Monthly Archives: October 2012
In 2009 California’s then-governor Arnold Schwarzenegger launched an initiative to replace printed textbooks with digital versions. He solicited feedback, and the man known as The Terminator got it in spades. Students flunked the format and wanted their paper books back.(See Not So Fast, Guv)
Since then, similar thumbs-down reactions have come in from schools in many other states, causing administrators to rethink e-book larnin’. But that didn’t stop Education Secretary Arne Duncan from pronouncing recently that “Over the next few years, textbooks should be obsolete.”
Author Justin Hollander, an assistant professor of urban and environmental policy and planning at Tufts University, countered with an op-ed piece in the New York Times. “Such technologies certainly have their place,” he wrote. “But Secretary Duncan is threatening to light a bonfire to a tried-and-true technology — good old paper — that has been the foundation for one of the great educational systems on the planet. And while e-readers and multimedia may seem appealing, the idea of replacing an effective learning platform with a widely hyped but still unproven one is extremely dangerous.”
Details in Long Live Paper. And for an analysis of the cognitive challenges to reading e-books, see The Medium is the Screen. The Message is Distraction.
This blog post was originally published by Digital Book World as Uncle Sam Pushes E-Textbooks, But Students Push Back
If you’re an author or agent wondering if it will be harder or easier to sell your work; if you’re an employee of either company wondering about job security; if you’re a bookstore owner or librarian wondering about the supply of product; or if you’re simply a book lover – you’ll want to know how the merger of Random House and Penguin, announced this morning, impacts on your life. As a veteran of far too many mergers and acquisitions I can give you some sense of what’s going to happen and when.
Over the next few months – and it could be as long as a year – little or nothing will occur that anyone can see. That is because executives will be reviewing the vast and complex structures of their respective firms looking for redundancies that can be eliminated or operated more efficiently. Printers, warehouses, and a host of departments ranging from editorial to marketing, sales, publicity and accounting will be scrutinized for unnecessary duplications. The redundancies will be earmarked for elimination or consolidation.
Though it’s clear that merger discussions have been under way for some time, it’s still a long way from the exchange of stock or cash to the shutdown of an imprint or issuance of a pink slip to a sales rep. Even after redundancies have been pinpointed, the implementation of consolidations will not happen rapidly. Negotiations must take place before departments are closed and people let go. Those decisions will be delegated to middle management executives who will be consulted but who themselves may be candidates for elimination.
Because publishing is still a people business, those negotiations will be arduous and painful. And therefore the only immediate effects of the merger will be anxiety and confusion, and there will be plenty of that. Tons of time will be occupied by speculation and gossip, and there will be a great deal of maneuvering as employees try to position themselves to look indispensable and their bosses strive to save jobs. Decision-making will be hampered in a climate of uncertainty and even paranoia as editors and managers wonder if they will be second-guessed or overruled from on high by superiors privy to some secret plan.
Though those superiors may seem like a monolithic autocracy, in fact top brass at both companies will be jockeying for position and struggling for power and control. No one wants to put out on the street friends, colleagues and employees who have labored loyally for years or even decades; no one wants to serve notice to suppliers, distributors or service providers that, in the terrifyingly bland language of bosses the world over, “We have decided to go in another direction” or “Your services are no longer required” or “Your department is redundant.” So, though it may not be visible, there will be plenty of infighting on a high level, and it will eventually filter down to a human scale. But this will take time.
When it does happen, in my experience the last people to get the ax are authors. That is not necessarily because the management of publishing companies is compassionate (though I believe it is). It’s because management is mindful (thank God) that the whole apparatus of the publishing industry is fed by authors, and there is great reluctance to slaughter the geese that lay the eggs. There is also the question of shelf space. Though the two companies have a number of science fiction and romance imprints between them, for instance, closing one of them could remove critical advantages in shelf space for which publishers fight tooth and nail. When that space is given up, competitive publishers are ready to rush in to fill it, and once lost it cannot easily be regained. So, in the next, say, six months to two years or longer we will see mergers of every process and function except editorial.
In time, however, the grim reaper (old-timers referred to him as The Turk) will aim his scythe at editors, imprints and lists. Authors will then realize that where there were three or four markets there are now two or one. Aside from the human toll, injury to literature itself will be inflicted as the Darwinian struggle rewards the most commercial authors and makes it even harder for newcomers to gain a toehold. And that in turn will fuel the self-publication and alternate-publishing trend that is already well under way. The e-book and print on demand businesses, already prospering from that trend, will continue to thrive.
This is what I believe is in the cards for you. As a scarred veteran of hundreds of mergers and acquisitions I think I can make these predictions with confidence. But I also make them with a heavy heart, for the road to Random/Penguin is littered with victims too numerous to list. For some sense of the relentless march of the consolidation you can read Book Pubs Headed for the Chop-Shop?
Or if you’re from the Grin and Bear It School of Adversity, you might be interested in a bit of doggerel I contributed to the 1986 year-end issue of Publishers Weekly entitled Merger, He Wrote. Here’s an excerpt:
Thus in frenzied syncopation
Proceeds the trade’s consolidation.
Scores of famous names of yore
Have since succumbed to corporate war
Or publish books with but a semblance
Of their former independence:
Coward, Crowell, Playboy, Grosset,
Dutton, Scribner, Morrow, Fawcett,
Prentice-Hall and Dial and Dell,
Random, Bantam, NAL,
Lothrop, John Day, Quick Fox, Jove,
Lippincott, Pop Libe, and Grove,
Bobbs and World and Atheneum . . .
There’s no end to our Te Deum.
Huge conglomerates expanding
Till scarcely anyone’s left standing.
In the first part of this article I described a fundamental shift under way in the book industry from original paperbacks to original e-books – “e-originals” in Publisher Speak – and its depressing effect on author compensation. These deals point to sharp reductions in advances and royalties and acceleration of the flight of authors from traditional to self-publication.
Impact of E-Originals on Publishers
The impact of the shift on publishers themselves is less quantifiable. It is, however, potentially far more devastating.
You can define publishers in many ways but their unique claim and strong attraction for authors is that they distribute printed books in brick and mortar stores. By forsaking the very element that defines and distinguishes them, however, publishers are at risk of becoming unmoored from the comfortable physical terrain of the book business and floating up like a balloon into the unfamiliar and turbulent stratosphere of Cloud publishing.
I say “unfamiliar” terrain. Though legacy publishers have adapted admirably to the challenge of digital publishing, few who work in the industry them have truly grasped the stupendous upheavals that come with full commitment to all-digital publishing, and who can blame them for being in denial? The truth is that a purely digital book industry is nowhere near as dependent on people, places and things as the traditional one.
The following email was issued to the literary agent community by Marcus Dohle, CEO of Random House, in connection with the announced merger of Random and Penguin:
To Our Literary Agents,
As you now know, our parent company Bertelsmann today signed an agreement with Pearson to combine Penguin and Random House’s respective trade-book publishing activities. In this new partnership with Penguin, we will be retaining the distinct identities of both companies’ imprints. You and your clients will benefit from an extraordinary breadth of publishing choices, and editorial talents and experience. Our Random House imprint leadership remains endowed with tremendous autonomy and financial resources to decide which books to publish, and how to publish them. We expect this to continue in our new business.
With our backlist always a priority, Random House expects the new company to offer an even deeper catalogue, alongside our newly published titles. Our investments in enhancing the supply chain and our marketing support for physical retail will be unwavering, as we continue to transition in the digital space—to seek the most diversified retail marketplace for our titles. And we will be even better positioned to support our authors’ intellectual property and copyrights.
The business combination is all ahead for us. Now, it is business as usual. Random House and Penguin remain competitors, and my colleagues and I remain focused on getting the most out of our terrific fall lists, while also working on the plans for our winter and spring title campaigns. We thank you for your many and ongoing contributions to Random House’s success, which has been a primary motivation behind Bertelsmann’s determination to extend and expand its commitment to trade publishing. We look forward to continuing our valued relationship with you at Random House, and post-closing together with Penguin.
Our goal for you and your authors is at the heart of everything we do: to publish the content you entrust us with for everyone, everywhere, in every format, and on every platform.
All my best,
(Signed) Marcus Dohle
My eyes moistened when I read in 2009 that Franklin Electronic Publishers had been acquired by an investment company. The company played a significant role in my life and more importantly, in the histories of both the computer and book industries. In fact, it is not hyperbole to say that today’s computer business would be radically different if a lawsuit brought against Franklin by Apple had had a different outcome.
The first electronic book I ever beheld was Franklin’s Spelling Ace. Produced in 1986, the palmtop device, as they were then called, enabled users to type a word phonetically (“fo-net-ik-lee”) on its keyboard and the Ace would display the correctly spelled word on its liquid crystal screen. It also intoned the word aloud in a lugubrious computer voice. My young son took great delight in typing in the clinical words for sex organs, then repeatedly hitting the voice function command at dinner parties.
The idea that your next-door neighbor’s opinion may affect your decision to buy or pass up a book seems unlikely. True, word of mouth has always been a factor in the fate of successful books, but usually the mouth that the words come from belongs to someone you know, not an anonymous name on a website.
But wait — when you search your Zagat guide for a restaurant recommendation, do you know who has written the review? No, but in all likelihood it’s a restaurant patron with no more professional reviewing credentials than yourself. That doesn’t stop you from saying, “Let’s go here!” Some of your neighbors thought the food was good, the place clean, the atmosphere pleasant, the service excellent, and the prices right, and that’s good enough for you.
In short, we live in an age when peer review is meaningful if not significant, and Amazon.com has used this fact to create a cadre of reviewers who must be taken seriously.
I have a standing bet with many publishers, backed by one thousand dollars payable to the charity of their choice. The bet is that a professional author can write a book faster than a publisher can write a check. And I hereby reaffirm the bet publicly.
So far nobody has taken me up on this wager, and I doubt if anybody will. But if someone wants to, just make your check payable to Doctors Without Borders.
There is no gimmick here. At least a dozen professional writers on my client list are capable of turning out a novel in two to four weeks, even less if their publisher is desperate. But I know of scarcely any major publisher capable of routinely preparing contracts or, once contracts have been signed, cutting a check in that period of time. Unless it’s an emergency, in which case it takes about three weeks longer.
In the last year a number of major publishers have begun offering authors contracts for “e-originals” – books released originally – and exclusively – in e-book format. Though this is a logical step in the evolution of traditional publishing houses from tangible to virtual formats, the deflationary nature of its business model poses a serious threat to author earning power. Less obvious but ultimately more dangerous is the implosive effect the shift may have on the publishing companies themselves and the people who work for them.
What’s Wrong with Paperback Originals?
The first and obvious question is, what’s wrong with paperbacks books, that publishers are abandoning them in favor of digital originals? The fact is that in the past fifteen or twenty years, mass market paperback books have transformed from a breeding ground for fresh talent to an exclusive club for bestselling authors.
The reasons for this metamorphosis are complex (you can read about them in The Rise and Fall of the Mass Market Paperback: Part 1, Part 2), but in essence the ruthless math of an industry based on the returnability of books has made it almost impossible for fresh talent to develop over time in the nursery of original paperbacks. Though many promising genre authors, especially romance writers, continue to be introduced in mass market paperback, the sales thresholds they must achieve in order to make a profit for their publishers have risen to almost unattainable heights.
Cue e-book originals.
At first blush, e-originals appear to be the perfect way for publishers to pull authors out of this death spiral, for many of the costs of manufacturing and distribution are lower or negligible. You would think that the savings would be passed along to authors in the form of higher advances and royalties. So far, that has proven far from true. Why?