A student of the publishing industry would be amazed at the transformation which has taken place in the last decade. According to the Association of American Publishers, “[t]he eBook phenomenon continued in 2011 with eBooks ranking, for the first time, as the year’s #1 individual format for Adult Fiction.”
This transformation comes at a time when the battle over tablet readers has suddenly heated up. Apple’s lead in tablet computing has slipped to a paltry 50.4% – still the global majority, but a 15% decline in the last quarter. Which of course is before the new Microsoft marketing push for its competing Windows 8 products. Using Google’s Android OS, Samsung has taken away the majority of that market share away from Apple.
An increase in book reader form factors to include Apple, Microsoft, Google powered Samsung (and maybe Sony) does not suggest a fragmented market. (Both Amazon and Barnes & Noble are pushing branded tablets as well.) Instead it suggests that the dominant computer companies are rolling from video games and music distribution into consumption of the publishing industry.
Perhaps this is why antitrust actions continue. The Department of Justice plans to press its case against Apple and publishers MacMillan and Penguin over restraint of trade in the pricing of ebooks on the iTunes platform. Former publishing defendants Hachette Bok Group, HarperCollins Publishers and Simon & Schuster have settled identical charges.
Notably absent from the list of defendants was Random House. Instead of arranging pricing structures with its competitors through a standardized iTunes license, Random House instead elected to grow more powerful by acquiring Penguin. As the New York Times describes the merger, it “narrows the business to a handful of big publishers, and could set off a long-expected round of consolidation as the industry adapts to the digital marketplace.”
[T]he major publishers have been expected to join together, getting smaller in number and bigger in size. The other four houses among the so-called Big Six are also owned by larger media conglomerates: HarperCollins, which is part of News Corporation; Macmillan, owned by Georg von Holtzbrinck of Germany; Hachette, whose parent company is Lagardère of France; and Simon & Schuster, a division of CBS. They could all now face increased pressure to consolidate in response to a combined Penguin Random House.
“Survival of the largest appears to be the message here,” said Scott Turow, Authors Guild president. “Penguin Random House, our first mega-publisher, would have additional negotiating leverage with the bookselling giants, but that leverage would come at a high cost for the literary market and therefore for readers. There are already far too few publishers willing to invest in nonfiction authors, who may require years to research and write histories, biographies, and other works, and in novelists, who may need the help of a substantial publisher to effectively market their books to readers.”
Still, the lesson may be that big wins. The Google Book scanning project has been in litigation for seven years with apathy and partial settlements derailing most of the importance of the litigation. In October 2012, the publishers capitulated and settled. The arrangement involved the Association of American Publishers, along with McGraw-Hill Companies, Pearson Education, Penguin, John Wiley & Sons and Simon & Schuster. The Authors Guild continues to fight, though the relevance of the litigation seems to be waning. The actual use of the digitized books has become more constrained and falls into fair use activities like text searches and archival backups. As a result, the Authors Guild was handed a stunningly lopsided defeat in its action against the HathiTrust, the partnership between Google and the university libraries that allowed digitization of their collections.
These concerns are a far cry from the monopoly concerns leveled at national book retailers a decade ago. In 2011 Borders Books was the latest mega-book retailer to disappear in bankruptcy. (Waldenbooks was a subsidiary disappeared as well.) Crown Books, once the third largest retailer, collapsed a decade earlier. This leaves only Barnes & Noble and Books-A-Million as bookstore retail chains, though Walmart, Costco, and Target sell mass retail. Online Amazon, Barnes & Noble, and Books-A-Million dominate sales.
It has never been easier for an author to publish materials for the world to see or even to place works into national distribution. The only thing the new publishing order lacks is infrastructure to support nurturing talent and carefully editing works. Larger publishers rely more on backlists and less on new authors. Fewer editors spend less time on more manuscripts. Research and factual works are mined by researchers using word searches and shoddy research that diminishes the need to acquire actual copies of those works.
Arbitrary legal barriers to the transformation are irrelevant or even counter-productive. Antitrust suits will simply change who will dominate the new, concentrated landscape. Nonetheless, it is important to note the passing of an era even if nothing can be done save mourn its passing.
So, in keeping with the season, sing along – with feeling:
Five major publishers, four ebook sources, three mass market chains, two national bookstores … and just Amazon for all our online needs!