Pearson encouraged by ‘good first half’ but reports sales fall for PRH

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From The Bookseller:

Pearson has reinforced guidance that it expects to return to underlying profit growth in 2018 after posting underlying revenue growth of 2% and adjusted operating profit up 46% year-on-year for the first half of 2018. However it reported Penguin Random House – in which Pearson still has a 25% stake – saw sales fall in the first half owing to “softer fiction print sales and lower e-book sales”, only “partially offset by rising audio sales”.

According to Pearson’s first half report, Penguin Random House saw “revenues down on an underlying basis year on year”, although figures were not disclosed. However Pearson said the business did benefit from major bestsellers by Bill Clinton and James Patterson, Jordan Peterson, Lee Child, R J Palacio and Dr Seuss. Pearson’s stake in PRH contributed £22m to the education company’s adjusted operating profit, down 4% in underlying terms, and down 52% in headline terms primarily due to the disposal of Pearson’s 22% stake in the business to Bertelsmann in October 2017.

First-half TCM figures from Nielsen BookScan put Penguin Random House UK sales in the UK at £137.8m, down 1.6% on the same period last year.

Link to the rest at The Bookseller

14 thoughts on “Pearson encouraged by ‘good first half’ but reports sales fall for PRH”

  1. Loss of market share is so dangerous because it is usually followed by a loss of sales.

    Many tell us loss of market share doesn’t matter if sales are increasing. Some tell us they bank dollars, not market share.

    PRH now has a loss of market share and a loss of sales.

  2. It reads like they googled ‘buzzword bingo’ and then used as many of the big words with no meaning they could find … 😉

  3. One of my PRH titles earned out its generous advance many years ago, but PRH keeps the ebook price so high no one will buy it or its sequel. They’re not just hurting me; they’re hurting themselves. They lowered the price briefly when I complained and sales perked up immediately, but PRH raised the price again and sales dropped to the same pre-reduction numbers. You’d think they’d see a lesson in that, but … nope.

    • As I’ve said a time or three, it’s not the money so much for them but the control.

      Once the contract was signed they could make you a star – or sink you beneath the waves. Maybe they now don’t like your story or its message, or maybe they’d rather another ‘friend’ of theirs have a better chance to be noticed so they overprice yours to remove them from the buyers’ eye.

      I’d suggest trying to get your rights to your books back, though they’ll really want to keep you under their heel and under their control. Not knowing how your contract was written I can’t/won’t suggest any legal ideas (IANAL!) but bugging them constantly about it might make them do something with it just to get you out of their hair. 😉

      • About that control thing…

        1- A point KKR and others have made: what do tbe BPHs do when their cash cow big names start retiring?

        In the OP Pearson admitted that what saved the Penguin were Clinton & Patterson (71),Child (63), and ghost of Dr Seuss.

        Stephen King is 70, Nora Roberts 67, and J.R.R. Martin is 69.

        2- I’m thinking that some time after they announce their retirement, some if not all will be fitted with state of the art life support cybernetics (at publisher expense) to ensure the clock doesn’t start ticking on their copyrights. 😀

        • With the death plus seventy years I don’t think today’s trad-pubs are worried about it (none of them will be alive to see it happen!), I figure they’ll do as others have suggested and kill off their staff and just sell the long tail (and if they deep-discount then most of those old contracts won’t pay the writers’ estates a dime.)

          As they show with Patricia above, they aren’t trying to sell so much as maintain control over as much of the a/e/book market as they can. After all, it used to work quite well for them before that internet thingy became a thing.

          Today is not the time to be signing any trad-pub contracts unless the rights revert back to you if they play games that keep your stuff from selling. (I know, no way it would work out that way …)

        • what do tbe BPHs do when their cash cow big names start retiring?

          Continue to take as much cash as possible from the fiction market while executing an orderly withdrawal from that market.

          • You keep asserting that they are making an orderly withdrawal from the market. Meanwhile, they keep spending scarce capital to buy up smaller publishers in order to increase their commitment to that very same market, and otherwise doubling down on their present business model.

            I am quite confident that the ‘orderly withdrawal’ exists only in your head.

            • Hmm, another way of looking at it is they are locking down all the titles those companies held, and when they finally go there won’t be any of those little publishers left …

              They’ll have the long tail to sell, for everything else there’s Amazon – who they will sell through.

              And here I thought they didn’t like Amazon and indie artist, but they are turning that into the only way to reach the readers.

      • KKR got her rights thrown back at her when she *asked* for an audit of her accounts. In her case, she knew for a fact that money was missing. For others, you’d want a solid idea that something had been going on. Maybe foreign editions you hadn’t heard about, sales income that doesn’t seem to match Amazon ranking, etc.

        (Just a heads up: Most contracts used to say that if the audit turned up more than a 5% discrepancy, the publisher paid for the audit, but less than 5% and the author would have to pay for it.)

    • I wonder if they’re trying to pump up their asset value by inflating the price of the book, with a hope of selling the company. I’m not sure how the accounting would work, but it’s the only logic I can find in this.

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