Friday, June 14, 2019

MediaWeek: Publishing News - B&N bidding, EBSCO, Follett, Axel Springer, Paper Shortages, University Presses

Seoul, Korea: Book store
Investors believe the recent bid of $476mm for Barnes & Noble by Elliot Management under values the business (Reuters).   Additionally, ReaderLink - the largest distributor you may not have heard of - may enter the bidding (WSJ).  Investors want the B&N board to consider more options.

EBSCO is moving in to the textbook hosting game with this announcement that they are creating a solution specifically for faculty which will make it easier to select materials for their courses:
EBSCO Information Services (EBSCO) announces the release of EBSCO Faculty Select™ (Faculty Select), a single interface for library staff and institutional faculty. Faculty Select makes it easy for faculty to explore Open Educational Resources (OER) and purchasable DRM-free e-books to support their courses. The interface provides the highest quality, affordable course options that drive textbook affordability, access and usability for faculty and students alike.
Follett has also launched a campus 'all access' solution for educational content:
Follett ACCESS is an evolution of delivering over seven years of affordability programs for campuses.  The powerful new program delivers all required print and digital course materials to all enrolled students at a campus as part of their tuition, or course charges, on the first day of class—resulting in lower costs, reduced stress, and greater student preparedness.  By serving over 1,200 campuses in North America, Follett is experiencing demand shift from a course-by-course solution, to a broader full campus participation with Follett ACCESS.
Equity firm KKR really wanted a piece of Axel Springer and have announced a tender offer for all outstanding shares other than those owned by the Springer family and management.  The deal values Axel Springer at just under EUR 7Billion.  The deal is expect to allow Axel Springer to speed up their digital transformation without the constricts of a public (reporting) company (PR):
Axel Springer aims at becoming the leading global provider of digital content and digital classifieds. KKR has significant expertise in the digital and media sectors, an impressive track record of successful investments in Germany and across Europe and will be a strong strategic and financial partner for Axel Springer. KKR supports Axel Springer’s strategy of investing in further growth projects to generate long-term value. Furthermore, the parties are in agreement that Axel Springer will remain a leading voice in independent journalism across all channels, nationally and internationally alike.
 If you attended the BISG annual meeting you will have heard the fireside chat about the state of the printing and paper industry.   Not great is the short answer: Consolidation has resulted in fewer print options for publishers together with capacity issues and in addition paper is becoming more expensive and harder to resource.  Here Forbes takes a look at the paper shortage from the publisher perspective:
Where did this paper shortage come from, and how long will it last? To find out, I asked Danny Adlerman, Director of Production and Manufacturing at multicultural children’s book publisher Lee & Low Books, who’s been with the company since its founding in 1992 and works on 200 active titles, including front and backlist, at any given time. Adlerman said that while the paper shortage was most acute about six months ago, its effects are still being felt, though he’s hopeful it’s closer to being resolved than it was at the start of 2019. While Lee & Low hasn’t seen any significant delay in sending out ARCs and galleys, the shortage has yet to be fully resolved. I asked Adlerman about the causes of the paper shortage and what the possible solution could be.
Troubled university publisher Melbourne University Press has announced their new publishing director Nathan Hollier (SMH):
Hollier, the director of Monash University Publishing, has been named as successor to Louise Adler, who resigned along with five directors in January after MUP turned its back on its previous policy to be a more commercial publisher of books in order to focus on academic work and introduce an editorial board to approve publications. He will start the job on July 1.  Speaking to The Age from Detroit, where he is attending a conference of university presses, Hollier said he didn’t expect the approach he adopted at Monash would differ massively at MUP. "I’m going to try to publish books which are the most relevant and important for our times," he said.
Another University Press in the news recently for the wrong reasons: Stanford University Press was the main subject a recent Stanford faculty meeting.  Leaders want a press that is "healthy and excellent" (Stanford)
The Press moved into the spotlight in April when Provost Persis Drell announced that, while Stanford would continue to support the Press with base funding, the university did not intend to fund the Press’ request for five additional years of $1.7 million in one-time support.
Following faculty concerns, Drell clarified that the university had no intention of closing the Press and that she recommended the formation of a faculty committee to develop a long-term plan to strengthen the Press’ financial and operational model. The provost made additional one-time funds of $1.7 million available to the Press for fiscal year 2020 to assist with this process.
The Press received about $900,000 annually in institutional support from the university’s base general funds and income from a small endowment, and at the senate meeting Thursday, Drell said that support would continue. The Press also receives about $5.1 million in revenue from book sales and other sources; however, that income does not cover its annual expenses
“The challenge we’ve been confronting is that the Press is operating with a structural deficit, which was $1.7 million in 2008, and that has motivated a succession of requests for one-time funding,” Drell said. “There have been attempts to address the structural deficit that have not been successful in the past. We need a strategy and a plan to ensure that our Press is excellent and supported over the long term, and we will be working with the faculty on that.”
Read more articles on my flipboard magazine:


*******

Are you considering an investment in new technology?  Check out my report on software and services providers.  (PubTech Report)
Michael Cairns is a business strategy consultant and executive.  He can be reached at michael.cairns@infomediapartners.com or (908) 938 4889 for project work or executive roles.

Monday, June 03, 2019

Mediaweek: BookExpo, Elsevier, Viral Books, Bennington College, Magazines and Print.


From this past weeks BookExpo conference, the Washington Post reflects on publishers concerns about the future.  (What would the business be without concerns?)  Personally, I found BookExpo dismal.
At the same time, publishing faces troubling unknowns and adjustments. Barnes & Noble, the country’s largest physical book retailer, has been struggling for years and is considering a sale of the company. One of the largest distributors, Baker & Taylor, is ending its retail business, forcing some stores to find new ways to keep books in stock. And publishers again face a potential shortage of printing capacity that resulted in two future Pulitzer Prize winners, David Blight’s biography “Frederick Douglass” and Richard Powers’ novel “The Overstory,” being among numerous releases unavailable for extended stretches late last year.
But the most immediate concern is President Donald Trump’s threatened 25% tariff on some $300 billion worth of Chinese goods, including those from the country’s printing facilities. For years, U.S. publishers have relied on China for low-cost, high-capacity printing of four-color books, coffee table editions, Bibles and other standards of the trade and education market. The new tariff would almost surely result in higher prices, with publishers saying a hike of 50 cents or more is possible for a given book.
Elsevier announces a national agreement in Poland to enable access to their academic content:
The Polish consortium for higher education and Elsevier, the information analytics business, today agreed on a national license agreement for access to critical academic research, while advancing Poland's open access objectives. The new three-year national license is based on a thorough analysis of the Polish requirements for access to research, the country's publishing choices and its focus on research quality. It provides over 500 universities and research institutions across the country with access to ScienceDirect, Elsevier's leading platform of peer-reviewed scholarly literature, as well as SciVal, the research performance tool, and Scopus, the largest abstract and citation database of peer-reviewed literature.
In the Columbia Journalism Review and discussion of the 'viral book'
Traditional publishing, among the slowest of all media, and social media, the quickest, are working together more often. A search of the Publishers Marketplace database for the word “viral” turned up 14 non-fiction books in the first five months of 2019. Seven were sold from viral articles, and six were sold on the basis of another “virality”—for instance, a viral photo or a viral Facebook broadcast. In comparison, 11 books were sold in conjunction with viral media in all of 2018, six based on articles and four on other online media (including a “viral cooking technique”).
Digital media is not an industry known for its profitability. However, the uptick in publisher interest in viral work indicates a hope that publishing can capitalize on an internet-tested zeitgeist: presumably, publishers believe that those viral articles will turn into bestselling books. Is this a legitimate hypothesis? Can publishers forge a solid link between the fast pace of the internet and the very slow business of book publishing? What can authors hoping to garner a book deal learn from this newfound interest in virality?
From Esquire, Bennington College has some literary chops:
A new freshman class arrives at arty, louche, and expensive Bennington College. Among the druggies, rebels, heirs, and posers: future Gen X literary stars Donna Tartt, Bret Easton Ellis, and Jonathan Lethem. What happened over the next four years would spark scandal, myth, and some of the authors' greatest novels. Return to a campus and an era like no other.
Folio magazine takes a look at three magazines which have ditched print and still survived (and thrived):
As consumers and advertisers continue to shift their attention to digital media platforms, traditional print publishers are increasingly coming to the difficult decision that their future doesn’t include a print publication at all—or at least not one with a regular frequency. 
In the last month alone, ESPN The Magazine, Money, Brides and Beer Advocate announced plans to end their print runs. And they all intend to continue producing content for their digital platforms.

Once considered a death knell for a brand, the print-to-digital transition has proven for some publications to be more of a rebirth, especially when they diversify to additional channels, like events and TV. With that in mind, here are a few brands who have shown there is life after print—a good life.
And the counter discussion: Keeping with print:
And yet, even in 2019, a diverse set of both new and traditional publishers continue to invest in the medium despite its inherent financial challenges, begging obvious questions about how, specifically, a new media brand stands to benefit from producing an expensive print magazine at a time when the barriers to entry in digital media are seemingly nonexistent.
Brazil's publishing market is not doing well at all.


Read more articles on my Flipboard magazine:



*******

Are you considering an investment in new technology?  Check out my report on software and services providers.  (PubTech Report)

Michael Cairns is a business strategy consultant and executive.  He can be reached at michael.cairns@infomediapartners.com or (908) 938 4889 for project work or executive roles.




Sunday, May 19, 2019

Media Week: The Week In Publishing - Vanity Fair Archive, LA Bookstores, Big Deal Subscriptions

Bondi Digital a NY based digital publishing company announced the launch of the full Vanity Fair magazine archive:
We are thrilled to share that Vanity Fair launched its Bondi-powered and collaboratively designed digital archive yesterday. For the first time, every photo, article, and issue is accessible on computers, tablets, and phones from 1913 to the present on archive.vanityfair.com.
Other Bondi deployments include Aviation Week, Playboy, Maclean's, This Old House and others.

The Hollywood Reporter takes a look at the LA independent bookstore market and asks "why are so many longtim LA bookstores closing?"
Despite the recent shuttering of Circus of Books, Caravan Book Store and Samuel French, bookstore experts say the end for the city's brick-and-mortar stores isn't nigh: "There is a sea change happening, and it is noteworthy."
A recent report by the European University Association (EUA) estimates that European libraries spend more than E1B per year on "big deal" subscription agreements wiht the largest scientific publishers (ScienceBusiness):
European universities are paying more than one billion euros per year for access to journals run by the leading science publishers, according to a new survey from the European University Association (EUA) of ‘big deal’ contracts for access to large bundles of journals.  The survey, published this week, looks at 167 contracts made by groups of universities with Elsevier, Springer Nature, Taylor & Francis, Wiley, and the American Chemical Society, finding that the cost for universities is already high and rising by an average 3.6 per cent a year.  The annual outlay, “Is fully paid by public funds and the bulk of these costs fall on Europe’s universities,” said Jean-Pierre Finance, former president of Henri Poincar√© University, who led the study.

The magic of notebooks (mine excepted) from The Economist citing an exhibit at the British Library
NPR's Book Concierge on the best books of 2018 

Read more articles on my Flipboard magazine:



*******

Are you considering an investment in new technology?  Check out my report on software and services providers.  (PubTech Report)
Michael Cairns is a business strategy consultant and executive.  He can be reached at michael.cairns@infomediapartners.com or (908) 938 4889 for project work or executive roles.

Monday, May 13, 2019

MediaWeek: The Week in Publishing - UVA Open Access Aperio, University Press, Danielle Steel


From the FT Why novelist Mark Haddon has lost faith in twitter. 

It's academic to some but The Atlantic suggests that university presses shouldn't have to make money joining the discussion that has been prompted by the off again/on again decision of Stanford to pull financial support from their university press.

In Science magazine, academic Alan Chambers describes how early in his career he became "easy prey for a predatory journal.  "The email appeared legitimate. It spelled my name correctly, referenced some of my previous work, and used correct grammar. The journal wasn’t on Beall’s List of Predatory Journals and Publishers. I thought I had done my due diligence."

How did Danielle Steel write more than 170 books?  A guide to efficiency from a profile in Glamour magazine. " There's a sign in Danielle Steel's office that reads, 'There are no miracles. There is only discipline.' It's a dutiful message, and yet the sheer amount that Steel has accomplished in her five-decade career does seem like the stuff of dreams."

Pottermore.com announced a partnership with Warner Brothers which creates a joint venture named wizardingworld.com and will combine the existing content of pottermore.com.  From their press release:  "Wizarding World is the magical universe that encompasses Harry Potter, Fantastic Beasts and an expanding range of characters, stories, experiences and products derived from them, as well as new projects inspired by this magical universe."

A curious experiment in micro metadata tagging:  "In the 21st century, digital publishing has led to the rise of ever-more niche microgenres in books – from Amish romance to NASCAR passion – and it’s changing our literary landscape." Pursuit

The University of Virginia recently launched its own open source publishing platform (Aperio) and David Ghamandi, UVa’s open publishing librarian and managing editor of Aperio, speaks to the UVA newspaper:  “To be successful over time, universities need to invest heavily in their own OA presses (where they exist) and support each other’s presses. Universities need to be more serious taking responsibility for the dissemination and preservation of the knowledge produced on their own campuses. There also needs to be a culture shift where more faculty recognize the benefits of OA and are supported by their departments and schools to move the journals they lead to open access presses.”

Read more articles on my Flipboard magazine:


*******

Are you considering an investment in new technology?  Check out my report on software and services providers.  (PubTech Report)
 
Michael Cairns is a business strategy consultant and executive.  He can be reached at michael.cairns@infomediapartners.com or (908) 938 4889 for project work or executive roles.
 

Thursday, May 09, 2019

MediaWeek: The Week in Publishing - Baker&Taylor, Wiley, Comics, Translations


In a blow to competition, although not without cause, Baker&Taylor announced they were calling it quits on the retail distribution market.  Independent booksellers in particular will feel the hit from this action which appears to have been in the works for a while but implemented by B&T without contingency planning.  Many independent retailers have been left scrambling to find alternatives not named Ingram.   (ABA)

Springtime for Hitler at the Turin Bookfair where anger is growing (surely it's reached full gestation) against the publisher (Altaforte) of neo-facist content.  As the photo shows, these white lovers are brazen.  From the Guardian.

Woody Allen may have to consider self-publishing (Vox) but it Angelica Houston he may have one buyer at least (NYMag)

John Wiley has acquired the assets of Knewton which was at one time a high flying web-based education start-up which also apparently took in over $180mm in investor capital.  The purchase price was a lot less than that (Chronicle)

An interesting article on comic book publishing.  It's not all Marvel and DC Comics.  There's some adaptation and consolidation going on here as well.  The NYTimes takes a look and shows some of the smaller players are taking the lead of those larger companies by setting up studio deals and other distribution methods.

Vulture challenges the way publishers approach the translation market and suggests at a minimum the English language market is missing out on at least 1000 titles per year from around the world.   It suggests cultural isolationism.

At the recent BISG annual meeting during a q/a on the international rights market one of the speakers lamented the state of the Brazilian book market.  Here from the Brazilian report a review of what they describe as a bleak market.  Since 2009, sales have been downward with 2018 being the worst in 30 years despite significant growth in religious books.

Read more articles on my flipboard magazine:

*******

Are you considering an investment in new technology?  Check out my report on software and services providers.  (PubTech Report)
Michael Cairns is a business strategy consultant and executive.  He can be reached at michael.cairns@infomediapartners.com or (908) 938 4889 for project work or executive roles.

Monday, May 06, 2019

The New McGraw-Hill: Where is Education Textbook Publishing Headed?


Last week McGraw-Hill and Cengage announced a merger which would combine the two businesses into a $3.1Billion provider of education textbooks and materials.  Assuming this merger proceeds through competitive review, as is likely, then McGraw Hill – as the new company will be known, will be second only to Pearson, plc ($5.5Billion) in size and reach.  The new McGraw-Hill will be run by current Cengage CEO Michael Hansen.  While broad trends in education indicate a widening of the education and training marketplace as employers and employees see the need for full career based training, traditional education companies such as Cengage, Pearson, Macmillan, John Wiley and McGraw Hill have struggled to protect their legacy print businesses and address new market and product opportunities. 

Financial reporting across the industry suggests that publishers are losing the battle of the textbook which is one reason this merger was inevitable.  The question is how the remaining textbook publishers such as Macmillan, John Wiley, Wolters Kluwer and others will react: I expect some additional M&A activity and partnerships in this space.   With revenues declining at a steady rate, unless alternative sources of revenues – whether new products or substitutions – are found then all publishers face an inevitable decline in scale benefits.  Having faced steady declines in revenue over the past ten years, some of these publishers have infrastructures which can support larger businesses and thus combining with one or two other publishers can ‘top-up’ this scale gap.   It is no surprise that new McGraw-Hill anticipates $300MM in efficiency savings and I would not be surprised if they have privately targeted a much larger number.

But what about revenue growth?  This is a very dull story if it is only about cost and scale improvements and CEO Michael Hansen hinted at a more appealing story line.  He disagreed with a question about market concentration: Rather than the combined company having 45% market share he suggested that both companies have a market share in the teens.  His perspective is that students have many options when they visit a bookstore and a variety of business models to chose from (including buy, borrow and steal).  Additionally, the target student is being redefined to include ‘professionals’ and career focused students.  If you agree to both these points then, in effect, the market in which the new McGraw-Hill competes is larger than that presented by the legacy textbook market.  Cengage’s aggressive move to address this new market has been their all access subscription pricing model which in less than twelve months has grown to over 1MM subscribers and over $60MM in revenue.  (See the PND articles below on these points).

It is my expectation that this deal will proceed without significant deliberation and McGraw-Hill will argue successfully that the education market is now much bigger than the legacy textbook market.  Other publishers may find themselves a step behind McGraw-Hill and Pearson which will result in further market consolidation and/or combinations.  We are now on the cusp of changes like those the journals business went through over twenty years ago.  What is interesting to contemplate is whether what is happening today in journal publishing vis-√†-vis open access content is in some way a predictor of what may happen to textbook content.   Journal publishers have moved to services and analytics and we may see a similar move in education.  Just not in twenty years.

(Company) and (Investor Call Recording)

**********

Are you considering an investment in new technology?  Check out my report on software and services providers.  (PubTech Report)
Michael Cairns is a business strategy consultant and executive.  He can be reached at michael.cairns@infomediapartners.com or (908) 938 4889 for project work or executive roles.

Tuesday, April 30, 2019

MediaWeek: The Week in Publishing - Cengage, McGrawHill, Jet


On Wednesday, Cengage and McGrawHill announced what may be the last mega merger in the educational publishing market place.  Valued at just over $5B this is an all stock deal and the combined  company will have just over $3B in revenue.  Once completed in early 2020, the company will be named McGrawHill and be led by current Cengage CEO Michael Hansen. (Company) and (Recording)

A first time young adult author pulls her title amid a 'racist' backlash and then reconsiders.  The NYTimes takes a look at the 'close-knit children’s publishing community' and the recent history of bullying and controversy and finds (not surprisingly) that "While there are often controversies simmering in the young adult literary world, the magnitude and speed at which the backlash builds seems to have accelerated, often amplified by social media."

Connecting the anticipated raft of data produced by all the electronic touch points which students of all ages generate may become as easy as a walk-up withdrawal at Fort Knox if publishers have their way. At least that is the conclusion of a recent report by Scholarly Publishing and Academic Resources Coalition (SPARC) which commented that "its (data about students, faculty, research outputs, institutional productivity, and more) capture and use could significantly reduce institutions’ and scholars’ rights to their data and related intellectual property"  There's more where that came from.

The demise of Jet and Ebony magazine and Johnson Publishing is a real shame but at least all the iconic images in their image library may end up in a museum should 'power couple' George Lucas and Mellody Hobson prevail at the bankruptcy auction (CB).  Although it may not go smoothly.  Lucas is owed $13MM for a loan collateralized by the image library and estimates of the library's value extend to $40MM.

Old line publishers seem in a race to sign open access publishing deals as a means to 'pivot' their business models.  Wiley in Germany and now Elsevier in Norway is the latest announcement and some say Elsevier's deal is akin to that last penguin to jumping off the ice.  But not so fast: This deal is still lucrative for Elsevier and the Norwegians appear willing to pay something for the cost of open access publishing. (FT)

Oh my Wiener!  Suggestions that Anthony Weiner is shopping a picture book are completely incorrect although he is looking for a book deal according to the NY Post.  As a bell weather, "Every Simon & Schuster imprint has passed,” although that really sells S&S short.

The assault (my word) on University Presses generated new news this week with notice that Standford University finds itself short of cash and will withdraw financial support from their University Press.  According to IHEd, the press relies on about $1.6mm in financial support from the university which is 'reliant' on the payout from the University's $26Billion endowment.  According to Provost Drell (who also happens to be a scholarly expert herself) next year's payout is expected to be smaller than usual and that the presses output is "second rate".  (Late word: Drell has announced a funding continuation due to the outcry. IHEd)

**********

Are you considering an investment in new technology?  Check out my report on software and services providers.  (PubTech Report)



Michael Cairns is a business strategy consultant and executive.  He can be reached at michael.cairns@infomediapartners.com or (908) 938 4889 for project work or executive roles.

Monday, April 22, 2019

Global Publishing Software & Services Report - Over 100 Companies

 

We have created a short free sample report which delivers a representative sample of the material contained in the 2019 report.  Visit this link to enter your information and receive the 20 page sample document.

*****************

My company, Information Media Partners recently published an updated version of our Publishing Technology Report which identifies over 100 software and services companies supporting global publishers and content owners. We asked some of the recent buyers of this report for some feedback:
 “…the report helped us avoid what may have become a very expensive mistake when we were looking to replace an important set of back office applications which run our business.” – Mike S. IT Director (Scholarly Publisher)
This report sets out some parameters for evaluating which providers you will want to look at as you make your decision to invest in new technology. Technology investment is a significant undertaking for any company regardless of your size or sophistication and our report provides a framework for identifying the best options for your business. We have conducted more than 30 in-depth interviews with the leading providers to help you understand each company's product offering and capabilities.
“Michael’s report helped us save a considerable amount of time in the selection of applicable vendors for our technology project and his concurrent consulting advice helped guide our process. We enjoyed working with him on this project.” Shelly B. Operations Director (Education Publisher)
With resources tight and frequently, expertise in short supply, this report and our consulting knowledge can help you ask the right questions and shorten your evaluation process. Time is money and no one wants to waste time and effort evaluating vendors which are not right for your business.
“In our view the most comprehensive report for software vendors supporting publishing and information companies” – Partner, Private Equity
This software and services market place is under researched and our market map is unique in the way it identifies the primary providers to publishers and content owners. Several private equity firms have purchased this report to support their knowledge and understanding of this vibrant market place.

This year we ranked Fadel (rights/royalties), Klopotek (Title, Editorial, Production) and Silverchair (Content Management) as the best positioned vendors in their segment having conducted over 30 interviews.



The 2019 report is 90 pages and includes a market overview, functional and technical descriptions of the primary software applications and vendors for enterprise resource planning (ERP), title, editorial and production (TEP), contracts, rights and royalties (CRR) and content management (CMS).

We advise that you should purchase this report if you are considering any investment in technology in the coming year and/or if you want to understand the competitive environment for these products.

As an added bonus, if you engage my company (Information Media Partners) for a consulting project in the coming year (not necessarily connected to this report) I will credit back the cost of this report.

Sunday, April 07, 2019

Fare Well the Editor? Springer Publishes Machine Generated Book

From the Springer press release:
In close collaboration between Springer Nature and researchers from Goethe University Frankfurt/Main, a state-of-the-art algorithm, the so-called Beta Writer, was developed to select, consume and process relevant publications in this field from Springer Nature’s content platform SpringerLink. Based on this peer-reviewed and published content, the Beta Writer uses a similarity-based clustering routine to arrange the source documents into coherent chapters and sections. It then creates succinct summaries of the articles. The extracted quotes are referenced by hyperlinks which allow readers to further explore the original source documents. Automatically created introductions, table of contents and references facilitate the orientation within the book.
Release

Tuesday, April 02, 2019

BISG Webinar: Technology Spending in the Publishing Industry

I did a webinar today for the BISG and below are the slides from that presentation.



Make sure you use the discount code in the deck
Also, I did a q/a recently and this is an edited transcript of that conversation:


Q: Tell us a little bit about your report: What made you decide you wanted to do this and what was your objective?

A: Last year I completed a similar report (although the 2019 version is more detailed and comprehensive) and received more positive feedback than I expected.  As a result, I decided to expand it and devote more time to interviewing as many of the companies profiled as I could.   Initially, for the 2018 report, I was motivated partly by my experience raising capital as CEO of Ingenta.  I needed comparative data on market competitors but there was no market research to be found.  There is also no research available on levels of technology spending in publishing which was (and remains) a point of frustration for me.

My objective was partially personal and professional-- I want to be seen as an expert in this area.  A lot of money is being spent on technology by publishers and I felt, given my background, that I had something to offer companies looking to invest in new technology solutions.  I had also never undertaken a market research project on my own before and tried to sell it.  So that part was an experiment, and it turned out well.  As I said, more industry insiders reacted favorably than I expected.  As part of this report, I created a market map of all the software players and I think many were excited to see all these companies – over 100 – depicted graphically in my diagram.

Q: What do you think are the biggest issues currently facing the companies you have profiled?

A: Well, they’re probably different for each-- of course, every company has its own view. But I think there are universal challenges facing most—if not all—of the companies serving this market.
The first is that technology has been undergoing significant change over the last 5-10 years or so: Locally-installed software is giving way to hosted and subscription-based business models. Code is now built on the basis of open architecture so that applications can be woven together and data and services exchanged from machine to machine.   Publishing and media are generally conservative businesses and-- generally speaking--companies serving this segment are by no means leaders in addressing these changes.  So most, if not all, of the vendors in my report are going through some type of technology rearchitecting, and this can be perilous if not managed well.  The happy thing is that, because the pace of change in publishing is slow, these companies can be fairly methodical about their approach.  For example, I see companies like Fadel, Klopotek and Silverchair executing well through this transition.

In my report, I tried to depict this technology evolution in what II call my ‘velocity chart’--look at it and you will see most companies at an inflection point at the small end of a funnel.  As they invest in new architectures, they begin to quickly move out of this funnel and put greater distance between themselves and companies that have not invested.   Thus, companies investing in technology achieve a better competitive position against their rivals who do not invest.   Some of the laggards will get left behind, I believe.  (I’m not naming names here but I do in the report).

On the revenue side, the move to subscription models must be managed carefully since, historically, software companies would receive large cash payments upfront for perpetual licenses and this cash helped fund the software implementation process.  Those days are gone, replaced by smaller monthly subscription fees. In the short term this negatively impacts cash flow but, over time, can represent a significant revenue improvement.   The hosting model is also important here because customers are no longer obliged to manage their own local environments:  This will not only save money but deliver better technical and more flexible environments

The last issue is universal in this space and that is the relatively small size of the companies.  Most are less than $15MM in revenue, though there are one or two closer to $20MM    (CMS/hosting companies Atypon and Highwire are considered larger.)  These industry providers retain the benefits of delivering very tailored products to publishers which precisely fit their needs.  On this basis, the companies can compete very well against far larger software companies such as SAP.   Where size is a limitation as in the provision of ‘on-call’ expert resources and project teams for large-scale implementations, especially if the company has been lucky enough to win multiple contracts at the same time.  These smaller companies don’t have the financial strength of the medium- and larger- sized companies.  One other thing related to this point: Most of these players do not work with integrators (third parties which can implement their software) so the only implementation option for customers is the software developer.  In my opinion that is a problem that hampers business growth.

Q: Who are the buyers of your report?

A: It has been a mix.  I anticipated when I began the project that most buyers would be companies  anticipating an investment in new technology but I’d say those have been a small sub-set of buyers.  And that really surprised me because reading my report could save them a lot of upfront time in deciding which companies to speak to and consider in the evaluation process.  I’ve seen the vendors themselves and some investment companies buy the report--for them, it’s a good way to get to know more about the competitive market.  There’s a lot of information in the report (it's over 90 pages!) but 
I think prospective buyers get “sticker shock” at the $1,500 price tag--though I do offer some free consulting time with a report purchase.  I do have a discount code: THANKS2019 which is available now.

Q: Presumably you have clients who make use of the report and do want advice on the process of selecting a technology provider. What advice do you give them?

A: Naturally, all situations are different. But first off, it's important to understand the circumstances in which the company finds itself.  For example, what is driving the business to take the decision to replace their ERP or CMS?  One company which recently declared bankruptcy had, only a few years ago, replaced all of their financial systems with a very expensive Oracle solution.  Their motivation was that the older solution couldn’t support the new business models and strategy the company wanted to execute.  But, hindsight being 20/20, it was poor judgement to engage this costly project before there was any indication the new strategies would work.  Now, with the business in bankruptcy, the expensive system supports much less revenue than the resilient legacy solution would have had no problem supporting.   Proceed with caution: These projects are expensive, disruptive and rarely go smoothly. Your business has to be tough and well managed to execute effectively.  That is especially true if your business is less than $50MM in annual revenue.

Another thing I would point out is that it is not necessary to do a full RFI/RFP process.  Compiling a set of high-level requirements and bringing in three or four vendors can save time and money-- and you will learn a lot in the process.   Additionally, if you have someone like me to help navigate this process (generally without a vote on final selection) it will go a lot more smoothly.
The last thing I’d mention is that you should have a good idea of your current technical environment, architecture and costs.  These new systems will likely need to interface with other existing systems (some of which will also be replaced) and mapping out all these intersections in advance is an important requirement.  Data conversion and interface work is likely to be one of your project's biggest time and cost demands--starting early to understand the scope of these activities is time well spent.

Q: What else would you like publishers to know?

A: I think my bias is that I’d rather see publishers spend technology dollars on product development and ‘front office’ applications which directly support revenue generation or growth.  Minimize spending on supporting applications for accounting, quote/order to cash, rights and royalties and title management and editorial solutions. Matching cost effectiveness with process efficiencies should be a primary consideration when looking at these solutions.  If you have $100 to spend on technology, don’t spend $95 on business applications—give yourself the flexibility to spend more on supporting revenue growth, new products and customer development.