Why Traditional Publishing Will Fail

Jun 5, 2013 | The Publishing Industry

Book with page markerWith the merger of Penguin and Random House, we now have Random Penguin, a mega-corp that represents about half of the traditional publishing industry. The question now is where do they go from here? How do they, and the other four big publishers, take control back from Amazon and start a new golden age of publishing?

Hah. No, I’m kidding. Sorry, that’s about as likely as me commuting to work tomorrow on a unicorn. My opinion is that the traditional publishers are headed for a slow death, and if there is a new golden age of publishing, it’s already started – and Amazon was the one to make it happen.

Here’s why.

Amazon built the ebook market they have to sell to now

Amazon also built the new self-publishing market, but that was a pretty obvious step when you think about it. They created the Kindle, made buying ebooks simple, cheap and easy, and started hammering nails into the brick and mortar bookstores’ collective coffins. When they opened up the Kindle to direct self-publishing, they were really just completing the circle – from writers to readers, with no need for the traditional publishers.

Amazon created the market, made it hugely successful, and then made 90% of what the traditional publishing houses do¬†obsolete, along with their entire customer base of bookstores. For some reason, they’re not terrified by this.

They have no data and the wrong kind of expertise

Okay, so the big publishers want to compete with Amazon. Amazon has a recommendation engine that’s spent years being refined and improved. It’s got statistical data on book sales that would make the average analyst wet their pants. It’s got teams of the best technical minds that money can buy, all working on innovations and new features and all kinds of exciting stuff to harness new technology and increase sales.

The traditional publishers have none of those things, as far as I know. Royalty payments to authors have a reputation for inaccuracy. They have no idea how or why people buy books, not to the level of detail that Amazon does. They’ve never had to know, up to this point. They have a sales team, yes, but that sales team knows all about selling to bookstores, not to end users. They can talk about developments in the industry and all that, but I don’t see any job openings that might suggest they’re building an actual dev team who might create the kind of platform that could take on Amazon.

They’re building the wrong stuff

Okay, so they’re low on tech knowledge. But you know what publishers do know about? Authors.

Remember when Penguin started up Book Country? And we were kinda enthusiastic for a while, because it was something new at least, but it was not very user friendly? And then it started offering mediocre and largely overpriced publishing packages? And then Penguin bought Author Solutions, the company that makes a living by ripping off authors, and integrated their overpriced crap into Book Country?

Yeah. That’s what I mean, right there. I don’t think it was the only reason Pearson (Penguin’s parent company) bought AS, but that’s the trend I’m seeing. The traditional publishers are still stuck in a business model that doesn’t include actual readers, and it’s easier to stick to what you know even when that’s a bad long term strategy.

The right stuff they build isn’t good enough

So, I get the feeling that someone at the big publishers sort of has an idea about this new technology. The problem is that they’re just not going the right way about it.

Here’s two examples:

Bookscout, the Facebook app from Random House that makes recommendations based on your likes. Nice idea, but, well, Amazon already does that. Just not on Facebook. As far as I can tell, no one uses it and I’ve never heard of it before today.

Bookish.com. This was a big thing, a recommendation and bookselling website pushed by three of the Big Six, but the problem is that it’s just not bringing anything new to the table. It launched, got a burst of traffic, and now it’s not really going anywhere, if Alexa.com is to be believed.

Challenging Amazon is going to take a lot more than this.

They’re not helping their customers

What I mean here is that they’re not really doing much to help bookstores. The independent stores seem to be weathering the Amazon storm better than the big chains, and yet they’re partnering with tech companies like Google Books or Kobo. Chain bookstores are becoming more like Target or Walmart.

The point here is that the traditional publishers are almost completely dependent on bookstores, so maybe they need to be a lot more involved in keeping bookstores open and stocked with books.

Their biggest customer base is slowly dying out or stocking products other than books to survive, right now. Could the publishers not offer them more money for premium display space? Give them a bigger discount on books? Anything would be better than nothing, and it looks like nothing is happening.

In Short

Look, the basic problem here is the same as it was with buggy whip makers a hundred years ago when cars were just getting popular: technology has moved on. The big publishers are in the business of selling paper books, and paper books have their place, of course. But the future of reading belongs to the tech companies like Amazon, who know how to make the best use of the ubiquitous technology in our lives. Unless the Big Six – or Big Five, now that Random Penguin is a thing – can wrap their collective business brains around this, they’re doomed.

Yeah, I know you like paper books, person who is now saying ‘But I like paper books and I buy them!’. That’s great and I’m sure you’ll keep buying them. But we have a generation of kids growing up who learned to read on devices like the iPad, and believe me, how they think about books is what you should be watching out for.

So, where to go from here?

Ebooks have exploded in popularity. Self-publishing has done likewise. The paradigm is already in place where authors can use a service like Amazon, or its successor, to sell their product direct to readers and undercut the hell out of anything the publishers put out.

Where the publishers need to go from here starts with figuring out what’s left after you take away all the stuff Amazon has made irrelevant.

On the author side:

  • Distribution? No longer important. The Internet, and POD technology, takes care of that.
  • Editing and cover design? Authors can buy those services as they need them, for less than what they’d give up in royalties.
  • Getting into bookstores? Now we’re getting somewhere, but that’s going to be less and less important as time goes by and ebooks become more of the market. So this is a perk, but not something to be relied on.
  • Prestige? Well… for some authors, yes, but this attitude isn’t going to last as self-publishing becomes more accepted.
  • Expertise? Yes. Absolutely. The publishers know about books.
  • Networking? Ah, now this is the big one. This is something they can offer that Amazon can’t. The big publishing houses have all kinds of contacts that authors can take advantage of.

On the reader side:

  • …I got nothing. It’s not like they were offering anything to readers to begin with, and they’re not really offering anything special now.

There isn’t much, is there? And this is why I think the publishers are ultimately going to fail: the few things that they can offer that no one else can are just not enough to sustain a business their size.


The big publishers have a very rocky road ahead of them. I expect there will be more mergers, but this isn’t going to change things. So here’s what I think they should do.

Hire programmers. Hire them out of Google or Microsoft if you have to. Have them build a Netflix-style service for books, tailored to an individual’s reading speed, that automatically sends new recommended books to them, with a skip function if they don’t like the blurb. But seriously, anything that Amazon can’t offer is what you need to look at.

For gods sake, just accept that ebooks are cheap. Indie authors look at your $14.99 price point and laugh all the way to the bank, because they at least know how to optimize the price for maximum profit. I know you don’t want digital downloads to cannibalize hardcover sales, but if you don’t get over this, you’ll never survive.

Reading is now competing with movies, TV, video games, music and a whole list of other pasttimes. You’ve got to innovate, to develop new ways of getting your books in front of people and to find ways of engaging them that doesn’t feel like social media cargo cult stuff. Hire a team to do R&D. Look at tie ins to other mediums. You’ve got contacts in Hollywood, get out there and use them. Look at viral advertising. Stop pretending that you have to keep readers at arm’s length, and turn your brand into one worth remembering. All those different imprints, by the way? They’re making sure you’re virtually unknown among ordinary people who read books.

While you’re at it, start moving your business away from large warehouses full of physical books. (Expensive, collectable physical books will still sell.) Lower the print runs and set up POD centers that can produce small orders of books locally and overnight them to bookstores in the area.

Start an online program for independent bookstores, where they can see which authors are doing book tours in their area, so they can contact them. Set up an in-store affiliate program – if people buy a physical book, they can get the ebook at a big discount and download it right then and there.

Forget Author Solutions. No savvy self-publisher is going to give you the time of day if you push that overpriced crap on them. You want to really pull self-published authors in and make money off them? Open up your Bookflix service to them, and start profit sharing on the same terms as Amazon.

Final thoughts

I still think the big publishers are doomed, unfortunately. The changes they need to make are just too big, and they move too slowly. I expect to see them shrink like nothing else in the next decade unless, by some miracle, they completely change their business model in the next few years.

For what it’s worth, though, I still don’t apply most of this to Baen, and maybe Tor. If any publisher or imprint has a hope of surviving, it’s those guys. Independent bookstores will also survive, because they’re small enough and nimble enough to change when and how they need to.

And authors? Authors will always write and sell books. Now more than ever, that’s pretty damn easy.

(Usual caveats apply about this being my own opinion, etc etc, as an observer of the industry. Take with grain of salt and all that.)