Nicholas Clee on why the rise of the conglomerates may not be a bad thing

For confirmation of the concentration of power at the top of UK publishing, take a look at the bestseller charts. Of the top 50 titles, 22 come from one group, Random House. Seven groups are responsible for the entire 50. Those groups all belong to international conglomerates, and they account for three out of every five books sold through British bookshops.

This concentration has taken place in what is still regarded by some as a cottage industry. A few J K Rowlings and Dan Browns apart, most books sell in modest quantities, and do not make much - or any - money. Yet even the most profit-driven companies have to produce unprofitable books, because only by showing hospitality to numerous talents do they stand a chance of discovering, among them, future Rowlings and Browns. It is a diverse industry, too, with thousands of publishers producing tens of thousands of books for which there may be fewer than a thousand buyers. One might thus assume that this is a market in which further consolidation is unlikely.

But not according to Tim Hely Hutchinson, UK boss of Hachette. He has predicted that, in ten years' time, three or four giant publishing groups will be responsible for 90 per cent of bestselling books. And he should know. His CV is typical of the modern publishing executive. Escaping a corporation (Robert Maxwell's Macdonald), he set up his own independent company, Headline, which went on to be subsumed by Hodder & Stoughton, one of the many privately owned publishers that, in the 1980s and 1990s, sold out to larger operations. Hodder Headline, as it became, was in turn bought by W H Smith, which last year sold it to Hachette. Every large publisher has a similarly complicated history, usually involving, at some point, the absorption of the private houses that once ruled UK publishing: Jonathan Cape, Secker & Warburg, Michael Joseph, Weidenfeld & Nicolson.

At the same time, bookselling, too, has consolidated. A large proportion of the large publishers' books are sold through five booksellers - Waterstone's, W H Smith, Borders, Ottakar's and Amazon - as well as, increasingly, supermarkets. These booksellers' share of the market on certain titles may be very high: Waterstone's might take more than half the sales of a literary novel, and Tesco an even larger share of the sale of a popular saga. UK booksellers have a great deal of power, and receive the highest discounts given by any publishers in the world: up to 50 per cent as standard, and often 10 per cent more than that if the book is to receive any kind of promotion.

That is why Hely Hutchinson thinks there will be more consolidation in publishing: to redress the balance of power. At present, unless a publisher has an author such as J K Rowling or Dan Brown, it does not have a great deal of leverage: booksellers, if they don't get the deal they want, simply promote the books of a more accommodating supplier. If, however, a publisher produced 30 per cent of the titles on the bestseller list, it would be in a much stronger negotiating position. Another reason why it is likely Hely Hutchinson's prediction will be fulfilled is that getting bigger is simply what successful companies - especially media companies - do.

However, they will not succeed in strangling diversity. Conglomerates are very good at publishing for the mainstream but, outside these waters, they often flounder. A newly invigorated independent sector is grasping the opportunities that the conglomerates miss. And in Hely Hutchinson's future, such opportunities will multiply.

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