so that's a precursor. and then if you look at the flexible savings accounts, this year it's $2500, so we're seeing the end of that. so i think the writing is on the wall for the fact that this is not something that's part of the agenda on the president or hhs' agenda, the continuation of hsas. >> the way the rule, what comes up in the question as grace marie said is you've got part of it paid, first, out of the hsa. well, if that doesn't count as a payout against the premium, then you get into this problem where the insurance company's running up costs and not making a payout, and they're going to be in violation of the rule. now, so if that payout is counted as being paid out against the premium, it might qualify. but then you have the other problem, what about the contribution that the employer makes to the health savings account? is that counted as premium cost? in which case then you just made the premium more expensive, and

the payout may not qualify as meeting the minimum loss ratio or not. that's why these rules are going to be very important for how they play out. >> yeah. they basically say that if a person pays for medical care out of their health savings account, that doesn't count. >> right. >> it only counts if the insurance company pays for it. >> but they're not designed that way. >> that they have to calculate how much that individual has paid in medical expenses, and part of the administrative costs. so it's just really, a very demonic way, i think, of killing health savings accounts indirectly rather than doing it more explicitly. >> and they've alrdy said you cannot use, um, your hsa account for over-the-counter meds. and so what does this mean? you know, people go to the drugstore and get an over-the-counter med, now if they want that medicine, they're going to have to go to the doctor, get a prescription, and this adds to the cost of our alth care. >> another gift for big pharma. you can't use it for the

generics or the drugs over the counter, instead you get a prescription for a brand name drug. >> i would just like to end it by saying i guess like we say at the heritage foundation, details matter. and the more the american people know the details, i think the less that they will like it. so thank everyone for the panel. we do have books available when you came out so, please, feel free to pick one up. but let's thank the panel one more time. [applause] >> every weekend booktv offers 48 hours of programming focused on nonfiction authors and books. watch it here on c-span2. >> and now booktv sits down with jonathan karp, executive vice president and publisher of simon and suiter, and morgan entremendous ken, publisher of grove atlantic to discuss the publishing world from bookexpo america, the annual trade show for the publishing industry. this is about half an hour.

>> you're watching booktv on c-span2, and we are on location in new york city at the annual book publishers' convention, book extoe america, it's called. -- bookexpo america, it's called, and we're pleased to be joined by two publishers. first, morgan entrekin, publisher of grove atlantic, and jonathan karp, vice president -- executive vice president and publisher of simon and schuster. gentlemen, thank you for being on booktv, we appreciate it. morgan entrekin, how would you describe the state of the publishing industry today? >> wow. exciting. there's a hot going on. i think that -- there's a lot going on. i think that we're going through a big shift as we move to digital, and i think it poses a lot of opportunity, it poses a lot of questions. there are big new players and forces at work, and i think all of us are trying to figure out, you know, what to do. but the main thing i think that

we have all realized is that the best thing we can do is find and publish the best books possible. >> so what percentage of revenues come from electronic books right now? >> probably for grove atlantic this year it will be around 30%. >> do you see that taking 50% at some point? >> i think eventually. one of the things we've all noticed is that the growth rate has slowed down. and, you know, grove/lantic is a mid-sized publisher. we do not publish children's books, reference books, travel books. we're in the business of 100,000 of prose -- [inaudible] and i think the physical book is probably going to stay around for a good while. >> jonathan karp, same question. >> well, that 30% number is a good number, and i'm going to stick to it. [laughter] there was some market research done, i think, by a guy named jack mckind, and he found that about 50% of the people surveyed

in independent bookstores were buying e-readers. um, and of that 50%, 50% of them said that they'd still want to keep buying hardcover books. they were in bookstores when they were full, so you could subtract for that. still, 50% are not buying e-readers and do not intend to. and i've seen that a couple of times, and i don't know whether that number will change as behavior changes. and it probably will. but i do also think that a lot of people are going to keep buying regular hardcover and trade paperback books. >> has the publishing world, in your view, stabilized in the last year or so as opposed to the last five years? seems to be a lot more turmoil in the last five years. >> you know, i didn't want feel that much turmoil personally because i wake up every morning thinking about what the book should be. and that hasn't changed. and a lot of this, um, coverage of digital publishing, it's

true, it is a transformative technology, but it doesn't, it hasn't radically changed the content very much, nor has it changed what makes a book great. so i still wake up in the morning thinking about the same thing, you know? how can you make the book better, who should be writing the book, how do we make people aware of the book. so it hasn't felt like as tumultuous a time to me as it may feel to people covering it. >> mr. entrekin? >> you know, what i'm trying to do is just watch everything that's going on and make smart decisions. but, you know, i agree with jon that i think there are a couple of things we have to recognize with the move to digital in books as a form. one, iis a qualitatively different experience to read a book on an e-reader versus to read a paper book, and that's not true of music. music sounds the same either way. the other thing is we have to realize book readers range in age from two days old to 110 years old. so the particularly over-40 or

over-50, i think, are going to be slower to adapt and move purely to digital. so, you know, in terms of the turmoil, i think what most of us were just a little unsure about what and how is going to be the shape of the channels of distribution, you know? what role are the big players going to play, are they continue to continue to play, are we going to be able to keep a significant number of bricks and mortar stores? and, you know, that's a question confronting all of us. >> recently in "the new york times" there was an article about how the publishers have done e-commerce or e-books differently and better than the music publishers from the previous era. are you satisfied with the approach that publishers have taken with e-books? >> wow, interesting question. i guess i'm satisfied. i mean, right now it's a fairly significant windfall and income for publisher. if you look at the companies that have to report their results publicly because they're

publicly traded, almost all of them are showing pretty robust profits over the last 24 months. so, you know, i think that we came later to digital than magazines or newspaper or music. i think that unlike magazines or newspaper, we don't have a subscription or advertiser base so that protected us some. we figuredut how to get paid. piracy is not a significant problem for us yet. you know, and again, it's, you know, it's a 17, 18-year-old kid is going to download music, and that's a different customer than a 45 or 55-year-old person buying a hardcover book. i've never stolen any music, you know? i pay for what i download, and i think that that's something we need to recognize, you know, we're going to have a different experience. >> just to pick up on that, jonathan karp, there's a generation now that expects music to be free, movies to be free. as a publisher, are you seeing that people expect their books

to be free as well? >> i haven't, i haven't perceived that. and, um, i agree with what morgan's saying. e lofook, t conventionalomn the publisng indtry that it's hard to sell togers or people in their 2viousl a in yng adult, but ihink parents are of those books for kids. d so'm not sure that, um, thatookve been as vulnerable as music and film has n, i notice, you know, i go onto youtube all the time when i want to hear a song, and i don't want pay for it. and i, but i'm still buying books. so from my own prsonal experience, i don't, i don't see it. >> why the boon in ya books? >> well, i think -- well, one reason is that they're online. and so the social media is communicateing excitement about those books so fast.

they have more time, so when they hear about something that's interesting, i think they all just flock to it faster. i think that it's easier to communicate enthusiastic word of mouth for young adult work. now, there's this phenomenon of adult readers buying young adult books, like the hunger games or harry potter, twilight. i haven't been able to figure out that except i guess readers are hooked, and it doesn't really matter. maybe, also, the line between what young adult is and what is allegedly adult is not as pronounced as it used to be. pe wth you publishing any of'tay lo ofauority.th publisher of twilightand there's amo an ai an tells about buyh. and kwing she so thihedeo resp twilight just the way any reader would. social media,

paicully when comes to pr and marketing of a book? >> well, um,'m s od, and i don't want tet plettw fi to do it. it's one of the things i'm trying to educate myself and my staff about, i think what the internet has offered us is a way to narrow cast thatneverble an a costfective man tore potentially reach the audience that might be interested in the bookhich has always been one of the biggest challenges for a bookblr. and i know you've had karl marlans on a couple times, and we really made great use of targeting the potential vietnam veterans or people interest inside that issue the same with what it's like to go to war, his bookn combat experience and how our society needs to, you know, direct more attention to preparing young men and women to

go off inom you,able to identi and communicate with potential audience for that book in a way that we never have been able to. and as far as the social media, um, i'm not certain, you know, how to use it most effectively. we try a lot of different things, it hel particularly if the author is very engaged. that's what -- i think that the author has more opportunity to control his or her own fate than ever before by being very active on social media. >> i agree with that. i mean, we're publishing arnold schwarzenegger's autobiography, and arnold actually asked people on his facebook page, he has, like, two million followers, he said what would you like me to write aout? he said, submit phot if there are photos you'd like to see in the book. and hundreds -- thousands of people actuall responded. so that's one wayou can communicate. we have other authors who just connect ve lyugh social media. a lot of novelis do it very well.

they're online a lot, i sometimes kes them from wrg thei book. but it's definitely a more effective way of getting authors to connect with their readers, and i think that line in catcher of -- catcher in the rye, actually if they don't hear back in a day, they're probably annoyed. >> jonathan karp, when did you get started in publishing? >> 1989. i went to work as an editorial assistant at random house for one of the best editors in the business, kate medina, and i got the job because i could type 100 words per minute. [laughter] >> did you plan on going into publishing? >> um, you know, it's funny because erwere several books that i'd read that made me want to go into publishing. one of them was "power broker," and it's nice to see robert caro out with a new one. one of them was the cider house rules by johnng. vi and i read those two books, and i was a reporter forthe miami

herald, and reading those two books was so much more profound than any of the journalism i was doing that i thought i should just work on books and have a deeply immersive experience and learn what real writing is about. and the great, you know, the great experience has been that i'm now actually john irving's editor. and it's been one of the best experiences of my life. >> with well, mr. karp, as a former newspaper reporter you've probably got a book in you, right? >> i don't know. when i was a newspaper reporter, i was -- one of my last stories is i was sent to cover a garbage dump that was on fire, so i think maybe i got out at the right time. >> morgan entrekin, how did you get into the publishing realm? >> i got into publish anything 977. i always say that i was at school in between the hippies and t yuppies so that just getting through school was an accomplishment. i was at stanford, and stanford

has always had a great writers' program. and some of the people that were there at the time when i was there, raymond carver, richard hugo, max crawford, none of them could get published. and one of them told me about the publishing graduate course at radcliffe, now columbia, and it sort of opened my eyes to this whole world. i grew up in middleton, you don't really grow up thinking about where books come from. i started to work at della court, and my first job was as a reader, and i could read very fast. so my first day, i came in, and i read three books in one day, and the editor-in-chief said give us two paragraphs of summary, one paragraph of evaluation and then say, yes, no, or maybe. and i looked at him and said what good is maybe? anhe syou're going to make a ed. but he read three booksfirst day, and he came -- and the next day he said how late didou stay? i said, about six. he sai y read three books? so i set the standard to where

ever day i had to read three books. i did th for about six weeks, rial.i eyes were f books yo worked o early in your career -- >> kur vonnegut's book "jailbird." slaughterhouse five, youno coming of age in the late '60s, that book was very, very important. kurt had never had a proper editor, and his publisher was one of the first imprint publishers, and he had seen some of my reader reese reports -- reader's reports. and i became kurt's editor. i was 23, and he was 56. >> what was that relationship like? >> hwas wonderful. was a dear frien a i was so lucky to have him in my life. and, you know of course he gave my career a huge boost because kurt vonnegut goinground te, thbook came out and got rave reviews. all kurt's doing, i very, very little contributed to that book, but, you know, it gave me a lot

of self-conferred, and he remain -- self-confidence, and he remained a friend. >> jonathan karp, who's an early author you worked with? >> maya pluto. i was about 27 years old, and the publisher of random house, joni evans, needed a guy to read this novel that he was writing. so i read it in one big, delighted gulp one weekend. and i wrote a ten-page editorial memo. and on the strength of the memo, i got invited to hp edit him in las vegas. >> that's where he lived? >> that's where he did his best work. [laughter] so we went to a a casino, and he had the best suite in the hotel because he was a high roller. and, you know, walking around, and we edited during the day, and then we gamed a night. and mario, i'd never galed before, an to play back rat,soe gave m icen gave nher10 and,

fortunately, i made enough to pa back. >> the 200? >> the 200. while, he made about $7,000. so after joapny an left random house, he asked for me to be his editor. and the only reason he asked is because he thought i was good luck. [laughter] so, anyway, fun. >> have you been gambling since with him? no, i never gambled again. well, except for that.o for n'to [inaudible] >> i did. i acquired less than zero. >> i once heard a story about you actually having to fight for that. >> yeah, absolutely. aisle not sure i can use the language on tfl of what some of the editors wrote, but you used to have to se around a manuscript, and everybody would note their comments before the editorial meeting and, you know, there were some pretty strong negative comments about that book including one i can't peat on the air. but ending with if there is a

market for this kind of book t resign. >> yeah. >> do you still send around those memos at simon and zeuser? >> that's what's so funny because i really want it to b a place where editors like mn can do whatever they want, and i find that story remarkable. >> dan green and dick schneider, to their credit, you know, th said, look, thisis why we have you here. you're 27 years old, and, you know, i bought the book for, i think, $5,000 for world rights and, younow, why not allow a young editor to take a chance now and again? that's why we have them. >> exactly. i mean, that's really -- the exciting thing is to let editors discover writers. that's the reason we're here. >> so, jonathan karp, besides the e-book world that we're live anything today, what other changes should we be looking out for in the next couple years in publishing? >> well, you know, i'm interested in whether the attention span is getting

shorter. and, i mean, if you were to look at writing from the previous century, it is longer. the books are longer, the sentences are longer. and so i wonder whether digital will result in some books being shorter and perhaps in longer-form journalism having, having more of a place in the culture than it does right now. i think, you know, magazines have cut back on their longer stories. so maybe the publishing industry can step in there at the 20-40,000 word leavitt. i hope we can find a way to make people aware of shorter work. but at the same time, i'm also ful that books will be increasingly authoritative. i think because so much of the media is disposable and because there's so much information coming, coming at people, i do hope and think that publishers will perhaps embrace a model of

really putting their investment and their muscle behind authority. that's what i'd like to believe. >> well, we talked to a couple publishers here at the convention about instant e-books. is that something that simon & schuster's looking into? >> hardly at all, no. because, you know, we really are trying to publish the books that are going to last. it's hard to compete with "the new york times" or with cnn. so i don't really see very much of that happening for us. >> morgan entrekin, what changes do you see coming down the road that we should be aware of? >> you know, i agree with what jonathan says in terms of the form changing some. we've done one enhanced e-book or app with an australian scientist named tim flannery. he did a book that's a natural history of the planet from the big bang until today, and it lent itself to, you know, sort of graphs and videos and putting a lot of the scientific stuff in. we have a new media company

called arcade sunshine, and they produced a really brilliant piece. but what my experience of using it was television sort of like reading a book and -- it was sort of like reading a book and watching a documentary at the same time. so i think that somebody who's 23 probably is more fluent in multitasking or absorbing media in a different way. i think with the change, change in form will happen. i mean, if you look at network television or some of the fiction that's published now, 50 years ago those forms would have been seen as avant-garde and almost incomprehensible. but our attention span has shortened or speeded up or broadened, whatever you want to say, so i think that form will be reflected. you know, and, again, i still think that the 100,000-word narrative does something that no other medium can. if you want to understand al-qaeda, you read "the looming tower," it explains it better than any other form will explain it.

and also if you want to enter that world of harry potter, fiction does that better th any other medium. and i find interesting that all young people aren't going to e-books right away. talking to some of my nephews and nieces, they spend so much time in many front of a screen that they prefer ink and paper as a form. so, you know, books have been around for a long time, time, te may change the way we deliver them, change the shape of this industry some, i think publishers are really going to have to examine closely what it and be smart about it and get as efficient and more efficient as possible, but ey're not ing to go away. we're ing to havbooks. more of who we alrea are.ome i think that f a while publishers thought they could be all things to all people, and i think there's something really very helpful about what's happening now. with all these people self-publishing, with publishers, the real strength of

publishers is their ability to focus on what they believe in and to be prosthelytizers for books of real importance or significance or just great entertainment value. so there should be less of the spaghetti against the wall syndrome where you're just, you know, sort of willy-nilly going off and doing whatever makes sense at that moment. and i think that the fact that the barrier to industry's so much -- entry's so much lower now, it forces publishers to decide, really what do you stand for, what are you behind? and i think that's a good thing. >> what are some of the upcoming books that simon schuster has coming out in the fallsome. >> ah, i love that question. well, one of them is called "paterno." the author is the most recent elected member of the sports writers' hall of fame. and he was with joe paer paternn this whole scandal erupted. he was writing the book before then. he had access to the family. and he is a wonderful writer -- >> did this scandal take him by

surprise as well? >> absolutely, yeah. but he -- it's about paterno's life. this man who was the winningest college football coach in history. and a man who valued excellence much more than success, about what happened when all of this erupted. and i would put it right up there with when crime still mattered by david maraniss or richard ben kramer's book on dimaggio that i loved and edited, seabiscuit. it's a book about much more than sports. the only other one i'll tell you about is a novel by herman wouk. he just turned 97 years old, and when i was in grad school, i actually wrote my master's thesis on the idea of entertainment as literature. and literature as entertainment. and wouk was the writer i wrote about to exemplify that.

his novels. and he's written a new novel that is very much sort of a latter-day e pis lair update of marjorie morningstar. and it's called "the lawgiver," and it's about a bunch of people trying to make a movie about the life of moses. and i can't wait to share it with the world. and i think it's just amazing that this man whose first novel was published by simon & schuster about 61 years ago has returned to simon & schuster and is still going strong at 97. >> morgan entrekin. >> um, well, i'm very excited about mark -- [inaudible] new book. a year ago he started to report on the killing of osama bin laden, probably the preeminent chronicler of the special forces and military actions in the u.s. today. and, you know, he -- jerry bruckheimer, who produced

blackhawk down, called mark and said do you want to do this story, and mark called me and said, well, if jerry's going to do a movie, we probably should make the book. he's gotten a lot of stuff that nobody else has got, so we're publishing that in october. it's called "the finish: the killing of osama bin laden." and then i've been waiting 11 years for a novelrom lawrence norfolk, and he delivered a book to me called "john satter knoll's beast." it's about a young boy, john, who is a prodigy of the kitchen andecomes a cook, the most renowned cook of his time, falls in love with the daughter of the lord of the manor, the english civil war intervenes, and the puritans don't like fancy cooking. anyway, it's for the audience who loves -- each chapter opens with a recipe, and i commissioned 13 original

illustrations, and i'm going to make the most beautiful book, and i'm excited about it. that's coming in the fall. >> two more questions. what's it like now to have amazon as a publishing competitor in i mean, obviously, all the publishers like amazon to sell their books, but -- >> well, you know, reporters have asked me that question, and i'm not particularly concerned by it. in fact, i've had competitors who are 100 times my size for 25 years, so now here's one that's a thousand times my size, what's the difference, right? [laughter] i'm going to have to find ways to maneuver and strategies that work for us. and the other thing i think is that it could educate amazon about the challenges that publishers have, the value that a publisher adds to the, to the process. and, you know, i mean, somebody said, well, aren't you afraid you'll ruse offers to them -- lose offers to them? i said, i lose offers to people all the time. it doesn't bother me that much. i think it provides an

interesting alternative. >> i couldn't have said that any better. i think that it's largely a media obsession. and i understand why. they're new, they're different, and they're big, and they've got a lot of money. but -- >> so does simon & schuster. >> well -- [laughter] i'm glad you think so. [laughter] but, you know, they are just, they are, ultimately, just another publisher, and there are enough good writers to go around. >> i was just kidding. [laughter] jonathan karp, publisher of simon & schuster. what's on your summer reading list? >> on my summer reading list? >> yep. what are you looking forward to reading? >> well, i'm looking forward to reading robert caro's lyndon johnson, the latest volume in the lyndon johnson series. and that that's going to take some time. i spend most of my time reading at simon & schuster, unfortunately. >> i've got a galley of canada, and that's the next book that i'm going to read. and i'm trying to get a galley of