INSIDE THE BOOK-PUBLISHING BUSINESS

By John Maxwell

Chicago Tribune, January 14, 2001

For a quick example of the perversity of contemporary publishing, consider Hillary Rodham Clinton's recent book deal: an $8 million advance payment from Simon & Schuster for her memoirs.

For thoughtful, revealing explanations of such megabucks transactions, read two books by veteran publishers who spent much of their careers involved with Random House: Andre Schiffrin's "The Business of Books" and Jason Epstein's "Book Business." While one suspects these men were never chums, they describe the general trends leading to Clinton's windfall the same way.

In mid-20th Century America, publishing was made up of small houses run by gentlemen (and some gentlewomen). They settled for modest profits in order to bring good books and their ideas to life. "For much of the twentieth century," Schiffrin writes, "trade publishing as a whole was seen as a break-even operation." Today the dominant publishing model is the giant multinational corporation with many interests besides books. Clinton's publisher, Simon & Schuster, is a subsidiary in Viacom/CBS' media empire, which includes MTV and Paramount Pictures. In many cases, these media conglomerates have paid premiums to acquire respected publishing houses. Logically, they now want big profits, which is where Clinton comes in. As a celebrity, she has drawing power not only at the ballot box but also in the bookstore--or so book executives hope. To get her on their side of the aisle, they do what they know how to do best, give her lots of money. In publishers' calculations, it matters little if Clinton spends much time writing her book or leaves the work entirely to ghostwriters. She did not even submit the customary written proposal to the publishers who bid for her book. Her name on the cover, and not her writing ability, they wager, will count at the cash register.

That Clinton's book deal might present a conflict of interest highlights how the business has changed. No one worried decades ago that Alfred Knopf could offer enough money to cultivate senatorial influence or that the grand old man of publishing would even want to. But it is easy to speculate that Viacom/CBS would welcome easy access to senators who make laws, ratify trade agreements and have sway over government regulatory agencies.

The rush to publishing profits, write Schiffrin and Epstein, has not turned out the way the< mergers-and-acquisitions people expected. Worse, our literary Establishment has been trampled in the process. Bottom-line publishing has in some cases returned lower profits than in the past and produced insanely competitive practices, for instance encouraging different houses inside a conglomerate to bid against each other to land star book contracts. The bidding has gotten so out of hand that celebrities such as Ronald Reagan have produced memoirs that did not come close to paying for their extravagant advances. A sign of the resulting uneasiness is that the publishing industry seems to be endlessly restructuring itself. Random House, as one example,has changed hands frequently.

Bookstores are in step with this big-buck, big-author scenario. The mammoth stores erected by Barnes & Noble and Borders want blockbusters that sell by the truckload.Unfortunately, small independent bookstores have become an endangered species without securing the future of the superstores that have driven them out of business. As Epstein points out, Barnes & Noble and Borders have watched their stocks languish as investors decided that their superstores could not survive the discount war they started. Brand-name authors like Tom Clancy fare so well financially that they have the capital to bid on sports teams. In one recent, 10-year period, Epstein reports, "sixty-three of the one hundred best-selling titles were written by a mere six writers."

But pity the midlist authors, who write worthwhile books for modest-size audiences, or debut novelists, who have no loyal readers. When Schiffrin and Epstein got into the book business after World War II, publishers supported books by those authors through sales from their backlists and the occasional best sellers. But conglomerate publishing houses not only want more blockbusters, they don't want any failures. Each book is supposed to make a profit right now.

This is costly to authors and publishers. Some of the fledgling authors subsidized today would become tomorrow's literary lights and in time the backbone of a backlist that made more money year after year. This is why Bennett Cerf, who headed Random House when Epstein and Schiffrin started to work there, used to say that it could make a profit every year if it never published another new book. All Random House had to do was to sell the tried-and-true ones in its warehouse. Of course, the more tried-and-true authors on the backlist, the more a publisher can do to nurture a new generation of unknown writers with potential.

The biggest losers, Epstein and Schiffrin argue, are readers, who do not have adequate access to authors with new, different ideas. It is difficult these days to find books with a left-wing point of view, Schiffrin laments. "The need for public debate and open discussion, inherent in the democratic ideal, conflicts with the ever-stricter demand for total profit." Schiffrin, the more pessimistic of the two authors, spent most of his career at Pantheon Books, to which he had a strong emotional attachment. His father, a Jew who had fled Nazi persecution, helped launch the house, although he died before his son went to work there.

Pantheon occasionally enjoyed highly profitable books, such as the paperback Signet Classics series, which Schiffrin fils created. Nevertheless, Schiffrin recalls, the emphasis was on publishing important books--until a series of acquisitions resulted in Pantheon being acquired by Random House, which ended up in the hands of larger media companies. >Schiffrin despised the Random House chief whom S.I. Newhouse installed when he owned Random

House. Alberto Vitale was "an illiterate businessman," writes Schiffrin, who did not have a single book on his office shelves. "The photographs on display were not of authors but of his yacht." When Vitale upped the pressure for profitable books, Schiffrin and his Pantheon colleagues launched a highly visible protest. Some of Schiffrin's authors demonstrated in front of Random House offices. As Schiffrin tells the story, Epstein, Random House's editorial director, did not support his fight with Vitale, and neither did many others. Soon Schiffrin was out of a job.

"Traditionally, ideas were exempted from the usual expectations of profit," writes Schiffrin, who has since started a small, independent house, The New Press. Whatever their differences during the Pantheon protest over profits, Epstein shares this view. "Book publishing is not a conventional business," he writes. "It more closely resembles a vocation or an amateur sport in which the primary goal is the activity itself rather than its financial outcome."

Still, book publishing,even in the good old days, was a business. As both writers show in their entertaining reminiscences, the most venerable publishing houses had their bottom-line dullards. It is difficult to imagine how publishing can avoid the laws of free-market gravity without the government or foundations--both of which have their own agendas--providing more subsidies than they have in the past.

The difference between Schiffrin and Epstein is that the latter is more reconciled to this reality, possibly because he has gravitated toward entrepreneurial roles. His first publishing job was at Doubleday, a more market-oriented house than Pantheon. There in 1952 he created Anchor Books, a high-quality series that he is proud to say "became known as the origin of a paperback revolution." Epstein later helped found The New York Review of Books, which has succeeded admirably as a leading source of literary criticism; the Library of America, a cloth-bound collection of the best American literature, which he created with critic Edmund Wilson and which has since been sold through mail order; and The Reader's Catalog, which his publicist describes as a precursor to online bookselling and which failed.

One of the defining features of Epstein's book, a loose collection of ruminations that began as lectures at the New York Public Library, is that he cheerfully speculates on how the market will work in the future. Thanks to the Internet, he forecasts, readers in far-flung places will have access to great literature. Brand-name authors may regularly publish their own books on the Web, as Stephen King did recently. Publishers may be liberated as well. Technological change will make it possible for them to worry less about shipping and warehousing and more about what they do best, working closely with authors to produce good books.

Contrary to current publishing models, size may be no advantage for publishers, Epstein speculates. "Book publishing may therefore become once more a cottage industry of diverse, creative autonomous units, or so there is now reason to believe."

Schiffrin's book contains an inadequate and inaccurate index, as well as egregious editing< errors, such as misspelling the name of the famous editor of this very newspaper, Robert R. McCormick. Such transgressions reinforce his point that our book culture will not take care of itself. It needs publishing staffs who watch over it carefully.

The lesson for readers from both books is caveat emptor. In the same way that shrewd shoppers check out Consumer Reports before buying a new appliance, faithful readers should check out these volumes. Taken together in an easy afternoon read, they make us into more intelligent consumers of books.