Home » Disruptive Innovation, Seth Godin » The real threat to (big time) book publishing

The real threat to (big time) book publishing

12 May 2012

From Seth Godin:

The people who run the big publishing houses feel threatened by Amazon and by ebooks and by pricing and by the death of chain bookstores, not to mention the Justice Department.

All of these are contributors to the future, but they cloud the core issue.

The narrative of their fear is that book publishing will be just like it is now, but with lower prices and just one or two stores.

. . . .

In the book case, the disruptive innovation isn’t a huge retailer or even lower prices, the disruptive innovation is the long tail of boundless inventory. Scarcity of selection combined with scarcity due to the marginal cost of each unit have disappeared.

Every single day, hundreds of millions of people read something that the big book publishers and the big magazine publishers didn’t publish. This is astonishing–just 30 years ago, if you read something that wasn’t a newspaper, it was probably published by someone like Time Inc or Simon & Schuster. It was a scarce object, one that you paid for and probably went to a special place to get.

. . . .

Today, of course, that special place is your laptop or your tablet. And you’re reading blogs (like this one) or tweets or updates or rants or pdfs or ebooks that were never vetted or curated or approved or processed by one of these legacy intermediaries.

The big guys turn up their noses at this content. They don’t give a Pulitzer for independent bloggers. The Times bestseller list tries hard not to count self-published ebooks. The discussions at industry cocktail parties have almost nothing to do with what masses of people (rebar!) are reading all day.

And now the market is moving up a notch, from blogs to ebooks. Suddenly, self-published ebooks are taking more and more time off the table, more and more money from the pockets of readers. And none of that is vetted or curated or approved or processed by one of these legacy intermediaries.

Link to the rest at The Domino Project

Disruptive Innovation, Seth Godin

14 Comments to “The real threat to (big time) book publishing”

  1. “The narrative of their fear is that book publishing will be just like it is now, but with lower prices and just one or two stores”

    I thought the fear was that they are proving themselves to be obsolete. What’s the problem if everything is just like it is now but lower prices? If the question is “Who needs us?” and the answer is “No one”, that’s scary. But if the question is “Who do we fire so the status quo can be maintained?” I don’t see what’s scary about that except to the people being fired.

    It sure shouldn’t be scary to writers who are saying “We don’t need them” or to readers who are saying “Who?”

  2. And just in time as more and more news sources are being bought up by one or two purchasers.

  3. Interesting point. There are now more venues for written material and the old masters don’t have control over them. However, I do have a counter point. There is a reason for the ‘legacy intermediaries’.

    I’ve been on fanfiction.net and fictionpress and other places where those intermediaries don’t exist. There’s nothing stopping anyone from posting any story they want. To be blunt, most of it is crap. Its immature and mispelled and other flaws yet it still goes out there. “And none of that is vetted or curated or approved or processed by one of these legacy intermediaries.”

    • I don’t use either of those sites, but Literotica(for erotic shorts/novella’s) has a rating system. If you only browse stuff a few months or older its all rated for you. I suspect most sites have similar top 100 lists, etc.

      There’s never been a need to wade through ‘crap’ published on Amazon if your willing to wait a while.

  4. I think those of us who hang around PG’s place are pretty familiar with the idea that “there sure is a lot of crap out there” can be assigned the meaning, “well, anyone can publish now.” Fan fiction has been around longer than you (or even I) have been alive, every word of it published by its authors, who have every right to publish it, just as I do not to read it. 99.999% of it has always been crap. The gatekeepers operate only where they can profit from operating. And they don’t set up business there to guard you or I from crap, no matter how often they say so.

    “Anyone” has been able to publish for a long, long time. Now it’s cheaper and faster, and that said, now you can sit in the comfort of your living room and read 10% of any book you’re considering purchasing. Yep, there’s still a lot of crap (with the understanding that we’re talking MY definition of crap and not necessarily yours or anyone else’s), and some writers are getting phat contracts for it, just like they always did, with checks signed by legacy intermediaries.

  5. I interpret “there sure is a lot of crap out there” to mean, “glad I got my deal with a trade publisher because this means it’s a good book! Sorry about the rest of yours.”

    I talked to a very able, multi-published writer today who insisted his agent is on his side, but of course he couldn’t negotiate the author out of a no-compete clause in a contract that basically prohibits said author from selling anything else he writes to any other house for the contract period. Say what? Out of one side of the face he says the agent works for HIM, but from the other side he confesses the agent isn’t working in his best interest, but that of his publisher. And he doesn’t even see the disconnect.

    Spare me. I’m working with my small press and going direct to reader, both, and sparing myself the disingenuity.

  6. When I look back on my earliest writing, I’m embarrased by it. I’m glad it never saw the light of day. At the time, however, I thought it was great. Someone (in this case it was my mom) told me I still had work to do.

  7. I think Godin underplays a key issue in publishing. The reason that the Big Six exist is that there are really significant barriers to becoming a big publisher. There are many, many traditional publishers, but there is no chance that one will grow big enough to challenge the Big Six. In publishing, these aren’t ‘natural’ barriers. In the automotive industry, global scale gives a manufacturer real advantages over smaller competitors. In publishing, the Big Six maintain their dominance through a complex set of business practices, partner relationships, and long-standing traditions shared industry-wide. In short, there is a set of cultural norms, enforced by contractual arrangements, that give the Big Six a privileged position in the industry. The internet would have undermined that privileged position eventually, but Amazon greatly accelerated the threat, even before the Kindle. E-books, by removing, quite literally all of the Big Six advantages AND disrupting the contractual arrangements used to enforce the cultural norms, will eventually end the hegemony of the Big Six. They know that.

    The Big Six management teams really only have one goal: delay the inevitable until it becomes somebody else’s problem. In that context, you can understand most of their actions. And it means that they are almost certainly not going to follow Godin’s advice.

    • Of course, the Big Six’s real problem is that each of those companies is the result of a long series of mergers and acquisitions, most of them performed with borrowed money. It’s not enough for them to make a profit; they have to make a sufficient profit to justify the inflated price they paid for the companies they took over. That means paying the interest on their debts, plus a high enough rate of return on capital to satisfy parent companies that are used to the returns from cable TV and other electronic media. And they are trying to do all this while paying the cost of huge and unwieldy management structures.

      We’ve seen the same thing happen time and again, when CEOs with eyes bigger than their stomachs cobble together a bunch of businesses just for the sake of bigness, and find them impossible to manage effectively. In the sixties it was LTV; in the eighties or thereabouts, Beatrice; in the nineties it was Time Warner AOL — just to name a few examples. In each case, the conglomerate self-destructed, costing the shareholders billions and heavily damaging the component businesses. It’s what Peter Lynch calls ‘diworsification’, and it never works. But it seems that every industry, and every generation of executives, has to learn this lesson the hard way.

      The Big Six should be in the business of selling off imprints, not buying them. The trouble is that they have been trying to corner a declining market, and nobody wants to buy those imprints for anything like what the Big Six paid for them. Well, those that live by the sword. . . .

  8. “The narrative of their fear is that book publishing will be just like it is now, but with lower prices and just one or two stores.”

    Ehhhh no …. I don’t believe that actually IS their fear.

    Their fear is that publishing will be turned on it’s head, with the vast majority of writers self publishing, few going anywhere near a publisher, and no major publishers remaining.

    And this is more or less what is going to happen.

    Q: As paper dwindles in the coming decades, can anyone really close their eyes and perceive of a market demand that would justify what one might call a Big Publisher ?

  9. I’m inclined to agree with Stephen Leather in his earlier interview posted to Passive Voice. Basically he says that agents will disappear as gatekeepers. That the market will act as the gatekeeper instead. Direct published authors that do well will be picked up by big publishing, and given contracts.

    Stephen Leather says: “But if you want predictions, sure. I think the days of chains of booksellers have gone for good. Their overheads are just too crippling. I think we will see a revitalisation of independently-run bookstores once they have worked out how to profit from eBooks.

    I think agents will be the hardest hit by the eBook revolution. There is almost no negotiation with Amazon over royalty rates so if you are dealing with them it’s pointless to pay an agent fifteen per cent. It used to be agents who acted as the gatekeepers – more trendy jargon – and they pretty much decided who got published and who didn’t but that has changed. Self-published authors who do well are quickly spotted. The market acts as the gatekeeper – if a hundred thousand people buy an eBook you don’t need an agent to give it a stamp of approval. If publishers realise that, they will start to do what they used to do and go looking for talent themselves. The biggest mistake publishers made was to do away with their slush piles and only take submissions from agents. That is already changing.

    Publishers will change, that’s a given. I think most will survive but they will have to change the way they work. Their function will be to spot talent and to market it. That might mean having imprints that are only for eBooks. There is so much rubbish being self-published that eventually the market will turn to the publishers for an assurance that they are buying a quality product. So I envisage a reader going to Hachette’s site, for instance, knowing that only quality books will be on sale there. Or a site that sells only crime novels. Or horror.”

    • “Publishers will change, that’s a given. I think most will survive but they will have to change the way they work. ”

      Yes, but the the way I see it is that they won’t really be Publishers, as such, anymore. They will have to morph into “Publishing Services” businesses that offer a menu of services to writers such as editing, digital services, marketing and design. Writers will chose which they want and pay mostly a flat fee. The “Publishing Services” business will then chose a small number to invest in and share royalties based on risk and investment.
      Another group of “Publishing Services” businesses will become talent ‘venture capitalists’. They will research and monitor the cloud of self published authors who may not be selling what they should be selling … and they will offer deals to them where they will invest in the author – they will promote and maybe edit them again and share the royalty.
      These are the two business models I see emerging in 15 years time.

  10. Why would Mr. Leather or anyone suppose they could go to ANY publisher’s website and find “only quality books” there? First of all, “quality” is a word that means different things to different people. It isn’t safe to suppose that everyone means what you mean when they say it.

    Second, large commercial publishers publish books that make money. Some of these are books you might personally consider as having “quality,” and yet others might be that to me or to someone else. Many, many of any large publisher’s most lucrative books occupy their spots in the catalogs because they make money despite the fact that hardly anyone would attach the word “quality” to them, including the people who buy them.

    Now, without looking, how many of the last 20 books you bought to read for enjoyment were published by one of Hachette Group’s publishers? How about Macmillan? Simon & Schuster? Penguin? I don’t know either, and I’m willing to bet Stephen Leather doesn’t.

    But I think any of our answers would be clearer when asked which authors’ books we buy. I worked in and managed bookstores for 13 years and no-one in my hearing ever asked “What do you have from Harper & Row?” Readers have never (in my experience) looked books up by publisher, and they’re not likely to start now.

    Anyhow, we were having a similar discussion on another thread here at PG’s place, if you’re interested: http://www.thepassivevoice.com/05/2012/houghton-mifflin-harcourt-enters-bankruptcy/#comments

    • “Readers have never (in my experience) looked books up by publisher, and they’re not likely to start now.”

      That says it all. They haven’t, the don’t and they never will.

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