Wiley's Professional/Trade Group Keeps On Rolling
With revenues of approximately $199 million in the fiscal year ended April 30, 2000, the professional/trade publishing group accounted for 33% of John Wiley's total revenue last year. Although still smaller than Wiley's STM group, which generated 41% ($244 million) of total revenues, the P/T unit is larger than the education group, which had revenues of $155 million last year, 26% of revenues. Moreover, the P/T group was Wiley's fastest growing segment last year with revenues up 27%, led by a 36% increase in domestic revenues.
The growth of the unit has been spearheaded by Stephen Kippur, executive v-p and president of the P/T group, who has overseen the division since it was formed in 1985. In its first year of operation, the division had 22 employees and sales of $13 million. The employee count is now up to 540 and the group publishes about 750 titles annually. Kippur credits organic growth as well as strategic acquisitions with making the unit an important player in the nonfiction fields in which it publishes. "In the areas we choose to compete, we have very strong positions," Kippur said. Business is the group's largest segment, and Wiley has also enjoyed success in the areas of architecture, culinary arts and hospitality, computer books, psychology and general interest. Kippur told PW he has no plans to expand into new fields, although the company is adding general interest titles in such subjects as biography, history, health, religion, self-improvement and children's. There are no plans to publish fiction.
One of the keys to the P/T group's success has been its ability to form alliances and partnerships. The publication of the Ernst & Young Tax Guide in 1992 "had a big impact on us. It made us believers in the value of forming strong alliances," Kippur said. The guide now sells more than 300,000 copies annually. Publishing with a partner "is truly a team effort. And while it can take time to cultivate a relationship, a successful alliance can pay off for a long time," Kippur said. Wiley has formed a number of alliances since the Ernst & Young deal, and Kippur is particularly excited about the line coming out this fall being published in connection with CNBC.
While the P/T group regularly publishes books whose sales top 100,000--the J.K. Lasser Tax Guide has sold more than 300,000 copies, and The Carbohydrate Addict's Cookbook had the largest hardcover first printing in Wiley history and now has 310,000 copies in print--the company's business model d s not rely on bestsellers for the unit to be successful. "We expect every book we publish to make money," Kippur stated. "If a book takes off, that is incremental income."
To help ensure that each title has a chance to reach the black, all the publishers in the P/T group have profit-and-loss responsibility for their areas. "We want publishers to have control over their operations," Kippur said. Kippur is quick to note that Wiley publishers are not left on an island to survive on their own. "We believe in a team-based approach," Kippur said, noting that each publishing group is aligned much like imprints are at other companies. The P/T's 80-person sales division incorporates a trade force, special markets force, library force and direct response unit, and sells all group titles to their respective accounts. Indicative of Wiley's multichannel sales approach, sales to colleges represent about 10% of the P/T group's annual sales. Not surprisingly, the Internet is Wiley's fastest growing distribution channel and accounted for 10% of P/T's revenues in fiscal 2000. Sales directly off of Wiley's Web site were in seven figures last year. Trade outlets now account for the largest portion of the P/T group's sales, something that took years to develop. "A dozen years ago, I would go to the ABA and booksellers wondered what I was doing there. That's not the case any more," Kippur said, stressing that the company is still looking to increase its penetration in the trade.
As a company, Wiley is better known in some countries than in the U.S., and the P/T group has used the publisher's international reputation to increase its foreign business. Wiley editors are expected to try to acquire global rights for each title, and the company is planning to do more global launches of titles; such a launch is planned for The Power of Gold,which Wiley expects to do extremely well across the various markets. The P/T group has large operations in Canada, Asia and the U.K., and Kippur's desire to grow more in Europe was one reason behind the June acquisition of the U.K.-based Capstone. Acquisitions both at home and abroad are an ongoing part of the P/T group's strategy. "We are looking to leverage our infrastructure," Kippur said.
Rounding out the P/T group's efforts is its electronic publishing program under the direction of Kelly Franklin. All of the group's frontlist titles are in digital format, and Wiley is digitizing parts of its backlist. "We will be a player in the e-publishing market," Kippur said. Approximately 700 of Wiley's titles will be included in an online library being developed by netLibrary. The group's in-house initiatives include plans to post books online that could be sold in their entirety or chapter by chapter. Kippur also expects to see sales of print-on-demand products grow.
Kippur is optimistic about the future of both the P/T group and publishing in general. According to Kippur, books are selling in higher numbers than ever before, and e-retailing and e-publishing have expanded the entire market. "I have a lot of confidence that our group will continue to show good growth in the future," Kippur said.
Volume 246 Issue 37 09/11/2000