Richard Nash on Publishing in a Recession

The latest entry in Scott Esposito’s fascinating series of interviews with independent publishers about publishing during a recession is now available online. This time he talks with Richard Nash, publisher of Soft Skull, and one of the smartest (and most articulate) people in the field when it comes to talking about the business of books.

Scott Esposito: Since November, newspapers have been full of reports of layoffs and cutbacks at large New York publishers, and the general mood one gets from reading these reports is gloom. Would you agree or disagree that things are gloomy for publishing right now?

Richard Nash: There are several distinct things going on at once. The first is the macro-economic problem which is indeed giving cause for gloom as it has caused a serious drop on aggregate adult trade book sales, greater than any recession heretofore.

The second is the shift on what media consumers purchase, and how they consume it, occurring for books, music, television and film—because it is the smallest of those industries, and because its technology—the printed book—was the most robust and fine-tuned of the analog technologies, it is only know we’re starting to see the impact. And the impact is currently less on the industry itself; it’s more that the cumulative effect of the changes from other industries, chiefly the amount of content consumed online, is drawing people away from the printed book format. The shift can be cause for gloom if you’re of the handwringing temperament, but it is far more an opportunity to rid the publishing business of a lot of cant and laziness and arrogance.

The third is the effect of all the other, non-consumer-facing change sin technology, especially that of supply chain management, in combination with the above two trends. Basically, retailers and wholesalers have been rapidly shifting risk from themselves back onto the publisher. Retailers order fewer and fewer copies of each book, believing that if the book is a failure, they’ll be stuck with less slow-moving inventory, and if it is a success the publisher can just reprint and ship them more. Retailers and wholesalers share less of the burden of printing books on spec., the publisher ever more. This has been especially hard on independent publishers, without the capital/cash flow to be doing extra lower profit margin printings of the book, and getting stuck with higher initial units costs because they’re printing 2500 copies rather than 3500 copies of an average title. The macroeconomic situation has made this worse, and the collapse in music sales (pace the second observation) has hurt retailers like Tower, Virgin, Borders, putting more pressure on the books to perform . . . This phenomenon is cause for gloom, though it has been going on for years and won’t stop really until there’s been a significant shift to digital download of books, and to subscriptions for direct-to—consumer physical books.

And his comments about Anita Elberse’s article on the blockbuster model and how this model will play out over time are both hilarious and accurate:

RN: Oh she’s really not done much research—she’s only looked at the corporate model, and developed theories about what works on their system. Which is self-fulfilling, since their system is designed to work that model. It’s really quite dense. Almost hare-brained. [. . .]

Corporate houses were already shifting to publishing fewer titles, and the recession will accelerate that process. They will continue to follow Elberse’s model, which will cause them to become smaller and smaller companies, since chasing blockbusters has never worked in books except one or two years out of every four or five, when they’re lucky. There will be layoffs in all the down years, which will be the majority, until they’re really just backlists with a sporadic hit factory attached.

All of Scott’s interviews are really interesting, in part because there does seem to be a greater awareness among independent presses about how things are changing and about what business models/strategies need to be instituted in order to survive and continue serving the reading public.

And the answer is never v-books. Although I’m sure these will help offset the $6.4 billion News Corp lost in the 2nd Quarter.