Monday, September 15, 2008

Sell with a whimper, or a bang?

Today's issue of Shelf Awareness included an article about a presentation by Harvard Business School professor Anita Elberse regarding the theory of "the long tail." We all know about this by now, right? The theory goes that in the Internet age, companies - let's say publishers specifically, as that is what we're talking about here, can sell a larger variety of products, each with lower numbers, than in the past when publishers had to sell more copies of few products to make margin - the blockbuster effect. Booksellers don't have to keep all these different books in storage, because people can just go to Amazon, which has huge warehouses, or get an e-book or what have you. So publishers, by this theory, should keep books available for longer and plan on them continuing to sell. Even if each title sells few copies, it's in a publisher's interest to keep as many available so as to have more opportunities for profit.

Professor Elberse, in a presentation to the Book Industry Study Group's annual meeeting and in a Harvard Business Review article (you can view the first page and then they make you pay), refutes this theory. She explains that people want to share in the experience of blockbusters, whether it's the hot cd or the big movie on opening weekend. In fact, according to her research, even people who like more niche things will also like the blockbuster. Moving away from having the big star products in favor of more diversied products will lead to consumer disinterest, even from those consumers who want the more obscure products. I appreciate this point, especially in talking about readers who are by their nature, to some extent, loners. We read alone, but that doesn't mean we don't want to discuss what we are reading alone. People read book after book in genres like fantasy and sci-fi, but then they get giddy with excitement when they can join others who appreciate these genres.

I found the opening to Elberse's Review article particularly interesting:

In a typical year, Grand Central Publishing (formerly Warner Books) goes to market with 275 to 300 book titles spread across two catalogs—its fall and winter lists. For each list the company identifies the handful of books it believes have the greatest sales potential and gives them the full benefit of its marketing capabilities. Of those, it spotlights just two “make” books, one fiction and one nonfiction, for which the company’s publisher is willing, in her words, to “pull out all the stops.” In the fall of 2007 those books were David Baldacci’s Stone Cold and Stephen Colbert’s I Am America (and So Can You!). The effects of this strategy show up in sales figures and profits. Whereas the 61 hardcover titles Grand Central put on its 2006 front list, on average, incurred costs of $650,000 and earned gross profits of just under 100,000, a wide range of numbers contributed to those averages. Grand Central’s most heavily marketed title incurred costs of $7 million and achieved net sales of just under $12 million, for a gross profit of nearly $5 million—50 times the average.

Grand Central is pursuing what is known as a blockbuster strategy—a time-honored approach, particularly in the media and entertainment sector. With limited space on store shelves and in traditional distribution channels, and with retailers and distributors seeking to maximize their returns, producers have tended to focus their marketing resources on a small number of likely best sellers. Although such an approach involves substantial risk, they expect that the occasional hit’s huge pay-off will cover the losses of many misses, and that a few big sellers will bring in the lion’s share of revenues and profits. In 2006 just 20% of Grand Central’s titles accounted for roughly 80% of its sales and an even larger share of its profits.

That really throws things into a certain light. Part of me sees that and thinks, ya can't argue with numbers.

I appreciate Elberse's point, that it's naive to hope you can achieve profitability through a series of niche items. Most small publishers have a break out hit at some point that helps the rest - George Lakoff's Don't Think of an Elephant surely offered Chelsea Green the opportunity to pursue more niche titles, and I'm sure Lydia Millet novels help Soft Skull's bottom line. It's important for an author, when s/he prepares for his/her book's publication on a list, appreciates this dynamic and does not inappropriately demand the same marketing dollars and effort for his/her book as the star is getting. It's in your best interest! That does not mean the publisher should just ignore a book on their list, but even small publishers are going to have this dynamic where effort is distributed unevenly. The publishers then can reinvest the profit from the blockbusters into the smaller books.

Publishers lose their way, it seems, when they start chasing the blockbusters and ignoring the smaller books. These smaller books are often the ones they use for credibility, whether that's literary or scholarly credibility. Nothing is more tragic than flipping through a new catalog from a big corporate publisher and seeing blockbuster after blockbuster, big name mystery authors next to big name political authors next to big name animals authors, etc..., with no cohesion. I know most readers don't read by brand, by publisher, but if a publisher has this eclectic mix held together by profit alone, authors should be weary of the kind of treatment they'll get if their particular genre falls out of favor before their book comes out.

Elberse's advice, then, should be followed by independents. You have to get a few big names, but they should be books that still fit your larger mission so bringing people to the list with the big name might help the smaller names. Even university presses publishing regional cookbooks still makes sense as they are reminding readers that they are regional publishers, and they probably have local history books on their list as well.

And if you're a star player, maybe publishing the big book for an independent can really pay off. I don't hear Lakoff complaining! You can still get your book out there in a big way, but unlike ending up on page 13 of a catalog next to a book about a puppy who changed some suburbanite's life, you'll be on page one, on the cover, and pulling along behind you some original and valuable voices that may not get heard otherwise.

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