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Monday, October 29, 2012

The Penguin Speaks

Posted by on Mon, Oct 29, 2012 at 4:33 PM

Penguin CEO John Makinson sent an e-mail to his staff today acknowledging the Random House/Penguin merger that Cienna told you about this morning.

The new company will be called Penguin Random House and will comprise all the English, Spanish and Portuguese language interests of the Penguin Group and of Random House. Bertelsmann will own 53 per cent of the shares and Pearson will hold the remaining 47 per cent. I will be the Chairman of the new company and Markus Dohle, the CEO of Random House, will be the Chief Executive. Markus and I are clear about our respective roles and will begin work later this week on the design of this new creative enterprise.
[...]
I have no doubt that some authors, agents and customers will express concern to many of us that this merger will reduce choice and competition. I believe, and so I know does Markus, that exactly the opposite will happen. The publishing imprints of the two companies will remain as they are today, competing for the very best authors and the very best books. But our access to investment resources will also allow Penguin Random House to take risks with new authors, to defend our creative and editorial independence, to publish the broadest range of books on the planet, and to do it all with the attention to quality that has always characterized both Penguin and Random House.

Look: Sorry, but that's bullshit. What you have here is a merger between two companies with strikingly different corporate philosophies. Random House is fast-moving (for a publishing company, that is), celebrity-obsessed, and whimsical. Penguin's culture is taciturn, slower, and more thoughtful. I'm making a generalization here, but when a merger like this happens, the louder, dumber, faster company's corporate culture will generally win out. And there's no way that these companies are going to go through with this without committing to huge layoffs.

Over the weekend, I talked with a bookseller who was worried about the local effects of the Penguin Random House deal. Both Random House and Penguin have smart, effective sales representatives in the Northwest. I see them at local book events all the time. There's no way that Penguin Random House is going to keep all those people on the payroll. Good people will lose their jobs. That's short-term.

Long-term, there's no way that these two imprints will be able to maintain their independence. There's a lot of organizational overlap, and no accountant is going to let that go on for more than a quarter or two. We're about to see this frankenpublisher become even more safe (read: dull) and obvious. This is a terrible idea that will only hurt the publishing industry and make it more vulnerable to spry, forward-thinking competitors like Amazon.com.

 

Comments (14) RSS

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Original Andrew 1
They're hangin' on for dear life to the Portuguese language interests. My gawd, what else do you want from these people??
Posted by Original Andrew on October 29, 2012 at 4:45 PM · Report this
2
Even before getting to your analysis, my prediction/hunch/guess is:

The CEO and upper-echelon management salaries will grow much larger.

Lots of people in the midlevels and lower will be laid off; the survivors will be left doing twice as much work for only a pittance more, at best.
Posted by LMcGuff http://holyoutlaw.livejournal.com/ on October 29, 2012 at 4:46 PM · Report this
3
Yeah, terrible idea, they even took the boring path on the name. They should have gone with Random Penguin House. Alas.
Posted by rainbird on October 29, 2012 at 4:47 PM · Report this
4
@3 Beat me to it (and that would have been a far superior name).
Posted by usagi on October 29, 2012 at 4:52 PM · Report this
care bear 5
I'm bummed that the name isn't Random Penguin or Penguin House.
Posted by care bear on October 29, 2012 at 4:53 PM · Report this
MacCrocodile 6
@3-5 - I came here to vote for Random Penguin. When they get shut down by the feds for whatever anti-trust thing gets thrown at them, they deserved it for not giving us a more internet-friendly name to rally around.
Posted by MacCrocodile http://maccrocodile.com/ on October 29, 2012 at 5:10 PM · Report this
Urgutha Forka 7
@3 beat me to it too.

Random Penguin House would have been so sublime.
Posted by Urgutha Forka on October 29, 2012 at 5:16 PM · Report this
8
It seems to me that if the only thing protecting these companies from "spry, forward-thinking competitors like Amazon.com" is federal anti-trust regulators, then what we have here is a dead parrot.

These companies are doomed long-term because their expertise is in the production and distribution of physical books. If a merger will let them fend off the grim reaper for a little longer, they should do it.
Posted by Alden on October 29, 2012 at 5:17 PM · Report this
9
Don't panic, consolidation is normal during the collapse of an industry.
Posted by unpaid reader on October 29, 2012 at 5:22 PM · Report this
Will in Seattle 10
I think they should have renamed it Random Dancing Penguin Press.

@8 or tax authorities.
Posted by Will in Seattle http://www.facebook.com/WillSeattle on October 29, 2012 at 5:33 PM · Report this
Karlheinz Arschbomber 11
@9 FTW. The execs will pay themselves fat bonuses for doing the deal, and all the efficiency (i.e., ruined people) they wring out of the merged mess. The product will erode. Win-Win.
Posted by Karlheinz Arschbomber http://de.wikipedia.org/wiki/Arschbombe on October 29, 2012 at 6:09 PM · Report this
Chelydra_serpentina 12
What about Random House Penguin? I'd love to have a house penguin. I'm not fussy; just pick any ol' penguin from the colony, and I'll take it.
Posted by Chelydra_serpentina on October 29, 2012 at 10:03 PM · Report this
13
I find it charmingly naive when someone who works for a newspaper frets about the state of the publishing industry.
Posted by cornflake on October 29, 2012 at 10:06 PM · Report this
14
Akbar and Jeff's Random House 'O Penguins
Posted by Mr. Happy Sunshine on October 30, 2012 at 8:58 AM · Report this

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