Bondage Bonuses: Random House Shares '50 Shades' Wealth With Employees

The New York Times’ Leslie Kaufman reports that Random House held its annual Christmas party in New York on Wednesday, when Markus Dohle, the company’s CEO, made the announcement. Perhaps not surprisingly, the announcement met with several minutes’ worth of cheering by partygoers.

“Fifty Shades,” which began as series of “Twilight” fan-fiction stories posted on websites, was first published last year by a small print-on-demand publisher in Australia. It became a runaway hit through word-of-mouth on book blogs and was snatched up by Random House’s Vintage Books imprint in April.

In August, the British author James became the best-selling author of all time in the U.K., unseating former champion J. K. Rowling. In the United States, “Fifty Shades” has sold some 35 million copies. The book has topped the New York Times paperback best-seller list for the past 37 weeks.

The bonuses will be doled out to everyone who has worked for Random House for at least a year, with other employees receiving prorated bonuses, the Times reports. Employees will receive the money in their next paychecks.

News of the bonuses comes at a transitional time for the book publishing industry, which is struggling with a business model in flux, as more readers migrate from paper books to e-reading devices. The change has shifted the balance of power in favor of Amazon (Nasdaq: AMZN), the online-retail giant whose penchant for selling books and e-books at low prices has drawn the scorn of the Big Six publishing companies.   

Ironically, “Fifty Shades” itself owes much of its success to the rise of Amazon’s Kindle, which has been cited as helping to revive interest in female erotica. The discrete devices have emboldened readers to sample the kinds of books they might not be willing to flash around in public.

Meanwhile, Random House itself is going through a transition of its own. In October, its parent company, the German media conglomerate Bertelsmann AG, announced that it will merge Random House with Penguin Group to create the world’s largest publisher of consumer books. The move is seen largely as a survival tactic to help the companies compete with Amazon, which has launched several of its own imprints and has been inking deals directly with authors. Bertelsmann will control 53 percent of the new company, while Penguin’s parent company, Person PLC (NYSE: PSO), will retain 47 percent.    

Read Kaufman’s full story on the Times’ Media Decoder blog here.