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Wednesday, November 12, 2008

All About Book Clubs

By Richard Curtis

Book clubs are such solid fixtures in the lives of authors, agents, and publishers that we take them for granted, like enormous monuments that we no longer notice on our way to work every day. How impoverished our literary environmen

t would be without book clubs can easily be grasped when you realize that millions of Americans subscribe to them. And because changes in pricing, reader tastes, distribution, marketing, and other trends have drawn new attention to the functions of book clubs, this is a particularly good time to examine this phenomenon.

Book clubs (and I'm referring to commercial clubs, not the informal discussion groups that have sprung up in living rooms over the last decade) were an outgrowth of attempts to reach a larger segment of the reading population than was then being served by bookstores. Experiments like department store book clubs (there were Macy's, Gimbel's, and Bloomingdale's clubs among others) and tie-ins of cheap editions of books with the sale of products (a tobacco company included miniature volumes of Shakespeare plays in its cigarette packs) inspired an enterprising merchandiser named Harry Scherman to found the Book-of-the-Month Club in 1926. He perceived that an enormous potential audience, particularly in rural areas, had inadequate access to bookstores in towns and cities. Mail order, which worked so successfully for many other products purveyed to rural people, ought to work with books, too, Scherman reasoned. And he was right.

Scherman, however, put a twist on this concept that made it a dramatic departure from the Sears, Roebuck approach. It's called the "negative option," meaning that unless members expressly indicate that they do not want the latest selection, the club will assume they do want it and will send it to them. Scherman's insight into human nature was almost diabolically shrewd. Perhaps he didn't trust that members would buy books simply because they were good, and he counted on such human foibles as laziness, guilt, and confusion to make members default on their obligation to return their cards in time to prevent clubs from shipping selections to them.

Whatever the motives of Scherman and subsequent book club entrepreneurs, the clubs caught on fast and hard, sweeping the country and, in the process, revealing some serious flaws in the way that books in this country were (and still are!) distributed and promoted. One publisher observed that "the clubs advertised books extensively and nationally, sold them regularly to people who had previously been only occasional book buyers and, most importantly, fostered the habit of regular reading," according to John Tebbel in his excellent book about American publishing, Between Covers. Tebbel cites book clubs aimed at business people, engineers and other professsionsl as particularly effective in reaching audiences that conventional bookstore marketing simply could not touch.

Not unexpectedly, the creation of the clubs provoked a great outcry among retail bookstore owners, who felt gravely threatened by them, particularly when a competitive club, the Literary Guild, added the wrinkle of offering books for prices below retail. Many retailers accused publishers who dealt with clubs of collaborating with the enemy. Harder to comprehend was the opposition by publishers, who after all did stand to profit from licenses to clubs. Their contention, however, was that the clubs represented an element of crass mercantilism and cynical exploitation of the hallowed spirit of literature (publishers believed the oddest things in those days!). The Bookman asserted that book club members were "too feeble-minded, too lazy, or too busy to make their own choices." But book clubs were an idea whose time had come, and after consolidating their gains during the Great Depression of the 1930s (reading being one of the few affordable pleasures of that grim era), they became the institution we revere today.

With few exceptions, the basic idea concocted by Scherman has not changed. A lot of other things have, however, forcing clubs to take measures to keep up with changing times, tastes, and conditions.

One of these is the shrinking of rural America, making bookstores accessible to people in all but the remotest reaches of the nation. Fortunately for the clubs, accessibility of bookstores is not by any means the most important factor for potential book buyers. Indeed, urban members constitute a large portion of the clubs' memberships. A far more important element is price. Book clubs offer discounts on the list prices of books, starting at around 10 percent, and additionally offer free bonus books plus sign-up inducements such as free sets of books.

As long as a wide gap existed between bookstore and book club prices for books, clubs could hope to continue doing a healthy business. The critical test came when the paperback revolution took hold, making paperback originals and reprints available for prices far below those offered by clubs to their members. But the clubs came through the test unbowed, revealing how solidly the convenience factor figured in the thinking of book buyers.

Most recently, the clubs found themselves under intensive fire from their old enemies the bookstores following the explosive expansion of such chains as Barnes & Noble, especially into suburban and rural areas, strip malls and the like. Not only did these chains reach deeply into territories that had been big profit targets for book clubs, but they started discounting books at or below the prices offered by the clubs. And when you added postage and handling charges to the prices members paid for book club selections, the allure of the stores became very compelling. Fortunately for the clubs, the stores could not sustain the narrow profit margins generated by "deep discounting," and although discounts are still offered on certain books by chain stores, the threat to the clubs from that source seems to have been averted.

It would appear that no matter what weapons the enemies of book clubs throw at them, the clubs survive because they possess one advantage the stores cannot overcome: selectivity. For readers too busy or uncertain to sort out the welter of new books, clubs proffer the recommendations of a panel of experts who have screened the candidates and distilled the very best. Furthermore, many book clubs cater to specialized tastes. Book buyers interested in subjects ranging from dance to warfare, mysteries to science fiction, nostalgia to travel, sailing to nursing, business to computers can satisfy their predilections by joining clubs aimed at those specific interests.

Most book clubs make their selections in pretty much the same way. Publishers submit books at an early stage, in manuscript or proofs, accompanied by promotional material and any other information about book and author that the publisher may feel will make the book more attractive to club members. (On occasion, a book will be chosen by a club after publication.) The submission is assigned by the club's editorial board to a reader, hopefully one who will give it an informed and sympathetic reading. Recommended works are then circulated to the rest of the editorial committee and are discussed, rated, and voted on. The club then negotiates deals with publishers on the books they wish to acquire. The club either guarantees to purchase a quantity of copies of the publisher's edition or, if the club has its own printing facility, licenses the right to publish its own edition. In either case, most clubs pay an advance against a royalty, though some smaller clubs pay a flat fee for a fixed, one-time printing. After the deal is struck, the clubs solicit orders from their membership. Except for the clubs that do their own printing, most clubs earn their profit from the difference between the cost of copies purchased from publishers and the price received from subscribers.

Book clubs are a major source of book sales, the largest clubs reaching hundreds of thousands of subscribers.

For the biggest literary stars the advances paid by book clubs can be mind-boggling, such as the $1.75 million reportedly paid by the Literary Guild for James Michener's The Covenant after a bidding war with the Book-of-the-Month Club (the two clubs merged, so it's not likely you will see future bidding wars on such a grand scale.). Most of the time, like any other business enterprise book clubs will offer as little as they can get away with, in many cases below $10,000. Often, however, publishers can sell the same book to more than one club. Royalties usually range from 5 to 10 percent of the book club's price.

The money paid to publishers by book clubs is, with almost no exceptions, split equally between publisher and author, and in a great many cases the club income makes the difference between profit and loss for a publisher on a given book. Indeed, a former head of Book-of-the-Month Club told a gathering of literary agents that she considers book clubs the saviors of midlist books. It can certainly be argued that in an era of increasing attention to frontlist books, book clubs keep a great many books in print far longer than publishers themselves are able to do.

Although the key interface with book clubs is the book publisher, agents often cultivate book club executives in order to give them early notice of publication deals on books that might be hot prospects for the clubs. Some time ago, my agency performed the equivalent of passing a camel through the eye of a needle when we submitted an unsold manuscript directly to the Reader's Digest Book Club and secured a commitment from the Club to buy the book if we could find a publisher for it. We had failed up to then to sell this lovely family-type story that seemed to be too tame for the editors who had read it. But it was right up the RDBC's alley, and armed with a five-figure book club offer, we easily attracted a publisher for the book. But this was a rare event and we just happened to have the right book in the right place at the right time.

It's hard to imagine authors failing to be delighted by book club sales, but there have been a few. Willa Cather's arm had to be twisted to accept book club selection of Shadows on the Rock because she considered it crass exploitation of her work (authors had the oddest ideas in those days, too!). More recently, a number of authors, notably Stephen King, have objected to book club acquisition of their books on the grounds that club sales cut into sales of hardcover and even of paperback editions of the same book, losing them both readers and money.

Their reasoning is by no means without merit. Take a big-name author such as King whose book is published by a hardcover-paperback company that pays him, we can assume, a full royalty on both editions of his book. Suppose the hardcover edition sells for $25 and the paperback for $7. One thousand copies of the hardcover edition might bring in about $3,000 in royalties. One thousand copies of the paperback edition might bring in about $700. Now, suppose one thousand copies of the book club edition are sold at a 20 percent discount to subscribers, or $20. The royalty on those thousand copies will be about $1,300. But that money must be split fifty-fifty with the author's publisher, netting the author $650. Thus the book club's revenues are about 25 percent of what the author will get for the same number of copies sold in hardcover, and even a little lower than the royalties for the same number of paperback copies sold. Although it can be argued that the same thousand people who might buy the book through a book club wouldn't necessarily buy it in stores if it weren't carried by the club, you can nevertheless see how authors like King might view sales of their works to book clubs as losing propositions. The war between bookstores and book clubs still smolders, sixty years after the opening volley.

Willa Cather and Stephen King notwithstanding, a phone call from your agent or editor informing you that your book has been selected by a club is cause for celebration, and of course it looks great on your resumé!


This article was originally written for Locus, The Newspaper of the Science Fiction Field. It's reprinted in Mastering the Business of Writing. Copyright © 1990 by Richard Curtis. All Rights Reserved.
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