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This case was prepared as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Acknowledgements: We would like to thank the editor and reviewers for their excellent guidance and encouragement, as well as the generous support of the Creative HQ business incubator. All views and errors are ours.
Journal of Applied Case Research, Vol. 8, No. 1
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of media options, book publishers have increasingly had to seek innovative approaches to create operating leverage. Such options have traditionally included movies, television adaptations, and merchandising. The Internet and digital technology has also added a wide array of options to leverage content through offerings such as gaming, on-line communities, and electronic books (Appendix A). Examples in the children's segment include the powerhouse brands of Harry Potter (www.harrypotter.warnerbros.com) and Narnia (www.narniafans.com). As a result, the traditional book publishing value chain (Figure 1) is being reconfigured by social and technological changes. As the head of picture books at HarperCollins stated: "The cream of traditional picture books will survive, but the rest of what we do has to offer something extra."1
Figure 1: Print Publishing Value Chain The global publishing industry was valued in 2007 at US$ 444.1 billion, with an average growth rate of 2.4 percent for the last five years (Figure 2). Book publishing, as a segment alongside advertising, newspapers and magazines, made up 28.1 percent of this global publishing industry2 (Figure 3).
Global Publishing Industry
$600.0 2.8% 2.5% $500.0 2.2% $400.0 2.3% 2.3% 2.2% 2.3% 2.3% 2.3% 3% 3%
2%
US$ Billions
$300.0 $454.0 $454.3 $474.9 $424.4 $434.2 $444.1 $200.0 $404.0 $412.9 $486.0 $498.4
2%
1%
$100.0
Revenues US$ Billions Annual Growth %
1%
$0.0 2003 2004 2005 2006 Journal of Applied Case Research, Vol.2007 No. 1 E 2010 E 2011 E 2012 E 8, 2008 E 2009

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