By: Aden Hizkias (Public Knowledge)
The publishing industry is growing increasingly concentrated as publishing house giants continue to merge. This hurts both authors and readers, in more ways than one. In a concentrated industry, prices are higher for readers, and payments are lower for authors as the publishing middleman takes a heftier cut. The book industry has been moving to a model that is harmful in other ways as well—libraries are being locked out of ebooks, and technical restrictions from ebook platforms keep readers locked in and prevent them from getting better deals elsewhere.
Penguin Random House/Simon & Schuster Merger
Penguin Random House is slated to buy Simon & Schuster for $2.17 billion in cash, reducing the Big 5 American publishing industry to a Big 4. The Authors Guild has opposed this deal, pointing out that if it goes through, the publishing company would account for 35% of all books sold. Public Knowledge has disagreed with the Guild on various copyright issues before, but it’s right to oppose this deal. Penguin has accounted for an estimated 25% of all print books sold in the U.S. in 2020, while Simon & Schuster accounted for about 9.1%. Additionally, the proposed merger would account for about 50% of all trade books published. In industries with concentration levels this high, not only do prices tend to be higher, but other anti-consumer practices are more prevalent, including limiting books with ideas outside the mainstream could have a negative impact on society.
This merger will also hurt authors. The most obvious way is that when authors have fewer publishers to negotiate with, their payments are lower. But the merger may also hurt authors in other ways—like how independent bookshops run, their ability to leverage and negotiate, and the amount writers get paid. Additionally, the merger will make it difficult for new competitors, like publishing house start-ups, with barriers to market entry, such as establishing relationships with authors and sellers and increasing returns to scale.
Retail Concentration
Not only is publishing highly concentrated, but bookselling is, too. Amazon dominates online bookselling in both print and ebooks. As of 2020, Amazon has 50% of the American print book marketplace (both online and physically sold) and three-fourths of ebook sales. Extending its platform to ebooks through subscription models, like Kindle Unlimited and Audible, it has moved ahead against its counterparts like Barnes & Noble, resulting in becoming the world’s largest book retailer. (Amazon’s book publishing component, Amazon Publishing, has also continued to grow by promoting self-published works and digital advertising.)
