Finally an article on publishing's sure-to-fail business model!
This from Forbes:
It’s not just that books are going to Kindles and iPads. It’s that books are going away, and the publishers have no one but themselves to blame.
The traditional New York publishing business model — publish a ton of books, fail to market most of them, and hope that somebody buys something — worked well when publishers had a hammerlock on the distribution and marketing of books. Publishers essentially faced no competition and enjoyed complete control of what books people could publish and sell.
[...]
Publishers can also blame Amazon for the collapse of their industry. When you went into a bookstore, you typically browsed and bought a handful of books, each from a different department. Amazon killed browsing. You go on, you find the book you wanted, you pay, and you leave. So instead of buying five books, you buy just one.
But the real reason why books are going to vanish is the remarkably un-business-like business model of the publishers. Think of General Motors — decades of inefficiency, but without the federal bailouts.
In no other industry do producers actually wait passively to see what products are suggested to them, instead of doing market research to see what people really want to buy. Yet publishers seldom generate book ideas; instead they wait for literary agents to submit proposals. Houses decide which book to publish based on little more than a gut feeling that says, “I think we can make money selling this!”
[...]
At BEA next week, the attendees will solemnly discuss the latest trends, discuss how to get 70-year-old authors to use Twitter, and generally party like it’s 1989. But for traditional publishing, the party’s over. They just don’t want to realize that it’s time to turn out the lights.
Follow this link to read Michael Levin's full piece.
It’s not just that books are going to Kindles and iPads. It’s that books are going away, and the publishers have no one but themselves to blame.
The traditional New York publishing business model — publish a ton of books, fail to market most of them, and hope that somebody buys something — worked well when publishers had a hammerlock on the distribution and marketing of books. Publishers essentially faced no competition and enjoyed complete control of what books people could publish and sell.
[...]
Publishers can also blame Amazon for the collapse of their industry. When you went into a bookstore, you typically browsed and bought a handful of books, each from a different department. Amazon killed browsing. You go on, you find the book you wanted, you pay, and you leave. So instead of buying five books, you buy just one.
But the real reason why books are going to vanish is the remarkably un-business-like business model of the publishers. Think of General Motors — decades of inefficiency, but without the federal bailouts.
In no other industry do producers actually wait passively to see what products are suggested to them, instead of doing market research to see what people really want to buy. Yet publishers seldom generate book ideas; instead they wait for literary agents to submit proposals. Houses decide which book to publish based on little more than a gut feeling that says, “I think we can make money selling this!”
[...]
At BEA next week, the attendees will solemnly discuss the latest trends, discuss how to get 70-year-old authors to use Twitter, and generally party like it’s 1989. But for traditional publishing, the party’s over. They just don’t want to realize that it’s time to turn out the lights.
Follow this link to read Michael Levin's full piece.
17 commentaires:
In the publisher's defense would we prefer the other model where they market their products to the "lowest common denominator"? I think you could call this the Britney Spears Phenomenon.
Music producers write songs, then go find someone to sing it capably through hours of remastering. I'm not sure I'd want publishing houses to do the same thing.
Not sure about the rest (I'm no economist) but about the 'passively...see[ing] what products are suggested to them' that's not actually the publishers fault because hey aren't the ultimate producers of books - the writers are. They do have to wait and see because bar being a self-publisher - a business model that has shown so much financial success - publishers are very well paid middle-men. Unless the author of this article intends publishers to write plot-templates for the authors to 'fill-in' with the actual long-hand prose (which I really hpe he isn't) then there is no way out of that pattern. While I agree that market research has its place I also contest the dea that anyone could ever use it to successfully locate what 'people want from a book' since if they are anything like me they want something that they could not imagine but that another author could - i.e. something original.
Moreover I don't know about anyone else but I certainly don't regard Amazon as the cause of a dearth in browsing - quite the opposite.
I'm not particularly impressed with his piece. It has a total lack of any hard numbers concerning sales (or trends in sales).
The publishing business model is flawed and has always been. Don't remember the exact figure, but only about one book out of ten used to make money. Some, bestsellers included, never truly generate any profits. A business model that calls for printing 100,000 copies to sell about 45,000 units (they need more copies in print to ensure distribution to a maximum number of stores), with guaranteed returns for all unsold copies, leaves you with 55,000 copies down the drain. Whatever profit you made with the 45,000 copies sold is offset by the loss of 55% of the print run...
That's what this article is about and I think that's why Pat put it up. You guys are missing the point...
Guy
@Guy
That's fair, but it definitely also talks about how there is something fundamentally flawed in the way publishing houses solicit intellectual property.
To your point, I think this is why it's so strange to me that some publishers still aren't bought in to the eBook movement. Unquestionably their profit margins are more secure without the overhead of 100,000 print runs.
Not entirely sure that Amazon prevents "browisng". Whenever i go onto amazon I'm bombarded with suggested books and whenever i buy something I get a "what people bought next" list too - that often leads to me buying additional books.
The only thing they really lack is the 3for2 offer (that bookstores have) but that usually winds me up as I usually feel like book 3 is something i don't really want anyhow.
This part of the article is just flat-out wrong: "Publishers can also blame Amazon for the collapse of their industry. When you went into a bookstore, you typically browsed and bought a handful of books, each from a different department. Amazon killed browsing. You go on, you find the book you wanted, you pay, and you leave. So instead of buying five books, you buy just one."
If anything, I buy MORE books now, rather than fewer books, thanks to the features on Amazon that display "Similar titles" or "Customers who bought this item also bought...". In that regard, Amazon seems to have done a good job of replicating the bookstore browsing experience. I've discovered so many books and authors I'd never even heard of before. Whenever I visit the site, I can't seem to resist buying more books than I'd originally planned to buy.
Comming from the music industry, this kind of article makes me smile. It reminds me of all the discussions about the majors stuck with their old models and those believing than do it yourself is an easy way to go.
For sure things are changing and publishers should come aboard and position themselves in the new ebook industry but one thing is clear:
Do-it-yourself is not a "one size fit all" solution"
Ebooks wont be the death of paper books
The Publishers must adapt to new market trands.
And bless those who can understand that in this kind of business, you do not always produce to sell. Having blockbusters, hits and NYT Bestsellers also allow the funding of more artistic works.
@ Justinn: I completely agree with your remarks regarding the Britney Spears Phenomenon.
I agree with you guys on buying MORE books because of Amazon. A) I never bought a book, from an author I havent read, from a bookstore (I'd get it from the library). Though, on Amazon I can get it for 40-50% off most times, so its worth it to buy. Also, Amazon ships for free if you by $25 worth of books. So I always buy a paperback (or 2) when buying a hardback, because I can usually get it to about $26-$29 for both and get the free shipping. ($4.99 for shipping, or Free if I buy a $7 book. Not too hard to figure out what I am going to do)
Have to disagree with your point on Amazon. While they may have something to do with the demise of the brick and mortar store, browsing isn't the reason. I "browse" on Amazon daily, as a matter of fact, they make it easier to browse by suggesting books that are similar to your browsing history and showing what your fellow browsers purchased. My town has one traditional bookstore left and I hate it. Let's call it Book-A-Million. They have discernable way of categorizing their books. The books that are correctly placed in the right department are not aphabetized, not remotely. They are tragically mis-organized. They also hire people that do not read books or know anything about books. Anyway Amazon makes finding, researching and buying books much easier than shopping in my bookstore. In my opinion, traditional bookstore's hiring practices and supervision have driven people to the arms of Amazon.
Books and the act of reading are not experiencing a crisis (sales are increasing all the time), however, fiction and literary studies may well be in a crisis, as the role of literature has diminished in the public debate.
At least this may be considered to be the situation in Finland and the other Nordic countries.
No offense, Anon #2, but that's just not true. The returns aren't some foreign thing; they're built into the model. First off, selling 45/100k printed copies would be anything but desirable. More importantly, though, say they got a 70% sell through and sold 70k. Yes, that means 30k got returned. But they're NOT losing money on those 30k, because they never went into this thinking that they would sell all 100k books.
As for the 1/10 statistic, I don't believe it's that low, but it is true that relatively few authors earn out there advance - but the publisher is making money long before the author does earn out the advance.
With regards to the "passively seeking" part, well, that's what you get when you're selling art as opposed to cars.
Folks,
It's now less than 1 book out of 10 that make a profit...
I say ride the wave. I realize we're a small sample of the reading population but the only thing to do is execute a better model; expose the good writers, get any medium of the reading experience to the reader, sustenance to the authors, and maintain your social viability.
- Madness
The whole "not making a profit" is a nebulous term at best. I thought it was industry standard to make sure something never makes a huge profit by boosting pay of those involved, using it on increased advertising etc.
I'm sure most books don't make a profit, what's interesting are those that lose a significant amount of money. I'm sure there are still a lot.
So, people are just going to stop reading? I just don't buy it.
There are problems in the publishing business model, chiefly that people are morons and determinted to get a discount on the books they buy, so desperate for their 50% or 60% off they've persuaded themselves it's their right to buy it at that rather than paying a sustainable price. Also, in the US particularly, returns can easily hit 45% of the print run, which is clearly madness. One thing that underpins the publishing model is that the big books subsidise the rest. Without Dan Brown, less than half the debuts published by the publisher wouldn't have got their chance. It IS a system with major flaws, but they're not easily fixable.
but at the same time, claiming that publishers haven't bought into ebooks is missing the point, they've not invested millions of dollars to be years ahead of the market because most don't have that much money to spare, so they're trying to move with the market not miles ahead of it. A vocal few who're the crest of the wave then claim publishers are years behind, but that's not actually as true as some say.
Lastly, book publishing is dead? Like CDs are dead? Or do CDs still outsell download sales? The bulk of the consumer market have ipods, yet not even the majority of sales are download sales. With luck, ebooks with actually help iron out some of the flaws in the market, but given CDs are still selling it's unlikely a model culturally significant mode, the book, will fare worse.
Any of that make sense? It's still early for me...
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