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April 1, 2015

Highlights from the Penguin Random House year-end report

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High fives via Shutterstock.

High five via Shutterstock.

Man, Penguin Random House is huge. Did you know it was huge? You might have missed that it controls over half of the publishing industry.

Or if you read last year’s revenue report, you might have noticed that it only accounted for six months of Penguin sales, so the company just looked, you know, really profitable and really huge, not REALLY PROFITABLE and REALLY HUGE.

Holding the majority of the industry works in Bertelmann‘s favor, you will not be the least bit surprised to learn. Here are year-end numbers along with a pep talk from CEO Markus Dohle:

Dohle says these things happened “while making major achievements in our integration in every territory. The seamless systems cutovers and distribution-center transfers in the United States this past winter will be a blueprint for our successful integration around the world.”

There are a few titles you may have heard of on the horizon for this year, like Harper Lee‘s Go Set a Watchman, which PRH will publish in the UK.

The company did have to lay off warehouse workers in the transition–in Kirkwood, 286 workers lost their jobs–and Random House closed small offices in France and Germany. It also halted the German book club program, which was still going somehow in 2014.

In the U.S., Gotham and Hudson Street Press are shuttering by the end of the year, but the editors will move to other imprints. Some of Penguin has been restructured since January (but we mean that in a literal, not euphemistic, way).

In sum, Penguin Random House is making a lot of profit in very little time… which isn’t a big surprise, since they’re in charge of most of the industry worldwide. The company has had announced surprisingly few layoffs since the merger in 2013, but the fastest way to profitability is firing people. As Penguin and Random House integrate expect more synergy—a term which John Lanchester reminds us means “sacking people” in his 2014 book How To Speak Money.

It’s important to note that, while the merger between Penguin and Random House has been a “success” in that it’s delivering profit to investors and making PRH’s even more massive parent company Bertlesmann happy (because it’s delivering profit to investors), it may not be a “success” for readers, or for the book world as a whole. The merger further consolidated the publishing industry and further tethered an already incredibly corporate publishing world to corporate interests. The merger between these two companies, however profitable, also likely means lower advances for authors, less competition in the industry itself, and, perhaps most crucially, fewer jobs for publishing professionals who care deeply about the work that they’re engaged in and the world that they belong to. Profitability is important—and lord knows, it’s important for book publishers to be seen as profitable—but there are consequences, and they may not be the kinds of things that show up in a quarterly report.

Alex Shephard contributed to this report. (Updated April 2, 6:15PM) 

 

Kirsten Reach was an editor at Melville House.

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