Here’s how it works. Barnes and Noble and Borders, the major bookstore chains, control the lion’s share of retail book sales. They order centrally for all their outlets together, for instance there is a single buyer for all science fiction, all mysteries, etc. How, you may well ask, can these buyers read and pass judgement on, for example, the over 1000 SF titles published in a year?This might be one of the reasons why Cory Doctorow makes his stuff available online for free. It's certainly disturbing. The book industry is already in a difficult position right now, and this is only going to make it worse, especially for new writers.
Of course the answer is they can’t. Instead, an equation makes the buys of most of the books on the racks or blackballs the ones that don’t make it that far. It’s called “order to net.”
Let’s say that some chain has ordered 10,000 copies of a novel, sold 8000 copies, and returned 2000, a really excellent sell-through of 80%. So they order to net on the author’s next novel, meaning 8000 copies. And let’s even say they still have an 80% sell-through of 6400 books, so they order 6400 copies of the next book, and sell 5120....
You see where this mathematical regression is going, don’t you? Sooner or later right down the willy-hole to an unpublishablity that has nothing at all to do with the literary quality of a writer’s work, or the loyalty of a reasonable body of would-be readers, or even the passionate support of an editor below the very top of the corporate pyramid.
And there’s a further wrinkle to it because what significant independent bookstores that still survive and the non-speciality outlets like WalMart subscribe to BookScan and have access to the Death Spiral numbers too and act accordingly. If there’s a book to order at all, because in many cases if the chains’ order to net equation zeros out and they don’t order at all, the book in question doesn’t get published. Back in the day, I knew of novels that were commissioned, accepted, and paid for but never published because the chains didn’t order. Today BookScan prevents such expensive mistakes from happening by aborting them at the acquisition stage.
Voila, the Death Spiral. And I too am in it.
It also shows how "safe" equations can choke you to death. It reminds me of one line from The Big Short: "The Lomas Financial Corporation is a perfectly hedged financial institution: it loses money in any conceivable interest rate environment." No matter what happens, everybody loses, like a casino where the house burns their winnings at the end of the day.