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.
And now just about everybody does.
Not only has the number of titles and the number of originating entities (in effect: publishers) mushroomed, their nature has also changed. 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). And if you are an entity like Cato Institute with a network of relationships and a way to reach much of your core audience, you really don’t need anything else.
But if the cost side of the publishing equation has gotten easier, the revenue side — facing those 16 million competitors — has gotten considerably more challenging. And it shouldn’t be surprising that established publishers are rethinking their organizations and methods, which explains the imprint consolidation we’ve seen twice in the past two weeks..
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.
Tom McCormack as CEO built St. Martin’s Press, now Macmillan, over three decades by steadily increasing the title output. He noticed very early that 85 percent or more of the titles his house published brought in more revenue than their direct cash cost. That is: they made a contribution to overhead and profit. With odds like that, McCormack figured (correctly) that doing more would almost always result in doing better.
But McCormack retired in 1997, almost exactly when the sales shift and title explosion began. It is pretty certain that no publishing house today has a record of recovering all direct cash costs — advances to authors, printing, and attributable distribution costs — on the vast majority of their titles. That makes a publisher want to be much more careful about what 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.
And these two factors together — the steeper competitive environment for new titles in the overall marketplace and the fact that modern list-building digital marketing wants more titles to bounce against the growing list of potential purchasers — lead us to the imprint consolidation in the major houses. Each imprint needs less new book development infrastructure and more titles to feed the digital marketing efforts. It is a pretty safe prediction that imprint consolidation in the big houses is not over
I had a great hour with Glenn Yeffeth of BenBella books doing his “Building Books” publishing podcast. It was a lively conversation that covered a lot of ground which readers of this blog might well enjoy. He’s just put it live.