Wednesday, June 25, 2014
And Then There Was One
A marriage made in heaven, surely. Perseus and Hachette have declared their intention to merge, thereby creating one from what once was two, and shrinking the publishing universe a little more. Random House and Penguin did it not long ago. Why not us, the happy couple said.
We won't end up like Houghton Mifflin and Harcourt did, on the rocks from the start and nearly breaking up completely. That lesson has been learned.
But like the whale of a merger that united Riverdeep with two other large publishers, those who would blend Perseus and Hachette speak lovingly of synergies and all the cost savings that will be had.
Those who once worked at Harcourt or Houghton Mifflin can tell you what realizing synergies means. It means you lose your job in accounting because there are plenty of other bean counters toiling at the other company. It means you're out on the street because there's a limit to how many editors any publisher needs, and when two can do the work of three, well, there's a synergy in there to be given the sack.
Hachette will gain access to the American market, and all those textbook sales that Perseus controls. You'd almost think Barry O'Callaghan was directing things from behind the scenes, with this fascination with academic works and creating the world's largest publisher of educational materials. But then again, there are always children and young adults going to school and they need textbooks so it's a market in need of product on a regular basis. And the market is in bookstores, not Amazon's website.
The ethos between the two partners is radically different, however. Hachette is all about blockbuster bestselling fiction, while Perseus plods along with non-fiction that typically reaches smaller markets. There's the occasional self-help book that sells well, but with non-fiction the concept of a bestseller is not quite the same.
Will Hachette's executives be able to keep their ethos out of Perseus? While Hachette plans to keep the Perseus imprints running as they have been, Perseus' CEO David Steinberg will leave after the dust of the merger has settled, along with his chief marketing officer and chief operating officer. There's a fine example of realizing some synergies.
Hachette will sell Perseus' distribution division to Ingram, which is already a powerhouse in book distribution, and so focus the merged publisher's attention on publishing.
It is up to Ingram, then, to decide how many of Perseus' distribution employees it will retain, but the folks who ship books out of the Tennessee warehouse are not feeling the love emanating from the upcoming union. Ingram is more likely to take over the physical space and consolidate its operations, again realizing synergies because one warehouse does not need multiple managers when one can do the job.
For authors, there is always the concern that fewer outlets buying manuscripts means fewer opportunities. While the two publishers are producing books in different areas, there is a concern that Hachette's acquisition of Perseus' back list would provide enough profit that Hachette would not have to take as much risk with someone new and untested. They wouldn't need the money so much, not with the back list selling and the e-book potential ready to be tapped.
Synergies all around, so.