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Tuesday, June 4, 2013

Will Consolidation Muscle Up Traditional Publishing To KO Amazon? Or Not?

The Publishing Industry if the Big Six becomes the Big Four
Two of the 'Big Six' publishers are in the The final stage of merging - Penguin and Random House.   The merger awaits final approval from antitrust regulators in Europe and the good ole USA.

This will drop the 'Big Six' to the ‘Big Five'.

If this merger is approved it will result in the world's biggest and most formidable publisher - at least based on past sales figures.

AND, rumor has it that in order to stay in the fray, Simon and Schuster and HarperCollins are contemplating a possible merger, further consolidating the traditional publishing industry into the ‘Big Four’ --- The ‘Big Three’ would soon follow, I’m almost sure, since Hachette and Macmillan would want to keep up with the Joneses.

Now, WHY are these old cobwebbed collaborators massing their artillery?        

Apparently the traditional publishing folks see this merging as a way to gain some strategic advantage over Amazon.


Hell, they’re no problem --- I’ve been told by many professional publishing ‘pros’ that Amazon is no real threat to ‘big publishing’. In fact, scuttlebutt on the street (what street is another story) is that traditional publishers are doing just fine and have nothing to fear from digital and the likes of Amazon --- This in spite of my best efforts to suggest or educate otherwise :)

Fact is, Amazon dominates the retail end of the book business and is expanding into the publishing end at a rather fast pace --- And traditional publishers are merging in the hopes of having enough clout to maintain high prices on their books sold through Amazon, Apple and other tech companies.

But, is merging diminishing their own publishing sector by decreasing healthy competition instead of empowering them to manhandle the likes of Amazon?

Yours truly thinks so; they appear to be cutting off their publishing nose to spite their fearful face!

These details by Zachary M. Seward in Quartz (qz.com) with a neat publishing industry chart:

This is what the publishing industry will look like if the Big Six become the Big Four

News Corp.’s HarperCollins and CBS’s Simon & Schuster are discussing a possible merger, according to The Wall Street Journal (paywall), in another move toward consolidation in the book publishing industry.
The talks follow the combination of Pearson’s Penguin and Bertelsmann’sRandom House, which will create the world’s largest publisher, two-and-a-half times bigger by sales than its nearest rival, Lagardère’s Hachette. That deal is still awaiting approval from antitrust regulators in the United States and Europe, who might look at something like the chart above and balk at evidence that competition in the industry is dwindling.
Our chart includes the so-called “Big Six” major trade publishers, ranked by trade and consumer sales in 2011, according to research firm Outsell. They will become the Big Five by mid-2013, if Penguin Random House is approved. HarperCollins and Simon & Schuster could make it the Big Four. And if Lagardere feels compelled to defend its territory, we could even be looking at the Big Three in short order.

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