Publisher Houghton Mifflin Harcourt has filed bankruptcy. I guess the majority of their output was textbooks, but they also published LoTR and other best-sellers. As someone who works in the publishing industry, I find the news somewhat alarming. Do you think this is an omen or an isolated incident? In the past few years we’ve seen distributors and retail chains go under, but this is the first major publishing house I remember reaching this kind of financial crisis. Time for the industry to re-think its business model?
There’s plenty of folks on these boards more knowledgeable about the publishing industry than I am, but I would still consider it an omen more than an isolated incident. The way media is dispersed is changing hugely and will only continue to do so. I was a little surprised to hear this at first considering the margins on upper education textbooks are outrageous, but the article seemed to suggest that their textbook business is aimed primarily at K-12 where the margins are likely lower and the books are considered valid texts much longer.
It could simply be a case of poor management as well. Apparently they rank quite low on companies to work for according to this poll. This is Chapter 11 so it doesn’t necessarily mean that they’re goners. Companies do successfully restructure and survive, but this may be a difficult business to come back in.
The Big Six publishing houses are all tiny outposts of huge multinational corporations. That’s why they’ve survived and why the industry has changed. An industry that historically gave 4% returns was suddenly expected to regularly post 10% returns.
I would be surprised if more small publishers didn’t fail. In that sense, this is an omen. But Houghton Mifflin is also an outlier because of the odd mixture of its core businesses so it’s hard to read the tea leaves of what this will mean for more standard publishers.
Yeah, that’s kind of my take on it, as well. Oddly, my company had its strongest year in over a decade in 2011, and sales are strong so far this year, as well. But we definitely publish more “niche” stuff - no fiction at all anymore (aside from children’s and the occasional YA title).
It could be said they’re reaping bad karma for being stingy gatekeepers, but not by me.