Book industry insights from Penguin Random House merger trial

DOJvPRH Day 4: Dohle: “Around 20-25% of heavy readers account for 80% of the revenue of the industry ” from consumers. “If the really dedicated readers go all-access, the revenue pool is going to be really small. The retail sector will be gone…authors are going to lose.”

— John Maher (@JohnHMaher) August 4, 2022

Pareto principle in action! When that’s your revenue stream probably doesn’t make sense to offer all access as a service 🤔

DOJvPRH Day 1: Pande explains how standard payout of advances went from thirds to quarters. Says approximately 20% of her authors earn out the advance, which can take 3-4 years to happen, forcing authors to teach, "work in coffee shops," do journalism (poor saps), nonprofits, etc

— John Maher (@JohnHMaher) August 1, 2022

If that applies industry-wide, shocking that only 20% of authors earn out their advance considering many advances are pretty small!

DOJvPRH Day 4: Dohle says Penguin-Random House merger did not result in reductions “at all,” attributing later reductions to “market sources.” He notes that genre fiction, especially romance, “switched to self-published stories…away from what we call mass-market paperbacks.”

— John Maher (@JohnHMaher) August 4, 2022

😎💪

DOJvPRH Day 4: On to BookScan, which Dohle says tracks “70-75% of print sales” (PW estimates more like 80-85%) and that's only“50% of the overall market, but a very relevant one.” AAP StatShot estimates PRH market share at “15%,” he says, and BookScan at “20-21%.”

— John Maher (@JohnHMaher) August 4, 2022

DOJvPRH Day 4: Dohle says outside of Big Five except for Scholastic, in 2019, “43%” of the market was “dominated” by other publishers (This means all other pubs, I think.) In 2021, “around 50% of the books sold in America were sold by publishers outside of the Big Five.”

— John Maher (@JohnHMaher) August 4, 2022

DOJvPRH Day 4: Dohle: “The main reason for the industry fragmenting is the shift to online and e-commerce,” where, he says 50% of books are sold, which has “leveled the playing field between larger houses and smaller houses.” See: https://t.co/ki5DTLdGoy

— John Maher (@JohnHMaher) August 4, 2022

DOJvPRH Day 4: “We don’t think it’s good for writing and for writers,” Dohle says re: Kindle Direct and other models, so PRH’s books don't compete in them. But “consumers like these models,” says Read. Will S&S’s books be pulled from them post-merger? Dohle hasn’t decided yet.

— John Maher (@JohnHMaher) August 4, 2022