Potter a Boon for... HarperCollins?
Steven Zeitchik -- Publishers Weekly, 7/25/2005
Forget Jo Rowling, there's a far more unlikely player who can make out deposit slips now that Harry Potter has raked in the sales: HarperCollins.
The book's success has had many beneficiaries, from UPS to Running Press, whose impulse-buys saw a spike. But in a little-known deal, Harper has been handling all billing for Scholastic since 2001.
The deal means revenue of as much as $8 million or $9 million for the new book. Sources say Harper gets a single-digit percentage of Scholastic's revenue for a book, which for Half-Blood could be $200 million. HC COO Glenn D'Agnes declined to comment on revenue.
Unlike traditional fulfillment deals, the house handles only billing—entering and tracking orders. The deal is unusual since most billing deals usually happen with smaller firms than Scholastic.
Given the low overhead, the money is largely profit. But D'Agnes emphasized that it wasn't so simple. "It's certainly less work than when you're physically handling every box of books," he said, but stressed "the substantial cost" of starting up and "the ongoing work."
The deal is said to be a source of discomfort for some Scholastic executives, upset they turn over millions to HC for each Potter. One source noted that the company has discussed handling billing themselves. But Scholastic's Lisa Holton said it wasn't a priority. "We're happy with our deal," she said.
