MANUFACTURERS fall out with their distributors on a regular basis. Arguments about the reliability of delivery and the quality of goods supplied are the stuff of everyday irritation. And behind the irritation is the fear that too much of the profit margin left to be divvied up goes to the other side.

The book trade is no different. It is intriguing to see how Random House, the book manufacturer, and WH Smith, the book distributor, are rubbing each other up the wrong way. Cards, not unreasonably, are being played pretty close to chests, but evidence is emerging that the two are involved in an unholy row.

The subject matter is alleged late delivery of titles by Random House and penalties that Smiths wants to levy. This, in turn, may lead Random House to stop supplying Smiths.

Kate Swann, the relatively new chief executive of WH Smith, probably picked the fight. Ms Swann is embarked on a fervent campaign to improve profits at the London quoted company. She is, of course, quite within her rights to seek efficiencies. Indeed, it is her clear obligation to serve shareholders and if she sees inefficiencies she is duty-bound to tackle them vigorously.

By the same token, Random House is quite within its rights to defend itself. Yet it is hard to avoid the conclusion that the substance of this argument is a pretext on which both sides can vent frustrations. It is also tempting to believe that the protagonists in this spat are behaving as representatives for their sides of the industry.

Time should tell us the exact nature of this particular argument. But frustrations such as these are sure to spill over, as they have in the past, for as long as the book-publishing industry fails to grasp the thorny thistle lying at the heart of its enterprises: it pitches commerce against philanthropy.

Book publishers have a duty, as well as a legitimate desire, to make money. They have a duty to be profitable because they can expect to publish confidently and from a position of independence only if they operate in accordance with a self-sustaining business model. At the same time, they need money to attract the talent required to produce good books. So there is, or should be, no shame in being profitable.

Yet book publishers do have a philanthropic function to perform as well. They act as a conduit for the free expression of views and for the development and dissemination of knowledge (academic and otherwise). There are plenty of books that may never be profitable, but which should be published.

Profit is a powerful and legitimate motivating force, but it is not the only one. Books that may not be profitable need to be tested by the reading public. Individual publishers should be cross-subsidising to ensure that important books go on shelves.

The suspicion, however, is that too few people in the book-publishing industry have any clear idea of the location of the dividing line between these two honourable pursuits. And the danger — if not the reality — is that this results in the production of too many books that fail to justify themselves on commercial grounds. At the same time, too few titles may appear that ought to appear purely for our edification.

No publisher can get every one of these judgments right. It is inevitable in an industry of this sort that publishers will find themselves publishing more failures than successes. But less-than-clear thinking about the different reasons why books should be published may be creating an imbalance in risk/reward calculations.

It may also lead to a build-up of frustration throughout the system. Without a fundamental rethink, we could see more unhappy sagas such as that being played out between Random House and WH Smith.

Caught out by bad timing

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