Wednesday, May 21, 2008

Random House Is Forward-Thinking

The publishing world was agog yesterday at the news that Markus Dohle has been crowned the new Random House king (and chief executive). The CEO of Bertelsmann, Random House's parent company, issued a statement.

According to Yahoo:
Dohle, head of a printing unit at Bertelsmann's Arvato division, replaces Peter W. Olson, who has had the job since 1998, but was hampered by losses at the unit amid a wider slowdown in sales of books . . .

"Random House plays an important role in Bertelsmann's growth strategy," Bertelsmann CEO Hartmut Ostrowski said in a statement. "Markus Dohle will continue to advance the development of (the) world's market-leading trade book publishing group through new ideas and by opening up new lines of business" . . .

"With his proven talent for innovation he [Dohle] will enhance Random House's long-term value and keep it strong even in a mature book marketplace," Ostrowski said.

The company said Olson, 58, was leaving at his own wish. He had been grappling with declining profits at the publishing house.
The thing that stirred the most comment was the fact that Dohle comes to his new job from the printing side of the business, not the publishing side.

Publishers Weekly had this to say:

The choice of Dohle to lead Random, rather than a publishing veteran, is meant to inject a new entrepreneurial spirit at the company. Ostrowski praised Dohle for his work at Bertelsmann’s Arvato printing group and was confident he could turn another mature business into a growth business . . . Dohle "will bring his innovative energy to tapping new lines of business for the company, such as the digital realm, and to lengthening its value chain.” Asked what lengthening the value chain means, Ostrowski said that publishing needs to take advantage of new marketing channels and get books to customers in new ways. One way to do that, Ostrowski said, is to create brands around popular books, much the way Random’s children’s group has done with Eragon.

According to Ostrowski, he "is not expecting a quick change in direction at Random, saying that Dohle 'should take his time to come up with a program,' adding that the new chairman has no mandate to downsize the company. The financial target for RH, as it is for all Bertelsmann companies, is an average of 4% annual internal growth . . ."

"Olson will move to Cambridge where he is close to landing a senior faculty position at a nearby university.”

I'm reminded of a post I did way back in November, 2005 here. At that time, I said this:
"Unwilling to let a Google, Yahoo, or Microsoft dictate terms in cyberspace, Random House, Inc., the world's largest trade publisher, is taking the industry lead. In early November it outlined ways it would begin to offer its books directly to consumers on a page-per-view basis. Random House will get at least 4 cents a page and split that roughly in half with authors for fiction and narrative non-fiction titles."

Richard Sarnoff, president of Random House's corporate development unit, was remarkably frank in his interview with BusinessWeek. "'We acknowledge that a generation is growing up that may not have the same visceral connection with the book format,'" he said. "'They have read as much on screens as they have on paper. We need vehicles to translate our books in different ways.'"
Finally, Publishers Marketplace had a link to an interview with Ostrowski. It wasn't hard to read between the lines:

Markus Dohle is the right executive at the right time in the right company. He is one of the outstanding young [39 to Olson's 58] entrepreneurs who will shape the future of Bertelsmann. Frankly, he’s been helping shape it for some time. Ever since he was appointed to head Mohn Media Group six years ago, he has demonstrated repeatedly his innovative power to bring businesses in mature markets to new heights. He is very capable of mastering turnarounds large and small and motivating and working collaboratively with the management and staff. Markus gets his colleagues excited about their shared goals and stimulated by fresh ideas for their company. I’m sure he’ll be inspiring the Random House staff with his entrepreneurial spirit before too long. Because as successful as Random House already is, the book business urgently needs new impetus for the future, to be able to grow again in view of challenges such as technological advances . . .

[H]e contributes his outstanding entrepreneurial skills, his love of innovation, and his purposeful, problem-solving approach to entrepreneurial challenges. These are precisely the traits needed at this time to make Random House – and Bertelsmann – ready for the publishing business of the near- and more distant future. Or put differently, to turn stability into growth.

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