The Future of Books: A Talk With Macmillan CEO John Sargent

John Sargent chats with an SPI student

John Sargent, CEO of Macmillan Publishers, commanded the stage at The Summer Publishing Institute in a heat-wave appropriate orange shirt and brown cowboy belt that hinted at his Wyoming roots. “Is there any reason to have this on?” Sargent asked of the computer projection screen behind him before beginning his talk – a question laced with irony given the emphasis on digital media that followed in his presentation. After shutting the laptop, Sargent explained: “When I was first in the business, there were no answering machines or personal computers. Now, it’s naïve to think that with our progress, technology won’t constantly adapt so that ink and paper are no longer the best.” Sargent believes we’re still some years away from print publications being the lesser medium, but with an unprecedented rate of change the switch to digital is inevitable. Sargent presented to us an overview of the current book publishing industry, arguing that it is not materially different with the new push to digital. “On paper or a screen, the publishing function is the same,” he said. “You find books people want, let the people know that they’re out there, and sell them to retailers.” Still, he noted, there has been a major transition from independently owned publishing companies and bookstores in the 1960’s and 70’s to the consolidation of the industry into six major publishers. In addition, major retail chains like Barnes & Noble and Borders have resulted in a vast reduction in the number of indies, and online retailers such as Amazon and Apple are shaking the foundation even further. “It is an interesting moment in time,” said Sargent.

The shift to digital, of course, is the major news, and Sargent sees some big problems with the growth of e-books and e-readers. Notably, retail bookstores will suffer. Though he seemed certain that brick and mortar stores would cease to exist in their current form at some point in the future, he wasn’t exactly sure when. “The curve is interesting,” he observed. “Sometimes electronic sales spike, sometimes they dip”.

Sargent is also concerned about the profit margins of today’s top publishing houses. “How much do you share with the author vs. how much do you charge the consumer?” Sargent asked his captivated audience. He noted that Amazon is now going directly to consumers, offering self-published authors 70% royalties to publish their digital books. He believes strongly that bypassing the traditional publishing model may eventually backfire because the quality of unedited books will frustrate consumers. “If you go to the theater three times in a row and each show you see is bad, you lose faith in the product. The same rings true for books,” he said.

As for what to charge the consumer, Sargent himself is an industry hero. He flew to Seattle last spring and faced down Amazon, arguing that the $9.99 price they were charging for many e-books was detrimental to publishers and devalued the price of books in the minds of consumers. Sargent’s stand helped launch the “Agency Model” in which publishers set the price of books and the online retailer takes a commission. “The good news,” said Sargent, “is that traditional publishers have established excellent long term deals with book retailers. Publishers will continue to healthily exist and go forward… for now,” he predicted.

In conclusion, Sargent stressed that word-of-mouth in the publishing industry will remain of utmost importance for the best books to reach readers. And he seemed to lament the inevitable end to ink on paper. “I ask you, do you want to read to your children on a Kindle or from a real book?”

I think I can speak on behalf of NYU Summer Publishing Students, Class of 2010, in saying that we will do our best to preserve print publications so we can read to our children the same way our parents read to us.

by Alexandra Schwartz

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