A Companion to the History of the Book (72 page)

Wallis, Lawrence W. (1997) “Monotype Time Check.”
Monotype Recorder,
n.s. 10: 46–55.

29

The Global Market 1970–2000: Producers

Eva Hemmungs Wirtén

Despite the fact that books had already proved themselves to be a highly adaptable commodity that prospered in the booming market conditions of mass production as early as the time of Charles Dickens and Victor Hugo, “one might almost as convincingly hold that book publishing was the last culture industry to attain modernity. Not until after World War II did it become part of the large corporate sector, and adopt the practices of publicity and marketing characteristic of monopoly capital” (Ohmann 1996: 22). Today, the book is fully integrated into our information age with its global media market. The last three decades of the twentieth century undoubtedly witnessed a radical transformation of a trade that had always seen itself as slightly apart and different from others. As trades go, publishing is a highly contextual business which operates under various different conditions, and thus looks very different in different parts of the world. Substantial local and regional variations in cultural identity, political and legal frameworks, language, economic structure, and social demographics, obviously influence the way in which books are produced. The diversity that results from such complexity cannot be fully accounted for here. Instead, the following chapter takes a different approach and suggests that the story of producers can be told by describing three interrelated themes that suggest a
structural
and far-reaching reorganization of contemporary publishing, the consequences of which reverberate both locally and globally. These themes are: conglomeratization, content, and convergence.

Conglomeratization

Perhaps the most obvious change in the business of publishing during this period is the way in which it moved from being mainly a privately and independently run and owned, small-scale endeavor to being part of larger, increasingly transnational, media conglomerates, so-called TMCs. This is a term used to describe the apparently haphazard amalgamation of disparate corporate entities sheltered by one huge corporation which buys everything in its way. Gulf and Western is an early example of such con-glomeratization, at one time owning land in the Dominican Republic, insurance companies, racehorses, sports teams, and lingerie manufacturers, as well as the publisher Simon & Schuster and Paramount Pictures (Bagdikian 2000: 28–9).

The integration of publishing into these larger conglomerates began in the 1960s and can be described as a three-stage process. Though close scrutiny will prove that we are not witnessing a perfectly chronological sequence, but rather seeing a fluid process in which some of these broader tendencies overlap in time, we can still summarize it as: (1) beginning with the buying of textbook publishers by companies which had little or no previous experience of publishing; (2) continuing with the buying of trade publishers by larger media corporations; (3) the vertical and horizontal consolidation of the contemporary transnational media corporation including its holdings in print.

The acquisition of textbook publishers by corporations like IBM, ITT, Westinghouse, and Xerox was initially prompted by an anticipation that buying software or “content” would – in combination with the hardware already at the disposal of these companies – serve as the ideal strategy at a time when teaching and education were perceived as one of the largest potential markets. Together with trade and professional books, education is one of the three major segments of the publishing industry. While much of this discussion centers on trade publishing – mostly for its cultural rather than financial significance – professional and educational publishing can hardly be discounted in a society that increasingly pivots around the acquisition of information and knowledge. Consequently, textbook publishers are major businesses in their own right displaying similar characteristics of concentration and consolidation as trade publishing. Evidence of this strategic role is the fact that the period’s largest acquisition in printing and publishing history was the sale by Viacom of Simon & Schuster’s textbook unit to Pearson PLC in 1998
(Mergerstat® Review
2000: 288).

The second wave of corporate invasions of publishing occurred when corporations such as RCA, CBS, and Gulf and Western began to purchase trade publishing houses. The story of Random House is a good example of the buying and selling pattern typical of this consolidation. Bought by RCA for $40 million in 1966, Random House had already purchased Knopf in 1960 and Pantheon in 1961. Sold to the Newhouse group (Advance Publications) in 1980, they then in turn traded Random House to the German company Bertelsmann for $1.4 billion in 1998. Currently, Random House acts as the corporate umbrella for over a hundred publishing houses in thirteen countries, owning imprints such as the previously mentioned Knopf, but also Ballantine Books and Bantam Dell in the US, Plaza & Janés in Spain, Goldmann in Germany, as well as several venerable British publishing houses such as Jonathan Cape, Chatto and Windus, and the Bodley Head.

The third stage – which is the most interesting for us – can perhaps be best described as a further consolidation of stage two, in that we now see these developments operating in a distinctly transnational media market. Publishing has by now left behind its tradition of being a set of family-run businesses and become integrated into transnational media conglomerates, conglomerates that look very much like a Russian
Babushka
doll, where the largest doll holds a smaller one, which in turn holds a still smaller one, until the most minuscule is reached. Translated into publishing, this means that if Jonathan Cape is now an imprint within Random House, Random House is only one of many companies owned by Bertelsmann. Within these larger media conglomerates, book publishing rarely constitutes more than a small part. In 2000, Time Warner Trade Publishing’s contribution to Time Warner’s total revenues stood at a mere 1 percent. HarperCollins provided 7 percent of its parent company News Corporation’s total sales, and Simon & Schuster’s contribution to the Viacom total revenue was expected to decline, as a result of the purchase of CBS in 2000, from 5 percent to 3 percent. In 2000, Random House had sales of $2 billion, representing approximately 12 percent of its parent company’s total revenues (Milliot 2001: 62–3). The emergence and consolidation of the media conglomerates must also be seen against a much larger backdrop of general transnationalization and globalization where the growth of transnational corporations in all types of businesses has been most dramatic in the developed countries.

On the one hand, this period appears to be one in which the market for books expands and becomes truly global; on the other hand, this development is matched by another, in which the control and ownership of publishing through the media conglomerates becomes ever more concentrated. Names and owners come and go, since the
modus operandi
of the conglomerate process is a continuous state of mergers and acquisitions, alliances and licensing deals that, during the 1990s, resulted in a “tiered global media market” (Herman and McChesney 1997: 52), where a handful of companies represented the most important and powerful. Although several of these were American, most notably Time Warner, Disney, and Viacom, the increasing transnational nature of the media market also meant that many companies rising to global prominence at this time were located outside the United States, but with substantial investments in American publishing, leading to a growing recognition that the United States was by no means immune to what some referred to as a possible “takeover” by European interests (Barnet and Cavanagh 1994: 105). Major players based outside the United States at the beginning of the twenty-first century were Rupert Murdoch’s News Corporation, the German firm Bertelsmann, the Dutch–British Reed Elsevier, the Dutch Wolters Kluwer, the Canadian Thompson, the British Pearson PLC, and the two French giants Lagardère and Vivendi Universal. It is interesting to note that all of the above non-US corporations have a history in print culture, several of them starting out as publishing houses, whereas firms such as Time Warner, Disney, and Viacom have stronger ties to movies, music, and television.

Undeniably, conglomeratization meant a structural transformation in the way in which publishing as a business was conducted. What emerged was a new economy and with it came new players onto the field, not necessarily because they desired to work with books, but rather because they were equipped with the know-how demanded by a new type of market. For instance, the literary agent knew how to negotiate and promote the deals that some authors now expected: in particular, the subsidiary-rights race that began in the wake of a truly successful book with paperback publishing, but would then branch out into major licensing deals for everything from movies to duvet covers. Other developments that had a considerable impact on the industry were the technological breakthroughs in inventory control, in particular the arrival of computerized systems that would indicate how well a book was selling. This was the corporate technologizing of books: the idea that everything could be tracked, understood, and made profitable by the new gadgets of surveillance. Add to this that the product itself – the text – faced massive challenges in the shape of things to come – e-books, hypertext, and more – and it all added up to a reconfiguration of a business that had existed without fundamental changes since the emergence of the mass market for such writers as Dickens and Hugo.

Of course, it was only to be expected that such profound restructuring would have a less tangible, but every bit as revolutionary, impact on those who worked in publishing: it caused an identity crisis that took many by surprise. Thomas Guinzburg, who sold Viking to Penguin in 1975, expressed a sense of lost innocence when reflecting on the deal, which looked ideal on paper, but quickly turned sour in real life. Penguin did not understand, Guinzburg said, after being ousted from the company, that “our
instinct
for books was always central” (quoted in Whiteside 1980: 145).

Despite statements to this effect, the business of publishing was never at any time or place a homogeneous and harmonious field – quite the opposite, in fact – and yet it is generally assumed as a truth of sorts that it used to be a calling where profit margins were low but steady and thus offered you a line of business you rarely entered for profit but because you had some sort of relationship with books and reading. In other words, publishing was “run by its editors rather than its accountants” (Schiffrin 2000: 81). The rewards you could hope to reap in such a system were intangible, coming to you in the shape of cultural and social capital rather than in dollars or pounds. Building a reputable stable of writers was a long-term rather than a short-term commitment, where investments were made in authors based on what they might achieve in the future and dividends put on hold until they eventually – many years in the future perhaps – provided a return on that initial investment. One of the basic premises that made such reasoning possible was that publishing operated on a principle of swings and roundabouts. If the publishing house was fortunate enough to secure a bestseller, then the substantial revenues that could be expected from that book would subsidize the losses incurred by less-successful and perhaps occasionally controversial books, books that nonetheless were judged important as part of the overall publishing program. Although having the occasional bestseller was important, it was the offerings of the house in its entirety, as well as a well-managed backlist, that finally justified the work of a publisher.

In his memoir
The Business of Books
(2000), André Schiffrin described a meeting in January 1990 with Albert Vitale, the man brought in to lead Random House when Newhouse purchased the publisher. The topic for their discussion was the spring 1990 list, one that the editors were particularly pleased with, partly because it included books about that highly popular cartoon family,
The Simpsons:

Vitale looked through the books that we were to publish … “Who is this Claude Simon?” he asked disdainfully, having clearly never heard of the Nobel Prize-winning novelist, “and this Carlo Ginzburg?” probably Italy’s best-known historian. I then noticed that he would begin reading on the right side of the page, where the print runs were listed, and only then moved to the puzzling titles. For him, it was as if we were a shoe manufacturer, making sizes too small to fit most customers. “What is the sense of publishing books with such small printings?” he shouted. Were we not ashamed of ourselves? How could I face myself in the mirror each morning knowing that I wanted to publish such hopelessly unprofitable titles? The list included Groening’s books, which, according to our reckoning, would more than amply pay for the losses that might be incurred by the more difficult books. But Vitales new policy was that each book should make money on its own and that one title should no longer be allowed to subsidize another. (Schiffrin 2000: 91)

Schiffrin’s account expresses in a nutshell the clash between the old (“swings and roundabouts”) and the new (“bean-counting”) approach to publishing. The relentless search for bestsellers and the demand that each title carry its own weight – both ideas seen as the result of conglomeratization – placed the two men in opposite corners: one following in the tradition of those who know how to “read” and the other belonging to those who know how to “count” (Bourdieu 1999: 16).

Even if we are compelled to accept this description of a widening split in attitude toward publishing, it is one in dire need of additional clarification. Publishing has always been two things at once: a commercial activity as well as a cultural one. The scales might have tipped in favor of the former during this period, and being subjected to the whims of the market no doubt provided an unwelcome wake-up call to the realities of corporate life. As it developed during this period, the identity crisis of the business can be related to this built-in dichotomy in which publishing – and trade publishing in particular – is seen as an entity that needs to make a profit, on the one hand, and, on the other, clings to a die-hard self-image as a unique undertaking operating according to its own economic laws.