A lesson for Harvard Business School

Bernhard Tauchnitz started young in the publishing industry, apprenticed to his uncle, Karl Tauchnitz, who specialised in publishing dictionaries, bibles and classical texts in Greek and Latin.   Karl died in 1836, and although the firm was carried on by his son, Bernhard seems to have decided at this point to launch his own publishing company. He was just 20 years old when the company was created on 1st February 1837.

To launch a publishing company under your own name at the age of 20 needs a lot of chutzpah, but it must also need a lot of money. Presumably the young Tauchnitz came from a comfortable background himself, but he was also by then engaged to be married to a wealthy young lady, Henriette Morgenstern, which no doubt helped.

baron BT low

For the first few years he continued in the family tradition.   Among the snappily titled works published in 1838 were ‘Bibliotheca Patrum Ecclesiasticorum Latinorum Selecta’ and the ‘Zeitschrift fuer Rechtspflege und Verwaltung zunaechst fuer das Koenigreich Sachsen’, a legal journal.   It was not until 1841 that he turned to the publication of novels in English, the idea that was to make his name and his fortune.   There was no copyright law at the time and he was able to print copies of the latest novels published in England without any restriction, or any need to pay the authors.   Others were already doing so, and he started off in the same way.

Whether this practice troubled his conscience, or whether he saw from the start that there could be commercial advantage in doing things differently, we can never know.   But he quickly came to the conclusion that he should offer voluntary payment to the authors, in return for which he would be able to describe his editions as ‘sanctioned by the author’, and he set off for London to make this proposal to a number of leading novelists.  The first to agree to it, in July 1843, were Bulwer Lytton, G.P.R. James and Lady Blessington.  They were quickly followed by others, including Charles Dickens and Benjamin Disraeli.

By this time, the Tauchnitz ‘Collection of British Authors’ had already reached 50 volumes, all published with no authorisation or payment at all, including 15 volumes by Lytton and 7 by Dickens.   It’s perhaps not surprising that both authors were quick to accept the proposal, even if no retrospective payments were on offer.

Title page 47 Nicholas Nickleby I

Nicholas Nickleby was an early publication by Tauchnitz, with no approval and no payment.

In practice the proposal Tauchnitz made was a masterstroke. Although he was anticipating the law by only about three years (Anglo-German treaties established copyright protection in Prussia and Saxony in 1846), by being the first mover he was able both to set the terms and to establish a reputation for fair dealing. Both advantages lasted a long time.

Having been offered voluntary payment, where none was legally required, authors were in no position to negotiate the terms, and most were simply grateful for the offer, so grateful indeed that they allowed Tauchnitz to continue to set the terms throughout their relationship. Charles Dickens was clear about this in much of their correspondence. For example in 1860, almost twenty years later, he wrote:
“I cannot consent to name the sum you shall pay for ‘Great Expectations’. I have too great a regard for you and too high a sense of your honourable dealing, to wish to depart from the custom we have always observed. Whatever price you put upon it will satisfy me. You have always proposed the terms yourself, on former occasions, and I entreat you to do so now.”

George Henry Lewes, the partner of George Eliot, as well as an author in his own right, similarly wrote “As to remuneration, from your having transmitted English authors an honorarium at the time when no law of copyright rendered such an action imperative, I have conceived such an idea of your liberality and probity as to leave it to you to send me whatever sum you consider the success of the work may justify.”

The advantage that a publisher might achieve from such a privileged position can only be surmised. Publishers today would be open-mouthed at the idea of being offered a new work such as ‘Great Expectations’ for whatever sum they wanted to pay. Presumably Tauchnitz had to be careful not to abuse his position, but it was certainly one of considerable power. It even extended to his son Christian, who eventually took on the business after the founder died in 1895, with Mark Twain writing “This father and this son have one prodigious distinction which I believe no other publishers have ever enjoyed – to whit, that they were never thieves”. Twain presumably was unaware that the first 50 volumes in the series had been unauthorised.

Title page 57 Martin Chuzzlewit I    Title page 175 David Copperfield I

Later publications – Martin Chuzzlewit in 1843 ‘Edition sanctioned by the author’ and David Copperfield in 1849  ‘Copyright Edition’

There was another advantage too from the reputation and the relationships that Tauchnitz had established. He was able to obtain new novels as soon as they were completed, often working from early proofs produced by the UK publishers, or from the serialisation in monthly magazines, and in many cases even issuing them before UK publication, so that the Tauchnitz Editions are in practice often the true worldwide first editions. Through his direct relationships with authors, he could effectively bypass the UK publishers, who would have preferred a delay before allowing continental publications that would undercut their more expensive editions.

That initial proposal by Tauchnitz, even if motivated by guilt rather than hard business calculation, was undoubtedly a stroke of genius. I almost feel it should be written up as a case study by Harvard Business School. It’s a wonderful example of what the British economist John Kay, has called ‘obliquity’ – that the best results in one direction are often obtained by starting off in another, and the companies most focused on delivering ‘shareholder value’ are often the least successful in doing so.

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Posted on January 30, 2015, in Vintage Paperbacks and tagged , , , , , , , . Bookmark the permalink. 12 Comments.

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