Revenue Declines Continue at Harlequin
Sales and income at Harlequin were down again in the fourth quarter and for all of fiscal 2013. The company has seen revenues decline steadily for the past five years as both ebook sales and the rise of indie authors have affected Harlequin’s business.
In the fourth quarter, sales were down to C$95 million (US$85.9 million) from C$105 million over the same period last year. Earnings before interest, taxes, depreciation and amortization (EBITDA, a measure of profit) was down to C$11.5 million from C$16.8 million a year ago. For the full year, sales were down to C$398 million from C$427 million last year, a decline of 6.8%. Profits were also down, to $56 million from $77 million in 2012, a decline of 27%.
In its report, Harlequin blamed ebook prices in North America, specifically, “increased discounts being offered on digital sales of other publishers’ bestselling titles.” Outside of North America, “growth in digital revenue was insufficient to offset print declines.”
As for 2014, Harlequin’s leadership expects sales to stabilize despite declining ebook prices and the rise of self-publishing. The average price of a best-selling ebook has been hovering around $6.00 for most of 2014. It currently sits at $6.57.
Romance and erotica are particularly strong segments for indie authors, meaning increased competition for readers as well as for authors. Harlequin has taken steps to engage indie authors and find new ways to attract author talent. In late 2013, Harlequin offered a book deal to the winner of a Wattpad writing contest.