TRIAL PUT PUBLISHING’S INNER WORKINGS ON DISPLAY

Executives, agents and authors spoke frankly on how books are made

Lawyers for the Department of Justice and for Penguin Random House delivered their closing argument Friday in a case that will determine whether the publisher, the country’s largest, can buy one of its rivals, Simon & Schuster.

The case, which will be decided in autumn by Judge Florence Pan, focused on the effects of consolidation on publishing, an industry that has already been dramatically reshaped by mergers in recent years.

The government sued to stop the deal on antitrust grounds, saying it would diminish competition among the biggest houses and push down advances for some authors. Bertelsmann, the parent company of Penguin Random House, argued the deal would bring its supply chain and distribution muscle to a longer list of authors, to their benefit, and that the industry is large and varied, made up of many important players beyond the biggest firms. Pan expressed skepticism of several of Penguin Random

House’s main arguments.

Beyond the legal debate, the three-week trial offered an unusual glimpse into the world of publishing, offering observers a parade of high-profile publishing executives, agents and authors speaking frankly and on the record about how books are made.

Here is some of what we learned.

What makes a bestseller?

No one — not even the top executives in publishing — has figured out the mix of factors that can guarantee a bestseller.

Markus Dohle, the head of Penguin Random House, said everything in the book business is “random.” The judge described the industry as one of “risk-taking” and said every book was “a gamble.” The publisher of a major imprint called the business “fickle.”

The difficulty of predicting success was a consistent theme during the trial. It sets the publishing world apart from many industries, which can use the past sales of similar products — like a type of washing machine or cereal — to predict future sales. But every book is unique, so while educated guesses can be made, especially concerning established authors, nobody really knows what the future holds for any given

Dear Liz: I am pondering the best time to begin drawing Social Security. I have no debt, am 61, retired and fortunate enough to have retirement funds that are projected to last until I’m 95 without Social Security. That said, when I begin drawing Social Security, I understand I am likely to get taxed at the full 85 percent rate based upon the monthly income I receive. Does it make sense to hold off on applying until 67 or later knowing that I’ll be taxed more on the higher income, or should I draw sooner, understanding the tax liability would be less? Or, when I begin receiving Social Security, would I cut back on the amount of retirement funds I receive monthly?

Answer: The way Social Security benefits are taxed is somewhat convoluted and easy to misunderstand. Just to be clear: You would never lose 85 percent of your Social Security benefit to taxes. But if you have income outside of Social Security, up to

BRITTAINY NEWMAN THE NEW YORK TIMES Penguin Random House executives said that just 35 percent of the books the company publishes are profitable. Among the titles that make money, a very small sliver — just 4 percent — account for 60 percent of those profits.