The Death of Traditional Publishers? Part 8: The Date of Their Demise

Michael Shatzkin, a respected book industry consultant, weighed in with an interesting article about how soon the publishing crash could come. His analysis is fairly solid and he sees a “serious disruption” in book distribution as early as November, 2012.

The latest game-changers are Apple’s iPad – which reached the 1 million sales mark in only four weeks – and the now-available iPhone 4.0.

This new generation of iPhones (and iPod Touches) all have a built-in version of iBooks, Apple’s book-reading software. This will add over fifty million eBook readers to the market, with readers being able to order books from anywhere at any time.

This will be a slow, steady and serious blow to brick-and-mortar stores. Predicting the death of traditional publishing, he says, is not a case of figuring out how it will happen, it’s a matter of pinpointing the when.

Early last month, Simon & Schuster announced that first-quarter sales from its digital division had more than tripled, to $12 million, and now account for nearly 8% of income for the publishing house. If by the end of 2012, 25% of sales for a new book are digital, then about half of new book sales will be made through online purchases. Print books are never going to go away; but the current distribution model will.

Shatzkin believes that once eBook sales hit 20-25% of total sales, print run numbers will fall to a point where the current system for sales will break down. Currently books can be returned for credit, so for every book sold, two are printed. EBook sales will create smaller print runs, driving up the per unit cost, forcing higher prices which, in turn, will kill sales. Game over.

The monthly release of eBook sales figures by the IDPF provides a regular reminder about how fast this market is growing. Project the curve into the future and think about the implications!

Author Michael Stackpole thinks the transition will be sooner: he says June 2012. He believes the most serious blow will be dealt in December 2011, when a second wave of tablets becomes the hottest holiday gift item.

The second point which propels Stackpole toward his conclusion is the ease with which authors themselves are able to create and market eBooks: “In just over an hour, I converted a 192,000 word novel into an eBook. Putting the book up for sale in my website’s store, and blogging about it on Twitter and Facebook to let readers know it exists, was work of a morning. And the cost to me of capitalizing story inventory that would otherwise sit idle is, well, a morning’s work.”

He knows that authors can easily produce eBook versions of any length: anthologies, novels, novellas and short stories. Authors will make far more on those eBooks through direct sales than publishers are offering, even with their inflated (and sale-discouraging) pricing.

There is no incentive for authors to sell those rights to traditional publishers which means, in the fairly short term, publishers run out of material to sell. Their backlists will vanish as authors sell the books themselves.

If these men’s estimates are right, we are only two years away from a publisher (or author) being able to reach half the market for a book without inventory/monetary risk! And that disruption could take place before many books under contract now will reach their publication date.

I’ll conclude with Michael Stackpole: “2012 could be a year of disaster, not because of the Mayan calendar, but because of traditional publishing’s inability to deal with the impact of technology, and their arrogant refusal to adapt. As long as publishers cling to the belief that they’re the only game in town – employing a business model that has not significantly changed since the early 1800s – it’s a matter of when, not if; and that when fast approaches.”

(By the way – if you haven’t done so, would you please click on the “HELP” tab and vote for a book cover? Or tell me where I can find blond male cover model photos? All the standard sites that sell photos have the SAME men! THANKS! – Kris) … (And subscribe to this blog if you haven’t already – big stuff is coming by the end of the month!)


7 Responses to “The Death of Traditional Publishers? Part 8: The Date of Their Demise”

  1. 1 americaneditor 06/12/2010 at 7:06 AM

    Kris, I think both Stackpole and Shatzkin are wrong. If the measure is the date when authors will be able to reach at least 50% of the marketplace sans publishers, then that day arrived months ago, if not years ago. The problem is not accessing the market but being more than a single needle in a haystack of needles so that the avid reader can find your work. And the answer is clearly not an author’s own website, which works only for devoted fans and for people who have nothing better to do with their lives than spend it online.

    Brick and mortar stores are in decline in their current configuration, but they needn’t be counting the days until their final demise. All they need to do is change their purpose and the way they are monetized — not an easy task but one that is definitely accomplishable (and something I plan to discuss on my own blog, so I won’t reveal my ideas here :)).

    The iPad is NOT — let me repeat — NOT the game changer that Shatzkin thinks, at least not based on what we know about iPad buyers today. The iPad is a toy; it is neither a particularly great computer nor a particularly great ebook reader; in virtually all aspects, it is mediocre.

    Yes, 2 million have been sold, but so what. How many millions of laptops and netbooks have been sold and none of them have been game changers for publishing even though iPad-type apps such as Stanza, B&N for the PC, Kindle for the PC, etc., have been available. Using the iPad is like using one of those devices to read a book except that it is a slicker design and has the Apple nameplate on it.

    The real revolutionaries were the Sony Reader and the Amazon Kindle; these devices, particularly the Kindle, upset the publishing world, and did so for a very good reason: these devices were bought by people who read and who want to buy books. In contrast, the iPad has not yet been bought in large numbers by those same people. Few avid readers that I know have rushed out to buy an iPad to replace their Kindle, Nook, or Sony. And regardless of what Stackpole and Shatzkin think, it is the market of the avid reader that the device has to capture, not the market of the person who buys 1-3 paperback books every year.

    There is a long way to go in deciding what the shape of the publishing world will be 10 years from now, let alone 2 years from now.


  2. 2 kristualla 06/12/2010 at 10:20 AM

    Rich, I agree about the iPad. It’s a weird and expensive item that is a hybrid much like a mule… Not as usable as a small computer (like an Acer), far too big to be a pocket-item (like ANY phone or PDA). Impotent.

    These men were talking about the iPHONE, and the iBook program on it. But for us *ahem* mature readers, reading on a tiny screen like the iPhone is 1) annoying, and 2) backlit (= eyestrain), unlike the dedicated e-readers. And you are right about Kindle – and who bought it! I’m a self-confessed Kindle-holic.

    I think the 2012 date is a conversation starter, for sure. When you say “it is the market of the avid reader that the device has to capture” you’ve hit the nail. The DEVICE needs to come down in price. When it does, things will tip.

    Monday’s post is about the new print book. I can’t wait to hear your take on that! Thanks for posting!

  3. 3 bethtrissel 06/12/2010 at 10:24 AM

    This is all quite fascinating. Publishing is undergoing a revolution, or is that evolution? Very interesting to see what will happen.

  4. 4 Frankie Robertson 06/12/2010 at 10:03 PM

    Another thought provoking post. Thanks, Kris!

    Rich (AmericanEditor) raised an interesting point: how do we gain the attention of the avid reader so we don’t disappear in the stack of needles? If the future is authors going it alone in the online ocean, how do self-publishing authors differentiate themselves from all the others using social media to promote themselves?

    • 5 kristualla 06/13/2010 at 1:21 PM

      This is where social media marketing and word of mouth come in. In the traditional model (just like on TV) new releases have to prove themselves quickly or they’re done. But independent authors can take their time – we aren’t going to pull our own stuff from publication!

      But it’s going to take a lot more than ONE book to get there. I would say, have at least 2 if not 3 polished works in the pipeline. That way, when someone DOES find you, they can keep finding you in quick succession. You can become a habit. 🙂

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