The Zooba Zeitgeist

By PT Editors
November 1, 2001
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As jitters over snail mail consume the media, email marketers have been keen to whisper what amounts to the new gospel in direct-to-consumer marketing: opting-in. Wary of their mailboxes, the theory goes, customers are much more likely to agree to receive promotional messages via email. Whether or not this is actually the case, sagging response rates to traditional mail and the prospect of cheap bulk emailings have made “permission-based sales opportunities” look better than ever.

One company working in the book realm is Zooba.com, a direct marketer that sends email newsletters on a variety of topics to its 2.8 million subscribers. Income is based primarily on advertising (mostly of books and videos that complement the newsletter topics) and branded sites. One of Zooba’s more liberating aspects is a chary attitude toward its own services: “We recommend you select no more than three topics,” the site warns, apparently warding off email overload. The user is also told how many emails will arrive on a particular topic, so that the fear of an unending avalanche of newsletters — like an electronic Time-Life continuity series — can be put to rest.

As of the beginning of 2001, Zooba also has some staying power amid failing dot-coms, namely the advantage of being owned by Bertelsmann (50% by the DirectGroup, and the other 50% by Bookspan). Forty-five is the magic number in this respect: Zooba has 45 employees, sends out newsletters in 45 content areas, and now has access to Bookspan’s 45 book clubs, which it makes no bones about plugging in pop-up ads (“Get 3 great cookbooks for only $3!”). But it has also provided publishers, including Cambridge U. Press, Henry Holt, St. Martin’s and Simon & Schuster, with access to lists on focused topics — everything from “Great Minds” to “Golf” — as well as advertising opportunities tied to the topic (in some cases a bit loosely: a sample newsletter advertises Dreamcatcher to readers interested in Pilates exercises). When they’re roused by the ads in their emails, readers can click on over to B&N.com and other e-tailers to purchase books posthaste.

More than 20 book publishers have availed themselves of the site’s “microcast transactive content technology,” and some of them, like Harvard Business School Press, have their own branded channel offering subscribers branded content (Harvard’s is mostly taken from Harvard Business Review articles). “We tap into an electronic universe that they’ve aggregated,” says George Pratt, Director of Web Marketing for Harvard Business School Publishing. Still, while Pratt reports “some success” throughout the company using outside email lists, they aren’t a silver bullet, at least not yet, for driving sales. “It’s fair to say that we’ve been successful in terms of getting additional reach,” he says. “The question is whether that has translated into enough actual business to continue doing it. That remains to be seen.”

According to Gwen Seznec, Zooba Director of Client Services, advertising fees range from $25 to $40 per thousand, depending on the use of original content, logos, and other customized items. To date, however, the major drawback for many e-marketers may simply be the paucity of known targets: only about 20 million email names are said to be traded in direct-email lists, compared to hundreds of millions of names available the old fashioned way.

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Pirates of New Delhi

By PT Editors
November 1, 2001
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Talk of international piracy may make some American publishers nod off at the conference table, but at a forum held in Frankfurt last month, the Indian anti-piracy daredevil Akash Chittranshi told tales that had even the most narcoleptic among us wide-eyed with suspense. An intellectual property lawyer based in New Delhi by day — and apparently an avid reader of cloak-and-dagger novels by night — Chittranshi has helped pull off nine daring raids on 40 different pirate publishers in India, rounding up 70,000 copies of pirated books to date.

One of the most celebrated Indian missions, reports PT’s correspondent, came last July, when a phalanx of 22 cops and 11 investigators swooped down on a Delhi warehouse after Chittranshi’s spies, posing as manual laborers, confirmed the whereabouts of a major pirate operation. The intricate 45-hour bust turned up scores of volumes from Grisham, Ludlum, and J.K. Rowling, and ended up being the biggest pirate haul in India’s history — more than 27,000 copies.

Unfortunately, that’s just the tip of the iceberg when it comes to copyright piracy, which AAP estimates put at an $8 billion loss last year for American publishers. For its part, the AAP hiked funding this year more than 100 percent to battle international copyright piracy. The $400,000 is hoped to bolster efforts such as those in India, which have also been aided by the British Publishers’ Association and the Indian Association of Publishers. Piracy experts note that even modest busts can be of paramount importance to medical and scientific publishers, as a hefty $300 engineering textbook can be pirated and sold for a fraction of the price. Moreover, sources say that in India, education programs have paid off: 90% of booksellers there now refuse to stock pirated copies. On the other hand, rogue traders still blithely take orders for illegal editions at open markets around New Delhi, and the police force has only a few officers to track what is said to be a sophisticated network of offenders.

In nearby Pakistan, half of the book market reportedly consists of pirated material, much of which is thought to find its way into Indian hands. And in Malaysia, copy shops happily take orders from schools, delivering photocopied texts to classrooms. But there’s hope. In Singapore, a new police division is targeting bulk photocopying, and last February, Korean agents nabbed 600,000 counterfeit English-language books worth $14.5 million. About 2,000 titles of bestsellers, textbooks, and other works were seized in a warehouse belonging to venerable distributor Han Shin. As officials complained, foreign publishers aren’t the only ones feeling the pain: “Korean students have been paying [the] full imported book retail price for Han Shin’s shoddy counterfeits.”

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On the Block?

By PT Editors
November 1, 2001
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Sales of Book Businesses Plummet, But the Big Keep Getting Bigger

In the third quarter of this year, merger and acquisition activity in trade book and other consumer publishing segments plummeted more than 40%, according to industry figures tracked by investment banking firm Whitestone Communications. Despite a flurry of speculation over sales — for example, both Merriam-Webster and North-South were whispered to be making the rounds — we are told neither of these companies is currently on the block. Chalk it up to the rumor mill. But the on-again, off-again nature of sales across the entire publishing and information sector can be seen as a telling sign of the economic times. With smaller buyers sidelined by the economic downturn — and larger buyers skittish on deals as their market caps turn south — the result is less competition among bidders and hence sinking prices. “It’s a tough market to be selling into,” says one investment advisor. “Financial buyers can’t pay what they used to. And many of the mid-size companies up for sale don’t even raise the eyebrows of today’s big publishing conglomerates.”

It almost makes one nostalgic for the go-go ’80s, when junk bonds ruled the day and staid Boston banks were throwing cash to the wind as big companies of all stripes clamored to get book businesses under their belts. “Publishing was seen as a sexy industry,” recalls Bill Hammond, President of Publishing Strategy International. “Having a media property in your portfolio was highly desirable. But the sexiness seemed to fade away as the financial reality dawned.” Flash forward to September 11, and that dawn looks even grimmer as recent events put downward pressure on an already glum economy. “To tell the truth,” The Daily Deal moaned this week, “it’s been a wretched year for M&A as a whole.”

Wake Up and Smell the Margins

Perversely, such deal-deprivation for the book industry may mean more business as usual. “Generally, the large companies are going to continue to do acquisitions,” says Baran Rosen, Whitestone’s President. “They’re always looking to fill holes in their line, and they have the resources to do acquisitions year in and year out.” In other words, the big get bigger while the marginal get, well, more marginal. It’s a familiar story, especially for those who have weathered the boom-and-bust cycle of book-biz demand. In the early 1990s, for example, publishing companies lost their luster as free-wheeling financiers woke up to smell the profit margins. “The banks retrenched, and the debt component really went away,” Hammond says. “The deal flow for many years dried up.” But eventually, as the non-media conglomerates shed their suddenly unglamorous book assets, deals began to flow again when today’s book behemoths swallowed up the little fish in the pond. Ironically, the spigot has now run dry partly because all the deals have been done. “Due to the work of the previous decades, there simply aren’t a lot of acquisition targets,” says Hammond. “Norton is about the only one of any significant size that is left.”

There are still a few items on the block, though, including book distributor Consortium, which Hammond is helping to find a buyer. In Consortium’s case, 86-year-old owner Bill Brinton is selling the company “strictly for estate planning purposes.” The company remains sound, says Hammond, with first quarter fiscal year 2002 sales “considerably above” sales for the previous year. Others rumored to be for sale include Prentice Hall Direct, which like many in the direct mail business is facing a difficult climate. In fact, Prentice Hall corporate parent Pearson had planned to sell the company along with reference and business units to Hicks, Muse, Tate & Furst, a deal that fell through in 1998. (Other units were eventually sold, such as Macmillan General Reference, which went to IDG for $83 million.)

Some observers point out that such businesses are like the industry’s latchkey kids, orphaned by their unloving parents. Prentice Hall was acquired when Pearson bought Simon & Schuster’s business and professional operations, and was never a full-fledged family member. Many divisions “have been badly mismanaged by their parent companies for years,” says one industry observer. “Larger conglomerates are constantly manipulating these businesses for short-term profit. All these guys are waking up to the fact that it’s not as easy as it sounded.” (A Pearson spokesperson did not respond to a request for comment.) On the other hand, analysts point out that some of these same companies, when well cared for, are not as subject to recessionary pressures as trade publishers. The professional segments of book publishing — including legal, medical, and educational publishers — are supposedly sitting prettiest. “They’re hardly impacted at all,” says Rosen. “That’s why those businesses always sell for the higher range of prices. They’re solid and reliable.”

Maybe the reference world has been spared, too. Reports that Merriam-Webster was on the block have now been quelled, despite a Wall Street Journal column in August announcing that parent company Encyclopaedia Britannica, “after stumbling in ambitious online efforts,” had sought buyers to raise fresh capital. Merriam-Webster, which has been owned by Britannica since the 1960s, was expected to sell for between $20 and $40 million. But we hear the sale was put off amid bidding from Random House, HarperCollins, and McGraw Hill, after executives decided the dictionary business wasn’t losing so much cash, after all. “Encyclopaedia Britannica has officially halted all activities relating to the possible sale of Merriam-Webster,” according to Arthur Bicknell, Merriam-Webster publicist. “It’s not true,” adds Britannica spokesman Tom Panelas, when asked about the possibility of a sale. He emphasized that Britannica is retooling in the wake of the Internet bust, hinting that the dictionary lines may prove a key asset in this regard. “Britannica is in a back-to-basics mode after several years of concentrating almost entirely on the Internet,” Panelas says. “We are diversifying our product line and going back to print, CD-ROM, and DVD. We’re also diversifying our product offerings and revenue streams on the Internet.”

Gorging on Growth

Despite such retrenchment, several investment advisors report that a variety of deals are still on the table. “We have more deals now than we’ve had in the last five years,” says Martin Levin of law firm Cowan, Liebowitz. The company’s last deal was selling Lyons Press to Globe Pequot, which is owned by Morris Communications. Unlike the larger players, Levin and colleagues are somewhat unusual in that they focus only on one deal at a time, and don’t take on a seller unless they feel they can close a deal. The firm turns down five opportunities for every one taken on. As for the boom in business, Levin notes that publishers who came of age after World War II are realizing that they’ve got to either pass the business baton to the next generation, or sell it. (In the case of Lyons Press, however, Nick Lyons’ son Tony is still with the company, under the new ownership.) Also boosting merger and acquisition vital signs is the fact that today’s conglomerates prefer to grow by gorging on other companies, which is “cheaper and faster” than internal growth.

Others agree that the downward trajectory of macro economic trends hasn’t necessarily harmed the book biz as a whole. “There clearly is a difference as you move from one sector to another,” says Kit van Tulleken of the eponymous M&A firm. “I don’t think you can look at general fiction with the same eye as you look at STM, or legal, or professional, or childrens. They all have different cycles.” Certainly, there are big deals to be consummated, at least in Europe: Cinven recently grabbed Vivendi’s business and health publications for $1.8 billion, and Finland’s Sanoma WSOY snapped up VNU’s Consumer Information Group for just over $1 billion. Even the trade side shows signs of life. “Hachette has just bought Octopus over here,” van Tulleken says of the recent UK purchase. “I suspect that the price wasn’t dramatically affected by September 11. I think it was a top price anyway.” In that transaction, the French publisher picked up the UK illustrated book group as “a new step in Hachette Livre’s international development in the anglophone arena,” the company said in a statement. (Hachette is itself owned by French media powerhouse Lagardère.) Yet in one sense, Hachette’s cross-border deal is the exception to the recessionary rule. In boom times, companies gunning for growth reach beyond their borders for new markets. But in tough times, says van Tulleken, contraction forces deal activity much closer to home.

And magazines? Don’t even go there. “This is a tough environment in terms of the outlook for the remainder of the year,” says David Libowitz, Managing Director at private equity firm Warburg Pincus. “Anything that’s advertising-related is difficult. We tend to focus on subscription-type businesses.” Another no-brainer is a glance at the share price of the media behemoths — who are now either unable or unlikely to cut big deals. “That absolutely will have an effect,” van Tulleken adds. Yet there’s still plenty of money around, and some bargains to be had. “Even in the good times, travel publishers are always for sale,” says Mark Pattis, partner in Next Chapter Holdings and former CEO of NTC/Contemporary, “and especially now.” In the end, though deals may be depressed, you can bet the market won’t lie fallow for long. “It’s like a crop,” sighs Martin Levin. “It keeps blooming, each and every year.”

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International Fiction Bestsellers

By PT Editors
November 1, 2001
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The Travolta Generation
Swingin’ Sweden’s Gardell, Finland’s Eager Readers, And Greece’s Turk in the Garden

One of Scandinavia’s sassiest stand-up comedians drenches himself in “sweaty randiness and lonely searching” this month with A UFO Makes an Entry, a second novel by Jonas Gardell about the star-crossed generation that grew up in the suburban 1970s, weaned on John Travolta and the Sex Pistols. A sort of comedian bildungsroman, the book takes up where Gardell’s earlier volume Growing Up a Comedian left off, with the tortured lives of teenagers Juha and Jenny. As they bump and grind their way through love and rebellion, the tragicomic teens confront a world equally tarnished by skin blemishes, bullies, and nuclear power plants. Possibly the best of Gardell’s “tender yet cruelly accurate” tales to date, this book is said to dexterously juggle bathos, pathos, and polyester — all to the gyrating soundtrack of Saturday Night Fever. The 38-year-old Gardell made a promising splash in 1985 with his debut novel The Passion Play, a work about homosexual love, and has gone on to write a number of well-received plays. Rights to the new book have been sold thus far to Norway (Tiden) and Denmark (Tiderne Skifter). See Clara Gustafsson at Norstedts.

In other northern European matters, we’re pleased to introduce our bestseller list from Finland, which debuted last month. A voracious nation of readers, Finland cranks out the second highest number of titles per capita in all of Europe. (Iceland, however, is the top titles-per-capita nation by a long shot.) Though it’s also a nation of short print runs — averaging 4,100 copies for a work of general fiction — we offer a brief overview of the industry to get you oriented. Total book sales in Finland amounted to about $360 million in 1999, with 40% of books sold in bookstores. The heavy hitters among Finnish publishers are WSOY, Otava, Edita, and Tammi, while the only Finnish wholesaler is Kirjavälitys Oy, owned jointly by bookstores and publishers, which has 30,000 titles in stock. Though the bestseller list this month is a rogues’ gallery of usual suspects, recent Finnish gems include Susanne Ringell’s “ABC for grown-ups,” a slim volume with a whopper of a title: It Was Embarrassment that Made Adele Fat. The book offers a mini-story for each letter of the alphabet, and is said to blend linguistics, psychology, and the absurd. As one critic warmly averred, “Female absurdism is something of which we cannot have too much.” See publisher Söderström for rights.

In Germany, literary argonaut Peter Stamm roves through an Uncharted Landscape in his second novel, an “elegy about the futility of life” that unfolds from a small Norwegian port of call above the Arctic Circle. A listless, 28-year-old customs officer named Kathrine boards a Hurtig Route ship called the Polarlys, and the voyage turns into a spiritual trek departing from her drunken first husband and 8-year-old child, and sailing to points unknown amid life’s icy lagoons. Stamm’s 1998 work Agnes was deemed a “fine first novel” recalling Raymond Carver in its stark portrayal of two lovers who meet in the Chicago public library and get terminally tangled when he begins writing a “fictionalized” account of their relationship. Critics called the story “the innermost of a set of Chinese boxes.” The 38-year-old Stamm has been an itinerant freelance writer and journalist who now lives in Switzerland, and his novel Agnes is now published in nine countries, including the UK (Bloomsbury), France (Christian Bourgois), and Spain (Quaderns Crema). Rights to the new one, which is just below the top ten this month, have been sold to Italy (Neri Pozza), with deals imminent in Spain and France. Talk to Marianne Fritsch at the Liepman agency.

Also in Germany, TV and radio sensation Elke Heidenreich has floored even her staunchest admirers with a collection of seven short stories called Turn Your Back on the World. Mournful but leavened with irony, the stories offer elliptical reveries, such as one about a woman who vows to find a former lover 25 years after their week-long affair. The two hook up for a tryst and — wham-bam! — the Berlin Wall kicks the dust. The author’s Nero Corleone (a children’s book illustrated by Quint Buchholz) was published in the US by Viking in 1997, as well as a dozen other countries. The new one has sold over 120,000 copies in Germany, with rights sold only to France thus far. See Susanne Bauknecht at Hanser for rights.

Meanwhile, Greece has been chasing after the Turk in the Garden, an “attractive and atmospheric” new novel by prolific journalist and playwright Yiannis Xanthoulis. The time-twisting plot centers on the 11-year-old son of a gardener who becomes the catalyst in a series of supernatural events — all of which culminate around the garden of an aristocratic éminence grise. Protagonist Ilias deploys his “paranormal abilities” to avenge the death of the old woman’s brother, and soon a 16th-century noble Turk pops in among the dahlias to wreak havoc. Xanthoulis’ novel Dead Liqueur sold 122,000 copies, and was published in Holland (de Geus), Japan (Kodansha), Spain (Seix Barral), and France (Hatier) — though we’re told rights have reverted in France and are now up for grabs. The new one, published in June, has sold more than 25,000 copies, and all rights are open from Maria Fakinou at Kastaniotis.

Also of note in Greece, a brief update on Nikos Themelis (see PT 5/01), whose novel The Search is now up to 70,000 copies sold, while his second effort, The Subversion, has sold 60,000. Critics were wary of Themelis’ alter ego — he’s counselor to the Greek prime minister — but we’re told readers have found The Search a Jamesian mosaic woven from the life of a young man in Asia Minor. Rights have been sold to Germany (Piper), Italy (Crocetti), and Turkey (Dogan Kitap). Meanwhile, The Subversion has been deemed “a highly attractive novel” about the Greek Diaspora, detailed in “perfectly accurate period atmosphere.” See Kedros for rights.

And Australia is atwitter over the latest from Matthew Reilly, whose Area 7 is the young maestro’s fictional look at “America’s most secret base,” an Air Force outpost in the Utah desert. The book recounts a presidential visit to the compound that turns ugly when hostile forces are found inside. Reilly’s earlier efforts Ice Station and Temple were published in eight countries, and the new one has sold 100,000 copies. Rights have been sold to the UK (Macmillan), Germany (Econ), and Holland (Het Spectrum), with publication in the US expected in February from St. Martin’s. See Macmillan UK for rights.

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Doldrums for Direct Mail

By PT Editors
November 1, 2001
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In the waning days of October, Publishing Trends paid a nostalgia-filled visit to Chicago’s McCormick place, this time to the 84th Annual Direct Marketing Association conference to see how another troubled industry deals with adversity. Next to the direct response business — buffeted by ever-increasing postal rates and regulations, an economy in the doldrums and now, anthrax — trade publishing is a problem-free, booming business. But ask publishers in the direct mail industry how they’re faring, and the full impact of what Bob Wientzen, President of the DMA, called the Post Office’s annus horribilis, will be clear.

Signaling the true extent of the devastation, officials are not even pretending it’s business as usual. Several seminars were added to roster at the last moment, including “Direct Marketing in Adverse Circumstances: Gaining Consumer Trust in Your Mail,” conducted by a postal inspector, and another USPS session with the unfortunate title, “Direct Mail: Hit your target every time.” The NY Daily News’ Phyllis Furman reported estimates of as much as $7 billion in lost transactions by the end of this year, because of 9/11 and specifically the anthrax scare. According to Media Buyer’s Daily, that number could rise to $20 billion over the course of a full year.

In his opening remarks at DMA, President Wientzen quoted an industry poll which found that 20% of consumers are “less inclined” to open their mail, though he claimed the impact so far has been “negligible.” Including direct and interactive marketing, sales in the US exceeded $1.7 trillion in 2000, including $110 billion in catalog sales and $28 billion in sales generated by the Internet. And some are pointing to a surge of interest in email-based marketing in this time of postal panic (see article below). Still, the mood at the convention was wary, with no official estimates on turnout. The DMA offered prospective registrants free air fare or Amtrak tickets, but even with that, some estimate that at most, half the projected attendance will have come this year. (Last year 13,000 attendees showed up in New Orleans.)

Those who did find their way to the exhibition hall also found George Bush père at the podium, giving the keynote address on Monday morning. Greeted by cheers and standing ovations loud enough to suggest a roomful of staunch and newly converted Republicans, a well-prepped Bush was bullish on the industry, noting that “I’m a strong believer in the work of the DMA,” and telling the crowd, “I’m married to a black belt shopper.” He also contributed some of the most amusing remarks of the show, as when he claimed that mum was the word on any political pronouncements, because his sons George and Jeb “don’t need that grief, and neither do I.” He admitted that the press had been treating George better than he himself had been treated, “And oh my golly, how I hope they stay with him.” The elder Bush, however, was happily turning the tables: “Now, if I don’t like your question, to hell with you.” That brought the house down.

Elsewhere, the agenda was solidly focused on business, with the Internet an obvious topic of interest. According to the DMA’s State of the Catalog/Interactive Industry Report 2001, which was released at the show (it’s $595 for DMA members), the Internet generated 13 percent of all catalog sales in 2000, almost a 50% increase from a year earlier. Seventy-two percent of catalogers said that greater visibility was the top benefit received from the web, and half of survey respondents reported new business opportunities. In perhaps the best news of the show, 70% of catalogers claimed the Internet even bumped up their revenues.

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All Crime, All the Time

By PT Editors
November 1, 2001
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Crime has been paying well enough for Court TV, the fast-growing cable network launched in 1991 (and founded by the now beleaguered Steven Brill) that under chief executive Henry Schleiff has doubled its reach to 60 million viewers in recent years, doling out televised trials by day and original riffs on the criminal justice system by night. But brand extension pays, too, and the network is now giving the green light to a variety of book-related projects it hopes will parlay its courtroom dramas into bestseller material, and vice versa. “We’re being very opportunistic, because we have resources and experts that nobody else has,” says Court TV General Counsel Doug Jacobs. “Books are a great way for us to put our best foot forward.”

Book traffic flows in several directions at Court TV. The company is actively seeking books and manuscripts — primarily nonfiction — that it can develop as TV programming. “We are very interested in books,” affirms Rosalie Muskatt, Vice President for original movies, speaking from the Toronto set of Court TV’s first original television movie. That production, set to air in 2002, chronicles the plight of a woman who has two young children and is slammed with 20 years in prison under questionably excessive drug laws. It typifies Court TV originals in that it deals “with strong social issues that have elements of American crime and justice,” Muskatt says. “They need to be contemporary stories.” The network aims to produce between two and four TV movies per year, all in the same social-justice vein. “We’re also very open to exploring established writers and working with them on original ideas,” Muskatt adds.

Going the other direction, the network develops book spin-offs based on its documentaries and other televised or online content. Since Court TV is half owned by AOL Time Warner (the other half is held by Liberty Media), the AOL publishing family makes a natural book partner. Earlier this year, for example, Time Warner unit Little, Brown published The Smoking Gun, a volume of documents taken from the Court TV-owned website of the same name, which collects an amusing array of “secret, surprising, and salacious” items through freedom-of-information requests and other means, and serves them to 600,000 visitors a month. (Featured document: Burt Reynolds’ 1996 bankruptcy statement, disclosing his $7,500 debt to two toupee companies.) There’s also Shots in the Dark, a compendium of crime photography published by Little, Brown in connection with a Court TV documentary on the subject. And the Time Warner family is set to publish a book called You Be the Judge, based on summaries of trials and featuring an interactive component that lets readers guess the verdict in each case. Despite the AOL synergy, however, executives stress that Court TV is open to deals with other houses. In 1999, says Jacobs, Kensington was invited to raid the network’s library of trial stories for a series of four books collecting the hottest cases in the archives.

On the classroom front, Court TV has renewed a deal with Wadsworth International Thompson Learning, which has licensed 25 Court TV documentaries as “added value” for its textbooks. The network’s “Choices and Consequences” effort feeds a number of teen-relevant documentaries into classrooms, and the company may look into publishing related textbooks for teens as well. Elsewhere, discussions are burbling about a print version of the material collected on Court TV’s website, which includes extensive trial coverage (more than 700 cases have aired to date), an archive of verdicts, and more riveting, salacious documents (O.J. Simpson transcript, anyone?). A subsidiary site, Crime Library, contains a database with serial killers from Jack the Ripper to Ted Bundy, ripe for repackaging in book form.

It can start to sound unsavory. But back on the set in Toronto, Muskatt emphasizes that not just any drive-by crime novel will do for a Court TV production. “I wish we could just adapt a wonderful murder mystery,” she says. “But that’s not our mandate. We’re hoping that this movie will call attention to drug laws that need to be looked at and changed. What we’re trying to do across the board with our movies is to stimulate conversation.”

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Book View, November 2001

By PT Editors
November 1, 2001
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PEOPLE


Layoffs are the order of the day, though mergers, not the economy, seem to be the main reason. DK has laid off about 25 people, with more to come. Meanwhile, the move down to Hudson Street has been postponed, apparently as a cost-savings measure. No word yet on Phyllis Grann’s plans, though Random House continues to figure in the speculation. Word is that by the end of the year Golden will have laid off half of its employees. Its offices will also remain separate from the mother ship, but they are almost adjacent to the new Random digs. And, of course, Rodale laid off 148 people, mostly in its direct response book publishing area. One of those was Roz Siegel, formerly Senior Editor at S&S. She may be reached at roz.siegel@mindspring.com.

Speaking of S&S, Colin Harrison, noted author and previously an editor at Harper’s (and husband of author Kathryn, onetime editorial assistant to Nan Graham), is rumored to be going to Scribner, as an editor. There’s a spot open, since Crown’s Shaye Areheart hired away Jake Morissey as Executive Editor for Harmony, and Jane Rosenman left for St. Martin’s (PT 9/01).

In other news, Miranda De Kay has left Bookspan. . . . Kathleen Carson, Executive Editor of Budget Book Service is going to Random House Value Publishing as Editorial Director, replacing Susanne Jaffe, who left to join Thurman House.

Harper thawed out from its hiring freeze long enough to bring in two Executive Editors in October, Dan Menaker and Dawn Davis. Menaker will report to Susan Weinberg, SVP and Editorial Director. Davis, who was at Vintage for five years, will also serve as editorial director of Amistad.

Michaela Hamilton has been named Editor-in-Chief at Kensington Publishing. She succeeds Paul Dinas, who joined Reader’s Digest last month (see PT 9/01), and will report to Laurie Parkin, VP and Publisher of Kensington. . . . Leona Nevler, who arrived at Penguin Putnam on Sept. 10, says she bought two books in her first three weeks. She was most recently a SVP and Editorial Director of Ballantine, where she had been since 1982, when Fawcett was acquired by Random House. She reports to Leslie Gelbman, President of the Berkley Publishing Group and NAL. . . . Peter Clifton has moved (literally) to Tennessee as President and CEO of Ingram Periodicals. He had been CEO of Vista’s PubEasy, and subsequently interim CEO of Previewport. He will commute between La Vergne and his home in Westchester for the time being.

Among promotions, André Bernard has been named VP, Publisher of Harcourt’s Trade division. Michael Stearns has been promoted to Director of Paperback Publishing at Harcourt Children’s. He was formerly a Senior Editor and will continue to acquire and edit. . . . Rick Pascocello has been promoted to VP, Advertising and Promotion for Berkley and NAL. He was previously Director. . . . Michelle Yeauger has been promoted to Senior Marketing Manager, Direct at McGraw-Hill Children’s Publishing. She was previously Marketing Manager.

DEALS


Susan Schulman, who handles translation rights for Millbrook, huddled over her computer instead of the TV in the days following the 9/11 attack — she had recently received the ms for Osama Bin Laden: A War Against the West, in Millbrook’s recently launched YA division, the Twenty First Century Books line. The book had been signed up by Publisher Jean Reynolds in 1999, after the US embassy bombings in Africa. Over that first weekend after downloading mss around the world, she had sold the rights in Spain and Japan, and by the end of that week had concluded deals (all via her 15 subagents) in Poland, Estonia, Korea, Portugal, Croatia, and French Canada, with offers pending from Turkey and the Scandinavians starting to line up. The book was published in Spain (Planeta, with a separate licensed Mexican edition) on October 19th, and in Canada on October 30th. The book will still be published in a library edition (short discount) shipping in December. Trade rights (hard or softcover) are available.

DULY NOTED


Ipsos NPD has issued its Adult BookTrends Update, an ongoing survey of the book buying habits of more than 12,000 households, and the news for fiction was good, at least pre-9/11. Fiction sales rose 2.7%, the highest jump of any category. Meanwhile, book club sales have increased by almost 2% — and 3.5% compared with all of 2000 (mostly through an increase in online sales) — while chain sales have decreased slightly.

• Elle is launching a readers choice award, for the best fiction and nonfiction of the year. French Elle has been doing it for years, with apparent success. The voting seems unduly complicated, but the result will be a Grand Prix winner in fiction and nonfiction, to be announced in the December 2002 issue. Readers’ comments on the books that are read throughout the year are available at www.elle.com.

• PublishersMarketplace launches as a subscription site in November. Michael Cader, of publisherslunch.com fame, is behind this latest effort, which will cost $15 a month, billed monthly. He tells PT that “I’ve been surprised and delighted by how quickly people have started using the whole array of features and making them work; writers are finding agents and publishers; agents are selling proposals here (which I never expected) and foreign rights through their postings; the deal resources are helping to further increase the flow of deal information; and we will have generated over 175,000 page views in the first month (with the site continuing to get busier).” Score one for the impresarios.

• Morty Mint, former chief of Guinness Publishing in the US, will publish and distribute the US edition of a new paperback series, ParentSmart Books. It is published by ParentSmart Books of Canada. Maryann Palumbo Marketing Concepts will handle US marketing for the series (launch is in January 2002). In other Canadian news, Raincoast closed down its fiction imprint, and HarperCollins Canada’s Marketing Director, Judy Brunsek, has left the company.

• The magazine strategy+business has published its “Best Business Books of the Millennium” issue. Jim Collins tops the list with Good to Great. Go to www.strategy-business.com.

NOVEMBER DATES


NYU’s Center for Publishing, along with the French Publishers’ Agency and the German Book Office, have organized a seminar, “How to Effectively Acquire, Translate and Publish Foreign Titles.” The all-day seminar takes place on Friday, Nov. 2nd at the Center for Publishing. Tickets are $50. Call 212 790-3232 or go to www.scps.nyu.edu/pubcenter.

• Small Press Center hosts two November panels. On Monday, November 12th from 5:30 to 8:00 pm is “Publishing Predictions: Past and Present Visions of the Future,” in partnership with PW, at The New York Times Auditorium. On Tuesday, November 20th, from 5:30 to 7:30 pm, is “What’s Happening to Book Reviewing?” Email info@smallpress.org for details.

• The 52nd National Book Awards evening is on Wednesday, November 14th at the Marriott. Tickets for the dinner and awards ceremony (again, with Steve Martin as host) are $1000. But for $100 you can attend the reception.

• The Miami Book Fair is scheduled for November 11-18 at the Miami-Dade Community College. An eclectic mix of some 250 authors, including Vernon Jordan, Stephen Ambrose, Naomi Wolf, and Rabbi Harold Kushner will be present, and almost 500,000 visitors are expected to attend.

• Author and former Houghton Mifflin publisher Joe Kanon will be reading from his new bestseller, The Good German, on Thursday, November 8th, at the 82nd and Broadway Barnes & Noble at 7:30 pm.

MAZELTOV


Congrats to publishing couple Chitra (McGraw-Hill) Bopardikar and Josh (HarperCollins) Marwell, whose wedding is on November 3rd in New York.

And to Book-of-the-Month Club, on its 75th birthday this month.

Also, Joseph Xavier Held was born October 15, 2001 to Random’s Ivan Held and his wife, Patricia Falvo, until recently a Senior Writer at Allure.

Finally, congrats to Pam and Joel Fishman (former editor, agent, and founder of subrights.com), on the birth of a baby girl, Macklin, on Sept. 25.

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Book View, October 2001

By PT Editors
October 1, 2001
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PEOPLE


Phyllis Grann’s imminent departure from Penguin Putnam took almost everyone aback, and unnerved more than a few long-time Putnam folks. In other PP news, Sean Moore has left DK US, where he was VP Publisher of the Adult division. He may be reached at 914 591-3220.

David Ford came to New York over the summer and found himself plunging into interviews moments after his plane landed (he has been living on St. Simon’s Island since leaving Candlewick). He starts in November as VP Publisher of Little, Brown Children’s, succeeding John Keller, who will leave in the summer of 2002. Houghton Mifflin is still searching for a publisher, as Anita Silvey has announced plans to retire. Speaking of children’s publishing, David Krishock is succeeding David Yun, who is retiring as President of Scholastic Book Fairs. And Rosanna Hansen is leaving Weekly Reader, where she was SVP Publisher and Editor-in-Chief, to pursue her career as an author (she’s written 12 children’s books) and consultant. She can be reached at rhansen149@netzero.net. Peter Bergen, President and CEO of Weekly Reader, left several months earlier.

Linda Howey, most recently Publisher of NetLibrary, has been named VP Director of Sales for National Geographic books, which is distributed by Simon & Schuster. Meanwhile S&S announced that Cam Cloeter, previously VP of The Source Information Management Co., has been named VP Distributor Sales and Retail Marketing for S&S. He replaces Steve Kaiser, who left to join Hearst.

Leslie Meredith has been named Senior Editor and VP of Free Press, reporting to Dominick Anfuso. She was previously at Ballantine . . . . With Brill’s Contentville shutting its doors and its fifteen employees laid off, Kori Anderson will move to Inside.com, reporting to Executive Editor Sara Nelson. . . . Jane Rosenman was named Executive Editor of St. Martin’s. She was previously Executive Editor of Scribner . . . . John Silbersack, previously SVP and Publishing Director of Harper Entertainment, joined Robert Gottlieb’s Trident Media as SVP in charge of business development. . . . Word has it that Doreen Carvajal is leaving the NY Times to work for Bertelsmann in Paris. . . . David Chalfant, SVP at Siegelgale, has left the company as a result of its most recent round of layoffs. He may be reached at 212 581-9821.

Columbia U. Press has a new CFO, Rebecca Schrader. She started in August, and comes from Island Press, and before that, U. of Michigan Press. . . . Colin and Pam Webb, formerly of Pavilion Books, will launch Palazzo Editions at Frankfurt (8.0, F 911) with 20 projects, including the reissue of Alistair Cooke’s America.

As noted elsewhere, Hungry Minds’ top honchos, including John Kilcullen, Bill Barry (previously at Doubleday), John Ball, and John Harris, have left the company, following its sale to Wiley. And rightsworld has discontinued its publishing rights marketplace as of September 2001. Eric Miller was the CEO, out of Dallas, and Nick Bogarty, the President, in New York.

DULY NOTED


Thomas Middelhoff held his now-annual state-of-Bertelsmann speech on October 1 at Ford’s Theater, and declared that, with the exception of BMG’s sorry performance, the company is well positioned for its forthcoming IPO. In a Q&A, he asked the audience, “Did we all like our PC-for-all?”, and told of an email addressed to “uncle Thomas,” which suggested that for next year’s company present, the Audi 16 was a “fine automobile.”

• HarperCollins Publishers announced that it will launch the Fourth Estate imprint in the US with the publication of Carol Shields’ Unless. The book will be published simultaneously by Fourth Estate in the UK, which has published all of Shields’ novels in Britain. Christopher Potter, Publisher and Managing Director of Fourth Estate, and Dan Halpern, Vice President, Editorial Director of Ecco and Executive Editor of the HarperCollins General Books Group, will be co-publishers of Fourth Estate US. Clive Priddle will serve as Publishing Director for Fourth Estate in the US. Courtney Hodell, who recently joined HarperCollins UK from Random US, will be Publishing Director, Fourth Estate in the UK. In addition, Nicky Eaton, Fourth Estate Publicity Director, will take on extra responsibility as Deputy Managing Director.

• The board of Consortium Book Distributors is entertaining offers for the company, and though both the board and senior management would prefer that the buyer be local, “we will be exploring all viable sources,” according to Bill Hammond, who will handle inquiries. Contact him at Publishing Strategy International, 612 349-2714 or pubstrat1@aol.com.

• Michael Cader announces the launching of Publishers Marketplace, “an electronic place to help publishing professionals of all sorts find each other, and find important information.” The basic search is free, but there will be (eventually) a $15 monthly fee for access to the new deal database, and posting privileges. Go to www.Publishers Marketplace.com.

• Jennifer McCord, our correspondent at the Pacific Northwest Booksellers Association’s meeting on Sept. 14-16 in Portland, Oregon, reports that show numbers were close to last year, even though several participants cancelled, unable to find transportation to the Northwest. As for sales, “the show was steady,” according to Gary Lothian of Ingram, while Luis Borella of Redsides, an independent rep group, added that “it was initially slow, but gained momentum.” Portland’s own Chuck Palahniuk even popped in on very short notice.

OCTOBER DATES


The “Frankfurt Big Questions Conference” is scheduled for Monday, Oct. 8 in Frankfurt. Peter Olson and a bevy of speakers from the US and Europe will address, well, the big questions confronting publishers. Go to www. frankfurt-book-fair.com.

• Small Press Center has publishing workshops every Tuesday evening starting on October 2nd and running through Nov. 12th, at its offices at 20 W. 44th Street. Email info@smallpress.org for details.

• Book Industry Study Group hosts “Beyond The Hype: The Realities of Digital Publishing,” on October 24 from 2:00 – 5:00 pm at The McGraw Hill Auditorium, 1221 Ave. of the Americas. Three panels will focus on “The Logic of Digital Publishing,” “Delivering e-Content,” and “Inter-Operability: Putting the Pieces Together.” The conference will be co-chaired by Frank Daly, Executive Director of BISG, and Charles Benante (Pearson Technology), Chair of BISG. It’s $150 per person (BISG members $50). Email Bill@bookinfo.org for details.

PARTIES


Many parties and events were cancelled over the past few weeks, but a handful took place as scheduled, albeit with a certain somberness.

• On September 21, the Association of Authors’ Representatives celebrated its 10th anniversary at a gala event at the W Hotel in Union Square, with 300 attendees. Jane Gelfman, Owen Laster, Don Congdon, Deborah Schneider, Jamie Raab, Michael Carlisle, Maria Carvanis, Molly Stern, as well as numerous “great young editors and agents” attended, according to our correspondent. There was a “festive feeling, good bags of books and audio tapes. . . . People seemed so glad to commune with one another.”

• The same could be said for Ecco Press’s 30th anniversary, celebrated at the Century Club on September 24th. Authors (including Fran Liebowitz and Francine Prose), HarperCollins colleagues, agents, and friends of Dan Halpern toasted the publisher and remarked on how glad they were to have the chance to take their minds off recent events — even as they compared notes on what they had experienced over the prior two weeks.

• On September 25 Tom Dunne, Barbara Lowenstein, Madeleine Morel, and 50 volunteers from St. Martin’s hosted a fundraiser for various 9/11 charities, and raised over $100K. The same night, Publishers Publicity Association had its annual “mixer” at the Time-Life auditorium, and got a good crowd, presumably some of whom proceeded downtown thereafter.

MAZELTOV


To Curious George, who turns 60 this fall, and to Moby Dick, which turns 150.

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Surveying the Shortlists

By PT Editors
October 1, 2001
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Black-tie shebangs are thick on the calendar this time of year, with publishers scurrying from one award ceremony to the next, buoyed along by the hope of slapping those “Winner!” stickers on their authors’ books — or at least hoping to have a good meal and a quick exit from the fête du jour.

September brought The Lannan Literary Award, with prize money of $600,000, including a $200,000 Lifetime Achievement award to Robert Creeley. October heats up with the Frankfurt eBook Award, the first award designed to recognize achievements in the (slowly) emerging ebook industry. For those in the neighborhood, the winners of five awards will be announced on October 10 at the Frankfurt Opera House, with the Author’s Grand Prizes of $50,000 going to the best fiction and nonfiction ebooks. A children’s award will be presented in Bologna in April. See www.iebaf.org for details.

Then there’s the Booker, bestowed upon fiction writers from the UK and its empire, and the less-known Neustadt International Prize for Literature. The Booker prize money is a solid $30,000, plus the enticing chance to actually sell books on the strength of winning it. It is administered by the Book Trust, and is, of course, famous for its petulant jurists, and the professional betting that accompanies the release of its long- and shortlist (no longlist favorites actually made it to the shortlist this year, which includes The Dark Room by Rachel Seiffert and Ali Smith’s Hotel World). See www.bookerprize.co.uk.

The Neustadt may lack the Booker’s buzz, but it carries a more than modest $50,000 in prize money (plus a replica of an eagle feather cast in silver, sure to excite every writer’s quill fetish). This is a biennial award (David Malouf won last year) sponsored by the University of Oklahoma and World Literature Today, the international literary quarterly founded in 1927 at OU. The award was created in 1969 as the “Books Abroad International Prize for Literature,” and has existed since under a variety of names. The 2002 winner will be announced at the Neustadt prize jury banquet this October 19. And coming at the end of the month is The Whiting Writers’ Award, given for fiction, nonfiction, poetry, and playwright. In 2000 (for the 16th year in a row) ten new writers found themselves $35,000 richer for showing “talent and promise.” The winners are announced October 26; call 212 336-2138 for details.

Then there are the Nobel Prizes, celebrating their hundredth anniversary this year. The prize — for achievements in physics, chemistry, medicine, literature, and peace — consists of a medal, a personal diploma, and a prize of 10,000,000 kroner (around $1 million). Winners are announced in October and the awards ceremony is on December 10 in Stockholm. See www.nobel.se.

November brings (counting all the previous iterations) the 52nd annual National Book Awards, presented at a lavish dinner on November 14. The awards recognize achievement in four areas: fiction, nonfiction, poetry, and young people’s literature. The winners are selected by a five-member, independent judging panel for each genre, and receive a $10,000 cash award and a crystal sculpture. The final shortlist (five finalists for each genre) is announced on October 11, and each shortlist winner receives a $1,000 prize. Call 212 685-0261 or go to www.nationalbook.org.

Last, least (monetarily), but newest, is the Mercantile Library’s Fadiman Award, named in honor of Clifton Fadiman, and presented to a living author of fiction whose book the jury feels is worthy of rediscovery. The $5,000 prize and medal is sponsored by Bookspan (Fadiman was a longtime judge of Book-of-the-Month). The jury is made up of committee members of the board, and they accept suggestions from the literary community at large. The award presentation is set to take place at the library’s annual benefit on November 13. Call 212 755-6710 for details.

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The Quiet Revolution

By PT Editors
October 1, 2001
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Reader’s Digest Revamps Amid Topsy-Turvy Fiscal Forecasts

Pleasantville, New York has always been a delightfully apt address for the Reader’s Digest Association. Ensconced there in its bucolic 113-acre campus — the global headquarters for an empire old DeWitt Wallace built on tales of anodyne, American optimism — Reader’s Digest was pleasantry incarnate. For the 100 million readers flipping open their monthly issue of Reader’s Digest (and the millions of other subscribers to the company’s book, video, music, and financial products) popping a renewal check in the mail to Pleasantville was like having an interest-bearing account in the Bank of Consolation. But as many in publishing are aware, smiley faces are scarce around Pleasantville these days, where a jarringly ambitious effort is under way to combat hemorrhaging profits, tumbling response rates, and a sluggish, aging subscriber base. Under the command of Chairman and CEO Thomas O. Ryder, executives have mapped out a subtle yet sweeping makeover to render products “at once familiar and radically new.” Corporate parlance is now riddled with can-do jargon like “leaner,” “low to the ground,” and “fast moving.” Meanwhile, former employees have described the last three years as a low-grade state of siege. Around Pleasantville, they call it “the quiet revolution.”

Struggling to attain financial targets, however, beleaguered Chief Ryder has been forced to eat his own words, which, last November, were precisely these: “the turnaround in the US is here now.” Nine months later, Ryder memorably summed up results for the fiscal year ended June 30: “You have seen the numbers for our fourth quarter, and they are ugly.” Revenues for the fiscal year were just over $2.5 billion, up 1%. Operating profit slipped about 4% to $247 million. And in the US, Ryder told shareholders this month, “Books and Home Entertainment (BHE) was hardest hit. Orders for most products declined sharply, especially videos and general books.” Operating profit for the North America BHE group plunged 21% to $71 million, on revenues that were up slightly to $719 million.

Specifically, the North America BHE unit, led by Thomas Gardner, was home to “our big disappointment in the US”: the company’s general books segment, which slid 18% to $85 million. Officials blamed a bad case of freezer burn from the frosty direct marketing climate, as well as a hangover from the deal last March with attorneys general in 32 states, which forced Reader’s Digest to alter the language and packaging used for sweepstakes mailings. “The effect of this on our business was far more negative than we had anticipated,” Ryder told shareholders. All of which has hastened the global “re-engineering” effort predicted to shave $150 million off of costs over three years. As part of that effort, two months ago the BHE operations were re-racked into six strategic business units: entertainment, health, home, reading, trade publishing, and Young Families. Among the casualties, the company reported, 380 employees were slated to “be separated” from Reader’s Digest over the coming year, with the brunt of those cuts hitting workers in the US.

The upshot for books? “This was a year where we were very glad that we were global,” says spokesman William Adler. “Overseas just about every book product was up, and in almost all countries.” Half of the company’s international markets, in fact, turned in double-digit revenue growth, among them Spain, Russia, Mexico, and Asia, with series products in Germany and Eastern Europe singled out as top performers. In fact, during the fiscal year the company sold more general books in Poland than anywhere except the US, France, and the UK.

One-Shots Out, Bob Dylan In

At home, the company has shunned its dismally performing one-shot products, looking instead to extend the franchise of continuity lines — particularly the flagship Select Editions, which Ryder called “our most profitable product.” This series of condensed novels packed in a hardcover volume is now published in 30 countries, and Ryder noted that as many as 1.5 million new customers per year could be brought into the fold due to new list acquisitions. No doubt, business is booming. “We quadrupled our work load in one year,” says Laura Kelly, VP and Global Editor-in-Chief of Select Editions and Reading Series. New products have been coming down the pike, including several softcover debuts. Select Editions launched in softcover in August, and last month saw the launch of Nonfiction Bestsellers, a series of five condensed books in a single, softcover volume (think Ghost Soldiers and Son of a Grifter, but also watch for a Bob Dylan bio). “We’ve tended to do collectible books that go on the shelf,” Kelly says. “Now we’re saying, these are bestsellers. They’re quick reads. Let’s package them that way.”

In creating market-driven company pods, the re-engineering effort has in some ways brought the group back to its roots. “This company was founded on research and product testing, so it has always been close to its customers,” Kelly says. “Now we’re doing faster testing and faster research to get closer to the marketplace.” Post-product research is done on every title after it ships, including interviews with 300 readers. Revenues from series books in North America rose slightly for the year to $30 million. Internationally, series books were up 4% to $97 million.

Mounting smaller, niche product lines has proved a big challenge, however, because identifying pockets of readers and getting to them through the mail can be painstaking. To date, sallies in new directions include last year’s launch of Best Mysteries of All Time, which was the result of a survey editors sent to their readers asking them to rank their favorite mysteries. The editorial team then winnowed the list to what they considered quality titles, and bingo: the company promoted it once at launch, and is now 15 books into the series. There’s also Life Touched with Wonder, the inspirational series launched in March with content culled from the Reader’s Digest magazine archives. Meanwhile, testing continues with the romance series Of Love and Life, a decided departure from staid Reader’s Digest fare, what with its “spicy tales” and “zestful romantic thrillers.” Hopefully for their sake, this frenzy of activity will help rouse the Select Editions line, which turned in revenues of $98 million for the fiscal year, down 5%. But so far, it seems, so good. “My whole team is energized,” Kelly says. “It’s great to see one condensation used in four different ways.”

Business also seems to be brightening on the trade side. “From a combined trade point of view, it was a successful turnaround year,” says Harold Clarke, VP and Publisher of the trade publishing unit, which acts as the “retail channel manager” for titles that have done well on the direct marketing side. The trade program handles 50 titles per year, typically illustrated reference books that need the benefit of the international coedition process. “All the books that we publish have to be used in multiple channels,” says Clarke. The unit also originates up to 20 of its own titles per year that are then sold via direct channels or internationally. Meanwhile, the Young Families division, which as recently as two years ago was “a very unprofitable part of the company,” according to spokesman Adler, has turned into “one of our very fastest growing areas.” Selling mainly licensed children’s books through direct mail, Young Families (under the leadership of Heather Burgett) has doubled its business in the past two years, a feat largely attributed to its customer-oriented, team-based model, which has since become a template for the other new BHE units. “Historically, Reader’s Digest books were published in a series of hand-offs, almost like an assembly line,” Adler says. Now, the autonomous units have better market intelligence and are also fleeter, with mail campaigns now said to be developed in 13 weeks, when they used to take nearly a year.

Another saving grace for book operations is Books Are Fun, the profitable display marketer acquired in 1999, which did about $250 million in sales last year. Headed by Joel Feigenbaum, the unit uses 700 independent reps to conduct mini-fairs at schools and businesses, where titles from a variety of publishers are heavily discounted. Several divisions are developing new products for marketing via Books Are Fun, and the program has rolled out in Mexico, with testing under way in France. The Books Are Fun unit, in fact, has been a plank in Reader’s Digest’s bid to reinvent itself as a “multi-channel powerhouse” that sells via non-sweepstakes direct mail and direct-response TV. For instance, the bestselling How To Do Just About Anything on a Computer did wonders on QVC. The company is also looking into email and even telemarketing, which already accounts for more than 5% of all BHE sales worldwide, including 20% of Select Editions sales in Germany. Ryder has said he expects 15% of BHE sales in the US to come in over the telephone this year.

Despite these gains, the quiet revolutionaries clearly have their work cut out for them. Company revenues are still at their lowest point in a decade, far from the $5 billion Ryder has vowed to reach by 2004. And company stock trades around $18, down from a 52-week high of $40. As the CEO confessed to analysts, “I don’t have a clue when things will get better and, frankly, I am concerned about them spreading to Europe.” Amid the lowering economic clouds, however, certain quarters of the book business seem refreshingly unfazed. “We’re doing fine,” says Clarke, admiring the list in his latest children’s trade catalog, which includes new licenses for Disney and Hasbro. “When you look at the books you’ll realize we’re having a good time.”

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