Half year results show print decline slowing

Half year results show print decline slowing

It has been a pretty decent year on the shop floor and in publishing boardrooms thus far in 2014. As we reveal in greater detail in our Review of the Half Year, the physical market for the first half of 2014 fell 2.4% to £526m through Nielsen BookScan. A decline, yes, but the shallowest one in the first half of a year since the market began contracting in 2008.

Owing to the way e-tailers report figures, full six-month data for digital could not be obtained for our review. However, anecdotally, publishers report a rise in digital, although not the stratospheric triple-digit percentage increases of recent years.

Tom Weldon, c.e.o. of Penguin Random House, the UK’s largest publisher, noted the “challenging” print market; PRH had a 7.2% decline in sales through Nielsen BookScan for the first half of the year (technically 24 weeks, not 26, as BookScan’s half year is six four-week periods).

Weldon said: “UK digital sales continue to be our main source of growth although, as expected, the rate is more muted than last year. This growth is largely prompted by the market trend towards lower pricing, as well as some terrific fiction performances, including Tony Parsons, Dan Brown and Jojo Moyes.”

Second-placed Hachette had a broadly similar print decline to PRH (-7.7%), while HarperCollins had the shallowest physical slump of the “Big Three”, down 5.1% to £38.6m.

HC c.e.o. Charlie Redmayne said: “On the physical book side, fiction is slightly down year on year, but that is more than compensated for by our digital. We have had big digital growth, and our market share in digital has really grown a lot more than our physical market share. Our sales of HCUK worldwide e-books are up 30% year on year and we have invested a lot in understanding that market.”

Of the larger groups, Pan Macmillan had the strongest year in print, up a whopping 8% in BookScan value against 2013. Pan Mac m.d. Anthony Forbes Watson said there were “good things happening across all our lists”. He pointed to a 3.7% rise in fiction sales—against a sector which had a print value decline of 9.5%—helped by the “consistently relentless growth book on book” of Jeffrey Archer’s Clifton Chronicles series. Pan Mac’s children’s division grew 5.6%, driven by the half-year’s top selling author, Julia Donaldson, and Rainbow Rowell’s coming-of-age YA hit, FanGirl.  

Forbes Watson said: “We were also the fastest-growing non-fiction publisher, marketing Martin Sixsmith’s Philomena to keep it front and centre long after the film had closed and on into summer reading, and we successfully positioned [Sarah Wilson’s] I Quit Sugar as one of the top diet books of the year.”

Craft work

Pan Mac’s children’s performance is not against the grain of the rest of the kids’ market. The ongoing trend of the past few years—fiction sales migrating to e-books and a largely digital-resistant children’s sector becoming a bigger part of the print books pile—has continued apace this year. In the first half of 2014, the Children’s category was up 9.1%, and earned more (£125.5m) than Fiction (£125m)—which declined 9.5%—through BookScan for the first time in a half year since records began.

Leading the children’s surge has been the Minecraft phenomenon, Egmont’s official licensed franchise of the wildly popular video game. The five Egmont books have collectively sold almost £5.1m through the tills this year, a whopping 52% of Egmont’s entire BookScan revenue, helping the publisher to a massive 87% rise year on year.

Unsurprisingly, the growth has led to TCM gains for many children’s publishers. Of the top 10 children’s publishers of 2014, eight had year-on-year growth, with double-digit percentage climbs for Egmont, study guides specialist CGP (up 13.7% to £5.1m), Bonnier (up 17.7% to £1.7m), and licensed character specialist Phidal (a huge 328% jump to £1.6m).

Outside of the top 10, Nosy Crow had a 55% leap to £580,000. M.d. Kate Wilson said: “We’ve had terrific support from bricks-and-mortar booksellers, and there’s an ever-growing group of mums, dads, teachers and librarians who seem keen on what we do.”

Shop focus

The TCM children’s bump both benefitted, and was partially driven by, the country’s biggest specialist books chain. Waterstones director of buying Kate Skipper said: “Children’s remains our star performing category, driven by great publishing and some superb film tie-ins, allied with increased space and focus in our shops.”

Outside of children’s, Skipper admitted the fiction market was “challenging, but we are really pleased with our market share”, flagging titles such as Nathan Filer’s Costa-winning The Shock of the Fall (Borough) and Eimear McBride’s Baileys-winner A Girl is a Half-Formed Thing (Galley Beggar).

However, the dearth of brand fiction was a concern. “We’re pleased with our sales of Robert Galbraith’s The Silkworm (Sphere), but other than that there has been a lack of new publishing from big-name authors—certainly nothing to match last year’s Dan Brown hardback,” Skipper said.

Katharine Fry, Blackwell’s trade buying manager, agreed that it was “a generally rather unremarkable half year in terms of new publishing”. Both Skipper and Fry praised one of 2014’s surprise hits, Thomas Piketty’s heavyweight economics tome, Capital in the Twenty-First Century (Belknapp Press). The £30 hardback has shifted just under 21,000 units through the tills, earning £565,000—making it the 25th bestselling book of the year to date by value.

Interestingly, an oft-derided promotion has paid dividends for Blackwell’s. Fry said: “It has been the three for two offer that has seen the strongest growth so far, with some titles that we know will keep running throughout the year—from obvious bestsellers to older titles that just keep on performing.”

Half-time team talks

Tom Weldon, Penguin Random House c.e.o.

The physical market continues to be challenging. However, PRH has dominated the bestseller charts with around a 40% share of the weekly top 50. Internationally our business continues to be strong—Peppa Pig is particularly successful in Australia, taking well in excess of AUS$2m. We continue to focus on our D2C relationship, and My Independent Bookshop is a great example of how we partnered with indie booksellers.

Charlie Redmayne, HarperCollins c.e.o.

Children’s has been our stand-out—up 50% year on year across all markets and formats. The work [HC Children’s Books publisher] Ann-Janine Murtagh has done bringing that department together is reaping huge rewards. Our learning business has done well and on the education side we are competing strongly in the primary and secondary sectors. There is a big battle going on for curriculum change and we are performing well.

Hilary Murray Hill, Egmont m.d

Our success has been led by Minecraft, a combination of an exceptional creative approach and bespoke marketing. We’re proud that Minecraft is responsible for a surge in children’s reading. The international story is extraordinary—we’ve sold the handbooks in 28 markets and 24 languages. Retail continues to be risk-averse and the challenges around launching débuts are significant, but we are thrilled with a strong first half.

Stephen Page Faber & Faber chief executive

It has been a really interesting six months, possibly more so than any period we have had for a while. It’s been a flat, soft market for Faber so far this year, but what has been most exciting for us is the new form of publishing we have seen coming out of Faber Social—a marriage of events, social marketing and books for a very analogue audience, such as Viv Albertine’s Clothes, Clothes, Clothes. Music, Music, Music. Boys, Boys, Boys.