Tuesday, September 7, 2010

Publishing's Journey from Privately-held Companies to Multi-national Corporations

“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war. God grant that my suspicions may prove groundless.”

From a letter by President Abraham Lincoln to Col. William F. Elkins, Nov. 21, 1864.

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“Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.” And: “God gave me my money.”

John D. Rockefeller, 1839-1937; founder of the Standard Oil Company and the first American billionaire.

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“To widen the market and narrow the competition, is always the interest of the dealers.”

Adam Smith, The Wealth of Nations, Book I (Everyman’s Library, 6th Printing 1991)

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There’s not a person on this earth today who isn’t in some way affected by the growing power of multinational corporations. From retail giants to telecommunication syndicates, from energy conglomerates to international investment banks, global business interests influence how we live and work.

Writers are no less affected than anyone else by this change in the worldwide economic blueprint. American publishing companies that independently prospered in the 1800’s and early 1900’s are now mere cogs in the wheels of corporations so vast and ever-changing that some employees aren’t sure from day to day exactly who they work for.

How did it get this way? Who owns what? And how does the ownership of publishing companies affect writers?

Well, let’s take a look at Simon and Schuster. S and S was founded in 1924 after Richard L. Simon’s aunt, a devotee of the crossword puzzles printed in the New York World newspaper, asked if there existed a book of such puzzles. On finding there wasn’t, Simon teamed up with M. Lincoln (“Max”) Schuster to become the first publisher of such books. The pair marketed the books aggressively, including a pencil with each copy and assuring buyers through their newspaper ads that crosswords were the country’s next craze.

The ploy worked well. The book became a bestseller and launched S and S as a publishing company to be reckoned with. (Adding to the proof that the two men made a wise decision with this initial effort, it should be noted that even today, Simon and Schuster is the leading U.S. publisher of crossword puzzle books.)

(photo on left: Simon and Schuster logo, circa 1961)

Dick Simon and Max Schuster were not content to be just another pair of struggling entrepreneurs. They took risks other book publishers of their time were unwilling to make, spending up to ten times more than their competitors on advertising and introducing schemes that made their products highly attractive to booksellers. They are probably best known for introducing the return system where bookstores could return unsold titles for credit towards future purchases.

The pair made another good move in 1939 when they teamed up with Robert Fair de Graff to found Pocket Books, thus becoming America's first modern paperback publisher.

Paperback books actually got their start in the U.S. in the mid-1800’s with the publication of New York printer Erastus Beadle’s A Dime Song Book, a paperbound collection of popular song lyrics. It sold so well that Beadle published another “dime” book, Maleska: The Indian Wife of the White Hunter, an adventure novel by Anne S. Stephens.

“Dime novels” were all the rage in the late 1800’s and early twentieth century, but they fell out of favor in the 1920’s with the advent of pulp fiction magazines. Although cheaply produced reprints of Victorian novels continued to be sold in paperback, it wasn’t until 1935 when British businessman Allen Lane founded Penguin Books in London that good quality contemporary novels began being published in that format. At the time, modern novels were printed only in hardcover at prices above what the average worker in England could afford. Lane made books by writers like Agatha Christie and Ernest Hemingway available to the general public at much lower prices and sold his paperbacks not only in bookstores, but also in tobacco shops, train stations, and grocery stores.

Attentive to Lane’s success in England, Dick Simon and Max Schuster eagerly followed in his footsteps when entrepreneur Robert Fair de Graff approached them with the idea to create Pocket Books. The Simon and Schuster imprint bore the logo of "Gertrude the kangaroo" (named for the artist’s mother-in-law) and featured reprints of works by writers like Dorothy Parker, Agatha Christie, Emily Bronte, and Thornton Wilder in glued rather than stitched paperbacks. Bronte’s Wuthering Heights made the best-seller list and was one reason S and S sold more than 1.5 million Pocket Book editions by the end of the first year of production. With de Graff at the helm of the imprint, mysteries and movie tie-ins became staples of the line.

S and S took another giant step forward in 1942 by launching the Little Golden Books series in cooperation with the Artist and Writers Guild, Inc. These children’s books originally sold for twenty-five cents each and included such all-time favorites as The Little Red Hen and Mother Goose. S and S published the books for sixteen years before selling their interest in the line to Western Printing and Lithographing. Ownership of the series changed hands several times after that with Random House acquiring Golden Books for about 85 million dollars in 2001. Probably the most famous Golden Book of all time is The Poky Little Puppy, one of the twelve original titles published in 1942. As of 2005, 15 million copies had been sold worldwide.

In 1944, Dick Simon and Max Schuster sold S and S and Pocket Books to Marshall Field III, founder of the Chicago Sun newspaper (now the Chicago Sun-Times). They bought S and S back from Field’s heirs in 1957, but left Pocket Books to be purchased by their new business partners, Leon Shimkin and James M. Jacobson. Pocket Books returned to the S and S umbrella in 1966. For the next nine years the four partners varied their levels of ownership in the company. In 1975, majority holder Leon Shimkin sold Simon and Schuster to Charles Bluhdorn, founder of the American conglomerate Gulf and Western.


More on Gulf and Western's alliance with Simon and Schuster tomorrow.

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