The Penguin Blog

Friday afternoon literary thought-provoker - part #2

I suppose I owe you all a charitable high-five for not pointing out that not only had our previous Friday afternoon literary thought-provoker been done before, but it had been done by me. Shameful. But you were all v sporting for not whispering about my fading cerebral powers behind your hands. Or were you?

This Friday, new thoughts (one hopes). I'm only fifty pages or so from the end of this (which has possibly the best collection of quotes on the jacket that I've seen for a while) and I'm desperate that it wasn't so. At least with this one, there's two whole sequels, which are equally excellent. I'm just not particularly eager to leave the world of Priss, Lakey and Kay, despite those throwaway name-references making the whole thing sound a little too Blyton. Still.

So, my question to you this fine Friday is: which are the books that, while you're reading them, you wished they'd never end? Subquestion: which book would you actually like to live in?

To complete your happy Friday, here's a man we should all be cheering and whooping and celebrating all round. (Actually am, for once, crying as I read this.) Please read this, as it's so very, very important, and go to your library this weekend, and show it some affection.

Sam the Copywriter

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Dirty Rotten Scavengers

At the Penguin Press ‘launch lunch’ I talked about a book called Waste, by Tristram Stuart, which we're publishing in July. It's about food waste. We throw away up to 20 million tonnes of food in the UK every year, and that amount is matched by some other European countries, Japan, and the US. If there was a way of redistributing the excess it would feed 1 billion of the world's hungry three times over. Food is wasted all along the supply chain. Farmers overproduce because they know as much as a quarter of their crop may be rejected for aesthetic reasons – if a potato is too knobbly or a carrot too wonky  it will be thrown away. In the supermarket, because of unnecessarily strict food  safety guidelines and sell-by dates that again are there for aesthetic reasons, food is thrown out weeks before it would be unsafe to eat. And finally, in the home, we buy too much food and don't eat it all. If we wasted less, global food prices could stabilise, thereby allowing the hungry to afford more, and because there would be less demand in the rich West, the countries that export food to us at their population's expense would sell it where it was needed. Pollution would be drastically reduced – there would be fewer cows emitting methane and fewer fuel-guzzling machines transporting and processing food.

 

The author lives by example. As a student he fed himself on what food shops and supermarkets threw away. He is a Freegan. To this day, as well as the pigs he rears and his vegetable patch, he lives largely on what is discarded by others. Now I have always wanted to go bin-dipping, and when I mentioned this to my colleague, Emily Hill, she confessed that she did too, so on a Sunday afternoon in April we went looking for our dinner in bins around the Strand and Covent Garden.

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The first supermarket we came to had closed a few minutes before we arrived, and there was no sign of food being wasted front of house, but when we went around the back we saw a man unloading several green pallets into a green skip. The pallets were full of food that had reached its sell-by date but was fit to eat. When we asked if he minded us taking pictures he was delighted. He had complained to his manager about the amount wasted every day but was told there was nothing they could do about it. Not only was this food fated to expend its nutrients in an incinerator or pit, it was sprayed with blue dye to prevent the food being sold on, a slightly less offensive deterrent than bleach, which some supermarkets use to put off scavengers.

The second supermarket, within walking distance of the first, was more careful about who it let look at its bins. We came to locked doors and a warning sign that rhymed: ‘This door will not open before 8AM, unless it is the dustbin men.’ We moved on to a doughnut shop. A black bag nestled innocuously by its doorstep. It was heavy. I opened it and found a buffet of multicoloured, icing-smeared, cream-filled unhealthy snacks. They had been put in the bag an hour earlier, when they would have been fine to eat, and now were soiled by cup dregs and damp tissues.

 

Our last two stops were coffee shops. One we passed as it was closing, saw the fridge shelves stacked with ready-to-eat sandwiches and resolved to come back to find out what was being done with them. The other we were drawn to by the small hill of transparent bin bags outside it. The first, we discovered, did not throw its sandwiches away, but saved them till the next day – a guiding star of frugality in a sea of commercial effluent. But the see-through bin bags of the second were full of sticky Danish pastries, soggy bread pitted with dried fruits, and croissants.

 

We went home hungry, but not because there wasn’t enough to eat.

 

 

 

 

 

Phillip Birch

Assistant Editor, Penguin Press

 

Emily Hill

Publishing Co-ordinator, Penguin Press

          

How to Sell Books in a Recession

In one of the darkest years of the 1930s depression, Allen Lane founded Penguin with the -- then groundbreaking -- notion to sell quality writing as cheaply as a pack of cigarettes and to sell them everywhere.

Studying our own history gives us pause for thought as we tip headfirst into recession: bleak economic times are sometimes the crucible of inspiration and creativity. I think of the black box theatres so beloved of Peter Brook and endless student productions, in which limited resources became the spur to imagination. And I compare that to a particularly bloated production I once saw where just one effect must have cost thousands of pounds, scores of unionised man-hours and added precisely nothing of meaning or value to the piece.

When I say we're ready and inspired to take the challenge of an economic downturn, I don't just mean cutting a few long lunches, but having a vision and being fleet of foot enough to respond to changing market conditions. Historically, the publishing industry thrives on such challenges. I think I've said in a previous blog that for an "old" industry, we're pretty responsive and innovative. We have to be.

Our customers are still there and a book remains fantastic value for money. Apparently at such times we skew more toward escapist fare, rather like the cinema goers in the 30s flocked to gangster films, musicals and screwball comedies. When the Canary Wharf Waterstones opened the day after the collapse of Lehman Bros, the first two books to be sold were books on spirituality. Another huge growth area is teenage fiction thanks to the Harry Potter effect on our growing kids, with help from teenage vampires in Twilight and teenage fathers in Nick Hornby's Slam. The common wisdom is that this mortgage-free demographic market's disposible income remains relatively unaffected, although books compete for it with games and music. People will also still buy books for their kids. The success of Ascent of Money, Black Swan and The Great Crash 1929 shows that those books helping us understand what's happening are also flying out the door.

So what are we worried about?

In short, it might not be our readers, but our retailers.

The once mighty high street has been fighting competition from online and supermarkets for a few years, but when every day another high street name goes into administration, we have to assess the risk. When a company goes into administration, the independent administrators sell off as many assets as possible, paying off debts in order of priority. If we have lots of stock sitting in a customer's warehouse or on their shelves, we first have to prove to the administrators that we supplied it, rather than a third party wholesaler, and then once that value is assessed, we may only be awarded pence in the pound. So a retailer going under is bad news for its suppliers.

There is a theory that in these times it's best to be very big so you can take a hit like the one I've described, or to be very small, so you can turn on a dime in response to tricky market conditions. Each of our retailers needs a strategy to suit these times as much as we do: whether it's negotiating down rents and utilities, increasing margin on every book sold, increasing marketing income, consolidating roles, departments or even outlets, making cost savings in the supply chain, and so on. That can make for even tougher negotiations between publishers and retailers, but it's not the only game in town. How do we get back to creativity and innovation? How do we as publishers and retailers inspire our customers to buy books?

Peter Brook felt passionately that a theatre of more limited means helped to bring theatre-makers and their audiences into a closer rapport. The stage is bare. Enter an actor and a book.

Fiona Buckland
Sales Manager

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Credit Crunch Blues

My posh dress is hanging up behind my desk and I'm hoping rather forornly that the creases will fall out of it by the time I finish writing this post. Spring 09 Conference is over and tonight I'm off to the Bookseller Retail Awards to celebrate supply chain initiatives. I wonder how many times the credit crunch will be raised tonight? You couldn't avoid it at conference. Everyone at Penguin is wondering just what effect it will have on us this Christmas, not just here in the UK trade, but also in our group and international territories.

Joe Stiglitz says those who claim they can see light at the end of the tunnel are only seeing the light from the freight train coming right at them. For, he claims, we are only just beginning to face into the storm.

Strong stuff.

And yet, there is a view (hopefully not a complacent one) which says that books are relatively recession proof. Is this true? I have heard three possible reasons for this view:

1. The lipstick effect: that in tough economic times, people may baulk at buying a new wide-screen tv, but a lipstick (or indeed a book) is a relatively low-cost, feel-good purchase, whether for yourself or as a gift.

2. For the same reason pubs are suffering, books may thrive as more people choose to save money by staying in, and what better way to relax as the nights draw in than reading a book?

3. This one from our MD in Singapore who cites the 20:80 rule: that a small fraction of people buy the majority of books and these people are themselves relatively recession-proof, their disposible income being such that they don't deprive themselves of anything in order to buy books.

I'm tempted to call Niall Ferguson to ask his opinion as I sat in a room with him at the beginning of the year discussing his new book The Ascent of Money, and he predicted everything we're seeing. What did the book index look like in previous cycles? I find consolation in history, in knowing that this is part of a cycle, rather than a free-form meltdown with no precedent.

Sales, well, sales are always tough. We are looking down that long runway toward Christmas and it's nerve-jangling waiting for the rush to hit. So we'll raise our glasses of chardonnay to the company that wins the Award for Expanding the Retail Market, we'll share the gossip, we'll invoke the crunch again as the answer to our questions and the question we need to answer, and then tomorrow, we'll have one more coffee and then pick up the phone and sell some more books.

And perhaps no-one will notice the creases after all.

Fiona Buckland
Sales Manager

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First Impressions

This summer, after nearly a decade writing about the world of publishing, I handed in my pen – just like a retiring NYPD cop surrenders his badge and gun – to join Penguin. But after just seven working days at the Strand, the blog-meisters have convinced me to pick that pen up again, and give you my first impressions of life inside this well-oiled, world-famous publishing supertanker.

How little I knew. I barely had an inkling of the complexity and scale involved in producing quality books, or of the way the diverse specialities and teams elegantly slot together. I certainly didn’t appreciate the level of strategising, energy and care that is needed to push writers’ work into the world. It’s fascinating to find how deeply it runs: that Penguin blend of creativity and determination also shines through the internal company stuff. And yes, everyone does talk about books a lot – with a refreshing absence of the world-weary cynicism which can be the norm in journalism.

There’s much for me to adjust to. First there’s timescale: instead of the instant-hit cycle of hackery, I’ll be juggling projects over months and years. Timeliness is important, but for Viking, quality is top priority. The same applies to decision-making. Proposals for books are carefully refined and tested rigorously from every angle – though ultimately there’s still the need for a leap of faith. Then it’s all about advocacy to get your writer’s efforts noticed. Nothing happens by chance. That’s not because of the industry cliché about sales and marketing “taking over”: it’s more that all the different parts of a publisher need to back a book to get the best possible results. There’s no point in fine writing (or editing) if no-one reads it.

I half-expected my inbox to be besieged by dross, but the bulk of the manuscripts I’ve read have been decent. Many of them will find a home. But I’m looking for that special extra something that will make them stand out, win over the trade, and ultimately persuade a reader to part with their hard-earned cash.
Another surprise is the democratic, transparent nature of Penguin. Big decisions are made in meetings (and there aren’t many doors to close, since the open-plan revolution). Everyone is given regular, sobering exposure to the financials. And there’s a genuine attempt to analyse what has worked, what hasn’t worked, and why.

The calm confidence exuded in this place is a contrast to journalism, where newsrooms are a perpetual state of crisis (The Bookseller excepted). That allows broader thinking to flourish: at Viking the editorial discussions have ranged from the Olympics and the US elections to the death of consumerism. And the digital revolution is being embraced, not feared.

I think I’ll like this publishing lark. My only regret is the time it will take before my books are out and I start to pay my way – though everyone seems remarkably relaxed about this. And thankfully my new colleagues are far too polite to mention any of the shocking ignorance and errors I must have displayed in my former incarnation. So far, so good.

Joel Rickett
Editorial Director, Viking

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Are Penguins Baked Beans?

Imaginatively titled London paper, The London Paper, yesterday ran an article listing 10 types of company deemed to be recession proof (baked beans manufacturers, dating websites…) and the 3 worst hit (estate agents…). Publishers didn’t appear on either, and we’re not about to diversify into baked beans as far as I know. So, with terrifying words such as recession and credit-crunch everywhere, what happens to the UK book industry? And what questions are we asking ourselves?

 

There are two schools of thoughts, easily labeled optimistic and pessimistic. I like the first - most at Penguin Towers would agree - we’re a sunny bunch. Penguin surely ought to be well prepared, we’re certainly well connected – our cousin apparently knows lots about this sort of thing. The optimism comes from the same logic as The London Paper used in arriving at the good news for Messrs Heinz and Branston. Books are broadly speaking cheaper than the alternatives, in this case the wider entertainment industry. Book prices to the consumer are fairly stable over the last few years – any upward inflationary pressure being neutered by the attractive customer offers particularly from supermarkets and online retailers. So we should be fine yes? Our entertainment offer is well priced compared to alternatives, people will go out less – books will keep selling. We should bury our heads in the sand (not a Penguin trait) and carry on.

Certainly this was true last time the UK was in recession, I’m assured by those with more Penguin years in the bag that we came through reasonably unscathed. But is it my imagination or are CD prices falling, cinema tickets getting cheaper if you have the right mobile phone and DVDs going from £20 to £5 within weeks of release into stores? Add to that the fact that many people have about 800 more TV channels to choose from than they did during the last recession and we might start worrying.

And we are. Books are getting more expensive to manufacture. The best way to bring down the cost of an individual book is to print a higher quantity, spreading set-up costs over a larger volume. But if people do actually buy less this will lead to a warehouse full of unsold books, never a good thing. We have a product which is heavy in bulk and - with rising oil prices - our transport and distribution costs are going to rise rapidly. Very generally speaking, we can print more cheaply in Asia than closer to home, especially when colour is involved, but the rising cost of bringing them all back here is reversing this. Our wonderful Penguin production team have gone a little pale but they keep coming up with brilliant ideas around paper and format – the more we stick to a few standard formats the better price we can obtain. There’s a new kind of creativity emerging – finding a way to keep our books looking and feeling as good as ever, but within a few new economic constraints

If we can’t keep our costs stable then we start thinking about other levers. And the biggest one is the cover price of the book, we certainly wouldn’t be the first or only industry to be putting prices up right now. Publishers everywhere must be feeling the same. We want our books everywhere, we want them to reach as many people as possible, but we need a profit as well. The trick is to be brave with prices but sensitive to market sectors. It’s easier to be brave when you have a premium product or brand than when you are competing for shelf space in a competitive area like women’s fiction where an extra £1 can mean a bookseller will choose to stock a similar substitute.

So we’re all thinking harder. Our editorial, marketing and design teams are still the creative hub. But there’s new creativity springing up all over the place in response to the challenge. Production have their thinking caps firmly on, the sales team are finding new ways to differentiate our offer and yes, even my colleagues and I in finance are bracing ourselves to plot a course for this old bird to get through any storm.

Mark the Bean Counter

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Why we buy

There have been some interesting discussions at Penguin Towers about consumers' decision-making processes.

The fiction manager at Waterstones asked me a deceptively simple question: "Why do people buy more Penguin Classics than other publishers'? What is the customer decision-making tree?" I could talk about the qualities of the brand until I'm blue in the face, but what do people actually do in the shop? How do they decide that out of the 8 (count them!) editions of Pride and Prejudice on the shelf, that they are going to buy the black Penguin edition?

More generally, questions about why we make the decisions we do have been the subject of several key books including Paco Underhill's seminal Why We Buy -- based on research watching what people actually did in store, rather than what they said they did (these are not the same thing, so caveat marketeer). More recently, books on behavioural economics such as Predictably Irrational by Dan Ariely offer plenty of food for thought for publishers and retailers.

Two of his arguments seem particularly relevant to me as I think about selling Classics:

1. Context is key.
(a) Give people too much choice and conversion from browsing to buying reduces (how many editions of P&P do we need on the shelves?).
(b) People find it difficult to judge the value of something in isolation. He tells the story of the first bread-maker on the market. It didn't sell until they introduced a second, bigger and more expensive model and positioned it in store next to it -- then the cheaper model flew off the shelves as customers had a context and could put a value to that product.

2. Imprinting habits. Once we start to buy something (say, coffee from Starbucks, or Classics by Penguin), it becomes much easier to do it again and again. It becomes a habit.

(Read more here.)

The implications for me include how to bring new readers to the Classics as well as reminding people of how much pleasure they have had from reading them and reminding them that more people buy/read Penguin Classics than any other brand, therefore appealing to what psychologists call the herding (hate that word) mentality. And here's the confessional part -- I love selling Classics, because I love Classics. I have never had a poor experience from choosing to read a Classic (wish I could say the same of every book I pick up). If I were selling cigarettes, or weapons, or Celine Dion CDs, I might feel more morally conflicted.

We've just bought the paperback rights to Thaler and Sunstein's Nudge which explores "choice architecture" and how to improve your decision-making and we'll publish in January (check out their blog). I'm quite seized by this as you can tell. I warn you, this won't be the last time you hear about this.

Fiona Buckland
Sales Manager

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What do we want? We want to be Free!

Kevin Kelly, who a couple of years ago wrote this provocative article on the future of books, is at it again, this time asking how it is possible to charge for something in a digital world where the cost of duplication and redistribution is almost exactly zero. While books are not the focus of his latest blog post, he could be talking about the publishing industry when he says 'Our wealth sits upon a very large device that copies promiscuously and constantly.'

The problem for content producers and owners, as he describes it, is that 'Once anything that can be copied [eg ebooks] is brought into contact with [the] internet, it will be copied, and those copies never leave. Even a dog knows you can't erase something once it's flowed on the internet.' For book publishers, struggling with issues of ebook pricing, or looking askance at the record business where copy protection is on the way out and the price of recorded music slides inexorably towards free, working out how to create value and encourage people to pay for digital products is becoming an important issue.

But happily Kelly has a possible balm;

'When copies are free, you need to sell things which cannot be copied.'

He suggests 8 'values', including authority, personalization and immediacy which increase value for the user and potentially could encourage payment for a something which might otherwise have a tangible value close to zero. I'm not going to copy his entire article here (though I could simply reproduce a digital copy at no cost to myself at all) - but I do suggest checking it out, it is a most worthwhile read. Perhaps most usefully (and something that really should be obvious) is his suggestion that business models are considered from the point of view not of the content creator, owner or distributor, but from the users perspective; What, he asks, can encourage us to pay for something we can get for free?

Meanwhile, the O'Reilly publishing conference is today starting in New York. At last years' conference Chris Anderson scandalized attending publishers when he said that he was trying to get his new book, Free, priced as close to, er, free, as possible since for him books were an advertisement for his speaking and consultancy business. As every single publisher said, 'that's great for him, but what about us?'. Kevin Kelly, thankfully, provides ample food for thought.

Jeremy Ettinghausen, Digital Publisher

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