Q: How is the publishing industry impacted by a struggling economy?
A: I can only answer on the basis of today, and on November 25, 2008 (*), the answer is that the publishing industry has indeed been impacted negatively and at least in equal measure to the overall economy!
The old axiom was that publishing was recession proof – especially religious publishing. Why? In the overall scheme of the economy (and people’s pocketbooks) books are a relatively inexpensive form of entertainment, best partaken at home, which saves gas and eat-out money. In the case of religious publishing, the prevailing wisdom has been that when the economy is good “people play” but when it’s bad “people pray!”
But in this ongoing subprime-crisis-automaker-melt-down-government-bail-out-required economic downturn in America, sales are not good for retailers or publishers. The list of retail chains reporting same-store declines is as long as the list of … well, uh, retail chains. The only reliable statistics available on the health of independent retailers is the number that are closing on a weekly basis. Iconic flagship book retailer, Barnes & Noble, reports glum 3rd quarter results and 4th quarter projections:
by Jim Milliot — Publishers Weekly, 11/20/2008 6:19:00 AM
The news was about as bad as it could be from Barnes & Noble. For the third quarter ended November 1, total sales fell 4.4%, to $1.1 billion, with sales through its bookstores down by the same 4.4%. Same store sales fell 7.4%. Sales at Barnes & Noble.com rose 2%, to $109 million. Moreover, the nation’s largest bookstore chain predicted that–based on the negative sales trend to date–same store sales in the fourth quarter will fall 6% to 9%. Earlier this month, B&N chairman Len Riggio warned employees in a memo that the company was bracing for a terrible holiday season.
Books-A-Million, which is strongest in the Bible Belt fared even worse.
by Jim Milliot — Publishers Weekly, 11/21/2008 2:13:00 PM
The drumbeat of bad news from the nation’s bookstore chains continued Friday with Books-A-Million reporting that total revenue dropped 5.7% in the third quarter ended November 1, to $110.9 million. Comparable store sales tumbled 9.9%, the “weakest comparable store sales in many years,” said CEO Sandy Cochran. With the sales decline, BAM’s loss deepened to $2.2 million in the quarter compared to a loss of $555,000 in last year’s third period.
The sales decline was felt in most segments, Cochran said, with bargain books, gifts, and the teen categories among the few areas where business was up. A decline in customer traffic plus a cost conscious consumer where blamed for the poor results. BAM is focused on “controlling costs, managing inventory and preparing for the holiday season,” Cochran said.
While Cochran said the holiday publishing schedule is a good one, she sees few signs indicating that the difficult marketplace will shift anytime soon. For the first nine months of the year, revenue was down 4.8%, to $349.2 million, and the company had a loss of $635,000 compared to earnings of $4.6 million in the same period last year. Comp sales for the nine months were off 8.0%
Perhaps the most dramatic announcement came from the supply side of the industry with the news that literary giant Houghton Mifflin was putting a hold on acquisitions – akin to a fish saying that they might spend a year away from the water.
HMH Places “Temporary” Halt on Acquisitions
By Rachel Deahl — Publishers Weekly, 11/24/2008 12:54:00 PM
It’s been clear for months that it will be a not-so-merry holiday season for publishers, but at least one house has gone so far as to halt acquisitions. PW has learned that Houghton Mifflin Harcourt has asked its editors to stop buying books.
Josef Blumenfeld, v-p of communications for HMH, confirmed that the publisher has “temporarily stopped acquiring manuscripts” across its trade and reference divisions. The directive was given verbally to a handful of executives and, according to Blumenfeld, is “not a permanent change.” Blumenfeld, who hedged on when the ban might be lifted, said that the right project could still go to the editorial review board. He also maintained that the the decision is less about taking drastic measures than conducting good business.
“In this case, it’s a symbol of doing things smarter; it’s not an indicator of the end of literature,” he said. “We have turned off the spigot, but we have a very robust pipeline.” The action by the highly leveraged HMH may also be as much about the company’s need to cut costs in a tight credit market.as about the current economic slowdown.
What’s it mean for you as author or aspiring author?
If your heart is set on publishing with a traditional publishing house of note, the news isn’t great. My own company, Thomas Nelson, in anticipation of emerging economic woes, cut the number of titles being published almost in half as of March 2008. As a publisher I always find it more fun to do books than to not do books, but unquestionably, we were ahead of the curve.
If you are able to see publishing not just in terms of a paper and ink product with a particular logo or name on the spine – and are open to the array of self- and micro-publishing options available today – then this is just one more confirmation to go for it now rather than wait for your deal to sail in!
I grew up in the volatile, exciting, and often strident 60s and 70s, finishing high school in the ‘spirit of ’76’ bicentennial year. During my formative years –
• John F. Kennedy, Martin Luther King, Jr., and Bobby Kennedy were assassinated
• The culture of divorce and promiscuity took root and blossomed
• Watts burned and riots rocked Chicago during the Democratic National Convention
• America surrendered in war for the first time when it pulled out of Viet Nam – unless you count Korea, which was at best a stalemate
• Muslim terrorists killed Jewish athletes at the Olympics
• There was an energy crisis
• Commercial airlines and cruise ships were hi-jacked (and yes, my future wife was a ‘stewardess’ on that 1978 Delta flight that got redirected to Havana)
• The American auto industry lost its preeminent role
• A president was impeached and removed from office
• Disco conquered the airwaves – yikes
• The U.S. Olympic basketball team lost its first ever international game to the U.S.S.R. in a highly controversial ending
• Oh, and ‘we’ landed on the moon
Whatever you think of Jimmy Carter ‘the President,’ he made a number of profound statements that summed up where America was a month before the end of my teens years in a speech he gave on July 15, 1979.
The erosion of our confidence in the future is threatening to destroy the social and the political fabric of America.
The confidence that we have always had as a people is not simply some romantic dream or a proverb in a dusty book that we read just on the Fourth of July. It is the idea which founded our Nation and has guided our development as a people. Confidence in the future has supported everything else – public institutions and private enterprise, our own families, and the very Constitution of the United States. Confidence has defined our course and has served as a link between generations. We’ve always believed in something called progress. We’ve always had a faith that the days of our children would be better than our own.
Ironically, Carter’s greatest failing may have been the palpable sense of pessimism – a near doom? – that pervaded his demeanor and words throughout his presidency. And in case you are wondering, yes, this was part of his famous “malaise” speech. How was I going to argue with that? I didn’t feel very confident about the future myself.
It was Ronald Reagan who seemed to understand Carter’s words better than Carter himself and brought a positive buoyancy to the American psyche over much of the next decade. Some say he was just in the right place at the right time and got lucky that the business cycle turned around but even his most ardent critics have to admit his sense of optimism may have helped change some things.
In a Tale of Two Cities (1859) Charles Dickens penned the immortal phrase: it was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness … Set in London and Paris before and during the French Revolution, he showed how the peasants were oppressed and brutalized by the aristocracy and how in turn they were indiscriminately brutalized by the revolutionaries. (Brazilian author, educator, and reformer Paulo Freire described the psychological movement from oppressed to oppressor in his landmark book Pedagogy of the Oppressed  that described freedom movements in South America.)
There is a lot of hand-wringing today. And for reason. There is a plethora of real and pervasive international, national, ethnic, economic, moral, social, personal, and spiritual problems. And yes, the American auto industry is reeling yet again.
Maybe it is the end of an era of prosperity and more importantly opportunity. But I suspect that the real reality is what Dickens described; we are living in the best of times and the worst of times. Even if consumer confidence was up and economic indicators were through the roof – the best of times for some – if there are oppressors and oppressed then it is still the worst of times … for somebody.
And yet a focus on such ‘realism’ simply doesn’t ignite passions and energize dreams. And what are dreams but what Carter called ‘confidence in the future’ … the belief – as unrealistic as it might seem – that my plans and actions can create a new reality. I can do something to build a better world.
Jesus said, ‘ the poor you will always have with you’ (Matthew 26:11) – very realistic – but men and women who have faith in Him have been at the forefront of compassionate ministry.
Even as companies fall there are people who still work to build new companies … and succeed.
Today is just like other days. The best of times. The worst of times. You may fall to one side of that equation personally. No matter. As a psychology professor said in a graduate class I took: I don’t care where you’ve been or even where you are … I want to know where you’re going!
So where are you going? What does the future look like to you?
One topic that jumped off the pages of the China Daily (the national English language newspaper of China) with a clang and a bang for me was the different perspective on the Dalai Lama, who is also on the front page of many Western newspapers, particularly in the wake of protests that accompany the Olympic Torch each step of its trek to Beijing for opening ceremonies. Oh, and that March 14 riot thing in Lhasa, Tibet, which included monks. Maybe. (Not “maybe” on the riot but on whether the monks were monks or soldiers dressed as monks.)
Here are just a few of the juxtapositions:
Western View: Tibet was a free country since a treaty that ended 200 years of fighting was ratified in 821 A.D., but was forcibly seized and annexed by China as part of Mao Zedong’s 1950 invasion with the People’s Liberation Army that was ratified under coercion in 1951. China View: Yes, Tibet and China separated in 821 A.D., but Tibet became an intrinsic part of China between the 13th and 15th Centuries in response to Mongolian invasions; China was granted formal sovereignty in 1751 to protect Tibet from the Nepalese Gurkha invasions.
Western View: The Independent Tibet movement rectifies historical injustices by returning sovereignty to the Tibetan people. China View: There is no historical validity to a Greater Tibet, administratively, religiously, and especially ethnically–at least 10 other groups have been living on the Qinghai-Tibet Plateau for generations, including Han, Hi, Mongolian, Tu, Monba, and Lhoba.
Western View: China wants to suppress religious expression in Tibet. China View: China has shown more than 50 years of restraint and respect on Tibetan culture, particularly in regards to religion. In fact, all of China is prospering and experiencing new freedoms, including speech and religion, to a much greater degree than Tibet, with its theocratic leanings.
Western View: The Dalai Lama is a man of peace and goodwill. China View: The Dalai Lama is a political operator–and sometimes instigator–who was part of theocratic feudal regime that enslaved and impoverished the Tibetan population; nobles and senior monks owned and controlled 90% of the land.
Western View: On March 14, awakening echoes of Tienanmen Square, the Chinese government once again crushed a peaceful demonstration of people who seek freedom. China View: The Tibetan Government in Exile, with the fundraising savvy and organizational skills of the international “Dalai clique” orchestrated a violent riot that resulted in $35 million (U.S.) in damage.
I spoke with one U.S. businessman who has lived in Hong Kong for a number of years and he commented:
Maybe I’ve lived here too long and have been brainwashed, but I’m no longer convinced that the Chinese government is all wrong on this Tibet issue and, in fact, may do more for the everyday Tibetan people than the separatist movement. For example, the government in exile has no plans on accommodating a multi-ethnic population.
So has he been brainwashed? The obvious answer is, yes, of course he has–and it’s tied to the simple notion that the official Chinese media can’t be trusted to produce anything more than propaganda. I’m glad that I don’t have to worry about that danger in America because I have objective, reliable, and trustworthy news sources like The New York Times to protect me. Okay, cheap shot. But there is a strong resentment in China that they aren’t getting a fair trial in the international court of opinion. A Western expatriate made this statement:
The official Chinese media may be clumsy, but at least they are not as hypocritical as the Western media which always claims to be impartial, yet are actually biased on many issues related to China … and in their own countries!
Well, I’m no expert on Chinese politics, but this exercise has helped me come to one iron-clad conclusion: to fight media bias on the issues near and dear to my heart, I’m going to hire the PR firm the Dalai Lama uses, not the one the Chinese government has on retainer.
I’m not going to touch his evolutionary theory in relation to biology and the origin of humans with a ten-foot pole – and I’m going to avoid cheap and gratuitous humor, like, “Charles you don’t need a match to light your birthday candles where he went,” or anything else juvenile.
No way am I getting anyone from any side of that debate mad at me. What I thought I’d do is get people mad at me for other things, like imagining what Darwin might have to say about Bailout Fever in Washington, D.C., applying aspects of his theory of evolution like natural selection, adaptability, and fitness.
Note: The views expressed may or may not be the views of the blogger in whole or in part. The character named Charles R. Darwin did in fact exist (Feb. 12, 1809 – April 19, 1882) but he probably did not state nor even think any of the following thoughts. This blogger is also not positing any theories of whether dead philosophers would agree to be interviewed. This is intended for entertainment only!
MG: Charles, what do you think of all the money the U.S. Government is spending to save companies and industries?
CD: They are simply rearranging chairs on the Titanic. The ship is sinking. And so will the whole fleet called Western Civilization if they keep pursuing such poppycock.
MG: Wow. How did you know that? The Titanic sunk in 1912 and you had already been dead almost 30 years.
CD: I have my sources.
MG: I’ll leave it at that … but don’t you think it’s compassionate for a government to step in and relieve millions of people of the misery caused by such dramatic failures?
CD: Compassion? What does that have to do with survival? In fact, I’d say that rewarding weak and bumbling practices is the opposite of compassion. It hurts everybody.
MG: But it worked in the 1930s when FDR saved our nation from the Great Depression. Oh, I forgot you were already dead when that happened.
CD: I know the whole story.
MG: That’s right, you have sources.
CD: Exactly. In fact, I blame FDR and his adopted son LBJ for creating the conditions that will eventually lead the American economy into a death spiral.
MG: That’s rather dramatic. So are you saying that government assistance and intervention is always bad?
CD: First of all, I think government has an important role in economic evolution. I think Teddy Roosevelt got it right when he kept the Rockefellers from taking over the country and building an oligarchy that would have made Medieval feudal lords roll over in their graves with envy. You could argue that Teddy, not FDR, set the economy in motion. This opened up many more entrepreneurial opportunities. As a believer in letting natural selection take its course in a free market it doesn’t mean I don’t believe that there should be no accountability of corporations. For example, I believe they should pay for defrauding consumers. Nature has laws. Business should too. The business culture thrives when it adheres to good laws.
What FDR did may have helped America in the short term. But the course correction would have happened naturally, even if slower. And the companies that would have survived would have been much stronger for their resilience in face of adversity. But don’t be fooled. America is paying for FDR’s largesse with a populous that has screamed ever since, WHY AREN’T YOU SAVING ME? Maybe things are better for what he did and any argument about how history might have unfolded otherwise is pure speculation, either direction. I won’t say whether the payback is reasonable or not. But ask the Romans. Once the masses are promised that government will be the great problem solver, do they ever stop asking for their due? As a society you are constantly looking for money to fund the kinds of programs rolled out by FDR and accelerated by LBJ with his Great Society. Kennedy may have been from Boston but he would never put up with that kind of ethos. His dad taught him to exploit opportunities with the best of them. I digress. I’d just say again, the expectation and demand for more help, even after a crisis ends, never ends. People will ask for more and more government and more and more funding, which rewards ineptitude and punishes success. As glum as it looks in America right now, check out the economies of the more progressive social democracies. They won’t admit it but they would love to have your problems.
And ultimately natural selection finds a way anyway. When you crash and burn under the burden of compensating for a lack of fitness, you‘ll be singing a new tune, WHY COULDN’T YOU JUST LET US BE FREE?
MG: What about things like universal health care? Surely you can’t be so cold-hearted as to withhold that as a basic responsibility of the government?
CD: Again, I can’t think of a single country in the world that doesn’t envy your health care system. But I believe that when you move to socialized medicine America will absolutely love it. For a while. That is until services devolve and the governmental bureaucracy demonstrates it can no longer manage it. Then typical of America, you all will cry, UNFAIR!
MG: But it isn’t fair is it?
CD: Uh, who said anything about fair? I didn’t prescribe a theory of adaptation and fundamental fitness, I just described it. You all can do whatever you want.
MG: You seem awfully negative when it comes to government. Government gets a lot of things right.
CD: Sure they do. Other than eternal potholes around Chicago, Eisenhower’s interstate highway system was great. But when priorities and plans come from above, what happens to productivity? There ceases to be the kind of entrepreneurial spirit that feeds new design and development. There is no motivation to adapt to changing circumstances. So what you see is the eventual collapse of a healthy, breathing, growing economy. Capitalism does have to clean house in a big way every once and a while and incrementally on a daily basis, and yes people are hurt financially in the process. But you Americans worry too much about setbacks and love your histrionics. It sells newspapers! You take a snapshot and declare it is moving picture that will endure for 10 years! Almost as long as that Titanic film that came out a while back. I remember your end-of-the-world-as-we-know-it handwringing of 1987, which lasted about a month – and yes, I was already dead, but I do have my sources, so don’t ask how I remember. But in a fit and adaptable society, there are enough opportunities for people to get back on their feet. And don’t fool yourself. In a government-sponsored economic system, cataclysm comes as well. When the government can’t feed and clothe its wards the result is often violent and ugly in ways Americans can barely imagine.
MG: But owning a home has always been the American dream. Are you willing to kill that dream?
CD: You can manipulate the housing market with government rebates and incentives but it’s not going to solve the problem. Actually, if everyday Americans want to solve the housing crisis they can do so right now. Joe Homebuyer can go out and start a trend of buying and that will effect comparable sales and begin the process of price stabilization and even appreciation. But Americans aren’t doing that. Why? Not because of greed or corruption. It simply doesn’t make sense right now to buy. It’s not the investment it once was. The market was artificially inflated with government mandated lending policies and it’s still undergoing correction. Once it nears rock bottom people will buy again. Lenders will create new affordable lending practices to accommodate the demand. This will perpetuate appreciation. It will happen naturally. Just leave it alone.
MG: Where’s the compassion?
CD: Who said anything against a neighborliness that isn’t federally enacted?
Again, do what you want. Just make sure you have counted the cost of asking government to be the great financial problem solver. Does the make you more or less of a free nation? Does that fuel innovation and productivity or hinder it? Are you personally more responsible or less?
Having a government define and deliver what is good for the collective sounds compassionate and just might solve some short terms problems. But will government pull back from such a mandate? I’ve not seen such a tendency. One of my contemporaries, Karl, made a lot of utopian promises in an economic environment that was much more dire than it is today. Make sure the promises that have your heart thump thumping so excitedly today aren’t as empty!