Amazon, the mega sized book e-tailer and burgeoning publisher, is reported to be making a bid for Dorchester Publishing.
Founded in 1971 Dorchester was one of the biggest independent publishers of mass market paperbacks through their imprints Love Spell, which specialized in romance novels, and Leisure Books which was the last major publisher to specialize in horror novels as of 2000, and acted as the distributor of the Hard Case Crime series of pulp-revival paperbacks.
Now a few years ago saw a dip in the sales of mass market paperbacks, and the company immediately started to collapse in on itself. It announced that it was shifting its focus to e-books and print on demand publishing, lost Hard Case Crime to rival Titan Books, and stopped paying royalties to their authors, while collecting revenues on e-book editions of books that they didn't have the rights to.
Then the company's owner decided to foreclose on Dorchester Publishing over several million dollars that had been loaned to the publisher by its parent company. Soon after that they started sniffing around looking for a buyer willing to sort out the dog's breakfast the once venerable company had become.
So far, no dice until Amazon expressed interest.
It is in Amazon's best interest to save Dorchester and sort out the boondoggle with the writers who are currently fighting it over rights to their books, that go beyond profit and loss.
Right now Amazon is the biggest dog in the book business. The bulk of books being sold these days are sold via Amazon. While the e-book has gone from a pipe dream to a major part of the industry in a very short period of time, there is still a large market for hardcover and paperback books, and to survive the industry needs a steady supply of new material.
To do that they can't allow a once major publisher to die, especially in the middle of a feud over rights with dozens of authors. If the company goes officially bankrupt, the battle over those rights becomes even more convoluted and harder to sort out, putting authors and their work in a state of limbo. Publishers can't buy books that are being published by someone else, legally or illegally, because that means they have to share with someone who doesn't bother paying royalties.
The industry can't afford for that to happen, and what hurts the industry hurts Amazon.
Now Dorchester's problems could add up to costing millions of dollars to sort out. Amazon though has literally billions in their war chest, and are one of the few entities in the industry with pockets deep enough to fix this in a way that can please the ex-Dorchester authors and their fans, while keeping the uncertainty and chaos from having a ripple effect that affects the whole industry.
Actually, the story reminds me of a banking crisis that struck America in the 1900s. JP Morgan saw that the collapse of a chain of unstable banks would hurt the whole financial sector. So he rounded up all the biggest names in Wall Street, and literally overnight they set out a plan where they took over the debts, protected the depositors and squelched a panic before it happened.
Fixing this mess could cost Amazon a lot of money, but not fixing it could cost Amazon more.