The recently announced merger of Penguin and Random House, which is owned by Bertelsmann in Germany, sent shock waves throughout Western publishing circles. This new leviathan will publish a quarter of all books appearing in English, with annual sales of close to $4 billion, yet it is being treated by The New York Times and other media as a routine and perhaps even beneficial development.
Faced with this challenge, the newly merged companies argue that they will save money on sales and distribution, and thus compete with Amazon or get a better deal. They can hardly argue that they will publish more profitable books, since they are doing all they can now. But they can cut the smaller titles, commonly known as the midlist. The Economist quotes Mark Oliver, a publishing consultant, saying that he “expects Penguin Random House to cut the number of midlist authors, just as music labels once cut mediocre crooners.” So much for literary authors or those attempting serious nonfiction. But as every business school student knows, the real savings come not from eliminating titles but from firing those hapless editors who still feel it part of their duty to find such books.
Citing Thomas Rabe, the head of Bertelsmann, the Times tried to reassure its readers that “the merger would also allow the combined company to invest in emerging markets, which show more promise for growth than developed markets like the United States and Western Europe.” That’s not an encouraging comment about their hopes for publishing in this country. When I was in India last fall, I met the chief editors of the leading European-owned houses, who did not seem to share such expectations and indeed worried about the sales and profit targets they were expected to meet. But Bertelsmann—famous for having more accountants in its headquarters than editors in all the companies it owns—must have more accurate projections than its employees possibly could.
Full article at The Nation