AOL Time Warner and publishing

Once upon a time, business visionaries could look at companies as diverse as

AOL and Time Warner and see synergies there. One provided content; the other

the means to drive that content to consumers. But those days are long gone now,

and the new bosses of the merged company are saying that they are "committed

to selling noncore businesses". The question is what, exactly, AOL Time

Warner’s core business is.

Evidently, as Daniel Gross points

out in Slate, it still includes AOL. A spin-off of AOL would make a much

bigger dent in the company’s $26 billion of debt than what seems like a rather

desperate

attempt to sell off the book publishing business for somewhere south of

$400 million.

The weird thing is that if you believe that big media conglomerates make sense

at all, then you would presumably believe that publishing operations have a

place within them. Gross points out that Time Warner has done a pretty bad job

of finding synergies with its book department, but that doesn’t mean it can’t

be done. The New York Times, for instance, under its new editor, Howell Raines,

is making a much more concerted effort to make sure that its publishing arm

publishes its own journalists’ work. And although Talk magazine didn’t

work out in the end, there was surely some substance in the idea of finding

synergies between a magazine (Talk), a movie studio (Miramax), and a publishing

house (Talk Miramax Books). Time Warner has the magazines and the movie studio:

why not keep the books?

I hate to even float the idea, because authors have a hard enough time as it

is, but it would make perfect sense for Time Warner’s publishing house to automatically

write the film rights into every contract it signed with a new author. Since

most first-time authors are happy to get picked up with a major publisher at

all, it would probably cost them very little. But Warner Bros would then have

a huge number of film rights which it could either develop or sell: every time

it had a bestseller on its hands, it would make money not only from the book

but also from the film.

What’s more, the synergies run both ways: books can become big films, but films

can become big books as well. Look at the New York Times paperback non-fiction

bestseller

list this week. Three of the top six books are film tie-ins: Catch Me

If You Can, The Gangs of New York, and the Antwone Fisher book.

Talk Miramax is far too small to turn films into mass-market paperbacks, but

Time Warner isn’t.

As Michael over at 2Blowhards never

tires of pointing out, the general public doesn’t like what he calls "contempo

lit". And people are conservative when it comes to books: that’s why so

few authors ever make a living by writing fiction. Readers only buy books by

authors they know, and (of course) they only know the authors they read. So

a handful of writers benefit from a virtuous circle, and the rest are largely

ignored. Film offers publishing houses a way out of this dilemma. Once I’ve

spent a couple of hours watching Frank Abagnale or Antwone Fisher on screen,

I feel I know and like them enough to go out and buy their books. These books

are review-proof: look at the way that none of them has a link to a Times review.

Antwone Fisher could be the worst writer in the shop, and people would still

rush out and buy the book.

But my point is more about AOL Time Warner than about the nature of paperback

bestsellers. Publishing houses obviously have a place in a media conglomerate,

in the way that dial-up internet service providers don’t. But AOL Time Warner,

flailing around for cash, is selling its books division even after all the AOL

guys have left senior management. OK, books are a low-margin business, and maybe

there are good reasons for putting up the "for sale" sign. But it

does leave me wondering whether AOL Time Warner has anything approaching a strategy.

For ever since Time Warner was bought out by the dot-com cowboys, the indications

have been somehwat to the contrary.