When I was in college lo thirty years ago, I had a good friend who I’ll call Margaret.* She was so petite that she bought her clothes in the children’s department, but she made up for her physical stature with brains and good humor. (When she became a lawyer, she happily started wearing non-prescription glasses just to look older.) I don’t recall how we met, but we really dug each other in a platonic way. We dined regularly on Chinese food and would talk the night away.

One day, Margaret told me she’d started dating a guy who she wanted me to meet. In her typically self-deprecating way, she described the guy as “kind of goofy,” but it was clear to me that she was falling in love. His name was Seth Godin.

If you don’t know who Seth Godin is and you have anything to sell, find his blog here. Not that he needs any help from me; he’s a brilliant marketer and purports to have more than 600,000 blog subscribers, let alone occasional readers. He’s also written more than a dozen books on marketing, many of them bestsellers, and appeared on the cover of Fast Company magazine at least once.

You knew from the first conversation you had with Seth that he’d be successful in his chosen field. He had a way — like Warren Buffet on investing — of cutting through all the jargon and seeing the world as it really was (or could be shaped to be).

Seth had his own book packaging firm when I knew him well, but it was clear even in those early days that he couldn’t be contained by a small business. Eventually he was going big-time, though Margaret (whom he married) professed not to see it. I once told her that Seth was going to be rich one day and she turned to me incredulously and said, “You really think so?”

Though I’m no longer in touch with Margaret and Seth, I tapped him for some business advice years ago and I’ve followed his career from afar. He’s been an innovator since the Eighties on how to position oneself in the electronic world, and he invented the term “permission marketing,” among other things. A marketing company that he founded was sold to Yahoo! in the Nineties, and he’s just announced a partnership with Amazon.com that will publish books under an imprint called The Domino Project.

On many occasions lately I’ve recalled Seth’s early frustrations with book publishers, who often made decisions on his submissions to them without reference to data or what he would consider sound business principles. I used to defend them because — well, er, I was one of them. Now with a little hindsight, I can see that Seth was right about just about everything.

So to my lost friend Seth Godin I dedicate this list of:

10 Big Mistakes Publishers Make

1. Knowing their suppliers (authors) better than their customers (readers).

Steve Rubin took over Doubleday as publisher in the late Eighties, while I was there. He was an imposing presence in the editorial meeting (at least until we got to know him), and he would occasionally leave editors speechless by asking a simple question: “Who’s going to buy this book?”

Alas, although publishers have gotten a lot better at pretending to answer this question, it’s the rare case when they can do so to any degree of certainty. Compare this ignorance to consumer product companies, which I’m sure could tell you how many whiskers the typical Sensor razor user has per square inch, where he lives, and how much he spends on groceries.

Books are not razors, of course, though both stand between us and barbarism. Yet most people responsible for deciding what books to publish (and how to publish them) tend to know more about authors than they know about who exactly reads those authors. Forgive me, but this is tantamount to Gillette knowing more about stainless steel than about what bearded people require.

2. Failing to do market research.

Of course, one of the reasons publishers know so little about their customers is because so few in the business ever ask.

A friend of mine recently told me that an agent had rejected her YA novel about adoption because, the agent said, families of adoption are too small a group. Did he cite any data to back up this conclusion? Of course not. No doubt he came to it by parsing his personal experience living and recreating within a thirty block radius in Manhattan.

When considering what to acquire, publishers frequently do tap into prior sales figures for a particular author or for related books, but that tends to be the extent of their market research. They will tell you that market research doesn’t pay because every book is unique. But that doesn’t mean books of a certain type don’t fall into an aggregated, identifiable market — a market they ought to know more about than they do.

3. Thinking big advances produce “heat.”

There is a certain mentality that says heated auctions and million-dollar advances generate excitement that carries over into the marketplace. If this happens at all, it’s the exception that proves the rule. The size of the advance is inside baseball, and few prospective readers care. It may influence the (incredibly shrinking) book trade, but it rarely filters down to customers.

4.  Assuming readers think like them.

This is a corollary to No. 2.

My father, a retired accountant with rather refined taste in clothes, was once asked his opinion of two outfits by a client in the children’s clothing business. The one that most appealed to him was the worst seller and the one he hated turned out to be the bestseller.

Is it possible that publishers too often publish to the tastes of their editors rather than to the taste of the marketplace? You bet it is.

5. Worrying more about stealing than about selling.

One of the reasons, I believe, that publishers have been so slow in responding to new technologies has been the Napster effect — the fear that book digitization would lead to widespread pirating.

I had my own experience with this mentality in 2000 when, along with some colleagues, I launched a rights-trading website called Subrights.com. It was meant to be a marketplace for book rights but it failed miserably. One of the reasons was an obsession with piracy that prevented most publishers from posting text to the site. It’s hard to sell when you won’t show anyone the goods.

A friend of mine who ran a small but fashionable retail chain told me that sales doubled when they took the jewelry out of the case and put it on the counter. “But,” I wondered, “doesn’t that make it easier to steal?”

He looked at me as if I’d lost my mind. Sure it makes it easier to steal, you idiot.  And sales doubled.

Theft is a manageable problem. Lack of sales kills an enterprise.

6. Trying to cut their way to profitability.

A friend who has worked at a major house for more than twenty years told me recently that he fears his days there are numbered. “They’re mowing down all the experienced people now,” he said, “cutting all the big salaries.”

Unless I’m miscounting, this will be Year 3 in the big publisher austerity plan. How’s that working out for you, fellas?

An existing company can cut its way to profitability in the short term, but in the long term the only way to make money is to grow.

7. Failing to teach business principles to English majors.

People who love money go to Wall Street. People who love electronics go to Silicon Valley. People who love books go into book publishing.

That’s all good and well, but if book publishing is to survive it will require the understanding of sound business principles. For whatever reason, most people who love books so much that they seeks jobs in publishing don’t tend to have business backgrounds. An English major myself, I recall being taken aback the first time someone asked me to run a Profit & Loss statement. I was there to edit!

Maybe that guy in warehouse operations already has an MBA, but would it hurt publishers to send more of their key people for business training?

8. Publishing too few books.

More often than not, one hears from agents and authors these days that publishers don’t promote the books they publish. Rebecca Skloot, I understand, spent tens of thousands of dollars of her own money turning her book, The Immortal Life of Henrietta Lacks, into a bestseller. Nothing unusual there. We hear endless stories of authors taking themselves on tour, booking their own appearances, even purchasing ads on their own behalf.

Rather than diligently marketing most books on their list, commercial publishers, it seems, are increasingly in the business of throwing stuff up against the wall to see what sticks. At the same time, apparently, they’re reducing the number of books they publish. Does this make sense?

If I’m playing roulette, don’t I have more chances to win if I bet a little bit on many numbers? Sure it costs money to place the bets, but (unlike roulette) once a book pays off it tends to keep on paying, at least for a while. If your strategy is to allow the randomness of the marketplace to decide which products of yours succeed, shouldn’t you have as many products out there as possible?

By not promoting most of their books and, at the same time, publishing fewer books, publishers aren’t playing roulette — they’re playing Russian roulette. And guess where they have the gun pointed.

9. Refusing to collude.

In many ways, the book business is suffering. One big problem publishers have is the common policy of selling returnable, which can kill the bottom line (not to mention killing a whole bunch of trees). No one house, of course, can solve this problem on its own. If I refuse to sell returnable to bookstores, my competitor would be happy to make up the difference. That’s why we need a little collusion in book publishing.

How will bookstores feel about this? Not good, of course. One universal human trait is a willingness to lay one’s risk off on the next party. If you could gamble with someone else’s money and keep the proceeds if you win, wouldn’t you take that bet? But this isn’t how most retailers work nor must the book business continue to work that way. Stopping returns would be good for everyone, including retailers, in the long run.

If major publishers all got together to ban returns, in the first instance it would undoubtedly lead to a flood of returns, as retailers rushed to disgorge themselves of inventory sold under the old terms. This would be a one-time financial hit that the big publishers (which would be the ones colluding) could withstand. And it would be a boon to booksellers, allowing them to re-capitalize. Then everyone in the book business could start to treat merchandise the way most retailers and their vendors do.

I know, I know, collusion is illegal. While booksellers are returning all those old books they’ll also be suing and publishers will have to defend themselves. But those lawsuits will take years. Meanwhile, the business will be healthier overall. By the time things settle, no one — not even the booksellers — will want to go back to the old way.

10. Forgetting what business they’re in.

Consider a large publisher I know of that has a small foreign language program, which it bought more than a decade ago. If I recall the numbers correctly, that division has had flat sales around $10 million ever since. Meanwhile, a company calling itself Rosetta Stone comes along and in less time grows from zero to more than a quarter billion dollars in revenue.

Why didn’t the publisher’s division get that growth? Lack of innovation, naturally. They thought they were in the book business (the language book business) when they were really in the language teaching business.

Contrast this lack of understanding with that of CBS, for example, in the days of William Paley. CBS began in radio but when television appeared Paley knew his company wasn’t in the radio business — they were in the broadcast business.

Now we have e-books, which book publishers first met with contempt, then with fear and now with a cold embrace.

Last year at this time Jonathan Gallassi, the brilliant publisher of Farrar, Straus & Giroux, wrote an interesting op-ed upon the news that Open Road Media would publish the backlist of William Styron, cutting out Styron’s original publisher.  He stated: “Even if someday, God forbid, books are no longer printed, they will still need the thought and care and dedication that” editors and publishers gave to Styron.

Why “God forbid”? Why should it matter to a publisher whether books are made of paper or pixels, so long as the publisher can nurture talent and make money doing so? If they’re going to survive well into this century, publishers need to let go of the idea that they’re in the book business and embrace the realization that they’re in the story business and/or the information business.

Most writers I know will be rooting for them. But we also know that not every story has a happy ending.

*I’m using a pseudonym for Seth’s wife because, though Seth’s made himself a public figure, I’ve never seen him refer to his family by name.

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J.E. Fishman, a former Big Six book editor and former literary agent, is author of the thriller Primacy, which Publishers Weekly called "appealing" and Kirkus called "good, boisterous fun." His mystery novel, Cadaver Blues, was serialized in 2010 on TNB and you can still find it here if you dig deep enough. It's now available in ebook and paperback. His financial thriller, The Dark Pool, was published this year, and his new series of police thrillers, Bomb Squad NYC, will be published in February 2014. He blogs here and at the Huffington Post. Please visit and follow him at his very fancy and expensive official author website.

28 responses to “10 Mistakes Big Publishers Make”

  1. Paul Clayton says:

    J.E., thank you for your post. My feelings about publishers range from contempt to perplexion (did I just create a new word here? Don’t have my Webster’s with me.) Anyway, My few encounters with them have been mixed, obviously. I had the second book in a series dropped, while the other two were continued, covers designed that would repel the folks who would enjoy what was within, and entice those who would not, that sort of thing. But, as an unknown writer, you take what you can get. Or at least, you did, until the ebook revolution came along. I’m still trying to find a regular publisher to take a look at my latest historical, White Seed: The Untold Story of the Lost Colony of Roanoke. But while I’m waiting, I’m busy publishing it myself, both as a POD and as an ebook on Kindle and other outlets. I first uploaded it in 2009. Initially it sold a half dozen books a month. Now it’s selling a couple dozen a day and is hanging out in the Kindle>Fiction>Historical> Top One Hundred selling books, with works by Follett, Clavell, Gregory, Galbaldon.

    I cannot understand the disinterest on the part of Big Publishing in regards to this book. Perhaps that’s due to the fact that there are no vampires or werewolves in the book. Or maybe I’m on some kind of list due to my snarky attitudes towards the NYC houses. But you’d think if there was money to be made…

    But I think you have it right. They’re just too slow on the uptake.

    Anyway, as long as the internet doesn’t crash and burn, I’m happy.

    Best!

  2. J.E. Fishman says:

    Glad to hear you’re working it on your own behalf…and having some success. Stay tuned for my own efforts.

  3. Anitra says:

    A more accurate title for this article might be “Ten Mistakes Big Publishers Make.” Coming from the small press world, I had a hard time finding ideas here that I could imagine putting into action. The points about business education and knowing the reader are well put (and applicable to everyone in this industry, I might add). But I was taken aback by the breeziness of your argument that abolishing returns would be “a one-time financial hit that the big publishers (which would be the ones colluding) could withstand.” This would leave small presses where exactly?

    On second thought, don’t answer that. I think I can figure it out for myself. 🙂

    I’ve really enjoyed reading your posts here on TNB, but this one seems to make the too-common mistake of equating “publishing” with “big publishing.”

    • J.E. Fishman says:

      You are so absolutely right that I’ve just changed the title. But I don’t agree with the implication that small publishers would be killed by the elimination of returnable terms. Hurt, yes, but made stronger in the long run.

      • Anitra says:

        Wow! The system works.

        Seriously though, thanks for changing the title. That was a very nice surprise.

        I’m intrigued by your comment on the possible effects of abolishing returns on small presses. Can I put in a request for a future post focused on returns? Or even a series of posts?

        Now look what you’ve done: I’m drunk with commenter power!

        • J.E. Fishman says:

          You know, I’ve now mentioned returns in two posts. They’re the bane of the industry, but I fear boring people with a deeper discussion of them. Nor do I claim to be an expert on that subject.

          Having been a business person, I think in general that contracts are not written in stone. If the big publishers abolished returns it would set a standard for the industry. Small publishers wouldn’t have to follow all at once. They might, for example, begin by only selling certain titles non-returnable and then build on that. But even if they did abolish returns in one fell swoop, they could string out the credits owed. They wouldn’t necessarily have to write checks to the bookstores. The big guys wouldn’t want to be seen beating up small presses and the smaller retailers can relate to the challenges of a small business. These are symbiotic relationships, after all. In the long run, the whole industry would be better off.

      • James Fouche says:

        Hi JE!

        What an accurate description of what we as writers are currently facing. I’m stuck in South Africa where shelf space still rules the coop. With a worldwide release I notice the differences over the borders. Overseas its predominantly e-commerce, here it is very much I-see-I-buy.

        If I can already see this, why aren’t publishers adapting their industry to what will be the new norm? Or, better yet, why aren’t they creating the new norm? I’m baffled!

        Would love to get your feedback on the site. jackhanger.com

        Where do you see the industry in 10 years? Do tell…

        Keep up the good articles.

        James Fouche

        • J.E. Fishman says:

          I checked out your site. I’m not an expert on websites (hell, I’m not an expert on anything — that’s why I mostly write fiction), but here’s my take…

          1) Get rid of the music. It’s intrusive. And it’s made worse by the fact that, even when you turn it off, it pops back on again when you switch pages within the site.

          2) Get rid of the counter. If the number is anything smaller than 300,000 (and whose isn’t), you look like a loser.

          3) Your bio makes you sound like a stalker.

          4) Your book description is weak. Why are you starting with the backstory when you have so much space? The backstory is only interesting once one is into the main premise.

  4. Greg Olear says:

    Love this series, Joel. Really learning a lot.

  5. “Most writers I know will be rooting for them.”

    Which is the thing I don’t get. Your posts here have been extraordinarily cogent and canny about these matters, Joel. Far more so than many of the other posts I’ve read around the Interwebs. There’s always some publisher or other seeking to demonstrate why ebooks have to be ten bucks, or why literary agents will remain the best thing to happen to the publishing industry since movable type, or some author who’s mistaking high sales for business acumen and telling everyone that they should self-publish.

    So it’s refreshing to see some thoughtful discussion. Because we desperately need it, I think.

    I still don’t think corporate publishers are considering readers, though. I think they’re focused on booksellers and retailers and literary agents and authors, and I think a lot of people in executive positions within the corporate publishing industry have forgotten that every business is, at its core, a provider of some service, and worse yet, as you mention, many have forgotten what service they provide.

    But even if they had, You list ten big mistakes corporate publishers make. And you have a background in business, as you note.

    But yet most writers are rooting for them?

    Are they, really, or is it mostly just a case of refraining from biting the hand that feeds them?

    I read a lot of people uphold the traditional view of corporate publishing, sometimes stating that it’s still some mark of legitimacy. I’ve read contests whose eligibility requirements demand that entrants have “returnable” books “stocked in brick-and-mortar stores,” and it makes me scratch my head. With Barnes & Noble on the sales block for the past, what, six or seven months, and vendors no longer shipping to Borders because Borders is no longer paying them, I admit I don’t understand the allure of bookstores. I mean, don’t get me wrong; the Strand is pretty friggin’ awesome. And I’ve gone to B&N readings. But honestly, the only time I’ve walked into a bookstore since I bought my Kindle was to check out a nook color (meh) at B&N.

    I suppose I just don’t get why anyone–especially writers–would root for the success of corporate publishing. I think the reason corporate publishers were so slow to resignedly embrace ebooks is that they sensed it was the end of an era, and that era was theirs.

    • J.E. Fishman says:

      Yes, it is a case of refraining from biting the hand that feeds them, or may one day, or may never again, but hope springs eternal. Who can be sure whether time is really running out on all that, eh?

      • J.E. Fishman says:

        O.k. More seriously. Writers should want there to be options. Better to have the old options linger while the new options work themselves out.

        • Sometimes I’m not so sure, especially during times when it seems the old options are lingering and attempting to prevent new options from working themselves out. And actively disparaging new options while they’re at it.

  6. Reno Romero says:

    Wow. This was great. I don’t think much about publishing (yeah, I know I should) and you bringing these issues to light is probably the reason why. Bu i needed to hear it. I needed to hear it. You should send this post all over the place. Folk can benefit from this. Thanks.

  7. Tom Hansen says:

    Loving this series JE.

  8. Zara Potts says:

    This is a great series, J.E. I’m learning a lot and your common sense attitude is right on the mark…
    Thank you so much for posting these..

  9. Thanks for another fascinating post. As long-time Godin groupie, it was fun to get a further insight into what makes him tick (a smart woman beside the smart man? ), and your comments about and knowledge of the p- world are always instructive. Especially the point about established pubs being stuck on being in the book business rather than the story business. This is where Indie and small presses are leaving them in their dust. Thanks, J.E.

  10. Simon Smithson says:

    This is – to re-use a word used already – fascinating stuff, J.E. Please, keep this series up, it’s inspirational as much as it is good reading.

  11. […] From The Nervous Breakdown, 10 Mistakes Big Publishers Make: […]

  12. Juicy, tangible, real, disturbing. But then that’s businesses of all kinds. The most successful companies aren’t just branding, but connecting to customers and clients in unique ways, and you point that out so well.

  13. J.D. Smith says:

    In support of Points 1, 2 and 4, I am continually amazed that publishers neglect light verse, which would outsell virtually any of the “heavy” verse made available by the few well-known houses that bother with that sort of thing.

    While the potential for extra sales might not be great by contemporary standards, I suspect those involved in editorial decision are caught up in a sort of groupthink that blinds them to this small net positive.

  14. Jeffro says:

    I think the number one mistake publishers make is pricing their books so high. Tao Lin’s 112 page novella Shoplifting from American Apparel has been sitting on the Charlottesville Barnes and Noble bookshelf priced at $14.95 for well over a year now. When I first found it, I was thrilled. Then I flipped it over, saw how much it would cost me, and thought, “You’ve got to be kidding me?!”

    I’m not paying that much for a novella by anyone. And it’s still there because I imagine many others have picked it up and put it back down for the very same reason.

    Publishers and booksellers are shooting themselves in the foot just like music stores were doing 10-15 years ago charing their customers $18 for a CD.

  15. […] an earlier post I mentioned that one of the big mistakes publishers have made is losing touch with their end […]

  16. myne Whitman says:

    I’m really loving these series, and as someone who’s interested in a different and more customer focused publishing, I think the first point is absolutely correct.

  17. Ed says:

    I found this post very educational and enlightening – thank you!

  18. […] of Chadds Ford, Pennsylvania, recently wrote a brilliant blog: 10 Mistakes Big Publishers Make. http://www.thenervousbreakdown.com/jefishman/2011/01/10-big-mistakes-publishers-make/. Knowing their common mistakes can help an author jump publishers’ hurdles. If you can get inside […]

  19. […] — 10 mistakes big publishers make […]

  20. […] Fishman of Chadds Ford, Pennsylvania, recently wrote a brilliant blog: 10 Mistakes Big Publishers Make. Knowing their common mistakes can help an author jump publishers’ hurdles. If you can get […]

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