What Does the Random House/Penguin Merger Mean for Independent Presses?

Of course it is early to speculate about the effects of this merger, but if we think about it as the latest step in a process that has been moving forward for the last decade or so, it will not seem very surprising.

A place to start is with the lead sentence in last week’s article in the New York Times:

The book publishing industry is starting to get smaller in order to get stronger.

This is the sort of press coverage that drives indie presses crazy. It perpetuates the utterly false notion that the Big Six publishers are all that counts in the book business. In fact, they account for only about 50% of bookstore sales. I think many assume their share is much larger.

If we accept the spurious notion that the Big Six publishers and the “book publishing industry” are the same thing, then it is true that the book publishing industry is “starting to get smaller;”  actually has been getting smaller for years. Unit sales for the Big Six as reported in point-of-sale data are 23% less now than they were in 2007; these numbers actually understate the decline, because the number and kinds of stores included in the point-of sale data have increased over time.

However, the sales of all the other publishers captured in the point-of-sale data have only declined 18% compared to 2007, or 5% less than the Big Six publishers’ sales have fallen. This, of course, means that the market share of the “others,” the non-Big Six publishers, has increased. But how about unit sales in absolute terms? Indie presses depend more on sales made outside of the book trade than big publishers do, and these sales, which go mostly unaccounted for in the available point-of-sale data, have grown much faster than sales inside the regular book trade. Gift stores, museum shops, and specialty stores in general are natural customers for the niche titles independent publishers mostly produce.

Such sales are very hard to track on a national basis, but at IPG, we have seen dramatic increases in sales to such non-standard book trade customers—in actuality, much greater increases than in the regular book trade. So it may be that sales of indie publishers have increased, not just in terms of market share, but also in terms of total units sold.

There are multiple reasons to explain the growth of the indies, but a main one is that the big houses can no longer make a financial success of midlist titles. Their overheads are too high to even think of publishing a book that might only sell 3-5,000 copies—but such titles are the bread and butter of small and medium sized houses, and book buyers, who really want special interest and niche titles. So much so that the number of publishable niches is proliferating right along with the explosion of interest groups we see reflected on the internet.

The Random House/Penguin merger is just the first step in the consolidation of the Big Six and I think that their share of the market will continue to decline. Of course “the suits” say otherwise. According to the New York Times article, one spokesperson stated:

The merger would not result in closing redundant imprints and less editorial independence. The idea of this company is to combine the small company culture and the small company feeling on the creative and content side with the richest and most enhanced access to services on the corporate side.

Right—except every one of the things that will not happen will happen, quickly, right after the merger is completed. Heads and imprints will roll right and left.

Indie publishers do not have to pretend they have a “small company culture” or “editorial independence.” They come by these desirable traits naturally. As the room at the top contracts, there will be more room in more markets for us.

Curt Matthews
CEO, IPG/Chicago Review Press, Incorporated

Curt Matthews is the founder and CEO of Chicago Review Press, Incorporated, which is the parent company of Chicago Review Press and of Independent Publishers Group (IPG), the first independent press distributor and now the second largest. Curt has served on the Independent Book Publishers Association (IBPA) board and has also served as its president.

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