Led by a 250% increase in e-book sales, strong lists and favorable exchange rates, total revenue at Random House rose 6.1%, to 1.83 billion euros ($2.57 billion at current exchange rates), while earnings before interest, taxes and special items jumped 26.3% to 173 million euros ($243 million). In addition to top line growth profits benefited from cost controls, parent company Bertelsmann said. Random ended 2010 with 168 fewer employees than in 2009.
Random’s star performer in 2010 was Stieg Larsson with the company selling more than 13 million copies of his trilogy in the U.S. across all formats. Random chairman Markus Dohle called the results excellent and in his letter to employees commended the Random staff for rising to the market changes and challenges head-on as we are continuing to fulfill our mission: to deliver our content to the largest possible audience wherever and however our consumers want to buy and read our books.”
While digital sales (books and audio) accounted for about 10% of sales in its U.S. subsidiary, Dohle said their will continue to be a market for print books and that the combination of print and digital offers the opportunity to reach more readers. Dohle also once again emphasized that Random will be shifting more of its marketing focus to reach consumers directly through more targeted campaigns that utilize different digital tools. Author development on a global basis will be even more of a priority for Random in 2011, Dohle said.
Digital investment remains key to growth, Dohle said, and the publisher will continue to experiment with different technology products such enhanced e-boos, pure-content apps plus new business models that include bundling e-books and print books, subscription models and digital services. Random is not leaving bookstores behind, holding discussions with “retail partners to establish sustainable profitability business models for our print and evolving digital business.”
Dohle said 2011 has gotten off to a good start, led by many of the titles that were doing well late in 2010, new titles and "sustained" high growth rates of e-books." Random has set its global expansion sites on Latin America, India, and Asia, although Dohle noted that the company needs to deal with regulatory restrictions in that region, particularly in China. More immediate growth is seen in Random's English-lanaguage markets, since, as Dohle noted, "our content can be purchased worldwide with just one click."