Monday, August 07, 2006

When Paradigms Collide

A puzzle solved.

Yesterday, StatCounter indicated that my blog had suddenly exploded in readership. I couldn't figure out why. My readership has been pretty steady for months.

Today I solved the mystery. Bookseller Chick had been kind enough to link to one of my blogs yesterday. Since I read her posts religiously, I was thrilled. See the link to her blog to the right of this column.

I've been stewing about this next post for nearly a week. It's about an article by Rachel Donadio that appeared in the New York Times on July 30, 2006. I've posted on other articles by Rachel in the past.

Rachel's latest story was entitled "Backlist to the Future." It talked about the struggle publishers are having trying to reconcile Chris Anderson's concept of the long tail to their industry (see posts on July 13-15 for more about The Long Tail).

The long tail theory refers to the two long, tapering tails of a bell curve. Anderson argues that, while industry focuses on the small number of blockbusters (the hump in the bell curve), there is enormous sales potential in the long tail--those products that sell relatively small, but steady numbers over time.

Rachel says: "So far publishers remain wary of the long tail theory, largely because they haven't figured out how to make money off it. Books require storage, and it quickly becomes impractical for publishers to keep low numbers of thousands of titles in their warehouses."

Rachel's article appeared two days after my July 28th blog on "The Subscription Revolution." In that blog, I wrote about how POD technology makes it possible for books from the backlist to remain available for purchase indefinitely. Rachel does give lip service to the subject, saying, "Although Anderson and some others believe print-on-demand will change publishing history, the technology is still imperfect and costly."

I smiled as I read that "Yes, but" comment. I imagined a factory owner in 1930 being advised by his accountant to try Henry Ford's new-styled assembly line. I could just hear the factory owner saying, "Yes, but Ford hasn't perfected it, and it will cost me a fortune to convert my operation over."

The interesting thing is that Rachel did quote a Barnes & Noble VP talking about the fact that "Most publishers . . . rely on backlist sales for a significant part of their business. Titles more than one year old--including best sellers with staying power like 'The DaVinci Code'--account for 62 to 68 percent of annual sales . . . 'It's what the business is built on.'"

Okay, now let's think about this. More than half their business is built on backlist sales, and there is a technology that will allow them to eliminate warehousing of thousands of titles while still making it possible to keep the backlist alive and vital. What's the problem? Even so, Terry Adams, director of trade paperbacks at Little, Brown, is quoted saying, "The costs associated with printing small quantities of many different titles and of warehousing those many different titles and of fulfilling single-copy orders . . . are so onerous that it's not a model that I feel works for publishing today."

Hello??? Can you see the problem now? Adams recognizes the need to keep the backlist alive, but cannot reconcile that need with an old-style worldview. We're no longer talking about warehousing all those titles. We're talking about virtual books kept on a computer, ready to be printed when an order for a book arrives. POD technology permits operations to provide for customer needs while eliminating costly warehousing, shipping and returns.

The winners of publishing tomorrow will be the ones who can see the value of changing their paradigm today and retooling their system to accommodate the necessary changes. We're not even talking about thinking outside of the box. The box has already expanded to include these options. Amazon is already doing what traditional publishers should be doing.

I'm wondering how many factories went out of business or were gobbled up by competitors due to a failure of vision on the part of their owners in the years immediately before and after the second World War.

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