Last week I received an email from a friend — hi, Taylor! — who asked if I’d seen what was heating up the twitter feeds from a lot of folks in publishing. That was the first I’d heard about the possible merger between Random House and Penguin. I read the initial articles and then read the next group where it was speculated that Rupert Murdoch might throw his hat into the fray. I’ll admit, I both laughed and shook my head in bewilderment at the way some folks were greeting the possible merger with tempered joy and yet the thought of Murdoch getting involved sent them scurrying like rats looking for shelter. Whether it was because they don’t like Rupert’s (AKA Fox News) politics or were afraid he’d actually require writers to write what readers wanted and not the politically correct tripe some of them have been cranking out, I don’t know and, frankly, I don’t really care.
We now have confirmation that the two publishing houses will be merging. Random House’s parent company will be the majority owner and will have more members on the board of directors. (You can see the official announcement at the Random House site.) It is anticipated that it will be the second half of next year before the merger is concluded — and that assumes there are no legal complications along the way. Considering the fact this is a merger of multi-national companies it is possible that it will take longer and that any significant delay might cause the agreement to fall apart.
Still, it is interesting to see how the media is handling the announcement. The New York Times notes that this merger could “set off a long-expected round of consolidation as the industry adapts to the digital marketplace.” John Makinson of Penguin who will serve as the new company’s chairman noted that they decided to make this move now, so they wouldn’t be “a follower”. Sounds to me like he realizes they were late getting into the e-book era, or at least adapting to it, and is now trying to avoid doing that as the landscape of publishing changes. The question is, is this concern not to be left behind again so great that the companies made a knee-jerk reaction and jumped before they should have?
Some hard facts. The merger will create the largest “consumer book publisher” in the world. It will have a global market share of something like 25%. This market share is based on such current best sellers as Fifty Shades of Grey as well as Penguin’s backlist of classics from authors such as Orwell.
There is speculation that one reason for the merger was to combat the growing influence of Amazon and, to a lesser extent, Apple. Forbes specifically noted Amazon’s growing footprint in publishing as the company continues to woo authors to the KDP platform as well as expanding its own publishing lines. It wouldn’t surprise me at all if that wasn’t one of a number of considerations for the merger. However, whether the creation of a Super-Publisher will take much of a chunk out of Amazon remains to be seen. My own thought is that it won’t. At least not unless the new Random Penguin figures out how to have a consumer driven user interface with good customer service.
Other details of the merger have continued to emerge. Random House’s parent company will own 53% of the new Random Penguin and will nominate five directors. The remaining four directors will come from Penguin’s parent company. There is also a clause requiring the two corporations to retain their interest in the merger for at least three years. Makinson, Penguin’s chairman and CEO, will chair the new company and Random House CEO Markus Dohle will be the CEO. It is claimed the new company will save money on warehousing, distribution, printing and “central functions”.
But this is what interests me and, to be honest, is something I find hard to swallow. “We will have more than 250 imprints in this company,” Dohle said in an interview with Reuters. “We want to preserve and give those imprints even better and richer resources.” Okay, color me skeptical, but how often do two companies merge and there aren’t changes in the way both companies operate? If this merger is to make more money, does anyone really believe they won’t cut those imprints that aren’t pulling their weight?
And this is what worries me as a reader and as a writer. Not only does the merger of two of the Big Six mean there are now fewer players to bid on works out there making the rounds, it means there are going to be even fewer slots, at least for a couple of years, for new authors to break into. It also means that authors who are publishing through the imprints that will be cut — and don’t fool yourselves into thinking there won’t be casualties — may very well find themselves with orphaned works they can’t get back without jumping through legal hoops.
I’ll be honest, I’ve already talked with a couple of authors I know who have books with one or the other of these publishers. I’ve told them to check their contracts and their statements. If they have rights they need to get back,, they need to do it now, before they get tied up in the lengthy merger process. Authors and their works are nothing more than assets to these companies, something to be traded on and used. So here’s my advice to each of you. If you are an author with either of these houses, check your rights. Do what you need to do to protect yourselves because the companies won’t.
If you work for these companies as editors or support staff, I hope you are getting your resumes together because there will be personnel changes. You’ve seen it before as the companies downsized. Get ready for the next round.
As an aside, I hope everyone in the New York/New Jersey area is safe this morning. My thoughts have been with all of you in the path of Sandy.