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Saturday, April 19, 2008

An Unappealing Byproduct, Part 1

A recent poll I conducted asked this question: "Where do you buy most of your books?"

Here is the breakdown for that poll:

From the Publisher: 5 (16%)
Bookstores: 11 (36%)
Amazon: 12 (40%)
Other: 2 (6%) (primarily eBay)

I will explore this in several posts.

The results dovetail exactly with our own internal data, which is that buyers in ever greater numbers are turning to the least expensive (and often most hassle-free) option to buy their books. This is completely logical. Why pay more?, as the Target slogan asks its customers. Like most of those who read my blog and patronize Savas Beatie, I too am a lover, buyer, and collector of books. Saving money makes sense and is a factor in deciding how, whether, and what I purchase. Most who buy directly from us do so because they want a first edition, want a signed author book plate or a signature in the book itself, or like to patronize the hand that feeds them (so to speak).

But hidden inside these poll numbers is an unappealing byproduct most book buyers do not fully appreciate: The natural tendency of buyers to gravitate to discount books chokes off the dollars necessary for publishers and authors to continue producing them. This is especially true in niche areas like the Civil War (or Revolutionary War, or . . . pick a category).

The consolidation taking place within the publishing industry at all levels over the past decade is not the result of simply poor business decisions (although that accounts for some of it). Mergers, bankruptcies, and the trimming of staffs and budgets is the direct result of the confluence of technology and buying habits. The development, implementation, and availability of the former has dramatically influenced the latter. One need only think of the Internet, Amazon, and Print on Demand (POD) to understand why.

The following example applies to most niche-type titles, and not just the one I will use. Eight or ten years ago, it was an easy decision to accept and publish a well-written and deeply researched regimental history. Niche titles are typically more expensive to produce than general titles (they are usually longer, need more proofing, and include more complex formatting issues), and they require a higher than normal retail price because the market for them is smaller.

But only a handful of years go, a very sizable percentage of buyers purchased these books at full retail price. The balance left the warehouse via traditional book trade sales or were sold to authors for resale. The money generated in this manner allowed us to stock the refrigerator, pay overhead and salaries, and produce the next similar manuscript, and also earned for the author a royalty check that did not induce heart-stopping dismay.

The advent of improved technology, which in turn made Amazon and eBay possible, has turned this revenue model on its head.

I will explore why and the ensuing ramifications, together with specific examples in how this impacts our own internal decision-making, in my next post.



Mark Wilensky said...

Your post about market constraints reminded me of another industry that faced the same issues several years ago; the film industry. Movies continued to rise in cost, albeit because of special effects, opening power of talent, marketing, and probably most of all; the increased accessibility of technology opened the door to a tremendous amount of product and talent.

Interestingly, well monied studios weren't willing to foot the bill to distribute big budget pictures, and alliances started to form between once rival producers. All you have to do is watch the opening credits of a movie anymore and read all the imprints of all the studios involved in a film. The industry became willing to release better product by floating the risk.

Is there a correlation to the book business now? I have to wonder, and hope, if these pressures on the book business will produce interesting alliances in the future.

Mark Wilensky
The Elementary Common Sense of Thomas Paine; an Interactive Adaptation.

Theodore P. Savas said...


Thank you for your truly insightful observation. Our book Playing with the Enemy is being filmed, and I have learned a lot by listening and talking to some of the studio-related people about the issues you raised.

As to your question about a similar correlation in the book business, the answer is, for Savas Beatie, "yes." In fact, what we believe will be our "big" (think nationwide appeal) title this fall came to us with exactly that relationship.

Stay tuned for more on that front.

Thanks for stopping by.