Ostrowski: Random Remains Core Business

by Jim Milliot -- Publishers Weekly, 5/20/2008 8:14:00 AM

The departure of Peter Olson in no way means Bertelsmann is lessening its commitment to American trade publishing, Hartmut Ostrowski, chairman of the German media conglomerate, told PW in a brief interview at Random House’s New York headquarters this morning following news that Markus Dohle has been named the new Random chairman. “Random House is and will continue to be a core business,” Ostrowski said. Ostroswki also stressed that it was Olson’s own decision to pursue a new career after running Random for 10 years. “Peter made Random House a prosperous publishing house,” Ostrowski said.

The choice of Dohle to lead Random, rather than a publishing veteran, is meant to inject a new entrepreneurial spirit at the company. Ostrowski praised Dohle for his work at Bertelsmann’s Arvato printing group and was confident he could turn another mature business into a growth business. In his letter to Bertelsmann employees, Ostrowski said Dohle will continue to respect the autonomy of Random’s publishers, while opening up “new business prospects and opportunities for Random House. He will bring his innovative energy to tapping new lines of business for the company, such as the digital realm, and to lengthening its value chain.” Asked what lengthening the value chain means, Ostrowski said that publishing needs to take advantage of new marketing channels and get books to customers in new ways. One way to do that, Ostrowski said, is to create brands around popular books, much the way Random’s children’s group has done with Eragon.

Ostrowski is not expecting a quick change in direction at Random, saying that Dohle “should take his time to come up with a program,” adding that the new chairman has no mandate to downsize the company. The financial target for RH, as it is for all Bertelsmann companies, is an average of 4% annual internal growth, Ostrowski said, noting that “I know every year can’t be a record year.” Random will also pursue niche acquisitions, Ostrowski said, adding that a major purchase in the trade field is unlikely in the near term.

In his farewell letter, Olson said the last 10 years “have been the best and happiest of my life,” but that he still has one professional dream to fulfill—a life in academia. Olson will move to Cambridge where he is close to landing a senior faculty position at a nearby university. Noting that he has fully recovered from his bout with double pneumonia, Olson said “this seems like the right moment for me to try something new.”