Home » Big Publishing, Mike Shatzkin » Imprint consolidation at big houses is a sign of changed times

Imprint consolidation at big houses is a sign of changed times

26 October 2018

From veteran publishing consultant, Mike Shatzkin:

I had reason to learn recently that Ingram has 16 million individual titles loaded in their Lightning Source database ready to be delivered as a bound book to you within 24 hours, if not sooner. So every book coming into the world today is competing against 16 million other books that you might buy.

That number — the number of individual book titles available to any consumer, bookstore, or library — has exploded in my working lifetime. As recently as 25 years ago, the potential titles  available — in print and on a warehouse shelf ready to be ordered, or even to be backordered until a next printing — was numbered in the hundreds of thousands. So it has grown by 20 or 30 or 40 times. That’s between 2000 percent and 4000 percent in the last quarter century.

This has, like the Internet or CO2 in the atmosphere, changed everything. And it seems like the organizing structure of the major publishers is also changing in response.

On Monday morning, Simon & Schuster became the second major house in a week to announce that it was consolidating two imprints, effectively reducing by one the number of discrete publishing units within the conglomerate empowered to decide what to publish and how to promote it. They folded the Touchstone imprint into Atria and Gallery; last week Penguin Random House collapsed their Crown imprint into Random House (sometimes referred to as “Little Random”.)

The title explosion is part of a sea change in the world of book publishing that has taken place over the past quarter century. At the same time, sales have shifted in two dimensions: a big chunk of the books now bought and consumed are digital, not printed, and more than half the books consumers buy are not bought in brick-and-mortar stores. And the share for physical stores continues to shrink. Indeed, these trends are linked. The fact that books can now be delivered without inventory, without a sales force, and without a warehouse has made it possible for just about anybody to publish a book.

. . . .

Commercial publishers bring books to market to make money for themselves and their authors. But today, book publishing is a idea-dissemination or brand-extension tool for many originators, and making money on the publication is a secondary consideration.

That means that commercial viability is no longer an effective check on the number of titles. One wealthy and digitally-smart author we know is reluctant to engage with a publisher because he wants to be free to give away his content. And in another case we found and discussed in a recent post, because the originator was so enamored of the idea of giving it away through web streaming, they ignored the opportunities through commercial ebooks that would have required setting some price a bit higher than zero to work in that channel. Anybody doing this more than once will figure out ways to increase their distribution.

It wasn’t very long ago that nobody would think seriously about publishing a book unless they had the infrastructure — a sales force, a warehouse, a way to process shipments and returns — to put books on many bookstore shelves. Now those services are ubiquitously available for variable, not fixed, costs (you can reach the whole world through Ingram Spark or a big chunk of the world through Amazon Kindle and CreateSpace).

. . . .

In the new marketplace, where most of the sales don’t require the expensive-to-engage distributed bookstore infrastructure, established publishers no longer automatically dominate. So we’ve gone from a marketplace where only truly professional publishers could effectively get books to customers to one where their size, their lists, their sales forces, and their operational efficiencies give them much less competitive advantage. That new marketplace and the competitive set means that publishers can no longer count on a reasonably substantial minimum sale for every title they publish.

. . . .

For as long as I’ve been in the industry, I have heard publishers complain “there are too many titles” while the smartest ones also saw that their own profitability was improved by increasing their own company’s title output. But over the past two decades, the title glut has hit home and even the biggest and most powerful publishers need to exercise restraint about what they try to publish profitably. Because they really can lose money publishing a book, which two decades ago was actually a rare occurrence in a major house unless they had wildly overpaid for the rights.

Publishers have also found it sensible to redeploy resources from “sales” — working with intermediaries to reach a book’s customers — to “digital marketing”, which often leads to a direct sales appeal from the publisher to the consumer. (Although the sales themselves might be executed through Amazon or another retailer, the publisher’s effort is driving the specific sale to the specific customer.)

This has, inevitably, made publishers more “audience centric”. They build topic- or genre-specific websites, apps, and — critically — email lists. The email lists of book purchasers are of increasing value, if the publisher can continue to feed it choices from which it will find things to buy.

Link to the rest at The Shatzkin Files and thanks to Nate at The Digital Reader for the tip.

PG suggests that, not long ago, publishers would not have considered direct sales efforts to readers via mailing lists, etc., because bookstore owners would have objected. The OP suggests to PG that publishers have mentally written off Leonard Riggio/Barnes & Noble and no other bookstore chain is big enough to intimidate them.

At a time when real digital marketing talent is widely recognized as a valuable skill, PG also wonders what sorts of digital marketers are willing to go to work for a publisher instead of a tech startup or digital marketing agency with potential for some real upside.

For authors, signing a standard contract with a traditional publisher looks like something akin to an extraordinarily expensive exclusive contract with a digital marketing agency which you can’t fire for incompetence or failure to respond to your emails.

And where’s the nurturing in that sort of relationship?

Big Publishing, Mike Shatzkin

21 Comments to “Imprint consolidation at big houses is a sign of changed times”

  1. “One wealthy and digitally-smart author we know is reluctant to engage with a publisher because he wants to be free to give away his content. And in another case we found and discussed in a recent post, because the originator was so enamored of the idea of giving it away through web streaming, they ignored the opportunities through commercial ebooks that would have required setting some price a bit higher than zero to work in that channel.”

    Please Mike, stop pretending to be this dumb.

    There have always been writers that just wanted to write, before the internet trad-pub was the only way to reach readers (or being rich enough to self publish). As soon as there was an internet there were stories to read for free – you just had to find the website hosting them. Now there are plenty of ways to get paid for writing without trad-pub getting in the way.

    “there are too many titles”

    Translation: we don’t like to have to compete. We don’t want to have to stand out in the crowd. And we dang sure don’t like the idea of competing with the prices indies can charge and still make more per sale than they would going through us!

    I’m far from wealthy, but I like to thing I’m semi-digitally-smart. My stories are out there for free because even the papers have discovered that paywalls reduce readership. The same stories are on Amazon (not KU obviously) and not for $0.99 – for those wishing to donate to my madness. Just a couple more titles stealing eyes/hours/money from trad-pub. Not, by the way to spite trad-pub, no more than me not shopping at Macy’s – they just don’t have what I want/need for what I want to pay for it.

    The biggest change in these times for trad-pub is the lose of control over who can ‘publish’ and be found/read by the public.

  2. I’m constantly amazed at the importance that businesses attach to mailing lists. As an internet denizen I maintain a number of email addresses, and very few people or organizations get the addresses that I regularly look at. Most of them get a black-hole email address that I check for things at most a few times a year.

    • Oh, mailing lists work and they work very well.
      They just don’t work the way they think they work.
      They think they work like big-bucks campaign contributor lists work: somebody gives a few thousand to support a political party once, odds are they can be counted to do it again for every successive campaign. Not all do, but a large proportion do. Many will cough up every time they’re tapped.

      Author mailing lists don’t work like that.
      People who sign up for author mailing lists do it for one of two reasons: an attached freebie–which means they’ll likely provide a dead end address, as you suggest–or, because they genuinely want to be informed about future releases in a particular series. Some, a minority, want to know about any future releases by the author. Even that last group have no interest in getting flooded with weekly emails.

      A lot of authors, though, don’t quite get it: mailing lists work best to maintain existing readers and they barely, if at all, work to bring in new readers.

      Check the comments at one of KKRs columns on the subject.

      https://kriswrites.com/2017/04/19/business-musings-found-it/

      There’s all sorts of thoughts from both authors and readers.

      The way the BPHs think, a mailing list is like an internet banner ad: you put it everywhere as often as possible. And their kind of mailing is just as “beloved”.

  3. “But over the past two decades, the title glut has hit home and even the biggest and most powerful publishers need to exercise restraint about what they try to publish profitably.”

    Which is exactly what people have been saying for years — publishers are dropping mid-list authors and focusing on their big sellers. And in the end, all that will be published will be the big sellers, and publishers revenue will mostly come from backlist titles.

    • And as they themselves have proved time and time again that they have no idea what the next best seller looks like. And those that might have been best sellers they kill by over pricing them.

      Which is why some indies are doing so well. They have a good product with a cover actually designed for it selling at a price people are willing to pay. And then we hear from some of them that trad-pub notices them selling well and offers them a bad contract that pays off less than what the e/book was already making them each and every month.

      That’s another reason for loving those EU articles that may pass next year, the only way the EU’s trad-pub will be able to get the world of a new book out will be by paying advertisers – as no one will want to pay just to link it.

      The internet made it a whole new game – and it routes around problems.

      MYMV

      • And traditional publishers find the idea of seriously competing with retail pricing completely foreign.

        Even if a publisher was willing to seriously compete on price, its distribution system (bookstores) can’t be trusted to pass on price discounts to the store’s customers.

        • “Even if a publisher was willing to seriously compete on price, its distribution system (bookstores) can’t be trusted to pass on price discounts to the store’s customers.”

          They’d have no choice if trad-pub pulled the same agency game on paper/hardbacks like they did ebooks. And of course there’s trying to compete with Amazon – who will sell them cheaper when they can …

          • Trade pub might try, A, but you’ll remember the antitrust suit that involved all but one of the largest US publishers when they tried to tinker with mandatory retail prices on Amazon.

      • Which is why some indies are doing so well. They have a good product with a cover actually designed for it selling at a price people are willing to pay.

        We know people are willing to pay publishers’ prices because they have done so for years.

        The independents are doing well because, as a class, they throw everything they can find at the wall and see what sticks. The guys on the wall are the independent successes. That’s a luxury the publishers never had, and it’s a structural factor that is highly unfavorable for them.

        Scarcity is the driving force in economics and markets. Publishing slots were once scarce. Publishers produced and sold them to authors. Now they are not scarce. The drop in value of the publishing slot drives the drop in independent prices. (Increase in supply) There is no more basic disruption than that.

        If the publishers also put out everything that came their way, we would be applauding the for the fascinating new voices they have discovered. And we would be paying their prices.

        • However, people were already starting to not pay publisher’s prices, even before indy publishing became a thing with ebooks.
          For current examples, you can also look at the stagnation and decline of tradpub ebook sales.

          • Sure they were. Anyone willing to pay $10 is also willing to pay $5.

            And publisher stagnation? It’s because they are being pushed off the digital shelves, and that is pushing on the paper shelves. The publishers’ share of total available titles keeps shrinking.

            So, they are faced with a high priced, shrinking share of books on the market. That’s a formula for loss of unit market share, and loss of unit market share leads to a loss of dollar market share. In simpler terms, it’s supply.

            The structure of the market has changed to the point where what we see as cause and effect is simply one of the many ways the changed market structure could manifest. It can take lots of different paths, but will end up in the same place.

            People tell us all the things publishers should have done, or should do. None of it matters, because none of it will change the supply structure of the market.

        • “We know people are willing to pay publishers’ prices because they have done so for years.”

          Ah, but they aren’t doing it as much it seems – not with the cheaper and just as good/better indie stuff to find.

          MYMV

          • Agree. Willingness doesn’t imply people will pay more than they have to. For any product, there are lots of people willing to pay more then the retail price.

  4. One thing trad pub can do once B&N collapses is to eradicate the returns policy. You bought it, you sell it.

    • It would actually be good for them to go to the model used for comics: bookstores place an order, get it and pay for it. The distributor might keep a small surplus on hand but anything beyond the first printing is POD or digital.
      No returns.
      No remainders getting into the dollar book piles.
      No pulping.

      Sales would definitely go down but so would costs, especially payola costs.
      Profits would go up.

      Too sensible, though. “Books aren’t widgets!”

      • Then after the first batch they’d better lower their ebook prices if they want any more sales!

        I can see the book’s Amazon page saying ‘HB $30, PB $10 (out of stock) Ebook $15’ and wondering why they can’t move them …

        MYMV

  5. One thing that’s always missing in these “There are too many books available it’s hurting everyone!” articles is that a lot of those books would never, ever see the light of day under the TradPub rules. I don’t mean because of quality, either. I mean because of the genre. TradPub doesn’t really publish a number of popular genres. I say “popular” in the modest sense. I’m killing it (for me) in superheroes. I know authors making bank in LiTRPG, African American Fantasy, Space Fantasy, and stories about people with disabilities in fantasy settings.

    TradPub never prints a book with a different protagonist unless the book is about being that difference. I recall an article on here about a Korean writer who was told his book wasn’t “Korean” enough so he had to change his protag to white if he wanted to publish.

    My protag is in a wheelchair. The book has ABSOLUTELY nothing to do with her being in a wheelchair, she just is. Not only would Trad never publish my superhero novel, they certainly wouldn’t publish it with her in a wheelchair unless it was about the injustice of a cruel world without wheelchair access (which really does suck for them).

    Not to mention you could forget all the MilSci-fi, space fantasy, and shorter works that have exploded over the last five years. None of that would be published either.

    My point is this, are we really stealing from tradpub? Or has our island only ever had Domino’s pizza to eat and suddenly Pizza Hut moved in? If I were Domino’s I’d find a way to compete instead of bemoaning the days when I was the only game in town and now there is “too much pizza choice.”

    Haha just writing that sentence makes their entire argument stupid.

    • Well, if the Domino’s profits were razor thin to start with and their reaction to competition were to raise prices and stiff their flour supplier…

    • If I were Domino’s I’d find a way to compete instead of bemoaning the days when I was the only game in town and now there is “too much pizza choice.”

      The publishers may compete, but there is no way for them to win. I think lots of authors want to hold onto fiction publishers and bookstores. The disruption is brutal, and isn’t even close to playing out. It’s far more brutal than most would like.

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