Publisher and property developer Morry Schwartz on how to win in both fields Melbourne publisher Morry Schwartz is out of the property development business for the first time in 30 years. Peter Braig by Andrew Burke The closest thing Morry Schwartz has to a Sydney office is a table at Fratelli Paradiso. So it's no surprise that the Melbourne-based publisher and property developer has chosen to meet at the Potts Point institution as he gears up to launch the latest addition to his growing media and publishing empire – a thrice-yearly journal called Australian Foreign Affairs to add to The Monthly, theQuarterly Essay, The Saturday Paper and his imprints including Black Inc. and Nero. It's a sunny day and by the time I arrive at 12.30pm he's already been conducting meetings at a shaded outside table for hours. He quickly wraps up the last of them – with his newest editor, Jonathan Pearlman, who he's chosen to steer what Schwartz refers to as AFA – with vigorous agreement on the challenge China faces to lift hundreds of millions more out of poverty. With his grey, shoulder-length hair, black, slightly rumpled suit and white shirt without a tie, Schwartz reminds me a little of actor Christopher Lloyd in his Back to the Future guise. He is the personification of the migrant made good. Born in postwar Hungary to Jewish parents who had survived the Holocaust, he was smuggled across the border to Germany when he was one and spent most of the next nine years in Israel. Morry Schwartz in publisher mode in 1981. He started Schwartz Publishing the day after Outback Press folded – "I didn't miss a beat." Supplied When he was 10, his parents, Andor and Baba, migrated to Australia with his younger brothers. Schwartz didn't speak a word of English, he tells me, but says it didn't really matter. "Look, a child of 10 doesn't find it hard to learn." Today he speaks English, understands Hebrew completely – "every word but I speak it badly" – and understands Hungarian from his childhood in a Hungarian settler village. "I understand every word but can't speak one, can't access a single word." After finishing school at the selective Melbourne High, he studied architecture briefly before deciding he didn't have the patience for six years of theory. He dropped out to travel, spending time in Indonesia and Cambodia, before returning to get into the film business. "That was my first love," Schwartz tells me, before describing a business that took films to regional areas. It was his first foray into the arts and, while it didn't last long, his work as a publisher, time on the board of the Australian Film Institute and marriage to art dealer Anna Schwartz has meant he's remained closely involved. Rising from the Ashes He started Outback Press with three partners in 1973. Schwartz describes Outback as a pioneer in Australia because it published Australian writers at a time when few others did. Alan Schwartz, left, Anna Schwartz and Morry Schwartz in 2009. The family has remained very close, says Morry Schwartz, in part because they've never done business together. Shaney Balcombe "They were great days," says Schwartz, but it would eventually come unstuck in the courts. "We ran Outback Press for about four years until a big defamation case knocked the company over." The case was a fight against the Australian Cricket Board to publish Lambs to the Slaughter, a memoir by Australia's young cricket captain Graham Yallop about the disastrous 1978-79 Ashes series. "I sold the first serial rights to The Age and The Sydney Morning Herald and then we were injuncted by the Cricket Board." Outback Press won the case but it was a pyrrhic victory. "We were allowed to publish but we'd run out of money – they'd sucked us dry," says Schwartz without any apparent bitterness. Morry Schwartz says delivering books digitally has meant publishers have had to get bigger. "And so, as they get bigger, they need to have more income so they publish more books. You have every publisher doing this so there are so many books in the market." Peter Braig "We put it out, and it sold reasonably well because the media was full of it. But it couldn't go on. So we collapsed it and the next day I started Schwartz Publishing, so I didn't miss a beat. Don't mention the property business "I tried to save the company by doing property and created a small concrete company called Aardvark. Eventually that became a property development company which was very successful." It was a pivotal move. While he had started Schwartz Publishing the day after Outback Press folded, it would be the property developing that would make his fortune and come to define him, at least in the press. Schwartz describes himself as a "proud property developer, it's an endeavour that takes a lot of imagination and a lot of risk-taking to do it well". But it clearly grates with a man who seems otherwise pretty philosophical about his life. "It's really strange, because to this very day I'm not mentioned in the press – ever – as Morry Schwartz publisher; it's always Morry Schwartz property developer, particularly in The Australian, as if I'm some sort of white shoe brigade person." "Ciao, ciao, keep well." An acquaintance stops by our table to greet Schwartz, something that will happen another four times during lunch. By way of emphasising how focused he is on publishing, Schwartz turns the conversation to property. "I've got to say, my last crane came down a year ago. I haven't got one property under development and I don't have any property development planned at the moment. It's much better to be out when things are toppy." For a developer who's made tens of millions putting up buildings, this is a telling comment. More so because Schwartz has lived through the bad times – the epic crash of 1989 when prices in Sydney and Melbourne plummeted virtually overnight – and knows better than most how bad they can get. "Eighty-nine was a bummer. I survived by the skin of my teeth." I ask what he's learned from that and another 28 years in the game? "Nothing." It's a nice line and one Schwartz has used before. But when I remind him that he's sold out of everything, he relents. "Maybe I did learn something. It's a strange feeling. It's a long time now, 30 years of developing, so from one day to the next to not develop, it's like a limb is missing. You wake up in the morning and you don't have all those problems – it's strange." When I suggest that he has different problems now – such as making money printing papers and books – he says there is no comparison. "There are no external forces playing on you except for the markets. You don't have unions, you don't have city councils, you don't have neighbours." E-book's limitations The waiter arrives and we finally get around to ordering. I opt for the prawn, stracciatella and Calabrian chilli risotto. Schwartz chooses the whiting with samphire and radish – hold the cream. He is excited by the samphire – a salty, succulent, native often found on salt flats that has in recent years found its way into restaurant kitchens – which he first became acquainted with while walking on the beach near his "place in the bush" in the Otways. For wine, I go with Schwartz's usual strategy – choose the food then let the waiter advise what works best. We end up with a delightful Italian Falanghina. As a publisher who has also started a newspaper, magazine and two periodicals, Schwartz is clearly a lover of the printed word. But, in the publishing context, he says the failure of digital books to break beyond about a fifth of the market is having a profound and unsustainable effect on the way it works. "I thought e-books would take over. I thought we'd have a market where you'd have hardcovers for people who like to collect books and, at the other extreme, we'd have e-books. And that we wouldn't have paperbacks." Schwartz thought it would be a good financial model because the costs of printing would be slashed and delivering e-books is very cheap. But it didn't pan out like this. "I thought [e-book sales] would go to 20, 30, 40, 50, 60 to 80 per cent, but it got stuck on 20." Schwartz says that in fact delivering books digitally has meant publishers have had to get bigger. Contrary to common perception, publishing e-books is more than just pouring words into a shell and sending it off, he says. Publishers now need specialist teams to prepare the books for the "many channels" out there. This has knock-on effects for publishing more broadly. "So the publishing companies have had to get bigger to cope with this ... and so, as they get bigger, they need to have more income so they publish more books. You have every publisher doing this so there are so many books in the market. "Look at bookshops now, look at the front counter and the books will all change. Every two weeks there seems to be a whole bunch of new books – the lifespan of a book is low.