This article is from the rec.arts.sf.written FAQ, by Evelyn C. Leeper evelynleeper@geocities.com with numerous contributions by others.
Kevin O'Donnell has provided a very clear explanation, available at
http://www.sfwa.org/bulletin/articles/thor.htm. (My quick summary is
that manufacturers (and publishers) could no longer use the fact that
some inventory would go unsold to calculate their taxable inventory.
According to at least one publisher, accountants figured out within a
couple of years how to compensate for that. The damage to the backlist
is mostly due to rising warehouse, production, and distribution costs.)
 
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