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The problem for small publishers is one of scale.
Big publishers put out thousands of titles a year and they have tens of thousands of backlist titles trickling in revenue. So even though their overhead is very high the sales rate of any one title (barring the now-rare lotto winners) has little direct impact on the bottom line. They have a lot of margin to work with to cushion the vagaries of the market. They are gamblers who spread their bets all over the place.
Self-publishers, on the other extreme, typically have but a handful of titles to promote. They also have extremely low overhead and are effectively venture capital operations in ramp-up mode, surviving on investor funding (the author's "day job") so the level of incoming revenue by itself doesn't determine their fate. Their support is determined by their success in growing the one brand; the author's name. Vagaries in sales are fretted but won't necessarily discourage the "investors".
In the middle there are the medium and small traditional and not-so-traditional publishers. They lack the resources of the big boys but like the big boys they need a minimum level of income to stay afloat. They all have cushions and, in some cases, actual venture cspital support or bank lines of credit but with smaller blacklists and maybe dozens of titles per year they have much lower margin for error. Performance of specific titles definitely impacts the bottom line.
The outfits that have been failing all come from the low end of the scale in this middle group. Most have had managerial failings. Some were running in the red *before* the downturn of 2016. They just ran out of margin.
The one thing to consider is that the "print is back" and "independent bookstore resurgence" cheerleading is all fake. Misreading of data. In actual fact, *everybody* lost new *book* sales in 2016. Well, everybody except Amazon...
Some lost a little, some lost a lot.
Some are able to hide their decline behind price hikes, format shifts, and non-book sales (calendars, journals, art supplies, etc) but everybody suffered. Bestsellers lost sales. Newbies lost sales. Overall, the limited growth being reported is Amazon growth. Everybody else combined is stagnant at best. And in stagnant businesses overhead is a killer.
The industry tracks sales in dollars more often than not and by total sales at specific types of outlets. This hides a lot of uncomfortable truths that make the problems of the small players look worse than they are because it hides the quiet retrenching going on with the big ones. The reduction in advances, in number of titles published, in employee reductions, in employee benefits reductions. The big guys are hurting. And if the big guys with the cushion are hurting it should be no surprise the smaller players are bleeding and the smallest dying.
The trade publishing businesses (plural) are by nature low margin businesses. The big boys squeeze double digit margins out of them by squeezing staff, suppliers, and consumers. None of those are tactics that small publishers can use. Those live and die by sales rate.
And lately, dying is coming a bit more frequently.
Hopefully, things will readjust as we move forward and growth will resume for *some* players. But as the ebook evolution rolls on and the markets keep developing the gold rush aspects are fading and giving way to basic economics. And right now economics are saying that the long term survivors are more likely to be the very small and the very big. And even the latter will be greatly diminished.
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