Digital technologies have enormous appeal

Reidy: Industry at a "Defining Moment"

By Jim Milliot -- Publishers Weekly, 12/18/2009 7:32:00 AM

In her annual letter to employees, Simon & Schuster CEO Carolyn Reidy observed that both S&S and the publishing industry “are at a defining moment,” and minced no words is saying the challenges faced in 2009 will continue into the new year and that in 2010 “we have every reason to expect that this coming year will bring its own set of difficulties for us to face.”

"S&S had its share of accomplishments including 164 New York Times bestsellers, a number of award-winning titles and innovations in the digital area. Digital technologies, Reidy noted “have enormous appeal, be it prospects for more efficient distribution, the ability to capture a sale on a 24/7/365 basis, new and intriguing ways to find consumers and engage them with our books and authors, and new formats, hybrids, and business models.”

Reidy added however, that digital opportunities are not without risk. “We must do everything in our power to uphold the value of our content against the downward pressures exerted by the marketplace and the perception that “digital” means “cheap.” We must work to defend the livelihoods of our authors at a time when instantaneous file transfer makes piracy easier than ever, and in a world in which many consider copyright irrelevant,” Reidy said.

“These challenges will play out on all fronts in our business, from our interaction with authors and customers to how we acquire, produce, market, and distribute our books, and sometimes subjected to the scrutiny of the media and the blogosphere. The importance of making the right decisions has never been greater, and I have every confidence that we will continue to employ our publishing expertise and culture of innovation to keep Simon & Schuster on the path to a prosperous future in a new age of publishing.”

With consumers “overwhelmed by an onslaught of information and media, and faced with a bewildering array of possibilities for purchasing books,” Reidy said the road ahead for publishers of all kinds will be difficult “and the rate of change greater than at any time in history.” But she noted, “I am confident that the culture we have created at Simon & Schuster makes us ideally suited to meet the challenges we face. We have always prided ourselves on the expertise with which we acquire and publish the books that readers want; on a flexible approach that allows us to quickly adapt to current conditions; on the speed with which we are able to bring our books to market; on our willingness to do the right thing for our business no matter how difficult.”

In a review of the past year, Reidy noted that the bookselling marketplace “has been truly lackluster, and year-on-year sales at most of our major customers have declined significantly. Books from many of our continuing authors, as well as our higher-margin backlist, are selling at levels well below their peak.” And although S&S had solid gains in its conservative and teen markets and strong performances in the U.K. and Canada, “the lower sales volume attributable to the soft marketplace was impossible for us to overcome.”

Reidy said she was “heartened” by the seriousness in which S&S employees took to the task of helping the company run a lean operation in difficult economic times.