Stunning! Major publisher goes bankrupt! Wow..that is great for our self publsihing industry. Wahoo!!
Bankruptcy (for either good or ill) doesn't really mean a whole lot other than they have more debt than they can pay off in the foreseeable future. It could be because they're having a cash-flow crunch, they're poorly managed, over staffed, a bad economy. . .
It doesn't necessarily mean that they're not selling books or that they won't continue to sell books. They'll stay in business and continue to make lots of money. What it does mean is that a court-appointed trustee will decide which creditors get paid and when. So, unless you're one of Houghton Mifflin Harcourt's creditor's, this doesn't really amount to a hill of beans.
A different article in the NY Times mentions that the firm has been saddled with a heavy debt burden since 2006--2007, from something that sounds very much like what used to be called a "leveraged buyout" in the last century. LBOs very often had the same result back then.
Their plans are to sell stock to raise the money to pay off the debt ("convert debt to equity").
A great many things go on behind the scenes in the business world that Mr. Average never knows about. Some of it would blow your socks off. Trust only the things affecting you personally and let the rest pass you by.
Your response made the most sense. The publishing industry is changing. Createspace knew this and cottoned onto it. In the past, self publshing was considered vanity publishing and highly frowned upon. Now, there are great authors who are getting their work out there without being rejected continuously by the "literary agent" or the "big house publisher."
As the proprietor of a small publishing company, this bodes well for small industry. The market is changing. Like it or not. That is a fact. The electronic market is also affecting things. Especially bookstores. DFW a huge metroplex of over 2 million people has only one independent bookstore. And kudos to that bookstore, it is awesome ARealBookStore at the Villages at Fairview.
I am just saying as a writer and small publisher, it is fascinating to watch the dinosaurs fold. The times they are a changing. I believe that is for the better.
Thanks for explaining your position. I guess I haven't read the business analysis that explains how HMH's declining revenues are a result of customers buying independently published books instead of theirs. I thought it had more to do with the recession and unemployment pulling down local tax bases, which in turn has caused school districts and other institutional buyers to defer book purchases because they don't have any funding for them. That didn't seem like such a good thing to me, but I guess if the institutions that can't afford to buy books from HMH or any of its major competitors are still finding the money to buy from us, then maybe it is.
For what it's worth, a 2009 Reuters survey ranked HMH as one of the ten worst places to work in the U.S., so that's probably not helping the operation either.
Personally, I don't applaud the possible demise of any traditional publisher. They offer a number of things that small publishers cannot. Aside from marketing and distribution (which could certainly be poor), these companies generally offer significantly better editorial resources, legal review (albeit often on the conservative side), and media perils coverage.