Publishers are always moaning about something. But with the Bertelsmann takeover of Random House they finally have good cause to complainby Andrew Franklin / May 20, 1998 / Leave a comment
Published in May 1998 issue of Prospect Magazine
Book publishers are the farmers of the media: they are always grumbling. If they aren’t complaining about too much rain in August, it is rising paper prices, the threat of CD-Roms and the internet-or simply too many books. The result is that when something serious does happen their cries, like Matilda’s, are ignored. And that is exactly what happened last month. Random House, the largest and most distinguished book publisher in the English language, was swallowed by Bertelsmann, an even larger German behemoth, and no one has batted an eyelid. Publishers have complained once too often. Most takeovers pass unnoticed outside the City. Does anyone care that Somerfield bought Kwik Save, that the utility companies change hands every few months or even that BMW is going to buy Rolls Royce? But some takeovers do matter. If the GlaxoWellcome-Smith-Kline Beecham merger had gone ahead, the new group would have had a frightening proportion of British medical research scientists on its staff, controlling job opportunities and patterns of research for a whole sector of the economy. The Bertelsmann takeover has the same oligopolistic effect on books in the US and Britain. Until now there have been six big consumer publishing groups in Britain. They are (in order): HarperCollins, Penguin, Random House, Transworld (already owned by Bertelsmann) and Hodder Headline. We are used to “conglomerisation” in British publishing, but this is something different. Now there will be one giant which controls perhaps 40 per cent of the British fiction market and 30 per cent of bookshop sales. These figures are disputed. Bertelsmann says its market share will be a modest 11 per cent, but this includes law books, medical publishing, school textbooks and so on. (In the US, where the statistics are more reliable, the combined group had 32.8 per cent of all hardback bestsellers and 40.9 per cent of all paperback bestsellers in 1997.) Bertelsmann is a responsible corporation-everyone agrees on this. But it is also huge and shows the usual monopolistic tendencies of any media conglomerate. It has been swallowing companies throughout eastern Europe and, while buying Random House, has been involved in complicated negotiations with the largest publishing group in France. It already owns the largest bookclubs in Britain and the US, and is setting up Books Online, which is due to become the largest internet bookseller in the world. It is by far the largest publisher in Germany and has a 50 per cent stake in AOL Europe. It is, in fact, the largest publisher in the world and second only to Time Warner as a worldwide media conglomerate. It is ahead of News Corporation and Disney, and much larger than Pearson. But Bertelsmann shrewdly leaves the limelight to Rupert Murdoch and has scarcely been heard of in Britain. The Economist reported (approvingly) that the merger would lead to substantial economies of scale and (again approvingly) that it would bring down payments to authors. Perhaps no one minds if the mega-advances of the bestselling authors come down, but the effect is certain to be felt across the board. To use business jargon, this is the transfer of value from suppliers (authors) to shareholders (Bertelsmann). Like any rational business, Bertelsmann will look to make savings and those “rationalisations” will, unavoidably, have an impact on writers, books and the literary culture in Britain. In the short run Bertelsmann has promised that there will be no changes and that Random House and Transworld will be kept separate. To be sure, there will be no visible changes until the whispers of complaint have dried up. But then the changes will-must-start so that the companies can be managed as a single business. The boring stuff will merge first: computer systems, warehouses, finance departments. But over time the pressure will mount for the companies to combine their editorial departments. This is when the cultural damage will be done. Transworld and Random House both have very strong identities; both have recently been publisher of the year. But their identities are not compatible. Transworld is a brilliant mass-market company. It has no literary pretensions, has never had a Booker winner or even a shortlisted title, but it wins all the marketing prizes. It dominates the bestseller lists and the shelves at the airports, WH Smiths and the supermarkets. It is marketing led. Random House also has powerful mass-market arms in Century and Arrow and publishes John Grisham, but its reputation lies in its literary imprints-Jonathan Cape, Secker & Warburg and Chatto & Windus. It publishes young writers, fiction in translation, experimental material, serious non-fiction and many Booker winners. In short, literary books. Random House is editorially led. In theory it ought to be possible for the two to sit together. But in practice it will not work: either the mass market or the literary books will be submerged. A company cannot be both editorially led and marketing led-either the editors or the salesmen ultimately triumph. Because the mass market is (by definition) larger than the literary audience, and Transworld is more profitable than Random House, it is easy to guess which way it will go. The editorial destruction of the Independent by the Mirror Group is a case in point from the newspaper industry. Of course the stars won’t suffer. Salman Rushdie, Martin Amis, Jeanette Winterson-all Random House authors-need fear nothing (except perhaps lower advances). But newer authors will find it harder. The editors will find it more difficult to take on the quirky, the off-beat, the minority interest or the intellectually challenging. The pressure to buy the bonkbusters leaves no time or space for smaller books. If the company is bigger, the books must be bigger. The process is inexorable and in literary Darwinism only the fittest survive. There is a further problem. An owner, however benign, inevitably imposes a style and character on a company. A single style will in time be found throughout 30 per cent of bookshop sales in Britain. Companies have distinct styles of jacket design and rules for copy editors; they favour specific formats and make company-wide decisions on paper qualities. Moreover, there are implicit rules of censorship. Nothing ever needs to be articulated, because the owner’s needs are obvious. Editors know when their proposed acquisitions will offend their owner’s sensibilities and usually never take them as far as an editorial meeting. It is only when they go too far and actually propose to publish an offending book that the issue becomes explicit, as it did for HarperCollins with Chris Patten. Is it all gloom? There is no discernible optimism at Transworld or Random House, but then not a single director or employee-not even at the most senior level-was consulted in either company. Nor were authors or their agents. But new publishers are starting all the time and barriers to entry are low. If, in the future, Bertelsmann abandons the midlist and serious publishing for the mass market, perhaps other publishers will take up the slack. If there is a market, even a modest one, for literary books, other publishers will find it. There will certainly be cracks to fill, if small publishers can reach them without being crushed. Still, this time the publishers/farmers may be right: it is going to be a wet August and the harvest will be bad for years to come.