Interview with Alberto Vitale, Former Chairman, President and CEO, Random House
Excerpts from my 2011 interview with Alberto Vitale, who came from Italy to America on a Fulbright Scholarship to the Wharton School. He ran Random House with an entrepreneurial attitude, and has invested in a number of entrepreneurs, so I enter it here. You may see the full interview from 2011, on page 10 of this issue.
The much reported technological transformation of publishing, rapidly spreading new ideas and connecting people across the globe, occurred of course, in 1440, with the invention of Gutenberg Press. By the 1480s, hundreds of printers concentrated in the publishing capital of the world, that international city where trade and commerce flourished: Venice, Italy! One prolific publisher was Aldo Manuzio, who created italics and the paperback, and who had as one of his editors, Desiderius Erasmus. Such is the cultural inheritance of Alberto Vitale, who came to Wharton from Italy on a Fulbright Scholarship and eventually became the Chairman and CEO of Random House. A classic publisher, the good-humored Vitale witnessed and acted in many of the great publishing dramas during the past four decades in this country. In this interview, Vitale explains the pragmatic fundamentals of publishing that endure, as well as the positive effects of the e-book revolution.
How are the large publishers, like Random House, able to bring together and successfully operate hundreds of major imprints? As CEO, how could you manage them all?
I was first at Bantam and then at Random House, and at both, we had a lot of imprints, which were organized under different publishing houses. The reason you have a lot of imprints is because publishing is only as good as the people you have to pick books. And you can’t go to college or graduate school to learn how to pick books. You either have it or you don’t have it. Most of the time, editors who have a career in publishing start by bringing coffee and filing papers for their bosses. Then, they start reading books, and then, they start working with the editor. After that, they start working with some authors, and they go to the editor and say, “Hey, Mr. Editor, I came across this thing, and it looks very favorable!” and the editor says, “You’re right — it does look favorable. Let’s buy it!” Then, they buy another book and another book and another book, and maybe they become an associate editor and then an editor. That’s how you progress in publishing.
Now, if you have a large publishing house like Bantam or Random House, it’s very difficult for one person to oversee 200 editors, because then you have a very mediocre environment, and it’s hard to motivate people. On the other hand, if I say, “Kent, I think you have done well. I want you to have your own imprint, so we will give you an assistant and an editor, and you can publish up to 20 to 30 books per year. Go and try your luck!” Now you are empowered — you have a business within a business. You don’t have to worry about accounting, promotion, marketing and sales, because the larger organization provides these common services. And so, you develop your imprint, and if you are successful, you get another editor, and another editor and another assistant, and so your imprint grows.
The whole idea with imprints is to empower people of talent to have their own business and be the master of their own destiny. Of course, in a publishing house, you have rules and a budget. Normally, the head of an imprint reports to someone who oversees three to ten imprints. That way, you don’t have an organization that stifles your imagination, but instead, one that puts you in front of your own responsibilities. The way you keep these things going is by picking the right people, never trying to second-guess them. If they perform well, you have them expand, and if they don’t, I’m afraid you’re going to have to make a change.
For those considering their future, what are the careers in book publishing?
For any career in publishing, you must have a love of books, and you must appreciate what authors do. As I explained, the most creative career is in editorial. Then, there is a career in marketing, which is very important, because a company like Random House used to publish 3,000 books per year, which is a lot of books. To get customers to know about these books, and to get booksellers to be anxious to sell your books, is not an easy task. If you are selling Kleenexes, and you heavily advertise Kleenexes, then, eventually, people are going to buy Kleenexes. But a single book is a finite undertaking — it has its own life, and it is a business unto itself. There is no residual value to advertising from one book to another. Advertising is expensive, and books can’t support heavy advertising, because the economics of the book don’t allow it.
Basically, marketing is a very sophisticated set of skills — that go from word of mouth, to how your books are sold and displayed in the marketplace, to, recently, the use of the Internet — but these don’t entail high out-of-pocket costs.
This kind of marketing you don’t learn at school, but something you develop from the time you are a junior rep.
For example, at Bantam, I had a young fellow who started as a telephone sales rep at maybe 19 years old — can you imagine? He became the best telephone sales rep, then a great sales rep in the field, then a sales manager, and eventually, he became the head of sales at Random House, and now, he’s head of children’s publishing at Penguin. You start from the ground floor up. It’s almost like a trade. You cannot write down that you have to have these 12 skills of marketing.
Rather, you have to develop them as you go along. The skills that one person develops are different from the skills that another person develops, which is why in publishing, there has to be cross-fertilization between various people and functions. Nobody has the right answer or the only answer for the success of the book.
Another career is in management, in which you must be able to relate with editors and the marketplace. But to get into publishing, you have to start early in the game — it is very difficult to start when you are 30 or 40. Having said that, I did it. I came into publishing on the business side of things, in my early 40s, but I was an exception to the rule.
Can you share a memorable experience publishing a particular book?
Yes, “90 minutes at Entebbe.” On July 4, 1976, in response to a hijacked airline, the Israeli Mossad flew 2,500 miles through the night, mostly very low to the ground, and rescued 105 hostages from Idi Amin’s Uganda. America was excited to understand the story in depth, so at Bantam, we assembled a team and had our book “90 Minutes at Entebbe” in the stores within two weeks, and sold 1.5 million copies!
What endures in publishing, despite all of the technological transformations?
That is the simplest question of all. What remains the same is the picking of good books that people want to read. That is the beginning and the end. That is the common denominator, whether you’re publishing them in paper or in e-format.
How have the factors that drive pricing in book publishing changed?
A major factor affecting pricing is the advent of e-books. While they have only 9% of the business today, a year ago, it was only 1%. So it is a big improvement. In the future, e-books could be 30% to 40% or more. Of course, the economics of e-books are a helluva lot more attractive than the economics of printed books, in which you have the costs of paper, printing, binding, warehousing, transportation, pilferage, returns and inventory obsolescence. For just a few positives for printed books, you have tons of negatives.
What I would like to say to you is that the way publishing will evolve is that books printed on paper will be a luxury item, so their quality will be better, but the price will grow. And e-books will be what paperbacks used to be.
And then e-books will have to evolve into something different — you may have to add a lot of enhancements. For example, if you look at George Bush’s e-book “Decision Points” — take a look at the Kindle copy — you will see that it is interspersed with pictures that make it more interesting. This is only the beginning — with digital technology, you can add audio and video as well, and can experiment with pricing. Once you start with a price of $29.95 on a hardback, then you are stuck. But with e-books, you may play with the price to find what sells best. So the publisher will have to live in a very dynamic environment.
In 1996, in a Fast Company interview, you proclaimed that Amazon.com is “the beginning of a completely new way to buy books.” That was fairly prescient as Amazon.com was founded only months before.
All my life, I was very close to computers. When I saw what Jeff Bezos wanted to do, it dawned on me that he was a genius, that his formula was a winning one. In late 1995, I was at the Association of American Publishers meeting, one of the most boring meetings I ever attended, and there was a reporter from the Wall Street Journal who asked me, “Alberto, what am I going to write?” I said, “I don’t think you are going to write much, because nothing is going on here — but if you want to write about something interesting, write about Amazon.com.” He said, “What?” and looked at me like I was crazy. I said, “Look, you’re the reporter. You can write about what you like, but if you look into Amazon.com, you are going to be impressed.” Two weeks later, the reporter calls me and says, “I’m on my way to Seattle.” The next thing I know, there is a 1.5 page story on Amazon.com in the Wall Street Journal.