News | Naperville, Illinois, 05/09/2023

Redefining Reading Culture

Boost@Bertelsmann: Sourcebooks

Since 2019, Penguin Random House US has been invested in Sourcebooks, a US publisher founded in 1987 by Dominique Raccah. Sourcebooks is using data to disrupt the traditional publishing business, turning casual readers into avid readers.

The world of books is changing rapidly. Readers are discovering books in new ways, and today’s authors are able to grow fanbases at an exponential rate using new channels. Sourcebooks – the enormously successful
Illinois-based independent publisher in which Penguin Random House US has been invested since 2019 –
thrives on these recent marketplace developments. Known for innovation and agility, Sourcebooks breaks traditional models and constantly redefines book culture while helping authors build their careers and reach more readers: all with the goal of changing and enriching lives through books.

How did Sourcebooks, which Dominique Raccah founded in a spare bedroom of her suburban Chicago home in 1987, become the seventh-largest book publisher in the United States? How does the publisher leverage data and experimentation to break the traditional publishing model, rebuilding it into one that launches unexpected books to the top of bestseller lists and turns ambivalent readers into voracious ones?

It all starts with the company’s mission that “books change lives,” which has been dear to Dominique since she moved to the United States from France at the age of nine. At the time she didn’t know a word of English, “so I went to the local library and started teaching myself English, and getting to know my new home, with the help of books,” recalls Dominique in an interview. “Books made me who I am today,” she says.

Publishing company founded with 17,000 US dollars

 While books would continue to play a determining role in Dominique’s life, her path initially led her in a different direction: she developed a passion for mathematics, became a statistician, and spent eight years working at the advertising agency Leo Burnett, where she established a department for the analysis of data long before terms like “big data” became mainstream. She took this experience with her when she decided to become a publishing entrepreneur in 1987, diverting 17,000 US dollars from her retirement fund as her only starting capital. Today, Sourcebooks employs more than 200 people, publishes 500+ new books annually through
18 imprints, and has many New York Times bestsellers in its catalog. Based on the company’s growth trajectory and data from NPD Bookscan, it is considered the most successful independent book publisher in the country.

Sourcebooks’ first title, published in 1987, was a guidebook called “Financial Sourcebooks.” “The book was incredibly ugly, but it taught me a lot,” recalls Dominique. The design of their books has improved considerably since that first publication, but the name Sourcebooks – and the commitment to data and innovation – remains.

After “Financial Sourcebooks,” Dominique published several more nonfiction titles. It became clear she was going to have to figure out exactly what customers and readers really wanted if Sourcebooks was to become profitable. Consumer research and focus groups informed what became the publisher’s first New York Times bestseller, “We Interrupt This Broadcast” by Joe Garner, a collection of major 20th century news events. What made it special was the combination of text, photos, and audio clips of the events that were included on two accompanying CDs. “We Interrupt This Broadcast” was one of the first multimedia bestsellers in the United States. Sourcebooks went on to publish more bestsellers of a similar nature, like “And The Crowd Goes Wild,” a collection of famous sports moments by the same author.

Focus on readers

 “Given my professional background, when I first started publishing books, I found it amazing how little was known about readers at the time,” says Dominique. She says this was incomprehensible to her when Sourcebooks was just starting out, because publishers alone bear the economic risk of new publications: bookstores can return unsold books. “So publishers should actually be very interested in any information that helps their books sell better, to ensure fewer of them are returned,” she adds with a laugh. “Because I didn’t know anything about the publishing business when I started Sourcebooks, the whole company was literally created from scratch,” Dominique continues. “That means that to survive, we had to spend a lot of time figuring out what our customers wanted – and it’s precisely that focus that sets Sourcebooks apart today.” From the very beginning, therefore, data analysis has been a key element of Sourcebooks’ publishing work. “Data is a creative power,” says Dominique. “It’s a great tool for making better decisions as a publisher.”

And so, in the past several years the publisher has systematically built out their data team, invested in technology platforms and created targeted internal programs to help all employees develop data literacy. This data-centricity helps Sourcebooks ensure authors’ books resonate with readers. Dominique emphasizes, “Data alone isn’t the answer. Rather, it reveals the questions that a publisher needs to answer.”

This attitude supports a deeply experimental culture: there are hundreds of experiments running at any time at Sourcebooks, which has led to new strategies like early adoption of TikTok as a marketing tool, lots of successful backlist promotion initiatives, a new editorial training program to help diversify the publishing industry, and more.

Radical innovation in kids and young adult

 When Dominique first began publishing books for children, it was an important step forward for Sourcebooks. She tells us it all began with the volume “Poetry Speaks,” another multimedia bestseller in which the poems were complemented by three audio CDs featuring well-known poets reciting their own poetry. For Dominique, “Poetry Speaks” marks “probably the most significant milestone in the history of Sourcebooks.” That’s because, she says, it was the moment she really started following her own direction as a publisher.

In 2005, she used the same formula to publish “Poetry Speaks to Children,” the first Sourcebooks title for children, which also became a bestseller. The publisher issued more children’s books, and in 2007 launched Sourcebooks Jabberwocky, the first of several in-house children’s imprints. In the years that followed, Sourcebooks enjoyed many successes with its programs for children and young adults, becoming one of the country’s leading children’s book publishers.

Today, over half of Sourcebooks’ overall sales come from children’s and young adult books – a business that has experienced sales growth every year for the past decade. In both 2021 and 2022, the publisher saw double-digit growth across its children’s imprints (23 percent growth in 2022 alone).

Experimentation is a big part of how Sourcebooks develops books for children. The “personalized-at-retail” program, for example, had never been done before and has contributed significantly to Sourcebooks’ growth. The idea developed from early experimentation with online personalized books through its “Put Me in the Story” platform. Analysis revealed an additional customer need for personalized books sold in brick-and-mortar stores at affordable price points, rather than available online only. The result is 3.5 million units sold and counting.

In another example, the bestselling “How To Catch” series has sold 14.4 million books to date and produced eleven New York Times bestsellers. Launched in 2016, “How To Catch” was developed internally as a scalable concept. There are currently 17 picture books in the series, three board books, and multiple activity books and proprietary projects.

Sourcebooks Fire, the publisher’s young adult (YA) imprint, grew 37 percent in 2022, and as of early 2023, one quarter of YA thrillers sold in the United States are from Sourcebooks Fire. By focusing on reader needs and trends, Sourcebooks Fire has uniquely positioned itself in the YA marketplace. When the editorial and marketing teams saw that readers were embracing gritty, emotional romance, they repackaged “If He Had Been With Me” by Laura Nowlin, originally published in 2013. Readers began to discover the book, particularly on TikTok, and in 2022 sales rose to over 100,000 copies, with 93,000 copies sold so far in 2023.

Disrupting the romance genre

 In 2007, Sourcebooks launched Casablanca, its romance imprint. As romance readership in the United States started to expand, Dominique and her colleagues noticed readers’ desire for deeper, more modern, more authentic and diverse stories in romance. Clear trends began to emerge, including the fact that many people who didn’t consider themselves readers were starting to read these stories. And many lifelong romance readers began talking publicly about their favorite books for the first time, openly rejecting the stereotype that romance is somehow a lesser genre. Sourcebooks saw a big opportunity to reach this new, fast-growing reader base. In 2021, after Sourcebooks steadily grew its market share in the romance category, the industry took notice when the publisher announced Bloom Books, a brand new publishing model that puts more control into authors’ hands and speaks directly to entrepreneurial romance authors’ fan communities.

The first author in the Bloom program was E. L. James, who moved her backlist to Bloom through a cooperation with partner Penguin Random House. “It feels like I’m coming home,” the world-famous “Fifty Shades” author said at the time. “I’m returning to my indie roots, and working with an innovative, dynamic and very successful publisher who is always open to new ventures.” The move to Bloom happened with the support of her previous publisher, Penguin Random House, which retained a number of rights to E. L. James’ works after the switch. Other highly successful authors in the Bloom program include Scarlett St. Clair, Elle Kennedy, Lucy Score and Ana Huang.

As of the week ending February 25, 2023, Sourcebooks is the #2 publisher of romance in the United States overall. Bloom authors are seeing sold-out book signings and highly successful pre-order campaigns. They have strong social media followings and connect directly with readers through BookTok, romance conferences and events.

Data is a key driver in the success of the Bloom program as well, allowing the teams to make informed, creative decisions that help authors best position their books. “We invest lots of time in learning who our authors’ readers are,” Raccah says, adding that the process involves a lot of ideas, experimentation and iteration, and plenty of changes with each new book – over and over again. This year, Sourcebooks will make the Bloom model available to select young adult and mystery authors, having just signed the first several authors in early 2023.

Embracing agility

 Listening to bookselling partners is a major part of Sourcebooks’ approach as well. Frequently, booksellers will request books of a certain type or on certain topics. Here, Sourcebooks’ answer is almost always: “Yes, let’s see what we can build for you.” It is precisely this speed and agility in all processes that sets Sourcebooks apart.

Dominique and her publishing house have received many awards for their deep understanding of target groups, the innovation Sourcebooks keeps demonstrating, and their systematic use of new opportunities. In 2016, the US trade magazine Publishers Weekly named Dominique Raccah its “Person of the Year.”

And agility is leveraged in all parts of Sourcebooks’ business, not just in the editorial or bookmaking process: as of early 2023, attempts to ban books across the United States have reached levels not seen in almost 50 years. Sourcebooks proudly publishes the 9th-most banned book in the country (“This Book Is Gay” by Juno Dawson), along with dozens of other books that are regularly banned by special-interest groups. In the past year the publisher has devoted more time and resources to protecting the right to read: for example, solidifying partnerships with organizations like the National Coalition Against Censorship, co-publishing a book with the American Library Association, and directly sending banned books to affected students and teachers. 

Collaboration with Penguin Random House

 Another milestone in Sourcebooks’ story was the above-mentioned entry of Penguin Random House in May 2019, when Bertelsmann’s book publishing division acquired 45 percent ownership in the publisher. Once the decision was made to seek a partner for Sourcebooks, there were numerous meetings with interested parties, recalls Raccah. “But the team at Penguin Random House impressed us the most. It was in every way the most diverse of any team we met with.” Penguin Random House presented itself as a big, encompassing world from that very first meeting, she said, and it was that perspective that she found exciting. “They made us feel like we could be part of something bigger,” she said.

According to Dominique, Penguin Random House’s partnership has only supported Sourcebooks’ independence. The publisher remains autonomous, and continues to handle the sale and distribution of their own books, ensuring they retain the special character behind Sourcebooks’ success. “Penguin Random House made it clear from the beginning that Sourcebooks should remain Sourcebooks, that they just want to help us grow,” Raccah says. In particular, Sourcebooks has benefited from being part of the larger Penguin Random House (PRH) family in its international expansion. The Illinois-based publisher now works with the Spanish-language publishing group Penguin Random House Grupo Editorial, and the global publisher DK, the latter of which has taken over distribution of Sourcebooks titles in Europe. “Penguin Random House helps us on so many levels. It’s a unique partnership that fosters innovative growth on both sides,” emphasizes Raccah.

Since Penguin Random House has come on board, Sourcebooks has been able to access PRH’s extensive expertise, experience and resources, and in return brings its knowledge and unique publishing perspective to its PRH colleagues. The publisher cites the further development of the “How To Catch” series for older children as an outstanding example of this exchange of ideas. The idea grew from a workshop with Penguin Random House colleagues, and Sourcebooks will now adapt the popular characters for the 6- to 9-year-old age group with a new graphic novel series, “Pup and Dragon.” The first book, “Pup and Dragon – How to Catch an Elf,” will be published in September.

Going forward, with the support of Penguin Random House, Dominique hopes to expand even further. Relentless experimentation, curiosity and Sourcebooks’ trademark focus on data will continue to be key. “This has been a watershed year for us. And we can see the next steps in our growth,” promises Raccah. “Our partnership with Penguin Random House works extremely well,” concludes Raccah. “It helps us keep reaching the next generation of readers with our books – because that, after all, is what our work is all about."