We just acquired a company which is a new group within hachette. Perseus is a great group of publishing nonfiction for all kinds of readers. Was the importance of having all these different inputs . Why not go all your books hachette . The wonderful thing about publishing is successful publishing is done out of creative teams that have the kind of focus on the kind of book we are doing. A way of publishing. You a notice throughout times the Publishing Companies that have two peoples names together, little and brown, the harper brothers for a long time. Publishing is a collective activity. So you want to group that are focused about individual titles. One brand across all those books would lose it into the object of each of those publishing imprints as to the different personalities, different books they love, giveaways to bring them into the world and you want to have that branding not because of consumers care so much. Nobody is looking a at a spine d see if the basic book necessarily, but the people in between the publisher and the reader, all the tv reviewers, bloggers, librarians, booksellers, they know those brands. They know the Publishing Group and another person of the enemy something to those people when a book comes in. You attend these different groups because of thi of his fof energy that really works. Publishing as a persontoperson, just a greeting. When you have read the book of love, you want to tell somebody about it. Are pushing is the impulse. How long has hachette been around . Hachette has been in the u. S. For 10 years but its a favorite old publisher. Its the Third Largest in the world. In france it goes back to the 1820s. They had a plan to expand internationally from france because the ceo said that the books are sold all over the world were often published in english or spanish. So we acquired company in the uk, the u. S. , spain and they acquired the Time Warner Book Group 10 years ago. You are headquartered in new york speak with yes. As all major publishers are. We want to know why . Go ahead. We have to think about this because recently we moved offices, we could be anywhere in three. What all the big publishers in new york . I read histories about it. The reason the biggest publishers were in new york historically is because of the elite cannot the biggest we publishers in boston, philadelphia, new york, about the same size, the cities are about the same size. With the erie canal was completed, the cost was so mature that was profitable to them, they could make more money to authors, and it became the place office came if it wanted a full National Publication thats why publishers used to be in your. The erie canal does not drive our business anywhere. I realized what i thought where we need to be was publishers are in new york because of marketing opportunities, because media. Publishers first job is to get published. To get your books noticed is the first job. You get your books noticed through your relationship with radio, tv come online companies, all the Media Companies. All the Media Companies are in new york. A personal relationship is the lifeblood of the business and thats why publishers are in new york. How much of your business comes from International Sales . Our business in the u. S. Is about 10 international. I would like it to be more. Its a growing percentage because american entertainment products are just getting bigger and bigger around the world. And because of the ease of selling thanks to digitization, ebooks can be sold and bought in many countries around the world. How did you get into this business. I get into Book Publishing basically because im a publisher. Was kids know as having his note in the book are and love talk about books, loved writing book reports for of all kinds of nonfiction. I was part of a big family and my third is i found privacy and books that i was one of seven kids and privacy was in short supply but i could disappear into book and have my own world. Went to college thinking i was going to become a lawyer and ended up majoring in english is to because i wanted to read and think and talk about books. Which i thought about what i do for a living after i finish college, i heard of this thing called the publishing. Looked around and found internship at a small Publishing Company in boston. I walked in the door and just literally never looked back from the first minute of being inside a set of rooms are people were reading manuscripts, think about books they should acquire kambiz relationship with author, publicizing, packaging, design and everything that goes into it. The pleasure thinking about how to take a book on whats inside a book and the incarnate it in physical form, not in digital form a committee gadgets out in the world i just find completely compelling, totally what i want to be doing all this time. Publishing is full of people like that. People really want to think about whats inside the book and how they can get that out in the world. What was your first job . My first job was dog spotting which means you do whatever we tell you to do. It was exciting because it is a small place that gave me the opportunity to do everything. I was a sales rep in the midwest for a few weeks. I was working with a designer and cutting and pasting tight. I was working with the finance got everything in voices. Of the best part was when i spot him to the office, i was brought into a library and in this labyrinth of the shelf and on the shelf with a stack of manuscripts in boxes. The way the used to coming. I got to take on as many of those boxes as one can open them up and read it and see what was inside. Come back and see what do you think was should rethink about publishing this book . Is this something people would pay money to read . Thats the essential question. So the first job i got to see a piece of everything and i got to see the thrill of teamwork and who is a great way to begin because you get to see all the pieces. That addition has served me really, really well. Having how has your career advance . I came to new york, thats where the publishers were. All the major publishers were in new york and i came to new york. I was then Editorial Assistant at a got to work on the books my boss brought in. So i got to begin doing the work of an assistant which includes always reading and reading. One of the i became editor and add the enormous pleasure of working on a hemingway but the theres an enormous opportunity. I get to edit a posthumous book about hemingways, a memoir which have never been published. The thrill was the odd describing. Is a great place to begin, begin acquiring books. And to be an acquiring editor is manager of entrustewith a companies money. Your job is to read things and say to people, i think we should entrust them a investing in book because i believe we can make money on it for these reasons. That was when my first experts as an investor. A great risk to talk on the kid and a great responsibility. What was a smart decision you made as an acquiring editor and what was not a smart decision you made as an acquiring editor . A smart decision as an acquiring editor, there have been, im happy to say, there have been a lot of them. I would say working with James Patterson. I became his editor at one point and i guess i cant take credit because he was already being published by little, brown when i became his editor. Working with James Patterson has been one of best lessons ive ever had but the i cant take ct as an acquiring editor. I would say persuaded my boss to invest in David Foster Wallace novel infinite jest was a great investment spewing you have to persuade . It was a partial novel, 150 pages of a book that would be unspecified length but nor would be very long. It was challenging work. Its hard to see what the big story is going to be. His previous books i, the reasoi was offered but because his previous book was a story collection which i believe had sold fewer than 2000 copies. I was able to get support by the readers and house, i was a wreck before and what this promised, and to get a little brown to support the acquisition of infinite jest. Is give me some of the longest term rewards in terms of the way the book has affected peoples lives and how much alive it is still in our culture. Is an acquiring editor somebody come is it different than being the editor who marks up the transcript, manuscript . A difference between an acquiring editor and a light editor is usually not large for almost all acquiring editors are also editing the book that way. Some acquire so many books they do and turn some of them over to an editor who partners with them. But i do not any editors who just acquire it and give it to someone else to edit. Its usually a path, having been a line editor and that is thrilling, intimate and aboard to the organization because what the writer is doing is they are trusting of advice. Plus they listen to your advice. They dont have to take a. No words can be changed without the authors approval but the editor is someone who makes suggestions. Sometimes that is a very, very small change. Sometimes its full some, or just very small things and sometimes virtually thinking about the trajectory of a book, plot lines that are not making sense the way a Nonfiction Book opens with the way the store is like a. Sometimes its really big in a big, intimate Close Partnership with the range is enormous and each book is distinct but that work is kind of the glue of the relationship between the publisher and the writer. How have not worked serve you as ceo today speak with the work of having been an editor, i believe, has served me very well as ceo because i worked directly with writers as anyone in the publishing writing does. So the editing job, the editor is kind of a Business Manager as well. Your job is to recommend investments that oversee those investments in the way the book is brought into the world to work with your marketers, packages, design, publicist on the method, timing. Theyre doing all those things welcome to all that is a foundation for becoming a ceo because the unit of commerce is a single book and how it is brought into the world. As an editor i have done that. Working actively with authors and their agents as a better acquiring come you didnt understand of the financial aspect of the relationship in their lives and how it feels to them, and to have a ceo who really understand how authors feel about the relationship and how important the author is to our enterprise i think is a great strength. I continue to edit a couple books for you. I love intimate work with the author. I love writers can another books and and i wouldnt give up the pleasure. If you are still doing that, who are some of the author choose to work with . Ive only been doing this, ive been ceo for three years. So inaccurate ive been doing editing about three books a year. Last year ive worked with stacy schiff. That was an enormous pleasure i worked with peter brown on his ardor for sam phillips, the founder of sun records. Im not going to get someone else the pleasure of working with this brilliant writers. And i worked with James Patterson. I love keeping a connection with James Patterson on the page level in addition to on the business level. So michael pietsch, James Patterson has become quite an industry, quite a force in the publishing world in other ways. Have you been part of that . Ive been working with James Patterson since going on 20 years. I started working with him as an editor and you still polishing one book to you. Estimate that i became his editor at the time he became up with the idea of publishing he finished with a time aside to publishing is one book a year, same month, serious packaging, bestsellers, works. It did work. He came up with this idea, and i to say that the executives at the time, whoever saw the company, just said thats crazy talk. This works. Why would we do that . Thats too soon. That would be wrong. This is whats working. Why would we mess with that . And jim said, michael, when you finish a novel and really love it, keep it down and said great, i really want to wait a year for the next book with i had to say no. They said dont you think we should try that . We were able to persuade the executives of the company that we should try. Of course, the second book sold more than first that animates and. He looks at the reader first, not at the business side and what the reader wants. He builds from the. So working with the jim as a writer and seeing how well it works has been the greatest education for me. Also sings understand of what readers respond to. And his understand of the business. He has a brilliant mind for how organizations were, how retail works. He was the chairman before he became a fulltime writer but he knows a lot about marketing. He approaches it from a readers point of view. He pioneered this idea of doing the one book a year which is way of publishing five hardcovers for adults every year. They are all great. He worked with coauthors. These are his ideas, a his outlines any works within certain bring his ideas. Hes built an incredible series of childrens books. Creating the next generation of readers. He has a new idea that we are launching next june which you can comes out of the reader. He as a reader has sent a looking at how busy i dont allies are contagious and a lot of readers books are too long. They know they like books but theyre just a long. He came up with the idea of tracking all of the thrills of one of his thrills in a short novel that is only 140 pages that you can finish in one night to all those thrills than half the time. These are paperbacks that are only 4. 99, new stories, to a month thrillers and one romance a month. So they dont miss a stock of books. They will be in book section and checkoucheck out lines and othes to get people to say chance patterson, 4. 99, and get the pleasure of reading back in their lives again. Michael pietsch, so far in your career we havent found the financing of the ceo. Where does that come in . The finance side of the ceo comes in as an editor. If you really care about being successful as an editor he got to understand that this is a business. If you are recommending books that dont make money, you want to know why and how you can make money. So from the first the i walked through the door i was always look at every piece of Financial Statement i could get. You want to do right by your writers. You understand the business. You do well by the people who employ you by doing well for the visit if you are not profitable you dont need to be employed as an editor so you got to make sure you understand you know, managing projects and then after some number of years i was promoted from an editor at scribners. I moved to brown, became editor of chief we are responsible for managing a group of people, and as a publisher youre responsible for the p l of the publishing division. That means you got to give every detail, paper cost, jacket off, advances, publicity costs, where youre spending money on marketing that everything that goes into making as successful publication. So overseeing it is a good step towards running the p l of the entire company because it is an aggregation. Is hachette a private company . Hachette is a publicly traded company in france that is controlled by a family. The Parent Company is a mixed Media Company that has television, radio, travel retailers, Book Publishing and magazine publishing and some other businesses. To whom do you report . The global ceo who is a brilliant, brilliant strategist, statistician and financial mine who understands the full range of what goes into publishing successfully. When i first entered this job, i asked him, we got to talking together, from years of publishing in france and england and spain, what of the universal lessons that apply everywhere . What if you learned . He said there are no universal lessons. Every country has its own publishing economics. Publishing focused on its own point of mark and i would never buy a company as they do at this liquor i tried a couple times to say theres a book successful in one country, publisher do. It doesnt work. You cant have some who believes in it and can put their heart behind and the idea behind and really invest themselves in a. So do you speak any french . I think just enough french to get myself into trouble. I get asked a question but i cant understand it because they talk much too fast for me. Im not helpful to the. Our Board Meetings are conducted in english. Michael pietsch, we have a staff meeting in the United States with hachette, who was around the table . We have a monthly Board Meeting, and the board is composed of all the publishers of all seven divisions. And the heads of each of the major function, chief financial officer, chief operating officer, chief counsel, our head of h. R. , marketing director, communications director. Im probably leaving some out and i apologize in advance by people who run all the major functions are there. At that Board Meeting would talk about how were doing in the budget for the year, i can strategic initiatives, whats happened with publishing, direct sales. Very important. Is Book Publishing a modern business . Book publishing is a 19th century business thats changed more in the last 10 years than did the 100 just before. It is not a leading edge modern business because the experience of reading is an ancient and really unchanged experience. Because reading a book is like a 12, 15 our experience, its a deeply emotional experiences that takes time and books are portable but they they were invented. So my theory is i could turn around and say books are incredible in modern invention because the rest of the media are just catching up with books. Whats happened with digitization is that movies, tv come all these other forms of music you had to be in one place before, there were portable. Digitization at all that part of those businesses were radically transform because it came more like books. So books i should say are pretty modern. We have fully modernized in digitizing every book we have and making books available to every kind of reader for every kind of format. When i see as a 19th century business, the basic Financial Relationships between author, publisher, retailer are not much changed. Because of the business literally hundreds of thousands of product. A number of books published each year is gigantic are all these individual projects, each needing individual attention. The focus of that, apart a lot of books, developing, marketing, trying to get them out to the millions of readers to bookstores around the country, that really hasnt changed much. Digitization changed wonderfully and that anybody can buy the book the second to think of it. They dont have to go to bookstore if you dont want to. You can have it in your ipad the next minute. It is instantaneous in the way but that instantaneous expenses to unchanged a part of the reef like books have not changed much in the past decade as these other Media Industries i talked about, because the experience of reading a book, people really like the physical incarnation of the book. Its a souvenir of the journey took him to his the book. The reading experience is different than the screen. You absorb it better, you retain it better. Its taken 20 of the business but 80 of our revenue is still print and has leveled off completely. Ebooks grew rapidly over soviet but they hit a peak into been declining for the major trade publisher and print sales have been growing the independent retailers have been growing. Independent booksellers have been thrive and grow. At the sight of a really healthy deep root of her interest. Those independent booksellers who are the first readers, people spread ideas through community. They are thriving. To me thats a great part of our business. Has the digital revolution been painful . Has it been a disruptor . It has been a disruptor. Of course, i would not say its not nearly as disruptive as it has been in magazines, movies, television, music. Those businesses were much more radically transformed. We have been transformed. Digitization, the rise of has led to conglomeration. Publishers have had to get bigger to spread across a large base because the cost of getting to market has grown. Because of the concentration of the retail power into two really big retailers. They have a lot of clout. The audience has grown a lot. Thats why you never see perseus part of hachette books. The digital transmission is by giving some of conglomeration you are saying but its not a radical transmission like using in many other areas. 2016, the health of the Publishing Industry speak with the health is very strong. Publishing has a very stable foundation. Because the demand for books is timeless, enormous. Our biggest challenge is the quality of entertainment thats on the device. Youve got a device to put your games on and social media is on there. A number of Different Things competing for peoples time in the same channels, digitally speaking, thats a big challenge and we have to make sure that books remain, stand out even more compelling than the do. We have to sharpen the messaging antithink we have to come up with a new format. Today get finished of the dna of games. The amount of narrative in games is expanding i think theres a place where games and books can meet a new kind of books which will be really exciting. Its the foundation of publishing, reading, writing, really, really strong spent where do you spend to shut what do you spend the majority eithef your day doing . Spend the majority of my day . Thats always a tough question because each day is different. I spent the budget of my time working with the publishers on publishing their books. On what books were acquired and how were bringing them into the world. Maybe have my time goes there and the rest of my time thinking about strategy in the future and organization of the company, finances and all those things you need to think about to run a healthy country. The core of the business is publishing and i spent as much of my time there as i possibly can. I love it and its fun. Give us a sense, and i dont not do this, how many books did hachette so last year, or what is your revenues or how many employees . Of us a sense of how big. I did a sense of scale. To are five publishers in new york got a pretty big. Penguin random house harpercollins, third biggest the Simon Schuster followed by hachette and mcmillan, the five biggest. Hachette and mcmillan and Simon Schuster all pretty close to the same size can within 100 million of revenue of each other. Arbor college is right three times as big as hachette, and Penguin Random house five to six times as big as we are. One gigantic, two really Big Companies and then three that are about the same size. A unique feature of hachette is that among the big five can we are by far the smallest title count, but olympic even after quare perseus, we are still smallest by a substantial number the next biggest to the very big is our mcmillan and fleetwood ran. The reason i like it is i think it seeks attention to the writer. We are being selected and making sure we have time to partner with the writer, editing on the marketing come on communicating, the whole experience of the partnership. We think that is something that is unique strength of ours that we want to keep it that way. As a publicly traded company what are your revenues . Our revenues were 600 billion in 2015. We just acquired perseus, which is a 50 increase the revenues
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