A

PUBLISHING

Bigger, Not Better

The 1980s was a decade in which publishers' business decisions changed the sorts of works available to readers and markedly altered the format in which those works were presented. The combination of recession and inflation that afflicted the American economy in the late 1970s and early 1980s adversely affected book sales and made publishers easy prey for large conglomerates more concerned with profits than good books. At the same time, independent bookstores, often owned and staffed by book lovers, were giving way to large chain stores that had large advertising budgets and could sell books at lower prices because publishers gave them discounts for buying in large quantities. Even after publishers responded to complaints from independent store owners by offering them discounts as well, the small bookshops had difficulty competing with the chains. The result was a growing standardization of offerings nationwide, with both publishers and bookstores merchandising best-sellers and books by popular authors at the expense of books with acknowledged merit but limited sales potential.

Takeovers and Mergers

The trend of publishing houses being swallowed up by larger and larger conglomerates picked up speed in the 1980s and continued into the 1990s. By 1992 seven giant conglomerates dominated the publishing industry and accounted for 80 percent of all best-sellers. Several of these companies brought together book publishing with other media, including newspaper chains, television networks, and movie studios. In 1980 the Newhouse newspaper chain made news when it paid between $65 million and $70 million for Random House—which had earlier merged with Knopf (1960) and Pantheon (1961), become a subsidiary of RCA (1966), and then bought Ballantine paperbacks (1976). Bertelsmann AG, a German company that became the largest media conglomerate in Europe, bought Bantam paperbacks in 1980 and Doubleday in 1986. The merger news in the late 1980s centered on the actions of two controversial media moguls: Englishman Robert Maxwell and Australian Rupert Murdoch. After an unsuccessful attempt to take over Harcourt Brace Jovanovich, Maxwell acquired a foothold in the United States in 1988, when he bought Science Research Associates from IBM and Macmillan. Murdoch spent several decades creating a newspaper empire before turning to book publishing, buying the British firm William Collins in 1981 and the U.S. publisher Harper and Row in 1987. In 1989 he merged these firms with several other publishers—including Basic Books, T. Y. Crowell, and Scott Foresman—to form HarperCollins. Murdoch's News Corporation also owns 20th Century-Fox movie studios and the Fox Broadcasting television network. Gulf and Western, which had owned Paramount Pictures Corporation since 1966 and book publisher Simon and Schuster since 1975, expanded further into publishing in 1984, when it bought Esquire, Inc., Prentice-Hall, and Glen and Company. By 1989 Gulf and Western had sold its consumer-and-industrial-products and financial-services divisions, becoming exclusively an entertainment and communications company and changing its name to Paramount Communications. In 1991 the company bought Macmillan and moved into pay-per-view television. Three years later Paramount was bought by Viacom, Inc.

Looking for "Blockbusters."

In 1980 a Supreme Court decision changed the way publishers accounted for un-sold books and had an adverse effect on the availability of books to the public. The court upheld an Internal Revenue Service ruling that the value of unsold merchandise could not be discounted for tax purposes. Faced with having to pay taxes on the full value of books sitting in warehouses, publishers began remaindering or destroying unsold books much sooner than they had in the past. The ruling, combined with the conglomerates' emphasis on profits, made publishers less willing to take chances on quality books that seemed unlikely to become best-sellers immediately. The ruling had a particularly adverse effect on scholarly and technical publishers, who typically expect to sell their books slowly but steadily over several years, but it also hurt commercial publishers committed to maintaining the availability of books of genuine merit regardless of their sales. At the same time, publishers began to gamble on "blockbusters," paying larger sums of money for books by authors with proven track records of best-sellers. For example, in 1980 Bantam Books paid $3.2 million for Judith Krantz's novel Princess Daisy, a move widely deplored as proof that publishing had become "a money-mad branch of show business," as John F. Baker said in Publishers Weekly (13 March 1981). In 1981 Simon and Schuster paid popular astronomer Carl Sagan a $2 million advance for a novel he had not yet started to write. By the middle of the decade the ante had increased. In 1986 William Morrow and Avon Books paid $5 million for James Clavell's novel Whirl wind, and in 1988 Simon and Schuster paid Mary Higgins Clark a $10 million to $11 million advance for her next four novels.

The Paperback Trend

During the runaway inflation of the late 1970s and early 1980s, book costs increased sharply, and consumers began to balk at paying high prices for hardcover books. Bookstores began stocking more and more paperbacks and fewer hardbacks. Main-stream publishers responded to the trend by publishing some books simultaneously in hard and soft cover and by starting their own lines of trade paperbacks, including old, proven moneymakers as well as new books brought out only in paperback. This break with the traditional practice of first publishing a book in hardcover and later selling reprint rights to a mass-market paperback publisher also had an effect on mass-paperback publishers, who began publishing more and more paperback originals. Often these books were genre fiction, such as science-fiction or romance novels, and these publishers continued to bid high for softcover rights to hardcover "blockbusters." Yet they bought fewer and fewer of the sort of moderate sellers on which they had been willing to take chances in the past. The trend hurt hardcover publishers, who depended heavily on the subsidiary-rights income generated by sales of paperback rights, and it adversely affected readers, whose selection of inexpensive paperbacks became more narrowly limited to books with proven sales records.

The Birth of Desktop Publishing

In general publishers were slow to understand the implications of the computer revolution for their industry. John F. Baker, editor of Publishers Weekly, commented in early 1983 that in most publishers' offices only billing and record keeping had been computerized and added, "oddly enough, authors seemed in many cases to be more technically sophisticated than their publishers." The situation soon changed, however, after the resolution of problems arising from the incompatibility of different brands of computer hardware and software. Where once publishers depended on outside typesetters to set type from edited typescripts, by the mid 1980s they could avoid printers' errors by entering editorial changes directly into the version provided by the author and then create their own pages directly from desktop computers.

New Technologies Create New Markets

In 1984, while publishers were finding ways of using new technologies in book production, they also began efforts to bolster sagging profits from book sales by exploiting the markets created by the development of VCRs, small audiocassette players, and home computers. Self-help books and best-sellers on audio tape turned out to be hot marketing news in 1985, catching on faster than the higher-priced videos, which eventually found a niche in the market. Publishers' efforts at creating and marketing computer software were largely unsuccessful. By the end of 1984 they had flooded the market with some four thousand software titles—far exceeding the needs of a still-limited number of home-computer owners. The problem was compounded by the fact that the software was being sold in bookstores, where salespeople lacked the expertise to advise customers about selection and installation. Publishers saw potential in computer software, but the market was not yet established. Even in the early 1990s traditional publishers avoided digital publishing, which was taken over by software entrepreneurs.