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Book Cash, Part Four

Over on Making Light, Teresa Nielsen Hayden has a post on Angus & Robertsons recent grab for cash:

I have a theory about what A&R is up to. Traditionally, when a publishing house is acquired by some big conglomerate, the bean counters take a look at the accounts, turn pale, and have a talk with the publisher. It has come to their attention, they say, that many books lose money, and most of the others make a small profit at most. Almost all the publisher’s profits come from a small number of bestselling titles. “True,” says the publisher. In that case, the beancounters reply, would it not make more sense to only publish the bestsellers?

I’m wondering whether A&R thinks they’d do better business if they only stocked the bestsellers. (If you look at the sixty-odd reader comments on the news story in question, you can see the actual reaction the book-buying public has when they find a poor selection on offer in a bookstore.)

Alternately, it’s possible that A&R’s management stands to personally profit if the company goes public and the initial stock offering does well, so they’re running a quick slash-and-burn raid on their more vulnerable suppliers in order to temporarily make their company look more profitable. Or maybe it’s something else. It’s tacky and stupid and self-defeating, whatever it is.

Worth a read, it is.

Personally, next week, I'm going to drive to my local Angus & Robertson and ask them to give me petrol money. I don't play to buy anything. I just think they should pay me to go to the store. It seems like the kind of thing I can do now.


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Aug. 11th, 2007 12:51 am (UTC)
In that case, the beancounters reply, would it not make more sense to only publish the bestsellers?

It amazes me that so many people who make Capitalism Their One True God apparently fail to understand any aspect of how capitalism actually works.

It's like the commonly accepted model that 80 percent of your sales come from 20 percent of your audience. Yes, there are any number of real-world examples which would tend to support such a view, but the supposedly capitalistic Morons In Charge all too often use this as a justification for focusing exclusively on that 20 percent of their consuming audience, to the extent of losing the remaining audience, without realizing that part of the whole point of the 80/20 split is that, according to the same theory they say they're basing their decisions on, no matter how small the total consuming audience becomes, that number of hardcore consumers is always going to be 20 percent. So, if you shun 80 percent of your total audience to focus on the 20 percent who are hardcore consumers, the number of hardcore consumers will shrink down to 20 percent of that remaining 20 percent.

Any self-professed "capitalist" who chooses to diminish their own returns in this fashion - which is strikingly similar to publishing only bestsellers - is a completely worthless fucktard who should not be allowed to make their own peanut butter sandwiches, much less run any business more advanced than an ice cream truck, and yet, these are precisely the sorts of people who represent The Majority Of People Who Run The World, even though, if our world had been created by A Just God, these people would instead be getting anally raped by wild dogs every day of their goddamned lives.
Aug. 11th, 2007 09:07 am (UTC)
nice rant :)
Aug. 11th, 2007 09:12 am (UTC)
Thanks. :)
The sad thing is, it's coming from a guy who can't even balance his own checkbook, which means, if I'm that stupid about money, then they're somehow even worse. You literally have to get into negative integers to measure financial IQs that low.
Aug. 11th, 2007 02:13 am (UTC)
From my experiences in working in a small independent bookshop, it's just down to common sense: you order however many copies you need.

So having left over stock of a book in the shop is a problem; yes it is, but it is the problem of the buyer who couldn't accurately judge from the type of customers that frequent that shop.

Of course, this may be harder because of the collected buying power which A&R may or may not have (I'm not sure how they work) whereby they buy for all the franchises. But from talking to my friend who works at an Ezydvd shop, a lot of their business got thrown out by the "area manager" because he decided that the art house and world movies section was not popular (which was false since it was one of the stronger departments for that particular shop) and started stocking "tin case collector editions" that they had shitloads of, making their stock the same as the other million Ezydvd franchises around the place.

I guess A&R have to start looking at changing their ordering procedure and not cover their faults by bullying people.
Aug. 11th, 2007 09:09 am (UTC)
well, it seems to me that angus and robertson are having bad decisions all the way through--it reminds me a bit of when i was working in a cinema, and you'd watch cinema bosses continually cut out anything small and interesting, just so you could fill it up with multiple cinemas of the same popular film... seemed to me a choice based only on immediate gain, and one which would kinda suck in the long run.
Aug. 12th, 2007 12:01 pm (UTC)
Before you demand petrol money from your local A&R, you might want to enquire if they are a franchise or company-owned store. The franchises are not subject to the new policy and may or may not participate in collective buying with the other stores. These franchises are mostly family-owned businesses and I feel sorry for the ones that are going to get caught up in the backlash of this nonsense.

I think Theresa's theory about the company floating is closest to the mark as I believe Pacific Equity Partners have already made public plans to float the Whitcoulls/A&R retail chain. So this policy makes sense in the context of PEP (which is a private equity fund) wanting to plump up the company's bottom line to get a higher share price at float.

Kate E.
Aug. 13th, 2007 11:42 am (UTC)
yeah,the float thing is probably true. i can't imagine it's working for them now, though, since all the press that they've gotten has been negative. which, of course, will impact on the francises, too.
Aug. 16th, 2007 05:48 am (UTC)
yeah absolutely, and it exposes their strategy as short-term at best which isn't going to inspire confidence in investors, unless its those predatory daytraders that look to make a swift killing at float and then get out 30 min later.

The A&R GM has been out in public since then and said that A&R company stores are actually making a cash loss. This illustrates better than anything else that they don't understand their own products. They're getting probably close to 50% discounts already. If they can't make that business model work then, well, then they should get out of the book biz.

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