The merger of Penguin and Random House is expected to significantly affect global publishing business. British publishing house Penguin, owned by the Pearson Group and German house Random House, owned by German media giant Bertelsmann has announced a £2.4 billion merger deal to create the biggest book publisher in the world. The new company will now be called Penguin Random House. Of the deal, the German company will own 53 per cent while Pearson will own the rest 47 per cent. Clearly the publishing giants who are already leaders in book publishing are not coming together to enhance only their book business, though the merger will mean that the new company will have a market share of 25 per cent. The real reason lies elsewhere. They are looking at the future and are clearly preparing a war chest for the digital publishing space which is now dominated by the likes of Amazon and Apple. Half the future lies in the digital space for traditional print publishing companies and the merger was effected to ensure that the print book leaders could cope with a fast changing technology scenario, which was ensured that publishing business is determined less by publishers but more by technology companies. The last has been the most significant development in the sector in the last decade or so. So some kind of shake up in the industry, which is increasingly becoming technology-dominated, was expected and on Monday, the first move in the major shake-up was made.
Also, the merger leaves out in the cold Harper Collins. That itself is reason enough for Penguin and Random House to hold each other’s hands. The deal means that the best-selling authors Terry Pratchett, EL James and 2012 Nobel Prize winner Mo Yan are now under one-roof, which is a great strength for any publication company. The deal will also significantly alter the book distribution business- a major headache in the sector- by bringing in the combined strengths of Penguin and Random House together.In India the scenario is a little different that in most of the West. In India, Penguin is a clear leader in terms of presence, distribution, sale and attracting eyeballs to its checklists, compared to Random House. So in India Random House gain out the deal more than Penguin as the former can access Penguin’s recall value, its distinguished familiarity with the reading public, its marketing ability, access to the media. But one would hope that the shake-up would mature the industry significantly improve its content delivery and not only its marketing razzmatazz.
Also, the merger leaves out in the cold Harper Collins. That itself is reason enough for Penguin and Random House to hold each other’s hands. The deal means that the best-selling authors Terry Pratchett, EL James and 2012 Nobel Prize winner Mo Yan are now under one-roof, which is a great strength for any publication company. The deal will also significantly alter the book distribution business- a major headache in the sector- by bringing in the combined strengths of Penguin and Random House together.In India the scenario is a little different that in most of the West. In India, Penguin is a clear leader in terms of presence, distribution, sale and attracting eyeballs to its checklists, compared to Random House. So in India Random House gain out the deal more than Penguin as the former can access Penguin’s recall value, its distinguished familiarity with the reading public, its marketing ability, access to the media. But one would hope that the shake-up would mature the industry significantly improve its content delivery and not only its marketing razzmatazz.