Since founding Bloomsbury Publishing in London in 1986, Nigel Newton has endeavored to keep it at the quality end of the book market. That position was cemented by Bloomsbury's acquisition in 1997 of an author whose books have outsold everything but the Bible.
Newton advanced the then-unknown J.K. Rowling 2,500 ($4,700 at the current exchange rate) against her first Harry Potter book. The rest is now publishing history. The sixth "HP," as the books are known in the industry, is to be published on July 16. HP7 is destined to be the final one in the series.
To learn whether there is life beyond Harry Potter, BusinessWeek's John Lawless tracked down the California-born Newton at a London airport terminal on his way to dine with one of his authors in Hungary. The following are excerpts from their conversation.
Q: How did Bloomsbury, a comparatively small publisher at the time, come to sign J.K. Rowling, the author of the world-beating Harry Potter book series?
A: I read a specimen chapter. I took my set of pages home and showed them to Alice, my then-eight-year-old daughter. She came down from her room an hour later glowing, saying "Dad this is so much better than anything else." She nagged and nagged me for the following months, just to see what came next.
[The manuscript] was then taken up by Barry Cunningham, the head of our children's editorial team. We were unanimous in identifying this as an extremely good book. Harry Potter books have since sold 260 million copies. But the story is that eight publishers turned J.K. Rowling down.
Q: What has Harry Potter actually done for Bloomsbury?
A: We had only just started to publish children's books in June, 1994, and we hit it lucky with Harry Potter in July, 1997. [When Bloomsbury went public in 1995] our shares were worth 105p [$1.90 at the current rate]. Two years ago we did a four-for-one split, making the originally floated shares worth 26.5p [48 cents]. They have just been trading at 341p [$6.28]. Harry Potter is probably a total one-off. There has never been anything like it. It has no disadvantages. It has not skewed the company in any way.
Q: The big debate centers on one question: Will Bloomsbury survive beyond what Rowling has always said will be a seventh and final Harry Potter book?
A: With ease. Take a look at what we are achieving. In the U.S. we published a No. 1 best-selling novel last year, Jonathan Strange and Mr Norrell. This was a substantial revenue generator for Bloomsbury in 2004.
Q: The institutional investment community gives you great credit for having repositioned Bloomsbury, by making acquisitions in the U.S. and Germany, two of the world's biggest publishing markets. What has this achieved?
A: We are increasing the number of strings to our bow. On Dec. 31, we finalized the buying of Walker & Co in New York for $6.4 million. It brought us great strength in a new market.
George Gibson, the publisher who has stayed with the company post-acquisition, has developed what is called "narrative nonfiction." And they have a stunning children's list. Before that, we acquired Berlin Verlag in Germany. So we are now in a position where, when we find really original and outstanding new books, we can benefit from publishing them in the three big markets, instead of just one. It increases the return for us by a factor of four.
Q: Bloomsbury won a marketing award for the way it promoted Susanna Clarke's first book, Jonathan Strange and Mr Norrell. What was your approach?
A: It was based on getting people to read the book, to see how extraordinary it was. We'd had a sustained campaign in America that included a four-page interview in The New York Times magazine, about the "the phenomenon that was about to be unleashed." It went to No. 1 and did well everywhere, being named Time magazine's Novel of the Year.
The marketing of Harry Potter, however, has been based on protecting our story in advance, so that children can discover it for themselves. And then, of course, tell their friends.
Q: So where will Bloomsbury be in five years time?
A: We are planning to become as large as a medium-sized publisher can be, without becoming a media conglomerate ourselves.