30 March 2006

Across the Pond

Two news items concerning UK publishing have some disturbing implications for US publishing (and, of course, over there).

First, in a not entirely unexpected development, the Competition Commission provisionally approved the takeover of Ottakar's by HMW, the parent of Waterstone's. It's pretty apparent that those who evaluated the situation have little understanding of the fragmentation and multiple populations in the book trade.

[The Commission's] four-month inquiry concluded that the competitive threat from supermarkets and online retailers such as Amazon would ensure that book prices would remain low.… "We do not see any reason why the merger would change this or reduce the number of titles published," said [inquiry group chair Diana] Guy.

This is true only under the following three conditions:

  1. Book purchasers go to their vendor of choice knowing exactly what they wish to purchase, and in fact make that purchase and only that purchase;
  2. The nature of book vendors does not influence the nature and character of "the number of titles published;" and
  3. Nonbookstore outlets will stock a similar proportion of the backlist (that is, books that have been published more than six months previously) as do bookstores.

Although I haven't been to Tesco, Asda, or Sainsbury's since I was last in England—a long time ago, and in fact before any of them other than Sainsbury's offered any reading material other than tabloids and cookery magazines—what I have observed over here has been otherwise. All three conditions fail. Would the "book trade" (not to mention consumer choice) be harmed by publishers shifting their acquisitions and marketing efforts to selling even more copies of James Patterson than any copies of Henry James? The key here is the marginal shift. At least as publishers perceive things, most books operate on a razor-thin margin, and the publishers are kept afloat by a few big successes.1 That means that when the few outlets that stock backlist titles consolidate, they have less incentive to order a broad range of the backlist and make them available to consumers. Remember one thing: Over the last thirty years (which is as far back as I've seen verifiable data), if one excludes bestsellers, more than 80% of book purchases that are not to fill an immediate business need (e.g., an update to a law treatise) are made by less than 5% of the population.

Then there's the issue of the Macmillan New Writers program. As Ian Hocking, a "young writer" in England, notes:

But any other publishing contract is subject to negotiation under the firey glare of a literary agent. MNW contracts are non-negiotable [sic], which renders an agent pointless. So any unfairnesses — which I think is the right word; MNW is the behemoth, the author is the little guy — cannot be remedied through discussion of, perhaps, the royalty rate, or other aspects of the contract. And let's not forget that MNW have loaded the dice in their favour. World rights: MNW has these, non-negotiable. Other versions of the book, in electronic form, etc.: MNW has the rights to these. Subsidiary rights, for TV spin-offs, etc.: MNW has the rights but will split any proceeds fifty-fifty ('simple and not open to confusion'; another word for 'confusion' would be 'negotiation'). Next book option: MNW has the right to first refusal on the author's next book.

" Macmillan New Writing: Transparent Imprint by Michael Barnard" (26 Mar. 2006) (paragraphing and internal citation removed for clarity). Mr Hocking is far less skeptical of the result of these problems than am I. Let's just say that I've seen far too much "nonnegotiability" in publishing contracts turn into abuse. If the MNW program proves successful, you can bet that US publishers will start the same sort of practices—particularly including the rights grabs.

  1. Although this is really an argument for another time, I said "perceive" for a reason. In reality, the way publishers determine a "profit" on a book bears only slightly more resemblance to the ordinary business (or accounting) understanding of that term than "net profits" in Hollywood, although admittedly without nearly the overt intention to avoid ever being "profitable."