When I bought Hamish Hamilton and Michael Joseph and so on, that was the first real consolidation, if you like, of many that ensued after that. They were called the Thompson companies, because Lord Thomson's organisation here, Thomson Travel [Group]... And I think a man named Gordon Brunton was the head of Thomson's publishing. And they owned Hamish Hamilton, Michael Joseph, Rainbird, which was a packager, and Sphere, which was a mass paperback publisher. And for whatever reason, undoubtedly economics, for whatever reason, the board of Thomson's decided to sell this group of four or five companies – I can't remember if there was a fifth or not – at one go, to someone. And we were asked if we were... we'd be interested. And I was.

And the reason I was interested, for Penguin, was something very important in the history of both Penguin and British and American publishing. The vaunted and famous Penguin backlist was made up of books - great books - that had been bought, not by me, but by my predecessors, originally on full term contracts, which meant that they were sold to Penguin on a license, but forever inviolate. In other words, they could not be reverted from Penguin. Others were sold to Penguin, or licensed to Penguin, but could be reverted at the end of a term. Increasingly the latter, licenses for term became the operative way in which British hardcover publishers sold, or licensed, books to Penguin and to other paperback publishers as well. When I came to Penguin in 1978, I saw – and this was something that I spoke about in this policy statement six months after I arrived – an aspect of that was the rebuilding of the Penguin backlist. Penguin was incurring losses of its backlist because the original hardcover publishers were reverting the rights after a term.

So that would have been fine if... not fine, perhaps that's the wrong word, but that would have been all right if Penguin had been building up new rights and new copyrights to accompany or allay the pain of losing older copyrights. But that was difficult to do. We did not have an editorial staff, when I came there, that was interested in publishing across a mass market. They might or might not have said it, but that was how they functioned. They were, politically, very, very strong, mostly on the left as I've also said. But they were not particularly interested in popular fiction, which is the largest category for large sales of paperbacks. And Pan was book... was built on the titles that either had been reverted from Penguin or that… or that Penguin didn't bid on for new books. So I could see when I came, that over time, there wouldn't be a Penguin anymore. Books would be increasingly reverted to the original publishers, put out by either other paperback publishers or by the publishers themselves in paperback, and Penguin would become... Penguin would go into further decline. It was already in decline.

Well, part of that policy statement was that we would rebuild the backlist by creating more copyrights, so we would be less a reprinter and more an originating publisher. Because as an originating publisher, we would own the books fully, life of copyright, and so-called volume rights, and they could never be taken away from us. But it also occurred to me that it would take us 20 or 30 year to do that, so I decided on a two-pronged approach. One was to rebuild copyright by commissioning more original books, and the second one was to buy those companies from whom Penguin had the most copyrights. And one of them was Hamish Hamilton, and the other one was Michael Joseph.

So, by buying those two companies of the four or five that we bought, I was securing long term health of those books in paperback, for the Penguin backlist. And we never bought a book... we never bought a company just to be larger; we always bought companies because they were strategic. When we bought Frederick Warne and I was the only bidder, which is a very funny story which I'll tell, not now but next time. Beatrix Potter story, very English subject, is one I will tell. That was because I wanted to take Penguin into the field of mass merchandising, and we had no product, as to use the word that mass merchandisers use, we had no product to do that with. And it occurred to me that Peter Rabbit was a character who could be mass-merchandised.