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Dec 2009

Richard Curtis on
Publishing in the 21st Century

From
Mastering the Business of Publishing

by Richard Curtis

Originally published by E-Reads

CHAPTER 23

Book Clubs

BOOK CLUBS ARE such solid fixtures in the lives of authors, agents, and publishers that we take them for granted, like enormous monuments that we no longer notice on our way to work every day. How impoverished our environment would be without book clubs can easily be grasped when you realize that some 7 million Americans subscribe to them. And because changes in pricing, reader tastes, distribution, marketing, and other trends have drawn new attention to the functions of book clubs, this is a particularly good time to examine this phenomenon.

Book clubs are an outgrowth of attempts to reach a larger segment of the reading population than was then being served by bookstores. Experiments like department store book clubs (there were Macy's, Gimbel's, and Bloomingdale's clubs among others) and tie-ins of cheap editions of books with the sale of products (a tobacco company included miniature volumes of Shakespeare plays in its cigarette packs) inspired an enterprising merchandiser named Harry Scherman to found the Book-of-the-Month Club in 1926. He perceived that an enormous potential audience, particularly in rural areas, had inadequate access to bookstores in towns and cities. Mail order, which worked so successfully for many other products purveyed to rural people, ought to work with books, too, Scherman reasoned. But he put a twist on this concept that made it a dramatic departure from the Sears, Roebuck approach. It's called the "negative option," meaning that unless members expressly indicate that they do not want the latest selection, the club will assume they do want it and will send it to them. Scherman's insight into human nature was almost diabolically shrewd. Perhaps he didn't trust that members would buy books simply because they were good, and he counted on such human foibles as laziness, guilt, and confusion to make members default on their obligation to return their cards in time to prevent clubs from shipping selections to them.

Whatever the motives of Scherman and subsequent book club entrepreneurs, the clubs caught on fast and hard, sweeping the country and, in the process, revealing some serious flaws in the way that books in this country are distributed and promoted. One publisher observed that "the clubs advertised books extensively and nationally, sold them regularly to people who had previously been only occasional book buyers and, most importantly, fostered the habit of regular reading," according to John Tebbel in his excellent book about American publishing, Between Covers. Tebbel cites book clubs for professionals such as businesspeople, engineers, and the like as particularly effective in reaching audiences that conventional bookstore marketing simply cannot touch.

Not unexpectedly, the creation of the clubs provoked a great outcry among retail bookstore owners, who felt gravely threatened by them, particularly when the Literary Guild added the wrinkle of offering books for prices below retail. Many retailers accused publishers who dealt with clubs of collaborating with the enemy. Harder to comprehend was the opposition by publishers, who after all did stand to profit from book club revenue. Their contention, however, was that book clubs represented an element of crass mercantilism and cynical exploitation of the hallowed spirit of literature (publishers believed the oddest things in those days!). The Bookman asserted that book club members were "too feeble-minded, too lazy, or too busy to make their own choices." But book clubs were an idea whose time had come, and after consolidating their gains during the Great Depression of the 1930s (reading being one of the few affordable pleasures of that grim era), they became the institution we revere today.

With few exceptions, the basic idea concocted by Scherman has not changed. A lot of other things have, however, forcing Book-of-the-Month Club and its imitators and competitors to take measures to keep up with changing times, tastes, and conditions.

One of these is the shrinking of rural America, making bookstores accessible to people in all but the remotest reaches of the nation. Fortunately for the clubs, accessibility of bookstores is not by any means the most important factor for potential book buyers. Indeed, urban members constitute a large portion of the clubs' memberships. A far more important element is price. Book clubs offer discounts on the list prices of books, starting at around 10 percent, and additionally offer free bonus books plus sign-up inducements such as free sets of books.

As long as a wide gap existed between bookstore and book club prices for books, clubs could hope to continue doing a healthy business. The critical test came when the paperback revolution took hold, making paperback originals and reprints available for prices far below those offered by clubs to their members. But the clubs came through the test unbowed, revealing how solidly the convenience factor figured in the thinking of book buyers.

Most recently, the clubs found themselves under intensive fire from their old enemies the bookstores following the explosive expansion of such chains as Crown and Barnes & Noble. Not only did these chains reach deeply into rural territories that had been big profit targets for book clubs, but they started discounting books at or below the prices offered by the clubs. And when you added postage and handling charges to the prices members paid for book club selections, the allure of the stores became very compelling. Fortunately for the clubs, the stores could not sustain the narrow profit margins generated by "deep discounting," and although discounts are still offered on certain books by chain stores, the threat to the clubs from that source seems to have been averted.

It would appear that no matter what weapons the enemies of book clubs throw at them, the clubs survive because they possess one advantage the stores cannot overcome: selectivity. For readers too busy or uncertain to sort out the welter of new books, clubs proffer the recommendations of a panel of experts who have screened the candidates and distilled the very best. Furthermore, many book clubs cater to specialized tastes. Book buyers interested in subjects ranging from dance to war, mysteries to science fiction, nostalgia to travel, sailing to nursing, business to computers can satisfy their predilections by joining clubs aimed at those specific interests.

Most book clubs make their selections in pretty much the same way. Publishers submit books at an early stage, in manuscript or proofs, accompanied by promotional material and any other information about book and author that the publisher may feel will make the book more attractive to club members. (On occasion, a book will be chosen by a club after publication.) The submission is assigned by the club's editorial board to a reader, hopefully one who will give it an informed and sympathetic reading. Recommended works are then circulated to the rest of the editorial committee and are discussed, rated, and voted on. The club then negotiates deals with publishers on the books they wish to acquire. The club either guarantees to purchase a quantity of copies of the publisher's edition or, if the club has its own printing facility, licenses the right to publish its own edition. In either case, most clubs pay an advance against a royalty, though some smaller clubs pay a flat fee for a fixed, one-time printing. After the deal is struck, the clubs solicit orders from their membership. Except for the clubs that do their own printing, most clubs earn their profit from the difference between the cost of copies purchased from publishers and the price received from subscribers.

Although most clubs allow members to pick and choose selections, the Reader's Digest Book Club operates by requiring its members to take each and every volume offered during their term of subscription. The RDBC selects several titles to go into each monthly release, then condenses and edits them for both length and taste. In keeping with Reader's Digest's editorial policy, there are strictures against excessive sex and violence, hard-to-identify-with characters, and slow-moving or excessively philosophical, controversial, or experimental books.

Book clubs are a major source of book sales, the largest clubs reaching hundreds of thousands of subscribers, and one of them, the Reader's Digest, boasting approximately 1.5 million members. While condensation and/or expurgation of your book (and sharing of your royalties with companion authors in the same volume) may not thrill you, sale of your book to RDBC is a handsome score, with advances starting around $25,000.

For the biggest literary stars the advances paid by book clubs can be mind-boggling, such as the $1.75 million reportedly paid by the Literary Guild for James Michener's The Covenant after a bidding war with the Book-of-the-Month Club. BOMC's advance for a less-blockbusting main selection is still nothing to sniff at, around $80,000 on the average if there is bidding competition by other clubs. If, however, there are no bidders to bump up the action, book clubs may offer as little as they can get away with. In any event the advances paid by most clubs are usually below $10,000. Often, however, publishers can sell the same book to more than one club. Royalties usually range from 5 to 10 percent of the book club's price.

The money paid to publishers by book clubs is, with almost no exceptions, split equally between publisher and author, and in a great many cases the club income makes the difference between profit and loss for a publisher on a given book. Indeed, a former head of Book-of-the-Month Club told a gathering of literary agents that she considers book clubs the saviors of midlist books. It can certainly be argued that in an era of increasing attention to frontlist books, book clubs keep a great many books in print far longer than publishers themselves are able to do.

Although the key interface with book clubs is the book publisher, agents often cultivate book club executives in order to give them early notice of publication deals on books that might be hot prospects for the clubs. Some time ago, my agency performed the equivalent of passing a camel through the eye of a needle when we submitted an unsold manuscript directly to the Reader's Digest Book Club and secured a commitment from the Club to buy the book if we could find a publisher for it. We had failed up to then to sell this lovely family-type story that seemed to be too tame for the editors who had read it. But it was right up the RDBC's alley, and armed with a five-figure book club offer, we easily attracted a publisher for the book. But this was a rare event and we just happened to have the right book in the right place at the right time.

It's hard to imagine authors failing to be delighted by book club sales, but there have been a few. Willa Cather's arm had to be twisted to accept book club selection of Shadows on the Rock because she considered it crass exploitation of her work (authors had the oddest ideas in those days, too!). More recently, a number of authors, notably Stephen King, have objected to book club acquisition of their books on the grounds that club sales cut into sales of hardcover and even of paperback editions of the same book, losing them both readers and money.

Their reasoning is by no means without merit. Take a big-name author such as King whose book is published by a hardcover-paperback company that pays him, we can assume, a full royalty on both editions of his book. Suppose the hardcover edition sells for $25 and the paperback for $7. One thousand copies of the hardcover edition might bring in about $3,000 in royalties. One thousand copies of the paperback edition might bring in about $700. Now, suppose one thousand copies of the book club edition are sold at a 20 percent discount to subscribers, or $20. The royalty on those thousand copies will be about $1,300. But that money must be split fifty-fifty with the author's publisher, netting the author $650. Thus the book club's revenues are about 25 percent of what the author will get for the same number of copies sold in hardcover, and even a little lower than the royalties for the same number of paperback copies sold. Although it can be argued that the same thousand people who might buy the book through a book club wouldn't necessarily buy it in stores if it weren't carried by the club, you can nevertheless see how authors like King might view sales of their works to book clubs as losing propositions. The war between bookstores and book clubs still smolders, sixty years after the opening volley.

CHAPTER 24

Bookstore Buyers:
The Book Stops Here

THE BOOKSTORE BUYER is the last link in the chain connecting author to reader. Or perhaps we should say he is the last obstacle between them, for as we track the life of a book from the time the author turns it in, we may well be put in mind of the upstream battle of a salmon against rapids, waterfalls, submerged rocks and trees, and a host of predators. Many perish before they reach the quiet headwaters, and most that make it are doomed as well. A book must struggle against all manner of challenges: the hazards of editorial judgment, the treacheries of corporate politics, the uncertainties of the economy, a host of human failings, and a congeries of unlucky or providential events.

The final, and perhaps most brutal, stretch in the obstacle course occurs when the publisher's sales representatives attempt to interest bookstore buyers in their forthcoming lists. These hardy men and women will have attended their publishers' sales conference, where scheduled books are introduced to them by the firms' editorial staffs. As we've seen, editors presenting their books accompany their pitches with pertinent information and sales aids: the author's track record, advertising and promotional plans, news of movie or magazine or foreign deals, anything, in short, that makes the book stand out from its partners on the publisher's list, or from the competition on the lists of other publishers. Then, bearing proofs, catalogues, covers or dust jackets, sales information, press kits, and novelty items such as buttons or bookmarks, the sales people make appointments to visit the buyers in their territories.

Before the advent of bookstore chains, these sales reps (or "travellers," as they were then known) visited individual bookshops and pitched their lists to each store owner or purchasing manager. The dialogue between buyer and sales rep reflected their joint interest in matching consumer reading tastes with the current and past lists of titles offered by each publisher. Although bookstore chains have been around for a long time, until recently these were not a significant factor in buying patterns, and the relationship between sales rep and store buyer was a highly personal one emphasizing local values.

The rise of the chains has revolutionized every aspect of book merchandising, not the least of which is that special bond between publisher and bookseller. The impact of this change cannot possibly be understated. The buying power of the chains is so highly concentrated and leveraged that even a modest order per store, multiplied by the number of stores in any given chain, can easily make the difference between success or failure for a given book; a larger order can put a book on the best-seller list or extend its stay on it for a long time. Indeed, some chains have their own best-seller lists on which publishers heavily rely in assessing sales activity of their books. To a disturbingly increasing degree, chain store buyers are being consulted by publishers about whether or not to acquire certain types of books, placing the buyer in effect on the editorial boards of some publishers.

The same power that can exalt a book can cast it down if the chain store buyers withhold their blessing. Thus, publishers are concentrating an ever-increasing portion of their time, energy, human and financial resources to currying favor with the chains at the expense of the independent bookstore. Not unexpectedly, this has resulted in the near-demise of the old-fashioned bookshop. These beloved emporia, with their casual atmosphere and library-like hush, with the visual and tactile delights of wonderful and interesting books everywhere the eye settles, with the varied stock reflecting the eclectic tastes of both owner and clientele—these are yielding one by one to the march of progress represented by clean, tidy, bland, efficient, convenient chain store branches with their homogenized stock, distinctly unbookish sales staffs, and computerized record-keeping and purchasing programs.

Individually owned shops cannot hope to compete with the discounted prices offered on frontlist books by the chains, nor can their low-volume turnover generate the kind of capital necessary to meet the rents in high-traffic urban and suburban shopping centers. Over the last few years, an association of small booksellers in northern California litigated with a publisher, Avon Books, alleging that Avon offered preferential discounts to book chains, a practice that the small stores maintain is widespread through the publishing industry. The store owners simply did not have the funds to prosecute their suit to the bitter end and were compelled at length to settle, leaving the issue unresolved but guaranteeing that preferential discounting in favor of the chains will continue to drive nails into the coffins of the small bookstores. At this writing, similar litigations are creeping through the courts.

Although they differ from one another in buying policies and patterns, discounting practices, and many other respects, fundamentally all chains function in much the same way. Their buying staffs receive sales representatives of publishers or publishing groups and listen to their spiels about forthcoming titles. The buyers then consult their records and sales data, review the information and material furnished by the publisher, and yes, they even read the books. After taking everything into consideration, the buyers put in their orders: some in large quantity, some in small. And sometimes, they don't buy any quantity at all.

How is business transacted in a typical buying office? Well, for one thing, you may safely believe that the publishers' reps talk fast. Given the large size of many publishers' lists, sales people have precious little time to give speeches. It has been estimated that they have between thirty and sixty seconds per title to get their message across. I suppose that if you divided their publisher's list precisely by the number of minutes granted to the rep for this interview, that estimate would be accurate. In fact, it doesn't quite work that way.

For one thing, there are some kinds of books that require little or no salesmanship: certain backlist books, for example. When the stock of Dr. Spock's Baby and Child Care or The Random House Dictionary falls below a certain number, it is usually reordered automatically. The latest novel in a long-running series may not call for extensive discussion. Some other types of books, such as most first novels, will seldom fetch large orders even if the sales rep talks himself blue in the face, unless it's something on the order of The Hunt for Red October by Tom Clancy. That is because the buying policies of the chain, or the parameters of the computer's purchasing program (more about this presently) simply prohibit a large order for first novels, and the experienced sales rep has learned to save his breath for pitching books for which there is more latitude (and potential for commissions). "Don't waste my time in the 'gimmes,' " one buyer is fond of saying. "Just tell me about your featured books." He is referring to such "product" as celebrity biographies, new books by best-selling authors, timely or controversial nonfiction books, and other books that the publisher believes will have "legs." On these the sales rep may soliloquize to his heart's content: he will invariably find an attentive listener.

What are the things that chain store buyers look and listen for when sales reps go into their routines? Bear in mind that salesmen are salesmen the world over, and whatever they are hawking there is usually a percentage of blarney mingled with the truth. Astute buyers have learned to detect it, and because they are powerful and have at their disposal the best information-gathering capability this side of the Russian embassy, wise sales reps seldom bluff, bullshit, or soft-pedal the truth. "Don't tell me my market," another buyer told me he frequently says to sales reps.

The thing buyers most want to hear is, how much is the publisher getting behind the big books on its next list? A sales rep will boast of enormous "in-house" enthusiasm for a book, may show the buyer a fancy bound proof specially printed to impress the book trade, may inundate the buyer with tie-in gimmicks of all sorts, may tender to the buyer an invitation to publication party in a swank restaurant. Few of these inducements turn the buyer's head as much as a commitment by a publisher to advertising, publicity, and promotion. In particular, as one buyer reported to me, bookstore people are most impressed by plans for co-op advertising. As opposed to advertising that carries only the name of a book's publisher, co-op ads show the book's cover along with the name of the store: "Available at all XYZ Bookstores," such an ad might read. The cost of the ad is borne by both publisher and bookstore, and the publisher's commitment in hard dollars guarantees that the company will be getting strongly behind its product.

One of the most unsettling aspects of chain store buying practices is the use of computers to make decisions. As in so many other applications, the computer is both an invaluable tool and a frightening menace. It provides the book-buying office with highly detailed information about sales patterns on a book-by-book, author-by-author, store-by-store, region-by-region, publisher-by-publisher, basis, and the data are available instantly. Track records of previous books by any given author may be summoned by the touch of a finger or two on a computer keyboard, providing the buyer with all the input he needs to make his decision.

Some chains depend more heavily on computer data than others, and in many instances purchase orders are rigidly programmed: "If we bought 10,000 copies of that author's last book, we cannot buy more than 10 percent more copies of his next one, so put us down for 11,000." It is here that the greatest danger to literature may lie, for obviously this slavish devotion to ordering programs simply does not take into account such critical factors as a buyer's common sense, his instincts, and his personal enthusiasms. Most of all, it does not take into account the quality of the book in question, for even if an author's book is a quantum leap in quality over its predecessor, the buyer who has not read it—or even one who has—may be compelled by his own computer program to order the same number he would if the book were no better than the last.

It was comforting for me to learn, as I prepared this chapter, that there are still buyers, even in chain store offices, who care about books and authors and maintain a personal rapport both with publishers and consumers. The best buyers recognize the computer for the tool it is, but understand that a time comes when you have to walk away from the computer screen and go out among the customers.

Spencer Gale, a former executive of Doubleday Book Shops and of the Waldenbooks chain, believes that the vital information harvested by computers must be balanced by a humanistic approach to book ordering. "Computers don't read books and computers don't buy them," he told me. Doubleday Book Shops is a relatively small chain and its buying staff is small, too. Nevertheless, its buyers are presented all of the books that the larger chains are shown. These buyers must of necessity have a broader range of interests than those of their specialist counterparts in the giant chain offices. The staff constantly discusses books with each other, creating a sense of teamwork that makes Doubleday Book Shops' batting average—its ratio of sales to purchases—a respectable one. If one buyer says he just doesn't have a feel for a certain type of book or a specific author, he may defer to someone else in the office. One buyer for another store told me she conducts informal but highly accurate market surveys by showing new women's novels to her mother and highly touted young adult books to her teenage daughter. Good buyers look beyond their own predilections: "You are not buying for your taste alone," Gale expressed it.

Nevertheless, one gets the uneasy feeling that the noose around the throats of all who love literature is tightening with each step toward the consolidation and computerization of the publishing industry. The acquisition of B. Dalton by Barnes & Noble and the chain's move to New York City forge another massive link binding seller and buyer together. The intimacy between the publishing and bookstore businesses is now all but visible and palpable. It may legitimately be wondered what use sales reps will be in the future if there no longer is any distance for the "traveller" to travel. A phone call, a lunch date, a stroll across town, and the fate of a book could be sealed even before its acquisition by a publisher.

All the best,

Richard Curtis

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