RH, Kodansha Form Random House Kodansha

Random House has targeted Japan as its next major market opportunity and has formed a co-venture with the Japanese publishing giant Kodansha to create Random House Kodansha. The new company will be based in Tokyo and will begin operation in the second quarter under the direction of a CEO who is expected to be named shortly. Random and Kodansha are contributing an equal amount of funding to the startup.

Random chairman Peter Olson said the deal with Kodansha fits with Random's strategy of becoming a major player in all of the world's largest language markets. According to Olson, Japan accounts for roughly 10% of the world trade book market. With Random already having a leading position in the English, German and Spanish markets, "Japan is the next logical step and Kodansha the logical partner," Olson explained.

The chief architect of Random House Kodansha was Y.S. Chi, who was named chairman of Random House Asia in November 2001. Chi will serve as the primary liaison between Random and RHK, which will be overseen by a board comprising Random and Kodansha executives. Kodansha will provide both publishing infrastructure and sales support to the co-venture, while Random will contribute training to the employees of the new company in a variety of editorial, technological and operational areas. The first books under the RHK umbrella are scheduled to be released later this year or in early 2004, and will be in both hardcover and paperback. Olson declined to comment on revenue targets for the company, noting only that "it will be a gradual buildup."

RHK will publish both original Japanese works by Japanese writers as well as Japanese editions of books published by Random's other publishing subsidiaries, as well as translations from other publishers. RHK's Japanese authors will also have the opportunity to be published by other companies in the Random family.

While RHK gives Random House a beachhead in the Asian market, Olson does not see a rapid expansion into other Asian countries. "My view of different language markets is that they have to be treated as local markets," Olson said. "Right now our focus is on Japan."

The deal with Kodansha is Random House's second international co-venture. In early 2001 the company partnered with the Italian publisher Mondadori to form Random House Mondadori to publish Spanish-language books in Spain and Latin America.