Simon & Schuster

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Simon & Schuster

founded: 1924

Contact Information:

headquarters: 1230 avenue of the americas
new york, ny 10020 phone: (212)698-7000 fax: (212)632-8090 url: http://www.simonandschuster.com

OVERVIEW

Simon & Schuster is one of the leading publishers in the United States. It is owned by Viacom Inc., which also owns Blockbuster Video, MTV, Nickelodeon, Paramount Pictures, and a host of other media companies. Simon & Schuster has four separate groups: Consumer, Education, International and Business & Professional, and Macmillan Publishing USA. In 1997 Simon & Schuster had total revenues of $2.5 billion.

Consumer Group

Simon & Schuster publishes many popular fiction and nonfiction authors in hardcover, paperback, audio-book, and CD-ROM formats. In 1996 the company had 55 books on the New York Times' best-seller list, including Angela's Ashes by Frank McCourt, Waiting to Exhale by Terry McMillan, and We're Right, They're Wrong by James Carville and Mary Matalin. Some of the company's imprints (essentially, brand names) include Scribner, Kaplan Books, Touchstone, Baseball America, Aladdin Paperbacks, Anne Schwartz Books, and Atheneum Books for Young Readers.

Education Group

Simon & Schuster is a leading publisher of textbooks and other educational materials for children, young people, and adults, with sales of over $1 billion annually. Some of its imprints include Prentice Hall, Silver Burdett Ginn, Allyn & Bacon, and Merril Education.

International and Business & Professional Group

This group produces and sells Simon & Schuster products outside of the United States; it also includes medical, financial, and other professional books sold internationally. The group's books and multimedia products are offered through a 25,000-title catalog handled by sales offices and subsidiaries in 43 countries.

Macmillan Publishing USA

Macmillan Publishing USA is Simon & Schuster's reference publishing division. In 1997 it was one of the largest computer book publishers in the world; its imprints include Que, Sams, and Ziff-Davis Press. Well-known noncomputer products include Betty Crocker cookbooks, Frommer's Travel Guides, J.K. Lasser's Tax Guides, and The Macmillan Baseball Encyclopedia.

COMPANY FINANCES

In 1997 Simon & Schuster recorded a 6-percent increase in sales to $2.47 billion. Operating income rose 2 percent to $221.7 million. The increase in sales came from the company's International, Macmillan Publishing USA, and Education groups. Sales dropped 5 percent to $377 million for the first quarter of 1998, while the operating loss rose to $88.5 million from $57.8 million in the first quarter of 1997. The poorer results reflected fewer releases from the Consumer group, decreased international sales stemming from the Asian economic crisis, and lower sales of computer books because of the delay in the release of Windows 98. However, sales have consistently risen over the years—from $1.60 billion in 1993, to $1.79 billion in 1994, $2.17 billion in 1995, and $2.33 billion in 1996.

HISTORY

Simon & Schuster was founded in 1924 by Richard L. Simon and M. Lincoln Schuster. The company first published books of crossword puzzles, but it soon branched out to other types of nonfiction. In 1939 the company put up 49 percent of the financing for Pocket Books, the first significant paperback book publisher. In 1942 Simon & Schuster started the Little Golden Books line, which was aimed at children. Simon & Schuster was sold in 1944 to Field Enterprises, but the principals—Simon, Schuster, and business manager Leon Shimkin—bought it back in 1957. Following the death of Richard Simon in 1960 and the retirement of M. Lincoln Schuster in 1966, the company became publicly owned in the late 1960s.

In 1975 the conglomerate Gulf + Western (which became Paramount Communications in 1989) bought the company. Simon & Schuster expanded rapidly during the late 1970s and 1980s under the leadership of Richard E. Snyder. Between 1975 and 1989 revenues increased from $40 million to $1.3 billion. Much of the growth reflected acquisitions, including the purchase of Prentice Hall in 1984.

In 1993 Simon & Schuster acquired the large publishing company Macmillan Inc. for $553 million. That same year, Simon & Schuster became Paramount Publishing in a move to give the various divisions of Paramount Communications a more unified appearance. In 1994, however, Paramount Communications was acquired by Viacom, Inc., which changed the name of the publisher back to Simon & Schuster.

STRATEGY

In the late 1990s Simon & Schuster was strongly committed to using new technologies to expand and improve its business. It saw excellent potential in electronic publishing and, in the mid-1990s, created Macmillan Digital to exploit these opportunities. The company also was looking to expand its international audience, and as such was increasing its Spanish-language operations.

FAST FACTS: About Simon & Schuster

Ownership: Simon and Schuster is a subsidiary of Viacom, Inc., a publicly owned company traded on the American Stock Exchange.

Ticker symbol: VIA

Officers: Jonathon Newcomb, Pres. & CEO; Andrew Evans, Exec. VP & CFO; Benjamin Roter, Sr. VP, Human Resources

Employees: 10,000 (1996)

Chief Competitors: Simon & Schuster competes with other major publishing houses, including: Random House; Time Warner; Putnam Berkeley; Golden-Books; Penguin USA.

Since Simon & Schuster is part of the major media conglomerate Viacom, management attempts to develop "synergistic" projects that will benefit both parent and subsidiary. For example, Nickelodeon, a Viacom property, teamed up in 1994 with Pocket Books, part of Simon & Schuster, to develop a line of children's books.

INFLUENCES

The first book published by Simon & Schuster, in 1924, simply contained crossword puzzles. It was an immediate success, selling more than 100,000 copies. Simon & Schuster quickly followed up with three additional crossword-puzzle books. All four became best-sellers and, by the end of the year, the company had sold more than a million copies.

The crossword puzzle craze eventually ended, and the company sought out new publishing fields. Its first big success was Will Durant's The Story of Philosophy, published in 1926. Simon & Schuster soon became known as a highly commercial publishing house. In the late 1930s two of its most successful titles were Dale Carnegie's How to Win Friends and Influence People and J.K. Lasser's Your Income Tax. The company also produced many distinguished works, including Rachel Carson's Under the Sea Wind.

In 1939 founders Simon and Schuster, along with the company's business manager Leon Shimkin, put up 49 percent of the financing to start Pocket Books, a line of inexpensive, mass-market paperback books. While paperback books had been around for many years, not until Pocket Books promoted them did they realized their full potential. Paperbacks received a big boost during World War II, when the government shipped millions of them to U.S. troops stationed overseas. Initially, Pocket Books published only paperback versions of hardcover titles, but it eventually brought out original titles as well. Its most successful book was Dr. Benjamin Spock's Baby and Child Care, originally published in 1946. By 1989 more than 33 million copies were in print.

Another important addition to the Simon & Schuster product line came in 1942 with the start-up of Little Golden Books. The line offered full-color, high-quality children's books for only $.25 per copy. Simon & Schuster handled editorial, art, and sales functions, while the Western Printing and Lithographic company took care of production and manufacturing. By 1958, the year Simon & Schuster sold its interest in the line to Western Printing, some 400 million Little Golden Books had been sold.

In 1975 Simon & Schuster was bought by Gulf + Western Industries (which became Paramount Communications in 1989). With the new ownership, Simon & Schuster began to expand rapidly under the helm of Richard E. Snyder. Between 1975 and 1983 sales rose from $44 to $210 million; by 1989, revenues were $1.3 billion. One of Simon & Schuster's most successful new ventures was a line of romance novels called Silhouette Books. Acquisitions also played a key role in the company's growth. The textbook publisher Esquire Inc. (which no longer owned Esquire magazine) was purchased in 1984, nearly doubling Simon & Schuster's staff to 2,300. Prentice-Hall, another large textbook publisher, was acquired later that year. By 1985 Simon & Schuster was the largest book publisher in the United States.

CHRONOLOGY: Key Dates for Simon & Schuster

1924:: Richard Simon and M. Lincoln Schuster found the company and publish books of crossword puzzles
1939:: Simon & Schuster create Pocket Books, one of the first large paperback book publishers
1942:: Starts Little Golden Books for children
1944:: Simon & Schuster is sold to Field Enterprises
1957:: Simon, Schuster, and Leo Shimkin buy back the company
1966:: The company goes public
1975:: Gulf + Western buys the company
1984:: Purchases Prentice-Hall Inc. and Esquire Inc. textbook publishers
1989:: Gulf + Western changes its name to Paramount Communications
1993:: Simon & Schuster acquires Macmillan publishing and changes its name to Paramount Publishing
1994:: Viacom purchases Paramount Communications and changes Paramount Publishing back to Simon & Schuster
1997:: Introduces Newslink

Richard Snyder also aggressively pursued and signed star writers, such as Bob Woodward, Kitty Kelley, Jackie Collins, and Rush Limbaugh. He reportedly paid Ronald Reagan $7 million for his memoirs. The addition of "name" authors does not always expand a publisher's bottom line. Indeed, by 1994 the company's entire trade publishing division (fiction and nonfiction books sold in bookstores) accounted for only about 10 percent of total revenues. However, blockbuster best-sellers enhance a publisher's prestige and help it acquire other publishing properties. As literary agent Morton Janklow told Time in 1994 "Trade publishing is like couture in fashion. Saint Laurent loses money on couture, but that's what allows him to make millions from his perfumes."

In 1994 Viacom acquired Paramount Communications, and Simon & Schuster became part of that media giant. Richard Snyder was dismissed by the new management; he was replaced by Jonathan Newcomb, chief operating officer. Newcomb had made his reputation by smoothly integrating Macmillan Inc., purchased in 1993 for $553 million, into Simon & Schuster's operations.

CURRENT TRENDS

Simon & Schuster has invested large sums to become a leading digital publisher. The company has created 30 web sites with 400,000 Internet pages to support its publishing efforts. Some 25 percent of its annual revenues in 1996 came from electronic products, including CD-ROMs, video disks, and Internet publications. In 1997 Simon & Schuster announced plans to raise the share of revenue from electronic publishing to 50 percent by the year 2000.

In late 1997 Simon & Schuster introduced Newslink, a Web-based service that provides subject-related daily news updates for students using its textbooks. Each day the service updates 50,000 to 100,000 pages of content by using information from news sources and web sites from all over the world. The service enables the company to supplement its textbooks by keeping students upto-date on the subject matter.

PRODUCTS

Simon & Schuster has continually introduced new imprints and product lines, often in conjunction with other companies and institutions. In 1996 it joined with Kaplan Educational Centers to create Kaplan Books, whose titles center on test preparation, college admissions, and career services. The same year Simon & Schuster and Harvard Medical School announced a joint venture that will publish books, periodicals, newsletters, CD-ROMs, and other products. Under the agreement, Simon & Schuster would prepare most of the materials, all of which would be reviewed by Harvard Medical. Another agreement signed with Cisco Systems will create materials on internetworking for corporate users of the Internet.

HEMINGWAY'S FINAL FICTION

For 25 years Ernest Hemingway's final unpublished book has gone unread by most, other than a handful of relatives, publishers, and a few scholars. However, Scribner, an imprint of publishing company Simon & Schuster, will be publishing Hemingway's fictionalized account of his 1953 safari to Africa in time for the centennial of the author's birth in July 1999. Scribner was Hemingway's publisher before he died in 1961, and the late author's son, Patrick, edited his final book, True at First Light, in preparation for release to the public.

When Hemingway committed suicide in July 1961, he was living in Havana, Cuba, and special arrangements were made by President Kennedy to allow Hemingway's widow to retrieve his personal papers. In return for this favor, Mrs. Hemingway deeded her late husband's papers to the John F. Kennedy Library, where the manuscript for True at First Light remained sealed from the public. A second copy of the manuscript is at Princeton University, but it too, is sealed.

The manuscript describes tales of leopard and lion hunts and a tribal uprising as it relates the story of the marriage of Hemingway to an 18-year-old African woman. In the work, the author's wife gives the couple her blessing. According to Charles Scribner III, "Hemingway loved tall stories. Who knows?" (Scribner questions the veracity, or truth, of the tale.)

Known best for his works The Old Man and the Sea, A Farewell to Arms, and The Sun Also Rises, Hemingway's final fiction is sure to be a best-seller for Scribner.

GLOBAL PRESENCE

In 1997 Simon & Schuster distributed both English-language titles and foreign-language titles overseas. Books, software, and multimedia products were offered in more than 150 countries. The company expected to publish books in 11 languages and 20 countries outside North America in 1997, primarily in the areas of academics, computers, English-language training, vocational training, and professional publishing. Simon & Schuster also maintains publishing partnerships in approximately 14 countries, including Japan and the People's Republic of China.