Continued investment in its global publishing ventures is one way that HarperCollins hopes to expand its operating margins, company CEO Brian Murry said at Deutsche Bank’s 25th Annual Media & Telecom conference held March 6 in Palm Beach, Fla.
HC now publishes in 17 languages and is continuing to build up its author services in the countries where it has divisions, Murray said. He told the crowd that, by the end of the year, he estimates foreign language markets will account for nearly 10% of the publisher’s overall revenue, up from less than 1% before HC acquired Harlequin in 2014. Murray sees HC operating like a movie studio, with it developing content in a central location and then marketing and distributing that content around the globe.
Another growth area for the publisher will be digital audiobooks, which Murray said will grow by significant double digits this year. He said that given the rapid growth of digital audio he expects another significant player to get into the market to compete with Audible. At present, digital audiobooks generates revenue of about $50 million for HC.
Murray told the analysts that book publishing has weathered the digital transition well, and that a good balance between print and digital has been established. He said he is very happy with HC’s portfolio, explaining that about half of its revenue comes from its backlist and the remainder from the frontlist.
While the backlist is relatively steady generator of cash and profits, it is the unexpected hit that can give the company a real boon. And, although the Divergent remains the biggest home run the company has had in the last five years, HC still has surprise hits. Highlighting this, Murray pointed to the Hillbilly Elegy. The 2016 nonfiction title had a first printing of 15,000 copies and is now up to 1 million copies in print.
Another steady source of revenue is the Bible market which, annually, bring in about $60 million for the publisher. To ensure it remains competitive with the other major trade houses, HC spends about $200 million a year to acquire content, Murray said.
Asked if HC was on the lookout for more acquisitions, Murray said the company always has an eye out for “the right company that is the right fit at the right price,” but that no deal is eminent.