And do you know why? Salon.com does:
Free us, oh, please FREE us from the “free market”!
Thanks to conglomeration and corporate distribution models, some of publishing’s biggest houses were laid very low by the current stock market collapse. And scary holiday book sales figures compounded the industry’s woes, with recent news of a 20 percent drop in sales in October from last year’s book market. Even worse, Nielsen Book Scan reported a 6.6 percent drop in unit sales during early December. Not even the holiday season could bolster book sales.Houghton Mifflin Harcourt was particularly vulnerable to the Wall Street crash. Since the turn of the 21st century, investors have struggled to spin gold out of the different companies that now make up the conglomerate. In 2001, Vivendi Universal bought Houghton Mifflin (which has been publishing literary and educational books since the late 1800s), but then sold it to private equity firms a year later. In 2006, an Irish firm bought Houghton Mifflin; within a year, they had merged with one of Houghton Mifflin’s largest rivals, Harcourt. The publisher’s parent company is now saddled with billions in debt.“There were hedge fund guys with no background in publishing buying up publishing houses,” says André Schiffrin, founder of the New Press and author of “The Business of Books: How the International Conglomerates Took Over Publishing and Changed the Way We Read.” He explains that corporate owners of major publishing houses expected impossible 15 to 20 percent profit margins in an industry with traditional margins of 3 to 4 percent. “They were part of that whole feeling that you could make money by buying and selling companies, rather than by selling books. At some point it comes to a dead end.”