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Originally Posted by bgalbrecht
I'm sure some of this is because merger of two companies always causes some duplication of resources that can be downsized without affecting overall performance (sucks to be downsized though). I also wonder if some of this is motivated by the tax consequences of publishers maintaining book inventories, and that they might be using this merger as an excuse to shrink the inventories.
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They are shrinking inventories, yes.
They are shrinking staff, they are shrinking advances, they are shrinking print runs. (Also, odds are the Penguin facilities were larger, older, and more expensive to run than the RH warehouses they are keeping. Expect most of the downsizing to come from the Penguin side.)
By the time they are done consolidating Penguin and Random House, the Randy Penguin will be about the size of the pre-merger RH in everything except catalog. And if the other four haven't combined and downsized into comparable players by then, the Randy Penguin will look to consume another of them.
Right now, they are publishing more "bestsellers" than the other four combined and swamping them. Between that, the declining trade pbook market, and the dirty little secret of 2014 (less new authors are showing up trying to get published by the BPHs) the smaller BPHs need to either eat or be eaten. Pearson had the right idea in getting out of trade publishing when they did; by the time the dust settles in BPH-land (circa 2020) there will be at most three and more likely two NYC trade publishing houses worthy of the BPH name.
That is how industry consolidations play out under tech disruptions.
And since trade publishing really is not a special snowflake there is no reason to expect anything different. It happened to Hollywood during the collapse of the classic studio system, it happened to cars, mainframes, technical workstations, radio, and department stores. Different industries, same outcome.
Edit: Check this:
http://www.huffingtonpost.com/penny-...&rid=241005533
That such a headline can be seriously floated this early in the disruption speaks wonders of the speed at which change is coming.
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The problem in the industry, and I would say that this is the biggest problem, is that so many still don't get it. Donald Maass wrote a piece for Writer Unboxed last week that illuminates this point with stunning clarity: the industry does not get it. They see this as a class issue (at some point in his piece Maass refers to the self-published group as "Freight class") (http://writerunboxed.com/2014/02/05/...-class-system/). It was infuriating and frightening at the same time. Frightening because despite this self-publishing revolution, no one wants publishers to go away. We do, however, want them to get it. The revolution has arrived, it's knocking on their door and no matter how long they decide to bury their heads in the sand or write blogs about the class distinction and other outdated notions, it is taking over and changing the way we see the industry.
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Pearson got it and got out; RH thinks they get it and ate Penguin to survive. The other four show little signs of getting it. And the NYC "literary" establishment is in outright denial.