Kensington Has a Winning 2009

In a year in which many publishers will settle for finishing flat with last year, Kensington Publishing completed its fiscal year ended September 30 ahead of budget and with net sales up about 7%. CEO Steve Zacharius said the increase occurred across all formats and was led by gains in the Zebra mass market and Kensington trade paperback imprints, plus substantial gains in e-book sales.

While mass market paperback accounts for more than 50% of revenue, the fastest selling segment for Kensington has been trade paperback. Looking to keep prices as low as possible, the company is publishing fewer hardcovers and more trade paperbacks, which it prices at no higher than $15. (Its mass market paperbacks are mostly $7.99, with some cheaper, and there are no premium paperbacks.) The trade paperback focus is on “literary commercial fiction,” said Laurie Parkin, v-p and publisher, with an emphasis on women's fiction. As part of its increased trade paperback efforts, Kensington has improved the packaging of titles. And even though Kensington is now doing about 20 trade paperbacks monthly, the list is still small enough to allow Kensington to develop a marketing plan for each title. This approach has resulted in more attention from independent booksellers and more reviews, which in turn allows Kensington to build authors and find some surprise hits. Two Rivers by T. Greenwood, for example, started with 30,000 copies in print and is now up to 80,000, Parkin said.

Sales of mass market paperbacks were up slightly in a tough market. “It's a format we continue to embrace,” said Parkin. Romance of all kinds and thrillers drove sales of mass market paperbacks last year and sales of westerns also improved. “We see more accounts asking about [westerns],” said Parkin, noting that series from William Johnstone have sold well.

Kensington remains committed to the mass market format and is constantly looking for creative marketing campaigns it can do with accounts. “If we think an account has a good idea, we'll work with them to make it happen,” said Parkin. Different types of in-store displays and online promotions, including e-blasts are among practices used by Kensington to spur sell-through. As a result, Zacharius said the company saw “substantial” increases with several of its major customers, both retailers and wholesalers, in the year, and with mass merchandisers as well as bookstores chains, particularly Borders, where Kensington's sales were up about 10%. Overall, sell-through was up and returns down, said Zacharius. “It's about getting the right books to the right accounts,” Parkin added.

Kensington is now doing about three to four hardcovers per month, built around its major authors including Fern Michaels, Lisa Jackson, Carl Weber, and Mary Monroe. Newly acquired bestselling historical romance author Victoria Alexander will publish two hardcovers and three paperback originals as part of her five-book deal.

On the e-book front, as described in the September 21 edition of PW, Kensington uses free e-book promotions to boost sales of e-books and first-time authors. Zacharius estimated e-books will account for about 2.5% of revenue in fiscal 2010. The company's strategy is to release e-books simultaneously with the print edition priced at a 20% discount from print. To date, all of Kensington's e-books have been derived from print titles, but Parkin said Kensington will do an original e-book when the right project comes along. Kensington has yet to digitize its 3,000-title backlist, although Zacharius said he is in discussions with a number of companies to work on a digital distribution strategy.

Kensington is also moving ahead with a project that involves three generations of the Zacharius family. Kensington Media was the brainchild of Walter Zacharius, company founder and now chairman emeritus, and is run by Steve's son, Adam, from a California office. The unit is now in postproduction on its first film, The Company We Keep, based on a Kensington book by Mary Monroe, who wrote the screenplay. Kensington is still looking for a distributor. Kensington is one of the first publishers to sign up with Jane Friedman's Open Road Integrated Media, and a byproduct of that deal is that Friedman's partner, Jeff Sharp, will be working with the Kensington editorial staff to look at the potential for independent feature film development for Kensington titles.

Now in its 35th year, Kensington is arguably the largest independent trade publisher based in New York City. In February, the company moved its 90 employees into newly refurbished (to the tune of $2 million) offices on 40th Street. “New York is still the heart of trade publishing,” Zacharius said about his decision to stay in Manhattan. And Zacharius remains bullish on the book market, targeting a 10% increase in sales in fiscal 2010.

Kensington Publishing