Mergers and Acquisitions and Consolidation, Oh My! 

Mergers and Acquisitions and Consolidation, Oh My! 
We’re excited to welcome publishing pro and author Rachel Kempster Barry to our teaching staff.  Rachel knows this business inside and out and will help you get a handle on how publishing runs and how you can strategize for the good of your own writing.  Here’s just a taste of the kind of insights she’ll be sharing in her six-week Publishing Boot Camp this summer.  

By Rachel Kempster Barry

You may have read about the big mergers in publishing. In early May 2021, HarperCollins acquired the books division of HMHPenguin merged with Random House in 2013, and now Penguin Random House is poised to merge with Simon & Schuster. 

What does that mean to you, as a reader and a writer? 

First, no matter how anyone spins it, mergers are about profits and power. 

How does it help profit? When two giant companies merge, they consolidate services. Merging mailrooms, print services, finance departments, corporate communications teams, warehouses, and human resources departments save money. It also costs people their jobs—not in one fell swoop but in a trickle over time. I’ve lived through a couple mergers in my time in the book industry, and I’ve seen it take several years for the lay-offs and job losses to fully shake out. 

What about power? It should come as no surprise that Amazon has enormous power in the book world. When publishers consolidate, the sheer volume and value of their combined publishing programs (new books and the backlist books) gives them stronger footing with Amazon. Is it strong enough to counter the impact of Amazon on the book industry? Never. Heck, Jeff Bezos just built a yacht so big he had to build a support yacht. He’s the richest man alive because he built a world-changing business. Even though he stepped down from Amazon, his impact has forever changed the book industry and the retail landscape.

Another important bit of power (and, ultimately, profit), when publishers merge they also have a stronger position to negotiate with paper suppliers, shipping service providers, etc. When the Penguin Random House/Simon & Schuster merger goes through, they  will be responsible for nearly 20% of all books in the U.S. market (that goes up to 30% if you factor in all the books they distribute for other independent publishers). That’s a lot of bargaining power to use with every single vendor and partner. 

Of course, that power is exactly why many people are nervous about the potential impact of the merger. There are anti-trust issues to consider, of course. But in an industry as fragmented as book publishing, it can be tricky to pin down exactly how much the impact of a big merger will have on the overall business. The Authors Guild along with several other creator-focused organizations, wrote an open letter to the Department of Justice against the PRH/S&S merger when it was first announced. (You can read the letter in full here.) One of their concerns? An imbalance of power, especially in certain publishing categories like literary fiction, biography, horror, and other genres. They also worry deeply about the impact on authors—less competition for manuscripts could lead to significantly less pay for their work. The American Book Association, the trade organization for independent bookstores, also expressed concern, saying the merger would give “too much power over authors and readers in the hands of a single corporation.”

Which brings us back to you. As a reader, will you feel the impact of this merger in some profound way? No, not at first. The systemic changes a merger brings will take time to trickle down to the reader. But I do think it’s wise (and interesting!) to pay attention to the books you’re reading. Who’s publishing them? Where are you finding the books to read? Who’s recommending them? While the big books, the NYT bestsellers or the titles you see promoted at B&N, Costco, Target, and Amazon, are generally being published from the top five publishing houses, there’s a whole other world of books coming out from independent presses. Ask your local indie bookstore for their favorites—we’re lucky to have a heap of great indies in New Jersey to choose from. And then there’s self publishing too. As a reader, you have options. Use them to find new authors to love and follow and recommend. 

Finally, as a writer, especially as a writer with aspirations to traditionally publish, this might seem daunting. The book publishing industry can already feel like an impenetrable fortress, especially when you’re trying to decide what to do with the novel or children’s book that you want to share with more readers. My advice? Don’t let your concerns about the merger stop you from writing (don’t let anything stop you from writing!) or trying to find readers. Keep writing, keep taking classes and learning, keep doing the work. If you want to keep up on the publishing industry news, subscribe to the free newsletter from Publishers Weekly, the book industry trade newsletter.   

I’ve met writers who use such matters as an excuse not to write. They say things like, “Oh, why bother writing? The industry is shrinking, I don’t have a shot at getting published.” I’m not going to deny that traditional publishing is a tough nut to crack. But it’s not impossible, and there’s not one single “perfect” path to getting published. Write what you love to write. Keep an eye on the inside-baseball-book-industry news if you find it interesting. And ignore it entirely if you use it as an excuse not to write! 

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Rachel Kempster Barry has been an author, big-name publisher marketing exec, indie bookseller, and book festival director. As the president of Tuesday Magic Marketing, a bookish consultancy, she works with authors, publishers, small businesses, and non-profits. Rachel has co-written several books about creativity and kindness including The Happy Books (Sourcebooks) and This Book Is About You (DK Books). She lives in Madison, NJ.

Join her for her six-week Publishing Boot Camp, running virtually on Wednesdays at 7PM (ET) this summer.

 

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Feature Photo by Stephen Phillips – Hostreviews.co.uk on Unsplash

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