John Sargent on the Whole Damn Thing

During the Wednesday morning plenary session that kicked off this year’s “Bookselling Today & ABA Education” track at BookExpo America, Macmillan CEO John Sargent discussed recent events within the book industry, challenges that threaten it, and his ultimate hope for the future with outgoing ABA President Becky Anderson of Anderson’s Bookshops in Naperville, Illinois.

The session’s title, “Publishing, Bookselling, and the Whole Damn Thing,” was intentionally provocative, said ABA CEO Oren Teicher, “but it really underscores how, in this incredibly rapidly changing world in which we live, all segments of this business are becoming ever more interdependent.”

Teicher introduced Sargent as a “forceful and vigorous ally” in the continuing fight to level the playing field for booksellers, and he expressed his thanks for the many key decisions Sargent has made –– most notably, Macmillan’s fight on behalf of the agency model.

Teicher introduced Becky Anderson as a fifth generation bookseller “whose commitment to independent bookselling knows no bounds.” Anderson has championed the localism movement, said Teicher, and “has a really clear vision about what it is that makes independent booksellers successful.”

In response to Anderson’s first question, Sargent explained that he decided to speak now on the many issues affecting the book industry because booksellers, authors, and agents are Macmillan’s partners in business, and “we owe it to the community at large to discuss these things.”

Sargent added that while the law is specific in what cannot be discussed –– like pricing and business models –– there are still many things that can and should be talked about, and “it is dangerous for us as an industry if everybody in the industry lives under sort of a pall of the Department of Justice.

“The DOJ is very aggressive and they’re good at intimidating,” he said. “And we need not to be intimidated as an industry.” Regarding the values of the industry, Sargent noted, “This is an industry [over the years] that is based on freedom of speech. Booksellers have stood up over and over again for generations to defend that…. So we can’t be in a position where we sort of question ourselves on that. We have to be strong, and we cannot be intimidated.”

When Anderson asked Sargent if he could tell booksellers about some of Macmillan’s plans for creating new business models, Sargent said that he could not, noting that he will be testifying in the Department of Justice’s case against Apple the week of June 3 and that he had to be “careful” in responding to some questions. Still, Sargent candidly described the actions of DOJ as “incredibly myopic” and characterized its decision-makers as “incompetent,” as they chose “to carry Amazon’s water in this case,” thereby discouraging new entrants to the market while protecting the one retailer with more than 90 percent market share.

However, Sargent said that he remains hopeful in regards to the future of the industry. In contrast to the music industry, where “no one went back” after the newest format was adopted, Sargent said, “in the publishing world, people are moving back and forth between the formats,” noting that, in the end, “the consumer was always going to vote — the consumer was going to decide how [they] want to read.”

Sargent said that it’s difficult to distinguish the level at which e-books will grow, because “the pace of innovation is exhausting.” However, he suggested that the industry has reached a plateau –– e-book growth has been relatively static when looking at the number of new devices on the market. “Retail booksellers are superb at adapting,” he said, “but what you need is some time to adjust, to figure out the right square footage, the right product mix.” In order to give booksellers this time, there needs to be a more gradual curve, he said.

Regardless of new business models, channels of distribution, and the plethora of formats available to readers, Sargent said, “At the end of the day, what people want is book-length works that tell a good story with a great narrative. That hasn’t changed.”

Asked about the subject of self-publishing, Sargent said that, while he has a lot of respect for the “democratic empowerment” that it bestows on authors, the role of the publisher remains integral. It is an instinctual skill to recognize talent and generate word of mouth, he said. “I think people forget that this is a human business.”

Speaking on the power of the localism movement, Sargent said that consumers are beginning to realize the value of the local bookshop within a community. Macmillan has always realized their value, he said, especially when it comes to generating word of mouth and introducing new authors to consumers. “So [independent bookstores] are always in our mind and the great value you bring is always in our mind.”

Noting that independent booksellers have been very actively working for passage of the Marketplace Fairness Act, Anderson asked Sargent what he thought publishers could do to support their efforts to get the bill passed the House of Representatives. “The only effective mechanism the publishing industry has for lobbying is the Association of American Publishers,” Sargent said, suggesting that booksellers reach out to AAP to inform their lobbyists about the fight and get them engaged.

When asked what booksellers can do to be braver and bolder in defending a fair marketplace, Sargent said there is room for more activism. “You have tremendous political power,” he said. “Your representatives in Congress really care about small retailers in their states.” Additionally, it is critically important, said Sargent, that booksellers keep doing what they have been doing in adapting to changes, creating deeper roots in the community, and “making sure people love having a bookstore in their town.”