IN THE DAYS earlier than Thanksgiving two high contenders emerged for Simon & Schuster, the fifth-biggest English-language ebook writer by revenues, from ViacomCBS, an American media group. On November 25th Bertelsmann gained the higher hand. With a proposal of $2.2bn the German dad or mum of Penguin Random Home (PRH), the biggest writer by a Tolstoyan margin, outbid Information Corp, Rupert Murdoch’s media group, whose catalogue incorporates HarperCollins, ranked third (see chart).
A merger with Simon & Schuster would give PRH virtually one-third of English-language ebook gross sales. That’s greater than double the market share of its closest rival, Hachette Livre, owned by Lagardère, an ailing French conglomerate. (Vivendi, a French group that’s Lagardère’s largest shareholder, additionally briefly vied for Simon & Schuster.) In America the merged biblio-behemoth would management 70% of the marketplace for literary fiction.
Authors and brokers fear that the enlarged PRH could change into ever extra dominant in distribution—and that market focus may result in an extreme deal with bestsellers such Michelle Obama’s memoir of her time as America’s first woman (which was revealed by a PRH subsidiary) on the expense of area of interest titles which are no much less worthy. Robert Thomson, Information Corp’s boss, is for certain, for his half, that the Bertelsmann deal will alert trustbusters. Earlier this 12 months America’s Division of Justice thwarted a merger of Cengage and McGraw-Hill, two publishers of instructional books. Any delay can be unhealthy information for ViacomCBS, which wants the cash badly for investments in video-streaming, the place it lags behind rivals akin to Netflix, Disney or AT&T, a telecoms big that owns HBO.
Thomas Rabe, Bertelsmann’s boss, says he’s assured that regulators in America and different nations will bless the deal. They not often block mergers that solely cut back the variety of massive gamers from 5 to 4. The final massive union, Bertelsmann’s takeover in 2013 of Penguin, didn’t fall foul of antitrust guardians. Furthermore, the main 5 have misplaced market share lately to smaller rivals, to not point out Amazon, which nowadays not solely sells books (in addition to nearly every thing else) but in addition publishes them.
That also leaves the query of whether or not the deal is an efficient one for Bertelsmann. The value was heftier than even ViacomCBS anticipated. Covid-19 initially damage ebook gross sales, because it did different discretionary spending. “The primary 5 weeks [of the pandemic] have been very robust,” admits Brian Murray, chief government of HarperCollins.
However with their pantries full, self-isolators turned to fiction for escapism and edification. “Persons are at all times predicting the decline of ebook publishing, however it has really been very resilient,” says David Steinberger, chief government of Arcadia Publishing, a writer of historical past books.
And Simon & Schuster is a prestigious prize. It was initially arrange in 1924 to publish crosswords, however went on to signify Ernest Hemingway, F. Scott Fitzgerald and Tom Wolfe. This 12 months it made waves with the publication of “Rage”, a ferocious account of Donald Trump’s White Home by Bob Woodward, a far-famed journalist, in addition to a tell-all memoir by the president’s niece, a psychologist.
Nabbing Simon & Schuster is Bertelsmann’s second coup within the house of every week. On November 17th American and Canadian readers set a file for first-day gross sales, snapping up 890,000 copies of a brand new memoir by Mrs Obama’s husband, additionally revealed by a PRH subsidiary. ■
This text appeared within the Enterprise part of the print version underneath the headline “E-book-binding”