Publishers, Weakly: What The Penguin/Random House Merger Really Means

Published: Wednesday, November 7, 2012 at 16:41 PM.

When I saw the word “synergies” applied to the proposed merger of publishing giants Penguin and Random House, I laughed out loud.  “Synergies” is Wall Street-speak for “Let’s merge two failing companies, fire half the employees, run the resulting business more cheaply, suck out all the money we can as quickly as we can, and then leave the wounded, gasping beast that is the resulting company to die a miserable, public death.”

Which is exactly why “synergies” best describes the merger of two of the biggest names in the publishing industry, which is wringing its hands over the immediate consequences of this deal, which really represents one more death rattle of the once thriving book publishing trade.

Here’s what happens now:  lots of editorial, marketing, and other jobs will vanish.  Agents will have fewer places to sell books.  Fewer books will be published.  Authors will get even less money (if that’s even possible, since some publishers are paying zero advances whenever they can get away with it).  And the pontificators will pontificate on what it all means to society (not much, since most of society has already given up on reading books).

Here’s what happens next:  the remaining major publishers will find it harder to compete, because the resulting publisher (Penguin House?) will be able to produce books more cheaply.  So they’ll fire people, merge, fire more people, and eventually roll over and die.

All because publishers never figured out how to deal with the Internet and how to sell books in a wired world.

All because publishers considered themselves “special” and thought they could get away with selling products they didn’t market.

All because publishers are English majors wearing Daddy’s work clothes and pretending to be business people, running their businesses on whim and gut feeling instead of figuring out what people want and giving it to them, the way smart businesses work.



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