"The universe is made of stories, not of atoms."
—Muriel Rukeyser
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Guest Post: ALTERNATIVE PUBLISHING GROWS WHILE TRADITIONAL MARKET CONTINUES TO CONTRACT

From Publishers Weekly [via David Hanock, Clint Greenleaf]

Against All Odds, Small Presses Prosper
Indies find ways to work through a tough economy
By Lynn Andriani and Jim Milliot -- Publishers Weekly, 3/2/2009

Despite brutal economic conditions, several independent publishers managed to find ways to grow both their sales and profits in 2008. How did they do it? They are not afraid to be frugal—forgoing advances in favor of offering higher royalties, for example; and they practice innovation—“mining data” for new audio prospects, in the case of Tantor, or teaching authors how to self-promote, as Morgan James does. These 11 presses have adopted a combination of strategies that have helped them not only survive in the recession, but prosper.

Ever since Todd Bottorff acquired Turner Publishing in 2002, his goal has been to convert the Nashville publisher from a company focused on specialty books and calendars to one firmly based in the trade market. Bottorff began the makeover in earnest in 2006 by adding more trade-oriented titles, and accelerated the process in 2007 when he closed the calendar operation and reduced the specialty business. The result has been a 321% increase in trade sales between 2006 and 2008.

Turner's list blends nonfiction with fiction titles (under the Iroquois imprint) as well as works with books of strong regional appeal and others that have a national audience. One of his big books in 2008 was The History and Stories of the Best Bars of New York. A series devoted to historical photos has also sold well and Bottorff is betting that the addition of more series will spur growth in the future. One new line is “21 Things” that will kick-off in May with the release of Bottorff's own 21 Things to Create a Better Life, which the publisher says features pragmatic tips for easing stress. Six other titles are signed, and Bottorff is building a twentyonethings.com Web site to promote the line. A number of merchandise items set around 21 Things is also in the works. Bottorff also hopes to grow his fiction line over the next few years and is keeping an eye out for acquisitions. In early February, Bottorff added depth to his list by acquiring the inventory and option rights for 432 titles published by Cumberland House. Turner handles its own distribution and has seen good gains with selected bookstore chains and the warehouse clubs.

Efficient production is at the root of Tantor Media's explosive growth over the past two years. CEO Kevin Colebank says that an improved recording process has helped the company produce more audiobooks at a lower cost than most of its competitors are paying. The Connecticut company—which was PW's fastest-growing publisher in 2007—brought its production from 145 titles in 2006 to 387 in 2008. An audiobook recording software program that it developed in-house has been key to efficient production, says Colebank.

Increased output has also influenced how Tantor selects which audiobooks to publish. The company has developed what Colebank calls title selector software, which helps it “data mine,” i.e., search thousands of records and pull together pertinent information for Tantor that helps Colebank and his colleagues make decisions about which titles—out of the tens of thousands published every week—it should produce in audio format.

As Tantor reported last year, quick turnaround has continued to boost development. One recent last-minute addition that turned into a hit was A Slobbering Love Affair: The True (and Pathetic) Story of the Torrid Romance Between Barack Obama and the Mainstream Media by Bernard Goldberg, which Tantor took from licensing to bookstores in less than two weeks. Tantor's library sales force launched a direct library sales campaign in 2007, and Colebank says the company now has six reps out in the field talking to libraries directly. A “Hotlist” e-mail goes out weekly to national accounts, library customers, industry publications and Tantor's narrators and has “really helped sales,” says Colebank.

Six years after its founding, Morgan James Publishing is making its first appearance on PW's fast-growing small press list. The “entrepreneurial publisher” operates under a model that's becoming increasingly common: no advances and high royalties. Yet Morgan James makes an extraordinary effort to help its authors to grow their own business—whether an author is a self-help guru or a financial advisor—through promoting their books (the house specializes in business, self-help, inspirational and health books).

Founder David Hancock, a former mortgage banker, says the company helps its authors sell books by hosting educational events. “Our book sales are up 52% over last year, and that's because we try to teach authors how to market their books. It's had a significant impact on book sales.” Advertising and marketing are generally the authors' responsibility; Morgan James markets to bookstores and an e-mail list it has. But ultimately, publicity and promotion is up to the authors, “and we teach them how to do it,” Hancock says. Plus, if authors use a public relations firm that Morgan James approves of, the publisher will pay a percentage of the cost.

When Morgan James launched, it required its authors to pay for book design, and did some custom publishing as well. “But we've since moved from that,” says Hancock—although the house has a self-publishing imprint, Persona Publishing, which Hancock says will positively affect the house's bottom line for this year. The company partners with Author Solutions for Persona titles.

“I'm a miserly CEO,” says Clint Greenleaf, chairman and CEO of Greenleaf Book Group. “We're very careful with our money. We save our reserves and don't spend where we don't have to. We've been profitable since '02.”

Greenleaf began in 1997 as a distributor and began developing a publishing program in 2000. In 2006, it started trimming the number of publishers it represented while taking on more publishing projects. It upped its output from 45 titles published and distributed in 2006 to 85 titles in 2008—and out of those, about 10 titles were distributed. Greenleaf's net sales climbed from $4.64 million in 2006 to $8.12 million in 2008.

Of course, in order for Greenleaf to save its reserves, it must first build them up. One of the key contributors to that reserve last year was a bestseller, Killing Sacred Cows: Overcoming the Financial Myths That Are Destroying Your Prosperity by Garrett B. Gunderson. The book makes some bold suggestions—e.g., “don't contribute to your 401(k)”—that caught on with the media: Gunderson got on CNBC, Fox Business and other major news networks, and sold about 60,000 copies of the book. “When we get a big book like that, I throw all that money into our reserve accounts, which helps us get through times like today,” says Greenleaf.

Another factor in Greenleaf's success: its 28-person staff is in Austin, Tex., which is “a lot less expensive than being in New York,” says Greenleaf. The house also skips advances in lieu of a higher-than-average royalty rate.

Brooklyn art publisher powerHouse Books had a good year, with net sales up 45% from 2006 to 2008. CEO Daniel Power says the house has managed to grow in a weak economy by taking its “production expense budget bull by the horn.” That means carefully negotiating and preparing lower print runs but keeping the same high quality, which resulted in lower overall budgets. Additionally, Power says, the house doesn't “front load” its advances with the trade, so release figures matched up with the company's 18 month- to two-year inventory targets.

Additionally, powerHouse has reduced some PR expenses, like blanket review copy mailings. It also completely cut out book trade convention expenses, including booth spaces at London, Frankfurt and BEA. “They were nominally effective at best as long ago as four years ago, and over the last few completely worthless,” Power says.

PowerHouse's biggest hit last year was Yes We Can: Barack Obama's History-Making Presidential Campaign by Scout Tufankjian; it has shipped 80,000 units, and the publisher is currently out of stock. The book includes more than 200 color photographs by Tufankjian, the only independent photographer to cover Obama's entire campaign from before he announced his run through the Election Night celebration in Chicago's Grant Park.

Peace Hill Press, founded in 2001, is split between Virginia (editorial) and Seattle (business). The eight-person, family-run educational press has tapped an underserved group of customers: parents who are either home schooling or supplementing their child's education—and who are doing so for academic rather than religious reasons. Vice-president Susan Wise Bauer says that increasingly, even home educators with deep religious convictions are turning away from the traditional, conservative Christian materials that have been home school standards, and are looking toward nonsectarian books aimed at home education—which Peace Hill publishes. And parents who teach one or two subjects at home after school are seeking these books out, too.

Peace Hill's distribution through W.W. Norton (where Bauer and her mother published a book on classical home education in 1999) has been a boon to sales. Many of the publisher's competitors sell only through specialty catalogues and Web sites, or through attendance at home school conferences, so the Norton deal gives Peace Hill increased visibility. Bauer says the home education and home tutoring markets are proving to be recession-resistant. The house's 2008 bestsellers included four books that make up the Story of the World series, a chronological world history narrative, with each book increasing slightly in difficulty; and First Language Lessons, a beginning grammar and writing text.

Square One Publishers, a regular on PW's fast-growing small publisher list, is now in its ninth year of business. As he did last year, publisher Rudy Shur points to special sales as a major reason for the company's success, but other factors include a drop in returns and a boost in foreign rights sales.

Square One's gross trade sales for 2008 equaled those of 2007, but there was an unexpected 25% drop in returns, which resulted in “a reasonable net growth,” says Shur. Also, the nonfiction publisher saw its foreign rights sales more than triple over the past year. Shur says it took time for the press to solidify relationships with foreign publishers, but at Frankfurt last year, it became clear that “we hit a critical mass with the number of people who'd been noticing our titles.” Shur credits Taking Woodstock by Elliot Tiber with Tom Monte, published in 2007, with helping put Square One on the map for international publishers; Brokeback Mountain director Ang Lee will direct an adaptation of the book, about a Catskills hotel manager and interior designer who helped make the Woodstock festival a reality.

Square One remains dependent on special sales to boost its bottom line; it will partner with Macy's for an April title, Macy's: The Store. The Star. The Story. by Robert M. Grippo. It also recently published The New Art of Negotiating, a revised edition of a book that has already sold more than a million copies.

How does environmentally minded Vermont press Chelsea Green Publishing handle the recession? A few things are going its way, not the least of which is its editorial focus on books that help people become more self-sufficient and survive hard times. Sales are up 21% from 2006 to 2008, and net sales with its Green Partner stores are up more than 100% compared to an equivalent prior period.

A national bestseller (Naomi Wolf's The End of America) helped land Chelsea Green on last year's fast-growing list, and this year Obama's Challenge: America's Economic Crisis and the Power of a Transformative Presidency by Robert Kuttner did the same. Chelsea Green crashed the book in time for the Democratic National Convention last August, and—in a move that angered independents—made the book available early on Amazon.

Chelsea Green has “pretty much jettisoned printed galleys” in favor of e-galleys, says president and publisher Margo Baldwin. It may do the same with its catalogues, starting this fall. CG is not going to BEA this year, says Baldwin. She prefers to attend green consumer shows like Bioneers and the Green Festivals. However, CG will attend ALA in July, where it will unveil a new library program. It is also ramping up its academic marketing in view of sustainability commitments and interest in green issues demonstrated on college campuses. Other initiatives include a new Web site, with a blog and video component.

Fox Chapel Publishing's diversity has helped the company through the recession. Its book business continues to drive growth, but two magazines—Woodcarving Illustrated and Scroll Saw Woodworking and Crafts—as well as a distribution deal for woodworking and craft titles from other publishers, help provide cash flow, market research, access to future authors and a connection to a targeted community of crafters. That, in turn, leads to direct sales.

Paul McGahren, v-p of sales and marketing, says Fox Chapel operates under a fiscally conservative model: all book costs are covered within 90 days of a book's publication date—“or we don't publish the book,” he says. That approach has ensured that the company has cash on hand to acquire content and assets during lean times. One recent acquisition was more than 36,000 pages of Time Life material covering the crafts and hobbies of woodworking, home improvement, fiber arts, boating and collectibles.

Publishing partnerships have also helped the house's success. Relationships with the Smithsonian, Winterthur Museum, New Track Media/American Woodworker and Center for Furniture Craftsmanship have helped Fox Chapel reach larger, targeted audiences. Fox Chapel also looks beyond its core focus for some titles; for instance, it realized tattoo enthusiasts were purchasing its pattern books featuring dragons and Celtic images—so it bound its existing content and published The Great Book of Tattoo Designs, which has sold 20,000 copies.

After solid gains in 2007 Red Wheel Weiser Conari managed to consolidate that increase in what was a difficult 2008. The lifestyle and body-mind-spirit publisher has also held steady in its staffing, maintaining a 20-person staff. President Michael Kerber says the Newburyport, Mass., house has been able to maintain stable sales by concentrating on its core publishing categories of new age, self-help/recovery and alternative health. It released two fewer titles in 2008 than it did in 2007, and even a small change like that helped improve Red Wheel's bottom line.

Last year's lead titles—Serpent of Light: Beyond 2012 by Drunvalo Melchizedek and Essential Laws of Fearless Living by Guy Finley—did well. Kerber said its backlist also continues to perform strongly, in particular Weiser metaphysical books and Conari books on kindness and gratitude.

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Skyhorse: Small and Fast

Skyhorse Publishing's first titles came off press in March 2007, so the house is too young to qualify for PW's list of fast-growing small publishers. Yet its growth over nearly two years is impressive; 2007 net sales were $2.7 million, with 120 titles published, and in 2008, those figures climbed to $4.7 million and 140 titles. Publisher Tony Lyons says one of Skyhorse's key strengths is its size—with 12 employees, “we can move very quickly,” he says.

The New York City house has excelled with titles in the areas of sports, narrative nonfiction, history and military history, nature and conservation, reference, house and home, gambling, hobbies, rural living and business. In the past 12 months, Skyhorse has done exceptionally well with quickly published books targeted toward the economic crisis. A junior editor came up with the idea for No Job? No Prob! How to Pay Your Bills, Feed Your Mind, and Have a Blast When You're Out of Work by Nicholas Nigro, and Skyhorse published the book in about a month, releasing it last October. Another book that came together quickly was 10,001 Ways to Live Large on a Small Budget by the Writers of Wise Bread, which the house will publish in May. Skyhorse also made a speedy decision to bring back a long out-of-print title, Back to Basics: A Complete Guide to Traditional Skills, Third Edition, edited by Abigail R. Gehring, last year. It sold about 50,000 copies in hardcover. Lyons says operating with a small staff makes it “easy to have a meeting and change the way you're doing things.”

Skyhorse has also published a number of titles recently at lower price points. “If we were a bigger company, we'd probably worry about the margins not being as good,” Lyons says, “Whereas at a small company, we were able to recognize that if the book isn't going to sell it doesn't matter how good the margin is.”—Lynn Andriani

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