Editorial by Richard Eoin Nash
Last month, when this online magazine asked me if I would write an editorial on predictions for 2010, I apologized and said, I just can’t figure out what is likely to happen this year.
But, I suggested, I could write about ten years from now. Why is a ten year prediction easier than a one year prediction? Surely the less far into the future one must speculate, the less likely one could be wrong? Ordinarily yes, as with, say, the economy or the next gadget. But with trade publishing, the next year is effectively in the hands of the CEO’s of the corporate publishers and the retailers of print and digital books.
I’m reminded of one of the key fictional disciplines in Asimov’s Foundation trilogy: psychohistory. It could never predict the actions of an individual, but by applying statistical analysis to a sociology/history hybrid, it could predict long-term trends in human social development. (Paul Krugman recently admitted the reason he became an economist was that economics was as close as he could get to psychohistory.)
While psychohistory is a fictional “science,” applying some history, sociology and economics to publishing (and publishing prognoses) might in fact be a good idea.
“The Winner’s Curse”
Think of the commonplace notion that smaller independent publishers are ill-versed in the ways of markets and capitalism, all the while, people fail to notice that corporate publishing is no savvier.
Consider, the auction…It is axiomatic in economics that auctions almost always result in the “winner” overpaying, a phenomenon called “Winner’s Curse,” and one could easily say that the winner of the auction is in fact the loser. The worst offenders in this regard are corporate publishers, not the independents; it is the corporates who are the most economically irrational.
Why? Well, top management in book publishing corporations, indeed in any corporation, are largely interested in personal survival. As mostly recently elaborated in The Curse of the Mogul, most media companies are run by managers who operate in their own interests, not on behalf of shareholders. (And who could blame them — it’s the [failed] corporate governance system, not self-abnegation, that is supposed to align their interests with the shareholders.) The recent financial meltdown and subsequent battle over executive compensation demonstrates that the finance industry is equally beset.
Corporate publishing management’s goal is clearly to minimize disruption in the short-term and focus on maximizing survival through acquisitions (of big-ticket books, of companies): a publishing instance of what is called in more general business circles, IBGYBG: “I’ll be gone, you’ll be gone,” we’ll pocket the bonuses and move on.
More charitably, what CEO wants to spend her (or his) last three years in publishing laying off seventy percent of the workforce and reducing new title count by ninety percent? We saw what happened when Houghton Mifflin Harcourt inadvertently told the truth of their business, that they’d be better off acquiring no new books. We excoriated them! Few folks got into publishing to repackage the backlist.
All the current debates about pricing, discounts, publishing windows, and so forth have little to do with the future of publishing, since they assume that digital content will have a price, that sales will be of units, that content can be locked up, that retail discounts are negotiable. The debate is basically akin to discussing the intricacies of gun emplacements on the Maginot Line. It proceeds, though, because it might affect next quarters profits and that has everything to do with senior management not wanting to be fired. This is understandable — if you had to choose between saving your job or saving your industry, which would you pick?
Profit-seeking is Not the Problem
It’s been remarkable to see how many people put the blame on profit-seeking when explaining what’s wrong in US trade publishing, when in fact most top management activity — the “Winner’s Curse” above, buying other publishing businesses, maintaining an enormous real estate footprint in midtown Manhattan — has had the effect of hurting profit margins. The notion that profit-seeking is destroying publishing is a fantasy, really, it’s a lack of entrepreneurial capitalism that has been destroying publishing for decades.
While I’m not arguing that capitalism is the best form of social organization, especially as it pertains to culture-making, it is very clear that the insider establishment capitalism practiced in the Western media industries is far worse than entrepreneurial late modern capitalism. Entrepreneurial capitalism doesn’t need saving, because when it fails, it fails quickly, and when it succeeds others learn from it. It telegraphs where society can best allocate resources. Conversely the structure of the publishing industry now knows only survival and is incapable of learning from those forces whose effects it seeks to blunt and minimize.[Let me add that not one word of this is intended as an indictment of the generous, gentle, and intelligent folks working at these companies — it’s the system, not the individuals…]
So, unless one CEO arises who, I’m appalled to see myself write, lays off about 50% of the workforce and utterly reconstitutes the company (as IBM did 1990-1995) all the aforementioned leads to one significant prediction — that all the giant publishers will be pygmies in ten years, publishing perhaps 100 books a year, all blockbusters or would-be blockbusters, and continually under threat of going out of business.
The End of Bricks-and-Mortar
The companies that will be at the center of the reading-writing economy in 2020, therefore, will be companies that likely don’t exist now, with the probable exception of Amazon who will endure a Microsoft-like diminution of market power, given that their competitive advantage has always been more in print than digital.
The bricks-and-mortar chains will be gone, since their greatest strength, selection, will be ever less relevant, and the strength of the boutique retailer, taste, is unavailable to them. So Borders, Barnes & Noble, and Books-A-Million will go the way of retailers like Circuit City, Tower Records, Virgin Megastore and Sharper Image. A couple hundred bricks-and-mortar venues will be central to book culture, but they won’t resemble traditional bookstores, and will function more like non-book retailers. Other Music record store in New York City, the Apple Stores, and Giant Robot, a magazine and microchain of Asian-inflected pop culture stores, are all good models.
The price of raw digital content will have been zero for quite a while, just as it is now for music, news, TV, and film, though plenty of effective market mechanisms will arise to pay both authors — the majority of whom will generate more revenue in 2020 than they did in 2010, though there will no longer be the fantasy of hitting the big advance lottery — and to pay intermediaries who help connect authors to readers in what will be called a “multi-sided marketplace.”
The New Gatekeepers
The endless media hoo-haa about the death of the book and the death of reading will slowly fade away, going the way of the articles of the last century about TV destroying radio and film and books. The death of the e-book, much like the death of the CD and the coming demise of the mp3, will provoke relatively few histrionics. As connectivity becomes ever more pervasive through 4G, WiMax etc, all text will be in the cloud, and the need for files vanishes.
It becomes clear that roughly the same percentage of the population continues to read immersive text-only long form narrative, and that the proliferation of multimodal forms in art, entertainment and education are precisely that, the creation of something new, and not the destruction of books, or painting. Many writers will choose to write in multimodal forms, just as many novelists currently write screenplays, and a few write videogames.
However, articles on the death of culture will continue. Any time technology has increased the number of people who can create, disseminate, and consume knowledge, the existing gatekeepers have decried it as signaling the end of civilization. This phenomenon goes as far back as we can keep track of this impulse, to Socrates bemoaning the use of the book to avoid memorization, and continues throughout history, through Gutenberg and the loss of control over translations of the Bible, through the 19th century and the panic over fiction destroying the minds and morals of young women, through the moral panic of the 1950’s over comics and the pulp novel, to the present reactionary idiocies of Sven Birkerts and Mark Helprin.
Yet more fuel will be added to the conservative reaction as increasing access to education and lower technical and economic barriers to entry is going to lead to an explosion of creative production in the developing world, as billions more Africans, Indians and Asians enter the middle-class and start reading and writing narrative, just as Westerners did in the past century.
Too much to possibly happen in a decade? Remember: two and a half decades from now, the iPhone’s computing power will fit inside a blood cell.
Takeaway: While companies are destroyed, modes of creating culture are not. In 2020 there will be more writers, more readers, and yes, more match-makers bringing them together, than ever before.
And in 2020, I’ll predict there’ll be yet more writers, readers and matchmakers in 2030.