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Books: Onward to the Digital Revolution

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Tomohiro Ohsumi/Bloomberg/Getty Images
Models showing off Sharp’s new Galapagos e-book readers at a news conference in Tokyo, September 2010

In his acute, prolix study of contemporary book-publishing practice in the United States and Great Britain, John B. Thompson, a British sociologist, warns against drawing facile inferences from digital technology. He writes:

The fact that ebook sales finally [came] to life…when the sales of traditional printed books were declining is only [a] superficial…sign—we are still a long way from [when] publishers can rely on ebook sales for a substantial or even a significant proportion of their revenue (if indeed they ever will).

But what if digital technology spawns a radically new mode of distribution with few of the present industry’s fixed costs, one that delivers content in both physical and e-book form directly to readers wherever they may be?

How this new mode of production will affect the world’s future as Gutenberg’s press unexpectedly affected the future of Europe is not within the scope of Thompson’s book. Even at this early stage, however, we may safely assume that this historic change, like all human ventures, will not be an unmixed blessing. We may be thrilled to know that Su Tung Po, Mark Twain, and Leo Tolstoy can soon be read in multiple languages by residents of the most remote human settlements but Das Kapital and The Fountainhead are also books and they and their digital successors will now enjoy greater access than before to susceptible readers.

Digital enthusiasts should also consider that as the embrace of other electronic media has widened, the average quality of their product has declined: from Masterpiece Theatre to Jersey Shore, from Franklin Roosevelt and Adlai Stevenson to Sarah Palin, from Julia Child to Rachael Ray. My own guess is that the digital future in which anyone can become a published writer will separate along the usual two paths, a narrow path toward more multilingual variety, specificity, and higher average quality and a broader path downward toward greater banality and incoherence, while the collective wisdom of the species, the infallible critic, will continue to preserve what is essential and over time discard the rest.

Electronic storage is fragile and interconnected, subject to unpredictable shocks, corruption, and deletions including those instigated by dictatorial regimes and individual lunatics. The two-thousand-year-old codex—printed pages, bound between covers—therefore will not go the way of vinyl and the compact disc but will survive for content worth keeping while the e-book/ e-pad formats and their future iterations will be more and more widely used, particularly for ephemera including soft-core pornography by women,1 the fastest-growing e-book category, and most reference works, such as encyclopedias, atlases, manuals, and so on that are constantly revised and may now be downloaded item by item.

Far more than any other medium, books contain civilizations, the ongoing conversation between present and past. Without this conversation we are lost. But books are also a business, which is the subject of Thompson’s book. As a social scientist he studies the “field” of book publishing as he would that of a strange culture. He has “listened attentively to people speaking a language [he] didn’t understand [and] eventually grasp[ed] the rules of grammar that make their language intelligible…[to] one another.” From this he “reconstruct[s] the logic of the [book publishing] field.” Like Samoan teenagers affronted by Margaret Mead’s version of their ritual coming of age,2 Thompson’s subjects may resent what an outsider has made of their own practices, but the wiser among them will be impressed, for this is the story of a culture in trouble, facing a profound change in its mode of production, but so encumbered by its past as to be unable to seize opportunities offered by technological change.

Had Thompson begun his book with its conclusion and described the culture of publishing in transition toward a digital future, he might have told a more dramatic story. Instead he has produced a fine-grained snapshot, frozen in time, of the terminal struggle of traditional publishers. His mordant picture of an industry in crisis gives publishers, writers, and readers much to think about.

The industry that Thompson has studied, to say nothing of the digital future that he belatedly describes, could not have been imagined fifty-two years ago when I first joined Random House as an editor. Then the cultivation of the backlist was essential to publishers’ survival, a mark of distinction and a service to civilization. We took pride in our brilliant backlist and weighed every editorial decision with backlist in mind. If a strong preliminary sale was also in prospect, so much the better, but it was backlist income that had sustained the highly conservative publishing industry for centuries and would do so forever, we thought then.3

Random House editors were entrusted with all but unlimited autonomy. There were eight or nine of us of more or less equal status in those years, supported by editorial assistants and a small technical staff: a publicist, a sales manager responsible for a dozen or so travelers, a production manager, an art director, a business manager, copy editors, a receptionist, a telephone operator, a few warehouse people, and the founders, who shared a secretary. They looked after large matters and left editorial decisions to the editors except where unusual risk was involved. The internal telephone directory didn’t fill a three-by-five card. Best sellers were welcome but not, as they are today, a matter of life and death. Random House best sellers typically enjoyed a long second life on our paperbound backlists, which were stocked by hundreds of independent bookstores in cities and towns. Our procedures were informal. We had no meetings.

Unlike today’s market, dominated by a few national chains, most bookshops were locally owned and managed. Their staffs were usually avid readers and knew what to recommend to their customers. Many of them were our friends and confidants, keeping us in touch with the marketplace. Mornings I stopped at the basement mail room to read the day’s orders before I walked upstairs to my office. Random House was a happy and successful place, a dream in retrospect populated by William Faulkner, Jane Jacobs, Bill Styron, Ted Geisel, John O’Hara, Jim Michener, Robert Penn Warren—where the owners kept their business worries to themselves while we spent our days and nights with Wystan, Toni, Jim, Edgar, Truman, Norman, Terry, Red, and Peter. The company made money but this was a means, not an end. What mattered most to us was the work itself. The business grew and survived the occasional drought. We thought it would never end.

And then it ended. When I joined the company in 1958 its sales were less than $8 million. Because the business was privately owned, none of us knew or cared what it was worth until the owners took the company public to establish a valuation for estate-planning purposes. Then, having acquired a few smaller firms, including the illustrious Alfred A. Knopf, the owners, thinking of retirement, sold Random House to RCA in 1965 for $40 million, a surprisingly high figure.

We assumed that RCA, which owned one of the great music labels, had been impressed by Random’s equally distinguished backlist. RCA was acquired in turn by General Electric, which had no use amid its jet engines, locomotives, and dynamos for a marginally profitable player in an exotic field and sold the company to Condé Nast. Eventually Random House, by now laden with acquisitions, was acquired by Bertelsmann, a German conglomerate, for $1 billion, more or less, an astonishing price in 1998 for a mature firm in a marginal industry. By then the Random House I had known was unrecognizable.

The trouble had begun in the Eighties when the book business had unexpectedly inverted, the result of the demographic shift from cities to suburbs in which the large, urban, independent bookstores with extensive backlist stocks and bookish owners and clerks attuned to their customers’ tastes and interests began to disappear as their customers migrated to the suburbs. They were replaced by chains of small shops in malls, paying the same rent as the shoe store next door and dependent on the same turnover. The effect on Random House was felt as a loss of autonomy as our retail market consolidated under remote management. The chains borrowed their business plan from McDonald’s. Books were hamburgers, fast-moving items with mass appeal served by unsophisticated staff to anonymous customers. Their management thought of books as units and no longer talked to editors.

As backlists melted away, best sellers were now essential to publishers’ survival: a disaster for undercapitalized publishers and a bonanza for agents of brand-name authors who could now put their celebrity clients up for auction, forcing publishers to risk ever greater guarantees to sustain a constant supply of potential best sellers demanded by the malls. Only the richest houses could afford the shortfall when these guarantees failed to earn out and truckloads of unsold copies were returned to the warehouse.

Since size was now obligatory, mergers and further mergers were inevitable. The result is today’s ramshackle conglomerates with their ghostly imprints served by layers of costly management unable to respond nimbly if at all to an expanding digital marketplace in which the major innovations are introduced not by publishers but by the electronic marketplace itself—by Google, Amazon, Apple—to which publishers have only belatedly and weakly responded.

In the mid-Eighties I proposed to my colleagues at Random House that we create a direct mail catalog comprising 40,000 or so backlist titles selected from the lists of all publishers, to be ordered by readers over an 800 number. The Internet had not then been commercialized but digitization was in the wind and “disintermediation” had become a buzz word. I argued that with retailers increasingly unable to stock extensive backlist we should now sell our backlists to readers directly. I was, of course, proposing the opportunity that Amazon eventually seized. My colleagues rejected the idea for fear of offending our retailers, and perhaps because intermingled backlists suggested unseemly intimacy among competitors, reasonable objections at the time and a textbook example of how existing infrastructure paralyzes innovation.

Technological change is discontinuous. The monks in their scriptoria did not invent the printing press, horse breeders did not invent the motorcar, and the music industry did not invent the iPod or launch iTunes. Early in the new century book publishers, confined within their history and outflanked by unencumbered digital innovators, missed yet another critical opportunity, seized once again by Amazon, this time to build their own universal digital catalog, serving e-book users directly and on their own terms while collecting the names, e-mail addresses, and preferences of their customers. This strategic error will have large consequences.4

Meanwhile the conglomerates, managing dozens of imprints and publishing thousands of new titles a year, are increasingly alienated at the managerial level from their commoditized product. Thompson lets a typical sales manager describe the bloody triage by which so-called “big titles” are singled out and presented to chain store buyers:

  1. 1

    The New York Times, December 8, 2010. 

  2. 2

    Coming of Age in Samoa (Morrow, 1928). 

  3. 3

    2011 marks the fiftieth anniversary of Random’s publication of Jane Jacobs’s highly influential The Death and Life of Great American Cities, still in print after half a century. The author’s guarantee was $2,500. Its first printing was 7,500 copies. 

  4. 4

    Several large publishers have tried to recover some of this lost ground by adopting the so-called agency model, in which the publisher retains ownership and sets the price of its files while the distributor receives a sales commission, a strategy meant to overcome the legal restriction that retailers are entitled to set the price of goods they buy from a manufacturer, and to thwart Amazon’s costly attempt to establish an industry standard by creating an artificially low consumer price for e-books, hoping that publishers will adjust their price to Amazon accordingly. As of this writing the pricing future is unclear. To add to the confusion, publishers are themselves only licensees selling content that belongs to their authors, represented by agents determined to increase their share of this complex pudding. Meanwhile online distributors retain exclusive access to customer data. In the digital future authors in partnership with publishers and advised by agents may simplify matters by selling their content directly to end users over appropriate websites. 

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