The ongoing saga on whether the US will allow the merger of Penguin Random House and Simon and Shuster continues. Markus Dohle, chief executive officer of the biggest publisher, Penguin Random House, bemoaned his company’s declining market share in book sales as he testified in support of a $2.18 billion merger with Simon & Schuster.
Dohle told the judge at an antitrust trial in federal court in Washington that about half the books sold in the US last year came from publishers outside of the biggest five companies. He testified on Thursday that the shift to e-commerce platforms such as Amazon has “leveled the playing field” between the big and small players.
The DOJ has alleged that the combination will concentrate power among four publishing houses instead of five. The publishers have argued that the merger will, instead, increase competition and payments to authors. The government has focused its case on how the largest publishers have cornered the market in buying books from authors and has argued that the merger would give the combined company almost half of the market for buying anticipated top-selling books. The defense shifted the focus on Thursday to Penguin’s smaller slice of the market for selling books.
Daniel Petrocelli, attorney for Penguin and its parent, referred to a presentation from December 2019 that showed Penguin’s share of retail book sales sliding from 25% to 21% since the 2013 merger between Penguin and Random House. In his testimony, Dohle expressed frustration with Penguin’s failure to keep up with industry growth and said the merger would help the company make back its share. He testified that e-commerce platforms level the playing field because they rely on algorithms that decide which books are “discoverable.” While being questioned, Dohle testified that his company uses data scientists and pays Amazon to improve placement.
The trial, which started Monday, has already elicited testimony from best-selling horror author Stephen King. King, known for numerous best-sellers such “IT” and “Carrie,” spoke out against consolidation and warned of the impact it could have on the livelihood of authors.
I think it is very telling that the largest book publisher in the world pays Amazon a copious amount of money for their titles to be advertised. It shows that small, medium and even the largest publishers sees value in paying Amazon to showcase their books.
Michael Kozlowski has written about audiobooks and e-readers for the past twelve years. Newspapers and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times have picked up his articles. He Lives in Vancouver, British Columbia, Canada.