A Sad Day for the World of Books

The merger between Penguin and Random House has now been approved by all the regulators. This giant publisher will inevitably become more remote from both readers and authors. Future sales are likely to be driven even more by advertising and gimicky promotion. Will this improve shareholder returns? I doubt it. So the question is, 'What is the point?'

We have been there before, in the world of banking. Business strategy in the big banks has not been driven by the interests of shareholders (let alone customers, the general public or national governments) but by the interests of directors and senior managers. If I were a shareholder in the merged group, I'd keep a very wary eye on the wage bill and my dividend payments. If I were a supplier to the group, I'd be looking for other customers. Large publishers, far from achieving economies of scale, tend to be cumbersome and inefficient, a fact they try to disguise by using their enormous purchasing power to squeeze printers and typesetters.

This is a sad day for the world of books.

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