Publishers: Bet the Farm
April 16, 2009
Uncertain about the vagaries of digital products, publishers are doing what we call in Harrod’s Creek, “betting the farm.” The idea is simple. The person who plays poker looks at her hand. She decides that the cards are a sure bet. Instead of raising a dollar or two, she goes whole hog (another farm colloquialism) and bets the farm; that is, she puts the deed to her two acres of rocky ground on the pile of money and says, “Call.” If you are a gambler with a math background, you may suggest that she’s nuts. If you are a Kentucky lottery customer, you say, “That’s smart, lady.”
These down home images waddled though my goose brain when I read Lynn Neary’s “Publishers Gamble on Blockbuster Book Deals” on the NPR.org Web site. You can read her story here. (There’s probably a link to the audio somewhere on the page, but these tired eyes can’t spot gray links, sorry.) The idea is that publishers are opening their checkbooks to get their ink stained paws on “sure winner” authors. What’s a sure winner? How about books by female humorists such as Tina Fey and Sarah Silverman, among others?
The strengths and weaknesses of this approach to media was documented in a memorable book called Carnival Culture by James Twitchell. I am certain the economists from Stanford University who read this Web log will point to earlier and probably less readable analyses of this aspect of the media business. If you want to take my recommendation, grab a copy from Amazon here. The strength of the “blockbuster” is that when a media company gets one, money rains in torrents. The problem is that when the blockbuster flops, the advance and the effort goes to the remainder bin or direct to video. A publisher with a blockbuster that occurs with a textbook adoption cycle is in a pickle. The risk of losing the text adoption for an economics or psych book can plunge the publishing company into a sea of red ink. The narrowing margins mean that the costs of updating become more burdensome over time. Like I said, pickle.
Ms. Neary wrote:
Publishing has been always a gamble… no one really knows what will take off is part of the fun. But he thinks these days the stakes are getting too high, with the publishers taking all the risks and writers getting paid whether the book sells or not.
My conclusion: publishing companies’ business strategy is pretty similar to my Harrod’s Creek neighbor who bets the farm on the flip of a card. I don’t have the nerves for this type of business model. I prefer to float in my mine run off choked pond and watch the wizards of traditional media deal with the information opportunities from afar. My network connection feeds by addled goose brain. I am not sure what sustains the publishing companies with the blockbuster tactic.
Stephen Arnold, April 16, 2009
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