Most observers of the ebook publishing scene have undoubtedly taken notice of the increasing volume of books on Amazon and other retailers. It has been said that ebooks are forever (or for as long as the e-retailers will offer distribution). They don't get pulled off the shelves in a few months, the way print books get pulled out of bricks and mortar stores. Like most things in life, that's an advantage and a disadvantage, depending on who you are and where you stand.
For self-publishers and very small publishers (Indies), that has tended to be a decided advantage over the past few years. Many Indies are new writers; others are traditionally published writers who have been dropped by their publishers or who have dropped out themselves, frustrated by traditional publishers (“Trads”) contracts and practices. The fact that their work could be exposed to the public for a much longer time than the traditional 3 or 4 months has allowed them more time to be discovered by readers and build a following. It has also provided a source of income - usually a small one, but one that contains within it the hope (and the possibility) of a breakout to greater things.
The physicist Richard Feynman famously said that there's plenty of room at the bottom, when speaking of nanotechnology. The phrase might also be applied to the Indie ebook world. Many writers are happy to be purchased and read by even a few dozen readers per year. Money is not their main motivator, though they won't turn their nose up at it. There's plenty of room at the bottom – i.e. in the long tail.
The same can't be said for traditional publishers. Trads must make money to survive, and plenty of it. They have a lot of overhead, even after taking into account the fact that ebooks don't have the printing and distribution costs of physical books. Expensive New York or London real estate doesn't come cheap, nor do high priced executives. Add to that the limitless demand for profit that shareholders require, and the financial picture looks pretty constrained.
Until quite recently, Trads saw their backlists as something to bury rather than something to exploit. Older books were taken off the shelves quickly, if they didn't sell in rather high numbers. This made way for newer, fresher product and ensured that the supply of books could be carefully managed. After all, it was always assumed that the immutable law of supply and demand meant that a large and constantly growing supply of older books would drive down the price of newer books. Ergo, the majority of the backlist had to be pulped, though a few copies might be kept on sale somewhere, to ensure that copyright didn't revert too quickly to the writer, who might try to re-inject the book into the market.
But Amazon, Kobo, and the rest changed all that. By opening up their stores to Indies, they eliminated the Trads' ability to manage supply. Previously unpublished Indies were providing the diversity of books that a large part of the reading market wanted, so supply was growing even with the Trad backlist being kept off the market. That was exacerbated by Trad writers getting their backlist reverted to them, and then self-publishing them.
There is an old saying - “if you can't beat them, join them”. It has become very obvious that the big publishing houses are doing just that, by furiously putting up the backlist to which they still have the rights. In addition, they appear to be selling these at reduced prices, in the $4 or less range that Indies previously had to themselves. I believe that they have been surprised by how lucrative this business strategy has been.
But the strategy has several pitfalls that I can think of, all in some way related to the supply and demand issue.
The first problem is that filling up the long tail with Trad backlist will drive down the price of that backlist. Once more, that's just the law of supply and demand. The average price of backlist books will drop, but their costs will remain fairly stable.
Indeed, costs might even rise as the publishers mine deeper into their backlists, to books that require more manual efforts to e-publish – i.e. scanning paper books, purchasing and maintaining expensive optical character recognition systems, and manual re-reading to locate and correct OCR errors that spell-checkers can't catch. Skimping on these steps will help to contain costs, but at the price of reduced quality. And the big publishing houses base much of their appeal (deserved or not) on the notion that they have reliable quality standards. Ceding that advantage to Indies would be destructive, in the long run.
In addition, as they go further back in time, it will be more difficult to judge whether a book will appeal even minimally to modern tastes and cultural mores. Consider how attitudes to race and sexuality have changed in recent decades. Some older best-sellers would seem pretty scandalous now, in these areas.
There is also the legal issue of copyright to consider. It may be difficult to ascertain just who holds the rights to older works. Putting up content that has reverted could be a legal money pit for the big publishing houses. Legal risks generally turn into legal costs, sooner or later.
Then there is the issue of how publishing the backlist will affect the front list. Will people still be willing to pay $25 for the latest Dan Brown novel or $12 for an ebook by Grisham if a wide range of quality backlist is available at low prices from the same publisher?
The big publishers appear to be betting that they can have it both ways; big sales at premium prices (and profits) for new works by big name writers, coupled with substantial sales (and profits) from their low priced backlist. It is hard to say if that is a sustainable business model. To me, it seems riddled with contradictions, but only time will tell.
As for Indies, the strategy is clear. Hang in there and keep on writing if that is what you love to do. If you don't love writing, consider another career, because the next few years will feature cutthroat competition. Either way, though, the future will take care of itself.