I wish I had gotten to the comment section earlier because the top-level summary of this article is simply incorrect.
The majority of the revenue of the Big 5 publishers may come from celebrities and repeat best-sellers. But the majority of the profit comes from the un-anticipated best sellers: books that the publishers offer low advances but end up going on to vastly out-sell expectations. While some of those books may have ended up in the "anticipated top selling books" category identified in the trial, the point is that their eventual sales are vastly greater than anticipated, for whatever level was offered.
This means that the rest of their publishing business is absolutely not a "vanity project": it is the business of publishing itself. The reason why these publishers have a backlist (older books that earn a profit long after release) is because of the unanticipated best-sellers. The trial data makes it very clear that publishers (and authors) are actually better at pricing the very high-end books and therefore the profits are typically less (because authors have more leverage to get a fair price in their initial negotiations).
So TL;DR: publishers hope to find promising, but under-rated, authors who may potentially go on to become best-sellers. They continue to fund the books of such authors (despite generally not making a profit) because the few that do fund the rest of the business. But (ironically) once such authors are actually established as best-selling franchise authors, those very same authors' ability to negotiate drives profit margins down, which drives the endless search for fresh talent in the publishing industry.
I feel like I finally need to complete my own analysis of the trial results, because I don't think this is well understood.
The majority of the revenue of the Big 5 publishers may come from celebrities and repeat best-sellers. But the majority of the profit comes from the un-anticipated best sellers: books that the publishers offer low advances but end up going on to vastly out-sell expectations. While some of those books may have ended up in the "anticipated top selling books" category identified in the trial, the point is that their eventual sales are vastly greater than anticipated, for whatever level was offered.
This means that the rest of their publishing business is absolutely not a "vanity project": it is the business of publishing itself. The reason why these publishers have a backlist (older books that earn a profit long after release) is because of the unanticipated best-sellers. The trial data makes it very clear that publishers (and authors) are actually better at pricing the very high-end books and therefore the profits are typically less (because authors have more leverage to get a fair price in their initial negotiations).
So TL;DR: publishers hope to find promising, but under-rated, authors who may potentially go on to become best-sellers. They continue to fund the books of such authors (despite generally not making a profit) because the few that do fund the rest of the business. But (ironically) once such authors are actually established as best-selling franchise authors, those very same authors' ability to negotiate drives profit margins down, which drives the endless search for fresh talent in the publishing industry.
I feel like I finally need to complete my own analysis of the trial results, because I don't think this is well understood.