Harry Potter it’s a difficult thing to do. With more than $25 billion earned from books, films, video games and more, the commercial boy wizard franchise has far eclipsed and outlasted most pop culture crazes.
For Bloomsbury, the British publisher of the series, it has proven to be a huge cash cow, helping it become one of the leading players in the world. But it’s also been 27 years since JK Rowling’s first book (yes, that’s What old).
Since then, genres have come and gone, e-books rose, fell, and then began to rise againand social media sites like TikTok have changed the number of people who discover books. Despite all these changes, Bloomsbury managed to avoid becoming a miracle worker, and his books still fill bookstore windows to this day.
Last week Bloomsbury reported a 30% jump in sales to £343 million ($436.6 million) and an almost 60% rise in profits to £49 million ($62.4 million) for the year to February 29, 2024 year, setting a record. -high 12 months for the company. This is not an isolated case: the company has been showing good results for several years, breaking records. year after year.
Meanwhile, its competitors haven’t shared the same wealth growth. Penguin Random House, many more publisher, saw 7% increase revenue in 2023, and profit fell slightly by 0.3%. American publishing house HarperCollins has calculated its profit for the 2023 financial year drop 45% sales fell 10% in the 12 months to June 30.
Bloomsbury’s latest acquisition was the £65 million ($82.5 million) purchase of US academic publisher Rowman & Littlefield. announced Wednesday– provides insight into why the company has achieved success.
What did Bloomsbury do differently?
In short: he’s looking for science fiction writers who can attract loyal readers, and he’s looking to diversify.
As the pandemic began to subside amid the high cost of living, people turned to books as inexpensive entertainment—a trend that worked miracles for Bloomsbury and the entire industry.
The UK publishing industry’s growth in recent years has been driven by best-selling authors such as Sarah J. Maas (whose title sales are up 161% year-on-year) and Samantha Shannon, who have given the publisher big hits.
Weiss Eubanks – NBCUniversal/Getty Images
“Maas’s books have a huge audience that continues to grow, fueled by Bloomsbury’s major advertising campaigns, resulting in strong word-of-mouth recommendations, particularly through TikTok and Instagram channels,” Bloomsbury CEO Nigel Newton said earlier this year, citing “books of MaasBookTokthe phenomenon of book lovers recommending new reads on TikTok.
Another source of success for the publisher was the fantasy series. Three body problem which was turned in a Netflix show.
And while the peak Harry Potter It may be long gone, but its magic continues to attract new business to Bloomsbury. For example, last year the first Harry Potter was a UK number. 1 bestselling children’s book for the first time since 2002. The London Stock Exchange-listed company has also expanded its franchise with new books such as Magic almanac.
But publishing books for the mass market isn’t all Bloomsbury does. The acquisition of independent publisher Rowman & Littlefield, whose authors cover topics including the arts, humanities and social sciences, is a game-changer. Bloomsbury is moving even deeper into the academic publishing space, adding 40,000 titles to its existing roster and expanding its operations in North America. America.
It is part of a diversification strategy that began several years ago and includes a joint venture in China to expand its international presence. Academic publishing now accounts for about 20.5% of Bloomsbury’s revenue, with Bloomsbury’s fast-growing revenue accounting for another 7.7%. digital resource platformwhich leverages the academic division’s intellectual property for the online education market.
“We believe this is very attractive from a strategic perspective as it provides an opportunity for BMY (Bloomsbury) to roll out content across its digital assets platform,” Investec analysts said in a note on Wednesday. The asset management group added that Bloomsbury’s flywheel growth potential and track record were “undervalued”.
In its latest earnings report, Bloomsbury announced it would raise its dividend after an “outstanding” year.
“Our strong cash generation and balance sheet positions us to continue to invest in innovative content and creators and capitalize on emerging opportunities,” Newton said in a statement.
What might the path forward look like?
Although Bloomsbury has strengthened its position, it still shares the challenges other publishers face, such as with generative artificial intelligence.
“The biggest issue right now in our industry is preventing books from being taught by generative artificial intelligence, because they are essentially stealing the author’s copyrighted work,” Newton told the publication. Financial Times last year.
He added that this opens the door to greater productivity for authors using artificial intelligence tools, but still marks a rocky new chapter in the rocky relationship between publishing and Big Tech, which dates back to the days when Amazon first began cannibalizing the bookselling sector.
Bloomsbury expects its portfolio this year to be in line with last year, although it has no new Maas titles in the coming months, which investors fear could set the company back.
“It shifts the focus to making money from it. [Maas’s] catalog, just like Bloomsbury managed to sweat Harry Potter assets with new versions of the beloved book series,” said AJ Bell investment director Russ Mold.
“This news is like hearing a famous band say they’re going on hiatus – it’s disappointing now, but there’s potential to make even more money when they come back.”
However, Bloomsbury is confident it will ride out this wave. It has built a strong fan base among its core authors, which attracts readers new and old, while leaving room for experimentation with new and innovative readers. And thanks to academic books, it has what CEO Newton calls a “sustainable model” in the face of the volatility that typifies the creative industries.