Paradigm Shift: DOJ v. PRH: The Hidden Peaks of a Flat Industry

Profits in Publishing: The Hidden Peaks of a Flat Industry

Bethanne Patrick: 

One of the best parts of being a reader is that books are pretty accessible. And finding one has become even simpler than a trip to your local library or book seller.

However, that wasn’t always the case. 

As late as the mid-nineteenth century, access to books was a privilege afforded mainly to the rich. It wasn’t until major publishing houses began cropping up in New York and innovating print speeds, that books as we know them were brought to the masses.

Take Simon & Schuster for instance. Founded by business partners Richard Simon and Max Schuster in 1924, they landed their break selling crossword puzzle books. 

HarperCollins began with the four brothers Harper, who opened their own printing press and eventually expanded into the editorial space.

Random House began printing literary classics in 1927, Penguin Books sought to make books as affordable as a pack of cigarettes. We can’t forget Macmillan and Hachette, who also solidified their standing in American book publishing in the early part of the 1900s.

These companies eventually came to be known as the Big Six of publishing, which became the Big Five after the 2013 merger of Penguin and Random House. But therein lies the common thread that they all seem to share. 

They’ve all endured a fair share of mergers and acquisitions.

But when Penguin Random House vied to acquire Simon & Schuster in November 2020, the wolfish approach of publishing’s trade-happy past struck a chord of resounding disapproval with the general public.

Some people wondered what made Simon & Schuster, a publishing house grossing $1 billion annually in book sales, vulnerable to such a move. 

Others worried about what this shift in publishing would mean for mid-tier authors, who struggle as it is to get their paperbacks on shelves. And just about everyone wondered how an acquisition of this scale could possibly be legal given antitrust laws…

CBS New York Clip:

A big deal in the book world may not be happening.

The justice department is suing to block a proposed acquisition of simon and schuster by penguin random house. The doj argues that it would give penguin random house outsized influence on what is published and how much authors are paid.

Bethanne Patrick: 

And so began a trial that would pull back the curtain on an industry so enigmatic, not even the publishing executives had clear answers. 

Then again, did we really expect them to?

Welcome back to Missing Pages. I’m your host, writer and literary critic, Bethanne Patrick. This is the podcast where we examine some of the most surprising, industry-shaking controversies in the literary world and try to make sense of them.

This is the third episode in a series on a paradigm shift we’re seeing across the publishing industry – as publishing succumbs to new business models driven by the rise of social media and online communities, will the old models of mergers and acquisitions pass muster? Today we’ll dive deep into the often convoluted decisions and practices of the Big Five Publishers, which fell under scrutiny when the DOJ sued Penguin Random House in 2021. 

Chapter One: Dead or Alive, A Litmus Test

Before we dive into the biggest trial in publishing in the last decade, we need to go back in time to learn how we got to where we are today. 

I’m gonna go out on a limb here and say that no form of commerce has had its death prophesied more than the publishing industry. 

Since the 1960s, when electronic giants like the Radio Corporation of America purchased Random House and CBS bought the publisher Henry Holt, there has been a near-constant thread of journalists forewarning the end of publishing.

CBC News:

And it's worse in the US for traditional publishers. E-book revenue for the first five months of 2015 was down more than 10%

Bethanne Patrick: 

Well, in 2020 over 750 million print books were sold in the USA. That was a more than 8% increase from 2019. And in terms of revenue, the Association of American Publishers reported that in 2021, the U.S. book publishing industry generated more than 25 billion dollars.

I’ll say that again, because it’s a staggering number. More than 25 billion dollars.

For an industry alleged to be on its deathbed, those recent numbers don’t suggest that it’s hemorrhaging lifeblood to me. But Publisher’s Weekly Co-Editorial Director, Jim Milliot pointed out that there are real factors contributing to the overall perception that publishing is experiencing a sort of collapse. 

JIM MILLIOT:

You know, Harper Collins, they operate on this crazy fiscal year that ends in June 30th. They reported what for them were horrible results. Their profits went down like 45% in, in the fiscal year, ended in June, but they still made $167 million. So it kind of depends how you wanna look at how you're doing.

You know, the economic reality of 2023 is, kind of trying to find equilibrium, of where we are because, you know, everybody knows that. PRH had a buyout and laid off some people. 

Bethanne Patrick: 

That’s PRH as in Penguin Random House.

JIM MILLIOT:

Harper Collins laid off some people. So you know, what really happened is costs really rose, as I think everybody knows, inflation was at a record level last year, and that's really what publishers are actually. You talk about metrics, what they're most focused on right now. It's not so much that sales are bound bad, they're down like maybe three or 4%, which in publishing in the old days back then, as you know, flat is the new up. So they’re sort of used to that. But they're not really capable of absorbing, like an inflation shock that they had in 2022.

Bethanne Patrick: 

“Flat is the new up.”

Back in 2007 and 2008, stock brokers used the word “flat” to suggest that their consistent numbers in an industry that was downtrending reflected that they were outperforming competitors. That they were doing well and would continue to do well.

Similarly, in publishing, “flat” refers to the fact that while there aren’t huge gains being made in terms of revenue, with the number of billions in revenue shifting only slightly year-to-year, the consistency of the numbers is as good as growth.

The embrace of the flat industry deeply contrasts other markets, where high risks are preferable and rapidly changing numbers illustrate promise.

To put this in perspective – YouTube alone made 29 Billion dollars in revenue in 2022, which is more than the entire book publishing industry.

In publishing, you don't get huge revenue changes unless you have some major success. 

Al Jazeera English: Harry Potter 20th Anniversary

No one could have predicted the spell that Harry Potter would cast over the world the first book the story of a young wizard and his friends was initially rejected by publishers but readers were addicted and Harry Potter is now the most successful children's book series of all time

Bethanne Patrick: 

That said, the publishing industry has made changes over the years. And much of those changes pertain to ownership and cost. Of course, money motivates both industries. But the way that manifests in each is significantly different.

Youtube will add a Shorts feature in order to compete with TikTok’s short-form video content and then switch their app’s layout ever so subtly to promote the new feature. They experiment often, and with the intention of increasing user retention. 

Meanwhile, changes in the publishing industry aren’t so much motivated by product innovation and retention as they are by maximizing efficiency on the backend. Often at the expense of the reader.

Chapter Two: Publishing Practices vs. Public Opinion

If we’re honing in on changes in publishing practices that have come at the expense of the reader, it may be best to start with a practice that hasn’t changed. And that is the debut release of each book…in hardcover form.

I promise this is all leading up to the DOJ antitrust lawsuit. 

Hard-bound books once made up the majority of all printed texts. It wasn’t until the 1920s and ‘30s that publishers tried making paperback books, in order to publish a wider range of books more cheaply. 

Naturally, paperbacks cost less to make and are easier to mass-produce. But it wasn’t until the 1940s when they really caught on.

NEVILLE CHAMBERLAIN WW2 ANNOUNCEMENT (0:06 - 0:11) (0:44 - 0:48)

“I am speaking to you from the Cabinet room at 10 Downing Street, this country is at war with Germany.”

Bethanne Patrick: 

During the war, Pocket Books and Penguin Books began doing reprints of hardcover books in paperback form and sent them to soldiers to support the war effort. Paperbacks were the only financially feasible way to do this, since they needed to produce millions of books in order to meet the needs of the U.S. army. 

At this point, paperback books cost publishers just six cents a volume. And they performed really well with soldiers, who started carrying them in their pockets, using them as a temporary escape from hellish conditions.

From there, the paperback generally stuck. And publishers like Penguin worked hard to get creative with their cover pages and design, even though they were less expensive. But it was still the general practice in publishing to print first editions of books as hard covers – as a way to signify quality and serious intent.

This trend continued well after the stigma surrounding paperbacks as the “cheaper option” faded. Why? Ah, yes. Because it’s more profitable for publishers.

Here’s a take from author John Green that I find helpful in understanding this concept:

JOHN GREEN:

Let’s say the average hardcover costs $30, the average paperback $20. Now hardcovers are somewhat more expensive to print. They have certain bells and whistles. The binding is a little better. They might have a subtle tuatara debossed onto the hardcover etc. But they don’t cost like $10 more to print, so hardcovers are more profitable per unit sold than paperbacks. Like if I get $3 or $4 per hardcover sale, I might get $2 per paperback. Also publishers and bookstores have higher margins per hardcover sold, but paperbacks, because they are less expensive, tend to sell overall more books. So from a publisher and bookstore perspective, hardcover first publishing makes a lot of sense, both because it allows publishers to make more money on the first year of a book’s life and because it allows them to find out which books are likely to have a large enough audience to make paperback publishing profitable.

Bethanne Patrick:

Hard covers are a kind of proving ground for a new book on the shelves. They show publishers how many paperbacks to produce for the next year of distribution. 

Unfortunately, this standard practice means that if a reader wants a title sooner rather than later, they have no choice but to opt for the $38 hard cover. For some, the option to spend that much on a book isn’t available. And of course, there are libraries. 

But there is a certain feeling that comes with owning the book you have in your hands…that connects you to the words. It’s sad to consider that some children might be missing out on that experience due to profit margins in publishing.

On the other hand, readers aren’t the only ones hindered by the practice. 

Authors can lose out on sales in that important first year, especially in a recession economy, where readers are far less likely to shell out a nice dinner’s worth of money on a book.

KATHLEEN SCHMIDT:

There are bookstores, that depend on those hardcover sales being a certain amount, but at the same time, wouldn't you want a book that costs less to sell more copies [00:31:00] to make your numbers for, you know, the quarter or the fiscal year rather than hardcovers priced at $38?

Bethanne Patrick:

That’s Kathleen Schmidt, a publishing industry consultant with both Penguin and Simon & Schuster on her resume. To her, the expensive hardcovers push readers to seek other avenues.

KATHLEEN SCHMIDT:

Independent bookstores can't discount them that much, if at all. So they're going to lose the business to Amazon because it's simply cheaper. And the thing with Amazon is, you know, if you have Prime and you, and you have Kindle Unlimited, I'm going for those Kindle Unlimited books. If I've never read an author before and I read a lot of romance books, if I've never read a romance author before and something to me seems interesting on Kindle Unlimited and I don't have to pay for that book, I'm gonna try it. And what happens in that instance is all of a sudden you'll see some unknown romance out there – hit number one in the Kindle store because of that, and that tells you that people are more willing to try something new if it's free or doesn't cost that much. So I would say, especially for debut authors, pricing their hardcovers higher is a disservice to them because people are simply less likely to try something that they don't know anything about if it’s priced higher.

Bethanne Patrick:

Schmidt brought up a really important point here – that it’s not just paperbacks that debut hardcovers are up against now, but a plethora of electronic book editions. These come from self-published authors, independent publishers, and the Big Five. And this leads us to an industry-wide change that has been long coming for publishing…the proliferation of e-books.

It makes sense for every big title to have its own electronic copy. But in the mid two thousand teens, many publishers were still figuring out how they could generate the most profit from this venture. 

For one, they prevented libraries from accessing digital licenses…or limited those digital licenses to a small number of lends before the library would have to purchase the ebook again…sometimes for more than the market rate.

Around the same time, the Big Five publishers were sued for colluding with Apple when the tech brand agreed to raise e-book prices and give the publishers a cut of the earnings. This challenged Amazon, who had been buying e-books at wholesale prices, only to sell them at retail prices – around $9.99 per book.

This helped Amazon promote their Kindle product…but Apple was trying to promote its iPad. And once Apple had tempted publishers, offering a cut of its e-book shares, the Big Five went to Amazon and allegedly threatened to pull their e-books from the platform unless they were given a cut like the one Apple had proposed.

The publishers settled out of court for that one.

But apparently, they didn’t learn their lesson, because in 2021, the Big Five were sued alongside Amazon, for keeping ebook prices artificially high. Platforms that weren’t Amazon would have to sell for higher prices, allowing Amazon to corner the market. 

As of 2023, Amazon accounts for 67 to 85% of e-book sales – a percentage that has certainly been influenced by the strategic connections between the Big Five and the world’s largest online retailer. Publishers may try to distance themselves from this fact as a matter of optics. 

After all, when it comes to monopolistic behaviors, Amazon takes the cake. 

But Amazon is not a far cry from the Big Publishers whose bottom line matters more to them than the readers and authors they disregard in their profiteering. 

Fortunately, that’s one place where independent publishers can find a stronghold with readers. 

KATHLEEN SCHMIDT:

I think there is something to be said about experimenting in all formats at publication, but the big five can’t do that because they’re beholden to, you know, their balance sheets are beholden to conglomerates.

Bethanne Patrick:

This is something I’ve really been watching what Zibby Owens is doing with Zibby books they have decided that when their book is released, when, and they’re only doing a certain number per year, but it’s hardcover, ebook, audiobook, trade paperback, you know everything all at once. None of this you wait for a year for the trade paperback and all that sort of thing. I mean, Zibby books is its own thing. And I’m not saying the Big Five necessarily want to or should reproduce that, however it does show that you can try something different, doesn’t it?

KATHLEEN SCHMIDT:

It does, but what it really shows is that you can try something different. If you’re independent, you can try something different. If you’re not tethered to a corporate giant, and that is the beauty of indie publishing.

Bethanne Patrick:

Jim Milliot had a similar point to make about independent publishers and their freedoms to put out what they like.

JIM MILLIOT:

It’s the independent presses who are more literary bound and forwarded ‘cause you know, they’ll know, I mean they could be happy with a book that’ll sell 5,000 copies, whereas, and not to pick on PRH, but 5,000 copy sale is not what they’re after. So there’s that very real dichotomy between how the publishers view publishing and how the little guys approach it.

Bethanne Patrick:

I think these perspectives are so important, because they shed light on the importance of independent presses in this industry. The fact that they can publish authors who haven’t reached the mainstream and don’t have a built in social media following means they can think more about the quality of what they’re putting out. 

And often, authors have more control over the way their book is published and marketed. Furthermore, some authors have taken the leap from the Big Five to independent presses, tired of disappointing games with the household names.

Of course, there is a tradeoff as far as reach potential. But the process of submitting a manuscript, receiving feedback, and getting words to print may be far more accessible…and enjoyable. And for many, that’s a worthwhile tradeoff.

As the Big Five undergo shockwaves amid the economic hardships that followed the pandemic, indie publishers have a chance to become stronger than ever.

Still, massive public support for the DOJ’s suit to prevent Penguin Random House from acquiring Simon & Schuster points to an extant concern for competition in the more corporate side of publishing…which tells us this:

People haven’t so resigned themselves to the profiteering approach of publishing’s conglomerates that they can look the other way when two of them threaten to turn the Big Five publishers into the Big Four.

Chapter Three: Big Publishers on Big Publishing

And now we're finally at the moment you all came here for - the trial.

This episode wouldn’t exist without the seminal trial that occurred in August 2022, following the suit by the Department of Justice against Penguin Random House in November 2021.

The trouble is…like much of publishing, the trial was far from clear. 

Proceedings began on August 1st in Washington D.C. and were expected to go on for about three weeks. I was there sharing trial time with my colleagues from Publishers Weekly, John Maher and Ed Nawotka. 

As a part of the press, I didn’t sit where the judge and witnesses did. We gathered in a room with two big screens and wooden benches where we could sit and watch. 

We weren’t allowed to record anything. And that makes providing soundbytes from the trial nearly impossible. But I did take notes because in the evenings, it was my job to write up a report of what had happened.

I remember just looking around at the room, you really got a sense for the case’s importance. A reporter from the New York Times was there, and one from Vox, and then Christian Lorentzen, who wrote a big piece on the trial for Harper’s Magazine.

The overall sense was that whatever decision was made would be historical for publishing. And even if Penguin Random House didn’t win, S&S was going to need a buyer – the reason for that being that Paramount was selling.

I had my own hunch about their reasoning. Kathleen Schmidt confirmed my suspicions.

KATHLEEN SCHMIDT:

Once the pandemic started, everybody and their mother jumped on the streaming train and the streaming war started. So every media conglomerate right now is trying to make their streaming business profitable. A lot of them are failing. But Paramount Global Set, you know, they sold CNET also, which was their tech consumer website. They sold it to, you know, an equity firm called Red Ventures, who is not doing a great job with them. They didn't want the publishing business, which kind of astounded me because there's so much IP there that they could have used to help their streaming business. But the problem is it costs a lot of money to make originals. It costs a lot less to license shows that have already been made.

Bethanne Patrick:

So Penguin Random House’s offer of two point one seven billion for a company that had generated over nine hundred million in revenue the year before couldn’t have come at a better time for Paramount. But even if they were trying to jump ship, the acquirer they were considering had serious hooks in the book market.

With over 300 imprints, which release 15,000 new books each year, bringing in billions, Penguin Random House is the biggest publisher of the Big Five. 

As of 2022, it owned 37 percent of the publishing market share. For reference, the big five combined control 80% of that market share, so PRH is nearly half of that. If you tack S&S onto PRH, we're talking about nearly half of the market share of all publishing. So it was with good reason that the Department of Justice decided to hinder what might be a large change to the entire industry.

During opening arguments, the DOJ made it clear that they were concerned about a decline in competition. 

They also honed in on a specific area of publishing they foresaw being most affected if the acquisition went through: author advances of $250,000 or more.

PRH claimed that they were focusing on an arbitrary and small fraction of the author pool at large, but it seemed that the DOJ was simply using this metric as an example for how the decrease in market competition would most tangibly impact working authors. 

As DOJ’s expert witness Nicholas Hill put it, “A merger between PRH and S&S would give the company such a high market share in the top selling author market that theoretically, it would depress advances paid to authors.”

And to understand that, we have to address how pay structure works in publishing houses.

Since publishers often take a while to turn an author’s manuscript into a market-ready product, they pay the author for the money they anticipate making on the book, which is often determined by the author’s existing status in the publishing world or their social status as a human being…For example, Britney Spears.

Forbes: Britney Spears’ Book Sales

Spears Memoir which became a bestseller even before its October 24th release date sold 1.1 million copies in all formats.

Bethanne Patrick:

These advances are important to successful, mid-tier, and nascent authors alike, though perhaps more so for the second two because they help such writers pay the bills during periods when they don’t have an alternative revenue stream…something that is becoming increasingly unlikely for authors of every kind in the modern-age. 

Nevertheless, book advances keep authors fairly compensated for the time they spend on a work before it hits the market. But these advances aren’t fixed numbers across the board. It’s not like everyone at a certain tier makes the exact same amount when they sign the deal. And that’s where the term “right auction” comes into play.

Let’s say there’s a really great author with an amazing idea for a book. 

If multiple Big Five publishers want to see that book published, they’ll each have to submit offers to the author and their agent, often with competitive book advances that sweeten the deal.

But if the Big Five publishing houses were suddenly the Big Four, and one of those Big Four owned nearly half the market share, it would be way easier for that one powerful company to beat out its competitors, becoming a manipulative buyer authors simply couldn’t turn down…potentially offering low advances with little to no consequences.

Let’s call in the experts to explain this one.

Do You Know Who Owns Your Vet? | Freakonomics Radio | Episode 532

To talk about that, we need to learn a new word:

PRAGER: Monopsony is typically the labor market analog to monopoly. 

That’s Elena Prager, an economist at the University of Rochester. And monopsony is what, exactly?

PRAGER: Monopsony is when a firm can dictate market conditions for the things that it purchases, rather than for the things that it sells. And one of the most important inputs that companies purchase, of course, is labor from their workers. So a monopsonist is a company that has the power to make working conditions worse or make wages lower without immediately losing all of its employees who decide to quit and go to another competitor.

Imagine, for instance, that you are an experienced, well-trained, high-end chef, and there’s only one or two high-end restaurants within a few hundred miles. Those restaurants have monopsony power.

Bethanne Patrick:

It’s hard to imagine that a Simon & Schuster-owning Penguin Random House would have all that power and not try its hand at low-balling authors for the sake of profit improvement. If we look at publishing’s past, it’s a fair assumption that Penguin Random House would continue to prioritize its bottomline over the careers of the authors that keep its business running…but the CEO of Penguin Random House had no trouble suggesting that this was far from the case.

In his statement, PRH’s CEO Markus Dohle said that he would “Keep the ecosystem of imprints at Simon & Schuster together” and let them bid for manuscripts against imprints of PRH as if they were external bidders.” Which was later compared to a husband and wife bidding on the same house as different bidders under the same last name, with the same interests. And conveniently, Dohle said that “unfortunately, [they] could not find a legally binding way” to solidify this promise.

Here’s literary consultant and publishing influencer Alyssa Matesic outlining the other claims that PRH made in its defense against the DOJ.

ALYSSA MATESIC:

“Literary agents who are a key component of the book deal process would continue to enforce competition. And they argued that other publishers, the other three of the big five as well as smaller traditional publishers, do continue to win some of the biggest book deals year after year. Their argument that’s pro-merger is that having the resources of a larger publisher i.e. Penguin Random House would benefit the authors currently at the smaller SImon & Schuster.”

Bethanne Patrick:

In his deposition, Jonathan Karp said that Amazon was not competition for publishing. But at the trial, he was saying that Amazon was underestimated. I don’t know about you, but the contradiction left me wondering – “Which one was it?”

I suppose it makes sense that Karp wanted to punch up the industry threat of brands like Amazon, which the Big 5 share a market with…It makes a merger between two of them seem less intimidating. And…to an extent. That’s fair. Jim Milliot pointed out that Amazon does impact how publishers approach the market.

JIM MILLIOT:

Amazon’s the biggest book retailer in the world, and we all know what they’re like to deal with from a publisher’s side. You know, they want certain things and they don’t want to extend a lot of, margin, shall we say. You know, we’re down to Barnes and Noble, the one bookstore chain, Ingram’s, the one big wholesalers. So there are a lot of pressures on publishers to see how they can grow. 

Bethanne Patrick:

But they have a far lower impact on writer advances than the actual competition between the Big Five houses. And they’re not the ones determining a book’s marketing budget – a potential impact of the merger that also seemed to worry publishing insiders. 

But Karp challenged the relevance of marketing budgets, claiming they aren’t determined by advance sizes and sometimes authors use their own resources to bolster their book sales. For his example, he used Colleen Hoover, pointing out that she doesn’t use a lot of Simon & Schuster money to promote her books because she’s the queen of TikTok. While I know I gave a nod to CoHo earlier in this episode, it bears reminding that as exciting as her story is, it’s not necessarily the blueprint in publishing. 

Authors need marketing budgets behind their books.

And Karp’s impression that certain authors don’t perform better directly because of the big budgets behind their marketing campaigns is ignorant at best. Marketing is a primary way publishers can help bring success to those books they most need to succeed based on the risk they assume with a book deal.

Karp’s general oversights weren’t just felt by me. Ann Garvin, a best-selling author of five books and founder of The Tall Poppy Writers, an all-women cross-genre author collective, had this to say in a roundtable conducted by publishing industry experts.

ANN GARVIN:

Whenever I would start listening to the defense on the Penguin Random House side was – I was frustrated by the idea that their case was built on “well we’re bumblers and we don’t know anything. And I, from my perspective, and the careers that I’ve been in prior to writing, there was no time ever that I was able to call myself a bumbler, say “oh well” and still collect a salary or even run a business for that matter.

Bethanne Patrick:

A similar feeling came for me when PRH CEO Markus Dohle went on to call trade book publishing “the Silicon Valley of media” and further added that “[publishers] are angel investors in our authors and their dreams, their stories.”

The comparison seemed like an attempt to suggest publishing takes huge risks on previously unpublished authors frequently, with little expectation for immediate success of said authors. In big trade publishing, that isn’t typically the case.

The gist of the testimony from the leaders of PRH and S&S: there seemed to be a convenient lack of understanding for how publishing actually works. At one point Dohle even claimed that “Penguin Random House” has it’s name because “everything in publishing is random.”...Pointing me back to Ann Garvin’s use of the term “bumbling.”

While I have to agree that many moments of this trial left me affirmed in my sense that publishing is often unpredictable, even for industry experts, there was nothing random to me about the profit margins of a prospective merger that would half-subsume an entire market. Then again, the confusing P&L reports that came up in countless conversations after the trial tell a different story.

So, Kathleen, I’m curious about the P&L reports that came up throughout the trial…because everyone was speaking about how little they made sense. What are they trying to do here?”

KATHLEEN SCHMIDT:

What they were trying to do basically is prove the point that number one, the merger would not hurt earnings of the highest, selling authors. Number two, they were trying to explain how math works and publishing, which. It doesn't really make sense because Book publishing has a very complicated relationship with math and numbers in general. And thirdly, they were trying to explain competition in publishing. What really struck me about it, probably more than anything else, was when. They were explaining p and l statements, so that's profit and loss statements. And those are the statements that editors, when they're going to acquire a book, have to create a p and l. And that means how much the book is going to cost to produce, how many copies they think it will sell at what price, and put some comp titles in. The problem with p and Ls is that none of them make sense, and that became truly evident on the stand in the trial when, and an editorial director or editor in chief was on the stand and said, “We kind of just make it up.” 

Bethanne Patrick:

After 13 days at trial, Judge Pan finally reached a verdict. The U.S. District Court for the District of Columbia ruled in favor of the DOJ’s antitrust lawsuit. PRH was barred from acquiring S&S, and in August 2023, Paramount sold the publisher instead to KKR, a private equity firm, whose media chief is Richard Sarnoff, a publisher with roots at Random House. The plus side of that is: he knows how the industry works.

I’m interested to see how S&S iterates in the years to come, especially under a private equity firm – which no doubt will attempt to buy up smaller presses to increase the company’s market share. 

Even if S&S proceeds in cutting losses and optimizing profits with a rather clinical approach, something endemic to Big Five operations, we can find hope in this:

The Big Five are not the Big Four. In big publishing, competition still reigns. And more than that, Independent Publishing is on the up and up. With so many small presses offering avenues for modern writers who don’t want to deal with the drama at the top, it may just be the perfect time to get published.

Missing Pages is a Podglomerate Original, Produced, mixed, and mastered by Chris Boniello with additional production and editing by Jordan Aaron.

This episode was produced by Bethanne Patrick

This episode was written by Lauren Delisle

Fact checking by Douglas Weissman

Marketing by Joni Deutsch, Madison Richards, Morgan Swift, Vannessa Ullman, and Annabella Pena. 

Art by Tom Grillo. Produced and Hosted by me, Bethanne Patrick. Original music composed and performed by Hashem Assadullahi, additional music provided by Epidemic Sound. 

Executive Produced by Jeff Umbro and the Podglomerate.

Special thanks to Dan Christo, Matt Keeley, Jim Milliot and Kathleen Schmidt.

You can learn more about Missing Pages at the podglomerate dot com, on twitter at miss pages pod and on Instagram at missing pages pod, or you can email us at missing pages at the podglomerate dot com. If you liked what you heard today, please let your friends and family know and suggest an episode for them to listen to.