By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid
Revenue from e-books was up 106% at Penguin Group to £127.4 ($201.9) in 2011, driving profit company-wide up 8% while overall sales were relatively flat.
E-book sales represented 12% of all Penguin revenue worldwide in 2011; in the U.S., e-book sales accounted for more than 20% of Penguin’s revenue. While overall revenues at the company were up 1%, profits were up 8%, according to a statement from the company, suggesting that e-book sales deliver a higher profit margin.
Request to the company for comment on e-book sales growth driving company profit has not yet been filled.
Another big-six publisher, Simon & Schuster, showed a similar pattern in its 2011 results. According to a February 15 statement, publishing revenues were relatively flat (down 1%) while operating income was up 31%. The company attributed the numbers to “strong growth in the sale of digital content, which more than doubled from 2010” and offset declines in print.
In this morning’s statement, Penguin chairman and CEO John Makinson attributed the company’s 2011 results to “excellent publishing,” including “innovation in every aspect of our digital publishing.” Penguin Group (USA) CEO David Shanks pegged success on “expanded digital publishing programs,” “more bestsellers than we’ve ever had in a single year” and “strategic investments in new processes” that “improved our overall efficiency.”
In addition to its e-book program, Penguin produced book apps, enhanced e-books and a slew of short, timely e-book releases mostly priced under $4.99, known inside the company as eSpecials.
In 2012, Penguin plans to publish twice as many eSpecials as the 37 it published in 2011, release new book apps, and create at least two more enhanced e-books, including an enhanced version of Manning Marable’s Malcolm X: A Life of Reinvention.
At Penguin’s parent company, Pearson, digital also drove profits. Digital revenues were up 18% in 2011 to £2 billion ($3.17 billion) and represented a third of all revenues at the company. Overall revenues were up 6% and operating profit was up 12% to £942 million.
The company expects that digital revenues will exceed revenues from print publishing in 2012, it said in a statement this morning.
According to Publisher’s Weekly, Shanks, the company CEO, expects digital growth to slow in 2012.
Write to Jeremy Greenfield