Monday, March 19, 2012

MediaWeek (V5 N12): BBC on Education, UK Copyright Revision, Pricing Classes, Book Binding, B&N Speculation Continues + More

The BBC on Education:  Has The Internet Sparked a Revolution in Education (Video):
The internet is helping to reshape the very foundation education by both allowing individuals to learn from the comfort of their own homes as well as training them to be the entrepreneurial moguls.  The BBC's Matt Danzico investigates what place traditional academic institutions have in a world consumed by do-it-yourself education.
The UK government in a proposed review of copyright laws has music publishers up in arms about the proposed benefits from revision to copyright laws (Telegraph):
A plan to update outmoded laws and legalise “format shifting” – transferring a song from a CD to an MP3 player, for example – will deliver up to £2bn of growth alone, according to the Government projection, which was adopted from an independent review of IP laws . It is partly based on the premise that the existing rules prevent companies conducting the kind of innovation that led to the MP3 player.
Mr Mollet added that the £2.2bn that is estimated to come from the creation of a Digital Copyright Exchange – a proposal for an online “one stop shop” for digital rights clearance Mr Mollet supports – is based on the “misappropriation” of an unrelated study.
“There are areas where copyright needs to be reformed. But we see a lot in the consultation on how [the proposals] would be good for anonymous entrepreneurs but there’s little on the cost for current creatives. That’s a damaging gap," he said.
Pete Wishart MP, of the all-party Intellectual Property Group, said: “ How the Government has got away with such bonkers figures is beyond me.”
But a Business Department spokesman said: “We’re not backing away from the £7.9bn figure.”
School costs more depending on popularity - Is this the new model? (Atlantic)
Since 2008, the Golden State has shrunk funding for its sprawling, 112-school community college system by 13 percent. Its cuts to higher-ed have not been the most severe in the nation, but they have been painful. Santa Monica alone has lost $9.9 million support. And like its institutional peers, the school has been forced to cut classes in response. It now offers 15 percent fewer courses than four years ago -- not nearly enough to meet the demand from students, many of whom simply cannot get enough credits to finish their degrees on schedule, or transfer to a four-year school. A Santa Monica spokesman told me that some courses have waiting lists twice the size of the actual class. Out of frustration, students have started transferring to expensive, for-profit schools, taking out high-priced loans in order to get their degree in a reasonable amount of time.
Santa Monica has come up with a smart, yet frustrating, solution. This week, the school announced that it would begin offering more expensive versions of its most popular courses during the summer in order to accommodate students who can't take them during the school year. The classes will be offered at cost, since the college is providing them without any subsidy from the state. The price works out to $180 a credit -- not a huge sum, but still five-times what students pay now.
Making books like art objects (Telegraph).  There is still art to books and book binding.
The books are so remarkable to look at they seem as though they might already be precious antiques – both because of the unearthed gems within the pages and the external format, a replica of the clothbound pocket hardbacks Jonathan Cape used to make in the Twenties. The creamy paper is the same as that used in the quarterly, the Slightly Foxed colophon is blind blocked on the front, and the title and author gold blocked on the spine. Each edition has a specially chosen cloth binding, contrasting endpaper, head and tail band and ribbon marker. The whole thing seems so handmade – indeed, as the film we’ve made shows, much of it is handmade – you can’t imagine how Slightly Foxed doesn’t make a huge loss. There aren’t even any dustjackets with which to sell the books or explain them, nor quotes of recommendation, nor blurbs. The books are, Wood suggests, like “portable sculptures”.
This weekend saw speculation that an offer had been placed for the (Barnes & Noble) college retail business that Barnes & Noble, Inc. absorbed a few years ago.

G Asset Management, a shareholder has lodged a bid for 51% of the business which in the carve out would also take on $410mm in debt.  Reported in the NY Post the story comes from the Bloomberg wire and notes that the business would be valued at $460mm.

In a letter to the board dated Febuary 17th, Michael Glickstein President of G Asset Management revisited his (and the funds desire) to 'unlock shareholder value' by proposing a break-up of the business.  Here is the text of his letter:
February 17, 2012

Members of the Board of Directors
Barnes & Noble, Inc.
P.O. Box 111
Lyndhurst, NJ 07071

Dear Members of the Board of Directors:

We are writing to reiterate our belief that taking strategic action to spin-off the Nook business would create substantial value for shareholders. We have communicated previously with you and with Chairman Riggio on this subject (our letters of April 5, 2011 and November 16, 2011 are attached).

We believe BKS should take strategic action as soon as practicable to unlock the value of the NOOK business and BKS as a whole. As shown in the attached summary of our analysis, we believe that very substantial shareholder value could be created by moving forward and executing a spinoff of the NOOK business. Furthermore, we believe that a spinoff by way of a rights offering in which each BKS shareholder would receive rights to exchange a proportion of their BKS shares for NOOK shares could create meaningful upside for both the NOOK and the parent firm.

While we were pleased to see the Company announce on January 5 of this year that it had decided “to pursue strategic exploratory work to separate the NOOK business,” we are concerned that there is no timetable for review and that the Company has said that it may decide not to take any action. We believe that BKS both can and should act without delay to reduce the risk that changes in technology and/or a reduction in current favorable high growth tech company valuations may occur. There is no assurance the same opportunity will be present down the line.

We are encouraged by management’s ability to improve results in a challenging industry environment and its ability to adapt and find new opportunities for growth. We have great confidence in the Board’s ability to take the steps needed to unlock the value of the NOOK business. Our attached November 16 letter notes the track record in successful spin-offs of Mr. Riggio and Dr. Malone’s Liberty Media.

We look forward to the Board’s consideration of this analysis and the taking of appropriate action as soon as practicable.
The above was submitted to the SEC and the submission also includes a Powerpoint deck describing in some detail their view.  (SEC).

Among numerous points made in the deck is a suggestion that in a 'sum of the parts' analysis the company could be worth $71 per share which is in excess of 400% more than the current market cap.  Nice!

Here is the deck via slideshare (since this is a scan it is a little difficult to read);

Barnes & Noble; G Asset Management SEC Filling
View more presentations from Michael Cairns.

From the twitter:

Literary legends brought to life in publisher's archive

Some deeply retro moaning about the internet from the Publisher of Harper's magazine Providence Journal

TechRadar - Encyclopedia Britannica now online only

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