Staying alive in the land of the giantsTime Warner makes a mint. Sports Illustrated publishes the magazine
and licenses the calendar. A Warner division might make a video-
tape and that, in turn, can be aired over the cable network HBO.
See? The colossus wins in several ways.
Plenty of other conglomerates practice this strategy, too. Viacom
owns Paramount Studios, which makes Star Trek TV shows and
movies... and Pocket Books, which publishes Star Trek novels and
books... plus Simon & Schuster Interactive, which markets a CD-
ROM called Star Trek—The Next Generation Interactive Manual.
To discover the hidden "vertical" value of a publishing company,
you have only to look at what they own. Warner owns D. C. Comics.
Simon & Schuster owns Nancy Drew and the Hardy Boys. You fol-
low? Publishers follow, too. So do financial analysts. They like to
call vertical integration the creation of "synergies."
Thoughtful authors will have noticed a hidden danger to them in
the drive for "synergies"; namely, the giants can make big money
from a property only if they own it outright. With fiction, that means
they must control the copyright. They may settle for trademarking a
series title and logo, or even for mere merchandising rights (the
ability to license a property or its contents for use in or on other
products such as, say, toys).
Great. Just great, you say. As if we do not have enough problems
already! Not long ago, publishers tried to grab audiocassette rights.
Then came their drive for "world English" rights—remember that? And
then there was the big electronic-rights war. (That one is still going on,
come to think of it.) And now you are telling us publishers will want to
own our copyrights, or at least control of all rights throughout the
world? How long does it take to become a CPA, anyway?
Do not panic. The situation is not as bad as it looks. For one
thing, synergies ultimately will not remain a threat since they are
not the magic bullet that will rid the giants of their debt problems.
(Although it must be said that some synergies—like the coupling of
Disney's programming with ABC's TV network stations—will proba-
bly produce big new revenues.)
For another thing, in the world of fiction most copyrights are held
by individual authors, who are not going to give them up lightly.
Selling world rights is tempting in certain situations (see Strategy