Adapting to acquisition

<p>Hilary Macaskill</p><p>There is a prevailing view that the character and values of independent publishing inevitably disappear under conglomerate ownership; that the idiosyncratic, free-spirited style of the publishing houses of yore is fading away, with predictably dire results for the world of books. Five publishers: Random House (including Transworld), HarperCollins, Penguin, Hodder Headline and Macmillan, now account for 44% of high street sales ( The Book Sales Yearbook 2003, Bookseller Publications). The alarming prospect is of individuality and diversity under threat. </p><p>But being taken over by a conglomerate may not be the nail in the coffin that the pessimists claim. At HarperCollins, the purchase of Fourth Estate in July 2000 has triggered a completely different approach to its imprints. Random House is regarded by many as a model of how acquisition by a conglomerate can work, as I discovered from booksellers and literary agents when researching an article on giving up independence, "The glory and the nothing of a name" (The Bookseller, 28th June 2002). A year on from Hodder Headline's purchase of John Murray, Murray is now able to expand thanks to its access to new resources.</p><p>Random House UK's Vauxhall Bridge Road headquarters is home to 30 imprints. Some of these have been in residence for many years: Jonathan Cape and Chatto&amp;Windus, for example, since 1987. Some are newer and home-grown lists, such as the upmarket Vintage paperback list and the niche sports imprint Yellow Jersey. Yet others are more recent acquisitions.</p><p>In 2002, however, RH's acquisition of the Harvill Press was met with the kind of media consternation that was to greet the sale of Murray a few months later. Nevertheless, Boyd Tonkin, literary editor of the Independent, thinks that the Harvill list still looks good--with the caveat that, "We need to see what happens in a year or two's time. Random House has to be told that it has an absolute treasure, which must be looked after. I think we need to watch it closely."</p><p>Random House deputy chairman Simon Master believes that RH has established a good reputation for how it deals with its imprints. He explains the publisher's attitude towards its acquisitions: "Basically what we do is preserve their identity. They publish under their own names in a sympathetic publishing division. Physical location is important. It may not exactly have the name over the door but it must have its own space, with a dedicated publicity person, for example. </p><p>"There are central departments for rights and contracts, and for certain specialised functions such as book club or US rights, but we try to ensure that at least one person has special responsibility for a particular publisher--Secker and Harvill contracts, for example, specialising in buying foreign fiction, can be quite peculiar. It is a federal and devolved structure, and it seems to work."</p><p>Security for Harvill</p><p>This model has been applied to the Harvill Press. "Originally," Master says, "we were talking to Harvill about a joint venture on the paperback side, but it became evident that they couldn't cope financially. They had 20 staff plus freelances (though that, of course, included production and so on) on a turnover of &#163;3m. Now their Panther paperbacks have moved to Vintage, Harvill publishes between 25 and 30 titles a year--and the dedicated staff is four." </p><p>Though Harvill's publisher, Christopher MacLehose, admits that, "It is dangerously hard work. We haven't pared away our intentions, but we have fewer people to do it with", this does not seem to have dampened his appreciation of the outcome. "If Harvill had been acquired by potential alternatives, its fate as a distinct publishing entity would have been very different. The shareholders and all the people who had supported Harvill were very glad that Random House was where it finished up. Once inside Random House, the Harvill Press and its authors were much more secure."</p><p>Mightier Virago</p><p>For a small publishing house, the option of sheltering under the wing of a big player may well be the best outcome. At Time Warner Books, Virago publisher Lennie Goodings ponders on what the imprint's future might have been. Virago Press joined the then Little, Brown stable in 1995 and has lived to celebrate its 30th anniversary this year. "I don't know how Virago could have survived otherwise; it has to be tucked in somewhere. This is the best version I can imagine for us. I don't feel like a tiny cog, or that we are a besieged imprint. We came here fully formed, with our own ethos. Little, Brown knew what it was buying--a very strong brand name with a strong philosophy."</p><p>And there are tangible benefits. "What you give up in independence you gain in might," Goodings says. "The greatest difference in the landscape now is the demise of the independent bookshop. It's a world of chains and discounts. You don't see small presses on the shelves. You need proper promotion muscle. You need to get into the shop."</p><p>Christopher MacLehose, now a year into his second stint of working with a conglomerate, agrees: "When we left HarperCollins in 1993/4 it was still possible for a publishing house with our particular aim to flourish. But from the moment the bookshop conditions changed, Harvill became a more problematic entity. And we didn't fly under all the fiscal radars. We should perhaps have turned ourselves into a minuscule business, but others were doing that well, such as Norvik, Arcadia, Serpent's Tail.</p><p>"We tried to be, we are still trying to be, a European-seeming list. We publish 34 different languages, and have our ears open to more than that, trying always to provide an English market place for the best possible translations of the best possible writers."</p><p>Will he still publish the novelist Andrey Platonov--who, according to Angel Books, publisher of classic Russian works, is "at least as important as Solzhenitsyn or Pasternak"? "We have not turned down a single writer we would have published in our independent days," MacLehose maintains. "Maybe there's one Russian poet . . ."</p><p>But however impressive an author, the difficulties for smaller publishers are considerable. When Swedish writer Henning Mankell won the prestigious Crime Writers Association Gold Dagger Award in 2001, the accolade might reasonably have been regarded as a passport to mainstream success. However, MacLehose recalls: "W H Smith didn't return our call for 10 days and then took 500 copies--500 copies! That wouldn't happen with Random House. And the energy and money now spent on Henning Mankell, getting him into shops, on to the Underground, into airports is remarkable. It's a qualitative jump. So, not the least aspect of being part of a giant is that authors are happy."</p><p>There is also the advantage of being able to share superior support services. "There is a help desk which will advise on any problem with machinery 24 hours a day, even at 4 o'clock in the morning," MacLehose says. "And did Simon mention the archive? It's in Northamptonshire, a vast resource which stores all the backlists, files, contracts from Cape and Chatto, for example, precious historical and cultural assets all carefully catalogued. Harvill's is now part of that--it's so much better than its being in the basement of our typesetter in Marlborough."</p><p>More money to make money</p><p>Another, and significant, advantage for the acquired imprint is access to money for advances. Lennie Goodings says: "We never considered ourselves to be marginal at Virago: that was one of its successes, we were centre stage. But to go on like that we needed a lot more money. That's why it works here. I can go into auctions now. Passion is not enough."</p><p>The ability, as part of a conglomerate, to compete with the big players is an argument put forward, too, by Roland Philipps, former publishing director of Hodder and now m.d. of John Murray. "We now have the money to acquire new titles. One effect is that we will make John Murray a bigger company in turnover terms. We have started up a fiction list again--the first time in 20 years--and because we have the budget, we have acquired Neil Jordan's new novel, which will stand out on the list."</p><p>But, Philipps maintains, Murray has not sacrificed its independence. "Some publishers get downsized, but here it's being built up and strongly backed. We have our own editorial, home sales and marketing, publicity, rights, art direction and production departments. We have selling autonomy in most of the key markets, such as Waterstone's and Borders: the reps enjoy selling John Murray very much. We do our own promotion, but there is an impact on promotional budgets since we were acquired."</p><p>Much is made of the financial autonomy of Hodder Headline companies, the fact that Hodder and Headline--and now Murray--can bid against each other in auctions. Martin Neild, HH's managing director of the adult consumer division, explains: "There is shared finance and distribution but they are totally separate companies, with dedicated marketing and sales. They operate as middle-sized publishing companies, they have their own people acquiring. We encourage agents to submit books to both. What that means is that as a group you acquire more, and more interesting, books."</p><p>The disadvantages</p><p>There are, of course, downsides for the former independents. For MacLehose, it is the appearance of the books. "One disadvantage is the loss of the quality of bookmaking--the time and scholarship spent on typesetting and the quality of paper. How do you relate that to the advantages? Apart from the freedom to sleep at night, that is, and the universal happiness of our authors?"</p><p>In Lennie Goodings' case, there is the more predictable drawback of compromise. "More people take decisions about what to publish and how to publish. My role is bridging--remembering the essence of Virago. Occasionally we can't see a way to publish something. I have to get my books in a hierarchy; the reps are selling the top of the list. But on the other hand, as an independent--since we didn't have our own sales team--we were never first out of the bag."</p><p>MacLehose is still basking in the pleasure of getting Harvill titles into the bookshops with relative ease, praising a sales force "of such sophistication. The quality of the people who sell is terrific, they are highly motivated, thoughtful, highly educated--and they are inhouse.</p><p>"The only real difference," MacLehose says, "is that when one is at liberty and very small, one can say the new translation of Platonov is the priority, and you can make the case in five minutes. It takes a lot longer than five minutes at Random House to explain why Platonov is more important than John Grisham."</p><p>Buyer mimics bought</p><p>HarperCollins is a curiosity among the conglomerates, being in the singular position of having the senior management of the purchase take over at the helm of the purchaser. "I'm a sort of poacher turned gamekeeper," Victoria Barnsley, chief executive of HarperCollins UK, says. "There is a view that companies get gobbled up and nothing remains, that they are asset stripped. What I wanted was for the structure of HarperCollins to mirror that of Fourth Estate. I want it to be decentralised, so I have created new divisions. There is a federal structure, though obviously with central services--a series of little Fourth Estates."</p><p>She sees many advantages for the HC imprints: "They will have much more ownership over titles, a more distinct identity, which is better for authors and agents. We will still have the advantage of economies of scale, but there'll be more creativity and a greater sense of autonomy. And things will work faster."</p><p>Despite these promising steps towards replicating the benefits of the smaller publishing model, deputy m.d. of the independent Fourth Estate Stephen Page eventually left the senior ranks of HarperCollins to return to independent publishing as chief executive of Faber. "The kind of publishing I feel I'm best at, which I have a passion for, tends to be more intimate, the sort where there is real integration. That is just harder to do in a big organisation."</p><p>He can see that Fourth Estate still champions its books, but looks back with affection on "the experience of 30 people involved in everything from editing to sales and marketing, making publishing choices in an informal and open way. It is easier to be impassioned about harder-to-place books. Fourth Estate became known as having surprise bestsellers--in the end bookshops would say, 'Come on, tell us, which will be the surprise bestseller.' The point is we did well for the quirky books, like The Diving Bell and the Butterfly, Fermat's Last Theorem and The Hours, which performed well, but which you would struggle to find the time and energy to support in big corporations with very big agendas to fulfil."</p><p>Yet Page is careful not to condemn the publishing giants or the conglomerate approach. "I am very cautious about saying smaller-scale publishers can do things that are harder for bigger publishers. The world needs both, because it fuels diversity. The writer needs the different experience of each. I would be very loath to say that one sort of publishing was better than the other."</p><p>Victoria Barnsley is intent on finding a middle way between the two extremes. The model, she says, is not typical. And nor is the process involved a quick one. "It's taken three years. I spent the first year just looking and seeing what I wanted to do. I have a fundamental belief that it will be economically effective, but it's too soon to say. People like Caroline Michel [m.d. and publisher of HarperPress], Trevor Dolby [m.d. and publisher at HarperEntertainment] and Sally Gritten [m.d. children's division] have only been here a short time."</p><p>Proof in the pudding</p><p>What is generally accepted is that, in hard financial terms, it makes sense to be an imprint of a conglomerate, as Virago has found. "The proof is in the pudding. When we came here," said Lennie Goodings, "we were publishing 50 titles a year with a turnover of &#163;2m. Six years later, we still publish 50 titles and the turnover is &#163;4m."</p><p>David Young, chief executive of Time Warner Books UK, feels that it has been a successful acquisition. "I don't just feel it, I know it. Year-on-year sales and profit growth tell the tale. Virago has put on tremendous growth and is as capable of selling high quantities of a title as any of our imprints."</p><p>It is too early to tell whether Hodder Headline will be as satisfied with its acquisition, but so far so good. "Murray is performing ahead of forecast," Martin Neild says. "It will have the best of both worlds. It will continue doing what it does best. It can carry on being a small independent. It doesn't have to refer things up, it can be flexible and quick thinking and quick to react, but with the safety net of Hodder Headline." n</p><p> </p><p>Hilary Macaskill is a freelance journalist and publisher</p><p></p><p></p><p></p>