Book publishing is different from all other activities in one essential respect. It is the only business where you already know from the beginning that a large number of publications will result in a significant financial loss. Products in other industries can obviously also lose money, but it is never intentional, and may be due to miscalculation, misjudgement of the market, or the like. In the case of book publishing, it is even part of the business idea, that some books will never make money. (This, and the following reasoning, applies to so-called ‘general publishing’, not textbooks, books for special areas, or reference books.)

The reason is that product development – that which in other businesses takes place in laboratories – in the case of books can only be done by publication. It is for the publisher to finance the cost of research and development. There is no way to do market research before you give out a book. No one...