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.