Scholarly Kitchen has some historical musings and a hint of things to come if the Random Penguin merger goes through unhindered:
http://scholarlykitchen.sspnet.org/2...rs-get-so-big/
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The rationale for bigness among book publishers has changed over the years. Go back a few decades and the nation was dotted with independent bookstores, one in every town center of any size. The distributed nature of independent bookstores presented challenges for publishers that wanted to sell books through those outlets. How can you have a salesperson call on each store? Note that this was long before the cost of telemarketing plummeted and the Internet was only a dream of Vannevar Bush. Publishers thus had to reach a size sufficient to field a national sales force. This meant hiring between 25 and 30 people, whose cost included a car. Now, what sales volume does a publisher have to achieve to keep the cost of that sales force to a manageable level? Hence the rationale for bigness — big enough to blanket the country with a sales organization.
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With the advent of the superauthors, another reason for bigness arose: the need to be able to guarantee large sums of money to authors. This was about the time that I got into the business, and I remember it well. The proximate cause of the rise of these highly paid authors was the ubiquity and low cost of photocopying machines, which made it possible for literary agents to submit manuscripts to multiple publishers at the same time. Thus the literary auction was born. A million-dollar advance by a $10 million company is not feasible, but a million-dollar advance by a $100 million company is just the cost of doing business. Smaller publishers that could not afford these sums got swept up by the bigger players. Just think of all the companies that are now part of Random House: Knopf, Crown, Ballantine, Fawcett, House of Collectibles, Bantam, Doubleday, Dell, Fodor’s, and on and on. And now there is Penguin. This rationale has not exhausted itself.
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There will of course be huge cost savings in the back office from this merger, but perhaps the primary rationale is upstream, with the relationships with agents and authors. In the print world, publishers typically pay a royalty of 28% of their net receipts for hardcovers, half that for trade paperbacks. (Let’s not get into how those figures are derived, as there is nothing more complicated than a publisher’s discount schedule.) With e-books, publishers routinely pay royalties of 25%. There is a big push by authors to move that number up to 50%, which would dramatically increase the costs of publishing houses everywhere, and not even the most assiduous cost-cutter could find enough people to fire in the warehouse, in accounting, the production department, and elsewhere to offset that increase in author royalties. A combined Penguin Random House, however, would be in a position to get agents to toe the line, and also in a leadership position in the industry, inviting other publishers to say, If Penguin Random House does not pay 50%, why should we? You don’t have to collude over a lunch table to get uniform practices in an industry where certain players have common interests.
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Boldface mine.
Explains why the Author's Guild is upset, no? Not only can the Random Penguin resist raising ebook royalties, they'll be in a good position to.... trim
all royalties, say to 25% on hardcover. A point here, a point there...
He also addresses the benefits to the publisher in other markets besides consumer publishing, like journals, libraries, and academic publishing.
A good read: recommended.