What does the PRH purchase of Simon & Schuster mean for authors?
Last week, Bertelsmann, which is the parent company to Penguin Random House (PRH), confirmed its purchase of Simon and Schuster for approximately $2.2 billion. This acquisition, which is expected to close in the second half of 2021, will combine two of the “Big Five” publishers.
Bertelsmann seems to be aggressively competing for market share in the book publishing space. It already owned Random House in 2013 when it purchased Penguin. Now it has again broadened its position with the acquisition of Simon and Schuster, which CNBC says will push PRH to 34% of all book sales in the U.S. For context, HarperCollins owns the second most market share at 11%.
What does this mean for authors?
Any time two companies the size of PRH and S&S merge forces, authors need to pay attention. Why? For a couple of reasons.
Advances and contracts
An author’s advance is based on what a publisher is willing to invest. Part of that decision is based on competition and paying a price that would out bid another publisher. The merging of these two gigantic publishers means they won’t be bidding against each other anymore. Theoretically, that puts the publisher in a stronger negotiating position.
But bidding on a project is fairly rare in the publishing world. There is a low percentage of books that capture the attention of multiple publishers and force them to compete for that title, and those books tend to be from public figures or authors with a large following (there are certainly exceptions to this. Some debut authors are fortunate enough to get multi-million dollar deals without being known publicly). So while this merger does give the publisher leverage from the bidding perspective, this is not something that will impact the overwhelming majority of authors.
The impact on readers
Simon & Schuster will continue to operate as its own separate publishing unit under Penguin Random House. That suggests that the majority of authors looking for publishing deals will still have the same number of editors they can pitch to, which is important. Publishing is moving towards being more inclusive in the stories they tell, the authors who they choose to tell these stories and in the way they market, in addition to hiring a more diverse staff. The industry needs more editors right now, not less, although having them consolidated to a single entity could prove problematic.
PRH publishes 15,000 titles a year and S&S publishes 2,000. That’s a lot of power in shaping the stories that the public reads. But if this single, dominant entity handles this well, it could reshape the narratives of an entire generation and the generations to follow. It can help readers better see themselves in these stories and can help capture audiences that have long been ignored by publishers.
Independent Publishers
Another argument I’ve read is that independent publishers will struggle even more to compete once this merger is finalized. The Association of Canadian Publishers (ACP) released a statement that said this deal…
“would be particularly challenging for the independent Canadian-owned sector, which competes with multinational publishers for authors, media coverage, retail shelf space, and staff. A combined S&S/PRH will make these challenges even more acute.”
This is a fair argument. I can see how indie publishers are collectively throwing their hands in the air in frustration at the thought of one of the Big Five becoming even stronger. Not only do they compete with multinational publishers for authors, they also compete with them for employees.
But by their own statement, the ACP admits that this merger “will make these challenges more acute.” This infers that it’s already a problem independent publishers are facing. By nature, they already need to be more creative, nimble and more innovative in the way they approach authors and their projects. That’s the beauty and burden of being an indie press, so it’s not precisely clear to me how the merging of these companies will make the beauty and burden more prominent.
Summary
- Yes, this merger is a big deal
- Some authors will be effected, but only a small percentage
- There’s an opportunity for PRH and S&S to really change the landscape of publishing if they manage this right
- Indie publishers are going to have to keep being innovate and agile if they hope to compete
