June 26, 2015
The vanishing mass market: Penguin merges two mass market publishing houses to create new mass market publishing house
by Alex Shephard
Earlier this week, Penguin announced it would be merging two of its mass market divisions, Berkley and New American Library, into one division, Berkley Publishing Group. According to Publishers Weekly, “Leslie Gelbman, who had headed up Berkley, has been named president of the new unit. As part of the reorganization, Berkley will expand the number of hardcover and trade paperbacks it publishes, and unite separate editorial, managing editorial, production and art departments under the Berkley banner.”
This merger is part of the larger “restructuring” at Penguin, which was announced in January. “Restructuring” as I mentioned in my post about the announcement, is one of the corporate world’s favorite euphemisms for firings. The restructuring here is partly literal, as it’s been at Penguin for most of the year. In January, Penguin combined a number of similar (some would say redundant) imprints, and that’s what they’re doing again here.But the restructuring is also partly rhetorical, which is to say that it also means that people are being fired.
That is, of course, what often happens when companies are combined, but Penguin’s restructuring is also fallout from the largest merger the publishing industry has ever seen—the one that created Penguin Random House. While the merger was presented as being between two (gargantuan) equals, Penguin was always seen as being the lesser of two equals—in other words, the company that was more likely to experience turmoil as imprints were made redundant. Berkley and New American Library were already somewhat redundant within Penguin, but they became increasingly redundant once they had been paired with their Random House equivalents. Mergers are about creating more profit for investors, and the best way to provide more profit for investors is to synergize by folding “redundant” entities into one another. That’s part of the story here.
The human cost is unclear—Publishers Weekly mentions only that “Rich Hasselberger, v-p, executive creative director, Penguin Publishing Group, will be leaving the company as a part of the restructuring”—but no other layoffs are mentioned (not that anything is ever referred to as a layoff anymore). Job cuts have been expected ever since Penguin and Random House announced they were merging in the fall of 2012, but Penguin Random House has avoided any Black Fridays—mergers and the presumed layoffs that go with them have happened few and far between, to their credit, and they’ve rarely been reported. (I’m speaking only about jobs in editorial divisions—286 PRH warehouse workers were laid off last December).
Corporate restructuring also presumes that—or at least is presented as if—there will be an increase in efficiency without a loss in quality or volume. That seems unlikely here, and that could be a big loss for fans of commercial fiction and, more importantly, authors—the mass market has widely been seen as being in decline over the last decade plus, and this is another hit. Even without confirmation, it seems fair to suggest that the new Berkley Publishing Group will publish less than Berkley and NAL did separately. In any case, job cuts and fewer slots for authors in fewer imprints and divisions were expected to happen and they have happened, even though thankfully not to the extent some of us expected.
The market for mass market paperbacks has been particularly volatile for quite a while or so and has defied trends many other trade and commercial publishers have experienced—while many trade publishers have seen business stabilize after a few years of ebook-induced instability (and terror), the mass market hasn’t settled down. In part, that’s because mass market books have been particularly vulnerable to the rise of ebooks: many readers of commercial fiction—romance, in particular, but also crime, fantasy, and science fiction—have turned enthusiastically toward digital. This largely (probably close to entirely) has to do with cost—ebooks are cheaper and these readers tend to read voraciously; many have also demanded increasingly low prices for titles. While $9.99 has been a line in the sand for most so-called traditional publishers, many readers of commercial fiction have demanded a much lower price point. Because mass market readers tended to be price-conscious anyway, this shouldn’t be surprising, but it has had an enormous effect on publishers.
Mass market paperbacks have always been especially reliant on hits—massive hits, in particular—and those are harder to come by now. As Publishers Weekly noted in a piece from last year, “Mass Market Paperback: Not Dead Yet”: “While a mass market edition can still sell in the hundreds of thousands, the days when one could sell more than a million copies are gone for good.” Again, part of this decline has come from the increased segmentation of the marketplace over the last few year, with ebooks, hardcovers, and subscription each taking a cut, but it’s undoubtedly changed these publishers’ prospects. Mass market paperbacks rely on low margins and high sales—the margins aren’t any higher than they were a a decade ago, but the sales certainly are certainly lower.
The rise of the mass market paperback coincided with what many still see as the apex of the publishing industry—the 1950s and 60s. The kind of experimentation—mostly by Jason Epstein—that spurred their growth hasn’t been seen for some time. Signet and Dover are still proudly mass market, but most publishers have shown a willingness to experiment with trade, not mass market. The black, relatively cheap, sometimes public domain Penguin Classics still exist, but Penguin has also released a host of beautiful, well-bound paperback and hardcover editions of many of these books. In part, this is simply a quest for higher margins, but I worry it also speaks to trade fiction’s greater comfort with and increasing reliance on one side of the wealth gap—creating books that are beautifully designed but that have a certain objet-quality, instead of being engineered for mass readership.
It’s also possible that publishers themselves wouldn’t mind it if mass market readers gravitated towards electronic editions—as long as those editions have similar (or better) margins than their paperback equivalents. Unlike physical books, there is no resale market for ebooks—no electronic copies of Nora Roberts book for $0.01 + $3.99 shipping on Amazon—and the resale market likely cuts into mass market sales, especially because of the aforementioned price-conscious consumers.
Of course, publishers are notoriously risk-averse, so it’s unlikely they would be willing to stake this kind of bet—instead, the lack of a secondary market may just be seen as a silver lining. But, despite the margins, increased marketing and promotion designed to attract readers to mass market ebooks may just be the way to go, if publishers can figure out a way to do it that doesn’t lock readers into a format or a platform. I’ll be curious to see if mass market publishers experiment more with highly elastic platforms like BookBub in the future. These experiments would be more worthwhile and interesting if publishers didn’t circle the wagons—that is, if they didn’t cut back on titles—but they could yield results, especially when it comes to winning over (or winning back) readers who never had any interest in spending $16 (let alone $30) for a book, anyway. Of course, you’d run a risk of extending these assumptions about pricing across multiple formats and genres—devaluation is publishers’ biggest fear when it comes to ebooks—but the success of mass market paperbacks themselves suggest this may not be the risk that some think it is.
Most of this is speculation, however, and speculation has abounded about the mass market since its inception—publishing is rocky business, but nothing is rockier than publishing mass market books. People have been predicting that mass market books would either doom the publishing industry at large or that they would crumble into dust since their inception. Instead, the publishing industry and the mass market book have had a mutually beneficial relationship for decades. But there are some more concrete takeaways.
One is that the merger between Penguin and Random House is happening in slyer and subtler ways than many of us expected—it’s happening slowly and relatively quietly. This is good insofar as it quiets the industry’s Chicken Little tendencies, but it’s also quieted the cost of the merger itself. These mergers have consistently been presented as being syngergizing decisions—of combining the best of both worlds—but synergy means firing people. It’s important to remember, as these layoffs often go unreported.
The second is that mass market is still in trouble, though perhaps only compared to its own glory days—selling hundreds of thousands of copies of any book is extraordinary, regardless of margin. That said, the mass market has also set a very narrow set of rules for itself and it has only be an answer for a very particular kind of book for a long, long time and that’s not going to change anytime soon. I’m not going to bet on seeing a copy of My Struggle or H Is For Hawk in a mass market edition anytime soon. That may not be surprising, but I also wouldn’t expect anything out of the ordinary in other areas, like marketing, either.
These kinds of mergers are often presented as if they naturally make things more efficient and, therefore, more effective—as if cutting slots for authors and positions for experienced professionals would naturally create more stability and dynamism, rather than less. It might. I can’t presume to know the inner workings of large publishing houses, let alone the inner workings of large corporations, their leadership, or their shareholders. From afar, these moves strike me as being bad for authors, bad for publishing employees, and bad for readers, but it’s more than possible that this kind of slack will be picked up in other areas—that work will be streamlined, that an influx of employees from outside the industry and a greater attention to data will solve these problems, that they’ll help one or two people do the work a team once did. After six decades of publishing mergers, however, there’s no evidence that anything of the sort will happen. Instead, these moves speak to the logic of corporate culture, of corporate publishing itself: reductionism is resolved by reductionism, which can only provoke more reductionism.
Alex Shephard is the director of digital media for Melville House, and a former bookseller.