NORTHERN CALIFORNIA INDEPENDENT BOOKSELLERS ASSOCIATION

HOLT UNCENSORED #66
by Pat Holt

Tuesday, June 1, 1999:

RANDOM HOUSE AND OUR FUTURE
LETTERS

----------

RANDOM HOUSE AND OUR FUTURE

You know that very good people work for the new and expanded Random House, and very fine books are being published from its 1600 (okay, fewer than that) imprints.

But Publishers Weekly's announcement last week of internal reorganization at Random House sent a chill up the spine. With great finality and oompha, here was the inevitable concentration of power at work, with this publisher thrown out and that publisher put on top, and imprints bandied about (and banded) like captured pigeons.

It's the old story of decision-making falling into fewer and fewer hands, of the book industry adapting too soon, of editorial freedom and creativity left to fend for themselves in an industry that's seen more upheavals than San Francisco in 1906. Of course, the heads of Random House know all this and aren't timid about addressing the issue.

"We recently had a sales conference in Arizona for all of us [including] sales people and publishers, and it was a BIG sales conference," Random House head Peter Olnos said at a panel at the recent Book Expo convention. "We also addressed the issue: 'Is bigness necessarily [or] inherently bad in book publishing and in bookselling?' "

One of the questions "we tried to emphasize," said Olnos, "is: Can you strike the right balance between creative independence . . . and the need to have support operations [that] are efficient and responsive investing in the new technology? We feel very strongly that the only way we can survive and prosper is by increasing diversity, by increasing the distinctiveness of our publishing programs."

Of course it's easy to poke a little fun at this - gee, the biggest publishing house in the country held a meeting with the theme, ''Is Bigness Bad?'' and guess what they decided? Bigness is okay! - but Olnos' belief in diversity was quite convincing.

He added, a bit forbiddingly, one felt, "Random House is not a monolith. It is a series of very independent publishing divisions and publishing programs, and the Knopf group, believe me, is very different from the Ballantine group, and the Bantam group, and so forth . . . I don't think the issue is the size of the publisher . . . I think the question is the commitment we have to how we manage the creative process and how we preserve that independence [in] our publishing programs."

Unfortunately left unmentioned was how exactly the Knopf group competes for the same manuscript with Ballantine and Bantam (and Crown and Doubleday and Pantheon and Fawcett and Times and Delacorte and so forth). It must be tough for those ol' economies of scale when imprints battle each other and drive the price up "unnecessarily," as financial managers have said.

It was good to hear Avin Domnitz of the American Booksellers Association remark at the same panel at which Peter Olnos (and Michael Lynton of Penguin Putnam) spoke that "independent [booksellers] have never felt well-served by consolidation. I don't think concentration of power has worked to the benefit of individual consumers and a diversity of ideas in the marketplace.

"That is not to say that Random House or Penguin/Putnam are not committed to those values, because I believe they are . . . [But] maybe there won't always be a Peter Olson or Michael Lynton guiding the fortunes of major publishing houses, and maybe those decisions will be made by people who don't feel they [must guide these houses in the same way]."

Then there's another side to the matter. Instead of looking down from Peter Olnos's position on the hierarchy at the many imprints of the new Random House, let's look up at what is controlling Random House itself - the Bertelsmann publishing empire headquartered in Germany that continues to gobble up one publishing company after another. Check out its website from time to time and you come across announcements like these:

*** "Munich, February 16, 1999 - As expected, the Monopolies and Mergers Commission in Brussels has approved the takeover of the scientific publishing group Springer GMBH & Co. KG by Bertelsmann Fachinformation GmbH. . . With this acquisition, the turnover of the specialist publishing segment of Bertelsmann AG jumps from 625 million German marks to approximately 1.5 billion German marks."

*** "Hamburg, March 1, 1999 - Gruner + Jahr [owned by Bertelsmann] and the Financial Times Group [owned by the Pearson Corporation in Britain] have created a 50:50 joint venture with the goal of producing a daily business newspaper for the German market . . . The Gruner + Jahr Group achieved global sales totalling DEM 5.1 billion in the 1997/98 business year.

*** "New York, April 7, 1999 - Universal Music Group and BMG Entertainment, two of the world's leading music companies, today announced the formation of an unprecedented Internet content and commerce alliance to create online communities of music fans, promote artists and sell CDs online."

*** "Berlin, GŁtersloh, April 23, 1999 - The multimedia agency Pixelpark, top-ranked in Germany in terms of revenue, plans to enter the stock market in the second half of 1999, announced Bertelsmann . . . Pixelpark plans to list its stocks in Frankfurt and, through its initial public offering (IPO), will solidify its leading position in Germany and Europe."

*** "New York, May 25, 1999 - barnesandnoble.com (Nasdaq: BNBN) announced the successful completion of the largest ever Internet e-commerce initial public offering. The initial public offering price for the 25 million shares of Class A Common Stock offered by the company was $18 per share, raising a total of approximately $421.6 million after commissions and expenses."

Random House, as huge as it is, and barnesandnoble.com, as fat as it is, are both smallish cogs in the Bertelsmann machine, which gets hungrier with each acquisition it makes.

While Bertelsmann has the reputation of leaving its publishing subsidiaries relatively alone when it comes to editorial decisions, it's dangerous for any publishing house to depend on the largesse of its current parent for whatever independence it may pursue. And since Bertelsmann has crossed the barrier between publishing (Random House) and bookselling (barnesandnoble.com), who knows what values will dictate its decisions in the future?

Perhaps it's a good thing Bertelsmann never wonders out loud if bigness is bad, because the single-minded effort with which this huge conglomerate seems intent upon taking over the world does not bode well for anybody. One hopes in any case that the end of the milennium brings with it the end of consolidation in publishing - or at least, this was the question posed to Michael Lynton of Penguin Putnam, whose own evisceration and restitching has been quite an operation to watch in recent months.

Lynton's answer was not exactly comforting: "I think there will be more consolidation in this industry," he said. "Partially it's the economics [that] drive it in that direction; partially it's because there are certain corporate parents who don't necessarily feel as comfortable with book publishing as others do. So [book publishing companies] are lower in their priorities in terms of how they use their capital."

So much for depending on Mom and Dad Takeover's largesse. Is there nothing positive on the publishing horizon? Well, yes, said Lynton: "Every time a big tree is cut down, a lot of little ones grow up underneath, and I think what you'll also find is that a lot of small publishing companies will grow very nicely over the next ten years as well."

Oh dear! It's the old "Yankeeism will save us" argument that mainstream publishers so often quote when they're failing as caretakers of American literature. True, culture always insists upon emerging - writers will always express themselves in books, and systems (electronic and otherwise) will always be out there to publish them.

But let's not place the burden on small and independent presses to fill all the huge gaps on the literary landscape. Much was made at the BEA panel of studies showing that some 53,000 presses in the United States publish anywhere from 1 to 100 books per year. But this is not a problem that can be solved by quantity. The number could be 100,000 or a million presses, and the solution would still be out of reach.

Bigness per se, especially institutionalized bigness, is antithetical to independent thought, creativity and literature. It overrides the book-by-book, bookseller-by-bookseller, customer-by-customer process that connects the mind of the author and the mind of the reader.

This is a process that needs nurturing and care and respect every step of the way, and the great wonder is that so many people, in and out of "mainstream" publishing, bring tremendous enthusiasm and dedication to it every day.

---------

LETTERS

Dear Holt Uncensored:

We are a proud independent that just celebrated our ten-year anniversary. We are located in Pittsboro, North Carolina, eight miles outside of Chapel Hill. And talk about a sad state of affairs; the only bookstore in Chapel Hill is the Bulls Head Bookshop at University of North Carolina - everyone else has closed or been driven out of business. For a thriving and growing community with more PhD's per capita than anywhere else in the country, this is a damn shame. But I digress.

The real point of my letter is addressing the issue regarding Waterstone bookstores leaving the Boston area. Let me set the record straight. I was one of the very first employees of the company way back in September of 1991. The message we were told, loud and clear, was that we were an independent store. Back then we were all young and filled with idealistic notions; we thought that we were the first of a new breed of bookstore.

The way management explained it, each bookseller "owned" his or her section of the store. We bought for, managed and groomed our individual sections like a garden plot. This was an unheard notion to me - that the individual bookseller would have a voice in the overall management of the store and its inventory. This of course didn't last, for a number of reasons, but it was a noble experiment. Eventually three other stores were opened, but each bought books for itself - there was no spreadsheet management of stock at the time that I worked for the company, which was until 1996.

Eventually I worked my way up the ladder til I was the head buyer for the Exeter Street store. At that time I continued to buy books with the idea that we were an independent store, selection and depth being my criteria. At the time I was extremely proud of the store and its selection.

After a tragic fire of 1995, everything changed. The bean counters and know-nothing upper management(from a record distribution company, no less!) came in and destroyed everything that the staff and I had built. In disgust I fled to the South where I now manage and buy for a wonderful store, McIntyre's Fine Books. I am still bitter about some of the behind-the-scenes backbiting that took place. It hurts me deeply to know that a store that I helped build, not once but twice, is now going to be closed due to ineptitude and sheer ignorance of bookselling skill.

I haven't worked at Waterstone's for a couple of years now, but my hackles were raised when I read the past couple of letters. Thank you for letting me set the record straight, at least for posterity's sake. Thanks for letting me vent and blow off some steam.

Robert Segedy
books@fearrington.com
http://www.fearrington.com

Dear Holt Uncensored:

Over the last few months I've managed to do all my book ordering from OTA (Other than Amazon.com), but this past week I couldn't find the title I wanted anywhere. It's Walter Zettl's "Dressage in Harmony," an enthusiastically reviewed title about training horses and riders in dressage, from Half Halt Press, which specializes in books on horsemanship.

So I went to amazon.com, which had all kinds of recommendations for me based on my previous purchases (science fiction and the kind of reference you'd expect an editor to stockpile), and searched for the title I wanted. Not yet received, said the virtual clerk, but we'll take orders.

Well, I knew the book was already out, and that the official pub date was November 1998. So why does amazon.com want me to place an advance order?

I did a web search and found a site in California that specializes in dressage books and is well set up for e-mail orders. So I ordered the book and hope to receive it in the next day or two.

So I'm wondering: had I ordered the book from amazon.com, would that have been their cue to order it? Maybe I'm cynical, but I suspect that's how they deal with esoteric independent press books: list it in inventory, but don't make any commitments until the buyer appears. Meanwhile I'm extremely happy to have made the acquaintance of an organization that has other resources I can use. Moral of story: amazon.com junkies CAN break the habit, and learn useful stuff when we do!

Susanna J. Sturgis
sjs2@capecod.net

Dear Holt Uncensored:

One thing the online bookstores have over brick and morter stores- chains or independents- is the online catalogue. I spend a lot of enjoyable time just searching the Amazon database because it's so much fun. And it's a smart database. It makes suggestions based on the author and subject you're searching. It tells you what other books were bought by people who bought the one you're looking at. It can find things even if you spelled them wrong, which might happen if you just caught the author's name on the radio.

Whatever one might think about the effect of the online superstores on bookselling, the databases are a good thing. Just like card catalogues and online catalogues in libraries are a good thing. They can help you chase a vague notion you might have until they find the book you want. No matter how well chosen a store's stock is, it's incomplete. No store can stock everything. A good independent bookstore has a selection that reflects the point of view of the people who work there. That's invaluable. But when I go into a bookstore now I sometimes find myself looking over the counter at the Books in Print terminal and thinking "Why don't they just turn that thing around?" It's like they have the oracle there but I'm not going to get a look at it without the help of a priest.

So my suggestion to anyone who wants to make their store more friendly for those of us who are now used to being able to browse a book database is to make it available. Is there any reason why Books in Print can't be used by the customer? Or certainly when the new Independent online service beomes available it could be out on the floor, over by the coffee bar. Couldn't it?

Dear Holt Uncensored:

I, too, am very interested to see what happens between all the websites that are super discounting the bestsellers. I find it very ironic that even as a bookseller at a chain store, my employee discount is significantly less than if I purchased my books on the internet. Not much of an incentive to make a purchase at my own store, is it?

\r