The Wealth of Publishers

It’s no secret that there are people worried about the future of libraries.  I would suggest that this is a passing problem, with libraries realigning to take advantage of new media and modes of distribution.

The ones to worry about (if you’re so inclined) are main stream publishers.

Two events shaped the modern publishing industry.  Neither was intended to alter the world of books, writers, and readers.

One is the 1979 Supreme Court ruling of Thor Power Tool Company versus Commissioner of Internal Revenue (there’s a nice summary at: .  The gist of this was that a change in how inventory was valued for tax purposes led to a reduction in print runs … it no longer being as profitable to carry books “in inventory” for an extended period of time.

It also – and this is important – minimized the “long tail” that publishers traditionally kept (often mere mentions of titles and authors in the back of a catalog) and which supplied a significant, and reliable, fraction of a firm’s total income.

The second event was the “rationalization” of major publishers as they were acquired by large media companies.  Profit had always, of course, been important to publishers.  It soon became even more important … which meant a greater emphasis on best sellers (and a corresponding lack of emphasis on quality).  Here’s a book on that phenomenon:   The huge profits made on best sellers made such books the avowed aim of publishers.  The marketing dedicated to best sellers meant marketing not provided for other works.

These events have put mainstream publishing in a perilous position.  On the one hand, once a bestselling author has established a reputation he or she can begin to sell books on his or her own … disintermediating the publisher from the author –> reader value proposition.

On the other, the lack of a “long tail” means that main stream publishers no longer have the deep talent pool which had kept them in business for so many years.  This was a “farm team” of developing authors who experienced editors hoped would write more good books and even, perhaps, the occasional best seller.   These “second tier” authors were an expensive and raucous bunch and some were (no doubt) not worth carrying … but they were the true wealth of a publishing company.

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