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Publishing Crashes in 2012

Prognosticating the future of traditional publishing is not a case of figuring outwill happen, it's just pinpointing the.
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Michael Shatzkin, a book industry consultant who is widely read and respected, 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.

His thinking runs thusly: once ebook sales hit 20-25% of book sales, print run numbers will fall to a point where the current consignment system for sales will break down. Under the current system, most books can be returned for credit, so for every book sold, two are printed. Those "returned" books have the covers torn off, and the guts discarded, so they cannot be put out into the market again. Ebook sales will create smaller print runs, driving up the unit cost, forcing higher prices which, in turn, will kill sales. Game over.

Aside from my discomfort with the vanity publishing companies he cites in the article as self-publishing resources for authors, I think the analysis is fairly solid. It's very much the same thing that Michael Mennenga and I have been talking about for the last three years on Dragonpage Cover to Cover, our book and publishing podcast. Shatzkin's strategies for publisher survival even parallel my suggestions in a recent post on my website suggesting ways Random House can save itself.

Prognosticating the future of traditional publishing is not a case of figuring out what will happen, it's just pinpointing the when. Shatzkin suggests November, 2012. I think it will be sooner: June 2012, and the most serious blow will be struck in December, 2011, when a second wave of tablets becomes the hottest holiday gift item. To Mr. Shatzkin's credit, one factor in my analysis wasn't announced until after he published his analysis, and I would expect him to revise his timeline when he factors it in.

The first and most critical point he missed was Apple's announcement on 8 April about the iPhone OS 4.0. With this new revision, later generation iPhones and iPod Touches will all get a 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 serious blow to brick-and-mortar stores, eroding their sales more quickly than imagined. This erosion will be aided and abetted by the fact that Borders and B&N are furiously shifting their sales to ebooks as well.

The second point which Mr. Shatzkin doesn't seem to appreciate fully, in my opinion, is the sheer ease with which authors can themselves create and market ebooks. Earlier this week, in just over an hour, I converted a 192,000 word novel into an epub format ebook. Doing up the Kindle version would have taken about the same amount of time, and a PDF would have been even easier. Putting the book up for sale in my website's store, blogging about it on Twitter and Facebook to let readers know it exists, and dealing with any delivery problems would be the work of a morning. And the cost to me of capitalizing story inventory that would otherwise sit idle is, well, a morning's work.

Publishers, because of their sloth in contracting electronic book rights, own ebook rights to maybe the last fifteen years of their output. Authors can easily produce ebook versions of novels and shorter work which publishers' don't own. Authors will make far more on those ebooks through direct sales than publishers are offering. 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 you will, the publishers' gold mine will have played out.

Print books are never going to go away; but the current distribution model will. 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.