[X-posted at Huffpo & Book Oven]
Question: What would happen if, tomorrow, every publisher, and every book store, went out of business? What would you do?
The Big Stores
About fifteen years ago I walked into my first of the new breed of big book stores, Chapters in Toronto. I thought to myself: how can the book business support such a huge store? How can book selling pay for all this real estate? How can there be so many books?
At first I was encouraged by these stores. The choice of titles seemed endless. They were comfortable, well-designed. There was attention to detail. The coffee-shops were a nice touch, especially in the old days when you could get a stack of books from the shelves, get a coffee, and flip through books to your heart’s content. If these book stores could be profitable, I thought, maybe there was hope for humanity after all.
Soon these big book stores were everywhere: Barnes & Noble and Borders in the US, Chapters and Indigo in Canada (now merged, but with separate branding to create the fiction of competition), Waterstones in the UK, and others elsewhere. They invested massive amounts in real estate, getting huge commercial spaces in prime locations in major cities, and bigger spaces in the suburbs. They stocked their stores with a dizzying array of books.
Boon or Bust?
But things started to go a little sour early on. The first indication that the new book behemoths might be bad for the long-term health of the book ecosystem came quickly, when the little guys started going out of business. Economies of scale and and pricing clout meant that the big stores could charge less than their smaller competitors; and because of their size, their selection was always bigger. Following their in-store caffeine partners, Starbucks, they liked to choose their locations near existing successful independents. The little guys couldn’t compete, and went out of business, or got bought up, and absorbed into the book selling borg.
So now, there are precious few independent books stores left even in big cities.
The indie stores weren’t the only ones complaining. Because of the volume that goes through these stores, they could squeeze the publishers, on cost of books and return policies. They could charge for prime shelf-space. Small publishers found it harder to get the attention of the readers. But even the big publishers complained about the policies of these stores – and a little later, the other behemoth on the scene, Amazon.
Then there’s that odd feeling of being in a book store staffed by people who don’t know much about books. Any inquiry about a more obscure title more often than not ended up in front of a terminal. It seemed as if book stores, if their hiring policies were any indication, no longer cared much about books.
More: as time went on, it turned out that book sales weren’t really the most profitable kind of business these stores could do. Solution: reduce the shelf-space for books, increase the shelf-space for candles and trinkets. In Canada Chapters/Indigo has reduced book shelf-space from 75% to 60% (with Canadian fiction losing, and publishers cutting their lists in consequence). If the trend continues, books will be the minority in bookstores, and we might consider renaming them smelly candle stores that carry books.
The book business has stopped caring much about books.
Step One: Make Profit
These big stores are public companies, and big businesses. Like all businesses listed on stock exchanges, the people running them (boards of directors, and executives), have one central responsibility: to increase shareholder value.
The problem is that “shareholder value” has been defined almost exclusively as: “increased profits.” The owners of shares of Borders or any other large company don’t give a shit about books. They care about increased profits and increased share prices. The same is true in all businesses listed on stock exchanges. Mutual fund managers and institutional investors don’t buy stocks because of what a company does; they buy stock in companies whose stock prices will rise. And stock prices rise when profits go up.
But extracting profit is not necessarily related to long-term creation of value. In the book business (selling and publishing) what we’ve witnessed in the last couple of decades might be considered a stripping of true value, in order to deliver shareholder profit.
The “fault” does not lie with the big companies. They’re driven by a particular motive – profit. It’s built into the DNA of public companies, and the way stock exchanges work. There’s no use blaming them, might as well blame beavers for chewing through trees. But we should all remember that these companies are not driven by “value,” if you define value as healthy long-term prospects for readers and writers.
The state of the book publishing business is dire. Publishers are cutting back staff, editors are getting fired, or leaving. Amazon is putting the squeeze on everyone, and bookstores across the land are having a hard time, with major closures expected.
The Future?
So the rest of us, readers and writers and lovers of books, entrepreneurs and technologists, those of us really interested in the voracious appetite of the powerful and relatively affluent group, are going to have to come up with new and different ways to get books written, published and in the hands of readers.
Imagine: what would happen if every publisher in the world went out of business tomorrow? If every book store closed it’s doors?
Here’s what I think: I think we would see a flourishing of innovation and the kind of excitement the book business has not seen since the printing press was invented. These companies (sellers and publishers) aren’t all going to close their doors, but a good number might.
Lamentable? Maybe. Or maybe this is a fabulous opportunity for something new.
I’m optimistic. New technologies are coming along that change the economics of books: ebooks, ipods, print-on-demand, the web, and more to come yet. The readers are there, maybe fewer of them, but no less passionate. The writers are there. And let’s face it, if the doom and gloom in the business is right, whatever model these companies were using hasn’t worked all that well.
So it’s up to us — all of us who care about books — to figure out what the book business is going to look in the next decade or so.
Exciting times.
Disaster. Yet at the same time I wonder if we wouldn’t revert to the oral tradition. Reading has become solitary (save for book cubs) but story telling is always a joint affair.
Kathleen Molloy, author – Dining with Death
Hugh understands both the challenges and the opportunities facing the publishing industry today.
As an author and publisher, I’m also very aware of the problems facing the publishing industry. Publishing costs keep rising and margins keep getting tighter with the end result that far too many books don’t make money for the publisher or the author.
Many were hopeful that digital publishing would help resolve the problem. At the very least, digital publishing should significantly reduce costs related to printing, shipping, and warehousing. And, it seems that digital publishing should open up significant new distribution channels.
But digital publishing has yet to take off.
One problem is that digital books are much less visible to potential buyers. There is no compelling digital equivalent to browsing a big bookstore and leafing through potentially interesting titles. To make up for this lack of visibility, digital publishers have to spend significant sums on marketing costs to generate sales.
Another, perhaps more serious problem with digital publishing is that only a modest percentage of readers want to read a book digitally. Most readers prefer the convenience and familiarity of paper books. If you give those readers a choice between a digital book and a paper book, they’ll choose the paper book almost every time.
So, where do we go from here?
I can’t believe that ink on paper is the ultimate publishing solution.
I believe that in the future, we’ll see digital publications that fully utilize the power of computers and the Internet to provide a reading experience that combines the best of books, movies, and the Web.
We’ve been working towards that multimedia digital publishing future for over a decade. If you want to experience our vision of the future of digital publishing, try the free samples from http://www.mediatechnicscorp.com or http://www.sixstarsinthewindow.com.
Hi Dan, thanks for stopping by, will check out your URLs. In the mean time, here’s more or less what I think will happen with digital books:
http://blog.bookoven.com/2008/12/24/ipodstanza-a-christmas-tale/
[…] his blog, Hugh Mcguire asks “What if the Book Business collapses?†It would be a disaster for the armies of Canadian publicists. Mayhem for the distributors, […]
You do realize that when Paragraphe Books (that seemed
to be Mansfield Book Mart reborn, it was the same location
and I don’t recall a break between the two, but never heard
the details of how one morphed into the other) first added
a cafe in the corner, it was to get around the laws about
opening hours. Circa 1983 or exactly when it happened,
pretty much everything closed down on Sundays, including
book stores. So Paragraphe (and I think another book
store or two) realized if they had a cafe, they could
be open on Sundays. That eventually caused the law
to change so bookstores could be open longer, and
eventually the store opening laws were completely
rewritten.
But, your focus seemed to be about the bookstores, when
I’m not so sure they are the problem, but the result.
Fifty plus years ago, paperbacks were the big thing, specifically
pocket size paperbacks. Suddenly, books became cheap, and portable.
The publishers of paperbacks were generally newcomers to the business,
created to publish paperbacks. If they published hardcovers, it
was to deal with places like libraries that wanted hardcovers, and
more often, they’d just work a deal so Publisher A would publish
a book in hardcover, while Publisher B would get the paperback rights.
You could get everything in paperback, fiction and non-fiction and
it was cheap. Things weren’t selected because there’d be a large market
for that title, they published things because it was cheap enough
to do it and the expectation that the low price would bring
the readers. Books about model rocketry, quicky biographies,
cookbooks, classics, howto books, things that had immediacy
but were too large for the newspapers like “The Pentagon Papers”
and Che Guevara’s diary. All portable, all cheap, and put these
titles and concepts into popular culture because they were cheap and
portable. The pocket size paperbacks represented a wide diversity of
books.
Then bookstores started up specifically to sell paperback books,
instead of the racks at train stations and drugstores that had
been their previous domain. Places like “City Lights” in San
Francisco and Cody’s in Berkeley, and elsewhere with time. Some
of them were able to get all the paperbacks in print, and they’d
be kept, because books were seen not as something to last. I think
“Argo” locally was part of that wave, though maybe not as early.
But as with many other things, that success changed the industry.
Most of those paperback book publishers were bought up by hardcover
publishers, and then the resulting companies were bought up by
non-publishers. That’s when books started to become a commodity,
something where profit became primary. The US law that made it
a liability to keep old stock around, now in place at least
20 years, likely changed things too.
Before small computers, the hobby electronic books were reasonably
priced, albeit a larger format than pocket size. Yet when small
computers took off, the computer books ended up being treated like
text books, expensive and large. In many cases, the large form
wasn’t needed, but if they didn’t have those huge books, then
how could they justify the high prices? Thirty years later, computers
are more common than ever, yet very few books about computers sell
for as low as ten dollars.
Very few books are now published in pocket size, virtually all of it
is fiction. There may be good reasons for that, but it may simply
be the profit motive of the current book companies, selling books
as objects rather than the information they contain. Trade paperbacks
become status, and you can charge more for that status even if someone
isn’t going to read the book more than once. Gone are the days when
books were printed cheaply and sold over the course of a few years,
remaining until they actually were all sold off, the profit coming
from a small percentage of the price over many units. Instead, charge
a high price, get the profit, and then dump the book as the return
falls off, because it matters more to make money off the books than
to let people read the ideas of Victor Papanek or Ivan Illich.
The changes were made at the publishing companies, the glossy bookstores
followed. If the diversity of the old days is gone, then there’s little
reason for multiple bookstores, since that small bookstore doesn’t have
a bigger pool of books to select from than the Big Chain. You want to
push the latest best seller because the publishing companies want
the print run sold out, so they can print up some other book to fill
the warehouses and the shelves. You want to sell books that are like
what you sold people last month, so they’ll come back and buy basically
the same book over and over, it’s easier than trying to convince people
to read something different. Get some hype going, people rush out and
buy the book, and then come back next month to follow the next trend.
Sell people books that are about lifestyle, books with lots of pictures
that you can sell at a higher price, and some people will buy to decorate
their homes. They aren’t buying those books for the knowledge they
impart, but for the status they are perceived to give (and then, it’s
so much easier to leap to selling yoga gear and such in the bookstores,
since the people are coming in to buy that sort of thing in the first
place).
Thirty years ago, I could get an introductory book on just about any
subject for a couple of dollars, and find it at the local bookstore.
I could find “Deschooling Society” six years after it was published,
and find it at the shelf of the local bookstore. Books stayed in print
and they stayed on the shelves.
Now, books are not a cheap introduction to a subject. If I start
reading a science fiction book, I better be careful to buy the full
series, because there’s no guarantee that they’ll all be there when
I get to reading them otherwise. Nevermind that most science fiction
is no longer a standalone book, but a series, again it being easier
to sell the same book a few times to the same person than to introduce
something new and try to convince them to buy it. It doesn’t matter
that the really large book stores have a limited selection of books,
because the diversity isn’t there to begin with, and certainly not
the great prices.
Too many books get published that have a limited appeal, so they get
published as hardcover. I found a book about Pacifica Radio some years
back at Chapters. It was in the clearance bin at half price. But the
cover price was about $75, so at half price it was still not appealing.
Who even knows how that book landed at a book store in Montreal. I
waited, and kept finding it in the discard bin, until finally the
reduction brought it to ten dollars or so, where it was reasonably
priced. I’ve seen other examples in those same clearance bins, books
priced so outrageously that few will buy them, yet their life is
measured in a very short period of time, and then if you’re lucky
you find them in a clearance bin at a low enough price to justify
buying them. The old model would have had the book in pocket size
paperback, luring the readers with the low price, and the publishing
companies would have patience on the title, valuing what it represented
as information so keep it around and let the profit trickle in slowly.
You can’t do that if you’re buying the next best seller for a massive
advance, you need the profit to come in fast.
The thing is, this change is not a result of “the internet”. The
consolidation of book publishers took place decades ago, and they
were bought by non-publishing companies almost as long ago. The
pocket books disappeared at some point that wasn’t recent, it just
happened slow enough that only recently did I realize it had happened.
If I go into a bookstore and then walk away without buying anything,
it’s not just the selection, it’s the pricing. There’s not a lot
that excites me enough to want to spend the money. Forty years ago,
I’d spend my fifty cents a week allowance on “How and Why Wonder Books”
and always came away satisfied. I spend 14.00 on a novel now, and it
leaves little lasting impression, and I often will wonder why I
bothered.
The big chain book stores have just followed the non-publishing companies
into the book industry, where profit comes first.
Michael
I appreciated your post. The issues you raise are real and are truly a big part of what many of us in the publishing business are facing.
I share your optimism.
Thanks for sharing
http://www.navpress.com
http://www.michaeldmiller.wordpress.com
Being aware of the problems facing the publishing industry is a good start. The next step is to think about how those problems might be resolved. I have some definite thoughts about what needs to be done to fix the publishing industry so it better serves the needs of readers, authors, and publishers, but I’d be very interested in hearing what you folks think.
Does anybody care to share their vision of what the publishing industry might be like–or should be like–in 10 or 20 years?
Hugh – you have that little something up your sleeve, and I’m hoping this post is your preamble unveiling bookoven!
Even if it’s not, and we have to wait on the big reveal, I am in complete accord with your thoughts here. I know lots of authors, book industry peeps, and even some booksellers who are ready to do things differently. radically differently. No doubt 2009 will ring in great and positive changes for book lovers everywhere.
Cheers!
~ Kat
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“how can the book business support such a huge store? How can book selling pay for all this real estate? How can there be so many books?â€
Finally! Someone has made astute observations … and then stepped outside the box to examine them.
Firstly – once the novelty of the large number of books wore off the book buying public realized that moneyed interests are seldom interested in things other than money. The book business’s real clientele, the ones who sustain and promote a book store and assure its longevity, is not long fooled by fluff. They know there are real books out there – and they want them! Book lovers will willingly, and have the wherewithal to, support a store that delivers the goods.
“The coffee-shops were a nice touch, especially in the old days when you could get a stack of books from the shelves, get a coffee, and flip through books to your heart’s content.â€
And yes, other amenities are nice – but not at the expense of the books we seek.
“The first indication that the new book behemoths might be bad for the long-term health of the book ecosystem came quickly, when the little guys started going out of business.â€
Change is a constant in business. One of the necessities is to innovate and improve – businesses that do can generally adapt to meet new situations. Sitting still (becoming fat and lazy) is not advisable but building a business that depended upon most of your income coming from best sellers was not wise.
“Because of the volume that goes through these stores, they could squeeze the publishers, on cost of books and return policies. They could charge for prime shelf-space. Small publishers found it harder to get the attention of the readers.â€
Another reason moneyed interests are deadly to the book business.
“there’s that odd feeling of being in a book store staffed by people who don’t know much about books.
….. as if book stores, if their hiring policies were any indication, no longer cared much about books.â€
People who are just looking for a job should never be hired by a bookstore. Most of them don’t have the stamina, the enthusiasm and the inquisitiveness a bookstore requires of an individual. It is a hunger many book lovers satisfy within themselves in a few months but most of the time they are there they are invaluable.
“as time went on, it turned out that book sales weren’t really the most profitable kind of business these stores could do. Solution: reduce the shelf-space for books, increase the shelf-space for candles and trinkets. In Canada Chapters/Indigo has reduced book shelf-space from 75% to 60% (with Canadian fiction losing, and publishers cutting their lists in consequence).â€
Moneyed people go into the business because it is a “medium markup business†and the dollar signs dazzle them but they eventually realize the percentage of population that actually read is low so they hope the other bells and whistles will attract more people – unfortunately readers like being around readers so that won’t necessarily work for them, and it may work against them.
“But extracting profit is not necessarily related to long-term creation of value. In the book business (selling and publishing) what we’ve witnessed in the last couple of decades might be considered a stripping of true value, in order to deliver shareholder profit.â€
True value – hmmm …. Moneyed people don’t seem to understand the concept. NOW … is more their kind of word.
“The state of the book publishing business is dire. Publishers are cutting back staff, editors are getting fired, or leaving. Amazon is putting the squeeze on everyone, and bookstores across the land are having a hard time, with major closures expected.â€
It is another case of “… the chicken or the egg?†Gluttony, in this case a unquenchable hunger for a piece of everything with almost no consideration of what the cost may be, is a huge factor motivating internet sales in many venues. Please buy locally first – your community is important!
“I think we would see a flourishing of innovation and the kind of excitement the book business has not seen since the printing press was invented. These companies (sellers and publishers) aren’t all going to close their doors, but a good number might.â€
Your shocking (to some) conclusion is very valid. The freshness after a storm is so invigorating – if it hasn’t destroyed us. The world will survive and prosper. Thanks for your fresh viewpoint – we needed it.
“So it’s up to us — all of us who care about books — to figure out what the book business is going to look in the next decade or so.
Exciting times.â€