NPL Publishing Consultants

As many of you know, I have just returned from Book Expo America, the annual book show - this year in New York City. Since I am not the cocktail, autograph, roundtable, or buzz party attendee type, I had a little time each evening to consider what this trade show was all about, and ponder the more global meaning of life in publishing and where we all fit into the picture. And I have decided I don’t think it is a very pretty picture - which is why I am taking the time to express myself - today, in a more serious vein.

As those of you who know me know, I am the eternal optimist, things are always great and getting better, and I always see the glass half full - (and am asking someone to fill it!) - so it is with a heavy heart that I expose deep concerns and feelings in this essay.

Agree or disagree, make your comments as public as mine by registering them here, or simply quietly soak in what I am saying, and draw your own conclusions. Don’t shoot me, I am only the messenger, but DO take the time to read this essay. I believe there are some serious changes afoot, and not all good ones. They will impact you whether you like it or not, or accept them or not, and some may actually succeed in taking money out of your pocket if you’re not careful.

First, and I’ll write a separate article about this shortly, is the cover story and lengthy section in The Futurist magazine, March-April, 2007, titled “The New Media Age-End of the Written Word?” Now this isn’t some “New Age” publication making psychic predictions, but a well respected magazine with regular articles written by future thinking professionals of all stripes from think tanks, major corporations, authors, organization executives, and the like. The question they ask is:

What does the world look like after text?

After text? You can’t possibly suggest - Ok, you might respond, they’re talking about in the next two hundred years - No, actually, they are talking about in the next twenty to forty years. Yes, yes, the demise of the book is not imminent, but consider what I SAW at BEA that ties in.

Affordable machines were being promoted in more than one place to allow you, as publisher, to digitize books at the rate of thirty pages a minute, faster if it is just black and white text. A number of service companies were also offering the service. And, we all know about Google’s Orwellian desire to own every last book ever written in digitized form. Let’s not just go after Google any more - there must be something to the idea - Microsoft now has its own initiative rivaling Google’s. I am missing the monetization of this concept, but that’s not the point of this essay.

What I didn’t miss was a line of publishers begging to speak with Google reps - giving them info, offering to digitize their books in their hotel rooms to have them handed over to Google by the next morning; remember this, as it is a really important piece of the puzzle. You wouldn’t think publishers would be running into the arms of Google’s project, but they are. It took me a while to figure this one out!

Consider that one book was completely missing at BEA, yet it will outsell every, yes, every book that was touted at BEA. And the next biggest seller was exhibited completely without fanfare in a tiny single booth, under a relatively unknown publishing banner, by a man to whom I am going introduce you in a moment.

Of course, the big book… the biggest book possibly of all publishing history (other than reprints of the Bible) is the last installment of Harry Potter. Expectations range from TEN to TWELVE MILLION books will be sold in the first 24 hours of its release date this July. Every last retailer on the English planet will carry it… from WalMart to drugstores, to bookstores, and anyone else who wants to drive some ‘one day only’ traffic to his/her store or place of business. No promo necessary, but trade distribution will play a large role… though neither an exclusive one nor possibly the largest dollar one.

Now, let’s consider the next biggest seller… a book called The Secret. I have mentioned it before, when talking about how a book (and DVD) gets hours of Oprah’s time AND not one mention of the trade since every referral on her show was to an 800 number or the website. Yes, I have been told that hundreds of thousands have been sold through the trade… but MILLIONS have not. What does it mean? Well, before I tell you my thoughts, I do want to introduce you to the publisher, Richard Cohn.

As mild mannered and quiet a man as I have met in a long time… and I only spoke with him for five minutes at the show and quite by accident as I was meeting someone else at his booth. The other person was running a little late and, seeing the rather smallish poster for The Secret, I was more than ready to learn something. For a man who has sold a number of millions of books and DVDs in the last eighteen months, my estimate-not his, he was mighty quiet about it… just thankful for the opportunity to bring the information to the public. I did not get a chance to meet his partner and spouse… she was busy with a customer, but I got the distinct impression that here was a couple, not unlike my wife and myself, who wanted to produce quality materials and earn a living in publishing… and through hard work, luck, skill, the lottery, call it what you want, he has hit the publishing world’s version of a major Superball drawing.

I subsequently learned a bit of his story from my lunch partner and my respect for him grew even beyond that which he projected at his booth to a complete stranger in five minutes. I make this sidebar only to tip my hat to a lifetime publishing professional who deserved and got to grab the brass ring. If you get an opportunity to meet this man, and his wife, do it. If only as a reminder that 1) the Superball drawing takes place regularly, and every single publisher has a shot at the Holy Grail, and 2) professionality, humility, and integrity still exist in publishing. (See, I’m not so cynical after all.)

But I digress.

Let’s add some more factors to the discussion. The front page article on the Day 1 Publisher’s Weekly Show newspaper wasn’t about bestsellers, or attendance, or the future of the industry (they wouldn’t dare… trust me), but was:

“Distributors Play Musical Chairs”

Yep, the whole page plus continuation spoke about which publishers had gone with the new PGW/Perseus, which ones had gone to NBN, and the cloak and dagger of who would be going where to recapture distribution lost when PGW went under at the end of 2006. Like it matters. Other than the specific publishers and specific distributors, why does ANYONE in the industry give a damn who is distributing whom?

OH! I forgot… when customers walk into Borders, their first question is always: Is the publisher of this book distributed by NBN? …’Cause if not, I don’t want the book!

(Pause inserted to allow for guffaws, chuckles, and rolling on the floor.)

Call me a conspiracy theorist, but PW gets it. Without constantly reminding mid and small publishers that trade distribution is a serious issue, and should be treated as front page news (not the pointed, irrelevent gossip and innuendo it actually is) then publishers may forget they NEED trade distribution and figure out other ways of selling their books and DVDs.

It doesn’t take a CPA to figure out that trade distribution is a losing proposition… count the number of distributors still standing against the number who have gone out of business in just the last ten years. But if PW makes it a major issue, then small and mid sized publishers will still believe it is a necessity, just like accepting returns… we’ve been doing it forever and no one can change the way the industry does business!

And one last factor… the one that impacts me personally the most, gave me pause to think when more than one of my meetings, after greetings and salutations, began with:

“Marty, I’ll bet your brokerage business is huge right now from all the publishers getting out after PGW.”

Well, so far it isn’t. But, after hearing that remark over and over, I began to sort out why not. Well, my off the cuff answer has been that it happened at the end of 2006. The first and second quarters of 2007 saw the proceedings, the acquisition of the bankrupt company, and a lot of what PW spoke about in its article of soliciting publishers away to new distributors. Here we are at the end of the first half of 2007… and most publishers in this mess haven’t taken the time yet to figure out exactly where they are. (While I am aware this isn’t true, what I mean is they are in shock and not really thinking completely clearly… just trying to replace what they have lost… and get back to business and creating some deal that creates revenue streams.)

Along about the end of next quarter, in September or October, before the end of the year and after things have settled down a bit… these owners will start to tally up the damage.

It is my strong belief that, when they do, the few other professional publishing brokers and I will get many more telephone calls about newly reconsidered exit strategies, before things get any worse for each individual company. I would estimate that between 50 and 100 extra publishers will be ‘on the block’ by the end of the year, just from the fallout of PGW AND other publishers considering their own fates with their current distributors.

All this talk and I haven’t said a word about anything “global”. So, before I put the whole puzzle together for you (and for those of you who think you have it already together, hang on a few more minutes) let me add some “global” stuff.

The American economy, despite what the government is telling the media, is in deep shit. Sorry, no other way to say it. The dollar is falling, and rapidly. Petrodollars, the dollars earned by oil producing countries and invested in dollar denominated bonds and instruments for safety of investment, are now rapidly becoming petro-euros. There is a major move afoot to move the euro into the position of the dollar as the world’s primary reserve currency. What does this mean… well, in simple English, when China, Saudi Arabia, and other ’surplus dollar’ countries stop investing in dollar investments, it has been estimated by economists that our economy will take a huge hit, and that our currency could fall another 20-30%… the impact of which in our ‘house of cards’ superheated investment community would be a meltdown of disastrous proportions.

Ok, I’m no economic expert, so enough of this, but I will tell you that as a resident user of two currencies on a daily basis… it has only been in the last few months that the Canadian dollar has gone from 82 cents US to today’s 95 cent US quote. I took a 15% pay cut and wasn’t even asked about it. And the rest of you will, too, depending on how far down the US dollar goes.

Have I mentioned a war we aren’t able to finance? Have I mentioned the US is the world’s largest debtor nation? And have you seen the line up of potential Presidential candidates? The whole economic picture looks grim in the short to medium term. What does that matter… well, from my research and personal experience, during downturns, and particularly at the beginning of “announced recessions”, publishers who have been thinking of selling, start to sell. ** Too late. **

As the economy gets worse, prices for publishers do not tend to go down, they tend to evaporate. That is, prices go down for the best 20% of companies for sale, and the rest simply don’t sell at any price. This is common to all industries.

So… let’s pick up the pieces and see what we can assemble.

Global economic position of US, bad. Dollar support, bad. Largest debtor nation, bad.

Personal prediction for US economy… downhill starting in fall or winter 07-08, and continuing through about mid 2009, early 2010. My guess is eighteen to twenty four months of downturn.

Now let’s get more specific… you know how I feel about trade distribution (and in a smaller way, returns) as dinosaurs of an industry moving at glacial speed. Further consolidations will happen over the next two years. Actually, I see major publishing players (not necessarily the largest, but maybe the best known brands) in specific fields becoming quasi distributors for the rest of the publishers in that field, much as my company did through the 80s and 90s… and in different ways.

Prediction: more publishers will stop looking at trade distribution and start looking at treating their companies like companies… selling books any which way they can. MAKING MONEY FIRST. The less publishers doing the distribution route, the less profits for distributors… thus my prediction of further consolidation. Remember, for distributors, it is all in the numbers… they could truly care less WHO they represent, as long as there are lots of them and they PAY.

*** One more major bankruptcy in distribution might end the practice of large scale distributors altogether and move publishers to actually THINK about how they want to sell and to whom they want to sell.***

Now, let’s assume that publishers discover that more than half their future market of readers are truly nothing more than monitor viewers. This might cause them to digitize their titles and monetize them via ebooks, Google/Microsoft programs, and the like. Hey, wait a minute, who’s buying books in old fashioned bookstores? Thankfully, for the next 10-20 years, boomers who were brought up to read ink on paper… in hands… in a chair… in a quiet place… not doing six other things at the same time. But, remember, this group will be getting smaller each year until it disappears altogether.

After… while it sickens me to say this… twenty years from now, probably far less considering the delta rate of change in society, maybe starting ten years out… I agree that there will be a severely reduced if not completely obliterated printed book publishing industry. Those who don’t find alternate ways to sell the information they now own, will be severely reduced or obliterated in the process.

It sickens me because a society without books isn’t a society at all. Yes, we’ll have even greater access to even more information, but it won’t be the same. It may be even better, I can’t say, but I am one of those purists who sit down in a big overstuffed leather chair and open a book and read it and find that activity one of the most enjoyable of my day.

The scales of life always balance back to ‘normal’. Excesses are temporary and don’t last, bringing the excessive behavior back to a “norm” at some point. When I saw what steelworkers were earning in Pittsburgh in the mid to late 70’s, I told my wife it couldn’t possibly last. Pittsburgh would take a terrible hit when the mills finally figured it out.

We left in 1981. There hasn’t been a steel mill in Pittsburgh for many years now and it took the city almost ten years to recover.

Gold was held artificially at $35 an ounce. When it was finally let go of these restrictions, it moved, and excessively, to $800 an ounce, and then came back, excessively, to $250 an ounce. Its real world value average is around $550 an ounce (my opinion). But I wouldn’t bet against it going well over $1,000 an ounce before it bounces back to a more ‘normal’ value.

Those who don’t study history, and learn from it, are doomed to repeat it.

How many more distributors and publishers have to hit the wall before someone, and important someones in the industry, say, ENOUGH!… let’s start looking at the whole model ’cause it is broken, and if we don’t fix it, we’ll be going the way of the buggy whip… you’ll find us in second hand and antique stores?

How many more will abandon printed words and follow what appears to be the trend of digitized information and protect their futures, at least for the next round of technological advances? Better to make some money than be out of business.

And, as they abandon the trade system, and others go out of business, how long will it be before the whole system crumbles under the weight of failure? Oh, don’t tell me the top 20 will hold the system together… not when they figure out it is cheaper to sell direct.

How many of you have read Atlas Shrugged? Do you remember how quickly the society disintegrated? Narrow it down just to publishing and that is one very possible scenario.

As less companies want paper, paper mills go downhill, less mills, less paper, then paper gets more expensive, giving publishers even more incentive to go digital or ebook or into some other as yet unknown potentials.

As more retail book stores, offline or online, sell books at 35-45% off direct to the public, discounts have to get higher to keep old fashioned stores in business, or they fall off the map like most independent bookstores. When the Amazons and online, low overhead mini players start selling at 45-50% off and earning 5-10% margins… then what does a bookstore do? Quit. What do the biggie book chains do? Squeeze another 5-10% out of the publishers. How? Not to worry, the trade distributors will just do it… with or without their publisher/customers permission. What happens then… publishers who were making a dollar on $20 books now make nothing… and quit distribution models altogether.

Are you noticing the same theme here as I am? I thought it might just be me.

Well, enough chat. Ten years out… you will be in one of the following four categories:

1. Sold out at the first opportunity after being hit on the head with reality.
2. Still in the business with a huge content driven website, ebooks and echapters, podcasts with authors and experts, and basically an electronic publishing company.
3. Still in business with a substantial web presence, a substantial direct to end user selling program, a substantial premium and custom program, a substantial reseller program for non book trade retailers and web tailers, and some safe, nominal investment risk trade distribution plan.
4. Dead from a heart attack, or bleeding to death from a self inflicted letter opener wound (yes, if you are in this category, you are probably still using letter openers), after being notified that Ingram, the only wholesaler/distributor left, has declared bankruptcy, leaving you holding the bag for roughly a Million $ in A/R and a Half Million $ in print cost Inventory, which you can’t access because you didn’t change your wholesaler agreement when I advised you to, back in 2007.

Which category will you be in?

Martin Foner, President, NPL Publishing Consultants

P.S. Yes, you’re welcome to comment… in fact I hope we get hundreds of comments and get a conversation going that results in some changes, or at least deep thought about the future of the industry and your own company. No profanity, no naming names unless you’re the name, and you must sign your comment, but if you want to remain anonymous, we can do that on the site.

P.P.S. No, you’re not welcome to borrow parts or pieces of this essay without my express written permission. I am not interested in answering for four half sentences taken out of context and put into some other newsletter. While I am overjoyed to share this essay, no charge, please respect my wishes and get permission first. In fact, I’d like to see every publishing related newsletter, online, blog, magazine, and communication tool of any stripe reprint this essay to get everyone in the industry thinking before only the top 20 are left on the playing field.

I won’t go into great detail about this just here and now, but reality is, the trade distribution system is in trouble. Yes, many have said it before and the stores are still around, and so are Ingram and the others… but the failure rate for distributors is growing, independent bookstores are failing, and if you ask B & N or Borders, they’ll tell you they get a fair chunk of their sales from the Internet. Oh, let’s not forget one of the big retailers… Amazon… who is 100% internet, not one single store.

The ‘why’ is complicated, but a few points do stand out:

1. The trade distribution system with product returns and a small wholesale pipeline is a model that is at least one hundred years old. Now, so is the Rolls Royce, and it is doing fine, but counting old marketing models to work properly in new marketing worlds, is taking an amazingly high risk. And, to allow those ‘in the know’ to tell you, particularly as a brand new publisher, that “you have to be in with Ingram and B&T, and in the B&N and Borders” is the only way to make money in publishing, is delusional. And if you listen, you get what you deserve. (The game is rigged, see #3 below.)

2. Any product that relies on “distribution” of any kind can only be successful when the pipeline is protected. Otherwise, those in the pipeline (wholesalers, distributors, retailers) run the risk of being blindsided by others in the pipeline or by the manufacturer (publisher) himself. Translation: The high rate of behind the back, over the top, direct sales to cut out middlemen, and the number of ways you can buy a book these days either as a consumer or a reseller, simply means there is no “order” to the industry.

Meaning, why should a bookstore protect one publisher over another, when selling fifty copies of a book to a school, when that publisher will think nothing of selling the fifty copies directly, if they could, and cut out the bookstore in the process.

As we all know, it doesn’t matter how “good” a book is, the way the big chains promote, or face out titles, is the same way canned corn is sold in supermarkets… the space is paid for.

When the pipeline places no value of one product over another (commoditization), the consumer is going to react in exactly the same way.

3. The game is rigged. Watch carefully… (and yes, if you haven’t figured it out by now, I do have a bias against trade distribution that goes far beyond rational reasonability… and this might be one of the reasons why). You print a book… you’ve been pre-promoting it, now that it is out, you’re promoting it, selling everywhere and to everyone you can… the budget is only so deep and you’ve got six months to get all the sales on the book you can to keep promoting it or it goes on deep, dark backlist forever.

So… let’s assume that all the promo will sell 10,000 books, and will cost a dollar a book. The retail is $10., and it cost you a dollar to print. You are one amazing salesperson and manage to sell 9,000 books to Amazon, B&N, and Ingram, and you have given at least a 55% discount, maybe more depending on your program with each of them. You’ve kept 1,000 books to sell direct. The clock is ticking now.

So, you promote some more telling customers, ‘in your favorite bookstore or at our website’. Website my tootle… unless you’re offering it for the 35-40% discount that Amazon does with free shipping, is there some specific reason a customer will pay you MORE for the book than they have to? Now, you’re COMPETING with your own distributors! Forget selling the thousand books at retail and making a couple extra bucks to pay the rent and phone bills… idea out the door in this program.

Now we’re six months down the line. Altogether, your sources have sold 5,000 books. Keep in mind that unless you were on Today or Oprah or reviewed in the NYT… you did ok (at least that’s what the industry bean counters will tell you). Now the returns start coming… you now have 4,000 unsold books plus all of the thousand you started with. Promotion has now cost you TWO dollars a sold book. Oh, something strange has happened… though they aren’t holding inventory (maybe a dozen copies or so) B&N and Amazon will still list your book for a while, since it did sell decently for them… and maybe, just to screw you up some more, at a 20-25-or 30% discount. Doesn’t matter, whatever the discount, you have to sell for less to get the direct sales. Imagine your own distributors and sales outlets forcing you to sell your own book well into the future for a discounted price, and these guys aren’t even stocking or supporting your title any more (yes, technically they have a few, but they haven’t promoted or done anything for your title since the beginning anyway).

Quick Math: After discount, shipping, packaging, and processing and counting returns… your $10 book is now grossing you between $3.70 and $3.90. Assuming roughly $4.30 as the selling price, you pay your author another $.43, unless you have, God forbid, a ‘retail’ royalty deal, in which case you don’t belong in this business anyway. Give or take you’re at $3.27 to $3.47, less the dollar for printing and the two dollars for promotion… you’re at $.27 to $.47 gross profit… before contributing the first dime to the operation of the business.

Hey, hey, if you don’t sell through the trade, you’re not making money. Oh yes, and everyone in the industry will ‘know’ your products are inferior and you’re a small timer, if you don’t have a ‘presence’ as they like to call it, so you play along, and boy, did you ever make money! You made somewhere between $1,350 and $2,350. and now you’re stuck with 5,000 books for future sale, so if they don’t sell, you have actually LOST MONEY!

OK… you know what’s coming… I said the game is rigged. You mean you thought it was rigged in YOUR favor, as one of the insiders? (Here’s one of the places in the newsletter where I sprinkled humor.)

Instead, go back six months… promote your title and let the whole world know it is ONLY available through your 800 number or on your website. You DON’T sell to any distributors unless YOU control the deals. So, you’re not selling to distributors. Let’s be honest, you would not have sold 5,000 books with your own promotion… some people came into the bookstore looking to browse the book from your promo and then bought… which they wouldn’t have done at your website. Let’s assume that the bookstore function is worth half the sales.

You make 2,500 sales at your website and through your office. Shipping is a non event, the customer pays for it. You get your retail of $10. on every book, except for any bulk sales you might make at a discount, but these weren’t made at the bookstore level either, so they are a no count for now. You’re ready to count beans.

Quick Math II: After discount, shipping, packaging, and processing and counting returns… your $10 book is still grossing you $10. You pay your author $1.00 and smile, net or retail royalty deal. You’re at $9.00, less the dollar for printing and the four dollars for promotion… yes, four dollars for promotion, though likely eliminating the trade from your promotional efforts reduces your budget by half, but let’s not go there just now. You’re at $4.00 gross profit… before contributing the first dime to the operation of the business. So, you have netted $10,000 for your troubles… you have all 2,500 customer names and addresses so you can sell them your other titles (didn’t get that from the trade did you?)… and you can continue to sell this book for $10. until hell freezes over.

Now I admit there are a few ‘adjustment arguments’ that could be made, the main one being you would only print 5,000 books if you felt you would sell 2,500… OK.. so increase the print cost to $1.50 per book, and see what happens: Your net is now $8,750. If you NEVER SELL another copy, your after print net is $5,000. In the trade example, if you never sell another copy, you are losers roughly $3,250. No, no, you HAD to print 10,000 in that example to get 9,000 out to the various distributors and bookstores to make the sales at all.

Maybe it’s just me, but I would rather make $10,000 and have 2,500 customer names and a future with the book on backlist, than be in the hole, with no customer names, and having to discount future sales just to get rid of the rather substantial inventory left in the warehouse.

If I did something wrong in my math or thinking, I know there are plenty of you ready to send me emails… I am not holding my breath.

Sidebar… I am NOT the only person in the industry who thinks the way I do…

In the November, 2006, issue of INC Magazine, they did a spread piece on Barefoot Books, a children’s book publisher started in 1993. Seven years the two partners worked from home and built the company to approximately $3MM. In 2000, they opened offices and went whole hog. They are now doing $6.5MM. Oh, they do NO Trade distribution, but they used to. Here is that part of the story, told by one of the partners:

Our books don’t sell in the chains. If you go into a Barnes & Noble or a Borders, no one tells you what’s a great book. You buy what your kid pulls off the shelf — usually whatever is face out or on the table. That means someone’s paid a lot of money to get that real estate; it doesn’t mean it’s the best book. The whole chain model is a nightmare: 60 percent or 70 percent returns and you don’t get paid. So at the beginning of the year I said to the Barnes & Noble and the Borders buyers, “I really can’t sell to you anymore.” They said, “Fine, we’ll put our money behind other publishers.” And they cleared their shelves. One buyer took it particularly badly. She told me she’d read every single Bareboot cover to cover. I said, “That’s wonderful, but it’s not the point.”

She didn’t have to be hit over the head with reality. Nor was she going to accept all those industry homilies about success. What’s funny to me is that the big players WANT you to keep playing by their rules, so they can keep ruling. As long as the major publishers keep the pipeline filled with product, it matters not what the mid and small sized publishers do… so why play a sucker’s game? Do as you wish, but do think about it seriously when considering your direction for 2008.

As you all know if you read my newsletters, Google isn’t exactly my favorite company, and, if you’re in publishing, it shouldn’t be one of yours, either. Here are two quick pieces I did recently in the newsletter about your friend and mine:

Oh yes, I almost forgot Google. Google has determined, after being asked politely to stop copyright infrigement by a number of Belgian newspapers… that it didn’t have to. Apparently a Brussels court decided otherwise. Here’s the brief from The Economist, Feb 17, 2007:

“”A court in Brussels ruled that Google had infringed the copyright of Belgian newspapers by publishing links to their stories on Google News. The case, in which the newspapers argued that the internet company was giving away articles they were charging for, was closely watched by other press proprietors. Google is to appeal.”"

Here’s my take on the appeal thing (again, my opinion, Google lawyers). Google and God both start with Go. This is a clear sign to Google that they should Go and they should Go with God… meaning they only have to follow God’s laws and may ignore secular laws. If it is yours, and Google can use it, it becomes theirs; if it is theirs in the first place, look out if you want to expropriate it.

* * *

Did you know… You can pull up the White House in detail on Google Earth. You can pull up the Pentagon in detail on Google Earth. You can ask for the Vice President’s house on Google Earth and all you get is a pixelated blur. Apparently when a quail hunting shotgun is pointed at your parts, this becomes the one exception to the Google rule. If “they” are bigger than Google, then Google does the kowtowing. So far, Vice Presidents and foreign countries (China). And they do a great imitation of Opie while they do it…aw shucks, dad. We don’t care about profits, Aunt Bea… we are only after world domination, that’s all.

I have been asked by more than a couple folks what exactly I read every day/week/month. I don’t think my reading list is vastly different or superior to anyone else’s who considers themselves well read… Let me give you just a brief partial list:

What you must read every week to be informed: The Economist. What Time & Newsweek want to be when they grow up. Don’t be put off by the name… this is the world’s preeminent weekly news magazine. Period. For example, last week’s ‘focus story’ was on offshore finance… everyone else would give you a page or two… The Economist devoted fourteen pages of text covering the subject from six different story lines. And no, I don’t get a new bicycle if I get twenty people to subscribe. (Pick up an issue before telling me what’s better.)

What you must read every week to be informed, and take with a large grain of salt: Publisher’s Weekly. What everyone in the industry would like to count on as gospel, but the magazine’s biases make it difficult. In the absence of anything else, read it. Let me know what you’re reading instead of PW, please.

What you should read if you’re a marketing type: Catalog Age, DM News, trade publications about informercials, retail trends, and demographics; and at least some of the weekly/monthly business magazines. INC has been consistently good. Forbes is ideologically bent in my direction, and for a big business magazine, is simple to read, and covers lots of mid size applicable stuff.

What you should read to understand what’s next: BUSINESS 2.0. Again, don’t be put off by the 2.0… that was their name long before the 2.0 concept hit the web. This is must reading particularly if you don’t ‘get’ the web, computers, streaming anything, RSS, or blogs.

Books… do I ever read a book? I do my best to read two to four books a month, above and beyond the half dozen or so books I read every week in my regular daily workload. Since I am about a 99.5% non fiction reader, much of what I read is business, self help related, or humor.

The last three books I have just finished:

Freakonomics - while it is a must read, the longer I have had to think about how these guys may have cooked their own results too, the more I think they may have. The concept is interesting… don’t accept ‘widely accepted’ answers to life’s situations, but take another look at the numbers, the base info, and maybe you’ll draw different conclusions.

The Long Tail - I think I recommended this last month. If I did, read it again. If I didn’t, this is the one book that will give you the future macro about the Internet. Now you’re doing 2% of sales on the net… in two years, 50%… in five years, 100%, minus your special sales bulk sales. Here’s the why and the global how. You still have to figure out how the how applies to you, but here’s a big piece of the roadmap.

Nasty Little Bits - Bourdain is a long time chef and now has his own rather odd travelog/food program/history lesson/culture shock rolled into a TV series. If you’ve seen it, then the book makes sense; if you haven’t then unless you’re a major foodie, it might not. By the way, he’s been renewed for a second season, on now I believe… worth the hour most weeks… called: Anthony Bourdain, No Reservations.

In my last newsletter I made a brief comment about the Judith Regan, OJ Simpson, Rupert Murdoch menage a trois. Since then, and after what was reported in the newspapers as a very heated meeting between Ms. Regan and Mr. Murdoch, Ms. Regan has made reference to the “Jewish cabal in publishing”, and something to the effect of how this group was out to “get her”.

When you start hearing people talk this way, it is time for the white sports jackets that tie in the back. As I said last time, three cheers for Mr. Murdoch who had the kahones to do the right thing. Further, if Ms. Regan is this unstable (it is possible she was misquoted, so do your own due diligence before blaming me!) she should have been fired. So another cheer for Mr. Murdoch for keeping order in the chaos of publishing and sending her on her way.

All I can say, Ms. Regan, if you believe you truly are the premier publisher in the industry, indispensible, and have the judgment of Solomon - then do what the rest of us working stiffs have done. Put up your own money, start another publishing company, and prove Mr. Murdoch wrong. (Last piece of advice - don’t do the OJ book - even if you make money, people like myself will pillory you until your final moment on this planet for excessively poor judgment. It’s one thing to be wealthy and loved, another to be wealthy and despised, but to be wealthy and pitied - there is no escape from the shame.)

Don’t Buy the “Isolated Incident” BS Being Bandied About in the Industry!

Either we start looking at what’s wrong with the publishing industry that keeps taking down fine distribution companies in the US (and in Canada), or we’re doomed to keep repeating these failures. No, I don’t have any inside information and haven’t even bothered to read most of the news reports. Reality is that another fine company has bitten the dust.

I searched back in my newsletter archives and it was three years ago that the #1 Canadian distributor filed for bankruptcy, which prompted me to write about protecting yourself in your dealing with distributors. I also mentioned my personal opinion that, within five years, there would only be Ingram and Baker & Taylor type distributors left, if even these folks. I’m getting close.

It would take pages and pages to dissect the issues in the “business”, and even acknowledging new forms of publishing, methods of transmission, and parts and pieces of books available in a number of ways, free, the industry has some basic flaws. We all know pretty much what they are, of course, depending on where you sit in the stadium.

As most of you already know, I am a staunch believer in titles generating revenues APART from the distribution process - using distribution as a second level device to add to an already solid sales base. Unless you have the machine, the money, and the constant vigilance, distribution is about a break even proposition for most of us. And now, as we slowly watch the distirbution concept crumble, it is even more important to have other revenue sources as #1 on your list.

And don’t forget to review your agreements with all your distributors to protect yourself, yet again.

I’ll review the article about protecting yourself with distributors and provide some additional information and advice about alternatives to distribution.