London’s Great Flood

All circuits are go for this year’s London Book Fair, which returns on March 16 – 18 to the Olympia Exhibition Centre with its usual bagful of rights-trading (400 tables at the International Rights Centre are virtually sold out); foreign affairs (“huge” stands from Belgium and Greece); and industry seminars (such as ePub London, chock full of “practicalities and mini-case studies”). “We’re on track for 6% growth in overall size of the show,” Exhibition Director Alistair Burtenshaw tells PT. “Preregistration is looking very positive indeed.”

If only the same could be said of the British book market, which suffered a dearth of high-profile author output and bobbling frontlist sales in the first half of last year, leading some to charge that publishers were punishing the industry by saving up their big guns for the Christmas blitz. That’s the opening question, anyway, of “The Great Autumn Flood: Good for Business?”, a presentation prepared by Nielsen BookScan’s Richard Knight and originally scheduled for last November, but postponed after booksellers said they were too clobbered by the holiday onslaught.

The presentation may have been sacked, but here’s the take-home message. Analyzing sales in the UK over the last five years, Knight says he’s confirmed the obvious: September and October log 25% higher title output when indexed against an average month, and 40% more books are handled in September than in February. As for last year’s dismal showing, he found no difference between 2002 and previous years: “In fact, 2002 remained very poor on top author output in the UK, but the market eventually compensated (as it always does with books) so the year ended up being ‘OK’.” So does the “Great Flood” work? “Looking at the lifetime sales of books launched at different times of the year actually shows that publishers are right to keep some books back to the last quarter or autumn release,” says Knight. An October biography will see three times more copies sold than biographies launched in the spring, owing to the crucial Christmas gift factor for this genre. For midlist paperback fiction, a spring release actually turns in a slightly better sales performance. And top fiction authors can launch at any time of the year, with books sailing off the shelves. Somebody tell John Grisham his next holiday offering ought to be Skipping Groundhog Day.

International Fiction Bestsellers

Realpolitik Redux
Aguinis in Argentina, King’s Ransom in Denmark, and Slobo’s Serbian Adventures

With the world reeling from the 1994 bombings of the Israeli embassy and the Argentine Jewish Mutual Aid Association in Buenos Aires, a Moslem scholar and a young and impulsive journalist join forces to prevent future attacks in Argentine author Marcos Aguinis’ latest and perhaps most controversial novel, Assault on Paradise. Using actual testimony from a New York Times report suggesting that the Iranian government organized and carried out the bombings — and then paid Argentina’s president at the time, Carlos Saúl Menem, $10 million to cover it up — Aguinis, one-time recipient of the Planeta Prize of Spain, rakes through the rubble in a bid to denounce those responsible, and to castigate those who covered up the heinous crime. Among the ruins of the former embassy, scholar Zacarias preaches a radically different view of Islam from fundamentalism, as journalist Tíbori discovers that one of the victims of the blast is her own sister. Then there’s Dawud, a suicide bomber who is welcomed with open arms by Mohsen Rabbani at the Iranian Embassy (the only character in the book representing a historical figure), and whose flashbacks to a tragic childhood in Beirut explain the historical conditions under which his worldview was forged. Aguinis’ even-handed treatment of characters on both sides of the struggle is noteworthy, according to critics, while “terrible facts are brilliantly fictionalized with psychological depth.” After a first print run of 30,000, a second edition of 10,000 is on tap, and sales have been made to Spain, Colombia, and Mexico. See Guillermo Schavelzon at guillermo@ schavelzon.com for rights.

Turning back the historical clock considerably further, Denmark is abuzz over young Neils Eskessøn, the ambitious son of a Jutland farmer, who embarks on a European journey to advance his education in Hanne Reintoft’s latest novel, Raven’s Food. We’re in Copenhagen in 1533, as the death of King Frederik I precipitates a national assembly of nobility who congregate to choose a new leader. Tensions soon flare among this “Assemblage of Excellences,” however, culminating in a civil war in Denmark that rages between 1534 and 1536. By a strange set of coincidences, our man Eskessøn lands in Denmark on the day of the assembly, but soon scoots off on a secret mission to Sweden, where he meets the love of his life: the fiery red-head Sidsel. Author Reintoft, a social counselor best known for her popular public radio program What Are My Rights and What Are My Duties? — a Studs Terkel-type show in which she responds to queries about social issues — chronicles a darn near epic 40 years of the young couple’s tempestuous relationship against the backdrop of a nation sundered by war. In this compendium of horrors, queens are raped, the poor are starved, and religion is a sop for tyrants. Foreign rights are wide open from Forum in Denmark.

Meanwhile, in the third installment of Jens Henrik Jensen’s ragingly successful thriller trilogy The Wolf in Banja Luka, CIA agent Jan Jordi Kazanski ransacks the former Yugoslavia on a bender taut with violence and drama. The book centers around the hunt for Kurjak — the Wolf — which is the mythical code name of a highly influential Serbian underworld figure expected by the International Criminal Tribunal in The Hague to serve as a material witness against Slobodan Milosevic and other Serbian war criminals. Kazanski is pulled into the hunt for the Wolf when his girlfriend, Ewa (who arrived on the scene in the first book of the series, The Shrew of Krakow), has been sent out by the Tribunal on a secret mission to track the Wolf and disappears without a trace. Together with an old Serb who also works for the Hague tribunal, and a woman whose cause for revenge against the Wolf is a mystery, Kazanski heads to the Balkans, passing through the picturesquely war-torn landscapes of Croatia, Kosovo, and Bosnia/Herzegovina, a journey undertaken by the author himself in 2001. Rights have been sold to Sweden (Norstedts/Prisma), Holland (de Geus), and Italy (Rizzoli/Sonzogno), with international film rights optioned to Nimbus Film (Denmark). Contact the Leonhardt and Hoier Literary Agency/Borgen Publishers.

The serial crime spree continues in Spain this month, as Lorenzo Silva offers us his most ambitious tale of perennial adventurer Sergeant Bevilaqua in The Mist and the Maiden. Entrusted to investigate the death of an untamed youngster in La Gomera, the Sergeant, along with his inseparable corporal Chamorro, will try to clear up a convoluted case in which Juan Luis Gomez Padilla, a renowned politician on the island, has been deemed the principal suspect — but absolved by a popular court in spite of the evidence against him. Sarge puts Padilla once again in the cross-hairs, but is faced with a political hornets’ nest and must also quell the smoldering mistrust among his colleagues as he reopens a case they had considered to be closed. Winner of Spain’s most established literary award, the prestigious Premio Nadal for The Impatient Alchemist (the second installment of the Bevilaqua trilogy), Silva has now written twelve novels, three of which are for young readers, and has been declared “one of the most promising writers of his generation.” The Mist and the Maiden has been sold to Italy (Passigli) and France (Lattès). Other works from the author have been translated into Russian, and are in the process of being translated into Greek and German. Contact Laure Merle d’Aubigné of ACER (Madrid).

Also in Spain, Maria de la Pau Janer’s novel The Women in Me summons up the ethereal story of a twentysomething orphan, Carlota, whose home is haunted by a matriarchal clan of phantoms: there’s her mother Elisa, who died under mysterious circumstances at the age of twenty, and also grandmother Sofia, who lost her life at the same age during childbirth. Faced with the fear of sharing their fate, young Carlota embarks on a quest to reconstruct their lives through stories told by her grandfather, who is her only surviving relative. Already on its 4th edition in Spanish with 115,000 copies sold (and with a Catalan edition on the way), the book has been sold to Germany (Blanvalet). For rights, see Cristina Mora of Planeta.

And a final note: last month we got our wires crossed in our Year-End International Bestseller List. Contrary to our report, US rights to bestselling author Luis Verissimo’s The Lies that Men Tell (which was #10 on our year-end list) are available from agent Ray-Güde Mertin in Germany.

Cultural Revolution, Post-Mao

Stroll through Shanghai’s “Book City,” a four-story goliath crammed with titles on a surprising breadth of subjects, and you’ll notice something big is happening in the land of Mao’s little red book. As the Chinese government makes unprecedented moves to loosen its grip on book retailing and distribution — working to satisfy obligations under China’s 2002 entry into the ranks of the World Trade Organization — opportunities for foreign investment are being flung open in the world’s most populous nation with a brazenness free-marketeers could barely have imagined two years ago.

The great Chinese bookstore grab got its official green light, anyway, at last month’s Summit of Book Publishing in Beijing, where Niu Bingjie, Deputy General Director of China National Press and Publications Administration (NPPA), announced that China will open the book retail market in over 30 cities to foreign investment beginning this year, with detailed regulations on the matter expected shortly. As a consequence, says Wei Zhao, Random House Sales Manager for China, “Barnes & Noble can open up a bookstore in China if it chooses to do so. Both non-publishing industries in China and foreign investors will be allowed to invest in privately-held book retailers.” With bankers and co-venturers lining up at the gates, the Chinese book market — already subject to constant turmoil for the last three years — is quite likely headed for even more sweeping contortions. “As China enters into a second year of WTO,” Zhao predicts, “2003 could be pivotal for book distribution.”

To date, however, the Chinese bookselling terrain is virtually terra incognita to foreign investors. Though ownership of bookstores has been allowed on a trial basis since last June, the sale of foreign books, including those published in Taiwan and Hong Kong, is “still restricted to the [state-owned] Foreign Language Press bookstore,” according to Luc Kwanten, Executive Director at the Shanghai office of Big Apple-Tuttle Mori. And so far, no foreign bookstores have set up shop in China — though rumor has it that Shanghai and Beijing may soon be the latest outposts of leading French book and music retailer FNAC, which has already planted its flag in Taipei.

What is known about Chinese book retailing amounts to this: In major cities with a population of more than 10 million, there are two primary forms of state-owned retail outlets: the “book city” (a building of three to five stories, portions of which are rented out by individuals as well as publishers), and the “book center” (owned by either a state-run or private corporation which offers large retail spaces for goods such as books, music, and art supplies). Add to that 57,000 privately owned bookstores, which amounts to about four times as many as the state-owned bookstores. This process of liberalization has helped to gradually erode the state-owned Xinhua Bookstore Chain monopoly, which itself has drawn the ire of publishers, who have been forced to negotiate distribution deals with individual Xinhua bookstores in major cities. The Xishu Book House, in particular, has seized enough turf to become the largest privately held national bookstore chain, and is said to be the “first-choice bookstore” for many readers in some smaller cities.

Cracks have opened in the nationwide distribution system as well. The state-owned Xinhua network has been challenged by so-called Second Channel distributors, who emerged with the government’s efforts to liberalize book distribution in the 1980s. Consisting of independent booksellers and distributors operating under a market economy, the Second Channel allows for returns of unsold copies of books to publishers. These wholesalers and retailers account for about 30% of annual total book sales in China, but the limited regional scope of Second Channel distributors — coupled with the fact that they have no access to China’s real cash cow: textbooks — has put many of them out of business. Even so, such competition has spurred the sluggish Xinhua to beef up its operations, as most publishers prefer to deal with Second Channel firms due to their more agile maneuvering among the nation’s topsy-turvy market conditions.

Harry Potter Does Beijing

As it slowly grinds its way toward privately operated book distribution, China is clearly looking to the US for guidance. Credit Robert Baensch, Director of the Center for Publishing at NYU, for providing at least a crash course in modern publishing. Under Baensch’s tutelage, NYU has offered six seminars for groups of 30 Chinese booksellers and publishers, ranging widely over the nuts and bolts of bookselling and distribution, and including visits to both Ingram’s and publishers’ distribution centers. Baensch (who is also editor of the forthcoming book The Publishing Industry in China) cites Chinese news reports indicating that 20 new measures are expected over the coming year “to create an amiable legal environment for the growth of the nation’s media and publishing sector.” The 60 or so overseas companies that have set up offices on the Chinese mainland with the intention of investing in the distribution business, reveals Bingjie in a Xinhua News Agency article, “are likely to be the first to have their applications approved.” Those who have cooperated closely with their Chinese counterparts obviously stand the best chance of getting a foot in the market. Of course, the most exciting news from last month’s semi-annual Beijing National Book Fair, says Baensch, was word that Harry Potter V would be available in June (igniting much euphoria, as last year 1.3 million copies were sold of a special four-volume boxed set of the Chinese Potter edition). Other bestsellers in translation included the ubiquitous Who Moved My Cheese? and the globally appealing aphorisms of Jack: Straight from the Gut.

Indeed, the case might be made that the West has already colonized the hearts and minds of the Chinese bookselling trade, with foreign behemoths like the Shanghai Bertelsmann Book Club trumpeting a membership of more than one million, and high-profile magazine launches from Hearst and Primedia bringing Cosmo to the post-Mao masses. But industry rumors have it that the Bertelsmann club’s days may be numbered, and Chinese news reports say that Bertelsmann is shifting focus to radio and TV broadcasting in the region. And Chinese officials say that regardless of foreign bookselling deals, “there will be no opening up of the editorial or publication side of the industry.”

Then again, the headlines tell us China is the world’s “fastest growing major economy,” the government has opened the sluice gates to 92 new printing companies with $55 million in foreign investment, and 91,000 new titles were published there last year. Set your controls for the 10th Beijing International Book Fair, on May 19–23, and see the bookselling revolution for yourself.

Book View, February 2003

PEOPLE


Lots happening in the sales and distribution world: The big — though not unexpected — news is that, following Kristina Peterson’s departure from Simon & Schuster, Rick Richter has been named President of the S&S Children’s Publishing Division, a position he held prior to Peterson’s arrival. He is currently President of the S&S Sales & Distribution Division, a role that Larry Norton will take over. Norton was previously SVP of Sales & Distribution.

Other sales moves: Dana Baylor, VP Marketing and Distribution at Globe Pequot, says it’s time for a sabbatical and has resigned to do just that for the next six months (at least). . . Mary Albi, VP Sales & Marketing at Phaidon, has left the company in a restructuring which will have much of the company reporting to the UK home office. Meanwhile, Martha Reddington, VP Special Markets at HarperCollins, along with two other members of her department, is leaving the company in a reorganization. Email [email protected].

After a brief stint at Harmony Books, Jake Morrissey has become the Managing Editor of comics at United Feature Syndicate in New York. He’ll be editing cartoons, including Peanuts, Dilbert, For Better or For Worse, Get Fuzzy, and “about 70 others.” He also plans to do some writing. . . Katie Hall has joined Harcourt as a Senior Editor. She was most recently at Random House. . . Lindley Boegehold has left Carlton Books New York and is joining Black Dog & Leventhal with the charge of developing their proprietary publishing business. Keith Allen Jones of Carlton in London has also left the company.

Anne Kostick joins STC as Senior Editor. She had been consulting with STC and previously was at VitaminShoppe. com and Workman. . . Andrea Spooner is joining Little, Brown Children’s publishing as Executive Editor. She was Editor-in-Chief of North-South Books’ SeaStar division, which she helped to launch. . . Penguin has lots of new hires, other than the newest and most talked about, Ann Godoff, and her Senior Editor, Scott Moyers. Susan Lehman was appointed Editor, Riverhead Books. She had been Senior Editor at Talk and Salon.com. Last month PT reported Sean McDonald’s departure from Nan Talese books to be a Senior Editor at Riverhead. Dave Zimmer has joined The Penguin Group as Manager of Corporate Communications, reporting to Marilyn Ducksworth. Most recently, he worked for Vivendi Universal in New York and Paris.

HarperCollins UK announced the appointment of Caroline Michel as MD and Publisher of the newly-created division of HarperPress, which is the name for the combined editorial, marketing, design, publicity, and rights teams for Flamingo, HarperCollins nonfiction, and Fourth Estate. Michel, who was Publisher of Vintage, and Deputy MD and Deputy Publisher of the CCV division of Random House, will report to Amanda Ridout. Christopher Potter has been promoted to the new position of Associate Publisher and Editor-in-Chief of HarperPress. He remains as Co-Publisher of Fourth Estate New York (with Dan Halpern at HC US), while buying for HarperPress across all imprints. Clive Priddle remains Publishing Director for the US.

Hanna Oterio has joined SparkNotes as Executive Editor, to spearhead its expansion into the K–8 Market. She was previously at Macmillan/McGraw-Hill, were she was Supervising Editor, and at Frank Schaffer, as Editorial Director.

Nancy Trypuc has moved from Penguin to St. Martin’s Press, where she is Director of Advertising & Promotion. She was handling advertising and promotion for Berkley/NAL.

PROMOTIONS


Tim Bakke has been promoted to VP Editorial Director of Creative Homeowner. He has been with the company for six years and was previously Editorial Director. . . Carol Morgan has been promoted to Publicity Director at Harry N. Abrams. She was Publicity Manager. She is the founder of Boston Literary Hour. . . Ben Morgan has been promoted to Marketing & Sales Associate at SparkNotes, reporting to Associate Publisher Robert Riger.

FEBRUARY DATES


The Small Press Center sponsors an Inside Publishing evening, wherein Christopher Lehmann-Haupt interviews Peter Mayer. The event, which begins at 6, with a reception following at 7:30, takes place at the Small Press Center on 20 W. 44th. For further information go to www.smallpress.org.

At the Feb. 11 Books for a Better Life awards, retiring HarperCollins editor Larry Ashmead will be the first non-author to be inducted into the Hall of Fame, along with Suze Orman and Dr. Andrew Weil.

• AAP hosts its two-day conference, at which Oprah Winfrey will be honored, taking place February 26–28 at the Renaissance Mayflower Hotel in DC. The 2003 Annual Meeting for Smaller and Independent Publishers takes place immediately preceding the opening reception for the general meeting. Meanwhile, on February 3 – 5 the Professional / Scholarly Publishing Division’s Annual Conference takes place, also in DC. Go to www.publishers.org.

FROM THE FLOOR . . .


Our correspondent writes to PT that “Some 10,000 librarians made it to the new and improved Philadelphia for the Mid-Winter ALA (January 24 – 29). Traffic at booths on Sunday seemed light until the various ALA council meetings and lunches let out and then the floor was flooded with librarians eager for the many handouts. Most notable among them was Barnes & Noble.com’s mega tote bag which included an 8 oz. bar of chocolate — not to mention an extra 5% special show discount to launch ‘The Library Bookstore’ from BN.com. Using it, librarians can create a custom-built bookstore, buy online, and get bulk discounts. In preparation for the ALA’s main conference this summer in Toronto, one booth was taking free passport photos to prepare attendees for the border crossing. Penguin was very visible with their immense children’s offerings, but Dan Lundy manfully manned a booth dedicated to the relaunched Penguin Classics titles. Generally the show was short on books and long on furniture, fixtures, and databases. (Certainly the book-folk had spent nothing on display, while the tech types were positively resplendent.)”

DULY NOTED


Taking exception to a recent Marty Arnold column, Jeffrey Lependorf, Executive Director of CLMP, wrote the following in rebuttal, which hasn’t made it into the NYT as of PT’s closing, but which we thought we’d share with our readers.

“To the Editor: In “No Purebreds in Publishing” (Making Books, January 23) Martin Arnold states that “the reality is that there is no longer any such a thing as a purely literary publishing house.” In fact, America boasts a thriving community of independent publishers devoted to mission-driven literary publishing. A mere glance at the Council of Literary Magazines’ on-line directory (http://www.clmp.org/directory/) will reveal over a hundred exclusively literary publishers. Often non-profit, generally run by devoted volunteer staff, sometimes producing but one title a year, these publishers have made literature their only business — and their titles have won National Book Awards and Pulitzer Prizes as a result.”

PARTIES & EVENTS


Basic Civitas Books gave an “early celebration” of Black History Month at their offices on Park Avenue, on a frigid January 27th. Spotted in the crowd were authors Henry Louis Gates Jr., Michael Eric Dyson, and Martha Southgate, as well as literary agents Manie Baron, Malaika Adero, and Marie Brown, and Patrik Henry Bass of Essence (and a Running Press author), Henry Finder of the New Yorker, and Max Rodriguez, editor of QBR: The Black Book Review.

• Atlas Books, James Atlas’s reinvented Lipper Books line, now ensconced at HarperCollins, and funded by Roger Altman and other investors, chose The Lotos Club to celebrate its launch on January 30th.

MAZEL TOV


McGraw-Hill’s Chitra Bopardikar and HarperCollins’ Josh Marwell are delighted to announce the early arrival of Tobias Julian Marwell on January 27th.

High Fidelity?

MP3 Audio Is the Next Big Thing. Unless It’s Audiobook Suicide.

The average Los Angeles motorist now spends 136 hours per year sitting stock-still in traffic, according to the landmark Texas Transportation Institute study, and audiobook publishers are thrilled. Indeed, the apocalyptic fate of our nation’s highway infrastructure is rehearsed by audio industry brass with barely repressed glee: 97 million people in America commute to work by car, up 15% over the last decade. Mean travel time to work has grown to 24.3 minutes each way, up 7% from 1990. And New York’s rush-hour delays — a breeze by LA standards — clocked in at a soul-crushing 73 hours per year.

This is extremely gladdening, of course, because nearly 60% of audiobook fans log most of their listening hours in cars, according to the Consumer Electronics Association and its eBrain market research division. Gridlock has gotten so good, the study concluded, that audiobook compatible in-dash systems could pump up sales by almost 15%, kicking the US audiobook market, which is conservatively estimated at $400 million, into overdrive. So honk all you want, folks, because what was not long ago deemed “the most underpenetrated segment of publishing” may be on the cusp of a listening revolution.

“Audiobooks are still growing at a faster rate than print books,” explains Eileen Hutton, President of the Audio Publisher Association. “There’s an incredible amount of interest in the audiobook industry by personal stereo manufacturers, especially those in the MP3 market.” And anyone familiar with Napster knows that MP3 allows more content to fit on one CD — up to 20 hours of spoken audio — than ever before. That could mean lower price-points for audiobooks (ditch those 14-cassette titles) and more fun for the consumer (download Jack Welch direct to your hard drive). The problem is that MP3 players currently have a dismal market share. And the vanguard of today’s audiobook consumers have only recently warmed to the idea of books on conventional CDs. But in the paradoxical land of audio, bad news breeds optimism, and by some measures the audio industry’s pursuit of revenue opportunities, courtship of device manufacturers, and focus on “unprecedented convenience for consumers” makes the audio biz a model of growth that print and ebook divisions can only dream of.

The Aura of Audible

If you’re looking for optimism, you can’t do better than this: digital audio pioneer Audible, Inc., which downloads audio files directly to consumers’ computers, may one day earn a profit. “What Audible has done is created a more convenient channel of distribution of the audiobook product,” says CEO Don Katz. “But it has also created like-minded audio products based on a pre-branded and desirable piece of media. There was never really a way to get the Wall Street Journal into someone’s drivetime before we invented it.” Katz is referring to exclusive audio digests of the WSJ, along with other options such as The New York Times, In Bed With Susie Bright, and a virtually unlimited supply of old NPR programs. All told, there are 6,000 audiobooks and 14,000 other programs that can be downloaded to MP3 players and even burned onto a CD. (To avoid the Napster effect, the company limits playback of audio files to specifically identified personal computers and hand-held digital audio players.) Audible is also flogging its “AudibleListener” program, which allows a customer to choose one audiobook and one periodical every month for $14.95 per month — and they’re throwing in a free Otis MP3 player with a 12-month subscription. Titles are typically priced at about 30% less than the same audiobook on cassette or CD, and discounts can reach the 80% range. “Most importantly, we’ve got over 200,000 paying customers who have taken on habitual listening to this product,” says Katz. “Half the customers who have become dedicated users through Audible.com had never used audiobooks before.”

“The MP3 CD has taken off,” adds Paul Coughlin, Sales and Publicity Manager for Blackstone Audiobooks. Coughlin cites the format’s high-quality audio and price savings for unabridged audiobooks. He also predicts that DVD players will before long be standard equipment in cars (put Junior in back and pop in Terminator 2), and those players are MP3 compatible. Of Blackstone’s 2,000 titles, over 500 are available on CD, and 300 are out on MP3 CD. This summer, the publisher will begin offering digital downloads from its website, and “we see an increase every year in both the rental market of audiobooks,” says Coughlin, “as well as purchases from libraries.”

To be sure, libraries are fast becoming a proving ground for digital technology, and other audio publishers report that their library sales have been “growing exponentially.” In what was touted as “the first such deals by a major US trade publisher,” HarperCollins said last week that the publisher’s PerfectBound ebooks would be downloadable and circulated to patrons over the Internet, via distribution from netLibrary and OverDrive. Buried in the press release was the detail that OverDrive’s library package would support digital audio as well. This March the Cleveland Public Library, for example, debuts its digital media collection, which can allow audio downloads directly to patrons’ own devices. (Titles expire on the borrower’s computer at the end of the loan period, and can then be recirculated.) Library Deputy Director Sari Feldman says they’re also creating an online library card to attract “a large market of people” who don’t physically use libraries, but would happily download from home.

Audible now works with 50 library systems, among them the Kalamazoo Public Library, which circulates Rio MP3 players pre-loaded with an audiobook. Library Director Saul Amdursky says he downloads titles according to consumer demand: “If you come into my library and say you want Airframe, you wait while we download it first to our computer and then to a MP3 player. You go away satisfied immediately.” An even more ambitious program has launched at Washington State’s King County Library System, according to Bruce Schauer, Associate Director for Collection Management Services. The library purchased 200 Rio players and picked up 15 titles for its initial “eAudio” collection, and soon added another 400 audio players, with management begging Audible for some way for cardholders to download content directly to their own player.

Cutting Your Own Throat?

Traditional publishers aren’t so sold on the MP3 marketplace. “We can adopt all the technologies we want,” says David Naggar, President of Random House Audio and Diversified Publishing, “but the bottom line is, you’re looking for a consumer to make a purchase. As an industry, we haven’t even made a full implementation to CD, because the consumer isn’t ready.” More than half of Random’s audio sales are still on cassette, he notes. And too many formats can be “hurtful to the industry,” because retailers with scarce audio shelf space don’t know which one to choose. “If you all of a sudden add a third format, you’re basically cutting your own throat,” says Naggar. Such caution may reflect lessons learned from the Random House Audible imprint, with Internet distribution of audiobooks exclusively by Audible.com, in which it has an investment.

“It’s sexy and cool to be talking about MP3,” adds Carrie Kania, VP, Associate Publisher of HarperAudio, “but we’re just losing sight of our main focus — giving audiobooks the best possible representation in bookstores.” Shelf space in stores hasn’t kept pace as the audio industry has grown, she says, and that hurts backlist sales. And Gilles Dana, President and Publisher of Simon & Schuster Audio, says he tested the market with Stephen King’s The Talisman as a MP3 CD, partnering with Borders to sell the disc set both in the audiobook section and in the music aisle. Priced at $49.95 (well below the $75 CD set), it seemed like the perfect way to grab all those early adopters. Would he do it again? “Not tomorrow,” Dana says. “I don’t think the audience is ready for it yet.”

Still, many in the industry are warily eyeing music-based services such as Pressplay, MusicNet, and RealNetworks, lest they too bound into the downloadable spoken audio market. And MediaBay has recently announced the strategic decision to “aggressively grow our Audio Book Club membership by expanding our targeted direct mail campaigns and Internet marketing efforts,” counting a customer base of over 2.8 million spoken audio buyers. Flush from the acquisitions of audiobook clubs at Columbia House and Doubleday Direct, MediaBay is now rolling out niche audio clubs, including he already successful Christian club Audio Passages, and is salivating over self-help, mystery, and Spanish club opportunities. Then there’s the company’s new monthly “Digital Audio Subscription Service,” allowing users to download up to 20 hours of content each month — including audiobooks — for $9.95.

The folks back at Audible, trying to stay one step ahead of the game, have been in market trials with AT&T Wireless for downloads right to your earpiece. From Katz’s perspective, it’s just one more way to get books into whatever future is coming down the pike. “It’s in its early stage, but so was the paperback book and other new innovations that are now the bread and butter of the publishing industry,” he says, ever the investor-visionary. “Audio represents a transitional opportunity for a print product to become part of the look and feel of everyday life.”

Of Attorneys and Agents

When should an author sign up an attorney to clinch a book deal, rather than an agent? It’s a delicate question in the book world, but here’s one straight-up answer: when you’ve got a six-figure-plus deal, and you’re one of the most famous faces on the planet. “Mrs. Clinton’s deal was publicly known to be $8 million,” says Robert Barnett, the Washington attorney who played a prominent role in negotiating it. “She would have paid an agent a million two. My bill was about $35,000.” Simple arithmetic: He charges by the hour; agents don’t.

Barnett, a Senior Partner at Williams & Connolly whose 170 author clients include, besides two Clintons, Lynne Cheney, Dan Quayle, and Tim Russert, says he spends about 25% of his time on authors, the balance being litigation and corporate work. “I feel immodestly that I do this as well as anybody,” he adds, “and I know I do it more inexpensively.” It all started with a book deal for Geraldine Ferraro, and then came David Stockman, who was Reagan’s budget director. “At that point I had done one Republican and one Democrat, and I just started getting a lot of books,” Barnett explains.

Beyond the cold cash, other attorneys say, they can offer one-stop-shops for authors’ agenting and legal needs. “Lawyers provide all the same skills that agents do, but provide a whole range of skills that agents don’t,” argues Ronald Goldfarb, citing fair use questions, freedom of information act requests, first amendment issues, and libel readings — all of which mean retaining a lawyer. Plus, he says, he knows publishers and editors as well as anyone. “My little black book has been going for 30 years now, and I know their beach numbers and office numbers and which ones to go to.” Goldfarb charges a contingency fee, as an agent would, and bills separately for spinoff legal work.

Attorney Ike Williams, whose Kneerim & Williams agency now resides within the Boston office of intellectual property firm Fish & Richardson, notes that established law firms also offer logistical support unavailable to agents who fly solo. “A lot of money flows through an agency, and that takes a fairly developed back office,” he says, pointing to nuances of cash flow easily handled by large legal firms, such as filing under reciprocal tax treaties with foreign countries. Williams’ agency has about 400 clients, managed with Co-director Jill Kneerim. (They are joined by Elaine Rodgers and Alexis Rizzuto, plus New York–based agents Rob McQuilkin and Brettne Bloom.) Fees are based on a standard agent commission, but, says Williams, “The difference is you have legal advice included in that 15%.”

Moreover, says Mary Luria, Partner at New York–based law firm Davis & Gilbert, any book with serious legal problems will benefit from having a lawyer brought in at the contract stage. Lawyers also make sense for authors with multiple deals at a single house, where contracts may just need a lawyerly once-over. “One author told me it didn’t make sense that he was parting with a percentage every time,” Luria notes. Ideally, wise authors will figure out the most cost-effective strategy: “If I can add value to ICM’s comments for a client whose business interests I understand, the net result is the best contract for this author.” (Luria’s firm was recently joined by Martin Garbus, who tells PT that while he represents about 5 authors as an agent, he has no plans to take on further agenting work.)

By contrast, J. Stephen Sheppard, Partner at Cowan, DeBaets, Abrahams & Sheppard (and formerly an agent with the Paul Reynolds agency) specifically does not do what agents do — and that goes for Ellis Levine, newly Of Counsel at the firm — arguing that it does a disservice to the authors. Agents know the marketplace, the editors, and the judgments that go with placing an author, he says, although he works closely with large agencies to handle contract negotiations and other legal matters.

In the end, for most authors, agents may still be the front-line literary gatekeepers. But Barnett says he turns down 20 authors each week — indicating no shortage of interest in his services — and he’s got a few plans of his own. “My hope is to get into the world of big fiction,” he says. “Most of those are cookie-cutter deals. And those people could literally save hundreds of thousands of dollars using someone other than an agent.”

Trendspotting: Betting With Your Head

PT’s Savvy Commentators Ponder the Fallout from Another Year in Publishing

As we surveyed the smoking turf from another twelve months in the book business, it struck us that this year’s pinnacles and pratfalls were decidedly in the eye of the beholder. We asked a number of savvy publishing personalities to offer their take on the ever-shifting corporate landscape of trade publishing. Here’s what they saw.

Sara Nelson, Senior Contributing Editor, Glamour, and New York Observer publishing columnist:
Call me contrary, but I don’t happen to believe that the book business is going to hell in the proverbial handbasket, thanks in large part to some publishers’ realization that they need to use smaller handbaskets. In a year when “big” blockbusters like Michael Crichton’s Prey and Stephen King’s View From a Buick 8 performed — no matter what their publishers say — disappointingly, such so-called sleepers as The Lovely Bones and Koufax have broken the bank. (The former boasts 2.5 million copies in print, the latter a more modest, but impressive quarter-million.) The secret: betting with your head, not over it. Both books were bought for decent advances in the $100-200K range; both have more than earned out, and their writers and houses (and agents) have filled their pockets, but as a reward, not an incentive, for work well done. Does that mean Riverhead will take a bath on Kurt Cobain’s Journals, for which it paid a reported $4 million? Not necessarily, but only time, the Christmas rush, and foreign receipts will tell. Meanwhile, Little, Brown and HarperCollins are laughing all the way to the bank.

Michael Cader, Book Packager and Publishers Lunch founder:
For years media conglomerates and their publishing divisions have simply gotten bigger and bigger. But with Vivendi’s blow-up, AOL’s troubles, and some thoughtful sniping from the sidelines by New York media columnist Michael Wolff (who will expound more on the fall of the Titans in his book for Harper next year), this year you heard lots of people wondering if the mighty could grow no more. There was even speculation — or wishful thinking — that trade publishing could see a mild return to the romanticized days in which leading publishers were privately held enterprises, focused more on building lists and companies than making next quarter’s number.

What’s certain is that privately-owned publishers are showing the ability to attain meaningful scale, and the trend is likely to continue. The behemoths may have swallowed as many imprints as they can (and gotten so big that who knows if they could find buyers if they want to sell), but the back-end nuts and bolts of distribution and fulfillment look like the area headed for even further consolidation, and one path to the kind of margins and growth that investors look for.

Take Frank Pearl. He seemed like just another dilettante investor looking for glamour when he started the Perseus Books Group in the mid-’90s. With this year’s purchase of Running Press, the company has become a true mini-major and seems intent on further expansion. Interestingly, after completing the merger, Pearl and Jack McKeown decided to forgo the Running Press model of self-distributing, giving up that company’s warehouse in favor of renewing their agreement with Harper for distribution and fulfillment (minus the sales component). In another privately-held success story, Andrews McMeel closed its Kansas warehouse, shifting back-end operations to Simon & Schuster. Meanwhile S&S and Harper regularly note the positive impact of these back-end relationships (Harper is buoyed by a similar relationship with Scholastic).

PGW, on the other hand, was considered the “best of breed” independent distributor, growing so successfully that the company probably went as far as it could on its own. It turns out the unit is a perfect fit for public AMS as the company continues to expand dramatically, while maintaining a profitable division publishing specifically for the accounts they sell. Notably, PGW co-founder Charlie Winton set off on a Pearl-esque course, buying back the Avalon Publishing Group as part of the AMS deal after (like Pearl) realizing that he had transformed relatively modest publishing assets into a substantial company. Following the Perseus model, Avalon will leave its distribution with PGW, and has agreed to a joint venture imprint with Jack Shoemaker.

Of course, the biggest newly private publisher may not stay that way for long. Once-public Houghton Mifflin is in the hands of private vulture capitalists, having shed over $500 million in value from the year before, and drawing only one bidding consortium willing to come close to Vivendi’s fire-sale price. The new owners insist they’ll keep Houghton whole, at least for now. But if there’s a logic to the year’s major transactions, they’ll need to either add to the modest trade unit, sell it, or at least farm out the back-end.

Mike Shatzkin, Publishing Consultant, Idea Logical Company:
For a few years, several major publishers — notably Random House, HarperCollins, and Simon & Schuster — have been managing data warehouses to help them analyze the supply chain. In some cases employing BookScan data, and in some cases building what amounts to an in-house substitute, publishers have been able to boost the productivity of the books they manufacture.

Now, thanks largely to data feeds offered by Barnes & Noble and Borders through BookScan, this effort is spreading. Even publishers who don’t avail themselves of the full BookScan service, which aggregates point-of-sale data (but not inventory) from an estimated 70% of the cash registers ringing up books, go to the FTP site to get detailed chain-level information. The number of publishers getting BookScan data now tops 300.

The chain data allow those publishers to compute stock turn by title and by store section, giving them an effective tool to persuade buyers to raise inventory levels on some titles (and signalling that others should be sold down or returned, of course). One of the major wholesalers in the trade is looking at providing data to “employ” their publisher-vendors in the same way. As publishers use sales data to improve their own understanding of the profitability of their inventory in their customers’ stores and warehouses, the interaction in the supply chain will become more collaborative. In 2003, we can expect to see more effort by publishers’ customers to supply helpful data, with the reciprocal expectation that publishers will apply effort to “turn data into information” in ways that reduce returns to everybody’s benefit.

Karen Jenkins Holt, Managing Editor, Book Publishing Report:
The Houghton Mifflin deal aside, this was a year without any of those mega-acquisitions that we’d seen in previous years. But there were surprising combinations. One of those was the $760 million Reader’s Digest acquisition of Reiman Publications, a profitable company that was off the radar screen of the usual media and business types. The Wisconsin-based direct marketer publishes enthusiast magazines and books that are inexpensive to produce — people send in their own recipes, for example — and came to the table with a database of 32 million names, 19 million of which Reader’s Digest did not have in its database. You put those two together and you’re talking about tens of millions of people who have expressed interest in these topics. As Reader’s Digest’s problems in its Books and Home Entertainment division have been well documented, it will be interesting to see how the acquisition of Reiman can help them out. [Holt’s survey of the year in M&A activity will appear in next week’s BP Report.]

Joe Spieler, The Spieler Agency:
Of course the sky is falling, of course retail sales of books are off (and for some titles punishingly so); yes, publishers seem to be tightening up; yes, there are fewer publishers, and their imprints nest like Russian dolls (even as I write this, I have a direct line-of-sight to Bertelsmann’s new American colonial HQ, finished in dark cladding that entirely fails to obscure its banal architecture). Yes, editors’ lunch budgets (I don’t concern myself with their travel funds) are being cut, though I still seem to be eating out quite decently on the cuffs of others; yes, editors collectively seem to be doing less editing and more ushering; yes, publishers are still cutting back on vital staff.

On the other hand: how wonderful that Pat Strachan is at Little, Brown; how extraordinary that Jack Shoemaker gets to live another of his nine publishing incarnations at Shoemaker & Hoard; how reassuring that most everyone I speak to is either publishing or has sold to a trade house an “obviously” uncommercial book that is dear to his or her heart (self-serving Spieler Agency pick: The Afterword by Mike Bryan, Pantheon, March 2003); how wondrous that young editors classified as “interns” can still somehow survive on $18,000 a year (without benefits) and that even if they don’t know the novels of Sir Walter Scott, they’re still onto stuff that most of us who are into their fourth decade (and beyond) are not. And don’t we continue to feel just a tad smug that we can say of our work with books that it involves the ideas, the imagination, the creativity, and the very lives of writers?

Of Pricing and Purgatory

Two New Surveys Suggest That Book Price-Elasticity Is Getting All Stretched Out

Among the persnickety trends of 2002 was continued brow-furrowing from industry observers and surveyors about the perception that book prices are disastrously high (see article). Some have cited the ruinous effect of “increasingly ubiquitous remainders” on the one hand, and stunningly deep discounts at mass merchandisers on the other — both of which make people who pay “retail” price feel cheated. Others note that Len Riggio is hardly alone in pushing for more discount and lower prices, further pilfering publishers’ margins. And then, pity the poor book buyer. “Consumers are often baffled at the price tag attached to what appears to be little more than a mass of paper, cardboard, and ink,” declared Salon’s Christopher Dreher last month, worrying over that stumper, “Why Do Books Cost So Much?” The answer: hardcover fiction and nonfiction books don’t, at least from a historical perspective. Bowker statistics show that when adjusted for inflation, hardcover fiction prices have actually sunk by 2% over the past 25 years, while nonfiction hardcovers tumbled in real price by 27%. “I’m not very surprised,” political science professor Robert Sahr told Salon. “Trade books are one of the clearest examples of a completely discretionary purchase. They have to be price-sensitive.”

Still, the same numbers show that even when adjusting for inflation, mass-market paperback prices have shot up almost 40% and juvenile titles soared by about 60%. All things considered, Salon concluded, “what’s taken a huge bite out of America’s book budget is the rise of the trade paperback” — which has “supplanted those less expensive” mass-market titles and driven consumers to wallet-numbed distraction. “The prices are kind of astonishing,” as one sticker-shocked Barnes & Noble customer stammered to the New York Times late last year. “I keep putting things back because I look at the price.”

Price Elasticity: Stretched Out?

It doesn’t take a forensic economist to figure out why, according to a recent poll of over 1,300 visitors to the Book Reporter website, 57% of respondents said they had been buying used books for years — with 42% of the respondents citing price as the main factor. (Another 24% said they wanted to fill in their collection of an author.) More to the point, about 17% said they recently started buying used books, and roughly the same number said they had bought more than 10 used books in the past three months. But before you go and blame Jeff Bezos, consider this: by far the largest number of respondents shopped for used books at their local bookseller, and only 17% shopped for them at Amazon.com (perhaps poking a hole in the Authors Guild’s apocalyptic scenario whereby Amazon’s used-book sales will imperil literature as we know it).

Of those survey respondents that did troll for used volumes at Amazon, 41% said that if offered the used book on the same page as the new one, they’d buy the used one if it were more than 50% off. However, 38% would still buy the new book. (Taking another tack, the New York Times reported that customer loyalty at Amazon seems much higher than at BN.com: a 1% price increase at Amazon reduces sales there by half a percent, while the same increase at B&N spurs a 4% sales drop — eight times as large.) Also of note in the survey, when respondents were asked what one format they would choose if price were not a factor, 55% said they’d buy a hardcover. “To me that indicates it’s not about rising paperback prices,” says Book Report founder Carol Fitzgerald. “It’s all about the price of the hardcover.”

Meanwhile, as the swivel-screen dawn of the Tablet PC rekindles e-publishing visions, consumers may soon wonder why ebook prices are so high, according to a separate study. In the Open eBook Forum’s “Consumer Survey on Electronic Books,” which was conducted at New York Is Book Country last fall and aimed to test ebook perceptions among the paper-friendly crowd, 61% of the 263 respondents said ebooks “should be priced the same as paperback books.” The upshot: “There appears to be little price elasticity by consumers for what they will pay for eBooks.” The OeBF’s antennae were all akimbo over a different result, however: “Contrary to a commonly held industry belief, results indicate no correlation between computer skills or daily Internet use and downloading an eBook,” the OeBF reported, hammering home the idea that heightened awareness of ebooks would be the format’s prime mover. And 70% of respondents said they’d buy an ebook “if it could be read on any computer.” As the study noted: “The consumers want to read the eBook they bought on their home computer, their handheld organizer, their laptop, their personal digital assistant, and their dedicated eBook reader.” And again, regarding general book prices, the largest share of respondents said they shopped at discount bookstores.

Dodging the ‘Death Spiral’

Yet it may turn out that backpedaling on list prices is no surefire remedy for sluggish sales. There are zillions of bargain books out there to placate the price-sensitive, contends industry consultant Mike Shatzkin. “Because the act of reading a book requires a bigger commitment than money — which is many solitary hours of a person’s time — it is doubtful that price-cutting will draw too many non-readers to become readers,” he argues. Shatzkin also implicates book returns as a key driver of price inflation. “Returns have been rising,” he pointed out in a recent online debate on pricing issues, “and those books manufactured and not bought have to be paid for by the books that are bought.”

That may be so, but it doesn’t mean publishers can simply tweak the supply chain and go back to business as usual, responds Publishers Lunch founder Michael Cader, who has sounded an alarm over modern-day publishing’s “mathematical death spiral”: the toxic convergence of stagnant book dollars being spent, increasing book prices, and increasing numbers of both new and used titles on the market. In Cader’s view, boosting book sales means going back to the beginning. “To prosper, the business needs to grow. And to grow it needs new buyers,” he notes. “We spend the very early years reading to children and encouraging them to enjoy the practice and see it as a window on their world. And then we turn them over to the textbook publishers, a medicine-flavored scholastic ‘canon,’ and a marketplace with little that appeals to ‘tweens’ and, yes, one that they see as expensive.” As for adults, Cader sees hope and an instructive lesson in the significant growth in deep-discounted frontlist sold at warehouse clubs and other non-book discounters. “People who aren’t supposed to be core book buyers are grabbing what they see as an attractive deal on impulse. To me that alone says something powerful about how price can correlate to growth.”

Bonjour, M. Le Monopoly

The sell-off of French giant Vivendi’s media assets has had buy-out bankers licking their chops the world over. But what does it spell for the increasingly monolithic publishing culture in France? This month Jean Rosenthal, former President of French publisher Stock and currently a translator and consultant to the publishing business, offers a view from Vivendi’s home turf.

“He really is a very clever guy,” an investment banker commented after the announcement that Jean-Luc Lagardère had bought Vivendi Universal Publishing. It is indeed a coup you can only see every quarter-century in the book business, ending a nerve-racking spell after the departure of Jean-Marie Messier, the flamboyant President of Vivendi (and now tell-all author of My True Diary). Dodging European anti-trust regulators and putting down protests by his own compatriots, the artful Lagardère has managed to turn his company, France’s enormous aerospace-and-media concern, into the nation’s now undisputed book publishing behemoth.

How could it have come to this? When new Vivendi CEO Jean-René Fourtou arrived last July, he knew only that he had to find one thing: cash. Specifically, a liquidity infusion for a group exhausted by too many acquisitions. Selling off the company’s entertainment units — cinema and music — presented a number of touchy problems, with partners across the Atlantic deeply reluctant to cede control of Hollywood studios to non-Americans. That left one option: books. Fourtou decided at a very early stage to sell the publishing branch of the company, Vivendi Universal Publishing (VUP), a huge chunk of French letters including such prestigious houses as Laffont, Plon, Presses de la Cité, Belfond, Press Pocket, and Larousse. Before the Messier era, this galaxy of publishers bore the rather nice name of Groupe de la Cité. With a turnover of 2.5 billion euros in 2001 (1.1 for Europe, 1.4 for Houghton Mifflin), it was #1 in French publishing.

Those who have followed the buy-out blow-by-blow will know that there were three eager suitors: PAI, in partnership with Apax Partners and American funds Thomas H. Lee, Blackstone, and KKR; Eurazeo, a holding of the French Banque Lazard in partnership with American fund Carlyle; and Lagardère, who had bought Hachette more than 20 years ago when he was a leader in the arms and missile industry. When rumors of the mammoth sale began to leak, protests rang out: it was unconscionable to let le patrimoine français fall into the hands of foreign investors, and finance vultures on top of that. Lagardère rode in on his white horse, with aerospace connections to the French administration and a chummy relationship with President Chirac. Wishes from the Elysée Palace did not leave Jean-René Fourtou unmoved, and Jean-Luc Lagardère pocketed VUP.

This created an extraordinary situation. For the time being, and before any sale to other publishers to prevent a monopolistic situation, the new Hachette-VUP group represents 30% of the French trade publishing market; 80% of its paperback market; 80% of reference books, dictionaries, and school books; and 70% of the nation’s book distribution business. The behemoth has a turnover of practically 2 billion euros, a staggering ten times as much as its direct competitors: Gallimard, ranking second among French publishers, with a turnover of 235 million euros; and Flammarion, with turnover of 216 million.

Reactions were immediate. Antoine Gallimard, President of the company bearing his name, says: “It is an earthquake.” He claims to be worried not so much about freedom of expression, but about the nuts and bolts of the business: “the distribution system may well be an overwhelming burden.” Claude Cherki, CEO of Editions du Seuil, adds: “Mr. Fourtou has just taken a tremendous risk. The situation of the publishing industry in France will be unique, with the creation of an enormous group which will be a mega monster.” Groupe Albin Michel President Francis Esmenard, as usual, was more restrained in his comments, suggesting in a very British way that the nation should wait and see. (One should observe that since Lagardère will be legally bound to sell a few companies, Albin Michel would have a unique opportunity to strengthen its position in the textbook field.) On the other hand, a few voices were heard to defend Hachette’s stand. Fayard CEO Claude Durand, in a letter to Le Monde, expressed enthusiasm to see Lagardère offer a “solution, both French and realistic instead of the purely financial and essentially American propositions made by other candidates.” At the same time, Jean-Louis Lisimachio, the head of Hachette Livre, tried to reassure booksellers, who were panicked to see Hachette devour such a huge share of the French market.

Enron, N’est-ce Pas?

Jean-Marie Messier, on the other hand, has his own spin on the matter in My True Diary. It perhaps goes without saying that the title was not published by his former publisher, Hachette Littérature, but by Balland, a small independent company. The former Vivendi CEO explains that he has been the victim of a council of godfathers led by Claude Bébéar, the former President of AXA, the largest French insurance company, who loves to play the éminence grise of French capitalism. Messier admits a few mistakes, but regrets he was not given the time to show that he was right. (“Vivendi is no Enron,” he told reporters in Paris, when put on the spot about the fact that French authorities were investigating alleged corporate misdeeds under his watch.)

Whatever the reactions, the die is cast, and it is highly unlikely that any serious challengers will oppose the deal. It is true that Lagardère used a very clever stratagem to avoid problems with the European Commission in Brussels, which is always on the lookout for unfair competition. VUP was sold to Natexis, a bank which in due time will sell pieces of the prey to Hachette or to other buyers. Meanwhile, both Jean-Luc Lagardère and his son Arnaud vow that Hachette will “preserve the French cultural heritage and respect the independence” of publishers. As Lagardère ironically observes, “At the time we bought Hachette in 1980, people were shocked to see ‘un marchand d’armes’ take over a prestigious publishing house; today, they resent the fact that a big publisher could swallow a competitor like VUP. For my status, it sounds like an improvement.” As for Vivendi itself, the sale of VUP will be like uncorking an oxygen bottle. The company, which is $19 billion in debt, needs cash to reinforce Cegetel, the phone company which is a highly desirable asset in the group. The books-for-phones irony was not lost in publishing circles. “It is too bad indeed to jeopardize the status of French publishing companies,” Antoine Gallimard sadly commented, “in order to save the future of the French telephone industry.”

Tablet PC: The Ebook Savior?

It was not so long ago — well, 2000, actually — that the age of ebooks ascended upon us, an era that would, as the AAP and Andersen Consulting then dreamily proclaimed, be “a significant opportunity” for the book biz, devouring almost 10% of the total consumer publishing market by 2005 and bloating into “total projected retail sales of $2.3 billion for the trade publishing industry.” Remember RocketeBook battling Softbook, and Palm menacing Microsoft to dominate the world of onscreen reading? By 2001, of course, expectations had been brutally downsized, and last week might have seemed like the nail in the coffin, as Reuters announced that Gemstar would try to dump its ebook business, including RocketeBook and Softbook, under the feeble proviso that a sale would occur “if a buyer emerged.”

Ding-dong, ebooks are dead. So why are 350 hype-weary publishing types scrambling to attend a sold-out conference on December 5 hosted by The Open eBook Forum?

Behold the Tablet PC. Unveiled by Microsoft on November 7, the new gizmo weighs about 3 pounds and allows the user to write on it with a stylus, or read from it, thanks to an onboard copy of Microsoft Reader. Chairman Bill Gates has already boasted that within five years (the timespan of choice for futurists) “it will be the most popular form of PC sold in America.” But will early adopters shell out $2,499.99 to read on it? For his part, Chris North, VP and General Manager of Electronic Publishing at HarperCollins (and a speaker at Open eBook’s “Tablet PC Digital Publishing Conference”), volunteers that the tablet is “pretty cool.” “Reading trade books is not one of the primary purposes” in buying a tablet, he adds, but he thinks that, just as Palm Pilot users began downloading ebooks onto their devices, so will tablet owners. But this time, cautions North, publishers who survived the “extremes of over-enthusiasm and despair” will greet the new opportunity with “more realistic” expectations.

Still, they have expectations, and that’s attracted paying customers (with some seats advertised at $129 a pop) to one of the first industry conferences in a year or more. In addition, the lineup of sponsors, including AOL Time Warner, NYU Center for Publishing, and McGraw-Hill (along with the Adobes, Fujitsus, and Microsofts of the planet), suggests that all of those files weren’t digitized for naught. Most impressively, perhaps, the conference embraces not just book publishing, but newspaper and magazine publishing, making it one of the first conferences in which every medium of consumer publisher will participate.

Indeed, for those on the magazine side, the Tablet PC is a ray of hope. “The tablet introduces a whole new ballgame,” says Dan Schwartz, President and CEO of digital newsstand Qmags (also known as Qiosk). “That’s the excitement for us and the ebook space.” Qmags.com, now offering electronic delivery of eight magazine titles, including Popular Mechanics and The American Lawyer, has been plying a space also inhabited by Zinio.com (peddling e-versions of 20 magazines, such as Business Week and National Geographic Traveler), and NewsStand.com (with about 30 periodicals). Schwartz thinks the big draw is digital delivery, not onscreen reading. “There are people who read onscreen, but we think they’re a minority,” he says. Still, with the Tablet PC’s light weight and improved display, reading on your PC is easier than it’s ever been. The real trick is tapping into a revenue stream, and by Schwartz’s lights, online books may well become more like online magazines — delivered as serialized books, or even sponsored books — because the advertiser-based model simply offers more avenues for cash. “We’re really still very much at the frontier,” he adds. “It’s the frontier of the frontier.”