I was flattered to be asked to speak to the AAR last night as part of a very distinguished group. My fellow panelists were John Sargent, CEO of Macmillan; Morgan Entrekin, the CEO of Atlantic Monthly Press; the agent Larry Kirshbaum, who was CEO of TimeWarner’s book division (now Hachette Book Group); and Susan Katz, the CEO of Harper’s juvenile division. The topic was the “future of publishing.” We each got ten minutes to introduce our thoughts about “the future of publishing”. I went feeling the need to make three points:
1. The shift from horizontal to vertical is inexorable, unstoppable. People need to understand what that means and, as uncomfortable as it is for many leaders of today’s trade, they need to start adjusting their business to meet that shift. I wasn’t expecting any agreement, or even any recognition of this fact, from my fellow panelists. It’s still sort of my own private little point in trade publishing circles (but I’ll keep making it).
2. The impression I was getting from our BISG research for “Shifting Sales Channels” is that a) big publishers are feeling the pain more than smaller ones, b) people are seeing backlist erosion they hadn’t seen before (although that was contradicted at a lunch I had yesterday with a publisher who follows BookScan numbers closely and said backlist was holding pretty firm); and that the pain was much worse in Q408 than in Q109. Publishers are feeling excess pain at the moment, of course, because they’re taking returns from the Fall against smaller frontlist buys. But, in any case, books are down a lot less than a lot of other discretionary things.
Short conclusion: books may not be recession-proof, but they might be recession-resistant.
3. Trade Books live in an ecosystem. The publishers and agents in the room last night were mostly in the business of fiction and narrative non-fiction and juveniles. But if sales of travel books, craft books, and cookbooks go down, it hurts the stores. And if a store loses 10% or 15% of its business, it could close. Whatever publishers are seeing in growth of online sales, they should never forget that retailers give priceless exposure of their books, and only fullline bookstores give that exposure to just about all their books. The agents and writers and publishers can be just as smart as they’ve ever been, but if the bookstore shelf space shrinks, and it is doing that, the results will not be the same as they’ve always been.
All of my fellow panelists had useful contributions to make but I took most note of John Sargent’s points. He made it clear that big publishers are in troubled times. He pointed out that all big publishers work with borrowed money and want to be working with less of it. So they’ll be “de-leveraging.” That means smaller advances to authors, smaller printings, and tighter financial controls all around. He also reported that Macmillan had invested many more millions in ebook infrastructure last year than they had realized in ebook sales (in response to suggestions from some, including publisher-turned-agent Kirshbaum, that perhaps ebook royalties should rise.)
I made one point at the end that I was a bit surprised seemed new to just about everybody. Very few had taken on board that the difficulties in the trade book business are partly due to the Long Tail: the fact that Amazon’s retailing and Ingram’s Lightning Print (particularly) is making it easy for people to buy books that would have been dead a decade or two ago is just increasing the competition for every book that is newly published tomorrow. (And, of course, throw used books in there too, part of the Long Tail and largely enabled by Amazon.)
This is the same phenomenon that has made it harder for new bands to break out for years: a kid today can still “discover” the Beatles or Bob Dylan and have dozens of songs to listen to and learn without any regard to what is “new”, because the Beatles and Dylan are new to them! We haven’t (yet) had the situation where a multi-book novelist from the 1880s or the 1930s becomes a new addiction, but we’re bound to eventually. And in the meantime, all those Long Tail units are just making the slope to success a little steeper for every new book.
I also told the agents (and, because I did, I want to tell you) about a brand new business I’m involved in called Filedby which, I’m happy to say, is addressing the Long Tail question from another direction. Filedby is now live with a web page for 1.8 million authors — every single one with a live ISBN in the US or Canada. The pages, already mounted, are “claimable” by the authors, providing a big head start on a personalized web page that Filedby has provided largely through automation. We see an enormous opportunity in helping authors help themselves. There are a lot of them not getting much help from their publishers. Frankly, except for Morgan Entrekin — who explictly spoke about working the internet finding the audiences for books that would sell between 6,000 and 25,000 copies — nobody was offering much hope that the publishers would be doing more for the authors in the days to come. Everybody seems to be looking to authors to do more for themselves. I think my co-founder Peter Clifton and I picked a very good time to be starting this business.