New York magazine has published an article on Random House's Peter Olson, who will soon be stepping down from his position as CEO. It provides a quick overview of what Olson did to change Random House, but why, perhaps, his changes did not lead to the company's longterm success. Of course there are many measures of success, and this article greatly simplifies matters, but the most interesting tidbit:

Random’s size became a liability. Even with megahits like Bill Clinton’s memoir and The Da Vinci Code, the company’s annual revenue has been stagnant. To maintain its 20 percent share, the company has to publish around 2,000 titles, while more-efficient rivals like Hachette do under 500 titles for about 10 percent of the market. It’s a quarter of the work for half as much market share.

The publishing stars of the last ten years were small, crafty outfits able to exploit a niche: Miramax had a magic touch with publicity, Judith Regan’s company-within-a-company made the most of the cable-TV freak show, and Regnery mined conservative politics. Demand driven by product and publicity—Oprah, The Daily Show, and Today—replaced distribution. Margins followed. Olson’s company was too big to easily adapt.

So I take away two lessons for the future of publishing:

• Publishing more titles doesn't mean we profit more. (Less work can actually be better!) We must be aware, we must be intentional in what we are publishing.
  
• The mantra I repeat to writers/authors: Exploit a niche. Exploit a niche. Exploit a niche. You have to know what you're about, be passionate about it, and not ask forgiveness for it or be embarrassed by it (think Judith Regan).