Nathan Bransford, Author


Thursday, March 24, 2011

Why (Most) Publishers Are Still In New York

When publishing outsiders are suggesting cures for what ails the business, one very common suggestion is that publishers ditch their New York real estate and head for the sticks. Why do they need to pay Manhattan rent?

Why indeed?

Well, first this ignores that there are actually quite a few publishers outside of New York. You have Sourcebooks in Chicago, Chronicle in San Francisco, and many many more.

And there's a historical explanation as well: New York has been an important center of the American publishing world since the early 1800s.

But setting that aside, why are the Big Six all still in New York? Why don't they hightail it to South Dakota?

The same reason Apple and Google are in Silicon Valley, Wall Street is on Wall Street, and Hollywood is in Hollywood: Industries tend to cluster in certain areas and derive more benefit from drawing upon a talent pool and networking than they lose in increased rent.

You can actually observe this on an individual store level (think: the Diamond District in New York). Shops cluster together and derive benefits from the increased traffic. But that's retail.

Urban studies theorist Richard Florida has written about the power of industry density. He writes:
Density makes it easier for people and firms to interact and connect with one another, and it reduces the effort, friction, and energy that's used to make these connections. Density increases the speed at which new ideas are conceived and diffused across the economy, accelerating the speed with which new enterprises and new industries are created.
In New York, publishers can draw upon being close to the other major media outlets, they can draw upon a highly educated and creative workforce, are more likely to attract executive talent, draw upon the cachet of being one of the New York publishers, and network with writers themselves, many of whom live in New York.

And to a certain extent publishers have already moved to Scranton: one of the jokes on The Office was that they were trying to win HarperCollins' business. Well, Scranton really is where HarperCollins' accounting department is located. What's in New York? Editorial, art, marketing, sales, executives.

It's easy to just say, oh, well, all those people can up and move, or you can find people with those qualifications elsewhere. But moving carries its own costs, and the people working at publishers are highly skilled. It would be extremely difficult to migrate those operations elsewhere on a major scale.

All that said: Things do change!

Los Angeles and New York used to be the center of the music industry, but no longer. Now Nashville is growing in clout. Detroit used to be the undisputed center of the auto industry, but now plants are increasingly opening in the Deep South.

Could publishing be forced from NYC? Random House recently saved "millions" of dollars by downsizing its footprint, and these days millions isn't anything to sneeze at, but we're talking about a company with revenue in the billions. "Millions" is not exactly the difference between wild profitability and turning out the lights.

And then there's this: Publishers are able to draw upon a tremendous wealth of publishing talent in New York, and if there's one thing publishers need to weather this massive transformation: it's talent.

What do you think? Is it NYC or bust for publishers?






73 comments:

Mary DeMuth said...

Thank you for this, Nathan. I've long wondered about this, though many of my publishing houses are scattered around the nation (Oregon, Michigan, Colorado). It's also important to note that folks can have really amazing power lunches in Manhattan! (Just not the same in Colorado Springs.)

Deni Krueger said...

I think it's more basic than that.

1.) It's easy to stay. The wheels are already in motion. The resources are already there. I'm a person who's moved 10x in 10 years, it's always hard to get going in a new place.
2.) History runs deep.

That being said, they could do it. Life outside of New York isn't as soul sucking or artless as it's made out to be. The skilled employees would move with their job. Or other qualified people would step in.

Personally, a move shakes up the pot in a good way. A little more diversity. A little more growth. Neither of which would be bad for the publishing industry.

Jared X said...

It's easier to move an industry that relies on unskilled workers (textile manufacturing moved out of New York, then offshore without too much trouble) than it is to move skilled workers away en masse.

Also, commercial real estate in NY (+ tax incentives) isn't as pricy as you might think since 9/11. There are still many empty offices downtown, and that drives prices down.

That said, as the industry consolidates more and more, and the Big Six becomes the Big Two or the Big 0.67, it becomes easier for an industry to move out because there are fewer decision-makers.

So New York could lose the publishing industry when HarperCollinsHachetteMacMillianPenguin & Schuster gets a better offer somewhere else.

BookEnds, LLC said...

Interesting post. I think you have some good points about drawing on talent, etc, but there is a lot of talent elsewhere and the truth is there are a lot of people who move to NYC because of publishing. People who might not have to move if publishing were spread throughout the country.

Another thought about this, is would we think more broadly, have different perspectives on our readership, were we spread throughout the country? Would it give us a marketing edge if we were less NYC centric?

I'm not sure if the cost savings is enough to leave, but I think that as time goes on we'll see more smaller presses in other parts of the country, like Sourcebooks for example, make bigger inroads and make NYC less important as a publishing town.


--jhf

Scott said...

You cite the availability of a highly educated workforce as a major reason to center in NYC. I'm wondering what the workforce there has over any other city.

There are an awful lot of English majors graduating every year that would like a publishing/editing position. Even in South Dakota.

I don't have any experience with this yet, and hate to sound negative. But are New York editors really that educated and talented compared to elsewhere?

John Jack said...
This comment has been removed by the author.
Nathan Bransford said...

Jessica-

Definitely, and that's one reason I found it helpful as an agent to be outside of NYC. Having things concentrated in one place does have its disadvantages as well.

Others-

It's not snobbery that's keeping publishing in New York any more than it's snobbery keeping the computer industry in Silicon Valley. That's, historically, where it set up, that's where the concentration of skilled workers are. Yes, there are educated people elsewhere, but industries benefit from drawing upon a concentration of an industry in one place and the networking opportunities it affords. Please read the Richard Florida articles!

John Jack said...

New York is a mindset all its own. Good and bad, the mindset is one of megatropolis-itis. It's Gotham high brow, great for mass culture urbanism. The downside is a thought process that treats everywhere else like hinterlands subserviently serving the primate city. New York doesn't give two figs or know what it's like in Ruralania. Everywhere else is beneath New York in stature. As a consequence, what New York publishes doesn't fully serve the hinterlands, writers or readers.

Take off the blinders, get out and enjoy the countryside, New York. Discover rural arts and broaden horizons.

Anonymous said...

Given the rise of eBooks, publishing needs to be a low cost business. Being in New York does not make publishing a low cost business. If anything, being in NY raises the overhead for a business that already has slim margins.

With computers, cover art can be freelanced out and files can be sent in. Edits can also be done remotely. And book layout in InDesign can be done anywhere. These skills are not location specific or incredibly difficult to learn.

Book marketing barely exists now, and publishers would hire outside firms anyway.

So what else am I missing besides copyright stuff and book sales to distributors and chains?

Why do you need a highly educated work force for this business model? What is so challenging about it?

Nathan: what are these skills that can only be found in NY? I just don't get it.

Craig Rayl said...

Don't forget that these places can also draw talent to the pool. Just like publishers settling in one place they can draw talent to them. Writers can go to New York, like actors go to LA and computer programmers go to Silicon Valley. You can always be small in one market, but there is always a place called the Big-time.

Mr. D said...

I don't think it matters where a publisher is located. Signing on excellent authors and publishing great books - that's the deal. I believe publishers can find talent in every corner of the globe.

Theresa said...

I think this sort of ignores one important point. The assumption seems to be that there needs to be a central office at all. I think we all know that people are working remotely more and more. (I type this from my couch between editing articles of my own.) In fact, it was always my experience with editors that when ever they wanted to get some real editing done...they worked from home where there aren't pointless meetings and a million phone calls. The question isn't really "Do publishers need NY offices?" but "Do they need an office, and if so, how big does it really need to be?"

There's also something to be said for hiring the best, and not just the closest person for the job...and the ability to pay "South Dakota" salaries instead of "NYC salaries."

Nathan Bransford said...

anon-

The same could be said of the computer industry. Everyone could work remotely, particularly because everyone is already so Internet savvy. So why are so many companies in San Francisco and Silicon Valley?

Because there's a benefit to face to face communication, networking, and talent (and experience) pools.

btownbangles said...

Well, isn't it obvious? New York is just cooler.

:)

MaryZ said...

Having worked in NYC publishing for a couple of decades, I thrived in the density of talent with creative, intelligent people working very hard to produce the best possible work.

Now, living and working across the river, I can tell you it just ain't the same. I miss the stimulation of a bright, creative environment (but I don't miss the commute).

Anonymous said...

@Nathan:

But I would argue that the computer industry has challenging problems that need the talent to be available locally in teams. So I get Silicon Valley.

But Hollywood has seen a shift to Canada, where most of our TV shows and some movies today are filmed to save money.

I don't think publishing has many new problems that need folks available in person on a day to day basis. Besides networking, what are the advantages for publishing to be in NY?

Ella Schwartz said...

Nathan,
As a New Yorker myself, I for one hope New York remains the hub of publishing; both for my own writing interests and as a New York tax payer!

That said, I think the "overhead" of the publishing business will probably migrate out of NY as the publishing business continues to evolve and face pricing pressure. I'm talking about the "worker-bees" (i.e. administration, marketing, shipping, design, etc.) There is no reason to maintain this presence in a pricey market such as NY, and other emerging business hubs are offering favorable tax advantages to businesses to move work forces to their town (Cincinnati, and Minneapolis come to mind).

Nathan - you parallel this to the technology industry maintaining their presence in Silicon Valley. Interestingly enough, my day job is in tech so I know a lot about this. A lot of the Silicon Valley companies are maintaining their management presence in pricey CA, but moving their developers, QA people, support, etc. to cheaper areas. We all know about outsourcing to India, but I am seeing a move to Florida, Texas, and even Canada.

Publishers will always maintain some presence in NY. They can't afford not to. Their "worker-bees" may move elsewhere, but management will stay in NY.

Nathan Bransford said...

anon-

Even if movies are filmed in Canada, the studios and agents are mostly in LA.

Publishing is a collaborative process--there are meetings to decide which books to acquire, how best to produce and market them, etc. etc., and this means lots and lots of meetings. Not to mention lunches with agents and editors from other houses and various other socializing, during which lots and lots and lots of information and ideas are exchanged.

And yeah, you can videoconference, but it's just not the same.

But really, all of this kind of strikes me as kind of missing the forest from the trees. The marginal cost of renting Manhattan office space vs. Illinois office space is what, a couple million dollars? Ten million dollars? For a company that measures its revenue in the billions and profit in the hundreds of millions that ten million dollars is a relative drop in the bucket.

Sommer Leigh said...

I loved loved loved being in New York, but the oh-god-why-cost of living is wretched and I didn't even live there. I lived in Boston which is absolutely no better, and took a train to NY every weekend. The density of everything is incredibly stimulating and awesome, but financially it made no sense for little old me to move there, not when I could move home to Nebraska and pay a third of what I paid out East and do most of the same work from home.

I get that it is nice to be so close to each other and to talent - because let's face it, the city itself draws the talent - but when companies are struggling and people are struggling, maybe changing locales is something to think about. Moving out to cheaper real estate climate isn't necessarily a bad idea to consider. I don't run a billion dollar company though so who knows? Maybe it isn't such an expense in the big picture.

Still, I think it is interesting that one of the big problems the publishing industry seems to be facing is the fact they aren't adapting quickly to the technological changes being made around them by others. These days so much work doesn't even need to be made IN the workplace thanks to technology. Some things yes, and occassionally definitely, but I work in an office that functions quite well when people work from home.

Margo said...

As someone who works in regional planning and deals with this kind of stuff all the time, let me tell you it's not all about land values. There are many factors that go into whether (or NOT) you can attract a talent pool to a location, whether workers will be happy, whether they will *flee* because they can't handle the political/economic/religious/civic nature of the area. I'm sorry, but as cheap as (for instance) central California is, there is no way either the publishing industry or the computer industry could thrive here with the region's majority values (including rampant anti-intellectualism). That being said, I do think the publishing industry could make better use of information technology to spread out at least a little bit, if there was really a benefit to doing so. I doubt the real estate is as big an issue as employee salaries and benefits, and I'm not going to suggest slashing someone's pay so I can have a paperback a dollar cheaper. No, I think NY's future (if it has much of one) is going to have to be innovation and evolution rather than budget-balancing.

Christine Borne, The Cleveland Review said...

Sometimes I daydream about how much easier my life would be if the publishing industry picked up and moved lock, stock, and barrel from New York to Cleveland, a city that's been bleeding jobs and population for decades, but which retains the vestiges and mystique of an old American city. I mean, I used to live in New York, used to work in publishing. I loved working in publishing and I loved living in New York. But I moved back to Cleveland because life is complicated and as you get older, you find that you have other responsibilities. I guess.

There's been a lot of talk lately about enticing artists into moving to the Rust Belt. I overheard a couple of enthusiastic new urbanist types talking about this on the bus the other day: "All you need to attract artists is cheap rent and a positive attitude!" Well, but also you need decent day jobs for them, and a critical mass of educated people who will be interested in their art. New York has those things; Rust Belt cities, maybe not as much.

I also think creative people just like living in places that look and feel like *somewhere*, and while relocating them to an office park in central Pennsylvania might make better business sense, it's going to squash the life out of them. (See "Michigan CEO: Soul-Crushing Sprawl Killing Business" at RustWire.)

Michael Offutt said...

I think Nicholas Cage said it best in one of his movies. "If Rome was the center of civilization for the Roman Empire then New York City is the Rome for modern times." Or something like that.

Istvan Szabo, Ifj. said...

Thank you for the history lesson, Nathan. I always wondered why NYC is the center. NYC always had a glamorous connection with publishing. In comic novels NYC and publishing is also appeared one way or another (i.e.: Daily Planet). NYC is not lost. The question is; do they want to save it or not. But I don't believe that a new symbol can replace NYC. That publisher is going to win who will stay behind in NYC after all the others left. That one will have the greatest prestige, a symbol, while the rest must rebuild everything from the beginning.

MaryZ
"I miss the stimulation of a bright, creative environment"
The usual quantity vs. quality problem. Unfortunately it's appearing in every industry.

Anonymous said...

yes, there's the critical mass theory / argument as for why the publishing industry is NYC centric. However, that attitude breeds a snobbery that insulates NY pubs from larger, national realities. Riding the subway, one might assume from the many people one sees reading that the publishing industry is fine (tons of people read on the train.) Although I doubt publishing execs take their cues from the No.6, I believe it relates to a snobbery - about the rest of the country - that works against a NY centric world view, specifically writers who, if they don't live there, are viewed as provincial. I've lived in NY, and not lived in NY, and have come to the conclusion that while it's exciting to live there, it's not particularly conducive to actual writing. The self-inflation New Yorkers seem to derive from weathering snow, and riding around in metal containers underground is funny if you think about it (esp. since they all look so serious doing it.)

Not living there affects one's career in the practical way you describe: during the course of the day, you're less likely (okay, unlikely) to run into a colleague. However, that lack of personal contact would seem to be contradicted by the oft played tune, "The internet's going to solve everything." Maybe the fact that there are advantages and disadvantages to living in an 19th century city are the same contradictions we're seeing played out in publishing ie., print vs. digital?

Theresa said...

The tech industry, and Hollywood, are different animals that operate a bit differently. Still, what I'm suggesting is that at least one publisher get out ahead of the curve, and downsize its offices. Publishers already work with freelancers all over the country -- designers, proofreaders, etc. -- many of whom have left New York and the full-time publishing world. In fact, at some houses, I'd say those freelancers do the majority of the heavy lifting. Smaller, smarter offices and a digital workforce could really kick-start a much needed change in an industry struggling with profit margins.

Anonymous said...

I agree with the cluster theory. Even porn has its own little cluster thing going on in The Valley.

Heidi said...

I think he simplest answer is that they're in New York because that's where they've always been. Why move? I mean, besides the obvious pool of talent, agents, editors, et al, the mechanics of the industry are located in and around the area.
I'm sure we'll start to see more imprints popping up in other areas, but if I'm a huge publishing house that's been in a specific area for years, and I'm experiencing relative success, why would I want to change that?

meredithmansfield said...

I don't think WHERE the publishing industry is will be as important in the digital age as its mindset. If they can't stop thinking in the old pre-digital ways, they're going to be in trouble wherever they're located, just like the big brick and mortar bookstores.
If moving would help them start thinking in newer ways, then it might be good for them, but there's no reason they can't do the same thing right where they are.

D.G. Hudson said...

New York and other large cities seem to have a vibrancy that appeals to all - they have super jazz spots, fashion houses,and the big publishers.

There is also a certain business logic to consolidating to be near suppliers and associated industries, but writing talent isn't clustered in 3 or 4 cities.

It's not as important as it was -- with online access -- to live near the centre of the publishing world.

Elitism survives in daily life, simply because the elite like to be above the masses. Do NY publishers give preference to NY writers, considering the rest of us to be 'lesser than'?

I'd prefer to see publishing in a large city rather than a small town, based on attitudes that seem prevalent in small communities. I can't see that moving out of NY is going to change anything that much. Especially when no one is sure what is on the horizon.

Just let the authors/writers survive, that's what really counts.

It seems now that most people in publishing (lit agents,editors,etc)have a book in mind themselves that they want to get published.

Is that why agents, editors & writers are clustered in New York?

Katherine Hyde said...

I see the validity of your arguments, Nathan, but there's another factor that I think should be considered: Being centered in New York, a unique and rarefied environment, can cause publishers to be out of touch with the majority of their potential readers scattered across the country. The ethos of Middle America, the South, the Northwest, or any other region you care to name is radically different from the ethos of New York.

Also, I contend that many writers only live in New York in order to be close to publishers. Chances are a lot of them would rather live somewhere else.

Personally, I wish the industry would move to the middle of the country somewhere. It's frustrating for writers on the West Coast to be so far from "where it's happening." Especially since, as writers, we don't have the budget for travel.

Nathan Kuiper (Compass Book) said...

Nathan,
Great work, look forward to each post. I really think this day in age if you are putting out a great product people will find you. I come from the print side of things and worked with hundreds and hundreds of publishers big and small and we never thought one area of the country stood out...being big does not mean they were great to work with or knew what they were doing. That I can promise you. I think getting back to working directly with the author is the way things are going and you the author should have more and more say in each decision, if you're not...then you're losing opportunities. Keep up the great work.

Nathan Kuiper
Compass Book

Reesha said...

I can see why clustering works really well for publishers.

But have you ever seen the movie Interstate 60? Remember the town of Morlaw?

Sometimes I wonder if clustering that much is healthy.

Mahak Jain said...

I am an editor who is located in Montreal, Canada, when most of mainstream publishing is located in Toronto, and some of the more renegade publishing is in British Columbia (out west). I can tell you from my experience that location has certainly affected how I feel about publishing. Montreal is in Quebec, which is primarily a French-language province, and I work at an English-language publisher. There is certainly a place for that in Quebec as well, but I don't know of any other publishing house that works in mainstream publishing in Montreal. As a result, I do often feel isolated and not steeped in publishing the way I would like to be (though at times I appreciate the break as well). But as an editor, I feel it's important to be in touch with a community -- editing is about collaboration and conversation -- in order to understand the shifts that are happening in form and market -- in order to better communicate them -- and I sometimes fear the lack of that (I compensate by reading wonderful blogs such as these!). It's easy to quantify financial benefits -- but there are some things, while not easily measurable, really determine not only our success but also our satisfaction with what we are doing.

Claire Dawn said...

I hink another reason, industry density works for publishing is that it's still very much a face-to-face industry.

Lots of business meetings over lunch, which could arguably be done by email. But that's just a characteristic of the industry. And as long as those lunches stay important, publishers, agents, authors and illustrators will have every reason to be in NYC or at least within striking distance.

richfigel said...

Clustering happens with criminals too. Here's a link to a Wired mag article about how a small town in Romania became "Cybercrime Central"...
http://tinyurl.com/5wccy64

D.G. Hudson said...

NOTE to those commenters referring to the movie industry filming a lot in Canada - it's mainly Vancouver.

We have an film industry in Vancouver that has proved very efficient and sometimes cheaper than producing in LA. There is also a large talent pool of actors & support industries to select from.

Recent productions (still filming) include the current sequel for Twilight. Tom Cruise and his wife shop and visit here while he's filming another Mission Impossible movie. They call Vancouver 'Hollywood North' for a reason.

So the film industry knows that expansion outside the 'centre' can be profitable. Some of their best directors are stepping outside the protective bubble of familiarity.

terryd said...

As an author, I love having a California agent. But there's nothing quite like having a NYC publisher, even as the empire is wobbling.

New authors must differentiate themselves as never before, these days. Landing a New York publisher isn't a bad way to do that.

And it's not easy getting past the old-school gatekeepers. After all that striving for all those years, I'd prefer not to receive editorial and publicity correspondence from Just Anywhere, USA.

Call it sentimental or elitist or delusional but, as with the mythic notion of Hollywood, I think it's great that authors still have a physical address for their dreams.

Phoenix said...

1) Not all tech industries are in Silicon Valley. And these days, the HQ may be in one locale but the majority of tech workers are either at low-cost hubs (Arkansas and Texas, and other places without a state income tax) in the States, offshore or they work from home.

2) Just because a company or industry has revenue in the billions doesn't mean it's profitable. You have to look at profit margins, which may be razor thin or even negative. In that case, cutting overhead costs by even a few million CAN make a huge difference to the bottom line. The Big 6 chose to cut a heck of a lot of talent instead of real estate a couple of years ago, opting for short-term gain over long-term value. That's because investors are interested in short-term profitability in a shaky economy, NOT in the overall health of a company or industry.

You only have to look at Michigan and its housing economy and unemployment stats to see what happens when an industry stays concentrated.

Krista V. said...

I think this underscores another important point: If the market's doing something, it's doing it for a reason. Believe it or not, most businesses tend to make rational decisions. (Otherwise, they wouldn't stay in business very long.) We don't have to complain about this; we just have to find our own place in the market, our own little niche.

Great post, Nathan. This is the sort of stuff that makes the economist in me smile:)

Bryan Russell (Ink) said...

I think Windsor, Ontario, would be far superior. Just sayin'.

MJR said...

Good question...I've worked in publishing or printing in NYC for most of my career and sometimes I've wanted to relocate, but it's hard to figure out where to go. There are great publishing houses here and there outside NYC, but it would be risky to take a job at one of them--in case it didn't work out.

I disagree that NYC publishers are provincial and don't care about the hinterlands. My novel is set in NYC and that's not something that's very interesting to people in publishing--I think they'd much rather read about a place that seems exotic to them (a ranch in Montana? another country? etc etc)...

Publishing requires a whole lot of younger assistants who will work for very little money--and no, not all of them have trust funds. Perhaps it's easier to find this pool of well educated, liberal arts grads in and near NYC than in some other cities.

But I think it's mostly just due to tradition....

Pen and Ink said...

Tradition is a heavy weight. I think there will still be major publishers in New York for a long time to come. But times "are a changing..."
I just had a picture book accepted by Beach Lane Books. Beach Lane Books is Allyn Johnston's imprint at Simon and Schuster and it's located in La Jolla, CA Allyn is, for my money, the Steven Spielberg of editors. I think where she is located is unimportant.
I have three books published by Guardian Angel Publishing. GAP is located in St Louis Mo.
The WWW had made us all much more of a global community. We're all local now.

Melissa said...

One thing that one might point out about the publishing talent is that it came to New York – it likely wasn’t born and raised there. ☺ I would argue that if someone in publishing doesn’t want to relocate to … oh, I dunno, Utah or Nevada or a less exciting area, he/she probably went into it for all the wrong reasons.

The manufacturing plants that moved to the South (nonunion states) had the right idea. I’ve noticed that most of my clients have small offices in big cities like NYC and LA but do the bulk of their business out of Texas or Washington State. Reason? Austin and Seattle are the two most educated cities in the U.S. One of two people has a four-year university degree, and Austin takes the lead in the highest population with masters degrees and PhDs. It would be easier to go where the biggest pools of talent exist.

All of these things are points to consider for the publishing industry, not only when considering its future but when looking at our shabby state of our country’s economics -- which is not going to change soon. It would very still be sad to see the industry leave New York. Will the industry make a smart business decision? I don’t know. I mean, I never thought I’d see the day where the music industry in L.A. would crumble, and yet it did. Had it already had a presence established anywhere else but one of the most cost-prohibitive cities in which to do business, it could have rallied.

Sheila Cull said...

Great review on this topic and you did it again.

It took a day to do? It's loaded with information.

Thanks for all you do Nathan Bransford.

Mira said...

Nathan, you write about the most interesting things! Albeit, controversial. And I have to admit, I was very judgemental about Publishing in New York, but you've changed my mind.

You're right. History, contact density, access to professional worker, it makes sense that publishers haven't moved.

I also just realized that after all those years of paying rent, not to mention billion dollar budgets, they probably own the buildings by now, anyway.

Besides, I really don't think that cost-cutting is the way for publishers to go right now anyway. They need to spend MORE money. They need to spend money on fostering author loyalty and strengthening their imprint. They also need to start thinking creatively. In the same way that we've been advising bookstores to diversify and think out of the box, I think publishers could benefit from doing the same thing.

Amy said...

I would like to see the major publishers spread throughout the country rather than all located in one city. I think their having a little more cultural/regional diversity would help them do a better job of selling books, collectively, to the entire nation.

Plus, I don't see publishing as a high-margin business. If it was high margin in the past, it won't be in the future. Low-margin businesses need to keep their overhead low.

re: talent, people go where the jobs are. I live in Seattle because a Seattle-area tech company offered me a job. Not all tech companies are located in Silicon Valley. Seattle is a major tech hub, as is Austin, TX. This is a good thing, if for no other reason than we wouldn't want our entire tech industry to be wiped out by an earthquake :)

Also, I'm told many publishing industry jobs don't pay very well. Doesn't that make the cost of living in New York a problem for some people?

Anonymous said...
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jjdebenedictis said...

My supervisor in grad school once said if you want to build a world-class research university, the one thing you must do is put everybody's offices in the same building.

Human beings spark ideas off one another and come up with better solutions than they could working alone.

This is why it's so important for writers to read widely--most of our work must be done alone, so reading is our way to spark ideas off one another.

Kristin Laughtin said...

It's important to note that most of these industries clustered in one location before the advent of electronic communication, which allows people on different continents to communicate almost instantaneously. The industry in New York probably has enough gravity to keep attracting people there, but it's not completely implausible that new companies could rise up elsewhere and help distribute the industry more geographically, especially given all the shake-ups lately.

Mandi Kang said...

Interesting points - I've never given a thought to why all the publishers are located in one place but it makes sense.

Missed Periods said...

I love New York so much. If my husband would agree to it, I'd pay a ton of money to live in a closet-sized studio in East Village. I can see why publishers would want to stay put.

Erin said...

This makes a lot of sense, but one reason publishers should consider migrating is that talent is also migrating. More and more urban intensification and reclaimed industrial space is happening in smaller, once-robust towns (such as my own, Winston-Salem, which is re-imagining itself a hub for the arts instead of the cradle of the tobacco industry).

Although saving on Manhattan rent may not ultimately be the difference between fiscal life and death, cost of living for employees is also startlingly lower outside major urban areas, most prominently in New York.

While I certainly don't want a trend of underpaying publishing employees, adjusting salaries commensurate with cost of living—when coupled with lower operating expenses—could certainly make a difference to a house's bottom line. And maybe plumbing other reservoirs of talent (particularly the kind of talent already focused on seeing new possibilities in established areas) might bring some fresh ideas to the industry.

Terin Tashi Miller said...

A very interesting and thought provoking post.

I live in the NYC area; I work in Manhattan. In fact, I work across the street from Simon & Schuster and down the street from MacMillan.

But I have yet to see any great personal benefit to living and working in the heart of the U.S. publishing industry (other than my "day job," which is journalism).

I have friends who have published with online-based publishers. I do not believe, with today's technology, publishers need either to be based or even clustered around famed haunts for "doing lunch" in Manhattan. I could theoretically be published by Espasa in Madrid as easily--thanks to the internet--as by Scribner's in Manhattan, or Wylie & Sons in Cincinatti. Or by McSweeney's out your way.

Many of the "better" agents were based in Manhattan at one time, for the very reasons you mentioned. And, because of the sense that pressure makes diamonds and competition makes sharper talent, many writers still live and work here.

But they don't have to. They choose to. Just as many celebrities choose to buy Manhattan apartments and price out those trying to make a living in "the City," so, too, do many not.

I have one friend, a reasonably famous and successful writer, who still mostly lives in Wisconsin. One who lives in Oregon. One in Baltimore. One where he's always lived, in Whitmore Lake, Michigan.

And at least one (really several, because I lived there for years as well) in Texas.

And there's you, in sunny California (where "Redroom.com," a writer's online community, is based).

It always has amused me that Joseph Pulitzer was really mostly known for the St. Louis Post-Dispatch, yet Columbia University, in NYC, is in charge of the Pulitzer Prizes.

And William Randolph Hearst is mostly known for San Simeon, out your way, than for the New York World (which no longer exists).

New York is reasonably unique as a melting pot of humanity, a particularly ambitious nd hardworking, creative and intelligent and, presumably largely well-educated sampling of humanity. It's true.

But locations attract people and industry, I think, more than the industries--in this day and age--necessarily attract people. That's exactly why, while New York still has Broadway, Los Angeles has Hollywood (even some television series', most notably All My Children, that were filmed in NY have moved to California).

So, real estate prices being what they are, I would not be at all surprised to find, say, a start-up upstart publishing house operated virtually out of someone's basement, garage or apartment, that one day will be the place people want to be associated with.

Publishing--I'm not, you'll note, talking literature here--is a business. A business based on economics. And if an "economy of scale" cannot be reached remaining in Manhattan, I expect it will move. Look at Amazon, for instance...or Google...you may not be. But they are.

Marilyn Peake said...

Nathan @8:03 AM said:
"But really, all of this kind of strikes me as kind of missing the forest from the trees. The marginal cost of renting Manhattan office space vs. Illinois office space is what, a couple million dollars? Ten million dollars? For a company that measures its revenue in the billions and profit in the hundreds of millions that ten million dollars is a relative drop in the bucket."

Huzzah!! Oh my word, in so many discussions about the state of the economy that includes recommendations about how people need to cut back, it always seems to me that the forest is being completely ignored. It’s like saying, Well, we want the rich to remain unbelievably rich, so everyone else needs to cut back to help them out. I’m not against people being rich. But Bertelsmann AG owns Random House, and last year Bertelsmann AG INCREASED its sales to $21.7 BILLION. So, considering that they increased their sales to $21.7 billion...which, with all the digits looks like this: $21,700,000,000.00...it really doesn’t make sense to say that Bertelsmann AG should take away the New York office space of the people toiling away in publishing in order to save $1 million or even $10 million. Plus, when entire industries actually do leave a city, the city usually ends up decimated – not a great thing for the people living there.

Ishta Mercurio said...

Good post, good discussion!

I hear what some people are saying about high rent and low profit margins, but I agree that when you start talking in terms of billions, saving a few million (and it would just be a few, not even a few hundred) really isn't much. I mean, would you move across town just to save $5 a day on transit fare? Or on gas? It doesn't make sense.

Also: I know a writer who sent 300 queries before she got a yes. But once she had that one yes, she had a contact, who she remembered. And then she met that same contact at a meeting later, and at the meetings she met more contacts, whom she remembered, and from then on all her book deals were basically brokered face-to-face. She developed relationships with people in publishing by going to conferences and workshops and meetings for writers and she knows what people want and she gets a lot of work. You cannot underestimate the power of face-to-face networking.

Anonymous said...

So some folks are clamoring about how large the sales are for publishing companies. But these same publishing companies with huge sales are struggling to turn a profit. That's right, even with a billion dollars in sales, some of these companies still run red from time to time.

http://www.publishersweekly.com/pw/by-topic/industry-news/financial-reporting/article/46591-scholastic-reports-higher-third-quarter-loss.html

And if you look at financial statements, the biggest expenses are usually salaries and facilities.

Because the major publishers are located in one of the most expensive to live in cities, then I'd also expect publishers to have high than average salaries, even though some of the staff can afford to work for free, and even though some of the staff will spend over an hour riding the train in from a cheaper, nearby city like NJ.

What this means is that these publishers have to charge more for eBooks like Nathan pointed out in an earlier blog post to make money.

Of course, these same publishers heavily depend on their authors. Check this out:

http://www.publishersweekly.com/pw/by-topic/industry-news/financial-reporting/article/46428-profits-fall-at-hachette.html

Anonymous said...

The new publishers are located in every little hamlet. All it takes for an author to be successful is writing talent, a computer (with MS Word), and partnerships with a good editor and cover designer. Even critique groups can be found online.

Virtual partnering changes everything, and lowers overhead significantly. How can NY compete with the business that runs out of a garage in Nebraska?

Look at all the indies in the top 100 bestsellers on Kindle store. They have extremely low overhead and high profit margins. How does the NY high-buck lunch crowd compete with that?

They can't. Publishing will operate on a more distributed model. Some NY publishers will survive, but their business model will look very different from what it is today.

Marilyn Peake said...

Anon @8:58 PM,

I’m not sure how you’re interpreting the financial figures in the articles you mentioned. Also, I’m not sure, but I don’t think that Scholastic’s one of the "Big Six" publishing houses. Here are the "Big Six" with information on the bigger corporations that own them: here.

The Publishers Weekly article said that profits fell from the previous year for the Hachette Book Group USA parent company Lagardere because the previous year they had "unprecedented sales" for the mega-best-seller Stephenie Meyer’s books. So, of course, sales later on wouldn’t be as high as during the unprecedented mega-best-selling period. Even then, their sales "dropped down" to 2.16 BILLION euros.

In regard to Scholastic, they still earned $1.37 BILLION revenue for a 9-month period, and expect to earn $1.9 BILLION revenue for the year: here.

Marilyn Peake said...

Anon @8:58 PM,

I’m not sure how you’re interpreting the financial figures in the articles you mentioned. Also, I’m not sure, but I don’t think that Scholastic’s one of the “Big Six” publishing houses. Here are the “Big Six” with information on the bigger corporations that own them: here.

The Publishers Weekly article said that profits fell from the previous year for the Hachette Book Group USA parent company Lagardere because the previous year they had “unprecedented sales” for the mega-best-seller Stephenie Meyer’s books. So, of course, sales later on wouldn’t be as high as during the unprecedented mega-best-selling period. Even then, their sales “dropped down” to 2.16 billion euros.

In regard to Scholastic, they still earned $1.37 BILLION revenue for a 9-month period, and expect to earn $1.9 BILLION revenue for the year: here.

Claude Nougat said...

Great post, Nathan, as always! It seems to boil down to the advantages of face-to-face networking vs. networking on the Internet. A little like the digital vs. the paper book controversy.

Since this is a "globalizing" age, with more and more information flying in the ether, it is likely that there will be a "spreading out" effect. Some publishers will move out of NYC, or at least move out some of their operations (the "worker-bees" of administration etc. Others will stay for the benefit of "density", "stimulation" from face-to-face interaction.

Conclusion? NYC will always remain a major publishing center, but others will rise - indeed, they have already risen in California and elsewhere!

Alwyn said...

I've never really thought about this issue because to me all publishers being in New York just always seemed to make sense. As an Art History Major I always just think of great industries clustering together and thriving (Publishing in NYC, Films in Hollywood etc.) as functionning on the same sort of logic/system that made Florence the Cradle of the Renaissance. It's incredibly difficult to pinpoint how most of these things start and is usually a weird serendipidous mix of the money, the talent and the demand being in the same place at the same time (We are the Medicis, we have power and palaces and churches. We need Artists to Decorate them. You! Giotto, come work for us). But once it has started its so easy for these things to build up and maintain themselves (Leonardo, Michelangelo, Raphael, and other artists who were sometimes but not always Ninja Turtles). This is not to say the industry can't spread and prosper elsewhere (Titian in Venice...) and sure it doesn't last forever (Give it a few centuries and Paris became the capitol of the Art world and then...well New York), but while it does it's just...natural.

Robin Brown Davis said...

Staying in NYC seems the lazy way out. But I admit I'm biased. I'm a 52 year old woman who drove to Manhattan last April from rural far west Texas (from Alpine, next to Marfa) to be part of Seth Godin's 1st leadership session, "Linchpin: Are You Indispensable?" I am the mother of two, and my husband's business partner, so of course I'm a linchpin!! I felt like every cabbie I passed in NYC had the same idea "Let's scare the crap out of the little lady with the Texas tags!" It worked, too!

http://jdavisstudio.com/2011/03/seth-godin-poke-the-box-linchpin-and-hows-that-for-seo-seth/

Dana Stabenow said...

Interesting post, Nathan, thank you, and I learned a lot from the various perspectives of the commenters. I do understand the theory of clustering (Banks all wind up on the same street and sometimes the same street corner of town, for example). However, the Internet has changed and will continue to change daily the way we work across the business spectrum, including where we live and work. The inability thus far of NYC publishing to recognize this and to react well to it in a real-time manner can be seen in every publisher's bottom line and every author's royalty statement. If they want to remain relevant in this world, they'd better hop to it, and that means re-examining some of their most cherished precepts. Like advances for Snooki, and Fifth Avenue rentals.

John Jack said...

Publishers are mostly in New York because that's where they first set up shop. The first firms were little more than copyright pirates crouching on trade routes waiting for hijacked products to come in from "literary agents" operating abroad.

New York was the closest port of call from European locales and coasting packet ships and centrally situated for postal roads between New England and North Atlantic colonies.

The book presses of the time were mostly in Connecticut, one or two situated here and there elsewhere. Connecticut predominated in that noble pasttime until further mass production advances came to the industry early 20th century.

In order to protect the major capital investments involved, the industry as a whole lobbied for rigorous copyright enforcement. Copyright laws until that time were largely given lip service, including in the Constitution.

Meghan Ward said...

I talked to a publishing house editor who recently moved to the Midwest from New York. He said he flies to New York and has power lunches with agents just as often as he did when he was in New York ("When I lived in New York, I could go a year without seeing someone," he said.) So maybe that will be a trend - agencies and publishing houses stay in New York but agents and editors telecommute.

Lance C. said...

At one time, New York was the center of everything in America. It used to be the major cargo port-of-entry; now Los Angeles and Long Beach have that distinction. It used to be the center of the movie industry until the moviemakers discovered Los Angeles was cheaper, had better weather and was 3000 miles away from Thomas Edison's goons. It used to have a stranglehold on advertising, which has now freed itself from Madison Avenue. NYC was the first U.S. capitol after independence. It was the main destination for immigrants (now Los Angeles).

All this goes to show that New York has no permanent claim on the publishing industry or, for that matter, any other industry.

We've all seen billion-dollar companies cut back on trivial expenses to make their quarterly numbers look good. (I worked for one that stopped buying office supplies for a year.) NYC rents and salaries are hardly trivial expenses. And while major corporations don't seem to give a damn how much they pay their executives, they grind every dime possible out of their lower-level supervisors and workers, both in salaries and amenities.

In a way, I'm astonished the publishing industry didn't start migrating out of NYC as soon as it was devoured by huge multinationals; the largest companies seem to also be the biggest tightwads.

The high-tech industry is scattered all over the country -- Silicon Valley, yes, but also Seattle, Portland, Austin, Boston, San Diego, and Raleigh-Durham. Big Pharma is the same way. Seattle thought Boeing could never move, but it did and seems to be doing okay. As others have pointed out here, there are film professionals making good livings in Vancouver, Toronto, Dallas, and various other places without ever having to go to Hollywood.

As some other posters have suggested, I wouldn't be at all surprised to see the vast majority of publishing-related workers hied out to the other 99% of the country (or outsourced to other English-speaking countries) while the executives keep their vestigial headquarters in NYC. It's happened with most other industries -- publishing ultimately can't be that different.

--E said...

Big Publishing may eventually migrate out of NYC, but consider what changes would be necessary to make it happen quickly:

I. Convince your staff that they want to pack up and live somewhere else. (And let's assume the company is willing to pay for their relocation.)
a. How many of them have spouses/lifepartners who cannot so easily relocate? Odds are very good that the partner is the bigger breadwinner.
b. Or children in school? (If you're putting kids through college, the CUNY local-resident tuition can't be beat.)

II. So a nontrivial percentage of your staff do not want to relocate. Do you:
a. Hire a bunch of unknowns in the new location, who will have to be trained, or
b. Continue to work with your old staff via Skype and other internet options?

II.b. is not as easy as you might think. More issues get resolved in any large office--not just publishing--by someone riding an elevator to see a colleague face-to-face in their office.

III. Publishing-specific, there are some things you just can't do over the internet:
a. Route hard proofs quickly (essential for anything done in color, which would apply to any book that has a cover)
b. Get a quick second or third opinion from colleagues
c. Process a whole lot of something efficiently at a big meeting (e.g. budget an entire month's list, have five cover conferences, etc.)

The reality is that while many jobs in publishing can be done remotely, it is more efficient and easier to do these things with everyone in the same building. I don't think a day has gone by in my 16 years in the biz where I don't get out of my office to bring something to a colleague for discussion. Sure, I could call or email, but it's just plain faster to do in person, and if there's one thing you don't have excess of in publishing, it's time.

------------

Related to this would be the issue of ongoing staffing. When a senior staff person quits, you want to replace them quickly, with a plug-n-play new hire. You don't want to say, "Is there anyone else here in Omaha who can do this?"; or worse, "Who can we convince to come out here to Omaha?"

No, you will say, "Hey, I know three people over at Harper/Random/Penguin who have been itching to move up. Let's get them in for interviews."

If you want to relocate the portions of the industry that are unique to Publishing, then you have to either dismantle a highly efficient personnel-management arrangement, or you have to recreate the existing situation in a different locale.

Anonymous said...

I’m an editor living and working in Colorado. I love living here. I love the laid-back vibe and outdoorsy culture. But when it comes to networking opportunities, it’s definitely a little painful. You really have to put yourself out there to meet other people in your field. There are some innovative companies here, but there are also some companies that are completely stagnant. With fewer opportunities to change jobs, it’s not uncommon for some people to stay at the same publishing house for their entire career doing the same thing day in and day out. It’s not easy to move up. I don’t plan on relocating to New York, but I totally and completely understand why so many people do.

Disgruntled Bear (Kate Kaynak) said...

It's much easier for small presses now. I'm an editor who lives in New Hampshire. Another lives in California, and a third lives in Massachusetts. We have authors all over the country, and even an intern in Ohio. We all work virtually. It saves a bundle on overhead, and we can all live where and how we like. I go to New York for meetings about a dozen times a year, but that's all I need to do, thanks to the interwebs. :)

Lance C. said...

I've seen a lot of posts pitting NYC against Omaha or North Dakota. But that's really a false choice. There are any number of major metropolitan areas in the U.S. that would be perfectly suitable homes for the headquarters of a publishing firm. This country isn't like that famous New Yorker cover map of the U.S., where everything west of the Hudson is an arid wasteland.

As far as staffing is concerned: most modern firms are perfectly able to hire people who don't live next door, even people with specialized skills. Perhaps *especially* people with specialized skills: two medical device companies have flown a friend of mine from Boston to Southern California for interviews in the past couple of weeks. The more senior the candidate, the more likely the firm will court him/her wherever he/she happens to be. The lower-level employees move themselves if they can.

Would people move with the firm? Well, people do that regularly when their employer ups stakes and moves. Yes, a few of them stay behind. A firm moving from Manhattan to Queens would probably lose a few people in transit, too.

Isn't it possible, though, that some number of employees would welcome the move? Unless you're in the top 10% of wage earners, your quality of life in New York City can be pretty grim. Even as expensive as Los Angeles or San Francisco are, they're cheap compared to NYC. There are world-class museums in Chicago and L.A. and acclaimed theater scenes in Minneapolis and Seattle -- and you can afford to enjoy them without a second mortgage.

The Big 3 automakers thought they had to be in Detroit for critical mass. Aerospace thought it had to be in Southern California for critical mass. That's over now. Someday it will be publishing's turn.

Anonymous said...

NYC for everything publishing breeds a pack mentality, an echo chamber. If you want to see and hear the same people, the same editors, and hire the same talent from the same old snob places, then stay in NYC.

Publishing deserves a diversity of voices, and for that reason alone it should embrace a more distributed model.

daretoeatapeach said...

I work in Berkeley and there are plenty of networking opportunities. I also don't think the reasons highlighted in the article are particularly striking. Full-color covers are not as limiting as many consumer goods, like say calculators or quilts. We have made cover decisions before based on the digital images the designers sent over. It's not that big a deal.
It is also not that difficult to train new staff. Sure, it takes longer, but you get them cheaper and in this industry there's a line waiting to get in. You can also hire people with editorial experience who've worked outside of publishing: there's still advertising, PR, design--basically any company that produces copy will need editors.
I've been told that NY publishers think they're the whole world and posts like this sadly confirm that stereotype. We have NYC transplants and I always ask them how it is different. Haven't had a meaningful response yet.

Anonymous said...

The same type of people who are normally writers/artists/or into the humanities in general are the same type of people who appreciate all of the other creative industries and lifestyle that NYC brings... It is not wonder it has stayed in NYC...
Sure, other places you can find work, but would you go "looking" for work there? It's much easier long term for somebody in that career to be in NYC as their job is going to change multiple times most likely and they can just hop from one gig to another. This is the same way IT consultants do in say, Silicon Valley. They also want to be around the best and the brightest. I'd rather live say, in Chicago or Boston myself... but, the industry and connections in NYC in this field and related ones are just too much to reckon with, especially for somebody that nothing is keeping them from staying where they currently are. Just move to NYC like everybody else. I've lived in other major metros, and it is just not the same. A simple look in something like writers market or on job boards or company holdings will quantify any doubt you might have.
Until you become an author who has contacts or can work independently, you still have to pay the bills. Working in a related industry is better for your talent to be writing or editing every day, than it is to say take an insurance job in Chicago or a tech job in Silicon Valley then try to write at night.

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