Wednesday, October 31, 2012

Penguin Random House

 
The biggest publishing industry news going around is the merger between Penguin and Random House. One is a grand old dame, a queen of the industry, old money, and the other a brash young united states of ‘once known but now anonymous’ publishers – think Fifty Shades. (Interestingly, Rupert Murdock apparently offered to buy Penguin for GBP 1 billion, but was rebuffed. The queen was not willing to stoop that low?) Fittingly, the new entity is called Penguin Random House, so the monarch gets to keep her name, even if not the power. Various sources say that it could take up to a year (earliest mid-2013) for final approval and that, in the meantime, it’s business as usual.

Still, the aftershocks running through the industry will take a while to settle, if at all. Together, the new group will control 25% of the market, which might be scary, but is not; they controlled it anyway. "From the perspective of a reader, author or agent there won't be very much change in the day-to-day operations of the companies," says John Makinson, the current CEO of Penguin and the future chairman of the new company. The CEO of the new company will be Markus Dohle , currently chief executive of Random House.
That this is a reaction to new realities in the book industry is a no brainer. But which reality, specifically? It is easier to understand what Random House would want from Penguin; their back list and classics are to die for. Besides, they also do their own distribution. In Malaysia, distribution of Penguin books used to be handled by STP (later by Times, later still by Pansing) before the parent company set up their own warehouse and operations here. (Pearson also distributes Faber.) It’s unclear if distribution will be an expertise Penguin will bring to the merger.

What does Penguin get from the merger? Protection? Penguin US was one of the two publishers (the other being Macmillan) that declined to settle the civil antitrust case brought by the Department of Justice (DOJ). (Random House was not named in the action.) Apple has been quoted as saying that Amazon is playing the DOJ like a violin. So will one and one make three?

Despite all the usual platitudes following the merger, one wonders if something more serious is afoot?  The merger will make Penguin Random House the largest book publisher in the world.  Large enough to take on Amazon?  Large enough not to have to live in terror of Amazon’s control over that ‘buy’ button?  Large enough to set up a distribution network to fight Tyrannosaurus Rex on its own turf?

It will certainly be good for the industry if that first beast is kept under control, but having two predatory beasts roaming the earth is not very comforting either. It's like Jurassic Park? I’m not sure if it's scary or comforting. I prefer a world with no superpowers, but who’s listening?