Erik Sherman's WriterBiz

A spot about the business of writing as seen by a freelance writer. That includes marketing, sales, contracts, copyright, planning, research - in short, the business end of writing.

Name: Erik Sherman
Location: Massachusetts, United States

I'm an independent writer and photographer who covers business, food, technology, books, media, general features, and pretty much anything appealing that results in a signed check. My work has appeared in such places as the New York Times Magazine, Newsweek, Newsweek Japan, Fortune, Inc, Fortune Small Business, the Financial Times, Advertising Age, Saveur, US News & World Report, and Continental

Thursday, January 31, 2008

Announcement Post: All-Expenses-Paid Health Journalism Fellowships With Reporting Stipend

I have no connection with this, so cannot vouch one way or the other. However, USC's Annenberg School is certainly well-regarded.




*Call for Applications! All-Expenses-Paid Seminars in Health Journalism*
*With $2000 Reporting Stipend!*
*When: April 13-18, 2008. *
*Deadline to Apply: March 3.*
*University** of Southern California’s Annenberg School for Communication*

The California Endowment Health Journalism Fellowships

USC’s Annenberg School for Communication is calling for applications for its national health journalism seminars. Based in Los Angeles, *The California Endowment Health Journalism Fellowships* are open to professional print, broadcast and multimedia journalists from around the country who have a passion for health news.

The United States is rapidly becoming more diverse – today one-third of the nation’s 300 million residents are ethnic minorities. This program explores the intersection between community health, health policy and the nation’s growing diversity.

Participates receive free tuition, meals, travel to seminar locations and lodging for fellows. The program offers *a $2,000 reporting stipend* upon completion of major fellowship projects and it flies out editors for a special editor-fellow workshop. To encourage collaboration, the Annenberg School will award *$4000* in *reporting stipends* to teams of journalists from mainstream and ethnic media whose project would be expected to appear in both media outlets. For more information, click the link above.

You can also contact us at 213 437-4419 or calendow@usc.edu.

Michelle Levander
Director
The California Endowment Health Journalism Fellowships Annenberg School for Communication University of Southern California
One California Plaza
300 S. Grand
Suite 3950
Los Angeles, CA 90071
Tel: 213 437-4418
Fax: 213 437-4424

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Site Review: Groovin' on Gorkana

Someone on a writers' web site mentioned Gorkana.com. I took a look and it seems to be a useful and free marketing tool for journalists. (Sorry, but corporate writers probably won't get anything from it.)

Gorkana has two sides: one for journalists, and another for PR people. For writers, the cost is that you have to be a working journalist, and you must let information be put into a database to which PR people have access. I haven't found myself inundated any more heavily than usual, so I'm not sure that's a problem. What you get as a journalist are a few things. One is regularly emailed updates to industry changes. From Gorkana alerts, I recently got the still-current email address for the editor who will head the new weekend magazine for the Wall Street Journal and the current email and phone for the new managing editor of Conde Nast's Portfolio.

If you need a source or sample, you can post a request through the alerts the site sends to press representatives. You can also offer your services to editors. I think it's definitely worth checking out.

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Wednesday, January 30, 2008

Triangulating on the WSJ

We're starting to get indications of where the Wall Street Journal may be going, at least in part. Rupert Murdoch has changed his mind about making everything available on wsj.com for free. You know he had people undertake some significant financial analysis before reversing his decision, which suggests that the ad money that could come in simply doesn't compare with the paid subscriptions, as well as the difficulty that having all those articles for free might cause for the subscription base of the paper. After all, why pay if you don't have to? But that also suggests that papers hoping to make it online through the strength of advertising may face a difficult time.

So, he can't make enough online. But what is happening in print? Expansion of topics. He's convinced that a full page of sports and a new weekend magazine (edited by someone he's bringing over from another of his properties, The Times in London) will add to the value of the paper. It might at that, who knows? Certainly having some heavy non-business weekend coverage hasn't hurt the Financial Times. But before you figure out whether you should be trying to query, also realize that Murdoch has said that he things the front-page stories at the Journal are too long. That makes me wonder whether he'll try to add the coverage from people already in house, or consider freelance help.

In terms of contacting that new weekend magazine editor, look for my post tomorrow about Gorkana.com, an editorial move/update service that seems to have some potentially serious value, all without having to pay.

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Tuesday, January 29, 2008

Site: How We Became Writers

Knowing the unceasing interest writers generally have in reading, hearing, and talking about writing, here's a site: How We Became Writers. It features writers telling stories of how they ended up doing what they do.

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When Not to Focus on Monthly Goals

I'm a big advocate for monthly goals, but they can cause one big problem. It's easy to focus so much on what you're supposed to make in January - going through a panicked rush in the last week when you find yourself a bit short - that you forget there's more to a year of revenue than any one period. To focus too much on what you make any given month can cause you to waste time and lose your grasp on the big picture.

Ultimately, the important thing is what you average over a quarter and, then, the year, and not every single month taken absolutely on its own. One reason is that it's difficult to turn around a significant amount that drops out of a month, as by the time you make the sale and start work, generally you will find your deadline into at least the next month. And if the amount is small, it's probably not worth diverting your attention from where your business is going overall.

If you do find yourself short, consider whether you would better take your time and work on getting assignments for larger amounts. Could you split up that shortfall and make it up over the next two or three months?

Be more flexible in your planning. Look at what you are doing per month, certainly, but also per quarter. I know some writers who combine quarterly and daily views, to make sure they're on track in the short and long terms. Personally, daily can be too widely variable for me, but if it fits your business model, then by all means use that approach as well. Whatever you do, though, remember that planning and goals are there to help you run your business and keep on track, not to run you.

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Saturday, January 26, 2008

Giving Away E-Books to Drive Sales

Author Paolo Coelho has apparently been giving away electronic versions of his books to great marketing effect. There's a quote on a site called TorrentFreak:
In 2001, I sold 10,000 hard copies. And everyone was puzzled. We came from zero, from 1000, to 10,000. And then the next year we were over 100,000. […]

I thought that this is fantastic. You give to the reader the possibility of reading your books and choosing whether to buy it or not. […]

So, I went to BitTorrent and I got all my pirate editions… And I created a site called The Pirate Coelho.
And here's something from his official blog discussing a talk he gave about the phenomenon. I'm not saying that every author should immediately run off and give away copies, but the success that some have with this method does give one pause to think. With so many book purchases happening online, maybe this is the online equivalent of going to a book store, having a title catch your eye, flipping through it, and deciding to buy it. Or perhaps this will only work with a few authors and eventually the whole approach will fall apart. Interestingly, the people I've heard of who have had success - Coelho; journalist, science fiction author, and co-publisher of the popular web site BoingBoing.net; and M.J. Rose - have all been giving fiction away.

It makes me wonder whether there has been any success with giving away non-fiction - at least the non-literary type. (If you've heard of a case, please email me and let me know.) It could be that it's an approach that only works with more "literary" works. Or perhaps it's just that non-fiction authors generally have an easier time to get commercially published, and aren't quite desperate enough to take big chances that could result in success.

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Thursday, January 24, 2008

Mediabisto Gives Heads Up Over Ad

About a week ago, Mediabistro ran an advertisement for OverTime Magazine, which was seeking "Excellent Freelance Writers." But according to an article that MB ran today, the publication is in deep hoch:
According to interviews conducted by mediabistro.com with five people who worked on the magazine at various times since 2004, McNeil's company, Maven Media Group, which publishes OverTime, owes money to vendors, freelancers, and former staff. One source with intimate knowledge of its finances -- who is owed more than $8,000 by Maven Media to date -- said the company owes "considerably more than $100,000" to former magazine staff, freelancers and vendors. "[$100,000] wouldn't even cover the loans [McNeil's] taken out," she said.
Of course, that's based on a few sources that may or may not be correct, and the publication claims that everyone has been paid. However, there are enough questions raised in this piece that, personally, I'd steer clear. There are too many problems in the business world. Why walk in a direction with signs proclaiming alligators, quicksand, and stinging flies?

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Wednesday, January 23, 2008

Planning for the Recession

There's talk about a recession, with experts disagreeing as to whether it will happen, it is happening, or already has happened. That's my way of saying that there is always an economic situation. It may be deemed "good," "bad," or "indifferent." No matter what the description, however, that doesn't mean the specifics will be good for you and your business. I've talked to writers who found that their businesses took big hits in the post dot-com recession of 2000 and 2001. I know other writers who saw their businesses take off. At any time, some people will do well and some will do badly.

The difference is that, whether consciously or not, the ones that profit have business strategies matching the conditions. Those that lose have incompatible strategies. Really economically successful writers are aware of changing conditions and adapt their approach as needed. To do that, you have to see that things are changing and then find what will work. That may take some experimentation, but in the end, you can do it.

As an example, let's look at just some of the things happening now. The whole world seems to be slipping into a slump. Banks and other lenders are taking a beating; look at Bank of America, which saw a 95% drop in earnings. The home housing market is slow. Hollywood writers are still on strike. Just these few facts would suggest the following:
  • Trying to diversify by going after foreign markets won't necessarily be a help, though Americans might still intelligently make some efforts in this direction because of the current exchange rates.

  • Financial services companies may be a poor choice, because many will be cutting corners to restore earnings and regain their stock prices.

  • Covering consumer real estate will be tricky, because those in the area will be spending a lot less, which means they will be less interesting for the time being to advertisers, making it difficult for advertisers to justify spending too much on advertising.

  • Hollywood has pretty much ground to a halt because of the writers' strike. But signs are that talks may soon restart, and if the two sides come to an agreement, there will be overtime work to get projects moving again. And then, maybe a year down the line (possibly more, depending on how long it takes productions to move from one stage to the next). If you write about entertainment, you might start a particularly heavy marketing phase in a few months. (After the obligatory article on the What The Strike Meant.)
One professional I know said in an online discussion thread that he's concentrating on blue chip clients. That could be wise - assuming that you've got your writing chops to a point that you can satisfy such clients. But remember that even blue chip clients - Bank of America would normally be considered one - can have problems. Read the business news, pay attention to all of the clues, and think about what each implies, and how they all connect.

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Tuesday, January 22, 2008

On Wal-Mart Dropping 1,000 Magazine Titles

I think the story of Wal-Mart cutting a thousand magazine titles off its list is probably more complicated than it seems on the surface. Wal-Mart is driven by operational efficiency. Part of that means carrying products that really move. News stand sales are often the opposite of efficiency - think 70 to 85 percent or more being returned because no one buys them. Plus, the article talks about the list having magazines that hadn't existed in a significant period of time.

It sounds to me like they are purging lists of things they haven't/didn't want to carry for a while, even with some major titles being taken off. I'd also wonder if this is a step toward something else that would be pretty significant: taking control of their own magazine distribution, rather than doing the "usual" thing of allowing distributors to populate the shelves as they please.

Finally, dropping 1,000 magazines? That alone is a clue, to me, at least, that something is odd. I've been in some large Wal-Marts, and there's simply not enough shelf room to drop 1,000 magazines and have anything left. Maybe a lot of the titles were distributed regionally, or had been brought in and one time and then not a second. In fact, I just saw something from a publishing consultant (sorry, no free online link) that suggests a) the magazines left in Wal-Marts will easily account for over 95% of their sales, and b) the number of magazines actually on display at a Wal-Mart at any one time is closer to 300. Many of the cut titles are only sold in certain geographic areas or during particular times of the year. Finally, some of the magazines - like the Economist or the New Yorker - are aimed at a different demographic than Wal-Mart's customers.

So, when Wal-Mart trims magazine list, it's significant news for the publishing industry. But the real significance - taking more control over distribution - is yet to be seen.

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Friday, January 18, 2008

CJR Column on Blogging

It's interesting to see how blogging has become part of the professional journalistic landscape. The Columbia Journalism Review has a piece this month on the economics of blogging. Anticipating that blogging could end up with its own guild like the WGA is probably unrealistic. After all, author Chris Mooney describes a group of freelance writers, and that means no "real" union. (Here's an earlier post where I describe how the WGA writers differ.)

Where he's right, though, is in understanding that publishers, whether print or online, cannot assume that they can reach significant audiences and reap the advertising economic benefits while continuing to assume that writers shouldn't be paid. Unfortunately, too many writers - not just the casual ones, but the professionals - have gone along with this nonsense, buying the arguments that the publishers "aren't making any money on this - it's the web, after all." Do you realize that traditional print magazine business models assume that publications run in the red for three years? Does that mean the writers, designers, and printers are all supposed to work for free? No, it's called an investment in the business by the publishers.

That's what web sites and blogs are: investments. Until writers start thinking like business people and stop thinking that they have to be grateful that someone allows them to provide value, they will continue to undercut themselves and all other writers.

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Thursday, January 17, 2008

Using Information to Leverage Negotiations

Sometimes negotiation seems like a big hole that you have to fill, but you don't know with what. But a little bit of research, or even something you already know, can give you the edge you need. Here's a recent example I had. Although most of my work is in non-fiction, I write plays and had submitted a short one to a publisher that I knew was looking for material to go into a new anthology for actors. Six months ago I sent in some work, as it literally wasn't going to hurt anything I was doing, and might be an opportunity.

The other day I received an email from the editor of the book, saying that she wanted to include my play. Payment would be either $30 or five copies of the book. It sounds like an iffy deal, but I did some research, calling a playwright I know and asking if he knew the publisher and what he thought of the rates. He's put together at least one anthology in conjunction with the Kennedy Center in D.C. and said that they paid about the same, noted that the publisher was reputable, and echoed my own thought: it can't hurt, and it might help. He also suggested taking the money, because it could offer proof to the IRS that I actually am doing work in the dramatic field. A very smart suggestion.

But I still wanted copies of the book. I checked at Amazon.com and found that these books pretty much sell for list price wherever you find them. The publisher obviously was valuing the five copies as the equivalent of $30. However, I've done research into book publishing in the past and know that the actual unit cost of the book is probably going to be in the $1 to $1.50 range. So I made a counter offer: $25 and two copies of the book, indicating that I knew the marginal cost. Their answer? Sounds good. So I get a couple of copies and I also get the $25 to help establish a track record as a paid dramatist.

Had I not done the research into the offer, I would probably have agree anyway and picked either the money or the books. But I knew that the worst that could happen was the editor said, "Sorry, it's one or the other." But with the facts backing me, I also knew that they were still saving money over the straight cash payment. Although this is a small example, it shows the important principle that the more you know going into a negotiation, the smarter you can negotiate.

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Wednesday, January 16, 2008

Opting for the Long Open-Ended Interview

During the fall, I was interviewed a number of times regarding my cookbook. Each time, the reporter seemed to have a strict list of questions. It's not that they were close-ended, which is the death of interviewing, but more close-scoped. The writer had a structure already in mind and was looking to fill in the appropriate blanks. Another way of looking at this is that the writer had already written the article, and just needed the requisite finishing details.

That, to me, is an almost unthinkable way of conducting an interview. I don't mean unthinkable in the judgmental and disapproving sense, but unthinkable, as in such an approach rarely occurs to me. Perhaps it's my rambling nature, but I prefer longer interviews - 45 minutes to an hour being a usual amount for me. While that increases the research time of an article, I find that the payoff is immense, which keeps me going back to the same method.

A bit part of what I can offer to editors - and what they specifically have said they like - are the details and unexpected views and insights that they often find in my work. Although having a large dose of ego, I don't mean that as backhanded bragging. I often enter intricacies in subjects that don't often get coverage. I only get those because I don't decide ahead of time what I "need" and let the interview dictate that. It may be that the nature of the stories I do lend themselves to this, but I've also done at least 30 minute interviews, and often longer, even for stories that will only run several hundred words.

Not only do editors like the result, but so do I. the available material is deeper and richer, giving me many more options in structuring and writing the piece, which makes the writing process more enjoyable. I get other story ideas, a lot more information in case I'm doing another take or slant on the story, and I seldom get questions from editors that I can't answer directly from my notes.

Finally, when you provide clients with what they like but seldom get from others, you increase the value you offer and, accordingly, what you can command in compensation. Here are some tips from my time in long interviews:
  • Avoid pointed and specific questions. At least early in the interview, skip the particular questions that will net you the information you think you will need for the story. There is always time for those later into the interview. Start by asking about the topic in question. Encourage people to just start talking and see what is important to them. You don't need to make a direct assault on the topic. Use this time to get a lay of the land - a topicgraphic map, if you'll pardon the pun.

  • Use what you just learned. Once you've spent some time letting people talk about the topic, you'll realize that you've provided the psychological tool and opportunity for them to show you what they consider most important. Take note, because it can explain what they know best or see as the heart of the issue. Some people will use this as a chance o dictate their own spin, which is fine. Use it as an opportunity to let them get that out. Until they do, you probably won't get anything else.

  • Begin exploring. Now that you've figured out the person's relationship to the topic and their interests, you can start to investigate the topic. Continuing with an open-ended interview technique, enter into some of these areas and keep digging. Let them define and describe, even if you think you know what they are saying. There might be an alternative vocabulary that will be important to understand, or you might find that you know squat. That's fine, as you need to know the limits of your knowledge.

  • Keep pushing. Remember the basics of who, what, when, where, why, which, and how (WWWWWWH) in reporting? here's where you can use them in a natural and investigative way. Let each be part of the foundation of your being able to describe something that the interview subject says. Don't just repeat, but be sure you know the importance of what they say, its relationship to other parts of your topic, the mechanics of its operation. The questions help you structure a whole picture that you'll then integrate into the other pictures from the other interviews. In doing this, you move from the information-based world of traditional news reporting to the understand-based world of modern journalism.

  • Use a topic list, not a question list. Of course there are things you'll need to learn to write the story, and you want to ask those questions. But treat them as topics you need to discuss. Rather than create a topically close-ended question - When did you first start cooking? - you now have a topic of the person's introduction to cooking. You'd start by asking them to talk about their early times cooking, and then move into additional WWWWWWH questions (Who introduced you to cooking? Do you remember the first dish you cooked? Did other people you knew show any interest?) about those early times.

  • Ask for help. You've just shown evidence that you're interested in what the person has to say, and not just look for a series of stock answers to plug into your "process." So ask who else might be helpful. You can get some great sources that way.

  • Honor the subject. In most articles, you cannot use everything the person said. But you can use things in context, mine the conversation for the points that the interviewee thought were important, and present, as much as possible, the essentials of the person's views. When you do that, you reduce the subject's feelings of having wasted time on just "a quote or two" and increase the sense of having participated in something substantial.
Try these techniques in non-critical situations at first, and see how you can make use of them. Then, as you gain experience, you can bring more depth to your reporting and differentiate yourself from all those "other" writers.

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Tuesday, January 15, 2008

Studios Play Hardball with Writers and Producers

The big studios are starting to cut loose writers and producers who were on long-term deals, according to Variety. Maybe the studios think they are saving money, but more likely they're trying to send a message. However, it might backfire, particularly as at least one person found out by reading online that his deal had been terminated. Maybe the studios think that they can completely settle on reality television. It might work in some cases, but eventually all "reality" all the time is going to seem pretty damned identical. In any case, I wonder if the studios realize just how strongly they are signaling that they want the writers to go away for good. You'd think that it would take an idiot not to realize what this collection of actions communicated, but then, corporate bigwigs sometimes do seem far removed from all realities except the programmed television type.

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Comparing POD Choices

Someone on a private writers' discussion group mentioned a site that I pass along. Print on Demand Publishing was put together by some NWU members. I haven't double-checked the facts, but it does bring up some basic condierations of using print on demand and compares some of the more popular providers.

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Monday, January 14, 2008

Real Lesson From the Golden Globes

On NRP's Weekend Edition Sunday, I heard a story about the Golden Globes having "become the biggest, high-profile casualty of the ongoing Hollywood writers' strike." The emphasis was on how much the Los Angeles area lost in business opportunity in ceremonies, advertising, services, and parties - $80 million, in the estimate the show decided to use.

It would be easy - and I'm sure there will be those who do so - to use this as an example of how writers are hurting everyone else by being stubborn and selfish. I supposed you could look at it that way, but I prefer to turn that view upside for a moment. if the writers can keep that from happening, then, to at least some degree, the writers make all that possible - actually a drop in the bucket when you consider all the money made by producing and exhibiting the entertainments themselves. None of this, of course, is solely due to the writers. But, as one quickly sees, none of this happens without the writers. this is not commodity work that can easily be farmed out to the firm of Tom Dick & Harry. In fact, writers are perhaps the least replaceable people in the entertainment industry. Different actors, with varying degrees of success and appeal, can undertake the same characters. Different directors will offer different visions of the story. But the underlying tale, the dialog and plot and conflict, come from the writers. Change the writer, and you have something that is completely and irrevocably different as steak is from a fish fillet. Both may offer excellent meals, but you won't find someone eating one and mistaking it for the other.

There is no need to seek pity for writers. All of us, no matter what medium of expression we choose, do this of our own volition, even if we're of the type unsuited to any legitimate and honest form of employment. (Please note the intended irony.) Working as a stock broker or traditional business owner or even entertainment executive can pay far better. Oh, some writers are stars in their own right and do command enormous sums.

But most struggle to one degree or another to find enough work, to pay insurance costs and put some aside for retirement, to pay for lessons for the kids and upkeep for the car, all with far less guarantee of having gainful employment next week than even those in the most turbulent high tech start up. Writers are expected to pitch ideas, provide spec scripts in Hollywood, underwrite all costs of doing business, find ongoing projects, deal with taxes - in short, to take risks that would seem enormous to anyone brought up only on experiences of being employees. When you invest and risk, you want reward.

In this case, writers aren't asking for the world. They are asking for some return commensurate with their investment. They want a little security, continuing revenue from projects that, themselves, continue to provide revenue to others in the industry. Society as a whole has recognized that such expectations are reasonable. That's why the US Constitution recognizes the need for protection of intellectual property, why everyone "knows" that book authors are supposed to get royalties, and why the television and movie industries have institutionalized additional pay in the past.

That is why having payments for web use of material is only right. perhaps the studios have been taking a chance on the medium, but they also read the writing on the wall. They invest because they must, and they expect some payoff for every use. That's why they come down so heavily on those who post clips on Youtube: because they don't want others to make money off their investments without their say or their participation in the profits. Because writers are hired on a temporary basis and can strike, there is a legal fiction that they are employees. They are not; they are solo practitioners and businesspeople. They also make possible enormous sums that cascade throughout, profiting institutions and people directly and indirectly. For all they do, a small cut of the Internet revenues is not greed, but, rather, a business necessity. It is also right.

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Friday, January 11, 2008

More Deals With Writers & Why You Should Care

First David Letterman made a deal with the Writers Guild so he could use professional writing talent (and get stars to start showing up on his show again). Then came United Artists, which Tom Cruise is trying to revive. Now the Weinstein Company, a huge name in independent film, has signed an interim deal with the WGA. This has lessons for those writers who think that they always have to give in and have no power.
“We need to get people back to work,” Mr. Weinstein said of the agreement. He said executives of the major film and television companies — which broke off talks with the writers last month — had reacted “negatively” to his decision to reach independent terms. But Mr. Weinstein said he felt an obligation to help break the logjam that has shut down much of the entertainment industry.
Other production companies are seeking independent deals. The major studios haven't given in, but there is only so long they can hold out when companies that can and will produce film and television - and online entertainment - swoop in to pick up consumer dollars. The reason writers have felt that they have little power is that they have given it away by giving up.

As for another example of why to push for rights, there is this "tidbit" passed on from writer activist Debra Cash:
Presented by The JetBlue Card from American Express, Times On Air(TM) is the latest addition to our many in-flight entertainment options. Tune to channel 41 of our seatback TVs to watch lifestyle programming exclusive to JetBlue from the New York Times' library, including interviews with celebrities and influencers, home and garden segments, and travel tips.
As she notes, "...and they wonder why writers are striking over residuals for the as yet undetermined media of the future..." Actually, they don't wonder; the major corporations just want it all for themselves. Now is the time to keep pushing back.

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Thursday, January 10, 2008

It Can Happen To You

I recently had a book project get canceled in the middle. Although I had proposed the basic idea, the publisher wanted something near to it but different (like the difference between Manhattan and Trenton - at least they're both in the Northeast). The head of this imprint had decided to fit the book in with a new concept she tried in another book. And then the initial sales results came in: that book did terribly and she decided to can this project, assuming that it would have as many fiscal problems.

There was a clause in my contract that let the company cancel the contract should it decide that the book wouldn't sell in advance of its actually coming out and selling, and my legal remedies were limited to getting the parts of the advance that had come due. And I singed it, because the chance of losing the project was low, and even if it occurred, the advanced owed me would reasonably cover the blow. And, to be fair, my editor let me know, but said that I wouldn't be asked to pay anything back. I now have to look around for some replacement work, but it's only inconvenient, not a disaster.

I went into this with my eyes open, and only agreed because I had inherently limited any damages. That's because I've been around the block enough in life to know that any given unexpected event may be unlikely, but when you add all the things that can go wrong, chances are that something will. Many writers go into projects holding their noses at some unpleasant clause in a contract, but tell themselves that the situation can't happen. But of course it can. Look at all the news you've heard about the sub prime credit meltdown. Sophisticated and highly-paid managers at prestigious financial institutions told themselves that they were getting their organizations into easy money. After all, what could go wrong? Oops.

If you see a clause in a contract that makes you uncomfortable, be realistic about how safe you might be. If you're writing an essay about how you did something foolish and embarrassed yourself and don't mention anyone or anything else, then, sure, you aren't going to have a problem with libel. But if you tell yourself that you're only writing a small article and that who would take offense at something you said, then you are out of making a realistic analysis and into the realm of rationalization. You've crossed the line and aren't thinking, but coming up with ways to excuse your behavior to yourself.

You can't eliminate all risk from doing business. Risk is an inherent part of business, because it is the risk that also offers the opportunity. But do avoid foolish risks, and make sure that for the ones you take, you've got enough protection to keep yourself from taking an unexpected bath.

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Wednesday, January 9, 2008

Newspapers and Goodwill

Most people think of good will as a desirable state of mind around the winter solstice holidays, no matter what you call them. But in business, goodwill is the difference between the value of a company - expressed as the value of all its stock - and the value of the firm's tangible assets. In other words, goodwill is how much investors and the market think a company is work over and above the more objective value of everything it owns. And if you count newspapers as a market, read this Bloomberg article and you may see why you should make the acquaintence of this term.

Goodwill exists because the world wants to account from where the value of a company comes. It's clear why; without financial attribution, charlatans would be free to claim any value of a company, pulling the wool over the eyes of many. The problem with goodwill is that it can be fickle. As the opinions of those in the market change, so can the goodwill, and the value - and financial solvency - of the company. Some companies, like Google, have a great deal of goodwill value. But the danger is when you see too much value in goodwill, you must wonder how stable it is.

As the article's author, Jonathan Weil, notes, many publicly-held newspaper companies have a great deal of goodwill on their balance sheets. That might mean that the values are artificially high and that companies will ahve to write down their book value, which means it will be harder for them to get credit, raise money, and do other things that will hinder their competitiveness. Here's Gannett as an example:
Even Gannett, the largest U.S. newspaper publisher, looks ripe for a balance-sheet hit. Its market value is $7.9 billion. By comparison, its $8.98 billion book value at Sept. 30 included $10.06 billion of goodwill and $818 million of other intangibles. Tara Connell, a spokeswoman for the McLean, Virginia-based company, says Gannett is evaluating the matter.
If you're going to do business with an industry, it's important to gain some financial literacy so you can see where trouble might be brewing.

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Tuesday, January 8, 2008

Finding New Ways to Save Money

You own a business, and every penny that goes to expenses comes out of your pocket. Yes, it's great to have tax write-offs, but it's almost always more profitable to reduce those expenses to a minimum and pay taxes on what you get to keep. To fatten your wallet, it's necessary to emulate an aspect of a successful business owner - being a creative skinflint. It even can become a game, where you look for ways to get what you legitimately need and find ways to pay as little as possible. Here are some examples from my own business:
  • Need to rent a car? Try asking for an economy. Sometimes you get stock with a very small car, but when a national chain like Enterprise has run out of the low-end, you get an upgrade while still getting the economy price.

  • When you're traveling and need to be in touch, consider using Skype Pro, a software package and service that turns your computer and broadband connection (make that laptop and hotel or public wireless hotspot) into a phone. For $3/month, you get up to 3,000 minutes per month of calls to landlines and cell phones in Canada and the US, and another $36 a year (total of $6/month) gets you an inbound phone number that will follow you. Depending on your phone use, that can be a good alternative to a cell phone. Check the site for info on international calling.

  • While on the topic of telecommunications, need a fax number? I get mine through Faxaway.com. The downside, if this is one, is that it comes with a Washington state area code. All faxes come in as emails, and the cost for unlimited fax reception is $1 a month.

  • Ink jet cartridges can be expensive, and most of your printing is probably black and white text. Consider getting a used laser printer. One cartridge at about $60 can cover thousands of pages of printing, reducing the per page price to a few pennies at most. Connect the laser through the printer port on your PC and hook the ink jet through the USB connection (most have them). Then pick whichever printer works best for you.

  • Are you a member of AAA, AARP, or any other organization? You may be eligible for discounts on hotels, car rentals, and other expenses. If you can get a lower price, might as well take it.

  • Try negotiation. Ask for better rates, upgrades, etc., and you may get them.

  • If you need a digital camera or consumer electronics device, make the business models of the manufacturers work for you. Generally new models come out every six months or so, and everyone starts discounting to get rid of the old and ring in the new. Get a model or two back, and you'll find plenty of features at an attractive price. For digital SLRs, the turnover in models is a bit slower, but the principle holds true - buy a model or two back, and chances are you'll get everything you need.

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Saturday, January 5, 2008

Learning Everyday Business Analysis

A writer on an online forum recently noted in passing that Writers Digest seems to have shifted its editorial focus, targeting would-be writers rather than experienced working writers. There's a lot to learn from this observation, and much to be gleaned for the way that I think writing is moving.

Why WD would shift audience definition comes down to money. Compared the the number of people who think they would like to be writers, I suspect there is a relatively small pool of those actually in the business.

The publisher needs to make a lot of money to pay for articles, marketing, design, production, printing, and everything else that is part of publishing. The money has to come from a combination of advertising and subscriptions. Remembering the concept of different business models in the writing and publishing world, either you pay, the audience pays, or someone else pays. One aspect of third parties paying is that they must think they'll get more back in business or value than they money they pay to the publisher. In the case of a publication aimed at writers, I suspect the expectations are low, because we are, let's face it, such an incredibly cheap lot.

That means the money coming from readers - subscriptions and news stand sales - are going to be the big driver of revenue. There are two ways of getting this money: charging a small number of people a lot, or charging a lot of people relatively little. In other words, you have to balance real niche publishing (vehicles that address the interests of small audiences who badly want something) against mass market (getting less money per copy, but selling many).

To make niche publishing work, you'd have to charge a premium price and get the audience to pay. Think of it this way: you have a collection of four targeted articles in a month. Each runs 1500 words. If the articles' writers are going to get even $1 a word, that's $6000 in labor. A subscription base of 1000 would have to pay at least $6 a month, or $72 for a subscription, just to cover the writing labor, with no money for design, marketing and sales, and production. Roughly double that to cover other costs and leave some profit for the publisher, and consider whether the audience members will pay $140 or $150 a year. Are you providing something of such value that it becomes worth it to them? And are they the type of people who will recognize the value and appreciate it?

There are newsletters that get have these types of subscription fees, and some that charge much more. But I'm not sure writers are good candidates for being willing to pay that sort of premium. And so, the publications like WD fall back to the least common denominator, publishing articles for people who aren't in the business but wish they were. Get an audience of 20,000, and the money you need from an annual subscription of those four articles (at least distributed electronically) goes down to $7 or $7.50 - low enough that many people will take it on impulse.

I think this is an example of the types of calculations we're all going to have to start making. What is the audience for a particular piece of writing? What will they pay? How much does it cost to reach them? Quotidian business planning and analysis is as necessary as a firm grasp on grammar, and a darn sight more important than excellent spelling. You can always use a spell checker, but there's no such thing as a business checker.

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Thursday, January 3, 2008

Keeping a Standard

I was talking with a friend and colleague the other day, and we were both shaking our heads at some writers we've heard boast of knocking off a thousand word piece in a very few hours, including interviews and research. Apparently the clients didn't mind, and the results were high hourly rates and, in the case of one, a high annual gross.

I'm all for making money, and I'm all for being efficient. But there is something about the take-two-interviews-and-write-a-thousand-words-by-morning approach that bothers me. I could put it off to jealousy, and yet I don't get that way about some colleagues who I know pull down far more than I do, and yet still undertake what I'd see as a reasonable number of interviews for a single article. (For those doing corporate work, feel free to substitute a lot of interviewing of people in the company and researching the product or service.)

What bothered me, I think, was the process of cutting corners. Writing has to be about more than just making money. If you're interested only in the monetary world, there are many occupations and businesses that can deliver in greater abundance. I've found myself similarly bristling when hearing, "Because I'm only getting paid X, there's only so hard I'm going to work on the assignment."

I really don't get that attitude. If you have a connection to the craft of writing, then you have respect for the process and what it can do. Good writing requires putting the needs of the story and the craft first - while ensuring that you've made arrangements for sufficient remuneration to keep your life from rising up and revolting. (Or so your life isn't revolting, for a different view.) If I've taken a shot at an assignment and it legitimately needs a rewrite, I rewrite. It comes with the territory, and if you're going to spend the time doing something, you might as well be proud of what you have done.

There are secondary business benefits. For example, if you keep hacking through assignments, then your clips will read like hack work, and you'll find it more difficult to land assignments at top publications, or even to muster the writing muscle to tackle various types of articles to your satisfaction. Given the large amounts of snow that have fallen in the last two weeks where I live, I'll use a winter analogy told to me by a pastor. He and his wife lived for years in northern Maine. He remembered their first snow fall there, and he was perplexed to see people plowing not only their driveways, but their entire yards. "I soon learned why," he said. So much snow fell annually that residents had to clear room so by the end of the season, they could still remove the snow from their sidewalks and driveways and have somewhere to put it.

Throughout your career, you need to make room for new techniques and approaches to story telling. When a writer takes the easy way out, he or she is actually only plowing the driveway and not the lawn in those first snowfalls. You become fixed in your approach, because you're now focusing on speed and efficiency, not on quality.

If you care at all about the writing craft, you have to keep reaching to do better, research more deeply, understand more thoroughly. All of this increases your ability to tell a story. To do that, you push aside the old tricks and concepts and keep turning into a wide-eyed student, always trying to grasp what it possible. That way, what you write becomes better and has more substance to it. You may make fewer dollars, but I've found that people who rely on their income as a measure of their self-worth always sound a little hollow. At least in my opinion, that's no way to go through life.

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Wednesday, January 2, 2008

A Note From the Music World

Debra Cash sent another great link - this time to an article by musician David Byrne (at one time in the Talking Heads). He analyzes the current music business and identifies six distinct business models that musicians can consider for their recorded music. It's not that a writer can make direct use of all this, but many of the issues are similar, and the important thing is to see an example of a creator looking at his or her markets with a sharp business eye.

His analysis makes makes me think that there are (at least) nine basic models for writers:
  • Doing someone else's writing Whether ghosting or true corporate work, there is a class of writing in which you sell your skills, but not necessarily the writing you want to do. You might get credit, or not. You might get royalties, or not. In general, you should charge more, because you're not getting much of anything else out of this. (Note that charging can include royalties, in something like a book deal.)

  • Sell all rights for a fixed fee The positive part is that, if you are getting an economically reasonable amount of money, you avoid having to do the resales and don't have to wait for months or years to collect additional money. Unfortunately, writers often settle for sums that don't approach the potential value of the work, and they also give up all control over the writing going forward.

  • Sell all rights for a combination of fixed fee and royalty In this case, you get an ongoing payment stream while, presumably, not having to sell. That can be good if the company obtaining the rights is good at what it does, and bad if they couldn't sell a blanket to a shivering person. Also, you still lose control over the writing.

  • License all non-exclusive rights You don't get as much up-front (presumably), but you also don't completely lock yourself out of doing something else with the writing. It means little if you don't consider what else you might do with your intellectual property.

  • Judiciously sublicense rights License a small set of rights, possibly allowing one publisher to make one type of use and letting another do something different. In this scenario, you need to understand the concepts of rights and how to divide them into sets that can be profitable but that won't preclude each other. (For example, if you license an exclusive in a major city to one publisher, you can't make a sale to a national publication that would require distribution in the same area.

  • Self-publishing, subscription-based Here you produce your own content - whether in print, on the web, in an exectronic format, through skywriting - and get your audience to pay. You keep control of everything, but also have all the production and distribution expenses. It's maximum profit, but maximum expense, as well. If something doesn't sell, you are the only one out money.

  • Self-publishing, advertising-based You produce the material and get advertisers to support it. You see this model in web sites, in newsletters, and you might eventually see it in books. (It's come and go in that world before, although not successfully.)

  • Self-publishing, subsidized You write and get someone else to pay. It's different from advertising in that there is a closer arrangement. One entity, whether company or individual, pays to make the material available to others. We saw this model in art and music for centuries, in which Rembrandts and Mozarts needed patrons or wealthy nobles who would pay for their creativity. There's the potential of losing control here, particularly when dealing with a corporate sponsor.

  • Self-publishing, self-subsidized In this model, you'd give away what you have because what you can get in return - whether speaking engagements, conversions of ebook readers to print copies, consulting work, and so on - more than makes up for the investment you've made in time and money in giving your writing away. Chris Anderson, editor of Wired and creator of the phrase "the long tail," is apparently touting the concept of giving things away now, as you can see in this interview in Media Magazine.
There is no absolute answer for any of us, and there may well be many other models I'm not addressing. The issue is to start thinking - to get outside the "I write and then a publisher pays me" assumptions that may become even more economically unviable than they are today.

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Tuesday, January 1, 2008

Handling Client Budget Moaning

Yes, economic times are tough. Yes, some industries are particularly hard hit. Yes, some number of clients are going to push back on rates, crying that they are in budget difficulties. And, yes, it's true: many are and might not have more money to spend.

But, as I've written before, no, your first reaction should not be to drop your prices in a bid to make clients happy. There are a few reasons:
  • Some clients may be desperate, but there will also be many interested in knowing how much they can save by crying poor.
  • Anyone who wrote for technology publications in the late 1990s knows that when the dot com bubble burst, specialized magazines were going out of business right and left, and the remaining ones reduced their rates. (To be fair, the rates were related to high demand for writers and their relative scarcity to the work load.) If a client says, "We'll pay less until times are better," realize that the probability that times will get better enough for them to raise rates is about zero.
  • Clients often talk, and once you're known for writing for those who pay less, the ones who pay more may want to revisit your rates.
  • The more you give in on pricing, the more you have to work to make your living. Eventually your life is there to support your work, not the other way around.
To reduce your rates is to devalue what you are doing. There may be times it is necessary, but that is probably a rare occasion. More often you can try renegotiating to balance out the value you are giving up. Here are some approaches that can work:
  1. Reduce what you offer -- Look to see where you can scale back what you provide to the client. Mind you, this is something you do out in the open so they understand that they are getting less because they are paying less. Maybe you don't search for art, or write something shorter, or provide fewer options.
  2. Better payment terms -- If budgets are smaller, it might be that the client can pay faster or pay for a bank transfer instead of your waiting for a check to clear. Be careful, as some clients will promise anything knowing that the accounting department will work on its usually time frame.
  3. Get regular work -- It takes a certain amount of time to find work. Get to some reasonable estimate of how long that is, and you can use your bottom line hourly figure to determine how much that time is worth to you. Discount an assignment by less than that, and you're actually ahead because you open more time for assignments and other marketing. So trade off a somewhat lower fee for guaranteed work.
  4. Improve other terms -- There may be other conditions that, if changed, either improve cash flow, open time, or provide some other benefit whose financial value you can calculate. It may be that having more time to work on an assignment lets you manage your schedule more effectively. If you're doing work that requires outsourcing sections, it could be that you can have the client directly pay the other people (though you do face the potential risk of their making deals independent of you, which may or may not be a problem, depending on your business model). It might be that you can get money forwarded for expenses, rather than receiving payment after the fact.
As with all forms of negotiation, creative problem solving can take you a long way and even turn what could have been an income drop into a net gain.

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