Among authors it has become a cliché that book publishers obsess over bottom lines at the expense of serious literature. Publishers carp back that they can’t turn a profit, no matter what they do. The latest industry tumult is over the resignation of Random House Editor in Chief Harry Evans, who doled out mammoth advances to celebrities such as Dick Morris and Marlon Brando, only to see their books bomb. In June, Rupert Murdoch’s troubled book division, HarperCollins, canceled 106 book contracts to avoid big losses. Highbrow book imprints have either been scaled back or sold off. Is publishing really in crisis? Is the serious book dead? How has the industry changed? What are the issues behind the publishing malaise?
Conglomeratization: Book publishing is dominated by seven media conglomerates: Paramount (Simon & Schuster), News Corp. (HarperCollins), Bertelsmann AG (Bantam Doubleday Dell), Advance Publications (Random House), Time Warner (Little, Brown), Pearson PLC (Viking Penguin), and Holtzbrinck (Holt). W.W. Norton, Houghton Mifflin, and Grove-Atlantic are among the few surviving big independents.
Critics say the conglomerates have damaged book publishing with their obsessive pursuit of “blockbusters.” Last year, 212 hardcovers sold more than 100,000 copies, establishing a new record. The conglomerates pay huge advances and spend outrageous sums marketing these titles in the hope that they will top the best-seller lists. Critics also say that editors, who once patiently developed writers, now spend more time marketing books than editing them, which results in the production of longer, sloppier, less interesting books that readers spurn. Also, the conglomerates are accused of having dumbed down books, publishing titles that may be more easily adapted by their Hollywood subsidiaries. (Last year, News Corp.’s HarperCollins opened an office in the headquarters of its 20th Century Fox unit.)
Declining Sales and Profits: Most conglomerates don’t break out figures on their book divisions. News Corp., which does release HarperCollins’ figures, reports that the book division’s operating profit fell 66 percent during the first six months of fiscal year 1997. Industry analysts guess that most of the largest houses, such as Bantam Doubleday Dell and Random House, turn between 4 percent and 8 percent in annual profits–approximately the same percentage they have earned every year since the ‘50s and well below their 12-percent to 15-percent projections.
Book sales are stagnating. Sales grew by only 6 percent in 1995 and 4 percent in 1996. The textbook and computer-book markets continue to boom, but hardcover sales sag. This year, they are off 10 percent. Some theorize a change in leisure habits is behind the drop-off, as readers shift their attention to cable TV and new media like the Internet and computer games. But census data reveal that time devoted to reading books continues to expand, with the average person spending more than 100 hours a year with the printed word. Also, the book business has boomed in the ‘90s. In 1960, 710 million books were sold. Those numbers grew to 897 million in 1992 and 1.06 billion in 1996. These figures indicate that publishing isn’t so much in crisis as it is in flux, and that the conglomerates’ financial expectations are unrealistic.
Mega-Advances: The success of hit books like Bill Cosby’s Fatherhood, which set sales records, induced publishers to compete for blockbuster authors. In frenzied bidding wars, publishers award record advances. (Click here to see a list of big ones.) Even authors of lesser-selling books now receive larger advances. Where a new book would have received an advance of between $5,000 and $10,000 in 1980, it now gets between $40,000 and $50,000.
Publishing houses complain that big advances hurt profits. The New Yorker reported that last year, Random House had $50 million in unearned advances on its books, and Simon & Schuster had $35 million. Book agents say that publishers exaggerate the impact of advances, hoping thereby to drive the demand for big advances down.
Barnes & Noblefication: The imagined golden age of publishing was the ‘30s and ‘40s, when gentleman publishers like Alfred A. Knopf published only the authors they admired. Book retailing was a genteel and polite profession, too, with few booksellers owning more than one store. All that changed in the postwar era. The paperback book emerged to tap the popular market, and mall-based chains such as Waldenbooks and B. Dalton arrived to make the book market a true mass market.
The ‘90s brought the superstore, typified by the still-expanding Barnes & Noble and Borders chains. Thanks to the superstore chains, retail space devoted to books expanded by 20 percent last year. (Industry giant Barnes & Noble has 455 superstores and does $2.45 billion in annual sales.) The chains sell 25 percent of all books; nonbookstores (department stores, grocery stores, discount outlets, etc.) sell 53 percent; small independent stores sell 18.5 percent; and book clubs account for most of the remainder.
Critics complain that the chains exploit the industry’s liberal “returns” policy, in which stores pay for only the books they sell. (About 40 percent of all hardcovers ordered by the chains are returned.) Chains overorder to fill their expanding floor space, but sell a lower percentage of the books ordered than independent stores do. Publishers must then absorb the high costs of huge returns from the chains. The conspiracy-minded allege that the chains also leverage their influence to persuade the big publishers to produce more blockbusters at the expense of moderate-selling books. Although the book business has grown more dependent on new blockbusters, 53 percent of Barnes & Noble’s sales, for example, come from “backlist” books, i.e., books published more than 12 months ago.
Overproduction: Fueled by conglomerate investment, publishers released more than 60,000 new titles in 1995, at least 10,000 more than in 1985. This growing number of titles leaves publishing houses with less time and attention to edit and market books. Some houses–big and small–have trimmed their lists, consulting closely with the chains to determine what is commercial, and have seen their profits and sales rise.
Midlist Crisis: Some charge that the conglomerates are starting to ignore the “midlist” book, serious nonfiction and literary fiction that sells fewer than 30,000 copies, preferring to gamble on potentially lucrative blockbusters. Imprints that concentrate on midlist books–like The Free Press, Basic Books, and Pantheon–have been downsized, sold, or repositioned by their conglomerate fathers in recent years.
Some publishers say that the proliferation of midlist books, not blockbusters, have injured the bottom line. Incoming Random House editor Ann Godoff argues against this notion: She plans to publish more literature and fewer celebrity memoirs, because the big-market books ultimately earn lower returns.