Friday, 19 July 2013
The book industry has had long had its own ecosystem, characterized in the main by authors, publishers and brick-and-mortar retailers. But lurking behind this well-recognized ecosystem is a subsidiary ecosystem that has well served the needs of authors, publishers and the reading public. One of the main pillars of the subsidiary ecosystem is the way that reader browsing has fed the sale of backlist titles, which in turn has served as a significant source of income for both publishers and their authors. However, at least according to a recent Bloomberg radio podcast that reached this Kat's ears, the browsing/backlist ecosystem is under threat from the rise of the online book retailer and e-book markets, which in turn may threaten the larger book publishing business. At a time when even a large book dealer like Borders can go out of business, here, this phenomenon is worthy of a closer look.
The publishing business is roughly divided into a front list and a backlist. The former refers to the first year or so after a book is published. The latter refers to books that are no longer on the front list, but which appear in a publisher's catalogue. The book retailer will then decide which of the books appearing on the publisher's backlist are worthy of being stocked on the retailer's bookshelves. Thus The Da Vinci Code is now a backlist book and it continues to sell well (as Mr and Mrs Kat can testify, having recently fought the crowds to visit Rosslyn Chapel near Edinburgh, a site that appears prominently in the book, here). For those who like greater backlist longevity, it is difficult to beat the late J.D. Salinger's classic work, The Catcher in the Rye, which is reported to sell over 200,000 copies each year. Backlist sales are not just "nice to have". It is estimated that up to 50% of a publisher's profits in a book are attributable to the sale of its backlist titles. Add to this the fact that most of a publisher's expenses are incurred at the front end (such as editing, printing and marketing) and one can see that a substantial portion of the amounts received from the sale of backlist titles goes straight the publisher's bottom line. The successful sale of back list books is therefore an essential component of a traditional publisher's business model.
The rise of both the online book retailer, such as Amazon.com, as well as the e-book reader, materially threaten to disrupt the browsing/backlist ecosystem. To the extent that online retailers and e-books both contribute to the decline of the brick-and-mortar book industry, there are fewer such outlets for the reading public to frequent. Fewer outlets, together with fewer browsers, mean that that there are fewer opportunities for browsers to come upon a backlist title that they may wish to purchase. Fewer purchases of backlist titles put increasing pressure on a critical part of a book publisher's sources of income. Given this, it seems to this Kat that the publishing industry has two choices (not necessarily mutually exclusive). First, it can continue to search for effective ways to emulate the browsing experience in the online environment, thereby preserving the functionally of the browsing/ backlist subsidiary ecosystem. Secondly, it can jettison, at least in part, this subsidiary ecosystem and search for substitutes to that ecosystem that work in the online world. This Kat, a book lover before he even learned how to purr, will follow this drama with eager, even compulsive interest.