Wednesday, October 31, 2012
WSJ Wednesday: Penguin Random House Merger
Exciting news in the publishing world this week over the announcement of the creation of Penguin Random House. In this Tuesday, October 30, 2012 article by Jeffrey A. Trachtenberg, it mentions the hope that this merger will help these two companies deal better with the digital transformation of the book industry.
The antitrust suit brought against Apple, Inc. and five major publishers by the U.S. Justice Department alleging a price-fixing conspiracy on e-books is cited in the article. Three publishers settled and two continue to fight. The settlement forced publishers to resume discounted pricing of e-books, which Amazon has been in favor of since it introduced its Kindle.
This merger could, as the article states, provide publishers with more "heft in negotiating terms with retailers, including Amazon." Pending regulatory approvals, the hope is that the merger would be completed by the second half of 2013.
Penguin CEO John Makinson is quoted in the article as saying the merger would allow the companies to invest more heavily in social media and other technologies. Since there are fewer traditional bookstores around, Makinson says it's harder and riskier to take on new writers because of the difficulty of finding an audience. Social media could help that situation.
As a reader and writer, this is exciting to me. In the past I've been discouraged from purchasing e-books because of the cost, which is sometimes within a dollar or two of the printed version, or can even cost more than the printed version. Cheaper e-books means I can afford to purchase more of what I want in a format I enjoy. It also means I might be willing to take more of a chance on an unknown author.
While I'm not certain anyone knows how this will play out, if an industry insider believes the merger could encourage publishers to take a chance on new writers, then it gives hopes to those of us seeking representation. Granted, you still have to get an agent, but if the publishers are taking more chances, it stands to reason that agents will too.
This is definitely a story I'll be keeping my eye on.
How do you feel about the merger? Do you think it's a good thing for readers and/or writers?