The illogical industry of book publishing.

Being a college student I’m often forced to take classes I don’t like and do projects that I have no interest in. Which I assume is strange because no one else who has ever attended college would experience that same feeling toward college . . . right?

Well, one particular class the final one that I needed to round out my minor in economics focused on economic conditions that affect the entertainment community. The final project in that class was an economic topic of my choice related to the entertainment industry. Naturally I gravitated toward the publishing industry because I like to learn more about both writing and the dirty side of the industry, publishing.

The big question that I sought to answer—pardon the economics speech, I’ll limit it from here on out—was “Has the advent of easy self publishing increased or decreased the utility of readers or authors?” In otherwords, who is better off?

If you have any questions about my data, follow this link to a small page with my data and original presentation. There you will also find all my sources.

The Illogical Industry

With roaring sales of books and all these brand new authors with their new books entering the market we would assume one more thing. There is a proportionate increase in the number of books being read, or the number of readers purchasing books. Maybe more hours spent reading as well. But the answer surprisingly to all of these questions is no.

There has been no significant increase in the number of hours that readers spend reading, according to a Pew Research poll. There is also a decrease of 12% people reading more than 50 books per year and less than 13% increases of people reading 6-50 books per year according to Gallup. That is on the average, when those numbers are attached to an increase of population there was only a 299% increase overall of books being read, compared to a 1,232% increase in the number of books being published and purchased.

This shows an obvious disparity between purchasing behavior and reading behavior. I considered the possibility of “Hoarding” behavior. Readers don’t fit that mold though. Traditional hoarding requires the perception that there will be a future scarcity of books or a potential rise in prices. Neither of which exists.

It appears as though readers don’t purchase with the intent to read, but only to possess. They want to own books, because they love books. And with ebooks, they don’t even need to clutter up a room anymore.

Authors are at least benefitting from all this right? No, they aren’t, at least not all of them. According to Smashwords the top-grossing author in 2011 made 37 times more than number 500. In 2012 number one made 170 times more than 500, and number 500 made 2.8 times as much as number 1000. That is a 530% increase in the disparity of earnings between 1 and 500. Readers aren’t buying a proportionate amount more from every author. They are flocking toward the top.

There is an idea called “Choice Overload” if you have too many choices, you stop weighing your options and buy what you trust. With the incredible increase in the number of new authors readers are being pushed more and more toward those that they know and trust.

None of that is actually stopping authors from entering the market; they just keep pouring in, and driving sales toward the top earners. If I were to guess why, I would settle on two reasons. The first being Information Assymetry, new authors don’t know that the odds are stacked against them and steadily getting worse. For the sake of remaining positive, I would say that new authors are writing for the love of the craft. Willing to spend a fairly substantial amount on getting a quality manuscript to print for no other reason than they love what they do.

This leads me into my final point, in my original assumption when I started all this I assumed authors to be producers and readers to be consumers. And I was half right, readers do consume, often with no interest in actually obtaining value from what they have purchased. Authors on the other hand don’t behave like normal producers, making well-educated decisions with an interest in profit. If anything the vast majority of authors are consumers. For their own personal satisfaction they are consuming services from publishing platforms, editors and various other author support providers.

All of this is kind of disenchanting, and I wasn’t particularly pleased to have learned any of this, as it was a surprise to me also. I suppose the message I am trying to send is that each author needs to perform a critical analysis of why they write. If it is for vanity, but you enjoy it, go for it. If you are writing to make a profit be an informed producer, look at the industry, perfect your craft and develop your readership. Do not just be another consumer.

If you want to check my data, look at my original presentation, or see my sources follow this link.

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