A publishing powerhouse

Could a merger between Penguin and Random House stop Amazon in its tracks?

After the FT reported that talks had been held between two of the world’s “big six” publishers, Penguin and Random House, an official statement has finally been made. Pearson, the UK-listed education specialist (and the world’s single largest book publisher), who owns both Penguin and the FT, released the following announcement: “Pearson confirms that it is discussing with Bertelsmann a possible combination of Penguin and Random House. The two companies have no reached an agreement and there is no certainty that the discussion will lead to a transaction. A further announcement will be made if and when appropriate.”

Random House is owned by the German media conglomerate Bertelsmann, whose ill-fated merger with Sony (creating Sony-BMG) has left them anxious to take the lead on any potential deal. Thomas Rabe, Bertelsmann’s chief executive, commented on the “pitfalls of putting creative businesses together”, which mean that one side must take ultimate control. “We have the ambition to lead,” he said.

A merger between the two companies – whose brands, it should be noted, are distinct and unlikely to be hastily dissolved – would create a 25 per cent market share, large enough to come under scrutiny from the OFT and Competition Commission. A second factor which may hinder a potential merger is the ongoing allegations of price-fixing in the US, a suit which Penguin has repeatedly contested.

The elephant in the room, as ever, is Amazon. The internet retailer, whose UK business operates from the company’s base in Luxembourg, continues to plough millions into its ebook infrastructure despite huge losses. Described by Waterstones head James Daunt as a “ruthless, money-making devil” and of “using authors as a financial football” by Curtis Brown chairman Jonathan Lloyd, the company facilitates and encourages self-publishing, which perhaps signals the endgame of their repeated attempts to undermine present publishing models. “Penguin House” may just have the reputation, power and resources to stop the internet giant in its tracks.

Phil Jones, editor of the publishing trade magazine The Bookseller, said: “The merger of Penguin and Random house would create a powerhouse of a consumer publisher across books, ebooks and apps.” Analyst Lorna Tilbian from Numis Securities concurs: “Consolidation is the order of the day,” she said. “Technology and tablet computers have given it extra momentum. They [publishers] have got to gang together to have enough clout to take on the technology giants that have transformed the industry.”

Update: This morning the merger between Penguin and Random House was confirmed. Check out The Bookseller for more information.

Berthold Lubetkin's Penguin Pool at London Zoo (Photograph: Getty Images)

Philip Maughan is a freelance writer in Berlin and a former Assistant Editor at the New Statesman.

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Katy Perry just saved the Brits with a parody of Donald Trump and Theresa May

Our sincerest thanks to the pop star for bringing one fleeting moment of edge to a very boring awards show.

Now, your mole cannot claim to be an expert on the cutting edge of culture, but if there’s one thing we can all agree on in 2017, it’s that the Brit Awards are more old hat than my press cap. 

Repeatedly excluding the genres and artists that make British music genuinely innovative, the Brits instead likes to spend its time rewarding such dangerous up-and-coming acts as Robbie Williams. And it’s hosted by Dermot O’Leary.

Which is why the regular audience must have been genuinely baffled to see a hint of political edge entering the ceremony this year. Following an extremely #makeuthink music video released earlier this week, Katy Perry took to the stage to perform her single “Chained to the Rhythm” amongst a sea of suburban houses. Your mole, for one, doesn’t think there are enough model villages at popular award ceremonies these days.

But while Katy sang of “stumbling around like a wasted zombie”, and her house-clad dancers fell off the edge of the stage, two enormous skeleton puppets entered the performance in... familiar outfits.

As our Prime Minister likes to ask, remind you of anyone?

How about now?

Wow. Satire.

The mole would like to extend its sincerest lukewarm thanks to Katy Perry for bringing one fleeting moment of edge to one of the most vanilla, status-quo-preserving awards ceremonies in existence. 

I'm a mole, innit.