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.

Photo: Getty
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Out with the old: how new species are evolving faster than ever

A future geologist will look back to the present day as a time of diversification, as well as extinction.

Human population growth, increased consumption, hunting, habitat destruction, pollution, invasive species and now climate change are turning the biological world on its head. The consequence is that species are becoming extinct, perhaps faster than at any time since the dinosaurs died out 66 million years ago. This is an inconvenient truth.

But there are also convenient truths. Britain has gained about 2,000 new species over the past two millennia, because our predecessors converted forests into managed woodlands, orchards, meadows, wheat fields, roadsides, hedgerows, ponds and ditches, as well as gardens and urban sprawl, each providing new opportunities.

Then we started to transport species deliberately. We have the Romans to thank for brown hares and the Normans for rabbits. In the 20th century, ring-necked parakeets escaped from captivity and now adorn London’s parks and gardens.

Climate warming is bringing yet more new species to our shores, including little egrets and tree bumblebees, both of which have colonised Britain in recent years and then spread so far north that I can see them at home in Yorkshire. Convenient truth No 1 is that more species have arrived than have died out: most American states, most islands in the Pacific and most countries in Europe, including Britain, support more species today than they did centuries ago.

Evolution has also gone into overdrive. Just as some species are thriving on a human-dominated planet, the same is true of genes. Some genes are surviving better than others. Brown argus butterflies in my meadow have evolved a change in diet (their caterpillars now eat dove’s-foot cranesbill plants, which are common in human-disturbed landscapes), enabling them to take advantage of a warming climate and spread northwards.

Evolution is a second convenient truth. Many species are surviving better than we might have expected because they are becoming adapted to the human-altered world – although this is not such good news when diseases evolve immunity to medicines or crop pests become resistant to insecticides.

A third convenient truth is that new species are coming into existence. The hybrid Italian sparrow was born one spring day when a male Spanish sparrow (the “original” Mediterranean species) hitched up with a female house sparrow (which had spread from Asia into newly created farmland). The descendants of this happy union live on, purloining dropped grains and scraps from the farms and towns of the Italian peninsula. Some of those grains are wheat, which is also a hybrid species that originated as crosses between wild grasses in the Middle East.

This is not the only process by which new species are arising. On a much longer time scale, all of the species that we have released on thousands of islands across the world’s oceans and transported to new continents will start to become more distinct in their new homes, eventually separating into entirely new creatures. The current rate at which new species are forming may well be the highest ever. A future geologist will look back to the present day as a time of great diversification on Earth, as well as a time of extinction.

The processes of ecological and evolutionary change that brought all of Earth’s existing biological diversity into being – including ourselves – is continuing to generate new diversity in today’s human-altered world. Unless we sterilise our planet in some unimagined way, this will continue. In my book Inheritors of the Earth, I criss-cross the world to survey the growth in biological diversity (as well as to chart some of the losses) that has taken place in the human epoch and argue that this growth fundamentally alters our relationship with nature.

We need to walk a tightrope between saving “old nature” (some of which might be useful) and facilitating what will enable the biological world to adjust to its changed state. Humans are integral to Earth’s “new nature”, and we should not presume that the old was better than the new.

“Inheritors of the Earth: How Nature Is Thriving in an Age of Extinction” by Chris D Thomas is published by Allen Lane

This article first appeared in the 20 July 2017 issue of the New Statesman, The new world disorder