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How will the Random House-Penguin merger affect Canadian publishing? Add to ...

We don’t know who will win the Scotiabank Giller Prize Tuesday, but we’re pretty sure the cocktail talk will veer early and often toward the pending merger of Random House and Penguin Books. Add in last week’s bankruptcy-protection filing by Vancouver publisher Douglas & McIntyre, and you have the ingredients for some black-tie soul-searching, if not outright doomsaying. Here’s some of the chatter we picked up from those who know the scene.

Rowland Lorimer, director, master of publishing program, Simon Fraser University; author of Ultra Libris: Policy, Technology, and the Creative Economy of Book Publishing in Canada (ECW Press)

“The merger will be a disaster more in Canada than elsewhere, because we only have three multinational publishers operating in Canada, and Random House was already the behemoth in the market. I think it’s too much concentration in the industry. It will have to go before Investment Canada for review, but I think they’ll approve it, because Random House is in a position to promise the world in terms of net benefit.

I don’t see Douglas &McIntyre as a company that’s going down and leaving a big hole in the market. The company has been for sale for at least six months. If they actually go through and declare bankruptcy, they’ll emerge in very good shape, because they’ll be rid of their debt and will still have their backlist and author contracts. HarperCollins is the most likely purchaser, or Simon & Shuster, who really want to be a Canadian publisher. Either would have deep enough pockets to continue D&M’s publishing program. Or a consortium of people in Canadian publishing will buy the company, and divide the assets.”

Denise Bukowski, The Bukowski Agency

“What mergers always mean in the end is that you have fewer options to submit to, especially in Canada. When Random House bought Doubleday, they said that you could make multiple submissions and everyone in the group could bid against each other, but they’ve stopped that. You can still make multiple submissions, but there’ll only be one offer. Writers will have few options. I’m more likely to take on things I can submit in New York, because there I can submit to 25 publishers who will compete. I think the merger can only help HarperCollins. They’re the only company that’s expanding. They’ve added staff, they’re doing very well.”

Sarah MacLachlan, president and publisher, House of Anansi Press

“I can’t imagine that bigger means necessarily better for writers. I think you kind of get lost in the size of it all. But it may benefit us, because there may be some writers who get loose of the big guys. I think eventually we may get down to just two big publishers.

Douglas & McIntyre has been doing great stuff, but I think they got to a size that is not optimal for an independent publisher. That $6-million to $10-million range is difficult to make work. You need to stay smaller or get absorbed in something bigger. I think there’s still a hope they can resort it into something.”

Charlotte Gill, author of Eating Dirt

“Who knows what this will look like in the end, but Douglas & McIntyre was one of the bigger independents and had quite extensive lists every year. Certainly it’s not a good thing for young authors. I think it’s devastating, devastating. You know there’s something to be said for the way that Canadian independents do business. They have just more room for new authors, they have more room for regional voices, they have room for mid-list authors that perhaps the big corporate publishers don’t.”

Bruce Westwood, Westwood Creative Artists

“If it weren’t for Amazon, I don’t think there would have been a merger. This is an extraordinary way to fight Amazon, which has made such inroads into the publishing business. I think the merger will manifest in being able to make a book cheaper, for digital and hard copies. We’ve been told that Penguin will still compete with Random House for new titles, as long as there’s another publisher in the mix.”

Howard White, publisher and co-founder of Harbour Publishing

“I suspect when it all comes out that the D&M story is going to be as much about internal ownership issues as it will be about general conditions in the industry. Everybody knows Scott [McIntyre] sold the company five years ago and he sold it to people outside the publishing industry who at the time said they loved publishing and wanted to subsidize a great new phase in D&M’s life, and obviously no longer want to do that. It worries me when I see people who got into publishing because they loved books selling out to people who look on it as an ordinary business and something that they can build up and get a big return from; I think this always leads to trouble. The publishing industry has never been able to support those kinds of expectations and that’s probably what’s going on at the very top end with Random House and Penguin too. They’re just finding that they’ve built a huge corporate monster there which requires the kind of financial support that any giant corporation does but doesn’t produce the return.”

Bill Harnum, president of the Association of Canadian Publishers

“[The merger] is completely unsurprising as far as I’m concerned. Publishing is in a state of great change. [But] there’s never been a merger that I can recall of this size in publishing. I’m not sure that the implication for Canadian publishers is going to be all that significant. We can’t compete with them now. Whether they’re twice as big or 12 times as big doesn’t mean that we’re going to be able to compete with them. The problem with publishing is it’s hard: It’s high costs, low margins, and the margins are getting thinner. It doesn’t matter how big you are – whether you have $2.5-billion worth of sales or $175,000 worth of sales, you face the same problems. But the bigger they are, the more difficult they are.”

Stephen Henighan, author and columnist

“The merger is obviously inspired by the panic that both companies might be marginalized in the e-book market. And Penguin didn’t want to be bought out by Rupert Murdoch. They’ll get economies of scale and will have more power to enforce deep discounting, to the point that small bookstores may have a hard time continuing. That’s a worry for the bookstores and for small publishers, who rely on independent bookstores to place their books.”

The D&M thing worries me a lot, because they were the biggest publisher west of Toronto. But it may not be a trend that sees one publisher go down after another like a house of cards.”

Andrew Steeves, publisher, Gaspereau Press

“It’s always hard to make the argument that fewer options are better, but in terms of the ecology of publishing, this merger may not be a bad thing. Maybe the big houses are putting out more product than the public can consume. Maybe they need to pull back and consolidate to survive. I do no author a service if I try to do more than is sustainable.”

Beverley Slopen, Beverley Slopen Literary Agency

“In general, consolidation does not favour literary culture. Literary culture is definitely favoured by diversity. I’m very interested to see how the merged company will handle distribution and retail. Are they going to have their own digital outlets and kiosks? Because we’re facing a world without bookstores.

D&M are larger in influence than their size and sales would indicate. They published very good books that added immeasurably to the national conversation.”

Stuart Applebaum, spokesman for Random House in New York

“Canada has been a tremendously robust cultural and commercial market for Random House, which has the largest Canadian publishing list of any multinational company. The success of RH Canada is a motivating factor in Bertelsmann’s desire to increase its investment in trade publishing. The goal is not to diminish the current Canadian publishing program. We’re in this to build, not to diminish. We’re going to want to expand our electronic publishing, and provide more diversity of choice for authors and agents. Each of our imprints has its own unique identity and editorial voice, and the expectation is that the new company will preserve that voice.”

These interviews have been condensed and edited.

Follow on Twitter: @marshalederman

 

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