American Literature Loses Out to Consolidation
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By Richard Howorth
Mr. Howorth founded, with his wife, Lisa Howorth, Square Books in Oxford, Miss., in 1979.
OXFORD, Miss. — Penguin Random House, the largest English-language trade book publisher in the world, has made an offer to acquire Simon & Schuster, another large publisher and one of its rivals. For American consumers, this is bad news. Allison Hill, the chief executive of the American Booksellers Association, a trade association that promotes independent bookstores like mine, said the sale “threatens to undermine competition … and put bookstores and authors at risk.” A lawyer for the Justice Department, which is suing to block the purchase, commented that the lawsuit “will prevent further consolidation in an industry that has a history of collusion.”
The problem is not what we know about these giant publishers, or specifically about Penguin Random House or Simon & Schuster; we know that they and the other publishers that make up the so-called Big Five publish many good books, and they probably will continue to deal fairly with the bookstore world in the near future. What I worry about are the writers and books that will not get published or could be otherwise marginalized because of this even greater concentration of power.
If the Penguin Random House deal is successful, the Justice Department argues that the resulting merged company would control close to half of the best-seller market, continuing a longer history of publisher acquisitions, mergers and consolidation. This extraordinary shift in the balance of power in one of our nation’s most important industries has gone largely unremarked upon, even if it may change the kinds of books most Americans learn about and choose to read.
And who are these remaining publishing giants? Penguin Random House (owned by Bertelsmann, a German company), which I will now pair with Simon & Schuster (formerly Paramount Global, American-based); HarperCollins (News Corp, maybe an American corporation, maybe Australian, depending upon who’s asking, and so convoluted it might as well be another country); Hachette (Lagardère, a French group); and Macmillan (Holtzbrinck, another German company). Together these four corporations make up 80 percent of the U.S. book market.
What I have seen as a bookseller is that publishing, originally geared toward offering new writers the chance to connect with readers, evermore trends toward an industry narrowly engineered to produce repeat best sellers. The immense resources of a Penguin Random House or a Simon & Schuster will train mostly on a small percentage of its authors; the rest of the authors whom they publish will hope to take advantage of what collateral prestige and opportunity exists by being published in the company of household names.
The number of copies of best sellers sold rose nearly 30 percent from 2017 to 2019, while all other book sales fell by 16 percent. The number of midlist titles (books with modest print runs and sales expectations) is being greatly diminished, which means that fewer books of quality — or indeed, fewer potential best sellers — will have the chance to be published and read. In the 43 years that my bookstore, Square Books, has been in business — and we now have four different shops in three buildings 100 feet apart — our gross revenue has declined from the previous year only twice (once in 2008, when the economy teetered; the other during the height of Covid).
Many booksellers may remember a series of lawsuits that addressed anticompetitive behavior in the 1980s and ’90s. Those suits hinged on a little-known but important aspect of antitrust law, the Robinson-Patman Act, which prohibited manufacturers (publishers) from selling goods (books) to retail vendors (bookstores) at “disproportionate” or discriminatory prices. A publisher used to be able to sell its books to a corporate bookstore for less than it might to an independent bookstore — but only to the extent that the difference was equivalent to the savings by the publisher. What the American Booksellers Association found was that the pricing was both disproportionate and arbitrary, and large chain store accounts were demanding and receiving much lower prices.
The American Booksellers Association eventually settled with a group of six publishers, who signed consent decrees agreeing to abide by legal terms henceforth. This set a standard for all publishers and leveled the playing field. Later, one of the publishers, Penguin, was found to have violated the consent decree. The matter was resolved by a $25 million settlement paid to the American Booksellers Association and distributed to its member bookstores, the largest monetary settlement in a discriminatory pricing case in U.S. legal history at the time.
A few years later, in 1999, bookstores gathered some 90,000 signatures in a petition to the Federal Trade Commission opposing Barnes & Noble’s offer to buy Ingram Book Group, the largest book wholesaler in the country and a company that virtually every independent bookstore did business with.
The American Booksellers Association wrote a letter — under my signature, as I was board chair at the time — to Attorney General Janet Reno and Robert Pitofsky, who was then the Federal Trade Commission chair, stating our opinion that the proposed merger of Barnes & Noble and Ingram was “a devastating development that threatens the viability of competition in the book industry and limits the diversity and availability of books to consumers” and calling for investigative action. After a June 1, 1999, report in The Times indicating that the Federal Trade Commission staff would recommend to the commission that it challenge the proposed $600 million purchase, Barnes & Noble terminated its deal, presumably, in part, to avoid the embarrassment of being denied.
Interestingly, it wasn’t just associations of authors and booksellers who opposed the Barnes & Noble and Ingram consolidation but also a company that then had nearly 60 percent of its order fulfillment provided through Ingram: Amazon, which would continue to grow and flex its own ability to negotiate. Fifteen years later, in 2014, over 900 authors, including Stephen King, Anna Quindlen and John Grisham, signed a full-page ad in The Times asking Amazon to stop its “selective retaliation” against authors whose publishers had not capitulated to Amazon’s demands. Today the American Booksellers Association, on behalf of indie stores, continues to challenge Amazon’s anticompetitive behavior, lobbying for antitrust legislation like the American Innovation and Choice Online Act. This bipartisan bill, which passed the Senate Judiciary Committee by a 16-to-6 vote in early 2022, creates rules for fair competition online by banning monopolistic behavior by large online platforms.
According to the Justice Department, Penguin Random House argued that the potential acquisition of Simon & Schuster “will provide a counterweight to Amazon’s alleged buying power,” but the Justice Department countered that “internal documents tell a different story: Penguin Random House plans to embrace Amazon even more closely after the merger.”
Publishers are by necessity gatekeepers. They can accept only as many manuscripts or writers as they can afford to publish and sell. They are limited by their competition, however, because only so many books may be published and purchased. Today there are roughly 2.5 books sold per person in the United States every year.
In the world of book selling today, a customer may be left with a book less well made, less appealing, less diverse, more expensive, and whose author makes less money. No two books are the same, you say? Yes, and every day I see buyers choosing one book rather than another. While Amazon has siphoned off an enormous share of the physical book market and almost the entire e-book market, our customers at Square Books constantly express thanks for our actual presence and what they tell us is a better, more pleasurable way to shop. The language they use to express their preferences is money.
I hesitate to speak critically of Penguin Random House. After all, William Faulkner, published almost entirely by Random House, was a longtime resident of Oxford, Miss. — where I live — and Penguin Random House published my wife’s novel, “Summerlings,” for heaven’s sake, so of course our store does business with it. And a whole lot of business it is. Penguin Random House, even without including Simon & Schuster, has a larger share of our business than all of Square Books’ other accounts — combined.
But how would readers ever have discovered Larry Brown, another fine writer — who, like Faulkner, was a resident of Lafayette County — if he hadn’t been discovered by a brilliant editor, Shannon Ravenel, at a small outfit, Algonquin, having enjoyed little or no interest from the biggies? Or Kiese Laymon, whose first two books originated with a tiny publisher, or Lee Durkee, who lives in Oxford and whose recent novel “The Last Taxi Driver” was published by the independent press Tin House?
While Faulkner was associated with Random House for the bulk of his career, his first two books were published by Boni & Liveright, which grew into W.W. Norton (incidentally, the publisher of Lee Durkee’s first novel). I am sure Penguin Random House would love to add Norton, one of the finest, most distinguished publishers in our country, to its amalgamation, were it to find a way to wrest the company from its employees — who own it.
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