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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How Paul Giamatti changed the fate of Pinot Noir

The actor's prickly character in Sideways - a film about wine buffs - made us appreciate this tricky grape.

When Paul Giamatti, playing Miles in the 2004 film Sideways, started waxing lyrical about Pinot Noir, he changed his own fate and, surprisingly, that of the grape. It is hard to know which was more unlikely: the sexual interest of the beautiful, wine-loving Maya (Virginia Madsen) in this thin-skinned, temperamental loser, or the world’s heightened interest in this thin-skinned, temperamental grape.

“Only somebody who really takes the time to understand Pinot’s potential can then coax it into its fullest expression,” Miles growled and, kapow: those patient winemakers suddenly found a bunch of film buffs queuing for their wine. Perhaps it was the character’s description of its flavours as “just the most haunting and brilliant and thrilling and subtle . . . on the planet”. Perhaps it was the power of celebrity approval.

In fact, the correlation between finicky Miles and finicky Pinot is even closer than the script claims. Miles in California wine country doesn’t behave exactly like Miles back home in San Diego, and that is true of Pinot Noir, too. Everybody marvels at the tiny difference between one Burgundy vineyard and the next: how Pommard’s red wines have such power while those of Volnay next door have more elegance; how a wine such as Armand Rousseau’s Premier Cru Clos St Jacques – so good as to be almost indescribable – can differ in quality from surrounding Gevrey-Chambertins, which aren’t exactly shoddy either.

Perhaps the Sideways audience understood that no two of us are alike. Miles was talking about vulnerability, and the need to feel unique and uniquely cared for. No wonder Maya melted.

Given its variability and responsiveness, the best way to explore Pinot is to try several. So, I lined up bottles and drinkers from three continents and took a world tour without leaving the dinner table.

It seemed unfair to include a great Burgundy name, so I began with David Moreau’s Maranges 2014 from the southernmost part of the Côte d’Or. It had clean, redcurranty flavours but felt too young – trying to taste the terroir was like asking a lost toddler for their address. Still, when we moved on to a purplish Pinot from Bulgaria, a country still suffering the loss of the vast and uncritical Soviet market, the Maranges improved by comparison. We fled to America, where Oregon Pinots, particularly from the Willamette Valley, are much praised and steeply priced. Lemelson Vineyards’ “Thea’s Selection” 2013 was rich but lacked depth; I preferred the wild berries and marzipan of Elizabeth’s Reserve 2012 from Adelsheim Vineyard.

The difference between the two, just six miles apart, was their most interesting aspect, so we assembled another pair of neighbours: Ocean Eight 2012 and Paringa Estate 2013, both from Australia’s Mornington Peninsula, separated by a year and four zigzagging miles.

These are beautiful wines, the former full of blackberry, the latter spectacular, perfectly structured and with a scent to dab behind your ears. And here is the paradox of Pinot, which tastes of where it’s grown but is grown everywhere that stubborn individuals can persuade it to fruit.

The Mornington Peninsula is planted with Pinot because its patient winemakers claim their climate is similar to Burgundy’s – which would be hilarious if it weren’t, like Miles’s grandstanding, rather plaintive. This is a spit of land with water on three sides, ten thousand miles from France, as much like the landlocked Côte d’Or as I am like Virginia Madsen, which is to say that there are basic structural similarities but you’ll never mistake one for the other.

Ambition and imagination are qualities we don’t share with the vine – but plant those attributes in the right soil and the results can be delicious.

Nina Caplan is the 2014 Fortnum & Mason Drink Writer of the Year and 2014 Louis Roederer International Wine Columnist of the Year for her columns on drink in the New Statesman. She tweets as @NinaCaplan.

This article first appeared in the 24 February 2017 issue of the New Statesman, The world after Brexit