The third day of the antitrust trial over the sale of Simon & Schuster to Penguin Random House offers a fascinating glimpse into the workings of the publishing industry, from big advances to marketing plans—and how publishers decide where the big bucks should be placed.
These extracts from testimony were published in Publishers Lunch industry newsletter, August 4, 2022.
S&S attorney Stephen Fishbein walked S&S CEO Jonathan Karp through several significant deals to demonstrate that the house sometimes loses titles of scale to “non-Big 5” publishers such as Farrar Straus and Giroux, Flatiron, Norton, and Scholastic, as well as—at least in the occasional instance—Hay House, Princeton University Press, and Harvard Business Review Press. In redirect, however, the prosecution showed internal emails on the Hay House and PUP titles where Libby McGuire (SVP and publisher of Atria, a division of S&S) expressed surprise—"Wow, I didn't know they pay big advances"—and her colleague Julia Cheiffetz commented that, "They do that in university presses, buy one big book a year."
Abrams CEO Michael Jacobs amusingly noted they were not invited to bid on Barack and Michelle Obama's books, cheerfully admitting, "We're not used to paying those kinds of advances." Abrams have had enormous success with Jeff Kinney's Wimpy Kid series -- which has sold over 270 million copies around the world in almost 70 languages.
Marketing was a topic that Judge Florence Pan and Karp engaged in lively exchanges over. At one point, when Karp was asked when marketing budgets are set, he claimed that: "We often decide late in the process after we have heard the reactions from readers. In fact, literary agents frequently ask us to guarantee marketing dollars. And we don't do it because we don't want to be locked into a plan when we acquire the book."
Judge Pan wanted to know, "Putting aside the advance, books that [authors/agents] expect to sell well, they can ask you for things, like, can you commit certain marketing dollars? And do they ask you, for example, can you get this book reviewed in the New York Times, can you get my author on the Today Show, things like that?"
Karp said, "You would be a fool to make that kind of promise because we can't control that."
Judge Pan also asked, "There was also something in one of the exhibits about a compelling marketing plan. [Which is how Karp said Norton had won a book away from them.] And that was a factor in which publisher an author chose. So if you know it's going to be a hot auction, a lot of interest, do you spend more time developing a compelling marketing plan?"
"Yes....When you really want the author, you jump through hoops," Karp replied. He then said marketing plans aren't dependent on the expected advance at all. "A lot of the times when you do these marketing plans, you don't know what the book will wind up selling for. So, you know, you could do it for any reason. Sometimes editors just do them because they really want the book and they are just showing that they are going the extra mile."
In a different exchange, Karp told the court, "The idea that any publisher can make a book a best seller is false."
But Judge Pan asked: "But you are telling [authors] that you can better their chances, so that's why they should come with you; because you have a broad distribution network, you have relationships with sellers, you can raise the profile of their book, you can create buzz, you are saying all those things, right?"
To which Karp responded, "The problem is…if you are an author, after you have had two meetings and everyone says the same thing in the meeting, you don't believe it. And a lot of the time...your success is like taking credit for the weather. And you can't really make those assurances to authors."
He added later in the exchange, "I have much more humility about my role in the publishing process now than I did ten years ago, I think that so much depends on luck, so much depends upon factors that are out of your control."
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