Thinking Forward: When Publishing Shifts Gears

In my research for Army Ant Publishing, I sometimes run into articles about other industries that challenge me to think about the future of the world of publishing.

Link: Off the Record by Robert Sandall, Prospect Magazine

20 years ago, the recording industry operated under a fairly simple model: recording artists would sign up for an album and enjoy all of the benefits of working with a major label, and they would forfeit almost all of their profits to increase their exposure. The artists would then ride the wave of their newfound popularity by touring and make back the money they’d lost by selling out to the label. The label got rich. The artist got rich (if they didn’t suck, of course). Everybody won.

But as technology shifted, things got a little more complicated. For one thing, the movement from analog cassettes and records to digital CDs wound up working against the recording industry since computer users found simple ways to copy and share music over the Internet. For another, the Internet changed the way that music marketing worked and made it easier for unknown acts to build up a fanbase by simply releasing their tracks for free. Listeners became less thrilled with the idea of buying an album just to get “that song I like on the radio” and became more eager to simply buy “that song” for 99 cents on iTunes. The music paradigm shifted drastically, despite the recording labels fighting it every step of the way.

And now, this article reports that the recording industry is desperately trying to force new acts to give up a cut of their touring revenues to offset lower CD sales. To make matters even more interesting, it brings up the case of a band who decided the labels were a complete waste of time and created its own instead so that the members of the band could market themselves instead of relying on a label to do it for them. And they’re succeeding.

Reading between the lines, the real shift has occurred in the product consumers want to buy. While CDs were once in demand, consumers prefer their music cheap or free now. They’d rather shell out bigger bucks to enjoy the experience of seeing an act than pay $15-20 for the privilege of owning a piece of plastic. They don’t want the music as much as they want the thrill of enjoying it live.

This shift may affect the publishing industry in the near future as well.

I’ve always been surprised that there’s a market for $14.99 paperback nonfiction books. I rarely buy them; I prefer to wait until they hit the bargain rack, or to wait until I can find a copy used. Presumably, consumers pay the premium price because they feel that the information in the book is worth a little extra. Often, it’s not, but we’ll get to that in a minute.

The publishing industry’s excuse has long been that “paper and printing are so expensive that these books have to cost $14.95 for anyone to make any money!” And that may be true from a traditional publishing standpoint; if a book with a small print run costs $3 to print and ship and the publisher’s only generating about $6 in revenue per copy, then sure, I can see it. But will that hold true for much longer as the printing and publishing world gets more technologically advanced?

Print-on-Demand technology may change everything. Consider this. There are already companies that have developed mini printing systems that can be placed in bookstores to print books on demand. All a customer has to do is approach the kiosk, select a book, and place an order. The kiosk can print and bind the book in about 15 minutes and have it ready for the customer. The only limit to which books the kiosk can print depends on which files it has available to print from. The book doesn’t have to be shelved, because it’s already been sold. There’s no real labor needed for these sales since the system is doing all the work. And, aside from a defective book here and there, there are no returns.

If this system catches on, it could eliminate the need for trade discounts. Publishers could simply set a royalty rate – say, 30% of cover price – and supply files to these systems. The publishers would make more because they wouldn’t be printing the books. A book sold for $9.99 would generate the same amount of revenue for the publisher. It would also be more economical for the retailer, since it would require less shelf space and improve direct sales of backlist books. The only thing this system would not work well for would be mass market titles selling tens of thousands (or even hundreds of thousands) of copies. It would also probably not work as well for prestige books, children’s books, or coffee table books.

But for fiction paperbacks, nonfiction paperbacks and reference books? The model makes a lot of sense! With all of the shelf space bookstores would be saving, they would have even more opportunities to branch out their services. Consider how different a bookstore would be if half of the customers were forced to browse while they waited for their books to print. Coffee sales would increase, impulse sales would increase, and convenience item sales would increase. The entire retail model would shift dramatically! And the $14.99 paperback would be dead.

There is one place, however, where the $14.99 book could still thrive, and that’s through direct sales from an author.

Consumers relish the opportunity to meet their favorite authors, and they love buying personalized, autographed copies of their books. Price is not an object. If authors going on book tours used offset printing or POD techniques to create special editions of their books designed for fans, they could conceivably charge more for the same book that customers could walk over to the shelves and buy. The reason this is not done now is because authors are sent on book tours by publishers who are hoping to spur the sales of already-published titles. But again… things are shifting. Authors need publishers a lot less now than they used to. Under this new system of printing, an author could be his or her own publisher and no one would notice. And no one would care.

The publishing industry is going to get a big shakeup in the next 20 years as digital distribution becomes more common and traditional printing and publishing practices are out-evolved. If you’re going into publishing now, let me encourage you to think forward… you’ll be glad you did down the road.

Writing Scraps

by Sean J. Jordan