Tue, 16 Oct 12 at 18:09 |
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Traditional Publishing: Raking It In?
Not an image usually associated with publishing
I recently had a chance to ask a senior Big Six editor how the division’s P&L looked. Answer? No idea whatsoever.
You’d think people would be more curious. I certainly am! Top executives presumably know, but such data is closely, closely held. Editors are apparently not even told how their individual books are doing financially, let alone their imprints.
Still, through close examination of financial statements we can glean a little information. Here’s one metric not often discussed: revenue per employee.
As a measure of corporate performance, RPE is a crude measure at best. An independent consultant might bring in $100,000 every year and feel great, since he or she has few expenses beyond printer paper and phone bills. The same RPE for, say, an oil drilling company would be terrible, because of the vast overhead they have to pay.
As an example, Google, Amazon and the giant insurer UnitedHealth bring in over $1 million per employee. Walmart, about $200,000. And so forth.
How about publishing?
It’s hard to know. Five of the big six are owned by foreign companies, and all hide or bury useful information deep in their reports. But CBS is publicly traded in the US, and News Corp let slip some numbers. Putting together the details (sources in the endnote below) reveals the following approximate RPEs:
Simon & Schuster: $625,000
HarperCollins: $510,000
Which is a little more than half what Amazon is raking in.
Is that good or bad?
Well, the RPE figures suggest that income, at least, is doing fairly well. I’m certainly not qualified to talk about cost structures, and the NYC houses do have enormous expenditures (though, sadly, not my royalties) pushing net profits down to minimal levels. All the same, half a mil per employee is decent. I’d be interested to hear from anyone inside just how far off these calculations are.
As it stands, however, I think Penguin could afford to kick a little more my way.
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Note:
In its 2011 10-K annual report to the SEC, CBS reported that its Publishing Division (= Simon & Schuster) earns 6% of total annual revenues, which were $14.06b. Simon & Schusters’ own “corporate overview” says they have 1,350 employees.
HarperCollins, meanwhile, had 3,000 employees in 2006. Following layoffs and retrenchment in 2009, I assume this figure dropped to about 2,500. Total revenue was $1.27b in FY2010.
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