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Studs Terkel's longtime publisher looks back on the historian's remarkable career.

More information about our extremely unequal world--and to help advance the struggle for a more equal future (web only).

1. It is morally reprehensible to take a life, and it is especially
reprehensible for the state to do so.

It's too early to tell what the long-range effects will be on the American economy of September's disastrous events--certainly the short-term effects have not been salutary. And the recession we had been fearing is now officially declared. We can be sure that the cost to book publishing will be great.

If it were simply part of the decline of sales within the overall entertainment industry, there would be less cause for concern. But at a time when the country badly needs more information, new ideas and countercyclical analyses of American foreign policy, the chances that these will be published have diminished considerably. The recession will bring increasing profit pressures on the conglomerates. The natural reaction to this, as we know from the past, will be to cut back on "smaller" books, the ones that have little chance of selling in any large number, precisely the books we will be needing at this critical juncture in our history.

In the year since The Business of Books: How the International Conglomerates Took Over Publishing and Changed the Way We Read appeared, the trends I tried to analyze have continued unabated. In country after country, the few remaining independent publishers have decreased still further in number and the large international conglomerates have taken over an ever-increasing share of publishing. In Britain, where there were only four important independents, one of the most promising, Fourth Estate, was bought by HarperCollins, part of the Murdoch empire. One of the first decisions taken after the merger was to cancel the contract for a biography of Murdoch, which the publishers realized would be critical of its subject. The impact of Fourth Estate's sale negatively affected other independent publishers. A number of the smaller British firms, like Granta, Profile and Verso [whose managing director, Colin Robinson, recently joined The New Press--Ed.], relied on Fourth Estate's excellent sales force to represent their books to the bookstores. Once the merger had taken place, this was no longer possible, and these smaller firms had to find new ways of selling their wares. This task became even more difficult with the announcement that Britain's largest bookstore chain, Waterstone's, would demand much higher discounts from smaller firms, a decision that threatened economic ruin for many of them. Appeals to the appropriate authorities in Britain went unheeded. Interestingly, a similar development has occurred in the US record business, where the giant Tower chain has decided to cut back drastically on its stock of the smaller, classical-music labels.

In France the long-established nineteenth-century firm of Flammarion, the doyenne of French independent publishers, was bought by Rizzoli, the Italian publishing firm partially controlled by the Fiat Corporation, just as last year's Frankfurt Book Fair opened its doors. I have yet to find a French or Italian publisher who can explain the editorial rationale for such a merger. But clearly the urge to diversify internationally, to become a player on the European scene and in general simply to grow by acquisition is enough to justify mergers that may seem difficult to understand otherwise.

In the United States the merger between Time Warner and AOL had surprisingly swift consequences. The New York Times reported the departure of Little, Brown'spublisher shortly after the merger was announced--Little, Brown's list was apparently not sufficiently commercial for the new owners. More ominous, the new merged entity announced that it would transform the nature of CNN, the country's only remaining international news outlet. Four hundred people were fired immediately amid reports that CNN would place less emphasis on news and more on entertainment--and presumably more on profit. Having safely navigated the shoals of antitrust scrutiny, the new AOL Time Warner was clearly intent on being even more profitable than its components. CNN's recent return to massive news coverage shows how unreliable corporate planning can be.

The list of independent US publishers was reduced when Vivendi, the French water and book company, which already controlled a third of French publishers, bought Houghton Mifflin, the largest of the remaining US independents. Few could understand why close to $2 billion was spent to acquire a company whose educational publishing barely fitted with Vivendi's general program. A group headed by Reed likewise bought Harcourt General in July. This time Reed's educational and reference focus caused concern for the safety of Harcourt's small but prestigious general list.

It's safe to assume that more such mergers will take place. The only question is whether the economic downturn that marked the first half of 2001 and has now entrenched itself will slow down the trend toward ever-larger conglomerates or whether, on the contrary, the increasing economic pressures will force even further amalgamations and greater cutbacks. Indeed, these foreign conglomerates may well wonder why they bought these excellent trade houses to begin with. They represent but a small part of both Houghton and Harcourt, and could well be dumped in hard times.

Everywhere, publishers and booksellers have debated the issues raised by the mergers and have sought differing and new solutions. In Italy, for instance, a series of debates in bookstores across the country led to the introduction of a bill in the Italian Senate seeking to protect the independents. These were defined as bookstores in which the majority of sales come from the publishers' backlists. In other countries, the debate on possible discounting and the future of the fixed price of books continues to be hotly disputed.

In some places, such as Spain, critics have disagreed with my suggestions of increased government aid. When this has happened, these critics argue, the result has been nepotism and corruption, as in their film industries. But each nation has to find its own appropriate solution. Certainly just about everyone could do with better funding for schools and public libraries (as has happened in Norway), which alone would suffice to give back to publishing some of the economic underpinning from which it has benefited for many decades.

There has been widespread discussion as to whether the problems are as severe as I suggest. Critics and independent publishers have tended to agree with the analysis I put forward. In several countries, those working for the large conglomerates concurred in general but argued that it has not affected the firms for which they work. The nature of the changes that I discuss varies from country to country, of course. In France and Germany the large houses are still publishing a far wider selection of intellectual titles than in neighboring countries, but even there, available choices have been narrowed. In the United States and Britain, there is little doubt in my mind, after looking carefully at the publishers' catalogues over the past decades, that the changes are very considerable and perhaps permanent.

The area in which critics have differed most markedly with my conclusions is in the field of new technology. There are many who feel that electronic publishing will solve many of the problems I describe; but it is evident that the underlying problem of how to get people to pay for materials that appear on the web has yet to be solved. Random House recently canceled its e-book publishing, AOL-Time Warner has laid off almost its entire e-publishing staff and everyone has given up on CD-ROMs as the wave of the future. Even Stephen King's experiments at getting readers to pay for his books in the Dickensian manner of purchasing each chapter separately did not last. King abandoned this attempt when the number of purchases diminished markedly, even though the quantity of would-be purchasers was far greater than most authors would dream of. Perhaps more telling is the fact that the widely read American literary and political magazines that appear on the web, such as Slate and Salon, have struggled to find a way to get people to pay for their service. Only time will tell whether alternatives such as issuing print versions will work, but it is clearly not a way of dealing with the problems facing books on the web.

The more optimistic partisans of the web tend to forget that the most expensive book is not the ten thousandth or even the hundredth copy but the very first. I well remember my last year at Pantheon, when two books on The New York Times Book Review's list of the ten best of the year came from our catalogue. Ian Gibson's biography of García Lorca and Donald Cameron Watt's marvelous history of the origins of World War II, How War Came, had both been commissioned twenty years before we published the books! Clearly the authors needed substantial financial support over those decades, support we were only able to provide in anticipation of sales.

Even the university presses have not yet figured out how the editorial work required in the preparation of monographs to be published online will be paid for once the initial foundation grants allowing for them run out. It is hard enough to make books pay for themselves when they are sold, copy by copy, in bookstores and by mail. The idea that authors can sit down at their computers and simply feed in their major works without outside support is not at all realistic.

We are still in the early days of the new technologies, and it is certainly possible that novel ways of dealing with these problems will be discovered. The question remains whether sufficient time, effort and money will be spent on books that are not significantly profitable in printed form and even less profitable online. These are the books that are often the most important and are the most endangered.

Jason Epstein's Book Business: Publishing Past Present and Future is the third memoir of a major American life in book publishing to reach print in less than two years. It is at once a sign that the guard is changing and a recognition that the business has already changed. It is also, in the case of the 72-year-old Epstein, an opportunity to gaze into the crystal ball to predict the changes to be, something he has been rather good at during the course of his long career.

Simon & Schuster's Michael Korda got the triumvirate rolling in 1999 with Another Life, gossipy and entertaining and novelistic, like the books Korda often publishes. The New Press's André Schiffrin--famously ousted from Random House's Pantheon Books, the once independent imprint his father started--followed suit more recently with The Business of Books, the kind of polemic he has sometimes featured on his list [see Daniel Simon, "Keepers of the Word," December 25, 2000].

It's not surprising, then, that the tone pervading Epstein's memoir--which began with a series of lectures he gave at the New York Public Library, formed two essays in The New York Review of Books and was coaxed into a book by Norton president Drake McFeely--is cool and elegant and full of the gravitas of a man who wanted to be a great writer and instead ended up publishing many such, Morrison and Mailer and Doctorow among them.

He arrived at Random House in 1958, having deemed it time to leave Doubleday when he was prevented from publishing Lolita there. While at Doubleday he had founded Anchor Books and with it the trade paperback format in America. He retired as Random's editorial director in 1998, and during the four decades in between started the Library of America, a unified series of reprints of great American literature; The Reader's Catalog, a kind of print precursor to Amazon; and The New York Review of Books. He had a reputation as a brilliant editor but went beyond that to envisage change and make it happen, and in the process made himself into a pillar of the New York intellectual establishment.

"If I have any regrets, I can't think what they are," he declared during an interview recently, sipping homemade espresso at his large kitchen table in an opulent downtown apartment that could double as the upscale set for one of Woody Allen's Manhattan tales. He still edits authors he's been associated with but now does it from home. He prefers to be based there rather than in the Random corporate offices, wishes to put space between himself and an "increasingly distressed industry" mired in "severe structural problems." Prominent among them are a chain-driven bookselling system that favors "brand name" authors and often returns other new books to their publishers after only a few weeks on the shelves, before the titles have a chance to establish themselves; and a bestseller-driven system of high royalty advances that often do not earn back the money invested, a system that ratchets up unrealistically high sales expectations for new titles overall, and in so doing makes it increasingly difficult to publish certain kinds of books.

One-third of the way through his slim text, Epstein writes that his career has demonstrated an "ambivalence toward innovation." Ambivalence also pervades this elegiac book. Perhaps it is inevitable when a man looks back to his youth and forward to a future in which he will not play a major part, even if he is hopeful about that future. Perhaps, too, it is inevitable when confronting the distress signals of an industry he has spent his life in and clearly loves. Epstein shares his visions of a publishing future liberated electronically, but that future harks back to a deep-seated nostalgia, a longing for what was. His book seems to predict that technology in the form of the Internet will restore to the book business a certain lost rightness from the past.

His first chapter, like Dickens's Christmas tale, moves back and forth among past, present and future in an attempt to limn the larger changes of the past fifty years and what may yet unfold. The rest of the book is chronologically structured. It follows Epstein's career and the transformation of publishing from primarily small-scale, owner-operated enterprises rooted in the 1920s "golden age" of Liveright and Knopf to the "media empires" of today, which are forced to operate within an "overconcentrated," "undifferentiated" and fatally "rigid" bookselling structure. Now, he says, "there can't be Liverights or Cerfs because the context is so different. Roger Straus is the very last of them," and even he has sold his company to the German firm von Holtzbrinck.

Publishing must return to being "a much smaller business again," Epstein is convinced. "It has to, it's a craft and can't be industrialized any more than writing can. It's about to undergo a huge structural shift and there's nothing the conglomerates can do about it. The marketplace has shifted out from under them: the system of big money bestsellers defeats the possibility of building a sustained backlist. And without a sustained backlist, publishing cannot function in the long term. Providentially, just as the industry was falling into terminal decadence, electronic publishing has come along."

Epstein is in no way predicting the demise of print. Rather, his future is predicated on a kind of universal electronic Reader's Catalog, "much like Amazon" but far beyond it, "multilingual, multinational, and responsibly annotated. People will access it on their computers at home, in the office, and in kiosks like ATMs. It will be possible to browse those books, and downloading technology will eventually solve the problem of making it possible to buy those books. They won't exist in print until they're actually bought.

"There is no room on the Internet for middlemen, who sell the same product as their competitors, competing on the basis of price and service, and in so doing eat up their margins." Epstein is of course speaking of the Amazons and B&N.coms of today. "I think Amazon can't be here that much longer," says the man who sat at this same kitchen table doling out advice to its CEO, Jeff Bezos, a few years back.

As for brick-and-mortar stores, "the chains aren't tenable, either. They never were. The superstores have become what the old mall stores were. There are far too many of them, Waldens with coffee bars, and they will shrink. Stores run by people who love running bookstores will arise spontaneously like mushrooms and find a way to stay in business once the chains begin to recede."

And the conglomerate publishers? "I think they can show some financial progress for some years by cutting costs and cutting out redundancies, but eventually they'll find themselves with expensive traditional facilities that are increasingly irrelevant. They'll have to offload many functions on to specialist firms. In the end, they in turn will look for a buyer if they can find one. They should have noticed that the previous owners were all too happy to sell."

Meanwhile, authors will have found a way to bypass their publishers by going directly to the web. People will start independent authors' websites. Books will be much cheaper. Authors will have a much larger share of the revenue.

Stephen King has already gained notoriety in trying to do so. But the spectacular starting bang of Riding the Bullet, done in conjunction with his publisher, Simon & Schuster, attenuated when he tried to serialize online a novel, The Plant, on his own. A downturn in paying customers for the later chapters led King to abandon the project. Asked about this, Epstein insists, "It's like the days of the early cars that ran off the road into the mud. People said cars would never work. Well, one of these days e-publishing will work."

Of other experiments now being tried Epstein is openly dismissive, and he sees a kind of Darwinian process filtering chaff from grain. Mighty Words and similar online publishers "don't know what a book is," he contends. "But people know what a book is. Human beings are designed to distinguish value, and in my opinion that problem will take care of itself."

He disregards the tremors that have gone through the publishing houses ever since B&N.com announced it was getting into the business of publishing books. Barnes & Noble Digital was formed the first week in January to compete with the new electronic subsidiaries of traditional publishers, which are bringing out digital versions of new titles readable on PCs or dedicated devices, as well as original works specifically created for electronic distribution. In addition, they are digitizing backlist and out-of-print books that can be reprinted in very small quantities in a process known as print-on-demand."It's yet another premature entry," says Epstein. "B&N's publishing experience is limited to a remainder operation. That's entirely different from bringing out original works."

While Epstein criticizes the proverbial naysayers' laughing at those early cars stuck in the mud, at the same time he cautions, "I don't think an author who has worked hard to create something of value will want to risk it in the electronic format at this point." He says bookstores will wind up selling new titles at much lower prices than is now the case, $10 or so, but "can't figure out" how that will be done in the black. His predictions are compelling, but they are also much too vague--for instance, he sets out no time frame or actual mechanics for what he believes will transpire.

The bloat of the superstores is something publishers have worried about for years, almost from their rollout. This holiday season's flat sales at the three biggest chains; the margin-slashing of Amazon; and the re-energizing of the independent stores through a marketing program called Booksense, which includes web-based retailing, all serve to illustrate Epstein's points. Borders went so far as to put itself on the block, but found no willing takers. Recent murmurs about B&N's CEO Len Riggio entertaining a buyout offer from media conglomerate Gemstar-TV Guide International, which has aggressively entered the e-book technology market, did not result in a deal but also were more than simple gossip.

The past twenty years have seen the RCAs, MCAs, Advance Publications and the like learn their lessons and abandon book publishing, as Epstein has noted. Other conglomerates have already tried to offload their publishing components and in time will try again. But it also can't be ignored that companies like the German-based Bertelsmann (which acquired Bantam, Doubleday Dell and Random House and consolidated them) and von Holtzbrinck (which has bought Holt, St. Martin's and Farrar, Straus & Giroux) have their roots in the book business itself. They are therefore not as likely to exit the scene as Epstein would have us believe.

Undoubtedly, many of Epstein's electronic dreams are prescient and will one day come to pass. The companies that first turn them into reality, though, will likely be turning out works in the professional, scholarly, reference and educational sectors rather than in the trade world he knows so well. But although the Internet will change book publishing profoundly and in ways even Jason Epstein can't predict, other forces are at work as well and shouldn't be ignored.

A couple of years ago a brilliant and rich entrepreneur who also happens to be a profoundly bookish man devised a model, not unlike Epstein's nostalgic vision, of devolved companies publishing real books that share a central financial source. It is called the Perseus Group. It is still in its early days, far too soon to know whether it will last. But Epstein's longing for a more civilized, human-scale publishing business is shared by many. The Internet may help bring it about, but it won't do everything.

JOEL ROGERS

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