About Me

A blog wherein a literary agent will sometimes discuss his business, sometimes discuss the movies he sees, the tennis he watches, or the world around him. In which he will often wish he could say more, but will be obliged by business necessity and basic politeness and simple civility to hold his tongue. Rankings are done on a scale of one to five Slithy Toads, where a 0 is a complete waste of time, a 2 is a completely innocuous way to spend your time, and a 4 is intended as a geas compelling you to make the time.

Monday, October 29, 2012

Pengdom House

I'm not a big fan of pontificating too much about things with too much uncertainty, and believe it or not there are a lot of uncertainties about Random House's acquisition of Penguin that make it a mistake for people to get too far ahead of themselves.

The first major uncertainty is government regulation.  In both the US and UK, the merger will give the combined company large market share in the publishing industry.  Will there be any divestitures required?  My guess is we're not looking at a lot, because 25% market share with four other decent-sized competitors is hardly a dominant market position.  But will the government look more closely at any particular categories?  As an example in sf/fantasy, the merged company would control Ace, Roc, Del Rey, and distribute DAW.  Which would be quite a dominant market share.  Our Bookscan account doesn't offer market share data, but it's out there, if anyone who reads this post has any light to shed on their position in certain genres it would be very interesting.

And the second uncertainty?  Well, quite frankly, not even the people at Random House know what they're doing with the new toy.  The people at the highest levels of Bertelsmann have crunched numbers and found a price that makes sense, but they haven't formed the committees that actually make everything come together.  Obviously the people at Random House like the Random House contract, but that doesn't mean there isn't going to be a committee to decide who actually has the better language on rights reversions, or termination in the event of non-delivery of a manuscript, or a gazillion other things.  There hasn't been a committee formed to see who has the better royalty statement format, and how you get the computers to talk to one another to eventually consolidate the systems.  I'm told on hearsay that Penguin has a 99-year lease that would go for at least another 80 years on its office space, and Random House has some kind of fancy condominium arrangement I think for its office space, and there hasn't been a committee formed to decide if they want to keep the offices separate or move people here or there or come to an arrangement with a new developer for 99 years of space in some new building.

We do know that Random House gives more editorial autonomy than in other large publishing companies, and I see no reason why they'd change that practice.  What this means is that they are happier to let the different editorial divisions compete for books than at other companies, so at least until we get to a situation where Ace and Del Rey both want the same book, or Viking and Crown want the same book, they'll let people go at it.  S&S is much pickier about needing to know if/who else in the conglomerate is also looking at something.

We do know that this won't be like when Penguin purchased Berkley 20 years ago, and then let the Berkley people come in and run things because they were very well managed.  I can't see Bertelsmann looking at Penguin and thinking "oh, let's buy them for their management expertise!"  Bertelsmann has been running book businesses for many many decades.

For JABberwocky, selfishly:

We like our Penguin contract more than our Random House contract, but I don't dislike our Random House contract, and I think over time as Peter Brett becomes a more prominent author for Random House and we're now selling Brandon Sanderson to Random/Delacorte with his Steelheart series, there's a likely move to be able to make our Random House contract better over time.    If you told me we had to move all of our Penguin authors to Macmillan boilerplate moving forward, I wouldn't be thrilled.  And as I mentioned above, who knows whose contract we'll actually get moving forward.

We do a lot of business with Penguin, too much in some ways, because I hate to have too many eggs in one basket.  Having Peter Brett become a breakout author for Random House and Brandon Sanderson the same with Tor has given me a lot more comfort than six or eight years ago, now we're going to have a very big Pengdom House basket and the Tor basket looking that much smaller.

When I started in the business, Penguin was this very strange conglomerate that did all sorts of things that the other big conglomerates were smart enough not to do, examples of this would be that Penguin would do big three-book deals, and dole out half the advance on signing, and all the rest on delivery of the manuscript.  Over time, bean-counters started to crack down on some of these things.  Penguin payout is more like other payouts.  The agita when I tried to suggest a client should get his Penguin delivery advance for a book he hadn't finished revisions on last year, oy!  Still, Penguin I would say is a somewhat less corporate place than Random House is.

I do most of my business at Penguin with their Berkley imprint, and Berkley has been an amazingly stable company.  I've been doing business with Ginjer Buchanan and Susan Allison for about as long as I've been in the business, and they've been working with the same people atop of them for as long as more.  I can tell you exactly when I read that Susan Allison would be taking over Ace, and that was in 1981 when I was still in high school and Jim Baen announced in the final issue of his Destinies "bookazine" that he was going off to get a Jim Baen Presents imprint at Tor and would be turning the reins over to Susan.  That's an amazing run.  They keep losing excellent junior people because the downside of good stable management is that you eventually run out of promotions and new titles to hand out to ambitious people.  I've also got to say, Susan's had a long run because she's razor sharp and deserves it.

Del Rey has been an amazingly unstable company, to be blunt.  When I started in the business, and when Random House was still an "independent' publishing company, if you can use that term for an arm of the Newhouse's Advance Communications conglomerate, it was still run by Judy and Lester del Rey.  Can we even keep track of how many people have been running Del Rey since it hasn't been the del Reys?  For many years, I had this impression that Del Rey was an imprint with a lot of senior people and not a lot of less senior people, "too many chiefs and not enough Indians."  I don't think that any more, Scott Shannon seems to have found the right people balance for the Del Rey and Spectra imprints.  But it's come with a huge human cost to people working at the companies.  The designated heir to the del Reys, Owen Locke, departed.   Editors like Jim Minz and Liz Scheier came in and out way too quickly, too quickly for their departures to be based on any profit & loss report card for things they'd purchased.  The consolidation of Del Rey and Bantam Spectra led to other departures.  This is hardly a full list of people to be in and out of Del Rey and Spectra, my apologies to all the many people I am not specifically naming (yes, Steve, that means you).  Elizabeth Moon has had five editors in ten years with Del Rey, it would have been much more difficult to "achieve" that "feat" at the Penguin sf imprints.

If I get a little queasy thinking on some of the less stable aspects of the Random House corporate structure weighing on Berkley, I think I'm excited at seeing Penguin benefit from some of the digitial stuff that Random House is up to.  Peter Brett and I had a marketing meeting on plans for The Daylight War in September, my general experience with publisher marketing plans is that they can spend a lot of time coming up with six pages that say "we will send out review copies and galleys" or, today, "review copies, galleys, and we'll do shit on Facebook."  The Del Rey plan here looked and felt different, leveraging different things like Suvudu that Random House has invested in over the years, with an awful lot of dedicated digital marketing people, with a lot of coordination and involvement with the editorial and other people at Del Rey.  I might be over-stating the import of this, because all the big publishers will do a lot of things for an author like Peter V. Brett that they see heading to bestseller lists that they don't do generally, but I'm not sure I am.  I felt like the plan was using more things that are actually embedded in what Random House is doing and has been doing, and that they went beyond what I see from other publishers for other of our bestselling authors.

I hope Random House will switch to Penguin's royalty reporting.  Random House has updated their royalty statements the way the TSA updates airport security, grafting layer after layer after layer on to what they were doing when I started in the business, it looks prettier in some ways but you have to keep flipping back and forth between pages to properly read, and they do not routinely provide across-the-board the information on copies shipped and returned the last six months, which is what you actually need, while providing a few lines of information on the total sales of the 1993 edition of your book that hasn't been in print or selling since 1996.   Penguin needs to do a little better job of purging sheets of paper on old inactive ISBNs from their reports, but otherwise they provide statements that are a model of clarity.   Information on copies shipped and returned is found easily, and there's summary information telling you that information in a big picture way before and during the current period and then in total following.

So this isn't the answer to all of your questions, not even the publisher knows the answer to all of its questions.

Just in a big picture way, what does this mean?  Well, I'm never fond of mergers that reduce competition for my authors, reduce the number of markets that I can sell authors to (especially because there are plenty of good books that don't find a market when they should, every time a new publisher starts up they are often buying books other people rejected and finding success with some of them), increase the clout of the people at the other end of the bargaining table.  However, the fact that I don't like it when these things happen doesn't keep them from happening, the question is how you deal with what actually comes out the other side, and right now we have no way of knowing anything about that in much detail.


Stacey Cochran said...

Nice insights here. Thanks.

Elizabeth Moon said...

Like you, I'm wondering if the genre shares will remain the same or change with this merger. But NYC has more important things to fret about today than Penguin & Random House.