Hyperion CEO Ellen Archer: Book Publishing Business Model Is Broken

By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid

The fourth time was the charm for Ellen Archer.

Archer, 49, now president of Hyperion Publishing, the book-publishing arm of Walt Disney Co.’s Disney-ABC Television Group, almost didn’t get her start in the business. It was 1984 and a typing test stood between her and a job as a publicity assistant at Ballantine, an imprint of New York based publishing giant Random House. She took the test three times and failed before passing it on the fourth attempt.

At the time, Ballantine was on the cutting edge of publishing technology, using word processors and employing an advanced system for inputting author information – and Archer leapt at the opportunity to be a part of it.

The lesson of embracing new technology was not lost on Archer, who projects that Hyperion will derive 50% to 60% of its revenues from e-books by 2015. The company is already on its way, with 28% of revenue projected to be digital for fiscal year 2012, ending September 30, 2012, and 18% of revenue booked as digital for fiscal year 2011, ended September 30, 2011. In fiscal year 2010, that number was only 6%.

Archer’s path from publicity assistant to publishing company president and digital books pioneer counts some of book publishing’s most storied houses as way-stations. She has held positions in marketing, publicity and executive management at Ballantine, Simon & Schuster, Doubleday and Hyperion. She has worked with then-Doubleday president and publisher Nancy Evans, her replacement and long-time Doubleday publisher Steve Rubin and Bob Miller, who was publisher of Hyperion but now is president at New York-based Workman Publishing, to name a few.

Before her life in publishing, Archer went to Hamilton College in Clinton, NY and graduated in 1984.

We spoke with Archer about why advances should go away, building franchises and publishing’s broken business model.

If you’re interested in hearing more from Archer, she will be appearing on the Digital Book World CEO Panel at the Digital Book World Conference + Expo in New York City from January 23 to 25.


Jeremy Greenfield: You’re projecting big digital revenues for fiscal year 2012 and significant digital revenue growth all the way through 2015. Will overall revenues grow along with digital revenues?

Ellen Archer: Digital continues to take a bigger share of the pie.

We’re all going to be watching the first three months of 2012 very closely. We’ve seen huge disruptions in 2011 to the marketplace. With all the tablet devices that will be given as gifts for the holidays, there’s more unknown. What impact will we see on reading and on book acquisition based on people having these tablets?

As for overall revenues, let’s just say, as we move forward, we’re going to have to create new models. This business model, while it’s never been great, is broken; 2012 is going to be about finding new business models.

We’ve been able to provide advances to authors and unfortunately most of those [advances] don’t drive revenue.

What are the new ways of making these deals so that it’s fair to all of us?


JG: Are you suggesting advances will go away in the future?

EA: I’m suggesting that we need to create a “Chinese menu” for deals. There are lots of different ways of how a deal can be structured and we need to explore what those deals could look like.

The one pattern that I have seen is that while there is still big money being thrown around for certain books, there is an awareness that we can’t continue to overpay. Advances are already lowering.


JG: The issue of relevancy of publishing companies has been in the news lately. Do you think publishers are relevant?

EA: I think our relevance is going to change as the business changes. Each publisher’s relevance is going to be dependent upon what their business is and where they sit.

For me, I sit in a media empire.

While Amazon and Apple have incredible insight into consumer-buying patterns and habits, I have something else that’s really interesting, which is a bird’s eye view on how to collaborate with media partners to drive discovery and sales.

How do I move my business when everyone is looking for discovery and I have this platform for discovery? How does that impact the kind of books we publish in the future?

And we know who the big-six publishers are now, but who will they be in the digital age where size doesn’t matter?


JG: Do you think the big-six will go away as more revenue moves to digital and business models evolve?

EA: All I’m saying is that I look at where I sit and I think that I have an enormous advantage in the marketplace because I have media platforms that I can partner with to create and promote books.

At the end of our fiscal year, I had two No. 1 best-sellers the same week, and it showed the range and the power of my media company to help fuel those successes

The Jacqueline Kennedy book [Jacqueline Kennedy: Historic Conversations on Life with John F. Kennedy] was the basis of a two-hour ABC News special and many other parts of the company participated in the promotion of this book.

And the third book tied to an ABC TV show called Castle [about a fictional detective novelist named Richard Castle], Heat Rises, debuted at No. 1.

That’s the way in which we’re going to take our business. I took really special pride that Apple cited our enhanced Jackie book as the No. 1 enhanced e-book of the year.

It goes to show what a nimble, mid-size company can accomplish. Not that the big-six don’t do wonderful publishing, I just like the ability we have to be scrappy and nimble and move quickly.

JG: Going off on a little tangent, can you talk more about projects like Castle? Our conference in the Fall called StoryWorld is all about transmedia projects like this one. [Editor’s note: For those who don’t know, Castle was originally conceived as a TV show about a fictional mystery novelist who has writer’s block. As the show progressed past its first season, Hyperion turned Castle into a real mystery novelist and has since published three Castle books.]

EA: Castle is going to be more than a TV show, a DVD franchise and a book.

We’re going to be working on a cookbook with The Chew, a new daily talk show focused on food. We’re going to be releasing reading experiences tied to The Chew in September.

In addition, Disney just formed a “franchise” group this Fall and we are working very closely with it. The franchise group will be looking at all sorts of opportunities for merchandising and all sorts of Chew products along with the release of our publication.

As Barnes & Noble and other retail outlets look to find sidelines to marry with books, this is another way for us to go to our retail partners and tell them we’re going to be one-stop shopping.


JG: How will you be evolving the way you staff your organization because of new digital opportunities and challenges?

EA: That’s a struggle for all of us: Who do we need and how many do we need?

Right now we have people doing two jobs. They’re doing the print job because that drives most of our revenue but they’re also putting out the e-books and they have to digitize our backlist. Everyone is working very hard.

In production and pre-production is where the new technologies will come out that will facilitate a speedier process and I do believe those tools will be coming out in six months.


JG: What about in marketing and sales?

EA: Marketing, publicity and sales are now one group. Author tours will be few and far between; it’s going to be more of a focus on finding those niche communities and working social media. We have hired a social media manager, but I don’t think that’s enough.

You want to be supportive of the independent book stores, but you have to look at the cost of sending authors on tour. People still want to have engagement with authors, but what does that look like in this new world? We have to use technologies to do that.

A lot of people feel comfort in doing what they’ve always done, but we have to look at what moves the needle and what doesn’t. Change is hard for people. Some people think they’re changing because they’re making a little shift in what they’re doing and what they need to do is make a radical shift in what they’re doing.


JG: More radical than what we’ve already seen?

EA: Maybe we have to drop “books” from the way we think. I think that’s keeping us from not thinking as big and broadly as we need to.

I have authors come in and I suggest we start with e-books and then have a print companion later on and they say, “what about the ‘book’ book?”

What I see Hyperion as is a producer of great reading experiences in the form that someone enjoys.

Don’t trap yourself in the “’book’ book.” It’s wonderful and it’s been wonderful for many years, but the years of printing too many books and taking them back…it’s not really a great business model and we have an opportunity to create a better business model.


JG: Give me an example.

EA: I’ve been looking closely at pre-orders and pre-order strategy and how that aligns with authors that we acquire and publish that have active blog sites and followers.

We’ve got a number of authors who are really good with social media and when we acquire their books, three months ahead of time, they’ll do something really interesting for their audience, like a cover-reveal, and all of the sudden, you’ll see the pre-orders build. Then you take that information to retailers and that can impact their interest in ordering more copies.

On the publication date, all of those orders release, and then it gets really quiet and euphoria dissipates because you get these mediocre daily sales for three or four weeks.

Then sales start growing and building. The core fans buy the book, and then they start talking about it and sharing it with all their friends, and then you begin to see the results of it all paying off.


JG: That’s interesting, but what if your author isn’t skilled in that approach?

EA: That’s going to be a problem. That’s always been a problem.

If they’re not promotable, then it makes selling their book challenging.

If the work is extraordinary, it will be discovered, but it will be challenging. You have a much more cluttered marketplace than we did beforehand.

Also, I will look to acquire media-genic authors and properties.


JG: What are you reading and on what platform?

EA: I read 80% of my books on my tablet. I own all of the devices, but the one I enjoy most is reading on my iPad, except if I’m outside.

I’ve been reading a lot of proposals, honestly. What I plan to read on my vacation is the new Jeffrey Eugenides book [The Marriage Plot, Farrar, Straus and Giroux] and the Steve Jobs book [by Walter Isaacson, Simon & Schuster].

Write to Jeremy Greenfield

7 thoughts on “Hyperion CEO Ellen Archer: Book Publishing Business Model Is Broken

  1. Lesley Riley

    Ellen Archer has given us an extremely honest, no BS look into the future of books. Its the first time I have seen sme light in the publishing tunnel. Media-genic will now become part of my vocabulary and shared with my clients.

    Wile we all dont have access to the media platforms she describes, it does give me insight into the type of cross-promotion/cross platform thinking that is necessary for success.

  2. Kat Engh

    it’s so great to read all of this from a publishing executive and nod my head with each of her answers! North Atlantic Books has been a non-profit, independent “little guy” publisher for decades, but with a new partnership with the popular counterculture website Realitysandwich.com and their sister social network site Evolver.net, we successfully launched a new imprint to a captive audience in 2011 with great results.

    We also launched our own online journal and social network last year called NABCommunities.com, which connects our authors to their fans on a whole new platform (couldn’t agree more with Archer about book tours, fortunately and unfortunately!), and allows people to meet their favorite authors and ask them questions without having to leave their homes! The site also features exclusive author articles, our own NAB Communities podcast, fun videos, and discussion forums. In the new year, we’ll be expanding NABCommunities.com out even further with new media partnerships, fresh content, more author articles and bonus reads, and more! It’s not that we’re not focused on our books; it’s that we’re more focused on the content of our books and the expertise of our authors now than we ever could be before. Having worked in both web and print industries now, I see this as one of the most strategic ways to remain not only current, but relevant in the future. What a really exciting time to be a part of the publishing industry!



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