Is Publishing About Art or Commerce?

From The New Yorker:

On the afternoon of August 10th, in the E. Barrett Prettyman federal courthouse, the Department of Justice trial to block Penguin Random House from acquiring Simon & Schuster had hit a midweek lull. The courtroom itself—as well as the overflow room, where journalists were permitted Internet access—was a few booksellers shy of crowded. But the first witness for the defense, the mega-agent Jennifer Rudolph Walsh, was intensely present, and seemed thrilled to be testifying. (Penguin Random House was paying her a quarter of a million dollars.) In a rippling cream-colored blouse and gold jewelry, her hair loose around her shoulders, Walsh painted a picture of publishing as a labor of love. Agents, she said, are in the business of fairy-tale matches between author and editor—mind meldings that span decades, shape careers, and win prizes. Walsh even had a magic wand, she added, that was given to her by the novelist Sue Monk Kidd. When the judge Florence Y. Pan asked if agents had a fiduciary duty to secure their writers the highest possible advances, Walsh responded in the negative. “More isn’t always more,” she said. “We’re not always looking to take every single dollar out of an editor’s pocket.”

The exchange exposed the core question of the day, and of every day in a trial that has riveted the publishing industry since proceedings began on August 1st: Is publishing about art or commerce? The answer, of course, is “Both”—as with any creative business—but watching each side wrestle with that ambiguity has been instructive. Penguin Random House, itself the product of a merger between Penguin and Random House in 2013, is the biggest of publishing’s so-called Big Five. (The others are HarperCollins, Macmillan, Simon & Schuster, and Hachette.) If the acquisition goes through, the new company will dwarf its nearest rivals. This is one of the first high-profile antitrust suits to be brought by President Biden’s Department of Justice. It may, along with the recent appointment of Lina Khan as chair of the Federal Trade Commission, indicate a new direction for the country’s regulatory climate. But, to people who care about books, what’s gone most conspicuously on trial is publishing itself. In the course of two weeks, an image of publishers as savvy and data-driven has vied with a tenderly drawn (auto-)portrait of gamblers, guessers, and dreamers. At times it has felt reasonable to wonder whether the industry should be characterized as an industry at all.

The spectacle has been curiously entertaining. Publishing executives have had to initiate federal employees into a dialect of “backlists,” “advance copies,” and “BookTok influencers.” Onlookers have been treated to piquant performances, from the cheeky verve of Simon & Schuster’s Jonathan Karp to the C-suite solidity of Brian Murray, of HarperCollins, who seemed to quietly deflate under a round of pointed questioning. On Tuesday, the horror maestro Stephen King popped up to testify that “consolidation is bad for competition” and that the disappearance of “idiosyncratic” imprints from the publishing landscape has made it “tougher and tougher for writers to find enough money to live on.” King, who wore sneakers and introduced himself as a “freelance writer,” wanted to advocate for younger and less established peers—those for whom a book deal might mean the difference between creating art and waiting tables.

And yet King’s championing of struggling artists felt tangential to the specifics of the trial.

Government lawyers have built the heart of their case around a relatively narrow category—“anticipated top sellers”—where the threat of monopsony is greatest. The plaintiff defines these as the small fraction of books for which authors receive advances of two hundred and fifty thousand dollars or higher. They are also the books that tend to fly off shelves and the books with which publishing houses pay their bills. The Justice Department is claiming that a Penguin Random House–Simon & Schuster merger would suppress competition for top sellers, driving down advances and ultimately lessening both the number and the diversity of the titles. The defense has countered that “anticipated top seller” does not designate a real market—merely a “price segment.” One cannot “anticipate” a blockbuster, lawyers have implied; the publishing gods are fickle, and whether a book will sell at all—much less go supernova—is anyone’s guess. Moreover, Simon & Schuster’s authors would benefit from access to Penguin Random House’s superior distribution and sales teams. Other houses would need to compete even harder to lure them away.

One by one, soberly dressed executives mounted the dais to frame publishing as a game of chance—a “business of passion,” in the words of the departing Macmillan C.E.O., Don Weisberg. “Everything is random in publishing,” Markus Dohle, the C.E.O. of Penguin Random House, testified on August 4th. “Success is random. Best-sellers are random. That is why we are the Random House!” Acquiring books, Brian Tart, the president of Viking, testified on August 3rd, “is as much an art as a science.” To illustrate his point, he described passing on Marie Kondo’s “The Life-Changing Magic of Tidying Up” and the current No. 1 New York Times best-seller, “Where the Crawdads Sing,” by Delia Owens. Judge Pan observed that profit-and-loss statements “are really fake.” Tart enthusiastically agreed. On August 2nd, Karp, the C.E.O. of Simon & Schuster, testified that gloating over a best-seller is like “taking credit for the weather,” and wryly recalled the eagerness with which he’d promoted a manuscript by a prominent spiritual guru. “Unfortunately,” he said, “his followers didn’t follow him to the bookstore.”

The rogue’s gallery of industry figures presented a stark contrast to the government’s expert witness, the economist Nicholas Hill. Soft-voiced and physically imposing, with broad shoulders, thick silver hair, and a square chin, he was there to reinforce the idea of an “anticipated top seller” market. Writers behave differently around the two-hundred-and-fifty-thousand-dollar threshold, Hill alleged. They’re “making different choices.” His most memorable contribution, though, was a series of Gross Upward Pricing Pressure Index (guppi) models, which he’d crafted to theorize about the market share that a joint Penguin Random House–Simon & Schuster might capture.

The guppis proved a matter of tense dispute. If Hill embodied the Justice Department’s academic approach, Mark Oppenheimer, an attorney in the defense, appeared intent on casting him as the Casaubon of economic consultants. A meandering cross-examination summoned impressions of mystifying esoterica, as Oppenheimer’s attempt to refute Hill’s methodology morphed into a ritual hypnosis, a ceremony to stupefy the courtroom. The lawyer, gentle and avuncular, dramatized his own inability to keep “monopoly” and “monopsony” straight; he paused to rifle through his notes, asked repetitive questions, and referred Hill to such destinations as a table’s “last column, fifth line”—or was it the “sixth line”? Several times, Judge Pan challenged Oppenheimer’s path of inquiry, and at one point pleaded with him to move on. When the court recessed, a clutch of ashen reporters staggered out of the overflow room. “Guppies,” Publishers Weekly’s news editor John Maher, who’d been valiantly live-tweeting the trial, whispered. “All I see are guppies.”

The entertainment value of Hill’s models aside, his larger case was persuasive. Big Five publishers possess advantages that render them uniquely attractive to literary stars: reputation, breadth of distribution, breadth of marketing, and—perhaps most important–extensive backlists that generate enough revenue to offset potential losses. New companies, such as the bantling publisher Zando, “can’t expand to mitigate the anticompetitive effects of the merger,” Hill said, because they lack such backlists, which grow over decades, like oaks. Yes, publishing is a risky endeavor; yes, the elusiveness of a good formula for success means that small presses and self-published authors all have a shot at producing a best-seller. But, year after year, the Big Five churn out the vast majority of profitable books—and this is precisely due to their ability to manage risk. Success in the publishing industry is not being able to publish a single hit; it’s being able to publish many hits over a long period of time. Here, the larger publishers eat their competitors’ lunch.

Link to the rest at The New Yorker and thanks to C. for the tip.

11 thoughts on “Is Publishing About Art or Commerce?”

  1. We’re at Bob’s Country Bunker. We’ve got both kinds of music here: Country and Western. And ignore that Mr “Stein” purporting to be from the American Federation of Musicians, questioning the “right to work” of the “authentic” Good Old Boys due to the absence of union cards.†

    Because according to these — persons — only those already in The Biz are allowed to define either “art” or “commerce.” (No one need wonder whether they’ve ever read Orwell’s little essay; they obviously have not. And even the “four reasons” are not all-inclusive!)

    † No snide remarks that “But… but… but… that part is true” will be heard anywhere near a major motion picture, broadcast or nationally-streamed television production, or completion-bond insurer. Now, may I see your union cards, please?

  2. I suspect that Ms. Ward has generally favored the interests of the publishers at the expense of her clients for the entirety of her career, including convincing said clients to accept lower advances and royalties on the grounds that “it shouldn’t be about the money, dear.” (Protip: when the person who is supposed to be paying you says that, that should be a giant red flag.)

    Honestly. Anyone who has actually looked at how the publishing industry operates, with obscene advances paid to celebrities and politicians for books of little to no lasting value because people will buy them because they have a famous person’s name on the front, while far better writers and storytellers get paid considerably less and get considerably less push because they will not garner as much profit, knows that publishing is about the cash first, the prestige second, and the art third.

    And the thing is, that’s fine. Publishers have a fiduciary responsibility to stay in business, which requires making a profit. I just wish they’d stop pretending that they’re somehow among the guardians of the culture.

  3. “We’re not always looking to take every single dollar out of an editor’s pocket.”

    Of course not.
    Agents have to preserve their relationships with the publishers. Authors they can live without as long as they stay on the right side of the Manhattan Mafia.

    And throught it all, the trade press keeps pretending the BPHs are all that matters in publishing.

    • “We’re not always looking to take every single dollar out of an editor’s pocket.”

      “Consider the one we leave behind the tip you’ve earned with the quality of your service.”

      Yes, I’m grouchy. In the last few weeks, I’ve spent some time going over [reasonably well-known author]’s decades-old contracts, at the behest of [honest agent not based in NYC}… because [nonspecified subject of the current trial] offered a “new” contract and fresh advance at a time [author] is in dire straits, and Something Seemed Off. Frankly, the 6-for-5-every-week-or-Guido-here-fondles-your-kneecaps offers of the Old Mob had fewer traps embedded in them.

      Contempt? No; the commercial-publishing hierarchy is beneath contempt. On their good days, of which there have been about six in the last decade — which is a slight improvement on the decade before that — the average executive in commercial publishing (and I do not exclude Big Middleman, even the parts away from Manhattan) is merely a self-aggrandizing entitled schoolyard bully, secure in the knowledge that their parents will deal with almost any “consequences” and that their trust funds or married-into money will buy off anything else. The rest of the time… well, they’re centered in Manhattan, and civilization really does end at the Hudson (it’s just that the real barbarians control the eastern side).

    • Found it interesting that the ‘fiduciary duty’ was quickly swept under the agent’s rug.

      Yes, agents of all kinds have to stay in business; they should NOT be allowed to give legal advice about contracts, because they do NOT work in the client’s interest.

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