Interview with Brian Felsen, President of BookBaby.com

Jennifer Fulford interviews BookBaby President Brian Felsen in Portland, Ore., Nov. 10, 2011. Copyright Jennifer Fulford, 2011. Link-backs encouraged. No part of this transcript may be reproduced. The interview was recorded and transcribed with permission from Mr. Felsen. Very minor edits were made for clarity.

Brian Felsen at BookBaby HQ.

JMF: Let me ask you first about how BookBaby evolved from CDBaby.

BF: CDBaby is the largest distributor of independent music on the internet. We have 300,000 artists and 3.5 million titles. So we have great relationships with iTunes. We give them a quarter of all their music, and Amazon and Spotify and all the digital partners. We have 60 digital partners. I fell in love with the iPad when it came out. And then there’s the Kindle, which is delightful. I fly here twice a week, so I see people reading the Kindle, and I’m a writer, and I love books, and I just fell in love with the devices. And I realized a couple of things. First of all, our writers, a lot of our recording artists are writers as well, so a lot of our 300,000 clients have their own books, so they need a way of getting them onto these marvelous devices. Then I also realized the people making these devices were the same digital partners we were already distributing all this music to. So it seemed like an absolutely natural thing for us to do.

JMF: So you’re a writer? What kind of writing do you do?

BF: I write stuff which is not—my muse is not congruent with mainstream mass tastes. (We laugh.) So I’ve written plays. I’ve written screenplays. I write poetry, mostly avant garde Russian futurist poetry type stuff, not …

JMF: In Russian, or about Russia?

BF: No, neither, but very interested in recursion and visual elements on the page and stuff like F.T. Marinetti would have done 100 years go. I like, as I say, my tastes are out of the mainstream. But my wife has published a couple of books in Turkey, and we released one of hers through BookBaby. I realize that content creators looking at the publishing industry, there are a lot of parallels with the music industry. There’s a lot of consolidation. A lot of book sellers are going out of business, just like Tower Records went under, Borders went under. Barnes and Noble is threatened, and if you go in there, they’re just pushing the Nooks super hard on the PA system in every store, and it’s got all the real estate in the store. Authors—with the death of many of the gatekeepers—authors need a way to get their books out on the great devices that people are consuming content on.

JMF: So you are commuting? Where are you commuting from?

BF: I live in Los Angelos.

JMF: What’s the connection with Turkey?

BF: My wife is Turkish.

JMF: You launched BookBaby a year ago. How long was it in development?

BF: Well, what happened, it was in development for about a week.

JMF: A week? (I laugh.)

BF: I’m, I’m not making this up. I was at South By Southwest last year and we were having our ordinary meeting with Apple, and I’m having breakfast there, a little bit hungover (more laughter), as were we all, as were we all, and Apple just said, ‘Yeah. We’re launching the ibook store in a week.’ And I’m like, ‘Heck, I want to on there at lunch.’ And he’s like, ‘You got about a week.’ So I called up our dev team, threw ‘em all on the project. They worked nights and weekends and drank a lot of Red Bull, and we got a site up in a week. Now, the site didn’t really do anything. It was kinda, it was, we were only able to deliver to the iBook store, and we were lucky because we were able to leverage and deliver our content to Apple there. But we really didn’t have—we were able to capture people’s information in a database, but everything was done by hand. In the 1700s, there’s was the mechanical Turk, mind you I’m married to a Turk, but the mechanical Turk was this box. The box could beat anybody in chess. The box toured the world, and people couldn’t believe it. And the purveyor of the mechanical Turk would say, 'There is a brilliant computer inside this box that can beat you in chess.' And it amazed Kings and Queens, and Ben Franklin was one of the people to debunk this, I think he was, unless I think he was the one who debunked Mesmer, if he didn’t debunk it, he would have. But basically, there was a midget inside it playing chess, a really good chess-playing midget as well. And for that week until we actually developed systems, we were “mechanical Turking” it. We were basically doing everything by hand, but I came to realize that doing it by hand produced a better quality product than some of our competitors’ systems, which are affectionately called the meat grinder. So it resulted in better looking conversion, and I realized we could charge an affordable amount of money for it and make something that would look good.

CDBaby worker in the 16,000 sq. ft. warehouse.

JMF: Are you making money, though? It’s $99 for a basic book, and you say on your website that you get a lot of people who ask you, ‘How can you do that for $99.’ And you have your other company, you have CDBaby, to support that. Is that always going to be the case?

BF: CDBaby isn’t subsidizing BookBaby. That’s just a division of it. As I say, we are lucky to leverage the accounting systems. Our accounting systems have paid out over $2 million to independent artists. We are able to leverage those same accounting systems in industry-leading delivery systems that we have for CDBaby for BookBaby. So we really didn’t have to reinvent the wheel there. We hope to really to do well with—$99 does not leave us with any margin after doing the manual conversion and the delivery, but a lot of people who become part of the BookBaby universe also buy cover design, which we also sell very affordably, or web hosting and soon we are going to offer premium conversions with proofing and all kinds of other stuff. Really, we want to ramp up and become for independent authors what CDBaby is for independent musicians.

JMF: Do you foresee that the model, the hand, that you are doing conversions by hand, will change, or are you pretty committed to doing it that way?

BF: No, our conversions are done by hand. As new tablets come out, there’s going to be more opportunities for advanced formatting with multimedia or fixed layout and those, we would probably have to charge a little bit more because they take many hours to do. But for the time being, this is how we are doing it.

JMF: There was an article, I think about two or three weeks ago, on the very last page of the New York Times magazine about endnotes, or footnotes, in documents, or novels, that that’s a popular thing, but when you convert it into an ebook, that changes the whole experience of reading the book.

BF: Absolutely.

JMF: Are you looking at that, too?

BF: We are (pauses). Notice I inflected a comma at the end of it. Uhm, ebooks are a different experience than p-books or print books. So they have their advantages, meaning I can just fly to Germany with an entire library in my jacket pocket, but they have their disadvantages. For example the old Kindles, the e-ink is nice to read under the light, but it can’t really do a lot. So with endnotes and footnotes, there are definitely tradeoffs. We’re not here to pioneer something that won’t be adopted on the major platforms. We’re here to, once it is implemented on the major platforms, to make it easy for the independent content creator to get their work onto all the platforms that are available to all the major retail stores without compromising their art or having to convince gatekeepers that they are indeed mainstream appropriate.

JMF: How are you marketing it now? You’ve been doing BookBaby a year. How has that changed, besides just get-it-up, get-it-going …

BF: Yeah. Well, we are still constantly developing to try and get better at things. I talked about fixed layout and cover design and all kinds of other things that we are doing. Uh, in terms of marketing, we’re doing more, we’re sending more people to trade shows. I just spoke on a panel at the Frankfurt Book Fair, and we’re going to other markets. We did the National Speakers Convention. We did BlogWorld. We’re doing a lot with the San FranciscoWriters Conference coming up. That’s a really good one…

JMF: That’s in February?

BF: Yes, and speaking at Tools of Change in New York, so they’ve got me flying around.

JMF: Do you think the old way of getting books into readers hands, and this is the way I’m approaching it because I’m trying to write some novels and get them out and get published. And I’m really going about it the very traditional way. I’m writing the book, completely to the end, querying an agent, then going from there to hoping that they will sell it to a traditional publisher, and then the traditional publisher getting it onto the shelves. Is that model just really going by the wayside?

BF: Absolutely. But it’s not dead yet. Right now, an author should take advantage of all the systems of distribution that are available to the author, but the author shouldn’t make themselves crazy trying to jump through hoops or do things that either would be soul-sucking or compromise their time or cost them lots of money. There are a lot of predatory companies out there that would charge thousands of dollars for marketing and will do not much more than send out a press release on your behalf. Or, they’ll say ‘We’ll get you into an independent bookstore,’ and they get one copy into some backshelf of a place in Poughkeepsie. BookBaby is going to be providing a print solution in a month. We’re gonna be doing—I’ve gone through over a hundred providers, and my criteria is if we offer print books, I want it to look like books you would see in a bookstore. I don’t want print-on-demand that screams print-on-demand, with glossy covers and bad paper quality. But if you can get distributed, if you can get the publicity machine of a major agent, who can push you to get signed by a publishing house, whose own publicity machine can turn your book release into an event, it can be a great thing for the author. But as bookstores are going away, as the publishing houses are consolidating, the mid-tail author is becoming more and more abandoned. It’s like the shrinking middle class. The mid-tier author is not getting the advances that they were. They’re not getting the publicity that they were; there’s not the outlets that there used to be; advances that are doled out are doled out over three years in quarterly installments, and it’s still not really—the pot at the end of the rainbow is a very small one nowadays, and it’s not for everybody. So, it’s a great thing to pursue, and if you can, and economics work out, you should absolutely do it. But if you can hold on to your digital rights, it’s a great thing to do because you can get 100 percent of what you earn after the retailer takes their cut, as opposed to getting 8 percent or 12 percent, or something like that. The amount that traditional publishers take for digital distribution is, in my mind, too much and unfair.

JMF: And how much is that typically?

BF: It really depends. It really depends. There are some that the author only gets 9 percent. It really depends from company to company. But even if the author typically gets a quarter, the author should be getting most of it. There’s no warehousing or distribution, there’s really nothing. It’s not rocket science. There’s nothing to it. The sort-of dirty little secret of publishing is that publishers don’t add a ton of value in terms of marketing your work to the readers. They market your work to book sellers. But so many famous authors still have to go to book conventions themselves. They still have to manage their social networking presence themselves, have a website and Twitter accounts and reach out to fans and have contests and do all this stuff that they do, but you’d have to that as an independent author anyway, so you might as well keep the money.

JMF: You would advise the author, even if they were going to go the traditional route, to keep their e-rights.

BF: If you can. That’s the thing. The traditional publishers are fighting tooth and nail to keep the e-rights. And in most cases, you’re not going to be able to keep them. But it doesn’t hurt you to release your work electronically first.

JMF: You don’t think so? Because there is a debate about that.

BF: There’s really not a debate.

JMF: Not?

BF: No. We have an author, Tom Watson, whose series of books, Stick Dog, had like five out the top ten most downloaded children’s books on the iPad. And he just, he’s in negotiations with a huge publisher now. And he may still be able to keep his backlist with us digitally. But even if not, he got discovered by releasing his stuff digitally. Look at the books …

JMF: Amanda Hocking.

BF: Amanda Hocking is an outlier.

JMF: Yeah, she is definitely.

BF: Amanda Hocking is held up as an exemplar of self-publishing, but the punchline is Amanda Hocking doesn’t even want to be Amanda Hocking any more. She’s signed to a traditional publisher because she didn’t want to spend all her time promoting her work. I like to hold up the examples of John Grisham who had A Time to Kill self-released, and he then he got a huge publishing deal out of it. Or Celestine Prophecy sold hundreds of thousands of copies self-released. Man, the Joy of Cooking, there are so many books that were self-released that then either the author or, in later printings, got traditional distribution even wider. So it doesn’t hurt you if you release your work now by e, either you can get it pulled down and then get traditional distribution later or still give up the e-rights to it later, if you want to. Or, it’s the calling card for you to get future works noticed, but you shouldn’t put your career on hold and spend tons of money trying to go traditional with a work that’s completed and drive yourself crazy if it’s not imminently happening.

JMF: Well, I would argue with you that there is a debate going on, especially among writers, about which is the right way to go …

BF: I’m sure there’s a debate, but I also think the correct answer is patently obvious, and there’s a wrong side of the debate.

JMF: Even the agent who had suggested you might be a good thing to look into, was like, ‘Still, if you e-publish or self-publish, traditional publishers are going to look at you differently.’

BF: Okay, that’s a different story.

JMF: You think?

BF: Now, will traditional publishers look at you different? Well, traditional publishers are going to tell you they’re going to look at you differently because you are out there eating their lunch. So, you know, I talk to people, to traditional publishers, many of whom I’ve interviewed on camera for the BookBaby blog, and they would, they’ll say, ‘Yeah, there’s a stigma to self-publishing.’ Well, of course, ‘cause they’re taking an unreasonable cut with unreasonable overhead, and they’re going out of business, so of course they’re going to say that. But if you’re self-released, and you’re one of the top sellers, or if you win awards, they’re gonna want to sign you so badly and so fast, they’re not going to say, ‘Oh, yeah, he’s just writing, a family memoirist.’ No, not at all.

JMF: What about agents? Do they feel the same way?

BF: Oh, agents are even trying to get into the game of doing distribution themselves. Or changing the model of how they charge for services. So everybody in traditional publishing is in the same boat together, and they’re trying to find dry land.

JMF: What about, do you still feel that self-publishing has that vanity stigma, the vanity press stigma?

BF: I think that the words self-publishing unfortunately have that vanity press stigma, but we’re leading, as part of the Baby brands, a DIY revolution. Self-releasing music had a vanity stigma when CDBaby started, and now we have 300,000 artists and 3.5 million tracks, and we paid out $200 million dollars, and we’ve got some top million-selling artists who are doing it, and meanwhile all the New York record labels are consolidating and going out of business. So, the stigma exists because it’s in the economic interest of people who would label it as a stigma. Also, gatekeepers don’t want to feel like they are falling away. Curators and bookstores don’t want to feel like they are falling away. And also, because we’re not gatekeepers, we do release a lot of vanity stuff and memoirists. But there’s this thing called the internet, which has a lot of content on it, and there’s good content, and there’s poopy content, and there’s normal content, and there’s weird content, and it’s not—there’s no magic Wizard of Oz that can give you a heart, courage and soul. An imprimatur, a diploma, a certificate and say, ‘Ah, you’re signed.’ Suppose somebody were to say, ‘You’re now in Borders bookstore.’ And you go, ‘Hooray!’ And then Borders goes out of business. I played in major rock bands. I got signed on major labels. Then the bands got dropped. So then it’s like, ‘Okay, great. I was on this major record label that was huge in 1987, and now they don’t exist anymore.’ You’ve got the heart, courage and brain, and just get your work out there. Find your niche on the internet. Socialize and network with them, and if someone can turn your release into a major event, and it’s worth their cut for doing so, then it's well worth hooking up with them. But if it’s not, you can do a lot yourself.

JMF: So am I actually sitting with the founder of CDBaby? Did you start this company, like in your garage, 13 years ago?

BF: I’m not the founder of CDBaby. CDBaby was founded by Dereck Sivers, who did found it in his garage about 13 years ago.

JMF: In Portland?

BF: In Portland, Oregon, yeah. I was with Disc Makers. At the time…

JMF: In New Jersey?

BF: Disc Makers is in New Jersey. At the time Derek started it, he was living in Woodstock, New York, where I was at the time also, in a bizarre thing. I had lived in Turkey. There was a military coup. We made a documentary film about the coup. We ran to upstate New York to edit the film, and we were there at the time he was starting this company. In a weird sort of confluence, our lives intertwined nine years later. I was working with Disc Makers, who sponsored a rock’n’roll music conference I used to run. I worked in the acquisition, and we bought it from Derek in 2008, and I’ve been running it since then.

JMF: And have you seen growth? I’m more interested in BookBaby, now that you’re a year into it. I’m assuming CDBaby is growing as well.

BF: Oh, massively. Absolutely. CDBaby is the only company that has not only thrived but grown in the transition from physical to digital.

JMF: And what do you foresee for BookBaby? How many titles have you got out now?

BF: BookBaby only has about 4,000 titles at present. But as I say, we’ve just started marketing it. We’ve just started adding new partners. We’re on a really good growth trajectory.

JMF: And do you think you’ll ever go public? You’re not a public company, right?

BF: No, we’re privately held. Haven’t been public in 13 years since it was founded, and I don’t see that in the near future.

JMF: So who are your chief competitors? You’ve got CreateSpace, Lulu. I’ve heard of something called Fast Pencil.

BF: There are a lot of other companies out there. Smashwords, there’s a bunch of companies out there. Nobody does what we do.

JMF: What’s the distinction, besides that you are manually …?

BF: That’s one distinction. The second distinction is that right now we give back 100 percent of profits. So we’re the only company to do that. We don’t take anything off the backend. Also, we have a full customer service team, people who actually answer the phones, which is an extreme rarity in this internet day and age. And we offer more and different services than any other company does, as I say, cover design and web hosting and all kinds of things. And we’re going to have a larger partner network. For example, CreateSpace will get you on Amazon, or Smashwords will get you on to, God, who are they doing? Like Sony and Barnes and Noble, but not Amazon. Oh, Apple, but not Amazon. We’re also expanding our distribution network to international partners and libraries and all kinds of things as well.

JMF: For the author who is sitting on the fence. Let’s say, for someone who’s finished a book, been trying to get a publisher interested, and is just, like, still not quite there, what would you say to convince them to do it?

BF: There’s nothing to convince them, you know. What? ‘Come on in. The water’s fine?’ You know, it’s like, there’s no downside to this thing. It’s literally, it’s under 100 bucks. As I say, there’s no contract, so you could put it up and take it down at any time. It can get you get discovered and help get sales and help build your fan base. It’s the author’s responsibility to build the platform. As I said, the author—publishers, if they do go traditional, publishers don’t market to fans. They market to book sellers. So, the author is going to have to bring the platform. And mind you, bringing the platform is the way you are going to get signed to traditional publishing in the first place. What they want is people who don’t need them. So if the author wants to build a platform, you can’t do it without a workout. You can’t build one with your work in your digital drawer. So open, open your drawers. Let down your drawers. (We laugh.) Really, it’s under 100 bucks, get your work onto all the devices that let people read it, and then do all the nuts and bolts of social marketing to find your genre and find your audience.

JMF: So you say your wife has done one. How has that gone for her? How have sales gone for her?

BF: Oh, it’s great. She’s only released in on the iBookstore for the iPad because her work is in Turkish. So she’s not able, we’re not able to deliver her to the other stores, including the largest one, which is Amazon, because they don’t take Turkish. But it’s been really good for her, and she’s actually, people in newspapers in Turkey, they’ll get it from there, and she’s been able to do interviews and stuff like that.

JMF: Do you think you’ll ever publish anything yourself?

BF: It’s been an interesting thing. I’m a composer, and I haven’t released my stuff on CDBaby yet, and a poet and not released my stuff on BookBaby yet. Short answer is yes. I’ve also been working 80-hour weeks, so it’s been hard for me to compile my works to do it. But I guarantee you within the next couple of months, I won’t just be the Hair Club president (laughter) …

JMF: I don’t know if you want to reveal any dirty little secrets, but which is the best distributor to work with?

BF: I love all our distributors.

JMF: You have a very big smile on your face.

BF: No, I mean, not distributor, you mean retailer …

JMF: Yeah, Amazon, Barnes and Noble …

BF: They’re all, they’re all different. Right now, the Kindle has the most adoption for books.

JMF: Adoption, you mean?

BF: Meaning that our authors sell more on the Kindle and more people own books and read books on the Kindle. But Apple is really, really working hard to ramp up their content, ramp up their iBookstore, and we have high hopes for it. Nook is pushing hard in the stores also. Sony is trying as well. And we’re going to be distributing to Kobo. We’re going to be distributing to, there’s a British company, we’re going to be distributing to libraries. I can’t announce anything yet. I just signed three more. Just like we don’t play favorites with authors, we want to get our authors’ works onto everywhere. Because, what my favorite is doesn’t matter. It’s the favorite of somebody who goes into the store and buys that tablet. Whoever it is, wherever it is, you can buy a Kobo at a RiteAid for a hundred bucks. I want that person to be able to find our authors’ books in the Kobo library. I want, so no matter what anybody has, I want them to get our authors’ works.

JMF: What kind of reader do you have? You probably have them all.

BF: I do. The one I use the most is the iPad but that is simply because I have to do so much with music for the CDBaby thing. But, on an airplane, I like the old school Kindle because it’s lightweight and it’s easy on the eyes, but I, yeah ... (claps hands) But I also have a lot of physical books. I like to draw in my books and mark books. I just like books. But I swing both ways. I don’t go, I’m not partial to one or the other.

JMF: Before I wrap it up, because I’m pretty much done, tell me about your other life as a musician. What kind of music were you into? What kind of bands did you play in?

BF: When I graduated school, college, with degrees in marketing and communications and then I went on job interviews for marketing and got called back on second interviews for marketing and kinda freaked out and joined rock bands  ...

JMF: (laughing) That’s a big switch.

BF: … which is kinda good because I could have had that in the middle of college and dropped out, but I actually preserved and got through college and then had my sort of Benjamin-Braddock-sort-of-pool-type thing. But then after playing in bands for a few years, I realized that a lot of the musicians had sold millions of copies and not recouped money from the major labels. They were holding back money for breakage or promotion or the video or for the recording, and the band was in so much debt that if their second album stiffed they were working in bars as bartenders or waiters. And I realized that, I was in Philadelphia, and I wanted to start a music conference, and I did, and that’s what sort of sent me down that road. But then when I met my wife, who’s an opera singer, we sold the conference, and I went to Julliard and Mannes, taking classes there on orchestration and then I went into composing classical music and got into all kinds of weird music. And I performed some of them, but I realized there wasn’t money in it, and I’ve always had a split personality. When I’m doing art full time, and after I sold my company for instance, I was basically retired for seven years …

JMF: Nice.

BF: … which was very delightful …

JMF: Betcha did a lot of art then.

BF: Well, I did. I did in a lot of different mediums, and we did the documentary film, and it was fun. But when I was doing art, I missed developing products for business, and I missed that. And now that I’m doing business this many hours, I miss the artistic side. The balance has been very difficult for me. There’s a lot of people in the business who are only interested in the business and you can tell by what they release that they don’t really “get” authors. And there are other people in the business who really want to be artists and can’t focus on the business. And for me, I actually like both.

JMF: And you probably have a lot of people who work here, the same thing.

BF: Most of the people that work at CDBaby are musicians or play in bands. Literally most. And some of them have been in wildly successful bands. In fact, one, our shipping supervisor in the warehouse, was the base guitarist for Everclear during that band’s heyday, like not just a hanger on, but a multi-platinum selling artist, who works here. And we have plenty of artists who were on Sub Pop and some large indie labels. A number of them have had successful careers that work here.

CDBaby, BookBaby and HostBaby office in Portland, OR.

JMF: And how many employees do you have?

BF: There are 105 in CDBaby. All the Baby brands together, 105.

JMF: Are they all here?

BF: All except for one, yeah.

JMF: Do you count yourself as that one? (laugh)

BF: Yeah, yeah. (Smiling) But, as I say, I commute back and forth.

JMF: Do you have a website that you share of your own work?

BF: brianfelsen.com

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Connect with Jennifer Fulford on Twitter, @jmfwriter.