Random House and Penguin to merge – Reading a watershed development in global publishingPosted on October 29, 2012 BY admin
I spend a good part of the day giving interviews to German, Swiss and Austrian media, while trying to get a reading of the many dimensions of the at first rumored, and now confirmed merger of two leading trade publishing houeses, Random House and Penguin.
These are the easy to comprehend aspects: When German Bertelsmann acquired Random House in 1998, the leading US’ trade publisher, this kicked off publishing as an international – more precisely: trans-national – business. But at that point, “international” was still confined to Europe and North America. Today’s announcement of the merger of the global number 3 and 4 in trade, according to our Global Ranking of the Publishing Industry Ranking, or, in the US perspective, the combo of #1 and #2 of the American Big Six publishers, this reaches out across five continents.
The newexpansion now gets publishing at a really global stage, aiming at markets like China, India, or Brazil. Ironically, the German home of Random, Munich, is explicitely cut out of that picture. Strange at first glance. The German imprints of Random House will continue to report to RH New York, but will not have a seat at that table where global decisions will be made. Germany, once the proud second largest publishing market worldwide (now overtaken by China) finds itself on the rear seat.
Also obviously, this is about publishers trying to find their (new) angle with Amazon, Apple, or Google in that new map of global publishing. But the new Penguin Random House (or, as my old friend Philipp Jones coined the wonderful phrase in the Guardian today, the “House of the Random Pendguin“) will have revenues of perhaps â‚¬2.5 bn, against Amazon’s 15 fold turnover of â‚¬ 37bn. How will such an imbalance work out in the near future?
Or can they, really, get leverage from owning the world class content that indeed they own?
Many thoughts to be considered and discussed. This should make me want to write – and discuss – more, here in this lazy blog, and elsewhere.
With more to come.