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Bertelsmann Group

Overview

This profile considers the Bertelsmann media group.


It covers -

  • introduction
  • Doubleday, Random House, Knopf and Pantheon
  • Springer Verlag
  • studies
  • holdings

Introduction

The Gutersloh (Germany) based Bertelsmann group originated in the 19th century as a Bible publisher, traditionally one of the more profitable specialisations.

It is now the second- or third-largest global media conglomerate in terms of revenue. It has over 76,000 employees. Its holdings encompasses book and magazine publishing, film and music recording, online services and other interests. Sales in 1998 were US$16.4 billion (73% outside Germany). In 2003 that was €16.8 billion. Bertelsmann operates in the EU, North and South America, Africa and Asia.

The breakup of revenue for 2003 by region was US 25.1%, Germany 30.7%, Europe (excluding Germany) 38.6%, other countries (inc Australia) 5.6%. By business group 25.7% of revenue was attributed to RTL, 10.2% to Random House, 14.3% to Gruner + Jahr, 15.6% to BMG, 13.2% to DirectGroup and 21.0% to Arvato.

It holds 75% of magazine publisher Gruner & Jahr. Bertelsmann has a controlling stake in RTL, the Luxembourg-based broadcaster (22 television stations and 18 radio stations across Europe) formed through the merger of CLT-UFA with Pearson TV. In December 2001 Bertelsmann acquired Pearson's 22% in RTL.

Acquisition of most of RTL involved Franco-Belgian financier Groupe Bruxelles Lambert (controlled by the Frère-Bourgeois group and Desmarais' Power Corp) gaining 25% of Bertelsmann, a precursor to listing of the group on the major exchanges and further diluting ownership by the Mohn family and the Bertelsmann Foundation.

The group publishes over 400 general magazines and specialist journals, has substantial newspaper interests and owns the BMG recording giant. It has proposed to merge BMG with Sony's music arm.

In 2003 London-based private equity funds Candover and Cinven (owners of Kluwer Academic Publishers, acquired from Wolters Kluwer in 2002) agreed to buy BertelsmannSpringer from Bertelsmann for €1.05 billion.

In May 2006 Bertelsmann struck a €4.5bn deal with financier Albert Frere's investment house Groupe Bruxelles Lambert (GBL) to buy back GBL's 25.1% shareholding in the group, thereby avoid a stock market flotation.

A basic chronology of the group's development is here.

Doubleday, Random House, Knopf and Pantheon

The Random 'family' now includes Knopf, Random House, Doubleday, Bantam, Dell, Ballantine, Dial Press, Schocken, Anchor, Clarkson Potter, Three Rivers, Delacorte, Chatto & Windus, Bodley Head, Jonathan Cape, Virago, Crown, Broadway and Ebury Press. Its history is one of aggregation, with large publishers absorbing smaller houses and in turn being absorbed by larger publishers or traded between different media groups.

Random House was founded in 1927 by Bennett Cerf (1898-1971) and Donald Klopfer, who had acquired The Modern Library imprint from the bankrupt Boni & Liveright in 1925. Consistent with a reputation for wisecracks, Cerf disingenuously commented that in founding Random House "we just said we were going to publish a few books on the side at random".

Random House acquired Alfred A Knopf Inc in 1960, Pantheon Books in 1961 and Chatto & Windus in 1987. It absorbed paperback publisher Fawcett Books in 1982, Times Books (from the NY Times Company) in 1984, Fodor's Travel Guides in 1986, Crown Publishing Group (inc Crown, Clarkson Potter, Harmony Books and Outlet Book Company) in 1988, Century Hutchinson in 1989 and the trade division of Reed Books in 1997.

Doubleday was founded in 1897 by Frank Nelson Doubleday (1862-1934) as Doubleday & McClure Company, reflecting a short-lived partnership with magazine publisher Samuel McClure. It became Doubleday, Page & Company in 1900 when Walter Hines Page replaced McClure and Doubleday, Doran (at that time the largest book publisher in the English-speaking world) in 1927 through a merger with George H Doran Company. It became Doubleday & Company in 1946. Anchor Books was founded in 1953 by great editor Jason Epstein. Doubleday was acquired by Bertelsmann in 1986.

Knopf was founded in 1915 by Alfred Knopf (1892-1984), arguably the most distinguished US book publisher of last century. He founded the Vintage Books imprint in 1954. Pantheon Books was founded in New York by German emigres Helen and Kurt Wolff (1887-1963), of the Kurt Wolff Verlag, during 1942. They later joined Harcourt Brace Jovanovich, published under the Helen & Kurt Wolff Books imprint. Schocken Books, founded in Germany in 1931 by retailer and publisher Salman Schocken (who acquired Ha'aretz in 1935) was relaunched in the US in 1945 and absorbed by Random in 1987

Chatto & Windus was founded by Andrew Chatto (1841-1913) and merged with Jonathan Cape in 1969. Cape traces its origins to Jonathan Page & Company, founded in 1919 and renamed in 1921 when it took over Fifield's back list. It absorbed the Bodley Head and Carmen Callil's Virago Press. Bodley had been founded in 1887 by Elkin Matthew and John Lane (1854-1925), gaining notoriety as publisher of The Yellow Book before being rescued in 1936 by Cape, Allen & Unwin and J M Dent.

Ballantine was founded in 1952 and acquired by Random in 1973.
Bantam Books was established in 1945. Crown was founded in 1933.

The US Book-of-the-Month Club was founded in 1926 by former advertising executive Harry Scherman. In 2001 Bertelsmann merged its book clubs with those of Time Warner to form Bookspan, a jointly owned company that includes the Book-of-the-Month Club and the Literary Guild.

Springer Verlag and BertelsmannSpringer

BertelsmannSpringer, the academic publisher sold to Candover and Cinven in 2003, published over 700 journals and trade magazines and some 4,000 new book titles per year at that time. It comprised 70 publishing houses, with over 5,000 employees in 16 countries. It resulted from acquisition of Springer-Verlag by Bertelsmann in 1999. Springer - unrelated to the Axel Springer conglomerate profiled elsewhere on this site - dates from 1842 and was examined in Heinz Sarkowski's Springer-Verlag: History of a Scientific Publishing House (Berlin: Springer 1997). The group's history is discussed in a more detailed profile here.

Studies

As yet there has been no in-depth English-language academic study of the group. Jean-Louis Barsoux's 2000 INSEAD Bertelsmann: Corporate Structures and the Internet Age (PDF) is suggestive.

Following criticism that former official historian Dirk Bavendamm was an apologist for Hitler, Bertelsmann established an Independent Historical Commission (UHK) - headed by Saul Friedländer and Norbert Frei - to explore its behaviour during 1933-45.

Bavendamm's Bertelsmann-Mohn-Seippel Drei Familien - ein Unternehmen (Munich: Bertelsmann 1986) and 1835-1985: 150 Jahre Bertelsmann - Die Geschichte des Verlagsunternehmens in Texten, Bildern und Dokumenten (Munich: Bertelsmann 1985) aren't available in an English translation and aren't highlighted on the corporate site.

In October 2002 the 1,434 page report of the Commission was released (Bertelsmann is selling it as a two volume set), commenting that in the first part of last century Bertelsmann's

anti-modern milieu was mirrored in a program of theological and edifying literature. In the debate over what constituted 'true' Christianity, the contributing authors sometimes took a critical position vis-à-vis the Nazi world-view, but sometimes piously spoke up for its basic ideas. Initiated in 1928, the program of popular literature was similarly stamped by nationalistic and anti-modern sentiments. Its marketing displayed more and more success immediately following the Nazi rise to power—this due to unconventional advertising and business strategies. The success was enjoyed above all by the war books, which both profited from and promoted the militarizing of German society. ...

With a total circulation of nineteen million volumes, Bertelsmann became the largest publisher for the German army during the Second World War. Many contracts were arranged for printing in occupied regions—while some Dutch "civil workers" were employed in Gütersloh, no use was made there of slave labor. There were, however, Jewish slave laborers in printing presses Bertelsmann used for several jobs in Riga and, possibly, Vilna. In any case, in 1943 the company’s effort to continue its lucrative production despite the advent of 'total war' cast it under the Nazi authorities' suspicion of illegally procuring and hoarding paper stockpiles. Following the arrest of high-placed company-employees, the legal proceedings ended with a fine. Still, they contributed in a basic manner to the closing of the C. Bertelsmann publishers in 1944 - Mohn's smaller publishing house, the Rufer Verlag, had already ceased publishing a year earlier. In 1945, the legend that C. Bertelsmann was closed down because of resistance to the Nazis smoothed the way for the occupation authorities promptly granting the firm a new licence to publish. In light of the IHC’s findings, this legend can no longer be sustained. ...

Bertelsmann in the Third Reich presents the extraordinary success story in the 1930s and 1940s of what had started as a modest, provincial publishing enterprise a century earlier. The book discloses the room for maneuver available to a firm and its director under Nazi rule—it describes an interplay between religious traditions and ideology, an all too eager readiness to conform and a successful business dynamic. In its business and marketing strategies and "mass market" orientation, the continuity of the Bertelsmann house seems remarkable: from the original church-linked reading-circle to entertainment aimed at the German army and onward to the popular book clubs of the 1950s.

For the more recent regulatory environment see Peter Humphreys' Media and Media Policy in Germany: Press & Broadcasting since 1945 (Oxford: Berg 1994) and Pluralism, Politics & the Marketplace: The Regulation of German Broadcasting (London: Routledge 1991) by Vincent Porter & Suzanne Hasselbach.

For context regarding the Bertelsmann publishing houses in the US and UK (and their international offshoots) see John Tebbel's four volume A History of Book Publishing In America (New York: Oxford Uni Press 1972-81), Thomas Whiteside's The Blockbuster Complex: Conglomerates, Show Business & Book Publishing (Middletown: Wesleyan Uni Press 1981), John Feather's A History of British Publishing (London: Croom Helm 1988), The Structure of International Publishing in the 1990s (New Brunswick: Transaction 1992) edited by Fred Kobrak & Beth Luey and Andre Schiffrin's incisive The Business Of Books: How The International Conglomerates Took Over Publishing & Changed The Way We Read (New York: Verso 2000).

Dell is examined in William Lyles' Putting Dell on the map: A History of the Dell paperbacks (Westport: Greenwood Press 1983). There is a brief history in David Aronovitz' Ballantine Books: The First Decade - A Bibliographical History & Guide of the Publisher's Early Years (Rochester: Bailiwick Books 1987) and Clarence Petersen's The Bantam Story: Thirty Years of Paperback Publishing (New York: Bantam 1975).

For Random House see Bennett Cerf's chirpy At Random: The Reminiscences of Bennett Cerf (Random: New York 1977) and Tom Dardis' Firebrand: The Life of Horace Liveright (New York: Random 1995). The Patron: A Life of Salman Schocken, 1877–1959 (New York: Holt 2004) by Anthony David considers the founder of two major imprints, the Schocken department store and Schocken Library in Israel. Michael Ermarth's Kurt Wolff : A Portrait in Essays & Letters (Chicago: Uni of Chicago Press 1991) covers his relations with Hesse, Mann, Grass, Kafka, Kraus, Rilke and Pasternak among others through a selection of Wolff's writings. Jason Epstein's Book Business: Publishing Past Present & Future (New York: Norton 2000) is of value.

Reinhard Mohn's Humanity Wins (New York: Crown 2000), originally a report to the Club of Rome, is vacuous - no problem is insoluble if men of good will come together - and offers few insights into Bertelsmann's growth.

Holdings

The following page provides an indication of Bertelsmann holdings.