From The Digital Reader:
Editor’s Note: The following post is by Rich Adin, and it reflects the inside the industry viewpoint of a long-time professional editor.
In the past, consolidation has been very bad for professional editors. Somehow these mergers and purchases needed to be paid for and with supposedly declining sales in bookworld, the way to pay for the merger was to cut expenses. The primary way to cut expenses has been to cut costs in areas that consumers do not see or notice until too late, thus primarily in editorial and book production.
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The merger of Random House and Penguin, who combined will account for approximately 25% of traditionally published (as opposed to self-published) books, is likely to spur a second merger, that of HarperCollins and Macmillan (or perhaps it will be HarperCollins and Simon and Schuster), who combined will account for at least another 20% of that market. And when pricing for freelancers is set, it will be set companywide – it will make little difference which imprint of the RandomPenguin colossus a freelancer works for, the pricing will be fairly uniform, and increasingly depressed. Or so experience says.
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What if one or both of these megapublishers – RandomPenguin or HarperMacmillan – decides to combat Amazon and Apple directly? It strikes me that the way to do it would be to buy Barnes & Noble. Buying B&N would give them immediate access directly to consumers. They could set terms for distribution with their captive company (bring back agency pricing) and tell Amazon and Apple they, too, can have access to these books but on the same terms as B&N. It would put the publishers back into control quickly, and B&N could be bought cheaply – a couple of billion dollars ought to do it.
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It strikes me that if the Justice Department doesn’t think that Amazon dominates the ebook retail market in the United States and that it never did, it would be hard pressed to oppose these consolidations or even the purchase of B&N by a combination of the megapublishers because their market position would be less than that of Amazon.
Link to the rest at The Digital Reader and thanks to Ellen for the tip.
Passive Guy will explain for the billionth time that it is not against the law to be a monopoly. The legal problem that the Price-Fix Six had arose from combining together to fix prices. That is a violation of US antitrust laws and harms consumers because they had to pay higher prices for books than they would have absent the illegal collusion.
Buying Barnes & Noble is an interesting idea. Given the recent bad behavior of publishers, such a purchase would almost certainly be subject to careful scrutiny by the Justice Department and might not be approved.
The other problem with purchasing Barnes & Noble is that the company tends to lose money and is in long-term decline. The question an intelligent publishing executive might ask is, “Why do we think we can run a chain of bookstores any better than experienced booksellers can?”
Before PG dismounts his high horse, he will also say that the toxic Big Publishing obsession with defeating Amazon is stupid. A far better use of time and talent would be to focus on innovative ways of becoming better publishers, particularly with creating much better ebooks, and figuring out what parts of the organization and infrastructure require radical reinvention to compete in a book world that is forever changed.
Amazon wants to sell lots of books. In particular Amazon wants to sell lots of ebooks. Publishers should want the same thing.
PG sometimes wonders if the hatred of Amazon is really a proxy for the hatred of change.