Bloomsbury is on a roll. Harry Potter and the Half-Blood Prince won Book of the Year at the annual Nibbies Awards — probably the biggest publishing award of the year. Then the company posted another spectacular set of financial results when it released its accounts for last year. Turnover up 30% to £109million; pre-tax profit up 24% to £20million. This in a business where a 10% rate of return is considered healthy.
The two events are, of course, not unrelated. Bloomsbury Publishing’s extraordinary growth over the past decade is due, in large part, to the magical performance of the Potter series. Every publisher needs a big hit now and again, but the scale of Harry Potter’s success is without precedent. When Bloomsbury founding editor Liz Calder calls it ”the greatest phenomenon in publishing history”, most commentators would agree that she is simply stating fact.
Exactly how much of the Bloomsbury bonanza is down to the boy wizard is hard to unpick from the published accounts but, at £69million, the children’s division was responsible for almost two-thirds of the firm’s turnover last year. Even on a conservative estimate, according to one industry analyst, half of Bloomsbury’s business is Harry Potter.
It has made Bloomsbury not just the most successful independent publisher in the United Kingdom by far, but also one of the most cash-rich companies in the entire industry, with a reserve of more than £50million to draw on. And draw on it it has.
Bloomsbury is on a spree. Last week it was reported that it had acquired a political memoir by David Blunkett for £400 000. Then there’s the multi-book deal recently concluded with novelist William Boyd for £500 000. New books by Richard Ford, Germaine Greer and Charlotte Rampling have been snapped up. But these are small potatoes next to the huge contracts lately issued to cookery writer Hugh Fearnley-Whittingstall and travel writer and historian William Dalrymple — each worth £1,9million.
Lavishly illustrated recipe books are a new line for Bloomsbury but, apart from Fearnley-Whittingstall, all the previous authors fit squarely into the firm’s traditional formula of mixing crossover literary-commercial fiction with popular non-fiction — even if the sums being shelled out are pretty spectacular. But the acquisition that has really raised eyebrows is the cool £1million that Bloomsbury has paid former Take That star Gary Barlow for his autobiography.
”I can’t see it working,” says an executive at Penguin. ”If they’ve paid £1million for a celebrity who was famous 15 years ago, they’re going to take a bath.”
From another publisher, this could be just sour grapes. But others find it baffling too. ”There have been some strange recent purchases,” says Jonny Geller of literary agents Curtis Brown.
The Bloomsbury response is self-assured. ”We have made a number of big purchases in the past six months,” says Bloomsbury’s chairperson, Nigel Newton, in the measured way of a man now more accustomed to meeting institutional shareholders in the city than lunching authors in Soho. ”We’re in a position to do so.”
It is certainly a far cry from 1986, when the company set up shop — with a modest chunk of venture capital and no photocopying machine — in an office above a Chinese restaurant in Putney. Calder, now 68 and no longer full-time, has always been the guiding light of Blooms-bury’s identity as a publisher.
Her taste and sensibility, which tend towards the literary high end, but combine with a knack for finding the enduring ”good reads”, still inform the list: Margaret Atwood, Michael Ondaatje, Joanna Trollope and John Irving are a few of her cherished authors. As a champion of writers who has made her mark in an industry once dominated by male editors and gentleman publishers, she commands enormous respect and affection. And Bloomsbury continues to trade on that goodwill, seen as the underdog keeping the spirit of quality, independent publishing alive.
But, 20 years on, the game appears to be changing; the new strategy looks like ”big names, big money”. Yet, Calder and co-founder Newton — the other two originators have since retired — are at pains to point out that this is business as usual for Britain’s biggest independent. ”All it is,” says Calder, ”is extending the areas we’ve always been involved in. The mix has always been part of the list. Its character has not changed.”
Calder and Newton point to the recent success of Sheila Hancock’s book about her life with John Thaw, The Two of Us, which has sold nearly one million copies in all editions (hardback and paperback).
But many see the Barlow book, in particular, as a sign of something new and different: Bloomsbury using its cash to muscle in on the mass-market territory of supermarket retailing. To be a player there, you have to have the blockbusters — but does Bloomsbury thereby risk losing its soul?
”The Bloomsbury culture used to be all about growing authors. Now they’re acting more like a big publisher, and perhaps overpaying,” says Geller. ”The challenge is not losing their identity. They have to preserve the values of their brand.”
And it is a strong brand. Calder has, according to Publishing News editor Liz Thomson, ”impeccable taste”. And now, under the direction of editor Alexandra Pringle, Bloomsbury’s fiction list is and will continue to be ”the heart and soul of the company”, in Calder’s words.
But perhaps the romantic perception of Bloomsbury — that it is some hallowed, uncommercial guardian of English literary culture — is more wishful than real. According to Joanna Briscoe, a recent Bloomsbury author with her last novel, Sleep With Me, it is wrong to pigeonhole Bloomsbury in this way.
”Everyone thinks they’re this high-end literary publisher, but they make a lot of money, not through Harry Potter,” she says. ”They do a wonderful job of applying a commercial touch to a thumping great literary novel like Jonathan Strange’s — and did incredibly well.”
Susanna Clark’s debut novel repaid its heavy promotion, especially in the United States, where it reached number three in The New York Times bestsellers chart. And it is true that, Harry Potter apart, Bloomsbury does have an impressive track record of turning literary novels into crossover hits — going back to Donna Tartt’s The Little Friend and, further still, to David Guterson’s Snow Falling on Cedars.
It is true, too, that Bloomsbury has always published unabashedly money-making non-fiction. Its very first list, says Calder, included a Marilyn Monroe photobook. But the new investment in mass-market non-fiction is on a far larger, more systematic scale.
”At a time when every big publisher has been cutting their lists by about 20% a year for the past three years, reducing the overall number of titles to concentrate resources on fewer, Bloomsbury has been growing its list aggressively,” says Joel Rickett, deputy editor of Thebookseller.com. ”It’s moving in the opposite direction.”
So why is Bloomsbury being so bullish? The answer is that it has little choice: it cannot afford to stand still.
Bloomsbury’s spectacular trading performance, built on the Harry Potter phenomenon, has been an incredible success story for shareholders, but it has also saddled the company with expectations of spectacular year-on-year growth. Yes, Bloomsbury is independent, but, being a plc and quoted on the stock exhange, it must answer to its shareholders. And that creates a challenging conundrum for the company.
The fact that Harry Potter and the Half-Blood Prince, the latest and sixth in the series, is also the penultimate cannot have escaped the attention of Bloomsbury’s shareholders. Newton talks about sustaining the franchise with ”launches” of Harry Potter products until 2011 but, after the final volume of JK Rowling’s series appears, probably in 2007 and then in paperback in 2008, the company has just three more years of mega-bucks revenues. Of course, Harry Potter will be a fantastic backlist asset, still worth millions of pounds a year, but the £100millionplus turnover figures and double-digit profits are going to have to come from elsewhere.
”They are actively planning for the post-Harry future,” says Rickett, ”because they’re under pressure to bolster their non-Harry Potter list.They’ve decided they have to increase their scale in trade publishing.”
One way to increase scale quickly is simply to buy other publishing houses, agglomeration, but there is not much left to buy. So the only alternative is to grow.
A couple of editors from Bloomsbury’s bigger rivals have been headhunted to build the new list. Notably Richard Atkinson from Hodder, who has not even started at Blooms-bury yet, but has already secured the Hugh Fearnley-Whittingstall deal, and Michael Fishwick, a legendary non-fiction editor who published John Major and Margaret Thatcher in his time at Harper-Collins. But even with its new expertise, does it have the know-how to make these work?
There is still much in its favour. While Bloomsbury, as an independent, is a long way short of the scale of the big four multinational conglomerates that dominate UK bookselling — Random House, Hachette, Penguin and HarperCollins — it punches way above its weight. As owner of the Harry Potter brand, Bloomsbury is considered so valuable that analysts estimate it could command a price three times its annual revenue. It has also stayed small and kept overheads modest. ”It’s a team effort; everyone is involved,” says Calder. ”We are less hierarchical and bureaucratic than the conglomerates.”
And this shows, according to Briscoe, in the experience they can offer to authors. ”Even though they’re quite large, they’ve still got a family feel. There’s a personal touch.”
Then there is Bloomsbury’s awesome buying power. There is no rival publisher who is not envious of Bloomsbury’s £53million war chest. ”We’re very aware of how much money they have,” says an editor at Penguin, through gritted teeth. ”We, and others, have been losing out in some big auctions recently.”
”They use the freedom of being an independent very well,” says literary agent David Godwin. ”They can make very swift decisions, and publish more creatively — they don’t have the bureaucracy of the big multi-nationals and, unlike them, Bloomsbury has editorial people at the heart of the business.”
But in the soon-to-be post-Harry Potter future, an occasional hit like Hancock’s The Two of Us won’t do. The plan has to be to supply a steady stream of ”bankers” every season, books such as Jamie Oliver’s Italy, John Peel and Sheila Ravenscroft’s Margrave of the Marshes and Sharon Osbourne’s Extreme (published by Penguin, Transworld and TimeWarner respectively).
Will Bloomsbury succeed? Newton is not contemplating failure. He does not acknowledge that, in a few years’ time, investors might decide that they’ve had Bloomsbury’s best years and take their funds elsewhere. Or that, with slowing growth, shareholders might begin to look with interest at a takeover offer. Either scenario is, in Rickett’s view, ”a clear and present danger”.
But perhaps there is one trump card Bloomsbury still holds in its hand: its relationship with its most famous author. The Harry Potter series may be coming to an end, but does anyone seriously believe the seventh volume will be the last book Rowling ever writes? Given the success she has shared with Bloomsbury, it seems unlikely she would move — and, as the Penguin editor observes, ”No one can afford her in the way that Bloomsbury can afford her.”
What will Bloomsbury do next? It might all depend on what JK Row-ling does next. — Â