Dohle optimistic about publishing's future and insists S&S acquisition 'pro-competitive'

Penguin Random House worldwide chief executive Markus Dohle says he is "optimistic" about the future of the publishing industry, claiming "it's the best time in this business since Gutenberg invented the printing press".

Dohle was interviewed via Zoom by The Bookseller editor Philip Jones at the FutureBook conference on 19th November and stressed that despite the challenges of the pandemic "books matter and readers are resilient". He also vowed to "do everything to help create the future of books and reading for generations to come" going as far as to insist that PRH's acquisition of Simon & Schuster (S&S) "will certainly help us to achieve that goal".

He was questioned extensively about the US Department of Justice's decision to file a lawsuit to block the deal between PRH and S&S, but insisted PRH is "deeply convinced" it is "the best steward for the Simon & Schuster imprint community and that this transaction is utterly pro-competitive". He told Jones: "We believe that it is positive and good for all constituencies in the industry starting with the agent and author community and retailers, its good for retailers and ultimately for readers and of course for us, in that order. We know now that the DoJ disagrees and that is of course disappointing to us but we are confident that the court will agree with us after looking at the facts, the details, of the industry as a whole and this transaction in particular."

Outlining his case for the merger, he said PRH sees itself "very much in alignment and not in competition with author income or author advances" stressing: "There is a very high correlation in this industry between publisher revenue and author and agent income. In other words if authors do well, publishers do well."

When asked about his previous assurances that PRH imprints will continue to compete with each other, he said competitive bidding between imprints allows "for finding the perfect match between story and editor, and author and imprint" adding: "We are perhaps going to focus even more on that." He described the move as "the reinvention of smallness in publishing" claiming "there is no scale on the publishing side – it is one book at a time, it is one idea at a time". 

He also contextualised his comments on being "an exceptional partner to Amazon" cited in the DoJ complaint as signalling the deal was not designed to counter the online giant as has been suggested. He told Jones: "I have always said that we are channel agnostic. We want to serve all channels, we don’t tell our readers where to buy their books, it is their decision, we are publishers, we are not retailers. We are committed to being exceptional partners to all channels beginning with and including the very important independent bookstores."

Recalling Penguin's merger with Random House nearly a decade ago, Dohle said the industry has been "diversifying in many ways" and that in the US and the UK "smaller publishers have done well and actually gained some market share against the larger publishers". 

"The experience has been positive for everyone. If you talk to agents these days they are saying they are having the best time many of them the best time in the history of their agency," he said, adding: "The idea is to do that with Simon & Schuster again to the benefit of all constituencies and ultimately to readers." He said the benefits of the acquisition are chiefly to reach more readers and have more books on shelves "to the benefit of retailers and readers. We want to have books in front of readers, we want to have books available in stock, investing in the supply chain, we want to sell more of the books that we publish and we want to make them more visible and more discoverable," he said. 

Jones also questioned Dohle on his thoughts on the recent news that streaming company Storytel has signed a deal to acquire Audiobooks.com, at the same time as Spotify announced it was acquiring audiobook and streaming giant Findaway. Dohle said he is "convinced" that "in the long run" subscription is not good for author income or retail. He added: "I can only speak for us and we will see how this unfolds and whether readers at large will adopt those kinds of models. Ultimately the reader will decide."

Lastly, on the question of social issues such as diversity, sustainability and ever more polarised questions around free speech, Dohle noted that PRH has "to become as a community ourselves more diverse" and that in doing so, it will be able to publish into more diverse communities. However it needs to be "vigorous, very clear and well publicised" he said, insisting PRH takes its role as a "service" to society "very seriously". 

"My conviction is that we don’t need to give everyone our megaphone and our brand, especially those who cross red lines on human values, democratic values and the rule of law. I’m very clear about that. The freedom of speech topic is a very complicated one but I am convinced that we can and have to make choices here," he said.