There are a great many things that frustrate me about the current state of the publishing world.  I’ve discussed many of them here and elsewhere.  The latest thing that really gets under my skin is this idea that publishers have to have the blockbusters to pay for all the books that don’t pay for themselves.

If you are in the business of selling things, and you sell something for less than you paid for it, this is a failure on your part.  Now, it’s a little different if selling that thing at a loss enables you to sell more of other things (see loss leader).  But that’s not what’s happening here.  The publishing industry is essentially selling the profitable thing to pay for the loss leaders.  This is not how selling things works.  This, incidentally, is why the publishing industry has such a problem with Amazon – Amazon is very good at using loss leaders, and it undercuts the way publishing has always worked.

There are numerous solutions to the problem, but all involve a big change in the way publishers do business.

First, they can make the “losses” less costly.  Move compensation towards the back – advances are gambles by publishers that often don’t pay off, and guess who gets to make up the difference?  That’s right, the reader.  Won’t this hurt authors, you ask?  Probably.  This is not what anyone wants, so we’re going to have to figure out ways to fix it.

Perhaps a better idea is for the publishers to learn how to use loss leaders correctly.  When someone buys the latest Dan Brown hardcover, give them the debut novel from a relative unknown who writes fast-paced conspiracy thrillers.  Note that this works even better with ebooks, where the marginal cost to produce another copy is infinitesimal.  You’ve now increased the value of Brown’s book, and maybe you’ve gained a fan for the new author.  I rarely buy books from authors I don’t know (not without strong and trusted recommendation), but I often by the second and third and fourth books from authors I first read for free.

As an aside, this works even better if you’re an indie bookshop run by someone who would know right away which unknown author would perfectly complement a Dan Brown or other famous author.

Publishers, recognize that the way (most of) you do business now is broken.  It is fixable.  Go figure out how.

This entry was posted on Wednesday, February 17th, 2010 at 10:04 am and is filed under Abusing your customers, Changing the market, Indie bookstores. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.