Matt Goolding

Could risk-aversion be positive for publishing in the long-run?

It's glaringly obvious that the publishing industry has undergone a seismic shift in recent times, and many of us will have experienced this upheaval first-hand. We've seen unprecedented global mergers and acquisitions, and the demise of established sector stalwarts.

Without dwelling on the doom and gloom, reports suggest that from June 2014 to June 2015, 128 publishing houses went out of business in the UK. This is an increase of 58% from the previous year, and similar trends are seen the world over. In the USA, the liquidation of Borders Group in 2011 meant that top publishers were owed many millions of dollars. These are challenging times, that's for sure. (Source: Moore Stephens)

A fascinating yet understandable side-effect of this volatility has been the increasingly cautious approach of larger publishers. The global financial crash of 2007-2008 has left many industries reeling and, while recovery is ongoing, large enterprises are covering their backs and adopting a more tentative approach. Publishing has been hit by an economic crisis, the digital revolution and a massive change in consumer habits all at once. This is enough to send even the bravest business mogul running for the hills.

And yet, smaller independent publishers are still pushing boundaries and driving the industry forward with supreme innovation. Digital technology has facilitated this but, arguably, so too has the reluctance of larger publishers to take risks on authors, titles and markets.

A window of opportunity

What we've seen in recent times is major publishing firms favouring derivative content, sequels and established authors over less certain projects. More than ever before, it's about sure-fire hits and guaranteed break evens. Some commentators lament a loss of variety, claiming that treading water is not what the industry needs at this testing time. California-based literary agent, Janet Kobobel Grant, shared her thoughts in an article on this very topic in 2015:

"If that trend-starter doesn't get published, publishers will end up competing for the same authors and the same topics – the sure bets. Then, the only way an author or agent can decide which publishing house to go with is through the size of the advance. Because, suddenly, all the publishers look alike. That's part of the fallout of not taking risks with what is acquired. Because each publishing house not only will be risk averse in what it chooses to publish but also in experimenting with new marketing ideas and figuring out new sales channels. Risk aversion, once it sets in, permeates a publishing house." (Source:

However, it could be argued that this is merely a temporary consolidation period. Adapt, survive, and move forwards thereafter. When this transition phase is over, we may see the larger publishers moving again to more interesting areas in terms of technology, products, authors and stories. By this point, niche independent publishers will have built strong lists and loyal audiences, and they'll be in a position to thrive by themselves, or attract acquisition and partnership interest from the big guys.

But how exactly are smaller publishers making such inroads? In many cases, they're going back to the constants and the unmovable philosophies. What cannot be quenched is the human thirst for great stories. That will never change, and is as true for education publishing as it is for entertainment. Independent publishing houses have a renewed focus on this and have benefited as a result. Furthermore, smaller operations can be much closer to their authors, who can help develop an effective marketing strategy for each title. I spoke to Caroline Goldsmithat Red Button Publishing about how they've benefited from the current industry landscape:

"I think it's generally easier for small publishers to take a risk on something. They can move quicker and the stakes are lower. They don't have the overheads or, in some cases, shareholders to be concerned about. I suppose the main example of this, for us, would be 'The Human Script' by Johnny Rich, which was our first book. Despite meeting with literary acclaim from people like Tom McCarthy and Ian McEwan, and having representation from a major agent, the book failed to find a publisher in the early 2000s – possibly because it is a hard book to categorize. We knew it was brilliant and knew we had to get it out there."

Unsurprisingly, structures and processes can limit a juggernaut's ability to adapt. Amid such change, publishers must change workforce skills balances, supplier contracts, production lines, sales targets and much more besides. This all takes time, and there are many difficult decisions to make along the way; redundancies, enterprise systems, marketing budgets and so on.

Digital's role

Digital has helped some grow, yet ushered in the downfall of others. A digital-first publishing approach requires less initial budget and less risk, and therefore greater opportunity to experiment. Undoubtedly, smaller publishers have thrived in an arena that allows them to publish work without the print-run investment.Furthermore, digital technology has enabled them to reach new audiences and promote work across social, search, online communities, and influencer blogs. Marketing online is open to all, and these publishers compete on different battlegrounds to those investing thousands on billboards and TV ads.

Larger publishers, although widely embracing digital media, were not set up to adapt immediately. For the most established publishing houses, it's a more gradual transition to adopting digital not only in their products, but in their sales and marketing. Although he disagrees with the notion that publishers are risk-averse, CEO of Simon & Schuster, Carolyn Reidy, said in a 2012 interview with Digital Book World:

"People have shrunk their lists a bit because the marketing of books is more difficult today. There's much more competition in the media. A lot of the old media we used – book reviews, television shows, etc. – there's a lot less attention placed on books (as books, not as an industry), than there was before. Digital is very complicated and it's much harder. There is no sure leverage yet in the digital world. We do ask our publishers to have a very clear idea of how they're going to publish what they purchase." 

In 2014, Simon & Schuster followed HarperCollins in joining digital services Oyster [IPA note: Oyster was absorbed by Google in September 2015] and Scribd, suppliers of books to readers' digital devices for a monthly subscription fee. Macmillan struck a deal for a thousand eBooks in 2015, and other large publishers will likely follow suit. The fact that these two start-ups secured three of the big five publishing houses highlights where innovation can forge a path in the industry, and shows how technology brings opportunity to everyone. The readers are still out there, but publishers are now able to find them in new and exciting ways.


I would argue that, albeit a short-term frustration, the risk-averse approach of major publishing groups is a necessary and positive thing for the industry in the long-run. It enables publishing houses to stay afloat and opens up gaps for new and innovative publishers to make their mark. After this consolidation period, larger publishers will take note of others that are growing and push for a more agile and exciting outlook, incorporating technology more fluidly into their products and overall operations.

Publishing is a battered but resolute industry that's simultaneously grappling with the digital revolution, shifting consumer habits and a worldwide economic downturn. But publishers are sticking at it and there are plenty of forward-thinking and innovative individuals entering the sector as apprentices, graduates, executives and business owners. This is still an industry in which bright people can thrive.

Furthermore, compelling content will always be written by the myriad of great storytellers in our world; in fiction, non-fiction, education and everywhere else. This will remain a constant, as will the insatiable demand for novelty from readers. Whilst a more cautious approach may slow the global impact of unknown titles and topics, it provides an opportunity for smaller publishers to purchase incredible pieces of work, expand their audience and grow their business. In turn, this creates a more vibrant and energetic industry for future generations.

Disclaimer: the views expressed here are those of the author and their publication does not imply endorsement by the IPA


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