In 2013, Markus Dohle received one of the biggest promotions the industry has ever seen—with the merger of Random House and Penguin, Dohle is now CEO of the world’s first mega trade publisher. To get there, though, the merger needed to receive clearances from more than half a dozen governments around the world. Those approvals not only came with little change to the terms of the original deal but were done quickly enough that Penguin Random House became a reality on July 1, less than a year after it was announced.
Dohle has only been in his new job for two quarters, but so far, so good. At a Frankfurt Book Fair talk this year, Dohle won raves for his comments on the merger, the challenges coming from digital and the rise of self-publishing, and his support of print and physical retail. Of course, the trick will be in how the new company manages those concerns—which Dohle admits will not be easy. “The task is to bring these two communities of small- and medium-size publishing houses together into one, and still preserve that small company feel on the creative, author, and agent-facing part of the business,” he said at the Frankfurt Book Fair. “The team feels a little responsibility to get this right for publishing and for the industry as a whole because we don’t want to mess this one up. That wouldn’t be good for publishing.”
In bringing the two companies together, Dohle has so far lived up to his promise when the deal was announced to adopt a go-slow approach. The priority for fall 2013 was not to interfere with selling Penguin’s and Random House’s lists, and by all accounts things have gone smoothly. But progress has been made in some areas, particularly in the backoffice, where Dohle had said the integration process would start. Earlier this fall, the company put management teams in place to create unified groups in fulfillment, credit, and customer service. A new Penguin Random House Audio group was also formed.—Andrew Albanese
If it wasn’t the biggest deal in trade publishing in 2013, it certainly was the one that generated the most heat. The spring purchase—for a rumored $190 million—of Goodreads by Amazon drew pans and praise from many Goodreads users (the site had over 16 million members at the time of the acquisition). But the deal also represented the culmination of six years of work for Goodreads CEO Otis Chandler, who cofounded the company in San Francisco with his wife Elizabeth in 2007 (though the two were not married at the time) and turned it into the most popular Web site for user-generated book reviews. Since the Amazon acquisition, Chandler has continued to run Goodreads, and he has spent some of his time assuring members that the key assets of Goodreads—“social and sharing”—will continue to be the site’s priority. Chandler and the Goodreads team have also been responding to criticism of how the company is monitoring reviews posted on the site. Despite some distractions, Goodreads continues to grow: membership has increased to over 20 million, and the number of unique visitors to the site climbed to 40 million in a recent month, compared to 37 million at the time of the purchase.
Amazon said one of its goals in acquiring Goodreads is to improve the user experience for Kindle owners. This fall, Amazon began integrating Goodreads into its reading devices, including the Paperwhite, where it lives on the top navigation bar. Chandler says integrating Goodreads into the Kindle family was one of his biggest projects of the year, and he was “incredibly impressed by the level of enthusiasm, support, and excitement” from Amazon. Chandler adds that the Kindle integration is just the start of beneficial relationship between Goodreads and Amazon. “Working with the Amazon team has been everything we hoped for and more,” Chandler says. “We are looking forward to working with them to take Goodreads to the next level in the years to come.”—Jim Milliot
Judge Denise Cote
Whether you agree with her decision in Apple’s e-book price-fixing case or think she totally botched it, there is no denying that Judge Denise Cote had a major impact on the publishing industry in 2013. In quickly approving the publisher settlements and by closely sticking to the timetable she had established, Cote brought a quick end to what could have been an even messier, costlier affair (see Judge Denny Chin’s handling of the Google case). And while there are critics of her decisive opinion in Apple’s trial, in the final analysis she showed restraint.
Where the Department of Justice pressed for a significantly more stringent final injunction against Apple, Cote stressed that she did not want to hobble innovation in the still evolving e-book market, and instead signed a relatively light final order. While the publishers are appealing that order, which they believe rewrites terms of their settlements by forcing Apple to maintain the power to discount for five years, in reality the publishers fate is their own hands—Apple has said it won’t sell e-books at a loss. Meanwhile, on December 6, a final hearing will be held to approve the Macmillan and Penguin settlements. If Cote approves the deals from the bench, some $166 million in refunds could flow into consumer e-book accounts—and from there, ultimately much of that money will flow right back to the publishers.
It remains to be seen what happens with Apple’s appeal. But for the publishers, the best strategy is to move on and to focus on innovating and competing, which they are. Is it possible that another judge might have found differently in Apple’s case? Sure. But given the sheer volume of evidence presented at trial, another judge could have also laid the hammer down. But whatever one thinks of the DoJ’s decision to bring suit in the first place—there are no shortage of opinions—Cote’s handling of the trial was remarkably efficient.
“It is essential to remember that the antitrust laws were enacted for the protection of competition, not competitors,” Cote wrote in her final decision.—Andrew Albanese
David Steinberger and Comixology
When the launch of Comixology, a digital comics platform and e-marketplace for digital comics, was announced at the San Diego Comic-Con in 2007, it offered less than 100 comics from a handful of publishers and none at all from the big two: DC Comics and Marvel. Not only did it have meager offerings, but most comics retailers believed that digital comics and Comixology would put their physical stores out of business. Six years later, Comixology is the dominant distributor and marketplace for digital comics, offering more than 40,000 titles from more than 100 publishers. David Steinberger, Comixology CEO and cofounder (along with his partners John D. Roberts and Peter Jaffe), calls the service “an iTunes and Kindle for comics.”
The company offers distribution and consumer sales through its Comics on Comixology mobile app, as well as powering the apps of the big two, and most of the largest independent comics publishers as well; it also sells digital comics via its Web site. In 2013, Comixology reached 200 million downloads—nine months after reaching 100 million downloads. And what about all those terrified comics retailers? This year, PW’s annual survey of comics shops found nothing but praise for the service, with retailers declaring that new customers are coming into their stores in search of print periodical- and book-format comics that they discover on their devices.
Steinberger attributes the company’s success to a number of factors—among them, Comixology’s commitment to the comics medium (make no mistake, the company is run by comic book fans), the launch of the iPad in 2009, and DC Comics going day and date (simultaneous print and digital release) for its New 52 series relaunch in fall 2011. “All the publishers followed DC’s lead,” Steinberger says.
Welcome to the brave and fast-growing new world of global digital comics distribution and retail, brought to you, in large measure, by David Steinberger and Comixology.—Calvin Reid
The YA Novel
The year kicked off with a YA author, John Green, selling out Carnegie Hall. And it’s ending with Catching Fire, the film adaptation of a bestselling teen novel, breaking records for its opening weekend and on its way to a projected billion-dollar run at the box office. This truly was the year of the YA novel: it seemed to be everywhere in the culture. YA dominated the mainstream media conversation and proved as popular as cat videos for click-bait, from CNN.com’s “Young adult books that changed our lives” to Entertainment Weekly, which enhanced its several-times-a-week online YA coverage with its recent March Madness–style bracket “What is the best YA novel of all time?” The Atlantic Monthly offered “The 8 Habits of Highly Successful Young-Adult Fiction Authors” and People gave insight into “What We’re Reading This Weekend: Young Adult Novels with Grownup Appeal.”
All of a sudden, too, it was cool for actors to appear in a movie based on a YA book: see A-list names like Emma Thompson and Jeremy Irons (Beautiful Creatures), Geoffrey Rush and Emily Watson (The Book Thief), not to mention Philip Seymour Hoffman, Woody Harrelson, Donald Sutherland, and Stanley Tucci (Catching Fire). As anticipation built for next year’s release of the film version of Veronica Roth’s Divergent, preorder numbers for Allegiant, the concluding volume in the Divergent trilogy, were massive, peaking at #5 on Amazon’s bestseller list. And there are plenty more big titles in the pipeline as well. Fantasy author Julie Kagawa signed a seven-figure deal for a new series with Harlequin Teen in January. Brandon Sanderson inked a seven-figure deal with Tor in October to continue his Mistborn series, now pitched to teens. And along with all the new YA flooding the market, Ig Books launched a new imprint, Lizzie Skurnick Books, with major nostalgic appeal: the line was conceived to reissue out-of-print YA novels from the ’30s through the ’80s.
The category shows no signs of slowing down, either. Divergent opens in theaters in March 2014, with film versions of John Green’s The Fault in Our Stars following in June and James Dashner’s The Maze Runner in September—and it won’t be just teens lining up to buy tickets. Factor in new books like the sequel to Ransom Riggs’s crossover hit about some very peculiar children, and it’s clear that—as adults have always feared—the teens are poised to take over.—Carolyn Juris and Diane Roback