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Lagardère’s Investor Presentation

13 June 2014

As mentioned previously, Lagardère, the parent company of Hachette, held an investor presentation recently.

PG has dropped a few red comments/boxes into parts of the presentation he found interesting (click for larger images):


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Link to the rest at Lagardère and thanks to Will for the tip.

Big Publishing

135 Comments to “Lagardère’s Investor Presentation”

  1. I think that the above slides show what Lagardère’s step is going to be: business as usual, with additional pressure on their work force and content providers.

    A privileged access to agents Isn’t it the other way around?

  2. Instead of being a sifter, they should be a snifter filled with Armagnac. We’d all feel better for it.

  3. I read through this yesterday, and most of the things you’ve highlighted, PG, I read out to my husband. It’s just fascinating to see Hachette’s mindset, especially spelled out so very clearly.

  4. They are a kind of a sifter? A bottom feeder is also a kind of sifter (perhaps they meant to say “grifter”, though?).

  5. If they’re a sifter, then how the hell did Twilight get through? I mean, I understand that it was successful beyond imagination, but still…

  6. “privileged access to agents”?

    Privileged, indeed. Good thing less writers need agents these days.

  7. As someone noted over on Konrath’s blog, doncha love the phrase ‘Anglo-Saxon prescence?’
    What’s that? As opposed to Hachette’s Norman, Aquitanian, Alasacian or Burgundian presence?

    French suits. They live in another world, somewhere between Blackadder and Ivanhoe.

    Bravo Les Sifters Extraordinaires!

    • The Anglo-Saxon thing jumped out at me, too. I kept picturing some Vikings and Visigoths showing up to the party 🙂

    • Leaves me out. I’m a Celt… mostly….

      • I guess that would make me a Slav then.

        • Absolutely, Joe. You are a Slav to your art 😉

          • Being half Scottish and half German makes me want to invade them, except I don’t want what they have.

            Maybe I’ll just paint meself blue and play the bagpipes.

          • Half Swedish, the rest English and Scottish. Hmm. Guess a Norse Anglo-Saxon mix makes me…not French?

            • In this context, it might actually mean “white,” in the sense of “Hachette’s ‘white male’ presence”.

              I could be wrong, of course…but what this actually reminded me of is the trial for the murder of Emmett Till in the US in 1955 (which I learned about in middle school). Two white men were accused of murdering a 14-year-old black boy, and during the closing arguments, the defense attorney told the all-white, all-male jury: “I’m sure every last Anglo-Saxon one of you has the courage to free [the defendants].”

              The implicit racism in that line stuck with me for the rest of my life…and at the same time I was baffled why he used the term “Anglo-Saxon” …but of course now I realize it was just a euphemism for “white.”

              I’m at a loss for any other explanation as to what Hachette meant…

              Edited to add: Looking at some of the other comments, maybe they meant the English Language…but it’s a strange mistake to make.

              • Suburbanbanshee

                I beg to report that the French are always talking about “Anglo-Saxon” people, at least in old novels. Discovering that this is still the case with French companies has made my day.

                • What do they mean by it, then? White people in general, specifically the English, or something else?

                • In current french politics anglosaxon means “active entrepreneurial economy that disdains price fixing and protectionism and is not overshadowed by german productivity and is lucky not to be part of the euro zone the dirty so’s and so’s”.
                  (More seriously: It is political code that blames globalization and US/UK economic policies of free trade and free markets for the malaise of the french economy. It’s how they explain the euro crisis and lack of competitiveness. There must’ve been politicians in the audience.”


                  There has long been resistance in France to global free markets, deemed “the anglosaxon model” as opposed to the french “dirigisme” model of active and continual goverment intervention to tilt economic activity in favor of local companies, the designated “national champions”. Bluntly: protectionism. Lagardere was playing a nationalism card.

                • Thank you very much for explaining this. I kept having images of blonde guys burning the English countryside north of Hadrian’s Wall and wondering what the heck it had to do with tween sparkly vampires.

                • And there was me thinking the French were Gauls. I feel as if I was led astray by Asterix.

                • Felix has it right, I think, so I would note that they’re strictly talking about US/UK. “White” is a very fluid identifier. Do we include Italians? Spanish? Polish?

                  Plus, for “U.S.”, they’re talking about their perception of the business culture, not people. I would love for them to come to certain parts of, say, L.A., or Texas, or even parts of Pennsylvania and talk to the “Anglo-Saxons” there.

                • LOL. Tit for tat. I recall a story on “60 Minutes” from many years ago that had a quote from a Brit: “The wogs start at Calais.”

          • Better than being a Slav to a publisher like Hachette, LOL!

        • Another Slav here.

      • The “claymore” was something of a clue…

        • Unless, of course, we took our name from the directional anti personnel mine…
          I suppose I also have some Norse, Roman, French and a smattering of shipwrecked North African raider.
          Then there’s the small matter of ‘Scott’ being the word the Romans used in reference to the Irish…

    • Celt-goth-roman here.
      Only one third rampaging barbarian.

    • The should learn to just say “English language.”

    • I choked on my salad after reading that, and hubby told me to close the laptop before I died. hahaha

      I also wondered. I guess cuz they iz French, and the Western markets are the Anglo-Saxons. I’m of Spanish stock, so I guess I’m one of the Iberians or something.

      • Celts and goths with some roman and a bit of merovingian in Catalonia is how I remember the pre-moorish Iberia.

    • FWIW, Actually, the word is used here in the second meaning of this http://en.wikipedia.org/wiki/Anglo-Saxon_(disambiguation) page : as in Anglosphere.

      In French, this word is used more frequently with this meaning than in English, looks like.

      I’m French, and don’t see any objection to its use in this case. I wouldn’t see it as derogatory, and don’t see how the slide’s designer would have.

      But after this thread, I’ll know I use the word with caution. Not really a False Friend, but close…

      • I would think we’re more bemused than offended. At least I am, and I hope my fellow PVers are, too.

        • I know I’m more bemused. Of course, I’m also thinking of the old Steve Martin skit: “Those French people. They have a word for everything!”

          Forty-plus years, and I finally found a use for that. Now I’m really bemused. Or amused. Or something. 😉


    But what the chart shows is that they grew significantly for the first 3 of those 10 years and then went essentially sideways for the next 7 years… and it would be worse if adjusted for inflation.

    Also, I thought it interesting that ebook sales are going to stabilize in the U.S. and Great Britain by 2017–in the absence of any indication why this is exactly so, and with charts that end abruptly on a high point of momentum. Not that I can say the information is wrong. We will have to wait and see.

  9. Okay, Hachette’s back on my short list, since they obviously speak Anglo-Saxon and want works in Old English.

    You think maybe:

    “nu scylun hergan hefaenricaes uard
    metudæs maecti end his modgidanc”

    might win them over?

  10. That 25-35% figure for “trade ebook penetration” ignores self-published works, I assume, if they’re only going by books with ISBNs.

    Which makes me shake my head and sigh.

    Off to write more books that don’t exist to collect direct deposits that are made up.

    • Yeah! And that’s the crazy part. How can these people not be aware that the figures they’re using fail to capture the fastest growing sector of the industry? They’re like ostriches burying their heads in the sand.

      • >How can these people not be aware that the figures they’re using fail to capture the fastest growing sector of the industry?

        Oh, they might be aware. Keep in mind this a presentation to investors. They’re making a pitch to their owners–and people who might buy their stock. There going to put forward the very best spin on the information–not necessarily the hard, hard truth.

        • Yes. They need to keep their investors confidence, even if it is an illusion falsely maintained. They also need to keep alive the myth that authors should all stay with traditional publishers to maintain their resource base.
          Denial is the bed rock of their plan to survive, probably because they actually still believe they can hold off the future and don’t need to change.

      • I doubt they’re unaware. It’s just happy corporate fiction.

      • This is a sales presentation.

    • Then you owe Hugh and DG a commission because they invented numbers. 😉

    • Yeah, it’s not exactly clear what their source tracks. But pretty much all industry statistics are based on either a) ISBNs or b) self-reporting.

      Neither of which is accurate.

      There’s more accessibility to ISBNs elsewhere (places outside the US, where Bowker has an ISBN monopoly), but I still think they’re a rarity in KDP publishing. I think for a lot of years that was easy to ignore because it was still nascent, but now?

      I think it’s reasonably safe to say that any article that discusses market share is woefully incomplete. Doesn’t matter the source. Because Amazon considers its data proprietary, and doesn’t share it.

      A lot of people begrudge them that. I don’t. I’d love access to it. Good lord, I’d happily give KDP another 10% cut just to see data about samples and book progress and product page traffic. But you know, they built an amazing platform, and they earned the right to proprietary treatment of data.

      • Patricia Sierra

        I agree. KDP is a hidden marketplace with data that only Amazon has. That must drive the BPs crazy.

        • It would drive them crazy if they had the wit to see that they need such data. Remember, they’re still hung up on the idea that their ultimate customer is the bookshop. Readers have scarcely impinged on their consciousness even yet.

  11. Do you think this whole row with Amazon has been because of some problem with different editions of the Anglo-Saxon dictionary?

    Maybe their negotiation would be resolved if they closed the linguistic breach and simply resorted to Medieval Latin?

    Do they view Bezos an Angle or a Saxon? Of is the problem that he’s a Celt and they have no significant prescence in the Celtic world?

    Somebody stop me. I’m still reeling from the bit about muscle to control authors. That’s definitely Rus slavetrader talk from the Dneiper border.

  12. One slide touts “editorial leadership” and has a picture of the cover of 50 Shades of Grey. Go figure!

  13. Patricia Sierra

    Doesn’t the heading on the second from the bottom slide indicate they’re going to acquire more publishers — or be acquired by them?

    • I think that’s the most likely place the Amazon negotiations are going to go. It’s probably easier for Hachette to merge with another company (which would mean falling under the umbrella of that company’s terms) than it is likely Amazon will accept the terms Hachette hopes for.

      But yes, the Big 5 will likely soon be four. I think there’s been talk of S&S and HC merging for a while, too. I figure it’s going to be Penguin Random House, HarperSimon, and Hachmillan before long. Then Harpermillan and Penguin Random House.

      • Patricia Sierra

        LOL They’re going to need a double-wide letterhead.

      • lol

        Oh how I wish it could they’d all merge into something like Penguin Hachette House. Just forget the others.

        • You never know, they might, and if they do, they don’t even have to spend any money of developing a new logo. They would only have to add another orange line on the logo and replace the Random with Hachette.
          Ah, now I get why they made such a simple logo; so they won’t have to worry about it in case of new mergers.

      • News Corp has been trying to buy S&S but CBS isn’t interested.
        Hachette and MacMillan are a good fit. Both are big believers in price fixing.

    • They are fourth in a five player lineup and number five doesn’t want to sell. They recently bought Hyperion but if you look at likely targets they would have to buy every last mid-size tradpub under the sun to move up the rankings even one notch. And if they were available, News Corp would be buying them first anyway.

      The more I look at those charts the more I think they’re selling.

    • It sounds pretty clear–they’re looking for some sort of merger.

  14. The one that jumped out at me was “cautious approach to new business models.”

    I’ll say.

  15. What struck me most was how few books were actually mentioned.

    I mean, I know it’s for investors. And I know figures like EBIT and CAGR are important to investors. But you’d think that investors would also be a little concerned with the actual services being offered, not just the profits those services drive.

    • Investors don’t care. They see them as a process business. Hachette has a process that turns raw material into products that are regularly shipped out the door. The more books they produce, the less important the individual books become to investors.

  16. “Advice and recommendations for cultural products needed.”

    Who are these guys, Dear Abby?

  17. Chris Armstrong

    Wait until the explicit One Direction fan-fic novel hits. We’ll all be looking back at these days as the dark ages.

  18. Re the 25-35% cap: I see what they are doing.

    1- They are using *their* ebook/pbook numbers and applying it to the rest of the industry, as if everybody else had the same focus and product mix they do.

    2- They are seeing a downwards inflection point for 2014 and extrapolating it linearly. Of course, their fight with Amazon cannot possibly be causing that downward inflexion in their growth curve so *obviously* everybody else is going to see less sales than expected, right? Right? Hello…?

  19. Totally getting an image in my mind of PG. He’s a mild mannered attorney by day, but after hours, he wears a Heat Miser costume and throws cans of lighter fluid and matches on the bonfires of traditional publishing’s angst-filled corporate reports. 😉

  20. Still married to agents, agency pricing, and (worthless and debilitating, but apparently “adequate”) DRM. Clinging to the belief with contradictory evidence that the eBook market has topped\is topping out. Looking as a plan of “growth through merger.” Hoping to use their clout to “control” authors as if they were slaves.

    And I thought Random Penguin was bad. Building a new business model around frauds like Authors Solutions looks positively forward-thinking in comparison.

    • That’s their big plan?

      A 2014 Maginot Line.

      Hachette is a French corporation, after all.

  21. Thanks for posting, PG. There’s a lot here. When it says above “all authors have agents” and then mentions “privileged access to agents” below, what it means is that the agents are working for the corporation because the corporation is giving them incentive to do so. Lots of little sideways things like that in here, all bad for authors, especially the point about size enabling the corporation to “control” author relations.

    • In the face of a lot of competition, the agent comments were the strangest parts of the whole presentation for me, Kris.

      • Especially given that so many agents are now offering publishing services.

        It was odd to see “all authors have agents” listed as a business factor. That’s because you’re closed to unagented submissions, you &^%$#@!

        I desperately hope that somebody listening to the presentation called them on that, but I doubt it.

        • It tells investors the company doesn’t waste time dealing with individual authors. They have a limited set of input streams that filter raw material and feed them the good stuff. They are highlighting their operational efficiency.

          • “The good stuff” being, sadly, 50 Shades of Grey and Twilight, according to the document.

            The former of which didn’t come from an agent.

            God, this stuff makes me sad. For years, all I ever wanted was a corporate contract. Now I’m utterly relieved I never signed one.

        • But they’re not really. Lots of unagened authors sell to big publishers like Hachette. It’s just a complete and weird lie.

      • PG, I found the “Anglo-Saxon presence” the single strangest part of the whole presentation. (But, alas, I see in the comments here that all the good jokes have already been taken.)

        And I found the need to “keep control over relations with authors” the single most telling part of it.

        • As I pointed out above it is a french political thing and economic nationalism code. They promptly all stood up and sang La Marseillesse.

  22. Good lord. Best comments I’ve ever seen on a TPV feature.

  23. This presentation might be a good for a laugh or two.

    Except it’s sorta hard to laugh when you have author friends who have signed contracts with Hachette… and who are deeply regretting it now, but have to bite their lip and publicly say nothing.

  24. “strong growth over the last ten years”
    The last five, not so much.
    Also, wasn’t there a slide in there about hiding under a pile of coats and assuming everything will work out?

  25. I suspect this was written originally in French and poorly translated. Or it was written by a native French speaker whose ESL is not so good, y’know what I mean?

  26. Did anyone notice that the first year, and trending after that, in which they experienced negative revenue growth is 2010, the year agency pricing hit through collusion?

    I wonder if other publishers would show the same, though 50 Shades of Grey would offset that for one publisher.

    IOW, they were willing to take the financial hit if they could control Amazon. They did better on the wholesale model.

  27. Interesting list of proactive actions. I have always asked for a second column that lists the results of the proactive actions. “Proactive” usually means, “BS to follow.”

  28. If I were an investor whom Hachette was courting, and they showed me this presentation, I’d go call my broker and buy a ton of Amazon stock.

  29. PG runs a clean ship so I won’t mention the “digital penetration of the market”. Oops, too late.

  30. Did I see that right? Does Hachette have strong growth because of 50 Shades? I wonder which agent submitted that one?

  31. I’m thinking it could have stood another translation pass, to make it more readable and less clumsy (and perhaps less honest). Clumsy language or unintentional but accurate representation of the superior industry and French mindsets?

  32. I was just thinking we haven’t seen such a clear candid look ijto the BPH mindset in two years or so. Since the DOJ published the conspiracy transcripts, in fact.
    Educational, in case anybody still had doubts about the real meaning of “nurturing” in BPH-land…

  33. “Publishers need size and muscle in order to keep control over relations with authors, over pricing and distribution”
    This statement was cited a few days ago, and it is worth going over it again, because it encapsulates so well what Hachette’s and perhaps all Trad-publishers strategy is. They need to be big to accomplish the following:
    -We’re the only game in town
    -We dictate the terms of the contract
    -We pay you what we wish
    -Don’t come to us without an agent
    -We determine the prices for books and eBooks to maintain our profits
    -We control the distribution channels and prevent the undesirables from selling their books
    -We dictate to the distribution channels the terms and conditions for doing business with us

    Well, the Titanic was big and therefore “unsinkable”, ignoring the icebergs, but it banged into one, sprang a leak and sank. The breach in the hull of the Big 5 Trad-pubs was caused by a different iceberg, called “e-Readers and Inexpensive eBooks.” The e-Reader was popularized by Amazon, and the self-published writers flooded the eBook market with inexpensive but good eBooks. Their size won’t help them as long as they don’t understand what hit them and continue ignoring the eBook revolution. 25 to 35% flat market by 2017? Mes amis, they’re smoking rope or the least they’re sniffing glue,

    • This is hilarious when it’s compared with statements from people who should know better like Stephen Colbert, Neil Gaiman and Amanda Palmer, who are defending Hatchett’s business model through “enlightened” self-interest.

      It’s like they’re the House Negros on the plantation.

      • That’s exactly what they are, plantation slaves

      • I think Gaiman is staying neutral on the topic, but Colbert broke my heart.

        • Feh. He’s always been this.

          As the CBS folks were oh-so-quick to point out, the Colbert personna everybody “knows” is literally an act, not his real personna. (If he even has a true one by now. As Vonnegut warned: be careful what you pretend to be…)

          Presumably he’ll show a third face when he moves to CBS; one crafted to the Letterman demographics.

        • Hachette isn’t Gaiman’s publisher, and it mostly seems to be Hachette bestsellers who are manning those barricades for Hachette.

  34. I like the repeated emphasis on maintaining “control” – control over prices, over authors, over distribution.

    To be specific, by “like” I mean “it makes me want to growl in anger and puke in disgust at the same time”.

    Readers? Writers? Screw them – control is what’s important.

  35. Google “Lagardere stock quote” and, on the chart box that comes up at the top of the search results, click on “three month.” Look at what Lagardere’s stock price did May 7th.

    Compare that to a similar quote for Amazon. Pretty impressive.

  36. Makes me wonder just how accurate — and real-world adherent — any investor presentation is. This one really takes the cake, however.

    OMG, I’m such a cynic. Bad me… 🙁

  37. I was talking about this with my (French) friend. We both live in France. Hachette owns all the book stores in the train stations and public places around here. They have complete control over that market, which is HUGE in France. That might explain why they live in such a strange world, where they can use muscle to bully their authors and insist that everyone has an agent.

    Also, being an author here, I can tell you that disdain for “vanity publishing” is still very much alive and well. I lost a friend over it, in fact. The idea of self-publishing to many is not only shameful but near to blasphemy. Reading a book on an electronic device? *gasp*

    It’s going to take France a long time to catch up to the “Anglo-Saxon” ebook worlds. And FWIW, I read “Anglo-Saxon” as “Anglophone” which is how most French describe us English speakers. 🙂

    • Hi Elle,

      Just curious: is that disdain you see for self-publishing only among French writers & industry types? I mean, is the typical French reader even aware of who publishes the authors they love, or how?

      I ask because here in the US, at least in my experience, the overwhelming majority of readers wouldn’t know if a book is self-published or Big-5 published, and wouldn’t care if they did.

      But outside the US, is negative perception of self-publishing going to be a speed-bump for the expansion of indie writer market share?

      • Hi, Paul. The disdain is from authors and industry types.

        The regular non-writing public is usually just confused when I say I’m self-published. They keep asking, “But what publisher do you use?” They just don’t get it. Only when I say, “I write for the Kindle” do they start to understand.

        To many The Kindle is as foreign as “Unaffordable Healthcare.” It just doesn’t exist in their world. 🙂

        ETA: the paperback reading experience and the ability to wander a bookshop or used book stand is very precious to French people. The idea that reading world would go digital is abhorrent to many of those over 30. Younger people don’t have that problem, but I’ve found that as younger French become older French, sometimes they start adopting the attitudes of their parents (as we all do). I believe (my opinion, obviously not everyone’s … ahem .. Hatchette) they’ll be about 10 years behind the trends of the US where digital is concerned.

  38. In Ireland and the UK I personally find that the tag ‘self published’ is still a huge block to buying. However people who have moved to an eReader and who buy from Amazon simply don’t realise they are buying self published authors and so make no distinction. I have also found it extraordinarily rare to find someone who knows that they can buy eBooks from anywhere other than Amazon..
    What this says to me is that this is one cause of the transition speed bump, but also that it shows there is a massive market still out there waiting to be captured. But not enough is going into making those eReader owners that there are places other than Kindle.

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