From Shelf Awareness, June 26, 2012: News Corp., parent company of HarperCollins, is considering separating its publishing and entertainment businesses, according to the Wall Street Journal, a News Corp. newspaper. Under the proposal–similar to suggestions made for years by investors wanting to focus on the company’s faster-growing, more profitable entertainment operations–HarperCollins would be included with the Journal, the Times of London, other newspapers and education businesses. The entertainment company would consist of film and TV properties, including 20th Century Fox, Fox News and Fox TV operations.
What does this mean exactly? Publishing has always been a low margin business. Compared to movie studio, television and other entertainment property profits, book publishers always look like the poor step-children with their hands out. I’m an incurable optimist, so when I heard about this I became hopeful that if HarperCollins is measured against other publishing properties in the future instead of News Corp’s entertainment juggernauts, perhaps the incredible pressure to squeeze expenses to improve their bottom line will ease up. Of course we are talking News Corp. here, so don’t get your hopes too high that future HarperCollins authors will get higher advances and better royalty percentages. This split might just as easily create a backwater entity that does not benefit from its more profitable sisters and brothers successes. Time will tell.