When the Department of Justice interviewed me in late 2012 as part of its investigation into the pending merger of Random House and Penguin, I was both surprised and heartened—the very fact that DOJ attorneys were talking with a small publisher suggested that they understood the dark potential of such a deal. After all, the Big Six publishers at the time accounted for roughly 50 percent of American book sales, with the rest of us—independent publishers, university presses, nonprofits—having to follow the rules of the market those few Goliaths dominated. The fact that a merger between Random House (the world’s biggest trade publisher) and Penguin (the world’s second-biggest trade publisher) would result in a monopoly seemed, to me, obvious.
During my long interview with the two DOJ attorneys, I prattled on about how the big houses dominated certain publishing categories, such as literary fiction and narrative nonfiction, and how they could prevail over the supply and printing chains—and the attorneys came back to me with numbers and research backing that up. My interrogators even seemed to understand the thing that most of us in the book business are too shy to say, because it sounds a bit holier than thou: Talking about books isn’t talking about just a retail marketplace, but also the marketplace of ideas—of art, free speech, and, yes, damn it, democracy itself.
As the big houses have become bigger and bigger, their business has become more about making money than art or protest, so that small publishers now provide a far wider variety of literature, politics, history, and journalism, of art making and truth-to-power-speaking, of actual risk taking—and from a far more diverse group of authors —than the commercial conglomerate publishers. And the bigger the big publishers get, I told the DOJ attorneys, the more risk-averse they become. The less willing they are to lose money. Audiences need to be expanded, not necessarily diversified. And then the safer, less boat-rocking, bigger-demographic-satisfying stuff they publish becomes what the marketplace they dominate adapts itself to sell. The risk aversion becomes systemic.
The attorneys didn’t disagree. And when the interview was over, I felt a huge sense of relief. They got it, I thought. They definitely got it.
The merger, of course, was approved shortly thereafter.
Thus a publishing behemoth was born, a behemoth that now, a mere seven years later, is once again taking over a leading competitor, Simon & Schuster. PRH has purchased S&S for $2.2 billion, or twice the asking price—a fee none of the other big publishers could match. News Corp, the owner of HarperCollins, blasted PRH for “buying market dominance.”
This is exactly right. Just seven years ago, the industry had six dominant giants. Now three of them have merged together. The other giants, let alone the numerous independent players, are not just smaller; they’re smaller by billions of dollars. I said it in 2012, and I’ll say it again now: The DOJ needs to stop the consolidation.
Barack Obama’s Justice Department was no trustbuster. That DOJ, also in 2013, sanctified Amazon’s monopoly by successfully prosecuting five of the Big Six publishers for collusion in an effort to stop Amazon’s loss-leader pricing. (Judge Denise Cote’s decision even strongly hinted that she thought Amazon was indeed a monopoly—she just felt like the publishers had gone about defending themselves in the wrong way—suggesting that antitrust law had thereby been used to prosecute the victims of a monopoly instead of the monopoly itself.)
For the past four years, the Trump administration has regularly attacked the monopolies that Obama championed. But with the incoming Biden administration looking like it will be stocked with graduates of the Obama team, we may be back where we started even if the DOJ does look into the PRH-S&S deal. We’re certainly back to where we were in 2013 insofar as the justifications being offered by the main players. In what seemed to be messaging to the DOJ, PRH explained that due to a more “fragmented” marketplace, the company had nowhere near as much market share as everyone thought it did. It didn’t have 30 percent, as The New York Times reported, it had less than 20 percent.
Of course, it isn’t a fragmented marketplace—it’s dominated by even fewer giant players than it was in 2013—and “market share” is a pretty fungible concept. Precisely what part of the marketplace is it talking about: trade books? Trade plus library sales? Total sales? U.S. sales? World sales?
The most pertinent market share to examine, as per my long-ago discussion with the DOJ, is dominance in a category. In its statement decrying the deal, News Corp said that a PRH-S&S “literary leviathan would have 70% of the U.S. literary and general fiction market.”
Here’s why that’s troubling: If you’re an independent or even a chain bookseller who gets, say, 50 percent of your fiction, 50 percent of your nonfiction, 50 percent of your kid’s books, and so forth from one giant publisher … well, it owns your checkbook. You are in its thrall. If that’s not bad enough, let’s say there’s, oh, I don’t know, a pandemic, and your store’s sales collapse. Sorry, every other publisher in the world, but I have to pay the big guy first, so I won’t pay you and I’ll in fact return your books to help myself pay that publisher.
In these most parlous of times, this is a particularly frightening prospect. A hurting marketplace, after all, is even more vulnerable to big players and monopolistic practices.
But in roll-ups like this one, much of what’s feared turns out to be slow moving and hard to register. Looking back at the merger of 2013, can we say for sure that it had all that much of a homogenizing influence? We can sense it more than prove it. But the situation is more obvious if we take a wider perspective, and examine what the big houses have been publishing since they started buying up smaller houses—since 1960, say, when Random House bought Knopf. Before that point, while the industry certainly put out its share of commercial dreck, publishers were far less reliant on lowest-common-denominator best sellers. The privately owned houses were less like faceless corporations, and their lists had individual character reflecting the whims of their owners. Now even insiders would be hard-pressed to explain how one house’s taste in fiction differs from another’s. They're all trying to sell the same kinds of books, to the same (big) demographics.
And what about the purported impact on democracy? There, too, the influence is not so immediately obvious … or is it? Many journalists covering this story have noted that S&S, the publisher of Bob Woodward and Carl Bernstein’s All the President’s Men and John Dean’s Blind Ambition, published some of this year’s very biggest political books—anti-Trump books—including Woodward’s Rage, John Bolton’s The Room Where It Happened, Mary Trump’s Too Much and Never Enough, and the scathing look at Fox News by CNN’s Brian Stelter, Hoax. It also distributed Disloyal, the book by Donald Trump’s attorney Michael Cohen. This was smart and in many ways brave publishing, for it was not without risk: S&S had to stare down the White House, and spend a lot of money defending itself against multiple legal threats.
PRH could have outbid S&S on these books (after all, it paid an astonishing $65 million for the Michelle and Barack Obama books) but it didn’t. Is that because such a huge company is necessarily too risk-averse to publish books the government might fight? Beyond the expense of litigation, a huge company may be more likely to avoid a public fuss because it doesn’t want additional government scrutiny, or controversy of any sort. So the question becomes: Once PRH takes over S&S, will the more cautious culture of PRH stop the more fearless S&S from publishing unusually controversial books?
That’s purely speculative, but it’s a safe bet, in any event, that many of the people involved in the Trump books won’t be at S&S for much longer, if the merger goes through. Sure, the PRH statement said the company would preserve “each imprint’s identity and independence,” but that doesn’t mean it isn’t going to lay off a lot of people, which is one of the primary ways companies benefit from the economies of scale that mergers are all about. Penguin lost a significant amount of personnel after it merged with Random House, and saw some of its imprints closed or combined with others. My guess is that something similar will happen to S&S—layoffs will start first in sales and operations, but eventually move to marketing and editorial.
Which is one way the very idea of politically defiant books can be disappeared from a company’s corporate memory, and, eventually, from the larger cultural memory. So yes, I’d say we could be witnessing democracy getting injured in real time.
And it has crossed my cynical mind that this deal is happening so suddenly because we are in a weird, distracted interregnum—distracted by an actual plague and the ravings of a lunatic demagogue and his followers—and it will be many months, if not longer, before the next government is in place and sufficiently focused.
I say all this despite the fact that I do business with PRH (it distributes Melville House’s books) and have found it to be not only very, very good at what it does, but filled with, individually, the friendliest, hardest-working, most book-loving people.
Still, a company that size has its imperatives, and is what it is. The monstrously big PRH-S&S will be a threat to all the stuff about the book business that most of us in it champion but are often too shy to shout about—free speech, art making, and perfecting and preserving democracy.