Don't Let's be Beastly to Publishers*

Great to see Iain Dale sticking it to the retailers. The reality is though that small publishers have been railing against WH Smith (among others) for years and years. For a small publisher a large order can represent a cash flow nightmare - a risk they have to take, but to see those books come back, months later in unopened boxes is more than dispiriting, it is a real threat to the health of their business.

Paid for charts have been a scandal for years and years and Iain Dale is not the first and nor will he be the last to say it. As long as it remains true that nothing succeeds like success then there will be publishers - and authors - willing to game the system, whether it is by purchasing chart position or by boosting numbers of, say, Amazon reviews with some dextrous sock puppetry.

Having said that the combination of book sellers taking stock on sale or return under ludicrously long payment terms and with no real incentive to actually sell any of it and then in addition to charge publishers for every inch of promotional value and store position that book sellers are willing to concede does force one to ask how it is that publishers allowed themselves to be backed into quite such unfavourable trading conditions.

A chunk of the reason is historical - book sellers were very often reasonably ramshackle independent businesses fighting a monthly battle with cash flow. Publishers weren't that different themselves and cosy, gentleman's agreements made sense when both booksellers and publishers were principally inefficient and undercapitalised lifestyle businesses.

However as bookselling (and publishing) became more corporatised and chains began to amalgamate the dodgy practices remained. Booksellers have always known that there are only so many books on one subject they can stock and that if a publisher wants them to take their royal baby book say then there really is no reason for them to pay anything up front.

Quite the reverse, they realised they were able to charge publishers considerable sums of money to stock their books - major in store promotions cost tens of thousands of pounds. On top of this the discounts retailers claim from publishers grew and grew.

This has resulted in the ludicrous situation where publishing contracts are riddled with archaicisms, such as clauses that state that paperback discounts of more that 55% are regarded as 'high' and subject to a special, punitive royalty rate despite the fact that there is barely a paperback in the UK which has been sold with a discount of less than 55% in the past decade.

Inevitably as publishers found themselves squeezed by retailers they have in their turn squeezed their suppliers - authors. And that in turn led to some high profile agents taking the position that if authors earned out their advance then their agent hadn't negotiated a good enough deal for them.

Publishers found themselves in a business position where they exist in the hinterland between two co-dependent relationships - agents and retailers. What was so nuts about it was that it was a menage where the two mot important elements in their business, authors and readers were all to often regarded as interlopers. The whole thing was wildly disfunctional and was a situation built for disintermediation.

Enter the Internet, and with it Amazon, who have of course done a fabulous job of introducing authors to readers - where once the chain read author - agent - publisher - retailer - reader it now reads author - retailer - reader for a significant part of the market. This is a seismic shift - and the earthquake isn't over by any means.

The big publishers have actually done a pretty good job of protecting their revenue over the last few years. However, the result of that is that authors get a significantly worse deal from publishers than they did ten years ago. The trouble is that ten years ago authors had to have publishers. They don't any more and publishers need to be very wary indeed of incentivising authors to look elsewhere for the solution to the problem of how to find readers.

The commercial chain has shortened irrevocably - that is a given - and it is perhaps not surprising that retailers, who already had a direct interface with one end of the chain, readers have made more of the running so far. Publishers, who found themselves cosily, if disfunctionally, insulated at the centre of the chain, have a tougher job - they really need to dig in and change their DNA and really build value into their relationship with authors by recognising that it is a partnership and the old 'bloody authors, doing them a favour' attitude has to be rooted out ruthlessly.

They also need to demonstrate that they are serious about establishing a direct link with readers. They need to disintermedite the retailers - online at least - and sell books themselves. It is a commercial necssity - it also will free them from a fundamentally unhealthy relationship.

Everything has changed in the last three years. Authors are publishers, agents are publishers, retailrs are publishers. Publishers are still, well, just publishers. Understandably they feel a little sensitive about this* - everyone else got a new dress exept for them.

Well, there may not be any fairy godmothers, but the opportunities are enormous. Amazon are more interested in selling iPod docks than books, the margins are better: fundamentally they don't care about books, authors or readers - publishers do: and in time that will tell.