Quote:
Originally Posted by fjtorres
That would be a reasonable explanation...if their revenues were in fact growing. They aren't. It might be a reasonable move if it improved their competitive position in the market but it isn't.
What they are seeing is double digit revenue declines in their higgest margin format and no offsetting increases in their lower margin format...
...and the market is still growing and they aren't growing with it, so their share of sales (and market power) is declining...
...and their suppliers are seeing less income and are starting to (oh so quietly) ask for a bigger share of the declining pie...
...and they are publicly complaining they aren't getting as many good manuscripts to choose from...
...and they are publicly complaining about having to dish out bigger advances for the "good" manuscripts they do see...
...and the one good bit of news keeping them from truly dismal financial results is the (faddish?) boom in adult coloring books...
These aren't supposed to be stupid people so when they engage in clearly self-defeating behavior against all advice, one has to wonder what they could possibly be thinking. And, lets face it, they do have a track record of conspiracies.
(Shrug)
I'm not about to speculate about why they are behaving as they are. I have my own ideas of what drives them but it really doesn't matter. The facts and trends are the only things that matter. And those are public knowledge.
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Revenues are not growing because of the economy.
Are you saying that if they priced lower they would make more money?
So this particular group would make less if they priced lower.
Here is the question to ask.
Are there more or less people buying books in general?
Last year, how many people bought books?
Make that 2 years ago.
How many people this year?
Little fact. When people have good jobs, people spend money. When half the jobs go away, people don't buy luxurious items.
Even the people that still have jobs spend less, due to not knowing what their income is going to do.
See two years ago out here, you could not find a one bedroom apartment on the bad side of town for under $750 a month. Heck companies like Halliburton were building their own lodging for their employees due to a severe shortage of housing. Everyone had money. Jobs were plentiful. RV parks on darn near every vacant lot within 100 miles.
Do note that gas prices were a bit high.
Now gas prices are dropping (except for Spring Break and Easter). The RV parks are less than half full. Rent has dropped to $99 move in specials or a month free. No more waiting lists there. Half the jobs are gone too just from last year.
Our region doubled the population with people coming from all over with jobs. Now we are about back to where we started but with way too many people unemployed or underemployed.
I saw an oilfield worker working at a local thrift store. His paycheck if he is lucky will be 1/3 what it was. So no luxuries there.