Official news came down the pipeline today that the rumors are true: Random House and Penguin are merging in a massive business deal that will create the largest publishing company in the world. Why is this Star Wars news? Well, as Dunc over at Club Jade pointed out, both Random House and Penguin both have imprints in DelRey and DK that print Star Wars material.
But don’t get too excited yet. This deal is still subject to regulatory approval, and that may be a problem. Dunc and I have both posited that this could be a case for anti-trust investigations. Why? Right now, in the UK, Random House and Penguin make up 27% of book sales. Forbes speculates that in the US, that number jumps to about 40% of trade book sales. Globally, according to the Huffington Post, the two would make up 26% of world wide book sales. I would note that none of these numbers specifically address the academic publishing arms of these companies either; Pearson (owner of Penguin) has a massive education publishing arm, and combining with Random House could end up with a larger share of the textbook market as well, and any college student taking a look at textbooks in their college bookstore knows what kind of problem that might be.
It is important that in all of these articles, the words “subject to regulatory approval” or “anti-trust approval” come up. The fact that both Random House and Penguin are European-based companies could complicate matters. And for those of us who are aspiring authors, this new conglomeration could be good or bad (see the Forbes article linked above.) In any case, this smacks of desperation on the sides of the publishers in the face of ebooks (especially after the Department of Justice came down on the agency pricing model). But don’t look away yet. The Huffington Post also reports that NewsCorp is looking to add to HarperCollins, so more big publisher mergers may be on the horizon.