The Scholarly Dollar

The U.S. book publishing industry., traditionally a tight little shelf of tweedy pipe-smokers for whom Wall Street was a subway stop and profits a slight source of bemusement, today fairly bustles with talk of mergers, stock splits and diversification. The reason: the boom in textbooks for the burgeoning U.S. school population, which is lifting many a once staid, privately owned publishing house into the heady world of big business. Last week two large, old-line publishers announced mergers aimed at increasing their share of the new textbook market.

P: Harcourt, Brace & Co., one of the largest publishers of high school texts with sales of $17 million, announced plans to merge with World Book Co. of Tarrytown, N.Y., which publishes elementary school texts (1959 sales: $10 million).

P: Random House acquired the L. W. Singer Co., an elementary and high school text publisher. Earlier this year Random House bought into the college text market by merging with Alfred A. Knopf and into the juvenile market by buying Beginner Books. The three mergers will push its annual sales to nearly $22 million.

Certified Check. Behind the rush to merge and diversify is the fact that sales of textbooks and encyclopedias have doubled since 1955, totaled nearly $600 million last year--nearly $200 million more than the sales of all other kinds of books put together. Last week's mergers were but the latest in a series this year: Prentice-Hall, the biggest college text publisher, acquired Iroquois Publishing, which puts out elementary and high school books. Crowell-Collier won control of the Macmillan Co. to create a $60 million publishing complex. Henry Holt, Rinehart and John C. Winston joined forces to create the leading science and language text publishing house, raising sales to $31 million. The aim of all is to get ready for the market looming in the '60s, during which total industry sales of textbooks seem likely to double.

Inevitably, the blossoming of the book industry has attracted hungry investors. "Those Wall Street houses are after all of us to go public," says Random House President Bennett Cerf. "They go around waving certified checks in publishers' faces--and I've never seen a publisher yet that could resist a certified check." Ran dom House could not resist, put some 222,060 shares of its stock on sale last October for 11 1/4. It was eagerly snapped up, now sells for about $31. Harcourt, Brace stock first went on the market last summer at 23 1/2, is selling at about 27. The stock of Scott, Foresman and Co., biggest publisher of elementary school texts, goes on sale this fall, and Boston's venerable Ginn & Co. is making discreet overtures in the same direction.

Ph.D. Agents. Textbooks are not only the publisher's best sellers, they are his longest sellers. Though it takes from three to ten years to prepare a good textbook, once it wins educators' approval it sells for years with only periodic revisions. Last year 94.7% of Harcourt, Brace's school text sales and 80.3% of its college sales were from its backlist.

Now this long-range market is being built higher by the boom in new books. The rise of corporation training programs, the new leisure for adult study in night school and correspondence courses has created a growing textbook market for adult education. Educational concern for special opportunity for the gifted child--and the unusually backward--has meant a proliferation of textbooks on the same subject at different levels. Holt now has four college freshman mathematics texts replacing what was once a single staple freshman algebra. From teaching electronic computers what to do man is learning new ways to teach himself: Doubleday and Harcourt this year published textbooks utilizing novel computer techniques to teach children subjects such as English.

The need for new, and more, textbooks is sharpening the competitive search among publishers to find qualified scholars to write the new books. One publisher ruefully foresees the day when "every college professor will have his own agent,." Prentice-Hall President John Powers estimates that his firm has signed over 2,000 contracts for new textbooks in the past few years. But it has paid off: last week Powers announced that Prentice-Hall profits this year will be up 17% on sales of $50 million, with 1960's earnings to be 87-c- per share v. 74-c- last year. Another key to the success of prestigious Prentice-Hall, founded in 1913 by two absent-minded professors: it takes virtually no gambles on fiction, puts out mostly textbooks and business publications.

Teaching Machines. Encyclopedia publishers have also benefited from the boom. The swing away from progressive educational theory and the return to the fundamentals of the three Rs is sending more children, at a younger age, home with homework. This plus overcrowded school libraries has handicapped the student without a standard reference shelf in his home. Sales of Grolier's encyclopedias (e.g., Book of Knowledge, Americana) have risen from $25 million in 1950 to an estimated $77 million this year.

For all the readymade market in textbooks in the decade ahead, U.S. publishers are hard at work trying to anticipate the next step in education. They are keeping a wary eye on teaching machines, now in the testing stage. Harcourt, Brace spent $60,000 building their own, but junked it. Explains Harcourt President William Jovanovich: "We decided it wasn't our field, but we felt we ought to give it a try." If teaching machines are perfected and catch on, the chances are good the publishing industry will soon be selling them too--or putting out books to teach teachers how to use them.

This file is automatically generated by a robot program, so reader's discretion is required.