Have you heard? Simon & Schuster accepted an offer of purchase from Penguin Random House. But now there’s a classic drama on our hands. What is happening, why, and what does it mean for you? Here’s the jist of it:
The Merger is Being Taken to Court by the Department of Justice
The Biden Administration is arguing in court as this blog is being published to argue that this merger would violate anti-trust laws already in place. It is their belief that the merger of these two companies would drastically alter the publishing space in a way that leads to fewer books being published each year, fewer opportunities for new authors to enter the field, and an overall decrease in compensation for authors as a result of less competition in the industry. As such, they will be fighting for author protections through this trial.
Why Penguin Wants Simon & Schuster—the Dangers of Private Equity
Okay, here comes the super boring business-ese paragraph. Penguin Random House is currently owned by another company named Bertelsmann based in Germany. Bertelsmann is a private equity firm, which is to say that they are a publicly traded company with the sole purpose of providing shareholder value through ownership and creating profit from other, smaller companies instead of doing something productive or innovative like create new products.
In the last 30 years, private equity firms have become safe havens for companies of dying industries that are seeing a dip in profitability. Rather than watch their own company go under, founders will sell to private equity firms to walk away with some cash in pocket. It’s not uncommon for these firms to go on to buy more competitors (S&S) in the same market or ones adjacent to prop up their existing investment (Penguin RH) and make it profitable for longer as the industry continues to crumble.
What Comes Next if the Merger Goes Through
Like with past, smaller publisher acquisitions we’ve seen from Penguin Random House in recent years, it’s likely Simon & Schuster will continue to appear operational independent of Penguin with exception of a watermark on their website. On the back end of the company, however, it’s likely many if not all departments will be downsized significantly as they’re deemed unnecessary or duplicate. This means, there will be fewer HR reps, fewer book sellers, fewer marketers, fewer artists, and eventually fewer acquisitions editors, publicists, and other direct-touches for authors in time. We’ll also likely see many contracted books end up back on sub as editors leave the company. But this is on a timescale of years, so you have some time to make moves now before it comes to impact you.
What Comes Next if the Merger Gets Cancelled
Unfortunately, S&S not being purchased likely does not lead to a great outcome for authors either. There is a reason the company was put up for sale. It isn’t profitable. And the reason Penguin was selected as the purchaser of the company is because Penguin made the best offer—likely because it props up its existing interest as one of the largest stakes holders in the industry. Either Simon & Schuster will continue to run independently and be forced to make major cuts to their staff as well, or they will be put back on the market and sold to a smaller company with a smaller bid than Penguin, who have even fewer resources to lend to the firm already experiencing hardships.
It's also worth noting that the federal judge presiding over this case, Florence Yu Pan, was nominated to become a U.S. Circuit Court Judge by President Joe Biden earlier this year. So, this outcome is the most likely scenario as her values fall in line with he who appointed her and is now arguing this case, especially with someone like Stephen King testifying against his own publisher.
What This Means for You as an Author
This large of a merger and its block by the DOJ is another indicator of the fragility of the literary market right now. As such, it is impossible to ignore the encroaching influence that independent authors and self-publishing platforms like Amazon and Kindle have on your future as an author. It’s time to consider how long you want to write books into the future and make plans based upon that future we’re now staring into in a new way.
Things You Can Do Today to Prepare
Wow, okay. That was kind of scary, right? The good news is that there are totally things you can be doing right now to help yourself whichever directions the chips fall:
Start Learning More About Self-Publishing
Yup, I get it. It may be your dream to traditionally publish, and I don’t think that is totally precluded from happening, but I do think that the longer you plan to publish the less likely you will be able to do so traditionally through the length of your career. So, get started learning about them, how their algorithms work, how you can make sales through them, what kind of books are working on their shelves, and more.
Double Down on Querying
For the last two years, the writing community has done nothing but have concern over how difficult it is to query right now, but this lawsuit and the concerns surrounding it indicate that this is not a period of difficulty we’re experiencing due to the pandemic. This is a new normal and it will, in fact, get worse. So, if you’re hellbent on getting your debut novel published traditionally, go harder as soon as you can.
Consider Self-Publishing Something Fun Under a Pen Name
If you have already published traditionally or just want to dip your toes in the water while continuing to seek traditional routes, it can be a great option to write a “throwaway” novel you write just for fun, polish it just enough, get a basic book cover, and sell it for a miniscule price on a self-publishing platform. It can honestly be fun and have nothing to do with how you want to continue publishing and teach you a lot about self-promotion, marketing, and how these platforms work. You’ll be glad you did it with something low-stakes and fun. Anyway, it’s possibly the best year to self-publish yet.
Prioritize Your Experience While Writing
More and more, it’s becoming clear that the querying process is hell and will continue to be hellatious for the long haul. So, practice self-care. Ignore your inbox on days you need a break. Take space when you’re feeling too much pressure to perform. Reflect on which parts of writing you love and which you hate and make room for more things that make you feel good. Writing is becoming less and less of a career and more and more of a hobby on the global scale. Make sure you’re keeping your priorities in line.
Consider Seeking Help Before Querying
If all of this has you quaking in your boots and you absolutely aren’t willing to consider self-publishing now or down the line, it will be in your best interest to really blow agents away when you are querying. Many authors try to make this happen with an army of beta readers and a good critique partnership. They’re great, traditional options that likely will help you improve your narrative.
But we’re no longer working in a traditional publishing atmosphere. Traditional is losing ground by the day. Unless you literally have one of the best critique partners in the world, it may be time to consider seeking help from an editor or professional query critique to make the most of your experience and not waste the opportunities with what are becoming limited access options.
Comments