Business Musings: The If-Only Lawsuit
So, last week, I had a blog deadline and nothing that I could really write about quickly, nothing that tickled my fancy. I did a process blog. Since you all say you love process blogs, I figured I was covered.
I still felt a bit let down—by my lack of time, by my own inability to schedule properly.
Then, three hours later, after I had put the post live on my Patreon page and scheduled it for this website, the news broke:
The United States Justice Department is suing to stop the big merger of Penguin Random House and Simon & Schuster. That I can write about without a lot of research, because I’ve been following this merger for a long time.
If only the news had arrived one day sooner….
But it didn’t, so I’m blogging about it this week. I’m not going greatly in depth, because this is just the complaint (not any trial or result or anything else), and things will definitely change.
However, this suit is worth mentioning…
Because it’s fifteen to twenty years too late. The Authors Guild noted that in their response to the news of the DOJ suit:
Today’s decision by the DOJ was unexpected given that so many other major mergers and acquisitions in the publishing industry have gone through recently and over the last few decades with nary a raised eyebrow, leaving us with only a handful of companies dominating the industry.
Yeah. Exactly. Those of us who suffered through the previous mergers know what bullshit the PRH and S&S are feeding the press. No effect on competition? In the 1990s, my books routinely went to auction, and we always got a higher price for the books than the initial offer.
By the end of the decade and into the early part of this century, there was no one to have an auction with. The book had to be a potential (and obvious) blockbuster. One of my editors backed out of a possible deal when she heard that another editor at a different imprint in the same gigantic merged company wanted the book.
Oh, my editor said to me, she can pay you more, and their imprint will probably take over mine in a year or so.
Guess what? My editor was right. Eighteen months after the merger, the “overlapping” departments and imprints were cut as a cost-saving measure, putting my former editor out of a job, along with everyone else on her team. The cuts and trimming, for the sake of the stockholders, mostly hit the most experienced people in the purchased company (not the one that did the buying) because experienced folk are paid more.
You all know this. Many of you went through something similar in your day jobs, especially if you work for a big concern and that concern got purchased by a different concern.
All the promises in the world mean nothing when large companies merge.
I read the complaint for the suit the day the suit was announced. The complaint is worth reading because, if nothing else, it’s a what-if. What if the DOJ had been on this as the mergers started twenty years ago? What would the traditional publishing landscape look like now?
I can tell you: It would look completely different. Instead of the traditional part of the industry being dominated by five large conglomerates, the traditional part of the industry would look the same or better than it did in the early 1990s. There would be a lot of publishing houses, a lot of working editors, a lot of imprints, and a lot of competition.
Indie wouldn’t be as attractive for many big name writers because those writers would still be working. Just this morning, I discovered that a writer whose work I loved decades ago has gone indie. Why? Because he hasn’t been able to get anyone to buy his books for…you guessed it…twenty years.
This happened to a worldwide bestseller who hit the top of the major lists for decades and whose work was made into three feature films. He couldn’t sell another book because his genre was “passé.” His genre? Horror. No one at the big houses would touch horror twenty years ago, and even the smaller ones looked askance at it.
If anyone had any brains, they would have seen that the genre would become as big as it is now. Right now, the people greenlighting movies and TV shows and buying books are the generation who grew up reading R.L. Stine. Of course, they want more horror. It was on the horizon.
The multitudinous publishing houses of the 1980s and 1990s could have afforded to play the waiting game—at least one or two of them, or maybe even three of them. Even better, the editors there who would have had long careers would have seen the writing on the wall and pushed out reissues of this writer’s books as the horror boom started.
The five large companies that exist now have no idea what they have in inventory. They have no institutional memory because they’re really not an institution. They’re parts, slammed together to make a great stock portfolio, so that they can be traded and bring in profits for the stockholders. Forget the books, forget the product, forget the employees, forget the readers. The books literally are widgets that are, in the minds of the people running the company, interchangeable.
If this weren’t true, then Simon & Schuster would not be up for sale. ViacomCBS would keep it and mine the inventory for projects for various TV, streaming, and movie projects, not to mention gaming rights and other things. A book publisher owned by a media company? Sounds like a surefire way to make even more money, right?
There’s no vision here.
And the suit by DOJ is as stuck in the past as that little dream of mine was. Yes, this merger by PRH and S&S is truly anti-competitive, just like all the other mergers were. And the impact, should the merger go through, on the traditional publishing industry will be profound…although not as profound as all of the mergers that preceded it.
What has changed is the rise of indie publishing. Writers do have somewhere else to go. They can publish their own works. They can reach the same readers that these large companies can, because these companies are no longer interested in publishing books. They’re just manufacturing widgets.
One very ironic thing that has emerged during the entire discussion of the merger is this: For about a decade now, companies like PRH and S&S denied that indie writers in any way contributed to the publishing industry. “Flotsam and jetsam” were some of the words floated around about indie publishing; “garbage” was another.
Now, though? Now that they need us? We’re part of their defense.
Oh, no, the attorneys for PRH and S&S have been saying all year, we’re not in control of the market. See this large thriving market over here? Those indie writers? They’re part of the industry too.
No, I’m not surprised that they’re using us as a defense. It might even work.
Not that it matters. The traditional publishing industry, as I have written many, many, many times, is broken. New writers can no longer anticipate having a career in the traditional publishing industry, let alone making a living at writing. And even a lot of the big guns are watching their income fade because of the policies and behaviors of these megacorporations.
Sure, there are always a handful of books that make millions. But once upon a time (twenty-five years ago), there were hundreds of books that made their authors millions. Enough books that Publisher’s Weekly devoted an entire month of issues every spring to cover the sales figures, never going below 250,000 for hardcovers and 500,000 for mass market paperbacks.
The industry thrived then. It was possible for any writer with ambition, common sense, and a willingness to write a lot under a number of names to not just make a living, but to make a six- or seven-figure income every year without really cracking any of the major bestseller lists.
Those opportunities had already been crushed by the mergers of this century. If only someone had filed a complaint sooner…this type of complaint.
So what will happen to traditional publishing in the future? I’m tempted to type “Who cares?” but I know some of you do.
What’ll happen is this: it won’t matter if this merger happens or not. The Big 4 or the Big 5 will be what they are now, or they’ll be even worse. No writer who is publishing with them will be able to make much money for more than five years or so.
The changes in traditional publishing will come from the middle up. The smaller companies—many of them indie and using indie channels—will some day become the Simon & Schusters of the future.
I picked Simon & Schuster for a reason because the company was founded in 1924 by a piano salesman (Simon) and an editor at an automotive trade magazine (Schuster). The company was young, hot, and hungry, and very very small.
It grew. It innovated, being the first to publish paperbacks and then founding Little Golden Books, the staple of my childhood. And on, and on. Not all of their gambits were good ones. Many weren’t even writer-friendly.
But the company—founded by two guys who initially just wanted a book of crossword puzzles—went on to become a behemoth that is now considered the fourth largest publisher in the U.S.
That’s how it’s done. And that’s what will happen in our future. There will always be writers who want to be taken care of, who want someone else to handle the messy business of publishing something. Those writers are willing to take a huge loss to get what they consider to be a huge possible profit. Whether that side of the equation will happen again in the traditional world remains to be seen, but smaller companies becoming big players in the market of the future? That will happen, and probably already is, under my radar.
I also found it telling that one week after the announcement of the DOJ lawsuit there was another announcement. General Electric, an insurmountable behemoth (or so we thought) in the 1980s and 1990s is dividing itself into three companies, because it’s been losing so much money for so very long.
It expanded too wide and too weirdly and the market changed underneath it. It was just so big that it took decades to figure out why the company was no longer the powerhouse it had once been. (If it had ever been more than a powerhouse on paper.)
If you look at the history of big big big companies like that from Standard Oil to United Steel to General Electric and on and on and on, you see this rise and mergers and acquisitions…followed by a slow and steady decline. Big companies can’t change with the times. Big companies move too slowly.
The one thing we all know, though—the one thing the pandemic taught all of us (not just those of us paying attention)—is that the future we thought we were going to have never really arrives. Something will crash into it and make it into a different future. Sometimes that future is better than the past; sometimes it’s significantly worse.
What companies have to do, though, is pivot to handle the inevitable changes. What big companies cannot do is pivot quickly.
That’s why the little companies thrive in tough times.
That’s why this suit is, at its core, sad and meaningless, except in an if-only way. If only we’d seen this exact suit (with different company names) filed twenty or so years ago.
Would I want that?
Naw. I like the publishing world we’re in now. Dean can publish seventy major books in one year and get them out to readers while doing other things. I can work on projects like the Holiday Spectacular while writing a super gigantic novel series and doing other things. Indie writers are doing and innovating and having a great deal of fun.
And that’s what makes this publishing world so much better than even the one in the 1980s and 1990s. This is a great time to be a writer.
An indie writer in control of her own destiny.
It sucks to be a traditionally published writer.
But at least now, there’s a choice.
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“Business Musings: The If-Only Lawsuit,” copyright © 2021 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / mybaitshop.