From The Atlantic:
The merger of Random House and Penguin unquestionably represents an enormous change in the scale of publishing companies. It is a direct response to the power of the digital marketplace, but shifting ownership in the publishing industry is nothing new.
It is worth rolling back time to consider how these two leading publishing companies came into being. Random House is a conglomerate of once-independent imprints — Alfred A. Knopf, Doubleday, Crown, Pantheon, Ballantine, to name just a handful. They were acquired over decades by a succession of proprietors. From 1980 to 1998, the Newhouse family presided over the company, and its value rose from somewhere in the $60 million range to well over $1 billion, when it was bought by Bertelsmann, based in Gutersloh, Germany.
Penguin is closely identified with its British origins in the 1920s, but it too is composed of multiple imprints — Viking, Putnam, Dutton, and many others that were assembled in an inexorable process of growth, always intended to provide a stronger base for publishing as the distribution methods for books evolved.
. . . .
In recent years, consolidation among publishing companies reached a level that was widely known as the Big Six: Random House, Penguin, HarperCollins, Hachette, Macmillan, and Simon & Schuster, all divisions of much larger companies. Together, they represent about half the total sales of trade books, with the balance spread among medium-size publishers, led by W.W. Norton, Bloomsbury, Scholastic and the Perseus Books Group, as well as thousands of smaller publishers, some of which are barely more than niche participants. With dizzying speed, the shift of digital sales meant that every publisher from virtually the smallest to the very largest has had to adapt.
Link to the rest at The Atlantic and thanks to Meryl for the tip.
PG doesn’t believe that adapting to survive in an ebook world and combining to create ever-larger business organizations are the same thing.
In in markets undergoing rapid change driven by disruptive technology, large established businesses are overturned by small businesses with lower costs and greater agility. The small businesses are typically run by people who are not part of the legacy business tradition.
The RH/Penguin merger strikes PG as a plan to create a larger and slower dinosaur.