Traditional Publishers Enjoy Gains During the Third Quarter

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Nonfiction, audio, and backlist continue to be important profit drivers across categories

Ever since the start of 2018, the publishing industry has been enjoying gains from new nonfiction, especially from titles in the political category. By mid-January, in fact, BookScan was already tracking a 9 percent boost in unit sales over the same week in 2017 due to Fire & Fury (Macmillan). Since those winter months, quarterly reports have been variations on that theme, complemented by good backlist performance and continued digital audio growth.

  • Simon & Schuster received a nice boost from Bob Woodward’s Fear. Adult publishing was up 6.5 percent, and children’s publishing was up 7 percent, the latter benefiting from Jenny Han’s To All the Boys I’ve Loved Before. Audio was up 15 percent.
  • HarperCollins saw digital audio sales grow 55 percent during the third quarter, which brought all digital product sales (including ebooks) to 22 percent. The CEO of News Corp. (the parent company of HarperCollins) noted, “We are in discussions with several Chinese audio publishers, who are also experiencing express growth in their market, which has been complicated in the past by a lack of IP protection and the proliferation of piracy. There has obviously been a fundamental shift in listening habits not just in the US but globally.” Book sales were led by new titles such as Rachel Hollis’s Girl, Wash Your Face and Gregg Jarrett’s The Russia Hoax (both nonfiction), but the CFO said backlist sales are really driving profit margin. Backlist comprised 55 percent of sales for the quarter; strong titles include The Subtle Art of Not Giving a F*ck by Mark Manson and The Hate U Give by Angie Thomas.
  • Hachette is doing well because of the Perseus backlist, especially Jen Sincero’s You Are a Badass. Also continuing to sell: Sally Field’s In Pieces and the James Patterson–Bill Clinton collaboration, The President Is Missing, which is seeing strong digital audio and ebook sales.
  • The big news at Penguin Random House this fall is the reorganization and merging of imprints. Publishing industry analyst Mike Shatzkin commented recently that such consolidations reflect that the revenue side of traditional publishing has become more challenging. While there are no third-quarter results available for PRH, the company saw a drop in earnings, attributed to exchange rates, during the first half of the year. However, expect the publisher to tout the success of Becoming by Michelle Obama, which has already sold about 1.5 million copies since mid-November.

Booksellers didn’t see the same uptick in revenues; both Indigo and Barnes & Noble experienced declines. However, Indigo did see some growth during the third quarter from online sales following the company’s “every book ships for free” promotion. Same-store sales for Barnes & Noble fell 1.4 percent during the most recent quarter, which is in fact their best quarterly performance in roughly two years.

Bottom line: Even though midterm elections are over, don’t expect political and nonfiction book acquisitions and sales to slow down. Frankfurt Book Fair was particularly focused on dealmaking for political and nonfiction books, with a focus on women. As Ron Charles in the Washington Post points out, “Scores of fresh faces are about to arrive in Congress,” and the women just elected to office are prime targets for publishers and agents. But so are losers like Beto O’Rourke. Next to watch: Bernie Sanders’s Where We Go from Here (released Nov. 27).

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