Traditional Book Publishing IS Dead
February 9, 2011
Actually, I have no arguments here. Okay, maybe I do. I spoke to one of my agents a couple weeks ago (yes, I have one for fiction and one for nonfiction, currently) and she noted that all of the publishers she's spoken to indicate that whatever they were giving for advances a year ago, they're doing at least half that now. She also dropped a line in the conversation that went something like, "At least publishers that have enough money to give advances at all."
So there's at least some anecdotal evidence that publishers are struggling. And if I were a publisher, small or large, I'd be very concerned with the rumors that Borders might declare bankruptcy, because, depending on how it's filed--restructuring versus liquidation--there's a very real possibility that if the Borders chain owes you money (which also means you owe the authors), you ain't getting that money. Which for publishers (small) that are operating on slim to none margins or (large) that have a lot of stock and credit offered to the bookstore chain, you're going to be hurting.
[For some interesting thoughts on the impact of a Borders bankruptcy, read this].
Which strikes me as being one of those Catch-22 situations: a publisher that doesn't publish books is... what, exactly? When companies get into financial problems and stop producing the product that is their reason for existence, sometimes they bounce back, sometimes they don't. But it does seem to me that readers will benefit simply because there are so many channels for their favorite authors to offer product--e-books and CreateSpace, et al.,--that doesn't require a publisher's involvement.
On a secondary note, although there are some persuasive arguments against this, if a publisher is offering both print books and e-books, and e-books, despite the lower price point, have lower overhead and production costs such as paper, ink, warehousing and shipping, and the publisher starts noticing that the print book sales figures are dropping (at a lower profit point anyway), they will respond by publishing fewer print books and/or raising the price point. So while e-books may remain consistent at $9.99 or lower (and trust me, most readers just aren't willing to cough up $25.95 for an e-book, although that's largely anecdotal), hardcovers and paperbacks might increase in price, which may have the effect of driving people to cheaper e-books. Which is fine ultimately for traditional publishers because they're making more money per unit off an e-book (once they cancel their contracts with warehouses, get out from under their UPS bills, and fire half their design and editorial staffs and hire more computer programmers).
As I mentioned, there are persuasive arguments against this, primarily that the profit on a hardcover is considerable (although publishers have a tendency to accept a 60-70% sell-through as a good/reasonable thing, which means their waste is 30-40%, which most businesses would, at the least, raise an eyebrow at) and the largest publishers, with their deep pockets, corporate backers and extensive distribution networks, can churn products better than indie authors and e-books can.
[And if you have a lot of time on your hands, Kristine Kathryn Rusch has about a million-part blog on the publishing industry and its changes and how it will affect writers that is excellent and highly recommended]
What say you?
And p.s. From the perspective of an author with a book coming out in June 2011, I'm a little concerned about the Borders bankruptcy and store closings, simply because last year's tour involved about 90% Borders stores, one or two Barnes & Noble stores, and a couple indies. It's not clear to me where I stand today what Borders stores will even be in existence in four months.