Interview with Mike Bray, President and CEO of Wolfpack Publishing
By Lauren Bridges
Mike Bray and L. J. Martin opened Wolfpack Publishing in June of 2013, hitting the ground running by signing up an impressive list of western authors and their back lists. By December 2016 Wolfpack had sold 2 million books. More impressively for the little startup publisher, they are on track to sell over 1 million books in 2017. Martin retired last year, selling most of his stake in the company to Bray and assuming more of a consultant role moving forward.
After over a year of trying to pin him down, I finally had the opportunity to speak with Mr. Bray about several issues from a small publisher point of view.
How did your partnership with L. J. Martin and Wolfpack Publishing begin?
It’s all L.J.’s (Larry’s) fault. When he approached me with the publishing company idea both Kat Martin (Larry’s wife) and I tried to talk him out of it. The Martin’s and I have been friends for close to 30 years. I was around when they first started writing. I read many of their first books in printed manuscript form—literally reams and reams of paper, double spaced text—as they looked for an agent, and I celebrated with them when they each sold their first book—which if I remember right, was within weeks of each other. Larry held his own in the Western genre for quite a few years, but Kat’s career as a romance writer dwarfed Larry’s. Kat hits the New York Times bestsellers list with each new release. In addition to being a terrific writer Kat is also a dedicated and disciplined writer. She has a writing schedule that seldom varies and that allows her to hit her deadlines. I can certainly understand why she would not want the distraction of Larry opening and running a new business from their home.
However, Larry made it clear that he was going forward with or without me. In addition to our friendship, Larry was also one of my mentors in the real estate game, and if he wanted to open a little digital publishing company, I owed him my support.
It turned out to be a perfect partnership. Larry had studied the publishing industry for 30 years, between Kat’s titles, his titles and their re-releases, he had been involved with the marketing of well over 100 books. I, on the other hand, I knew nothing about the publishing industry. Internet marketing was my thing.
In the beginning, Larry handled the publishing side and I handled the marketing side. We both worked seven days a week, 12+ hours a day the first year, which only made me respect Martin even more. Again, I knew very little about the publishing industry and approached the marketing end just as I would if I were selling any other product on the Internet. It worked, and today we are as much an internet marketing company as we are a publishing company.
I recently read that the eBook market has topped out and that print books have made a comeback.
I read those articles as well. My favorite headline was “Digital Fatigue Hits The eBook Market.” I read the article in a crowded Las Vegas sports bar while waiting for a lunch appointment to show up. I looked around the bar and over half of the patrons were staring at their phones. And I got a chuckle out of “digital fatigue.” In all seriousness, the articles talking about eBooks topping out are fake news based on incomplete data. Digital book sales did drop last year for traditional publishers; however, that market share was gobbled up by small presses, indie authors and Amazon’s own imprints. Print book sales did grow in 2015 and 2016, but the most interesting part of that growth is where it came from. Here are the numbers for traditionally published US trade print book units by channel for 2016 vs 2015, as reported by authorearnings.com:
2015 2016 change
Barnes & Noble 175,000,000 165,000,000 -10,000,000
Walmart, Target, etc. 106,000,000 100,500,000 -5,500,000
Indep. Bookstores 40,000,000 42,000,000 + 2,000,000
Chains, airports, etc. 91,000,000 89,000,000 -2,000,000
Amazon.com 240,000,000 275,000,000 +35,000,000
Those articles cheering the return of print versus digital should have also addressed the migration of book buyers from brick-and-mortar to online venues. Amazon played an additional role in the rise of US trade print sales in 2015 and 2016. In 2015 “agency” contracts eliminated retailer discounting of eBooks from large traditional publishers. So, in mid-2015 Amazon raised discounts on their print books instead. Amazon decreased discounts on print books back to 2014 levels in the second half of 2016, which started an industry-wide cooling off of print book sales. My biggest concern when we opened Wolfpack was competing against print books without brick-and-mortar exposure. One of my favorite authors (Robert Vaughan) told me not to worry about it. He said that even if Barnes and Noble stocked our titles they would have the shelf life of a gallon of milk.
Thanks to Amazon, Wolfpacks’ lack of a brick-and-mortar footprint is less relevant every month. We publish genre fiction; 77% of all genre fiction sales regardless of format are online.
You've certainly done your research. Amazon seems to be crushing the competition. What do you attribute that to?
The easy answer is the shopping experience at Amazon versus their online competitors.
The traditional brick-and-mortar bookstores take advantage of their prime in-store real estate by selling placement promotions known as co-op. I have no idea what the placement fees are but it isn’t limited to just the tables in the front; it’s the end caps, whether a book is displayed face out or spine out, etc.
Amazon’s biggest competitors adopted the same co-op strategy with their online stores, which means that visibility for the smaller publishers and indie authors is tough—everything from their emails to their bestsellers lists is curated by a human. With all three of Amazon’s primary competitors, it’s obvious that they want their customer attention on “co-op”: the prominent spots that large publishers have purchased.
Amazon has a different model. Their goal is to promote the product or products that their algorithms identify to have the highest probability of selling to each individual shopper, regardless of price, publisher or manufacturer. They have utilized machine learning from day one; tracking, gathering and analyzing data at every opportunity. Their referral and recommendation algorithms are by far the best in the online e-commerce world, and with each visit you make to Amazon.com, their recommendations become even more accurate. Amazon knows that if its customers trust their recommendations, they will act on them more often, making Amazon more money in the long run.
Amazon isn’t 100% co-op free—they won’t rent a spot on a bestsellers list—but the larger publishers have a few opportunities not available to small publishers and indie authors. In large, Amazon’s prime online real estate is dedicated to books the consumer wants to read vs their competitors who dedicate their equivalent online real estate to books that the larger publishers want to sell. Amazon has the closest thing to a true bestsellers list there is—it’s not curated; it is 100% generated by sales.
From a small publisher point of view, I love the level playing field Amazon provides, and I love that consumers are migrating away from a platform where a hand full of companies pick the bestsellers to a platform where consumers pick the bestsellers.
You are obviously quite bullish on Amazon. What don’t you like about Amazon?
Amazon is rapidly approaching 5 million titles and adds approximately 70,000 new titles each month. I can appreciate how huge the task of quality control is with that kind of volume. Currently, Amazon utilizes consumer feedback to identify quality issues. This is fine; I would just like to see them react faster, and when an issue is identified, I’d like to see Amazons quality control people review the offending authors entire catalog rather than just the title identified by consumers.
Amazon is obviously the largest online retailer in the world and a huge target for scammers. Quite often it’s the author community that identifies a scam and Amazon doesn’t react until the author community gets noisy. Obviously, I would like to see Amazon react faster and harsher to scammers.
The Amazon owned imprints also concern me. Their market share is slowly growing, which is ok. However, with the data and mailing lists Amazon controls, they could shake up the whole industry in a heartbeat with the titles under their imprints.
Do you personally think brick-and-mortar bookstores will survive?
I sure hope so—especially the small, quaint, mom-and-pop type stores I remember from 30 or 40 years ago. You know; where the owners and managers were in the business because they loved books. However, I think the days of the big box bookstore are over. This is not unique to book stores; it’s a trend hitting all retail. Last Black Friday weekend over 10 million more Americans shopped online than in brick-and-mortar stores. I just read in Bloomberg News that more than 8,600 US retail stores could close this year, which is well above the peak of 6200 stores that closed in 2008. Although online outlets are getting the bulk of the blame, Brick-and-mortar retail has been under pressure ever since the powerhouse discount chains like Walmart and Target started expanding their footprint.
I recently had the opportunity to tour the Amazon Books store in La Jolla, California and to chat with Jennifer Cast who manages The Amazon Books division for Amazon. The store itself was smaller than I expected; with maybe 2,000 titles and a small lineup of Kindle readers, fire tablets and Echo/Alexa devices. The titles carried in the store are all displayed face up with their Amazon star ranking, number of reviews and a snippet from a review from the books Amazon products page. Another interesting thing is that there are no prices listed. Instead, the consumer must scan the books barcode into one of the scanners conveniently located throughout the store to get the price and type in their email address if they want to get the special Prime Members pricing or use a free Amazon phone app to retrieve price and complete the transaction. Amazon never misses an opportunity to gather more data! I’m confident that Amazon has more than enough data and knows the demographics around each of their brick-and-mortar bookstores and future stores to identify the 2000 or so titles with the highest probability of selling in each of their locations.
Honestly, the most interesting part of the tour was meeting Jennifer Cast. Jennifer was an early executive with Amazon, joining the company in 1994 or 1995. She took an early retirement from Amazon years ago and spent her time doing charity work before coming back to Amazon to run the Amazon Books division. Of course, Jennifer would not disclose any information that wasn’t already public knowledge. I asked her if their plans included Espresso Book Machines or an equivalent print on demand solution. Her answer was “not this year.” I’d lay some pretty good odds that within a year, Amazon rolls out their own print on demand solution in their brick and mortar stores, as well as self-service print on demand kiosks in airports, malls and other high traffic locations. These machines would allow patrons almost instant access to millions of titles and have limitless capacity to add additional titles to their catalog.
Jennifer was impressive but I thought it odd that Amazon would select a retired online business executive to manage a new brick-and-mortar retail chain. I was curious enough to dig a little deeper to see who Jennifer answered to. It turns out that Amazon’s retail store initiative is led by Steve Kessel, another longtime Amazon executive. It was Kessel’s team that launched the first Kindle. Kessel left Amazon in 2011 or 2012, returning to Amazon to work on Amazon’s retail store initiative which was pretty much secret before they opened the first Amazon Books store in Seattle. I don’t think Amazon’s entry into the brick-and-mortar book business is just about books. They have been opening pop-ups for their devices for a while now and talking about the grocery business for well over a year. This is my opinion only and I have nothing to back it up with, but I believe Amazon is out to change the whole brick and mortar shopping experience.
I doubt that money would motivate the likes of Kessel and Cast to come out of retirement. Loyalty could be a factor, but I believe it would take something much bigger than a chain of bookstores. The two executives at the top of Amazon’s retail initiative not only believe in, but, have lived Amazon’s slogan “work hard, play hard and change the world.” I wouldn’t want to bet against them.
You have mentioned print on demand a few times. Do you see print on demand ever being utilized by traditional publishers?
I do. Many are using it now. It allows them to get away with shorter print runs; they simply switch to POD as their inventory for a title gets low. Then they can decide whether to do another print run. It’s also an easy way to make the out-of-print clause in author/publisher contracts irrelevant.
Amazon’s CreateSpace POD service has been a cost effective solution for Wolfpack, it allows us to price our titles competitively and still give a better return to the author then they would have seen under a traditional publishing agreement.
Thank you for taking the time to talk with me, I'm glad we were finally able to pin you down and pick your brain. You seem to have a lot of knowledge on the topic and I can see why Wolfpack is so successful! Best of luck for the future!