Penguin Random House Takes On The World

Who can blame Markus Dohle, the CEO of the newly erected Penguin Random House, for speaking of code? With Simon & Schuster author Dan Brown’s latest symbol-ridden fiction burning up the New York Timesbestseller list, he says one goal of the merged entity that will control 25% to 30% of the global publishing market is to “crack the code of discoverability” -- or, as the New York Times’ Julie Bosman puts it -- “of how to put books in front of potential buyers ‘in a world with fewer bookstores.’”

Besides the Amazon storefront “bookmarked” in everybody’s browser, that is.

Dohle was most recently chairman and CEO of Random House. John Makinson, who was most recently chairman and CEO of the Penguin Group, is chairman of the new company and has steeped down from the Pearson board.



Bertelsmann, which owns Random House, controls 53% of the joint venture and Pearson, which owns Penguin, controls 47%, according to a press release that claims the house will be “the first truly global publishing company with operations in the U.S., Canada, U.K., India, South Africa, Australia, New Zealand, Spain, Mexico, Argentina, Uruguay, Colombia and Chile.” It publishes more than 15,000 new titles every year across 250 imprints and has more than 70 Nobel Prize laureates in its catalog.

A new temporary logo for the publisher, which has its headquarters in New York, can be found atop the company’s jerry-rigged website. It’s an image unlikely to be found in nature -- a jaunty penguin adjacent to, and at the same scale as, a stately house. It  “essentially pairs the two old logos side-by-side (shades of the problems Mad Men's Sterling Cooper & Partners had coming up with a post-merger name and logo),” Scott Roxborough reports in The Hollywood Reporter.

The finalization of the deal first announced in October was broadcast in Dohle’s email to more than 10,000 employees yesterday that assured them that there will be more of the same-old same-old, at least in the short term. 

“The continuity will far outweigh the change,” Dohle, “who has a reputation for deliberate moves,” tells Bosman in a telephone interview from London. “We have the luxury to take the time before we make any strategic decisions. There is no need to rush.”

According to the release, “as colleagues, we will share and apply our passion for publishing the best books with our enormous experience, creativity, and entrepreneurial drive,” Dohle wrote to employees. “Together, we will give our authors unprecedented resources to help them reach global audiences -- and we will provide readers with unparalleled diversity and choice for future reading. Connecting authors and readers is, and will be, at the heart of all we strive to accomplish together.”

The Independent, calling the deal “an American takeover,” observes that “it would seem likely that Dohle will wield the axe to improve margins although the company insists the new combined management team wants to take its time to get to know the business.” Gideon Spanier concludes that “the next chapter for the books industry is more likely to be a tense thriller than a cheery fairytale.”

Three things to watch for as a result of the merger, according to ForbesJeremy Greenfield, are 1. e-book prices are likely to go down (you’ll have to read his piece to understand why), 2. There will be layoffs, 3. Those iconic logos? Try as people might, it’s evidently not easy to infuse a new effort with the brand equity burnished into the current symbols.

Further consolidation in the industry is a given, even as Amazon garners more share on razor-thin margins, and e-books continue to expand exponentially. 

Last week, Hachette announced it was buying Hyperion, the adult imprint owned by the Walt Disney Co., Alexander Nazaryan observes in the Los Angeles Times. “While that, in relative terms, is a smaller deal, it nevertheless continues a trend that worries some: the swallowing-up of smaller publishers by larger ones, thus leading to a homogenized publishing industry decreasingly willing to take on untested new authors or publish works that have literary merit but might not lead to Harry Potter-level sales,” he writes.

The deal leaves agents with “one fewer publisher to pitch their clients to,” the Los Angeles Times Carolyn Kellogg pointed out Friday. 

Judging by a smattering of comments across the web, the Penguin Random House deal leaves folks with a funny bone disappointed that the behemoth declined to be known as Random Penguin.

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