The Bloomsbury way

The Bloomsbury way

Bloomsbury Publishing’s full-year results, published today, show how different bits of the publishing market are transitioning to digital at different rates, and with differing results. Its trade e-book sales fell year-on-year, but digital sales at its professional and academic businesses accelerated as it was able to expand with new business models.

Bloomsbury reported that sales of digital titles in its academic and professional division grew by 35% year on year to £4.2m, more than double the overall industry growth rate in 2014. They now represent 12% of total revenues in the division (2014: 10%).

Bloomsbury noted that its digital strategy reflected the changing needs of scholars, students and librarians. In September 2014 it launched a new e-book platform, Bloomsbury Collections, to deliver online collections of scholarly e-books for the institutional market on a subscription and perpetual-access basis. The site has approximately 4,000 titles, many culled from the backlists of imprints such as Hart, T&T Clark, Bristol Classical Press, Continuum, Berg and the Arden Shakespeare. New collections in further subject areas will follow in future releases, and all newly published academic monographs will go directly on to the Bloomsbury Collections site in digital form. It offers three other websites in growing areas of interest, www.bloomsburyfashioncentral.com, www.dramaonlinelibrary.com and www.churchillcentral.com.

In this world Bloomsbury shows an ability to develop direct-to-consumer platforms that offer subscription-based packages to institutions and academics. As the company notes: “To support the growth in digital subscription products, in 2014 we invested in a worldwide in-house institutional sales team. This allows us to maintain control of the sales, customer service, marketing functions and data. It also affords opportunities in the cross-selling of other Bloomsbury products.”

In the trade space things look a little tougher, but not without light. Bloomsbury does not break out all the figures: but it notes that sales of digital titles fell by 4% to £11.7m (£12.2m in 2014), which was 12.1% of its total revenue from sales of books. But that includes sales from its academic ad professional division, meaning that consumer e-book sales from its adult and children’s businesses were worth £7.5m in 2014. Last year Bloomsbury noted that digital sales from adult titles were £7.1m, representing 14% of sales: in children’s digital sales were reported to be 8% of total sales of £23.6m at £1.9m. In total therefore there was a drop in consumer e-book sales from £9m to £7.5m. Yet in its report Bloomsbury noted: “Whilst e-book sales are down year on year, also reflecting the success of Khaled Hosseini’s books last year, opportunities for growth continue in many territories and the advent of new devices and new business models such as subscriptions will continue to expand the market. We are beginning to see material sales in India, parts of Europe and the Far East.”

Bloomsbury’s trade business is, perhaps, too small to act as a barometer for the other e-book publishers, but the report again emphasises that successful commercial publishing will lead to buoyancy in an e-book market that is incredibly receptive to certain types of books and certain price points but overall shows distinct signs of maturity. That Bloomsbury notes that it may look to stimulate sales through new models (subscriptions being the most obvious) is worth noting. Its success at growing these types of businesses at its non-trade divisions will obviously be instructive. Earlier this year, Bloomsbury, Hardie Grant and Quadrille launched Cooked (www.cooked.com), a subscription site featuring full cookbooks from the publishers' lists, in the UK. The subscription costs £2.99 per month, or £36 a year. Users can also buy books direct from the site. Like Faber with its members club, Bloomsbury is looking to find a model that serves consumers in a new way and reduces its exposure to traditional book retail.

Or as Nigel Newton, chief executive, put it: “This has been a good year for Bloomsbury. It was characterised by a consistent development of the strategic aims of the business – in short, digital investment, a greater proportion of business generated from academic and professional publishing, a greater proportion of sales from non-traditional book retailers and a focus on marketing to discrete communities of interest.”

Bloomsbury’s report show that the unfashionable mix of trade publishing with non-trade could prove to be a virtue beyond the bottom line in the longer term. Last week I noted that the Publishers Association’s Statistics Yearbook showed the steady growth of academic and professional digital business compared with the booming consumer e-book space. In 2010 the academic/professional digital market was already worth £134m (compared with the consumer e-book market that was worth £20m at that time). By 2014 the academic/professional digital market had virtually doubled to £252m, with an annualised growth rate of about 20%; but it was the consumer e-book market shooting up to £275m in the space of four years with growth overall of more than 1,000% that drew all the attention.

It may now be the turn of academic/professional publishers to take the lead. As Jonathan Glasspool, managing director, Bloomsbury Academic and Professional, noted in the Yearbook: “The sector continues to see rapid growth in digital consumption – in many subject areas at a much faster rate than in consumer publishing. Digital revenues are up by 88% over the same five-year period, and the rate remains healthy, if not enough to compensate for print falls.”

The two sectors face similar issues of course: both see rising digital sales not always able to compensate for declining print sales as the formats of consumption change. E-books have been good business for trade book publishers, leading to margin improvement and in some cases expanding markets, but there is already a sense that this golden period may be coming to end. Witness for example, the management changes at Orion, announced yesterday, or Bloomsbury’s redundancy of respected editor Bill Swainson. The big publishers are either consolidating, or retrenching. Two senior publishers have told me recently that they are expecting their costs of doing e-book business to increase (from author royalties to retailer discounts and in the UK due to the impact of VAT) and are responding appropriately.

To move that dial trade book publishers could do worse than look at what is happening across the divide: consistent digital growth aligned with experimentation, product innovation, and new business models. And then there are the profits, of course. Bloomsbury’s two non-trade divisions are the highest margin bits of the group and as the company notes these divisions that constitute just 36% of Bloomsbury’s overall revenue already make up 56% its total operating profit. Now, that is enhanced book publishing.