• Friday, March 29, 2024

Frankfurt Book Fair 2021: CEOs Discuss Consolidation and Digitization

Frankfurt Book Fair 2021: CEOs Discuss Consolidation and Digitization
on Oct 21, 2021
Frankfurt Book Fair 2021: CEOs Discuss Consolidation and Digitization

The annual Global 50 CEO Talk at the Frankfurt Book Fair is a highlight of the week’s professional programming. This year offered a hybrid virtual and in-person talk, with investment banker Robin Warner of Oaklin DeSilva+Philips on video from New York City and Klaus Driever of Munich based Allianz in-person in the book fair’s broadcast studio. As always, the event, was hosted and moderated by Ruediger Wischenbart, the Austrian publishing consultant, who facilitated questions from trade journalists including Sanguo Cheng, founder and president of Bookdao (China); Lena Scherer, deputy editor-in-chief, buchreport (Germany); Fabrice Piault, editor-in-chief, Livres Hebdo (France); Andrew Albanese, senior writer, Publishers Weekly (U.S.); and Carlo Carrenho, a publishing consultant from Sweden.

The theme of the talk was “consolidation, consumers, and community,” and touched on a range of subjects from Hachette’s $240 million acquisition of Workman in the U.S. to the battle between Thalia and Amazon for book buyers in Germany, to the ongoing digitization of the industry.

Addressing the Hachette acquisition of Workman, Warner said the sale was predicated on three things: a strong valuation, the protection of staff jobs for a period of time, and complementary corporate cultures. This “confluence” was a key factor in helping the deal progress. Another catalyst for industry consolidation was the growing appetite for nonbook and book-adjacent products, Warner noted, as well as departments with strong ties to Hollywood, which she said was part of the reason for HarperCollins's acquisition of Houghton Mifflin Harcourt Books & Media.

Ultimately, the consolidation trend in the U.S., which includes Penguin Random House’s pending $2.2 billion acquisition of Simon & Schuster, which has yet to be approved by the government, “is all about market share, Warner said. She cited both Chronicle and Abrams as the next potential takeover targets.

France, too, is awaiting the completion of a blockbuster merger, noted Livre Hebdo’s Piault, with the planned acquisition of Hachette Livres, by Vivendi, the parent company of Editis. This would merge the two largest publishers in France. Piault wondered aloud whether this would potentially stifle innovation, but it was quickly pointed out that part of the reason for the acquisition was Hachette’s moves into new areas of publishing and its own recent acquisitions and developments in areas like board and card games as well as apps.

In Germany, the existence of a fixed-book price law and a favorable business climate means that the publishing market can continue to support small to medium-sized publishers. Consolidation in Germany has taken place, instead, among retailers. Today, said Allianz’s Driever, “there are two players, Thalia and Amazon.” The rivals mirror how the marketplace has become a hybrid, with physical sales going primarily through Thalia and online orders going primarily through Amazon. Driever balked at the notion, posed by buchreport’s Sherer, that this consolidation of retailing was potentially detrimental to publishers. “It is positive, as it brings more visibility to books. I go into bookstores today and see how creative the displays are,” he said.

Carrenho challenged Driever to reflect on the last 10 year’s of digital developments in the industry, and Driever replied that “digitization is not done,” and publishing could look to what has happened in insurance and finance, for example, to see how the direct-to-consumer model is evolving. “The customer needs both online and off-line options.”

Ultimately, though, to fully take advantage of the opportunities offered by the rapid adoption of digital media and tools, and changing consumer patterns, “the industry needs a new approach” and for that to happen, “it will need data,” Driever said.

Source - publishersweekly

Post a comment

Your email address will not be published. Required fields are marked *

0 comments

    Sorry! No comment found for this post.