For Bloomsbury, the British publisher behind the series, it\u2019s proven a massive cash cow, helping it become one of the world\u2019s leading players. But it\u2019s also been 27 years since the first JK Rowling-authored book was released (yes, it\u2019s that <\/em>old).\u00a0<\/p>\n Since then, genres have come and gone, e-books rose, fell and then started rising again<\/a>, and social media sites like TikTok upended how many people discover books. Amid all these changes, Bloomsbury has been able to avoid becoming a one-wizard wonder, and its titles crowd bookstore windows to this day.\u00a0<\/p>\n Last week, Bloomsbury reported a 30% jump in sales to \u00a3343 million ($436.6 million) and a nearly 60% hike in profits to \u200b\u200b\u00a349 million ($62.4 million) in the year to Feb. 29, 2024, closing a record-high 12 months for the company. That\u2019s not a one-off case\u2014the company has had solid results for several years, beating records year after year<\/a>.\u00a0<\/p>\n Meanwhile, its rivals haven\u2019t shared the same growth in fortunes. Penguin Random House, a much larger<\/a> publisher, saw a 7% increase<\/a> in revenue in 2023, while profits shrank slightly by 0.3%. American publisher HarperCollins saw its fiscal 2023 profits dip 45%<\/a> in the 12 months to June 30 as sales plunged 10%.\u00a0\u00a0<\/p>\n Bloomsbury\u2019s latest acquisition\u2014the \u00a365 million ($82.5 million) purchase of American academic publisher Rowman & Littlefield, announced Wednesday<\/a>\u2014provides a window into why the company has succeeded.\u00a0<\/p>\n In short: its eye for fantasy fiction writers capable of building loyal readerships, and its nose for diversification.\u00a0\u00a0<\/p>\n When the pandemic began to subside amid high cost of living, people turned to books for budget-friendly entertainment\u2014a trend that\u2019s worked wonders<\/a> for Bloomsbury, and the wider industry.\u00a0<\/p>\n The British publisher\u2019s growth in recent years has been driven by bestselling authors like Sarah J. Maas (sales of whose titles grew 161% year over year) and Samantha Shannon, who\u2019ve yielded big hits for the publishing house.<\/p>\n Weiss Eubanks\u2014NBCUniversal\/Getty Images<\/p>\n<\/div>\n Maas\u2019s \u201cbooks have a huge audience which continues to grow, backed by major Bloomsbury promotional campaigns, driving strong word of mouth recommendation, particularly through TikTok and Instagram channels,\u201d Bloomsbury CEO Nigel Newton said earlier this year, referring to the \u201cBookTok<\/a>\u201d phenomenon where book enthusiasts recommend new reads on TikTok.\u00a0<\/p>\n Another source of success for the publisher has been the fantasy series Three Body Problem<\/em> which was turned into a Netflix show<\/a>.<\/p>\n And while peak Harry Potter<\/em> may have long passed, its magic continues to draw Bloomsbury new business. For instance, last year the first Harry Potter<\/em> was the U.K.\u2019s no. 1 best-seller in children\u2019s books for the first time since 2002<\/a>. The London-listed company has also expanded the franchise with new books like the Wizarding Almanac.<\/em><\/p>\n But book publishing for the mass market isn\u2019t all that Bloomsbury does. With its \u201cgame-changing\u201d purchase of Rowman & Littlefield, an independent publisher whose authors cover topics like arts, humanities and social science, Bloomsbury is leaning further into the realm of academic publishing, adding 40,000 titles to its existing roster and expanding into North America.\u00a0<\/p>\n It\u2019s part of a diversification strategy that kicked off several years ago, and includes a joint venture in China designed to grow its international presence. Now, academic publishing accounts for about 20.5% of Bloomsbury\u2019s revenues, with a further 7.7% from its rapidly growing digital resources platform<\/a>, which leverages the academic division\u2019s IP for the online educational market.<\/p>\n \u201cWe believe this is highly attractive strategically, providing the opportunity for BMY (Bloomsbury) to deploy the content into its digital resources platform,\u201d analysts at Investec said in a note Wednesday. The wealth management group added that Bloomsbury\u2019s \u201cflywheel\u201d growth potential and track record was \u201cunder-appreciated.\u201d\u00a0<\/p>\n In its latest earnings release, Bloomsbury announced that it\u2019ll hike dividends following an \u201coutstanding\u201d year.\u00a0<\/p>\n \u201cOur strong cash generation and balance sheet enables us to continue investing in innovative content and authors, as well as capitalizing on emerging opportunities,\u201d Newton said in a statement.\u00a0<\/p>\n Although Bloomsbury has secured its position, it still shares the challenges that other publishers face\u2014such as with generative AI.<\/p>\n \u201cThe most important issue right now in our industry is to prevent books being trained upon by generative AI because they, in effect, steal the author\u2019s copyrighted work,\u201d Newton told the Financial Times<\/em><\/a> last year.\u00a0<\/p>\n He added that it opens the door for greater productivity among authors who use AI tools, but it still marks an uneasy new chapter in the troubled relationship between publishing and big tech, which goes back to the days when Amazon first started devouring the bookselling sector.\u00a0<\/p>\n Bloomsbury expects its portfolio this year to match last year\u2019s performance, although it has no new titles by Maas for the upcoming months, which investors fear could set the company back.\u00a0\u00a0\u00a0\u00a0<\/p>\n \u201cThat shifts the emphasis on making money from her [Maas\u2019s] back catalog, in the same way that Bloomsbury has managed to sweat its Harry Potter<\/em> assets with new versions of the beloved book series,\u201d AJ Bell\u2019s investment director Russ Mould said.\u00a0<\/p>\n \u201cThe news is like a famous band saying they\u2019re going on a hiatus \u2013 disappointment now, but the potential to make even more money when they return.\u201d<\/p>\n Still, Bloomsbury is confident it\u2019ll rise above the tide. It\u2019s set up a strong fan base with its core authors, who keep new and old readers coming, while leaving room to experiment with new and innovative ones. And with academic books in the mix, it has what CEO Newton calls a \u201cresilient model\u201d in the face of volatility that typifies creative industries.<\/p>\n<\/div>\nWhat has Bloomsbury done differently?<\/strong><\/h2>\n
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What could the path forward look like?<\/strong>\u00a0<\/h2>\n