Bertelsmann to 'reshape' in next decade

Bertelsmann to 'reshape' in next decade

Random House Group UK c.e.o. Gail Rebuck has emphasised the importance of "building direct relationships with readers", as parent company Bertelsmann vowed to "reshape" the group over the next five to 10 years.

In audited results covering 2011, Bertelsmann confirmed previously announced revenue figures, saying that for Random House worldwide, revenue was down 4.3% year on year to €1.7bn, with operating Earnings Before Interest and Taxes (EBIT) rising to €185m from €173m the previous year. The return on sales was 10.6%, up on 9.5% in 2010. It also reported the company had recorded "record triple-digital-percentage" digital revenue growth.

In a statement released alongside the results, chairman and c.e.o. of Bertelsmann AG Thomas Rabe said: "Our primary goal is to grow the company faster, and to make it more digital and international. We plan to achieve this with four strategic approaches: first, by further consolidating and strengthening our portfolio. Second, by accelerating the transformation to digital of our core businesses. Third, by establishing new growth platforms. And fourth, by expanding into new geographic growth regions. On this basis,
we will reshape Bertelsmann over the next five to ten years."

Rabe added: "We will channel a large share of our investments into new businesses that meet clear guidelines: they should have attractive long-term growth potential, be global, and benefit from developments in digital media. Examples of this are our successful music rights business and new activities in the field of education. At the same time we will widen our footprints in countries like India, China and Brazil."

The statement confirmed Random House had nearly 40,000 e-book titles available in English, German and Spanish at the end of 2011, with the wider availability of tablet devices fuelling demand.

In a letter to staff today (28th March), Rebuck said further focus and investment on direct-to-consumer relationships was planned. "This time last year I spoke of the importance of building direct relationships with readers based on insight and market knowledge and this remains the case through 2012 as we continue to expand our consumer insight and data analytics teams to further embed a consumer-focused mindset throughout the company," she said. "Relationships are at the heart of what we do and the passion and success we display in the curation, nurturing and publishing of our talented writers is being echoed in the innovation we are using in our direct-to-reader conversations."

"We will continue to invest in new systems and in training to ensure our direct conversations are as rich and engaging as the content we provide, and can help readers everywhere to discover the books they will love."

Though Random House UK results are not specified in the Bertelsmann results, Rebuck added that e-book sales contributed about 11% of total net sales for Random House Group UK, reporting sales values as up by 500% on the previous year. She said: "This contribution continues to grow as we invest further in the digital conversion of our titles supported by our industry-leading investment in quality control, anti-piracy teams and targeted enhanced content backed by innovative publicity and marketing."

Rebuck added that digital sales for the first two months of 2012 are "substantially ahead" of 2011. She highlighted upcoming titles by authors including Salman Rushdie, Ian McEwan, Nigella Lawson, Katie Fforde and Jo Nesbo as part of the "exceptional" list for 2012.

She said Random House Group UK exceeded its internal targets in 2011, despite the "backdrop of a struggling high street and the collapse of the Red Group in Australia".