Compared to fiscal 2009, when HarperCollins underwent a major restructuring, fiscal 2010 was relatively quiet, and that stability helped the publisher post an 11% sales increase in the year, to $1.27 billion, while profits jumped to $88 million from $17 million, a year that included $33 million in write-offs. HC president Brian Murray credited the improved performance to a "focus on the basics—being as creative as possible within our imprints, while operating as efficiently as possible." The fiscal 2009 restructuring made HC a smaller company, and worldwide revenue and profits were still below fiscal 2008 levels in fiscal 2010, but given the weak economy and changing book market, Murray said he was "happy with what the team did over the last 12 months. We achieved our business goals and published well in a challenging market."
In the U.S., the general books group and children's division both did better than expected and e-book sales jumped 250%. By the end of calendar 2010, digital sales could represent 10% of adult sales, Murray said. He added that it's too early to determine if e-book sales are adding to sales or cannibalizing print sales. "We'll need more time to tell," Murray said, but added he was encouraged by sales of backlist e-books. He is very excited about the prospects for HC's new enhanced e-book program. The company has three titles in the iBookstore already (see review, p. 10) with at least five more to come. The format, Murray said, is perfect to keep narrative nonfiction titles, like HC's bestseller Game Change, relevant. Television and radio interviews and other new content can be aggregated and downloaded, Murray noted, bringing fresh material to the title. "There's room for experimentation," Murray said about enhanced e-books.
Experimentation was the mantra for HarperStudio, but with the departure of HarperStudio head Bob Miller to Workman, the unit was closed and titles placed in different HC imprints. Murray said HC is still willing to engage in one of HarperStudio's tenets—profit sharing with authors—on a case by case basis. As for e-book royalty rates, Murray remains committed to 25% of net receipts.
Murray said he also remains committed to Zondervan, the religious publishing division that has been undergoing changes. While the religious book market has been challenging, "the demographics for Christian books remain favorable. We're as committed as ever to Zondervan."
Murray believes HC is well positioned for 2011 and sees more substantial growth ahead for e-books as more devices come on the market. "By January there could be twice as many devices sold as there are now," he said.
HarperCollins Results Fiscal 2008–2010 ($ in millions)