Earlier this year, the Department of Justice blocked Penguin Random House, owned by the German media giant Bertelsmann, from acquiring Simon & Schuster. The big five publishers—HarperCollins, Penguin Random House, Hachette, Macmillan, and Simon & Schuster—already control about 80 percent of the book market. The literary class was relieved.
Less than a year later, the private-equity firm Kohlberg Kravis Roberts announced that it would buy Simon & Schuster. Because the firm doesn’t already own a competing publisher, the deal is unlikely to trigger another antitrust probe. But KKR, infamous as Wall Street’s “barbarians at the gate” since the 1980s, may leave Simon & Schuster employees and authors yearning for a third choice beyond a multinational conglomerate or a powerful financial firm.
Book publishers make money from sales of an original product, a portion of which goes to authors in the form of royalties—perhaps the true pot of gold for private equity in publishing. Although there’s nothing wrong with monetizing intellectual property, Simon & Schuster authors should expect intense pressure to give the publisher a bigger slice of that pie. A more speculative possibility involves the use of authors’ original work to train AI models that then generate new monetizable content. That scenario could provide KKR’s Simon & Schuster with a way to squeeze out money through co-ownership of copyrights, a prospect that alarms authors. “If you train an AI model on Danielle Steel’s nearly 200 books and write a new one, somebody has to own the rights,” Sinykin says.
This September article is a gruesome story about the gutting of publishing and predatory capitalism, in general. Read the whole thing for an education on the world we live in.
This will be the last post of my literary related backlog for now. I am trying to reduce posts I started and never finished because of THE TYRANNY OF STUFF.