From Publishers Weekly:
The lack of a new major bestseller was one factor in driving sales and earnings lower last year, compared to 2015, at Penguin Random House. According to PRH parent company Bertelsmann, revenue at the world’s largest trade publisher fell 9.6% in 2016, to 3.4 billion euros, while EBITDA (earnings before interest, taxes, depreciation and amortization) declined 3.6%, to 537 million euros. Figures include results from Verlagsgruppe Random House, the German publishing group wholly owned by Bertelsmann.
The lack of a breakout smash contributed to declines in both print and e-book sales but sales of digital audiobooks remained strong, Bertlesmann said.
. . . .
In his letter to employees, PRH CEO Markus Dohle said that despite having “a year that felt challenging for all of us,” PRH raised its operating margin to 16.0%. (Operating margin was 15.0% in 2015). A key to maintaining strong profitability levels, Dohle added, has been PRH’s commitment to “preserving a vital and vibrant bookselling community,” as well as “maximizing efficiencies in our cutting-edge supply chain.”
Dohle also emphasized PRH’s commitment to print, saying the house supported the format “even when it was in decline earlier this decade.”
. . . .
In a press conference in Germany, Bertelsmann CEO Thomas Rabe reiterated that the company, which currently owns 53% stake in PRH, is interested in raising its stake to 70% to 75%. Earlier this year, Pearson said it was looking to sell its 47% share of PRH.
Link to the rest at Publishers Weekly and thanks to Alexis for the tip.
“preserving a vital and vibrant bookselling community”
We hope Amazon doesn’t be mean to us, because we need them to sell these over-priced books.
“maximizing efficiencies in our cutting-edge supply chain”
You’re fired.
“maximizing efficiencies in our cutting-edge supply chain”
Selling more through Amazon.
“…maximizing efficiencies in our cutting-edge supply chain.”
That translates to “cutting staff size and benefits, reducing the number of author contracts, and reducing advances for all but the top sellers”. And maybe those too.
The first kneejerk reaction to stress of big entrenched companies in consolidating businesses is to cut costs instead of looking to grow their market. That of course results in a downsizing spiral. In this case, all the BPHs are complaining about a lack of lottery winners while ignoring that the market isn’t shrinking but rather spreading the wealth more evenly among midlisters. By acting as if the market is shrinking they guarantee their portion of it does in fact shrink.
Odds are that by the time the Randy Penguin stabilizes (*if*) it stabilizes, it will be roughly the size of the pre-merger Random House and it will have shed the equivalent of Penguin in staff and product. Not good for their staff and hostages but good for everybody else.
I like that metaphor: traditionally published hostages 🙂
Maybe they should try ‘sing-a-long’ books to go with the music CDs they sell.
(Oh, wait, the song writers will demand more than PRH likes to give their authors — and you can already get most of the songs online — for free.)
Maybe knitting books that come with free needles and twelve balls of yarn.