Thursday, December 20, 2012

Return of the Law of Unanticipated Consequences

December 19, 2012

A few months ago, my wife and I dined at a French restaurant. We were in withdrawal concerning the law prohibiting the sale of foie gras in California, where we live. I mentioned our unhappiness to the waiter. He said, “True, we can’t sell it anymore. So, we give it away. The law doesn’t prohibit free foie. There are dishes which aren’t on the menu, and when you order them, for example a plain green salad, you can ask for it to be topped with foie.”

I asked, “How would we know about them if they’re not on the menu?”

He replied, “You just asked about them.” He smiled.

I asked how much the salad is and he replied, “It’s thirty dollars.”

More expensive for a salad than for steak. But for someone who wants the product and knows the “password,” it’s still available.

The moral for us all, is that capitalism always seeks to find a way.  You may find the work-around difficult to find. You may find it to be nasty, but there will always be a work-around.

Saturday, December 15, 2012

China (PRC) is a Puzzle-Box

September 5, 2012

My wife and I just returned from a visit to Hong Kong and PRC. It was a vacation trip for her, research for me. And it was eye-popping. As a result, I’ll have to revise about fifty pages of the settings in my novels. As my friend Barry Eisler says, "Nothing beats first-hand research for writing fiction."

We bookended our trip in Hong Kong, both starting and finishing it there. Hong Kong is Manhattan on steroids. One of the major fictional characters in my espionage thrillers, William Wing, lives there, in the New Territories. I decided to visit the location where I’d put his residence. So, yes, I’m a bit crazy. Go figure. We ate in Fook Lam Moon, downtown on Johnson Street, the restaurant where I’d had one of my major fictional character Cassandra Sashakovich, dine. The food was superb. We also ate dim sum at the Dim Sum Bar and at Super Star Seafood, both extraordinary. Between the huge throngs walking the streets, the tall apartments, and the fastastic dim sum, Hong Kong was a dream.

Hong Kong is a shopper’s paradise, and fills its tiny island with over 20 million people. Everywhere you look, they are building or have already built skyscraper apartment buildings. I believe the residences make Manhattan condos look like a bargain.

In the PRC, we visited Beijing, Guilin, Yangshou, Hangzhou and Shanghai. It was an amazing experience, one I had wanted for years. So, what were my impressions of the PRC?

Mainland China is a puzzle-box. They are still mostly a third world country, but slowly – faster than I thought possible – becoming a mature nation with all the opportunities and problems faced by any leading world force. The cities are huge; 20 million or more in Beijing and Shanghai, 7 million in Hangzhou and Guilin. We only saw these coastal gems.

We saw rampant poverty alongside magnificent villas. Too many cars to believe. PRC has the same problem with income redistribution that America has, with too many poor and too little opportunity for them to advance. But, in China, they’re trying to remedy the problem. In America, we’re making it worse. And soon, if we don’t watch out, we’ll be China and they’ll be us.

Beijing is both ancient and administratively oriented. The buildings – the Forbidden City, the Summer Palace, all look similar and very old, even restored they are full of character and show off what is ancient about the places they inhabit. We saw the Forbidden City, the Summer Palace, and, way far away from the city, Andrea (my wife) walked the Great Wall while I took some of the over 1,000 photos of our trip. Our guide Jesse often would tell us a story about one of the sights and include the footnote, “This has a hidden meaning.” Seems, much of the history of China is filled with double meanings or hidden meanings.

As you move from central Beijing toward the outer ring roads, the city could be anyplace suburban. Tall apartments and factories dot the landscape. By the time you reach the airport, outside Ring Road Six, the city seems light years away. The high point of our visit to Beijing was when our guide pointed to a building in the heart of downtown Band said, “See that building? It’s the Chinese CIA.” Can’t fault him for not knowing that I write espionage thrillers, but I copied the street address so I can use it in my books. The best food we had in Beijing was at a vegetarian restaurant. Most of the rest can’t compete with the Chinese food we get in San Francisco.

Guilin was a remarkable contrast to Beijing. Country clubs with golf courses and villas filled the approach to the city from the airport. The city was almost entirely modern and middle class, with patches of poverty, but no major places where things looked sodden. We saw a cavern that was totally amazing and I took hundreds of photos in the caves. That’s when it hit me: China is now organized to look like Disneyland. It is entirely commercial. We visited a jade factory, a silk factory, a Chinese medicinal pharmacy, and bought an entire suitcase filled with functional, useable souvenirs.

Anyone visiting China should take the boat ride from Guilin to Yangshou. Our guide Warren helped take photos while we ate the dinner served on the boat. The needle-shaped mountains jutting out from the shoreline are both photo-worthy and eye-popping. As for the merchandizers in Yangshou, run away as fast as you can. Especially if you’ve already had to buy one new suitcase and fill it with stuff you bought.

Hangzhou Was pleasant enough, but after what we’d already seen, not that interesting. ‘Nuff said.

Shanghai, on the other hand, was the most impressive piece of real estate we saw in PRC. An amazing skyline. Our guide Cindy showed us a bake shop where almost a thousand people waited on line to buy their delicious Moon Cakes. We bought and ate many. Yum! And, after the tour finished, we had the best and most expensive meal we’d ever eaten, at Jean Georges, located on the fourth floor of Bund Number Three. Of the six courses, four had foie gras. Fatty but delicious. Our wait staff person, Olivia, was a marvel. We wanted to take her home.

So then, why is China a puzzle-box? The easy answer is that they have shown how fast a country can change from a closed dictatorship with a communist view toward life, to a capitalistic and materialistic society, where the entire country is on sale as a commercial enterprise. How can they manage such fast change when our society refuses to change? They are still the ancient society they always were, but with the patience of expert planners. Their long view rivals that of Japan. In the United States, we don’t even make short range plans, only annual budgets. And, in our Congress, even those never get approved anymore. This single difference gives the Chinese a major competitive advantage we cannot match. But, China has its own problems, like nothing we can understand. It appears to me from what I saw, that people living in the PRC and Hong Kong are left on their own without a government safety net to cushion against bad joss. In the USA, we have welfare, Social Security and Medicare. But we also have a very nasty financial system, where in China and Hong Kong at least their financial system isn’t nearly as corrupt. In the Far East, there is the threat of starvation motivating the poor and destitute. Here in the USA, we have a sense of entitlement that supersedes our desire to improve our lives and those of the next generation.

In Shanghai, Andrea got sick the last night we were there (after that amazing fatty meal at Jean Georges). It got worse our last night of the trip, in Hong Kong. So when we returned home, we had her see her doctor. She had her gall bladder duct blocked by a stone and we needed to rush her to the ER and get her gall bladder removed. Here’s the neat little irony: A life of eating fat food was the predisposing cause of her problem. But the precipitating cause was the dinner in Shanghai. Seems like no matter where we go, we remain constant. But, across the world, things have myriad shades of difference. And so it is between the USA and China. So similar, yet so different.

It was the vacation of a lifetime and a research opportunity that will continue to inform my fiction writing for the rest of my life. But, what it all comes down to at its end is, it’s good to be home.

Tuesday, June 12, 2012

The Future of Publishing - Part 4

June 12, 2012
About the Justice Department’s decision on Amazon and the case of publisher price fixing:

How can any publisher claim that Amazon is pricing eBooks at a loss when for DECADES paperbacks have been profitably sold at about $8.99 or less? A paperback requires everything an eBook requires in pre-sales and production, BUT paperbacks also require additional costs, including paper, printing, trucking, and distribution costs, making the break-even for an $8.99 paperback about $4.00. And, at that sales price and breakeven, they sell paperbacks profitably and give the authors about $0.28 to $0.63.  Do literary agents or authors complain that this price is too low?

On the other hand, selling an eBook, which requires none of the above except the distributors’ cut (and, if an eBook is sold at less than $10.00, Amazon gives the publisher 70% or $6.99 to divvy up, there’s an additional $2.00 beyond the $4.00 breakeven for a paperback.

So, as I read this, the publishers are complaining that Amazon is only giving them about $2.00 more than they would for selling a paperback.

The publishers are full of crap on this one. For another thing, lower prices increase sales (as traditional economics states, there is a lower intersection of supply and demand). So the publishers are actually stating that they want eBooks to sell fewer units. That’s crazy and it also implies that print publishers are actually using the higher price of eBooks to support their declining paper sales. If that’s so, then no one can deny that the print publishers are engages in price fixing, by setting prices for eBooks so that each and every eBook sold subsidizes the depreciation of the print factories owned by the largest print publishers.

The justice department is right going after the print publishers for their despicable behavior. But when they’ve done that, they need to ensure that Amazon and Barnes and Noble remain competitive so there is no monopoly in any format of (e)book sales.

Tuesday, March 20, 2012

Did our administration have pre-knowledge of 9/11?

 December 5, 2004

From a story reported on another web site ( Hearings On State Department IG Shows Conflict) during September 2007 , Inspector General Howard J. Krongard testified before Chairman Henry Waxman of the Congrssional Oversight Committee. These hearings continued, and on November 14, the public discovered that brother, Alvin Bernard “Buzzy” Krongard, may be on Blackwater’s advisory board. Buzzy had previously served as the Executive Director of the CIA.

The most disturbing thing about Buzzy is on September 6 and 7, 2001, just before ’9/11,’ he initiated a number of (criminal) transactions in financial markets that indicate specific foreknowledge of the September 11 attacks on the World Trade Center and the Pentagon.

From a story reported on another web site (, until 1997 A.B. “Buzzy” Krongard had been Chairman of the investment bank A.B. Brown. A.B. Brown was acquired by Banker’s Trust in 1997. Krongard then became, as part of the merger, Vice Chairman of Banker’s Trust-AB Brown, one of 20 major U.S. banks named by Senator Carl Levin this year as being connected to money laundering. Krongard’s last position at Banker’s Trust (BT) was to oversee “private client relations.” In this capacity he had direct hands-on relations with some of the wealthiest people in the world in a kind of specialized banking operation that has been identified by the U.S. Senate and other investigators as being closely connected to the laundering of drug money.

In the case of at least one of these trades – which has left a $2.5 million prize unclaimed – the firm used to place the “put options” on United Airlines stock was, until 1998, managed by the man who is now in the number three Executive Director position at the Central Intelligence Agency.

On September 29, 2001 – in a vital story that has gone unnoticed by the major media – the San Francisco Chronicle reported, “Investors have yet to collect more than $2.5 million in profits they made trading options in the stock of United Airlines before the Sept. 11, terrorist attacks, according to a source familiar with the trades and market data… The source familiar with the United trades identified Deutsche Bank Alex Brown, the American investment banking arm of German giant Deutsche Bank, as the investment bank used to purchase at least some of these options.”

The Middle East has always been a time bomb

February 24, 2011

The Middle East has always been a time bomb. It still is.

From the time the Jewish people migrated into the area now known as Israel, a few thousand years ago, until now, this area has known war without end. The Bible has a passage containing Moses’ use of spies to scout the Holy Land before they occupied it. (In North America, we did the same thing, but we didn’t just conquor the indigenous people, we eliminated most of them.)

Now, the Arab crescent is boiling over with unhappy young and disadvantaged people who have known only kings and dictators. Is it possible for democracy to succeed in such places?

In the United States, I believe we hope so. In fact, I’d bet most of the world hopes that the kings and dictators will be replaced with tolerant governments. Would this be good for the United States? Would it make a permanent peace with Israel possible? It’s very hard to say.

My personal opinion is that the current unrest in the Middle East was inevitable. It is a repeat of history not just from that region, but from the world over. Look back to the mid-nineteenth century’s revolts in Europe, where Prince Metternich played a prominent role. From the mid-1840′s to World War One, there was a time of conflict in Europe between the rich and poor leading to a few mostly-failed revolutions. During the Great Depression (the one in the 1920′s and 1930′s, not the current one), global conflict between the rich and poor intensified. World War Two ended that conflict, but it’s happening again all over the planet. What’s happening in the Middle East is more visible that what’s happening in the United States, but greed for power among the rich and a desire for a decent life among the poor will always set the stage for violence and change.

History repeats itself. It’s not that we don’t learn lessons from history. It’s that greed and power are what motivate those who seek to govern. The real lesson is in our DNA. We’re built like this.

Expect the worst to happen. Be surprised when, or if, it doesn’t. As for me, the current unrest is marvelous fodder for spies and their roles in political power shifts. As a fiction writer, it’s time to sit and watch.

After all, the Middle East has always been a time bomb.

Wisconsin and the Middle East

February 28, 2011

Wisconsin and the Middle East. Two places, so dissimilar, but with a common bond so strong it is undeniable. Can you guess what that commonality might be?

People in both of those places are now revolting against their governments.

I’d be among the first to agree that elections have consequences. In Wisconsin and other states, voters were faced with difficult choices where the outcomes might express more or less than the choice on which they voted. But, governments are more complicated in their governing than the opinions which got them elected. It is truly difficult to understand what issue or issues caused any voter to make their (often binary) decision. When a politician uses that decision as a claim for everything they personally deem within their own voting purview. I cringe and shudder.

Likewise, when Middle Eastern despots claim their right to absolute rule, I can understand the reaction of those of their people who want them gone. The protests in Wisconsin have taught me.

We – all of us everywhere – seem to have little patience for those who govern. We have no tolerance for others with an opinion unlike ours. And since most people lie in the middle of the proverbial bell-shaped curve, we are now a planet ruled everywhere by extremists. Fundamentalists of every description. Religious fundamentalists, Christian, Moslem, and Jewish want us to obey their versions of correct behavior. Political extremists of every kind claim the right to govern us, even when the issue at hand has little to do with what voters were thinking when they elected the politician. Without consensus, economic and financial experts claim they know best the regulations we should permit, even though most of us haven’t the skill to understand to follow their apparently well-disguised intentions.*

Special interests and greed continue to own unmitigated power. Whether it is duly elected Republican governors in the United States, desiring to eliminate the right of labor unions to collective bargaining, or despotic rulers of poverty stricken countries who have privately pocketed funds that might have been used to elevate the education level of their citizens, the result widens the gap between the socio-economic lives of the richest and poorest of us.

It is ironic, then, that this intended result has the unfortunate unintended consequence of the likelihood of massive political unrest and upheaval. We’ve all witnessed the revolts across the Middle East. I predict we’ll see voters revolt across America in the 2012 elections. Why? Because, the majority of voters are moderates, while left and right-wing extremists dominate the news. If Americans cannot find a moderate candidate to vote for, the extremists elected from the party that lost the previous election will once again again claim that they were elected to put in place their own extremist agenda.

The solution in both the Middle East and in America is moderation. Back in the 1950s, we had moderates practicing a moderate form of politics, promoting moderate religious views, practicing moderately regulated banking and economics, and life was good. I fear we’ll never see the likes of those days again.

Poisoning the Well – The Publishers and the Libraries

April 7, 2010

“Once upon a time,” two tribes fought over which one had rightful access to the crops growing in a local field. One of the angry tribesmen took matters into his own hands, dropping a powerful poison into the well of the opposing tribe. Soon, the opposing tribe’s populace began dying. The poisoner announced his act to the leaders of his own tribe. They rewarded him. But, then the poisoner’s tribesmen started dying, since they were downstream from the opposing tribe. In the end, no one survived.

The story illustrates a principle that publishers have forgotten. Publishing is a vertically integrated business, but it is also horizontally organized. There is a food chain, with the publishers selling to distributors and libraries, who are one step closer to the retail public. But publishers also have competing product lines in hardcover, paperback and eBook lines, and to keep their hardcover business alive they have artificially priced their eBook price much higher than it should be, IMHO. I believe (and have said here before) that, as the $2.99 price Amazon permits as a basic eBook unit price becomes the de facto price, this may eventually maim most traditional publishers and could kill many of them.

Apparently, the suicidal tendency of some of the publishers goes beyond what I saw as merely irrational. On my way back to Northern California from Seattle, I read in a newspaper that some publishers have tried to limit the number of times a library may loan an eBook before having to repurchase the title. The unintended consequences of this path are the deaths of both the libraries, who can’t afford to continually reacquire eBook titles, and the publishers, who will lose the library market and the young readers who use libraries. There is an even more insidious consequence: Given the current budget problems that trickle down from the Federal government to our local governments, libraries are already being tightly squeezed, and so are public schools. Forcing libraries to spend cash they don’t have simply means they won’t have many eBooks available at all. Children who used libraries because they can’t afford to buy books will lose their access and may stop reading. Fewer eBooks means fewer readers. Fewer readers means dumber adults. Dumber adults means a less competitive country, with us all suffering as a result. Here’s a case where poisoning the well is a national security issue.

Anyone have a different opinion? Please, express it here!

The Future of Publishing

February 23, 2011

Over this past weekend, I attended the San Francisco Writers Conference. I sat in sessions and soaked up lots of useful stuff, from ways to improve my writer’s tradecraft, to short courses in publicity for writers. I made connections with some literary agents and editors. It was a useful weekend. I also listened to my peers. They expressed concerns about what is currently happening in the publishing industry and how it might change their careers.

As the former CEO and publisher of an eBook company for almost a decade, I think I may have something useful to contribute in that discussion.

Everyone who watched the demise of the old infrastructure of the music business already understands what is happening. My opinion is that it provides more than an object lesson. The fate of the old lions of the music business looks to me to be the fate of the larger publishers. Yes, there are significant differences in the infrastructure of the industries, their product composition and the consumer attitudes toward change, but the lessons are there and to ignore them is to remain in denial.

Music went through several technological improvements in delivery before the major impacts hit the companies. First, we went from wax cylinder to 33 1/3 record to CD. Each of those left the record companies with no choice but to adjust their fixed asset base with massively changed equipment, and then amortize the costs across the sales of their products. Rough, but possible to survive the changes. The last, biggest change was the one of distribution, and this was the killer. Once record sales were replaced by song sales, and sold not in physical format but MP3, delivered over the Internet, the effects of change were massive. Brick and mortar stores were unnecessary. Trucks, warehouses and other infrastructure were assets the companies could no longer amortize and they became useless. Barriers to entry became a non-issue. Distribution was the only issue. Now let’s look at publishing. Each of the factors here is the same except for two: No one buys books by the chapter, and everyone uses software and possibly an eReader, if not a cell phone to read. Taken as a whole, the similarities outweigh the differences. Publishing is undergoing a change of seismic proportions.

In their current form, publishing companies won’t survive. They must jettison the unneeded fixed assets and find a way to become relevant. I’m not sure what they can do with all the trucks, warehouses and printing presses, but there is no way they can charge these off against the price of an eBook and get customers to go for it. Not when literary agents can become the publisher of record for eBooks sold through distributors such as and amazon. Within five years, there won’t be any bookstores. The price of an eBook won’t be much above $9.99. Smaller organizations like literary agencies and writing critique groups will become the ‘publishers.’ The financial failure of Borders is proof enough of this as a forecast of the future.

Libraries will lose their relevance as printed books become scarcer and more expensive. With neither bookstores nor libraries, printed books will be bought in short runs by the author and sold at signings conducted at restaurants and senior centers. For the most part, publicizing a new book will likely become a blogging event.

To see what will happen, no one need go farther than read T. S. Kuhn’s short monograph, published in the 1950’s, The Structure of Scientific Revolutions. He uses several historical examples, and concludes that those who cannot adjust to technology changes cease to have economic relevance.

Writers will still become authors, and literary agents will still be the arbiters of quality. But, any literary agent who can’t find a way to take advantage of the incredible opportunity offered by a time of massive change will find themselves gone from the planet.

Writers will need to learn how to be marketers. Promotion and Marketing will be their biggest post-writing activities, and these activities will be quite different from what they did pre-eBook. Some will jettison their paper publishers after getting a few titles in print and begin selling eBook titles to their established customer base. J. A. Konrath has done this and it works. Others will stick with their paper publishers and pray they can survive. Should the publisher adapt to the new world. It might work. Paper publishers currently provide the prime advantage of the stamp of quality to what goes out in print, and it is a formidable advantage for an unknown writer.

To survive, after shedding the unnecessary fixed assets that now burden them financially, publishers will probably purchase the literary agencies that are publisher of record. By itself, this changes everything. If they can’t come up with a better idea, or if they don’t begin acquiring the literary agencies that “own” the best writers, they will surely perish from carrying the weight of their current fixed asset infrastructure without the counterbalance of direct access to talented writers.

That’s my prediction, for what it’s worth.

If you’re a writer, take heart, the times may be interesting now, but the future is still bright. If you’re a literary agent, you hold all the cards if you play them right. If you’re a print publisher, the time has come to stop wondering what will happen and choose which literary agencies you want to become close with. Pick carefully; the clock is running.

Plotting Your Story Using Screenwriting Tools: Soth versus Schechter

Publishers will want to wrangle every last penny of revenue from anyone’s first novel. One of their best sources is the movie that can be made from a novelist’s first publication. The major reason is that movies drive incremental book sales for the author, years after the book has backlisted.

With that as their reasoning, for decades, book publishers now tend to read every potential book with their eyes imaging it in a movie theatre. The inevitable result is that novelists have started studying screenwriting to ensure they can fulfill the publisher’s unstated demand: Could a movie be made from this manuscript?

Since the most important way to develop character is through dialogue and stage direction of the character (what they do when they feel something), screenplay writing skills have become increasingly important. Teachers like Eric Witchey use tools like E-D-A-C-E (Emotion leads to Decision leads to Action leads to Conflict needs to another Emotion), and A-B-C (agenda leads to backstory leads to conflict) where dialogue and behavior driver character development.

My literary agent returned from meetings with NY publishers with a third and fairly new requirement for fiction manuscripts, based on what they feel is commercial: Eliminate all set-up and backstory (except what can be medicine-dropped into the dialogue of the characters), and have the story be solid action with no breaks. This is what you see when you’re at the movies.

There are two superb teachers of screenplay writing, Chris Soth and Jeffrey Alan Schechter. Soth ( has a PDF eBook called Million Dollar Screenwriting: Make Money with the Mini-Movie Method, available from his website for less than $50. Schechter wrote a PDF eBook called Totally Write Guide to Bulletproof Screenplay Structure Guide, which he made available from his website, but it was later turned into a software product called Contour, available from Mariner Software ( for less than $50. Each one has a system that is far advanced past the old three act structure that Chris Voglar (The Writer’s Journey) suggests for story development. The objective is to produce two-minute scenes, ideal for a movie.

I reviewed Schechter’s system and started using it several years ago as a result of a conversation with Dennis Phinney of Linda Rohrbough (a former member) suggested Soth’s system and I examined it last year. While there were similarities, I found the mini-movie system offered a simpler design to my plot. But, it wasn’t complete. When I cross-indexed the two systems, I finally had a product I could use, complete with a way to justify the times when I would have to break the rules. I developed a Microsoft Excel workbook that you can use, complete with the cross-index embedded within, called BLANK Outline and Grading Sheet.xls.

I use the tool to craft the early stages of my story. The instructions are simple. Enter your chapter and page number and the Description of the scene into columns A, B and F, and ensure they correspond to the aspect of your novel’s theme related to the scene in column G. Do this for all 44 plot points, all 8 mini-reels. Each scene should be about two minutes of real-time action in a movie, since the 44 plot points would then become an 88 minute movie. The other way to see it is that all 8 mini-reels would become a 96 minute movie. Examine the spreadsheet and do the math. It works. In effect, your time line becomes what a movie of your story would require in terms of minutes.

When you are finished, write the manuscript. When it has gone through all of the critiques necessary to complete its improvement cycle, review it against the Excel workbook and make corrections to the workbook so they correspond in all aspects (page number for each chapter, and all plot point descriptions. Send the workbook out with the manuscript to your test readers, and ask them to enter letter grades (column H) and comments (column I), enter evaluations (letter grades and comments) for every principal character (rows 66 through 7), and grades and comments for every aspect of the manuscript (rows 92 through 167). When you receive the returned workbook, review their comments and make your final changes.

If you are working on plotting a novel and want to use the BLANK Outline and Grading Sheet.xls, you can download it from my web site (



The Future of Publishing – Part II

April 3, 2011

This weekend I attended yet another writers conference. While I learned things I can use and enjoyed the camaraderie of the faculty and writers there, something I found there surprised me: Some of the literary agents had already determined how to respond to the vast sea change now beginning. A few, to be sure, are still perplexed or totally lost. But a surprising few have decided to charge for extra services they deem important as we move to a world where the new role of literary agents has still to be determined. For example, one agent now offers to assist writers in exploiting social media to promote the role of the writer as a brand. Another offers editing services for the manuscript, not just correcting grammatical errors but also providing advance notice on the writer’s “speed bumps” needing correction. It’s a plethora of services. If you are self-publishing, here is the stuff you might need to replace the traditional print publishers and the roles they value-added to your book.

If you are a writer, it’s as if you were an alien landing on this planet, preparing to find humans you have to conquer and instead, you find pre-packaged meat wating for pick-up. Bad metaphor, perhaps, but accurate none the less.

Literary agents will offer you a supermarket’s worth of services to entice you to pay fees. It’s actually very good news for writers. It’s even better for the larger literary agencies still wondering what they should do to prepare themselves for the brave new world. I propose this one: A larger literary agency (ten agents or more) will have to expand to survive. Smaller agencies have no chance of survival and in the end will band together to form a critical mass. Twelve agents is the size to offer robust survival and the larger the better. But that still doesn’t offer a business model. It just states the critical mass for continued synaptic activity. So, assuming the agency you pitch to is big enough to survive and continue serving you as a writer, what should you want, what should you expect them to do? I believe they will need to do two things. First, exploit the beand that is your writing. Without a brand, without reader expectations that each of your books will offer something uniquely “you,” nothing good will happen. Some agents already know how to do this. Agencies that don’t have this skill in their repertoire should acquire an agent who can provide it and find a way to compensate them for it. Second, for those writers whose work they feel deserves to be published, they should offer the writer a path to publication if they cannot make a deal with a traditional publisher. Yes, agents will have to be the “publisher of record” for writers they believe in when they cannot find a traditional publisher to do the heavy lifting. AAR (the Association of Authors Representatives) claims this is a violation of their code of ethic. AAR’s code of ethics was written before the tsunami of change now rolling over publishing. IMHO, it’s no longer relevant. Parts of it are reasonable, but for the survival of the industry, literary agents have no choice but to become publishers. To decline their destiny might leave readers with a sense of having been abandoned. If the print publishers die from their huge fixed asset base of irrelevant-to-the-eBook-world investments (trucks, warehouses, printing presses for creation, storage and transport of paper books), who will replace them? The eBook publishers now in existence are a good start, but they offer little in the way of service that literary agencies provide. And they agencies offer no publishing services and won’t work with the eBook publishers since they don’t offer writers advances. Mexican standoff. Hmmmmnnn.

So, then, what’s they optimal organization for a literary agency and how would their behavior differ from what they now do? The agency would continue trying to sell to traditional publishers. Where they couldn’t sell to a traditional publisher, they would have a bank credit line to provide them with the cash to prepare the author’s manuscript, develop cover art the book needs for publication. They would obtain copyright in the author’s name, obtain an ISBN number, and coach the author on crafting their brand. They would assist in obtaining publicity for the book, and assist in obtaining reviews of the book.

When sales of the book come in from Amazon and other sources, the first revenues would pay the agency back for the services they advanced, including interest on the bank credit line. After that, revenues would be split in a traditional way. Assuming the cover art, editing and other prepublishing costs total about $3,000 for a new eBook, and it takes a total of three months from contract to publishing date for the title to hit the market, the advance would probably not be repaid until the book had been out for about two months. The advance would accrue about five months of bank interest, which is not much. If the book is priced at $2.99 retail with Amazon, the agent and author would receive 70% of the sale, or $2.09. Assuming the $3,000 in prepublication costs plus about $100 of interest expense, it would take about 1,500 unit sales to cover the advance. The agency would keep the advance repayment, and then for subsequent sales, the author would receive their 85%, or about $1.75, and the agent would keep about $0.34 per unit sale.

To be fair, we have to compare this model with the traditional print publishing model. Which one is better on a per unit sale; eBook or hardcover? Since, for traditional publishing of a hardcover book the publisher sends about 15% of the net to the agent and author to split, and the net on a hardcover is usually about $10, on an eBook less than the agency model I’m proposing here would net the agent and the author. Surprised? Well, in the past we’d expect print publishers to provide expertise in publicity and marketing, but no longer. Literary agents often help out these days doing those things. BUT… for the most part, it’s left to the author. In the future, we can expect some of the better literary agents to teach their budding authors a few of the tricks of the trade, as value-added for the agent-author relationship. If you are looking for an agent, be sure to ask them what they’ll provide to improve the relationship and your chances of becoming a commercial success.

Good luck, all my fellow writers!

Indies versus Trads.

April 3, 2011

Interesting…The McKoys versus the Hatfields. The North versus the South..The families of Romeo and Juliet. War. And now the Indies versus the Trads. Wazzufak?

The Trads aren’t a drug dealing, weapons using gang. They’re the writers who became authors using the old print publishing model. Almost all of them are lost somewhere in the vast no man’s land of midlist. The Indies, in contrast, are an endless stream of writers looking for some way to get enough critical mass to sell their self-published works in the brave new world of publishing. I don’t fit into either category at this time, so I guess I’m currently an innocent bystander. As such, I have no place in either camp. My first impression is, they hate each other. The indies, led by J. A. Konrath, Barry Eisler and Amanda Hocking, have demonstrated it is a viable direction, one where a writer can be successful. The trads are fearful that when the “train leaves the station,” they’ll be left without any vehicle. Pick a side. Grab a weapon. Fight for your life as a writer.

How to choose? In the eyeball war, it’s the content that’s important. Fellow readers what do you think? Over the next few years, what’s the best path to follow?

Wikileaks and hacking in general

December 6, 2010

I believe all humans lie and all keep secrets. When I worked as a subcontractor for the government, one of the things I could do was lie well enough to pass a lie detector test. Most of my lies were lies of omission, but some were untruths I told. All spies lie. We have to in order to survive. Alternate identities are a lie. The way we walk is a deception: I am harmless. The way we talk is often a lie: I am not who you think. When we steal the secrets of others, we lie: I have nothing that could compromise you.

I stumbled across a secret that could have gotten me into massive trouble, had I revealed it. So, I never did. Even though its value has diminished over the years, I never will. Not telling is a lie. All secrets are, in essence, lies.

Our government tells us lies every day. Some of the lies are lies of omission, but many more are lies crafted by political parties to invoke fear into voters. Power is often maintained through a fabric of lies. When our government listens to its intelligence services for information relating to enfolding world events, it often is hearing lies. I know this, because by not telling my handler what I’d found out, I was, in effect, crafting a place where a lie could sit as its substitute. And, at least one lie did find its way into the fabric of our government’s understanding of world events because of my own actions.

When Julian Assange created Wikileaks, he and his followers worked for a world where truth can be more easily available. If no government lied to the world, what would the world be like?

Computer hackers have existed almost since the day computers were invented. Before I ever worked for the government, one of my major focuses as a management consultant was computer security. I worked on several computer crimes and solved them. I was quoted in Institutional Investor and in Pension and Investment Age on computer fraud and countermeasures and wrote an article for the Journal of Cash Management. I’ve been an expert on the topic of computer hacking for decades. About fifteen years ago, someone broke inot our house and stole documents that made it possible for them to sell my wife’s and my identity. I used my skills to track the culprit and find him (3,000 miles away). I helped get him arrested. My skills are still functional.

I think most hackers are better as fictional devices than as real people. In fiction, a writer can use a hacker to do either good or bad things. In real life, most of the hacking I know about is identity theft and its relatives. Nasty stuff. But, not all is bad. The hackers who “stole” secrets from our government and used Wikileaks to post them for all to see are doing us all a service, in my humble opinion.

The truth is out there. The hackers are setting it free.

Spy Toys

Friday, February 25, 2011

Like most thriller writers, my secret weapons really are secret weapons.

When I was writing my first thriller manuscript, I had a conversation with James Rollins, who told me where he found out about liquid armor. He got it from the US Army’s website, and has used it in some of his Sigma series. I borrowed the tech toy from him.

One of my friends is a computer hacker. He’s helped me with the theme and tech content of one of my manuscripts.

I know some folks who’ve worked at D.A.R.P.A. and they spoke to me about projects they had cancelled. Great spy tech. Even for cancelled projects, I thought D.A.R.P.A. was off limits.

Lately, however, spy technology I know about and wouldn’t have ever put in a story has showed up on television. NCIS and other shows have used tech I thought was classified. Seeing on the tube what I thought was the province of a classified status has shaken my understanding of the rules.

So then, what are the rules? Should they be followed? I thought anything with a current field use should be kept secret. I thought anything that could be used as a weapon against my government should be kept out of my fiction. Was I wrong? If NCIS, NCIS LA, and a few movies recently released offer examples of the new rules, then fiction writers can write about whatever they want.

Live and learn.

Computer Fraud and Countermeasures

March 14, 2010

I just read an article in about corporate cyberespionage (Cyber espionage: Firms fail to take threat seriously, by Shelly Portet,

Computer fraud has been responsible for a massive number of cases of identity theft over the last decade, and there is no end in sight. Both my wife and I have had our identities stolen, and sold to criminals. As a result, we needed an attorney’s help to work with the IRS, which thought we had an offshore bank account funding terrorism. Nasty.

Has this happened to you or someone you know? Do you track your credit reports to stop identity theft (after it’s occurred)?

From the article, it appears most corporations haven’t awakened to the possibility that a cybercriminal has hacked their corporate website and stolen proprietary information for resale or competitive response.

The author of the report recommends that corporate users not copy files to their own computers, since it would provide more targets for a hacker. But there’s a problem in not having multiple copies out there: A single copy on a cloud server provides less work for a hacker who desires to modify the file so it either contains viruses or, even worse, is no longer an accurate depiction of the thoughts of its creator. Without multiple copies, reconstructing the original version would be difficult or impossible. Seems to me, offsite, offline copies would be a better alternative.

I wrote an article years ago entitled “Cash Management Data Security,” for the Journal of Cash Management (under my real name: Volume 4, Number 5, page 74). I also was quoted on the subject of computer fraud corporate cybercrime in Pension & Investment Age on November 12, “Workstation Technology Dominates Conference,” 1984, page 26): “Nothing in the field of data security has really changed over the past seven years, only the prominence of the problem.”

Now, with cloud computing becoming prevalent, it appears we’re ripe for a bigger problem than ever.

What do your think? If the company you work for is prepared to defend itself against cybercriminals, I’d like to know about it. BUT, don’t leave your company’s name (in your blogspot comment). We wouldn’t want to tempt fate now, would we?

We’re all Prisoners of the Medical System… And we’re on Death Row

May 5, 2011

Just in case you’re healthy, take a look at what you’ll face when you’re not: The FDA belongs to drug companies, and they’d rather treat diseases than cure them. Of course, curing a disease is suicide to a medical corporation since once you’re cured, you are no longer a customer. It’s come to my attention that on several occasions, a large pharmaceutical company has purchased the stock of a corporation which has developed a cure for one of the diseases they treat. The large corporation then “sunsets” the cure, placing it in their inventory of research not to be pursued.

I keep a count of such things. From the leaks I’ve encountered, so far three cures for cancer and two cures for Type I diabetes have been sunsetted.

Of course, I have no real proof to offer. If I did and offered it, the pharmaceutical companies I named would sue me. So, do your own research. It’s not that hard.

The ethics of sunsetting a cure for any disease are questionable at best. The FDA and the SEC let this happen. It’s capitalism at its best. Conservatives don’t notice the lack of ethics and liberals don’t seem to care either.

When Obama rushed the Health Care bill into law, he and the democrats made many compromises. One of them appears to be that there won’t be any improved regulation of big pharmaceutical companies. In my opinion, this is not good.

What do you think?

Thursday, March 15, 2012

BEA 2011 (Book Expo America) and the Future of Publishing

May 28, 2011

Last week I attended the BEA in New York City and found it to be the heart of publishing, as it always has been. But the heart is not well. This BEA had fewer attendees and fewer authors doing autographing for bookstores. While eBooks were featured with their own arena, the topics in eBooks were somehow out of sync with my beliefs about the reality of the eBook tsunami. All in all, I found the experience alarming. One trad (paper and print books) publisher stated that they hadn’t figured out yet how to merchandise eBooks. That statement seems very troubling to me (as a former eBook publisher).

The trads people still maintaining their attitude of exclusivity. The indies are pushing their new author-centric models, and most literary agents are now either toying with the new models or exiting the business. So, nothing has been resolved. When I attended a session by the BISG (Book Industry Standards / Statistics Group), someone asked why they didn’t supply a breakdown of sales by price, especially for eBooks. The panel replied there was certainly a wide range of eBook prices. That’s a non-answer, and it is probably the most important question there is. Prices on eBooks range from $0.99 to $17.99, and those at the low end seem to be outselling their higher-priced brethren by multiples. Is this because of the continuing economic recession? And regardless, will the lower prices for Amanda Hocking’s and John Locke’s currently available eBooks become the standard price for an eBook? Why didn’t the BISG take this issue on? At the BEA, Barry Eisler, who I’ve known for over a dozen years, reconsidered going indie. Seems Amazon offered a much better deal than the trad he turned down about a month ago, and, of course, Amazon is likely to be the big survivor of the eBook tsunami. While I was disappointed he reversed direction, I do understand his objectives in doing so.

As we move through the coming year, I wonder how long it will be before the trads adjust their aim and hit the target. It’s no mystery and it should be pretty obvious. Lower your eBook prices and increase your sales!

If you’re in the business of publishing, what do you think?