Business profile: Tom Weldon, c.e.o, Penguin UK

Business profile: Tom Weldon, c.e.o, Penguin UK

At 47, Tom Weldon, Penguin UK’s new c.e.o., is the youngest person to run one of Britain’s big four publishers for many years.

He effectively replaces Helen Fraser, who left over a year ago after a 15-year stint. She, along with Victoria Barnsley at HarperCollins, Tim Hely Hutchinson at Hachette, and Gail Rebuck at Random House, had formed a stable quartet running the big four for a decade. Weldon was nominated for the top job in the summer of 2009,  and has spent the past 18 months as deputy, being prepared by Penguin interim c.e.o. Peter Field (now back running Dorling Kindersley) and Penguin worldwide boss John Makinson.

“Clearly this is a generational change and Penguin is the first place to do it,” says Weldon. “I am incredibly lucky in that I had John and Peter and we get on very well and they gave me loads of advice. They were very careful about how they brought me on, it’s been a year-and-a-half transition.  In terms of the generational change, there must be an embrace of digital, and I think that’s been more a part of our generation, and a slight change of style of management. I passionately believe in non-hierarchical organisations [here Weldon gestures at the open-plan layout where his desk forms one of many]. To lead you’ve got to have relationships with loads of people, you’ve got to be open and accessible, and I think there is something generational around that too.”

He also stresses that he is just one of a group of 40-somethings at Penguin, including Joanna Prior, in charge of Penguin General, Louise Moore, head of Michael Joseph, and Stefan McGrath, Penguin Press chief. Weldon is hardly a novice: after reading history at St John’s, Oxford, he has had 25 years’ experience, with spells at Macmillan and Heinemann as an editor, before moving to Penguin in 1997.

Nevertheless, the moment of his accession, at the start of 2011, presents him with a something of a double-edged sword, in that 2010 was an exceptional year for Penguin. Indeed it was the only one of the big four publishers to register growth. “We’re 21% up (Penguin UK), Penguin Group is 17% up. The really fascinating thing about the Penguin UK growth is that even if you strip out sales of Jamie Oliver’s 30-Minute Meals, we’re still 9% up—which is testament to the breadth and depth of the rest of our publishing.”

But it would be unfair to ignore Jamie, and the £16m that 30-Minute Meals alone brought in last year, in any objective evaluation of Weldon’s career, partly because Weldon was instrumental in signing the chef to Penguin for his first book in the late 1990s. Seven or eight publishers had spotted his potential, and it “ended up as a beauty contest. I went to see him, just with our art director. I said to him ‘we will teach you how to make books, and we will do what you say’ and that’s basically what’s happened. We clicked.”

Weldon lavished attention on his young chef: “It was 18 months before he first appeared on TV and his first first book was published. We took him round newspapers and magazines, we got him a column in the Times and in GQ, we introduced him to every single retailer.” It worked: after J K Rowling, Oliver is the bestselling author of the modern era.

Not that Weldon’s track record is entirely spotless. On regular trips to the greyhound racing track at Wimbledon (he is an enthusiastic gambler) with the finance team, his colleagues taunt him with a cry of ‘Rageh, Rageh, Rageh’ whenever he backs a loser—an in-joke about an infamously underperforming book Weldon signed by the BBC’s Rageh Omaar. (“My biggest mistake at Penguin—great book, great man, but we just overinvested”).

Oliver notwithstanding, much of Penguin’s success last year was in making the big books bigger. In 2009 Penguin published 24 books each worth over £500,000, making a total of £28m, but in 2010 the number was 35, worth £52m.

“Last year, we introduced a new meeting called ‘Hot Titles’ where once a week we look at the books for each division which are beginning to sell, and it’s about how we can keep them selling for weeks and weeks and months and months, because it’s so hard to get anything going, and then the trick is to pump the oxygen into it.”

But what does this mean in practice? “If we see any sign of life in that book then we have to get all over it, so if something starts working in Waterstone’s or WHSmiths—then we need to be alert . . . Extend the publicity tour, increase the advertising. It’s so hard to get anything to work that when something does you’ve got to be all over it. We have this phrase ‘rapid, relentless feedback’, so any good information which comes in needs to race around the company, it needs to be raced back to the retailers, to the media. It’s that sort of obsessive focus around trying to make books bigger.”

Weldon believes that at the root of Penguin’s current success lies an emphasis not on marketing or production or sales, but editorial excellence. “The big debate for anyone at the moment is where does publishing provide value? What is our role? In my view what we do is we select, we nurture, we position, we promote, we leverage—but author care, editorial expertise, design excellence—those things are absolutely critical. We are creative organisations, and we must never lose sight of that. Amazon has never made a bestseller—you first have to have a great book, and then you need marketing and publicity teams to create the consumer demand.”

Digital futures

However, for all major publishers in 2011, digital is front and centre. He predicts that e-books will provide 5%–7% of Penguin’s revenue by the end of 2011, and his gut feeling is that the proportion will be 25% within five years. “America is three years ahead, and looking at our sister companies there the sales seem to be substitutional, because books that work physically also work digitally.

“For a publisher that poses absolutely no threat and in some ways it’s very attractive because it opens up new channels. You’ve got to experiment, take some risks, see what works, see what doesn’t. What you can’t do is stand by the side of the swimming pool shivering—you need to jump in.”

Digital represents the biggest change in the publishing model for decades, centuries even, accordingly making it an even more demanding time to be running a major publisher.  “I like change. If I took over and it was essentially the same as it had been done for the past 30 years, and it all went wrong then I would look incredibly stupid. In a sense everybody is in the same boat now. I have enormous respect for Gail, and Tim and Vicky, and they’ve done amazing jobs, but this is new for them as well. As a publisher,  it’s incredibly exciting”. For a gambler too, this is an interesting moment.

And when he finally leaves Penguin, what would count as success? “I would hope that we still passionately care about all kinds of books, that we publish a great range, in all kinds of formats, physical and digital, and that the company is happy and successful and has fun. And you can’t be happy and have fun unless you are also financially successful.
“Money and numbers follow—they don’t lead—but they are a critical measure of success.”

Weldon on the agency model

“We need to set a fair price for consumers, but we also need to protect authors. I think in this industry you need to move the debate away simply from the consumption of content to the creation of content—how are the creatives going to be rewarded?  That needs to be equitable as well. Publishers take content to the market at risk. If we don’t make any money then there won’t be any new authors. It absolutely has to be a fair price, but the creatives have to be protected as well.”

Weldon on conglomerates

“I find this whole debate about independents versus conglomerates a complete red herring. It’s not about size or ownership—there are some fantastic independents and there are some lousy ones. I think the publishing industry has been a bit inhibited around conglomerates—I love conglomerates. I have a huge respect for independents, like Canongate, they’re great, but I wouldn’t want to work for one.  I like working for a large company, I like the scale. I think, as an employer, we need to think about this more carefully—because there is actually a lot to sell about working for a big company, not only stability and benefits but also intellectual sophistication. It’s an absolute myth that people just want to work for small companies.”

Weldon on Waterstone’s

“How are we going to help Waterstone’s? That’s a good business. They’ve kept their sales flat in a difficult environment but, as publishers, rather than moaning and whingeing and saying: “Oh God, you know, Waterstone’s is going to be next”, [we should be saying] how are we going to help them? Our sales with Waterstone’s were up 18% last year, that reflected to a degree the year we had, so we love Waterstone’s, we want to work with them; they suit our brand.”