Publishing Models, Translations, and the Financial Collapse (Part 1)
On Friday, I was invited by Riky Stock of the German Book Office to give a presentation to GBO directors from around the world about publishing post-financial collapse. Which is a pretty big topic, and one that will probably dominate conversations post-holiday season, especially if the retail sector struggles as much as people are predicting. Anyway, this is an admittedly incomplete, overly simplified look at the industry, the reigning sales models, and what might happen in the next few years. Oh, and it’s extremely long. I have no idea how many parts this will turn into, but it’ll last for at least a week or two
Stage One: Overview of the Publishing Marketplace
It’s no secret that publishing folk like to complain a lot and are somewhat addicted to “doom and gloom” prognostications about their industry. Sales are never what they should be (nor are salaries), there can never be enough book coverage for a hot title, everyone is under a lot of pressure to meet unrealistic expectations, and with thousands of over-educated, well-read people entering the work force every year, no one’s job feels safe. See this year’s surprise firing of Jane Friedman, CEO of HarperCollins. Or the fact that Peter Olson stepped down after profits at Random House dropped 4.7%. That’s not to say that publishing people can’t relax, or don’t enjoy the business, but it has—increasingly—become a business, and the strings and complications that go along with increasing profit margins impact all the various aspects of publishing and are altering the industry and literary culture as a whole.
There’s a famous publishing joke that goes, “Do you know how to make a small fortune in publishing? . . . Start with a large one.” Throughout modern times, publishing has been a small margin industry. Rich people got involved because of the glamour, the importance that comes from shaping our culture, the joy of working with intelligent artists. Not to mention the cocktail parties. (Nowadays, you can add free books to that list.) Rarely—if ever—did people start up publishing houses with the idea that this would make them millions. Same goes for bookstores and bookstore owners. In the best of times, these businesses aim for 3% profit margins. As conglomerates took over the industry though, and houses started merging, the expectations jumped to the 10% range, fundamentally changing the rules of the game and, in my opinion, pushing the industry into its current tenuous position where a lot of people are filled with anxiety and dread.
This past September, Boris Kachka wrote a nice overview article for New York magazine about the current state of publishing simply titled The End. In this piece he examined several components of the book business, providing evidence about how the system is essentially broke. Here’s how he summed it up:
“Sales at the five big publishers were up 0.5 percent in the first half of this year, bookstores sales tanked in June, and a full-year decline is expected. But pretty much every aspect of this business seems to be in turmoil. There’s the floundering of the few remaining semi-independent midsize publishers; the ouster of two powerful CEOs—one who inspired editors and one who at least let them be; the desperate race to evolve into e-book producers; the dire state of Borders, the only real competitor to Barnes & Noble; the feeling that outrageous money is being wasted on mediocre books; and Amazon.com, which many publishers look upon as a power-hungry monster bent on cornering the whole business.”
Kachka’s main focus is on commercial publishers, which is fine since the big houses are great case studies in what’s gone wrong, and besides his focus on the major houses leaves me something to add to the conversation.