End of the line for book clubs?

When I was growing up, pretty much every magazine had at least one double-page spread, with a response card tipped in, for a book club of one sort or another. Which club it was would depend on the readership of the magazine: Popular Science might have the “Computer Book Club” or the “Military Book Club”; a national general-interest magazine like The Atlantic or Time might have the “Literary Guild” or the “Book of the Month Club”, which was one of the biggest. Like their cousins the record-and-tape clubs, these businesses were not actually clubs at all; they were instead an outgrowth of 19th-century publishers’ business model of selling books by subscription. Unlike the original subscription-book business, where each series or title would have to be sold anew to a set of subscribers, in the book clubs, “members” would get a new book every month, selected by the club’s editors, and most could be depended on not to refuse or return their selections since it was a hassle (they had to return a postcard, or worse, mail the book back to the club’s warehouse). The clubs could then use these guaranteed sales to negotiate with publishers and authors for the right to reprint the books; by resetting all titles into just one or two different formats, they could use economies of scale to get lower production costs for their reprints; and by dealing directly with customers, they could eliminate the distributor’s and retailer’s markups (which account for 50% or more of the “cover price” of a new hardcover) and sell the books at a huge discount while still making a tidy profit for their shareholders. Because they were usually printed at a different size and lower-quality binding than the trade originals, the secondary market for book-club editions was (and is) relatively limited; many secondhand book dealers won’t even handle book-club books.

By the 1980s, there were three major book-club organizations: the Literary Guild, the Doubleday Book Clubs, and the Book of the Month Club clubs. Doubleday was acquired by the German media conglomerate Bertelsmann (which also purchased Columbia Records and its affiliated record-and-tape club). Eventually the former Doubleday book clubs merged with the Book of the Month Club, and many clubs were merged or shuttered; the combined organization was sold to a private-equity investor in 2008.

By this time, the book-club model had changed considerably. Although the customers would still be offered a monthly “featured selection”, the clubs maintained significant backlists from which customers could order, including many books which were never featured selection. (I am guessing that this originated as a way to sell off returns and other unsold copies of the featured selections, since as reprints they could not be returned to the publisher, but by the 1980s it was important to have a full catalogue for potential customers to order their “teaser” selections from, hence the double-page magazine spread.) Some of the book clubs were even able to commission their own editions — at first omnibus editions of shorter and classic titles, but later some even published original anthologies.

For the run-of-the-mill reprint business, however, book clubs depended on being able to acquire books before they were published, so that they could be re-typeset and reprinted by the time the original publisher’s edition appeared in retail stores. Otherwise, many subscribers would not wait for the club edition, but would instead buy the retail edition, leading to substantially increased refusal and return rates and poorer economies of scale.

But this model still depended on the clubs being competing primarily against the regular in-person retail book trade, and competing for customers who were relatively uninformed about the universe of titles available to them. In such a setting, the book club can provide value both as a source of cheaper books and as a better source of information about what books are available — particularly for the genre book clubs, whose editors see a far greater fraction of the books being published in their categories than your typical Waldenbooks PFY would.

That was the situation as late as 1992, when I joined the Science Fiction Book Club, one of the Doubleday clubs. SFBC’s editor was then Ellen Asher, who was one of the most respected editors in the SF genre, having run SFBC for two decades by then. According to my library database, I have since purchased 233 distinct titles from SFBC. I have stayed with the SFBC for all these years, since it was a good source (that I didn’t have to pay for) for information about many new books, and the prices were reasonably competitive. But my purchases have declined steadily over the past decade, from a peak of 24 books a year in each of 2003 and 2005, down to just three books this year, and there doesn’t seem much prospect for any more this year, given what sfbc.com lists as forthcoming.

What happened?

There are three reasons, two of which are more general, affecting all book clubs, and one of which is more specific to SFBC; I’ll take take the third reason first. During the one of the SFBC’s episodic consolidations, Ellen Asher left SFBC. Management was taken over by an editor from one of SFBC’s sister clubs — I don’t even recall which one. I’m sure the new editor, Rome Quezada, is not a bad fellow, but he doesn’t seem to have the talent at picking books that Asher and her staff had. They actually commissioned a telephone survey a couple of years ago and I told the survey-taker exactly that (and I usually don’t talk to telemarketers).

The second issue is the arrival of ebooks as a serious platform. Like book-club editions, ebooks have exactly the same creative content as physical books — sometimes even down to the same artwork, depending on the reader technology being used. Unlike book-club books or regular trade books, they cost nothing to print (since they’re not printed) and next to nothing to distribute or warehouse. Ebooks are sold by a very small number of sellers, who have a direct and ongoing relationship with their customers that often involves many other categories of goods and services. And in the specific case of the SFBC and clubs for other related genres, many of the target demo actually prefer ebooks over p-books for their convenience and portability. (I’m not one of them, but I’m also 40 years old. Nearly all of the people I know who are my age or younger are both neophiles and live in rental housing; the cost of moving a large library every few years is a substantial incentive not to accumulate physical books.) As downloads, there is no shipping cost for purchasers to pay, and they thus cost much less than even a book-club edition hardcover; indeed, they are often cheaper than publisher’s trade paperback editions.

The first, and most important issue facing book clubs is the same one facing the rest of the book industry: Amazon. Amazon is the Walmart of the book world: a near-monopsony buyer of books and many other creative commodities unafraid to use its market power to transfer authors’ and publishers’ shrinking producer surplus to the consumer. My progressive friends generally love Amazon and despise Walmart, but their role in their respective markets is essentially the same, with one exception: unlike Walmart’s shareholders, Amazon’s shareholders don’t appear to care whether the company actually makes a profit or not, enabling them to sell many goods at below cost. Amazon’s market power is such that no publisher can afford not to do business with them, on their terms, and that means that Amazon’s prices on physical books, including shipping, are often less than the corresponding, lower-quality, book-club edition. This leaves the book clubs in a precarious position: unless they are selling a product that Amazon can’t — a proprietary anthology or omnibus, or a hardcover version of a title available to the trade only in mass-market paperback — they can’t compete on price. And as their margins are further squeezed by increasing costs of printing and postage, there is less and less money available to commission new editions or even to hire specialist editors to do a better job of selecting the best titles for reprints. There was maybe a window, a few years back, for book clubs to turn to a more editorially-driven model — fewer titles, perhaps, but providing a better match with the audience and better content in the “monthly” newsletter to sell them — but it seems that this window is now well shut.

What brought me to write this was the realization that, for the first time in a couple of decades, Mercedes Lackey had a new Valdemar book, Bastion, coming out (DAW has consistently released a new one every autumn for the past decade) and SFBC was not carrying it. Lackey has legions of loyal fans, and the four previous titles in this series have by all account sold reasonably well, so it’s a mystery why they don’t have it. But whether they decided not to pick it up, or they couldn’t come to terms with the rights holders, the effect is the same: to drive many potential customers to other sources — like Amazon, which is where I preordered it yesterday. Now that Amazon knows I’ve bought a Lackey book, its recommendation algorithm is certain to recommend many of the other books that I would have bought from SFBC — and unlike the club newsletter, Amazon will tell me about them months in advance of their release date.

I’ll probably continue to read the SFBC newsletters if they keep sending them to me, but I am doubtful that I will have much to buy from them in the future. I’ll post again if I find something interesting.

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