Publishing would not survive without enterprise and bold ideas from several quarters. Deserving innovators of recent vintage include an aggressive Midwest distributor, a Christian publisher willing to remake a successful house, a Starbucks executive who knows there's room for books, and three veteran New York publishers who saw dollars in a Japanese puzzle.
Mark Suchomel: Growth at IPG
With its acquisition of Trafalgar Square earlier this fall, Chicago-based Independent Publishers Group is poised to move up from being the third largest full-service distributor in the U.S. to the number two slot. But double-digit growth is nothing new for the 35-year-old company, whose president, Mark Suchomel, has turned out such increases nearly every year since he took the helm in 1998.
Even without Trafalgar, says Suchomel, IPG's 2006 sales would be up 20% over the previous year. In 2007, when Trafalgar is absorbed—the warehouse and offices are moving to the Chicago area—Suchomel anticipates boosting IPG's business another 20%. "It's a big opportunity for us. Trafalgar has done a good job over the years. At our size, we're able to invest more in systems and make books more attractive to order," says Suchomel, referring to IPG's ability to turn orders around in 24 hours. IPG plans to operate Trafalgar, which specializes in distributing U.K. publishers, under its current non-consignment model; it buys books outright. IPG is giving its U.K. clients the option of switching to Trafalgar. "It's a great way for them to get their print runs up, and there's very little risk," Suchomel says.
This year IPG handled its first #1 New York Times bestseller, Tavis Smiley's The Covenant with Black America (Third World Press). To help Third World keep up with sales—and cash flow—IPG went beyond the traditional role of a distributor and took over the management of the book's printing.
In addition, the distributor added a gift catalogue and commission sales force with 100 reps. "It's performed well enough for me to be optimistic about its potential," says Suchomel, who notes, "the book trade is still our bread and butter."
Going forward, Suchomel views increased competition as a major challenge for distributors. At the same time, he sees more publishers turning to distributors. "I think more and more publishers are waking up to the fact that distributors can do it better than they can themselves. Small and medium-sized publishers are losing sales because their systems aren't state of the art. We put a lot of investment into systems," says Suchomel. "The notion that being with a small distributor will sell more books doesn't hold. The bigger we've gotten, the more of each title we sell."
Michael Hyatt: Changing Nelson
Since becoming president and COO of Thomas Nelson in 2004, then CEO in 2005, Michael Hyatt has helped bring the Christian publishing company back to profitability, led it through a major reorganization, taken it back to private ownership, paid off all of the company's debt and defied the tradition of male dominance in evangelical publishing by elevating 12 women to the v-p level and two to executive v-p.
Hyatt's latest big move—and a bit of a bombshell—came in October, when he announced that Nelson would eliminate all of its imprints and reorganize itself around "strategic publishing units." The thinking is that since imprints don't matter to consumers (true, with perhaps one or two exceptions) or booksellers (a bit more debatable), they shouldn't matter to publishers, either. This is heresy to many in publishing—especially those who head imprints—and Nelson has already lost one senior staffer over it (Jonathan Merkh at Nelson Books).
A risky move? Hyatt doesn't think so. "Not doing it is more risky," he says. "When a publisher is out of alignment with the market and with the way that people shop, that publisher is on dangerous ground." The real challenge of leadership, he says, is to look to the future and not fall back on old ways of doing things. "My riskiest moves have been my hires. In Christian publishing we tend to recycle the same people. When I became president, I replaced some key people with talented folks who didn't necessarily come from publishing"—like Mark Schoenwald, chief sales officer, who came from the gift industry, and Tami Heim, chief publishing officer, who was president of Borders Group but had no publishing experience.
For Hyatt the biggest payoffs are twofold: "I'm proud of what we've accomplished financially [over the last two years, sales at Nelson rose 14% and earnings increased 30%]. We're near the top of publishing companies in profitability, and our sale price [to Intermedia Partners VII in February] was a benchmark. But it's also been personally gratifying to create a place where people enjoy coming to work. Our turnover rate is just 6%—less than half what is was before I became president."
The next big opportunities lie far from the company's home base in Nashville. "Outside the U.S. is where the church is growing most rapidly. We can do simultaneous publishing in multiple languages and get the books out through multiple access points. That's why we've opened offices in Mexico City, Beijing and Rio de Janeiro."
Summarizing his management philosophy, Hyatt says: "Put the right people in the right spots, and everything else takes care of itself. Every business problem is a leadership problem."
Starbucks Adds Buzz to the Book Biz
Books and coffee have gone together since long before the chains got hooked on Starbucks. So it made sense when, in August, Starbucks' entertainment division, lead by Ken Lombard, announced that it would begin selling a small number of titles in its 5,400 stores, starting with Mitch Albom's For OneMore Day.
The move unsettled some booksellers, who were none too happy to see yet another nonbook retailer join the ranks of their competition. But for publishers, getting a book in front of the coffee merchant's 44 million caffeinated customers each week represented a huge opportunity. Even better—Starbucks bought the book nonreturnable. And Starbucks has proved an able bookseller, selling some 70,000 copies of the book since October 3.
When Lombard told PW Daily (Oct. 26) that the next title to be featured at Starbucks is expected to be a debut novel by an unknown writer, he signaled the company's willingness to go beyond brand-name authors like Albom. Considering the typical print run for first novels, just getting a reasonable number of books into every Starbucks outlet would require the publisher to boost the initial run. The retailer won't say whether it plans to continue buying nonreturnable. If it decides to negotiate more traditional terms, the risk of such a printing would fall mainly on the publisher, who could get hit with big returns if an unknown novelist fails to catch coffee-drinkers' attention the way Albom has.
Will publishers be willing to take such a risk? Almost surely, considering the potential payoff. Even if the demands prove too much for some, Starbucks won't lack for options—Lombard says the company "likes the idea of co-publishing" and is setting up a program.
He's already hinting that Starbucks may know how to move books better than the competition. "There's so much dysfunction in entertainment retailing at the moment. With the relationship our baristas have with our customers, we get instant feedback on a product. We have almost an inverted model: finding products to fit our customers, not customers to fit our products," Lombard says.
The Sudoku Scouts
"I first thought it was a Japanese dish," Peter Mayer says of sudoku, the numerical puzzle game he helped turn into a publishing craze in the U.S. Mayer, whose small house published its first sudoku title in August 2005 and now has printed more than two million copies of books on the subject, is among a handful of American publishers that have reaped big rewards from the game.
Mayer, who first saw the puzzles in the British papers during a business trip to London, struck a deal to do U.S. titles at roughly the same moment as Newmarket's Esther Margolis, Matthew Shear at St. Martin's, and Wiley.
Margolis, who's since cornered the market on kiddie sudoku—according to her, Newmarket was the first to publish a puzzle line for the younger set (its Junior Sudoku is now in its fifth printing)—explained that getting in early was essential. The prize? Newmarket now has over a million sudoku books in print, Margolis says.
Wiley, which also caught on to the craze early (it released its first title on the subject in August 2005), now has six sudoku titles (five are part of its bestselling For Dummies series), with 2,500,000 copies in print.
At St. Martin's, the benefits of being early were complemented by ties to one of the most powerful figures in the puzzle world. Shear, who also publishes New York Times crossword editor Will Shortz, knew immediately to add Shortz's name to the cover of the St. Martin's sudoku book. Declining to buy British sudoku titles may have turned out to be his best decision. According to Shear, St. Martin's has printed nearly 10 million sudoku books.
