One of the theories I’ve seen espoused about recessions is that they are really about a massive reordering of the economy. Lingering inefficiencies suddenly become glaring and are trimmed, weak companies fail, the work force reorders itself, and the strong companies either extend their dominance or retrench. The economy reemerges more efficient and ready for more growth.
The publishing industry has had to weather this storm along with the rest of the economy, and while the industry endured its share of tumult and layoffs, contrary to popular belief it is actually holding up reasonably well, especially when compared to the retail sector as a whole. Sales were off 2.5% for the year as of July, compared to a 9.5% drop in broader retail.
But even along with all of the economic pressures, the industry right now is facing a looming restructuring as e-books become more and more a part of the landscape. And as e-books become more and more common publishers will increasingly see their raison d’etre challenged by digital and self-publishing.
For the last hundred years the publishing industry has been built around one key advantage that no one else could match: distribution. Sure, publishers designed the cover and edited the pages and marketed the books. But the real secret to the dominance of the mainstream publishers, as anyone who self-published knows, was utilizing both their brand and their nuts and bolts distribution to get the books into the stores. Without traditional publishers: good luck. Publishers were the sole gatekeepers.
That’s all beginning to change with the Internet and online booksellers, and will change even more if/when e-books become the primary source of book revenue for an author.
Right now, with e-books hovering somewhere around 5% of sales, authors still need publishers. Even the self-publishing success stories almost always involve self-published authors finding their way to traditional publishers. Why? Someone’s got to get the books into the stores, and publishers are the best at it.
But what about in the future if e-books become 50% or more of an author’s sales?
You don’t need infrastructure to distribute e-books: you just need an Internet connection. An unknown, unpublished Author of the Future could do deals with the Amazons and B&Ns and Sonys of the world (or possible a single e-book distributor) and simply upload their book from Wasilla and voila, the book will be instantaneously available just as readily as the new book by Dan Brown of the Future. No warehouses, no catalogs, no print runs. Online vendors, as we’ve seen, will sell anything.
So, in this scenario, does the Author of the Future, especially one with a built-in audience, really need a publisher?
Well… yes. Maybe.
That’s because there are a whole lot of tasks that Author of the Future may not care to deal with, such as editing and copyediting, designing the cover, dealing with all of the zillions of different e-book vendors and their preferred file types, and, of course, marketing. Surely there will also be Co-op of the Future to reckon with – front page placement on an e-book store, for instance.
But most importantly, for the first time basically ever, Author of the Future is going to have a choice: work with a publisher, who takes care of a lot of the dirty work, or tackle the dirty work themselves, possibly with the help of ahem an agent who can help negotiate the e-distribution deals and work on selling the author’s subrights and help the author find freelancers to handle aspects they can’t tackle on their own.
If e-books-as-majority come to pass, the road to publication will be open like never before, and there will be a very crowded highway bypassing the publishers.
I really don’t think publishers are going to disappear entirely. The package of services and expertise they offer are unmatched (when things are running as they should), and it would be extremely difficult for Authors of the Future to navigate all of the complexities of making a bestselling book of the future by themselves. There’s a lot more to making a successful book than typing it out, hitting upload, and e-mailing your friends that your book’s on Amazon.
But publishers would have to be extremely author-friendly — they would be providing a service, not relying on their traditional role as gatekeepers and distributors. They’ll have to win over authors facing a choice between going with a publisher vs. handling matters on their own. Publishers won’t be able to rely, as they have traditionally, on the fact that authors need them in order to reach their audience, just as authors won’t be able to rely on publishers losing money on most of the books they publish.
This is why I think the relationship between author and publisher is going to increasingly be more of partnership.
I think it’s telling that some of the New Experimenters in the publishing industry, Twelve, HarperStudio and Vanguard, all treat the publishing experience as a partnership. Twelve cultivates the relationship between author and publisher and is able to do so by only publishing a book a month, HarperStudio limits advances but shares back-end revenue, and Vanguard asks the author to forego an advance in favor of transparency in marketing and higher royalties.
If e-books ever take over, the old system of authors and publishers squeezing every possible percentage point out of each other will give way for a system of shared responsibility and transparency. If the author doesn’t like the deal they’re getting they won’t be S.O.L. They can find another one. Or they can do it themselves.
But then there’s one more big looming question about publisher-as-service-provider: is there any profit in this?
I think so. My guess is that there will be a spectrum of choices available to authors, everything from no advance/handle everything themselves situation, where the author makes more profits on the backend, to the advance/traditional publisher scenario, where the author receives less on the backend.
But there are looming challenges with e-books, and lots of people are nervous about the $9.99 price point, and rightly so. Amazon is currently taking a loss on many of their sales in order to boost Kindle sales and market share. But some of these price point pressures, I think, will be sorted out by volume as e-book sales rise. Kassia Krozser blogged yesterday about how difficult it is right now for an e-publisher to turn any profit without significant scale.
My guess is that we’ll continue to see the mainstream publishing industry focus on the bestselling titles, and there will be a new crop of e-publishing services available for the rest. Some titles will rise up from the morass of author-published works and receive attention from the mainstream publishers, and some big authors will choose to take on the responsibilities of publishing themselves and bypass the publishers.
All of this assumes that e-books become dominant, and to be sure, that’s a big “if.” But things will definitely be changing.