Post Frankfurt, there is buzz in the German book trade. Times are changing in Germany as yet another traditional, independent house, Luchterhand, is incorporated into the media giant Bertelsmann. There are other big changes ahead, too, sparked off by new copyright legislation, which could drastically affect the way German publishers and booksellers do business. PW visited a number of the most significant publishing houses in Munich to take the temperature of an industry that is currently in a very interesting condition.

The German book trade continues to thrive, despite grim predictions that the market cannot possibly continue its upward trend. In fact, over the past 12 months, there has been something of a revival in hardback sales, against the odds. Last year 82,936 books were published in Germany, an increase of 2.7% over the previous year. Of these an astonishing 68,021 were new titles. Turnover for the publishing industry in Germany in the year 2000 amounted to DM 18.4 billion, for books and related products including audio sales, and to DM 16.6 billion for books alone—a staggering contribution to the national purse from the 100 million German-speaking readers in Germany, Austria and Switzerland. According to Eugen Emmerling at Frankfurt's Boersenverein, the number of translations from Anglo-American has also increased slightly, to 7,577, and accounts for just about 72% of all translations in the German market. Translation in general, especially from European languages, is a crucial and growing area, which we will hear about from the publishers themselves.

Munich has become increasingly important in trade publishing with the growth of the giant Bertelsmann media group, which is now, of course, not only the biggest book group in Germany (now as Random House) but in the world. Their headquarters are to be found on the western edge of the city. Munich is a stately European city with a warm and relaxed atmosphere and has retained its prominent position in publishing since the reunification of Germany and the reestablishment of Berlin as cultural capital.

There are about 280 publishers active in the Bavarian capital and they produce 20% of the country's books across the board, 12,000 titles a year. As far as commercial fiction is concerned, particularly translated American fiction, the proportion is much higher, as Goldmann (part of the Random group) and Heyne (part of the Econ Ullstein group) dominate this market. Droemer, of the Holzbrinck empire, has also been a significant player in the past, but has recently scaled down its lists drastically.

PW's first call is to Piper Verlag in Schwabing, the university district north of the city center and home to a great many of Munich's historic publishing houses. Viktor Niemann is publisher and president at Piper and he has presided over big changes in the structure and ownership of the company, changes that are typical of what has been happening on the German publishing scene over the past decade. Until 1994 the Piper family owned the elegant gray town house. Reinhard Piper founded the business in 1904 by publishing Dostoyevsky's work in German for the first time. Books associated with the art movement "Der Blaue Reiter" and its artists Kandinsky and Franz Marc established Piper's avant-garde and intellectual credentials as their list grew to encompass music and poetry. After the Second World War Piper were able once again to capitalize on their success in publishing European literature. Italian fiction has always been a strength, their first bestseller being The Leopard by Giuseppe di Lampedusa in the 1950s. Reinhard Piper's son Klaus inherited the burgeoning business and the firm expanded rapidly into nonfiction, especially biography, history and politics. Sadly the story was different when Klaus Piper wanted to retire.

The scenario of father and son conflicts is all too familiar in recent German publishing history; in order to secure the long-term financial security of Piper Verlag, Klaus Piper did not pass the business on to his son. Instead he sold the firm to the Swedish press and publishing group Bonnier. Ironically Bonnier remains in family hands after six generations, and the company appears to be the most benign of long-distance proprietors, providing sufficient investment to make two important additions to the Piper stable during the 1990s: Malik and Kabel.

Niemann has a special interest in his three Munich-based imprints. The classy Piper list includes Frederick Forsyth, homegrown bestseller Gaby Hauptmann, Carol Shields and Anita Shreve; elegant black-and-white portraits of these writers adorn the entrance hall of Piper's imposing offices. Urbane and charming, Niemann gave PW a guided tour of the other two lists. Malik has brought success in the field of adventure and travel. Pam Houston is currently doing well for them with Waltzing the Cat, and Nicolas Vanier's Das Schneekind (The Snow Child) is a ravishingly designed, illustrated account of Vanier's year in the snowy wastes of Alaska with his wife and tiny daughter. Travel and adventure are key expanding markets in Germany and there is great competition to secure these titles.

The health of the Piper Group has been significantly enhanced by the acquisition of the Harry Potter titles, published by their Hamburg-based Carlsen imprint. The four Harry Potter titles have sold a total of 12 million books in Germany, all in hardback; there is as yet no paperback edition. The first title alone has sold 3.7 million copies and is in its 35th printing.

But not everything in the world of German publishing is so rosy. Niemann explained to me how reliant Piper is on the support of specialist bookshops throughout Germany. There is a network of over 3,000 independent bookshops that are sustained through a strictly enforced fixed sales price agreement which prevents huge price discounts. Thus the retail giants like Hugendubel with a book superstore in Munich's Marienplatz are selling on a level playing field with specialist retailers like Lehmkuhl in Schwabing, a shop crammed with high literature, biography, history and design-orientated books, all stock celebrating the highest Teutonic production standards. This way of doing business is threatened by German-speaking Internet retailers outside Germany, willing to sell books into Germany at discounts of up to 20%.

In a test case this year, an Austrian bookseller, Libro, was brought to the brink of bankruptcy following action by publishers and distributors for its cut-price sales. But the European Community is not sympathetic to Germany's closed market system, which is essentially uncompetitive, and against the spirit of a free European market. All the publishing house chiefs I met with were unanimous in their perception of a real threat from the European Parliament and the competition commissioner Mario Monti, who appears to be determined to change the way books are sold in Germany.

Further down the Georgenstrasse from the Piper mansion are the offices of Antje Kunstmann Verlag. Kunstmann is completely independent and as such is presently an endangered species in Munich. Instead of a palace, its building used to be a pub, which clearly delights Antje Kunstmann with its sense of irony and unconventionality. These qualities are reflected in the Kunstmann list, which combines crime fiction, literary novels, German cartoon humor and adult fairy tales.

Kunstmann's track record extends just over 25 years in publishing, starting in the politically charged '70s in feminist, educational publishing. By 1976, she had set up a new publishing house with Peter Weismann, the same house that now bears her name and which she has run alone for 11 years. Writers such as Alice Walker found a natural home at Kunstmann, as did Fay Weldon and recently Barbara Gowdy and British novelist Tim Parks. Around 20 books a year appear on this eclectic list and the current hit is Weltwissen der Siebenjaehrigen (Worldly Wisdom of a Seven-Year-Old), number seven on the Spiegel bestseller list, having sold 65,000 copies at last count. Last year Kunstmann's turnover was up 40%, showing that small can still be commercially viable.

Hans-Peter Uebleis, one-time publisher of paperback market leader Heyne, is now managing director at Droemer Weltbild, a joint venture between the Holtzbrinck trade group and a large media and retailing chain. Their international publishing interests include Farrar, Straus & Giroux and Henry Holt in New York and the Macmillan Group in London. Droemer's headquarters are tucked away in a residential area of northeast Munich. The number of imprints under Uebleis's control is almost bewildering, encompassing children's publishing in Pattloch, design in Battenburg, Midena for health and lifestyle, and fiction imprints Droemer, Schneekluth and Scherz, to name but a few.

At Heyne Uebleis built up a reputation for trapping big-name American authors Tom Clancy, Stephen King and Dean Koontz, and at Droemer he has recently captured Dave Eggers's first two titles against stiff competition from Random House and Ullstein. Yet Uebleis has published a drastically reduced list this year. In 2000 he published 1000 books; this year it was half that, but it produced an increased turnover for the group.

British novelists feature heavily on Uebleis's lists: Maeve Binchy, P.D. James and Kate Atkinson all do well for him and Zadie Smith's White Teeth has sold 30,000 copies since September. New signings include Germs: Biological Weapons and America's Secret War by Judith Miller, Stephen Hugelberg and William J. Broad, which is riding high in the U.S. lists. Another title linked to the war in Afghanistan, Ahmed Rashid's Taliban: Islam, Oil and the New Great Game, is currently number four in the Spiegel bestseller list in Germany. Uebleis obviously has an eye for a winner and is building up an interesting stable of new writers at Droemer in the face of financial constraints from the controlling Holtzbrinck group.

The number of independent publishing houses in Munich is falling, as in the rest of Germany. In the country as a whole there are 25 fewer independents than there were a year ago, so it is refreshing to visit another one, C.H. Beck, which has been in the same hands since 1763. Beck has two divisions, law and general books, and has expanded with two new lists, a highly successful science list with 200 titles and a small fiction list launched just two years ago.

Dr. Detlev Felken explained that the ethos behind Beck's publishing had not changed since its foundation in the Age of Enlightenment. The fiction list was not set up as a commercial enterprise, and the titles were chosen for their intellectual merit and the importance of the ideas that they communicate. New books translated from English include John Bayley's Elegy for Iris, Paula Fox's Desperate Characters and Scottish novelist Shena Mackay's The Orchard on Fire. Print runs could be a little as 4,000 or as large as 15,000, but what matters is the merit of the writing. Because of the Beck commitment to specialist interest books Felken is a passionate supporter of the fixed-price agreement. He believes that without it Beck could not publish their range of high-quality fiction and nonfiction and still make a profit.

Just a couple of streets away in the Friedrichsstrasse are the offices of the dtv—the German Pocketbook (paperback) Publishing Company, headed by the charismatic Wolfgang Balk. The setup at dtv is unique in German publishing. Founded in the '60s by Heinz Friedrich, dtv provided a paperback imprint for 11 leading German publishers committed to making the best German fiction available to the average reader at an affordable price. The work of the great German novelists of the '60s and '70s—Günter Grass, Siegfried Lenz and Heinrich Böll—are synonymous with their dtv editions. (Grass is closely associated with them to this day.) Their current bestselling author is Henning Menkel, a Swedish crime writer with a dark and sardonic edge. Equally, classic literature has been a priority, with an emphasis on keeping a writer's complete works in print "rather than just cherry-picking the most recent or most popular works," Balk confirms. Dtv were the first to publish Goethe's complete works in paperback, and other critically acclaimed complete editions and reference works followed.

Dtv's identity was shaped 40 years ago by book designer Celestino Piatti, who created a new aesthetic in the European book market with his jacket designs. The binding, paper quality and printing of these early volumes brought new standards into the marketplace, which have been zealously upheld by Balk. Six years ago Balk was brought in to breathe new life into the look and content of dtv's diverse lists. He has succeeded in spectacular fashion, pushing dtv's turnover in 2000 past the DM 100 million—boundary for the first time. His reorganization of 17 categories into five clearly identified sublists has brought new clarity to the whole company and, as you might expect, it is reflected in a new and elegant design.

The combination of Balk's intellectual and aesthetic drive with an understanding of his market culminated in the ultimate industry accolade in 2000—Buchreport's Publisher of the Year. Balk does not just see the book as a piece of consumer goods, but as an educational and spiritual instrument that cannot be bettered. Culture matters. As well as the 50 new books a month for which Balk is responsible, he has set up an Internet site to provide information about worldwide cultural events, with a bias, of course, toward Germany and dtv's authors. There are links to other publishers and bookshops and a poem of the week. There are also links to libraries, cinemas and museums across the U.S. In April this year dtv also launched a digital literature prize to celebrate the publishing house's 40th birthday and to see whether the computer can open up a new literary dimension.

PW's next call was to the grand, modern complex that is Germany's Random House headquarters in Neumarkter Strasse. The atmosphere at Goldmann is warm and vibrant, not surprising as it is one of Bertelsmann's stunning successes and the biggest paperback list in Germany. Goldmann's turnover of the paperback list alone is in the region of DM 200 million. Publisher and managing director Georg Reuchlein presides over Goldmann's up market commercial fiction in hardcover and paperback, as well as the Manhattan and Blanvalet imprints. Goldmann paperback is the equivalent of Bantam in the U.S., while Blanvalet is strictly commercial fiction. The Manhattan list is more sophisticated, contemporary fiction in hardback. Authors include Elizabeth Gilbert, Neal Stephenson and a young Russian actor, Wladimir Kaminer, who writes in German. His wry portraits of life in the Soviet Union in the '70s and '80s have proved very popular. Militar Musik, Kaminer's first novel and second book for Manhattan, has already sold 45,000 copies since August. His first book, Russen Disko, sold over 70,000 copies.

Goldmann hardcover has gone from strength to strength, publishing about 30 hardcovers a year. Current bestsellers include the racy French memoir La Vie sexuelle de Catherine M., number two on the Spiegel bestseller list, selling 150,000 copies since September; Joy Fielding's The First Time has sold 90,000 copies and Amy Tan's The Bonesetter's Daughter 65,000 copies since August. Between 60% and 70% of these fiction lists are translations, and the trend at Goldmann, as at most German houses, is toward a higher percentage of translations from other European languages, particularly Scandinavian languages, French and Italian.

Reuchlein makes at least three trips a year each to New York and London, hunting for new titles for the insatiable German reading public, while also using the services of scouts Bettina Schrewe in New York and Kristina Lindell in London.

Germany's Random House has just bought long-established literary house Luchterhand. Its small but choice list includes some of the most important German and international writers in print. Christa Wolf, now 72, has just had her complete works published in 12 volumes and her name alone will bring tremendous kudos to the company, not to mention authors Pablo Neruda, Annie Proulx and Frank McCourt. Reuchlein is delighted by this development: "The acquisition of Luchterhand is something I am very proud of and happy about. Of course their editorial independence will be untouched, and Gerald Trageiser, who continues to be publisher, is a guarantee for this editorial continuity. With the financial backing of our group we hope Luchterhand will be able to continue with and further build its list of exquisite authors and at the same time I am happy to have them as contributors to our paperback list."

Georg Reuchlein is less concerned about the Preisbindung controversy, but then he has the might of Random House behind him to cushion any blows, and the majority of his titles are mass-market pleasers with great selling power at any price. What concerns Reuchlein more is the new copyright legislation going through the German parliament at the moment, the Urheberrechtsnovelle, which is designed to protect the originator of any written work, notably including translations. The draft law was originally intended to deal with the buy-out problems in the film and TV industry, where writers forfeit any future rights to their work for a one-off payment. Even if their work becomes a huge money-spinning hit, in law at present they are entitled to no further payments. It has been reinterpreted significantly to include any Urheber, or originator. The Minister for Justice has scared the daylights out of German publishers by suggesting that writers' contracts could be retrospectively renegotiated if their work did become very profitable, providing publishers with no financial security whatever. Arnulf Conradi, CEO of Berlin Verlag, has been making representations on behalf of German publishers to the Chancellor. The official debate will be taking place in the German parliament within the next two months.

Translators have very little control over their work and are usually paid on a fee-per-page basis; in rare cases they secure a small royalty. With the translation market booming and the pressure increasing to turn around translations of international bestsellers within a month, perhaps it is time that the translators had a bit more bargaining power. Ulrich Genzler is publisher of the trade paperback phenomenon Heyne, which now finds its home with the bullish Econ Ullstein publishing group, part of the enormous Axel Springer press and media combine. Springer's interests include magazine, Internet and TV production businesses throughout Europe. Genzler confirms that the average length of time spent translating a novel is three to six months. He should know, with an average of 600 paperbacks published a year, 70% of them translations. His main competitor is Goldmann and he and his colleagues Christian Strasser and the irrepressible Lothar Menne have just pulled off quite a coup. Strasser has signed up Bill Clinton's memoirs and Menne has wooed Danielle Steel away from Random House for a seven-figure sum: she is still signed to Delacorte (RH) in the U.S. Steel's next novel will be the last to be published by Random House—under the Blanvalet imprint—in Germany.

Econ Ullstein acquired Heyne at the beginning of the year and still has their original paperback list headed by Armin Gontermann. He laughs as he tells PW how he and Ulrich Genzler used to be direct competitors with each other. Now they work in collaboration, to the extent of swapping rights. Yet each list retains its own identity. Ullstein's list generates a turnover of DM 50 million a year, whereas Heyne is snapping at Goldmann's heels with a turnover of DM 180 million. Springer's book publishing businesses had a deficit of EUR 22 million last year, but according to Christian Strasser, they are heading for the black this year. In fact, after a period of consolidation the company intends to expand further and has not ruled out acquisitions abroad.

So the big corporations based in Munich are expanding and the independent publishing houses are being swallowed up, yet there are enough talented individuals at the top of those independents left to ensure their survival. The big threats to the German publishing industry at the moment are legal ones, from the EEC and its insistence on opening up the German market and jettisoning the fixed price system, and from the German minister of justice with the Urheberrechtsnovelle. It could be a bumpy ride ahead.