Authors are the lifeblood of book publishing. Without authors, there would be no stories; no poetry; no biographies; no written discourse on history, arts, culture, society, or politics.

No, this is none of the great writers defending their art. It is the U.S. Department of Justice (DOJ) Antitrust Division in the introduction of the complaint to stop Penguin Random House, LLC—the world’s largest book publisher—from buying its publishing rival, Simon & Schuster, Inc.

Yes, I love legal poetry, and here it goes:

Authors are the lifeblood of book publishing. Without authors, there would be no stories; no poetry; no biographies; no written discourse on history, arts, culture, society, or politics. In the words of Penguin Random House’s U.S. CEO, “[B]ooks have the power to sustain us, particularly in challenging times . . .” Penguin Random House’s Global CEO put it more simply, “Books matter . . .”

Penguin Random House’s proposed acquisition of Simon & Schuster would result in substantial harm to authors, particularly authors of anticipated top-selling books.

The US government sued to stop the deal on antitrust grounds, arguing it would diminish competition among the biggest houses and push down advances for some authors. Here is a very good summary by Vox of the technical legal & economic details behind the complaint.

Most of us are familiar with the idea of a monopoly, with the long history of regulation against monopolies (utiliies, telecoms,…), and with current debate about high tech (FAMGA) monopolies.

But with this case, the DOJ is arguing that PRHS&S would form a monopsony — an unfair buying market that would drive down the money paid to authors. Such cases are historically rare. If the DOJ succeeds here, it will be setting a major precedent for the way the US prosecutes corporate giants.

Historically, the US hasn’t prosecuted monopsony often. If the DOJ succeeds here, it will be setting a major precedent for the way the US prosecutes corporate giants. Therefore, what we are likely seeing is a kind of performance, orchestral manoeuvres in the dark (pool of justice).

But beyond the legal debate:

Beyond the legal debate, the trial is offering us an unusual glimpse into the world of publishing, “a parade of high-profile publishing executives, agents and authors speaking frankly and on the record about how books are made.”

What have we learnt?

• What makes a best seller? No one — not even the top executives in publishing — has figured out the mix of factors that can guarantee a best seller.
• How do publishers decide how much to pay an author? How much a publishing house offers an author for their book is usually a closely guarded secret
• What books drive the industry’s profits? A minuscule percentage of books generate the vast majority of profits. 35% of books the company publishes are profitable. A very small sliver — just 4%— account for 60% of those profits.
• How does consolidation impact publishing, and authors? Let me tell you. Publishing will be more concentrated (Logical consequence of information “system dynamics”). The vast majority of authors will live usually bad (with random exceptions), like Stephen King.

Stephen King testified on behalf of the government last August. Therefore, there might be an horror story behind this Big Six down to Big Five down to Big Four (and counting) antitrust affair 😉

In short,

“Everything is random in publishing,” Penguin Random House CEO Markus Dohle told the court during his testimony. “Success is random. Bestsellers are random. That is why we are the Random House!” He went on to describe the editors and publishers of PRH as “angel investors in our authors and their dreams, their stories.”

(I had a hunch.)

My only question is what about the other side of the market —readers? This is what nobody is talking about, the consequences of a publishing monopoly (yes, monopoly) in the offering to readers. Higher concentration is all about power to “convey” (the proper) ideas to a larger population. And now that we have informed “official” confirmation that there is only a random generator behind success, you can make your bets.

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Featured Image: Penguin Pays Slot