With retailers ranging from Borders to Home Depot to Williams-Sonoma looking to offer their customers books they can't get anywhere else, proprietary publishing is booming, drawing industry heavyweights into a field that used to be primarily the domain of packagers and smaller publishers.
HarperCollins has set of goal of increasing it's proprietary business by $10 million this year, Random House recently named Bill Huelster its first director of proprietary sales, and Simon & Schuster has hired Frank Fochetta to drum up proprietary work as part of his duties as v-p of field and special sales. "Customers are placing big enough orders now to make it financially viable for us to get more involved," explains Larry Norton, president of sales and distribution at S&S, who oversees the company's proprietary efforts. John Wiley & Sons, which does a brisk business in custom projects based on its well-known brands—such as For Dummies —is also doing more work for retailers, says spokesperson Susan Spilka.
Like custom publishing, in which titles are made-to-order for a corporation using existing content, proprietary publishing repurposes material. The difference is that with proprietary publishing, the books are made to be sold exclusively by a certain retailer. Such books are attractive to publishers because they are sold nonreturnable and can be produced relatively cheaply. Retailers see proprietary titles as a way to stand out from their competitors and to fill their tables with lower-priced books. "Consumers are looking for value," notes Barbara O'Shea, president of nontrade sales and new business development at Penguin. And it's probably no coincidence that retailers are becoming more interested in proprietary items at a time when the nation's largest bookseller is so heavily focused on self-publishing, "All eyes are on Barnes & Noble," says O'Shea.
Not every publisher welcomes the trend. Dominique Raccah of Sourcebooks says her company has done some proprietary titles, but she worries that too many bargain-priced titles on the market could devalue books. "If everyone is doing proprietary products, what does the business model look like if publishers become packagers?" Raccah wonders, noting that packagers typically have even smaller profit margins than publishers. Other publishers worry about protecting their brands. "We've dabbled in proprietary publishing for warehouse clubs," says Taunton president Jim Childs. "But we are all about our brand, and I'm hesitant to adjust our content for just one customer." Childs says he is more inclined to do a proprietary product if it will attract a new customer, rather than just cannibalize sales of Taunton's own titles.
But publishers who have ventured aggressively into proprietary say they are careful about what and how they publish. Sheryl Stebbins, publisher of Random House's value group, sees proprietary as a way to get backlist books in front of different customers in different formats. "We look for the best way to get a book back into the marketplace," says Stebbins. Sometimes that means repackaging hardcovers as paperbacks, or vice versa. Other options include packaging books in sets or adding padded covers. Mandala Publishing, for example, tipped in nine postcards for a proprietary edition of Celestial Gallery that it published for Advanced Marketing Services. O'Shea says Penguin has had great success with original cookbooks written by Johanna Lund that it packaged in a three-book set for QVC. Penguin has also packaged books by Suze Orman for special QVC editions. "We've taken old content, revised it, and given it a new format and new components," says O'Shea. For Borders, Penguin has put some of its MadLibs titles in larger formats that are sold in sets by the chain.
AMS and warehouse clubs are important outlets for proprietary products, as are national chains like Home Depot and Williams-Sonoma. Health Communications Inc. is finding a niche in the college market for specialized editions from its bestselling Chicken Soup franchise. The University of Michigan is set to publish Chicken Soup for the University of Michigan Soul as part of a fundraising effort. The Michigan alumni association is collecting "inspiring stories that parallel what Chicken Soup is all about" from UM alumni, students and faculty, says Terry Burke, v-p of proprietary publishing. HCI will publish the title on an exclusive basis for the university for several months before making it available regionally in stores.
The Borders Model
Following its main rival, B&N, Borders is stepping up its proprietary publishing program. Bill Nasshan, senior v-p of trade books at Borders, says that the company "is moving beyond the classics" this year. The focus of the program, Nasshan says, "will be on original titles, not knockoffs. We're not looking to duplicate works, but to fill in holes." Potential areas are identified by Borders's category mangers and buyers in consultation with publishers, Nasshan maintains.
Borders is looking to develop a publishing program that will strengthen customer loyalty, Nasshan explains, by creating books that customers believe they "can get only at Borders." To date, the company, in partnership with Meredith, has created the Borders at Home series of arts and crafts titles as well as five cobranded language-reference products with Kaplan. Nasshan says Borders's early efforts will concentrate on adult nonfiction, preferably on "highly illustrated books that contain relevant content." Borders is selling its titles, which carry the Borders Exclusive tag, in its superstores as well as through Waldenbooks. Nasshan says it is too early to predict how large the publishing operation will become. "We're not saying publishing will be X% of sales," Nasshan says, "We want to understand how the program works before we set targets."