The rise of generative artificial intelligence has been widely touted as the dawn of a new era, one in which machines become smarter than humans. But if the recent history of printed books is anything to go by, these predictions may not be entirely accurate. In 2007, when Amazon launched its Kindle ereader, publishers were convinced that eBooks were the future and that the days of print were numbered. But despite the digital tide, the printed book has not only survived, it has thrived, accounting for over 70% of book sales in the UK last year.

And it’s not just books that have defied predictions of extinction. Publishers like Bloomsbury, the company behind the Harry Potter series, have fought off existential threats from streaming services, smartphones, and other distractions that were supposed to lead to the demise of reading. In fact, Bloomsbury just posted another year of record results, with revenues and pre-tax profits both climbing 15% to £264.1mn and £25.4mn respectively. German media group Bertelsmann, the owner of Penguin Random House, also reported a strong first quarter, buoyed by strong sales of Prince Harry’s autobiography.

But it’s not all smooth sailing in the publishing world. Publishers are constantly adapting to survive, with consolidation a key strategy. Bloomsbury, while small, has been seeking to grow through acquisitions of independent rivals like Head of Zeus. It is also expanding its higher-margin non-consumer division, which includes academic and professional publishing as well as a “digital resources” business. And it seems to be paying off, with revenues at Bloomsbury Digital Resources rising 41% last year, driving sales at its non-consumer business up 19% to £97.4mn. Profits at the business increased a staggering 43% to £13.1mn.

Still, there are challenges on the horizon. Publishers are among the industries most at risk from generative AI, which some believe could make humans obsolete. But others, like Bertelsmann boss Thomas Rabe, see it as an opportunity rather than a threat. Only time will tell which camp is right, but for now, Bloomsbury is taking no chances, consolidating its position and diversifying its offerings. And with shares trading at a forward P/E ratio of 15 times, compared to a five-year average of 17 times, it looks like there could be value in this resilient industry yet.
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