Faced with a difficult comparison to last year's third quarter, sales at Simon & Schuster fell 11% in the third period ended September 30, 2014, compared to the same period last year.
Operating income before depreciation and amortization held even at $43 million. In last year's third quarter S&S benefited from strong sales of Stephen King's Doctor Sleep and Si Robertson's Si-Cology.
Sales of digital content, which were down in the first half of 2014, were "flat to a little down" in the third quarter, S&S CEO Carolyn Reidy told PW. She attributed the lack of e-book growth to a number of factors, including a slowdown in consumers' use of digital devices for reading, and downward pressure on e-book prices with more companies relying on price as a marketing tool. Digital content--e-books and downloadable audio--accounted for 28% of all sales in the quarter.
There were also, though, a number of bright spots in the third quarter, Reidy noted, including stronger than expected sales of S&S titles on subscription services. Reidy said that about 60% of the backlist books that S&S has made available on subscription services have been read or acquired, something she sees as evidence that consumers are reading a variety of titles on these sites, and not just buying a few titles.
Reidy was also pleased with the continuing success of Anthony Doerr's All the Light We Cannot See, which has now spent six months on the bestsellers list and is a National Book Award fiction nominee. Other third quarter bestsellers included Dork Diaries 8 and unPHILtered by Duck Dynasty star Phil Robertson.
During the conference call discussing quarterly results, Les Moonves, CEO of S&S parent company CBS, praised S&S executives for reaching an agreement with Amazon over sale terms. Moonves said the agreement was a "terrific" deal for S&S and its authors.
Reidy also remains confident that the fourth quarter will be a good one, noting that three major titles--Stephen King's Revival, Mary Higgins Clark and Alafair Burke's The Cinderella Murder and Tony Robbins's Money: Master of the Game--are all set for release this holiday season. A couple of new S&S authors are also expected to have popular holiday titles--Derek Jeter (Jeter Unfiltered) and Bruce Springsteen (Outlaw Pete). Reidy said she is hopeful that the 2014 holiday will follow the trend of the last few years, in which sales of print books rose as more people visited bookstores, giving a boost to a market that has been a little soft.
For the first nine months of 2014, sales at S&S were down 3.7%, to $563 million, but OIBDA rose 4%, to $80 million.