At a well-received talk at the 2013 Frankfurt Book Fair, Markus Dohle, CEO of the newly minted Penguin Random House, spoke on a range of subjects. A full transcript, lightly edited for clarity and readability is available on the PW Web site. But here are some highlights from his remarks:
On the merger of Penguin and Random House:
“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.”
"We have a big task here. And that task goes even beyond the company we create. You know, 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."
On the DoJ’s Price Fixing Suit:
“Well, look, I mean, the thing is over. We live now live in agency lite, right? It's a new experience. E-books are being discounted again. And we try to adapt. We try to test. We try to take a very analytical approach to it, and, you know, the task is to maximize the revenues for our authors going forward. And that's what we do. It's not a big deal for the company.”
On whether the newly merged publisher is “Big Enough”:
“I would not compare size on the publishing side with size on the retail side. And basically, fundamentally we are very aligned with the online retailers, be it physical or digital. Because, fundamentally, what we want to do is bring our books and introduce our books to as many readers as possible. So the fundamental idea of what retail wants and what we want as publishers is aligned. The rest is drama around it.”
On Amazon, and other new players:
“The global retailers and e-tailers have brought a lot of innovation into our industry. My hypothesis is that they've expanded the market because of the convenience they provide for readers: buying books 24/7, both in print and in digital form. They've expanded the market. So, you know, they need our content. We need their access to readers. It's a clear win-win situation.”
"Fundamentally, and this was always my mantra, the relationship is about cooperation and not about confrontation. And I don’t let anybody talk me into this sort of confrontation, because it’s not true. We want to reach out to as many readers as possible. Of course we have to manage each other, right? And that's fine. But fundamentally we are aligned, and the rest is about whatever, terms of sale and negotiation power, you name it."
“I have a great deal of respect for the entrepreneurial achievement and the innovation that Amazon et al brought into our industry. And we should not forget about that. Kindle has at large prevented us from piracy in the first place because they created this wonderful, very convenient kindle system with a fantastic Wi-Fi device with a huge selection of titles and a fantastic convenience to buy books. And that was sort of a gift for the book world and the value chain of books. That they started with that when the business was so small. So, they brought innovation. They have grown for a reason. And I think we can grow together, both domestically and internationally.”
On the future of print:
“Our basic strategic assumption is that print will always be important, always—not in 50 years or 100 years—always.”
“What’s really interesting is I think that our markets in the U.S. and the U.K…the [digital] growth rates are flattening out a little bit. Who would have thought that? At the sort of 25-percent-ish share? I think it's quite surprising. But we've always believed in print and we feel more encouraged and inspired as ever to invest in print because it will matter always.”
On the “three challenges” the publisher faces:
“For retail, our task is help sustain physical retail—I don't know whether we can save it—but to help sustain physical retail and to expand digital retail. So, that’s two clear tasks on the retail front.
“On the end consumer side, our task is to communicate much more directly with our end consumers. Together we can crack the code of discoverability in a world with fewer bookstores. We can do that. And only if we can prove in the future that we can reach more readers than anybody else in this industry—that we can actually connect our authors and their works to more readers than anybody else—only then we will be relevant. So that shift of paradigm in book marketing is extremely important and is at the center of innovation of Penguin Random House.
“And last but not least of course to begin with, our authors. Staying aligned with our authors, enhancing our service portfolio for our authors is extremely important for us. We don't want to be disintermediated.”
On global expansion:
“The core of the book business will always be local. And we enter those markets humbly. We want to learn about the local environment, about the local culture: like in China, for example, very small steps that Penguin did undertake to learn and not to sort of, you know, "bring publishing" to China. We want to learn, and once we have learned enough, we invest.”
On the rise of digital self-publishing:
“Self-publishing is market expansion. And I think self-publishing makes curated publishing more important because we have a flood of publications. I mean, 10 years ago with 85,000 new titles at the Book Fair, we always thought, "Oh my God, we cannot manage that!" Today we have hundreds of thousands of new titles with ISBNs every year. That makes curated publishing more important because in this more complex world, people need orientation and guidance, and publishers guide.”
“Our core goal is to crack the code of discoverability in a world with fewer bookstores. What do we want? We want to keep readers interested in reading, and we want to provide them with great reads. We want them to choose books in the future and not Netflix. And that is a big task. And this awareness thing, this shift of paradigm in book marketing, is the biggest task for us.”