The View From the Top
HarperCollins Publishers Worldwide, one of the five largest book publishers in the world and a subsidiary of News Corp., is strategically focused on a digital evolution that will shape the company’s goals and mission in the future. The foundation of this evolution can be traced back 10 years to when Jane Friedman was hired as the company’s president and CEO. According to Friedman, in the past 10 years HarperCollins has increased profits by more than 1,000 percent and its total revenue went from $600 million to $1.3 billion in 2006.
The company publishes an average of 4,300 titles globally per year, with 3,100 employees and a publishing presence in more than 75 countries. In 2006, HarperCollins U.S. had 109 books make The New York Times Best Sellers list, including 14 titles that reached No.1.
Friedman was lured to HarperCollins after a 29-year career at Knopf Publishers, an imprint of Random House Inc., where she worked her way up the ranks from the typing pool. During her days there, she was credited with many memorable accomplishments affecting the industry, including inventing author book tours and bringing the audio book to the mainstream publishing market.
Today, Friedman is driven to mix innovative technology with publishing and inspiring her staff to take publishing to the next level.
Hard work, solid results
Friedman explains that the marketplace remains a challenge even after a financially successful decade.
“To be the best is not always the easiest thing to do, so the challenge has always been to hire the best staff to work … in a united way, to publish books,” she says. “We are in a mature business, the marketplace is somewhat flat, and we still have grown every year [the last 10 years]. So that means not only being challenged by watching our costs—and we are … very cost-efficient—but also looking for that surprise and working to maximize the sales of the surprise hit. But really the major challenge is the marketplace and how the marketplace reacts to our books.”
When Friedman joined HarperCollins in 1997, profits were at $12 million, but jumped to $167 million by 2006.
“The jumping of the 1,000 percent is true, but there was an acquisition in there so it’s a little misleading … But we certainly have a fantastic financial picture,” she says. “And it’s not easy, I have to tell you. … Not easy at all, but certainly doable.”
Turning the company around
However, the financial picture was not always so bright for HarperCollins. Right before News Corp. CEO Rupert Murdoch hired Friedman, HarperCollins went through large layoffs and cancellations of book contracts.
So what contributed to this major turnaround?
“Everything,” says Friedman. “I mean the major contributors to the growth [were] every single imprint within the company and around the world. We had to look at every part of the company and … say, ‘This is what you are doing now, and this is what you can do,’” she says. “When I came here, it was clear to me that HarperCollins had a tremendous backlist that had not been explored. The people here were paralyzed, they didn’t know if they would be fired or if they could buy books or what.”
Friedman says she realized that HarperCollins had changed from what was once a strong, full-list company to a company that chased best sellers.
Today, she says, “We are back where we belong. Publishing is not only best sellers—in fact, best sellers may be the least fiscally responsible way to go. So we … [spend] a great deal of our time on the backlist. Obviously we have lots of best sellers … but the mix is what is very important, and the backlist is a significant part of it.”
Marketing the mix
Once a mix has been created, the right tools are needed to market that mix.
“I think that for a marketer … the Web has been the most incredible invention because we can reach so many people in such an easy way,” Friedman says. “We are no longer a small, cottage industry that doesn’t need to make money, etc. Most of the big publishing companies are owned by media giants, and we run very fiscally responsible companies.”
Friedman believes publishers must embrace whatever they can in the digital world.
“HarperCollins is really leading the pack by building a digital warehouse, which is the digital equivalent of our physical, print warehouse,” she says. “We are doing that because we want to protect copyright, and we don’t want our digital files floating out in cyberspace.”
To date, 12,000 titles are in its digital library.
“Obviously marketing online is very big and will only get bigger,” Friedman says.
She believes the trick is to figure out how to monetize the company’s many digital book initiatives.
“We have a Browse Inside function, which means the consumer can actually read pages of our books, we have widgets now that can be put on consumer Web sites,” she says. “We are very savvy about marketing, but we must become savvy about monetizing, because this can’t just be an investment with nothing on the other side.”
Partnerships are plentiful
The company’s investment in Internet technology and marketing is a major focus right now, and Friedman is always looking for partners to help the company succeed.
“… We are always looking to partner with organizations and with other companies that fill a void, that have specialties that we don’t,” she says.
Friedman says the company is fortunate to be part of News Corp. and able to have relationships with Fox, MySpace and other branches of the company. For example, HarperCollins recently completed a viral marketing campaign using a widget on MySpace where it received close to 4.5 million hits in a week and a half.
“It’s an enormous opportunity. Now, will it actually convert to book sales? Well, yes,” she says. “Will it convert to book sales in a dramatic way? We don’t know.”
“… We can’t be all things. We are basically a publishing company, and I am very happy being a publishing company,” Friedman says. “But we do have to enter the digital age, so why not partner with experts rather than reinventing the wheel every step of the way?”
Friedman practices what she preaches, too, as HarperCollins has been a leader in the digital age. The company is making every effort to provide consumers with books in the format, time and places they demand them. HarperCollins Australia was among the first book publishers in the world to launch a mobile publishing platform. HarperCollins was also the first major publisher to publish a book for free online with each page of the book’s text indexed for search engines and accompanied by contextual ads. The company is also creating its own digital content warehouse. And, it was the first major trade publisher to sell e-books to libraries, and among the first book publishers to experiment with and utilize webcasts and audio and video content on their Web sites.
Friedman has made her career out of following where the market is going, and right now, she says, “We are facing the digitization of the world. And we are facing the fact that if we are going to become a digital publisher as well as a physical publisher, [we have to figure out] how we are going to derive revenues. We can’t just invest, we must take something back.”
Investing in the future
So, what’s next for HarperCollins? “We’re about to go into a budget meeting and talk about it,” Friedman jokes. “Obviously investment is necessary, and that’s investment in people to build more imprints perhaps.”
She says that the company has been very cost-efficient, and its margins are “fabulous.”
“Maybe they can’t be so fabulous, because maybe we have to invest in more people and maybe it’s time to publish more rather than fewer books,” Friedman says. “We are also looking at growth in digital revenues, and we are looking at growth in the area of potential acquisition of both small and large companies.”