January 2005

The Future of Books

Continued from page 1

By Jason Epstein

Hankering for a revolution
It was all too good to last. At first I did not notice that the publishing business, along with much else in American life, was being reshaped by the great postwar demographic shift from city to suburb. As their customer base disappeared, so did hundreds of city bookstores with their thousands of backlist titles. Today, there aren't 50 independent retailers in the United States that stock 100,000 titles or more. By the mid-1960s, the new retail market, based largely on suburban malls where the dominant bookstore chains were paying the same rent as the shoe stores next door, could not afford to stock their costly shelves with slow-moving backlist inventories. Turnover was important to these chain outlets. Heavily promoted books by television celebrities and by well-known writers of formulaic thrillers and romances were what the chains wanted. Very soon, thousands of backlist titles were going out of print every year.

The effect of these new marketing conditions was to turn the industry upside down. Where previously publishers had depended on their backlists, now most of them survived precariously (if they survived at all) by scrambling after bestsellers. Celebrity ephemera were auctioned by their agents for dizzying guarantees, while the powerful retail chains demanded ever more discounts from publishers, forcing the smaller houses to merge with and be subsumed by the conglomerates that dominate the industry today. Publishers continued to produce as many books of real merit as ever, but as Calvin Trillin put it, their shelf life had deteriorated to somewhere between that of milk and yogurt. Book publishing began more and more to resemble the mass-market-magazine business.

In 1958, I left Doubleday for Random House. My arrangement was unusual. For many years I was the firm's editorial director, but I was also free to pursue my own ventures. By the mid-1980s, I had started a few successful businesses for the same readers for whom I had created ­Anchor Books. I began to look for ways to bypass the marketing forces that were eroding publishers' backlists. In 1986, with this problem in mind, I conceived the Readers Catalog, a directory of some 40,000 backlist titles that could be ordered through an 800 number (the Internet had not yet been commercialized). The idea was to re-create a medium-sized independent bookstore in the form of a printed catalogue the size of a big-city telephone directory. Sales were brisk -- but my business plan was flawed. The average revenue per order was about $35, plus shipping and handling, but the cost of handling small orders was more than could be recouped. By the time the Internet was flourishing, I had decided not to put the Readers Catalog online but instead auctioned it off to Amazon.com and Barnes and Noble -- warning them that their margins would not cover the cost of handling small orders for individual customers. (They have since lost millions of dollars while performing an invaluable service to publishers, writers, and readers.)

It was in the aftermath of the failure of the Readers Catalog that I saw the solution to the prohibitive expense of physically handling thousands of low-cost items. Books, like music, are among the few commercial products that can be reduced to digital files, stored, located, and transmitted electronically at virtually no cost. Publishers had been trying to sell electronic versions of their titles online since the early 1990s. They had failed because the programs were poorly designed and because most readers resisted the idea of reading books on their computer screens or on handheld gadgets. Imprinted paper, folded, gathered, and bound within covers, is still the most durable, readable, portable, and economic medium for books that are meant to be kept. It must be possible, I reasoned, to reconstitute a digi­tal file in the form of a library-quality paperback. What I imagined was the functional equivalent of an ATM -- a device that would quickly print a book from a digital file, bind it, trim it, and deliver it to the reader at low cost.

A rudimentary print-on-demand technology already existed, consisting of a separate duplex printer, binder, and trimmer, but the equipment was expensive and cumbersome and required skilled operators. It was designed to function within the existing supply chain of the publishing industry, but for printings too small for a conventional high-speed press. I wanted something else -- a free-standing, fully automatic machine that would bypass the entire Gutenberg system. A reader would select a file; the file would be transmitted over a secure network; and within minutes, the machine would print a single copy, in any language. The machine would deliver a book at less cost to the reader than books produced by more conventional means. By eliminating the physical supply chain, the new technology would offer readers a vastly greater selection of titles than existing technologies.

The 1950s "paperback revolution" in which I had been so bound up wasn't a revolution at all -- merely the introduction of a new format within the existing supply chain. I hankered for a true revolution, one that would maximize the world market for books and create unprecedented new efficiencies for publishers.

In 1999, I delivered three lectures at the New York Public Library, where I presented my vision of an electronic future and predicted that, sooner or later, such a machine would exist. (I reworked these remarks in my 2002 book Book Business: Publishing Past, Present, and Future.)

At the time, the mall chains had reached the limits of their expansion. Accordingly, by the early 1990s, they were being replaced by the so-called superstores, Barnes and Noble and Borders -- much larger, free-standing establishments whose prom­ise to carry large backlist inventories was often thwarted by costs that mandated instead the usual books of the moment, along with music, magazines, trinkets, and coffee bars. An alternative was more urgently needed than ever.