Media Circus

The travails of reeling HarperCollins reflect big trouble in the book publishing business

By James M. Surowiecki

Published July 15, 1997 7:00PM (EDT)

the shudder that went through the publishing industry when news was released of HarperCollins' decision to lop 106 books off its trade list was a shudder of recognition. HarperCollins' problems mirror those of the industry as a whole; the company's uncertain attempts to solve these problems neatly reflect the ambivalence and confusion plaguing publishing houses across the country.

Because HarperCollins is owned by Rupert Murdoch -- a media titan famous for his unswerving focus on the bottom line and for a lack of patience with highbrow art -- the company's decision made it an easy target for critics decrying the death of taste and the triumph of the profit mentality. The New York Times, which broke the story, quoted one literary agent as saying, "I have never witnessed a more cavalier disregard for the bond that exists between author and publisher. These people don't seem to care about books." But HarperCollins' troubles are a symptom. They're not the disease.

It's true that HarperCollins is in desperate need of direction. For the quarter ending March 31, it lost $7.7 million on revenues that were down 18 percent from the previous year. Its decision to fold Basic Books, which had published some of the most important public-affairs books of the previous two decades, already looks like a classic penny-wise and pound-foolish strategy. Conversations with people within HarperCollins paint a picture of a company at odds with itself and unsure of the future. "Morale is incredibly low," says one editor, who asked to remain unnamed. "There's no real sense of where we're heading, and it's not at all clear that the bleeding has stopped."

On the other hand, it's hard to find anyone at the company who disagrees with the decision to pare back the list. (Thirty-six books that had been accepted for publication were dropped, and another 70 whose authors had missed deadlines were eliminated. HarperCollins paid all advances in full.) And there is some sense, however tentative, that making the cuts in a decisive fashion was the right way to send the message that the company was, in the words of one editor, "ready to move on." As Ginger Curwen, vice president of corporate communications, put it, "This was a very deliberate strategy. These were books we decided weren't going to work, and we made a conscious decision in a very tight time frame to take some action."

In any case, for all of the lamentations about the crucifixion of art, it quickly became clear that few of the books HarperCollins had killed had any hope of being the next "Great Gatsby" (which was, in any case, a bestseller). They were books about celebrities and their pets, Jell-O recipes and paintings by the relatives of celebrities -- as the Wall Street Journal put it in a typically blunt editorial: "We suspect the culture will be able to withstand [the] blow" of not reading -- or, more accurately, skimming -- these books. Many of the titles, it seems clear, should not have been acquired in the first place, or at least not acquired by a house like HarperCollins. And things will presumably be different from now on.

"I think we're starting to progress from infanticide to contraception," says Andre Schiffrin, publisher of the New Press and former head of Pantheon Books. "People will not sign up those books in the future."

More importantly, it's also clear that the problems to which HarperCollins is reacting are not simply the function of mismanagement at a single company. "I really don't know what all the ruckus is about," says Stephanie Oda, publisher of Subtext, a publishing newsletter. "The news on returns across the industry has been awful. Trade sales are down, and if other publishers are not doing what Harper is, they're going to be in the near future." Indeed, a report released by the Book Industry Study Group cited returns as "the issue of the year," and said that adult trade sales dropped by 5.3 percent between 1995 and 1996. More than a third of all books shipped to booksellers are returned to publishers.

Oddly enough, though, even as book sales have been dropping, the number of titles published each year continues to rise, reaching close to 50,000 this year. In addition, print runs have not diminished in size. If anything, the rise of superstores has meant that publishers need to print more copies of potentially popular books, since it's the only way to get real attention from a Barnes and Noble or a Borders. At the same time, advances to celebrity and bestselling authors remain, if anything, more excessive than ever, despite such well-publicized debacles as the $4 million paid to Jay Leno, the $2.5 million Dick Morris got and the $3.2 million Johnny Cochran netted, all for books that never got within a mile of the bestseller list.

What this suggests is that publishing, at least with regard to the commercial houses, is an industry without a viable business model. "Harper apparently lost a lot of money last year, and that's interesting," says Schiffrin. "The feeling we're starting to get is that vandalism is not paying. You can slash away and stop publishing serious work and still not be profitable."

Oda, for one, suggests that publishers find themselves constantly fighting the last war. "The foresight is simply not there," she says. "When times are good, people keep acquiring, keep thinking that times are always going to be good. A few years ago, when superstores made their first big splash, publishers felt the need to keep filling up the superstores with books. And now we're seeing the consequences of that." In the late 1980s, she points out, when children's books were all the rage, publishing houses all decided they were going to do children's books and then found themselves trapped when the market crashed. It's a cycle that feeds on the industry's tendency to react to trends rather than to shape them.

To a certain extent, of course, publishing is the victim of larger cultural shifts over which it has little control. As Curwen of HarperCollins puts it, "It's very hard catching the consumer's attention these days. Everyone's got a very full entertainment and information plate in front of them." But it's telling that Curwen positions books as competitors with movies and television for consumers' attention, emphasizing not the distinctiveness of books or of reading but rather their similarity to other forms of media and of media consumption. This seems emblematic of what Schiffrin terms "the consolidation of publishing into the entertainment business." And one important consequence of imagining yourself as a competitor with TV and film is that you start to expect the profit margins those industries enjoy. That's an expectation that seems almost guaranteed to be disastrous for publishing. It seems possible, in the end, that the reason Rupert Murdoch shouldn't be publishing books is not because he has bad taste or bad politics, but because it's an industry that cannot earn profit margins of 15-17 percent. If someone's looking for those kinds of returns, publishing is probably not the place to be.

Scaling back expectations, though, will not be enough. Book publishers would be wise to take this moment of crisis in the industry as an opportunity to rethink some of their basic ways of doing business: the reliance upon huge advances, the practice of buying back returns at full price, the size of print runs and their remarkably inefficient inventory and distribution practices. (What other industry consistently manufactures hundreds of thousands of copies of an item that no one wants?) Perhaps if the publishing business made more sense, the books published might make sense too.

James M. Surowiecki

MORE FROM James M. Surowiecki

Related Topics ------------------------------------------