CEO of Hachette Livre Talks Book Industry Consolidation
Posted on September 1, 2009
The CEO of Hachette Livre, the world's second largest publisher, told the Financial Times that the book industry would have to consolidate in order to take on Amazon.com and Google in the arena of ebooks. Arnaud Nourry explained that book publishers must become as large as Amazon and Google in order to keep prices at a reasonable level.
"We are at the beginning of the process of transformation where size and the capacity to impose viable business models will be essential," he told the Financial Times. Since he took over as chief executive in 2003, Mr Nourry has transformed Hachette from a predominantly French publisher ranking 13th in the world by sales into the second largest. It had sales of E2.16bn ($3.09bn) last year, with 70 per cent of its turnover outside France.Nourry has thrown down the gauntlet, laying out the company's plans to be a major player in the digitized world. Hachette is expanding into India and Russia and entering into a joint venture with one of the biggest Chinese publishing houses. Many traditional publishers are unhappy with the lower price of ebooks, compared to hardcovers. The success of the Kindle and the Sony ebook reader has made ebooks the wave of the future. But consumers just won't pay as much for an electronic version of a book, especially one that has digital rights management protections.Hachette, owned by Lagardere, the French media and entertainment group, has expanded rapidly in English language books, buying Hodder Headline in 2004 and Warner Books two years later. The French publishing house is considered a likely bidder for Simon & Schuster, one of the top four US "trade" or consumer book publishers, should owners CBS decide to sell.
Mr Nourry said Hachette was the "hot place in the US at the moment", thanks largely to the phenomenal success of Stephenie Meyer�s vampire romance Twilight, to which the French publisher has global rights. The five books in her series sold 29.7m copies in the US last year.
"But we are still small," he added. Our [US] market share is only 5 or 6 per cent and that is not very big when you have to talk with Amazon, Barnes & Noble, perhaps one day Google. It also means we lack a diversity of brands to cover the entire market. We are very strong in commercial fiction, but less strong in non-fiction. From that point of view, strengthening our position in the US would make a lot of sense. "The bigger leaders, Penguin [owned by Pearson, the FT's parent company], Harper Collins, Random House, are twice or three times as large. There is a big gap," he noted.