Books in the Digital Age

The Transformation of Academic and Higher Education Publishing in Britain and the United States

John B. Thompson

• Publisher: Polity
• Year: 2013
• Print ISBN: 9780745634784, 9780745634777
• eBook ISBN: 9780745684994
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

The book publishing industry is going through a period of profound and turbulent change brought about in part by the digital revolution. What is the role of the book in an age preoccupied with computers and the internet? How has the book publishing industry been transformed by the economic and technological upheavals of recent years, and how is it likely to change in the future?

This is the first major study of the book publishing industry in Britain and the United States for more than two decades. Thompson focuses on academic and higher education publishing and analyses the evolution of these sectors from 1980 to the present. He shows that each sector is characterized by its own distinctive 'logic' or dynamic of change, and that by reconstructing this logic we can understand the problems, challenges and opportunities faced by publishing firms today. He also shows that the digital revolution has had, and continues to have, a profound impact on the book publishing business, although the real impact of this revolution has little to do with the ebook scenarios imagined by many commentators.

Books in the Digital Age will become a standard work on the publishing industry at the beginning of the 21st century. It will be of great interest to students taking courses in the sociology of culture, media and cultural studies, and publishing. It will also be of great value to professionals in the publishing industry, educators and policy makers, and to anyone interested in books and their future.

Part I

The Publishing Business

1

Publishing as an economic and cultural practice

The publishing firm

The book publishing business in the West has existed since the late fifteenth century, when Gutenberg's invention of the printing press gave rise to a flourishing trade in books throughout the urban centres of Europe. During the first few centuries of publishing, the distinction between printers and publishers was not clear-cut; many printers operated effectively as publisher-printers, selecting the material to print and using their own resources to print and distribute it. Many printers also relied on external financial backing to undertake particular printing jobs. In some cases they were commissioned by private financiers, publishers or booksellers to print particular texts, in other cases they were commissioned by the Church or the state to produce liturgical works or official publications. But gradually the roles of the printer and the publisher became differentiated, as publishers became increasingly concerned with the activities of selection and risk-taking, while printers operated essentially as manufacturers of printed texts. There are isolated cases where publishing and printing continue to operate today under a single administrative structure. Cambridge University Press still operates both a publishing and printing division, although this is one of the only major publishing houses in the English-speaking world which still has its own printing works. Oxford University Press had its own printing works since its origins in the seventeenth century, but the printing works were eventually closed down in the late 1980s.

For at least the last two centuries, most publishers have operated primarily as organizations concerned with acquiring symbolic content and the rights to use this content, processing the content in various ways and making available the financial capital necessary to turn it into stocks of books which can be distributed and sold in the marketplace. Publishers today are essentially content-acquiring and risk-taking organizations oriented towards the production of a particular kind of cultural commodity. They acquire rights in certain kinds of symbolic content and then speculatively invest capital to transform that content into physical books which they hope they can sell in sufficient quantities and at a suitable price to generate a profit. Their investment is protected by the law of copyright, the origins of which stem in part from the concern on the part of printers in early modern Europe to protect their exclusive right to print and sell books without fear of piracy. If the books sell well, the publisher may generate a healthy return on the investment; a successful title may be reprinted on numerous occasions, helping to create a backlist which provides financial stability to the firm. But the sales of a book may also fall well short of the publisher's expectations, in which case the risk is borne by the publisher, who may have to write off unsold stock.

Most publishing firms are divided into separate departments which are hierarchically structured and interconnected in terms of the workflow. A book typically begins life in the editorial department, which is responsible for acquiring new content, building and maintaining relationships with content creators, negotiating contracts with authors and others, and overseeing the intellectual development of projects. When a final manuscript has been approved by the editorial staff, it is generally handed over to a desk-editing department, which prepares the text for production. The copy-edited manuscript is then handed over to a production department, which is responsible for overseeing the production process through to the final delivery of bound and jacketed copies to the warehouse. Specific aspects of the production process, such as copy-editing, jacket design, typesetting, printing and binding, are often contracted out to freelancers or specialized firms which work for a specified fee paid by the publisher. At a certain stage in the production cycle, the marketing department begins to implement a strategy for the promotion of a specific title, which will also commonly feature in batch publicity material such as catalogues. While each department has its own specialized tasks and may have a significant degree of autonomy, the relationship between these departments tends to be hierarchically structured. The relative power of different departments, and of individuals and groups within these departments, will vary from one firm to another and from one type of publishing to another; it may also vary over time, as changing circumstances alter the relative importance of different tasks and functions within the firm.

In order to develop this analysis further, it is helpful to introduce three concepts: the publishing cycle, the publishing chain and the publishing field. The publishing cycle refers to the stages through which a book typically moves, from the contracting of the project to the point at which it goes out of print – it describes, in other words, the typical life cycle of the book. The publishing chain refers to the interconnection of organizations involved in the publishing, selling and distribution of books; this is a chain in which the publisher is one particular link, and where each link in the chain seeks to provide a specific range of functions or services which are valued by others. The publishing field is the structured space of positions in which different publishers, agents and other organizations are located; it is a space in which relative positions are defined by the differing kinds and quantities of capital possessed by the agents and organizations concerned. I shall examine the publishing cycle and the publishing chain in this chapter; the next chapter will be devoted to the analysis of the publishing field.

The publishing cycle

The publishing cycle defines the stages through which a book typically moves in the course of its life history. Each of these stages involves a range of specific activities which are carried out by individuals involved in the publishing process, and some stages require decisions which have a direct bearing on the financial characteristics of the project. The stages have a clear temporal and sequential structure and are typically integrated into a workflow, with certain activities necessarily following others. The financial decisions associated with these stages have varying degrees of risk and uncertainty, which are generally highest at the beginning of the sequence and which become progressively lower as the title moves along the stages of the publishing cycle.

There are four main stages of financial decision-making in the traditional publishing cycle. The first stage is usually the point at which the publisher has to decide whether to take on a project. At this stage, the book may be only an idea in the author's mind and the publisher may have no more than a brief proposal (although publishers may, in some cases, defer a decision until they have seen and assessed all or part of the manuscript). The decision to take on a project is probably the most important decision in the publishing cycle, since it commits the publisher to the investment of substantial amounts of time and capital in the development and production of a work. It is also a decision which, in many cases, carries a relatively high degree of uncertainty and risk, since those taking the decision may have very few reliable indicators of likely sales. The decision-making process may require editors to provide tentative figures on likely sales, but in the absence of actual data these figures are in many cases pretty notional. Editors may also have to decide how much to offer an author as an advance on royalties for a particular project and, in cases where publishers find themselves in a competitive situation, there is a significant risk that they may commit themselves to advances which turn out to be well in excess of the royalties actually earned by a title.

Given the relatively high degree of uncertainty that exists at the first stage of the publishing cycle, most publishers find themselves adopting in practice what could be described as the ‘frog model’:¹ fertilize a lot of eggs, hatch them and hope that some will survive and eventually turn from tadpoles into frogs. (This approach is also common in other sectors of the media and cultural industries, such as the music and film industries.) The frog metaphor captures well two rather sobering facts about book publishing – namely, that most books don't do very well, and very few books do very well. For most publishers, around 20 per cent of titles will account for around 80 per cent of revenue. Where the metaphor breaks down is that it misrepresents the kind of uncertainty faced by publishers when they make decisions about which projects to take on. Whether an egg makes it to the stage of a full-grown frog is largely a matter of chance, but publishers are often in a position to know that some projects and some authors will do very well, even if they can't be entirely sure just how many copies of a particular book they will manage to sell.

The second stage in the publishing cycle which requires important financial decisions is the point at which the initial prices and print-runs have to be set. There are sources of information and historical precedents which publishing staff can draw on in making these decisions, but there is, unavoidably, a fair degree of uncertainty at this stage. The decision concerning the price will be shaped by (a) the perception of the maximum price that the market will bear for a book of this type and size, and (b) the expectation of the likely sales at different possible prices. In general terms, publishers aim for a price that will maximize revenue over cost, where cost and revenue are dependent on price per copy, on total number of copies printed, and on total number sold. By increasing the print-run, one can lower the unit cost and thereby bring down the price per copy while achieving a reasonable margin; on the other hand, if the extra copies printed are not sold, then the potential gains will turn out to be illusory and the publisher will have to write off unsold stock.

For the most part, the setting of initial prices and print-runs tends to be done in a formulaic fashion. The publisher categorizes a book and then uses standardized formulae to set the prices and print-runs. These formulae tend to be based on the accumulated historical experience of the firm: they are rules of thumb which seem, on the basis of past experience, to be ‘about right’, allowing one to produce sufficient stock to meet the sales that are likely to transpire in a given time period (varying from twelve months to several years, depending on the stock accounting practices used by the firm) while minimizing the risks of stock write-downs. The formulae may be varied in particular cases if there are reasons to think that the sales are likely to be exceptionally good or exceptionally bad. For example, the publisher may have reason to believe, on the basis of feedback from marketing staff and sales reps and on the basis of back orders – orders that have built up in advance of publication – that a particular title is going to do exceptionally well, and may increase the initial print-run accordingly. On the other hand, evidence of this kind may also suggest that a particular title is going to flop, and the publisher may reduce the print-runs and increase the prices in order to minimize losses. While publishers can draw on various sources of information in order to make these decisions in a relatively reasoned fashion, they also tend to rely rather heavily on their ‘gut instincts’ about how well a particular title is likely to do.

The third stage at which key decisions have to be taken is the point at which the stock of the initial print-run has been substantially depleted and the publisher must decide whether to reprint (or to bring out a cheaper paperback edition). At this stage the risks are less than at the previous stage, since the publisher will now have a title-specific sales history to draw on. He or she will know exactly how many copies the book has sold over what period of time, and this information can be used to determine whether a reprint should be ordered and, if so, how many copies should be printed. But there are risks at this stage too. Certain kinds of books, like trade titles, may sell very strongly during the first few months after publication, when they may be getting a lot of attention in the media, and sales may then suddenly drop off. It may be very difficult to predict exactly when the sales will fall off, and yet when they do the decline may be sudden and steep – ‘when it's over, it really is over,’ lamented one editor. An incautious reprint at the wrong moment may leave the publisher with a great deal of excess stock and may wipe out a significant proportion of the profits earned on earlier sales, as many publishers have discovered to their cost.

Another source of uncertainty stems from the nature of the publishing chain. Most publishers sell the vast majority of their stock to booksellers and wholesalers rather than directly to consumers, and, unlike most other retail sectors, booksellers and wholesalers normally buy stock on a sale-or-return basis – in effect, books are sold on consignment. Bookstores can order stock on the understanding that if they don't sell it within a certain time period (usually twelve months), they can return it to the publisher for full credit; the only costs incurred by the bookseller are the handling and administrative costs, together with the shipping costs for returning the stock. This practice was established during the Great Depression of the 1930s as a means of encouraging booksellers to take books that they might otherwise be disinclined to stock, and it has continued to the present day. It has some advantages for publishers, because it lowers the risk barrier for booksellers and thus helps to ensure that new books are stocked and displayed in bookstores. But the risks are not eliminated by this arrangement: they are simply shifted back on to the publishers, who may find themselves faced with substantial returns of unsold stock, which depresses their sales figures and can create serious stock management problems. Publishers may also find it difficult to ascertain how many copies of a particular title they have really sold, since stock supplied to bookstores may not have sold through to customers and may, in the end, be returned. Hence reprint decisions may be rendered more difficult and uncertain. A publisher may find that its stock of a particular title has been depleted and decide to reprint what appears to be a title in demand, only to find that it is subsequently inundated with returns.

The fourth stage in the publishing cycle where important financial decisions have to be taken is the point at which a publisher must decide whether to put a particular title out of print. When the rate of sale has fallen below a certain level or when the stock of a slow-selling title has been exhausted, the publisher will normally have to consider whether to put the title out of print. The cost of warehousing stock may be such that it is no longer financially sensible to keep a slow-selling title in print, and the cost of reprinting may be such that it is no longer commercially viable to reprint. In these circumstances, the publisher may decide to put the title out of print and allow the rights to revert to the author (although this is one part of the publishing cycle where digital technology has had, and is continuing to have, a significant impact, as we shall see in part IV). The degree of risk associated with this decision is minimal, since by this stage the editor has a full sales history of the title and is in a position to estimate fairly reliably what the likely future sales of the title would be if it were kept in print. The decision to put a title out of print is usually a decision about minimizing future loss rather than maximizing further gains. But once this decision is taken, the capacity of t...

Table of contents

• Cover
• Title page
• Copyright page
• Figures and tables
• Preface
• Introduction
• Part I: The Publishing Business
• Part II: The Field of Academic Publishing
• Part III: The Field of Higher Education Publishing
• Part IV: The Digital Revolution
• Conclusion
• Appendix on research methods
• Bibliography
• Index