Online Sales Lift Publishers

With bookstore sales down in the first part of 2007, sales through online retailers have helped publishers increase sales in the first six months of the year. Penguin USA said that sales through online stores rose 23% in the first six months of 2007, while Simon & Schuster also reported online sales were up more than 20%. Even at Harlequin, where president Donna Hayes said sales through retailers have been good, online account sales have increased by double digits. No one could pinpoint a reason for the impressive gains at e-tailers, but the healthy increases are expected to continue for the remainder of the year.

The gains at online stores have not blinded executives to the sluggish retail environment. “You'd be foolish not to notice trends in the overall sale picture,” said S&S CEO Jack Romanos. He observed that given the sluggish industry growth, gains at one particular publisher are coming at the expense of others. And although six-month sales at S&S were up 20% in the first half of the year, Romanos called competition “ferocious.” Penguin USA CEO David Shanks said that while sales were up (currency fluctuations resulted in a decline for the entire Penguin Group), “units haven't been great.” Add in an uncertain economy, and Shanks said there is reason to be cautious about prospects for the industry in the second half of the year.

Both companies have seen gains in digital sales, although they still represent only a small portion of total revenue. At S&S, audio downloads were largely responsible for the 37% increase in second-quarter audio sales, while e-book sales at Penguin jumped 66%. Hayes said sales of e-books have been growing at a steady pace at Harlequin, particularly in some overseas markets. In Japan, e-book sales, combined with sales through cell phones, are equal to sales in the U.S., she noted, adding that manga is especially strong. To take advantage of its customers' interest in e-books, Harlequin has just introduced Spice Briefs, an e-book line of original erotic stories that will sell for $2.99 each.