Publishing's Black Wednesday

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CheshireCat

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I haven't seen this discussed as yet. But a bit from today's Publisher's Marketplace:

Layoffs at Nelson
Thomas Nelson ceo Michael Hyatt announced layoffs at the company today via his active Twitter feed and then wrote further on his blog. "Today, was a very difficult day at Thomas Nelson. We informed fifty-four of our friends and co-workers (about 10% of our workforce) that we have eliminated their jobs, effective this Friday. This will affect nearly every department in our company."

Random Drops the Next Shoe: Rubin and Applebaum Stepping Down in Reorg
The Random House reorganization everyone has been expecting under new ceo Markus Dohle was announced this morning. President and publisher of the Bantam Dell group Irwyn Applebaum is leaving the company immediately after 25 years there. Dohle calls him "one of the most successful publishers in our industry. He is widely regarded as a champion of great storytelling, with marketing acumen to match." The publishing line itself is being absorbed by the Random House group, under Gina Centrello, along with the Spiegel & Grau unit that had been part of Doubleday. It puts the company's two big mass-market lines together in the same division, though Dohle says that they will "continue to have separate editorial departments."

Dismantling of HMH Continues with Firings
Galleycat reports that Ann Patty says she has been "fired" along with "a lot" of other employees at Harcourt Houghton Mifflin, adding to the community's sense that the parent company has simply given up on the trade line. Place your takeover bids now.

Richter to Leave S&S; The Other Applebaum Stays
Simon & Schuster Children's president Rick Richter has resigned "to explore other opportunities in publishing," leaving December 5. He has run the unit since 2003, and has been with Simon & Schuster since 1996 (when he also ran the children's unit before switching over to sales and distribution). CEO Carolyn Reidy notes that "under his leadership, Children's division revenues have nearly doubled, and the division has grown to become an industry-leading full-service publishing enterprise." She underscores that "children's publishing remains an important and vital part of Simon & Schuster's overall publishing portfolio" and indicateDennis Eulau will "work with the children's division on day-to-day operational matters" on an interim basis while she finds a successor.

The Next Domino: Layoffs at S&S
Simon & Schuster has "enacted a reduction in staff in which 35 positions across the company were eliminated, from areas including our publishing divisions and international, operations and sales," according to a memo from ceo Carolyn Reidy.

The President and Publisher of Doubleday, Stephen Rubin, has also "stepped down" as his position has been eliminated.

Axes falling right and left.
 

WendyNYC

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I read that earlier today. Ugh, so depressing. I feel terrible for those who have lost their jobs.
 

CheshireCat

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Not so good for writers trying to break in either.

With so many heads rolling, you can bet there are "policy" changes dictating what's happening, and sooner or later those will affect editorial and acquisitions, either directly or indirectly.

The good news is that without writers publishers can't exist.

The bad news is that with the waste and saturation of the market in recent years, there's plenty of room to tighten publisher belts ...
 

MissLadyRae

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I feel terrible for those who have lost their jobs.

Me too. :-(

I keep reading bits and pieces here and there but seeing it altogether like that down the list...

Tough times are ahead.
 

scope

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Please excuse my somber tone, but as I've said before, I think we have only begun to see how the economic free-fall will effect the publishing industry. We are starting to see deep cuts in most all facets of the business. I believe agents will take on less new clients because the demands by publishers for new books will lessen. Publishers will rely even more heavily on their back-lists. They will decrease their publicity, merchandising and distribution efforts, and have less personnel to deal with any and everything on a daily basis. Big stores and independents will sell less books and consequently have less money to spend on purchasing and advertising. There will be fewer editors around to review newly published books. More and more magazines (with the articles we write for them) will close their doors. There will be less paid author visits and talks, what with the cuts in budgets. Writers will suffer in a slew of ways, particularly those who have yet to be published, and the quality of their work will become less of a factor than usual. There will be some increases, such as library borrowing. But will libraries be able to buy more books than usual with the budget cuts they are experiencing?

I have said many time that I don't believe in self-publishing--except for a select few and under certain circumstances. Many disagree with me, and that's fine. However, I can see where an increased number unpublished writers may, out of desperation, turn to self-publishing, most likely experience failure, lose money and time, and get a bad taste about the entire publishing business.

I hope my views on everything are 100% wrong, for a hsot of reasons, not the least of which is that I am a full time writer who for many years has written for his livelihood. However, until we see a reversal I think it's best to be sober about the goings on in the business and plan accordingly.
 

maestrowork

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Apparently many companies are having Black Wednesday. My friend's company just announced their layoff today -- a 10% reduction.

(I believe conventional wisdom says Wednesdays and Fridays are the most common days of the week for layoffs and firings...and December, ironically, is traditionally the busiest month for layoffs...Happy Holidays!)
 
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maestrowork

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The bad news is that with the waste and saturation of the market in recent years, there's plenty of room to tighten publisher belts ...

Maybe it's time for them to cut the crud as well. There really is quite a bit of rubbish out there, the reality TV/tabloid/fast food equivalence of the publishing industry. Like the TV industry, which is cutting on a lot of their reality TV shows, publishers may follow suit. On the other hand, maybe that's the only thing the companies will be keeping -- because like Big Macs, they may be the only thing making money in the down market, simply because they're cheap entertainment.

What we'll see, I think, is the suspension of a lot of low to mid-list authors' career. I posted somewhere else that publishers will be forced to focus more on the brands (King, Patterson, Grisham, etc.) and best-selling authors and trim the fat at the mid to low level. There will be less output in the genre/commercial market, and the selection would be discriminating in the literary market, leaving room only for the award-winning stars.

Economical e-Books, however, may see a surge.
 
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MarkEsq

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Here is my theory, based on no solid facts, no inside information, nor even deep thought:

Publishers will not cut back on the number of bokos they put out. Everyone knows that the recession will end, and probably in less than a year. How long does it take to bring out a book? See, publishers don't want to be behind the curve when the recession ends, when people start having money to buy books. They will want their products to be out there on the shelves.
Instead, publishers will pay smaller advances. That saves them money in the short term and allows for everyone to make a buck in twelve months time. So, my friends, don't stop hoping, don't stop believing and for heaven's sake, don't stop writing.
 

Dave.C.Robinson

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I think the bar may go up, and the reward may go down but there will still be room for new authors.

Besides, the difference between a 99.96% and a 99.98% rejection rate isn't really all that much in absolute terms anyway.

Like others, I think it's the midlisters that will feel the crunch.
 

waylander

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Plus with these publishing folk being laid off there's a fair number of them will set up a agents which should mean more opportunities to at least gain representation
 

maestrowork

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What hurts is when these editors get laid off, the authors they sign/work with may go as well. That's not good for the authors who are being considered or may be dropped.

I guess I'll have to see. My WIP is nowhere near finished, so I still have some time... :)
 

willietheshakes

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Like the TV industry, which is cutting on a lot of their reality TV shows, publishers may follow suit.

Do you have a cite for TV cutting a lot of reality programming? Because my understanding is completely the opposite -- scripted shows are being dropped (adieu Pushing Daisies, Eli Stone, Dirty Sexy Money), while reality shows, with their lower production costs and solid ratings, are being encouraged (Secret Millionaire, for example, debuted last night).
 

Adam Hammonds

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Too soon to decide on the crayon. I agree with Janet Reid. Allow some time to pass, to gain perspective. Probably gray is a better color. The gray of shifting paradigms and restructuring ladders and rewriting business plans.

A 10% layoff at the biggest house during a shakeup under a new boss; a freeze in acquisitions and a much-needed round of layoffs at an over-leveraged company like HMH; the king's headroll at S&S's children's division--considering the times, all quite expected. And hardly black.
 

maestrowork

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They do need writers, but now they want to get CHEAP writers, and desperate writers will take a much smaller advance just to get published. Plus the publishers will have smaller budgets for marketing, promotion, etc. Plus their "grace period" would be shorter -- it used to be about six months or so before they will drop a non-performing author, but that may change. They will be more swift and brutal when it comes to talents.
 

eforest

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Man,
This stuff is such a downer and I still don't have an agent. What are the likelihood for an agent to take me on when publishers make this type of announcement? And someone like Palin gets a +++ deal. Not that there’s anything wrong with that. I just don’t get the mindset in paying those types of advances then a month later coming out with statements like this.
Where's the hope for the un-agented writer.
 
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jclarkdawe

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Actually, long term we may see a different business model coming out, both in publishing and other industries. The suits that have been running things have been interested in the short-term, this year profit. They've been doing high leveraged deals (like the buyout of HRH was) and are now facing incredibly high debt loads.

Just like individuals, high debt loads are fixed costs that become big problems when there is a downturn in income. The thing is we haven't seen a downturn for a while so the suits thought they were onto something good. Get in, get out, make a quick profit, don't worry about tomorrow. This is one of the fundamental issues with the auto industry in the US.

The suits that are going to be looking good for the next few years are going to be the ones that have been taking a long view. Good solid planning, long-term plans, and serious development.

What this could mean in publishing is that we're going to see a reduction in advances (but this was likely to come anyways as sooner or later the publishing industry is going to get its act together on royalty statements and pay authors in a timely fashion), but I think we might see publishers more willing to stay with an author and spend the money developing him or her.

By being willing to take less in the short term, publishers are more likely to come out ahead in the long run. Anytime you start a new product, you've got high risk and high costs. Going with a solid product, even if it isn't taking off like a rocket, tends to be the mark of suits that think long term.

It's hard to say what's going to happen, especially as so many companies are in panic mode. But I think stockholder meetings for the next couple of years are going to be interesting. Sound management of a business isn't difficult, just not as popular as making the quick buck.

Best of luck,

Jim Clark-Dawe
 

eforest

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Congratulations. When these agents offered representation did they give you any info regarding their thoughts?

One thing that's a bummer is the agents who have built relationships with these editors they will no longer work with.
 

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Although I have some publishing credits with a few magazines and literary journals, I'm losing confidence that I'll be able to acquire agent representation. I've been wondering if it's time to jettison the querying and, instead, approach some of the smaller independent publishers directly.

Anyone else considering that?
 

CheshireCat

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Tell this to the suits making these decisions. You can bet your house they'll give it a try for at least a while.

caw


Nah, they'll just try to get us cheap -- or cheaper. Some of the bigger name authors may take smaller advances for a larger royalty. Stuff like that.

And all the publishers either have begun digitizing their catalogs or have plans to, so they can (finally) do the Big Push with eBooks.

They're looking to cut expenses wherever they can, and you can bet they'll try to pay authors as little as possible, but no company can exist on their backlist sales alone.

Not when the next Da Vinci Code could put a publisher in the black for years.

 

MarkEsq

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Congratulations. When these agents offered representation did they give you any info regarding their thoughts?

Not really, she was on her way out of the country though, so we didn't talk as long as we might have.
The other agent who offered representation, though, said that he would target the big publishers, partly because he wasn't sure some small ones were going to make it, but also because of the book itself. I guess it's wait and see time...
 
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