(To read Jason Epstein’s reply to this article, scroll to the bottom of the page.)
Every age has its prophets of literary decline. We have critics Harold Bloom and Sven Birkerts, who decry the Internet, and New Press publisher Andre Schiffrin, who frets about globalism and serious books. You’d be forgiven for thinking that you’d find former Random House editor Jason Epstein skulking in their midst. He has exhibited a gloomy streak before–in 1992, for instance, he predicted the demise of New York City right before the city began its most dramatic recovery in history. In his new book Book Business: Publishing Past, Present, and Future, Epstein laments the decline of the independent bookstore and the hardcover book, even though he invented the trade paperback in the 1950s (before that, paperbacks were mostly dime store junk). He extols the days when publishing was a cozy, well-lubricated affair, with authors dropping by unannounced and borrowing editors’ offices for evening trysts. When holding forth in this manner, Epstein works himself into a grand and mournful rhythm. His sentences become ever more orotund, no matter how mundane the matter under discussion. The man can sound dolorous when calculating the break-even point on a book.
But Epstein says that he’s enthusiastic about the future of publishing, and I believe him, sort of. Dour speech patterns aside, Epstein is an entrepreneur. He knows how to maintain a boyish optimism in the face of difficult market conditions. After all, he came up with the idea for the trade paperback at the precocious age of 22; co-founded the New York Review of Books during a New York Times strike; and compiled The Readers Catalogue, a pre-Internet effort to market books directly to readers that seemed like a good idea at the time though it failed. The problem is, I can’t figure out what Epstein is basing his optimism on. His account of the past is so glowing, so detailed, so colorful, and his glimpse of the future so vague and contradictory, that I half suspect him of subverting his own message of hope by providing almost no evidence for it.
In the past, says Epstein, high-end publishing was a cottage industry run by book lovers looking for an excuse to work in literature, rather than a business meant to generate pots of money. Book publishing, he writes, “more closely resembles a vocation or an amateur sport in which the primary goal is the activity itself rather than its financial outcome.” Now publishing is in the hands of large corporations that don’t understand this. They unreasonably expect a steady revenue stream from their publishing divisions, but given the whims of literary fashion and the control that a few superstores now wield over the retail end of the business–this quasimonopoly inflates publishers’ marketing costs and reduces their margins substantially–a predictable income is an increasingly remote possibility. As a result, publishers have come to rely heavily on blockbusters for their profits. But that strategy, too, is doomed to fail. Epstein sums up the dilemma with this clever formula: “The excessive royalty guarantees demanded by the authors of predictable best-sellers render their profitability problematic, while the profitability of books in the broader category is made problematic by the unpredictability of their sales.”
And the future? The good news, according to Epstein, is that publishing will become a cottage industry again, liberated both from its multinational conglomerate masters and from superstore chains, and thus from the need to produce a regular crop of best sellers. Publishers will be more willing to take risks and better able to nurture authors and books that need time to catch on. That is because the Internet makes it possible to publish on a smaller scale. No longer will a publisher have to order a big run in order to justify the cost of printing the book in the first place. Nor will the publisher have to accept returns–unsold books shipped back to publishers by booksellers. (One of the unfortunate anomalies of the book business, from a publisher’s perspective, is that under a Depression-era agreement between publishers and bookstores, books are sold on consignment.) Now, with instant transmission of digital files that can be printed on demand or read on electronic devices, publishers can target books to ever smaller groups of readers.
The key to understanding why Epstein thinks this new, pared-down publishing will allow small publishers to break even–or make money!--is a concept familiar to anyone who read the business pages during the height of Internet mania: disintermediation. Disintermediation is a fancy word for the process of cutting out the middlemen. Imagine that all the steps that go into making a book were assembled into a single production line, starting with the book contract and ending when a sale is rung up on a bookstore cash register or UPS delivers a package. Now imagine that every worker in the line had the right to pocket a portion of the price of the book in exchange for services rendered. The more workers you got rid of, the more money you would have left over.
Epstein is smart enough to realize that everyone in every part of the business longs to cut out everyone else. Authors and agents scheme to become their own publishers; Stephen King has already taken a shot at this with his serial novel, The Plant, though not with much success. Book retailers aspire to join the ranks of wholesalers and even manufacturers; Barnes & Noble already prints its own line of books whose copyright is in the public domain and recently announced plans to publish, digitally, the novels of Dean Koontz. Epstein’s own dream is that publishers form a consortium to sell books online; by bypassing wholesalers and booksellers, they could save as much as half the cover price on every book.
This is not implausible at first blush, but when you think about it for a minute, the idea of a middleman-free publishing industry doesn’t make a lot of sense. Publishers already have Web sites that nobody visits, even though it is as easy to buy a book from SimonSays.com (the Web site of Simon & Schuster) as from Amazon. What makes Epstein think that publishers, with their backgrounds in editing and publicity, will prove more skillful at book-selling than booksellers, with their backgrounds in sales, when the publishers haven’t done a good job of selling books in the past? What makes an agent, whose job is negotiating contracts, better qualified to edit and publicize a book than a publisher’s editorial and publicity staff?
Epstein seems to be misled by his dislike of large companies into hoping that little ones will overcome the big ones’ built-in economic advantage. That seems unlikely. Consider how much money it will take to survive the transition from a print to an electronic industry. Electronic publishing eliminates two fixed costs: printing and distribution. But as everyone in the electronic magazine publishing business has long since discovered, any money saved on those is likely to be eaten up by the high cost of replacing them with fledging technologies. The Internet and its appendages and appliances change in fundamental ways almost every day. What Slate doesn’t spend on paper and shipping, for instance, it has had to pay in salary to the software developers who invent and reinvent our Web site every month or so.
Eventually, publishers and manufacturers will settle on a standard format for print-on-demand machines and e-books, or whatever gizmo survives the inevitable shakeout, and the cost of new technology will level off. In the meantime, publishers are in for a long period of jockeying and upgrades. Those who want to stay in the business will have to hedge their bets by investing in a wide range of embryonic technologies, and no more than a few of these will catch on. The rest will go the way of the interactive CD-ROM, once viewed as the hot literary format of the future. Only publishers with deep pockets–the Bertelsmanns and the Time-Warner-AOLs and the Viacoms–will be able to pony up for that much research and development.
Even if you could realize all of the savings through e-publishing that Epstein imagines, and even if this created a situation where small companies could get into the business, they would have a hard time staying in it because there just isn’t much of a market for it. Selling books to serious readers is at best a low-margin undertaking; mostly, it loses money. New technologies are not going to expand the readership in any real way. The bigger the company is, the better it will be able to cover its losses on high-quality books with profits earned by the workhorses of the industry–textbooks, how-to books, and so forth. It’s galling to work in a business that isn’t really a business but a loss leader for other businesses (such as educational publishing)–especially if your paymasters are the sort of people who remind you of that fact frequently. You can see why Epstein would long for electronic liberation. But I don’t see how he’s going to get it.
Illustration by Robert Neubecker.