Wednesday, July 16, 2003

The shelf life of books We talked before about the importance of shelf life, indicating that one of the key issues for most companies involves extending the shelf life of its products. In the crazy book industry, where a few chains (Borders, Barnes & Noble, Wal-Mart) hold a powerful oligopsony, even the biggest publishers have little power over the shelf life of their books. That's especially bad for them, since the publishers have to swallow the cost of unsold books. Here's an insightful look at the issue of shelf life of books by someone who has closely observed the book industry: On average, a mass-market paperback stays on the shelf only 3 months. A trade paperback might stay as long as 6-9 months. Hardcovers are available until the paperback comes out or until the next hot, new hardcover pushes the previous one off the display racks. Almost all published books go out of print in 3 months. On average, best-sellers go out of print in 2 years. If a book sells well during its usually short time on the shelves, the title is often set up as an auto-reorder. In this case, when a copy sells, the store automatically reorders another copy of the book. This doesn't mean that stores will carry more than one copy of the novel; just that they will reorder that novel when that one copy does sell. Although this is unfortunate for readers who are seeking a novel in the time it is absent from the shelves, at least the novel is on reorder and is likely to be picked up again by some other reader's foraging. The major booksellers treat publishing companies like hired help. The privilege of being on the shelf is something that publishers buy, whereas the book chain takes next to no risk. Publishing, though somewhat concentrated, is competitive enough to have little power in the negotiations. This model, which has been in effect in the book industry for years, is now rapidly evolving in other retail areas. In supermarkets, more and more the chains are providing shelves for rent, and are ruthless about tossing out products that don't fly off those shelves. The supplier takes the risk. Amazon, of course, offers a different model, with seemingly infinite shelves. But Amazon still sells far fewer books than the chain competitors. For publishers, the ideal would be to disintermediate (get rid of the bookseller in middle) and sell directly to the customer. If digital delivery of books ever becomes a possibility, then publishers could sell directly. Anyone who has written a book that has neither magic academies or moving cheese, can see how badly this system is set up for anything but blockbusters, and how really impotent the publishers, even those belonging to giant multinationals, really are. 1:55:15 PM

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