriptions increase as citizens grew more willing to pay for access to quality journalism.
The New U.S. Tax Bill & Its Effect on Writers
The Tax Cuts and Jobs Act, the new U.S. tax bill, took effect on Jan. 1, 2018, and has had wide-ranging impacts on writers. Often used by authors and freelancers, pass-through entities such as LLCs, sole proprietorships, partnerships and S corporations are taxed differently under the new law. Currently, profits from pass-through entities are taxed at an individual rate, which can be as high as 39.6 percent. The new tax bill allows such businesses to deduct 20 percent of business income. However, high-earning writers (with annual earnings of more than $157,500) may not receive this new tax break in part or full.
New Supreme Court Ruling Is a Potential Win for Booksellers
On June 21, the Supreme Court handed down an important ruling in South Dakota v. Wayfair that affects bookselling nationwide. Until the ruling was made, it was not mandatory for online retailers to collect sales tax if they did not have a physical presence in the state; however, going forward, it is. While this decision has far-reaching implications for all businesses, it is widely considered a win for the bookselling community in its battle against Amazon. However, Amazon itself was already paying sales tax in all states before the ruling. Therefore, it primarily affects third-party sales made through Amazon (in the Amazon Marketplace). Ironically, if Amazon Marketplace sellers are negatively affected, sales may simply shift to Amazon itself.
Publishing’s #MeToo Reckoning
As headlines proliferated around #MeToo and issues of diversity this year, the publishing industry has been forced to deal with long-seated problems. Leading authors such as Sherman Alexie, Junot Díaz and Jay Asher have been accused of sexual harassment, forcing publishers, agents and booksellers to decide whether to retain or sever relationships, cancel planned events and rescind awards and positions. Morality clauses are now appearing in book-publishing contracts to give publishers flexibility to abandon an author when bad behavior surfaces. #MeToo isn’t the only issue, though. In the YA and romance communities in particular, race and diversity have become hot-button issues. YA authors are revising books to avoid claims of racism, and reviewers have been called out for favorably reviewing books considered racist. More publishers and authors now seek sensitivity readers prior to publication to catch problems early.
This year we lost two pre-eminent figures of 20th century literature: Philip Roth, perhaps best known for Portnoy’s Complaint and the character of Nathan Zuckerman; and new journalist Tom Wolfe, iconic in his trademark white suit, who wrote numerous bestsellers—both fiction and nonfiction—such as The Bonfire of the Vanities and The Electric Kool-Aid Acid Test.
We also said goodbye to Nobel Prize–winner V.S. Naipaul, poet Donald Hall, children’s author Richard Peck and novelist Anita Shreve (The Pilot’s Wife and The Weight of Water).
BOOK PUBLISHING DEVELOPMENTS
Amazon Shutters Some Indie Writer Publishing Programs
This year, Amazon pulled back on some of its publishing programs, closing down several initiatives popular with self-published authors. The most notable closure was that of Kindle Worlds, a platform that allowed established authors to license their story worlds to other writers—providing a legitimate path to profit from fan fiction. Over five years, Kindle Worlds launched nearly 100 licensed worlds, some well-known—everything from Hugh Howey to G.I. Joe. In addition to Kindle Worlds, Amazon also closed crowdsourced publishing platform Kindle Scout; stopped actively accepting submissions for Kindle Press, which focused on publishing digital-only editions; and halted their acceptance of script submissions for Amazon Studios.
Agent Embezzlement Reportedly Leaves Chuck Palahniuk Broke
In late May, shocking news circulated about the respected literary agency of Donadio & Olson, where the agency’s accountant was found to have embezzled $3.4 million over a period of years. In the aftermath, the agency’s client, Chuck Palahniuk, wrote on his website that he’s close to broke. Up until the embezzlement news, he’d blamed his dwindling income on piracy and slow-paying publishers. Attorneys for Donadio & Olson have said the agency “is ensuring that all of its impacted clients are made whole to the greatest extent possible.” Exactly who is affected and how much of that $3.4 million is owed to authors is unknown.
Nonfiction and Digital Audiobook Sales Thrive; Fiction Remains Stagnant
While traditional publishers have enjoyed a slight increase in overall book sales this year, the growth is mainly being driven by nonfiction as well as digital audio—the latter of which has been growing by 20 to 30 percent over the last few years. In the nonfiction realm, successful categories include politics, cookbooks, self-help and business. However, the CEO of Simon & Schuster, Carolyn Reidy, says some of their important authors have experienced sales declines, and that other houses are experiencing a similar trend. She said, “We’re talking about these real powerhouses that have fueled the industry for a lot of years. It’s still a challenge to help an established, bestselling author maintain and grow his or her audience—that’s a big challenge in today’s world.”
Barnes & Noble Continues to Experience Turmoil
Just before Valentine’s Day, the largest brick-and-mortar U.S. bookselling chain announced a “new labor model,” eliminating store positions to save $40 million annually. While no figures were given, it was estimated about 1,600 people were laid off, which would represent about a 6 percent decline in its workforce. Sales have been slowly declining for the last couple years at the beleaguered retailer as it attempts to create a shopping experience that will help it better compete against Amazon as well as independent bookstores. To that end, it has launched a new nationwide book club, focused on growing its own membership program, and created a book-browsing app to increase engagement. However, in a surprising turn of events, Barnes & Noble fired its CEO over the summer without severance and is now searching for a replacement. In the last five years, the company has had four chief executives; book publishers are frustrated at the retailer’s instability and fear its loss, as it represents an important counterweight to Amazon-ian power.
DEVELOPMENTS IN MAGAZINES & JOURNALISM
Major Magazine Mergers: Meredith Acquires Time Inc., Hearst Acquires Rodale
The year started with a not-unexpected—yet still groundbreaking—business merger: The Iowa-based Meredith (best known for Better Homes and Gardens) acquired New York–based Time Inc. The acquisition instantly made Meredith the largest magazine company in the world. By March, the company announced a round of layoffs and cost-cutting measures, and also that it would sell off several of Time’s flagship publications: Time, Sports Illustrated, Fortune and Money. (Buyers have recently been announced for Time.) That wasn’t the only big merger this year; Hearst acquired Rodale, best known for its health and wellness brands, such as Prevention and Men’s Health. As with Meredith, Hearst wasted little time in announcing layoffs and sold off Rodale’s book division to Penguin Random House.
New Facebook Algorithm Negatively Impacts Traffic for News Sites
While it’s not necessarily a new or surprising development, news publishers experienced serious declines in 2018 in non-paid traffic from Facebook. In his first announcement of the year, Facebook founder Mark Zuckerberg said the site would prioritize posts by families, friends and groups—partly driven by the negative attention Facebook has received for helping disseminate “fake news.” Some characterized Facebook’s move as a stark and disappointing retreat from the news business. The next strategy for some news outlets? Focus on driving organic search results from Google.
Increased Paper Costs Affecting Profit Margins, Especially at Newspapers and Magazines
It’s a cruel irony: Reduced demand for book and magazine paper stock has increased its cost, as paper companies have shifted production to areas where demand is growing, such as packaging. (Think: Amazon boxes.) Additionally, President Trump’s tariffs on paper from Canada has increased costs for newsprint, creating the very real possibility of driving small papers out of business. In May, several senators put forth a bill—the PRINT Act—to protect printers and publishers from such tariffs; and in August, the International Trade Commission voted unanimously to reverse the taxes.
Europe Tightens Up Privacy Laws, Affecting Publishers Worldwide
Due to increasing privacy concerns, a new law from the European Union, the General Data Protection Regulation (GDPR), took effect in May. While it’s meant to bring big tech firms—think Google and Facebook—to heel, the new law has repercussions for anyone who runs a website or collects personal data from EU citizens, such as email addresses. The key provisions of the law: People must give explicit and proactive consent for their data to be collected; they have the right to review what data is stored and take it elsewhere; and they have the right to withdraw consent and have their data expunged. Publishers are complying by having clear privacy policies and terms of service, and establishing records of consent. Since it’s often easier to make that a blanket request rather than singling out EU citizens, U.S. citizens now enjoy the halo effect the law is creating.
Looking ahead, keep your eye on the subscription wars: Every media business is now considering how to get readers to pay weekly, monthly or annually for access. While everyone agrees someone has to pay for content—especially since advertising is making up a smaller portion of the revenue pie than ever before—how many subscriptions can any single reader justify? Expect discussion of subscription exhaustion, especially if and when the news cycle becomes dramatically less interesting to readers.
This feature originally appeared in the Writer's Digest Yearbook 2019. Grab a copy or subscribe to discover more.
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