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CheshireCat
12-04-2008, 07:14 AM
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 (http://www.mediabistro.com/galleycat/the_revolving_door/houghton_mifflin_harcourt_breakdown_ann_patty_othe rs_cut_102289.asp?c=rss) 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
12-04-2008, 07:30 AM
I read that earlier today. Ugh, so depressing. I feel terrible for those who have lost their jobs.

Nymtoc
12-04-2008, 07:32 AM
Ugh!

But thanks for the information.

:(

CheshireCat
12-04-2008, 07:37 AM
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
12-04-2008, 08:48 AM
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
12-04-2008, 09:19 AM
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
12-04-2008, 10:15 AM
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!)

maestrowork
12-04-2008, 10:21 AM
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.

MarkEsq
12-04-2008, 06:29 PM
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
12-04-2008, 07:11 PM
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
12-04-2008, 07:37 PM
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
12-04-2008, 08:37 PM
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
12-04-2008, 08:45 PM
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
12-04-2008, 10:28 PM
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.

blacbird
12-04-2008, 11:46 PM
The good news is that without writers publishers can't exist.


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

maestrowork
12-05-2008, 12:12 AM
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.

MarkEsq
12-05-2008, 12:28 AM
They will be more swift and brutal when it comes to talents.

Well, Ray, you and I will be fine then, eh?!

eforest
12-05-2008, 02:40 AM
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.

MarkEsq
12-05-2008, 04:17 AM
Where's the hope for the un-agented writer.


Right here, old chap. Got two offers for representation, one yesterday. As I said before, keep hoping and keep writing.

jclarkdawe
12-05-2008, 04:19 AM
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
12-05-2008, 04:29 AM
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.

Nandi
12-05-2008, 04:49 AM
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
12-05-2008, 07:30 AM
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
12-05-2008, 08:17 PM
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...

blacbird
12-05-2008, 11:17 PM
no company can exist on their backlist sales alone.


Dover Books has been doing this for decades.

caw

willietheshakes
12-05-2008, 11:19 PM
Dover Books has been doing this for decades.

caw

Actually, Dover publishes new books each season. Yes, they're public domain reprints, but they're new (ergo frontlist).

CheshireCat
12-06-2008, 12:51 AM
Dover Books has been doing this for decades.

caw

Maybe I should have said no large commercial publisher can exist on backlist sales alone.

And they are, IMO, frankly too greedy to do so. As I said, everybody would love to publish the next Da Vinci Code -- and they have to publish a lot of attempts to get that one monster hit.

Assuming they ever do.

scope
12-07-2008, 12:40 AM
Just a small sign of the times. My agent is with a major agency. Given the pandemonium that presently engulfs the publishing industry, the agency has decided to cease submissions to publishers for at least one month. Their hope is that by then things will have somewhat calmed down and submissions can be made to "in place" editors. In addition, they plan to dramatically cut back positive answers of any sort queries and such which they receive from unpublished writers, at least for the time being. I imagine they are fairly typical of most literary agencies.

I agree with Jim that a major restructuring of the entire publishing industry will come out of all that's going on.

CheshireCat
12-07-2008, 04:32 AM
I agree with Jim that a major restructuring of the entire publishing industry will come out of all that's going on.

Yeah, the only question is what that new structure is going to look like. Publishers used to do their thing because they loved books. Editors would have writers loyal to them for their (the editors') entire careers. Then the media giants started to see Big Bucks in terms of profits, and it became less about the product and more about how much the product could earn the company.

I remember a couple of eons ago, the main guy at either Bantam, Dell, or Doubleday (they used to be separate) had come over from Pepsi. Marketing guy. Books, soft drinks -- what's the difference, right?

Things went downhill from there, really.

The new CEO of Random House, rumor has it, made his mark at Bertelsmann as a cost-cutting bean-counter. I'm guessing the perceived or real skills of his authors won't impress him nearly as much as whether they make money for the company. Fast.

Rumor also has it that one of his first cost-cutting actions at RH was to cancel the contract of a Very Big Name Author who had not delivered a contracted book on deadline.

I'm hearing similar stories from at least two more houses.

Really sounds like you're not safe no matter where you are in the food chain ...

Cranky
12-07-2008, 04:36 AM
:eek:

blacbird
12-07-2008, 11:09 AM
a couple of eons ago, the main guy at either Bantam, Dell, or Doubleday (they used to be separate) had come over from Pepsi. Marketing guy. Books, soft drinks -- what's the difference, right?

Things went downhill from there, really.

This exact thing happened to Apple Computers, and damnear sunk the company. Steve Jobs was forced out of leadership, and John Scully, former CEO of Pepsi, was hired. He was a complete disaster. Ultimately, Jobs (who has a well-deserved reputation for being a brilliant asshole) was invited back. And pretty much single-handed has revived Apple.

This Business School idea that if you are a trained business manager, it doesn't matter what kind of business you need to manage, is such utter crap. One might have some faint hope that the current financial fiasco we're dealing with could wake up some of the major bidness school gurus.

caw

jclarkdawe
12-07-2008, 07:18 PM
Short term we're going to see lots of cost cutting. HRM amd its holding company, over and above operating costs, needs $1.5 million dollars a day to pay its debt load. And that includes Saturdays and Sundays (their annual debt load is $500 million). And some of the other holding companies for publishers aren't in too much better position.

Just like everybody, if a business is close to just covering its fixed and operating costs, if there is a downturn, they have to cut operating costs. Same idea as not going out to eat as much. Combined with the panic factor, and that's why we saw 500,000 jobs go in November.

The question is going to be when the dust settles, whether businesses start thinking about how to make profits over a long period, or whether they're still going to freak out about quarterly statements. One of the things Jobs brought to Apple was the ability to accept short term losses (and he had some big ones) when the long term result was worth it.

The publisher industry has been in a short term model. Three or four books out and not on the best seller list. See ya later, let's try someone else. Of course, three or four years later, the second author isn't doing any better than the first one, so they need a new one. And each time you do this it costs you a lot of money.

Or they can go back to their former approach where they were with an author who keeps producing, knowing that a solid mid-list writer won't cost them money, just might never grab the gold ring.

But we're not going to be seeing this until at least a year, if not longer.

Best of luck,

Jim Clark-Dawe

Elidibus
12-08-2008, 02:31 PM
So, my friends, don't stop hoping, don't stop believing and for heaven's sake, don't stop writing.

I think this is the main thing people should take away from this thread. I don't care how bad it's gonna get. I'm a writer, dammit! And something as measly as an economy in utter turmoil isn't gonna keep me from what I want to do.

aruna
12-08-2008, 08:12 PM
Just last week I met a prospective agent. She had read a manuscript of mine back in April, loved parts of it but ultimately rejected it but said she'd give me a second read if I revised. This was the revised version. In addition, she had read partials of two other mss of mine and asked to see the fulls as well, so I personally delivered two fulls to her. We met outside a London restaurant and had a short chat. I am revising a third one for her.

She told me that the publishing industry is tougher than ever right now and it's harder than ever to break in. The collapse of Woolworths in the UK has made things worse since they were a major distributor. She said it's really, really grim.

Yet still she took the two mss from me, made the effort and took the time to meet me, and told me she is going to give me a serious (but slow) read over the next few weeks.

The point of this story? Nobody is giving up. They won't. When times get tough books are one of the cheapest methods of entertainment; when times get tough, people need escape and hope more than ever.
Books deliver on both. It's up to us to deliver. Come what may. Don't be downhearted; let's keep that hope alive!

rugcat
12-09-2008, 12:44 AM
More opinions about the state of the industry, from The New Yorker. (http://www.newyorker.com/online/blogs/books/2008/12/publishing-titl.html)