Randy Penguin: Survival in the age of the literary sausage machine

2 July 2013 by Admin in Book publishing

So, the biggest publisher in the world has formed by the merger of Random House and Penguin, thus creating Penguin Random House (or Randy Penguin as some have dubbed it).

The figures are staggering – this new company employs more than 10,000 people and publishes more than 15,000 new titles every year across 250 imprints. It will control some 25% of the entire trade market in the USA and 27% of the UK market (Monopolies Commission? What Monopolies Commission?). Sales for the group will be some £2.6bn. That is some industrial-scale literary sausage machine.

So why create it? Thomas Rabe, chairman and chief executive of Bertelsmann (owners of Random House), said: ‘Together, we can and will invest on a much larger scale than separately in diverse content, author development and support, the publishing talent, the entire spectrum of physical and digital book acquisitions, production, marketing, and distribution, and also in fast-growing markets of the future.’

So it’s pretty much a deal to drive costs down in order to be more competitive. In the last ten or so years, the big trade houses have been scratching their tender parts wondering how to cope as the world they knew imploded. High Street bookstores in the UK (Borders, Dillons, Ottakar’s, for example) have disappeared leaving just Waterstones and WH Smith (independent bookstores have shrunk by about a third in that period). Supermarkets have become increasingly important, concentrating on deep discounting of bestsellers (again squeezing margin often offering books as loss leaders).

But really what they’re frightened of are the ‘A’ words – Amazon and to a lesser extent Apple. Amazon’s global turnover in 2013 is anticipated to be $3.6bn, and their ownership of the most popular e-book market through the Kindle platform, their own publishing and self-publishing programmes means their dominance in the book world can only grow. And that’s what this merger is about – to create an entity to try to compete with the growth and ambition of our Seattle-based friends.

So, where does this leave independent publishers and authors? Well, it’s a tough market and it will probably get tougher. The independent publishers need to be fleet of foot and exceptionally creative (something that conglomerates are not traditionally strong at) and publish innovative books which are marketed in non-traditional ways. We believe that there can be a thriving independent sector once it is accepted that the old routes to market barely exist.

We do however fear for authors. Under the Penguin Random House umbrella, it’s safe to assume that the big names in all sectors will increase their earning power with all that sales and marketing muscle. New and mid-list authors will struggle to find businesses willing to take a risk and invest in the sometimes long process of breaking in new talent. There’s always the self-publishing route which has worked spectacularly for certain authors.

But we’re an optimistic lot at Infinite Ideas. We think that even in this world of massive organisations where the Financial Director is more important than the Editorial Director, good writing will find a way.