Tuesday, July 31, 2007
Reuters is reporting that the deal is done - then they changed their headline to 'deal expected Tuesday'. Assuming definitive agreement is reached at the DJ board meeting later today, Rupert Murdoch gets the biggest name in financial news reporting. Don't be surprised if we see him wrap the WSJ brand around his new financial news cable channel.
From the report:
"The Bancroft family has accepted," John Prestbo, editor and executive director of Dow Jones Indexes, told reporters in Chicago. He said Dow Jones "will be part of News Corp." Prestbo said the information came from an internal company memo.
New York Times: Murdoch Wanted it More
For the quarter:
Publishing revenues for the second quarter of 2007 increased 14% to$200.3 million from $176.0 million for the same prior-year period,principally reflecting higher sales from best-selling titles, including Blaze by Stephen King writing as Richard Bachman and The Secret by Rhonda Byrne. OIBDA increased to $20.1 million from $10.6 million and operating income increased to $18.1 million from $8.2 million, reflecting the revenue increase partially offset by higher production and royalty costs.Publishing results included stock-based compensation of $.9 million and $.5million for the second quarter of 2007 and 2006, respectively.Press Release
It may be no secret why the S&S results are so good. Assuming Bryne's book continues to sell into the third and fourth quarter and with the addition of ancillary titles, then S&S executives at S&S should be in line for nice bonuses this year.
Forbes: News Corp Unlikely to Proceed with Bid
Forbes: The MySpace Guy
Monday, July 30, 2007
For the first half education revenues were up 7% and profit also increased. The company's earlier statements regarding revenue growth particularly in education seemed conservative especially given the add on acquisitions the company has made in the past 18mths. Regardless, some analysts were surprised that the company has raised its growth expectations for the total to between 5-7% driven in part by the strength of education.
Marjorie Scardino, chief executive, said:
"Our half-year results are always just a hint of our potential for the year, but
certainly a strong hint this year. The Financial Times Group is showing the
value of its unique strategy; Penguin's publishing and profit are both solid and
promising, as is its approach to change in publishing; and in Education we
continue to set the pace as we use technology to personalise learning
Scardino also said on the conference call that the company was not completely seriously interested in the WSJ meaning that they were never going to put cash into a deal or make a deal that would have diluted EPS. However, she also said that when a competitor is being sold as an executive she is obliged to review all options which seems to be what they were doing.
Pearson's share price went up 2% yesterday on the news. On the back of these results and the others in the past few days, the publishing and information business seems to be doing quite well.
Friday, July 27, 2007
Children often have as much to teach as to learn.
My 6-year old son has recently become enamored by Webkinz, stuffed animals that come with a password which opens the door to a virtual world where you can house, feed, dress, accessorize and amuse your pet (complete with playdates through online chatting) to your heart’s content. The site rewards usage through the accumulation of Kinzcash, virtual money earned through clever games (pseudo educational), online “jobs” and kids gambling in the form of bingo and slots. All of which allows your child to buy even more virtual items for their pet (or pets—link your rooms together for more fun!), including “rare” items in the Curio Shop, sale items or items which require a coupon. Cleverly scary, huh?
If you haven’t checked out Webkinz yet, and if your job involves even a tinge of digital-ness (for example, you have a computer), I advise you to logon today. Here are a few quick observations:
- In Webkinz World, kids go online to the Reading Room to access virtual books with their pets and their friends—and I don’t see any complaints about format, metadata, reading devices or preference for printed matter. Kids don’t care how the content got there (and as adults they won’t either), and they are equally comfy curled up in their bed or a virtual couch.
- Why aren’t there Webkinz books in stores today? Point #1 taken, there is still a market for printed Webkinz books which would extend the brand to bookstores and feed this current hot trend. I could see “Choose your Own Adventure” succeeding—combining static with dynamic content, which is what kids today are doing all the time with no trouble at all.
- We know that the assault of content that exists today is just a dribble compared with what is to come. Ensuring that books stand out of the pack of potential media choices means being creative with how content is packaged, marketed and sold. Working with traditional publishing companies, I’d say it’s about 1 for 1 on those who are embracing new media tactics and those who insist that “it won’t work for our titles.” What do you all think?
I don’t know what Webkinz plans to do with their captive audience—or what I will have to pay to keep my son’s outdoor play yard (1000 Kinzcash) after the one-year trial—but I’ll probably do it. And though I don’t like the hyper-consumerism promoted by the site or the hysterics to be “in or out,” I have this vague awareness that the deftness he’s picking up clicking and buying and chatting and multi-tasking—well, that’s something I could learn from him.
Thursday, July 26, 2007
PR Newswire (As yet, not too much circulation on this story).
"Increasingly, our customers recognize that their success depends on being constructively engaged with others involved in teaching, learning and research," Ronald Dunn, chief executive officer of Thomson Learning, said in a statement. "The name Cengage Learning reflects our commitment to promoting engagement and improving results for all of our customers."The company also emphasized that they will continue to leverage the stable of strong "brand-name" imprints such as Heinle, Gale, Wadsworth, Delmar Learning, Brooks/Cole and South-Western, among others.
Lagardere's publishing division saw revenues up 11 percent to E897 million(US$1.23 billion), with the Time Warner Book Group providing a E82 million(US$112.7 million). The unit was not consolidated into the company results until April 2006.On a like-for-like basis, the publishing division's revenues rose 1.7 percent. Lagardere said the division's second-half revenue growth will be hit by weak sales in its French literature and Larousse dictionary businesses.Lagardere's publishing units operate in Spain (Education), France (literature and education), the UK (Hodder) and US. Publishing revenues without the US only rose 1.7% and reflected conditions in France (market issues) and Spain (timing). The company press release did note strong growth in the US due to title growth.
For their outlook for publishing they noted the following:
The 2007 second-half prospects for Lagardère Publishing are good, especially for Education in France and Spain (where the effect of publication timing differences is set to be recouped in the third quarter) and for Literature in the United States. However, sales growth will as expected be dented by weak sales in Literature in France (a low-margin business) and at Larousse(elimination of loss-making editorial lines).Businesswire
All in all a strange combination of assets when it is stated in black and white. In the US it is all the rage to de-comglomerate...one wonders.
- Revenues increase 11%; organic revenue up 6%
- Operating profit grows 15%; operating profit margin increases in all segments
- Diluted EPS increases to $0.58, from $0.26 a year ago
- Proposed acquisition of Reuters progressing
For the full six month period, revenues are up 11% and operating profit is up 12%. The company also stated that they continued to make significant product line investments and that these results included those investments. Additionally, the company expects to continue to make material improvements to operating margins into the future. CEO, Harrington:
"Building on a solid start to the year, the business continued to gain momentum in the second quarter. We achieved solid growth in revenues, operating profit, margins, and earnings. Organic revenue was up 6%, led by our Legal and Tax & Accounting business segments. “We also continued to make significant progress driving operational efficiencies throughout our company, resulting in a 15% increase in operating profit. Our success was reflected in substantial increases in operating profit margins in each of our business segments, which included the benefits of our THOMSONplus initiatives. THOMSONplus remains on track to generate run-rate savings of $150 million by the end of 2008,”The company beat by 2cents the prevailing analyst forecast for EPS. The company is not making any detailed forecasts on performance until the Reuters deal is completed only to say things look good.
With respect to Reuters, the company detailed the deal and also noted the regulatory hurdles that the company must make both in the US and Europe.
“Given the complementary nature of the two companies’ businesses and the highly competitive nature of the financial information services industry, we remain confident that the transaction will be approved,” Mr. Harrington said. “Upon completion of the transaction, Thomson-Reuters will be well positioned to capitalize on the positive trends driving growth in our markets. The combined business will also benefit from significantly greater global diversification and a broader and more deeply integrated product mix. We are confident this combination will equip us to meet our customers’ growing needs in an expanding and dynamic worldwide market translating into faster growth and higher profitability.
Thomson Press Release
The first half results as reported today were mixed with revenue flat but in excess of many analysts estimates. The company confirmed they are on target for a 10% increase in EPS. Revenues were up 6% and operating income up 10% in constant terms. All operating units performed consistently in revenue but Lexis Nexis lead the group in operating income growth of 13% and Business Information lagged at 7%. (The company is impacted by the weak dollar and taking into account currency changes total revenue growth was only 1% ).
- Elsevier: good momentum, strong renewals, good book revenue, growing online sales
- Lexis: positive outlook, good demand for online services and total solutions, and risk and analytics
- Business Information: cycling in of biennial shows, online revenue growth more than off-setting declines in print.
- Digital revenues are on target to represent 45% of total revenue
- To focus on additional cost efficencies the company has hired c-level positions in outsourcing, procurement and technology
- Davis commented to journalists that the company rejected a P/E approach for the business information division in 2006. The unit could be worth over $2.0bill
- Davis also said he continues to look for acquisitions and is particularly interested in those over $100mm.
Wednesday, July 25, 2007
Coincidentally, The New York Times released some private archive material of the owning family, Ochs Sulzberger to the New York Public Library. There is nothing recent yet (although additional material is anticipated to be made available soon) but there are interesting items relating to the relationship between the Editorial philosophy and that of the owners,
Many of the documents reveal the newsroom’s sometimes prickly relationship with its owners. “It’s difficult for me personally to take a position not in accord with the wife of the Publisher,” Edwin L. James, the managing editor, wrote to Arthur Hays Sulzberger on June 22, 1949, after Iphigene Sulzberger complained about placement of a story involving Cardinal Francis Spellman. (A spirited defense of the news desk’s judgment followed.)
Will we ever see Murdoch's personal archive...? Do we want to? What happens if the deal doesn't is not accepted? You can bet that News Corp has an alternative plan ready to roll if the Dow Jones bid fails.
This seems to go on all over. After communism collapsed in Eastern Europe in the late 1980’s, for example, countries there began rewriting their history texts wholesale, to correct the distortions, omissions and ideological slant introduced by the dictatorships - and some of those efforts were then criticized for going too far in other directions. And such controversies are far from unknown in the United States, where everyone from Native Americans to Hindus have objected to the way they have been treated in some states’ history textbooks.
I read Lies My Teacher Told Me a few years ago and found it most interesting.
Yeah give me money, yeah, yeah, yeah (thats what I want)
Lots of money, yeah, yeah, yeah (oh yeah, thats what iWant)
If you want me to love you (thats what I want)
Give me money (oh yeah, thats what I want)
If you want me to squeeze you (thats what I want)
Give me money (oh yeah, thats what I want)
Thats what I want, oh yeah (thats what I want)
Thats what I want (oh yeah, thats what I want)
The Beatles also did that song...
Tuesday, July 24, 2007
The McGraw Hill School education division reflected industry growth trends and full year revenue growth is on track for a 5-6% increase.
"A very strong performance by Financial Services was a key factor in our second quarter," said Harold McGraw III, chairman, president and chief executive officer of The McGraw-Hill Companies. "We also benefited from the McGraw-Hill School Education Group's strong start in this year's state new adoption market and solid performances in higher education, professional and international markets.In education, the company expects a strong adoption cycle to offset mediocre growth in open territories. The company is also seeing strong performance in College and international markets.
"Revenue for this segment increased 5.8% in the second quarter to $647.3 million compared to the same period last year. Operating profit grew by 18.6% to $80.4 million. Foreign exchange rates added $4.5 million to the growth in revenue, but had an immaterial effect on operating profit growth
The outlook for McGraw Hill is as follows:
"We expect to achieve our goal of double-digit earnings growth in 2007 even though the growth rate will probably slow during the second half of the year as compared to our very strong first half performance. Although we expect low double-digit growth from Financial Services in the second half, tougher comparisons will make the fourth quarter more challenging. Some operating margin compression may occur in our segments in the second half, but we still expect improved operating margins in all three segments for the full year".Press Release
Monday, July 23, 2007
“It is a great thrill for me to join the media and information industries’ leading and most active investment bank. Over the years, I have watched JEGI’s reputation grow and its deal volume increase. I very much look forward to helping the firm expand its footprint in the vibrant business information services sector, which offers its customers a growing number of must-have products and services.”Prese Release
shares of Scholastic, the book's U.S. publisher, are trading at 0.66 times annual sales, compared with 1.04 times sales for rival U.S. book publishers. The shares would be worth more than $50 each, or 48 percent above their current price, if the company were to sell itself, Boyar and Stifel Nicolaus & Co. analyst Drew Crum said.
The Bloomberg article does discuss continued operational issues most recently in their direct mail business,
Scholastic's latest stumble is in its direct-mail business, where subscriber delinquencies are rising. Yesterday, the company reported fourth-quarter profit of $40.4 million, or 93 cents a share, missing analysts' average estimate.
As a shareholder, there should be some concern over earnings growth in the next 12-24mths; however, assuming a premium will drive the stock price because of an anticipated acquisition would seem to be ill-advised.
Sunday, July 22, 2007
Dow Jones Yes or No? BBC
Dow Jones MySpace Revenge? PRNewswire
Gratuitous Potter Article: CNN
Christian Retail: WaPo
Thomson Financial using Generate to build Private Company and Executive Profiles: CMP
EBSCO's New Novalist Portal: Library Journal
Wilkins in The Age
Japan's Tiny Books: Wired
Standards Program for Downloadable Media: MediaPost
If Libraries Didn't Exist Would they Be Invented Today? Freakononics
Acquire Media purchases NewsEdge from Thomson: PRNewswire
Interview with Vivian Schiller, NY Times.com: MediaPost
Saturday, July 21, 2007
Friday, July 20, 2007
Having said that Candover invested 300mm Euros in 2004 - not such a bad return. Management are going to do well also. Good on them.
UPDATE: Reuters is reporting BVD has been sold to BC Partners for a little less that $1.obill. The deal is expected to close in October pending regulatory approval. Reuters
(For those unfamiliar with von Holtzbrinck, they are a family owned business operating newspapers, trade publishing, education and digital media businesses in over 80 countries. In the US they own FSG, St Martins, Henry Holt and in the UK they own Macmillan).
In related news, the company posted mixed results (Money) this week with traditional media showing decreases but with international, Barrons and some digital revenues up. Some analysts speculated that the continued softness in DJ's traditional sources of revenue may cause some Bancroft shareholders to take the money and run. In trading, the share price was down slightly based on doubts about whether the deal with NewsCorp would be completed.
Thursday, July 19, 2007
demonstrated why, with a bullish 'sum of the parts' valuation on the stock of up to £10.2bn, or 1100p a share.Currently, Pearson stock is at 823p. Furthermore (talking up the stock),
Mark Braley at Deutsche reckons Pearson's current share price, down 7½p at 823p, ' materially undervalues' the group. He added: 'There is a strong case for management to consider an aggressive restructuring of the portfolio.'There is nothing to suggest that anything is imminent and Pearson has consistently said that they will resist a P/E advance.
Wednesday, July 18, 2007
If Borders can keep up with (and hopefully extend) their promised thirty a month then that, together with the savings available (which brings prices in line with online stores) could see the service succeed. Before then, however, I’d like to see a little more clarity for first-time and novice users, who have been exposed to so much “fear the internet!” melodrama that they might not get past the first download warning.
Looks like an interesting concept; it will be even more interesting when the entire book is on a mobile which has happened in Japan. (Yes, big in Japan).
Tuesday, July 17, 2007
Editis is the second-largest publishing group in France, a major player in European publishing, and generally a star of the publishing world. Editis is present in the literature, education and reference publishing sectors, and is also a major player in the distribution field through its Interforum subsidiary.On their site they offer a view of the digital future. It shows a couple interacting with electronic content that bridges the gap(s) between the physical and digital world. Substitute the visit to Bruges with my imaginary trip to Boston (in my DK article) and their depiction is similar to my imaginary world. The video is in French but as Michael told me 'it hardly matters'.
The organization subsequently threw in with Amazon.com and he took up other responsibilities, left the company and then returned. In his current role he was responsible for strategic direction but this seemed to be more of a place-holder while George Jones decided what to do. Currently, the Borders strategy is not dependent on any one individual rather it depends how recently they have looked at the Barnes & Noble annual report.
The announcement was clearly hurried and they tacked on the cio announcement to make it look planned. With the IT issues Borders faces wouldn't it be better to focus on that story and how this ex-medium sized book retail VP Technology can help them?
Secondly, the company seems to have stepped into something smelly by stocking Tin Tin, a heretofore standard children's book but which is now regarded as racist. Somehow, they have garnered all kinds of newspaper commentary and reports about this rather negative situation. I think they need better PR.
And finally, George Jones was interviewed by Jeff Trachtenberg of the WSJ yesterday and said basically nothing new other than the following:
Why are retail stores having a problem? Answer: Internet, Walmart and Costco. Nothing about store location, store mix, better partnerships, better store layouts, better in store help, better community.
Are you too late to the webstore game? No. Well he couldn't say Yes; however, they do need to extend the community aspect with respect to their customers and investment here is probably unavoidable. They want to mimic B&N in the integration of store and web but there are no new customers who haven't already chosen between B&N or Amazon. They must separate the fulfillment and supply chain aspects from the community development/membership. Perhaps they are, but they could end up sinking a lot of money in a transaction site that doesn't come close to separating them from B&N and Amazon.com
An overemphasis on a digital offering? No, because people over 35 don't know how to program their IPOD. Hummm. Admittedly speechless.
Monday, July 16, 2007
Reed is also taking a $300 million stake in Houghton Mifflin Riverdeep Group, which will leave it with an 11.8 per cent of the common stock in the enlarged company. Houghton Mifflin Riverdeep is privately held, with a range of backers including the Irish stockbrokers J & E Davy. Existing investors put up $23 million of equity financing to help to meet the $3.7 billion cash requirement for the purchase.
Also of note, there was never a deal book circulated which recalls the initial analyst commentary when Reed announced the sale earlier in the year and O'Callaghan was heard commenting that he wanted the business. Given the timing of his 'reverse acquisition' of Houghton Mifflin there was general belief that he wouldn't be able to do it. Nevertheless here we are.
It will be an interesting company to watch: Riverdeep has a background in electronic publishing which represents the challenge facing both HM/Houghton and Thomson Learning as they attempt to catch Pearson. The dynamism of the educational publishing market will accelerate over the next five years as these three business transform the way educational material is delivered, the manner in which students learn and the way education is organized and measured.
Harcourt finished 2006 with revenues of Eur 1.4bill ($3.0bill) and operating profit of Eur190bill ($140mm). 2006 operating profit was boosted by currency fluctuations. Reed have sold the education business for a revenue multiple of about 1.7 which isn't bad going.
Earlier this year, Riverdeep performed a reverse takover of Houghton Mifflin in a deal worth $5.0mm, Apax Partners purchased Thomson Learning for $7.7bill and Bridgepoint bought Wolters Kluwer education for $1.5Bill.
Under the headline "Wheeler Dealer," the Irish Independent profiles Barry O'Callaghan and how he got here.
“I got the Joy of Sex,” Ms. Yao replied. “I thought for sure it was French Women Don’t Get Fat.” Ms. Yao could be forgiven for being confused: the drink was numbered and the guests had to guess the name. “613.96 C,” said Ms. Yao, cryptically, then apologized: “Sorry if I talk in Dewey.”But from hipster librarians - and by the way, in the letters section this week some older generation librarians took exception to the notion that this group of libraians was somehow unique - we go to hipster libraries. This week the Times has an article about the supposed end of Dewey currently showing at the Gilbert Arizona public library. The libary has shrugged off the shackles of the dewey decimal system and abopted a commercialist subject coding method - just like a Barnes & Noble:
But the new library in this growing Phoenix suburb has gone a step further. It is one of the first in the nation to have abandoned the Dewey Decimal System of classifying books, in favor of an approach similar to that at Barnes & Noble, say, where books are shelved in “neighborhoods” based on subject matter. It was Harry Courtright, director of the 15-branch Maricopa County Library District, who came up with the idea of a Dewey-less library. The plan took root two years ago after annual surveys of the district’s constituency found that most people came to browse, without a specific title in mind.The aspect of creating a more user friendly environment for patrons is a good one. Perhaps the imposition of Dewey into the public library setting was always one of those instances where the view point of consumers (patrons) was lacking; but, in this article there is little about whether the Dewey system can or is adapting. The hook to this story, is the ardent pursuit by Mr. Courtright for its elimination and this strikes me as rather misguided.
Her assessment, though, understates his goals. Throughout the recent annual convention of the American Library Association, in Washington, Mr. Courtright and 16 of his employees paraded around wearing and distributing eye-catching badges that bore the word “Dewey” encircled in red with a slash across the middle.
Certainly, Maricopa has made a valid choice if it satisfies the needs of their patrons; however, why is the choice absolute? Why pursue a crusade, aren't there better things to consider? Moreover, the Dewey system, LC, and BISAC (which Gilbert's system seems to mimic) are managed standards and all have good points and bad but why call for the exclusive selection of one over the other? Furthermore, bibliographic vendors - OCLC included - have created 'cross-walks' or linkages between the various subject classifications both as a way to augment titles with only one subject and as a way to provide more flexibility for users of these data records in how the records are cataloged.
With respect to B&N-like shelf locations it is interesting to note that B&N's are not the same as Borders' which are not the same as Ingram's. The approach Gilbert is taking is worth following especially if it helps patrons, but the crusade aspect is a waste of effort; rather pursue a standards based approach that either helps improve Dewey or supports a library version of BISAC.
Sunday, July 15, 2007
Apparently News of Murdoch's Dow Jones Purchase was Premature: MSNBC
Not so Smooth: Pearson are Selling Les Echos: WSJ
Soon to be everything except moot court, LN buys services provider: Dayton Bus Jrnal
Visant (educational pulisher) for sale: Reuters
In case you were wondering, Proquest are now Voyager: PRNews
Publishers create web travel aids: Galleycat
Looking for Divine Intervention for Christian Retailing: Washington Post
Topic Specific Search Engines are the Next Best Thing: Economist
Book Industry Council (UK) looks to improve Library Supply Chain: PN
Beckham arrives (and Posh): LA Times (It is all a bit silly)
Belmar Five: 34:10
Friday, July 13, 2007
a collaboration with universities and public libraries to preserve thousands of rare and inaccessible books from their collections and distribute them via BookSurge’s Print-on-Demand service. This collaboration, which will greatly enhance the selection of rare and historic books for sale on Amazon.com and other retail channels, represents a breakthrough approach to digitization and preservation that will ensure the public will have access to these works indefinitely via Print on Demand.Amazon bought BookSurge about three years ago to bolster their print on demand capacity. Emory University, University of Maine, Toronto Public Library, and Cincinnati Public Library are the first organizations to enter into agreements with Kirtas to make their rare-book collections available via Amazon.com.
Would-be novelists have until late August to submit manuscripts to email@example.com, and Gather.com members will have a say in selecting the winner, the company said.
Some of you will recall that Gather.com launched a similar competition earlier this year that resulted in a mystery writer winning a contract.
In this case, I doubt they will get anything like the kind of substantial and repeat participation that Harlequin gets from their eharlequin.com site. More on this next week.
Fellow traveller and sometime PND contributor John Dupuis (Confessions of a Science Librarian) recently reviewed the book Everything is Miscellaneous. In that book, the author David Weinberger takes a look at some things relevant to book and data lovers. Specifically, he looks at the comparison of Amazon and bookstores and also the Dewey system. John has some contrarian views on the conclusions Weinberger draws from these examples,
Starting on page 16, he begins a comparison of the Dewey decimal system libraries use to physically order their books with the subject approach Amazon and other online systems use. I find this comparison more than a bit misleading, almost to the point where I think Weinberger is setting up a straw man to be knocked down. Now, I'm not even a cataloguer and I know that Dewey is a classification system, a way to order books physically on shelves. It has abundant limitations (which Weinberger is more than happy to point out ad nauseum) but it mostly satisfies basic needs. One weakness is, of course, that it uses a hopelessly out of date subject classification system as a basis for ordering. Comparing it to the ability to tag and search in a system like Amazon or del.icio.us is, however, comparing apples to oranges. Those systems aren't really classification systems but subject analysis systems. The real comparison, to be fair, to compare apples to apples, should have been Amazon to the Library of Congress Subject Headings
In the end he does enjoy the book,
I find it frustrating that in a book Weinberg dedicates "To the Librarians" he doesn't take a bit more time to find out what librarians actually do, how libraries work in the 2007 rather than 1950. (See p. 132 for some cheap shots) But in the end, I have to say it was worth reading. If I disagreed violently with something on virtually every page, well, at least it got me thinking; I also found many brilliant insights and much solid analysis. A good book demands a dialogue of it's readers, and this one certainly demanded that I sit up and pay attention and think deeply about my own ideas. This is an interesting, engaging, important book that explores some extremely timely information trends and ideas, one that I'm sure that I haven't done justice to in my grumpiness, one that at times I find myself willfully misunderstanding and misrepresenting (misunderestimating?).
Wednesday, July 11, 2007
And so it has, for many children. But in keeping with the intricately plotted novels themselves, the truth about Harry Potter and reading is not quite so straight forward a success story. Indeed, as the series draws to a much-lamented close, federal statistics show that the percentage of youngsters who read for fun continues to drop significantly as children get older, at almost exactly the same rate as before Harry Potter came along.Aside from the real issues regarding the declining level of readership among children my immediate thought was about the retail environment. There is such an emphasis on deeply discounting these titles that they become loss-leaders. That is they are sold below cost in order to drive traffic and drive purchase of non-discounted products on sale at the same store. However, all major retailers have said their margins in the Potter quarter will tighten because of the Potter selling frenzy. It would appear that this research may get at the nub of the problem. That is opening the store at midnight and selling the book at 75% off will not result in additional sales because the children don't read beyond Potter; so what is the point?
Potter titles are no doubt great books but they have become lost-leaders because they undermine the bookstore financial model and they haven't extended reading in young people. Of course in hindsight (perhaps more obvious than that) it is dopey to think that one series/character could change behavior that parents and teachers couldn't. In fact no one really knows the secret sauce because publishers have been seeking a new Potter since the series came out and haven't found one. What interests Children in reading is a bit of a mystery compounded by the multitude of distractions that Children at 10-15 start to observe and become enamoured with. At this age they are starting to make their own media decisions - they have pocket money and spend it themselves rather than have it spent for them - they become mobile and their horizons open significantly and placing books in this environment is a competition that apparently the publishing industry is loosing.
Think back to my own experience, I did not read too many 'children's' books. I was introduced to reading (outside the classroom) by accident when at a birthday party they ran out of presents and one of the parents found me a book as a consolation (I am still coping with this but I think I get better every day). It took me a year to read this book but from that point I was hooked and read another five or six books by the same author (Enid Blyton) but then migrated to Fleming, McLean, Smith somewhere around age 12-13. This experience probably doesn't happen now, but perhaps one approach to interesting children in reading beyond Potter is to recognize they need to 'graduate' to adult 'adventure' books like the ones I read. (Of course, I'm a boy and this experience could be entire different for girls so excuse me.).
Regardless, to my earlier retail point. Given this research, it seems even more moronic to encourage profitless retailing when your target audience is unlikely to step into the store or by a non-related title at full price ever again.
Here is an intrepid fan's youtube video.
Tuesday, July 10, 2007
Exact Editions stepped up the pressure on Steve Jobs by suggesting that the "iphone is the best ebook ever" not just the best iPod ever. I spied someone waving their hand over one of these things this morning as though it was some kind of weegee board. Their absorption was complete and I suspect (and effectively agree) that e-books will be one of the collateral winners in the i-Phone launch.
Adam raises an interesting idea about what the interface for books (catalog front end) will look like on the I-Phone but I don't like any of his suggestions as to who will develop one. On the other hand it does have one thinking....
The creativity of some people is often quite amazing.
Friday, July 06, 2007
Here is his concluding comments:
We are used to thinking about better integration of library services. But that is a means, not an end. The end is the enhancement of research, learning and personal development. I discussed above how we want resources to be represented in various discovery environments. Increasingly, we want to represent resources in a variety of other workflows. These might be the personal digital environments that we are creating around RSS aggregators, toolbars and so on. Or the prefabricated institutional environments such as the course management system or the campus portal. Or emerging service composition environments like Facebook or iGoogle. As well as in network level discovery environments like Google or Amazon that are so much a part of people's behaviors
ALM is the publisher of magazines and newspapers and also manages trade shows directed at the legal profession. Primary among the magazines are The American Lawyer and The Corporate Council. Reuters is reporting the price was around $630mm
While there were many headline grabbing deals, JEGI notes that many more interesting deals occurred below the radar,
Major diversified media companies continue to reshape core models through acquisitions, and well-funded investors pursue new sources of growth. JEGI assisted with several such transactions in the second quarter, including arranging a $50 million investment for Gorilla Nation Media, the largest online advertising rep sales firm, from Great Hill Partners; the sale of Healia, an innovative heath search engine, to Meredith Corp; and the sale of TechnologyGuide.com, a provider of internet content sites for mobile technology products, to TechTarget.
The upcoming half year is expected to be as hot according to Tolman Geffs, a Managing Director with JEGI,
“There is a lot more consolidation ahead. There isn’t such a thing as old media anymore. There’s only diversified media. Every major media company is working hard to reshape their distribution model to reach new audiences, and that’s going to take years to pan out. Plus, you have an ocean of ad dollars moving from non-digital to digital.”
Increasing valuations have surprised many in the industry; however, with the continued availability of attractive financing and some large media companies radically changing their strategies and/or business models the continued volatility in the media market is expected to continue.
Wednesday, July 04, 2007
Tuesday, July 03, 2007
When Dutch retailer BGN looked to redesign their stores the consulted all manner of retail experts and research and not only revamped the physical look of the stores but incorporated technology behind the scenes to revolutionise the retail experience. That is the opportunity that Borders has but it remains to be seen whether they will reach a little higher than the ordinary.
Monday, July 02, 2007
I was curious. While I had attended BookExpo this year I had not taken the opportunity to examine the Expresso Print on Demand machine and when I heard that one was to be installed at New York Public library I thought I had to get a look at it. There is some debate about what the impact of this machine will be to everyday readers and some of that debate focuses on the final delivery; how useful will this be regarded if you are third in line and the process takes ten minutes. Are you going to wait? There is definitely something to that; however, the story of the Expresso is more about distribution and the opportunity to place more books where readers want to purchase them.
Some readers will remember the Sprout machine which Borders thought to place in their [stores and] distribution centers. They believed that via that machine that they could materially add to the inventory available to customers through their stores. Logistical and technical problems ended this experiment almost before it got started but it was surprising that it took so long for a new effort to come along. Sprout did sign up a number of independent stores to use their machine. Here are my notes from BookExpo 1999:
At the BookExpo show, a company named On Demand Machine Corp displayed a book printing system that can print and bind a standard trade paper back in a machine which measures eight feet by four feet. This machine is designed to fit in a bookstore and can both store electronic titles in its memory and call up additional titles from the company head office via satellite. Customers can order the books, confirm the title is the one they want and purchase using a credit card. The transaction takes a little more than five minutes. The first full implementation is scheduled to take place in June at The Tattered Cover in Denver. My guess is you will see similar machines at Kinkos, Airports and other public places in the not too distant future.
As Charkin says this current machine is too big and bulky, but when it gets smaller and less so there will be many more opportunities to leverage the benefits of this machine. Regrettably, my experience was problematic; I visited the NYPL on Saturday only to find the machine unattended and therefore out of reach. Forget anyone in line ahead of me - the place was deserted - and the NYPL desk person was next to useless. There was a printed card with information about the machine and its' smaller cousin and a log book for visitors to sign. I left my mark.
Many years ago while at Berlitz, I hit on the idea of selling our small format travel guides and phrase books out of vending machines. We struggled to get store distribution and I thought this would be a perfect way to place a 'store front' in non-traditional places where travel related traffic could be high but the retail options limited. Moreover, the machines could be moved around from place to place with less difficulty than setting up a traditional store or arranging store accounts and distribution. The genesis of this idea was Kodak's film vending machines. My point is that the Expresso needs to be this functional and 'ubiquitous' if it is to become an additional distribution option. In the meantime I guess I will give the Expresso another chance to impress me sometime in the next few weeks.
(Coda: the vending machine idea meandered: One of my colleagues at Berlitz suggested if she was going to put books in a vending machine she would put in Danielle Steele not a travel guide. This comment was doubly bad since I didn't really care for her - the colleague not Danielle. I did get some vending machine operators interested in the idea but then I left and went to PriceWaterhouse. And so ended the vending machine idea).
TuneCore is a digital distributor that gets music into online stores, just as traditional distributors stock shelves at regular retailers. But Mr. Price (who also co-owns an independent label) does not take a percentage of sales, as most distributors do, nor does he provide the same marketing and promotional services as those companies. Rather, he charges a flat fee: 99 cents a song as an uploading and processing fee, 99 cents for each store where the act wants to place the album, and $19.98 an album each year for storage.