Marie Tuhart, a writer I greatly respect, responded in the comments section to my Harlequin post of Saturday. Because there's been another post since then, I'm reprinting her comment here:
Maya: Since we know each other and you know I'm a fan of Harlequin, I do disagree with some of what you say.
Harlequin has tried over the years to break away from the "formula," and it hasn't worked. Now, with that said, the formula isn't working either.
While I do believe Harlequin needs to let its authors grow a little bit more in their books and not put so many restrictions on them, there are still some diehard readers that love and want the old formula.
What is setting things apart is its Harlequin's North American sales, not their United Kingdom division that is having problems.
Harlequin Presents and Romances are acquired and almost all the editing is done by editors in London. They have a different view of how the books should be and don't seem to be having any problems in sales.
The North American division has had problems for years and years. The demise of Bombshell this year tells me that while the line may have been a move in the right direction, it was marketed incorrectly and didn't attract the readers, had it been marketed differently.
The single lines may be up because of HQN--where they have allowed their authors to break the mold.
While Harlequin admits their bookclub is an issue, what is the actual issue with the bookclub? Is it the way they're distributed? Is it less consumers? I believe Harlequin has changed distribution channels twice in the last three years of the bookclub. That can cause major problems.
Also, I don't think they've taken into account their own website sales. There are many months that I'll hit the website only to find a book I want is already sold out on the website. I'm sure that has cut into the monthly bookclub sales as well.
Harlequin has been around for a long while, and I don't see them going anywhere. But they need to look at their North American series romance lines and see why they're not doing as good as their United Kingdom division.
Marie: Thanks so much for your comments. Your knowledge of Harlequin is definitely far greater than mine. But I don't think we're that far apart in our thinking on the company:
**We agree that the formulas aren't working any more for the bulk of the readership
**We agree that there will always be some readers who prefer the formula romances
**We agree that the reason Bombshell bombed was because of poor marketing (Readers: see my posts of August 15-16, 2006. Marie was the person I turned to when Harlequin made its announcement on Bombshell)
Having said that, the latest Torstar press release both provides some answers to your questions and creates some new questions. I didn't realize until I saw your comments that I didn't provide a link to the Torstar press release. I apologize for the oversight. Here's the link.
The first answer is that website revenue is included with the book club revenue in the figures for the North American Direct-to-Consumer sales. So, even if the Internet siphons off book club customers, the Internet revenues go into the column where the book clubs sales are reflected.
Torstar has been giving the "disrupted distribution system" as their excuse for poor book club sales for a long time. However, for the first time, the recent press release said that, in addition to the shipping disruptions and higher product cost, a long-term decline in the book club customer base contributed to the decline in earnings. That's also where the company said: "Improved sales through the Internet channel partially offset this decline [in book club sales]."
As far as differences in the sales figures for North American retail and the United Kingdom retail, the press release didn't give us enough information to tell. The UK numbers are lumped in the Overseas figure. The press release DID say:
The Overseas markets had mixed results in 2006 with improvements in the United Kingdom and the Nordic Group offset by lower results in Germany. In the United Kingdom improved retail results, primarily from adjustments to prior period returns provisions, more than offset lower direct-to-consumer volumes.
Direct-to-Consumer volumes refers to the UK book clubs and the Mills & Boon website. So, even in the UK, book club sales are off.
Overall operating profit from the three divisions was:
North American Retail: Up $2.7 million
North American Direct-to-Consumer (including book clubs & website): Down $6.5 million
Overseas (Including book clubs, websites and new programs in Brazil & Germany): Up $1.3 million
For the UK and the Nordic Group to have absorbed the losses elsewhere overseas, I agree that the UK operation is probably doing well. Because that figure is lumped in with the Nordic Group (that also did well) and the other foreign groups, we can't tell if that performance was better or worse than the North American Retail operating profit.
Marie, I don't know what the future holds for Harlequin. I see them making positive steps that I applaud. At the same time, their website indicates that worldwide sales in 1988 were in excess of 200 million books. In 2006, they managed to hold sales steady at the 2005 level: 131 million books.
I'll confess that I have an unsubstantiated theory about what's going on. Maybe later this week, I'll do a post on it.
Thanks so much for your comments. I appreciate them, and I appreciate you.
Visit Marie's website here.