Rainy Day Funds and the Publishing Industry

Okay, so I was reading a blog that happened to outline The Way Things Work in the publishing industry. Essentially: publishing houses look for huge bestsellers in order to finance all of the other books they publish that are not bestsellers and are not actually going to make any money.

I actually knew this. I took a couple writing classes in college and in each there was inevitable Day In Which We Talk About Getting Published. (An aside:I never really got a Day In Which We Talk About Getting Produced in any of my directing/playwrighting/dramaturgy classes. Consequently, I know a lot more about the mechanics of pursuing a professional career as a novelist than I do as a director, which seems strange. Anyway).

I'm assuming - and maybe this erroneous - that not every one of these non-bestselling books published is ever meant to be a bestseller. Certainly there are a fair amount of books - most of the ones I read, aside from, yes, the occasional Dan Brown - that don't look like they've been presented or marketed to fit the bill.

So, if this is true, this seems like a fairly altruistic, yet necessary, business strategy. From a strictly business perpective, why publish anything other than the books you really think will make you money? Yet, if that WERE all the was published, we would be doomed. What kind of a literary culture would we have left?

I'm just wondering if any producer or producing group has tried this strategy with theater. Produce a Wicked in order to produce a Scottsboro Boys, which just announced it's closing after just a two month run?

Is there a reason why we can't? I ask this out of curiosity and complete ignorance. Has it something to do with investor relations? Does the commericial/not-for-profit model somehow preclude such an arrangement?

I mentioned the subversive Scottsboro Boys in particular because the blog Gratuitous Violins said the following in response to its closing:

Well gee whiz guys, if you felt you had to produce it couldn't you at least have given it a chance to build an audience? Doesn't a challenging, provocative work need time for the buzz to spread? Couldn't you plow some of the profits from Chicago into it to keep things going a little longer?

Which is essentially the same idea I just proposed. And, admittedly, a commenter on the blog countered that the current climate of high costs and low profits precludes "rainy day funds [to keep] things afloat longer. Today it's do or die from day 1 (or even earlier!)." So maybe that's my answer.

But I'm still curious to see if anybody else has something to add to the conversation. Just wondering.