Penguin Random House To Acquire Simon & Schuster

An early breaking announcement on November 25 stated that Penguin Random House has acquired Simon & Schuster in a $2.2 billion deal.

Simon & Schuster and Penguin Random House logosAn early breaking announcement on November 25 stated that Penguin Random House has acquired Simon & Schuster in a $2.2 billion deal.

Though ViacomCBS announced Simon & Schuster was up for sale in March, the pending acquisition only began to gain steam—and speculation—as other Big Five publishers appeared lead the bidders. HarperCollins's parent-company News Corp and Penguin Random House parent company Bertelsmann were the top contenders, while a minority owner of Hachette, Vivendi, was also in play, according to a recent report in the New York Times.

The timing of the sale comes during a good year for S. & S., with profits to match the popularity of books it's released, like Rage by Bob Woodward and Too Much and Never Enough by Mary Trump. In its most recent quarterly revenue report, ViacomCBS said combined print and digital book sales were up 29 percent compared to the same time last year. That seems likely to continue through the end of the year with the forthcoming publication of Pope Francis's Let Us Dream: The Path to a Better Future.

While a lot has changed for publishing and libraries since the last large merger of Penguin and Random House in 2013, there is some concern among librarians about potential consequences of a "Big Four."

"Any time you see consolidation, it makes the hair on the back of your neck stand up," said Daniel Barden, technical services director at Cuyahoga County Public Library, OH. "My biggest fear is how that might impact access in terms of costs, licensing, and potentially physical access. Our focus is to provide our customers what they want as quickly as possible."

 

EBOOK WORRIES

How a Big Four might affect ebook and audiobook terms and pricing is a top concern among librarians. It's not surprising, following a year when demand skyrocketed for digital content due to COVID-19–related restrictions, and libraries boycotted one of the Big Five, Macmillan, over an enforced embargo period for new ebook releases (later dropped by the publisher owing to the pandemic).

"We had some leverage then, because we had four other publishers," said Lisa Rosenblum, executive director of King County Library System, WA, which was the first major system to enact a boycott. "When you take it from five to four and one does that, common sense tells you it's a little more problematic. We hope the publishers won't do that, but it is a worry."

The increased adoption of ebooks and audiobooks is one of the things that's changed since the Penguin Random House merger, but with that came understanding of how libraries get those materials into the hands and hearts of their patrons, said Lorraine Shanley, president of publishing consulting firm Market Partners International. "I think publishers recognize how important libraries are, not just monetarily, but increasingly—certainly for ebooks and audiobooks—for marketing titles," she said.

Rosenblum hopes that the symbiotic relationship between libraries and publishers continues, which could be a concern if publishers merge or downsize. "We love our best sellers, and our public does, too. But that does not a library make, nor does it make a healthy writing environment," she said. "We also like new authors, sleepers that all of a sudden have hundreds of holds on them because of a good review. That's part of the strength of publishers, that they discover new talent, and we ensure libraries buy that new talent."

Another concern is that consolidation will reduce the number of spots on publishers’ lists, and their staff. Many publishers, including S. & S., have recently made moves to improve the diversity of both; such cuts could put those efforts at risk. "It feels like publishers have recognized that the future success of publishing is with diverse voices and new perspectives," Barden said. "It would be horrible if they were to backslide."

 

COMPETITION COMPLICATIONS

Another thing that's changed since 2013 is Amazon's extraordinary growth. In terms of dollar sales, Amazon Publishing is the fifth largest publisher of ebooks. But Amazon won’t license any digital content to libraries.

"Historically, we'd be concerned about this consolidation," said Alan Inouye, senior director of public policy at the American Library Association (ALA). "With less competition in the marketplace, the remaining companies could gain more market power, more pricing power."

But when Amazon is part of the picture? "It's more complicated than usual," he said, pointing to the potential issues of competition between Amazon and a potential larger, consolidated publishing house.

Inouye added that ALA is paying attention to all aspects of the potential sale. "We want to make sure publishers get value for engaging with libraries, and we want to make sure libraries get what they need from publishers," he said.

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