At a Frankfurt Book Fair session on Wednesday, HarperCollins CEO Brian Murray took questions from the major industry trade magazines on a range of subjects, and confirmed that these are indeed exciting times for the publisher.
Fresh off a corporate split under the News Corporation banner, it's been a time of expansion, and experimentation, Murray told the audience, with the acquisition of Harlequin, innovative new strategies such as direct to consumer models, subscription access, and print/digital bundling. And, announced just in time for Frankfurt, an expansion into Germany.
Asked about the benefits of its recent corporate spin off, Murray said the News Corporation reorganization has helped open investors' and analysts' eyes about the health of the book business. "What’s very good for HarperCollins is that there’s a recognition that the book business is doing quite well," he said.
"The book publishing industry I think has done a very good job, and I think analysts are just starting to realize that now that collectively we have transitioned well from a primarily print business to what is now both print and digital. We’re now getting the exposure as a result of this split. Often I think they just lump publishers into other media segments and think, oh, digital is all bad. And it’s not all bad, it’s actually quite good. So the split has been a very good thing for HarperCollins. The fact that we were able to buy Harlequin and expand our international reach is a testament to the fact that [analysts] are very confident in the [publishing] business and where it can go."
Asked about the company's surging profits, Murray pointed to the success of Veronica Roth as a key driver, as well as new efficiencies driven by digital.
"You know, it comes down to the books at the end of the day," he said. "The Veronica Roth Divergent series that was spectacular, the kind of thing that I wish could happen more frequently. But there are a lot of other things besides that one property. Many of our markets around the world have had improved profitability. We have been looking to get as efficient as possible. And then on the digital side we’ve been investing in new marketing techniques, and new business models, and new ways to reach readers. So, we’re constantly trying to get the right balance between resources that are tied to the slowly declining print business, and making sure we reinvest to get the growth on the digital side. And I think that has also played a role in our increasing profitability."
He also said that after years of tension, print and digital sales were beginning to balance out, and that he was optimistic about the future of independent bookstores. "In the U.S., the independent channel is doing quite well," Murray said. "We’ve seen this reinvigoration in the independent channel, and we’re very supportive of that channel, and have done a number of initiatives to help support independent bookstores, and we’re going to continue to do that. Because we want to make sure all of these sales channels can coexist with one another, and hopefully complement HarperCollins."
Asked about the company's recent eagerness to experiment, Murray touched on a common theme at Frankfurt: in a time of transition, you have to try new things. "We definitely lean forward, and we want to try new things," he said. "We always want, whether something succeeds or fails, to learn in the process. We want to be the first to learn, and when something works, we double down and we do more of it."
Specifically, Murray said he's been "very happy" with the early returns from the subscription services, and that he plans to expand those ventures. "What we’ve seen in the digital realm is that every time you have a new partner, a new digital partner and a new digital offer, you’re creating new merchandising opportunities. So, while maybe there are fewer tables at the front of bookstore chains for marketing and promotion, when you introduce a brand new e-tailer or a different e-model, or distribution partner, you are picking up new ways to market your books. And subscription has turned out to be a model that is very successful in really merchandising and mining the backlist in the catalog. And that’s been a surprise to us, and how much churn there is in that deep catalog."
Of course, Murray conceded there have been things that haven't worked as well as the company would have liked, but he stressed that the company would continue to be aggressive in pursing new ventures, at home, and around the world.
"In this day and age, [new] companies come up seemingly overnight with billion dollar valuations, and next thing you know they’re trying to get into the publishing business. So you have to be at the forefront. You have to try things. And we’re going to continue to do that."
Murray was interviewed by representatives of Publishers Weekly, Livres Hebdo, The Bookseller, buchreport, and. PublishNews Brazil, moderated by German journalist and consultant, Ruediger Wischenbar in conjunction with the release of the Global Ranking of the Publishing Industry.