Penguin and Random House complete merger
It鈥檚 official! Penguin, of Britain鈥檚 Pearson, and Random House, of Germany鈥檚 Bertelsmann, are tying the knot.
The new venture, to be named Penguin Random House, will become the world鈥檚 largest publisher and control about 25 percent of all books published in the US.
The decision (about which rumors leaked last week)聽illustrates a growing trend in the publishing industry toward consolidation as a means to provide a more united front against the changes the industry is facing, including the rise of digital books, the growing power of web retailers like Amazon, and the erosion of traditional bricks-and-mortar bookstores.
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鈥淭he consumer publishing industry is going through a period of tumultuous change, propelled by digital technologies and the giant companies that dominate them," Pearson Chief Executive Marjorie Scardino said in an email to staff, according to . 鈥淭he book publishing industry today is remarkable for being composed of a few large, and a lot of relatively small companies, and there probably isn't room for them all 鈥撀爐hey're going to have to get together.鈥�
By merging, the companies 鈥渨ill create a publishing giant that will have more heft at a time when the book business is being rocked by the rise of online retailers and e-books,鈥� writes the .
鈥淭ogether, the two publishers will be able to share a large part of their costs, to invest more for their author and reader constituencies and to be more adventurous in trying new models in this exciting, fast-moving world of digital books and digital readers,鈥� said Marjorie Scardino, Pearson's chief executive.
Under the terms of the agreement, Bertelsmann (Random House) will own 53 percent of the joint venture while Pearson (Penguin) will own 47 percent.
As have pointed out, the union of the two publishing houses will result in a medley of odd bedfellows, including the likes of Patricia Cornwell, Nora Roberts, erotic fiction writer E.L. James, George R.R. Martin, and 2012 Nobel Prize winner Mo Yan.
To some, however, the literary matrimony is anything but happily ever after. Writers and readers鈥� groups are speculating there will be less competition, less diversity, and less price competitiveness as a result of the merger.
鈥淭elecom companies, airlines, banks 鈥撀爄t's hard to think of a single high-stakes merger that's resulted in lower prices and more innovation,鈥� writes the . 鈥淚t's pretty simple: The less competition you have, the less pressure there is to fight for customers鈥� With only a handful of major players, it seems likely that sellers will be free to set their own prices, rather than reflect the actual cost of distributing literature in digital form, which is fairly minuscule.鈥�
鈥淔or those who love to read,鈥� continued the Times, 鈥渁dmittedly, a dying breed 鈥� this isn鈥檛 good news.鈥�
Husna Haq is a Monitor correspondent.
