HarperCollins is a subsidiary of News Corp, a global media and information services company that covers a range of media, including news and information services, cable network programming in Australia, digital real estate services, book publishing, digital education, and pay-TV distribution in Australia.
News Corp is based in New York and its business is conducted primarily in the US, Australia, and the UK. In June 2013, News Corporation split into two companies. Television and film assets were put into a new company, 21st Century Fox, while roughly 130 newspapers (including the Wall Street Journal and the Times of London), educational businesses and other assets formed a new company under the old News Corp name. The split completes a process that the company announced in 2012, and responds to investor concerns that the newspaper and book publishing divisions were dragging on the faster growing pay TV business.
HarperCollins is one of the world’s largest English language book publishers. HarperCollins owns over 60 branded imprints, including Avon, Harper, HarperCollins Children’s Publishers, William Morrow and Christian publishers Zondervan and Thomas Nelson, which HarperCollins acquired in July 2012.
In 2011, News Corporation entered the US educational market. Amplify, an education technology business, provides digital products and services to the K-12 education market. Amplify is focused on transforming teaching and learning through Wireless Generation, which was acquired in 2011.
Key company developments in 2013 & first half of 2014
Book Publishing revenues increased $180 million in fiscal 2013, a 15% rise from 2012 due to $172 million from Thomas Nelson, which was acquired last year. Another $25 million of the boost is attributed to end of major costs in the e-book pricing settlements. Earnings were impaired by 13 million from Australia and Canada and the decision to exit third party distribution in the US. The financial lift from Nelson brings Harper's results close to where the company was in fiscal 2008 prior to the recession.
Ownership, mergers & acquisition, internal organization
HarperCollins made necessary adjustments in the wake of News Corp.'s separation. Victoria Barnsley left after 13 years as CEO of HarperCollins UK. The management of HarperCollins Australia, HarperCollins New Zealand and HarperCollins India was transferred from the UK to the US, where they report directly to Brian Murray. Replacing Barnsley as CEO is Charlie Redmayne, the company's former chief digital officer who left in 2011 to serve as Pottermore's chief executive officer.
News Corp announced in May 2014 that it would acquire Harlequin Enterprises from Torstar Corporation. Harlequin will remain headquartered in Toronto. Harlequin will become a division of HarperCollins. Approximately 40% of Harlequin’s revenues come from books published in languages other than English. Currently, 99% of HarperCollins books are published in English.
“Harlequin is a perfect fit for the new News Corp, vastly expanding our digital platform, extending our reach across borders and languages, and is expected to provide an immediate lift to earnings,” said Robert Thomson, Chief Executive of News Corp. Brian Murray cited Harlequin’s international business, “which will give HarperCollins an immediate foothold in 11 new countries from which we can expand into dozens of foreign languages for authors who choose to work with us globally.” The purchase price of the acquisition is 455m CANDollar in cash.
Following suit with Pearson, HarperCollins announced it will shutter its distribution operations in New Zealand and switch to its warehouses in Australia.
HarperCollins is rapidly transitioning from print production to digital. As of June 30, 2013, HarperCollins offered approximately 30,000 e-book titles, which accounted for approximately 19% of global revenues in the quarter (up from approximately 16% in the prior year period).
HarperCollins notably points to its romance imprint, Avon, which launches “digital-first,” releasing one new title per week in the romance category. The series has already generated three New York Times electronic bestsellers since its launch.
HarperCollins is working on bundling e-books with print books, and launched a parthership with Foyles in the UK to offer customers a selection of eight hardcover titles and their e-book versions. The offer ran from October 31, 2013 to January 2014.
Bestselling authors & titles
During fiscal 2013, HarperCollins U.S. had 167 titles on the New York Times bestseller list, with 16 titles hitting number one, including American Sniper by Chris Kyle, Veronica Roth’s Divergent-series, and Pete the Cat: Rocking in My School Shoes by Eric Litwin. In the UK, bestellers included Bring Up the Bodies by Hilary Mantel (winner of the Man Booker Prize) and The Hobbit, boosted by Peter Jackson’s film adaptation. George RR Martin, David Walliams, and Veronica Roth were also strong sellers.
HarperCollins's revenue fell slightly from 1.2 billion USD in 2011 to 1.19 billion USD. International turnover, excluding the US market, rose 4% from 254 million GBP to 263.5 million GBP, but operating profits slipped from more than 12.3 million GBP in 2011 to just over 9.8 million GBP in 2012, a fall of 20%. Profits after tax were 7.6 million GBP, down from 9.3 million GBP in 2011, a decline of around 18%.
According to The Bookseller, HarperCollins registered a "10% increase in physical market share, e-book sales grew by 250%, accounting for nearly 15% of trade revenue in the year." HarperCollins imprint Avon, which focuses on women's commercial fiction, saw a 72% increase in revenues, mainly in the e-book market.Sales of children's books also increased, up 9.47% with 30.6 million GBP.
Ownership, mergers & acquisition, internal organization
Two words from CEO Rupert Murdoch marked News Corp's fiscal 2012: “Big decisions.” The company was split into two separate, publicly traded businesses, one focused on news, publishing and education, the other on media and entertainment. Robert Thomson, former managing editor of the Wall Street Journal and editor of the Times, has been named the head of the publishing business, which includes HarperCollins.
In February 2013, HarperCollins announced to merge its three non-fiction divisions into two imprints, creating a new William Collins brand alongside HarperCollins Non-Fiction. CEO Victoria Barnsley noted that move was in response to the challenge of free content online. “We need to focus our resources so that we can concentrate on stretching the boundaries and redefining the genre.”
HarperCollins launched a new education publishing division in India, its "largest ever" investment in international education publishing. Collins India will provide books to Indian schools in 2014 across subjects including English, maths and science. Two months earlier, HarperCollins took full control of its India arm after ten years of running it in partnership with Living Media India (LMI). In a move to make its English language titles available around the globe, HarperCollins launched a program called HarperCollins 360. The program will ensure that "the HarperCollins global catalog, comprising 50,000 print books and 40,000 e-books, will be available, limited only by the rights held, not by technology or geography,” according to the company.
HarperCollins saw a rise in turnover but a fall in profits in 2012, with UK e-book sales growing by 250% and accounting for nearly 15% of trade revenue over the period. HarperCollins made 25% of its list available in e-books in the US. Two years after HarperCollins imprint Avon launched e-book branch Impulse, William Morrow inaugurated its digital crime imprint Witness with ten books.
More titles will come from Witness, as Morrow publishing director Dan Mallory has already bought the rights to 100 titles including original editions, international bestsellers that have not been released in the U.S., and newly digitized backlist classics, with a price range of $0.99 to $2.99. On investor day, HarperCollins CEO Brian Murray presented Harper's strategy focusing on investments in fiction, children’s and religion,driving growth through digital transformation, expanding internationally and driving profitability in core print businesses.
By 2014, there would be four instead of nine warehouses around the world. Estimates say that HarperCollins currently sells through 70 e-book storefronts worldwide, and sees that number rising to 150 storefronts in a year. The presentation also confirmed that Harper received 57% of their revenue from their top 15 customers, and that 50% of all revenues were from the backlist. Under Harper's agency e-book pricing, e-books were significantly more profitable than print books. The e-book edition of a new frontlist title was 39% more profitable.
Bestselling authors & titles
HarperCollins UK had 56 books on The Sunday Times bestseller list, with six titles reaching number one. Bestsellers included Bringing Up the Bodies by Hilary Mantel, The World of Downton Abbey by Jessica Fellowes, Three Letters by Josephine Cox, Dare to Dream by One Direction, and A Dance with Dragons by George R. R. Martin. The U.K. editions of The Game of Thrones contributed sales of $15 million in fiscal 2012.