John Murray, founded in 1768, the oldest independent publisher in Britain, has sold out to Hodder Headline, part of W H Smith. Only fervent supporters of the House of Lords and the hereditary principle could think that companies should be passed indefinitely from father to son. However, the disappearance of this distinguished company into the maw of a bland conglomerate is significant, because it was the last of the gentleman publishers and, with its demise, publishing has finally completed its transformation from the gentleman's club for members of the tweed-jacket brigade to the sharp-suited world of global corporations.
Forty years ago, London publishing was dominated by owner-managers whose success depended on their own taste. These were indigenous houses such as Penguin (now part of Pearson), Jonathan Cape and Chatto & Windus (now both part of Bertelsmann), Hamish Hamilton (Pearson) and William Heinemann (Bertelsmann). Then there were the big family firms, like Collins (News Corporation), Longman (Pearson) and Macmillan (Holtzbrinck). And there were the influential Jewish immigres who were such a potent part of the scene: Victor Gollancz (Orion), Andre Deutsch (Carlton), Weidenfeld & Nicolson (Orion), Secker & Warburg (Bertelsmann). Once centred around Bedford Square, every single one has now gone.
It would be easy to sing a nostalgic lament for a lost age of long lunches and pliant, underpaid authors, grateful for pathetic advances and intermittent royalties. There have been some triumphant new publishers launched in the past 20 years, including the spectacularly successful Bloomsbury, but others, such as Virago and Fourth Estate, flared briefly in the night sky before crash-landing into the arms of Time Warner and Rupert Murdoch, respectively. Only Faber and Faber continues as a resolutely independent literary trade publisher. Long may it continue.
Publishing is now dominated by six huge media groups, one indigenous, two German, one French and two American. The largest, HarperCollins, is owned by Rupert Murdoch, which is why it has a monopoly on British prime ministers' memoirs - when the time comes, each is handsomely rewarded for leaving News Corp alone. Penguin belongs to Pearson; Time Warner UK is part of the ill-fated conglomerate that so unhappily merged with AOL; Random House belongs to Bertelsmann of Germany, one of the world's largest but least visible media groups; Holtzbrinck owns Macmillan; and Orion belongs to Hachette, which in turn belongs to Lagardere Media, which is linked to Vivendi, the company run by Jean-Marie Messier that also owns Connex South East trains. These six groups now control more than 80 per cent of all books sold through bookshops. And the percentage is inexorably rising.
In this, publishing is the same as every other business, from advertising, accountancy and brewing to cars, insurance and groceries. There has been relentless consolidation in every sector of the economy, fuelled by the short-termism of the stock markets and the snake-oil salesmen in the City who make fortunes from engineering mergers and acquisitions. These are coupled with the larger technological changes and impact of globalisation that make the global corporation the triumphant symbol of the times. It is paradoxical that one of the most notable critics of global corporatism, Naomi Klein, is published by HarperCollins.
Publishing should have resisted the pressures of some other parts of the economy because, as No Logo shows, brands are so potent that they sweep all before them. But publishing brands count for little or nothing. Apart from Penguin, most readers cannot name any publisher, and care nothing for the name at the bottom of the spine. Carrying a Virago book was once a badge worn by every determined feminist, and a white-spined Picador was plumage for the trendy and edgy. Today, they mean next to nothing, because conglomeratisation has led to homogenisation. Virago is now just another (quality) imprint. And Picador publishes Bridget Jones, which is v good for the bottom line, but hardly radical.
The book market is more or less static. Music sales are collapsing, computer games are soaring, but bookshop sales have hardly moved at all for a decade. This is despite a decline in library borrowing (fuelled by calamitous underfunding by local authorities - something the government has remained silent about) and a very worrying decline in sales of children's books over the past five years, despite the popularity of the Harry Potter titles.
Meanwhile, the economics of the book market become tougher: while the volume of sales is static, prices are falling. Waterstone's, in particular, has pioneered three-for-two sales and offers more and more space to such promotions, which have not increased overall sales - only pushed down prices of the promoted titles.
So publishing groups have only one card to play: to increase market share, which they do by aggressively pursuing booksellers. This has led to the depressing situation where fewer and fewer titles are selling in ever larger numbers and the rest are falling by the wayside.
This is the triumph of the free market: the rich are getting richer and the poor are damned. A decade ago, million-copy paperbacks were rarities; today, there are regularly two or three every year and the percentage of the total book market taken by the top 100 titles inches up a few percentage points each year. The effect has been exactly the same as in football: the big-name clubs (the publishers) are hugely rich and pay their key players (the star authors) obscene amounts of money. Other clubs have to struggle on fewer resources. Harry Potter and David Beckham are part of the same phenomenon.
There are two perverse and parallel trends in publishing. Each year, publishers throw more effort at fewer books - the stars of their lists - but at the same time publish more. Twenty years ago, 50,000 books were published, but last year more than 100,000 books appeared, which is beyond the absurd, especially as this figure included more than 10,000 novels. Most of these books were stillborn and would have been better aborted or not even conceived. They received scant marketing (in many cases, none at all, with not one pound spent to promote them) and they must have lost everyone money. They are the new poor of the literary world.
At the other end of the scale are the new rich, because authors judged to be potentially bestselling have huge sums of money spent on them. Advances in excess of £500,000 are far from unusual. One example: Donna Tartt, who will be remembered for one successful book published ten years ago by Penguin, has just been paid £1m by Bloomsbury for her new, unfinished book. When chequebook transfers like this take place, it is inevitable that huge resources have to be used to market them. Otherwise, there is no chance of recouping the advance. The marketing effort is now divorced from literary judgement, an editor's passion or even belief in a book - it just follows the advances. So there is a vicious circle in which literary agents demand huge advances for their authors in order to make the book so infamous that the publishers have to spend hugely to recoup their outlay.
The whole business has become more speculative financially, and therefore more conservative culturally. The investment in films is now so huge that no one expects a good film from the Hollywood studios that dominate the system. The best Hollywood can offer is the bland and the beautiful. It takes independent studios to make cutting-edge films that take risks. So the big studios have to back the independents to do their creative work for them. Publishing is the same. The fiction offerings are remarkably homogeneous, with a predictable diet of "chick lit" for the girls, thrillers and action adventures for the boys with a leavening of crime. Penguin, whose profits come from Marian Keyes and Jane Green, is indistinguishable from the mass-market Bantam, Pan or Arrow.
It would be absurd to suggest that the conglomerates do not publish great books and enduring fiction; after all, their titles dominate the Whitbread, Booker and Orange shortlists every year, but that is not where the hearts and minds are.
It is impossible for John Murray, Fourth Estate or Harvill (the other major casualty this year) to compete with the conglomerates; that is why they are swallowed up. They cannot write out cheques for authors who demand half their annual turnover. They cannot pay for advertising on buses or the Tube.
The independents have to do things differently. They have to approach authors with ideas, rather than wait for the next offering from a well-connected agent, and they have to find books in unlikely places. They do things differently. Not necessarily either better or worse, but differently.
There are glimmers of hope: Faber and Faber, long dormant, is slowly waking up. Granta, Souvenir Press and Serpent's Tail are as innovative as ever. And expect great things from the new kid on the block, Atlantic Books. But if independent publishers, like indie music labels and independent film-makers, become an endangered species, that is unhealthy for everyone. Without them, what is the future of books and reading?
Andrew Franklin is the publisher and managing director of Profile Books