The Business of Books: How International Conglomerates Took Over Publishing and Changed the Way We Read, Andre Shiffrin. Verso, 181 pages, $23.00.
Book Business: Publishing Past, Present, and Future, Jason Epstein. W. W. Norton, 188 pages, $21.95.
Once upon a time, the major American publishing houses could be counted on to bring controversial new ideas, trenchant political criticism, and works of enduring literary merit to the reading public. No longer. Instead, we get a steady stream of diet books, celebrity biographies, quasi-spiritual self-help manuals, formulaic technothrillers, Jacqueline Susann knock-offs, and warmed-over tabloid journalism about the scandal of the moment. The book business is in terminal decline, and it's dragging the political and intellectual life of the nation down with it.
That, anyway, is the contention of the industry's more hyperbolic critics, who portray American publishing in dire terms. To some, the portrait might seem overdrawn. Flip through recent issues of The New York Times Book Review , for example: Plenty of intelligent and original works of fiction and nonfiction are still being published, even amidst the profusion of chaff. There's no shortage of good books to read--Americans bought 2.5 billion books in 1999--nor any dearth of provocative new ideas. And for that matter, even the Golden Age of American publishing (let's say 1920-1960) is obscured by a nostalgic haze that allows us to forget the profits made even then by ephemeral best-sellers, potboilers, bodice-rippers, and crossword puzzle books. The republic today is not endangered by the existence of Stephen King or John Grisham (although Tom Clancy makes me nervous). And as long as Noam Chomsky and Edward Said (or Charles Murray or Pat Buchanan) can find publishers, it's hard to make the case that the industry is politically repressive.
Still, the basic critique is correct: The Golden Age is over. The American publishing industry has been fundamentally transformed during the past 30 years, and largely for the worse. At one time, publishing represented the happy marriage of Art and Commerce; it was that rare preserve where intellect and mammon were productively conjoined. Today that marriage is on the rocks. As Commerce has squeezed Art out of the relationship--an increasing amount of money is being spent on bigger and bigger commercial blockbusters, at the expense of intellectually or politically or artistically substantive books--publishing is no more profitable than before. In fact, it's less profitable than ever and has arguably set itself on course for obsolescence.
Consider the following: Between 1986 and 1996, 63 of the top 100 best-sellers in the United States were written by just six authors: Clancy, Grisham, King, Michael Crichton, Dean Koontz, and Danielle Steele. During this same period, the top 30 best-sellers doubled their share of the total of books sold in this country, so the fortunes of American publishing have been riding largely on the sales of just a few authors. If these authors were to join forces, their combined sales would dwarf those of most publishing houses. When such a significant percentage of the industry's revenue comes from just a few authors who, in contrast to their publishers, have strong brand recognition (no one goes to the store looking for the latest HarperCollins or Houghton Mifflin), the temptation for these authors to go into business for themselves must be considerable. Stephen King (albeit in conjunction with his publisher Simon and Schuster) has experimented with a new model by selling hundreds of thousands of copies of his latest work in installments over the Internet, thereby cutting out the need for manufacturers, distributors, and office overhead. If you're Stephen King, do you need publishers?
Trouble is, if you're a publisher, having built your business model upon the sales of these blockbusters, you sure as hell need Stephen King. Which is why editors throw ever-larger advances at the Kings and the Koontzes of the world. Hillary Clinton just got an $8-million contract from Simon and Schuster for her memoir. But because of these gargantuan contracts, related profits will be small even if sales are huge--especially when you figure in losses from advances lavished on books that fail (remember the bath HarperCollins took on Newt Gingrich's $4.5-million advance in 1994?). All of this, in turn, means there is little money for and much aversion to producing new and original books and carrying authors who might not sell a lot of books right away; and little willingness to nurture a "backlist" (books that are not new but continue to sell well, year after year) that would provide a steady revenue stream.
What happened? How did backlists and small print runs get cast aside in favor of the blockbuster-at-all-costs mentality? How did the relationship between editor and author change from being a long-term partnership based on ideas and words on the page to being a contractual obligation based on marketing, publicity, returns, profit margins, agents, and remainders?
New books by two of the most esteemed editors in the business answer these questions. Andre Schiffrin was for 30 years the managing director of Pantheon Books (the distinguished imprint of Random House) before he founded the New Press (a nonprofit publisher with strongly left-of-center leanings) in 1990. Jason Epstein got his start in 1958 at Doubleday, where at a young age he launched the successful Anchor Books paperback series of classic works before commencing an illustrious career at Random House. Schiffrin's list of authors includes such luminaries as Studs Terkel, William Faulkner, Gunter Grass, E.P. Thompson, Eugene Genovese, Staughton Lind, John Dower, Ronald Laing, Michel Foucault, Marguerite Duras, E.L Doctorow, Noam Chomsky, Ralph Nader, and George Kennan. Epstein has worked with Edmund Wilson, Vladimir Nabokov, W.H. Auden, David Riesman, Elizabeth Hardwick, Will Barrett, Dwight Macdonald, Jane Jacobs, and hundreds more. Epstein also, in 1963, co-founded The New York Review of Books, which for years has been the best publication of books and ideas in America. No two people are better positioned to write of the developments in publishing over the past half-century than Schiffrin and Epstein.
The curious thing is, they seem to hate each other. Even though they tell much the same story (the contamination of publishing's intellectual values by its market values), have some of the same enemies (corporate accountants who see books less in terms of their intellectual or artistic merit than in terms of their profitability), and reach a similar conclusion (publishing must change to survive), Schiffrin and Epstein write from very different perspectives and serve as useful foils for one another. In fact, Schiffrin accuses Epstein of siding with Random House when management forced Schiffrin out at Pantheon. (In an interview with The Washington Post, Epstein denied spearheading Schiffrin's ouster.)
Epstein's book is witty, humane, clear-headed, and at times brilliant; yet because he's on the inside (still plying his trade at Random House, part of the German-owned Bertelsmann conglomerate), his view is naturally informed and constrained by his position. Schiffrin, on the other hand, has no such constraints. His book is a fierce jeremiad. It aims to right wrongs and settle old scores.
Schiffrin's New Press is on the barricades outside mainstream publishing. It is funded largely by foundation grants, and it eschews the commercial formulas of the major houses in favor of challenging, provocative, academic, and often politically radical books. An occasional New Press book makes the best-seller list, but, as you would expect, most of its books don't sell well. That's the point: Were it not for the New Press and a few others (such as Beacon Press, South End Press, and Public Affairs Books, which is an imprint of Perseus Books), these books would never be published at all, for lack of marketing potential.
Bennet Cerf, founder of Random House, says in his 1967 memoir At Random that the last thing he expected to do in publishing was make money. For years editors and their colleagues earned low salaries, and company profits were small--about 4 percent a year on average since 1920. Books by established authors that sold well could in effect underwrite books by unknown first-time authors that wouldn't sell as well; commercial best-sellers paid for difficult or experimental works; and the steady revenues generated by the backlist ensured that a house could take risks on its new books.
By the 1960s, all this began to change. On January 19, 1966, the electronics giant RCA, seduced by the sexiness of the occasional runaway best-seller, paid Cerf and his partner $40 million for Random House. Over the next 20 years, entertainment behemoths like CBS, ABC, MCA-Universal, and others gobbled up most of the independent publishing houses. "The million-copy sales of a few name-brand best-selling authors," Epstein writes, "led these conglomerates to believe incorrectly that general book publishing is a predictable mass-market business, like selling soap or razor blades or movies."
When the hoped-for profits failed to materialize, the conglomerates either sold the companies--often to other multimedia combines--or demanded higher margins from their book divisions. Forced to aim for higher profits, editors changed their acquisition strategy. Schiffrin found himself increasingly "forced to look for books that would sell in greater quantities and at higher prices." But this approach failed to generate more revenue; it merely caused ever-increasing amounts of money to be spent on ever-dwindling returns.
RCA sold Random House to media mogul Si Newhouse in 1980. Newhouse is Schiffrin's Great Satan: the embodiment of all that has gone wrong in publishing. By Schiffrin's account, after Newhouse took over, employees started leaving in droves, editors were forced out of the business by impossible profit goals, and the sales force was driven to drink by unrealistic sales targets. And then there was Alberto Vitale. "The future became very apparent when Newhouse brought in Alberto Vitale," Schiffrin writes. "Placing an illiterate businessman at the head of a publishing company" sent a clear message about corporate priorities. Schiffrin continues acidly,
Vitale was introduced by Newhouse as a man of culture and sensitivity, a description soon undermined by Vitale's admission that he was far too busy to read a book... . In a skyscraper where nearly every office was lined with books, Vitale's offered a stark contrast. Not a book could be seen on his shelves; the photographs on display were not of authors but of his yacht.
When Vitale trimmed Pantheon's list, demanded that the company stop publishing political books--especially "so many books on the left"--and insisted that every book earn a profit, Schiffrin and Random House parted ways, with much of Pantheon's editorial staff quitting in a principled huff.
While Schiffrin naturally directs most of his bile toward Newhouse and Random House, similar developments were occurring elsewhere. After adding HarperCollins to his media empire in 1987, Rupert Murdoch wasted no time in moving that house in a more commercial direction and jettisoning its high-quality social science imprint Basic Books. Murdoch also offered exorbitant advances to celebrity authors--a practice that effectively starved the little-known writers and ensured that the enterprise would lose money. In the mid-1990s, HarperCollins had to write off $270 million in unearned advances.
Today, despite abundant evidence that applying conventional profit-maximizing strategies to this unconventional business simply does not work, the conglomerates keep trying: In 1998 Bertelsmann bought Random House from Newhouse for more than $1 billion--and its executives promptly announced that they expected their new acquisition to generate 15 percent profit per year. The company's margin at the time of the sale, according to Schiffrin, was 1 percent.
If it were not books under discussion but toothpaste or widgets, these calls for greater profits might seem harsh but not unreasonable. But Schiffrin and Epstein argue that book publishing should be exempt from the demands of conventional business, that books deserve special consideration not given to other products. Are they right?
Schiffrin makes his case in political terms: Monopolies are bad--for economic reasons, primarily--in any industry, but they're particularly dangerous when they affect the flow of information. Concentrated ownership of the means of communication--whether the owner is government or private industry--tends to reduce diversity, eliminate dissident voices, and cut off political debate. That only five companies dominate American publishing, controlling 80 percent of U.S. book sales, should therefore be cause for concern. (And four of these five are foreign-owned: Germany's Bertelsmann and Holtzbrinck, England's Pearson, and Australia's News Corporation.)
Comparing the frontlists of the major houses in the 1960s, the 1970s, and today, Schiffrin finds that the center-left consensus that held sway in publishing through the 1970s has given way to a center-right consensus, paralleling the drift in intellectual life throughout the 1980s and 1990s. But he also found that there are fewer works on politics from any perspective and fewer books engaging with important intellectual or social issues. "In both the 1992 and 1996 presidential elections, virtually no books were published for the general reader that dealt with the big issues facing American citizens," Schiffrin writes. "There is no question in my mind that some of the more controversial issues, such as NAFTA and national health care, would have been dealt with very differently had a public discussion been fostered by critical books at the time." I don't know about that, but the larger point holds: As market values have suffused publishing, the range of intellectual interests represented and the depth in which they are explored have declined considerably.
Epstein's arguments for why books are a special case are less high-toned but ultimately more convincing. He vividly captures the flavor of pre-1970s publishing--the intellectual perfervidness and the quirky, intimate feel of the Random House office ("from time to time I came to work and found a wayward author who had spent the night there, not always alone") in its Manhattan mansion before it moved to a sterile skyscraper. He recalls outsized characters such as Edmund Wilson, who downed six martinis at the Princeton Club before giving the Epstein the idea for the Library of America series that the editor would launch 20 years later. Epstein conveys the distinctiveness of the business, which was more like academia than industry. Publishing clearly is--or used to be--a breed apart.
One might say, so what? We should all be so lucky as to work in a funky old mansion. But there's more to it than that. Publishing's essential difference emerges when you consider its customer: the reader. Recalling how he used to browse in various Manhattan bookstores, particularly the Eighth Street Bookstore, Epstein writes that "to linger in these shops for an hour or two was bibliographic adventure amid the scent of bindings, where the accrued wisdom of the species was lined up on shelves alphabetically within the categories of thought." He's got that about right, I'd say. Books are, for some people, like religion; bookstores are hallowed ground.
Unfortunately, as the publishing industry changed, retail bookselling changed with it. In 1969, just as the flurry of corporate acquisitions was gaining momentum, Waldenbooks and B. Dalton became freestanding chains, colonizing the malls that had sprung up to serve an increasingly suburbanized culture. Mall space was high rent--and like any retail store in a high-rent district, mall bookstores needed to generate a high sales volume and high inventory turnover in order to remain profitable. Thus, they demanded from publishers a growing supply of books by celebrities or "brand-name" authors.
When the chains couldn't turn over their inventories fast enough to make money, they resorted to various forms of discounting, cutting their margins thinner and thinner in order to get customers into the store and sell more books. Over time, the effect was to drive many independent bookstores out of business. Faced with a choice between matching the chains' discounts without the chains' heavy customer traffic and maintaining retail prices but losing customers, most independents logically concluded they were best off closing down. "With the disappearance of the independent booksellers," Epstein writes, "publishers suffered a kind of sensory deprivation, a loss of contact with the external world." What they were left with, the uniformly similar chain bookstores, simply intensified the unfortunate trends already in place: more best-sellers, less diversity, fewer interesting books.
While the prognosis for books is grim, it is not hopeless. Schiffrin suggests some alternatives to "the market theory of the dissemination of culture." One is simply more vigorous application of antitrust law--to diversify the industry and force media conglomerates to divest themselves of publishing houses. Another model would have government, through the National Endowment for the Arts or the National Endowment for the Humanities, subsidize serious book publishing. This has worked in some European countries and has (sort of) worked here with PBS television. Finally, there is the model of the nonprofit publisher, as exemplified by the New Press, which--while dependent on the continuing generosity of individual patrons and foundations--is at least freed from the brutal demands of the market.
Epstein is even more sanguine. He points out that while the book business as he once knew it is obsolete, the human impulse for storytelling long predates publishing's heyday--and even Gutenberg--and will not die even if the publishing apparatus of today withers away like Marx's state. Epstein places great hopes on technological developments. Don't worry: The book itself is not going anywhere for a while. Even at high-tech e-book conferences, where technophiles gather to show off their latest gadgets, there is much talk about how the book is the perfect technology--portable, user friendly, durable. But Epstein points to inventions that would allow the placement of ATM-like machines around the world, from which the reader in California or Quatar would be able to download, print, and bind the book of his or her choice with the press of a button. This would obviate the need for traditional manufacturing and distribution operations in publishing houses while preserving the traditional functions of publicity and manuscript editing.
Epstein is also excited about the possibilities offered by the Web, not just for the word-of-mouth publicity that drives many noncommercial book sales, but for its ability to provide unmediated access between an author and his or her readers. Just about every publishing memoir I've read laments that the corporatization and expansion of book companies has forced the business to abandon its natural scale--the small, decentralized cottage industry. Epstein believes that new forms of distribution, along with new kinds of Web-based collaboration, could lead to a resurgence of the publishing house in its proper size and shape.
While books may have sacred status, they are, as Bertolt Brecht observed, sacred commodities--and to think that publishing can stand outside or above the market system that produces other commodities is naive. (As a German publisher put it in 1913: "The publisher casts one eye at the writer, the other at the public. But the third eye, the eye of wisdom, gazes unflinchingly at the cash register.") For this reason, corporate executives have long argued that publishing is too important a business to be entrusted to intellectuals like Schiffrin.
But if Random House, HarperCollins, and Simon and Schuster are representative, the bottom-line-minded executives are as good at losing money as the most pointy-headed men and women of letters. Epstein's venture, The New York Review of Books, for that matter, is as intellectual and esoteric a publication as you'll find in a nonspecialized field--and it has run in the black for 34 years and counting. (Not so with Si Newhouse's New Yorker.) If the NYRB can turn a profit, maybe the New Press can, too. (Hell, maybe The American Prospect can.) Which means there's hope for books yet. ¤