For example, GalleyCat earlier this week asked for predictions from the always provocative Richard Nash, one of which I would like to point and laugh at:
3. Most predictions for 2020 based on models derived from controlling the supply side, that is, from the monopoly on the means of producing and distributing books, will be wrong. By which I mean, the supply chain book publishing and retail model is ending. The book retail chains will disappear, just like Circuit City, Sharper Image, Tower Records disappeared. And the corporate publishers will likely all but disappear just as Atari, Digital, Wang disappeared though the backlists will be spun off to private equity companies looking for semi-predictable IP-based cash flow, and a couple of front list publishing enterprises will likely be operating trying to emulate the Hollywood blockbuster model with just about enough success to be able to stay in business.Breathtaking in its audacity, isn't it? I particularly like how he throws in Circuit City, Sharper Image, Atari, and Wang as examples of failed businesses and allows the reader to assume that their failures mean that electronics retail, status-signifying tchotchkes, videogames, and computer manufacture are all industries that have already landed on the dungheap of history, quietly ignoring the existence of Dell and HP and Nintendo and a dozen others.
He may not be wrong about the fate of Big Trade Publishing, but his comparison is so radically flawed that it completely collapses under the weight of his argument. No, the supply chain model of retail has not yet collapsed -- we don't have nanotech compilers in all of our homes, or 3-D printers -- and the companies that manufacture things are doing about as well as anyone in the current economy. Publishers may well, as a class, be slower and dumber and less adaptable than Apple and Google and Target and Lenovo, but he hasn't actually given an argument along those lines.
I'll also note that the major New York houses are already "trying to emulate the Hollywood blockbuster model with just about enough success to be able to stay in business," and that's their problem. (And that they've been doing so for at least a decade now.) Consumer publishing needs to take a hard look at what it spends -- on advances, most of all, but other cost centers as well -- and reduce expenditure to a level so that most books are break-even or slightly profitable. It can be done, but it can't be done by paying advances that will never earn out, and you know will never earn out.
And, most importantly, for as long as copyright has real force, a publisher will always have a monopoly on the supply side of a particular book (I'll leave format questions -- audio, digital, etc. -- mostly out of the picture for clarity). The point, as always, is in making sure there's consumer demand for that particular book, thus making that monopoly a profitable one. The fact that there are other books, with their own demands or lack thereof, can affect the overall marketplace, but Book X must have a demand, or nothing else matters.
2 comments:
The list of companies that went out of business was not intended as an analogy—it was intended to point out that large businesses go out of business all the time. Size and longevity do not suffice. Your assumption about my intention treats the reader as being far more ignorant that I can imagine anyone treating a reader.
I address advances in my Publishing Perspective post.(There's only so much space appropriate to these articles.) It's a part of the problem, but largely without a solution, as "Winner's Curse" game theory points out.
If the corporate publishers were truly about generating Hollywood hits, they'd spin off their back list business and reduce their frontlist by about 90-95%.
My item was a prediction, therefore the fact that the supply chain works (sort of) at the moment doesn't falsify my assertion. The fact that inventory risk has been so dramatically shifted up the supply chain in the past decade is a very strong indicator.
Finally, while de jure copyright is unlikely to change much, de facto copyright will and has in music and video, and the only reason it hasn't in books is due to lack of demand. Moreover, books are substitutable as you half acknowledge, but the larger problem is that far more entities are now putting semi-substitutable books into the supply chain. The monopoly I was referring too wasn't really copyright but a monopoly on effective access to the supply chain.
Richard: So...let's just see if I have this right.
You meant that, in the past, random, separate businesses went under -- but never a whole category of business, because such an assumption would be "far more ignorant."
But now, a whole category of business will disappear, because you say so...and those other companies are just examples, with no actual pertinence to this case? I'm afraid I don't follow that line of argument at all.
On the other hand, I suspect we're very close in our thinking about advances.
But I find your comments on backlist to be baffling. Backlist has taken a big hit this past year -- I know that from industry news, as well as the company where I work -- but the reason it can take a big hit, and the reason why that's significant, is because it's the bedrock of publishing. Plenty of mergers over the past few decades have taken place primarily to obtain a strong backlist, which is the closest thing to a dependable income in this business. And the same has been true for other media companies -- movies, music -- over the same time period. So I really don't foresee anyone being so stupid as to gamble away a sure thing to focus on the riskiest side of the business. Even such a highly leveraged conglomeration as HMH -- run by money people from outside publishing -- hasn't shown any serious sign of trying to dump the lucrative backlist for quick cash.
I also don't believe the inventory risk really has been pushed up the supply chain in the past decade; since the dawn of returnable books, the publisher has always, in the end, been on the hook for every single copy sitting out at accounts. A little over a decade ago, there was a famous case on the science-fictional end of publishing: Newt Gingrich wrote a book for a smaller publisher, and that book was bought into the chains in herculean numbers, somewhat against the best judgment of that publisher...and then vast numbers of them came back four months later. That particular case didn't bankrupt that publisher, but cases like that had bankrupted publishers before and since. I really don't see that there's any difference now; if anything, the chains' very tight ordering now reduces the inventory risk for publishers, though it also reduces the upside possibilities.
There were, formerly, a fair number of independents with no real inventory control, who never bothered (or managed) to return unsold/unsalable books, and that may have tempered the returns storm for the kind of books that they were most likely to stock: midlist literary novels, the kind called luminous and gemlike. But those stores have been driven out of business themselves by this point.
And my point about copyright is that useful books -- the ones that will survive and thrive -- are not commodifed. Commodified books, the kind that are yet another undifferentiated legal thriller or Regency romance or piercing tale of growing up ethnic-American, will have a much tougher time of it, since readers will be choosing by price. But a book that provides something specific and meaningful will have a place.
Though, after typing all that, I'm coming to feel that we're furiously arguing straight past each other.
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