In this article, you’ll find an overview of the major news that both took place in May and caught my eye.
- Mixed Financial News from Big Five Publishers
- Not Big Five (Yet?), But Still Worth Mentioning
- Successful First Quarter for Bookstores
- Not All Penguin Random House Acquisitions Get Blocked
- Will Trump Lose Another Legal Battle against Simon & Schuster?
- Phenomenal Achievement by James Patterson
Mixed Financial News from Big Five Publishers
Most Big Five publishers released financial reports for the first quarter of 2023 in May. Let’s see how they are doing.
Penguin Random House had a strong first quarter of 2023, according to the press release of its parent company Bertelsmann. The ‘strength’ was provided by Prince Harry’s Spare, 4 million copies of which were sold globally in all formats. Bestsellers such as Lessons in Chemistry by Bonnie Garmus and Michelle Obama’s The Light We Carry also contributed to the growth. While Penguin Random House’s individual figures were not disclosed, Bertelsmann’s revenue grew by 6%.
Bertelsmann chairman and CEO Thomas Rabe commented on the result: “We are growing significantly and will continue to invest massively in our businesses in the coming months. Even with the external challenges, we are confident about the rest of the year.”
Hachette Book Group had a tough first quarter in the U.S., with sales falling 11%, while sales in Lagardère’s French, U.K., and Spanish divisions were up; Hachette Audio division also had a successful quarter. As per HBG CEO Michael Pietsch, the drop in the US was due to a strong first quarter for HBG in 2022, when Run, Rose, Run by Dolly Parton and James Patterson was released.
Pietsch said that the second quarter started on a high note – Admiral William McRaven’s The Wisdom of the Bullfrog became a #1 bestseller, and Sandra Boynton’s Woohoo! You’re Doing Great! joined the bestseller list in its first week.
HarperCollins had a 12% decrease in sales in the second half of 2022. However, their revenue stabilized at $515 million in the first period of 2023, with earnings falling by 9%. About 2% of the revenue was lost due to foreign currency volatility.
Christian books, Pulitzer Prize-winning Demon Copperhead by Barbara Kingsolver, Never, Never by Colleen Hoover and Tarryn Fisher, and downloadable audiobooks demonstrated solid financial results, while e-book sales decreased.
At HarperCollins, they hope the problem with the large drop in orders from Amazon has been resolved. Robert Thomson, CEO of News Corp, HarperCollins parent company, said that News Corp and HC believe the adjustments Amazon needed to make have been completed, and with the belief that whatever needed be reset at Amazon has been reset, “we have more confidence in the profitability of HarperCollins.”
While HarperCollins struggled, Simon & Schuster achieved yet another record quarter. Sales increased by 19%, to $258 million, and operating income grew by 16%, to $58 million. The revenue of S&S audio group increased by 36%, sales in the Pimsleur Language Program grew by whopping 40%.
“It is clear we are living in a boom in fiction,” Jonathan Karp, S&S CEO, said. According to him, word-of-mouth recommendations made through social media platforms were one of the important success factors.
Despite the fantastic results, Paramount Global, S&S parent company, is adamant about selling the publisher. CFO Neveen Chopra said Paramount has “restarted the sale process” and that a deal could get completed by the end of 2023.
This does not seem to bother Jonathan Karp, who noted that S&S has been for sale for three years, all of which have been record years. It looks like Paramount Global found a new way of improving financial performance – if you want your business to regularly beat income records, keep it ‘on sale’ permanently.
Overall, the first quarter was either quite successful for Big Five publishers, or their Chief Executives were optimistic about the companies’ future.
As you might have noticed, the audiobook divisions of the mentioned companies demonstrate great results. Audiobook sales have already overtaken those of ebooks, and their proportion in total sales is growing fast. According to some calculations, audiobook revenue is expected to grow about 20-25% every year, reaching $35 billion in 2030.
Not Big Five (Yet?), But Still Worth Mentioning
U.K.-based publisher Bloomsbury showed growth of 15% in fiscal year 2023, which ended on February 28, 2023. Bloomsbury “achieved its best ever performance,” said Nigel Newton, its chairman. The sales amounted to £264.1 million, with U.S. revenue above $150 million.
The company’s children’s division, with sales of £108.9 million (up 17%), contributed the most to the growth. Pretax profits increased by 15%, up to £25.4 million. Sales of Sarah J. Maas titles grew by 51%, and, there’s a surprise, Harry Potter books were selling like hotcakes last year as well.
The good year enabled the company to help its employees, who received £1,250 as a one-time payment in February 2023, and a permanent salary increase of £1,000 per year starting October 1, 2022. Bloomsbury also increased the stock dividend by 10%.
“These results demonstrate the strength of our strategy to publish for both the consumer and the academic markets, unusual in our industry, and to grow digital revenues while expanding globally,” Newton mentioned.
Successful First Quarter for Bookstores
Bookstore revenue increased by a solid 11.9% in the first quarter of 2023, to $2.07 billion from $1.83 billion in Q1 2022. This means that bookstores continue to recover from the massive drop they’d experienced during the pandemic, when all retailers, considered nonessential, had to close for long periods. According to the revised statistics for 2022, sales still lagged behind 2019 by 6%. Hopefully, in 2023 bookstore sales will finally exceed the pre-pandemic level.
Not All Penguin Random House Acquisitions Get Blocked
Sourcebooks and Penguin Random House, which owns a majority stake in the company, acquired the publishing assets of Callisto Media, a nonfiction adult and children’s books publisher. Sourcebooks will manage the Callisto Media titles, distribution will be performed by Simon & Schuster Distribution Services as before.
Dominique Raccah, CEO of Sourcebooks, said, “This acquisition brings together two of the most data-driven publishers in the industry to create a consumer-led organization that brings readers books that will change their lives in so many ways. This partnership also allows for an even greater level of innovation that will make an impactful difference for authors. We see data as an enormous creative power.”
Benjamin Wayne, CEO of Callisto, mentioned: “Callisto has been one of the fastest growing publishing companies in history and has reached over 50 million customers. The idea that we could determine through data what customers are really looking for and let them drive the books we create has served us incredibly well the past 10 years. I’m excited for Callisto to take the next step in its evolution as part of Sourcebooks and Penguin Random House, to continue delivering the kind of content that serves the underserved and helps them transform their lives.”
Will Trump Lose Another Legal Battle against Simon & Schuster?
In January, Trump filed a complaint (and updated it in April), in which he stated that Woodward exercised “systematic usurpation, manipulation, and exploitation of audio of President Trump” recorded for Woodward’s 2021 book Rage: “Said audio was protected material, subject to various limitations on use and distribution—as a matter of copyright, license, contract, basic principles of the publishing industry, and core values of fairness and consent.” The suit seeks “compensatory, punitive damages and disgorgement” equal to “at least $49,980,000.”
In response, Simon & Schuster lawyers filed two new motions, asking to dismiss the near $50 million lawsuit on the basis of the case being without merit. The motions argue that during the interviews, Trump was president of the United States and, therefore, can’t hold a copyright interest in the interviews, and there is no contract or agreement confirming the opposite. According to one of the motions, “this lawsuit offends the basic principle codified in the Copyright Act that government officials cannot own the words they speak while carrying out official duties.”
This suit is just one of the battles of Trump’s legal war against Simon & Schuster and other publishers. In 2020, Trump’s Department of Justice tried to prevent the publication of John Bolton’s memoir, The Room Where It Happened. The suit was unsuccessful, and the book became a bestseller. Later the same year, Trump lost against Simon & Schuster and his own niece Mary Trump. Her memoir Too Much and Never Enough: How My Family Created the World’s Most Dangerous Man sold more than a million copies. In January 2023, Trump promised to sue S&S and former New York criminal prosecutor Mark Pomerantz, trying to stop the publication of Pomerantz’s People vs. Donald Trump: An Inside Account.
I almost feel sorry for Donald Trump. Pretty much everyone he’s ever spoken to seems to be cashing in on his words, while the 45th President of the United States himself is missing out on the party completely.
Phenomenal Achievement by James Patterson
James Patterson is the first author to have sold more than 100 million printed copies of his books since 2004, when Circana BookScan (previously BookScan) started recording sales of print books. The writer crossed the 100 million mark in April, but I wasn’t paying attention at the time, so I’m writing about this incredible accomplishment in May’s article.
According to BookScan, Honeymoon and 3rd Degree are Patterson’s most successful books to date. As per Hachette Book Group, Patterson’s long-term U.S. publisher, the author has written a hundred #1 New York Times bestsellers during his career. Keeping in mind that his backlist of adult fiction and nonfiction contains 179 titles, this means that more than half of his books made it to the top of the New York Times bestsellers list. Absolutely mind-boggling.
What’s even more impressive is that James Patterson managed to sell a hundred million printed copies without writing a single book about Donald Trump. My hearty congratulations!
Conclusion
It’s pleasant for me to see that, overall, the book industry is more than alive. I just hope that the growing popularity of audiobooks does not lead to us all becoming analphabetic.
