Auto Industry Mistakes, Welcome to Publishing

I almost said “What the fuck?” aloud when I started reading Motoko Rich’s article “Price War Over Books Worries Industry” in the Times. There’s been much discussion over Amazon selling ebooks at a loss in order to gain market share; this lateral move with Wal-Mart regarding print titles is equally troubling. Rich got it right when she includes the effect this will have on the rest of the industry: if Wal-Mart and Amazon are selling the top bestsellers at a loss, how the hell is the other 97% of the industry supposed to compete? (This percentage is derived from Borders and B&N’s reporting that NYT bestsellers represent 3% of in-store units sold.)

This seems analogous to the auto industry’s mistakes in the last decade, particularly U.S. automaker’s reliance on high-profit-margin gas guzzlers over hybrids. A short-term gain at the expense of long-term damage to the industry. Amazon and Wal-Mart’s meretricious effect nullifies the viability of the next crop of John Grishams, James Pattersons, and Barbara Kingsolvers. By doing so, this shortsightedness denies the value of the publishing industry in general.

Imagine if the top movie theatre chains decided to charge $4 for just the big studio releases this December. Do you think there’d be independent films in two years? Or, for that matter, any more studio films?

There’s been some great debate in 2009 about the list price for print and electronic formats. A fixed component of the price, which should never be compromised, is the pie slice going to the editors. It’s not a large percentage, of course – see BookTwo’s breakdown. But the editor is the one that publishes one title for every fifty manuscripts they read. We all know that every book published has to fight for its life to reach even a handful of readers. What we forget is those books represent 0.1% of the manuscripts floating around. It’s uphill battle after uphill battle, and now these two retailers are devaluing the content of those that have met all challenges and found a mass audience. (And how do you think publishers can afford to publish niche titles with niche audiences? Because their top earners provide the resources to do so.)

At base, I always worry when major industry decisions are being made by those who don’t come from a place as booksellers, writers, or publishers. Wal-Mart could decide to stop selling books and they’d remain a robust business.

I know these are a lot of scattered thoughts. I’m still a bit incredulous after reading the article. What do you think? As a customer, getting Stephen King’s 1,100pg hardcover for $8 must be pretty great, right?

(As always, take these comments as my own, not my employer’s.)

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