Oct 19, 20234 min read

The 'big 5' publishing houses & the Penguin Random House, Simon & Schuster drama

Where do modern books come from? You can trace many to the "Big 5" publishing houses. These powerful conglomerates fill the shelves of bookstores nationwide with future bestsellers in every genre.

Last year, the "Big 5" almost became the "Big 4," prompting support and criticism from all corners of the literary world. But what actually happened when Penguin Random House tried to buy out one of their major rivals? Let's break it down.

Publishing Houses

Publishing houses exist in various shapes and sizes throughout the United States (and the world), but five stand out as the largest and most significant. We'll get to them in a second.

First, let's clarify some of the terminology.

What Is A Publishing House?

A publishing house is a company that purchases the rights to a manuscript and publishes it into a book.

What Does A Publishing House Do?

A publishing house turns an author's manuscript into a published book available to consumers.

They are usually responsible for all the 'extra' things a manuscript needs to become market-ready: book covers, titles, professional editors, and other marketing, to name a few.

When the book is sold, the earnings are shared between the publishing house, the author, and the agent that connected the two.

Publishing House vs. Imprint

An imprint is a smaller publishing group or network owned by a publishing house. A publishing house could own hundreds of imprints, each with its own specialties and reputation.

Who Are The Big 5 Publishing Houses?

There are five major publishing houses, each with its own well-known imprints that produce books across genres. These are not the only large publishing houses in the world, but when we say the "Big 5," this is who we are talking about.

Penguin Random House
Hachette Book Group
Harper Collins
Macmillan Publishers
Simon & Schuster

2013 Penguin Random House Merger

Penguin and Random House were previously separate publishing houses, both members of the "Big 6." After they merged in 2013, the Big 6 became the Big 5, and Penguin Random House was much larger than its counterparts.

Are All Books Published By The Big 5?

Not all books are published by these five publishing houses. In fact, not even all well-known bestsellers come from them.

While many aspiring authors initially seek a book deal with one of the Big 5, plenty ultimately work with smaller publishers or self-publish their books.

Some do this because they prefer to keep all control, rights, and earnings from their work, while others find it easier and faster to utilize one of the many self-publishing tools and market the book themselves.

Check out our article on self-publishing for more info and a list of well-known self-published books.

Why Did Penguin Random House Try To Buy Simon & Schuster In 2020?

In 2020, Penguin Random House made a deal to purchase Simon & Schuster because they hoped it would help them increase their market share.

While PRH was already the largest of the Big 5, the percentage of sales in the industry coming from PRH had declined for years. They hoped acquiring Simon & Schuster could reverse this trend.

Why Did The Penguin Random House And Simon & Schuster Deal Fall Through?

After Penguin Random House announced its deal to purchase Simon & Schuster, the Justice Department sued to stop the merger from happening.

The Justice Department argued that the merger would harm authors and consumers by significantly reducing competition in the US book market.

In other words, the government believed the merger would hurt the country because PRH would become too big for other companies to compete with them. They would have too much power and control over the industry.

A federal judge agreed with the Justice Department, blocking the merger in October 2022. Initially, PRH said it would appeal the decision, but the deal never happened.

How Did Authors Feel About The Merger?

This was a pretty big deal in the literary world. Voices emerged from all sides, and people waited with bated breath to see if the companies could go through with the merger.

Some authors and industry leaders, like Stephen King, warned of the merger's threat to aspiring authors and readers by prioritizing profits over all else.

Other industry professionals, like Brian O'Leary of the Book Industry Study Group, were less concerned, pointing to the growing plethora of books published outside the Big 5. After all, not every book on the shelves comes from either PRH or S & S.

What Happens Next?

Now that the initial merger has been blocked, we can consider implications for the industry.

The large publishing houses have been consolidating since the 1990s, sparking concern about the tightening of industry control and its impact on authors and their readers.

The government's denial of the Penguin Random House and Simon & Schuster deal could mean they will prohibit all future mergers between the Big 5 publishing houses. Only time will tell if this makes the others less likely to propose or finalize such deals.

For Simon & Schuster, the ending of this potential merger put them back on the market. As of August 2023, the investment firm KKR has a pending deal to purchase Simon & Schuster from Paramount.

Suggestions for Further Reading

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