Term Paper: John Martin Pulled the Plug

Pages: 7 (2877 words)  ·  Bibliography Sources: 1+  ·  Level: College Senior  ·  Topic: Teaching  ·  Buy This Paper

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[. . .] The advent of DVD may well lead to another sort of media revolution where the book is replaced by a reader of an interactive nature. We will probably in the next decade begin to see a proliferation of these products DVD books which will be especially useful for instructional material.

The Big Six

It's not just small presses that are living on the edge, as the downturn in the economy over the last couple of years has shown just how marginal profits in the publishing world are. The downturn has created cash flow problems for many of the largest companies and these past few years have seen a frenzy of acquisitions and mergers in the media world.

Up until the 1960s the publishing industry had largely been family-owned concerns, which favored each particular families interests, but by and large being more broad-based than today where most successful small presses have carved out a niche for themselves. However starting in the 70s, a trend started where, publishing houses were regularly purchased by and consolidated with other companies... For example, Rinehart & Company and the John C. Winston Company were purchased by Henry Holt & Company to form Holt, Rinehart, & Winston, Inc.... (which was then) purchased by the Columbia Broadcasting System. (Then in 1986), Harcourt, Inc. bought the educational and publishing division of CBS Inc., which included Holt, Rinehart & Winston. Henry Holt & Company was then sold to the Holtzbrinck group of Germany (Holtzbrinck now also owns St. Martin's). Time Warner, the world's largest entertainment and media company, owns Little, Brown & Co., Warner Books, Time Life Books, Book of the Month Club, and many popular magazines." (Columbia University Press, 2000).

Depending upon how one looks at the numbers, some twenty years ago, there were fifty large international media corporations in the world. Today there seems to be a consensus that six exist: The Big Six are AOL-Time Warner, News Corporation, Vivendi Universal, Viacom, Sony, Disney, and Bertelsmann.

Some American houses -- usually keeping their own imprints -- became subsidiaries of larger foreign and multinational corporations. Murdoch's Australia-based News Corporation in addition to HarperCollins, purchased William Morrow, and Avon, several American, Australian, and British magazines, as well as television and radio stations. The German-based firm Bertelsmann acquired Doubleday, which includes Delacorte and Dell, and merged it with Bantam. Bertelsmann by acquiring Random House in '98 became the largest U.S. trade publisher. Robert Maxwell of England bought Macmillan, the New York Daily News, and numerous other publishing enterprises. However, Maxwell's empire crumbled in the 1990s, and Macmillan was sold off to Viacom, which had already purchased Simon & Schuster. Prentice Hall, Scribner, among others. Viacom turned around in 1998 sold much of its publishing operation to the Pearson Group of England who, taking advantage of Maxwell's and other companies' cash problems had already acquired Allyn & Bacon, Appleton & Lange, Macmillan, Penguin Putnam, Prentice Hall, Silver Burdett Ginn, and Simon & Schuster.

This game of musical chairs still continues today. According to a wire story, Bertelsman of which 75% is privately owned by the Mohn family of German. The other 25% is own by a Belgium firm which is planning to go public with its stock. In November of 2002 reported a loss of 384 million dollars in the third quarter, principally due to accounting write-offs, although it showed a profit of 102 million dollars in operational earnings for the quarters with an overall revenue of 4.16 billion dollars. The company in addition to its traditional retail operation has a 40 million customer CD and book club operation. A substantial part of its sales (came from its selling of its stake in AOL Europe and profits from Zomba Music, which includes Brittany Spears on it artist list. (McHugh, AP).

The media giant founded in 1835 with the intent of publishing Bibles, now has such diverse holdings as print on demand services which can turn out a single book in two minutes, Napster rap, and many traditional book titles "is laboring to prove to the outside world that it can wring synergies out of its far-flung jumble of media properties in a way that rivals have not." (Schmid) Both Vivendi and Time Warner AOL have fired top executives in recent months for failing at similar missions.

Thomas Middelhoff, Bertelsmann's chief executive, calls the drive in the industry "a revolution." (Schmid) In four years the company has nearly doubled in size. It now operates in 58 counties with a customer base of 80 million. The company is looking to sell off 25 more pieces. While debt free, thanks to the AOL sale, it trails its five international rivals in earnings. Though owning the U.S. based Book of the Month Club and Random House, the leading U.S. consumer and literary publisher, books account for only 10% of its sales.

Along with Spears and Napster, Bertleman also has sales rights to the Nobel prize winner William Faulkner and Elvis Presley. It will use its media power and e-commerce sites to hype new books coming out of Random House. This cross media pollination has worked well for AOL Time Warner, which used its media clout to promote the first Harry Potter film. Interestingly enough, the public as of yet remains unaware of just how much their reading habits are being influenced by these media monopolies. In a recent poll "most Germans said they still saw Bertelsmann primarily as a book publisher." (Schmid)

Ultimately, there is a danger that the consolidation of news and information will fall into the hands of fewer and fewer people. While the Internet was designed to give all people a voice in the sharing of information, the trends in the industry suggest that we are in grave danger of allowing a few international profit-motivated companies determine what we read into the future.

Works Cited

ABA. (November 18, 2002)"Bureau of the Census, Current Retail Trade Branch." Online at American Booksellers. Available: http://news.bookweb.org/news/955.html.(11/25/02)

Columbia University Press (2000) "Mergers and Acquisition." The Columbia Electronic Encyclopedia. Online at elibrary.com. Available: (http://ask.elibrary.com/(11/25/02)

Farrington, Maire (June 1999) Snuggle up with A Good 'Indie' Bookstore. Online at Noe Valley Voice. Available: (http://www.noevalleyvoice.com/1999/June/indiebooks.html (11/25/02)

Hansen & Ydstie (05-31-2002) Commentary: Loss of Black Sparrow Press, a small publishing company that gave great love and attention to producing fine writers and books., All Things Considered (NPR), Available: (http://ask.elibrary.com (11/25/02)

Italie, Hillel (05-04-2002). AP Online, "More Books Out, but Sales Are Down" Online at elibrary.com. Available through subscription: (http://ask.elibrary.com/(11/25/02)

Levin, Alex (November 2002) Direct Interview with publisher, Alex Levin. Hedgehoghill Press.

McHugh, David (Nov. 07, 2002) "Media Giant Bertelsman Reports Loss."

Associated Press. Online at The State. Available: (http://www.thestate.com/mld/state/business/4465667.htm (11/25/02)

Publishing Trends (March 2002)"The Proprietary Pinch Just How Big Is The 'Off-The-Books' Book Business" Online at PUBLISHING TRENDS. Available: (http://www.publishingtrends.com/copy/0212/0212tablet.html (11/25/02)

Publishing Trends (December 2002)"Tablet PC: The Ebook Savior?"

Online at PUBLISHING TRENDS. Available: http://www.publishingtrends.com/copy/0212/0212tablet.html

Schmid, John (07-29-2002) "Can Bertelsmann succeed where others have failed? German media giant stalks the elusive synergy." Online at elibrary.com. Available: (http://ask.elibrary.com (11/25/02)

The life expectancy of a small press is short, but how short it's hard to say. There are no official reliable statistics available. Off -- the cuff remarks vary from one to two to four years. According to Alex Levin, editor/publisher of the inactive Hedgehoghill Press, "We lasted over two years and actually brought two books to print including The Act of Pitching which has sold over 7000 copies, a number that most of our peers envy. However, being a small venture, and often strapped for cash, most small presses live on the margin where one strategic mistake can wreck havoc. For us it was 9-11. Tying up $7,000 in a coming out party for AOP at a conference following 9-11, we were devastated as people's hesitancy to travel turned that usual bustling show to one that was attended only by vendors." [END OF PREVIEW]

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