Stephen King Testifies Against Book-Publishing Merger

From The Wall Street Journal:

Famed horror novelist Stephen King took the witness stand in a federal antitrust case on Tuesday, testifying that up-and-coming authors would be harmed if his longtime publisher Simon & Schuster is acquired by larger rival Penguin Random House.

“I came here because I think consolidation is bad for competition,” Mr. King said in a Washington, D.C., courtroom. “That’s my understanding of the book business, and I’ve been around it for 50 years,” he said.

The bestselling author said less-established writers are harmed by corporate consolidation in the industry. As publishers combine, “it becomes tougher and tougher for writers to find money to live on,” he said.

Mr. King’s testimony came on the second day of trial in the Justice Department’s lawsuit challenging Penguin Random House’s planned purchase of Simon & Schuster, a deal valued at more than $2 billion.

The trial is being closely watched by authors, literary agents and publishing-industry executives. Instead of arguing that the deal will increase book prices, the government has focused on author wages, saying writers of anticipated bestsellers likely will receive smaller upfront payments, or advances, if the deal is completed.

Penguin Random House and Simon & Schuster have defended the transaction as pro-competitive, saying that author advances won’t be lowered and that Simon & Schuster authors will benefit from access to Penguin Random House’s distribution channels and supply chain.

The German media company Bertelsmann SE, which owns Penguin Random House, agreed in November 2020 to buy Simon & Schuster from ViacomCBS.

. . .

Mr. King testified that he wasn’t reassured by Penguin Random House’s pledges that, if the merger is completed, imprints it owns will continue to compete against imprints owned by Simon & Schuster.

“It’s a little bit ridiculous,” Mr. King said. “You might as well say you’re going to have a husband and wife bidding against each other for the same house,” he said.

Link to the rest at The Wall Street Journal and thanks to S. for the tip

PG notes that Bertlesman is a very large media conglomerate which is owned and controlled by one very wealthy German family, both directly and via a family-controlled trust.

PG suggests that such ownership is usually not conducive to innovation, including lower prices.

15 thoughts on “Stephen King Testifies Against Book-Publishing Merger”

  1. Plaintiff United States calls as its next witness Mr Paul Sheldon, and respectfully requests that the bailiff rearrange the witness stand for wheelchair access…

    Reply
  2. If the publishing industry didn’t act as a pass-through for money to out-of-office Democrats (whose ghost-written, bloated books are a de facto campaign contribution/political payoff), they might be in better health.
    Libraries and schools have done their part, buying huge quantities of books to boost them into best-seller status, all on the public dime.
    My own library system (Cleveland Library) bought TRIPLE-digits of Michelle Obama’s book, only to see that readership (after the period in which activists checked out books at a furious rate) was virtually nil.
    Same with other books, many of which can be found in the remaindered piles (to be fair, some of them are on the GOP side, but most are former Dem politicians who got whooped in the elections).
    The publishers lose huge amounts of money on those gigantic advances.
    Same with many of the “Woke” books. Other than library and school purchases, they have few sales. But, they still get those contracts and big advances.

    Reply
    • And those big contracts are what King is fretting over, not the market for newcomers or midlisters.
      Those will keep on getting the same “industry standard”, take it or leave it deals.

      Reply
    • Michelle Obama’s memoir was a bestseller, not just due to school or library sales. The major publishers have imprint that publishe books by right wing pundits and GOP politicians, too. Who do you think publish the likes of Hannity, Limbaugh, O’Reilly, etc.?

      Reply
      • It’s not about the books they publish; it’s about the authors to whom they give eight-figure advances which they know in advance will never come close to earning out. But no doubt you knew this already, despite your loyal effort to obscure the issue.

        Reply
      • But was it profitable? To what level, if any?
        Inquiring minds want to know.
        Two separate things there, as I’m sure you know…

        If you expect 10 million in sales and batch print that many but only sell 10% of those, it’s still technically a “best seller” while also being a bloodbath. Two different metrics at work.

        No different than when NETFLIX cancels a JUPITER’S LEGACY, watched by tens of millions and critically approved but unable to turn a profit at any viewership level. Or when Warner Brothers new management cancels an unfinished movie it already sunk $100M into, with another $100M in FX and marketing to go, when recent comparables show it would at best break even, if that, off the secondary revenue streams. They decided that required money would be best spent elsewhere.

        Political books are primarily influence peddling and in today’s environment the very IdiotPoliticians™ they were trying to buy influence with are the ones they are now fighting in court. The “advance” money that went to political books would’ve easy bought them a hundred commercial manuscripts that might still be bringing in revenues for decades at no extra cost via digital, long after the masses are scratching their heads wondering “Michelle who?”
        (Does anybody know or care about Truman’s First Lady?)

        S&S used to be the top political book publisher in the US but today PARAMOUNT is fighting in court to get rid of it because they have way better uses for their sofa cushion money. In the content distribution businesses, books in general, and political books in particular are the lowest margin product still around.

        These days profits matter more than political boot licking.

        Reply
  3. And, let’s not even mention the “editorial” staff. Generally, children of the Elite, who use that “job” to justify their expensive education to the parents.
    Not based on competence, but on who they know.

    Reply
  4. Hmm, the law of unintended consequences strikes again. In order to beat tbe feds in court, the randy Penguin and friends are forced to answer embarrasing qurstions:

    https://abcnews.go.com/Business/wireStory/antitrust-trial-puts-book-publishing-industry-dock-88032256

    A couple quotes:

    “William Morrow Group’s president and publisher, Liate Stehlik, confided that she only made a limited effort to acquire fiction by Dean Koontz, who has published with Amazon.com, because his sales have been declining. ”

    “The president and publisher of Penguin Books, Brian Tart, agreed with the judge’s suggestion that profit and loss assessments for possible book acquisitions are “really fake” and do not reflect actual costs. Tart also testified that he passed on bidding for Marie Kondo’s million-selling “The Life-Changing Magic of Tidying Up” because he “didn’t know what to make of it.”

    “Simon & Schuster CEO Jonathan Karp acknowledged that a popular industry term, “mid-list writer,” long associated with a broad and intrepid corps of noncommercial authors, a kind of publishing middle class, is essentially fictitious and a polite way of not labeling anyone a “low-list” writer. ”

    “All access books: As defined by Dohle, these are books so inexpensive, such as those Amazon.com offers through its e-book subscription service Kindle Unlimited, that they damage the industry overall by forcing down prices and, inevitably, author advances. ”

    More at the source.

    (FWIW: other than the popcorn factor, the whole thing is much ado about very little. Win,lose, or draw, nothing will change. S&S is going to get sold no matter what. In toto, or in pieces.)

    Reply
    • “Simon & Schuster CEO Jonathan Karp acknowledged that a popular industry term, “mid-list writer,” long associated with a broad and intrepid corps of noncommercial authors, a kind of publishing middle class, is essentially fictitious and a polite way of not labeling anyone a “low-list” writer. ”

      I can’t find the article by John Betancourt, but he pointed out the same thing in the 90s.

      The Vanity Fair article is insane.

      Thanks for the links.

      Reply
  5. Producers will make less? Who cares? Typically, when that happens they do something else. Sounds like Franklin Foer and Scott Turrow are back. This harkens back to the beginning of Progressive economics where consumers are expected to pay more so producers don’t have to compete.

    Reply
    • Well, they care because those “All Access” books are finding an audience at market driven prices instead of tradpub mandated prices. That has always been anathema to the Manhattan Mafia. Power over profit, really.

      Their war on discounting gave us the first sale doctrine a century ago. And prices printed on the cover, intended to be the lowest “approved” sale price which, in the new age of inflation becomex the highest price (B&M) retailers can charge. Not unlike how minimum wage laws so often become maximum sage laws. (Let’s see how good those $15 an hour wages look in another year or two.)

      Market pricing wins out in tbe end.
      (Remember how Amazon started pricing tbeir APub titles at $8.99 to slightly undercut tradpub? Did work too well. So they tried $7.99, $6.99, and eventually found the sweet spot for their market at $4.99.

      King can get away with $12.99 because he is King but his slowing sales velocity indicates his sweet spot is slightly lower. His publisher is almost certainly leaving money of tbe table by not going to, say, $10.99 instead but King loves the status quo because he gets his money upfront regardless of total sales…until his velocity drops even more and he gets the “Koontz treatment”.

      Because the BPHs care more about sales velocity and launch window revenue than life cycle revenue. If they were in the movie business, they’d be happier with THOR LOVE AND THUNDER that opened over a $100M gross and withered to almost nothing in a month (topping out at maybe $600M gross ($300M net) on $250M cost than TOP GUN: MAVERICK that opened under $100M but is still raking in over $10M weekly after 3 Months and grossing nearly $1.5B, say $750M net, *before* secondary channel revenues kick in. Off a budget of around $150M. 50% net profit vs 500%. Even as we “speak” hollywood money guys all over are trying to figure out how this happened, how to copy TOP GUN and avoid another THOR plop. 😉

      Producers care bacause its their money at stake just as readers care because it is *theirs* at stake.
      Wise investors go for the best balance between launch plus long tail to maximize life cycle ROI. Others just want the quick buck…

      Reply

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