A very smart piece by Brian O’Leary of Magellan Media Partners, one of the smartest thinkers on content there is:
The challenge we face is less about an effort to find the next big thing and more about a series of efforts to accumulate a set of related, smaller things. The good news is, publishers have long been good at sussing out these niches, though more by subject than format
Interestingly, I’d argue that two of the most innovative publishers right now, Sourcebooks and Osprey (one on either side of the Atlantic) are doing exactly this by expanding their companies into new niches and sectors in intelligent ways that can be scaled in the face of success.
To be fair, Lagardère’s first half report does draw attention to its success in digital, in fact, on the publishing side, it says the following:
Digital books continued their rise in English-speaking countries, accounting for 34% of Adult Trade sales in the United States (vs. 27% at end-June 2012) and 31% in the United Kingdom (vs. 22% at end-June 2012). Digital books now account for 11.3% of Lagardère Publishing’s total net sales, compared with 8.4% at the end of June 2012. In France, the contribution of digital sales to Adult Trade sales remains low (3.2%), although rising sharply.
But you need to actually work the sums to see what that means. It means that in Fast-half 2013 Lagardère saw €103.61million in digital sales (Based n 11.3% of Net Sales for the division of €907million). So digital is now worth over €100million in net sales to Lagardère. That €100million is €27.59million more than First-half 2012.
That €27.59million represents just over 3% of overall net sales for the publishing division meaning practically all the like-for-like growth in the division and more than all the reported growth in the division came from digital. Without digital, Lagardère Publishing would be a shrinking business.
Perhaps more interestingly, while digital is clearly growing well, another part of the business is also booming, their Partworks unit. Different ends of the spectrum in some ways, but driven by trends obvious in digital too, branded and licensed content and subscriptions with a healthy dose of direct-to-consumer thrown in for good measure!