Serious staff cuts come to book publishing, too
COMMENTARY | December 19, 2008
An author and book editor looks at 'Black Wednesday' and the spate of firings in his industry. One publisher went so far as to put a freeze on acquisition of new books. (How's that for reducing the news hole.)
By Tom Engelhardt
(Republished with permission from Tomdispatch.com.)
Worlds shudder and collapse all the time. There's no news in that. Just ask the Assyrians, the last emperor of the Han Dynasty, the final Romanoff, Napoleon, or that Ponzi-schemer Bernard Madoff. But when it seems to be happening to your world, well, that's a different kettle of fish. When you get the word, the call, the notice that you're a goner, or when your little world shudders, that's something else again.
Even if the call's not for you, but for a friend, an acquaintance, someone close enough so you can feel the ripples, that can do the trick. It did for me two weeks ago, when a close friend in my niche world of book publishing (at whose edge I've been perched these last 30-odd years) called to tell me that an editor we both admire had been perp-walked out of his office and summarily dismissed by the publisher he worked for. That's what now passes for politeness in the once "gentlemanly" world of books.
His fault, the sap, was doing good books. The sort of books that might actually make a modest difference in the universe, but will be read by no less modest audiences -- too modest for flailing, failing publishing conglomerates. If you were talking in terms of cars, his books would have been the equivalent of those tiny "smart cars" you see in increasing numbers, tucked into previously nonexistent parking spots on city streets, rather than the SUVs and pick-ups of the Big Three. It may be part of the future, but who cares? Not now -- and too bad for him.
It wasn't really him, of course. He was just a small fry, like most of us, in the bloated universe of entertainment. As with so many workers at the moment -- and it doesn't matter whether you're talking about the downturn in restaurant hires or the cuts made by that sports titan, the National Football League (about 150 jobs), or the public radio oufit NPR (64 jobs, two shows) -- his firing was a by-product of economic and funding catastrophes elsewhere.
He went down during what publishing people are calling "Black Wednesday." On that day, 35 people were axed by publisher Simon & Schuster (owned by CBS), while two key figures at Random House (owned by the German multimedia giant Bertelsmann), who headed two of its largest groups "resigned" as part of a "reorganization" -- a vague word that covers a multitude of sins. This will undoubtedly result in further head-rolling in the weeks or months to come.
Then, of course, there was Houghton Mifflin Harcourt. (The name is a little publishing history lesson, a fusion of two recently conglomerated houses of distinction. It reminds me of newspaper names from my New York City childhood like the World-Telegram and Sun -- once the New York World, the Evening Telegram, and the New York Sun.) Just the week before Black Wednesday, its owner, the Irish private-equity firm Education Media & Publishing Group Ltd., saddled with an ocean of debt, made publishing history by instituting a "freeze" on the acquisition of new books. If you're not in the tiny world of publishing, that may not ring too weirdly, but what is a publishing house except a staff, a backlist (those books already published and still in circulation), a set of books being published (that is, a catalogue), and those signed on for the future? Without future books, there is no publishing.
On Black Wednesday, Education Media completed the deal by decimating Houghton's staff. Its publisher had already resigned, assumedly in protest or dismay. Evidently, sooner or later, the "house" will go on the auction block, the assumption perhaps being that, in the present economic environment, a distinguished publishing house with a long history is more saleable as a valuable backlist than as a living, breathing entity. Houghton-Mifflin (Harcourt) R.I.P.
A friend (and author) called me recently after visiting a large bookstore in Northern California and, his voice suitably hushed, told me that, on a weekday, he had been the only customer in sight. That's typical of the nightmarish tales about traffic in bookstores and book sales now ripping through my world as 2008 ends.
So it goes, the late Kurt Vonnegut might have said.
Publishing houses are certainly bleeding and those that haven't yet started to take staff and books out to the woodshed, axe in hand, are going after end-of-the-year bonuses, raises, and who knows what else, while management girds its loins for "the inevitable." After all, in malls across America, the chain bookstores are getting mauled (just like other retailers). Traffic at many bookstores nationwide has evidently slowed to a trickle. Book orders have reportedly fallen off a cliff. It's now being said that, in this Christmas season, no popular book is selling so well as to be unavailable. In other words, if you want it, it's going to be at your local Barnes & Noble. For publishing, that's like an obituary.
Think of those auto showrooms that were selling a couple of cars a week and are now lucky to sell a couple a month, then think books. And it's not just that books aren't selling, comparatively speaking, but that they're winging their way back to publishing houses in startling numbers and, evidently, even more startlingly to university presses. Rumor has it that some academic publishers are experiencing unheard of return rates that can go as high as 90%. (A unique aspect of the book business now guaranteed to add up to hell-on-Earth for publishers is that bookstores can return unsold product to manufacturers without penalty.)
Think of it this way, those book versions of SUVs and pick-ups, all those Ford Explorer-type volumes, often so costly to put under contract but churned out so confidently for so long by the oversized giants of the publishing world, are now mostly sitting in their mall lots idling -- or, as you read this, they're winging their way back to publishers' warehouses.
How Not to Read a Newspaper
To put this in perspective, the corporate giants of publishing, and their serried ranks of groups, divisions, imprints, and boutique operations, all those formerly independent houses swallowed whole from the 1970s through the 1990s, are but drops in the overflowing economic bucket of bad times. Thirty-five people beheaded? A mere bag of shells, as Jackie Gleason used to say.
For a little perspective, just consider the jobs headlines of the last couple of weeks: In a major reorganization, announced on December 8th, Dow Chemical revealed plans to cut 5,000 jobs and close 20 plants, sending about 11% of the chemical giant's workforce down the human drain. The company also plans to "temporarily idle 180 plants and prune 6,000 contractors from its payroll."
Or think of GM announcing that it will idle all its North American assembly plants during some part of the first quarter of 2009, while turning out 60% fewer vehicles. Or the 3M company, which announced cuts of 1,800 on the same day Dow issued its bad news. Talk about a "black" day! Or the Sony Company at about the same time, announcing that it would "cut 8,000 employees worldwide over the next year, slash investment in its electronics business by 30 percent, and close roughly half a dozen of its 57 manufacturing sites around the globe." We're talking 5% of Sony's workforce. Or Bank of America, which made public a massive "workforce reduction" scheme: 30,000-35,000 jobs eliminated globally over the next three years, as part of a reorganization after absorbing Merrill Lynch. I mean, we're talking slaughter here. And given the staggering U.S. job-loss count in November, 533,000 according to the Bureau of Labor Statistics, and the fact that the number of Americans filing for unemployment benefits jumped to a 26-year high in early December, you know that this is just scratching the surface of the disaster.
Chemicals, cars, finances, even post-its. That's major stuff. Books? They're such modest (and, at best, modestly profitable) objects, even if the book has the remarkable ability to teleport readers into worlds not their own. I mean, if you really want to talk about the destruction of companies in the reading game, then try a business where it's been hell on Earth for years: newspapers.
Talk about collapsing worlds, newspapers were a disaster area long before the greatest downturn "since the Great Depression" hit. The bad news about the news has been flooding in for years, even if it's worsened under the weight of more general economic tough times. If, for instance, you were even reading a newspaper in print on Tuesday, December 9th (and, if you're under 25, odds are you weren't), then you undoubtedly caught the story about the debt-ridden Tribune Company, a news monster which owns, among other properties, the Los Angeles Times (almost half its staff lost since 2001), the Baltimore Sun, the Chicago Tribune (almost a third of its staff lost since 2005), and even the Chicago Cubs, filing for "bankruptcy."
The company even had the nerve to claim that bankruptcy meant it could "cease all severance payments and deferred compensation to employees who have been laid off." (Pity the poor reporters who took those buyouts.) It also hired the investment bank Lazard and the law firm Sidley Austin as consultants. In case you're worried, they surely will get paid. (Up front, if they're smart.)
All this means is that another bunch of newspaper workers -- a dwindling crew -- is now in essentially the same situation as the workers who sat in and won their severance pay at Chicago's Republic Windows and Doors factory after they were given only three days notice to vacate. Don't expect sit-ins or fight-back victories at the LA Times anytime soon, however.
Only the week before the Tribune filed, America's largest newspaper company Gannett announced a 10% cut in its workforce due to "declining revenue," on top of a 3% cut last August (neither evidently being part of the 5% "trim" at its flagship paper USA Today in late November). And don't get me started on the rest of America's newspapers. At least 30 of them are for sale right now, including the 149-year-old Rocky Mountain News, which lost $11 million in the first nine months of this year, with few buyers in sight.
In the style of some black hole, the vortex of the Internet has, for years, been sucking in young readers and, more important for the finances of journalism, ads, which account for four-fifths of all newspaper revenue (with disappearing classifieds accounting for half of that). Under the extra pressure of hard times, the decline in ad revenues is now turning into a deluge. In the third quarter of 2008, national newspaper advertising reportedly dropped by 18%. When it comes to the news in print, you wonder who will be left minding the store. Poor Detroit's main papers are cutting home delivery to three days a week, another national first, and it can't be long before a major U.S. city lacks its own daily. Maybe the question now is: What store?
All of this certainly adds up to a nightmare for a guy just young enough to be running a political website, but old enough to have the habit of reading two newspapers in print a day. Still, none of this got to me, not even those 533,000 jobs lost, the way the firing of one editor I knew did.
And that, I suspect, is typical. For most of us, most of the time, the world is a remarkably parochial place. I read newspapers, use post-its and Saran Wrap, and drive a car (sometimes). But I've probably edited and put into circulation several hundred books. That's my world. And now it's beginning to look like the time of the bloated publishing conglomerate is nearing an end, with an unknown effect on the time of the book itself.
The Ad and the Book
In my career as an editor, a mere few decades, I've seen publishing transformed from the equivalent of a cottage industry -- the term "publishing house," of course, once implied a freestanding entity -- to the subbasement of giant entertainment conglomerates. I've watched those conglomerates swallow up houses large and small, creating book companies filled to the rafters with various publishing groups, divisions, imprints, and boutique operations.
All of this happened as bookstores, too, morphed from largely independent cottage operations into giant chains that kept expanding their vast book emporiums into ever newer territory. And all of this, in turn, was possible only because the computer was transforming everything in the publishing process except the book itself. (A typical Barnes & Noble book palace couldn't, for instance, exist without computer systems to keep track of stock.) And for those ever expanding stores, the publishing conglomerates just kept spewing out new catalogues and new volumes. After all, there were all those bookshelves to fill nationwide, forever.
In scale, even the largest of modern publishers with a global reach isn't exactly a GM or a Citigroup or an AIG, in part because, unlike the car, banking, or insurance, the book represents such a quirky, small-scale, labor-intensive process to create and produce, but also to absorb. Demanding a significant investment of time and energy on the part of the consumer, it has always fit somewhat awkwardly into the world of mass entertainment. Still, there's a comparison to be made. As bloated as their larger cousins, the big corporate publishing outfits seemed to feel that, when it came to the future, they were immune.
Now you can't exactly blame a business for not predicting the future, since we humans are generally terrible seers. But when the future stares you in the face, as with the three automobile giants over the last decade, or when, as with publishing, it even offers you a helpful illustration of what might be in store for you, aren't you culpable of something?
After all, when it came to illustrations, the newspaper's decline wasn't exactly a well-kept secret. But there were, I suspect, three key factors that cushioned book publishers from believing that that future would be theirs, and so from truly facing the challenge of the Internet and of the screaming wallpaper of the burgeoning entertainment universe.
The first was the ad. Book publishers seemed invulnerable to the fate of the newspaper, in part, because the ad played no part in the book's financial success.
There's a piece still to be written on the book and the ad. The ad, after all, has colonized everything in our world from gas pumps to urinals, bars to doctor's offices, taxis to your sneakers and cell phone, not to speak of every imaginable printed form, including the cereal box and the back of your supermarket receipt, and yet, strangely enough, it never successfully colonized the book.
This, in our world, has to be considered some kind of unnoticed miracle. Yes, the early book sometimes had quack medicine ads in it and, for years, certain paperbacks had ads for other books (by the same publisher) at the back, but the book largely resisted the ad. Even after publishers, rushing to join the other mass forms, began wrapping book covers around anything from movie novelizations to material that had once been confined to "police gazettes" or Hollywood fan mags, the ad still -- against all logic -- stayed away. The authority of the book seemed, by some mysterious process, to resist it.
Back in the 1990s, ad whiz Chris Whittle launched a series of books on serious subjects by select high-flying authors for select high-flying corporate readers and leaders. These were filled with glossy Fedex ads. But when the publisher W.W. Norton picked up the series for the book trade, the ads were dropped. In 2001, the jewelry firm Bulgari paid Fay Weldon for extensive "product placement" in her novel fittingly entitled The Bulgari Connection, and that caused a little media brouhaha. Each of these, however, proved not an inroad, but a stunt.
(On the other hand, any future successful e-book reader, whether the Amazon Kindle or something else, will surely have ads; but then again, if any one device really catches on, in its next generations it is bound to "generalize": that is, you'll be able to read books on it, but also undoubtedly catch what's left of newspapers, check your email, text friends, and probably take photos too. In other words, you'll be in a new universe which, for better and worse, will only partially resemble book reading as we've known it -- and worse yet, from the publisher's point of view, the technology will be the property of someone else.)
Because the ad played no part in the book, there was nothing of obvious financial value for the Internet to suck out of book operations, except, of course, the attention of readers. This left publishers, even if not thinking directly about the ad and the book, feeling relatively immune to the otherwise erosive and corrosive qualities of that new world.
In addition -- factor two -- the chain bookstore was still expanding in the early years of this century, reaching into new cities and new neighborhoods. This seemed to ensure an expanding future for the book business (despite a yawning lack of evidence that Americans were, on average, reading more books).
The blindly hopeful nature of all this was brought home only in the last few months as books went dead in those very same stores, and the chains began cutting back every which way. One of the two major chains, Borders, losing money hand over fist, is now "reorganizing," which may actually mean hanging on by a thread. As the trade publication Publisher's Weekly put the matter, Borders "has become more selective in its buying, aggressively reducing the size of its inventory." "Steep cuts in inventory" is another way of putting it and obviously not good news for those inventory providers, book publishers. By now, both chains may also be closing some less profitable stores.
As with GM, it was always easier and far more immediately profitable for the big publishers just to keep selling those "SUVs" until their business model went into the toilet rather than try to prepare for a new world. And -- factor three -- there was one last bit of history that helped foster the illusion of future book prosperity. It was well known in the business that, during the Great Depression, books, like movies, had done splendidly. They were an inexpensive bit of entertainment and distraction, consumable at home, at a time when not much else pleasurable was going on in a rugged world. Ergo, books would be no less recession-proof in the next big downturn.
There was no reason to believe otherwise… unless you happened to focus on just how many dazzling entertainment options had, in the interim, entered the American home at prices more than competitive with the book. After all, most Americans can now read endlessly on the Internet, play video games, download music, watch movies, and even write their own novels without stepping outside; and keep in mind that the $27.95 hardcover and the $15.95 paperback on the shelves of that mall store, once you drive there, aren't exactly the inexpensive objects of yore.
Publishers nonetheless clung to this bit of Depression-era lore for dear life as economic bad times bore down. And, unlike with the newspaper, it's been those bad times that have suddenly brought the axe down on book publishing. But publishers now firing staff, folding up or merging divisions, and shutting down boutique operations in order to last out the bad times shouldn't be fooled twice. The return of economically better times (someday) is unlikely to mean the return of the book world of these last few decades.
Small independent publishers, which often have trouble surviving even in good times, are nonetheless more agile, more experimental, and closer to the Internet revolution than the big houses. They are capable of turning on a dime, while the conglomerates -- with their long lead times (often 8 months to a year to put a book in the store) -- probably can't turn on anything, which leaves them losers in an Internet world in which yesterday's news might as well be last year's.
Think of that old image of shrew-like mammals scooting around among the feet of the soon-to-be-extinct dinosaurs. For instance, Chelsea Green, a small publisher in Vermont having its best year ever, reports that it delivered a new book by Robert Kuttner, Obama's Challenge: America's Economic Crisis and the Power of a Transformative Presidency, from final manuscript form into the hands of readers in a matter of four weeks, and so just in time for the Democratic Convention, which is remarkable. There perhaps lies one future for the book.
I can't claim to be exactly surprised by all this. After all, in my 2003 novel The Last Days of Publishing, I imagined -- because this wasn't exactly a feat of genius (except perhaps for publishing management) -- many of the things that are now happening to the book and the business (even an editor being perp-walked to an axing, something that, back then, hadn't yet happened in the business).
I meant that title with a certain irony, because the end of the book, or even of reading itself, had been predicted and fretted about for so long. And yet, more than 550 years after the first Gutenberg Bible appeared, the printed book, still an unsurpassed technology for delivering information and experience, isn't leaving the scene soon. It's always worth remembering that, when those first printed books began to circulate in Western Europe, the previous form, the illuminated, hand-copied manuscript, did not disappear, despite what you might imagine. It lasted at least another century as a high-end collectible, which was largely what it had long been anyway.
The book remains a techno-wonder that not even the Kindle has yet surpassed. But it's a wonder in a very crowded entertainment universe in which habits, reading and otherwise, are changing fast. Add to that a world plunging into the worst of times and you have a combustible combination. The chain bookstore, the bloated publishing house, and the specific corporate way of publishing that goes with them are indeed in peril. This may no longer be their time. As for the time of the book, add on another century if you want, but in our ever restless universe it does seem to be shortening.
This Monday, as I was working on this post, MacMillan, owned by the other German publishing giant Holtzbrinck, which owns St. Martin's Press, Farrar, Strauss, and Giroux, the paperback house Picador, and Henry Holt, which, in turn, houses Metropolitan Books, the small imprint for which I work part-time, fired 64 of its employees. I'm still here, but again my tiny world shuddered.