Markus Dohle, Penguin Random House’s global CEO, needs no introduction. As the leader of the world’s largest trade publishing house, he’s front-and-center in the fight to get books into the hands of readers around the world. The past several years have been eventful, with a global pandemic and PRH’s $2.2 billion purchase of U.S. publishing house Simon & Schuster being challenged in court by the U.S. Department of Justice. Dohle shared his thoughts about this and other issues with us prior to this year’s fair.

How has PRH been performing globally this year and what are your expectations for the rest of 2022 and going into 2023?

After record market performance in many countries during the pandemic resulted in all-time highs for us—particularly in the U.S.—2022 is a challenging year, on what is still a historically high level. Increases in factor cost and inflation burden our results, but most markets are holding up quite well despite the macroeconomic challenges; for example, the overall U.S. book market is still around 15% above the pre-Covid level, which is fantastic.

We have terrific lists around the world for the holiday season, so I expect us to have a strong finish in 2022 with some carryover sales into the first quarter of 2023. The market performance and consumer demand for next year are hard to predict, but at this point, the likelihood that the macroeconomic challenges will further increase is quite high. That’s what we expect and prepare for as publishing entrepreneurs.

How is the company positioned to weather some of the postpandemic challenges: inflation, supply chain issues, a softening of demand, etc?

At the height of the pandemic, we focused on fulfilling the high demand for physical books and keeping the production and supply chain open and reliable. I would like to again give my heartfelt thanks to our colleagues, especially those in the distribution centers, for all their efforts during that time. Now, we are working on keeping the demand for books as high as possible, getting four-color books shipped from overseas at reasonable costs, and, managing inflation in general while supporting our employees with the cost increases they and their families are experiencing in their daily lives.

We had to shift gears very quickly during Covid, including enhancing our internal process and project efficiencies and benefiting from our economies of scale—especially in sales and distribution. We constantly strive to better our cost position by continuously improving the thousands of decisions that are made on a daily basis and by leveraging data to improve our decision making, identifying how to complement our creativity with a data-driven approach in order to maximize the quality of our decisions.

Spain is the guest of honor at Frankfurt—you’ve long said the Spanish markets offer a good opportunity for PRH. How do you feel about them today?

Our story of the last decade in Spain and Latin America is quite amazing. We have tripled our revenues while improving our profitability even more significantly, and that includes our Brazilian publishing business with Grupo Companhia das Letras.

Today we are the market leader in Spanish- (and Portuguese-) language publishing, and that includes our thriving U.S. Spanish-language business. It has been a remarkable journey that our management teams across Spain and Latin America have forged over the last decade. So kudos and congrats to them!

All market and demographic developments across Spanish-language markets point towards even more opportunity in the future. Spain has seen unprecedented market growth during the pandemic with increasing consumer demand, while the shift to online sales in Latin American markets improves efficiencies and the availability of books, while literacy rates keep rising. In addition, our teams are ramping up our multicultural marketing efforts to maximize audience reach in all channels.

Have you any thoughts you can share on the possible merger with S&S in the U.S. and the possible outcomes from the Department of Justice trial?

We are still expecting the ruling this fall, and we are still convinced that we are the best home for the Simon & Schuster authors and their publishing talent. This acquisition is utterly pro-competitive and will benefit the entire book publishing industry—authors, agents, booksellers, and readers alike. As a publisher that deeply respects and understands the responsibility of carrying forward this iconic brand, we know we are the best steward for Simon & Schuster, as we will ensure the continuation of small, independent creative homes that remain empowered and autonomous.

Anything you feel people like myself or commentators consistently get wrong about PRH or the book business in general, both domestically and globally?

Haha…that’s a good one! Let me mention just two. First, the statement that “the industry is consolidating,” when it’s actually fragmenting. The main reason for this in recent years has been the shift to online sales and e-commerce. In many ways this has leveled the playing field between larger and smaller trade book publishers, which is a good thing and compels us to be even more innovative.

And second, that there’s a “scale advantage” in publishing on the creative side. Instead, it’s always one book and one editor, at one imprint, at a time. In essence, Penguin Random House is a community of 325 small- and medium-sized publishing houses around the world who try to maximize the readership for the stories they acquire and launch into the world. The scale advantage is only on the reach (the sales and distribution) side of the business. This is how we’re able to sell more frontlist and backlist books, benefiting authors, retailers, and readers.

For several years now you have said that this is a golden age for publishing. Do you still believe that? If so, can you elaborate?

We took a bet on the physical book more than ten years ago, and since then, we have invested more than $250M in the U.S. alone into our supply chain. We called it zig-zagging: when everyone else ran away from print we doubled down on that format. Almost ten years ago, I said here in Frankfurt that print is here to stay and that physical formats will always be important. Today, the physical format accounts for roughly 75% of our global distribution.

In 2017, I addressed the opening press conference at the Frankfurt Book Fair about “why this is the best time in publishing since Gutenberg invented the printing press some 600 years ago.” And yes, I still think this is the best time in book publishing— ever! Why? Because my reasons did not only hold true but rather accelerated during the pandemic: the global revenue pool for books increased significantly; our business models for print and digital formats are still robust; there maintains a healthy coexistence between print and digital formats; our addressable audience grows with literacy rates spiking; children’s books are still the fastest-growing category; and the audio format continues to deliver incremental growth and additional reading time!

So yes, I’m super confident about the future of books and reading in long form for generations to come. The last two years— including a global pandemic—have only increased my confidence in our future and the importance of what we do as book publishers every day as a service to our society.