It’s feast or famine for many publishers!

In a bad economy it seems like everyone suffers, and that certainly holds true for the publishing industry. Or does it? I wrote about the hard times some publishers are facing in this post, and one in particular, that has stopped acquiring new manuscripts. Houghton Mifflin Harcourt has temporarily stopped accepting new works, a move that sent shock waves throughout the industry.

But does the entire industry really look this grim? I thought so, until I came across this article from the New York Times. Here’s the news from another publisher:

At the other end of the spectrum was Hachette Book Group, whose Little, Brown and Grand Central Publishing units together represent some of the biggest commercial authors, including David Baldacci, Nelson DeMille and James Patterson, not to mention the category-killing vampire queen, Stephenie Meyer.

The article continues:

As first reported by Publishers Lunch, an industry newsletter, Hachette is giving bonuses equal to one week’s salary to every employee in the company, in addition to the regular bonuses for which staff members are eligible.

So while one publisher has stopped buying manuscripts (except on rare occasions, the article notes), another publisher is handing out healthy bonuses to all employees. What gives?

Can it be the authors in the publisher’s catalog?

HMH is no stranger to literary talent. One of its authors is Philip Roth, someone who could very well end up winning the Nobel Prize for Literature. But as the article notes, Mr. Roth’s last 3 novels sold less than 75,000 each.

Hatchette, on the other hand, also has some titans to its name. Although these authors are not known for their literary merit, they do sell a lot of books:

David Baldacci, meanwhile, a stalwart author in Grand Central’s stable, has already sold 114,000 hardcover copies of "Divine Justice," his latest novel, just published this month.

That’s a lot of books! In fact, the CEO for Hatchette notes that his company has 104 titles hit the NYT’s bestseller list this year alone.

Are there other factors at play?

Certainly it’s easy to assume that publishing companies with lots of bestselling authors on their rolls will do well. But is there anything else that can determine a publisher’s financial viability? Like any business, there are many factors at play here.

In Houghton Mifflin Harcourt’s case, the situation is clouded by its ownership by Education Media and Publishing Group, an Irish private-equity concern that borrowed heavily to finance the acquisitions of Houghton Mifflin in 2006 and, last year, Harcourt. (Both units have much larger textbook divisions that are unaffected by the acquisitions freeze.)

Ah, so the credit crunch we find ourselves in rears its ugly head once more. I’m no financial expert by any means, so I’m not going to analyze this too much. I’ll let you, the reader, draw whatever conclusions you want.

HMH possibly making a big mistake

Given the long length of time it takes to publish a book, from first being acquired to hitting bookstore shelves, it seems to me like a risky move to stop acquiring new manuscripts. Apparently, I’m not the only one who holds this opinion:

"I cannot conceive of ever saying, ‘We’re not buying more books,’ " said David Shanks, chief executive of Penguin Group USA…

The article continues:

Mr. Shanks acknowledged that "everybody is scared about what’s going to happen in the future" given dire predictions from book sellers about the holiday shopping season. But, he added, even publishers with big stables of established authors could not simply rely on their existing writers.

To me, it’s kind of like that old saying, "Don’t put all your eggs in one basket." And it appears like that is exactly what HMH is doing. One possible ramification of their decision is that down the road, as the economy improves and consumers loosen their wallets a little, they won’t have any new titles in the pipeline to meet renewed demand.

While times are definitely tough, there are other ways HMH could control costs, aside from not buying new novels. Other publishers are doing it, booksellers are doing, and so should HMH. Only time will tell, however, and the new year is sure to bring many surprises.

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