Register here for the upcoming PW Discussion Series event: The Future of Publishing: The Case for Libraries, moderated by David Vinjamuri, set for Tuesday, April 28, 2015, from 8:30 AM to 11:00 a.m. at the Penguin Random House Auditorium, 1745 Broadway, New York, NY.

Publishers are running out of space. Not in their headquarters, some of which are larger and more imposing than ever, but in retail. The number of booksellers has been dwindling since the demise of Borders, and the largest book retailer today is Amazon, which has no physical space at all.

So the question is, where can publishers showcase new books? If only there were a space dedicated primarily to reading that hundreds of millions of Americans visit annually. If only there existed a trusted space, free of the revenue pressure that necessitates displaying lightly pornographic books of debatable quality. If only there were a space largely inhabited by active readers, where publishers could showcase new authors or shine new light on talented mid-listers.

That space exists in the 16,000 public library branches in America. They’re trusted and willing, and they welcome your attention. But libraries receive surprisingly little coordinated help from publishers beyond lip service—in fact, they’re still in the middle of a very public dispute with publishers about the high prices and restrictive access libraries must contend with to lend e-books to their patrons.

The tension between libraries and publishers seems odd in a market where physical space for displaying books is quickly disappearing. How did we get here? And could libraries actually represent a much better opportunity for publishers than they are given credit for?

A History of Indifference

In the beginning, publishers and libraries were interdependent. When modern publishing houses emerged from printers in the late 19th century, public libraries in the U.S. and U.K. were often the first and only guaranteed customer for a title.

Even as late as 1950, libraries were indispensable customers for publishers. The entire output of the domestic publishing industry in that year was 11,000 titles, and the average branch of a public library purchased 14,000 titles annually. The most reliable market for many books was the 11,135 library branches operating then.

Things are different today. Publishers produced nearly half a million new ISBNs in 2013 (with self-publishers included, that total nearly doubles), though increasingly cash-strapped libraries are purchasing fewer titles. According to industry stats, the library market now represents just over 1.3% of publishers’ trade sales. But just as the crucible of the book superstore transformed publishing in the 1980s, the advent of online sellers—particularly Amazon—is remaking it today. And as the conflict between Hachette and Amazon last year proved, Amazon is both indispensable and despised as a partner to publishers.

But a new challenge has emerged from the transformation of sales channels in the past three decades: discovery. Five years, ago in 2010, just under a third of all frequent readers (who purchase 80% of all books and number 43 million) found the last book they bought at a bookstore. This year, that number is down to 17%, according to Peter Hildick-Smith, of the Codex Group—a change that gives Amazon more power than ever.

“A small group of authors control the bestseller lists,” Hildick-Smith observes. “When we indexed the New York Times hardcover fiction and mass market bestseller lists from June 2008 through June 2014, nearly 16,000 spots in total, we found that all those places were occupied by fewer than 650 authors.”

That concentration has created a problem for publishers, which Amazon has ruthlessly exploited. By promoting both self-published and Amazon-signed authors on the Kindle platform, the online retailer has come to exert tremendous pricing pressure on the entire industry. Amazon can now manipulate the products of hundreds of thousands of other authors through price reduction.

Meanwhile, the dominance of bestsellers has also put the squeeze on the marketing budgets of debut and midlist authors. Since publishers can only afford to make a few big bets per year, the route to building new franchise authors is more uncertain than ever.

Author Brands Matter

A great deal of attention has been paid to the question of so-called platform size for new authors. How large is the social media footprint of the author? How active is she on Facebook, Twitter, and Instagram? Does she send weekly emails to a large list of devotees? How many large audiences does the author speak to annually?

The problem with focusing on platform size is that it measures marketing potential rather than brand strength. Without a unique brand, all the marketing in the world won’t build loyal readers. And the benefits of loyalty are immense. Data from the Codex Group shows that an author’s brand has a huge impact on purchase intent (specifically, the likelihood that a reader hearing of the book will want to purchase it increases dramatically if the author is a favorite) as well as pricing expectations.

The biggest proof of this phenomenon was seen just a couple years ago, when a new author with a Big Five publisher and excellent early reviews failed to sell 500 copies in his first month out. But when the author was revealed to be the pen name of a household brand, things changed: The Cuckoo’s Calling didn’t become a better book between April and July of 2013. But its true author, J.K. Rowling, certainly has a bigger brand than her pen name Robert Galbraith did.

In the consumer-goods world, there are just a few primary mechanisms for building brands: word of mouth, advertising, promotions, and visual merchandising (the use of floor plans and displays, for example). Publishers are fairly adept at using word of mouth and have been experimenting heavily with social media as a new tool to propagate book recommendations. They are equally adept at promotions, and the price promotion in particular has gained quickly in popularity online, now accounting for about 6% of book discovery. Marketing budgets for new titles, however, are generally too small for significant advertising, and with the exception of James Patterson, most of the advertising done for books is either online or in print rather than on television, unlike most other consumer goods.

This leaves the last category: visual merchandising. This is how author brands have traditionally been built in bookstores. The book cover is every bit as iconic in popular culture as cereal boxes or soft-drink cans. But visual merchandising has hit a difficult patch.

The Decline of Book Merchandising

The advent of book superstores in the 1980s created a revolution in visual merchandising. For the first time, books had a showroom that appealed to suburban shoppers. And booksellers became adept at the kinds of merchandising techniques long known in other categories to move greater volumes of top sellers and encourage experimentation.

In recent years, however, this playground has declined. Borders, which helped invent the book superstore and at its height operated more than 1,200 of them, filed for bankruptcy and closed its last 200-odd stores in 2011. And Barnes & Noble has begun to diversify, moving into toys and other novelties. As of 2013, toys accounted for almost a quarter of B&N’s revenue.

Books are still merchandised in independent bookstores and in mass merchandisers such as Walmart, Target, and Costco, but those opportunities are increasingly limited. There is simply less space than ever to display books.

It would be natural to expect that online retailers such as Amazon would take over the duty of aiding book discovery through visual merchandising. But these retailers are inhibited by the real estate they inhabit: the inventory of Amazon may be virtually unlimited, but the size of your screen is not. And in spite of the precipitous drop of book discovery in bricks-and-mortar retailers, there has been no corresponding gain in book discovery from online retailers.

Five Myths About Libraries:

So why haven’t publishers turned to libraries to supplant the loss of merchandising space at retail? Of course, libraries don’t sell books—but they certainly display them. Moreover, libraries are seen by the public as impartial arbiters without a profit motivation. Libraries, in short, are ideal partners for publishers. Unfortunately, myths about libraries persist, which has prevented them from attracting support. The five most persistent are as follows:

Libraries cannibalize book sales. Part of this myth is based in reality: a certain percentage of library lends would indeed be publisher sales if the books were not available freely from the library. But this ignores greater truths about libraries. Unlike bookstores, they do not remainder books. So they’re stuck with their purchases even if their patrons show little interest. Unlike indie bookstores, libraries buy very broadly, so most of their titles don’t fly off the shelves like bestsellers. And part of the audience they serve would likely never buy hardcovers or non-discounted paperbacks in any case. So cannibalization is greatly overestimated.

Library borrowers don’t buy books. In fact, recent studies show that roughly a third of people who bought a book in the last month also read one from the library in that same month.

Libraries don’t develop authors. Recent studies also suggest that over 60% of frequent library users have also bought a book written by an author they first read in a library.

Libraries are unfriendly to commerce. Actually, libraries today are centers for entrepreneurship, hosting everything from maker spaces to small business seminars.

Libraries aren’t widely used. According to a recent Pew study, 48% of Americans over 16 have visited a library in the past year, and 27% of Americans visited one at least monthly in 2013. Some 70% of households with children report that a child has visited the library in 2013. And the most recent federal statistics show there were 1.53 billion in-person visits to public libraries in 2011.

The Case for Libraries

When the myths are washed away, the truth remains: libraries are the best (and sometimes the last-standing) physical spaces for books in many communities. But even though most libraries display books with affection, limited funding means very few can do so as effectively as professional marketers. Just like supermarkets, many of which operate on razor-thin margins and are starved for resources, libraries face huge funding challenges. The benefits for library/publisher partnerships are, however, significant.

Here are five reasons for publishers to partner with libraries:

They’re the most trusted institution in America. Compared to the findings of a Gallup poll on “confidence in public institutions,” a 2012 Pew survey found that libraries are more trusted than any other institution, including the military, churches, and the police.

They are book experts. The #1 reason people go to libraries is for books. Libraries are the most trusted source for book referrals.

Librarian book recommendations are effective. The Codex Group data shows that recommendations from libraries are much more likely to result in a reader rating a book highly than those of other sources such as Kindle Daily Deals.

Library readers buy more expensive books. Statistics suggest library readers are more likely to buy hardbacks than other buyers.

Merchandising works in libraries. Libraries in locations as diverse as Adams County, Colo., and Tulsa, Okla., have seen dramatic improvements in circulation from implementing basic merchandising.

Without Libraries

Though libraries may appear vibrant today, they are at a critical juncture. Currently, one of the most compelling features of libraries is that they provide free Wi-Fi Internet access. In the near future, however, local community-access projects and a general drop in the cost of mobile Internet access could eclipse this service. And while libraries are great community centers, they also compete for this role with dedicated community centers and other civic spaces. Only when it comes to books and reading do libraries stand alone.

Yet their reading mission is endangered by the same forces pressing publishers. The dramatic decline in book prices and the availability of free e-books has made borrowing library books less of a necessity for many. The explosion of published titles has also hurt the library’s ability to curate books. Libraries today see just a small slice of the output of the publishing industry, and because they use bestsellers to get patrons in the door, they devote fewer resources to promoting the kind of small gems that would mark them as a prized source for book discovery.

For all the upside for publishers who choose to work with libraries, there’s also the dark prospect of a future without libraries. One of my fellow columnists at Forbes has already suggested that communities would be better off buying Kindle Unlimited subscriptions for residents and dispensing with public libraries altogether. If this were to happen, Amazon would surely benefit. But it’s not at all clear what would happen to reading in this country.

As the amount of retail shelf space for books continues to shrink, libraries have all the tools to pick up the slack. “Public libraries are ideal partners for publishers,” says Gary Wasdin, director of the King County (Wash.) library system. “We have enormous traffic, our patrons love to read, and they come to us often hoping to find a new or lesser-known author.” But in the age of Netflix and Candy Crush, without greater support from publishers—including better displays, merchandising, training, and paying more attention to developing new authors in libraries—libraries and publishers alike will suffer.

“It’s hard for libraries to consistently build and stock very deep displays because of our limited resources,” Wasdin acknowledges. But the desire, he says, is certainly there. “We’d love to do more to help our patrons discover new authors with the support of publishers.”

David Vinjamuri is president of ThirdWay Brand Trainers. He also teaches branding and social media at NYU and writes the Brand Truth column online for Forbes.