“The global demand for books – print and digital – is no longer greater than before,” Brian Murray, president and chief executive officer of Harper Collins Publishers, said in a statement. “We expect rapid growth of joint companies at a time of rapid growth in book consumption.”
Educational publishers have also not done so, as the closure of schools across the United States has led to a significant revenue flow cut. Revenue for educational publishers to the Association of American Publishers fell 10.9 percent in 2020.
Houghton Mifflin, the largest learning technology company in the kindergarten-through 12th grade market, saw its sales fall last year, as its education division suffered a steep decline, though sales were strong in its consumer publishing business.
“For the past year, and still to this day, the epidemic has actually disrupted K-12 education,” Houghton Mifflin President and Chief Executive Officer Jack Lynch said in an interview. “It was a forced mechanism for rapid adoption of technology.”
The company hired its trade publishing division for a final decline in sales, as it aims to focus on its core business of educational publishing and technology and pay off its debt. The deal is expected to close in the second quarter of 2021.
Professor Eric Gordon of Michigan Ross School of Business said the deal could strengthen both companies. By selling to its trade publishers, Houghton Mifflin can consolidate its position in education, while Harper Collins will acquire 7,000 titles, including Tolkien’s “The Lord of the Rings” trilogy, which Amazon was adopting as a TV series is.
But Mr Gordon cautioned that the increasing consolidation in publishing could have an unexpected cultural ripple effect, unlike mergers and acquisitions in other industries.
“It’s not that I’ll pay more than a dollar for a book, it limits control over the field of ideas,” he said. “If the diversity of ideas – if the space for those who want to challenge mainstream ideas – narrow, then I have to spend a dollar more than something, we’re talking about something completely different Huh.”