Random House CEO Letter Focuses On New Opportunities: Year-end staff letter

We think this report from Random House CEO Markus Dohle is especially significant for authors. It confirms that Random House is still buying manuscripts, though it hints between the lines that advances may be lower. Dohle also confirms a growing commitment to e-books. Here's our take on the Dohle letter:

New York, NY (Authorlink News, December 18, 2008)--Random House CEO Markus Dohle distributed an upbeat year-end letter to employees today, promising that the publisher would face today's challenges "directly, confidently and creatively."

Among highlights of the letter, Dohle said Random House would continue to spend several hundred million dollars to acquire and market books worldwide, across its 130 imprints. He said "author development remains our publishers' number one objective." He also noted that publishing imprints would remain "independent and autonomous."

Dohle said the company will be more customer-oriented and market-driven. For example, Random House has consolidated its three sales forces into one for UK and Canadian customers. In Germany, Random House has become the country's first book publisher to instigate three, rather than two,sales cycles. "This will create greater marketing opportunities and a basis for sales growth in the future," the CEO said. "And in the U.S. we are looking at aligning our sales forces even more closely with how most of our customers actually buy our books, by publishing category and format."

Random House also will "significantly reduce the time it takes to re-supply bookstores," who are now ordering lower initial quantities and demanding faster, more frequent stock replenishments. The initiative will also help lower costs of inventory excesses throughout the supply chain."

Dohle put a major emphasis upon growing digitally. He noted that U.S. e-book sales have increased 400% over last year. Thus the company will be budgeting for more e-book growth in 2009. By the middle of 2009, Random House will offer more than 15,000 e-book titles, some of which are newly available on the iPhone.

The publisher's biggest challenge to its bottom line this coming year will continue to be rising costs, Dohle said. Employees will be asked to "consider reducing spending as part of your daily decision-making." He called cost saving "as much a mental as it is a financial discipline. The most we save in costs, the more we will have to invest in our publishing."

Dohle also cited "getting greener" as a top priority. The publisher will increase to 20% the targets for using recycled fiber paper in book production and will set new targets for reducing greenhouse-gas emissions.

"The strength of our 2009 publishing programs clearly illustrates that with every crisis come opportunities," Dohle reminded.

The CEO listed an amazing lineup of authors for 2009 and said, "We cannot allow the economic crisis to overshadow or distract us from the enormous commercial potential of our imprints' publishing programs for the coming twelve months.