The merger of Random House and Penguin may be more
about leverage than money, according to a report in The New York Times. The deal creates the largest consumer book publisher in
the world, but more importantly, could provide Penguin Random House with the clout
to compete with Google, Apple, and Amazon.
It also likely signals the beginning of more consolidation
in the industry as publishing houses join forces to create companies that have
the size to negotiate better terms.
“I wouldn’t be surprised if all the major trade publishers
were having conversations like this,” said Ned May, an analyst at the research
firm Outsell. “I would expect to see similar realignment.”
Rumors were spreading about a possible Penguin merger
with HarperCollins before the deal with Random House was announced, which means
parent company News Corp. will likely continue to look for a new suitor for
HarperCollins, according to Jeremy Greenfield in his Forbes blog.
Greenfield says he believes the merger could mean Penguin
Random House using the negotiating clout it would have with Internet giants in its dealings
with retailing partners and authors. At the same time, cost-saving efficiencies
in areas such as warehousing, distribution, and printing will be coming.
It just won’t happen quickly, says New York literary
agent Richard Curtis in digitalbookworld.com.
He sees plenty of infighting ahead as executives stake out their turf, but added
that editors, imprints, lists, and even authors will eventually feel the pinch.
“Aside from the human toll, injury to literature itself
will be inflicted as the Darwinian struggle rewards the most commercial authors
and makes it even harder for newcomers to gain a toehold,” Curtis writes. “And
that, in turn, will fuel the self-publication and alternate-publishing trend
that is already under way. The e-book and print-on-demand businesses, already
prospering from that trend, will continue to thrive.”
