Image: Penguin Random House
By Porter Anderson, Editor-in-Chief | @Porter_Anderson
Malaviya: ‘Our Mission to Create Books for Everyone’
In his memo to the international Penguin Random House staff today (August 30), worldwide CEO Nihar Malaviya speaks to parent company Bertelsmann‘s announcement from its headquarters in Gütersloh, Germany.
As Bertelsmann highlights, in the first six months of this year, PRH’s international operations were able to increase worldwide revenues by 9 percent over the first half of 2022—to €2.1 billion (US$2.3 billion) over 2022’s group H1 revenues of €1.9 billion.
Malaviya tells his international workforce that there are three factors driving the company’s success, citing “continued stability in book markets around the world, the excellent publishing performance from most of our businesses, and continued small-company acquisitions.”
Nihar Malaviya
Malaviya goes on to elaborate on some details, writing:
- “Book markets in most of our businesses are stable versus 2022 and higher than pre-COVID levels from 2019. This is a positive development for the long-term health of our industry. Despite the macroeconomic uncertainties in most of the countries in which we operate, readers are still gravitating to books to provide them with a unique experience they can’t get from anything else.
- “At Penguin Random House, we have increased our revenues due to your ongoing excellence in publishing books that resonate with readers amid a time of internal changes in some of our businesses. Thank you for your resilience, hard work, and dedication to our books, authors, booksellers, librarians, and readers.
- “Additionally, we acquired several small companies during this year, furthering our ambitions to grow in audio, children’s, and data-driven publishing, as well as in local content, among others.”
He does point out that the international revenue increase “did not translate into an increase in profits.”
“Most importantly, we can invest in more authors’ works and bring more voices and stories to readers that drive cultural impact.”Nihar Malaviya, Penguin Random House
That, he writes, “should come as no surprise, as industry inflationary cost pressures and increased costs across our businesses have continued to impact us. We have already taken several steps to offset these pressures in some of our markets around the world and will continue to carefully navigate these industry and structural dynamics.”
And in instructing the staff as to how to look forward for the latter half of the year, Malaviya writes of how the offsetting costs have to be factored into the company’s moves.
“Our ambition remains,” he writes, “to connect each book with the widest possible audience, guided by our mission to create books for everyone.
“Content and books are and will remain at the center of everything that we do in each market in which we operate. As we continue to excel here, we can achieve great commercial success and grow, which is the most effective way of combating this cost environment.
“Most importantly, we can invest in more authors’ works and bring more voices and stories to readers that drive cultural impact.”
Rabe: ‘Happy With Bertelsmann’s Business Performance’
In its first-half announcements from Germany, Bertelsmann indicates that Penguin Random House’s own revenue gains have come in at twice those of the parent company by percentage. Bertelsmann sees overall revenue growth of 4.5 percent for January through June over 2022 results, at €9.7 billion (US$10.6 billion), its operating EBITDA remaining at €1.3 billion (US$1.4).
Thomas Rabe
Bertelsmann’s chair and CEO Thomas Rabe says, “We look back on a good first half of 2023 and are happy with Bertelsmann’s business performance. The group’s transformation, with the establishment of new businesses and, above all, our ‘boost strategy,’ is increasingly making itself felt.
“And so, despite a difficult macroeconomic environment, our company posted record revenues and a high operating result.”
Echoing some of what Malaviya has said for Penguin Random House, Bertelsmann reports that its group profit, January through June, stood at €260 million over the same period in 2022’s €492 million, reporting in its statement, “Reasons included the lower operating result and various restructuring measures, such as the realignment of the publishing division at RTL Deutschland; the realignment of the United States business at Penguin Random House; and … site closures at Bertelsmann Marketing Services.”
In addressing parts of its portfolio based in international content, Bertelsmann reports, “The video production company Fremantle was once again very successful in the entertainment sector with leading entertainment shows in the United Kingdom and the United States, as well as with films, series, and documentaries. It also signed first-look deals with Oscar-nominated producers Edward Berger and Amy Berg.
“In the United States, Penguin Random House increased its stake in the publisher Sourcebooks to a majority interest, and in so doing acquired the publishing assets of the nonfiction publisher Callisto Media. Both are among the fastest-growing publishers in the United States.
“In May, Penguin Random House Grupo Editorial acquired Barcelona-based Roca Editorial, one of Spain’s leading independent publishers. Bertelsmann’s music subsidiary BMG made 15 acquisitions, including the song catalog of British rock and pop band The Hollies, and a significant share of Paul Simon’s music interests, including the rights to royalties from Simon & Garfunkel’s recordings.”
Nihar Malaviya
A programming note: The Publishing Perspectives Forum at Frankfurter Buchmesse on October 18 at 10 a.m. will feature our program headliner Nihar Malaviya, worldwide CEO of Penguin Random House, in an Executive Talk discussion – for many, a first chance to hear this new leader of the world’s largest trade book publishing company on the industry, the challenges, and opportunities.
As last year, the PP Forum is in the bright, tree-lined Room Spektrum on Level 2 of the Messe Frankfurt Congress Center, and admission is free to all trade visitors and exhibitors. More on the Forum and its programming is here, with speakers being added as we confirm them and programming descriptions being developed as they’re ready.
More from Publishing Perspectives on Penguin Random House is here, more on Bertelsmann is here, and more on industry statistics is here.