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November 12, 2015

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The Business of Drivel: Nash Equilibrium in Publishing

October 21, 2015



People just aren’t reading anymore, or so publishers tell us. Sales are dwindling; bookstores and publishers alike are closing their doors. On the surface it seems fair to assert that there might not be much of a market for books right now. Publishers insist on this as the explanation for the dire state of their industry.


Under scrutiny, however, these statements start to sound absurd. Literacy rates have climbed prodigiously over the last few decades, with world population growing steadily all the while. There are more readers than ever before. On average they have more disposable income than any previous generation. 


In the meantime, nerd culture has become main-stream and intellectualism has become socially acceptable. ‘The book was better’ is a rallying cry for a generation desperate to appear smart and discerning. 


I find myself unable to accept the assertion that there is no market for books.


There must be a more compelling explanation. One possibility stands out in particular. People aren’t buying books because bookstores simply don’t have anything good.


If that notion is difficult to believe, just take a walk through a bookstore. Don’t head for the sections you normally frequent; just grab books at random. Now, and this is important, be careful not to accidentally buy them. Rather, just take a look at what you’re holding. Odds are that there is nothing in your hands that you would ever want to read.


That’s certainly my reaction, and the reaction of most readers that I know. I’m no book hater; I’m a fairly prolific reader; three to five books in a typical week. I love books in a way that the average person would find off-putting. And yet even I find a bookstore’s typical contents to be distasteful at best.

If that’s the reaction of a devoted reader, try to imagine how someone would feel browsing a bookstore’s shelves for the first time. With no idea what they might like or where to find it, they’re adrift in a sea of drivel. It’s little wonder that people aren’t buying books; they can’t find any worth reading.


For those of you who are sceptical I point out that everyone reading this has an unusual level of interest in books. Not only do you like books more than most people, you’re also willing to put more effort into finding what you like. Your experience of reading is downright rosy by comparison to what the average person can expect. If you ever find yourself rolling your eyes at some of the tripe that makes it onto bookstore shelves, just put yourself in the shoes of someone who tried to read that tripe without knowing better.


Every time that happens, there’s a good chance that the publishing industry loses a customer for good. That’s a pretty compelling narrative for how the book market continues to shrink in such favourable conditions. We have arrived at a state of affairs where people want to read and want to be seen to read, but won’t step into a bookstore.


When books are bad, people stop buying books.


There is one key component missing from our narrative. How did books become so bad, and why? Surely the publishing industry has a vested interest in producing books that people enjoy reading, how could they possibly have made a business of poisoning their own market by churning out drivel? 

The answer, or at least part of it, lies in basic game theory. Printing one title and selling three thousand copies brings in less money than printing two titles that each sell two thousand copies. Twenty titles selling a thousand copies apiece is an even better bet. In the past, the high capital costs involved in getting a book to press made this a losing strategy. The advent of digital printing slashed those capital costs and removed the need for publishers to be selective, a phenomenon reinforced by the growing popularity of e-books.


The results have been staggering. As an example, the 2013 Bowker report indicates that the total number of ISBNs registered annually in the US increased tenfold between 2002 and 2012. With ten times as many books on the market,