Hachette Grows in First Half of 2014 on Success of Best-Sellers, Despite Amazon Dispute

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Big books from familiar names lifted Hachette’s first half sales beyond its 2013 performance despite what CEO Michael Pietsch called in a press email (below) “recent market challenges.”

Those challenges came in the form of Amazon, the world’s largest bookseller, ceasing pre-orders of upcoming Hachette titles and other tactics as part of its negotiation with the publisher over a new trading agreement.

Despite it all, Hachette revenues were up 5.6% in the U.S. versus the first six months of 2013 to €226 million ($303 million). The company attributes its results to strong sales from authors like J.K. Rowling (writing under the pen name Robert Galbraith) and Donna Tartt as well as the integration of the Hyperion business.

[Press Email]

At Hachette Book Group: HBG net revenues were up 5.6% over the first six months of 2013, “thanks to the integration of Hyperion, and the takeover of Disney’s distribution activity” notes Lagardère’s press release, as well as “good performances in General Literature, with the publication of THE SILKWORM by Robert Galbraith (JK Rowling), reorders for THE GOLDFINCH (Donna Tartt) and LONE SURVIVOR (Marcus Luttrell), and the release in theatres of the movie adaptation of THE MONUMENTS MEN,” which supported the sales of Robert Edsel’s book by the same name. In addition to these titles, books that made significant contributions to US revenues in the first half include James Patterson’s UNLUCKY 13, David Baldacci’s THE TARGET, Nicholas Sparks’ THE LONGEST RIDE, and T.D. Jakes’s INSTINCT.

CEO Michael Pietsch said “It is gratifying to have first half sales that exceed last year’s, especially in light of recent market challenges.”

HBG has had 108 titles on the New York Times bestseller list in print and 43 titles on the New York Times ebook bestseller chart in the first six months of the year, with 32 #1 bestsellers in the first half.

At Hachette Livre: the global publishing division delivered net sales of €903 million, down 1% over the first half of 2013. Looking at the second quarter 2014, the division was up 2.5% over Q2 2013. The slight decrease versus first half 2013 was expected, due to a tough comparison with a strong first half of 2013, especially in France, where Hachette Livre benefitted from the publication of volumes 2 and 3 of the Fifty Shades series and strong sales of Dan Brown’s Inferno. Hachette Livre saw solid growth (+7%) in their Partworks business. In the United Kingdom, business was up 1.1%, due in part to good performances in General Literature, ebook momentum, and Education sales. And in Spain and Latin America, activity was down 6.7% due to challenges to the Education business.

Ebooks accounted for 11.3% of sales in the first half of 2014, unchanged versus the same period last year. In the US, digital sales dropped from 34% of trade sales in 2013 first half to 29% in the first six months of this year, “reflecting market trend, fewer movie tie-ins compared to 2013, and Amazon’s punitive action,” according to Lagardère. In the UK ebooks still showed sustained growth, with 36% of net sales in Adult Trade vs 31% at the end of June 2013.

At Lagardère: the company reported net sales of €3.36 billion, down 1.2% versus the first half of 2013. Net sales in the second quarter are up slightly (+ .1%) versus Q2 2013. Total recurring EBIT, or profit, for Lagardere is €113 million, up 8%.
At HBG, we have a spectacular Fall 2014 season ahead including LIVING COURAGEOUSLY by Joyce Meyer, YOU CAN, YOU WILL by Joel Osteen, 13 HOURS by Mitchell Zuckoff, HOW GOOGLE WORKS by Eric Schmidt and Jonathan Rosenberg, GUS & ME by Keith Richards, “SHOULDN’T YOU BE IN SCHOOL?” by Lemony Snicket, DEATH OF A KING by Tavis Smiley, and BURN by James Patterson and Michael Ledwidge, LEARNING FROM THE GIANTS by John Maxwell, AMERICA: FARM TO TABLE by Mario Batali, WINTER STREET by Elin Hilderbrand, JJ VIRGIN’S SUGAR IMPACT DIET by JJ Virgin, BLUE LABYRINTH by Douglas Preston and Lincoln Child, THE ESCAPE by David Baldacci, THE BURNING ROOM by Michael Connelly, THE UNIVERSAL TONE by Carlos Santana, HOPE TO DIE by James Patterson, and The DASH Diet Younger You by Marla Heller.

 

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One thought on “Hachette Grows in First Half of 2014 on Success of Best-Sellers, Despite Amazon Dispute

  1. Thanks! This is good to know. The best way to stop bullying is to make sure it doesn’t succeed. Nothing discredits a bully like failure.

    In early 2012, the Manhattan-based lawyers for the J. R. R. Tolkien estate had such a nasty reputation for bullying authors and fans, that when those lawyers filed a copyright infringement suit against me in Seattle federal court, the Times of London responded by noting the \Tolkien estate is on the war path again.\

    I quickly realized that its lawyers hoped to win with a blundering sort of intimidation. They listed some seven Tolkien books that, they said, would suffer \irreparable harm\ of one-million dollars each and then totally those damages—would you believe—to one million dollars rather than seven.

    I flipped that nasty underbelly of our legal system around, the fact that for the little guy defending yourself quickly become prohibitively expensive. I was different, although they did not know that. I’d spent two years studying medical ethics at the University of Washington, something I referred to as \studying law in medical school.\ That was more than enough to make defending myself pro se reasonable and effective.

    Knowing law helps. At one point the opposing counsel and I disagreed about something. Still relying on intimidation, he claimed that the judge would hold me in contempt if I didn’t do as he said. I remained calm, told him she’d do no such thing and that, if he wanted to raise the issue with her, he’d have to do it himself. I wasn’t going to bother her.

    Flipping the cost factor worked in my favor too. On another occasion where we disagreed, he did raise the issue with the judge and the result was a conference in chambers. The Tolkien’s estate’s cost was perhaps two hours or more of time for two lawyers (one in NYC and one attending to provide a local presence)–call that $1000. My cost was a $2.25 bus ticket that took me downtown and back. With a 500-to-1 ratio in expenses, it is possible to wear down even an opponent as deep-pocketed as the Tolkien estate.

    And by the way, my arguments did carry the day at that conference and in the overall dispute. Both sides filed concurrent motions for summary judgment. My arguments for fair use so disturbed them, that they wrote the judge, asking that the move toward summary judgment be halted because they’d settle out-of-court. Three months later the judge put ‘fini’ to their case by dismissing it ‘with prejudice.’ That’s the best possible end to a dispute. The judge had told them to get lost.

    Interestingly, as far as I know in the eleven years since we settled, the Tolkien estate has not sued any other individual. It may be that my successful resistance to their bullying left them so badly burned, that they didn’t want to try again. After all, I’d spent about $3,000 and won. They’d spent about $300,000 and lost. That has to hurt.

    Of course, it’s also true that, with the movies coming out, what money the estate has to spend on litigation has been devoted to movie companies and not stubborn and legally astute small fry like me.

    You can listen to a podcast interview I did about the dispute here:

    http://litopia.com/lawyers-are-from-mordor/

    All in all, it was an interesting challenge, although the sluggishness of our court process was frustrating. At times I’d have rather settled it all with flintlocks at 20 paces.

    Based on that, I hope that Hachette executives hang in there. The more pain they inflict on Amazon, the better, especially if that pain is accompanied by a substantial defeat.

    –Michael W. Perry, Inkling Books

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