Don’t Pity the Publishers
It’s not easy being a book publisher. In most other media businesses, high demand gives you pricing power. You pay full-freight to see a movie on the opening weekend and top dollar for hot concert seats. But with books, the best properties are used by retailers as loss-leading door-busters. That trend only got worse this last weekend as Amazon, Wal-Mart and Target all joined into a price war on select blockbuster books that introduces $8.99 into the equation.
Disaster, right? Publishers certainly think so:
The combination of slow sales and squeezed margins is enough to make any publishing executive queasy. Perseus CEO David Steinberger explained it to the Wall Street Journal: “If you are taking margin out of the supply chain, it will eventually put pressure on everyone in that chain.” Publishers are afraid that if Wal-Mart, Amazon, and Target can make that $9 price stick, they’ll be forced to lower their wholesale prices. They don’t think the big writers will take less money up front. So they’re freaking out that the lower price point will come out of their profit margin. Publishers need that margin to pay off all the overpriced advances that lie like a dead hand on publishers’ profits.
But lower hardcover prices could finally give publishers some leverage to re-structure their business model. Rather than fight the increased sales–which are subsidized right now by the retailers–publishers should start chipping away at the super-sized advances they pay. I won’t bore you with my argument here but, if you’re interested, you can read the rest at The Big Money.
Source:
It’s the End of the Book World As We Know It: And Publishers Should Feel Fine
MARION MANEKER
The Big Money, October 2o, 2009
http://www.thebigmoney.com/features/kindle-chronicles/2009/10/20/it-s-end-book-world-we-know-it
October 20th, 2009 at 3:29 pm
Barry, as books follow music to digital, aren’t they slowly going to lose more talent to self-publishing? Not in the near term, but in 10-20 years?
If I could deal directly with Amazon as I can with Apple, I would self-publish for Kindle and print on demand for hard orders through my website.
Anyway, just a thought from when I spent 2 years working at an indie music label …
October 20th, 2009 at 3:29 pm
Subsidize publishers of books? Why next people will be calling for subsidies of newpapers and traditional news outlets…nah, probably not….
http://stevebuttry.wordpress.com/2009/10/19/american-media-need-innovation-not-subsidy/
American media need innovation, not subsidy
“Leonard Downie Jr., former executive editor of the Washington Post, and Michael Schudson, authors of the Columbia University report, described their work in the Post today as a “comprehensive report.” They recommend federal subsidies for news organizations and changes in federal law to allow more philanthropic support for journalism. More on those topics later.”
…Medicare for the New York Times…sure, why not…
October 20th, 2009 at 4:06 pm
Not a bad article. I have no pity for anyone, publisher or banker, who has not yet made significant efforts to move away from risk. Yes, even if that bank related risk is in markets with questionable regulation such as forex and, yes, even if said banks might have been given the green light by administative figures to use all means necessary loot at will.
My book related question pertains more to the future when perhaps the format of electronic readers and operating systems has undergone dozens of changes and has evolved over time. We all know that history is continually re-written by “victors”. What I want to know is, will the digital ways and means as we know them now finally succumb to entropy in a grand crash or will a more protracted slow and gradual loss of information lead to libraries with the morphology of Swiss cheese? If so, then what role will paper print copies of texts play in the future, say 100 years from now? Many of us already posses a lack of knowledge pertaining to history from relatively short whiles ago such as seems to be the case with the dark ages of Europe. The same seems to be true even in some cases the more recent history of nations such as Zimbabwe for example (where IMO propaganda and disinformation efforts appear to have ruled supreme for three or four decades). I feel that there is nothing quite like print books for preserving slices of history, even if they do tend to become a tad brittle and fall apart through the years. Reading about a topic as it was originally written 150 years or so ago from an original binding can be a very enlightening and transporting experience.
Either way, whoever said that about our attention spans being about as long as our, uh, well … they were right as far as I’m concerned.
October 20th, 2009 at 4:08 pm
What is the breakdown of who makes what in the publishing business?
Author __ %, Publisher __ % Distributor __ % and Retailer __ %
October 20th, 2009 at 5:35 pm
face it, they are screwed, buggy whip business, I’m a passionate reader, i easily purchase 100 books a year and have for decades, what do i do, i buy em used on amazon, so here you go for decades I spent a few thousand a year on reading material, now, five hundred……….where as I will be the last to get a kindle, young folks will not be like me, i have a library, book cases, glass enclosed cabinets and hundreds of volumes, now you can put it all on a kindle and put it in your pocket, yeah, since the actual cost of publishing will plummet because the hard cost of paper and shipping will plummet, the percieved value will bo down down down……………the dirty little secret of publishing………a book has to be at least 250 pages or people don’t feel it has any value, yeah, buyers buy based on the thickness of books, lol, and the beat goes on
October 20th, 2009 at 5:42 pm
thfiv,
it’s a numbers game, they expect 80% of books to lose money, 10% to break even, and 10% to be a big smash, and then make it to always in print list, meaning, something like tony robbins Unlimited Power, twenty years old, yet still sells 30-50K copies a year
a kiss breakdown
author 2 bucks
publisher, 2 bucks too mfg………1 buck overhead
sell to dist for 10
dist too retailer approximately 15
the thing is if they don’t sell the publisher gets them returned