HarperCollins is one of the world’s largest English language book publishers. The company owns over 120 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 July 2014, HarperCollins completed its acquisition of Harlequin, the leading publisher of women’s fiction, from Torstar Corporation.
HarperCollins is a subsidiary of News Corp, a global media and information services company comprised of businesses across 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. Headquartered in New York, the activities of News Corp are conducted primarily in the United States, Australia, and the United Kingdom. News Corp split in two companies in 2013. Television and film assets were put into the new 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.
Analysis & Key Developments
Financial
Revenues for HarperCollins decreased by 21 million USD in 2016, a 1% drop compared to fiscal 2015 for a total of 1.6 billion USD. The change was due to lower blockbuster sales, such as 2015’s Divergent series by Veronica Roth and American Sniper by Chris Kyle, which brought in a combined 69 million USD. Other factors included the industry-wide decline in e-book sales and negative impact of foreign currency fluctuations. EBITDA at HarperCollins decreased by 36 million USD, or 16%, to 185 million USD for 2016. The decrease was also primarily due to the same causes that impacted revenues, and was partially offset by cost savings initiatives and the contribution from higher print book sales, including Go Set a Watchman by Harper Lee.
Internal Organization
In April 2016 HarperCollins announced another expanded international division, HarperCollins France. Previously, Harlequin SA was a joint venture in France with Hachette Livre, but HarperCollins bought out their partner. They will continue to work with Hachette in an ongoing partnership for distribution and sales.
Acquisitions
In February 2016, HarperCollins Italia acquired 20lines, an app for the iPhone and Android that allows people to write, read and share short-format stories.
In March 2016, Harper Collins acquired the publishing rights for the accompanying volumes of the Warner Bros. film Fantastic Beasts and Where to Find Them by J. K. Rowling.
In January 2017 HarperCollins took full ownership of HarperCollins Brazil after purchasing the shares owned by Ediouro.
Merger
In March 2016 Harper Collins Germany expanded its sales team and started a joint venture with the Aufbau Vertriebs GmbH. The independent company provides the personal care of the stationary book trade of HarperCollins, HarperCollins ya! and MIRA Taschenbuch in Germany and Switzerland.
International
The company runs worldwide operations in 18 countries and publishes and distributes consumer books globally through print, digital and audio formats. HarperCollins offers a catalogue of more than 200,000 publications in 17 languages, with licensing deals in more than 50 languages around the world.
Digital
The digital portfolio of HarperCollins includes e-books for devices such as tablets and e-book readers, as well as downloadable audio for smartphones and MP3 players. As of June 30, 2016, the company offered approximately 100,000 publications in digital formats. Digital sales, comprising revenues generated through the sale of e-books as well as digital audio books, represented approximately 19% of global consumer revenues for the fiscal year ended June 30, 2016. Digital sales decreased 15% as compared to fiscal 2015 due to an industry-wide decline in e-book sales and the lower contribution from the Divergent series.
Bestsellers
During fiscal 2016, HarperCollins U.S. had 239 titles on the New York Times print and digital bestseller lists. Thirty titles reached number one, including Go Set a Watchman by Harper Lee, The Pioneer Woman Cooks: Dinnertime by Ree Drummond, The English Spy by Daniel Silva, The Glass Sword by Victoria Aveyard and Pax by Sara Pennypacker.
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