Since the question was asked, I thought I would take a break from my script this morning and articulate a few changes I could recommend for the publishing industry. A lot of the time, established publishers say "you always ask for change but never say what it should be," to which I reply: you always say things can't be improved, but then you skim over the most broken parts of the industry in your defence of it. Or worse yet, suggest that learning how to navigate the broken system is somehow a virtue, and not a sign of trouble.
I should preface this with the note that I think there are going to be three kinds of publishing organizations in the near future: the Old Guard, who hold on to the classic publisher methodology; the New Guard, who will do crazy things that nobody sees coming; and the Nimble Guard, who won't make the first moves, but will straddle both worlds and make a relatively easy transition. Of the three, the Nimble ones will probably come through in best shape. The other two will take a beating at either end of the process.
So here we have it: things about publishing that have to be fixed:
No Returns This one is pretty straightforward. Booksellers are able to return unwanted books and get their money back, leaving publishers carrying all the risk. It's a stupid way of doing business, and it really should stop. Print on Demand (even for big publishers) will likely fix some of this, but imperfectly. The whole concept needs to die, and it will take a lot of determination to make it happen. Booksellers will resist the change, but in the end, they'll be in a bad bargaining position, after everyone finally starts to...
Seriously Embrace eBooks Right now, eBooks are a small market. By the time my kids are in university, eBooks will probably dominate the market. Assuming things will turn out otherwise is just closing your eyes to the inevitable. Get your books into digital, find the magic price points (currently, $2.99 sounds like a solid number, though I think $4.99 will probably shake out as the winner). Publishers constantly complain that supporting the myriad of e-formats is more of a drain than making a print book. If that's the case, publishers, your tech folks are fleecing you. I created a very simple system that turns my manuscripts into HTML, ePub, Kindle, RTF (for Smashwords, itself a magic tool) and just about anything else... all with one click. It took me a day to write, and I'm not especially smart. Just because it would take an investment to get yourselves to that point, it doesn't mean it's impossible. eBooks are cheaper — MUCH cheaper — to produce. Ignore them at your peril.
Change the Acquisitions Process Okay, yes, the slush pile is full of crap. Agents are the new gatekeepers, editors are overworked, yada yada yada. What a terrible state of affairs. If only there were some large, interconnected system-like THING that could allow the vetting of the slush pile to be handled in a hands-off kind of way, allowing you to... oh WAIT! In-ter-net! I remember that! All right, so you can let the internet do the vetting for you. You already do this when you look for authors with a built-in fan base. So why do you go around casting all self-publishers in a negative light? Sure, warn them off scams like vanity publishers, but if you stopped for a minute, you'd realize this massive pool of talent is making your job easier. Let the strong float to the top, and snatch them up. Forget about "perfect your pitch" and "put it in a drawer" and focus on "perfect your craft" and "put it online." You obviously don't LIKE vetting, so why do you obsess on it?
Switch the Royalty Scheme I know advances are a big draw for writers, but they make very little sense. They either cost the publisher money (if the book tanks) or the author (if the book does insanely well and the author has traded a relatively tiny advance for an extremely small share in profits). Reduce advances, increase royalties, and (in this brave new world of e-distribution), stop playing accounting games. The accounting is straightforward: every quarter, 50% of profit goes back to the author. It's steep, but you have lower overhead, and you haven't just sunk a $20,000 on an advance.
Break Out Your Marketing Look at it this way: if you're courting authors with established reputations, you don't necessarily need to be paying a marketing guru to get the word out. If you've found a brilliant-but-unknown writer, you might need to pull out the big guns. Some books will do best in e-only, some will do best in small-run fancy hardcover, some will be mass market "paperbacks." Marketing departments need to be free agents, able to service a particular TYPE of client, rather than just a single organization. Marketers might troll the internet, looking for authors they can bolster. You might sign an author with a marketer attached. In any case, marketing would be an optional value, and would cut into the royalties the author receives (either through you, or directly to their marketer, in the same way an agent currently takes a cut). If the book needs more publicity than average, it costs more (in profit sharing and up-front fees). Within a few years, you'll have switched the system to focus on the marketing gurus... which sounds bad, but it will free you up to...
Support Your Damn Authors One of your chief responsibilities in the publishing industry is to make good authors better. The marketers are going to do the pimping, so your focus needs to be on really engaging the authors, to push them further, and create a better class of literature. Authors won't NEED you anymore, because they can build their own brand, attract a marketer and get on Amazon and iPad in an afternoon. What you bring to the table — what you SHOULD bring to the table — is intelligence and insight and support. You want to be the name people look at and say "ah, this team is behind it," and have confidence the prose is good. Sometimes you might be working from something very rough, and sometimes you might just be making tweaks to brilliance... but for the love of god, do SOMETHING. Resting on your "gatekeepers of quality" laurels is not getting anyone anywhere. Get back to basics. Prove to the world you actually do know more about literature than anyone else.
Granted, the publishing industry can't do all of this right now. You can't go declaring "no returns!" and expect anyone to listen. But you can start making plans, and getting yourselves into position. Right now, publishers are serious entities that try and do a lot at once. Some day soon, one of your industry's disgruntled marketing gurus is going to try poaching people straight off the web, have some amazing success, and then your added weight and resistance to change is going to be a major liability. The new publishing industry won't be an evolution of the current one, it will develop right next to it, and steal the Old Guard's talent away. How easily you move from one reality to the other depends on how competitive you are in a world where nobody cares about the way things were.
So that's that. I consider 1889 Labs to be a New Guard organization: we're taking a big beating on the way to success. I don't think most established publishers should do what we're doing, but you SHOULDN'T dismiss our efforts. Steal our good ideas, and prepare yourselves for the next step, and be ready for the day when you have to make the switch yourselves. It's coming up fast, and nobody will have any sympathy if you choose to be caught off guard.