A week ago, while I was babbling happily here about geocaching, there was a shakeout in the publishing industry. A number of major publishers announced drastic staffing cutbacks, some lines were stalled or eliminated, salaries frozen. And everyone involved with books held their breath. Is it the end of reading as we know it?

My friend and colleague Dick Margulis had some sensible (and hopefully prescient) words to say about it all, and I’m quoting him here with permission:

Consider this a primer on The Way Business Works, so that you can sanity-check content that comes your way in the next months.

In broad outline, what has happened to the book publishing industry and the newspaper publishing industry (along with many other industries)over the last thirty years is that they have been financialized. Ugly word? Yeah. Ugly concept? Definitely. See “financialization” (better than what I’d have written).

This has led to the current state of affairs in which companies are run not by experts in the stuff the companies deal in every day (such as books consisting of words on paper) but by MBAs who are there to do the bidding of Wall Street speculators, experts in the other kind of books (numbers in spreadsheets). This is a huge cultural shift. We went from a market where people invested in companies based on fundamentals (long-term health of the company and industry) to a market dominated by people who traded stocks based on what used to be called the technical model–looking at the price of the stock from hour to hour rather than looking at what the company does in the world from year to year.

As a result, a half-percent drop in quarterly profits is sufficient justification for cutting head count. It gets the numbers back in line with the expectations of traders.

So that’s where we are. Or rather that’s where we were a couple of months ago.

Now, faced with the very real possibility of Great Depression II if they don’t get smart, Wall Street types are starting to get religion about company fundamentals and to bemoan the depradations of the technical traders.

So stay tuned. You may see a big shift back to valuing companies based on product quality, customer service, and community support. It will take time, and I don’t mean to suggest we’re going to see a return to 1950s-style job security anytime soon, but if you’re not in the habit of paying attention to business news, this might be a good time to start.

While times are undoubtedly grim for all industries, and the publishing industry is taking its share of hits, the reality is that this is neither the first nor the last industry shakeout, and the sky still hasn’t fallen. No, I’m not optimistic that things will go back to where they were — they never do. Anyone reading this old enough to remember the pulp fiction books of the thirties? I thought not, but you’ve heard of them, right? We don’t have them around anymore, but reading is still alive and well. There will be changes. I expect that newspapers and magazines, in particular, are going to see dramatic changes (says the woman who now subscribes to The Atlantic on her Kindle!); but no one will be immune. Ebooks may take the place of some standard books, but the dead-tree version isn’t going away anytime soon. The more things change …

I’d be happier if we spent some of this hand-wringing energy worrying, not about those who are already reading, but about those who are not. We’re still looking at 90 million people in this country who are functionally illiterate, folks. We’re worried about Random House, when we should be worrying about a future in which books won’t be needed, because no one will be able to read them.

РJeannette C̩zanne
Open Your Heart with Reading