The Penguin Random House merger may have sent shock waves through the trade, but it has not fundamentally shaken up the top of the annual Global Ranking of the Publishing Industry.
The list was started in 2007 as an initiative of French trade journal Livres Hebdo and is co-published by The Bookseller, buchreport, Publishers Weekly and PublishNews Brazil. It is researched by Rüdiger Wischenbart Content & Consulting.
The top six places in 2013 remain the same as the previous year with Penguin Random House (PRH) nestled in fifth place (just as Random House was in 2012), almost €1bn behind fourth-placed Wolters Kluwer—even though these figures represent six months of Penguin revenues added to Random House. PRH should close the gap next year.
The rankings of the top four publishers—the education/STM giants Pearson, Reed Elsevier, ThomsonReuters and Wolters Kluwer—have remained unchanged for the past four years. Yet the PRH merger did alter some of the top-line numbers. Pearson remains the world’s biggest publisher by a considerable margin, but its revenues dipped €1.26bn in 2013 largely (but not solely) due to shedding 53% of its stake in Penguin. The merger enabled PRH to add €513m to its 2013 figures, and to put some distance between it and sixth-placed Hachette Livre.
There was movement further down the top 10, with the Holtzbrinck Group climbing three places to seventh. The Macmillan parent achieved this by standing still—revenues increased marginally (0.1%) year on year, to €1.61bn—while McGraw-Hill and Scholastic stuttered because of a restructure and a post-Hunger Games retraction, respectively.
Cengage moves into the top 10, although this is by virtue of the US-based academic publisher not yet reporting last year’s figures—it filed for Chapter 11 bankruptcy in July 2013. The company has restructured, and it is understood its revenues should be comparable to 2012’s figure of €1.5bn.
Old and new markets
The ranking is based on 2013 full-year financial results, a somewhat straightforward exercise in North America and Western Europe, but as we have seen with Cengage, some 2013 figures are unattainable. Reader’s Digest (33rd) filed for Chapter 11 two years ago, so its 2013 figures are not available, while Perseus (38th), as a private US company, is not required to post full-year public results. It provided information for the previous ranking, but did not do so this year. Its figures are understood to be in line with the group’s performance in 2012.
Getting financial information can be even more difficult in emerging territories. For example, the Chinese market is represented by two publishers: China Publishing Group Corporate, which rose eight places to 14th; and China Education & Media Group, which vaulted nine spots to 21st. Figures for the two companies were acquired by approaching the publishers directly.
Yet Wischenbart also reckons that two other emerging Chinese giants, Phoenix Publishing & Media Group and China South Publishing & Media Group, could also be high up on the list. Phoenix’s 2013 revenue is estimated at €2bn and China South’s at €1.6bn, but the numbers could not be verified accurately.
While the PRH deal may not have had a huge effect on chart positions, two other recent mergers certainly have. Groupe Madrigall, the parent company of France’s Gallimard, climbed 16 spots to 31st place following its 2012 purchase of Flammarion. Meanwhile, EKSMO’s acquisition of fellow Russian group AST created the country’s biggest publisher (it controls about 20% of its home market), propelling it into the top 50, at 45th place.
In the global publishing world of the 21st Century, where a company is headquartered matters less and less—particularly since the bulk of revenues of many of the groups come from abroad. That said, the Anglophone publishers continue to dominate. Sixteen of the 50 publishers come from a primarily English-speaking country (including Reed Elsevier, which has HQs in London, New York and Amsterdam), 11 from the US, five from the UK and one from Canada. Collectively, Anglophone publishers generated €25.3bn in revenue in 2013, 48.9% of the Top 50’s €51.7bn. That is a 6% decline from the €26.9bn those publishers earned in 2012, as a large chunk of revenue has migrated to German-owned PRH.
Germany has the second most entries on the list, with seven publishers. Five of the German groups had year-on-year revenue gains, while professional and education specialist Weka had a negligible (–0.3%) drop.
Berlin-based schoolbooks publisher Cornelsen, however, had the biggest percentage sales slide of any European publisher last year. Sales plummeted 21.2% to €330m, due to a two-year restructure which has seen the publisher dispose of some of its smaller divisions, scale back its textbook production, and consult on jobs—by the end of 2014, its 1,000-strong workforce will have been reduced by around 20%.
A trend continuing from 2012 is the ongoing difficulty in the Japanese market. The four Japanese publishers for which year-on-year comparisons can be made—the fifth in the Top 50, Gakken, changed the way it reported its sales this year—have all had double-digit percentage revenue slides. Japan’s biggest publisher, Shueisha, had the deepest drop, down 21.9% to €864.9m.
One country not represented is Brazil. In the ranking two years ago, it was an emerging powerhouse, with its two biggest publishers, Abril Educação and Saraiva, 40th and 50th respectively, and Editora FTD on the cusp of the Top 50. All three have been hurt over the past two years by the depreciation of the Brazilian Real and the country’s inflation. Saravia’s sales rose to R$507.2m last year (from R$470.4m in 2012), yet against the Euro that was actually a decline of 10.6% (€155.7m in 2013, down from €174.2m). Collectively, the three Brazilian publishers’ revenues declined 35% from 2011 to 2013.
The Global Ranking of the Publishing Industry was started in 2007 as an initiative of Livres Hebdo (France), is co-published by The Bookseller, buchreport, Publishers Weekly and PublishNews Brazil, Researched by Rüdiger Wischenbart Content & Consulting with support from BookDao for China, and PublishNews for Brazil, copyright Livres Hebdo.