For those of you who want some background on why big publishers have mostly abandoned the midlist, this article[1] by Kevin O'Donnell is a good summary. Short version: A Supreme Court ruling related to tax markdowns on slow-selling books made it too expensive for publishers to hold paper inventory of midlist books from year to year. On the other hand, since e-books don't create excess inventory, there are no tax penalties for Amazon (or Apple, or B&N, or whoever) to keep a midlist book "in print."
Another great example of how finance mumbo-jumbo destroys industries.
So the publishing industry's balance sheet looks better because they carry no inventory. How is the publishing balance sheet going to look when the industry implodes?
Books are technically obsolete, but there are still plenty of cases -- stundents going to exams, book that depend on exact layout, etc -- where ebooks are no substitute.
An the skills in marketing, layout, editing, etc that the publishers have build up over the years are as needed now as they have ever been.
The only way the publishers will fail is if they don't adapt.
And even then, people are still selling horse drawn buggies (http://www.buggy.com/ -- warning early 90 design) on the internet.
As jolhoeft remarked, sealing the e-reader in a plastic bag will do in a pinch. You can't (comfortably) do this with a bound volume. How exactly is this a point in favor of dead trees?
I worry less about water damage to my Kindle than I worry about water damage to physical books, even without any sort of protective covering. If I spill coffee on my Kindle, I simply wipe it off. If I spill coffee on a bound volume of paper, I consider it to be "ruined." My Kindle has demonstrated far greater fortitude than paper in weathering spills.
One data point, but I heard from Brad Feld that when writing Do More Faster he found the publisher to be really good at taking a Word doc and converting it into a book (and all the editing that goes into that). He found them to be pretty much useless when it came to actually marketing a book. That probably explains why he's self-publishing his upcoming series.
It seems to me publishers will have to figure out either how to get better at marketing or evolve into low-cost specialty printers.
>"Another great example of how finance mumbo-jumbo destroys industries."
Finance, the art of getting capital to where it can be utilized most efficiently, has created vast, vast, vast amounts of wealth, everywhere it is practiced. Destroys industries? Please. It has created and bolstered more industry than anything you can name. It's the reason you own a car and a house. Finance is not a bad word.
You overstate your case. Finance is capital allocation not capital creation, car companies could just as easily operate by directly leasing the cars they made vs using 3rd party's to finance the transaction. Finance increases the market for things beyond who can directly afford them which drives up prices, see home housing markets around the world. However, on net it's still generally considered a good thing.
>"car companies could just as easily operate by directly leasing the cars"
...which is finance. So why don't they do that, if it's just as easy? And where does the money come from to front the cost of building the car that is to be leased? Because the lessee won't cover the cost for quite some time. Yep, finance.
I realize there's a populist movement, especially among the younger crowds that frequent the interwebs, that influences people to hate everything Wall Street. But I don't think people realize what a fascinating and, more importantly fundamental, role finance has played in history. Present day Silicon Valley does not exist without it. It does, in fact, create capital.
It does, in fact, create capital. No, it allocates capital. VC's don't directly create capital they take money from investors, take their cut, invest the rest and then you get Silicon Valley. It might seem like a semantic argument, but what your suggesting would be the same thing as arguing that Walmart manufactures TV's. They are involved in the process, but a lot of bad policy shows up when people confuse bank balances with actual capital.
PS: 'So why don't they do that, if it's just as easy?'
A lot of car companies do that ex: http://www.hondafinancialservices.com/. Whenever they advertise 0% interest that's the car company handling the loan. However, car companies often resell these loans to third party's to get their capital back. There is a lot of capital out there that's looking for safe investments and repackaged loans fit the bill.
Whatever you want to call the worship of ratios like "return on equity" without an understanding of the business, that practice is dumb and destroys companies that actually create value.
Dell is a great example -- be a computer manufacturer that owns almost no assets related to the business. Their Taiwanese suppliers like Asus are laughing their way to the bank as the Dell management patted themselves on the back for improving some ratios.
I've lived this. I'm learning programming now, but LSAT prep is my field. Last year I wrote LSAT explanations which should earn me $15,000-$20,000 annually, and I havent even made a physical book on amazon yet.
No publisher would have touched that, but it's more than enough for me, given the one-time effort required.
In fact, the books that I'm writing explanations for are hardly publishable. Every LSAT student has one, but often bookstores don't stock them because it's such a niche market. But inventory is not an issue online.
It very likely will; but then something else will come around that will help us review these stories, and it'll probably make money off advertisments (for books, even).
the market is effectively unbounded too, though - you just need better client-side filtering to remove what you consider junk products from your personal view.
Wholeheartedly agree. The same can be said of the music industry: the return of the middle class. Fewer people making it huge by 99% luck, more people creating art because they enjoy it, and actually being able to live off the proceeds.
However, if you look at the music industry, online music has become more of a means of marketing for the vast majority. I think most midtier musicians make money by touring and selling merch. (Which may be combined with teaching or day jobs.)
19 comments
[ 2.6 ms ] story [ 48.2 ms ] thread[1] http://www.sfwa.org/bulletin/articles/thor.htm
So the publishing industry's balance sheet looks better because they carry no inventory. How is the publishing balance sheet going to look when the industry implodes?
Books are technically obsolete, but there are still plenty of cases -- stundents going to exams, book that depend on exact layout, etc -- where ebooks are no substitute.
An the skills in marketing, layout, editing, etc that the publishers have build up over the years are as needed now as they have ever been.
The only way the publishers will fail is if they don't adapt.
And even then, people are still selling horse drawn buggies (http://www.buggy.com/ -- warning early 90 design) on the internet.
Quite. Does anyone yet make an ereader that can safely and sanely be used in the bath?
I worry less about water damage to my Kindle than I worry about water damage to physical books, even without any sort of protective covering. If I spill coffee on my Kindle, I simply wipe it off. If I spill coffee on a bound volume of paper, I consider it to be "ruined." My Kindle has demonstrated far greater fortitude than paper in weathering spills.
It seems to me publishers will have to figure out either how to get better at marketing or evolve into low-cost specialty printers.
Finance, the art of getting capital to where it can be utilized most efficiently, has created vast, vast, vast amounts of wealth, everywhere it is practiced. Destroys industries? Please. It has created and bolstered more industry than anything you can name. It's the reason you own a car and a house. Finance is not a bad word.
...which is finance. So why don't they do that, if it's just as easy? And where does the money come from to front the cost of building the car that is to be leased? Because the lessee won't cover the cost for quite some time. Yep, finance.
I realize there's a populist movement, especially among the younger crowds that frequent the interwebs, that influences people to hate everything Wall Street. But I don't think people realize what a fascinating and, more importantly fundamental, role finance has played in history. Present day Silicon Valley does not exist without it. It does, in fact, create capital.
PS: 'So why don't they do that, if it's just as easy?'
A lot of car companies do that ex: http://www.hondafinancialservices.com/. Whenever they advertise 0% interest that's the car company handling the loan. However, car companies often resell these loans to third party's to get their capital back. There is a lot of capital out there that's looking for safe investments and repackaged loans fit the bill.
I guess it is semantics:
http://en.wikipedia.org/wiki/Financial_capital
Whatever you want to call the worship of ratios like "return on equity" without an understanding of the business, that practice is dumb and destroys companies that actually create value.
Dell is a great example -- be a computer manufacturer that owns almost no assets related to the business. Their Taiwanese suppliers like Asus are laughing their way to the bank as the Dell management patted themselves on the back for improving some ratios.
No publisher would have touched that, but it's more than enough for me, given the one-time effort required.
In fact, the books that I'm writing explanations for are hardly publishable. Every LSAT student has one, but often bookstores don't stock them because it's such a niche market. But inventory is not an issue online.
Let a million niches bloom.
I'm all for this as long as it doesn't cause a descent into poorly made, ripoff, or other junk products flooding the market.