Tuesday, August 3, 2010

The Financial Future of the Publishing Industry?

Today, the Book Boost welcomes author Sam Hilliard who is here to discuss the financial future of the publishing industry.

Here's what he had to say...

For those pioneers who are breaking the publishing mold, the ecosystem of entertainment based print material is in serious, big time trouble. By and large, the primary collective vision the publishers share about their predicament of falling sales ostensibly is that . . . well, sales are falling. In a New York Times meets the Titanic kind of sinking.

Pair that with some of the huge advances publishers have paid out recently even as the bottom line continues to ebb. Recouping a 1.5 million advance to a celebrity whose second title sold 65,000 copies verges on mathematically improbable.

And who paid that celebrity 1.5 million for book number two? The same industry that thought a fictional memoir was a good idea to market as non-fiction. Though now known as the man who duped Oprah, James Frey’s actual origins were more auspicious. He tried for quite a while to sell his breakout work as pure fiction. But then some bright spark uttered something like, "Memoirs are easy sells in this market. Couldn't this all be true?"

My point is less about Frey’s duplicity or that celebrity who failed to catch lightning a second time around. That is a rite of passage for most literary mega-phenomena. No, my contention is that major publishers bet the farm on a formula that worked a lot better years ago--at the expense of finding and growing new authors. And they keep betting even though their success rate diminishes every year.

A million and half dollars could have brought fifteen mid-list or new writers to market and even paid them a modest advance. Odds are good that at least one of them might have minted at least copper, if not silver. Instead a lot of ducats were spent digging for gold and only netting a cupful of rusty tin. Multiply that case by twenty-five--a rough estimate of how many big bets the industry made in one recent year and that's almost four hundred voices idling on the sidelines. Even being extremely pessimistic, I find it hard to believe there were not at least eight to twelve home-runs in the slushpile.

So why do publishers reject the math?

For starters, it's easier. One project takes less focus and oversight than fifteen. Second, big bets like these worked in the past. So far, so good. But there's another motive: door number three, aka Hollywood math, and my own personal theory. That celebrity got the huge check because someone got off on the idea they could pay a writer that kind of money for a book that had at best a modest chance among the sharks. It really was never about profits, but about the perception that it might actually make money. Call it a below the belt decision.

The problem with resting decisions on operations that exist below the belt, is that well, the flow of blood can only last so long. Eventually the brain has got to drive the body, rather than the reverse arrangement. Getting there in one piece is just more important.

So where might publishing be headed? I have long pondered the economics of the adult fiction model and their prospects for survival. It's my contention that traditional adult fiction publishers are staring into an abyss.

My money is on the marriage of publishing on demand and an 800 pound gorilla poised to become the biggest publisher the world has ever seen, who can operate without filling the distribution channel with millions of books destined for the shredder before the author typed the last sentence.

They have no need for remainders, literary agents, advances, or book tours. They can take a chance on publishing a lot of titles a year because they do not need to pay to place them in superstores. They already have a line of customers that stretches across the Internet. In their possession is a mailing list that includes more than one out of every three current book buyers in the United States.

And as for their track record selling online, can this new kid in town be trusted to follow through?

I don’t think anyone has gotten fired for betting on Amazon.com to deliver the goods thus far.

*excerpt from a guest blog by Sam Hilliard, author of The Last Track, on Book Boost. To read more go to:  http://thebookboost.blogspot.com/2010/07/financial-future-of-publication-with.html


Wolf said...

I think it's obvious to many in the industry that many of the bigger publishers are following the same path the music industry took more than a decade ago. But there are many small publishers out there who haven't lost touch with the reality that they're only as good as the writing talent they recruit, and that providing those writers with good editing and marketing help can go a long way now that the costs of inventory are becoming obsolete.

Unknown said...

Every time a new digital pad or reader comes on the market, I wonder what the fate of the publishing business will be – even beyond traditional media. Does it make sense that we look at ways to publish our own content for these devices?