Random House-Penguin merger: reaction

Authors
Lindsey Davis
Society of Authors chair

“As a Random House author, I can say there is no need for other authors to worry too much. They are already two organisations, Random House and Transworld, and they have each managed to keep their own identities. RH published me for 20 years and I wouldn’t have stayed if I hadn’t been happy. I felt, and still feel, there are benefits with being with a major firm, as well as other benefits to being with a smaller, more personal firm. I am sanguine to the point of optimism—on a scale of one to 10, I’m a six. If they ever became intransigent with advances and terms, that would be a worry.”

Kate Pool, deputy general secretary, the Society of Authors
"Whether the merger of Penguin and Random House will make a significant difference to authors remains to be seen. If the various imprints are allowed to remain discrete and autonomous, as has to a large extent been the case with the Random House and Transworld imprints even though they have been part of a single stable for some time now, authors may not detect much change. If the combined company has greater negotiating clout with Amazon, so much the better though not if it used its muscle to add to the difficulties faced by smaller booksellers—without them we would all be losers.

"We would of course be very concerned if the merged company used its combined market share to impose lower advances or less favourable contractual terms on authors. Indeed on the contrary, we believe that if they are to survive as a significant element of the new reading landscape, publishers need to make clear their value to authors (including compared with the increasingly viable alternative of self-publishing). In essence, that means: nurturing authors e.g. by paying proper advances and keeping faith in them in the long-term not just cherry-picking the odd title, actively and profitably negotiating foreign rights, and importantly offering very much more appropriate terms (royalties and reversion
provisions) for when a work has passed its prime and is being produced only as print-or-demand and/or in e-book form."

Anonymous Penguin author

"So-called mergers never fail to mean bloodshed in-house, resulting in chaos—disruption for authors and misery for staff. Fewer houses means fewer places for agents to sell to and less competition, worse terms and treatment for authors. Bad, bad news for the industry."

Agents

Jonny Geller, Curtis Brown
"The particular publishers involved is a surprise, but the fact that the publishers are merging isn¹t a big surprise. From an agent¹s point of view, it has to be thinking of what it means for our authors. From an author's point of view it has to be about excellence of delivery—will a huge publisher deliver excellence in terms of content and creativity and
marketing and sales? And that is an open question. I know the Random House and Penguin chiefs very well and I do think they run very good publishing houses—there is no reason for all that to go just because they are merging. During the transition it is absolutely crucial that people keep in mind why they are doing it and that has got to be to deliver better books and a better service to their authors."

Patrick Walsh, Conville & Walsh
"You can see Random House¹s logic—cut back office costs, larger clout to negotiate sales deals better, without fear of buy buttons being de-activated. That's also true of Penguin, particularly if Pearson really are set upon building an education business rather than continuing with general book publishing. I hope there's nothing ominous in the anagram of
Penguin Random being "I gona mid prune" but I fear there may be. It may well make negotiations harder for us agents. But at the same time it would be very exciting indeed if the new entity did develop a web platform selling books direct to customers, as is being reported, or indeed its own e-reader device. That would make sense, particularly with the agency pricing model for e-books under attack."

Bill Hamilton
A M Heath
“We are going to get a lot of consolidation in response to similar consolidation we’ve seen in retail outlets. It’s bound to add some homogenous policy coming from the top—it’s hard to keep creativity going in a bigger environment like that. There’s an old joke in New York publishing: if you want a strong auction, send 12 copies into Random House. If the imprints all remain there shouldn’t be a problem, but it depends how different they’ll be.”

Anthony Goff
David Higham Associates

“From the point of view of Penguin and Random it looks a good move. It will enable them to compete better with Amazon and it will be interesting to see how they use that power. From an author’s point of view, a lot will depend on how independently they choose to run the two companies, but inevitably it will reduce competition and that’s bad for authors. It will also enable them to compete better with authors, an aspect of the deal that they’re not choosing to highlight: both have been strict adherents of the 25% limit on e-book royalties, and we’ll see if they use their combined power to preserve a royalty that looks ever more inequitable as each month passes.”

Caroline Michel
PFD

“It’s got to be good for the industry. Our industry has sat there while the rest of the arts world businesses have moved on. We need to have powers in the market that have muscle for our clients, and our clients need to be published in the best possible way to take advantage of all the opportunities. It’s a huge relief that someone has taken this kind of step. It will be crucial how they take the business forward at a very important point—that they think how best to serve the author, how best to ensure it is making the most progress possible for them.”

Retailers
James Daunt
Waterstones m.d.

“It obviously says volumes about what the industry is going to be about in the age of digital. I think it is not surprising that it is these two that have decided to combine. It is a sensible combination of two of the best companies, and one plus one can quite easily make three in this case. If anyone is going to make this work, it is them. I think we can look upon it as a positive thing, there needs to be greater efficiency in this business on the things that cost money. This is a business that is changing, we all have to adapt to it in many ways.”

Matthew Clarke, The Torbay Bookshop, Paignton
³My immediate thought was that it is an indication of where our industry is
heading, in that it is going to get smaller and fewer titles will be around
and there will be less choice and fewer staff being employed in publishing.
The only reason for doing mergers is to save on overheads. I do not think it
will make a difference in the publishers' power with Amazon, I think Amazon
is too powerful already.²

Joanna de Guia
Victoria Park Books

“It will create a behemoth publisher which will have so much weight behind it that it may end up with too much influence over the market, and corporate influence is inevitably more conservative. I would be worried as an author that nobody would have a clue who I was, and I will certainly worry as an independent that I will be completely invisible; my financial contribution would be as negligible as a pinprick in the grand scheme of things.”

Sam Husain
Foyles c.e.o.

“It could be good news for us. We have good relationships with each of them and they are so supportive of bricks-and-mortar bookshops like us. They also have great backlists which suit range booksellers like Foyles. It will make them the biggest publisher ahead of Hachette, and I hope the economies will follow through to us by way of better terms. I would expect them to be making savings in due course. If there is a strategy which includes being stronger against the dominant position Amazon is in that can only be good for the rest of us booksellers as well.”

Publishers
Stephen Page
Faber publisher and c.e.o.

“For a long time we’ve wondered when further conglomeration would happen in the industry. Looking at other media businesses it seemed peculiar that it hadn’t happened before. But having powerful industry players is a good thing for everyone. For independents like ourselves, this move differentiates us. It makes clear the difference between a big company and indies, and leaves plenty of room for other players.”

Jeremy Trevathan
Macmillan adult books publisher

“I think it’s sad that one of the great literary cultures can no longer sustain a great publishing house like Penguin. I worry, with every merger, that it starts off saying that it won’t affect editorial individuality—and with every merger, it does. At least they are being upfront about the back-offices rationalisations, though that worries me too because that is where the culture of a business is. However much Penguin is a rival and competitor, there is a charisma to them. Penguin is the reason we are all so excited, and I worry about its charisma leaking out into a Fifty Shades of Grey world. I hope I’m wrong; maybe in this world where we are competing with Amazon that won’t happen. I also think it’s going to take a long time, and that it will destabilise the groups for some time.”

Jamie Byng
Canongate m.d.

“It took me by surprise really—not in the sense that two big companies would want to merge, but I didn’t expect it to be these two. I can see the logic of the move. It creates a powerful publishing group. It will be interesting to watch these changes and developments happening in the industry. Together they have an amazing list. They can do extremely exciting things for their authors and for readers in general.”

Jen Hamilton-Emery, Salt Publishing
The big presses are built on a model that is rapidly eroding, and the next stage will be that they will have to cut costs and merge departments. I think we will see more mergers of big publishers. If it¹s what they need to do to survive, it should be allowed—the last thing we need is for one of them to go bust, we need them to keep the book world buoyant. Being a small press, we started with a different footing, to get to know our end readers.

"We started by developing the relationships with readers that the big publishers are now trying to do. E-books cut away all the middle men. Those days of having books piled up in bookshops are long gone, and people are just as likely to buy e-books from small publisher as a large publisher. I think the new book world is really good news for small publishers— we know our end users, sometimes personally. We are totally different beasts.

Hannah Westland, Profile Books
When you're working for a smaller publisher, if the big players are taking 20% or 40% of the market, it doesn¹t make a huge amount of difference, they are still operating in a different sphere. It¹ll be interesting to see what the combination means, whether it helps in negotiations with Amazon, which could help all of us, but there are so many unknowns and whether there will be enough oxygen for all the imprints to survive remains to be seen. In terms of literary publishing, they probably constitute 50% of the market—whether that will make it harder for us who are trying to compete in the same field, we¹ll see. I¹m riveted by the whole thing, it¹s like watching an earthquake in slow motion, and no one knows how the aftershocks will play out. I just hope all the people who are so good at what they do are able to carry on doing what they are doing.

Editor's blog: How big is big?