No Limousines for Publishers
On Monday there was an interesting article in The New York Times about the state of the state in the book publishing industry (Puttin’ Off the Ritz: The New Austerity in Publishing). For those of us who make our living in publishing the article contained few surprises—yet many of the details were interesting and revealing.
Since the beginning of October 2008, book sales have been down about 7 percent (all book sales, not just business book sales). That’s no surprise. Back in late October, Len Riggio, the CEO of Barnes & Noble, sent a memo to his employees in which he declared that in all of his years in the business, never had he seen a worse outlook for the economy. He also used the term “Financial Tsunami” to describe the overall economic situation. However, he assured his people that they will be there for the long term, no matter what happens to the economy in the future. B&N is the #1 book retailer in the industry, and as Peter Drucker and Jack Welch taught us, #1 always has the best chance to make it out alive of a bad market.
Unfortunately, Barnes and Noble’s biggest competitor, Borders, can’t promise the same thing. Their company’s stock is selling for a stunning 61 cents per share on this day, meaning that the entire company is worth only $35 million. Their very uncertain future is one of publishers’ greatest concerns in 2009, since they are one of the top three retail accounts of most publishing houses (Barnes and Noble and Amazon being numbers one and two).
The best line in that Times article belonged to Amanda Urban, the literary agent who represents Toni Morrison and Cormac McCarthy, who said “the business was never meant to support limousines.” Urban’s right: I have never regarded publishing as a business for limousines, $500 lunches, or over-the-top sales meetings in foreign, exotic locations. However, I am not naive. Just because my career hasn’t included such things, it doesn’t mean that some publishers haven’t splurged on these items over the years. But, if the CEOs of the three biggest publishers were summoned to Washington to testify before congress you can bet that there would be no private planes fueled up.
The truth is that few of us ever go into publishing for the money—or the perks. We do it because we love books and the writen word. I got into publishing by accident in 1982 and I never looked back— not once. (I started at a particularly modest $14,000 per year). That’s why those of us who love the industry are almost as concerned about the future of publishing as we are about our own personal futures. What would happen if Border’s wasn’t around anymore?
However, many publishers are being as proactive as possible in saving money to help guard against their extinction. Job and salary freezes are common now throughout the industry. Some have cut jobs. One publisher went so far as to declare that they have put a “freeze” on new manuscripts altogether. That move seems too severe to me. As an author, I would be hesitant to sign with such a publisher when they announce that they are turning the spiggot back on. I would be too afraid that they might announce other draconian measures such as cutting back on marketing and promotion. In any event, I have never heard of a large publisher freezing the acquisition of new books/authors, so that tells you how serious the downturn has become.
Yet, there are reasons for optimism, especially in the business book field. The sales of business books have customarily moved with the stock market, and things are beginning to improve on Wall Street. We are about 1,500 points off the low, above 9,000, and by all appearances, the markets have stabilized. We are not seeing the 300-400 point swings these days (they are the exception now, not the rule), and the market has been rising against a backdrop of truly terrible news. That’s always a good sign, and one that has often indicated that a market bottom has been put in place. Earlier this week I predicted that we would see Dow 10,000 in 2009. If that happens, that will restore some confidence throughout the economy. That would stem bankruptcies and likely put a cap on unemployment—two essential ingredients for a turnaround in our economic fortunes.
So who needs limousines, anyway? They are overrated, not all that comfortable, and too big to talk to the driver. Besides, if you ever want to know what is really happening in a city or to the economy as a whole, ask a cab driver. They are the real sages of our day.