Is The Mid-List In Trouble?

I've been thinking about yesterday's post in which I reported on bookstore sales being down.

What worries me is the mid-list. In order to explain why, I'm going to spend a few minutes talking about history.

For many years, the bookselling business was decentralized, meaning it was dominated by the independent bookstore. Those stores were generally owned and operated by people who loved books and authors. They delighted in discovering new writers and helping to shape the tastes of their customers. The profits they made on the bestsellers helped to finance the cost of stocking the shelves with books by lesser known writers.

Starting in the '70s, the book business became more centralized. Barnes & Noble, Waldenbooks and other chains began popping up in every city and putting huge pressure on the independents. The chain stores offered large discounts on bestsellers, squeezing the independents' margins and driving many of them out of business.

The centralization juggernaut continued to roll throughout the '80s and '90s, with ownership being concentrated in fewer hands. Large corporations began gobbling up smaller chains.
K-Mart bought Waldenbooks and then, Walden's rival, Borders. Meantime, this same centralization trend hit publishers, too. Holtzbrinck acquired Henry Holt & Company (1985), News Corporation acquired Harper and Row (1987), and Viacom acquired Simon and Schuster (1994).

Corporate ownership means accountability. Public entities must answer to shareholders, who expect continued profits and fat dividends. Taking chances can be dangerous when you must report to your shareholders every quarter.

This focus on ever-increasing profits led to publishers and booksellers placing their dollars on the safe bets--proven authors like Stephen King, Nora Roberts or James Patterson--instead of gambling on unknown or less known writers.

The '70s were also a period of huge growth for Wal-Mart, the largest of the big discount stores. Big box stores like Wal-Mart and Target skim the cream off the top by only carrying the best-selling books. Because their margins are so narrow, they have to rely on high volume to provide profits. And, once again, high volume means the top-selling authors. Wal-Mart and Target have a limited amount of space devoted to books. New writers or lesser known mid-list writers get very short shrift from these discount giants.

And in a classic dog-eat-dog scenario, the discount stores put as much pressure on the chain bookstores as the chains had put on the independent bookstores. And the pressure on the independents just keeps growing. Two years ago (September 17, 2005) in one of my very first posts on this blog, I reported that "membership in the American Booksellers Association has dropped from about 3,000 members to about 1,800." Since then, that number has climbed back up to 2,200 according to the ABA website. And that leads me to the following:

In the '90s, the Internet began to shake up the world of publishing and bookselling.

The Internet brought new players to the table. Used bookstores like Powell's or the consortium called Abebooks.com now compete head-on with other booksellers online. In addition, online retailers like Amazon.com are taking a large chunk of the pie.

Adding to the new players, we have more and more electronic publishers springing up on the Internet and selling directly to readers. In the beginning, the e-pubs mainly focused on the erotic romance and sci-fi genres. But e-publishers are now going mainstream. You can buy mysteries, thrillers and even literary fiction online.

I believe the Internet is reversing the centralization trend of the last 35 years, leading to decentralization of the book business. We'll talk about what that means tomorrow.