News Corp, the umbrella company that owns HarperCollins, earned $2.16 billion in revenue in fiscal Q2 2016, down 4 percent from the comparable quarter last year.
The company attributed the drop to several factors including “lower consumer revenues at the Book Publishing segment.”
Revenues also suffered from foreign currency fluctuations of $141 million and the adjusted revenues only declined 1 percent. The company also reported lower advertising revenues at the News and Information Services segment.
News Corp’s revenues from book publishing reached $48 million during the company’s third quarter for fiscal 2015, up 14 percent from the same period last year.
The company attributed the growth to the inclusion of Harlequin in its numbers, as well as strong backlist sales in General Books which included bestseller “American Sniper” by Chris Kyle. Here is more from the earnings release:
Segment EBITDA for the quarter increased $3 million, or 6%, from the prior year, primarily due to the inclusion of the results of Harlequin and lower expenses, partially offset by lower contribution from the Divergent series. Adjusted revenues decreased 5% and Adjusted Segment EBITDA decreased 8% compared to the prior year.
eBook revenues made up 22 percent of consumer revenues for the quarter, according to New Corp’s earnings report. eBook revenues were down 3 percent over the same period last year. The company attributed the drop off to less sales in the Divergent series as well as an increase in non-fiction books, which have less eBook conversions.
Book sales at HarperCollins are having a positive impact on its parent company. News Corp’s total revenues for its fiscal 2015 second quarter reached $2.28 billion, up 2 percent from Q2 last year.
According to the media conglomerate, its book publishing business and digital real estate services segments helped drive this growth.
“Our digital personality has evolved quickly, with realtor.com having given us a new and influential platform, digital subscribers on the rise at our news mastheads, robust growth at REA, and healthy e-book sales at HarperCollins,” stated Robert Thomson, News Corp.’ CEO. “The vision we outlined for the company is becoming a reality, and while we have much work ahead, the foundations we have laid over the past 18 months put us in a strong position for enduring success and increased shareholder value.\"
By Robert F. Hurley
Greg Smith’s March 14, 2012 op-ed piece in the New York Times, “Why I am Leaving Goldman Sachs” is a familiar story for those who follow the betrayal and repair of trust. Smith tells a story of his frustration and disillusionment at Goldman changing from a culture that valued service to clients to one that rewarded those who made the most money for the firm even if it betrayed client interests. To be clear, from a trust violation standpoint, Smith suggests that Goldman lacks integrity because it holds itself out to clients as being their servants when in reality the firm is focused on manipulating clients to buy or sell securities that benefit Goldman’s interests more than the clients’. If this is true, Goldman is saying one thing but doing another, which is duplicitous and lacks integrity.
What is interesting about Smith’s resignation letter is that it tells the all-too-common, inside story of how firms lose their way and violate trust. The message here, and one that is consistent with the BP, News Corporation, Toyota, and Lehman violations, is that these betrayals of stakeholder trust have root causes that are embedded in the organizational system. At BP there was rhetoric about safety after the 2005 Texas oil refinery explosion, but real currency of the realm continued to be profit; so they chose to save 7 million dollars to drill a Deep Water Horizon well that they knew was not the safest option. At News Corp, they said that rogue employees were responsible for the first hacking scandals (that it was not inherent in the system), but it was later revealed that hacking was a strategy used in the News Corp system to gain advantage among news outlets. Toyota had a strong quality culture, but a flawed and Tokyo centric recall system that failed to notify US drivers about cars that had been recalled in other countries. Lehman systematically overrode its own risk management practices because growth and profit is what really mattered.
Betrayals of trust by tyrants and government agencies show similar patterns. Time and time again incongruence in the organizational system cause major trust violations, which lead to demonstrations of trustworthiness by some aspect of the system, only for some other aspect of the organization to undermine it. A failure to align all elements of the organization’s architecture toward achieving its stated mission and values is what causes these betrayals of stakeholder trust.
High trust firms like Zappos, Google, Proctor and Gamble, and QuikTrip don’t fall into these traps. They do the hard work of clarifying mission and values, and they align leadership, culture, reward systems, and all of their core processes (product development, supply chain, etc.) toward serving stakeholders’ interests. These stakeholders — customers, suppliers, communities, and employees — know that these firms can be counted on reliably. The data is clear that these high trust firms derive many competitive advantages in lower employee turnover, more customer loyalty, more organizational resilience, and even higher stock price from this service. Doing the right thing and doing it consistently is a virtuous and effective way of doing business.
The good news for Goldman Sachs is that trust failures can be repaired and reputations restored. Mattel recovered brilliantly from its lead paint problem in toys made in China; Bill Clinton went from the disgrace of the Monica Lewinsky scandal to being a leader in global causes and presented as the world’s CEO in the media . But the path is not easy. Real trust repair requires
Today we bring you another installment of Youth Media Movers and Shakers. We’ve culled through industry publications looking for the recent executive placements we think you should know about. If you have executive news that you want us to... Read the rest of this post
