Two years after Perseus Books Group first entered the business with its purchase of CDS, the company has completely altered the landscape of the independent distribution business. The CDS purchase, followed by Perseus's 2006 acquisition of Consortium and, most recently, the addition of 128 former PGW clients, gives Perseus a roster of nearly 280 publishers, making Perseus's distribution arm the largest independent distributor of publishers.
But Perseus is not the only company that has made significant moves in the distribution business over the past two years. Ingram Publisher Services has added new staff and new clients, bringing the company's roster to more than 60 publishers. Independent Publishers Group acquired Trafalgar Square last year, and NBN added 16 PGW clients after it failed in its bid to acquire PGW out of bankruptcy. Although Perseus is really a hybrid publisher-distributor, all its competitors in the distribution field will be watching closely to see if the company can successfully integrate PGW into its existing operations.
David Steinberger, president of Perseus, is certain he can do it. Although Steinberger acknowledged that there are challenges ahead, he said Perseus is committed "to bringing the power of scale to support the needs of independent publishers." The key to success, Steinberger said, will be to supply the services that independent publishers who were part of Consortium and PGW have come to expect. To meet that goal, Steinberger plans to keep independent marketing service organizations for Consortium, PGW and Perseus. In the recently announced restructuring, the PGW and Perseus sales forces were combined, although PGW will maintain an office in California. Steinberger doesn't apologize for consolidating the back-office operations of Consortium and PGW in Tennessee, arguing that it's the only way to afford making investments in such things as information technology that will benefit all publishers. The next big target date for Steinberger is August 1, when all books are scheduled to begin shipping from Perseus's Jackson, Tenn., warehouse.
Despite Steinberger's confidence, there are plenty of people in the distribution business who think it will be impossible for Perseus to successfully integrate the different distribution units, and are waiting in the wings to pick up unhappy Perseus clients.
Some distributors have already landed former PGW publishers. In addition to the 16 companies signed by NBN, its affiliated company Biblio added one publisher. NBN paid all PGW clients 85% of the amount owed them because of the PGW bankruptcy. Ingram added former PGW clients Berrett-Koehler and PoliPoint Press. IPG landed Bull Publishing, Big Kid Science and Organe Avenue, and now has 60 publishers using its general distribution services and another 300 for which IPG handles special sales. Midpoint Trade picked up North Bay Books and Big Tent Entertainment, while Diamond Book Distributors added DH Press, M Press and Go Media. SCB Distributors signed Koa Books. As dramatically as Perseus has already changed distribution, more shifts may be ahead if its integration efforts result in disgruntled publishers.
