Today, I’ll speak with Publishing and Strategy Expert Janet Goldstein about the high profile Penguin Random House and Simon & Schuster antitrust lawsuit. We’ll discuss the scope of the trial and what it means for the publishing industry as a whole and for burgeoning authors as they work to get their books published.

In this episode, we discuss the Department of Justice’s lawsuit against Penguin Random House and Simon & Schuster in response to their proposed merger.

Penguin Random House is already the largest book publisher in America, and by aquiring Simon & Schuster, many are afraid this would create a duopoly within the publishing industry, thus making it harder for authors to get their books picked up.

Some argue that the billion dollar deal would mean that instead of there being a competition between the two big publishers to acquire titles, there would effectively be a monopoly. This means there’s less incentive for the merged mega-publisher to offer a competitive advance amount to authors, since they’re not in a bidding contest to win the title.

Therefore, by driving down advances, this deal could effect the livelihood of authors who depend on those advances, and cause dire effects across the entire industry by making it more competitive than ever. Other concerns are that with one less publishing option, authors might struggle even more to get their books seen.

With all this buzz, we are bringing on industry expert Janet Goldstein to talk about her take and advice for authors who might be feeling concerned. We’ll discuss the importance of the trial, what it means for authors, and how to navigate the changing publishing landscape successfully.

Lets get into the interview!

1:45 – Janet, welcome to Published. We're so happy to have you. Why don't we start off by having you tell our listeners a bit about yourself and what you do?

· Absolutely. Well, I have done a lot of things in publishing. But I think the thing to highlight is that I spent about 25 years at three of the Big Six publishers. And today, it would be two of the Big Five publishers, and this will figure into the conversation we're going to have today.

· I was on the editorial side and rose up the ranks to Editorial Director at HarperCollins, at a startup division called Broadway Books, at Random House. And then at Viking Penguin, I directed a spirituality list, did business books, parenting books, fiction, published the Dalai Lama.

· You know, people say, ‘Have you ever worked with anyone famous,’ I published David Allen with Getting Things Done. I published Harriet Lerner who's having a whole renaissance. She wrote The Dance of Anger and The Dance of Intimacy. But she was a mentor, and teacher to Brene Brown. So, she's having a whole moment.

· And then I've been on my own as a Publishing Strategy Consultant, for the past 15 years. I collaborate on books and do some ghost writing, and a lot of strategic planning with authors. I've done teaching at NYU, I had a stint at National Geographic books.

· And interesting also, for this call, I have one foot in traditional publishing and keep up with it and have clients and authors going the traditional route successfully, and I value it. And I have other clients going hybrid and self-publishing routes, also very successfully. And it really depends on where you are on your track. So, I'm thrilled to be here and share what I know.

3:40 – I echo that. I often tell people, there's no right or wrong, there might be a few wrong, but generally no right or wrong way to publish a book. And it's really coming down to the fit and your resources and your priorities and your goals. We're not here to convince anyone one way or the other, it's just to make sure you're informed.

Speaking of informed, I don't want people to be quickly turning this off, when they find out we're talking about a corporate merger today, or a potential one. So maybe we should set the stage for our listeners, so they understand why the potential Penguin Random House and Simon and Schuster merger is our topic of discussion. And if you can, since you have such a deep background in traditional publishing, maybe give us the state of traditional publishing today and how it might change in the future, especially with an eye towards the consolidation that we've seen over the years.

· At the simplest level, I actually think big trade publishing is in a fairly solid state. They made huge adjustments to dealing with Amazon and the huge amount of business that goes through Amazon that can be physical books, but that are purchased through Amazon and not through the local bookstores.

· There's now a really cool platform that's competing with Amazon called bookshop.org. You can order books through bookshop.org and support any local bookseller you want.

· The publishers have figured out the right marketing steps and production steps and a lot of decision making. So, the businesses are healthy and not necessarily static, but there's like a stasis so it's not a state of emergency.

· Even through COVID, the big publishers were able to make adjustments. The big publishers have huge backlists. This means books that have sold 12 months prior. And people want to change that definition and talk about in the past, like two years prior or three years prior to kind of understand what deep backlist is. So, it's a healthy business.

· But then to put it in this context, the forces on trade publishing is digital books and eBooks. Those have kind of balanced out, so the number of people buying eBooks to physical books is not changing so much. There's some stability.

· But there is the rise of Amazon. That continues to be an issue. There is the issue of supply chain and having enough paper and having enough books and shipping books. Supply chain is an ongoing post epidemic factor. And then the huge rise in self-publishing and hybrid publishing.

· And I had just a little factoid here: Of the 3.2 million titles that are tracked on BookScan, only 1% sold more than 5000 copies. BookScan doesn't track everything. But it's all books with a barcode that can sell through retailers or online retailers. It's a pretty big sweep of the book selling environment and books available for sale, but not everything.

· 1% of that amount sold over 5000 copies and trade publishers, the Big Five trade publishers, make their profits on books that are selling over 3000 copies, over 5000, over 10,000. That's their business.

· The trade publishing businesses is much bigger. There are probably 25 big publishers, there's university presses, but for today, we're focused on these big five. And I'll just list them out for you: Simon and Schuster, HarperCollins. Hachette, which includes Little Brown and Grand Central, many others, Macmillan that includes St. Martin's and Holt, and then the gigantic, number one publisher in the world, which is Penguin Random House. And the focus of this lawsuit is the merger between Penguin Random House and Simon and Schuster. So that's the lay of the land.

8:05 –And as we've already alluded to, this business is no stranger to consolidation. And Penguin Random House itself, of course, was born of Penguin, and Random House, that's a mash up of two right there. So why is this particular merger getting so much attention? And why is it under the eyes of the Department of Justice?

· This small number of companies that are huge, they have so many imprints when you go to their website. They have specialty imprints, children's imprints, business imprints, thriller imprints, mystery imprints, general nonfiction, upscale, downscale, the whole gamut, mass market. And it's getting more and more consolidated.

· And I think we've all been reading in the news, there's a concern about income inequality, and what's happening in our society, and are the rich getting richer and the poor not being able to keep up? These are billion-dollar companies, we talk about publishing being this small, little business. It's a huge industry, it's not so small.

· I think what happened when this merger started, through due diligence, they came up with some emails of some of these senior executives, like the top executives saying, ‘Well, if we still have a Department of Justice,’ because it was the middle of the Trump administration, and we're not talking politics, it's just they were very business friendly. And they had a very different relationship with the Department of Justice that was not independent.

· So that was sort of like maybe we could just get this in under the radar because no one's looking at lack of competition. No one was looking at Google, no one was really looking at Amazon, nobody was really looking at Netflix, like all these big companies. And it was like, maybe we'll just get in under the radar, even though this consolidation, from six to five to four is huge.

· And then the new Department of Justice came in and this was top of mind. And this was just one of the mergers that was in that sweep of company mergers. And I would add people care about books, and a lot of people in government and a lot of people that are newsmakers, and in the press like to talk about publishing. They all have books; this is something that they think about. It's very topical.

· Could it have happened earlier with Penguin and Random House merging? There's been so much more consolidation around that they've swept up other smaller companies. So, I think it's a tipping point.

11:10 – For the authors and aspiring authors who are listening, who know that they're initially at least going to head down this traditional path, if this does go through, what does it mean for them? How would it impact a debut author, as I like to call them?

· I think that what was interesting about this lawsuit from the government to stop the merger, is they were saying there's no harm to consumers, right? Like prices are not going to go up. It's probably not going to change the book buying in environment. But the publishers all compete with each other.

· And what most of your audience and those of you listening don't realize is that within these publishers with all these competing smaller publishers, what we call imprints, they compete with each other internally. And there are these rules that I lived through when I was still on that side of the desk, of who could compete with whom, and we don't want to be just competing with each other, and pushing up the price. It'd be like trying to buy a house that your mother wants to buy, and you want to buy it. And you don't want to be competing against your mom. You want to compete against some stranger who you don't know. The publisher said, we're going to still have competition against each other. And we don't yet know if the government is going to believe that point of view.

· But I think for the, for the average writer, on the acquisition front, that's you've got your book proposal, you've got a niche, you're only going to be going to a big publisher, if you have the ability, be part of a national conversation. And if you have strong B2B business, but not national visibility, have original research or have new data or have lived experience that's just right in the moment, like race issues today. If you fit and kind of can garner that attention and excitement, and you have a great proposal, if this merger went through in the near future, I don't think it will have a huge change.

· The change that happens over time, is that imprints actually start to merge. They don't advertise it. But having lived through the Penguin and Random House merger, the outcome of that over time, is then they combine two business book imprints, and they combine two self-help imprints, and not only the acquisition, but the marketing. So, I think the impact is there's just not as much bandwidth, there are fewer people with so much.

· It's like another analogy. It's like trying to go to a restaurant, and you can't rush the service anymore. We've all learned we have to be more patient because there's just not enough people. That's what publishing is turning into: overworked people expected to think and do so much. And so over time, that care, and that customization is going to go away, if you don't break out.

14:55 – I've heard speculation that another possible impact from this could be decline in the average advance, especially for our debut authors, along with longer timelines, which I think points to what you just said—there aren't as many people which means it takes longer to get things done. So, what are your thoughts on those? And are there other impacts like that?

· I've seen the impact on the length of time, which is so counterintuitive, across the industry, with the big trade publishers and the indie publishers. And whether that changes or not is a bit of an unknown. I think when publishers want something, they move, and the big publishers on the one hand are strapped for time, but they do have the capacity to move if something is very timely. That's where you can get those bodies in place, and they have the infrastructure and the clout to make things happen. But only if you're really wanted.

· I think in terms of advances, it's a really good question. To some extent, advances have already taken a hit and so many books are not being published. With what we call the midlist, which are those in between books, it's often the second book that's even harder. If the first one doesn't perform, the sophomore book is often harder. But a lot of that has already disappeared because people say over and over again, I don't know how to publish it. I like this book, but I don't know what we're going to do with it. I'm not sure that the advances are going to come way down. But the $100,000 advances are.

· And I have another little factoid, that came up in the lawsuit. Books that yield advances of $250,000 or more are the top 2% of all books acquired by the top five publishers, and it represents only about 1000 authors. I thought that was astounding. This is information that's new because of this lawsuit.

· So, the lion's share of books are going for advances that are $20,000 to $60,000 which is kind of a tier, and another tier might be $80, to $150,000. And you can see how fast it might thin then out from there. So just a realistic perspective, there always are going to be people that overpay for these big books that everybody wants. And those are the ones you read about in the newspaper and the vast majority are going for that much smaller amount. I don't know if that amount is going to come down a lot more. But that idea that books have to have that built in audience already is just not going away. That is going up. The platform need for authors is going up with the trade publishers.

18:30– There's not a lot of transparency, sometimes, in this business. So, it is nice to finally get a little peek behind the curtain and understand what's going on behind the scenes. I'm curious, and we touched on it at the top of the show, about the impact on marketing support. Let's assume this does go through, we already talked about teams being stretched thin, and it's sort of a universal complaint of authors to say they don't feel their publishers support them enough on the marketing side. So, what might this do to that situation?

· I think it adds to that stress, or maybe that push and pull between the big publishers. They have specialized lists, it's not all famous authors. But that's where the revenue is coming from, that's paying the salaries, to buy the books you love. Sometimes your boss will say, ‘Well, you can buy one book you love. And then the others have to make money,’ or ‘we want the books that are going to get the awards,’ right. So, it's a mix of factors.

· I do worry that if the focus is on those big national books that you can lose the nuance and not have that boutique, more, not just necessarily intellectual books, but the books that need to build and take time. And that's what my career was based on. And I would think that that's going to be harder to do.

· Publishers always have a short attention span. The book gets goes through the production cycle, and there's a marketing plan. And hopefully, the authors are learning from all the things they can learn online, and their agent and they're prepared, and the right things are happening. And you know, you get some reviews, and the book starts to sell on Amazon, all the right things happen. But if a month goes by, and there's no momentum, books can get cut off.

· That's the concern, where's the uniqueness going to come from? Then things start to look the same. So, we say we want different voices. But when you only have four companies, and those imprints do start to merge or there's corporate oversight, maybe some departments are separate, but more merge, how are you going to get that quirkiness into the marketing departments? There's the time factor, but also the way we're thinking factor, and are we going to level out things because the standard becomes one norm? And how are those things going to actually be compatible of uniqueness and freshness? Of course, a huge new memoir, a breakthrough novelist, Where the Crawdads Sing, is a book people talk about, there’s always exceptions but we're not focused on the exceptions. We're not focused on those 2% of the books or the 1% of the books I used with some of the stats. So, I do think that that's a real risk.

· That's the whole point of this merger, it's that tipping point. It's just another wave where the scale is so huge, and the numbers of imprints are so big. And will they rationalize over time, so that the number of imprints does shrink, they have to. I mean, it will be over time, it won't be immediate.

· I think for any individual author, an individual book transcends all the concerns, right? That's the wonderful thing about publishing, any individual book can chart its own path, like any entrepreneur can chart their path and succeed. But when we look big picture, and you asked me for the risks, I think they're really real. And I think the case against the merger is very valid.

23:00 – Changing gears a little bit. Especially with this kind of hanging in the shadows here, how do you guide the authors? You mentioned you coach authors on the front end. How do you guide them through finding a publishing choice that might be appropriate for their situation? Are there certain criteria that you look for?

· There are and it's very nuanced but let me see if I could think of a few standout factors.

· I think one is, how developed is the idea? How ready is the idea? Whether it's a narrative, I actually do work on memoirs, I still do a little fiction, I publish Barbara Kingsolver, I love to occasionally work on a novel. But even if it's an idea that's going to be a nonfiction, issue-based book, or a leadership book, how ripe and ready is the idea?

· If it's an earlier stage, I will often recommend that somebody do a smaller book that won't affect their big book down the road or self-publish or do something hybrid or do something just for clients. It can be very distracting to try to get yourself ready for one of these big five publishers or the 10 publishers, it takes all your eyes off the work you're doing, and you become focused on the book as a business. You get focused on writing this book proposal that must leap off the page to get someone to say yes, and you most likely need an agent whereas you might not if it's a smaller, traditional publisher. So, the rightness of the idea I say is one.

· The next one I would say is the readiness and the maturity of your marketing. If you've never marketed, if you've never sold a course, if you've never run a workshop, like all those things, you learn so much by going through the process. And if you're starting a book without a running start, you don't really know the ropes, you don't know how to give your big trade publisher what they need, even if they grabbed on to the book. Your book proposal has to kind of have all of this not guaranteed, but it needs to show you understand your audience and where you're going and that you can pull it off at this very high level that maybe is not where your time should best be spent.

· You can do a really smart book that's more for a regional audience or a niche of an audience that will put sell thousands of copies. But it's not going to have that national, media interest. If you can learn and grow build as you grow, you can publish and expand.

· And I think this third thing, which is that national audience. Who is my audience, and am I looking for the exact right fit?

· Hybrid—because I can just say something about the Greenleaf program. They have two imprints I've learned about recently. One is for women; I actually have a perfect project to possibly talk about. And these two women are huge forces in their worlds, amazing forces, national recognition, but the book they're collaborating on is starting from scratch. So, we have a great case example, maybe going the hybrid route. They can leverage all of their resources that are substantial while they develop their idea.

· And it's possible it could go to a trade publisher, but the question is, do you know who you're speaking to? And is it a large national audience? Or would you be better going to a University Press, going to a hybrid publisher, going to the lefty press, going to the more conservative press? Who's in your niche? There are many, many smaller publishers that can really do right by authors.

· I think the hybrid thing where you get support is for somebody who has the resources, whereas self-publishing is like setting up your own business. And I recommend that as well if your audience is clear enough about the difference between self-publishing and hybrid.

· Hybrid, you get a lot more support and expertise and distribution. But it's more of an investment. And self-publishing is particularly great for fiction if you're going to have your own mystery series, or whatever.

· Those are the big three, I think. How ready is your idea? How national is your audience? And how experienced are you with marketing and your audience and the platform that you have? That's where I start.

· I have two authors with huge, big trade books, they got these advances over $250,000. And we worked on those for two or three years, with six months to a year on the proposal. We were taking ideas that were very mature, they match audiences that were clear, but getting it translated into a broad commercial, and finding the kind of presentation and the right voice and getting all the pieces together when the people I'm working with are awfully busy, it’s like a startup. Somebody is investing that time, and they can't meet the return on it in six months. If you want to use it as like a loss leader or back of the room, that’s great, and you should, but you need something as your first thing. Going trade publishing would not be your first thing.

· But that's a great extra criterion. And I love that because you have to be able to have that time, wrap your head around it, and get away. A lot of you are listening are very entrepreneurial. You want to go in, then aim. This is the opposite. And the bigger the publisher, the longer the process. It's kind of counterintuitive.

30:20 – Well, you've given us so much amazing insight and perspective and advice today. Any other parting advice or thoughts for our listeners?

· I think it's really exciting to publish. I mean, the process of crystallizing your ideas and sharing your voice is really powerful. And not everybody has to do it one way. I used to think not everyone had to have a book. That's not so much my thing, but I think with all the avenues—Tanya you published a book, so that's a separate conversation. But you know so much, and it really crystallizes your way of thinking and it's such a good practice for making your work meaningful and also you’re meeting a challenge, so I encourage everyone to strike out and go for it.

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ABOUT JANET GOLDSTEIN

Janet is a highly respected publishing and strategy expert with over 30 years of executive editorial experience, including leadership roles at three of the largest New York City publishing houses—including two divisions of Penguin Random House, and HarperCollins—where she acquired, developed, and helped launch the work of a long list of best-selling authors including David Allen, Harriet Lerner, Barbara Kingsolver, Wayne Dyer, and the Dalai Lama. In addition, she served as SVP and Editorial Director at National Geographic Books based in Washington DC where she expanded her expertise in illustrated, gift, narrative nonfiction, and co-branded publishing and worked with Cesar Millan, Dan Buettner, the Angry Birds, and the photographers and editors of the Society.

Janet works with new and established writers, experts, and thought leaders to shape their ideas, hone their narratives and stories, and grow their impact in such fields as business, personal development, psychology, women’s issues, parenting, education, health, social issues, spirituality, and fiction.

To learn more about Janet and the work she does, check out her website here: https://janetgoldstein.com/.