Why publishing is in so much trouble right now

From Beth Meacham via Facebook:

I want to talk for a minute about why publishing is in so much trouble right now.

It’s way more complicated than most people seem to think.

First, you need to know that the vast majority of our business remains in hardcover and paperback books. Hard copies, physical objects. The second strongest sector has been audio books. Ebooks are a distant third.

Selling books is a very long and complicated supply chain. Ignore editorial — writers and editors can work at a distance and electronically. It really starts with the paper. Storing paper for the big presses takes an enormous amount of warehouse space, which costs money. Printers don’t store a lot — they rely on a “just in time” supply chain so that when a book is scheduled to go to press, the paper is delivered to the printer. Most of that paper is manufactured in China. Guess what isn’t coming from China? Anything, for the last three months. Some of it comes from Canada. Guess what the Trump administration put a big tariff on at the beginning of the year?

So, we don’t have adequate paper supplies. Then consider, big printing plants are not “essential businesses”. There are only a couple printers in the US that can handle the book manufacturing business. One of them shut down last week. Covid-19. We started rescheduling books like mad to deal with that.

But supposing we had paper, and a printer and bindery, the books have to be shipped to the warehouse. Again, non-essential movement. The freight drivers moving books? Staying home, as they should. Not all of them. I hope they remain healthy, because dying to get the latest bestseller to the warehouse doesn’t seem quite right to me.

Now then, our warehouse. We have a gigantic facility in Virginia. Lots of people are working there, bless them, but it’s putting them at risk. There they are, filling orders, packing boxes, running invoices. Giving those boxes to the freight drivers who take the books to the bookstores and distributors. Again, truck drivers risking their lives to bring books to the bookstores.

But think again. The bookstores are closed. The distributors are closed . No place open to deliver the books to. Some bookstores are doing mail order business, bless them, but they aren’t ordering very many books from our warehouse. Amazon isn’t ordering very many, either — because they have (correctly) stopped shipping books and are using their reduced staff to ship medical supplies and food.

Link to the rest at Facebook

25 thoughts on “Why publishing is in so much trouble right now”

  1. The outpouring of love and support on her Facebook page is misguided. The publishing industry climbed the scaffold, tied the rope, slipped it over their neck, and now are complaining that they have to fall. NO ONE MADE YOU HANG YOURSELF.

    • Yup.
      If ebooks are a distant third for most of tradpub, it is by design.
      That is how they wanted it.
      As they say: “Be careful what you wish for. You might get it.”

  2. All of the problems Ms. Meacham identifies, except for the tariff on Canadian paper, are effects of the Covid-19 outbreak. If her explanation is complete, then publishing must have been in a fine and healthy condition two months ago.

    It wasn’t.

    Traditional publishing has been in clear decline for about a decade now (and was decaying internally for a long time before that). Only a fool would blame a ten-year-old problem on a disease that only appeared four months ago, and expect people to believe it.

    • 2000 was the last year they collectively had real growth.
      Not some-and-mirrors, merger and pink-slip, smaller than inflation “growth”.
      Even the years when they had a boom in ebook sales were offset by the sub-prime “great recession” . And they they chose to minimize high margin ebook sales in favor of low margin print.
      They built a house of cards and a wind came by.

      In the meantime, their pricing strategies have helped Indies growth into a billion dollar a year sector, displacing several billions in potential sales.
      They made their bed.
      Kinda hard to feel sorry for self-inflicted wounds.
      The staff, yes, bit the publishers?
      Nah.

    • What they mean is “Amazon has stopped picking up books at publisher warehouses.”

      As you noted, they’re still selling and shipping (priorities permitting) books (and other sundries).
      What Amazon said was they they would not be reordering once stock runs out or ordering new releases. Which in tradpubland, which lives by the new hardcover release window, is anathema.

      Faced with the same choice as movies studios (hold back or go straight to digital) they are holding back everything, whereas the studios are golding back onoy big-budget blockbusters and sending everything else to digital sales, to keep *some* new revenue coming in atop their backlist sales and rentals.

      Everybody is hurting but some folks are *actively* trying to minimize the damage.

    • Amazon can POD a huge amount of their catalog, I believe they have Ingram do some of that as well. Ingram prints the book and sticks it in an Amazon envelope even. Doing so would free up labor and warehouse capacity.

      I thought it was very telling that a company that has a book printing arm recently decided to just shut it down after they could not sell it, and the other company they were trying to merge it with (unsuccessfully because DOJ) is also losing money and in real financial trouble.

      https://www.publishersweekly.com/pw/by-topic/industry-news/manufacturing/article/82877-book-printers-struggle-with-plant-closures-financial-downturns.html

      • POD is non-functional right now because of lack of printing paper.

        Any paper production that might still be up is going to hygenic products and packaging.
        Even before the virus printing quality paper supply was an issue.
        It’s ironic that after decades of using paper costs as an excuse for raising prices, tradpub not finds itself with a true paper problem.

        Basically the decline of newspapers is reducing the plants’ total revenues but, like corporate publishing, their overhead isn’t going down. Conversely, demand for shipping cartons is booming. And cardboard is both cheaperto produce and less environmentally sensitive.
        https://www.forbes.com/sites/rachelkramerbussel/2019/06/10/how-the-paper-shortage-has-affected-book-publishing/#1b72f5e61b26

        Essentially the paper companies are moving to exploit the higher volume, higher margin product to the detriment of publishing grade paper. (The opposite approach of corporate publishers.) Add on the demand for hygenic paper products and the paper shortage, which predates the crisis, is likely to last well past it’s end.

  3. ‘…Ebooks are a distant third…’ Bwhahahahahaha!!! 😀 … I want some of what she’s sniffing!!!
    Traditional publishing is in so much trouble now. Yep, and that’s exactly how much trouble it was in four months ago too, only now they’re probably going to blame it on the toilet paper shortage.

  4. I suspect traditional publishing is not the only business that will be radically transformed by the virus. Looks like a perfect storm has hit a lot of things.

    I’ve been saying “Screen paranoia is about over now,” since the schools closed and everyone is working from home. I doubt that any of this will be temporary, even if the covid-19 is knocked back by fall, which could happen, but I’m not counting on it.

    Feel like lending a dynamite chef money to open a new restaurant this fall? In the 19th century novels I like to read, there are no restaurants, only dining rooms attached to inns and hotels that people went to because they had to, not because they wanted to. Will we see a return to that?

    Now that pandemics and the damage they do has been rubbed in our faces, any investment that relies on humans in close proximity will be at a new level of risk. Office buildings? What was it we used them for? Brick and mortar stores? INDOOR lumber yards? High rise apartments? Giant hotels? Cruise ships? Did you know that before 2020, people actually got on airplanes for f2f meetings? Just in time supply chains?

    I’m looking for an opportunity to invest in a bidet startup.

    • There are a lot of businesses that are booming with new customers. Some are temporary but many will like the new solutions and adopt them afterwards as at least part of their new normal.
      Some examples:

      – Microsoft TEAMS use grew 40% in a week after Work From Home became mandatory.
      They are adding a “friends and family” version to Office 365 personal.

      – Movie studios are releasing (non-blockbuster) movies to digital tbat were supposed to be in theaters. They’re experimenting with price points on sales, $20, $15, $10, depending on expectations for the theatrical release. People are responding. With 4K/HDR 70 in TVs under $1000 and even under $700, theaters don’t have much to offer for anything but the blockbusters and a $20 digital *purchase* of a new thread release can be a bargain for many families.

      – AMC, the largest theater chain around, was already shaky before the shutdown.
      The expectation is they probably won’t recover after the crisis is over:

      https://www.chicagotribune.com/coronavirus/ct-ent-amc-future-of-moviegoing-0406-20200403-radauz44abbohingv7dlcl5y5m-story.html

      – Most live TV streaming services are offering temporary free subsets (especially of the news channels) or extended free trials of their full packages. Most are significantly cheaper than their cable equivalents.

      -Online shopping and home delivery are getting a chance to shine for shut-ins. A lot of people will find their delivery fees appealing in tbe long term.

      – The traditional publishing challenges are well documented in the OP. The economics of pbooks were hardly booming before. Even a small defection might be too much for some tradpubs. S&S is already up for sale, others may follow in a further wave of consolidation.

      Finally, there is one sociological effect nobody is daring to voice just yet.
      The pandemic is not the first. It will not be the last. Nor will all coming outbreaks grow global; many will remain “merely” regional emergencies. On top of that, the mild weather NorthAm endured during the decades after the Dust Bowl is over. Blame it on whatever you wish too, natural disasters from major storms to hurricanes to quakes are going to be with us indefinitely.

      And all are magnified by high population density. (The virus loves *big* cities, from Italy to Spain, to Iran. And tbe east coast Tri-county area, coastal California, etc.)
      I’m thinking the expected rise of the Megapolis may be at least temporarily derailed. Suburban and exurban sprawl may be back and mid-sized cities of, say, under a half million may be tbe new urban planning focus.

      There already are several all new cities in various stages of experimentation. More may follow.

      The 20th century was a century of urbanization but the trend of concentration may be over.

      • Specifically, I’m thinking of Belmont, Arizona, Bill Gate’s Tempe-sized smart city project:

        https://www.chicagotribune.com/coronavirus/ct-ent-amc-future-of-moviegoing-0406-20200403-radauz44abbohingv7dlcl5y5m-story.html

        Considering the housing issues around SiliValley, Seattle, and (emerging in) Austin, and housing initiatives by Google and others we may be in for a new breed of company towns. Perhaps something along the lines of the Arcologies in Niven&Pornelle’s old OATH OF FEALTY.

        Story fodder if nothing else.

        • I was disappointed that there was never a sequal to “Oath;” I was sure Niven and Pournelle were going to show the nitty gritty of starting up “The Age of Exploration, 2.0 edition.” I could picture the Fromates et al who hated the arcology idea being even more incensed by the idea of people slipping the surly bonds of Earth as they please.

          At any rate, I like the arcologies concept for company towns for a terraforming industry on Mars.

          • Ditto.
            TODOS SANTOS was described as a testbed for a generation ship.
            The logical next step was to replicate it off-world.
            And then, build a ship.

            It’s something I’ve been pondering since I first heard of the O’Neil colonies.
            How do you fund an off-world colony?
            How do you move a self-sustaining population (30-50,000)?
            And what does the roster look like? How many doctors, engineers, plumbers, and farmingtechnicians do you need? How many families, singles, and children? Age distribution.
            Musk has a plan for funding and transport but the rest?
            The new smart cities can be the real world TODOS SANTOS up to and including tbe politics. It’s early and tbe rabble rousers haven’t noticed but the new cities are gated communities writ large. The ultimate in gentrification. A whole city where everyone has a job, a home, a future.
            No homeless, no native crime, no traffic accidents, no pollution.For at least a generation. Henry Ford must be laighing.

            The idiotpoliticiansâ„¢ will notice soon enough.
            Hopefully not before it’s too late.

              • Actually, a space elevator can be done today on the moon with off-the shelf tech. Instead of (potentially) graphene cables, a lunar elevator coud be built using Kevlar. Even wilder, it could be dangled all the way to Geo orbit. Estimates run about a billion US dollafs or so and the weight of the cables in the 88 ton range would easily fit on a Starship cargo version. Going by segments Four Falcon Heavies could lift them.
                A cheaper version to a lagrangian point would be cheaper.

                https://observer.com/2019/09/moon-space-elevator-lunar-exploration-columbia-study/
                As Musk (and Biaglow) has proven repeatedly, lots of science fictiony things have been doable and affordable for decades with NASA tech but have been blocked by the idiotpoliticiansâ„¢.
                Same here.
                Musk is (officially) focused on straight-to-mars but Bezos or Gates could fund the whole thing out of pocket without a second thought.

            • On the roster front, I actually created an “incentives” spread sheet for a backburner project. I’m creating a universe that begins with the colonial phase, and my “colony architect” is thinking in terms of how to incentivize the infrastructure industries to sign up for “Oklahoma Land Rush 2.0” She is specifically keen to get families to settle, so she wants to stack the deck accordingly.

              I think David Weber was optimistic about the Manticoran settlers’ money being left alone in the Swiss bank account during their 600 year sleep: I suspect the faction of politicians who want to “redistribute” people’s 401ks, would also try and seize the settlers’ Swiss accounts. “They’re traitors for leaving Earth, and that money is best used for the good of Loyalists.” Somehow that angle of attack would have to be neutralized by my architect.

              I always ignored the space elevator idea, partly because I have a terror of falling from heights … but mostly because it’s not obvious how you’d stop a terrorist from “severing” it (which is where the terror of falling comes into play). I always pictured the bending and twisting that the article you linked to addresses, because I thought the elevator would start on Earth’s surface, where a terrorist could readily get to it.

              Still, a reusable shuttle craft provides less opportunity for a 9/11-type of attack vs. a space elevator.

      • – Movie studios are releasing (non-blockbuster) movies to digital tbat were supposed to be in theaters.

        This right here. Meachem says in her own post that the publisher’s warehouse workers are being put at risk, and yet she doesn’t go with the obvious solution of sending them home and using the KDP upload button? In a sane business, a bunch of C-suite people would be made to “spend more time with their families,” with or without the Wu-flu

        The publishing industry didn’t just hang itself. It went straight up Rasputin.

        • I still see threads online about “how to get books when shops are closed” and I mention that ebooks are available instantly from many vendors. The response is “I can only read paper books.”

          Whatever.

    • I took a look at a virus map by zip code for Miami. The Miami area has over half of Florida cases. There was a scattering of very small zip codes (area) that had the bulk of the cases. While I don’t know Miami that well, I suspect those zips are very high density areas.

      And how about those elevators in high rise office buildings?

      • MSN has a state by state, county by county breakdown on their news site.
        Check the TriState area around NYC.
        The numbers are positively horrifying.p

        You can control your own behavior but not your neighbor’s.
        Having too many neighbors (for varying values of “too many”) is looking like a major risk factor, moving forward.

  5. In the future, we will talk about pre-2020 and post-2020. I suspect it will be at least as significant as pre-War and post-War was for the 20th century. And I expect the economy to be roaring in a few years building the new world. Some businesses like the tech companies will be roughly the same, others will change radically or disappear.

    My question is this: will unemployment be a problem? I expect the worker shortage will be a bigger problem. We’ll be thanking heaven for robots and AI.

    Being over 70, blessed with a congenital cardiomyopathy and diabetes, and dependent on an ACE inhibitor that is suspected of predisposing one to covid-19 infection, odds are not good that I will see it happen. Well, maybe I will: I’m not pregnant.

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