Publisher profits beginning to rise?

Just read an article in Publisher's Weekly indicating that publishers are finding ways to increase their profits. Unfortunately the article doesn't say anything about how they did this, but generally this is probably a good thing.

Hopefully it means publishers are finding more ways to increase income from the content they develop through things like creative special sales and rights deals. Hopefully it doesn't mean that publishers invested less in marketing their books.  The hedge bet is that it is a little bit of a combination of both.

The really drastic changes in the industry came when the corporate chains began to dominate bookselling.  I had the very interesting opportunity to have lunch with the now-former CEO of Borders, Greg Josefowicz. He said, point blank, that their belief was that annual book sales are flat and will continue to be flat essentially forever. Their mission was not to turn this trend around, but to squeeze more profit out of the same volume.

Publishers have been forced to adapt to this economy, and it is great that some seem to be turning a corner.  However, I think that authors really need to be savvy about what is going on. The way I see it, first the chains started to squeeze publishers, next publishers are probably going to have to squeeze authors. This may mean reduced marketing budgets, but I've always felt that publishers will (and probably should) sell more proprietary editions to the chains. If that starts to happen in any significant way, conventional publishing contracts will pay authors less money for more units sold.

Just something to think about.