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Penguin UK's focus on brand strategy and going direct to the consumer will continue into the second half of the year, Penguin Group chairman and c.e.o. John Makinson (pictured) and Penguin UK c.e.o. Tom Weldon have confirmed.
Speaking as the company's first-half year results showed a £20m profit drop for Penguin worldwide, Weldon said Penguin UK is currently setting up a "consumer insight hub", drawing together and sharing data from all different parts of the business. "Social media will be more and more important. We have 500,000 Twitter followers, which is a great deal more than any other publisher, and we will put a lot of emphasis on direct to consumer and the best way of doing that," he said.
Makinson said: "I think what will be very interesting over the next 12 months is how Author Solutions [acquired by Penguin earlier this month] can be helpful to us in building consumer platforms."
The Penguin Group chief also predicted that the number of originally self-published titles on the bestseller lists will grow, adding: "Self-publishing is an element that has become closer to the mainstream. There will be an incremental effect from self-publishing -those self-publishing titles in the bestseller lists will crowd out some traditionally published titles, but of the thousands of titles that were self-published last year, obviously only a few of those will make it to the very top - so the long tail of publishing is expanding dramatically because of self-publishing and because of digital platforms, and as you offer more titles to the consumer, they will buy more."
Penguin first-half 2012 sales were down worldwide, to £441m, a 4% drop on the first half of 2011, attributed to a "less favourable product mix, particularly in North America", the storming sales of competitor bestsellers, the Fifty Shades and Hunger Games series, and the sustained pressure on physical book publishing and retailing.
Makinson stressed the US was mainly responsible for the sales and profits drop across the company, with other parts of the world tracking sales in line with or above last year's levels. He said: "I suppose the big picture on this is that we continue to see growth in e-books but at a slower rate, and there is that continuing decline in physical bookshops across the whole industry, which had been somewhat disguised by the 50 Shades of Grey and The Hunger Games sales-so if you hadn't been lucky enough to have a spicy element to your publishing programme-which we now do with Bared to You-then you were going to lose out."
Penguin UK's digital sales currently account for about 15% of its business, "conforming to the industry average", Weldon said. In the US, Penguin chairman and c.e.o. John Makinson said e-book sales account for roughly 30% of sales, and grew by 25% in the first half of the year. He said this was a "natural slowing", with fewer new e-reading devices launched into the market this year.
Commenting on Penguin's absence from the Man Booker longlist this year, despite novels such as Zadie Smith's NW being hotly tipped, Weldon said: "We love being on the longlist of the Man Booker and winning awards, but that's not the only way to launch a literary novelist. We will still find other ways, and it's still possible for a literary novel to sell many thousands of copies. We are really committed to literary publishing."
Looking ahead to the performance of the high street in the second half of the year, Weldon said: "Waterstones' refurbishment is crucial-they will have to get their price message right and communicate that to the consumer, but I have every confidence they will deliver." He also said: "We are really looking forward to seeing the refurbished Waterstones stores, obviously it's a very important Christmas for Waterstones-I think Waterstones and the whole high street will have a great Christmas, it feels like a very strong list across the industry."
In international markets, Makinson said Pearson's focus remains on India, China and Brazil, with Penguin having acquired 45% of Brazilian publisher Companhia des Letras earlier this year. Makinson said: "The economy in Brazil has slowed slightly, so that is affecting a little bit the academic books we publish there, but the trade market is in good health. Companhia has already launched a commercial fiction imprint, helped greatly by commercial insights from New York, so we are starting to see synergies emerging there."