Mega-merger for publishing in southern Africa

September has been an eventful month for the big guns of the South African publishing industry. The main news was the announcement of the merger between Random House SA and Struik Publishing, the case for which had been sitting with the Competition Commission since April.
The new company – called Random House Struik – is 50.1% owned by New Holland Publishing SA, with the balance held by the Random House Group in London. New Holland Publishing SA is fully owned by South African media group Avusa. Prior to the merger, Avusa had held 24% in Random House SA.

The new company aims to publish more than 1000 titles a year – that’s about 83 titles a month to be pumped into the market. About half of the books produced will be local titles, mainly nonfiction from the Struik, Oshun and Zebra Press imprints. Random House SA’s imprint Umuzi will continue to publish fiction and nonfiction, and though the Random House Group’s international network, local writers would be able to enjoy wider exposure.

The Random House Group will supply the balance of the output by providing Random House Struik with titles by internationally renowned authors such as Toni Morrison, Philip Roth, Salman Rushdie, Dan Brown and Bill Bryson.

In a podcast with Sunday Times books editor Tymon Smith, the newly merged company’s managing director, Stephen Johnson, highlighted that the various local imprints would be retained and that the distinct sales teams for the imprints would also be kept in place. If anything, he felt that autonomy of the imprints should be promoted more than ever before. There was also no aim to change the editorial policies of the units.

In the interview, Johnson also said that the merger would allow the combined entities to look deeper into the issue of digital publishing, especially publishing via mobile phones. He went further to say that the company would be looking into distribution overall, examining innovative ways in which to reach audiences. While in no way wishing to downplay the role of retailers – who are, as he pointed out, the ones who provide a publisher’s bread and butter – he felt that the traditional retail booksellers’ model in South Africa had “a sense of the moribund”.

I contacted Johnson to ask if he could elaborate on what he had in mind and whether he was looking towards a greater shift to online selling rather than through physical retailers. He replied that while there was no clear strategy in place at the moment, digital platforms would certainly be examined and that the company would soon be aggressively looking at new possibilities of distribution – in a nutshell, how the company would be able to make its books more widely available to readers.

This is exciting stuff, and it will be interesting to see what develops. However, another industry player says that he is sceptical of such ideas, since within the South African market it is unlikely that – in the short term, at least – publishers will be able to wean hoards of book readers away from the traditional bricks-and-mortar bookstore.

Another interesting piece of news in September was that The Mandela Rhodes Foundation had purchased a 25.1% stake in Oxford University Press SA, thus cementing a black economic empowerment deal with one of the top publishing houses in the country. The foundation says that it will use its dividends to fund scholarships at Oxford University and hopes to support 100 scholars a year by 2012.

It makes you wonder whether there will be soon be any more empowerment deals for the industry.

(First published in The Bookseller, September 2008)