began to grind to a halt around 2000 and the superstore chains began to look more carefully at the relations between investment in stock, overheads and revenues and became more concerned about cash flow, their book-buying decisions became more cautious and they became more proactive about returning slow-moving stock. The chains had succeeded in bringing bookstores into the shopping malls and city centres where Americans did the rest of their shopping, had made books more available than ever before and had turned book-buying into a consumer experience like any other. But the more books were treated like any other commodity and subjected to the same principles of retailing, the more the chains would be forced to focus on fast-selling titles by brand-name authors at the expense of those titles that would add depth and range to the store but that would have much slower stock turns.
This inevitable shift was largely the consequence of the cost of real estate. Maintaining large bookstores in the shopping malls and city centres where there is high consumer traffic, and therefore competition for retail space, is a very costly business, and it is difficult to cover these costs and generate profits in a low-margin activity like bookselling. The pressure to reduce your investment in slow-moving stock, to focus more attention on fast-moving bestsellers and to look for other ways of improving margin – such as charging publishers more for display space and stocking non-book goods like chocolate and stationery where margins are higher – is difficult to resist. Epstein puts the point well: ‘In bookselling as in any retail business, inventory and rent are a trade-off. The more you pay for one, the less you can spend on the other.’16 Hence the growing dominance of the retail book chains, from the mall stores to the superstore chains, tended over time to accentuate the importance within the industry of fast-selling frontlist titles by authors with a good track record and a degree of name recognition. The chains were more likely to stock these books in substantial quantities and more likely to display them in prominent front-of-store positions, thereby increasing their chances of selling well. Books by less well-known authors were not ignored – on the contrary, the central buyers in the chains were always eager to find new authors and new titles that might appeal to their customers. But decisions about which books to buy, in what quantities, how to promote and display them and how long to keep stock on the shelves were being taken in contexts that were shaped by the increasingly stringent financial demands of running large retail businesses in expensive real estate. These were contexts that tended, over time, to reduce the levels of tolerance for slow-moving stock.
The rise of the retail chains had a third consequence which has been less appreciated but which was enormously important for the evolution of the publishing industry: it created a new market for what could be described as the ‘mass-market hardback’. Much has been written about the paperback revolution started by Allen Lane in Britain, with his launch of the Penguin imprint in the 1930s, and by the rise of Pocket Books, Bantam, Dell, Fawcett, the New American Library and other paperback houses in the US in the period after the Second World War. From the 1940s on, the sales of mass-market paperbacks grew enormously; paperbacks were being sold in newsagents, drugstores, supermarkets, airports, bus terminals and railway stations as well as in more conventional bookstores. Mass-market paperback sales became the financial driving force of the industry, and the sale of paperback rights became a principal source of revenue for the hardcover houses. By the 1960s the industry itself had bifurcated into two separate businesses – hardcover publishing, on the one hand, and paperback publishing, on the other. ‘The perception was that the only similarity between the two is that we both published books,’ explained one senior executive who had entered the paperback side of the business in the late 1960s. ‘The hardcover side was snobby, literary, prestigious, tweedy – all the things you would expect in that era. And the paperback business was sort of second class – we got the books a year later, we got no credit for the words, we were all about marketing, packaging, distributing and selling books. So you had these two universes coexisting, neither respecting the other very much but one totally dependent on the other for product.’ While the paperback business depended on the hardcover business for product, the hardcover houses depended heavily on royalty income from paperback sales to run their businesses.
The rise of the mall-store chains in the late 1960s and 1970s stimulated the sales of paperbacks and strengthened further the position of the paperback houses, as the mall stores embraced the paperback and made it available in a bookstore environment that was much more inviting and less intimidating for consumers than the traditional bookstore. By the mid-1970s, some of those working in the paperback houses began to realize that their business model – which made them dependent on the hardcover houses even though they, the paperback houses, were generating the real volume sales – was not a terribly good one. There were even cases where the publisher at a paperback house who had came up with the idea for a book was obliged to find a hardcover house to publish the initial hardcover edition, so that they could then license the paperback edition from them. ‘It would be like me coming to you and saying “look, I don’t have any editors here, edit this book for me, publish it in hardcover, I’ll give you the book to do that and then I will pay you some portion of the success I have after you do that,”’ explained a publisher who had started his career as an editor at a paperback house. Some of the employees at the paperback houses – usually the younger ones who were less wedded to the traditional model and less worried about offending the hardcover houses who were their traditional source of product – saw the need to start publishing books on their own. So in the 1970s the paperback houses began to originate their own titles, initially publishing them as paperback originals and then, by the late 1970s, publishing their own hardcover books. Crucially, they applied to hardcover publishing some of the techniques they had developed in the world of mass-market paperback publishing, such as using more attractive packaging and extending distribution to non-traditional outlets, and they were able in this way to achieve hardcover sales that were unprecedented in volume. This was the origin of the ‘hardcover revolution’.
The hardcover revolution
As the mall-store chains evolved into the chains of superstores that were being rolled out across the country, the hardcover revolution gained momentum. The application of mass-market publishing strategies to hardcover books dovetailed nicely with the non-traditional merchandising methods of the chains, including the use of discounting and dump bins; and the fact that the chains were opening large superstores across the country and developing more efficient systems for supplying their stores meant that the volume of books that could be put out into the marketplace on publication was much greater than it had ever been. In the 1970s, a book that sold 500,000 copies in hardcover would have been a huge success, practically unheard of in the industry. Thirty years later, an equivalent success would be in the region of 8–10 million copies – that is, around 20 times greater. In the early 2000s, hardcover sales in excess of a million copies were not unusual, and new books by brand-name authors often sold more than this. Dan Brown’s The Da Vinci Code, first published in 2003, had sold more than 18 million copies in hardcover in the US alone by 2006 – albeit exceptional, hardcover sales figures of this magnitude were simply unimaginable in earlier decades. As the sales of hardcovers increased, the old relationship between hardcover and paperback publishing was gradually inverted: whereas in the 1950s and 1960s, paperback publishing was the financial driving force of the trade publishing business, in the 1980s and 1990s hardcover publishing was increasingly becoming the financial foundation of the industry.
There were three other aspects of this hardcover revolution that were particularly important. First, as paperback publishers realized the value of publishing their own books, they began to use their growing financial strength to acquire hardback houses. This enabled them not only to expand their publishing programmes but also to secure their supply chains, so that they became less dependent on buying books from hardcover houses which were commanding higher and higher advances for paperback rights. This was a principal driver of the so-called ‘vertical integration’ of the publishing business, which became an integral part of the conglomeratization of publishing houses that characterized the period from the 1960s to the 1990s.
A second aspect of the hardcover revolution is that it diffused the principles of the
