The purpose of this report is to analyse a publishing house and its business model. The publisher in question is Usborne Publishing (henceforth ‘Usborne'). Usborne is an independent children's publishing house started in 1973 by Peter Usborne. The report will analyse the market sector and the bestselling titles from the publisher. An analysis of the business model will help to understand the market sector, products, sustainability, strengths and weaknesses of the publishing house. The report will then propose suggestions on how the company can eventually further the business. Business analysis tools such as SWOT analysis and Business Model Canvas have been used to observe various facets of Usborne's business plan and its market. While the objective of this report is to analyse Usborne's business model and market strategy, it is important to note that all data was gathered independently as annual and financial reports were not attainable. Nielsen BookScan was also reasonably used as a reference in this report.
Books become more attractive when marketed in combination with toys and clothing, as a branded item is engrossing to children with specific interests. Usborne publishes children's fiction, non-fiction, general knowledge, young adult fiction, puzzles, toys and more. They are committed to publishing enriching, engaging and innovative titles for children of all ages. That's not my…Touchy-Feely, Sticker Dolly Dressing and See Inside are the most prominent titles of the publisher. That's not my…Touchy-Feely and Sticker Dolly Dressing retail at £6.99 while See Inside retails at £9.99. These titles are available for purchase on Usborne's website, through online retailers and bookshops.
Since it's conception in 1973, Usborne has garnered a list of roughly 3000 titles in over 100 different languages. Their philosophy; ‘Do It Better', seeks to create the best books possible for children with reliable and attractive content and design. The main purpose is to generate an interest in children towards learning through interactive products like puzzles, toys and audiobooks. They also publish books under The Usborne Reading Programme, which has a collection of over 300 books to help children who find reading dull and uninteresting. This also includes fairy tales, history and classics like Pride and Prejudice, Jane Eyre, Dr Jekyll and Mr Hyde and more. Some of these classics are illustrated and also retail as box sets. Their major competitors are well-renowned children's publishing companies like Bloomsbury, Barrington Stoke and Penguin Books who are known to have a good hold of market share in children's publishing.
One of Usborne's best-selling titles of 2018 is That's not my Unicorn…, accompanied by its companion books by Fiona Watt. They are the top four highest sellers by volume and value. In 2018, That's not my Unicorn… sold 66,480 units, contributing £283,381 to the total sales revenue of the company. This is followed by Unicorns Sticker Book, Little Sticker Dolly Dressing Unicorns, Magic Painting Unicorns respectively earning a combined total of £537,117 by selling 123,221 units. This adds to the total sales revenue of £1,69,04,747; as of 31 October 2018. The net sales revenue is consistent with the third Quarter of 2018 being the most profitable with £6,557,168. This could be surpassed in the fourth and fifth quarter as they constitute gifting seasons. Assumed to have a turnover of £50 million, Usborne is a very successful independent publisher.
Children's books are extremely price-responsive. There is an interdependent relationship between retail price and volume in the mass market; adding an extra 10 per cent to a title can ruin its chances of success. Usborne have selected titles on discount on their website. The prices of a few box sets are considerably marked down. They will, consequently, have to compete with the low prices of sellers like Amazon, Book Depository and eBay.
The website circulates three different newsletters; Saturday Activities, Usborne and YA. YA is a monthly newsletter while the rest are weekly. They include the latest Usborne related news, sneak peeks, behind the scenes, book recommendations, author interviews, free chapters, competitions and downloadable content. These newsletters help the company assess their market sector and target audience.
Usborne's titles are divided into different subjects and age groups. Titles under Maths and Science are informational and creatively illustrated to engage young minds. Their list also includes products like activity books, baby books, gift books, lift-the-flap information books and more. With a staff of over 250 employees, it is thus categorised as a medium-sized publisher. On being asked the business strategy, Peter Usborne said, “We look around the sector for ‘dusty corners', where other publishers are not doing a genre properly, such as dot-to-dot or sticker books. We have access to more editorial, art and design talent, and now, more money. We make books instead of searching out big names. We are now trying to make construction books that slot together, and magic painting books.”
Business Model Canvas
An analysis of the Business Model Canvas of Usborne suggests that its Value Proposition is the strong brand recognition and extensive front and backlist. It is an important component of a business model along with Customer Segment. A strong list is an asset that turns into a marketing tool for authors and booksellers. Usborne's most acclaimed author, Fiona Watt is the sixth biggest-selling author in the UK after J.K. Rowling and Jacqueline Wilson. She is an Editorial Director and writer at Usborne and has sold over 10 million books in the UK. Likewise, she is a valued asset to Usborne, topping top bestseller charts in 2017. With almost 45 years of experience and knowledge of its target market sector, they have established a deep-rooted Customer Relationship with their readers, school authorities and business clients.
Usborne's list is generated and managed by the Key Partners such as the in-house editors, writers, printers and designers who conceptualise and create the titles and have creative control over their content. This is a unique selling point (USP) for the publisher and allows them to concentrate on their titles and improve the quality of the product without any deadlines. It also gives Usborne an advantage over other publishing houses. The reason being no pressing lack to commission external authors, editors or freelancers which decreases the fixed costs.
One of their specialised Key Activities is the testing of their products. Since the titles cater to children of all ages, the products are inspected regularly and intensively by the designers and engineers. Thus, by creating innovative and intriguing books, they have solidified their market presence as a leading specialist.
While Usborne operates moderately as any other publisher, its Channels of book distribution are distinct. Along with their website, online retailers and bookshops; they also manage Usborne Books at Home which is a direct sales Organiser and consultants' division in the UK. This is a community-based program that helps further the reach of Usborne to schools, libraries book fairs and bookshops. Organisers earn 24% commission on their sales which increases as the business grows. They also offer incentives like QuickStart Programme which is a twelve-week programme for future Usborne writers, Business Development Programme which offers discounts on books, free deliveries, exclusive offers and events and Up, Up and Away which rewards international trips to highest achievers.
Usborne's Customer Segment includes children, young adults and adults. Adults include parents, grandparents, teachers and school authorities. All three directly depend on each other as the parents help the children with these books, who then increase the demand. They operate as a Multi-Sided Platform as they employ in-house writers and manage different channels for sellers. Customer Segment is thus, closely correlated with Value Proposition as the organisation has to be aware of the different segments and their demands.
SWOT Analysis: Strengths
Usborne has a clear advantage over other publishing houses; as observed in Value Proposition above; with in-house writers, editors, staff and printing, it minimizes the external costs to a great extent. This is a major strength as it allows them to focus on the content meticulously and test for hazardous materials efficiently. They have a positive brand recognition as they have been in business for almost 45 years and understand the market very well. Their list is also translated into more than 100 languages. Being a medium sized publisher, they employ a skilled workforce who stay longer with the company. They have also been a recipient of the Children's Publisher of the Year award in 2014, chosen by the UK Independent Publishers Guild.
Peter Usborne and his children, Nicola and Martin Usborne founded The Usborne Foundation to address child literacy initiatives and to combine education and research and technology into an interactive experience. Their first project, Teach Your Monster to Read is a BAFTA-nominated free computer reading game, aims to make reading fun and accessible with over 25 million plays, as of October 2017. They are also charitable towards animal welfare and mental health foundations. They have also taken up childhood obesity in the UK as their next objective. Their aim is to create an interactive approach for children towards healthy eating. This establishes the company in a positive light and contributes towards Corporate Social Responsibility (CSR).
In 2018, Usborne launched The Usborne Academy, which is a new work experience scheme for under-represented publishing hopefuls. This will allow eight people a chance to spend a week at Usborne in different departments and learn from the professionals. According to Nicola Usborne, “The Usborne Academy is about sharing that passion and allowing more people, from more diverse backgrounds, an opportunity to find out more. We want young people from all walks of life to be able to discover what children's publishing is and what roles are available in the industry.” This will generate new opportunities for the company and new graduates as the work experience is offered with accommodation and a London living wage.
Since Usborne translates its titles in multiple foreign languages, its market share increases with the scope. Titles are translated by the publisher into French, German, Italian, Korean, Dutch, Spanish, Brazilian Portuguese, Catalan and Chinese. For other languages, they license local publishers to translate and publish through their publishing house. This helps the product reach international markets. Countries like China and Vietnam are major markets for Usborne as the target audience like the illustrations and design of English books. In 2017, Usborne launched a Chinese imprint with Jieli Publishing House. Usborne China is the second Asian-language imprint and ninth foreign-language imprint after the launch of Usborne Korea in 2015. Peter Usborne commented, “China is well on the way to becoming the world's biggest market for children's books. Jieli has been a strong rights customer of ours for many years, and I am thrilled to work with them from now on to bring the Usborne identity into the Chinese-language market.”
As mentioned in the market analysis, the value of a book increases when it is packaged and marketed as a special, library or limited edition. This could include gift books like Books with Toys, Gifts for Babies, Musical Books, Peep inside and Pop-up books and Boxed sets. Since they are aimed at gifters, not book buyers, the publisher targets a new audience and thus, stock huge quantities, especially during the gifting seasons.
Usborne released four apps for children based on their bestselling books. Sticker Dolly Dressing App, Sticker Dolly Dressing Princesses App, Pirates App and Baby's Very First Play App. While the first three are available for iPad, the latter is available on Android, OS and Kindle. Although these are paid applications, the company has a foothold in the market share of apps and games. This is a lucrative approach to monetising content which would, in turn, increase the financial resources of the company.
Children today are digital natives, time online is part of their daily lives – and if they do not gain access at home, they learn to use computers at school. Through this, new opportunities for accessing and sharing content have emerged. New digital formats like ePub and mobi have eased the method of content distribution and bolsters involvement of children with the content. The company has an impressive list of eBooks. The digitisation of their list was rewarding as eBooks are as popular as print copies. This also sets the company as a frontrunner against its competitors in the market. Furthermore, they also publish audiobooks that have CDs along with print books. Audiobooks are voiced by talented voice actors and are now beginning to take over significant market space.
Usborne has an extensive following on social media. They have accounts on Facebook, Twitter, Instagram, Pinterest and YouTube. They post updates regularly and have sufficient audience interaction. The posts are relevant to new releases, acquisitions, cover reveals, reposts, events, awards and general updates. The overview of the social media accounts is bright and colourful, complementary to the book covers. Usborne also publishes blog articles on its website which cover events, new releases, awards and personal blog posts covering manners, hygiene, technology and tips for job applications. Their blog articles are well rounded and cater to all ages. The YouTube channel lists videos introducing the Usborne staff, book releases, author interviews, tutorials and behind-the-scenes. They also have an informational Press enquiries section on their website that goes back to 2016.
A major weakness for Usborne would be the rise in print and ink costs. As they are dedicated to perfecting and creating innovative products, the design and layout costs of intricate books, for example, the lift-the-flap information books or the Touchy-Feely books, increase. This also impedes the quality of the product, with ruined copies being sent off to the market, as was the case with the mould infested copies of That's Not My Santa and That's Not My Reindeer. While they were recalled, it incurred huge financial losses to the company. Exorbitant trial and error that is undertaken during the conception of these books slow down the production. This is directly linked to the lack of financial resources as fewer titles are published every year.
The slow production schedule is disadvantageous to a publishing house, more so to Usborne, as the market trends change unpredictably. The editor, accordingly, has to monitor the publishing trends to be informed. In addition to the above, print and ink, transport and wholesale costs fluctuate intermittently, which could alter the costs of different editions. Similarly, wholesalers and distributors like Amazon often sell books at discounted prices which induces substantial loss to the company.
Although Usborne is an established publisher, mistakes cannot be avoided. In 2017, copies of Growing Up for Boys by Alex Frith were destroyed after a parent posted a passage on social media from the book that claimed girls have breasts for two reasons: “feeding babies and looking grown-up and attractive.” While the publisher apologised and assured that the copies of the book would be destroyed, and the material would be revised, there were still some concerns from parents on social media.
As technology evolves, enhanced illustrations in eBooks and richer graphics add to the reading experience. Future eBook technological advancement is under the domain of interactivity, intermedia, hyperlinking and embedding of audio, video and other non-text materials. Usborne has efficiently adapted to the rising technological advances in children's publishing. Usborne Quicklinks is an online learning resource with over half a million visitors each year. It is accessed by children, parents and teachers. Visitors can search for the Usborne book of their choice and the resource pairs it with comprehensively curated websites which include videos, quizzes, articles, virtual tours and more. Usborne's Web Research Editor, Jacqui Clark, answered why children need books by explaining, “Each Usborne book is written with an age group in mind, and they are very carefully written, in a way, that makes sure a reader really gets to understand an idea. Websites just don't do this, but they can give a lot more information and really get your excitement going. So, an Usborne book and Quicklinks is a perfect combination.” These links are specifically selected to enhance the experience of an Usborne book. One of the most visited links if the dinosaur pronunciation guide. The weblinks are inspected by Usborne Editors to ensure the safety of children.
In conclusion, Usborne Publishing is a well-known liberal and independent publisher. They have a contained business model where they know their strengths and weaknesses and have tried to minimise the risk, for example, eBooks and audiobooks. They have a practical business model with a noteworthy concentration on their strengths. They are a successful children's publisher and understand their market sector efficiently.
As for the sustainability of Usborne's business model henceforth, it is likely that they will continue to be successful in the publishing business. They should look into increasing their skilled workforce as it would decidedly help escalate the production. They also need to be conscious of the changes in publishing trends and society. While Quicklinks is extremely popular, they could venture in audio and video embedded eBooks. Acquisition of new titles might aid the growth of the business. Exporting titles to international markets could be potentially helpful.
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