Joseph Esposito of Scholarly Kitchen has a post looking at the demise of Borders and what it means for the publishing industry. Yes, I know, we’ve posted plenty of those looks before, closer to the time the demise actually happened, but this one brings a perspective I hadn’t thought so much about before.
When we think of Borders going away, a lot of people tend just to think of 10% of the print book market evaporating, as if the number of books sold is all that matters. But Esposito points out that the closure points to a matter that could be even more important for the publishing industry: an important segment of print publishing infrastructure vanishing.
It’s sort of the opposite of what’s happened with the Kindle—prices falling from $400 to $80 as the infrastructure for making them developed. But as fewer print books are published, the need for the infrastructure to support them evaporates, potentially making them more expensive to bring to print.
There is a vicious cycle when it comes to declining utilization of a legacy business. For example, by some reports, the growth of ebooks plus the decline of physical bookstores has led book publishers to reduce the print runs of trade paperback titles by 30%. This means that the unit cost of each copy rises because of the loss of scale. Higher manufacturing costs lead to higher retail prices, which lead to more defections to ebooks, which lead to reduced print runs, and so on. This would not be so bad if it were not for the fact that Amazon’s giant maw is thus positioned to gobble up even more market share — which will put pressure on publishers’ margins, making them less competitive to bid for first-rate authors — a bidding war that now includes Amazon. I have never before seen any company as brilliantly positioned as Amazon. It’s as though Atlas held the world on his shoulders and decided to tip it in the direction of Seattle.
Esposito encourages publishers to think seriously about their current trading partners and what they will do if those partners are no longer around in a few years—and what will happen if Amazon, Google, Apple, and Barnes & Noble become the only games left in town. He points out that a lot of businesses he’s worked with have been using their print ventures as “venture capital” to invest in their electronic ventures, planning against a mainly digital future.
I hadn’t really thought about what would happen to the print side of things as the need for it declines. Hopefully print-on-demand will prove ready to take up the slack if larger printing ventures go under.