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An overhead view of a bookstore

Image: Adolfo Felix, Unsplash

In late 2020, Penguin Random House announced its intent to buy its rival Simon & Schuster for US$2.174 billion from the media conglomerate Paramount, taking American publishing’s Big Five down to a Big Four. The Department of Justice (DOJ) sued Penguin Random House for violation of antitrust regulations, noting that the merger of the two conglomerate publishing houses would ‘substantially’ harm the US publishing sector; last month the sale was obstructed by Judge Florence Y Pan of the District of Columbia’s District Court, and has since been formally abandoned. Judge Pan’s verdict was broadly celebrated by authors, cultural commentators and publishing professionals. Stephen King was perhaps the most high-profile author to testify for the DOJ, tweeting that he was ‘delighted’ with the outcome and that ‘the proposed merger was never about readers and writers’. Bestselling author Don Winslow tweeted, ‘THIS. IS. AWESOME. NEWS. THIS. IS. GREAT. NEWS. THIS. IS. FANTASTIC. NEWS.’

Unbridled delight was not, however, the only sentiment coming from the industry. Simon & Schuster is, after all, still for sale; the blocking of the merger by the DOJ will do nothing to reverse the effects of the continuing conglomeration of the sector, effects that most commonly fall on publishing industry professionals and authors who don’t attract seven-figure advances. The 2012 merger of Penguin and Random House resulted in a number of layoffs across the business, as well as the shuttering of many Penguin and Random House imprints; ‘headcount synergy’ as it is euphemistically known.

Over the course of the three-week trial, lawyers for the DOJ argued that the merging of Penguin Random House and Simon & Schuster would weaken the competition between publishing houses for acquisitions and would ultimately drive down the price of advances for the highest-earning authors. Lawyers for Penguin Random House defended the merger, arguing that in establishing the proposed megapublisher they would achieve greater financial stability and operational efficiencies and, as a result, be in a better position to offer higher author advances.

The trial, in which rival publishers Hachette and HarperCollins also gave evidence, opened a window on publishing processes that are typically cloaked in mystery. The decision-making process that underpins acquisitions—and in particular the acquisition of projected bestsellers—was a major point of inquiry and discussion through the trial. Testimony from lawyers representing both Penguin Random House and the DOJ argued about the economies of publishing, the nature of blockbusters and bestsellers, and the industry practice of rights auctions, revealing insights about how the business of books, and especially the business of Big Books, occurs.

The blocking of the merger will do nothing to reverse the effects of the continuing conglomeration of the sector.

The arguments made by both sides about six- or seven-figure author advances, and the competition between houses to secure big-name authors and potential bestsellers, expose the realities of the economies of creative labour and the uncomfortable nature of the gap between the authors who attract big advances and the authors who fall outside of the narrow definition of what constitutes a bestseller.

Reading coverage of the trial, what stood out to me was the nature of the discussions of the economics of publishing (or at least, of a certain part of it), and the unsettling feeling that came with these discussions. Publishing is a commercial activity, but there appears to be a significant disconnect between the vast sums of money that were discussed in the trial and the realities of what the majority of authors are earning from writing every year. It seems absurd to be talking about protecting the earning capacities of people earning 6-figure advances when in Australia, more than half of full-time writers earn less than $15,000 a year for their work. And while there is little evidence to suggest that the merging of two publishing conglomerates would result in favourable remunerative practice for authors, there is similarly little evidence to suggest that the current structure of publishing multinationals has helped to nurture the publishing environment for those authors who are not writing blockbusters.

What is perhaps most striking about the ways that acquisitions processes were discussed in the trial is that, apparently, no one in publishing really knows what they are doing. There appears to be some well-developed thinking about a certain sub-group of potential bestsellers—a reality television star, an actor mired in controversy—however, beyond this there is no clear formula or strategy for acquiring the next Donna Tartt, Britt Bennett or Sally Rooney. This taps into the romantic idea of a publisher who follows their gut and acquires a bestseller, reinforcing the gatekeeping power of those at the top (Claire Squires’ research into the notion of taste in acquisitions explores this issue in detail). But what this also means is that beneath the romanticisation of taste and industry nous, there lies a deeply conservative and risk-averse group of decision makers who appear keen to drop large sums of money on a few, rather than medium sums of money on many.

For every cult hit that emerges seemingly from nowhere, there is an on-paper bestseller that fizzles.

In some respects, the Penguin Random House execs who describe the acquisitions process as ‘random’ are right. There have been scholarly investigations into what makes a bestseller, investigations that don’t really provide any meaningful answers. It is almost impossible to predict the next big literary trend and the next big-name celebrity author—for every cult hit that emerges seemingly from nowhere, there is an on-paper bestseller that fizzles. However, the narrative presented in the trial by publishing executives—that book publishing is a crapshoot—works to maintain the mystery of the process, bolstering the trappings of prestige that surround big conglomerate publishing houses. These are not just narratives that publishers tell themselves, but they are now narratives that are told in court by the biggest publishers on the planet and influence the delicate ecosystem of publishing around the world, obfuscating an increasing reliance on rare debuts and blockbusters, leaving very little attention and support for the midlist.

In a statement following Judge Pan’s decision, US Assistant Attorney General Jonathan Kanter said, ‘The proposed merger would have reduced competition, decreased author compensation, diminished the breadth, depth, and diversity of our stories and ideas, and ultimately impoverished our democracy.’ To me, though it feels a bit overwrought to place the burden of a thriving democracy at the feet of Penguin Random House, Kanter’s observation of the knock-on effects of the merger on the vibrance of the publishing sector should not be overlooked.

This is the new economics of publishing. Venture capital money and media conglomerate money, but not really cultural sector money. The midlist has always represented the industry’s awkward balancing act between the cultural and commercial sides of the business, with the notion that one big bestseller can fund the quiet, worthy work that defines midlist publishing. But perhaps this kind of publishing is over?

Testimony from the trial, together with evidence from the continued conglomeration of the sector suggests that the unparalleled dedication to blockbusters and the frontlist represents a growing creative conservatism among the big industry players. Literary agent David Kuhn said at the trial, ‘they [publishers] would rather go in bigger for the thing that they have the most consensus on,’ indicating that the practice of concentrating resources at the blockbuster end of the sector is seen as a sensible approach to the fickle business of publishing. It’s a similar story to Hollywood’s overreliance on franchises and bankable IP; the persistent industry narratives of commissioning editors’ gut-feel and the randomness of bestsellers loses resonance when it starts to look like no one is taking a chance.

Contemporary publishing is a cultural industry where money and creativity intermingle.

Massive (or even liveable) author advances are going to a shrinking number of authors and, to ensure that investment returns, finite publishing house resources are poured into those projects. This, presumably, leaves less money and fewer resources for midlist authors and midlist books. When the midlist is properly supported it becomes the experimentation space, the place from which bestsellers emerge. When editors and publishing executives talk about the randomness of the publishing bestseller, they’re likely talking about the second or third book that breaks out from the midlist. Bernardine Evaristo, Hilary Mantel and Celeste Ng wrote critically acclaimed novels that sold decent but not outstanding numbers before publishing Girl Woman Other, Wolf Hall and Little Fires Everywhere respectively. If the industry is looking for bestsellers, the midlist is still a good place to find them.

Contemporary publishing is a cultural industry where money and creativity intermingle to varying degrees to support the production and circulation of both—for example, Scott Pape’s The Barefoot Investor and Ellen van Neerven’s Throat. What happens in one sphere of the industry will affect the conditions of production in another. Sometimes these effects are large, such as Penguin’s 1989 purchase of independent publishing house McPhee Gribble, and sometimes they will be very small (such as Text Publishing parting ways with Canongate in 2011). There is, however, opportunity for hope in the wake of these effects.

With the continuing bifurcation of the contemporary publishing sector, as the gap between the giant multinationals and the small-to-medium independents widens, there exists a space for publishing micro-ecosystems to propagate. Environments where the economies of publishing operate according to slightly different commercial imperatives that are built upon ideas of long-term, viable cultural production and not shareholder interests. We see these micro-ecosystems in Australia’s small independent publishers, in self-publishing genre communities, and in community-led publishing projects. These micro-environments have a shared ecology with Penguin Random House, Simon & Schuster and Judge Florence Y Pan and, as they thrive, contribute to the creative and cultural health of the whole sector.