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Thursday, Jul 9, 2009
The economic news couldn't be worse for the book industry. Now insiders are asking how literature will survive.
By Jason Boog
Read more: Books, Random House, Book Publishing, Books Features, kindle, Jason Boog
Salon/Mignon Khargie
Dec. 23, 2008 | The end of days is here for the publishing industry -- or it sure seems like it. On Dec. 3, now known as "Black Wednesday," several major American publishers were dramatically downsized, leaving many celebrated editors and their colleagues jobless. The bad news stretches from the unemployment line to bookstores to literature itself.
"It's going to be very hard for the next few years across the board in literary fiction," says veteran agent Ira Silverberg. "A lot of good writers will be losing their editors, and loyalty is very important in this field."
One of the most visible victims was Houghton Mifflin Harcourt, the publisher of Philip Roth, Margaret Drabble, Richard Dawkins and J.R.R. Tolkien, among many others. Just before Thanksgiving, the publisher (actually two venerable houses, Houghton Mifflin and Harcourt, which were bought and merged by an Irish company over the past two years) had announced an unprecedented buying freeze on new manuscripts. On Dec. 3, they laid off what former executive editor Ann Patty described as "a lot" of employees (the industry trade publication Publishers Weekly confirmed at least eight), among them the distinguished editor Drenka Willen, whose list of authors included Günter Grass, Octavio Paz and José Saramago.
On the same day, Simon & Schuster laid off 35 employees, and a companywide memo from Random House's CEO announced the dissolution of Doubleday (publisher of "The Da Vinci Code" and Jonathan Lethem) and Bantam Dell (Danielle Steel, John Grisham), distributing the pieces among the conglomerate's three remaining publishing groups, which ultimately resulted in lost jobs. The large Christian publishing company Thomas Nelson also announced 54 layoffs.
The bad news kept rolling in. Within weeks, Macmillan had laid off 64 employees, spreading the damage across the entire company, which includes such literary stalwarts as Farrar, Straus, and Giroux; Henry Holt; Picador and St. Martin's Press. Not only were some of the industry's most respected figures out of a job, but a tremendous number of writers had lost their editors and publicists.
Publishing has endured plenty of rough patches, but this time, matters seemed truly dire. "There is a tendency in the industry to think that it is always under siege. There's a certain amount of Sturm und Drang that is part of book publishing," says Sara Nelson, editor in chief of Publishers Weekly. "I think it feels worse because it's everywhere now. It feels like the world is coming to an end -- and book publishing is just one part of that."
Thanks to conglomeration and corporate distribution models, some of publishing's biggest houses were laid very low by the current stock market collapse. And scary holiday book sales figures compounded the industry's woes, with recent news of a 20 percent drop in sales in October from last year's book market. Even worse, Nielsen Book Scan reported a 6.6 percent drop in unit sales during early December. Not even the holiday season could bolster book sales.
Houghton Mifflin Harcourt was particularly vulnerable to the Wall Street crash. Since the turn of the 21st century, investors have struggled to spin gold out of the different companies that now make up the conglomerate. In 2001, Vivendi Universal bought Houghton Mifflin (which has been publishing literary and educational books since the late 1800s), but then sold it to private equity firms a year later. In 2006, an Irish firm bought Houghton Mifflin; within a year, they had merged with one of Houghton Mifflin's largest rivals, Harcourt. The publisher's parent company is now saddled with billions in debt.
"There were hedge fund guys with no background in publishing buying up publishing houses," says André Schiffrin, founder of the New Press and author of "The Business of Books: How the International Conglomerates Took Over Publishing and Changed the Way We Read." He explains that corporate owners of major publishing houses expected impossible 15 to 20 percent profit margins in an industry with traditional margins of 3 to 4 percent. "They were part of that whole feeling that you could make money by buying and selling companies, rather than by selling books. At some point it comes to a dead end."
At the same time, shifting distribution models created another sort of dilemma. One expert blamed new kinds of stores for disrupting the system. "I think bookselling is the big problem," says Nelson from Publishers Weekly. "With the rise of the Barnes & Noble superstore and the advent of Amazon, the little stores are going by the wayside. Distribution is national, rather than individual. On the wholesale level, decisions are made by two or three groups of people. Used to be you could make a book with a bunch of small buyers. There are fewer small buyers, and they have less leverage."
Finally, experts suggest that publishers missed crucial opportunities to cope with digital books, Internet innovations and economic pressures. "The big houses proved incapable of looking at the future. I've always been struck at how relatively un-nimble the big houses are," says Tom Engelhardt, a consulting editor at Metropolitan books and the author of the prophetic novel "The Last Days of Publishing." He recently wrote an essay about the crisis at his Web site, TomDispatch.com, and says he predicted the crash for years -- but no one would listen.
All these factors have produced an industry slowdown that will affect all writers for years to come.
As the corporate monoliths limp into 2009, a number of smaller, more independent houses could thrive during this recession. A few of those presses have structured themselves to avoid long-standing problems that got big publishing into this mess: high advances, long author lists and spiraling costs.
Next page: Who will survive publishing's Ice Age?
The struggle for independents
Why do books cost so much?
