Random House-Penguin: publishers moot deal for digital clout

26 Oct

From Fifty Shades to Jamie Oliver, the mooted Random House-Penguin combination would create by far the world’s biggest book publisher, responsible for about one in four books published in Britain. If that sounds too much, consider that Universal has just swallowed up EMI in music, an operation with a market share of over 30%. Music has gone from four to three majors; why not books, leaving the other two – News Corp’s HarperCollins and Lagardère’s Hachette – wondering, “what next?”.

What the two industries have in common is that over them looms Amazon, Apple or Google – vast US concerns that largely monopolise the digital routes to the consumer. The publishers’ thinking is that being twice the size gives them a chance in negotiations with Amazon, although the worry is that as the inevitable savings follow, authors have fewer places to hawk their wares.

The proposed “combination” would leave the larger Random House, earnings £149m, in the driving seat. Penguin’s income is €130m. It also implies that Pearson, Penguin’s owner, is not cashing out, at least for now. Privately held Bertlesmann, the German owner of Random House, is overly endowed with money. But a minority position in media’s most mature business is not a long-term position. On the other hand, it sharpens the investor focus on Pearson’s world-leading education business.

And it makes the status of the Financial Times look more anomalous.

http://www.businessownersdirect.com/sales/

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: