Tuesday, November 13, 2012

Why Random and Penguin Must Merge—And When They Almost Did

The Book Beast - Nov 9, 2012 

Sixty years ago the founders of Penguin and Random House contemplated a merger, but now their successors are going forward with one. There’s no other choice against the might of Amazon and the huge changes of digital publishing writes Gayle Feldman.

The letter is headed “Notes for a possible basis whereby Random House could purchase Penguin Books for the American market.”

With news about a merger between Bertelsmann’s Random House and Pearson’s Penguin, you might think that letter was written recently. In fact, it was dated July 17, 1956, and the men doing the negotiating were Random House founders Bennett Cerf and Donald Klopfer and Penguin founder Allen Lane.

The romance between Random and Penguin may have started with their makers, but the digital revolution is forcing marriage on their descendants.

The book ecosystem as we’ve known it is being upended by Google, Apple, and especially Amazon: shuttering of stores; the rise of e-devices, e-books, e-tailing and self-publishing; the need for capital, creativity, and brand clout to enable publishers to build their own effective digital mechanisms for marketing and selling directly to readers, and to capture loyal social networks as well as dollars.

How did we get here? Where are we heading?

Penguin began in 1935; four years later, Lane authorized the opening of a New York office; post-war, he backed away from big dreams in favor of steady exports.

Cerf and Klopfer started in 1925. By the 1950s, they were eyeing Penguin’s U.S. operation with their own dreams, but so were others. Harper had a done deal, until Penguin pulled out at the last minute. (Its successor company’s boss, Rupert Murdoch, has also been disappointed when Penguin went with Random.)

Full story at The Book Beast

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