Through the first week of an expected two- to three-week trial in U.S. District Court in Washington, top publishing executives at Penguin Random House, Simon & Schuster and elsewhere, along with agents and such authors as Stephen King, have shared opinions, relived disappointments and revealed financial figures they otherwise would have preferred to discuss privately or confide on background with reporters.
Like such tidbits as:
Simon & Schuster CEO Jonathan Karp acknowledged that a popular industry term, “mid-list writer,” long associated with a broad and intrepid corps of noncommercial authors, a kind of publishing middle class, is essentially fictitious and a polite way of not labeling anyone a “low-list” writer.
The government is trying to demonstrate that the merger will lead to less competition for bestselling authors, lowering their advances and reducing the number of books. The Justice Department contends that the top publishers, which also include Hachette, HarperCollins Publishers and Macmillan, already dominate the market for popular books and writers and have effectively made it near-impossible for any smaller publisher to break through.
Authors Guild president Preston, who said some of his own books have been published by Simon & Schuster, added that author advances are also likely to take a hit with more consolidation.
“The fewer publishers there are bidding against each other for an author’s work, the lower the advance,” Preston said. “It’s economics 101.”
But Penguin Random House contends the merger would increase author advances. The pre-trial brief, shared with NPR, stated: “This is a pro-consumer acquisition that will allow Simon & Schuster and its editors and authors to become part of PRH with its industry-leading supply chain, giving readers and book sellers across the world greater access to their books. It will also enhance competition by enabling the combined company to offer increased advances and marketing support to authors. Competition will increase — not decrease — as a result of these investments.”
NPR also takes on the diversity issue.
“I have a white agent. The editors of our books are white. The heads of the marketing are white,” said Rao, who is South Asian American. “It’s white, white, white, white, white.”
A study, released in 2020 by major children’s book publisher Lee & Low Books in collaboration with Boston University, says 76% of people in the industry identify as white (down from 79% the last time the company conducted its survey in 2015).
A compilation of PW’s coverage of U.S. v. Bertelsmann SE & CO. KGaA, et al., the U.S. Department of Justice’s bid to block Penguin Random House’s acquisition of rival Big Five publisher Simon & Schuster, with the most recent coverage up top.
Publishers Weekly offers a roundup of their detailed reporting.
Back to Hillel Italie at The Associated Press for a glossary:
- Earning out: This is when a book sells enough to recoup the advance paid and the author can begin collecting royalties, although some books can make a profit for the publisher even when not earning out. (Most new books, executives acknowledged, do not earn out.)
- Backlist: This refers to older books, an invaluable resource for publishers, who rely on them as steady sources of revenue.
- Beauty contest: This is when two or more publishers are offering similar advances and nonfinancial terms such as marketing skills or the appeal of working with a particular editor determine who wins.
- 10% topping: This refers to when an agent asks the publisher not just to match the highest competing offer, but add 10% more.
- All access books: As defined by Dohle, these are books so inexpensive, such as those Amazon.com offers through its e-book subscription service Kindle Unlimited, that they damage the industry overall by forcing down prices and, inevitably, author advances.