Publishers Finally Acknowledge the Nine Gazillion Pound Gorilla in the Room

At Book Expo America, the publishing industry’s annual trade fair and self-celebration, attention focused on the fact that one of the few areas that is growing at a double digit — indeed, at an exponential — rate is e-book sales on the Kindle. And, according to the New York Times, the publishers are genuinely nervous. The Times pointed out that “…excitement about the Kindle, which was introduced in November, also worries some publishing executives, who fear Amazon’s still-growing power as a bookseller.”
Worried they should be. Surprised they should not. They have had ten years to ponder the meaning of the soaring growth of e-book sales and spent half of that decade deriding the trend as a flash in the pan. Now they’re rushing to put their backlists into e-book format even as they are haunted by the prospect that e-book sales undercut the profits they make from sales of traditional printed books. Publishing executives, the Times reports, “anticipate that it will not be long before Amazon begins using the Kindle’s popularity as a lever to demand that publishers cut prices.”

But publishers are still missing the point, which is that profits from printed books are hamstrung by a wasteful retail system that takes back one copy for every two distributed. The beauty of e-books is minimal distribution costs and zero returns. Barnes & Noble CEO Stephen Riggio finally acknowledged the insanity of the system, but, as we pointed out here, it’s just too late.

– Richard Curtis

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