Trends in Western Publishing
　　　　　　　　　Peter Weidhaas

Book production however, has been a microcosm of the society in which it finds itself, reflecting the overall direction of its development, whilst at the same time acting to a certain extend as a vehicle for the mental attitudes and ideas of that same society.
Andre Schiffrin

For as long as I have been in the public eye working with the
book industry, I have been pursued by anxious fears
concerning the demise of the book. Indeed, even one of the
opening speakers at the very first Frankfurt Book Fair in 1949
felt compelled to warn of the decline of book culture. At that
time, the apprehensive commentators believed that books were
under threat from the illustrated magazines which were
beginning to enjoy huge circulations. In the years that
followed, a whole series of so-called new media came on the
scene as potential eliminators of the book: radio was a
challenge to the book, then the cinema, later and indeed, to a
massive extent, television, today it's the Internet and the
electronic media.
But books have not disappeared, have not even shown any
signs of weakness, on the contrary, have developed into an
industry to be taken seriously, having consolidated and grown
both in quantity and quality, worldwide. This healthy
development is convincingly reflected in the growth of the
Frankfurt Book Fair over the past 50 years, becoming more
than just a key meeting place for the industry, but a venue for
the exchange and worldwide dissemination of titles and rights,
an opportunity to assess the competition, to provide and obtain
information, in short, an engine driving the book business.
The uneasy observers of those early days could not have
imagined that the first real threat to book culture might well
emerge from that selfsame success story of recent decades. But
it is precisely the dazzling changes experienced on the book
market over the past year that are driving us dedicated
professionals into-the camp of those fearful as to the chances
of survival.

The sudden globalization of an industry, the worldwide
process of corporate takeovers, within which the German
conglomerate Bertelsmann alone has been hitting the headlines
far beyond the trade press, registering a spectacular "deal"
almost every month, the introduction and the swift spread of
new technologies, directly involving every link within the
chain of the book business, the wide-ranging development of
the Internet as a complete new medium for the production,
distribution, marketing and sale of contents, and finally, the
subordination of the entire book industry to the role of no
more than one link alongside others within the network of
information and media - these are the disturbing features that
sum up the developments which have moved on with such
dynamic energy in 1998. Before the year was out, Lothar
Menne, head of Heyne Verlag, one of the few independent
quality publishers still surviving in Germany, put an end to
debate, at least for the time being, by declaring, "Grandad's
publishing company is dead". Because, as Menne continued,
the "type of the universally knowledgeable publisher is no
longer in demand, since the literary world has shifted from the
salon to the stockmarket".

In looking at these changes, I should like to begin by coming
back to the FRANKFURT BOOK FAIR.
Apart from being a commercial event without equal, the
FRANKFURT BOOK FAIR is a major cultural occasion
which, through the medium of publishing companies as
facilitators of cultural creativity, provides a showcase for the
many different manifestations of the countless cultures of this
world and a serious audience for their activities.

This is reflected in quantitative growth, but at the same time,
particularly in this past decade, in the increasing specialization
of individual target groups, which, incidentally, is true of both
exhibitors and trade visitors. We see a change here that might
at first seem contradictory.

On the one hand - with the Electronic Media, for instance -,
the products presented and required are increasingly
specialised. To give just one example: anyone looking around
on the digital media sector is either looking for educational
software or juridical databases - not for any wider electronic
context. And of course, this corresponds to the specialisation
that is equally apparent among the specialist publishers'
products. Simultaneously, the restructuring of international
corporations to form information companies such as Pearson,
Welters Kluwer or Reed provides sustained evidence of the
dynamic development and considerable expectations linked to
the market segment of specialist information.

On the other hand, we see a diametrically opposing trend
among mainstream publishing companies. Where there always
used to be a breakdown between subject groups and categories
such as art books, religion, or books for children and young
people, more and more publishers now argue that they have
long since developed mixed lists and prefer to be absorbed
within the umbrella category of "mainstream" or "trade book"
publishers.

If I understand this development rightly, then this is another
indication, on a larger scale, of what Lothar Menne identified
in my earlier quote as the disappearance of the publisher. It is
true not just of fiction and poetry, but of publishing as a
whole. Publishing is no longer a single, uniform occupation.
On the one hand, publishing has become one element within
the information media - in the case of technical and specialist
information for example -, or, as with trade books, it is
subsumed within the equally more large-scale range of the
entertainment media.

I should like to clarify this process by looking first at a rather
obscure and small example from Germany, and then going on
to the broader international picture.
Up until about ten years ago, Luchterhand Verlag was
considered one of the leading names in contemporary
literature in Germany. Many of our most important living
writers, such as Gunter Grass or, from the former GDR,
Christa Wolf, were published by Luchterhand. The solid
foundation for its ambitious, long-term publishing success was
provided, however, by the juridical titles produced by the
economically independent publishing company. Autonomy of
content was guaranteed by an authors' advisory committee. As
structural change began to affect the cultural landscape in
Germany at the beginning of the nineties, the specialist
publishing section of Luchterhand was sold to one of the
leading international companies, Welters Kluwer. For the
remaining literary publishing division, this spelt the beginning
of a journey into the unknown, in the course of which many of
its most important authors were lost. Paradoxically, it also
became apparent that the more the rigorous authors'
committee insisted on an uncompromising stance in its literary
publishing, the less it became possible to achieve the necessary
balance between its cultural image and commercial success.
But it is the genesis of this failure which is important for our
understanding: what had been lost was the business equation
behind Luchterhand Verlag, the balance between the dry, but
financially lucrative academic book section and the difficult
literary list which, however, had been responsible for the
company's prestige. Although "Luchterhand Literaturverlag"
has managed to carry on today as a literary publisher, it is of
far less consequence that just a decade ago.
The outcome of this represents a loss of publishing variety and
with it, cultural diversity, and there are numerous other
similar examples.

After the collapse of the Iron Curtain in 1989, a publishing
boom appeared to be on the way in most central and eastern
European countries. The number of newly set up publishing
companies and the scale of print-runs for certain very
ambitious titles hit the roof in Poland, Hungary or
Czechoslovakia. A previously banned novel by the Czech
writer in exile, Josef Skvorecki, sold approx. 300,000 copies
in his homeland. But the excitement was all over by the mid-
nineties when a process of market clear-out revealed a new
type of specialisation: a few publishing companies proved to be
successful when taking over the profitable sections of the
publishing business where reliable levels of sale could be
expected in the medium term, such as school textbooks or
reference books. This trend was most obviously apparent in
Hungary, where the state monopolies already set up by the
socialists along these lines were sold in the course of
privatisation to predominantly western European publishing
corporations such as Welters Kluwer. Dedicated small
publishers with no capital were left with the task of looking
after the extensive literature of living Hungarian writers, with
no money to be made from the drastically reduced numbers of
copies being published since about 1994.

For many writers in smaller politically reformed countries
such as Hungary or the Czech Republic, this development has
led to the culturally dubious situation of either enjoying
success with translations of their books on foreign markets -
in particular in Germany -, or having to find other sources of
income.

A significant driving force behind the agglomeration process
in publishing is known to be increased efficiency and
optimisation of proceeds. It becomes obvious that those areas
of publishing production which are profitable in their own
right are separated off - to the detriment of the balance and
cultural mix I have already referred to several times. This also
applies to bookselling, not just to publishing.

"Libro", the Austrian chain bookstore that has appealed to the
European Commission to stop cross-border fixed prices for
books between Austria and Germany, has stated that it does not
intend in any way to compete with traditional bookshops with
their wide range of stock. As the directors repeatedly
announced at the outset of the dispute, there was absolutely no
intention of setting up bookstores carrying complete ranges of
10,000 or more titles. On the contrary, the aim was to sell
only those 2000 or so titles which can be "turned over" the
fastest, in other words, promising the quickest sales. What was
not mentioned was that these sales would thus be lost to the
traditional, local bookshop for financing the expense of
holding books in stock. In the meantime, Libro has continued
to expand its strategy and has acquired a small chain of general
bookshops as well as opening a book and media superstore in a
prime site in the centre of Vienna - directly challenging and
competing with existing booksellers.

The effects of these developments are aggravated by the
continued excess production of titles throughout Europe, as
well as new sources of competition for the attention of
readers.

Last year's Frankfurt Book Fair presented 366,336 titles,
almost 20 percent more than the year before. There was
similarly expansive growth in new publications. At the same
time, the average number of copies being printed has
continued to decline for many years now.
In France, for example, the average number of copies printed
per title has fallen from approx. 15,000 copies ten years ago to
a current level of 9,000. In Germany, turnover from books
rose by 1.1 percent in 1997 (to 15.8 billion DM), but the
number of titles increased by 8.9 percent ( to 77,889 new
publications). Cheap paperback editions make up the majority
of these increases. At the same time, department stores, book
superstores and mail order companies are expanding both their
store areas and their market shares.

Cut-throat competition has taken over and is reflected in some
dramatic statistics. Whilst retail booksellers still hold on to 59
percent in Germany, the figure is only about 37 percent in
France. In the USA, retail booksellers accounted for only 17
percent in 1997. It was reported at BookExpo of America
1998 in Chicago that the membership of the American
Booksellers Association (ABA) had declined by 45 percent
between 1991 and 1998. In the summer of 1998, the German
trade journal, the "Borsenblatt des deutschen Buchhandels"
noted that the ABA had dropped its training courses for
independent booksellers - because of lack of demand!

This competition is intensified still further by the emergence
of online bookshops such as Amazon.com or
BarnesandNoble.com - in which Bertelsmann took over a 50
percent holding in October 1998. Analysts assume that within
only a few years at least 7 percent of book sales will have
shifted to the Internet - and consequently be lost to traditional
bookshops.

Possibly more significant than online bookselling as such,
however, is the fact that the major online suppliers have long
since ceased to offer books alone, but have deliberately
extended their ranges to include CD's, videos, software or
other media and consumer goods. This means that the
increasing struggle to attract the interest of the public brings
books into direct competition with numerous other media such
as TV, Internet or CD-ROM.

The mergers of the past year as well as the statements of intent
coming from the forerunners among these companies indicate
clear expectations for the newly adopted course of action.

"After all, we have more than 44 million subscribers
worldwide", was how the new Bertelsmann boss Thomas
Middelhoff defined the advantage held by his corporation in
the "battle for the consumer". Under the umbrella of
Bertelsmann, a network is emerging which brings together not
only publishing companies such as Random House and retail
chains such as Barnes & Noble Online, but thanks to mergers
with online services and computer companies (AOL, linked in
turn to the Internet software company Netscape) also includes
wide-ranging access to consumers and - via magazines
(Gruner & Jahr) and TV companies (CLT-Ufa) - shares and
therefore know-how in all links in the chain of trade in
contents. Bertelsmann's commitment to online business goes
far beyond books. According to Middelhoff, the "contents
corporation" Bertelsmann is aiming for hitherto undreamt-off
multiple exploitation within its own vertically integrated and
yet global company:
"One positive example: our music company BMG put on the
opera "Turandot" in the Forbidden City in Beijing. A CD
recording was made of the performance, our television
subsidiary CLT-Ufa has made a film, our magazine "Stern" is
publishing an article about it. And now we can sell the CD via
our clubs and the Internet as well." (Middelhoff)

To achieve synergies of this kind, international corporations
are currently willing to spend vast sums of money. In the first
half of 1998, buy outs and mergers in the USA alone reached a
volume of approx. 8.5 billion dollars. Here are just a few
examples from 1998:

. Barnes & Noble paid 600 million dollars for the USA's
largest intermediate trade company, Ingram;
. Bertelsmann took over Random House (for a rumoured 2.5
(New York Times) to 4.5 (FAZ) billion DM), making it the
largest US American trade publisher;
. With its takeover of the Education Division of Simon &
Schuster, the British conglomerate Pearson became the world
market leader on the education sector;
. The merger of two of the largest academic and STM
publishers, Welters Kluwer and Reed Elsevir, only failed in
the face of a likely veto from the monopolies and fair trading
authorities;
. Bertelsmann spent 500 million US dollars in acquiring a 50
percent holding in BarnesandNoble.com, 80 percent of
Springer Scientific Publishing and several share holdings in
German publishing companies (among them Berlin Verlag and
Falken Verlag); Bertelsmann is also negotiating a cooperation
deal with the largest French specialist publishers, Havas.

The newsletter "Subtext" comes to the conclusion that in 2000,
93 percent of US American publishing will be controlled by
the 20 largest players on the market. On the sector of specialist
information, in particular in, medicine and science where
linguistic barriers are virtually immaterial, the situation is
even more extreme. The three largest publishing companies on
the US market - none of them American companies - hold
approx. 90 percent.

Nevertheless, the process of agglomeration is not furthest
advanced in the USA, but in a country where the book is part
of cultural identity more than almost anywhere else, namely in
France. It is assumed that 50 to 60 percent of the market is
already controlled today by the two largest groups, Havas and
Hachette, both of which belong in turn to wider financial
empires, namely the technology, communications and
investment corporation Vivendi (an organisation which
emerged in 1998 from "Generale des Eaux") and the
Lagardere Group of which the French arms manufacturer
Matra is also part. Hachette has recently acquired strategically
important market shares in England with its takeover of the
publishing groups Orion and Cassel.

When it bought out the Spanish publishing group Anaya the
year before, Havas also expanded into a leading position on the
Latin American market. At the same time, Havas continues
negotiations with Bertelsmann. On the one hand, there has
already been agreement on joint activities in setting up the
Internet service provider AOL in France. On the other hand,
talks are being held regarding partnership on the academic and
STM publishing sector which, in light of Bertelmann's stake in
Springer, could potentially produce a worldwide market
leader on this profitable and innovative sector.

In Germany, the market is still significantly more widely
dispersed than in many other countries. 90 percent of
turnover, or 9.4 billion DM, is spread across the 100 largest
book publishers and publishing groups. The top 10 control
only about a quarter of the market. But in Germany too, it is
the largest players on the market which enjoy the fastest
growth. Publishing companies with a turnover of more than
60 million were able to increase their sales by an average of
4.2 per cent last year, indeed, the figure was 5.7 per cent for
the 50 largest groups, whilst publishers with turnover between
18 and 60 million DM achieved an increase of only 1.6 percent.

However, whilst Bertelsmann represents the newly created
giants of this industry in backing a "world without borders or
limits", unromantic observers foresee quite other brakes on
growth: "Corporations are not creative."

Of all the commentators, it has actually been the conservative
and business-friendly media such as the Neue Zurcher Zeitung
and The Economist which published several background
articles in 1998 pointing out the dubious nature of the
foundations underpinning developments in the publishing
industry.
The sceptical Swiss remind us, very like Lothar Menne whom
I quoted at the outset, that publishing's father figures of the
past have been increasingly replaced by managers who at best
pursue "discount wars" rather than proactive persuasion
through the power of good manuscripts and books, wars
around discounts in bookselling supermarkets where titles are
not ordered on an individual basis, but as a range.

The outcome is not just increased turnover, but above all an
increasingly susceptible conflict of interests between
writers, publishers and the reader. In the end, the
literary agents have stepped into the breach, benefiting from
the reputation of defending the rights of authors now under
threat from profit-seeking publishing companies. In fact, by
constantly driving up demands for advances, agents have
themselves played their part in undermining the livelihood of
those medium-sized publishing companies that carry literary
quality, but are scarcely still able to do so. What is more, in
illustrating the shift of creative potential away from publishing
companies and perhaps towards literary agents, the Zurcher
Zeitung points to names and careers - such as the discoverer
of the Indian Booker Prize winner Arundhati Poy, David
Goodwin.

For the publishing companies, the consequence of expansion
plus business and technological efficiency is that the individual
product becomes increasingly insignificant. "It's not the books
that matter, but the rights", as an anonymous employee from
Bertelsmann is quoted in the Neue Zurcher Zeitung. Especially
in the digital form which facilitates their free conversion
between the widest variety of media and presentational
versions, these rights are transmitted and exchanged around
the world. In this process, the book is at best an intermediate
vehicle. It is less and less of a crucial leading medium.

The Economist in Britain takes up this theme when it looks not
at the "publishing industries" but at "technology and
entertainment" in their various more dazzling and
metamorphosing guises, with an in-depth analysis of the
apparent trends for the future which comes to the conclusion:

"These days, the powers in the entertainment business are no
longer movie studios, or television broadcasters, or publishers:
all those businesses have become part of bigger businesses still,
companies that can both create content and distribute it in a
range of different ways."

What do these trends mean for international publishing and as
I personally ask myself, what do they mean for the
FRANKFURT BOOK FAIR after decades of seeing its role as
that of reflecting the industry and serving as one of its sources
of guidance?

Perhaps the future will bring us not the disappearance of the
book, but the complete disappearance of the publisher and of
independent publishing companies.

During the most recent reorganization at the Frankfurt Book
Fair three years ago (1996), I was made painfully aware that
attempts to intervene from above in countering international
trends and development are ruled out. At that time, we wanted
to support the "emerging markets", in other words publishers
from Africa, Asia, the Middle East, central and eastern
Europe, but also the small-scale and still diverse book trade of

western Europe, by placing them between the German-
language publishers on the one side and the English-speaking
countries on the other. The stronger markets were to penetrate
the weaker markets from either side. Fierce protests and
threats of boycott from the strongest groups showed us very
quickly that it was impossible.

Today's dynamics produce structures that accurately target
those sectors within the book trade and publishing which will
definitely produce considerable profits. These areas are
organised more effectively and are therefore correspondingly
successful. Because there is one thing we cannot ignore: the
large-scale bookselling and publishing mergers or the success
of the online bookshop Amazon.com on the New York stock
market underline the fact that the media industries, which now
include publishing, are experiencing a quite extraordinary
economic dynamism.

But sooner or later, the smaller, medium-sized and
"independent" players on the market will be left with nothing
but those contents sectors for which business profit can be
expected in exceptional cases only, or just for a short while.

The Monopolies Commissioner at the European Commission,
Karel van Miert, proposes instead that in future "good books"
which cannot be sustained by the market, should be financed
by subsidies. We know the result of that from European
agricultural policy. It is not just that a great deal of money is
used for such subsidies. The farmers are degraded to the role
of "guardians of the countryside", making a living from
taxpayers' money rather than from the fruits of their own
labours. In the same way, this sort of policy of subsidies would
make good books or other cultural products into endangered
species which could only continue to survive and enrich our
lives thanks to artificial protection.

In spite of all this, I do not wish to end this analysis of the
current trends on the book market on a pessimistic note. After
all, the basic views I have put forward here also include the
realisation that the industry in which we operate is
experiencing a powerful dynamism, even if this is linked to
considerable turbulences. The book as a medium, or as it is
summed up in the Anglo-Saxon world, the "publishing
industries" are not in danger in their essence.

In the history of the media, by the by, it has never been known
for a new medium to displace completely an earlier and
previously well-used medium. Letterpress did not do away
with direct speech, the telephone did not replace letter-writing,
the radio did not usurp the newspaper, nor the television the
cinema. But what has always changed has been the level of
influence and the cultural character of the respective
"displaced" medium.

In my view, the events of the past year as described here have
consolidated a trend and made it clear to us that the medium of
the book is increasingly affected by a shift in its cultural
standing. With the progressive commercialisation of
publishing through globalisation, the book loses substantial
elements of its cultural identity and is more than ever a
commodity which must hold its own against other media
commodities on the contents market.
In so doing, it can draw on cultural diversity and creative
independence, those values that have contributed to the sense
of self and the self-esteem of our business and have been
responsible for the unusual degree of social recognition
enjoyed by our medium.
I do not believe, however, that books are inevitably
superfluous just because their contents are limited to whatever
sells well, or is profitable as a product.

My hope lies with the mixed calculation which has always
characterised publishing, with successful titles helping to
finance those less likely to sell, but more ambitious in
publishing terms. Such decisions taken against the profit
interests of a company's own investors have always been
backed, however, by a responsible publisher with an
unwavering sense of obligation to the cultural potential of the
book. Lothar Menne believes that this figure has already
vanished for ever. Well, he has had his fair share of
experiences with big corporations, especially when buying
titles.

There is also the hope that at the grass roots, among the small
and medium-sized publishers, as so often in the history of
publishing, a new generation of dedicated book people will
emerge who - probably exploiting themselves in the process,
as already happens today - will take on the colourful, the
unusual, the peripheral, the difficult, the wonderful, the much
needed, the creative, but in any event probably not the
lucrative subjects.