Writer Wednesday: Capitalism Part 1
Good morning authors. What a summer, amirite? There has been a lot happening in the publishing industry this summer, from the merger buster case the Department of Justice brought to bare against Simon & Schuster and Penguin Random House, to Barnes & Noble's new buying policies to small presses behaving badly as recently as this week. It all falls under the umbrella of industry, where these failings are under sharp focus in the author community.
My goal with the Writer Wednesday series is to be a source of information for authors, no matter what path in the industry they take. So, with that spirit in mind, let's try to untangle this Gordian knot into a more accessible mess.
Capitalism & Publishing
One of the core issues at heart of publishing, particularly big publishing is our current mode of operation. Capitalism, as a system, is one that is foundationally skewed against minorities & marginalized participants. It is a system that likes to claim 'anyone, from anywhere' can rise through the successful practice of business and choice, while purposefully ignoring the massive advantages of class, location, inherited wealth, & other societal structures that play into oppression and inequality.
On the other hand, Art is creation and passion. The art of storytelling is a fundamental piece of human culture, that shapes our history and development as a society.
Before the advent of the modern printing press, the art of poetry and stories where much harder to attain and spread. The value of art has fluctuated over the centuries, from being the beating heart of a culture to having patron support to the 20th century, where Capitalism sank teeth into Passion, and put a price tag on it.
We have seen the results of that switch in the classics we read, in the voices buried beneath the barriers of modern industry, the authors 'discovered' after their time, writings uncovered like lost treasures. But the grip of capitalism persisted, because those in power discovered money could be squeezed from stories.
It always comes down to the money. You'll see me say this again before we're done.
Capitalism bit down harder, and harder, on passion, severing arteries and muscles, until it held this mangled system in its teeth, where money flows between the high echelons and passion slowly starves on the dregs.
At the Top, You Find the Billionaires
The big five, no wait four, or is it three now? At the top, above the multiple imprints and logo misdirects, sit the parent companies. Corporations & 'Groups', like Harper Collins, owned by News Corp which in turn is owned by Rupert Murdoch. Yes, that Rupert Murdoch, media mogul, infamous for moving and shaking the perception of a country through misleading & biased coverage. Murdoch also owns Fox. Harper Collins net revenue was 1.5 Billion in 2019.
Hachette is owned by Time Warner, wait no, dig deeper. Hachette is owned by a French Conglomerate called Lagardère Publishing. Hachette's net revenue was about 2.7 Billion in 2019.
MacMillan who is owned by the Holtzbrink Publishing Group had a former Nazi party member at the helm for decades, though they were reportedly apologetic of their involvement. MacMillan's net revenue was about 1.4 Billion in 2019. They weren't the only one with a shady wartime publishing history.
Penguin Random House is owned by Bertlesmann (75%) & Pearson PLC (25%). Noteworthy since during World War II, Bertlesmann were a leading supplier to the Wehrmacht, also known as the unified armed forces of Nazi Germany, even surpassing the Nazi Party's central publishing house of Franz Eher. Their net revenue was 3.3 Billion in 2019.
Penguin Random House is seeking to acquire Simon & Schuster from its parent company of Viacom CBS Corporation (they own Paramount, Showtime, etc) for $2.175 Billion dollars. Arguably, Simon & Schuster was the least profitable of the bunch coming in at 830 Million for net revenue in 2019.
Anti-Trust & Monopoly
At the center of the storm is the ongoing case against the Penguin Random House acquisition of Simon & Schuster. This is a case I will cover more in part 2, but why does this case exist and what does it seek to prevent?
Anti-Trust laws are meant to promote competition and prevent unjustified monopolies. That the Department of Justice is coming in now to stop this one may be a case of too little, too late, as big publishing has been cannibalizing itself for decades, but at least they stepped in at all. The goal of Anti-trust laws is to keep the market free, open, and competitive, but publishing has seemed to be a blind spot for the past 70 years while the houses absorbed down to less than half a dozen corporations in control of the whole traditional market.
The tightening chokehold on publishing is what spawned the thousands of small presses currently in existence and gave rise to self publishing practices, which may have been considered, in the Capitalistic mindset, free market competition. The monetary gap between traditionally published and self published authors continues to close as new marketing techniques & trends emerge. The rise of booktok & other social media marketing strategies are something small press & self published authors have used to break into spaces they previously couldn't, supported by strong readership and internet backed word of mouth.
However, in the sphere of big publishing, this merger is the proverbial straw that broke the camel's back, and the case has pulled back the curtain to big publishing's inner workings, to a point.
Now, to follow the money.
Resources & Further Reading
https://www.nytimes.com/2002/10/14/business/another-german-publisher-mulls-its-wartime-past.html
https://stevelaube.com/who-owns-whom-in-publishing/
https://izzardink.com/who-are-the-major-publishing-companies/
https://www.classlawgroup.com/antitrust/lawsuit/
https://www.seegerweiss.com/antitrust/
https://www.investopedia.com/terms/a/antitrust.asp
https://www.britannica.com/biography/Rupert-Murdoch/Scandal-and-reorganization