Are Traditional Publishers Following after Ford, Chrysler, and General Motors?

By Debbie Elicksen

The Big Three automakers seemingly woke up last week and got it. Unless one works on a construction or oil well site, and with the price of gas going sky high, V-8 and V-10 SUVs and monster trucks are no longer attractive. When Honda and Toyota kept raising their market share, Ford, Chrysler, and General Motors didn’t investigate to find out why.

Can the same be said for the traditional publishing industry? Here are some facts to sink your teeth into:

Media General, Inc. reported a 9.8 percent decline in revenues from June 2007 to June 2008, mostly from its Publishing Division revenues, which declined overall by 15.3 percent. (Fox Translator, July 17, 2008)
The Bowmark Entrepreneurs’ Index said an Optimism Index revealed small- and medium-sized media and publishing firms have the lowest levels of optimism among United Kingdom businesses. Almost 75 percent blame government intervention and legislation as impacting their growth. (Brandrepublic, Emma Barnett, Media Week, July 14, 2008)
The overall Canadian book publishing industry is down 1.2 percent from 2005 to 2006 re Statistics Canada (The Survey of Book Publishers). Ontario and Quebec factored into 91 percent of the industry’s operating revenues and 95 percent of the profits in 2006. Publishers outside of these provinces continue to rely on grants, subsidies, and tax credits. (Josh Kerbel, Publishers Weekly, July 24, 2008) However, the industry is still seen as being fairly stable and not losing as much as magazines and newspapers (to which the decline in profits correlate to free digital information). (Tobin Dalrymple, National Post, July 11, 2008)

What are some of the reasons for a declining industry? First, let’s start with the publishers. Traditional publishers still tend to take the conservative, safe approach to finding topic matter. It’s as if they think readers do not want to buy anything risqué, fresh and new, or controversial. Jason Quirk (Guardian.co.uk, Why publishing has gone to the dogs, June 27, 2008) says publishers are “dumbing down content and aiming for the lowest common denominator” and that “people will happily pay a lot more money for a slightly better product.”

We know that most of the major publishers, whether they print 10 or 200 titles a year, only choose a handful (not even 10 percent) to put their marketing dollars behind. The rest of the books sit in a catalogue and the hope is that the top titles will support the money spent on the latter.

Mark Thwaite of Guardian.co.uk adds that most publishers are not using the Internet to their fullest potential. In fact, most have substandard Websites. If publisher Websites had great search engines, up-to-date catalogues with detailed pages and graphics, author information, links to fan sites, blogs, and even social networking sites, they just might survive.

An online presence in today’s marketing environment is everything. Without it, you’re invisible. If people Google an author or book title and nothing shows up, you don’t exist.

Now let’s look at the booksellers. Chris Holifield says booksellers are more focused on bestsellers than stocking a range of books. That attitude ultimately puts more pressure on the other stock, makes it tougher for new authors to get on the shelf, and for publishers to keep books in print. According to some booksellers, the average shelf life of a book in a bookstore is three months.

And then there is the return factor. In an article series by Angela Hoy of WritersWeekly.com, September 2005, she points one of the reason for high returns is bookstores order too many books and then return them for a credit at the expense of the publisher. Many times, the books they return are damaged – or they are outright destroyed. So in other words, if the bookseller can’t sell books, the publisher is the one who suffers.

There is a quote in Hoy’s article from Jeffrey A. Trachtenberg of the Wall Street Journal who says, since the Depression, publishers told struggling booksellers they could return unwanted titles as long as they ordered new titles. The Depression happened in the 1930s. This is 2008 and publishers still use the same business model. As a result, the return ratio, while its average is slated to be 35 to 40 percent, in most cases, it’s much higher.

These are some of the contributing factors on why it’s easier to get an audience with the Pope than a publisher. Like the car industry, some time down the road, other firms – independent self-publishers – will reach a significant market share of the readership, if they haven’t already. We may never know officially because even the statistics gatherers only focus on the traditional bookselling market.

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