In two earlier Modest Proposal posts (A 21st Century Publishing Model and Book Warranty) I offered suggestions for changes publishers could (and should) consider to their business model. The first proposal, to make ebooks the new paperbacks and to publish only hardcover and ebook versions of books, was not well received by consumers. (Interestingly, some of the most vocal opposition to demising paperbacks came from people who claim to only buy ebooks!) The second proposal was much better received, probably because everyone loves perfection and loves the idea that something comes with a warranty.
Now comes my third modest proposal, which begins with a prediction: The big, multinational book publishers have begun their funeral march. Within a decade or two, possibly sooner, there will no longer be giants of publishing; instead there will be a reversion to the preconsolidation era with numerous small (by comparison to today’s Hachettes and Random Houses) publishers dominating the industry.
Before getting to my suggestions about what today’s giants can do to stave off their funeral orations, let’s consider why they are now walking that funeral path. What follows are a sample of publishing’s self-destruct problems.First, they are too big to react with grace and ease to changes in the publishing world. Imagine a sumo wrestler dancing Swan Lake. Decisions that need to be made quickly and locally cannot be made because there is always another corporate level to consult. It’s hard to survive when you need to turn on a dime but can only turn on a half dollar.
Second, they haven’t learned what I call the Dell lesson: Tell the customer he can have it his way and then limit the options. Dell always touted how customizable their computers were. Yet try to really customize a Dell computer — you can’t; Dell has limited options for particular computer models and you can’t take options from one model line to another. This is no different from what the automobile industry has done for decades. To get one feature you want, you have to buy an option package or do without. Or, better yet, cable TV. Few choices there. You pay for sports channels whether you want them or not. Unlike other industries, publishers let others dictate what they will do and offer. Publishers need to rethink this action model.
Third, publishers haven’t yet recognized where they are in the policy-setting chain. Although they should be in the catbird’s seat, instead it is the distributors and the retailers who drive publisher policies. What is the single most hurtful policy to publishers’ bottom line today? My guess is the returns policy. Who does this policy help: distributors and retailers because they do not have to pay for ordered product. No other industry has such a policy and no industry — including publishing — offers such a system to the consumer. This policy of returns for books started decades ago for a reason that was valid decades ago but is no longer valid or sustainable, yet publishers can’t stop killing themselves — it’s the fear of being first.
Publishers need to regain the catbird’s seat and immediately do away with returns. If, say, Random House were to unilaterally declare an end to the current returns system, most publishers would soon follow. Unlike computers and automobiles, there is no substitute for a Dan Brown best-selling novel that would give a competitor a leg up by keeping the return policy. Readers either want Brown’s novel or they don’t; no retailer is going to tell a customer that they can’t buy the Brown novel because the publisher doesn’t accept returns so the retailer won’t stock the book, but here is Joe Unknowns’ similar novel instead.
The returns problem highlights a fourth reason: Publishers are confused about who are their customers. Until recently, except occasionally, the giant publishers didn’t sell books directly to readers. Although the publisher has to produce books that readers want to buy, their immediate customers today are the middlemen between publishers and the readers. With the changes that ebooks are bringing to publishing, the giants will die on the vine if they do not rethink who their customers will be in the coming years and their relationship with them.
Alas, there is more to say, so this discussion continues in tomorrow’s post, wherein I reveal my modest proposal.
Editor’s Note: Rich Adin is an editor and owner of Freelance Editorial Services, a provider of editorial and production services to publishers and authors. This is reprinted, with permission, from his An American Editor blog. PB
I have to say I agree with Rich on this, especially the return policy. In my retail days we would often have multiple copies of titles, sometimes hundreds of copies and many times we returned most. I never understood the policy, it seemed and still does seem inefficient. The other kicker here is at the retail level many of those that say we need returns are not the actual people selling the books. Our buyers never sold the books, that fell to me and my crew of sales people and we tried, trust me, we had to or their were consequences, that alone tells you how messed up it was.
I think their may be a fifth reason that Rich kind of touched on but not really. With the internet being so accessible customers can buy at multiple places and the brick and mortar stores are struggling with this, even though some still have a horrible time of ordering a title in for you, so why would you work with them. Publishing is a great business, I’ve worked in it from retail and as a pubs rep in a variety of roles, but I worry about the path it is going on and the attitudes involved.
eBooks are just another format, so will that format push publishing to change or will they just try and fight it?
I agree with abolishing returns, on a more practical level: It should cut down on the number of books printed that will eventually get burned or landfilled; and printing fewer paperbacks should speed up the process of introducing more of the public to an e-book product.
With all the emphasis of cutting costs and reallocating funds to a downsizing industry, not to mention the brownie points that would be earned by doing something environmentally positive, the removal of copious amounts of waste product should be paramount on publishers’ minds.
Returns are a disaster. At least one small publisher I know of went out of business due to a failed attempt to expand to the bookstores and its inability to deal with a flood of returns. BooksForABuck.com doesn’t even try to sell through distribution because we know we cannot afford to pay for thousuands of copies of books which may eventually be returned damaged (or stripped) for full refunds including shipping costs. (So far none of the giant publishers have followed my lead).
On the other hand, considering the horrific economic situation of the brick and mortar bookstore today, abolishing returns seems most likely to result in hundreds of additional store closings. Which is why, suspect, the big publishers haven’t taken this step.
Rob Preece
Publisher
It seems too many needed changes in the publishing business, and other businesses as well, are put off with the same cry: “NoNoNoNoNoNo!! If we change it, it’ll all collapse! So don’t touch it!”
Then, when the needed changes don’t happen, the industry collapses anyway… and the pundits say: “Told you so…”
Abolishing returns make perfect sense, but would have significant ramifications. First, stores would order MUCH FEWER copies of books, because of being wary of being stuck with them. Second, Unknown authors probably wouldn’t get stocked at all. If A customer wants a book ,the store would order it- but then. Why not just buy it on line? You see where this is going- bye bye stores.
The comic book industry did this about 30 years ago very succesfully. There was a shift in selling comic books to comic book specialty stores, rather than corner drug stores. The pecialty stores had a no return policy with their distrubutor, the Mom and Pop corner stores did not., Eventually, the overwhelming majority of comics were sold in specialty shops or by subscriptions (not a big percentage). It did work well, especially for the small time comic book creator who knew exactly how many copies to print, etc.
Follow the money. If bricks and mortar stores are hurting and pubs are hurting where is the money going?
The new report on how much time kids spend with there electronics says about 7.5 hours a day.
Just follow the money.