Penguin and Random House are merging. This is big news because Random House and Penguin are two of the biggest of the “Big Six” publishing firms that currently rule the book business (the other four are Simon and Schuster, HarperCollins, Macmillan and Hachette). It’s also big news for devoted readers, because these are two of the most beloved historic brands in modern literature. Random House once published Ulysses by James Joyce, and its Alfred A. Knopf imprint is often considered the single most prestigious name in literary fiction. Penguin helped generations of readers enjoy great books of the past with its beautiful Penguin Classics line, and its Viking subsidiary once published On The Road by Jack Kerouac.
What good will a Penguin/Random House merger do? In my opinion: absolutely none. A book publisher merger, like a bank merger or a food company merger, is never designed to improve the products the companies sell. It’s usually an act of economic opportunism or arbitrage, a shuffling of objects to temporarily hype up their combined value. In this case, it appears that Penguin’s parent company Pearson wanted to get out of trade publishing to focus on other businesses, and Random House picked up the orphan before HarperCollins could grab it.
It does not appear that literary editors at any of these companies were consulted about the business decision, and the best possible hope appears to be that the changes won’t have a big impact on the editorial activity at either firm. The merging firms are trying to spin the announcement as good news, but we have little reason to applaud.
What does it ever mean for two companies with strong identities and mundane but stable business models (yes, book publishing is more stable than most people realize, and book publishers do make profits ever year) to seek a merger? It seems to indicate a desire to escape from their basic financial realities. It’s an act of existential denial, dressed up as innovation. We don’t know yet the particulars of the arrangement, but so far it doesn’t sound like the kind of move honest capitalists would make.