More Random Penguin and other thoughts

It’s election day in the U.S., so thoughts are scattered, to say the least. So, in the closest I’ll get to politics on this blog, I’ll simply urge those of you who haven’t voted yet to do so. And so ends the political bent of today’s post. Now onto the continuing saga of Random Penguin and other publishing news.

Let’s start with the “other” news first. Publishers Weekly has announced that e-books took a 22% share of the market during the second quarter of this year. This is up “only” 1% from the first quarter of the year but represents an increase of 14% over the same time last year. To put this into perspective, hard covers and trade paperbacks dropped 2% and mass market paperbacks dropped 3% (assuming I’m reading the article right).

Now, the naysayers will say that this means e-books are reaching their maximum sales rate. I disagree for a number of reasons. The first is that the figures come from Bowker and there is no explanation for how they came up with their figures. If they are using the same sampling method, or one similar to, that used by Bookscan, then the figures are merely an estimation of sales and not actual numbers.

The second, and more important, reason I don’t think we are seeing the point where e-book sales go flat or start decreasing is because there is an artificial ceiling in place right now. That artificial ceiling is DRM. It prevents most people from buying their e-books from a variety of major stores. Most folks think that if they have a Nook, they can only buy from Barnes & Noble. It’s the same with the Kindle or the Sony Reader, etc.

Going hand-in-hand with this is agency model pricing. Publishers following this model are pricing e-books higher than they are mmpb versions, causing people to delay buying a number of e-book titles they would otherwise. The problem with this is that it doesn’t lead to delayed sales. It leads to no sales because folks forget about going back to buy the mmpb when it comes out. This is not a situation of time making the heart grow fonder. No, it makes the brain forget.

The interesting thing pointed out by the article is that while BN physical store sales seem to have fallen, independent bookstores are holding firm. Yes, they represent only a small part of the market, but they are doing something right. Their numbers remained where they were. This is a situation where no growth is a good thing. As long as they hold steady, they can build on what they are doing right and correct what they aren’t doing right. They aren’t locked into a corporate business plan that doesn’t consider local needs or wants. They can, in short, serve the needs of their customers and build a strong customer base.

And now we have the latest on the Random Penguin merger. Scott Turow, president of the Author’s Guild, has weighed in on the merger, calling it “an unsettling announcement”.

His first concern is that the announcement understated just how much of the U.S. market the newly merged company would control. He says the 25% figure cited by Random House is more likely 3t%, with the share in certain markets being even higher. Because of this, he states that the proposed merger “merits close scrutiny” from the antitrust folks at the Department of Justice and FTC. Pardon me if I find it slightly ironic that he is now asking for DoJ to look at this possible merger for antitrust violations and yet he condemned the DoJ for looking into the alleged collusion between Apple and the five publishers for price fixing.

I will give it to Turow for cutting to the chase when it comes to the reasons behind the merger. He buys the cost-cutting arguments put forth in the announcement about as much as I do, especially if they don’t close any lines or conduct major and massive layoffs. As Turow says, “those potential efficiencies for such large publishers are probably minor.  Economies of scale only go so far.” He’s right. Just as he’s right to say that this proposed merger is more about trying to cope with the changing “ongoing restructuring of the book industry”.

Turow goes on to note that the new mega-publisher will have greater negotiating power with retail outlets. His concern is that it will come at a great cost to the literary market and, as a result, to readers. “There are already far too few publishers willing to invest in nonfiction authors, who may require years to research and write histories, biographies, and other works, and in novelists, who may need the help of a substantial publisher to effectively market their books to readers.” He’s right there. It is a problem we already see and one which, I fear, will be compounded by this merger.

But my concern goes even further. As noted in an earlier post, I doubt the new company will keep all 250 or so imprints alive. I doubt we will see more authors and new titles being offered. What I do see are more poor imitations of what they see as their best sellers and the newest, bestest fad. This is bad news for readers and for authors. It is yet another reason why I think we will see more authors going indie or going with small presses, no longer the bane of the industry.

Bigger isn’t always better and, I’m afraid, Random Penguin will prove that adage. I hope I’m wrong, but my gut says I’m not.