Profits at book publisher Penguin have almost halved in the first half of 2012, and parent company Pearson has placed the blame squarely on thanks in part to the runaway success of EL James's sex blockbuster Fifty Shades of Grey, published by rival Vintage Books.
But growth of the digital market has brought some comfort with ebook sales rising by 33% year-on-year.
The company's half-year announcement said:
We have significantly reshaped the business in recent years, against the backdrop of a fast-changing consumer publishing industry characterised by dramatic growth in digital retail channels, self-publishing and digital reading as well as pressure on high street booksellers. In the first half of the year, the industry was dominated by competitor bestsellers, The Hunger Games trilogy and E.L. James’ Fifty Shades of Grey, which has sold more than 30 million copies worldwide and surpassed the Harry Potter series as the fastest-selling paperback of all time. Penguin’s first half numbers reflect some impact from these challenges combined with a lighter first half publishing schedule and less favourable product mix, particularly in North America. Key highlights from the first half include:
Global
• Against a tough 2011 comparable, Penguin US published 132 bestsellers (157 in 2011) by authors such as Nora Roberts, Harlan Coben, Charlaine Harris, John Green and Jenny Lawson. Digital-first break-out hits included Bared to You and On the Island, both of which hit the eBook bestseller list and continue to sell strongly. Manning Marable’s Malcolm X: A Life of Reinvention won the Pulitzer Prize for History and John Lewis Gaddis’ George F. Kennan won the Pulitzer Prize for Biography.
• In the UK, Penguin performed well against a record first half last year publishing 49 bestsellers in 2012 (49 in 2011) from authors including Gok Wan, Rachel Khoo, Antony Beevor, Daniel Kahneman, Jo Jo Moyes, Jeff Kinney and Roald Dahl.
• DK had an excellent first half, posting good sales growth on top of a successful 2011. The LEGO® publishing programme continued to drive sales with The LEGO® Ideas Book and the LEGO® Star Wars Encyclopedia featuring in the New York Times bestseller list for 25 and 19 weeks respectively. Other strongly performing titles included Mary Berry’s Complete Cookbook, Art and Natural History. The travel market remains challenging.
• On 19th July 2012, Penguin acquired Author Solutions Inc. (ASI), a leading provider of professional self-publishing services, for $116 million (http://pear.sn/MxDlr4). This acquisition gives Penguin a leading position in the rapidly growing self-publishing space and together, Penguin and ASI will be able to offer a wide range of services across the broad publishing spectrum.
• Penguin Children’s continued to perform well growing sales in the first half, boosted by the continued success of DK’s LEGO® programme as well as big brands including Moshi Monsters, Roald Dahl and Peter Rabbit.
• Penguin’s international sales grew in the first half driven in part by a strong performance in India where Penguin is the clear market leader. Key titles included Breakout Nations by Ruchir Sharma and Ravinder Singh’s Can Love Happen Twice?, both of which were number one bestsellers. In February 2012, Penguin acquired 45% of Companhia das Letras, a leading trade book publisher in Brazil, with whom we have an existing Classics publishing partnership.
Digital
eBook sales grew 33% and now represent 19% of Penguin revenues worldwide. eBook successes in the first half included Nora Roberts’ The Witness, Sylvia Day’s Bared to You, John Standford’s Stolen Prey and Jo Jo Moyes’ Me Before You. In the US, Penguin launched InterMix, a digital-first imprint. Penguin India launched its eBook programme, the first list to be published internationally by an Indian publisher.
Penguin continued to invest in digital innovation. In January, DK was the only consumer publisher to partner with Apple on the launch of the new iBook platform and now has 35 titles available. Penguin extended its app programme with The World of Richelle Mead in the US and Peppa Pig Me and Spot Goes to the Farm in the UK. Penguin extended its digital short-form publishing programme with Penguin Specials now live in the US, UK and Australia.
Penguin continued to grow its presence in the direct-to-consumer space with initiatives including Bookish in the US, its online retailing platform in Australia and aNobii in the UK, which now has leading retailer Sainsbury’s as a new partner.
Second half
•Penguin has a strong second half publishing list with major new titles from authors including in adult: Ken Follett, Patricia Cornwell, Neil Young, Nora Roberts, Clive Cussler, Dolly Parton, Kofi Annan, Zadie Smith, Philip Pullman, Jamie Oliver, Pippa Middleton, David Walliams, Clare Balding, Dawn French, Marian Keyes and Jeremy Clarkson; and in children’s: Jeff Kinney, Ally Condie, Richelle Mead, Jacqueline Wilson, Emma Thompson, Eoin Colfer and Michelle Paver. DK will be publishing major new LEGO® titles including the LEGO® Ninjago Character Encyclopedia and The Batman Visual Dictionary as well as major reference titles Fashion and The Military History Book.