In this issue, with the support of the publisher, Shelf Awareness takes an in-depth look at Sourcebooks, the mid-size house that publishes with extreme passion and aims to thrive--not just survive--in today's challenging environment.

 

"We're a company that's transforming in an industry that's transforming," said Dominique Raccah, founder, CEO and publisher of Sourcebooks, Naperville, Ill. Her goal, she said, is to make Sourcebooks into "what a 21st Century book publisher would look like."

Here's how it looks so far:

Sourcebooks has been in the forefront of offering e-books, enhanced books, iPhone apps and just last month launched a poetry website that, Raccah said, is creating a community for people who love poetry--and may be a model for creating revenue. (Among other things, it sells poems for download, iTunes style.)

After deciding a year ago that it wasn't going "to participate" in the recession and that it would have no layoffs, the company involved all 75 employees in extraordinary efforts to build the company's business in a range of measurable ways, including improving cash flow and inventory, expanding markets, working better with customers and more. By doing so, Sourcebooks has tried to take advantage of being "in that funky space between big and small publishers," Raccah said--big enough to have a presence but small enough to be limber and both act and react quickly.

Sourcebooks continues to publish some 300 new titles a year in a range of subjects--test and study guides, poetry, historical and women's fiction, children's and YA books, reference, romance and more--using many e-tools to nurture both readers and writers. The house, Raccah emphasized repeatedly, is publishing "authors, not books," and many of them have become bestsellers. Sourcebooks was founded 22 years ago as a reference publisher.

 

At the beginning of the year, when there was so much doom and gloom in the industry after the economy had tanked and most publishers had sizable layoffs, Raccah called a meeting of all Sourcebooks employees, announcing that the company would freeze wages but not let anyone go, and she challenged them "to do something different" and not give in to the dispirited mood of the book business and the country.
 
"We decided to go into the year under a worst-case scenario, but we thought we could beat it," said Barbara Briel, v-p and director of administration and finance. "But to beat it, we needed every single employee enrolled in the effort."
 
At the meeting, the company came up with a "possibility diagram," consisting of qualities and traits that the company had or aspired to that would help it in this difficult year. Raccah was inspired, she said, by Ben Zander, conductor of the Boston Philharmonic Orchestra and co-author of The Art of Possibility, who argues that one can make one's destiny. The point, Raccah emphasized, was "in the vision, how you approach it, and what you create."
 
Todd Stocke, v-p and editorial director, put it this way: "We had to make a choice: either let the year happen to us or think differently. Some of the stuff is beyond our control, but we decided to be proactive and respond differently."
 
After that, they held meetings at which monthly goals were set for the company, departments and individuals, and updated data was shared. The goals were very specific and numerically oriented, involving sales, inventory, cash flow and more. Meeting those goals required "a lot of education," explained Peter Lynch, editorial manager, trade. "We all had to understand a lot more about how the business as a whole works, and that led to a lot of creativity and interaction."
 
In addition, everyone had to work together. As Chris Bauerle, director of mass market and specialty retail sales, said, "We had to trust everyone to go in the right direction and see the big picture. Here sales isn't fighting finance, for example."
 
At the meetings, Raccah and others made presentations and employees sometimes broke into groups. As Heather Moore, senior publicity manager, said, "We didn't feel it was left up to management or senior staff to deal with the issues." Raccah described one sign of the efficacy of the approach: "You can ask anyone in the building what we're trying to do this year and what we've gotten done, and they'll know."
 
The creative approach was not "limited to the building," Todd Stocke said. "The message reached customers, too, who were happy to be talking with energized people who weren't down in the dumps."
 
Sean Murray, director of trade sales, added, "Many of our customers will have their best year ever with us because of how we're working with them. Things that would have worked two or three years ago won't necessarily work now."
 
As befits a company whose head is co-chair of the Book Industry Study Group, Sourcebooks has worked hard on making the supply chain more efficient, working with retailers, educational partners and wholesalers, insuring they have the right inventory at the appropriate times, whether that means increasing or lowering stock. As a result, Raccah said proudly, inventory purchases are down 25% in a year in which sales are up significantly.
 
Inside, too, the company has made many changes, both streamlining and outsourcing some of the editorial and design work. "With a list that is so broad, finding the right cover on 300 books, we look for specialists," said Sarah Cardillo, managing editor. In addition, electronic workflow is much more efficient, green and lends itself to making e-book versions of books.
 
Sourcebooks has doubled its catalogue business and is "reaching the corporate market," Chris Bauerle said. "As the company and industry transform, it's important to put books in places that don't compete with retailers and are nonreturnable."
 
The results have been excellent. Overall year-to-date net revenue is up 31%, and returns are "significantly below industry averages," Sourcebooks said. At the same time, market share in some of the company's most important categories is also up. Sean Murray said that titles deep into the Sourcebooks list are doing better. "We're able to bring our retailers and partners very healthy growth and opportunities that are sustainable and not just one-book hits," he said. "We understand that in this retail environment, it's really important because they're trying to build their base business and be stable."
 
Raccah frequently praised Sourcebooks's employees, most of whom have been with the company for some time. "It's a solid team. The culture here has always been excellent. The energy and creativity and vibrancy of the people is so good. This year we saw it in spades."

 

To emphasize the transformation of Sourcebooks, the company is introducing a new logo, its first new one since 1993. The idea is, as Raccah put it, to "brand the creative aspect of Sourcebooks. We see ourselves as a creative shop."
 
The old logo, with its distinctive incandescent light bulb (the kind of bulb that's hard to find these days) was "too concrete," Raccah said. "It came to stand in the way of the creativity of the company."
 
In Sourcebooks style, three company-wide meetings about the logo included voting on new designs, leading to many changes. As Melanie Thompson, associate marketing manager, said, "We started at the far extreme of dropping the light bulb from the logo, then worked back toward the light bulb."
 
With its echoes of the old incandescent light bulb and a very loose, stylized "S," the final version of the new logo is being used across all imprints.
 

Poetry is the area of the company perhaps closest to Raccah's heart--"I got into poetry in eighth grade, and it changed my life"--and Raccah (r., with poet Nikki Giovanni) talked with special enthusiasm about Sourcebooks's efforts in this area, which are, as Sean Murray said, "to make poetry bigger and better and get it out to more people in a different way and at a higher level." Part of the company's success in poetry, he continued, has come "because we want to do it and aren't just doing it on the side."
 
Peter Lynch added that, contrary to conventional wisdom, poetry appeals to many people. An important part of expanding the reach of poetry has been using multimedia to heighten the experience of "reading" poetry. Through enhanced books that include CDs and DVDs of poets and others reading the work, Sourcebooks has emphasized that poetry is "not just words on a page by a dead person," Lynch continued.
 
In the same vein, Sean Murray added, children first hear poetry when parents and teachers read it aloud to them. "They hear the language, the rhyme, the tongue twisters. Unfortunately, as they grow older, poetry becomes words on a page. Multimedia reintroduces the dynamic that made them fall in love with poetry in the first place."

Standout poetry titles include Poetry Speaks (2001), Poetry Speaks Expanded (2007), Hip Hop Speaks to Children: A Celebration of Poetry with a Beat, edited by Nikki Giovanni (2008), Poetry Speaks to Children, edited by Elise Paschen (2005) and The Spoken Word Revolution, selected by Mark Eleveld (2008). These anthologies tend to boost the sales of other works by poets included in the books. As Todd Stocke said, "You won't love every poet in the collection, but you'll find someone you didn't know before."

Last month, the company moved a step further into new electronic territory, introducing PoetrySpeaks.com, a site that aims to serve as a social networking venue for poets and poetry lovers and a business and marketing engine for poets and poetry publishers. Using a kind of iPod model, the site will sell poems in audio, video or text digital download format, as well as books, CDs and e-books. Poets can post their poems on the site, and tickets are available for online performances, slams and readings. Marie Macaisa, head of Sourcebooks MediaFusion, noted that the site "gives people more tools to go deeper and to experience poetry and form community around it."
 
Raccah is happy with the results so far. "Every day the site's building. Already there have been visitors from 67 countries. The first upload of poetry was made before we went live."
 
A recent poetry title was The Tree That Time Built: A Celebration of Nature, Science, and Imagination by children's poet laureate Mary Ann Hoberman and Linda Winston. The project was a longtime dream of Hoberman; the collection includes poems from more than 100 contributors with recordings of many of them reading their work--all of which the company turned around in 10 months. Other publishers may have viewed the book as risky: the poems celebrate "the wonders of the natural world and encourage environmental awareness" and are a response to an "educational system co-opted by an anti-evolution agenda," Raccah said.
 
The next big poetry book is Poetry Speaks Who I Am, a "coming-of-age anthology" that will be published in the spring and is geared to middle-grade students. The poets involved in the book chose poems that most affected them at that age--participating poets include Billy Collins, Nikki Giovanni, Brad Leithauser and Molly Peacock. The selection is unlike other collections for this age group, Raccah said: "It's like the poems I put in my notebooks at that age: gut-wrenching, visceral, dark."

 

Sourcebooks introduced the Horrid Henry series, originally published in the U.K., in April, and has shipped 200,000 units in the nine months since then, a feat that makes Raccah especially proud. She called the series "great for reluctant readers."
 
The company did a range of things to promote the books, including:

• creating activity books and teachers' guides for libraries;
• providing costume characters for store appearances;
• creating online resources for libraries, teachers and stores;
• doing a huge shelf talker with Borders;
• sending Horrid Henry bags to accounts;
• providing 150 indies with Horrid Henry displays;
• partnering with Books Are Fun to distribute the title.

And there's more on the way. The company will promote next April Fool's Day as Horrid Henry Day and publish a joke book in connection with it. "The goal," Heather Moore said, "is to get these books into kids' hands because we know they will like them." She added, "We're still early in it."
 
In fact, in the U.K., where it took years to establish Horrid Henry, the series has now sold more than 15 million copies and has its own TV and live theater shows, an album and a video game.

 

Sourcebooks started publishing fiction in 2000, a program that has evolved: while the company earlier published several types of fiction and had done well over the past five years, it is now focusing on women's and historical fiction--most often with a female voice. As Peter Lynch said, "Just as an author often takes a while to find a voice, so it takes a publisher a little while to find a voice."
 
Measured by register sales, fiction sales have grown 66% this year and make up more than 30% of Sourcebooks's retail sales. Many of the company's titles in this area are bestselling British novelists (for example, Jill Mansell, Elizabeth Chadwick, Barbara Erskine) and classics that had gone out of print in the U.S., including, for example, work by Daphne du Maurier. Other key authors include Georgette Heyer, Wendy Holden and Susan Higginbotham. Raccah noted with a bit of amusement that Sourcebooks is also "the largest publisher of Jane Austen sequels in the world."
 
Many of the titles Sourcebooks has published in this area have been recommended by its own authors and enthusiastic readers, part of a strong online community. Women's voices may also resonate at Sourcebooks because it is the largest woman-owned trade book publisher in the country.

A big book for next year has a trim goal: it's The Perfect 10 Diet by Michael Aziz, M.D., which comes out the first week in January. Chris Bauerle said, "As corny as it sounds, the best books change lives, and we believe this one will." Raccah echoed him, saying, "This is a diet that could change the face of the nation. This is a book that can be revolutionary."
 
Created by New York City physician Michael Aziz, the diet focuses on what's right for the body's 10 most important and fat-fighting hormones. He based his recommendations on years of work with patients in his private practice, helping people whose ailments so often seemed rooted in the pervasive "low-fat, low-carb" dieting approach that, Aziz has concluded, contributes to the plague of obesity and poor health prevalent in the U.S. Aziz recommends a balanced diet, including some healthy saturated fats like butter and whole milk, no caffeinated coffee, no or little alcohol, no low-fat foods, no sugar, etc. He emphasizes the importance of exercise and that the diet is more than a meal plan--it's a healthy approach to life that has anti-aging effects.
 
The Perfect 10 Diet, the doctor's first book, began as handsheets for Aziz's patients and has garnered some media attention in New York in the last five years. Many of the doctor's patients offer highly enthusiastic testimonials--as do five Sourcebooks staffers, who have dropped a total of 100 lbs. One of the group is Raccah, who said, "I've been a failure on so many diets. This one works."
 
Sourcebooks and author are working with Krupp Kommunications, a New York publicity firm that helped promote The South Beach Diet, The Perricone Prescription and Your Best Life Now, among others.
 
Sourcebooks has a detailed web strategy to promote the book, backed up with "the biggest media campaign we've done," Bauerle said. He added that retail partners across all channels are supporting the title.
 

 
Lynch proudly noted that in these traditionally strong categories, Sourcebooks titles have been growing, while  overall category sales have declined. In part this has occurred because Sourcebooks has done such things as send out a catalogue twice a year to 20,000 high school guidance counselors. "We see the impact on retail," Lynch said. "Some are direct sales but many come from the guidance counselors' recommendations to parents."
 
The company plans to expand college survival advice, the area explored by Harlan Cohen in The Naked Roommate: And 107 Other Issues You Might Run into in College. ("He has really good advice that helps students and could change their lives," Lynch said.) Raccah noted that many high schools and colleges are offering classes in the subject because "high schools are trying to find the right college fit for their students, and colleges are trying to improve retention rates."

 

Sourcebooks bought some of the assets of Cumberland House exactly a year ago, including The Perfect 10 Diet and the bestselling Gregory Lang series. Chris Bauerle said that in a variety of areas, including distribution, technology and public relations, the house needed to expand and decided "the best opportunity for expansion was to partner with a company like Sourcebooks." Since the purchase, Cumberland House sales are up 30%.
 
Sourcebooks has founded a new YA imprint, Sourcebooks Fire, which will publish in a range of areas, and earlier this year hired Dan Ehrenhaft, former director of book development at Alloy, to head it. This follows on the launch in the last two years of Sourcebooks Jabberwocky, the children's imprint, and the extension of Sourcebooks Casablanca into romance fiction. Todd Stocke said the impetus for this came from booksellers who liked Sourcebooks Jabberwocky and asked, "Where's your YA line?"
 
The Fire line will consist of 15 titles this coming year and launched its first book with Dreaming Anastasia by Joy Preble this past fall. The title is doing very well and is now in it third printing since September, Raccah said.

 

Sourcebooks has been creative in approaching the digital world, and Raccah herself has spoken regularly at seminars and in other forums on the subject. She is a major proponent of finding e-publishing models with a viable revenue stream for "authors to keep writing and for us to keep publishing--because we add enormous amounts of value for the author and the reader.
 
"If all content is free," she continued. "All content will be junk." She added that expecting writers to market and publish themselves entirely "will keep them from writing."
 
She said that pricing e-books at $9.99, as Amazon.com does, leads consumers to think e-books are "worth less than a physical book." Unfortunately, she noted, "The publishing industry is so bad about explaining its role, which is often invisible to the reader."
 
As to the future of print books, Raccah added, "There are consumable books and books you want to own forever, and they will be different forever." In fact, "e-books are not the future of book publishing. I'm bullish about the future of the book business, but I don't think that lies solely in e-books--it's one part of it. I don't think we've even begun to understand how readers experience or will experience content in new, more powerful ways electronically."
 
Currently Sourcebooks has some 1,800 e-books available out of its 2,500 titles in print, and it is working on making the rest of its backlist available electronically. E-books account for about 2% of Sourcebooks's sales, up about 10 times this year; the digital channel as a whole represented about 3% of sales. As always, "a subtext of every conversation about digital is what's the revenue model," said Marie Macaisa. In many cases, the answer is that the e-version is "marketing to sell the sales of the physical book."
 
Digital is not a separate part of the company. "Digital is all around," Raccah said. "Everyone has pieces of digital as part of their job. Having 'new stuff' in one part of the company and having 'old stuff' in other doesn't work. In those cases, the people who aren't involved with the transformation don't try to harm those efforts, but they don't support it, either."
 
Websites have been "a constant," Marie Macaisa said. "And we're doing more thinking about platforms beyond just a book with a CD. An iPhone app is not just your book on an iPhone. We use the same approach we use with books: we're thinking about content and community and what each platform has to offer."
 
Sourcebooks authors are using the web in a variety of ways to reach readers. Harlan Cohen, for example, is a big fan of Twitter and tweets regularly. Romance writers for Casablanca have created their own blog separate from Sourcebooks.

Every several months Sourcebooks holds a webinar for authors about new technology and also offers an author tool kit (where authors can send e-postcards of their covers, create a blog and create a comprehensive author page on the Sourcebooks website). Among topics covered: how to do a media interview, how to build buzz, how to get reviews--both print and online--and much more. The goal, Raccah said, is to provide authors with "a supportive environment that helps them to do what they really want to do. Authors need to know about what's happening in the industry."
 
Lately the company has been focusing on iPhone apps. It currently has seven apps and is in the process of uploading two more--and more are on the way. Their purpose is to drive sales of the book. One example: Gruber's Shortest SAT, a 99-cent app that's based on Gruber's Complete SAT Guide and consists of 20 SAT test questions. The app analyzes the user's answers and recommends areas for the student to focus on. Raccah estimated that sales of the book are up 30% this year because of the app. "After students play it, they go and buy the book," she said.

 

This coming year will be "very hard, harder than 2009," Raccah predicted. "I see some retailers really struggling, and there could be some really damaging outcomes." For its part, Sourcebooks will continue to try "to create new revenue streams with as many partners as possible" and will "work deeply with all possible partners." Still, she believes, "Bricks-and-mortar bookstores are essential to the future of the book."