20 percent
Revenues outside Europe
in Group revenues 2011
28 percent
Revenues outside Europe
in Group revenues 2016
The New Bertelsmann Is More Inter­national

Bertelsmann Is More International

Positive demographic changes, a growing middle class with increased purchasing power and rising demand for digital media, services and education – these are just a few of the reasons why Bertelsmann foresees ideal conditions for its businesses in Brazil, India and China (BIC) in the long term.

The same is true for other countries outside of Europe, where Bertelsmann’s potential for growth is greater than in its core markets.

Beyond the BIC countries, Bertelsmann has increasingly strengthened its business activities in the United States over the past few years. The reasons are obvious – the US market for media and digital learning is the largest and most innovative in the world, and there is a broad range of opportunities for the services Bertelsmann offers.

The Group’s US business was already greatly strengthened in 2013 with the merger of Bertelsmann’s and Pearson’s book-publishing operations. The world’s largest trade publisher, Penguin Random House, has been managed from New York since then.

RTL Group focused primarily on the United States too, with the expansion of its multichannel networks; Fremantle Media stepped up its investments there; and Arvato became the service provider of choice for many US companies. The newly founded Bertelsmann Education Group is also headquartered in the United States, and all of the division’s businesses that were set up there are now expanding internationally. Bertelsmann now employs more than 10,000 people in the United States, where it currently generates nearly €3.5 billion annually in revenue.

At the same time, Bertelsmann has intensified its activities in the BIC countries. In 2012, the company opened new Corporate Centers in India’s capital New Delhi and in Brazil’s business metropolis São Paulo. Bertelsmann’s Chinese office in Beijing was also expanded. These locations are where the Group’s various business activities are centered and coordinated. Penguin Random House, for example, is now the largest English-language publisher in India and the leading player in the Latin American book market. Arvato now provides services in all three of these countries, and Bertelsmann’s growth platforms – like BMG and the Bertelsmann Education Group – have gradually increased their activities there. Meanwhile, Bertelsmann Investments’ funds acquired stakes in several innovative start-ups. This not only opens up strategic opportunities for Bertelsmann, but also ensures access to advances in technology and industry trends in these markets.

These measures have led to a sizable increase in the revenue share Bertelsmann has generated outside of Europe since 2011. While 80 percent of Bertelsmann’s revenues were generated from business in Europe in 2011, in 2016 it was 72 percent. Meanwhile, the revenue share generated outside of Europe increased from 20 to 28 percent.

In the years ahead, Bertelsmann is set to become even more international; its target revenue distribution is 60 percent from Europe, 30 percent from the United States and 10 percent from the rest of the world.

Highlights 2016: More International

Bestsellers Around the World

Penguin Random House’s bestsellers in 2016 were as diverse as the publishing group is international. The group, which operates on five continents, last year placed 585 print and e-book titles in the “New York Times” bestseller lists in the US market. The company’s divisions and imprints published successfully across all genres and formats with such major bestsellers as “The Girl on the Train” by Paula Hawkins, “Me Before You” and “After You” by Jojo Moyes, the posthumous memoir “When Breath Becomes Air” by Paul Kalanithi and children’s classics by Dr. Seuss and Roald Dahl.

Reader with When Breath Becomes Air Cover of Me Before You Cover of After You Cover of The Girl on the Train

Penguin Random House offers its authors a truly international audience, and Jamie Oliver was one of the many to demonstrate this in 2016. The celebrated chef’s books are bestsellers not only in his native United Kingdom, but they also enjoy massive sales in Australia and China.

Last year, Penguin Random House Grupo Editorial, the publishing group’s division in the Spanish and Latin American markets, benefited from the successful integration of Santillana Ediciones Generales’ Spanish and Portuguese-language publishing companies, acquired in 2014, as well as from growing e-book sales. Bestsellers of 2016 in the Spanish-speaking markets included “Falcó” by Arturo Pérez-Reverte and “Los Herederos De La Tierra” by Ildefonso Falcones.

Falcó on iPad Los Herederos De La Tierra on iPad

BMG Continues International Expansion

Meanwhile in China, BMG expanded its partnership with Alibaba Music, the music division of the well-known e-commerce platform. The two companies renewed their 2014 license agreement and additionally entered into a cooperation agreement to support the planned offering of Alibaba in the areas of film, television, fan interaction and e-commerce. The intensified collaboration creates a win-win situation – the partnership gives Alibaba Music easier access to Western artists, who in return gain entry into the huge Chinese music market.

In 2016, BMG expanded its operations to additional major music markets. Last year, the Bertelsmann subsidiary opened offices in Sydney, Australia, and in São Paulo, Brazil. Just a few months after launching in Australia, the world’s sixth-largest music market and a source of international repertoire, BMG announced its first major deal there – the acquisition of the legendary music company Alberts.

Education for the World

Growth in the United States and beyond – Relias Learning and Udacity, the Bertelsmann Education Group’s online education providers in the fields of healthcare and technology, expanded their offerings in the US home market last year, while also exporting them to other countries. For example, in 2016 Relias expanded its offerings to the United Kingdom and Germany and also to the strategic growth region of China. Since last year, Udacity, too, has offered its Nanodegree programs in China and in Brazil. In India, Udacity has had a presence since 2015. In each of these countries, more than 1,000 students have already enrolled in paid Udacity courses.

Relias Learning on iPad

Bertelsmann Funds Invest in BIC Countries and the United States

A partner for young companies around the world – in 2016 Bertelsmann invested in 43 new start-ups with innovative business models via its four strategic investment funds. The investments are focused in Brazil, India and China (BIC) and the United States.

The Bertelsmann Asia Investments (BAI) fund alone was responsible for 27 new shareholdings, including the Fintech company Yixin Capital and the bike-sharing app Mobike. BAI also made several follow-on investments in existing portfolio companies, for example, the fitness app Keep and the dating platform Tantan.

In India and Brazil, too, Bertelsmann strengthened its activities in business segments such as Fintech and education through investments. For example, Bertelsmann India Investments invested in Lendingkart, a start-up offering loans to small and medium enterprises in India in a fully automated and digitized way.

In Brazil, together with its strategic partner Bozano Investimentos, Bertelsmann acquired a stake in NRE Education Group, one of the country’s largest medical university groups.

In the United States, Bertelsmann Digital Media Investments acquired stakes in several new start-ups. The fund’s largest investment in 2016 was the online video network FloSports, a start-up specializing in live streams of sporting events.

keep FloSports online-video-network Mobike bike-sharing-app