Chip MacGregor

April 27, 2008

Mike Hyatt goes for broke…


What a week for Mike Hyatt, the Prez at Thomas Nelson Publishers. Early last week he announced that TN would pull out of ICRS (the big CBA book show) in Orlando this July. Then he announced that TN would also pull out of BEA (the big ABA book show for the general market). A day later, he let people know that TN was cutting 10% of its workforce. And in his blog the next day, he dropped his biggest bombshell: that TN was releasing too many under-performing books, and they planned to "eliminate a significant portion of our workload" by significantly cutting their list.

Wow. That is one lousy week.

Or maybe it turns out to be a great week — who knows? It’s got to be tough to face all these problems, and even tougher to blog about them. Mr. Hyatt keeps a blog (, in which he reveals some of his thinking. It can be an interesting read, and kudos to the guy for being willing to share some of his thinking. He’s got to be the highest-ranking person in all of publishing to offer thoughts in that format, and he took some hits for doing so — some people posted very personal attacks on the guy.

Um… Look, let me get this out right at the start: Mike and I are acquaintances, not friends. He is always very pleasant to me, but we’re not hanging out together in Nashville or going to get a drink with one another at CBA. I don’t feel sorry for him — when he signed on to be the Boss, he had to know he’d face some tough decisions. You figure they pay him the big bucks to make these types of tough decisions. But I gained a huge measure of respect for the way he handled this. I was a publisher once (though not in a position of authority like he is), and sometimes you’re asked to look at the future and make difficult decisions. Deciding to cut people or trim books isn’t easy, but I don’t see any other publisher taking the time to post some of his or her thinking on a personal web site, so that authors and agents can review it and comment on it. And, in retrospect, each of these four decisions have big repurcussions, and each may be necessary…

DUMPING ICRS: This announcement had to send shock waves through the guys running CBA — the largest Christian book publisher has just decided to pull the plug. This is something I’m on record as having predicted the past two years (go ahead — look it up). I just keep wondering if the show is cost-effective. The CBA convention is expensive, it doesn’t lead to much book ordering for a publisher any more, and in fact it’s not really a "book" show  — it’s more of a jewelry/art/t-shirt/choir-robe/Christian crap show (see my blog last year about finding "faith filled footwear," "gospel golfballs," and "armor of God pajamas"). At least at BEA you still get to hang out with BOOK people… whereas at ICRS you’re surrounded by 19-year-old music publicists, their 44-year-old-manager-with-a-ponytail, and people pushing gospel ties. The Christian book publishers are tired of it, and are ready to create their own book show that will focus on just books. (A couple publsihers have noted to me that for all the wailing CBA bookstores do about profits being down, they seem unwilling to recognize that their businesses took a downturn when they stopped focusing on books and started selling Thomas Kinkade art and Precious Moments statuettes. We’re a culture that appreciates speciality stores, and too many CBA member stores are now nothing more than Jesus Junk Shoppes.)

So the guys at CBA immediately issued a statement, claiming that the Thomas Nelson booth space was already rented out to somebody else, and that they were moving ahead, and that all was right with the world… don’t believe it. There were more Christian books created and sold last year than ever before. We live in the Golden Age of Christian books, with incredible quantity and excellent quality. And yet CBA is shrinking. Don’t blame that on consumers, and don’t place the blame on all those publishers who are producing good books. If CBA is shrinking, it’s because the organization and its members need to change and become part of the success story that is Christian publishing. My guess is that Thomas Nelson was spending about a quarter of a million dollars on ICRS, once you factor in travel and housing for all their staff and authors. Instead, they can send a small team to Orlando to meet with their authors and key accounts in a nearby hotel suite for one-tenth of that cost. Not only is it cheaper, they won’t have to put up with the nutty side of ICRS. They can even use some of that money to send sales reps to more independent CBA stores if they want. But I think this makes perfect sense, and I think you’re going to see other publishers follow suit.

In reality, I think this spells the beginning of the end for the ICRS convention. The winter show is already dead. I think the publishers will begin to focus more on BEA, where the major accounts are already attending. Or maybe we’ll see more publisher-specific events (Thomas Nelson just hosted an event for their best customers, flying them all to Nashville for a "Nelson-only" party, to rub shoulders with authors and find out what the new products are going to be.) Having been attending for 20 years, I’ll miss the atmosphere of the old CBA conventions… but I completely understand why Mr. Hyatt has chosen this path.

LEAVING BEA: This was probably done for the same reason — it’s a chance to save money. But over time it wouldn’t surprise me to see TN back at Book Expo America. It’s a true BOOK show, and my guess is that they’ll soon be doing a better job of integrating all the religious publishers. It’s also possible the Christian publishers will create their own trade show, going back to the roots of the early CBA events, where the focus was on books and authors and meeting bookstore owners… but the industry and culture have changed. Books sales are now dominated by Barnes & Noble and Borders, the sales at Amazon top the total sales of all the independent bookstores, and among Christian publishes it’s pretty well known that if you don’t have the support of Family Stores, you probably aren’t going to succeed in the Christian market anyway. So this decision of Mr. Hyatt is more of a surprise.

AXING STAFF: This one hurts. Again, I don’t know Mike well, but he’s got to be lying awake nights with this decision. Still, Thomas Nelson is the sixth largest publisher in America (I think I’ve got that correct), and they’ve had some growth recently in an industry that has been, overall, quite flat. I think this was the most controversial step — if you’re seeing growth, why cut jobs? But over time, growth causes you to put on some fat, and occasionally you have to trim the excess. I understand they cut most of the folks who had been with the old Rutledge Hill imprint (cookbooks, country music types, and Jeff Foxworthy humor titles), some sales staff, some support people… as I said, it can’t be easy. But if you’re going to trim the list of titles, you’ve got to trim the number of people working on titles.

CUTTING THE LIST: This is the one decision that has stirred up the most controversy. Last year TN produced 700 titles. Mr. Hyatt mentioned that 23% of them (about 160 titles) provided 90% of the company income. Or, to look at it another way, they produced more than 500 titles that, cumulatively, generated only 10% of the company income. Ouch. So they’re going to trim the list. Makes sense. I think some people have over-reacted to this, thinking that TN is about to cancel a couple hundred book contracts… but that’s not what he said (at least that’s not how I read it). I think a better reading is to suggest that they plan to cancel some smaller books, put some non-performing titles out of print, and take a closer look at the projections of new titles.

Here’s what’s scary about all this: Mr. Hyatt notes that he wants the company to focus on titles that "are typically written by known authors or from authors who at least have media platforms …"  Authors and agents are worried that means there will be more of a focus on celebrity, and fewer chances for new authors to be discovered and break out. A publisher is always looking for that next great voice — the author who will come from nowhere and begin selling well. Publishing is full of stories like that — in fact, their biggest fiction author, Ted Dekker, was an unpublished wannabe when TN did his first book. So here’s a hope that "the platform question" won’t always keep them from publishing great writing on a salable idea, even if the author is unknown.

This is too long already — there’s more to say, but I’ll leave it at this: Mike Hyatt had one really bad week. But I have to tell you, I think he’s done exactly the right things. The industry is changing, and here’s a perfect example of how things are changing.

I welcome your comments and questions…

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