The most powerful man in Canadian publishing is leading me on a tour of his new cubicle. It’s early afternoon on Tuesday, and Brad Martin, the president and CEO of Penguin Random House Canada, has just finished delivering remarks to his staff welcoming them all to their new Toronto office. Although the last of the employees moved in the previous week, Martin was in Berlin for meetings, meaning this past Monday was his first day in the office with the entire team in place. “So, the furniture hasn’t arrived,” he says, excusing the lack of seating. “But this is my new space.” Even the CEO has lost his office in the move to an open-concept floor plan, though the south-facing windows, looking out toward Lake Ontario and the Rogers Centre, offer a much better view. There are certainly fewer books. He heads over to the adjacent meeting room, where some of the 2,000-odd titles that lined his old office have found a home. He gestures here-and-there, positioning soon-to-arrive bookshelves, imagining art on the walls, explaining where the couch will go – at this point, the near-empty room is mostly potential. In a way, the surrounding office is the same thing. What will Penguin Random House Canada become?
In interviews with more than three dozen editors, publishers, authors, literary agents, current and former PRH employees, and other industry observers, a picture emerges of a company still unsure of its new identity. Although the merger was announced in October, 2012, and finalized July 1, 2013, Penguin Random House – here and around the world – remained a house divided. The long-distance relationship, in Canada, at least, came to an end last week. The vast majority of the 229 employees comprising the country’s largest publisher are now working together under one roof. The company enjoys a position of power and influence that is without peer, and others in Canadian publishing are watching, carefully and cautiously, to see how the merger affects the industry.
Will Penguin Random House Canada lead to the downfall of Canadian publishing or be its salvation? It is a near-monopoly, able to dictate financial terms to writers who now face fewer places to publish their work; a company that possesses “a staggering amount of talent,” in the words of one editor, yet has also shed employees since the merger; and one whose split history exists in tension with its future.
“Penguin have been very successful on certain kinds of books, and Random House has been very successful on certain kinds of books,” says Kevin Hanson, president of rival Simon & Schuster Canada. “The challenge they have is to be even better together. Does one and one make two? Does it make three? Or does it make one-and-a-half?”
The final “purge” day at Random House of Canada’s Toronto Street office took place on a Friday morning in mid-May. Flattened cardboard boxes and stacked red plastic bins lined the narrow halls, waiting to transport staff belongings across town to the new office in two weeks’ time. Each employee was provided with three of the red bins, and some were having a harder time than others deciding what to bring with them to the new space. While some offices and cubicles were empty, as if their occupants were leaving that very day, others were still in disarray. One office was full of poster-sized framed covers – Michael Ondaatje’s The English Patient leaned against a desk, while David Adams Richards’s Mercy Among the Children rested near an empty bookcase.
Anne Collins, a long-time publisher with the company, looked around the office where she’d worked the past 15 years with a mixture of bewilderment and sadness. She was still trying to figure out what to do with her books, with her manuscripts, with the art on the walls. During the purge, she’d uncovered a museum’s worth of publishing relics: a Chris Hadfield mustache-on-a-stick (from An Astronaut’s Guide to Life on Earth), an autographed photo of a young Julian Barnes; a note from Carol Shields; a “chi machine” gifted by the wrestler Bret Hart from when Collins published his autobiography. (“I’ve never actually used it,” she admitted, a bit confused. “Apparently it balances your chi. I don’t know why he thought I needed my chi rebalanced.”) First editions of every single title Random House Canada has published were lined up on one bookcase – these were coming to the new office – but there wouldn’t be room for much else she’d found. Collins showed me the floor plan, pointing to a small spot I estimated was about 1/10th the size of her current digs: “That’s me,” she said. “That’s my space.”
The history of publishing is a history of mergers. Just a few months before the Penguin-Random House amalgamation was announced, another merger was completed when McClelland & Stewart and Tundra, their chilren’s books imprint, moved into the building, Random House having taken full control of the company in January, 2012. That’s one reason former M&S executive editor Lara Hinchberger (she left the company last October) wasn’t surprised when news of the merger broke on Oct. 29, 2012. “There had been rumblings,” she says. “It wasn’t a shock.” Her colleague, senior editor Anita Chong, thinks it was “something that was inevitable.” Still, she adds, “when we first got the news, there was a bit of stunned silence.” Meanwhile, uptown at Penguin Canada’s Eglinton Avenue offices, associate publisher Nick Garrison (a former Random House editor) was at his desk, meeting with a colleague from Penguin U.K., when he learned of the deal. She was scrolling through Twitter and “went ashen,” he recalls. His reaction was a bit different, perhaps illustrating the incestuousness of the Canadian publishing world. “I was just thrilled. As soon as [the editor] left I called up Anne Collins and said, ‘This is amazing!’ I love so many people down there. I couldn’t wait to get into the same building with them again.”
On June 15, employees of Penguin Canada and the staff working out of Random House’s Sherbourne Street office moved into the new building on Front Street, a few blocks west of the CBC headquarters; employees of the Toronto Street office moved a fortnight before. Penguin Random House’s Canadian operation, with the exception of India, is the only one to physically consolidate thus far, a process that began soon after the merger was finalized. The address, one of seven they considered for their new HQ, is quickly becoming the heart of Canadian publishing; the Cooke Agency, whose international arm sells foreign rights on behalf of PRH, is also in the building, as are the offices of DK Canada, also owned by PRH, which specializes in lavishly illustrated coffee-table and reference books. Earlier this week, it was announced the McDermid Agency, one of the country’s leading literary agencies, was also moving to 320 Front St. West. (“No, nothing to do with PRH,” wrote founder Anne McDermid in an e-mail. “Separate space, separate entrance, no reason to do any more business with PRH than we do already.”)
“There were, I’m not going to lie, dark times over the past 18 months in this office move process,” says president and publisher Kristin Cochrane, listing off the time that went into potential site visits, office design and the logistics of the move. “So there were moments when [I] thought we really have our eyes off the business too much.”
Unlike the drab Penguin Canada offices, and the rather cramped Random House offices, the new space is airy and aesthically pleasant, if nothing else. It occupies 53,500 square feet and three floors, with a (still under construction) winding staircase linking the 12th and 14th floors. Almost every employee has a seat near a window, which, walking around the perimeter, offers a 360-degree view of the city. During my first visit, I asked one publicist how they were finding it. They gushed about it being “bright and beautiful” before leaning close to whisper: “But it’s open concept.”
If there was one overarching concern among staff in the lead-up to the move – a concern confirmed by internal surveys conducted by a firm hired to help manage the move – it was the switch to open concept, which Cochrane admits was a “bold decision.” No one – not Martin, not Cochrane, not a single editor or publisher, no matter their seniority – has an office, though there are 35 meeting and “phone” rooms scattered throughout the three floors. The decision is part of a mini-trend in the publishing industry; Hachette’s New York operations switched to open concept when they moved into their new office last October, following the lead of several British publishers, including Penguin U.K.
“Everybody in the beginning had some trepidations, because they couldn’t really visualize the space, and hadn’t necessarily experienced being in an open-concept office,” says Ellen Seligman, publisher of McClelland & Stewart. “For people with offices, of course it’s a big adjustment.”
“I think what struck us all was how open ‘open’ meant,” Collins says. “Everybody felt a little bit like a turtle who had their shell ripped off suddenly.”
On the second-to-last day in Penguin Canada’s seventh-floor office in midtown Toronto, where they’d spent the past decade, publisher Nicole Winstanley stood at the head of the company’s main boardroom and offered a toast.
“We did so many things together here,” she said, looking around the crowded room. “The beautiful, the infuriating, the ingenious. And we did them all together. And I don’t know about you, but I feel very proud of them, and I hope you do, too. We know, now, that things are going to change. That’s the nature of publishing – things do change. But we’re ready for it.”
Penguin Canada was established in 1974, the domestic arm of one of the publishing industry’s most storied houses, and perhaps the industry’s one household name. “The Penguin brand is something we can leverage in this country,” Martin says. Although the iconic black-and-white-and-orange bird is featured prominently on PRH’s new logo, the sense is, if a merger has a winner and a loser, that it’s Penguin being absorbed by Random House. (Penguin’s British parent, Pearson PLC, controls 47 per cent of the company; German multinational Bertelsmann, which acquired Random House in 1998, owns the rest.) In Canada, Random House had been the larger concern, with approximately four times as many employees.
When, sitting in her near-empty office later that afternoon, I asked how the staff are feeling, Winstanley admitted that “people have been a bit nervous,” and agreed with me when I suggested her team felt the need to prove themselves to their new colleagues.
“But I can’t help but wonder if the people on the other side feel that way, too, with us coming into the building,” she said. “We’ve been a leaner organization, and we’ve done some scrappier, riskier, bolder things, because we didn’t have the same structure in the place. Our bosses were in New York, and sometimes we’d get a little crazy.
“We had to be a little more thoughtful, and devious, and ingenious in the ways we could work with what we had,” she added. “I’m going to miss the way we did that together, and how close we all became in doing that. The joy and the heartbreak.”
Winstanley arrived at Penguin Canada in 2005, an agent-turned-editor who quickly developed a reputation for a shrewd editorial eye, publishing the likes of Joseph Boyden (winning the company its first Giller Prize in 2008), acquiring Canadian rights to Stieg Larsson’s Millennium Trilogy, and launching the prestige literary imprint Hamish Hamilton Canada. She was named to the top spot after the tumultuous departure of her predecessor, David Davidar, who left Penguin after being accused of sexual harassment by another employee.
“So much of Penguin becoming such a powerhouse is due to Nicole,” says Boyden, who has published three bestselling novels with Winstanley. “I don’t want Penguin to be looked at and seen as the bastard stepchild.”
Winstanley is on maternity leave for the remainder of the year, and will return to a changed company. Earlier this month, it was announced that she will now report to Cochrane, a decision regarded by some as a demotion. Cochrane, who is widely viewed as Martin’s eventual successor, now heads up the entirety of Penguin Random House Canada’s publishing group, which includes 18 separate imprints, ranging from non-fiction (Signal and Allen Lane) to paperbacks (Emblem, Anchor Canada, Vintage Canada) to lifestyle (Appetite by Random House). Former M&S publisher Douglas Gibson describes the assembled imprints as the equivalent of “the Montreal Canadiens mixed with the Toronto Maple Leafs. It’s almost inconceivable.”
“You cannot deny that this is an incredible wealth of talent in terms of editors and publishers,” Cochrane says. “The collective publishing experience in our building now is just extraordinary.”
But editors do not lack ego; it wasn’t that long ago that those on the 14th floor (where Penguin editorial resides) and the 12th floor (where the rest of the editorial team is located) were competing for some of the same books. Collins, for instance, says she always considered Penguin “as one of our most vigorous competitors, someone who would often swoop in and take something off the table.” Winstanley admits, “there are things that they won that I still see on their shelves, now that they’re my colleagues, and I feel a tinge of pain.” She describes it as “a collegial battle,” however: “You fight to the death to get a book. And then one of you would get it. And you’d see each other two days later at a party, and that person would buy the other a drink.”
The collegial battle will continue. Even though all 33 editors employed by PRH are, technically, on the same team, “it’s really important for us to preserve the competition between the imprints,” Cochrane maintains. “I can understand the perception, or the reaction, that there might be less competition, or more top-down decision making, but I really firmly believe that what we owe writers and what we owe their representatives is choice.”
This means, as Knopf Canada publishing director Lynn Henry puts it, she looks at her co-workers “both as colleagues and competitors.”
“We still compete with each other for books,” she says. “It’s just that the terms of the competition have changed. We don’t really compete so much financially as we do in terms of the vision. And often our publishing visions can be very different.”
“I’m not interested in a book that is going to generate less than $100,000 in revenue unless the editor or publisher has a compelling vision for the book and/or the author.” Brad Martin, sitting in one of the small meeting rooms scattered throughout the new office, taps the table with almost every word. “If the person that’s championing that book in the acquisitions meeting doesn’t have a compelling view of it, it’s just trying to fill a slot, then I’m not interested in doing it.
“I don’t subscribe to the, ‘Well, it’s not going to cost us very much,’” he says. “I don’t care what it’s going to cost you – what’s your vision of this book? Because, no, we can’t afford to do a lot of small books without a vision, because they take as much time to put through the system as a big book does.”
There is a fear, from those outside the company and others in the writing and publishing community, that Penguin Random House will publish fewer books than Penguin and Random House did when they were seperate entities. “I suspect that, over all, fewer writers, and certainly less variety of writing, is going to be published there,” says former Doubleday Canada editor-in-chief John Pearce, now a literary agent.
Martin doesn’t necessarily disagree.
“Just the way the industry has moved will mean there will be a few less books published,” he says. “I’ve always thought that there are books that could be published that may only need to be published digitally. The space available for books in this country, when you’ve got one chain, you’ve got a small, strong independent [bookstore] group, and then you’ve got your online sites, there’s only so much space. And if you can’t get merchandising space for your books in the retail stores, you can’t sell them. So I would rather publish two books instead of three, and give both of those books a chance to win, than publish all three of them. Because it’s a numbers game.”
Despite pledges of editorial autonomy, and promises of competition between imprints, there are worries, especially among agents, who fear it will result in lower advances. While the various imprints can compete against one another for the same book, agents and authors will have to choose between competing visions, rather than different bids, something literary agent Denise Bukowski characterizes as “the most devastating thing for authors and agents.” (“In Canada they’re not going to be different, and that’s just the way it’s going to be,” Martin says when I raise the issue. “Why would you bid against each other? Scale is supposed to mean something. This is a small market.”)
Several agents I spoke to say they are increasingly taking manuscripts to editors in the United States before showing them to their Canadian counterparts. (Imprints at Penguin Random House U.S. and U.K. can still offer competitive bids, as long as an outside publisher is also pursuing the book.) When submitting a book in Canada, says literary agent Martha Webb, “you just sort of pray that HarperCollins or Simon & Schuster is going to be interested, too.”
There is a fear that the publishing landscape in Canada could evolve into one of haves and have-nots; there will be authors who publish with Penguin Random House Canada and those who find a home elsewhere, though Martin bristles when I suggest they control the domestic market. “Control is a strong word, but our market share is about 32 per cent.” And PRH Canada is but one element in an enormous corporation, employing more than 12,000 people around the world, that includes nearly 250 individual imprints and publishing arms, which churn out more than 15,000 new books each year. The company, according to its latest annual report, increased revenue 25.2 per cent to €3.3-billion ($4.6-billion) in 2014. While the company would not provide financial information specific to Canada, Martin claims that “PRH Canada is a profitable company.” Domestically, Penguin Random House Canada published 542 books in 2014. They publish many of Canada’s best living writers (Margaret Atwood, Joseph Boyden and Alice Munro, who used to publish in hardcover with M&S and release paperbacks with Penguin) and the vast backlist includes many of our best dead writers (W.O. Mitchell, Margaret Laurence, Alistair MacLeod, Hugh MacLennan, Pierre Berton, Carol Shields, Mordecai Richler). Since the Giller Prize was first awarded in 1994, Penguin Random House Canada has published 16 of 22 winners.
“I do become nervous about one publishing group becoming so marketplace-dominant,” says Steven Galloway, chair of the University of British Columbia’s School of Creative Writing and a Random House author since 2001. “If for some reason the people at Penguin Random House ever decide I’m loathsome and don’t want to deal with me any more, one’s options for moving and still publishing are somewhat more limited than they used to be. That’s not a great thing.
“Consider what Canadian publishing would be if either of those two companies went down. There are those who would rejoice. I would argue that they’re just plain idiots. Anansi can’t be Anansi without Random House. Their whole brand doesn’t work if there’s no Random House. All the different publishers in Canada have a role to fill.
“Monopolies are not good things,” he says. “Not in publishing, not anywhere.”
It’s a word Martin has heard tossed around since the merger was finalized. Sitting in the meeting room earlier this week, he put the issue of size in context. Canadian publishing is partly being shaped by forces outside his cubicle, he argues, and the questions posed by the merger – of power, of influence – are not unique to this country.
“In the modern era, if you will, no, nobody’s been as big,” he says. “Then again, nobody’s been as big as PRH is in any of the English-speaking markets, nor has there been a company that has had German, Spanish, Portuguese and English-speaking publishers as big as we are. We’re a manifestation of the way that the business has changed globally.”