Entries in j.r.r. tolkien (1)

Wednesday
Jun062012

Houghton Mifflin Harcourt Publishing Co. Bankrupt

Houghton Mifflin Harcourt HeadquartersAnother one bites the dust! Houghton Mifflin Harcourt Publishing Co., the publisher behind renowed authors such as J.R.R. Tolkien and Mark Twain, have begun bankruptcy proceedings, thanks to mounting debt that hovers around $3 billion to date.

I have long said that the traditional publishing model is too expensive and archaic to continue in its current state, and eBooks are on the rise. According to the Association of American Publishers, from 2010 to 2011, sales of adult paperbacks and hardcover books fell 18 percent. Meanwhile, Amazon has reported stellar sales of eBooks during its busy holiday season; sales that have since eclipsed those of the benchmark hardcover.

Houghton Mifflin Harcourt, a Boston-based company, lists assets of $2.68 billion vs. $3.53 billion in debt in Chapter 11 documents filed in a Manhattan U.S. Bankruptcy Court. Some 20 other affiliates started bankruptcy proceedings as well, among them Classroom Connect, Inc and Broderbund, LLC.

Part of the problem stems from Houghton's reliance on state and federal funding, since they are in the schoolbook business, and states and school districts continue to slash budgets on a weekly basis. More than this however, the bankruptcy was fueled by a leveraged buyout, as investors were allowed to buy into the company with hordes of borrowed money. That money has since evaporated into "thin air"; the kind of air creditors breathe.

A major change is coming, and that change will see the destruction of many publishers and booksellers who hold to an outmoded publishing model. The future is here, and 711 Press is embracing it full on.