Publishing Tightens Its Belt But Still Plans to Spend Big
The title is contradictory but that's how I read two articles this weekend. Publishing has apparently spent lavishly on wining and dining sales representatives. The New York Times recounts one such expensive endeavor just two weeks prior announcing layoffs, Macmillan invited its own sales and marketing staff to meet with sales reps about the Spring 2009 publication list. Between the meetings, the reps were offered wine tastings and spa treatments. This year, the meetings will take place via webcam and/or telephone. Random House had gone to Bermuda with its staff the year before.
But while these companies engaged in expensive staff retreats, I agree with another industry veteran, Robert Gottlieb, who said that the expense accounts were "small potatoes compared to the problems [publishers] face." I doubt that HarperCollins saw a decrease of over $30 million in profits because of expense accounts. No, I put the blame squarely on the industry embrace of the big book concept which Anita Elberse, a Harvard professor, articulated in the January 3, 2009, Wall Street Journal .
The entire industry seems to be structured around the one hit wonder. In order to achieve that one hit, publishers are paying exorbitant advances. Elberse believes that this is the only way for publishing to be profitable because when a publisher spends a lot of money acquiring a manuscript, they spend even more to make sure it's a success.
Of course, if the whole business model of "throw enough money at a product and it will be successful" were true, then you wouldn't need to spend money at the acquisition stage, only at the marketing stage.
I read Elberse's article to suggest that success of a book is self fulfilling based upon the marketing dollars. I agree that marketing is incredibly important and that authors don't do enough of it on their own, but I don't believe that the business of model of spending alot on acquisitions that thus spurs major marketing campaigns is the right way to sustain the publishing industry in the future.
My belief is that microtargeting is the answer to successful publishing. I'll talk more about that concept in the coming weeks, but seriously, something within the publishing model is broken. Holding onto that now, in this time of opportunity as Elberse suggests, is dangerous.