Penguin Random House’s Open Letter to Our Book Publishing Industry Partners

Introduction

We are in an extraordinary moment for our industry and for reading culture.

During the pandemic, daily uncertainty inspired people to turn to the familiar comfort of books. An increase in readership over this time has reflected the continued growth of our entire industry that was taking shape even before the pandemic’s onset—a powerful and heartening trend to see and experience for all of us.

That is why, when ViacomCBS decided to sell Simon & Schuster to shift its focus to strategic growth priorities such as streaming content, we at Bertelsmann and Penguin Random House knew S&S would have its best home with us—a place that would be committed to carrying forward its storied legacy.

As we contemplate a future in which S&S joins PRH, I want to take this opportunity to reflect on how our values and history will fuel this combination, and explain how it will benefit and protect the lifeblood of our business: readers, booksellers, and current and future authors and agents.

Bertelsmann & PRH’s Long-standing Commitment to Books and Publishing   

• Bertelsmann’s history began in publishing nearly 200 years ago, and its bookish culture is the underpinning of a deep commitment to books and long-form reading.
• We have a very clear vision for how to bring the two companies together, and a track record of successfully integrating organizations while retaining distinct company and imprint cultures through the Penguin and Random House merger, so that the new combined company will be truly greater than the sum of its parts.

Content: Keeping the Creative Core Competitive and Independent

• Central to our mission as a publisher is to attract the ever-growing variety of the world’s greatest storytellers and to help them perfect their work, realize their vision for it, and connect it with the widest audience of readers.
• Our investments on the creative and editorial side of the business underscore that commitment. Since the Penguin and Random House merger, we have increased editorial staff, and we continue to invest in creative talent. The U.S. arm of PRH comprises a community of 100 small- and medium-sized publishing houses, which operate separately and autonomously in competition with one another, all to the benefit of authors and, ultimately, readers.
• In the spirit of decentralized creative decision-making and serving as the best steward for S&S after the closing, we will ensure that we continue to have small, independent creative homes so our creative core remains competitive, empowered, and autonomous.

Content: Separate Bidding Process for PRH and S&S in the Future 

• Going forward, we will be even more focused on the growth of our community of distinct imprints and the individuality of every author, by making sure they find their perfect home.
• To support this, we have already publicly committed to keeping the S&S imprints as an external bidder in auctions after the closing.
• This means that S&S imprints and PRH imprints will continue to bid against one another, just as they do today, even if they are the only ones left in an auction.
• The only caveat I made in the interest of transparency is that at a very high advance level, there will be a CEO review of the bids and oversight mandated by governance rules. I want to repeat that the advance level where there will be a joint review is very high and significantly above the $1 million mark.

Retailers: Ensuring a Wide Range of Sales Channels for Books

• A vibrant and dynamic retail community is central to promoting a healthy reading culture, and when we bring PRH and S&S together, that will not change. In fact, we plan not only to maintain but also to build on our already diverse mix of sales channels with an increasingly sharpened focus on physical bookstores and their financial viability.
• Over the last decade, we have invested more than $100 million in the United States alone into what is widely perceived as the most efficient supply chain for physical books in our industry.
• We have also doubled down on highly customized sales support for our retail partners.
• And we have helped many retailers financially before and during the pandemic by providing flexibility and support with programs such as: extended payment terms (which we just extended again for independent booksellers); donations for stores that faced closing, through our work with the Book Industry Charitable Foundation; and shipping support initiatives, such as our latest announcement of eliminating the minimum-retail-value requirement on expedited two-day shipping for the holiday season and the beginning of the new year.
• Over the next five years, we plan to invest another $100 million into our supply chain to help retailers keep more titles in stock while further reducing inventory levels and minimizing returns, all with an eye toward helping physical stores increase sales and profitability.
• In addition to supply chain, we are also working on new ways of reaching readers and informing them about their best next read.

Our Larger Purpose: Reading as a Force for Good in Our Society

• Our mission above all else is to ignite a universal passion for reading to shape and promote active, engaged, and critical minds for generations to come.
• Specifically, we work to promote literacy, the joy of reading and writing, and freedom of expression across the globe.
• We have donated millions of books through our long-standing partnership with First Book to schools and educational programs in low-income communities. Collaborations with schools, educators, and librarians through the American Library Association and Save the Children are essential to our efforts to increase access to books, especially for children in underserved communities.
• We also work with We Need Diverse Books (WNDB) to increase diversity in children’s books, and recently established the Black Creatives Fund to nurture and publish aspiring writers. Together with WNDB, we expanded our 28-year-old Creative Writing Awards scholarship program, which identifies, empowers, and celebrates the culture-shaping storytelling talent of tomorrow from underrepresented communities.
• We are steadfast supporters of free expression in all forms, and leading partners with PEN America in initiatives such as Book the Vote, a nonpartisan campaign to combat disinformation and ensure every voter’s right to participate in elections by creating and disseminating book and author content, voter registration information, and resources to increase understanding of civic topics.
• Adding S&S to this roster will undoubtedly enhance these efforts as we continue to further our commitment and activities toward these causes.

Growing Together  

Friends, we are grateful for your ongoing partnership. We strongly believe that, with your support, we will successfully bring two legendary creative homes together to benefit authors, retailers, and our society for generations to come.

I want to express my gratitude for all that you do in ensuring a vibrant future for books and reading, and I look forward to building this next chapter together with you.

Yours,

Markus Dohle