The news yesterday - which, since the book trade is not something I pay daily attention to, I didn't read until this post (via this one) informed me of it - is that many of the big US publishing concerns are retrenching, downsizing etc. Coincidentally, probably, the UK publishing industry is facing the problem of one of its major distributors, Entertainment UK, going titsup.com just in time for Christmas. EUK's collapse is a serious embuggerment since EUK is the main way that publishers get their titles onto the shelves of UK supermarkets. Fortunately it seems possible that it will remain a going concern in some form, however any confusion at this time is bad since the pre-Christmans season is when booksellers make the best money and in the UK Supermarkets have become a leading sales outlet.
However it isn't hard to note that certain parts of the book trade seem to be doing OK, as do certain publishers. As far as I can tell both Baen and Tor are flourishing, Harlequin / Mills&Boon ditto. Eagle Publishing (owner of Regnery, the publisher of Conservative books) doesn't seem to be hurting. I suspect there are other niches doing well that I don't pay attention to. All these successful players are genre/specialty publishers (some are of course parts of larger generalists) and I suspect that is a key reason for their success.
The larger publishing industry has, it seems to me, shot itself in the foot in a number of ways. Firstly there has been the "bestseller or bust" strategy, whereby a few authors get large advances to write books which are then hyped everywhere in the hope that they sell enough to cover the advance. This is not a good thing for all sorts of reasons, not least being what happens when one of these mongo would-be blockbusters flops. Another way the book trade is shooting itself in the foot is eBooks. I wrote a couple of articles fairly recently where I pointed out that practically every book published these days is available for free on various WaReZ sites so the adding of DRM and charging of large sums of money for stuff which anyone with a reasonable amount of spare time and google-fu can find for free without DRM is flat out stupid. Eric Flint disagrees with me about the amount of google-fu needed but he absolutely nails the point when he writes:
As a rule—there are always exceptions, of course, but not many—people who are well-enough educated technically to be able to devise quick ways to obtain pirated books, are also making a good living and don’t need to fret over a few dollars. They are no more likely to get involved in downloading illegal books—provided they can get what they want in a legal manner—than they are to shoplift a ten or twenty dollar item from a walk-in store.
I'll add that it also helps if they don't feel like they are being treated as either a criminal (DRM) or sucker (High prices) for an eBook.
Possibly the root reason why the book industry is in doo-doo is that they don't actually listen to their customers, something that the eBook issue I mention above is an example of. When it comes to dead tree editions they've actually got the system set up so they can't listen to the most important signal. Firstly there is the antiquated multi-tier distribution system that means that publishers actually market their books to the buyers of the major chain stores or the supermarket shelf fillers rather than to the reading public. Combine this with the fact that titles tend to get only fleeting exposure before being replaced and, as Lois M Bujold noted in an essay, there's a feedback problem:
One way to get More Stuff through is to speed it up, which is why books whip on and off the shelves with such velocity (category romance novels are given, count 'em, thirty days on the market before being replaced by the next batch). What this means is, the speed of book turnover has grown to be faster than the speed of word of mouth, a slowish process formerly vital to a new book or author. All but the very first readers to buy a book thus have no way to send economic feedback messages back through the system saying, "More, please." The late reader's vote is not counted; the reader who borrows instead of buying casts no vote at all.
I could go on but I think you get the point. The book trade is killing itself because it hasn't got a clue what its customers want and hence spends huge amounts of money trying to sell the wrong things at the wrong prices. Expect more firings and downsizings as the credit crunch bites because books are rarely a priority to the average consumer and hence are purchases that can easily be deferrred.