Publishing: The problem of Deseret Book Part 1: A Question of Size

This is the first in a three-part series on the role of Deseret Book in the LDS Market. As the largest player in the market and because it is owned by the LDS Church, it occupies a unique, but problematic, in my view, position.

The LDS publishing industry has an 800-pound gorilla -- Deseret Book. I'm sure that the management there would not disagree that Deseret Book is the largest company in the industry, but they would say that this is not a problem. After observing the industry for about 10 years, I have to disagree. Its a problem.

Why? Well, Deseret Book's size and control makes it much more difficult for smaller publishers to sell their books. This limits what books are available. Because Deseret Book is owned by the LDS Church, it is often percieved as being semi-official, giving it marked advantages among much of the LDS audience. And Deseret Book's size in combination with its position as retailer, distributor and publisher puts it in a position to make decisions that aren't fair to others.

Lets review Deseret Book's history and position. Arising from the operations of George Q. Cannon & Sons, owned by the long-time first counselor in the first presidency, the Church-owned Deseret Sunday School Press and the Church-owned Deseret News Press, Deseret Book was, like many publishers of the time (1st half of the 1900s) both a publisher and retailer. Since it was owned by the Church, Deseret Book had a stability that most other businesses of its size could only dream of.

I suspect the company's growth through the 1970s was mostly in its retail operations (i.e., stores), which have expanded to its present 41 stores (a 42nd is apparently in the works). At least some of this expansion has come from acquiring other LDS bookstores, as it did recently in Seattle. As a result Deseret Book is clearly the largest LDS retailer.

More recently, Deseret Book has grown its publishing operations through acquisitions, principally by acquiring Bookcraft, its most significant competitor, in April 1999. Deseret Book also aquired Excel Entertainment, the most important company in the nascent LDS film industry, earlier this year. Deseret Book is also clearly the largest LDS publisher, and recently began using this size to sell distribution services to small publishers, giving it a significant position among the distributors in the LDS market.

I found the purchase of Bookcraft particularly troubling at the time and wrote in a opinion on Mormon News (not available online at the moment) that the purchase made Deseret Book too dominant. At least since that time Deseret Book has controlled more than 60% of the LDS market, and its recent acquisitions make me believe that this percentage is increasing. If the LDS market were larger or if it were the entire US book market, such a purchase would have certainly invited anti-trust review. [Note: I am NOT a lawyer.]

So why is this bad? First, it tends to limit or reduce the number of titles produced, at least in the resulting company. This happens frequently in publishing mergers -- the merger means new management reviews the titles it is selling and has planned and gets rid of the slowest selling titles or those that don't fit the new vision of the management. Often, in order to pay for the merger, the combined company then cuts editorial staff in some way, reducing the number of titles it can produce.

Did this happen to Deseret Book? I don't know about staff cuts (there were some a year or so after the merger, but I don't know if editorial staff were cut), but Deseret Book did get rid of titles, and the structure it planned at the time -- four imprints (Deseret Book, Shadow Mountain, Bookcraft and Eagle Gate) -- seems to have also disappeared.

Market domination makes it easier for Deseret Book to sell its books. Because it is owned by the LDS Church, members naturally look to it for books about the Church. The ownership gives its book an air of approval, where one doesn't necessarily exist (generally books authorized by the Church are those published by the Church and distributed through Church distribution).

Members also naturally go to Deseret Book stores to get LDS books and other materials, simply because it is owned by the Church and, they assume, wouldn't sell anything that isn't in harmony with the Church's teachings. Right or not, Deseret Book apparently accepts this responsibility and, according to news reports in the past few years, requires that its buyers verify that the books it sells meet its standards.

This size also conveys a sense of completeness that clearly does not exist. While some members assume that everything that fits Church standards is available through Deseret Book, this is also clearly not true. Deseret Book doesn't take on products they don't think will sell, and those products often do not appear even on its website or in its catalogs. For a small LDS publisher, if Deseret Book doesn't buy a title, it may mean that even the best informed purchasers of LDS books won't know that the book even exists.

Deseret Book's advantage in the market also puts it in a position to push its own product at the expense of other publishers. As the largest LDS retailer, Deseret Book is looked to as the primary source for LDS books, but since it is also a publisher, it has an incentive to push its own books instead of others. As one competitor told me at the LDS Booksellers Association meetings in August, as the Christmas season approaches, orders from Deseret Book's stores dry up for all but their best selling titles. Orders from Seagull Books, the second largest LDS chain, owned by the second largest LDS publisher, Covenant Communications, also dry up. Why? They prefer to stock their stores with their own titles rather than those of other publishers.

Of course actions like these weaken the smaller publishers, and limit the number of titles that smaller publishers can produce, simply because they have fewer money and resources to market their titles and fewer prospects for selling those titles, if Deseret Book chooses not to carry those titles.

In a sense this is really not much of a surprise. Any company that dominates a market like Deseret Book dominates the LDS market has a similar advantage. Its certainly happened before. But rarely is it really good for a market.

Unfortunately the problem of Deseret Book doesn't stop at its size. I'll address that in the next part of this series.