A new buzz in retail, the hope of online, and a growing sense of a world order for English-language books, have combined to create a degree of optimism.
| THE 'NIBBIES' is London's annual publisher prize-giving, held each February at the London Hilton as a black-tie banquet. |
At the start of 1999, and after a particularly late Christmas season that looked at first as if it might be a disaster, British publishers seem to be feeling rather like prisoners long pent up below ground, who have suddenly emerged blinking into the light of what may, after all, not be such a bad year.
As PW zipped around London taking the temperature of the book business the week of February 15, the word its correspondent heard most frequently to describe the mood and current prospects, particularly in light of the rapidly changing retail scene and a new government interest in the promotion of reading at all levels of society, was "lively." (In fact one particularly eloquent executive, Nick Webb of Simon & Schuster, characterized it as "lively as a kipper.")
The reasons for this change of heart, so different from the almost palpable gloom that had descended on the business in the latter part of 1998, were many: the arrival of Borders, with its flagship London store, two provincial ones and plans, according to a source in the Bookseller, to open dozens more ultimately; the signs of a firmer hand at the tiller of W.H. Smith, the extensive chain that has for years been a significant if erratic book retailer, and which still sells a hefty share of British books; the growing significance (though at this stage far behind the U.S.) of sales via the Web; the very recent and so far enigmatic merger of Bertrams, a major wholesaler, and Cypher, a big library supplier; the impending arrival this spring of Bertelsmann's online operation; and signs that new government moves on interest rates are likely to ease consumer spending.
British publishing, heavily dependent on exports and therefore hard hit by the economic chaos in Asia and the current strength of the pound, is looking for new marketing opportunities-and where else to turn but the legendary one across the Atlantic?
Looking Toward America
| VICTORIA BARNSLEY: Looking to the States. |
Victoria Barnsley at Fourth Estate, one of the liveliest smaller independent publishers, said she was "in the very early stages" of planning an American office. It will, she said, be much like the Bloomsbury USA initiative (which, under Alan Wherry, recently hired an editorial director for New York). "I think there's room for more medium-sized quality publishers like Farrar, Straus and Norton. And we'll go in as a publisher; I don't want us to be seen as just a distribution business." Whereas once, she said, such a move would have required a huge rep force, "having so many fewer buyers makes it much easier to sell." Such a move, she says, is coming at least partly from her concern over the increasing erosion of territorial rights, for many of her biggest sellers, like Longitude, The Perfect Storm and The Shipping News, have come from wise U.K. rights buys of notable American titles.
A small, specialized publisher, Sutton Publishing, headquartered in bucolic Gloucestershire, is also looking for Stateside expansion. The 20-year-old house is Britain's leading historical publisher, ranging over military, transport and "heritage" aspects of the subject, and, according to publishing director Peter Clifford, has already begun working with American. authors on such New World subjects as the slave trade, the Civil War and Aztec civilization. The company, with about $10 million in annual sales, more than doubled its U.S. sales in 1998 over the year previous, and increased its U.S. book club sales (mostly via the History and Military clubs) by 70%. It opened a New York sales and marketing office last year, has just moved to larger premises, and is targeting a further 50% U.S. sales increase this year. It has no editorial office as yet, "but we're sending our commissioning editors over more and more frequently," Clifford said.
| PETER KINDERSLEY: New educational outreach. |
Dorling Kindersley, already a notable player in the States, is likely to become an even bigger one, according to new managing director James Middlehurst, who came aboard only recently after stints with Time Life Books, Polygram and Amazon.co, where he helped in the startup. Middlehurst shared the interview with chairman Peter Kindersley, touching down briefly in London between trips to such DK outposts as South Africa and India. A new DK strategy "is to produce a whole new line of learning products. We're going to hew more closely to the educational curriculum on both sides of the Atlantic." DK sees this as "a huge opportunity to create a new generation of learning materials." DK Interactive has already moved into Britain's School Certificate syllabus, will make its move into the U.S. via S.A.T.s, in a combination of electronic materials and print. "Danny Gur in the U.S. has a great understanding of this market," Middlehurst said.
DK is also stepping up production on its Eyewitness Travel Guides, and plans to have a total of 38 destinations by the end of this year. And of course, with its Star Wars arrangement, the company is aiming for huge sales of its tie-in titles for the new movie opening this spring. A lavish $20 book is so clearly detailed that Lucasfilms, Middlehurst says, developed some of the sets from the book, rather than vice versa. Its first two Star Wars titles sold a million copies, and they hope to do at least as well with the new ones.
| NICK WEBB: 'The market will decide.' |
Nick Webb at Simon & Schuster is one who has to learn to work closely with the U.S. parent company; half of his line is home-grown, half is brought in. They have a Star Trek license for Earthlight, do Sabina the Teenage Witch for the YA market, and in children's have recently hired Martina Challis from Random, who will do original children's publishing as well as bring in from the States what will travel. "You have to customize things for the local market, which is very sensitive to Americanisms. There are differences in packaging, for instance -- American paperbacks have so much foil I call them oven-ready -- and they come lathered in quotes, where we tend to use one, and quietly."
| TIM HELY-HUTCHINSON: 'Why pay those freight charges?' |
At Hodder Headline, Tim Hely-Hutchinson, whose very expansive list numbers about 1300 titles a year, and is heavily dependent at the top on U.S. bestselling fiction stars, is looking to make a major incursion on the American scene in due course, but is in no particular hurry. "I want to get us even stronger here first," he said. "And when we do go in, I think it's more likely to take the form of an acquisition of an appropriate operation rather than trying to start from scratch." It's not, however, something that's likely to happen within the next year or so.
For Jamie Camplin at art and illustrated books publisher Thames & Hudson (which, celebrating its 50th anniversary this year, just moved into spanking new headquarters in Holborn from its rather fustier Bloomsbury digs), relations with the U.S. involve a sister company in New York, run by Peter Warner, that distributes through Norton-and a succession of outright sales to, buys from and co-publishing deals with American houses. Adding up, he found that last year he had bought properties from no fewer than 17 of them, and this year has already made sales to nine. (T&H also sells Harry Abrams books everywhere in the world except North America.)
Anthony Cheetham, who heads the ambitious and expanding Orion Group (which last year received strong backing from Hachette Livre in Paris in the form of a majority stake), also expects ultimately to extend the English-language interests of his French partners into the American market. "But we must consolidate here first. We should get to 100 million pounds a year [from a current level of around 60 million] before I think we can expand dramatically." It would be very costly, Cheetham thinks, to establish a strong presence in the U.S., and he thinks it likely that it would be done by finding a medium-sized partner or making an acquisition rather than by launching. In any case, he said, Hachette Livre's president Jean-Louis Lisimachio "is conscious of the distance" from the U.S. market, and wants to concentrate initially on the British one. Philip Sturrock, who continues as head of Orion's recently acquired Cassell group (which also embraces Gollancz and Weidenfeld & Nicolson) offers a further thought along these lines. "Expansion into the U.S. is very much on the cards ultimately. You can't be ambitious for the English-language market and stop on our shores."
The Death of Territoriality?
Part of the impetus driving British publishers toward the American market is, of course, a sense that the English-language publishing world is increasingly one world in any case (so you might as well go where the biggest money is) and that the old concept of territorial rights, particularly the quaint Commonwealth notion still found in some contract clauses, is essentially dead.
This is not a view espoused by Ronnie Williams, the bearded, bustling new chief executive of the Publishers Association, who in a speech to a gathering of rights agents in Frankfurt last fall gave the notion of territoriality a ringing, economically based defense. He repeats the elements of it now for PW. "The old-guard economists would say that all territorial rights are a violation of free trade," he said. "But a newer approach, to which I adhere, suggests that territoriality is an efficient way of managing information, and that an investment in a publishing structure based on territorial rights is an investment in the long-term health of that structure." He added: "The market may be short term, but it requires management as for the long term."
The kind of action taken by New Zealand last year, which removed restrictions on parallel imports, thus in effect making the country an open market, seemed to Williams excessive. "Introducing parallel import legislation to control prices is like taking a sledgehammer to crack a nut." It also introduces the likelihood of a "gray market," which he finds "a real worry -- it's something you immediately associate with piracy."
As to what's now happening with online bookselling, particularly of U.S. titles into the hands of British consumers or even booksellers, Williams is reasonably sanguine. Amazon.co, the U.K. company, has now taken 80% of the British market away from Amazon.com, he said, and he now sees "only a handful" of rights-infringing copies coming into the country. As of January the British bibliographic database contains all rights information on new titles, and new publisher contracts are being designed with a special section showing rights information for easy access. Despite the problems it has brought with it, Williams sees online retailing as having "great growth potential, with enormous opportunities for the backlist."
| PHILIPPA HARRISON: Amazons on both sides. |
Even Little, Brown's Philippa Harrison, the PA's outgoing president, who had been openly anxious about the impact of online selling on rights last year, appeared much more at ease now that "there are Amazons on both sides" and the territorial rights database is being established so that online sellers can no longer plead ignorance of what titles infringe.
At Fourth Estate, Victoria Barnsley took the view that there was bound to be an erosion in the U.K. rights market, driven by increasing globalization as well as the online sales engine. "Ultimately there's going to be a single English-language market," she said. "At the end of the day you're going to have to publish everywhere pretty much simultaneously. The old Commonwealth rights ideas is an anachronism, though traces of it may remain for a while."
At S&S, Nick Webb lamented the rate of change while acknowledging the need to keep up with it. "Big copyrights will have to be done simultaneously around the world," he said. "You've got to amortize those big deals every way you can. The world won't wait any longer for that old Commonwealth model. The world is so porous now. You have to get the book to the customer when and where they want it. The market will decide." Still, this caused problems, especially in matching pub dates to those in the U.S. "There's often a complete mismatch in our publishing cycles, with the U.S. caught up in all sorts of electronic production schedules, and sometimes you just have to take their rights sight unseen." He thinks, however, that the old territorial rights approach could still work with translations, at least of big titles.
Hely-Hutchinson at Hodder Headline feels the market is already moving toward simultaneous worldwide English-language publication. "Unless a book is not available here, or it's absurdly overpriced, I don't see any incentive for a British buyer to get a book from overseas. But we all have to aim to bring the big books out simultaneously and at reasonable prices. I refuse to buy a book where a big gap is provided in the contract between U.S. and U.K. editions. It's simply not fair to British booksellers. Look what happened in Australia, where they made the 30-day rule; I think we have to operate as if there's a 30-day rule here. And American and British prices are closer now than they used to be, so why pay all those freight charges?"
At Thames & Hudson, Jamie Camplin noted that "too many British publishers have concentrated too much on the local and Commonwealth market. We've always published for the world, the more foreign sales the better, and the U.S. well ahead of the rest."
| GAIL REBUCK: ' A golden year' for Random. |
Random House UK's Gail Rebuck was another observer who felt that prompt publication on both sides of the Atlantic would go a long way toward mitigating the dangers, "and in any case, online is still laggardly." Tom Wolfe's A Man in Full, for example, was published on the same day in Britain and the U.S., though the author was much later with a British tour.
| ANTHONY FORBES WATSON: Turning Penguin around. |
Penguin's Anthony Forbes Watson agreed that "parity of pricing and timing is essential; the consumers are owed that," and was in accord with Williams at the PA that "the system of territorial rights inspires investment locally, and without them the local infrastructure will suffer. The disappearance of territoriality would not be in the interests of any of the key parties -- authors, readers or publishers."
Mark Barty-King at Transworld also stressed the likely impact on authors of an abandonment of territorial rights. "They're very important as a source of extra revenue for authors and their agents, and I think if places like Australia and New Zealand are going to develop into open markets it's not going to help them at all."
Tim Godfray, chief executive of the Booksellers Association, offered an interesting take on the situation-as well as a neat coinage to distinguish bricks-and-mortar booksellers from their cyber equivalents. "Terrestrial booksellers," he declared, "are going to have to use the Internet more themselves." And in fact he saw signs that the two kinds of practitioners are moving closer together. "Amazon is beginning to concentrate on warehousing and stocking books, and meanwhile independents are becoming more involved with Web selling themselves."
The Impact of Online
There was considerable speculation as to the ultimate impact of Web bookselling, which at this point is not nearly as advanced as in the U.S. (though Britain's per capita use of PCs is by far the highest in Europe, and it now has its own Amazon outpost). It seems to be a general article of faith, however, that sales increases, probably largely of backlist and otherwise slow-moving stock, are inevitable, and this perception was one of those helping to lift British expectations of a brighter future.
Nick Webb at Simon & Schuster was one of a few who hazarded a guess as to the future size of e-commerce in books. "It could be 10% of the market by 2004," he suggested, adding that "like most publishers, we're making sure all our information is available to the online sellers, but it's not just enough to supply the titles, you have to do more for them." At least, he added, it's still a question of dealing with traditional books.
Like most in Britain, Webb was not sufficiently familiar with the possibilities of on-demand publishing, or of the special requirements of the e-book, to offer informed comment on them; so far the contractual and other questions these technological developments have raised in the States seem remote in London.
Forbes Watson at Penguin was even more bullish on the cyber-future, saying that "online could be the equivalent of one of our largest customers not too far down the road -- say, about 15% of our business by 2003. It's fun, but unwise, to make five-year plans. There are various scenarios, starting at around 10%, but I think 15% is more likely. The indicators seem to suggest a real takeoff soon." The real key to bigger Web sales, said Forbes Watson, would be when office workers would start buying online in their coffee breaks or lunch hours. "That, and a steady increase in home use, is key." He pointed to two factors that are going to make the country more Web-bound: All local phone calls will be made free, as of 2001, and a national Internet grid will soon link all schools.
Said Forbes Watson: "It's the richness of the trove on the Net that's the real attraction, of course. The degree of availability of a huge range of titles, especially for a backlist publisher like us, will be a terrific advantage."
As might be expected from a technological innovator, Dorling Kindersley is high on Web-selling, seeing it as an important leg in its tripartite sales scheme: via the trade, by way of its home selling network, and online -- the latter of which is, going to be "spectacular," according to Middlehurst.
DK.com is a already a highly visible site, and ultimately the company's entire 2000-volume backlist will be available for sale there; currently, only a selection is offered. He also foresees presenting complete books online. "I see the future market being shaped by the Internet."
Philip Sturrock at Cassell found sales growing via Amazon, especially in the States, and added that as a reference, where consumers could look up what's available, it could only help sales, especially of backlist. "It's still a slight novelty for most consumers here, however. It's a generational thing, and older book buyers haven't got used to it yet."
Frances Coady at Granta Books, as befits a smaller publisher, finds she has not been much affected by online selling so far, but d sn't doubt it will have an effect, particularly among people who don't like to go into bookstores. Granta is redesigning its own Web site; meanwhile one impact is that she gets many more agent and author submissions by e-mail than she ever used to, "and it's much more difficult to resist reading them when they come in that way."
Orion's Anthony Cheetham thought online was likely to continue to expand "the erosion of rights," adding: "At the end of the day, online suppliers are going to have their sheds in different territories." Meanwhile, he added, with a hint of skepticism, "A lot of publishing philosophy is being based on the progress of online retailing."
Jamie Camplin, with Thames & Hudson's worldwide sales, found Net sales were very much on the increase, with "huge leaps in numbers." He added: "There are always prophets of doom who predict the end of the way things were, but I foresee new sales channels opening up, and the possibility of shorter runs for illustrated books." Thames & Hudson has a multimedia department -- "not a huge division, but we have the expertise to do some electronic and interactive publishing in niche areas." He noted wryly, however, that "even techies want to see their collections of Web site graphics actually published in book form."
Several publishers commented on the imminent arrival of Bertelsmann online in the U.K. (it is supposed to launch in March, but that date seems to have slipped more than once). Pending a clearer sense of what it was likely to offer, and on what terms, the chief interest was in seeing how it would affect the Bertelsmann book club operation in Britain. Otherwise, as Transworld's Barty-King said, "We haven't quite figured out how to take advantage of BOL yet."
The State of Business
It seems to be becoming a British trait these days, as it has long been an American one, to look on the bright side, even when the evidence seems to suggest that optimism is uncalled for; and such optimism, even if heavily qualified by some, was the general order of the day.
It was Barty-King again who, speaking from the viewpoint of one of the most successful of British publishers, Transworld, perhaps best caught the peculiar ambivalence that seemed rather widespread. "I think there's been more of a perception of growth than actual growth," he said thoughtfully. "The market's actually been rather flat, though there's no doubt that with the rise of reading groups there's a perception that reading books has become sexy." (He was not the only one to use this improbable word in the context; Random's Gail Rebuck did likewise.)
"In a way, things have never been more difficult than they are at the moment," Barty-King went on (as publisher Patrick Janson Smith, who had also sat in on the meeting, hurried off to make a bid for Ginger Spice's autobiography, on offer that week). "We have to adjust to new ways of selling books to the supermarkets, which give us very low margins, but it's impossible to put our prices up, because the discounting is so intensely competitive. Yet our advances are still going up, and so are our marketing and promotion costs. And all these pressures work together to create real headaches. I'm really quite optimistic in the long run, but I do want to emphasize the difficulties."
Still, Transworld was one of the handful of publishers that did particularly well over Christmas, with a strong array including new titles by Bill Bryson (big in the U.S. too) and Terry Pratchett (who appears not to travel), "and we sold on well into the New Year."
A particularly strong Christmas at Random was what enabled Gail Rebuck to be feeling as chipper as she did. "A golden year in publishing" was how she described it, crowned by "one of the best Christrmases I can remember, across the range." They had Tom Wolfe, of course, Ian McEwan's Booker winner Amsterdam, a new Irvine Welsh, and a runaway bestseller in Raymond Briggs's Ethel and Ernest, a wonderfully touching piece of English social history of the first half-century, told as a comic strip about the author's parents' lives, which Knopf will do here.
Rebuck was also pleased about the Labour Government's efforts to promote reading, and the concentrated efforts to make World Book Day on April 23 bigger even than it was last year. "I think everyone's livelier this year, they're acting together better," she said. Worries? "Well, all the post-Christmas returns obviously aren't in yet. And those advances! Sense prevailed for a time, but now they're creeping up again, especially in literary fiction, where something you should be able to get in the mid five figures is going well into six. Still, I think you need only a slight sense of optimism in order to make you feel better. People tend to forget how tough it's been, the extent of the recession anxiety in the period before Christmas -- including me."
Philip Sturrock focused on the country's economic picture. "It all depends," he said, "on the high street consumer's attitude to spending." (In England "high street" is used to mean general small-scale retail; "high street shops" are independent stores or very small chain branches.) "At present books are doing only slightly better than other consumables, and people seem reluctant to spend." Sturrock noted, however, that interest-rate cuts in the past couple of months should make more money available and spur spending. "I'd guess the current year won't be much better than last, but the underlying trends are quite positive."
With his eye on world markets, it was the state of the world economy that chiefly worried Jamie Camplin at Thames & Hudson -- and the fact that "there's not much appetite among the larger U.S. houses now for illustrated books," noting that the various imprints that did them until recently (at HarperCollins and S & S, for instance) have now largely disappeared or become dormant.
It is a world of issues that faces Ronnie Williams at the PA, and after his first year on the job he is struck by how unpredictable and diverse they are. There might, he thought, still have been scars from the collapse of the Net Book Agreement, but there don't seem to be, "and now it's gone we can get on with other matters." There is the question of European implementation of WIPO, the harmonizing of copyright agreements, "but I don't predict it will go through before 2002. The trouble is that it's a bunch of lawyers trying to understand a technology that's running ahead of them." At this stage Europe is way behind the U.S. in implementation, because "they were told over there to stop squabbling and get on with it," in Williams's view.
On the matter of business, Williams reflected caution: "I expected last year to be pretty dour, but some good trade titles, especially in fiction, helped lift it." One of his serious concerns is about the level of university library spending and acquisition. And despite promising noises from the government, the level of spending on education has been "disappointing so far, but the money will filter through in the end." Book exports is another worrying area, partly because of the elevated value of the pound, partly because of extensive piracy. "I'm talking to the IPA about holding an anti-piracy convention in Geneva," said Williams. "And we should follow the American example, and report piracy problems in our annual reports."
Last year saw a major report, partly funded by the government, on the book supply chain and how it could be improved to the general benefit. "In the second phase I want us to concentrate on returns as a physical problem." He thought that the report, which would probably interest Americans too, would be ready in three or four months.
World Book Day has been another area of strong involvement, "and this time I want to get the Americans more involved." The AAP's Pat Schr der, he says, has been a big backer of it. "Last year the emphasis was on the kids; this year we'll expand it to adults, and from next year on we're going to turn it into a registered charity to give it more permanence."
Philippa Harrison at Little, Brown was also pleased at the degree of government support, and was particularly proud, during her tenure as PA president, of having helped secure a form of licensing for academic fair use. "I think we're the only country that's done that." As to the state of the market, "the jury's still out on returns," she said, "but books at Christmas famously did a bit better than the high street."
Forbes Watson had found the end of the year a cliff-hanger. "The late fall was very grim, with a real sense that there was a crisis of economic confidence abroad in the land. Then Christmas was unbelievably late. In the end Random and ourselves both had a terrific Christmas; the secret is to have books with legs, which we both did."
Still, he d sn't feel the business is out of the woods yet. "Returns are no worse than usual at this stage, but perhaps a return to the November gloom would really be a return to reality. The fact is that sales are slow in the high street at present, and I think it's because there's been a mismanagement of consumer expectations. There's really no need why there should have been such gloom. The Asian crisis hasn't gone away, but it's stabilized, and we've be come used to it; now we can accommodate it and perhaps learn to alleviate it."
At the Sharp End
There's a regular column with that name that appears in London's Publishing News, and it's an expressive term for the retail side of the business: where the book actually gets sold to the customer. How was the British book business coping with the dizzying series of changes in its traditionally rather staid retail picture?
For Hely-Hutchinson at Hodder Headline, the changes are very welcome. "The increase in retail space is long overdue," he said. "We've been lagging behind the U.S., and it's high time we got new and better bookshops, including superstores." He did find, however, that the American approach was more aggressive, and hoped English civility would continue. "We're trying to make a living, not kill each other." Yes, there would be an impact on independents, "but it's only the second-rate ones that will suffer. We haven't seen all that many closings here."
Hodder publishes a large number of first novels, Hely-Hutchinson added, and "it's easier to get the independents to read all the early galleys we send out." He would be opposed to too much centralized buying, on the American pattern. But he welcomed the Borders invasion -- "new ways of selling are good for all of us" -- and was pleased at the idea of their further international expansion into Australia and the Far East. "I'd like to see them opening up in Europe, too, especially France and Germany. There are a lot of English speakers on the Continent, and the market there could grow as the euro draws it closer together."
A major development still roiling the waters in Britain is the recent merger of Bertrams Bertrams, the U.K.'s largest independent wholesaler, and Cypher, an important library supplier, a move roughly analogous to Ingram and Baker & Taylor forming an alliance in the States. The general worry, shared by Hely-Hutchinson, is that the two different discount systems may be merged, to the disadvantage of publishers, though both companies have said they will continue to be separate. Hely-Hutchinson is concerned, too, by the complexity of the distribution chain. "There are far too many suppliers, and it's inefficient. Some booksellers have to do deal with up to 200 different suppliers. I think they should insist on a smaller number of authorized distributors, no more than 20 or 30." He was, incidentally, one of several publishers who spoke with approval of Gardners as a distributor, praising their "excellent systems" and overall quality of service.
As to the discounting that arrived with the end of the Net Book Agreement, Hely-Hutchinson, who has been a skilled player at the game, thinks it is now working well. "People have learned a lot in a couple of years about what works and what d sn't, and now you have a relatively small number of discounted titles. We're not discounting to death."
Victoria Barnsley at Fourth Estate agrees that discounting "is more sophisticated than it was," and d s various promotions such as the offer of four books for the price of three. But as a smaller publisher, "we're very much in the hands of the bigger houses, which get to set the terms, then we have to try to along with it. " Barnsley felt that the rise of the superstores and the expansion of the chains would be "tough on the independents, and that's a pity. But having more selling space has to be good for all of us."
Barnsley, along with a number of other publishers, had experienced a flood of returns last spring, when W.H. Smith took over Waterstone's, but it has now settled, for her house, back to a level of around 16% -- a figure that would probably surprise most Americans.
W.H. Smith's many "ups and downs" over the years continue to intrigue Nick Webb at Simon & Schuster. "For years they were the tail that wagged the dog, and it's hard not to feel some schadenfreude now they're trying so hard to please." Webb sees new, cautious, just-in-time inventory replenishment as having changed everything in relations with booksellers. "Subscriptions [advance orders] are much lower than they used to be. The stores no longer take excess stock; the publisher holds the inventory, and the rule is to print little and often, to match the ordering."
While praising Borders' "tremendous vitality," Webb wondered, as did others, whether the chain would respect copyright exclusivity or bring in some U.S. editions as it felt inclined. "They've said they respect it, so let's hope they'll stick to that."
Sturrock at Cassell found the retail scene "extraordinarily exciting." W.H. Smith, under new management, was "notably improving its game. It's got its eyes fixed on the future, especially in its new electronic buying systems, and is obviously determined to be up with the best." It was good news, too, he thought, that Waterstone's, Smith's recently purchased upmarket chain, seemed to be leading the Dillon's stores more in its direction. Borders' opening had also been a spur to business, and its range of stock, along with the backlist riches revealed through the launch of Amazon co. had made customers more aware of the remarkable quantity of books available. This range of product went some way to put power back into the hands of the publishers, but "any large grouping, as in the chains, and the Bertrams/Cypher deal, is bound to put greater pressure on our margins."
From his wider perspective, Jamie Camplin at Thames & Hudson was equally concerned about that long-term pressure. "We can't bury our heads in the sand about the American invasion; we have to expect controlled change. It's already been difficult to deal with American chains driving down prices so far. It forces publishers who want to keep up their quality to cut corners. Traditionally, American publishers have been prepared to give discounts, and all American market influences in that respect are difficult to deal with. You just can't sell books at such high discounts as to leave out revenues for publishers and authors."
An elegiac note is struck by Paul Scherer, former head of Transworld, now retired from that position but still active on various boards, including those of the Curtis Brown literary agency (where PW encountered him), Bloomsbury, and the British Library. He recalls a time. not so long ago, when "everything in publishing used to be so much easier. There were lower discounts, lower advances, almost no promotion, but somehow books got sold. But I suppose the drive toward everything getting bigger is inevitable."
He senses, he said, despite the post-Christmas bullishness, "lingering anxiety about returns down the line." As to the retail scene, the development of Waterstone's probably means that W.H. Smith will become more bestseller-oriented, though he approved of the way it was upgrading its premises and becoming "more sophisticated." Developments otherwise, he felt, could only increase the pressures for higher discounts.
Discounts were a source of particular anxiety to Orion's Cheetham. "At our size, which is rather a dangerous one, we get the competitive attention of larger groups. We also get offered all sorts of deals. They give you volume, but your margins are constantly being eroded, and that's a spiral I find quite dangerous. It seems to me we give away greater discounts here than they do elsewhere, and there's not much room for further adjustment. I think there's more of a solid front against further elevation of discounts. It's something we all feel, so there's no need for collusion."
The most interesting retail development in Penguin's Forbes Watson's view, is the growth of book sales in supermarkets (which occupy on the British scene a position somewhat analogous to the price clubs). "They seem newly interested in adult books, where before they took mostly children's titles, and they provide a good new opportunity to market certain kinds of authors very effectively." Forbes Watson feels they are taking an increased share of the market, partly at the expense of the independents.
It remains for the BA's Tim Godfray to have the final word on the retail situation. When PW had called for an appointment, he had joked that "I suppose you want one last word before we are swept away by the American tide," but later he said more seriously that the Borders invasion was part of "a great deal going on that is exciting and stimulating." Among these developments is a program the BA is helping to launch that will enable payments between booksellers and publishers to be made online. And for World Book Day, Godfray estimates that as many as 25 million vouchers may be made available, with government assistance, to enable children and young adults to buy books, many perhaps for the first time. "I think this government has become well aware of how far behind we've got on reading."
On the plight of independents, he is more sanguine than might be expected, and certainly more so than his counterparts across the Atlantic. "The ABA tends to focus rather exclusively on independents' problems, but we're a broad church. We cover, and offer membership to, everyone, from the big chains like W.H. Smith -- and, yes, individual stores can be members too, and usually are -- to supermarkets, Amazon, school suppliers. We can't interfere in matters of competition, and in any case most of our policies apply equally to big and small. But we care about all our members surviving and flourishing.
"Independents are certainly under a lot of pressure, and ultimately their numbers are bound to decline as the big players expand and open new stores. But so far I haven't seen masses of independents going down the tubes, as we seem to hear from the States. In fact, since the beginning of the year I've noticed fewer withdrawing from membership than in previous years, though it may be too soon to call that an encouraging trend. Not many independents are located in prime positions anyway, and those not located near big superstores have a very good chance of surviving."
As often, Godfray had an intriguing insight to offer. "On the introduction of the euro here -- and it's not a question of if but when, probably in a couple of years -- publishers here will be pressured by their counterparts elsewhere in Europe not to print prices on their books. That would in effect make net pricing the general policy, and would give booksellers pricing power. That could be a very interesting debate, and in fact we're going to talk about it at the European Booksellers meeting in Amsterdam in April."
Just as in the U.S., British publishing is in a constant state of flux, with new combinations, new mandates and, of course, intriguing new authors and projects.
Much attention, inevitably, was focused on the new Bertelsmann colossus in Britain, which, as a combination of the extensive Random U.K. family and the various Transworld elements, will account for about 30% of the country's trade titles. The two are being much less rigorously married than in the U.S., however. Transworld's Barty-King explains that, editorially, the two groups remain quite independent, with their own separate management teams, and can compete against each other for titles. (They are even regarded as separate entities that can compete individually, as they did, for Publisher of the Year.) "We meet from time to time, and of course we check each other's publishing schedules," Barty-King said. "We don't want to be fighting each other in the shops. But we have a very special company culture here, one that's always been recognized, and I don't think anyone is out to change that." (Nor, he might have added, is anyone likely to move them from their low-overhead offices out in the western wilds of Ealing, a long ride from central London.)
Nick Webb's Simon & Schuster is in an exciting period of change. Having just moved to new offices on Kingsway, with a great deal of extra space, he has a mandate to fill it. "We need to be a bigger player," he said. "I have to grow the company from a 30-million-pound to a 60-million-pound one, and that will need a big investment in new infrastructure." He is looking for a new editor-in-chief, and plans to put new marketing support behind the extensive paperback list. "We're raising our game in all respects." Otherwise, he feels, other houses better able to exploit their rights here could steal away S&S authors. "Our parent company has a mine of copyrights that is not sufficiently exploited."
In addition to expanding the children's side (as mentioned earlier), Webb is also launching this spring a trade paperback list of upmarket titles. "Our attempts to find a dashing new name were unsuccessful, so we went with the tried and true." This turned out to be Scribners, and among the half-dozen titles in the launch list are Joseph Heller's memoir Now and Then, and Louise Doughty's Cyber Gypsies. Webb expects to export more to Europe too: "They prefer the British to the U.S. cover look." He added: "One thing we can do as a big international group is try to carve up the world between us."
DK's continuing effort, under Middlehurst, is to increase its already considerable brand-name recognition. "There's a huge amount of work still to be done to solidify the brand," and in an era that he sees moving toward "a customercentric society," he hopes to leverage that recognition to improve direct marketing sales. The aim, he said, is to have better control over distribution, especially of backlist, which in DK's case is is as much as 70% of sales.
For Philip Sturrock, the past couple of years have been a whirl. First there was the acquisition of Gollancz, then last fall an attempt at a hostile takeover came "out of the blue" from Macmillan. Sturrock turned down a bid that was two-and-a-half times the share price, "which could have been called foolhardy," but he had already had casual conversations with the Orion group, which had been at one time in much the same vulnerable position, but had been shored up by a majority stake taken by Hachette Livre. "We were up against a deadline from Macmillan, and I warned them that if they didn't act Macmillan would get us. It was a very exciting time."
In the end they prevailed, and the Cassell group is now part of Orion, and of Hachette's plans for expansion into English-language publishing. Orion's list, said Sturrock, g s well with Gollancz's, and the Cassell and Weidenfeld & Nicolson illustrated lists also go well together. Production is being done in association with the French, "where they have very good paper prices," and there will also probably be a common warehouse facility. Reference and academic and religion publishing are all areas of common interest where the Anglo-French group can expand, said Sturrock.
Hely-Hutchinson at Hodder Headline depends heavily on volume, though he said he is no longer increasing the number of titles, and is cutting Headline a bit from about 600 a year to 500. "Still," he said, "I'm amazed at how many books we do." There are about 1000 adult titles a year and 300 children's and academic ones, and there's a backlist 16,000 strong. "I think you need a broad list," he said. adding that he felt a number of the big American houses may have cut their lists too far.
By no means all Hodder titles are aimed at the bestseller list. It is active in biography, history, sports and genre fiction, but is perhaps best known for its continuing, and often successful, efforts to launch new writers. (Two current bestsellers, Wendy Holden's Simply Divine and John Connolly's Every Dead Thing, were Hodder discoveries.) Sometimes the authors make a breakthrough into the American market, sometimes not; Hely-Hutchinson cites Ellis Peters as an example of one who failed to get an American readership for years, only to finally break through quite recently, not long before her death.
Little Granta, with offices in a back alley in Islington, has been an independent publishing entity, closely tied to the magazine of the same name, for only three years, which is when the magazine's then editor Bill Buford asked Frances Coady, then supervising Random's literary imprints, to join them to do a book list. The magazine, and its first books, had been distributed by Penguin, and Coady's first move was to get the backlist back. Now she d s between 30 and 35 titles a year, divided about equally between fiction and nonfiction. "We do a lot of experimenting with shapes, sizes, designs. It's a bit of everything," she said. They publish Edward Said, Linda Grant, recently had a considerable success on both sides of the Atlantic with Eamon Collins's inside-the-IRA expose Killing Rage, which had a dire publicity boost when the author was assassinated.
The books are distributed in the U.K. by Bloomsbury and when appropriate through the New York Review of Books, which has an association with Granta , in the States, "though we don't get U.S. rights to most books." Coady has the feisty air of a dedicated small publisher who loves what she is doing. "We're not spending 90% of our time talking about money; we're just interested in getting out the books!"
Anthony Forbes Watson, who became Penguin's managing director just under three years ago, and whose achievements there since were rewarded by the house being named Publisher of the Year at the Nibbies, was understandably elated, and anxious to explain how it had been accomplished. He had felt when he took the helm, he said, that there were "great expectations of what we should be, but that people were disappointed in us." He had restructured the U.K. company into divisional publishing areas, each with its own service providers, and each headed by a publishing managing director. "Instead of being bureaucratically involved, these people were interfacing with the authors, agents and booksellers, newly empowered, given new accountability, and allowed to perform."
He thinks that Penguin now is "less aversive to aggressive buying, and much hungrier." As a result, he said, Penguin last year had seven No. 1 bestsellers and 10 titles in the top 40. "It's an exciting model of how a publisher can become bigger without becoming thick-skinned and insensitive. I think all the good things about Penguin remain alive, but applied in a new way."
In adult publishing the house is doing fewer but bigger books, with a stronger marketing focus on each title. Penguin Press, with a new editorial team, is actually increasing its publication of serious nonfiction.
Back in New York, Michael Lynton was also rejoicing in the Nibbies recognition, and mused to PW that he felt that more interesting books were currently coming out of English publishers than from those in New York. And coincidentally, a few days later agent Andrew Wylie, encountered at a party, said essentially the same thing. "I find the English publishing scene amazingly vigorous and interesting," he declared.
It was not ever thus.
Please see also: PW Supplement: London Book Fair.