How partnerships are changing publishing

You've heard of Random House and Penguin, right? If not, look at the spines of a few of the books you have on your bookshelf. Chances a few of them are from one of those two. Together they make up 1/3 of what's known as the Big 6, or the Biggest Six Publishing Houses in the world.

Well, Random House and Penguin are merging to create Penguin Random House. (I personally would have preferred if they mixed it up and called the new company "Random Penguin House," but I guess you can't always get what you want...)

The biggest thing this will affect is the future of eBook retailing.

Over the past few years, the big publishing houses have been in a huge legal and public battle with Amazon over pricing for eBooks. There's a lot to it, but it largely centers around something called the "agency model."

The publishing houses want to dictate how much eBooks cost on online distribution stores (like Amazon), while Amazon wants to dictate how much those same eBooks cost. The Big 6 want them to cost a little more to make the model work better for their profit margin, and Amazon wants them to cost a little less for the same reason. Right now, Amazon is winning and can set the price.

But with this merger, Pengin Random House has two options that could change the game. First, they are big enough that they could demand that Amazon sell their catalog at a higher price and Amazon would need to agree. Second, if Amazon refuses, Penguin Random House could conceivably pull all of their titles from Amazon and build their own online store, which would be a powerful competitor to Amazon.

Either move could be huge and change the way we buy eBooks and how much we pay. It's fascinating to see two of the big publishing houses sound like underdogs in this kind of industry reshuffling.

What do you think?

Image courtesy of kipbot via flickr