Richard Charkin: The Big Deal About Big Publishers

In News, Opinion & Commentary by Richard Charkin

The pros and cons of large publishing companies, especially for authors, may not always be immediately apparent.

A garden view of la forêt de Grésigne. Image: Richard Charkin

By Richard Charkin | @RCharkin

Five Ways Size Does Matter
Every July I head down to the French countryside for a much-needed change from urban cool Hackney in East London. The upsides are the weather, the air and water quality, the wine, the produce, the markets, and being visited by hordes of friends and family. The downsides are rather slow Internet connections, no public transport, the occasional overheating canicule, and spasmodic infestations of hornets or mosquitoes.

Richard Charkin

In the photo above taken from my garden, you can just make out in the distance the hills of the Grésigne Forest where I frequently walk and test my fitness for coping with steep up-slopes and slippery down-slopes. These plusses and minuses got me thinking about the benefits and drawbacks of large and small publishers. So here goes.

Large publishers, by definition, have scale.

The greater their revenue, the more scale they have. But what does scale really mean? How is it measured? I guess the simplest measure is revenue. The greater the revenue, the more clout they theoretically have with retailers, with printers, with distributors. High revenue allows higher and more cost-effective investment in systems. But does it work?

One argument for the proposed and ultimately failed takeover of Simon & Schuster by Penguin Random House was that it gave them more power when negotiating with that very large Internet retailer with whom we all have a love-hate relationship.

Might it have worked? I doubt it. A publisher even of the size of a PRH/S&S size is a minnow compared with You Know Who in Seattle. It would inevitably be an unfair struggle. Indeed, any retailer is more concerned with the trading terms achieved with the big publishers than the smaller ones. I can’t prove this, and trying to find out would probably be in breach of competition laws in most jurisdictions, but I’d lay money that small publishers are getting a better deal with retailers than the big guns. They might not be able to buy as much exposure but sales they make will be at higher margins. The benefits of scale might just be a little illusory.

An ability to hire the best staff is clearly one of the perceived advantages of being big.

People are keen to join bigger companies, as there should be more opportunities for promotion. And human resources departments are better funded and supported. In particular, larger firms can focus attention on trying to improve the diversity—age, gender, sexuality, race, etc.—of their workforce.

On the other hand, the structures of these companies favor specialization—production, sales, marketing, editorial, publicity, finance, IT, etc.—which works against those individuals who need to learn the whole business rather than the parts.

In addition, the HR departments of larger publishers are involved in making difficult decisions and communicating changes internally and externally. One large publisher’s internal memo I’ve read was 30 lines long, and its sole purpose was to announce in linguistic jargon the departure of a long-serving executive without a word of thanks. There are plenty more examples of such unfeeling gobbledygook. Working in a small office may be a better apprenticeship option or even offer a more secure career.

Large publishers can offer higher advances and thus attract the best authors.

Certainly it’s the case that competition between the major publishers and their ability to invest in intellectual property has led to some very significant earnings for top authors, including large numbers of ghost-written celebrity memoirs. But overall it’s unclear whether authors are the real beneficiaries of the consolidation of the industry.

One clear downside is that the large publishers have increased the discounts they grant to retailers, in some cases massively. Authors’ royalties reflect this by percentage royalty rates based on retail price being reduced for sales over certain discount points. What might appear as a 10-percent RRP royalty [recommended retail price] is frequently only 6 percent as a result of publisher-retailer trading terms. By and large, smaller publishers escape these penal discount terms by flying below the radar or simply being more prudent in negotiation and being less important to the retailer in question. Either way, authors stand to benefit even if their initial advances are lower.

There’s little doubt that the large publishers have extremely professional and diligent leadership.

This has improved markedly over the years. The downside is that when someone reaches the top of such a complex and widespread organization, it’s extremely difficult for them to do much more than try to keep the organization out of trouble and financially stable. The result is that senior management has inevitably become distanced from the real action of the business—the acquisition of the best titles and the marketing of them.

Actually publishing books has been replaced for much senior management by the chairing of strategy meetings; the writing of uplifting newsletters for staff; the supervision of audits to portray the business as forward-looking, inclusive, representative, caring, and human; the nurturing of relations with the owners, whether a distant head office in another country or hedge funds or public shareholders; the management of distribution, logistics, HR, IT and finance—all really important but not publishing, as such.

Small company managers have no such issues. They simply have to manage to stay in business and undertake whatever is required; but most of all, they have to focus on the authors whose work they represent.

Freedom to publish is a key tenet of the International Publishers Association and many other organizations.

Larger publishers trumpet their support for their authors and the principles of freedom of expression. There are many instances of big publishers standing up for their principles against political or similar pressures and we should celebrate these.

On the other hand, there are quite frequent situations in which within a large publisher one department’s freedom to publish may be unacceptable elsewhere in the organization. It would be wrong for me to cite examples but we are all, I imagine, aware of authors—even very successful ones—whose opinions on, say, gender or race do not chime with other authors or indeed the publisher’s own staff. Or cases in which publication of a book might lead to economic damage. Or where investors might not wish to be associated with titles of which they disapprove.

It has always been easier for small independent publishers to resist such pressures as they have so much less to lose and so much more to gain by maintaining editorial principles.

I find myself wondering whether the upsides of being small might also be relevant in other book trade entities. Are large bookshop chains better than small independents? Are large book charities better than smaller more focused ones? Might large literary agencies be at risk of losing their raison d’être?

Having this now off my chest, I’m off to mow the grass and then back to work at the Summer HQ of Mensch Publishing.

Image: Richard Charkin

Join us monthly for Richard Charkin’s latest column. More coverage of his work from Publishing Perspectives is here. Richard Charkin’s opinions are his own, of course, and not necessarily reflective of those of Publishing Perspectives.

Publishing Perspectives is the International Publishers Association’s world media partner.

About the Author

Richard Charkin

Richard Charkin is a former president of the International Publishers Association and the United Kingdom’s Publishers Association. For 11 years, he was executive director of Bloomsbury Publishing Plc. He has held many senior posts at major publishing houses, including Macmillan, Oxford University Press, Current Science Group, and Reed Elsevier. He is a former president of the Book Society and non-executive director of the Institute of Physics Publishing. He is currently a board member of Bloomsbury China’s Beijing joint venture with China Youth Press, a member of the international advisory board of Frankfurter Buchmesse, and is a senior adviser to and Shimmr AI. He is a non-executive director of Liverpool University Press, and Cricket Properties Ltd., and has founded his own business, Mensch Publishing. He lectures on the publishing courses at London College of Communications, City University, and University College London. Charkin has an MA in natural sciences from Trinity College, Cambridge; was a supernumerary fellow of Green College, Oxford; attended the Advanced Management Program at Harvard Business School; and is a visiting professor at the University of the Arts London. He is the author, with Tom Campbell, of ‘My Back Pages; An Undeniably Personal History of Publishing 1972-2022.’