Merchants of Culture 4: Publishers in the Middle

It’s easy to see the advantages of being a large publisher, as John B. Thompson chronicles in Merchants of Culture. (The first in this series is here.) It’s the economies of scale—consolidating business operations, having the size to field a sales team, having clout with suppliers and retailers, accumulating cash flow for big projects, having the ability to absorb losses from a big investment that goes bust, and being able to invest in IT.

And on reflection, we can see that despite the vulnerabilities of being small, there are advantages too.

First, you have little overhead structure, and second, you can participate in the economy of favors. That is, vendors are known to give breaks on rates because they know you can’t afford the going rate, and they like what you’re doing. They often admire or believe in your mission too.

The problem with being medium-sized ($1 to $50 million) is that neither of these sets of advantages tend to work for you. You aren’t big enough to have economy of scale, but you are big enough to need a full infrastructure. At the same time you are too big to benefit from the economy of favors; rarely do suppliers/agents give you a break.

In addition, medium-sized publishers often have the same disadvantages of small publishers, including

– being undercapitalized
– having difficulty getting attention in the media
– being dependent on one or two highly successful books
– losing authors to bigger houses
– often being dependent on third-party sales and distribution arrangements

All is not lost, however. Thompson notes several key strategies for medium-sized publishers to stay in the game:

– Create a set of relations with authors that some authors will value more than they will value the extra money they can get from larger houses.
– Develop symbolic capital. (See previous blog here.)
– Hold on to as many rights as possible.
– Club together, such as collaboration in sales and distribution, or with printers and other suppliers.

One other strategy he mentions: Be quicker and smarter. (Darn, I wish I had known that before.)

Next Installment: *[Not All Digital Is Created Equal](http://andyunedited.ivpress.com/2011/04/merchants_of_culture_5_not_all.php)*