My first thought is that the combination of the two largest houses results in a new company that will be stronger and better able to weather the shocks of transition to an electronic age. The process of change that transformed record companies is just beginning in book publishing.
What will it mean for me, and the thousands of other authors who are proud to have been published by both Random and Penguin? I wish I knew, but all I can offer is some speculation . . . .
It’s probably good for top management and owners. It’s probably not so good for any imprints that get closed after consolidation, though nothing of the sort has been announced yet. Still I would be surprised if that is not next.
The combined Penguin Random company will no doubt solidify its dominant position as the supplier of books to B&N (the one remaining book chain) and the mass merchandisers who sell books – Wal-Mart, Target, Costco, etc. They will also remain a strong supplier to the independent booksellers, though their share of the book market is shrinking.
I fear the concentration of publishing and distribution power in an ever-smaller number of corporate hands. The total quantity of books sold may stay high, but diversity of authors and titles will suffer more than it already has.
I’m not sure how effective the combined company will be in the emerging e-book field. Many of the biggest hits in the e-book market have been self published or have come from small houses. The traditional “big publisher” strengths – editing, promotion, distribution - may not mean much in this new arena. At the same time, the bigger company’s higher costs may make it hard for them to compete in a world where books are $1.99 or $2.99.
When I look at my own e-book sales record I see far more pirate copies than legitimate royalty-paying sales. The situation with audio books is even worse, with the vast majority of downloads of my books being bootleg.
I don’t see how this merger will help that situation, which came about because audio and e-books were priced high enough to make piracy attractive. If they did not want to address this by pricing to market before, what’s changed now? And what will pricing to market do for print sales? Who would buy a print book for ten bucks when an electronic copy was a third the price?
I fear this merger will mean lower advances, as the #2 bidder just dropped out for any new book project. Prior to today, agents submitted new projects to both Penguin and Random, and they often bid against one another. However, Random House has had a long-standing policy that their own imprints cannot bid against each other with ascending monetary bids.
In other words, if one RH imprint offers an author a $100k advance, no other RH imprint can top that figure though any are free to match it. The only way the offer will rise is if some outside house (in the past, this was often Penguin) raised the ante. In that case, any RH imprint was free to bid again.
Now that Random and Penguin are combined I suspect that rule will stand – and we will have less competition in the market.
This is particularly significant because Random and Penguin were the #1 and #2 players in the market. Their combination means there is a large gulf between #1 and #2; a development that is probably not good for authors.