Getting your Words' Worth? : The price of a good read is climbing higher as book publishers search for ways to deal with the rising cost of paper.


Ed Stackler, a senior editor atSignet in New York, thinks twice these days before taking on a new author.

Jack Romanos, president of the Simon & Schuster Consumer Group in New York, is looking harder at older titles, pondering which ones to keep in print.

Book publishers, large and small, are considering ways to curtail costs, all in response to whopping hikes in the price of paper, which in nearly one year's time have increased 40%--and continue to climb.

"I've never seen such a vertical rise," said George Adler, senior paper analyst at Smith Barney Inc. in New York.

Publishing houses also are beginning to pass on costs to consumers by raising book prices. These changes should be fully implemented by fall, traditionally a huge publishing season.

The price of new hardcover releases already exceeds $20; paperbacks have ascended to $7 and are still climbing.

Perusing the bestsellers, John Grisham's "The Rainmaker" is listed at $25.95, Robert Ludlum's "The Apocalypse Watch," $24.95; in paperback, Grisham's "The Chamber" retails at $7.50 and Michael Crichton's "Congo" is not far behind at $6.99.

"We're looking at our fall list now, and books that before were $19.95 won't be under $21.95," said Pat Lyons, vice president of production for Penguin USA in New York. "These increases could make a difference in more marginal books where people don't know the author, where he or she doesn't have a track record. A first novel at $22 will probably be over the edge.

"But retailers are aware of what we are going through. We are spending this year another $5 million over what we spent before."

Lyons said that this year, the company paid $720 per short ton (2,000 pounds) for mass-market paper versus the $440 spent previously; the base price for hardcover paper ran $52 per 100 pounds versus last year's expenditure in the low $40s.

Kathryn McAuley, a paper and forest products analyst for Brown Brothers Harriman & Co. in New York, predicts that increases for all paper grades will continue. The cost of newsprint, already up 50% in the past year, might go up another 10% in September, she said. This has resulted in higher prices at newsstands and in home delivery service, and in some instances, in smaller publications. Additionally, she said the costs of recycled paper and wood fiber remain very high.

Widespread paper price increases have followed on the heels of a nearly six-year slump when paper mills were forced to retrench and cut production in the face of a global recession. As the economies of Europe, Asia and the United States have strengthened, so has the demand for paper.

"It's a case of supply and demand, and the demand for paper is now far greater than the supply," said Simon & Schuster's Romanos. "We expected prices to go up in '95, but never this dramatically. And there appears to be no end in sight."

With paper representing about one-third of book production costs, which also include printing and royalty expenses, Simon & Schuster is considering the use of less expensive grades, printing smaller books and designing covers with fewer "special effects."

"Since this is an impulse business, there is some risk that the 'pick-me-up' quality we strive for in the jackets may be compromised to some degree," Romanos said concerning the changes.

Stackler, at Dutton / Signet, a division of Penguin, also voiced concern that compromises in design or length might well reduce consumer appeal.

"We must look at it genre by genre," he said. "Mystery readers don't care if a book is long or short as long as it tells who done it, but a sweeping rich saga looking short might send a mixed message. How well would a historical novel or romance do if short?"

Alberto Vitale, president and CEO of Random House in New York, said his company is experimenting with various paper grades and type styles, but if rising costs cannot be offset without a compromise in quality, higher prices are inevitable.

"We are coping with the problem as of now, and it's not as big a tragedy as people think," Vitale said in a phone interview. "We're cutting costs where we can, and otherwise will pass along price increases.

"People are mature enough," he says, to know that if paper prices go up between 35% and 50%, the prices of books will rise.

While some observers foresee no end in sight to these price hikes, analyst McAuley expects "the momentum for all grades of paper to begin to slow down." "There is resistance developing in the market for further increase," she said. "The problem is paper makers are operating at full capacity. They can flex their muscle by not supplying. The cards are now in their hands."

Industry experts advise that it would take years to build any new plants and expand the capacity of America's paper mills, which number about 530. Edward Gillis, vice president of marketing at Spring Grove, Pa.-based P.H. Glatfelter, one of the largest suppliers of book paper in the United States, says the costs of expansion would be prohibitive, especially given the company's projections in meeting tough environmental standards.

In Gillis' view, few dispute the fact that the mills' costs have escalated in recent years; what has taken the publishing world by surprise is the speed at which the mills instituted price increases.

"It all went without warning from a buyer's market to a seller's market," Gillis said. "There was no inventory, no backlog and customers had no paper in the warehouses. So when it turned, it turned very rapidly."

Meanwhile, publishers continue to scramble.

Jan Nathan, executive director of Hermosa Beach-based Publishers Marketing Assn., which represents mostly small- and medium-sized houses, said many of the 2,500 members who depend largely on direct-mail sales have had to contend not only with paper hikes in recent months, but also increased postal rates.

Yet these publishers remain cautious about passing on costs.

"When we go out to price our books, we are real conscious of what the competition has out there," she said. "Consider our self-help books. They typically sell for $9.95 to $12.95. If we go to $13 to $14.95, we are out of the marketplace and people won't buy it."

The way bookseller Doug Dutton sees it, however, customers complain about rising prices only "when you reach a milestone.

"When hardcovers went from being $9.95 to $10.95, and when books broke through the $20 range, they noticed," said Dutton, who owns Dutton's bookstore in Brentwood.

"I suppose when a new Stephen King comes out at $31.95, people will object."


By the Book

Fiction Bestsellers List from June 5, 1988

1. "The Icarus Agenda" by Robert Ludlum. Random House, $19.95.

2. "The Bonfire of the Vanities" by Tom Wolfe. Farrar, Straus & Giroux, $19.95.

3. "Love in the Time of Cholera" by Gabriel Garcia Marquez. Alfred A. Knopf, $18.95.

4. "Zoya" by Danielle Steel. Delacorte Press, $19.95.

5. "Rock Star" by Jackie Collins. Simon & Schuster, $19.95.

6. "People Like Us" by Dominick Dunne. Crown Publishers, $19.95.

7. "Prelude to Foundation" by Isaac Asimov. A Foundation Book/Doubleday, $18.95.

8. "Scorpius" by John Gardner. G.P. Putnam's Sons, $12.95.

9. "Crimson Joy" by Robert B. Parker. Delacorte Press, $16.95.

10. "Freaky Deaky" by Elmore Leonard. Arbor House/William Morrow, $18.95.

Average Price: $18.65 Fiction Bestsellers List from June 11, 1995

1. "The Apocalypse Watch" by Robert Ludlum. Bantam, $24.95.

2. "A Dog's Life" by Peter Mayle. Knopf, $19.95.

3. "The Rainmaker" by John Grisham. Doubleday, $25.95.

4. "The Bridges of Madison County" by Robert James Waller. Warner, $14.95.

5. "Show of Evil" by William Diehl. Random House, $22.

6. "Ladder of Years" by Anne Tyler. Knopf, $24.

7. "Freedom's Landing" by Anne McCaffrey. Putnam, $22.95.

8. "Let Me Call You Sweetheart" by Mary Higgins Clark. Simon & Schuster, $26.

9. "The Celestine Prophecy" by James Redfield. Warner, $17.95.

10. "Of Love and Other Demons" by Gabriel Garcia Marquez. Random House, $21.95.

Average Price: $22.07 Source: Los Angeles Times Book Review

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