Penguin Random House and Simon & Schuster Merge

“Come on, come on, listen to the moneytalk.”
-AC/DC, “Moneytalks

German company Bertelsmann has agreed to acquire Simon & Schuster for $2.175 billion from ViacomCBS. This is a massive deal in the book industry, and one that could either help or hurt indie publishers and amateur authors.

Bertelsmann is the parent company of Penguin Random House, and this agreement turns the media giant into a complete publishing conglomerate. Both Penguin and S&S are two of the five brand leaders in book publishing. The deal took eight months to close, and is set to become official next year.

Markus Dohle, Penguin’s CEO, told Publishers Weekly that the deal was a, “good day for books, book publishing and reading.”

HarperCollins, Hachette Book Group and Macmillan still remain strong outlets in the publishing world, but it will be hard to compete against Bertelsmann’s combination of houses.

Bertelsmann Chairman & CEO, Thomas Rabe, said in the company’s press release, “This purchase marks another strategic milestone in strengthening our global content businesses. The book business has been part of Bertelsmann’s identity since the founding of C. Bertelsmann Verlag more than 185 years ago and has lost none of its appeal to this day.”

On the contrary, the book business needs competition, and this transaction may reduce the possibility for deals and only present lower advance offers for authors. ViacomCBS explained that both Penguin and S&S would be managed as separate publishing units, just under the same umbrella. Though that resonates an assurance of market rivalry, the revenue is still filtered into the same ownership. 

CEO Robert Thomson of News Corp, parent company of HarperCollins, told Fox Business of the deal, “This literary leviathan would have 70% of the U.S. literary and general fiction market.”

HarperCollins was also bidding for S&S, but the house couldn’t outdo the substantial, almost desperate offer from Bertelsmann. If News Corp was able to land the deal for their publishing unit, it would have helped HarperCollins catch up to Penguin’s sales. The U.S. sales for both are estimated at $1.1 and $2.2 billion respectively.

Thomson added, “There is clearly no market logic to a bid that size. Bertelsmann is not just buying a book publisher, but buying market dominance.”

Despite the fierce challenge that lies ahead for HarperCollins, Hachette and Macmillan, this is the business of the industry. With that in mind, there needs to be less business and more diversity.

Independent Publishers   

Bellevue Literary Press is a non-profit publisher. The press was founded in 2005 as part of the New York University School of Medicine, and was stationed within Bellevue hospital. In 2010, the house made a mark in the literary world by publishing a Pulitzer Prize winner, Paul Harding’s Tinkers.

Bellevue has been dedicated to providing quality work that engages readers and creates conversations and debates. They have several award-winning titles in their catalog. Now fully at independent status and located in lower Manhattan, the press has become one of the more consistent and sustainable names not only in the non-profit world, but across the independent publishing landscape as well.    

Publisher and Editorial Director Erika Goldman said of Bellevue’s goals, “We simply wish to continue publishing great books at the same rate as we have been so far.”

Independent publishers have grown tremendously of recent, and more boutiques and presses open yearly. Due to the modern form of self-publishing and a variety of smaller outlets, major houses have seen a drop in market shares. Penguin and S&S combine for just 18.2% percent of the book market—and the giants rank first and third respectively.

“Consolidation of the commercial corporate publishing world has been going on for decades now,” explained Goldman. “Independent and small press publishers represent true diversity in the publishing industry and great alternatives for authors. I believe that authors and agents will understand that they may be better served by independent presses.”

Smaller houses tend to focus on producing a handful of excellent titles per year while corporations simply seek to increase revenue to benefit their shareholders. Quality over quantity should prevail, but that unfortunately isn’t always the case.    

Self-Published Authors

The plight of a self-published author is a difficult one to combat. The market has become over-saturated due to free platforms such as Amazon and a plethora of author services companies. There are some sub-par works being produced and made available to the public, but there are also great novels by undiscovered writers.

Scott Kujawa, author of four trilogies and a variety of novels and short stories, not only has had to battle in order to get noticed among the crowd, he also writes in a niche-romance genre. There is hope, however.

“My income is growing,” Kujawa said. “However, indie/selfpub is a different mindset compared to trade pub. I’ve heard many trade pub’s say they have to work to market their books. They don’t help the way they used to when it comes to selling certain authors. The help they receive depends on who the author is.”

Advertising and marketing rule the world. Many self-published authors and independent presses know how to expertly navigate social media. Their strategies have put the pressure on major brands. Even though Penguin’s and S&S’s market share percentages seem low, book sales are up in 2020 so far. Print sales have increased 3.6% and ebooks are up 4% from last year.

Yet, the merger may hurt self-published authors in the long run. “Many authors might struggle with finding anyone willing to contract their stories,” Kujawa predicts.

Looking Ahead

Smaller presses must be more select with the work they choose in order to strengthen their brand, and independent authors must increase their presence on social media. Bertelsmann’s acquisition promotes a strange forecast for the publishing industry next year. The independent sector could continue to grow, helping the industry overall with quality works and diversity within authors and trends, but authors may still struggle financially. Penguin and S&S can both expand their sales through synchronized rival marketing and taking advantage of famous author names and well-known brands. However, the merger could limit the scope of opportunity for unestablished writers, swaying them toward independent houses and platforms.

It’s still beneficial for an author to be traditionally published because of editing services, promotional strategies and media exposure. On the other hand, less opportunity at the highest publishing level may saturate the industry even more below. Dohle mentioned that the market was highly fragmented, but that doesn’t mean this merger is going to fix anything. We will wait and see.

Good luck, authors.

Incentivized Fraudulence (Eesh, That Sounds Serious)

“Don’t sell your soul for a pack of lies”
Eagle-Eye Cherry, “Rainbow Wings”

I realize that last post’s song, “She Works Hard For The Money” by Donna Summer, would have been a perfect fit for this article as well, but the lyric above still strikes the right chord (pun intended).

Solicitation. Whoa, whoa, whoa, settle down now, we’re not talking about the bad kind—or good kind, whichever way you want to view paying for services. The solicitation I’m talking about takes place in the writing community and the publishing industry. I’ve done it, you’ve done and future authors will do it.

Just to be clear, because I know some readers may be “groggy” from the turn of the year, I’m not talking about prostitution involving sexual acts. Sometimes, you just have to state the obvious.

Moving on. Let’s start by reading Amazon’s Customer Review Policy. I will give you a minute.

Don’t worry, that wasn’t the extended one. If you did read it, you may have noticed that some of the exclusions may seem outlandish, others valid and most create a double standard. Authors are in a difficult predicament when it comes to reviews because, whether we like it or not, they’re very important and have a direct impact on sales. There has been an ongoing argument in the writing community about who reviews are intended for. Some reviewers tend to believe that their posts are generally for readers, while publishers and authors view critiques useful for their own business or brand. The truth is: reviews are meant for everyone. Readers use reviews to see if the work is something that matches their interests or sounds intriguing enough to purchase, publishers examine how their product is performing through direct market analysis, and authors review criticism—hopefully constructive, but we know that’s not true all the time—to understand their demographics and better their writing. Though it seems that a review is as simple as writing something down and clicking the mouse, it’s far more complex than that. Here’s something a little startling: authors, the creators of the intellectual property, may actually make the least amount of money off their work out of the three mentioned parties.

Last post we discussed the amount of money that authors must put forth to publish a book, and that includes the time spent drafting and completing a written work. The author is now responsible for more tasks that have been primarily done by others in the past. This isn’t just limited to authors, but most writers. For example, in the journalism industry many job openings post duties that require the writer to not only write and report, but also take their own pictures and touch them up, design the layout of the article and fully edit the piece. As a journalist, that isn’t a big deal, however, they’re still only being compensated for one job, not three. I once saw an open position for a paper in Santa Fe, N.M., and the writer was responsible for all of the duties above and the salary was $30,000. The average salary in Santa Fe is $56,000 and the cost of living is very high for the region.

You may be thinking, “What the hell does this loser know?” Well, I know this type of stuff. I’m a writer in many forms, and this is why I returned to school to earn my graduate degree in journalism and creative media, and this is what my research involves. I’m here to help the writer—unlike other parties and platforms.

It takes authors longer to write a book than publishers to publish that work, and it takes authors longer to write a book than it takes for reviewers to read and critique that work. The time authors spend doing the actual work doesn’t guarantee any income. On the other hand, publishers take over during a stage that should lead to sales which betters their chances at turning a profit, and many reviewers are incentivized for their contributions—despite what Amazon believes, and what they do themselves for that matter.

Peter Riva, Publishers Weekly- Why most Amazon reader reviews are worthless

With incentive comes fraudulence. Ex literary agent Peter Riva said in his 2016 Publishers Weekly article, “My observation is that most Amazon and Barnes & Noble reader reviews are either fraudulent, or, at best, useless in assessing the true merit of any given title.” He continued, “It is trampling on First Amendment rights and playing into the hands of what is, after all, a nonliterary, mathematical rating system.”

Money drives the industry, but it doesn’t drive the authors. Many authors do this because they love writing and creating, however, their success and status is directly impacted on how other parties are incentivized. This is most apparent in reviewer credibility and retailer/media gatekeeping. Regarding the former, just like the publishing industry, the reviewer world is also competitive and over-saturated. In order to keep earning revenue through advertising and subscriptions, reviewers strategically provide scattered ratings; it’s almost like a quota to appear as a true critic rather than a paid blogger. An author may be receiving an average review just because a reviewer needs to mix up their rating average and not based on the quality of the content. The consequence of losing revenue isn’t the only factor in fraudulent reviews, however. There is also the relationship factor between blogger and author, whether that is a positive or negative connection.

In regards to the latter, giant online retailers like Amazon and major publications like The New York Times have a stranglehold on which titles are presented to potential readers. They decide what is relevant and what is trending, and most of it is based on what already sells. Just like in the news: we’re only aware of what we’re exposed to, and sometimes the relevance is for ratings. Amazon essentially tells authors they’re prohibited from soliciting their material for reviews, however, this creates a double standard. Amazon will solicit an author’s work via their advertising campaigns—and incentivize reviewers themselves—and the more the writer is willing to spend, the more their book will be visible across the massive retailer’s site. They don’t care about quality; they only care about quantity—available titles and revenue, that is. Who suffers in the end? The author.

Jay Green, The Washington Post- Amazon sellers say online retail giant is trying to help itself, not consumers

In his 2019 Washington Post report, Jay Greene explained that in 2018, Amazon generated $42.7 billion in revenue from seller services, fees and commissions, and they have the power to charge for communication with account managers, push their own brands, alter pricing and control product exposure through advertising services.

That is a lot of money if you couldn’t figure that out, and authors are considered sellers as well. However, they also produce intellectual property, but as we have discussed before with the music industry, that doesn’t seem to actually matter no matter the legal jargon and threats. If intellectual property is work or invention that is the result of creativity, then shouldn’t the rights always be with the creator? Of course, people sell rights and this and that, but the origin remains and the creator of that specific work or invention will always be the same. That is an argument for another time, however, and law definitions are written a certain way on purpose.

Anyway, we’re spiraling here. The truth of the matter is reviews and publishers and self-publishing platforms are needed, but authors also need more flexibility when it comes to how they go about promoting their work because they deserve to make money off their intellectual property; especially considering most still maintain those rights. Authors should be aware that if their work only receives five-star ratings, then the reviews probably are not credible. I received a one-star review for Cursed: A Jack Swift Case recently, and that’s okay, not everyone is going to like your content, but what is said in these types of critiques needs to be considered as well. Due to cases of fraudulence, it has left authors and readers in a annoyingly difficult spot because sometimes both parties really need to take the time to dissect the review (time they don’t have) to see why a critic was unhappy or overzealous about the work, and if the rating was valid. With said one-star review, the reviewer was upset at a few word choices I used in dialogue (though the linguistics were consistent with a character’s personality). Did that warrant a one-star rating? Did the other 80,000 words not matter? Are we now teetering on the line on unwarranted censorship? Honest constructive reviews help everyone, but unfortunately, we all have to work for them.

Who are we really in competition with, and when did books become less about writing and more about the politics of the industry? Two of the most important things to do within the writing community is to support your fellow authors, and keep writing.

If you’re really bored, I will be more than happy to share past relevant research by scholars, and my theory paper as well if interested. Who has time for that? You should be writing because someone needs to make money off that.

Happy New Year!

 
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