As demand for books skyrocketed, the publishing industry morphed to satisfy it. Companies that participated in this industry, often called publishing houses, were initially small and focused on offering the works of quality authors. Over time, major corporations with ties to international media conglomerates snapped up these companies. However, regardless of what subject matter they focus on or who owns them, publishing houses are structured in similar ways to carry out the process of attracting authors, developing manuscripts, and marketing published books.

Early Publishing Houses

The modern book industry in the United States developed gradually in the 1800s with the formation of “prestigious” publishing houses: companies that identified and produced the works of respected writers.⁷ The oldest American houses include J. B. Lippincott (1792); Harper & Bros. (1817), which became Harper & Row in 1962 and HarperCollins in 1990; Houghton Mifflin (1832); Little, Brown (1837); G. P. Putnam (1838); Scribner’s (1842); E. P. Dutton (1852); Rand McNally (1856); and Macmillan (1869).

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Between 1880 and 1920, as more people moved from rural areas to cities and learned to read, Americans became interested in reading all kinds of books—novels, historical accounts, reference materials, instructional resources. This caught the attention of entrepreneurs eager to profit by satisfying this demand. A savvy breed of publishing house—those focused on marketing—was born. These firms included Doubleday & McClure Company (1897), McGraw-Hill Book Company (1909), Prentice Hall (1913), Alfred A. Knopf (1915), Simon & Schuster (1924), and Random House (1925).

The Conglomerates

Book publishing sputtered from the 1910s into the 1940s, as the two world wars and the Great Depression turned Americans’ attention away from books. But as the U.S. economy recovered during the 1950s and 1960s, the industry bounced back. Major corporations and international media conglomerates began acquiring the smaller houses to expand their markets and take advantage of the synergy (the promotion and sale of different versions of a media product across the various subsidiaries of a conglomerate) between books and other media types.

Nowadays book publishing is dominated by a handful of these giants. Penguin Random House (jointly owned since 2013 by Bertelsmann and Pearson), Simon & Schuster (owned by CBS), Hachette (owned by Lagardère, based in France), HarperCollins (owned by News Corp.), and Macmillan (owned by German-based Holtzbrinck) are the five largest publishers of trade books (popular general-audience books) in the United States.

Looking globally and at all kinds of publishing (see Table 2.2), the top five book publishers in terms of revenue are Pearson (textbooks, educational materials), Reed Elsevier (professional books), Thomson Reuters (professional books), Wolters Kluwer (professional books), and Random House (Bertelsmann) (trade books).

The consolidation of the book industry has raised concerns among observers who mourn the loss of the older houses’ distinctive styles and their associations with renowned literary figures, like Mark Twain and Nathaniel Hawthorne. Moreover, the large corporations that now define the industry’s direction have huge marketing budgets and can buy needed resources (such as paper, printing, and binding services) at a discount and thus charge less for their product. Few independent publishers have been able to compete against them.

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Data from: “The World’s 56 Largest Book Publishers, 2014,” June 27, 2014, http://www.publishersweekly.com/pw/by-topic/industry-news/financial-reporting/article/63004-the-world-s-56-largest-book-publishers-2014.htmlNote: Cengage emerged from bankruptcy in 2014. Its ranking is based on 2012 revenue.

The Structure of Publishing Houses

Regardless of their size or the types of books they publish, publishing houses are structured similarly. For example, they have teams or divisions responsible for acquisitions and manuscript development; copyediting, design, and production; marketing and sales; and administration. And unlike daily newspapers but similar to magazines, most publishing houses pay independent printers to produce their books.

The majority of publishers employ acquisitions editors to seek out authors and offer them contracts to publish specific titles. For fiction, this might mean discovering talented writers through book agents or reading unsolicited manuscripts. For nonfiction, editors might examine unsolicited manuscripts and letters of inquiry or match a known writer to a project (such as a celebrity biography). Acquisitions editors also handle subsidiary rights for an author—that is, selling the rights to a book for use in other media, such as a mass market paperback, or as the basis for a screenplay.

After a contract is signed, the acquisitions editor may turn the book over to a developmental editor, who helps the author draft and revise the manuscript by providing his or her own feedback and soliciting advice from reviewers. If a book is to contain illustrations, editors work with photo researchers to select photographs or find artists to produce the needed drawings or other graphics. At this point, the production staff enters the picture. While copy editors fix any spelling, punctuation, grammar, or style problems in the manuscript, design managers determine the look and feel of the book, making decisions about type styles, paper, cover design, and layout of page spreads.

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Simultaneously, the publishing house determines a marketing strategy for the book, including identifying which readers will be most interested in the title, deciding how many copies to print and what price to charge, and selecting advertising channels for reaching the target customers. Marketing budgets usually make up a large part of a publishing company’s expenses, and marketing managers are often fairly high up in the organization.