The Publishing Death Spiral

July 29th, 2010 | researchmaterial

Norman Spinrad just emailed me this link to what appears to be the first of a series of posts about The Publishing Death Spiral, the core of which is this:

Here’s how it works. Barnes and Noble and Borders, the major bookstore chains, control the lion’s share of retail book sales. They order centrally for all their outlets together, for instance there is a single buyer for all science fiction, all mysteries, etc. How, you may well ask, can these buyers read and pass judgement on, for example, the over 1000 SF titles published in a year?

Of course the answer is they can’t. Instead, an equation makes the buys of most of the books on the racks or blackballs the ones that don’t make it that far. It’s called “order to net.”

Let’s say that some chain has ordered 10,000 copies of a novel, sold 8000 copies, and returned 2000, a really excellent sell-through of 80%. So they order to net on the author’s next novel, meaning 8000 copies. And let’s even say they still have an 80% sell-through of 6400 books, so they order 6400 copies of the next book, and sell 5120….

You see where this mathematical regression is going, don’t you?

Read the whole thing.


14 Responses to “The Publishing Death Spiral”

  1. It’s not helping them sell books. It’s not helping the publishers, the bookstores or the writers, much less the readers. It becomes a race to the lowest common denominator. And it is kneecapping a generation of writers.

  2. That’s mighty peculiar… last time I was at a B&N I was sitting next to an interview where they said they had 8 buyers in that store alone. Are those buyers all buying from this central, single mega-buyer? The stores here definitely seem to have certain local specificity or flavor that I reckoned to be due to the local buyers. I am not saying it’s impossible there’s a mega-buyer, but it seems possibly opposed to what they seem to think at the lower levels is their strategy. And what about their publishing platform they are coming out with? Does that mean nothing? Clearly I am missing a piece of the puzzle here. (or a bunch of pieces.)

  3. He seems to be only focusing on supply. It terms of rare earth minerals, supply is a factor. In terms of books, not so much. Demand is the much larger issue. Why is that only 80% of the people who read the first book buy the second book, and the book attracts no new readers? If people want to read a book, bookstores will order those books, and publishers will print them. Copies of books sitting on bookstore shelves don’t sell a book. The author, the agent, the publisher, and the fans all need to be behind a book, driving people to those shelves.

  4. “Why is that only 80% of the people who read the first book buy the second book, and the book attracts no new readers?”

    That’s not what he’s saying. Read it. He’s saying that there’s a formula applied, where only 80% of the first book’s numbers are ordered for a second book by that author. He’s saying it’s an equation, it’s an automated process. I shouldn’t have to walk people through basic comprehension here, come on.

  5. The question I have is does it make sense to do this? I mean, does it make sense to continually sell fewer copies of an author that does “all right”? Does no one else stop and say “Wait, there seems to be a really interesting pattern here”?

    I came away with the implication that people that have the authority to correct this sort of situation can’t or won’t for some reason. I’m interested in what that reason might be. I’m definitely looking forward to reading more on this subject.

  6. The way I read it, he’s saying that for the second book, they’ll order the exact number of sales that the first book had – the 80% being his example sales rate for each iteration… which suggests – assuming copies purchased as the _only_ factor at play – that with an unchanging readership across books, supply would be decreased to match demand and then hold steady.

    Of course, this clearly isn’t the result he’s describing, which means either there are more factors at work (promotion budget as a factor of copies ordered, maybe?), or he’s not explaining it clearly, or I haven’t had enough caffeine for my brain to work properly.

  7. I can’t speak for the past few years and what might have changed (I suspect, a great deal), but having been a buyer for one of those companies back in the ’90s, I can say that, while buyers did receive algorithm-driven recommendations when making orders, the final decision for how much to buy of a new book–both in total and at the store level–was in the buyer’s hands. Reorders of older titles were automated to some degree, but not initial buys.

    As for a death spiral effect, that potential was obvious to buyers as much as anyone, and part of training a new buyer was cautioning him or her to the possibility of that pattern emerging if system recommendations were followed unthinkingly.

    Having said that, it’s difficult to armchair-quarterback the buy placed for any particular book. That’s not an attempt to dodge the question–it’s simply to say that the buy on a new book was often influenced by many factors, not an algorithm alone.

  8. As I understand it, from regular discussions with publishers and agents, this comes from data collected from the Electronic Sales Point (don’t know if that’s the correct term) program. The booksellers’ order is based on the last book’s sales *minus* a standard rate of attrition – can’t recall if it’s 10 or 20%. Either way, it leads to the death spiral, and it’s something that is driving the rest of the publishing industry crazy.

  9. This sounds just like the music industry. The good news is people are searching for good writing and good music. The Death Spiral is a bad thing but creators are going to continue to create no matter what. The old models are breaking down. Having said that, it’s hard for writers to continue to produce quality work if they are not making money. It requires total commitment and the need to eat can get in the way. In my case I gave up on selling CD’s a few years ago. Since then I have pulled in some good money licensing the music I record. I realize we are talking about writing here but what I am trying to say is without the writers there is no industry, without the industry there will still be writers.

  10. The Death Spiral’s been around for a little while – that situation’s basically the first chapter of Donald Westlake’s novel “The Hook”

  11. If the assumption is we are talking about low-list genre titles and I just missed that in his post, mea culpa, but if an author’s first book sells 12K copies, and the second one wins a Hugo, or a Booker, or is chosen by Oprah, the spiral will not go into effect.

    The way he has present the formula is functionally in a vacuum wherein the bookstore is unable to order more books even if demand exceeds their initial order. Outside of books published by very small publishers who are unable to reprint a title without significant demand the model he presents cannot be applied uniformly.

    The sales of a title are simply not going to drop on their own, automatically, without being precipitated by a drop in demand for the books. I just don’t feel he is properly assessing this if he assumes the publishers and the bookstores won’t meet demand for the second book if it is higher than that of the first book.

  12. Most sales take place in the first three months of publication, apart from perennial favourites. My editor tells me that the biggest driver of sales, proven by multiple points of research, is not publicity (barring something like the Booker, Oprah), definitely not the internet, but simply having books displayed at the front of a shop or available on shelves. The majority of sales, I am told, come from people seeing the book and taking it to the counter. This is the one thing that really drives demand.

    If a bookchain orders a reduced number, there are fewer books on display, resulting in fewer overall sales in that crucial three-month period. Restocks don’t happen quick enough unless a book is doing fantastic business so the product withers on the vine. That’s where the death spiral really strikes.

  13. Thanks Mark, that is a helpful qualifier for trying to better assess what Norman is saying (and I’m not saying Norman is wrong per se, but he simply hasn’t qualified and quantified his assertions well).

    Book display really comes back to promotion though, because bookends, tabling, front of the store placement all ties back to the publisher, to whether or not the book is being pushed at that level. Those placements are largely made in consultation with the sales and marketing reps from the publishers who work to convince the promotions people at the chains that such and such book belongs on a center piece.

    There are any number of reason for why that does or does not happen – the editor and the publisher are pissed at one another so all the marketing support for the editor’s titles get pulled. Bad cover art. Or maybe the book just isn’t being championed and is slipping through the cracks.

    Shelf space I am going to have to think about some more. Having the book on hand is important, but most of the people I know, which is a strongly tilted towards the bibliophile as a caveat, walk into a bookstore with a long list of titles scribbled down or in the back of their mind already, such that the experience is more of a hunt for a known entity. Personally, I have such a backlog of material to read already I simply cannot pick up a book I know nothing about. This one is going into the shop for some more thinking.

  14. The issue that Norman raises with the death spiral is as much a function of the publisher as it is the buyer. The cold equation affects the initial print quantity. Say our 10k author in fact sold out the initial print run of 10k for the first book in a series. The second, for whatever reason (and the crap economy is an excellent reason), only sells 8k copies and generates 2k returns. The publisher will generally take on the third book, but may only print 8k copies.

    Book buyers see the initial publisher data, and sees that the series now has a smaller print run and, most likely, a smaller marketing budget. Th title is further back in the publisher’s catalog and isn’t pushed nearly as heavily by the publisher’s sales team. So the buyers book smaller orders which results in either fewer copies spread across the same number of outlets, or the same number of copies concentrated in fewer stores.

    Either way, there’s less exposure for the title, and sales will reflect that. So we see 80% of the 80%. The publisher now runs Book 4 (because at 6400 copies sold for Book 3, it’s still above a general 5k threshold), but again reduces the print run, this time to about 5k. And again cuts the marketing budget and further de-emphasizes the title in the sales cycle.

    Repeat the pattern with the buyers: clearly the publisher is no longer invested in the title; there won’t be any support for the stores to market, so they anticipate further reductions in projections and so accelerate the reduction in copies available to the public in favor of this week’s Twilight sequel.

    The publisher, now seeing that the series has fallen below the mystical 5k floor, declines to pick up Book 5, effectively killing the series and, generally, the author’s career. Other mainstream publishers see that the Author “couldn’t sustain an audience large enough to make the series profitable,” and so will pass on picking up the orphan.

    William Owen is correct: it all comes down to marketing. And mainstream publishers, as Norman says, will only put marketing dollars into titles they feel will return that investment. Sure they’ll buy new titles from new authors; you never know when a new book will strike a chord and make it to a second or third printing. But once an author has peaked,the cold equations will drive him right out of the game as quickly as possible.

    A bit of self-serving promotion for my own small press; here’s the URL of our mission statement, where we address the failings of mainstream publishing:

    http://plusonepress.com/PlusOne_About_Mission.htm

    nic