Fear of provoking Federal antitrust prosecution inhibited publishers from combining to combat the practice of returnability, even though it was draining the vitality of the industry. What was worse, the vested interests of the retail bookstore business insured that the system would never change. Powerful chain store entrepreneurs shrewdly recognized that returns are a form of currency and found a way to systematically manipulate them. Instead of paying cash for new titles, the chains simply returned slow-moving stock and applied the credit toward the purchase. No money changed hands – just paper.

Deprived of capital, publishers developed their own way of manipulating the currency of returns. They achieved this by withholding royalties from authors. They figured out that they could defray their overhead by holding author money for long periods of time in order to offset possible returns. The higher the percentage of royalties “reserved” against returns and the longer those reserves were held, the more interest publishers could earn.

The returnability of books was originally created as a good will gesture. Since then, the currency of returns has been debased, pitting booksellers against publishers and publishers against authors in an atmosphere of distrust and anger. In short, the old system has become corrupt and dishonest.

The New World

Towards the end of the twentieth century, advances in computer technology and telecommunication offered thrilling vistas of a new way to produce and deliver texts to reading audiences. The maturation of digital word processing, email correspondence, Internet commerce, cell phone communication, and miniaturization of computers provided a climate in which development of e-books could go forward vigorously. A generation comfortable with computers and Internet navigation had evolved for which the idea of electronic books seemed like a natural step. The meteoric ascent of amazon.com provided an attractive business model for online bookstores.

Although development of a viable handheld e-book reader proved more challenging than visionaries had projected, the eventual perfection of such a device and its adoption by the mass market was taken for granted by most futurists. Their optimism was bolstered by growing investment in research and development fueled by the economic boom of the 1990s. Towards the end of that decade these streams converged, and if any year could be celebrated as the official start of the digital book era, it is 1998.

In that year, breakthroughs in two initiatives were announced.

E-Books

The first introduced to the public a prototype of the portable electronic reader, the Rocket Book. Though crude (it would eventually be succeeded by far better devices and delivery systems) the mere thrill of downloading a text from a remote server and “navigating” it on an “e-book” had a galvanizing effect on authors and publishers alike. When, not long afterwards, bestselling author Stephen King self-published a novella and offered it for sale on the Internet, any publisher still in denial about the potential of e-books as an alternative publishing model woke up with a start.

Though initial giddiness about an e-book revolution was to prove premature as technological problems and business realities plagued progress, the impression nevertheless was indelibly imprinted on the consciousness of anyone connected to writing and publishing: a day would come when books would be read on a palm-sized reader.

Until that day, the reading device of choice was still the traditional book, and with all its faults there was still money to be made in publication of the good old bound and printed version -- if only a more efficient way could be developed to distribute it. Enter the second technological marvel, the process called print on demand.