Mark Terry

Wednesday, February 09, 2011

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.


Blogger Jon VanZile said...

I know yesterday I said I stopped prognosticating on the future of publishing, but just for today, I'll indulge ...

First off, I think it's beyond question that "traditional" publishing is dead, or at least close to it, but this doesn't mean "print" publishing is dead. That horse still has plenty of life in it, enough to keep kicking for years down the road. But by traditional publishing, I mean the old patterns of book acquisition, development, production and distribution. That business model is increasingly unsustainable. Borders is just one example of that, but there are plenty of others.

I also don't think the death of this business model spells the death of traditional publishers. I agree with Mike Shatzkin (who seems to make a lot of sense): the trick isn't whether the business model will change, it's how fast and whether or not corporate publishers will be able to stay ahead of the curve. My prediction is that some will and some won't ... my guess is we're headed for a period of rapid creative destruction in the industry as a whole. Some large companies will fail, other new companies will rise. Success will be based on the business model, just as it always has been.

I also think it remains to be seen where self-publishing will fit into this emerging world. My guess ... and this is purely my guess ... is that agents and large publishers will start picking off successful self-published authors for their lists. They already are doing this. You know how platform in nonfiction is everything? I can see a day when a previous sales history in fiction is pretty much expected, or at least a HUGE advantage. Of course, not every successful self-published writer will have the desire to make the jump. But my prediction is that plenty will.

I also think that publishers of the future will look more like successful websites of today. They won't produce book as much as they'll produce themed content—and that content will go deep. It will be interactive and specialized. It will essentially be a silo of specialization that commands a certain audience. The cost of printing physical books will drop dramatically thanks to increasingly sophisticated POD technology, and e-books will continue to grow until they reach stasis (for my two cents, we're not even close to that).

In this world of the future, distribution won't matter nearly as much—and this will be a jarring correction for today's big publishers, who've counted on their monopoly on distribution to remain afloat. Instead, what will matter is audience and a publisher's ability to successfully retain the loyalty of their audience.

I think there's a tremendous amount of opportunity for writers here. Let's face it: the publishing business model was sclerotic and very 20th century. When it breaks open, it will open space for innovation and creativity and all those wonderful things the free market encourages. There will be room for successful self-publishers to make a career, for new e-book publishers like Samhain to cultivate their audience, and even for smaller presses like Oceanview to survive in a low-cost, equal opportunity environment. Rather than see the death of traditional publishing as a bad thing, I'm actually excited about it ...

And finally, this link just now came across my Twitter feed:

5:49 AM  
Blogger Jim C. Hines said...

My agent weighed in on the Borders issue here: He's incredibly sharp about this stuff, almost obsessively so.

And as a single data point, my publisher doubled the advances on my next two books.

6:01 AM  
Blogger Mark Terry said...

I saw the article in today's USA Today, but only had a chance to skim it. What struck me during my skim, and it'll require a more detailed read to see if I'm right, was that someone in there took a traditional publishing contract after being so successful self-publishing. I would guess some will and some won't.

One of my thoughts is that the publishing industry as a whole is clearly going through a major change right now. Many of the large publishers APPEAR to be doing nothing, and I suspect in some cases that's true. But I also suspect that a lot of large publishers aren't doing nothing, but they're making plans and waiting to get a firmer sense of where things are going before they put them into place (maybe I'm being optimistic). Large corporations are rarely known for being nimble OR innovative, but they're often very good at taking an innovation or trend and then mass producing it on a large scale because they have the resources to do so. That often makes them seem like lumbering dinosaurs (which is often true). Sometimes this really works. Sometimes they're just too late in catching the wave and they'll just limp along playing catchup before going out of business or shifting gears.

I imagine I'm not the only person who noted AOL bought The Huffington Post and thought, "Yeah, I know AOL didn't go out of business, but where exactly have they been for the last decade?" And I wouldn't be surprised if a lot of people said, "AOL still exists?"

In that Google and Facebook currently hold almost exactly the same intellectual space that Yahoo and AOL did a decade ago, it's possible that publishing will shift like that, too, that they won't go away, but they'll be downsized and somewhat less relevant than Amazon and whatever service might come along.

6:02 AM  
Blogger Mark Terry said...

Jim--well, congratulations!

6:05 AM  
Anonymous Constant Writer said...

I really haven't caught on to the ebook thing. Sure, I don't have a Kindle or a Nook or whatever, but I don't really want one. I like dog-earing the pages and writing my name in the front cover. And the smell of paper is something you just can't replace with electronics. If they ever seriously quit publishing books in print, beware the bookworms.

8:39 PM  
Blogger OEBooks said...

Great analysis...
It's the one piece I scoffed at early on with traditional presses. Primarily investing in chasing headline stories, as opposed to building and redefining the 'actual' product...authors, books, and readers!!! But then what do I know? I'm just an independent pub/author who's sold (maybe) less than 500 copies of my work combined!

9:31 AM  
Anonymous buch veröffentlichen said...

Another informative blog… Thank you for sharing it… Best of luck for further endeavor too.

5:39 AM  
Blogger Unknown said...

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3:33 AM  

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