Happy Outcome for Random/Penguin Merger? History Tells A Different Tale
In his press release announcing Random House’s merger with Penguin, Random CEO Markus Dohle promised agents that “You and your clients will benefit from an extraordinary breadth of publishing choices, and editorial talents and experience.” Some leading literary agents are skeptical and one outspoken rep majorly begs to differ, reports Ella Delany in the Daily Beast.
“Publishers’ releases in the past have always said that nothing significant would change, and that all imprints would continue working independently as before.” says Georges Borchardt, one of the most distinguished authors’ representatives in the industry. What happened to such houses as Atheneum, Anchor, Lippincott, and Free Press? he asks. All absorbed in the churning mill of merger and acquisition that has homogenized hundreds and hundreds of proud and great publishing companies into an indistinguishable soup.
Though some other agents are content to take a wait-and-see attitude, history would certainly seem to support Borchardt’s pessimism. A few years ago we gave a thumbnail genealogy that went like this:
Bertelsmann owns Random House Inc. and Random House Inc. owns Crown Publishing Group and Crown Publishing Group owns Broadway Books. You follow? But Bertelsmann also owns Random House Publishing Group which owns Little Random House. You still with me? Crown Publishing Group owns Crown Business, which incorporates Doubleday Business. Somewhere in there is WaterBrook Multnomah which incorporates Multnomah and WaterBrook Press. And let’s not forget Potter Craft, Back Stage Books, Lone Eagle Publishing, and Wendy Lamb Books.
If you’d like to see just how great the toll of mergers and acquisitions has been, you might want to look at the scorecard produced by Publishers Marketplace founder Michael Cader, which we described as “an organizational chart for major publishers, their divisions, imprints, subsidiaries, affiliates, their sisters and their cousins and their aunts, along with charts for about a dozen smaller publishers with multiple imprints.
Even if you’re too young to remember companies buried in this graveyard, or too unsentimental to mourn their passing, it nevertheless makes for depressing reading and offers scant comfort for agents and their clients wondering how they will navigate the new landscape. Especially because smart money says there are more mergers on the way. Not long ago, Robert Miller, then president of HarperStudio (now publisher at Workman) projected trends that give agents little cause for optimism. Here are the highlights ( if that is the apt term):
- Trend: The large publishing houses will continue to reduce overhead as profits shrink in the years ahead.
- Counter trend: Publishers will be looking for mergers and acquisitions to compensate for those shrinking profits. The Big Six could be the Big Three within five years.
- Trend: These companies will continue to focus more resources on fewer titles…Title count at the largest houses could drop by as much as fifty percent over the next five years.
- Counter trend: Self-publishing will grow exponentially.
- Trend: In terms of advances, the amounts paid for brand-names will continue to increase, with seven-figure or eight-figure acquisitions commonplace among authors with established track records.
- Counter trend: The six-figure advance…will become a rare species within the decade.
- Trend: Within five years, half of all reading will be done electronically.
- Counter trend: There will be a resurgence of appreciation for well-designed physical books, as keepsakes, gifts, etc
- Trend: As more consumers become e-book readers, demand will increase for the availability of e-books simultaneously with p-books.
- Counter trend: Within five years, it will be common practice to give every p-book purchaser a “free” e-book version of that book at time of purchase.
- Trend: Fewer and fewer books will be sold to publishers at “auction,” and that practice will disappear completely within five years.
- Counter trend: Instead of auctions for the highest advance, there will be auctions in which a basic advance is established by the agent, with the auction winner being the publisher who bids the most in marketing committed to the book.
- Trend: The agent of the future will become more of a business manager who handles every aspect of an author’s career.
- Counter trend: Publishers will create free-standing departments whose services can be purchased a la carte by authors.
- Trend: As the Boomers lose their eyesight and their children become teenagers, demographics will favor books for young adults over books for adults.
- Counter trend: While auctions and advances diminish for adult titles, they could heat up for young adult material as publishers bet big in search of the next Stephenie Meyer.