Save the Book Publisher

Don't crush this. 

Last week, Matt Yglesias wrote a piece with the headline, "Amazon is doing the world a favor by crushing book publishers." He thinks that "publishers are superfluous," they're "terrible at marketing," and also something about advances.

Let's think about what publishers are, what they have to offer authors who would otherwise self-publish and what alternatives to them exist.

A lot of work goes into publishing a book. Someone needs to edit the manuscript. The manuscript must be typeset and copy-edited. A cover has to be designed (most self-published books are terrible in this regard). The book needs to be marketed to readers, which can require producing ads and seeking out publicity. Paper books have to be printed, stored, shipped to distributors and bookstores, and sold; returns need to be managed. E-books have to be converted to various formats, ideally not just using automated tools.

Self-published authors can try to do all of these jobs themselves. Many attempt that, and it shows. Or they can outsource some or all of the tasks. When doing so, it's best to use professionals who have tried to publish a book before. Maybe a team that's used to working together. Perhaps the people even sit in the same building, so that they can quickly coordinate.

Congratulations: You have just re-created publishers, but without advances.

The question is how to pay for all of that. Since there is no advance, the author has to not only finance writing the manuscript -- which can be a big burden -- but also to come up with perhaps tens of thousands of dollars to prepare the book for publication. A mainstream publisher pays for all of this; Cory Doctorow reminds us that the terms are surprisingly reasonable. Music labels typically charge musicians for production and marketing. Book royalties are only applied to the advance, and little else. If the book fails to make a profit, the loss is usually not charged to the author's future books.

The author could draw on savings, get a loan from a bank or seek an investment from the book-publishing venture capitalists who might emerge if publishers die. But there are benefits to combining financing with production. A publisher has a direct financial incentive to do a good job with the book so that its investment can be recouped. An advance is not just a loan combined with a royalty agreement, as Yglesias posits; it matters that the same company that produces the book offers the advance.

Separating the editorial and production aspects of publishing from the business of financing books may -- or may not -- be a net improvement, but it would definitely produce a radically different setup. Real-world frictions would make some projects hard to finance; others might never be realized. Yglesias is correct to write that "no book worth writing is undertaken for purely pecuniary motives." That doesn't mean that every book worth writing will, in fact, be written and published if it cannot be financed.

Books are start-ups, and staying relevant and profitable as a big publisher means making huge investments in advances and marketing for new books. If the Big Four book publishers followed a strategy of wringing "whatever remaining profit there is out of book publishing," as Yglesias suggests, they would no longer try to pay millions of dollars for big new books; they'd also shut down editorial operations, profiting off the backlist and projects already in the pipeline. None of the Big Four has done so.

It's definitely true that the big publishers are not competing effectively with Amazon. I should be able to buy a paper book and the e-book as a bundle, which few large publishers offer. By embracing Digital Rights Management, the copy-protection technology that in the short run gives publishers more control over book distribution because they get to approve each e-book vendor and platform, publishers sow the seeds of their own destruction, as DRM locks consumers into platforms such as Amazon Kindle.

It's probably true that publishers are terrible at marketing most books. And it may be true that some books aren't edited very well, although I know that my book editor girlfriend spends a lot of time on her manuscripts. The mistakes of big publishing are legion, but I doubt that the problem is that publishers are not investing enough in their business; rather, they are not investing enough in the right areas. If big publishers want to sell e-books directly to consumers as a way to circumvent Amazon -- and I agree that they should -- the cost of investing in the technology is not a huge barrier. (Publishers: just don't buy your solution from Adobe.)

There are still plenty of self-published books and non-traditional publishers, and lots of free content online, including this post. Even if someone wants to get his or her ideas out in book form, it's simply not true that publishers "sit astride the pipeline," as Yglesias suggests. George R.R. Martin (to use Yglesias's example) could cut out the middleman if he wants. But despite their flaws, book publishers probably can and do serve a useful function. It is hard to see any particular benefit from eliminating publishers, and harder yet to see why we should cheer their demise.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

    To contact the author on this story:
    Guan Yang at

    To contact the editor on this story:
    Zara Kessler at

    Before it's here, it's on the Bloomberg Terminal.