http://online.wsj.com/article/SB123093737793850127.html
By ANITA ELBERSE
Dark days are upon the book industry. Last month alone, Random House announced a massive restructuring; Simon & Schuster laid off 35 staffers; the adult division of Houghton Mifflin Harcourt stopped acquiring manuscripts for the rest of the year; and HarperCollins sent comedian Sarah Silverman a contract worth $2.5 million to write her first book.
Yes, that’s right — amid the worst economic crisis to hit the United States in decades, publishing executives are still making what many see as outrageous gambles on new manuscripts.
The move by HarperCollins is only one of the latest in a string of big bets by companies employing a blockbuster strategy — a common approach among movie studios, television-production companies and music labels. A spokeswoman for the publishing house says it doesn’t disclose author advances. (HarperCollins Publishers is a unit of News Corp., which also owns Dow Jones & Co., publisher of The Wall Street Journal.)
Most large media firms make outsized investments to acquire and market a small number of titles with strong hit potential, and bank on their sales to make up for middling performance in the rest of their catalogs.