Big disruption hit book publishing before AI showed up

From Mike Shatzkin:

Publishers Weekly recently hosted a stimulating and smart online session about AI and publishing, thanks to the organizing and moderating skills of Peter Brantley and Thad McIlroy. The day began with a presentation by former PRH CEO Markus Dohle and ended with one by thought leader Ethan Mollick of the Wharton School, which framed the day perfectly. Both of them were enthusiasts for AI. But they also presented what, to me, was the stark contrast on display for the whole day between people who think book publishing is largely the business it has always been and those who are seeing it isn’t and won’t ever be again.

Here’s the long story short. The task of establishing a new title in the marketplace has gotten progressively more difficult for more than two decades and will continue to. A business that used to be primarily focused on the current batch of titles is now increasingly attentive to the long tail backlist. This is structural, not cultural.

When I was a pup, books were mostly sold in bookstores and bookstores focused their stocking attention on what was new and likely to be hot. A plethora of book review media — led by the NY Times Book Review but complemented by reviews in newspapers and magazines and author appearances on radio and TV timed to a publication date, combined with robust and ubiquitous display of featured new books in thousands of bookstores across the country — enabled thousands of titles every year from publishers large and small to sell many thousands of copies, many doing well enough to “backlist” and become enduring sellers.

But, in those days, they didn’t all become enduring sellers that the publisher would keep available “forever”. Keeping books “in print” was not automatic, even though the penalty for not doing so was frequently losing the rights to that book to author reversion. In the 20th century, each “next printing” was a bit of a commitment, usually in the low thousands of copies. If the book was only selling dozens or hundreds a year, it made economic sense to kill it.

Two things changed that calculus. Ebooks don’t require inventory. And Ingram’s increasing competence with print-on-demand — tied, of course, to their wholesaling operation that reaches every bookstore and online seller in the world — meant there was a lower-margin but virtually investment-free alternative to ceasing publication of any title.

And, at the same time, the shape of the market was changing, and continues to. Most books consumers buy are still printed rather than electronic, but stores are not where most of them are purchased. Various online resources, starting with Amazon but also through an increasingly long tail of web sites sourcing primarily through Ingram (who will ship direct to the website’s customer, requiring no “handling” by the creator of the sale), now sell the vast majority of the print books (and, of course, ALL the ebooks.)

Although I get very little pushback from sage publishing veterans when I suggest that “trade publishing as we knew it is dead”, it isn’t at all clear that the surviving incumbents see it that way. (In fact, Dohle pretty much said these are the “best of times”.) They all know, of course, that their sales increasingly come from the thousands of titles they control from their years of publishing rather than the new titles issued this year or recently. But nobody has (yet) said publicly “publishing new titles is getting very hard” or “we’re going to publish a lot fewer new books.” (Of course, whatever the established publishers do, the world will publish many more new books; more in a month than we used to get in a year.)

But it does appear that cutbacks by the big publishers on new title publishing is the current reality. Agents are well aware that their business just gets harder and harder. Big publishers are increasingly encouraging longtime veterans of their companies to take retirement packages. In the 20th century, it was a perfectly reasonable ambition to start at an entry level position at a publisher and have it lead to a many decades-long career. Very few sentient young people would see that as a sensible plan or expectation today.

The math that explains this is compelling. In 1990, there were about 500,000 titles in print in the English language in the world, and not all of them were easily available. Today there are about 20 million titles in Ingram’s Lightning Print database and if you order one tonight, they’ll print it in the next day or two and send it to you. So the competitive set for each new title coming into the world has increased by FORTY times. And the publishers no longer have a moat around their new title launchpads. Bookstores can’t sell enough to make a book happen; the marketplace is online and incumbent publishers have a vastly diminished advantage in that world over many other players.

In fact, publishers increasingly depending on “Internet influencers” to push their books to their loyal followers are now seeing those very marketers turned into competitors by the start-up Bindery Books. So agents will now be considering Bindery as an alternative to PRH or HarperCollins.

And all of this has happened without any help from AI.

One thing AI threatens, of course, is a massive increase in the number of titles made available. One observation missing from the mostly-fabulous AI presentation from PW was the acknowledgment that a 40-fold increase in actively competitive titles has already taken place over the past two decades. There is very little doubt that a new surge of titles in the marketplace from AI will only compound the situation that has changed the landscape over the past two decades.

Link to the rest at Mike Shatzkin

When a publisher might not do as good a job as a self-publishing author

From Mike Shatzkin:

We’ve previously explored what I called “the end of the trade publishing concept”, which stems from the now wide-open opportunity to publish available to anybody with a computer and something to deliver as a book. It feels like we may have reached a new benchmark: admittedly a very fuzzy one. But it looks like it has become very difficult, bordering on impossible, for a commercial entity to make money consistently publishing new titles. Let’s summarize the facts that have changed on the ground that make that the case.

**Thirty years ago, each new book coming into the world in English was competing with 500,000 incumbents that were (at least theoretically) available for purchase. That was the total number of books “in print” in English in the world. Today that number, with a big boost from Ingram’s Lightning print-on-demand capability, has grown to more than nineteen million titles.

**Up until twenty years ago, bookstores sold the lion’s share of the books. Only serious publishers with sales forces, warehouses, inventory, and relationships with retailers could compete for sales. Now bookstores account for as little as 20 percent of the sales. Most sales are made through online promotion and availability that give incumbent publishers no particular edge. So increased title competition has come along with the vanishing of the unique publisher sales and distribution advantage.

**In the pre-Lightning era, publishers had to maintain inventory in a warehouse for any title expected to compete in the marketplace. That requirement cost publishers money, but also served to eliminate competition. No inventory holding is required today to have a title listed as available being able to ship within days, if not hours. That saves incumbent publishers some cash investment, but unleashes a slew of new competition.

**In those bookstore-dominant days, publishers could safely focus their marketing efforts on those titles just about to come out until a few months after publication day. In today’s world, titles can “pop” for myriad reasons that have nothing to do with when they were first issued. The death of an author, the surge in a book on the same subject, the sudden interest of a celebrity — all of these things can make a book suddenly competitive and promotable and no inventory has to be “in place” in stores to support it. Publishers have steadily increased the number of digital marketers on their staffs and now employ a variety of “listening” tools to detect what books on vast backlists should get attention, but the challenge of allocating scarce marketing resources across an increasing array of  apparent opportunities grows ever more difficult.

**Throughout the history of trade publishing, there were established venues in which to “work” the titles. You needed to get new titles promoted in the trade press and mentioned in as many of the hundreds (or thousands) of newspaper and magazine book reviews as possible. There were select television and radio shows that effectively promoted books. And if you wanted to keep a backlist title alive, the most important thing you needed to do was keep it stocked on bookstore shelves. Because there were important vehicles that were used repeatedly, established publishers developed longstanding relationships with established promotional outlets. Today, much of that established network has disappeared and a vast amount of the promotional opportunity for books, especially non-fiction, is through vehicles that arise as opportunities for the first time. An established publisher often has no more cred with them than the self-publishing author or fledgling publisher does.

**But perhaps the biggest change of all is that publishers aren’t “necessary” for an author to have a “published book” available for promotion or educational or any other use. With very little cash or know-how, anybody can publish a book these days. Any author who commands an audience through a website or other business network can make a book available without a publisher. So putting a book out through a publisher is now a choice, not the only way to accomplish the task.

And this takes us to the new decision-matrix for an author who is both not a “typical” author but also not a unique one: a business school professor who previously self-published books he wanted to have available for his students, but who now has a title of much broader interest.

The author in this case is Ed Rogoff, a business school dean and professor for many decades. A few years ago, Ed explored self-publishing to make his “Bankable Business Plans for Non-Profits” available for the classes he taught. He wasn’t particularly concerned with the revenue from the book, but he needed it to be available for students in classes he was teaching. A later variation on the Bankable Business Plan idea (the first of which had, indeed, been put out by an established publisher) was BBP for Entreprenurial Ventures. Having that book to show got Ed a new business school home, at the Wagner School at NYU, for that class.

The book leading to the class, rather than the other way around, was a sign of a world turned upside down by the capability to self-publish. And it shows why an academic might self-publish. You can do it fast and you can present your material in the ways best suited to sell a “course”, rather than to “sell books”.

Link to the rest at Mike Shatzkin