Image: So goes the Holden

GM announced this week that they were ending Australian production of the Holden.  Off into the dust...

Hard to categorize that color.  Other than very ugly.  Both images from 1973.

MediaWeek (Vol 5, No 35) Retail Bookstore Results: BN, Smiths, BAM, Dymocks (Aust) Strategy + More

Barnes And Noble reported their first quarter results which were mixed (Press Release)

First quarter consolidated revenues increased 2.5% to $1.5 billion as compared to the prior year. First quarter consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) was $4 million as compared to a loss of $24 million a year ago. The consolidated first quarter net loss declined 28% as compared to the prior year to $41.0 million, or $0.78 per share.

Digital Content Sales Increase 46%
Bookstore Comparable Sales Increase 4.6%
Retail EBITDA Increases 88% to $75 million

“During the first quarter, we continued to see improvement in both our rapidly growing NOOK business, which saw digital content sales increase 46% during the quarter, and at our bookstores, which continue to benefit from market consolidation and strong sales of the Fifty Shades series,” said William Lynch, Chief Executive Officer of Barnes & Noble. “The growth in comps at retail and the continued strong growth of our digital content business, as well as increased cost management focus, were drivers in the business turning from an EBITDA loss last year to slightly positive EBITDA in the first quarter of this year. As announced yesterday, we are excited to expand our award winning NOOK digital bookstore and devices beyond the U.S. market and to work with U.K. retailers to bring millions of U.K. customers the best experience in digital reading.”

Retail

The Retail segment, which consists of the Barnes & Noble bookstores and BN.com businesses, had revenues of $1.1 billion for the quarter, increasing 2% over the prior year. Comparable bookstore sales increased 4.6% for the quarter, as compared to the prior year period. Comparable bookstore sales continued to benefit from the liquidation of Borders’ bookstores in fiscal 2012 and strong sales of the Fifty Shades of Grey series. Core comparable bookstore sales, which exclude sales of NOOK products, increased 7.6% for the quarter. BN.com sales continued to decline for the quarter.

Retail earnings before interest, taxes, depreciation and amortization (EBITDA) increased from $40 million to $75 million during the first quarter, an 88% increase, driven by comparable sales increases, a higher mix of higher margin core products and increased store productivity.

College

The College segment, which consists of the Barnes & Noble College bookstores business, had revenues of $221 million during this non-back-to-school rush period. Comparable College store sales decreased 2.0% for the quarter, as compared to the prior year period. College comparable store sales reflect the retail selling price of a new or used textbook when rented, rather than solely the rental fee received and amortized over the rental period.

College EBITDA losses increased by $2 million during the quarter from a loss of $12 million a year ago to a loss of $14 million, driven by new store expenses and investments in digital education.

NOOK

The NOOK segment, which consists of the company’s digital business (including Readers, digital content and accessories), had revenues of $192 million for the quarter, essentially flat as compared to last year. Digital content sales increased 46% for the first quarter. Digital content sales are defined to include digital books, digital newsstand, and the apps business. Device sales declined for the quarter due to lower average selling prices and production scaling issues surrounding the popular newly launched GlowLight product resulting in unmet demand.

NOOK EBITDA losses increased by $6 million, from a loss of $51 million to a loss of $57 million, as a result of product markdowns on the recently announced NOOK price adjustments, as well as continued investments in the NOOK business.

Newco Formation

On April 30th, the company announced that it has formed a strategic partnership with Microsoft to form a new subsidiary, Newco, which is comprised of the company’s NOOK digital and College businesses. The company continues to be actively engaged in the formation of Newco and is in the process of implementing the work necessary to complete the Microsoft transaction. The company expects the Microsoft transaction to close this Fall.

Related:

BusinessWeek: Barnes & Noble Investor Elation With Microsoft Deal Fades
Publishers' Weekly: Content Drives Improvement at Barnes & Noble

Things seem to be going well for UK retailer WH Smiths which in advance of their full year results they announced they would perform at the top end of analyst expectations: Press Release:

WH Smith PLC will announce preliminary results for the year ending 31 August 2012 on Thursday 11 October 2012. Prior to its close period, the Company today issues the following pre close update.

The Travel business continues its good performance despite the current economic climate and its UK store opening programme remains on track. We continue to manage costs tightly and have delivered strong gross margin gains driven by good mix management. Travel continues to make good progress in winning new business in its international channel.

In the High Street business our focus on gross margin and tight cost control continues to deliver a good performance. In addition, High Street has seen an improvement in the sales trend of books following the recent positive publishing schedule.

WH Smith PLC expects the outcome for the year to 31 August 2012 to be at the top end of market expectations.  Both businesses remain highly cash generative.

Related:
Guardian: WH Smith shares hit all-time high as retailer expects good profits
Telegraph; Questor share tip: Update leaves WH Smith looking anything but grey

Books A Million announce their second quarter results (Press Release)

Books-A-Million, Inc. (NASDAQ:BAMM) today announced financial results for the 13-week and 26-week periods ended July 28, 2012. Net sales for the 13-week period ended July 28, 2012 increased 14.9% to $120.4 million compared with sales of $104.8 million in the year-earlier period. Comparable store sales for the second quarter increased 0.5%, compared with the 13-week period in the prior year. Net loss from continuing operations for the second quarter was $0.9 million, or $0.06 per diluted share, compared with net loss from continuing operations of $2.9 million, or $0.18 per diluted share, in the year-earlier period.

For the 26-week period ended July 28, 2012, net sales increased 12.7% to $233.5 million from net sales of $207.2 million in the year-earlier period. Comparable store sales declined 1.8% compared with the same period in the prior year. For the 26-week period ended July 28, 2012, the Company reported net loss from continuing operations of $2.8 million, or $0.18 per diluted share, compared with net loss from continuing operations of $6.3 million, or $0.40 per diluted share, in the year-earlier period.

Commenting on the results, Terrance G. Finley, Chief Executive Officer and President, said, "Results for the quarter reflect the contribution from our new stores that opened in the 4th quarter, the phenomenal success of the Fifty Shades of Grey series, and continued solid performance in kids, teen and general merchandise. Our team remains focused on diversifying our store assortments and adjusting our store layouts to support our core business and new categories as we prepare for the upcoming holiday season.”

The Company also announced today that the Company’s Board of Directors has authorized a program to repurchase up to $5 million in shares of its common stock. Stock may be purchased on the open market or through private transactions from time to time through March 31, 2014, dependent upon market conditions. The plan does not obligate the Company to repurchase any specific number of shares and may be suspended at any time at management’s discretion. The Company currently has 16.0 million shares of common stock outstanding.

Related:
Publishers' Weekly:: New Stores Boost Books-A-Million

Interesting write-up on the state of the Australian retail book market with a focus on Dymocks the largely franchise operator of bookstores (Sydney Telegraph)

Dymocks managing director Steven Cox said Dymocks had benefited from the Borders and A&R collapse. Stores that were competing, in many cases, against a Borders and an Angus & Robertson store became the only specialist seller in the shopping centre. "We have gone from an over-supply in the Australian market to having gaps in the market and locations with no bookstore," Mr Cox said. "We have a real opportunity to connect with more customers."

Dymocks opened eight new stores last year and a new store at Charlestown this year, with one at Wollongong soon to open and several more in the offing, including one at Hornsby, which was left without a specialist bookstore after Borders closed. He is less concerned about Amazon. "We've competed with Amazon for many years and we spend a lot of time connecting with our customers," Mr Cox said.

"The challenge people have is finding something of quality. We have really knowledgeable staff, our stores are locally owned and operated, and we help people find great books. "Readers want to have confidence they are buying a great book and our strength is in that. Amazon can't compete with our level of service."

On price, Mr Cox insists that without changes to the import laws, bookstores will struggle to compete with online retailers. His stance pitches him against publishers, who won a battle in 2009 when the federal Labor government rejected parallel import laws.

Australian publishers have the exclusive right to publish books written by overseas authors. So if a major American or British author brings out a book, booksellers such as Dymocks must wait until the local publisher prints it, which in some cases can be months after the overseas release. For the publisher, it means they can effectively subsidize Australian authors through the sales of big-name overseas authors and profit from the biggest releases.

Borders (Australia) Online name to disappear (The Bookseller):

The Borders name will soon be retired as the Pearson Group looks to rebrand the remaining online store under their Bookworld banner.

Despite Borders stores disappearing from the UK and USA, the name had continued in Australia as an online e-book store, but will soon be replaced, according to reports in The Australian.

James Webber, the chief executive of Bookworld, a division of the Pearson Group, told the newspaper: “We just believe the Borders brand has had its day. There are no stores left and globally it’s been in demise so we believe there’s an opportunity to revitalize (the franchise).”

From Twitter:
Digitize Your Personal Backlist? For a Dollar? BookBusiness
Julian Barnes pays tribute to Parade's End by Ford Madox Ford for  Guardian
Nebraska Book Company Names Steve Clemente President And CEO (PRNews)
Why All Schools Need iPads: Ending Texas's Bizarre Control Over National History Textbooks http://tcrn.ch/NmskFk

Goolagong at Kooyong 1976

Evonne Goolagong Kooyong 1976

Through family friends we had members tickets to Kooyong and at the 75, 76 and 77 championships I was able spend many full days there.  On this day, for some reason I don't recall, Moms PND and I got to sit court side and someone let me use their 35mm camera.  They came out OK for a first time effort - just a bit dark.  Here Evonne has just destroyed another opponent and she went on to win the Open that year.  As with all these early tennis images the thing that strikes you is the lack of equipment and the big bags of stuff all the players carry with them now.  The funny thing here is she is clutching a couple of cokes for later as though that's all she's going to get!

A few years ago, (on a whim) I thought I would check what newspaper images existed for the championships in the years I went.  I checked out the News International newspaper site and sure enough I was able to find myself in the crowd sitting behind the server in some early round match in 1975.  Pretty funny. 

Another weekly image from my archive. Click on it to make it larger.

In addition to the images I've posted on Flickr and those I've periodically posted on PND, I have now produced a Big Blurb Book: From the Archive 1960 -1980 of some of the images I really thought were special.

MediaWeek (Vol 5, No 4): Research Works Act, Aussie Fiction + More

The Chronicle of Higher Ed looks at the Research Works Act: (Chron)

Whatever the executive branch decides to do about open-access mandates, it's not at all certain that the Research Works Act stands much chance of becoming law. In 2009, a similar bill, called the Fair Copyright in Research Works Act, failed to make it out of committee.
This is an election year, which makes it "a very difficult year to move any sort of legislation, let along legislation that has acquired a certain amount of controversy," Mr. Adler said. A lot of Congress's attention has been absorbed by higher-profile proposals, such as the widely unpopular Stop Online Piracy Act, or SOPA, and its Senate counterpart, the Protect IP Act, or PIPA. Those bills have created considerable resistance in the tech industry and among advocates of an open Web. Rep. Issa has been one of the legislators most vocally against SOPA.
Still, the introduction of the Research Works Act has public-access advocates on the alert, and it has once again exposed the persistent differences of opinion among scholarly publishers over federal mandates and how to approach the complex issues they present. University presses in particular are caught between wanting to take advantage of the resources of a big group like the Association of American Publishers, their own commitment to spreading scholarship widely, and the need to find a way to stay in business while honoring that commitment.

Seems and annual call for the teaching of more Aussie Classics (Brisbane Times):

Mr Heyward's comments follow a Sunday Age report last August that Melbourne University students had started their own Australian literature studies because there was no comparable course offered by the university.
Barbara Creed, head of the school of culture and communication at Melbourne University, said this was an unusual situation in which the course lecturer had left unexpectedly, and the university had been unable to offer a dedicated Australian literature subject as a result. However, ''The Australian Imaginary'' was back on the syllabus this year.
Professor Creed said that, although there may not be many courses designated specifically as Australian literature, the texts were nonetheless covered in a wide range of other courses, including creative writing, indigenous studies and film studies.
But she agreed with Mr Heyward that more Australian texts need to be adapted to film or television, where they will have a far broader audience reach. Whenever a novel is adapted to screen, she said, there is a boost in sales of the book as a result.

From the Twitter:

Self-Published Authors Still Rarely Make the Jump to Publishing Houses: PBS MediaShift

Apple and digital publishing: A textbook manoeuvre  The Economist 

Bibliophilia: Punches, matrices and fetishists: The Economist  

Salman Rushdie: a literary giant still beset by bigots: Guardian

Is the International Herald Tribune about to breathe its last? Guardian

5 Universities to Test Bulk-Purchasing of E-Textbooks in Bid to Rein In Costs Chronicle

Universities look to get discounts on e-textbooks for students: Inside Higher Ed: 

Melbourne Cup 1973

Another weekly image from my archive. Click on it to make it larger.

It was race day in Melbourne this past week and the annual big race produced the closest finish in history.  I am not 100% certain this is the actual race from 1973 but it was taken in the right month and there would have been little other reason to visit the track.  I bet that skyline looks a little different now.

I'm not a big horse racing fan, but I did place my first bet - I didn't do it someone else did it for me because I was too young - a few years after this.  I think it was in something called the Cheltenham Cup and the horse was "How Now" which came in a close second.  I had him to place and I think I won about $6.  I quit while the going was good.

In addition to the images I've posted on Flickr and those I've periodically posted on PND, I have now produced a Big Blurb Book: From the Archive 1960 -1980 of some of the images I really thought were special.

I now have an iPad version of this book for sale ($4.99) on the Blurb site which you can find here: STORE

I have to say, even on the iPad the book looks pretty good.

John Newcombe Kooyong 1976

John Newcombe Kooyong 1976

Another weekly image from the archive. Click on it to make it larger.
Close readers of the blog will recall the PND family lived in Melbourne Australia between 1973-77. The Australian Open was held over Christmas and New Years in those days and I was lucky enough to be able to attend many matches at Kooyong where it was held. This day was a little more special than normal because I and the parents were sitting in a court side box. Someone in the box loaned me their camera that day and for the first time I was allowed to shoot my own 35mm images. Unfortunately my parents didn't take the hint and I had to go back to my Kodak instamatic once the day was done.

Here John Newcombe - who may have been number one in the world at this point - has just beaten a young guy named Ross Case 6-4, 6-4, 6-1 in the quarter finals. Newk made it all the way to the final where he was beaten by Mark Edmonson.

The rest of the images are located here.

In addition to the images I've posted on Flickr and those I've periodically posted on PND, I have now produced a Big Blurb Book: From the Archive 1960 -1980 of some of the images I really thought were special.

I now have an iPad version of this book for sale ($4.99) on the Blurb site which you can find here: STORE

I have to say, even on the iPad the book looks pretty good.

DA Australia Acquire Languages Direct

From their press release:

DA Information Services (DA) today announced it has completed the acquisition of Languages Direct, the leading supplier of LOTE (Languages Other Than English) books and AV material to Libraries in Australasia. This acquisition will mean public, state and University libraries in Australia, New Zealand and South East Asia can now consolidate English Language and LOTE purchasing easily.

As both companies are conveniently headquartered in Melbourne, integration has already commenced to incorporate Languages Direct as a division of DA Information Services. Languages Direct will continue to have its own identity within DA.

Richard Siegersma, Executive Chairman of DA Information Services said, “DA is the most innovative library supplier in Australia for English language titles. Our innovative solutions will be applied to the LOTE product range as well. Initiatives like local Print on Demand and access to foreign language electronic books, means a broader and more comprehensive range of books will be available faster. DA’s sophisticated technology platform and scale will deliver economies of scale for libraries, through merging the purchasing and delivery of LOTE and English
language titles.”

Jacob Miceli, Managing Director of Languages Direct commented: “We are delighted to have concluded our agreement with DA Information Services. DA have impressed us with their commitment to advancing LOTE and their capacity to expand the services associated with the supply of LOTE material. This is a positive development for our customers as it will provide continuity and improved services for our customers, which we know DA can
clearly provide.” Languages Direct operations will be relocated to DA’s Mitcham premises by early July 2009. The Foreign Language Bookshop in Collins Street, Melbourne will be retained by the Miceli family

.

Australian Territorial Copyright

The Globe and Mail has the text of a speech given by Australian novelist Richard Flanagan (Sound of One Hand Clapping) during the Sydney Writers Festival two weeks ago. In this speech he makes and impassioned call to the Australian government to abandon their review of the policy of territorial copyright retention of which Flanagan believes is essential to the continued vibrancy and health of the nations written word.

Here are several samples from this long speech:

The battle to understand this world in our own tongue that Tyndale's Bible represents, to make the universal particular, the sacred secular, and the secular in its turn sacred, is a battle that has strangely resurfaced here in Australia this year.

For it falls to us to once more to defend the right – our right and our deepest need – to our own stories in our own voice, which is also, historically and perhaps inevitably, that same battle between truth and power.

At this moment, as many of you would be aware, the Australian government is giving serious consideration to a proposal that would see the ending of territorial copyright for Australian writers.

This dullest and dreariest of phrases – territorial copyright – is the drab motley thrown over a measure which will do untold damage to Australian culture. I cannot begin to convey to you the destructive stupidity of what is being proposed, nor the intense sadness and great anger that so many Australian writers feel about this proposal.

.....

But Australian publishing over the last four decades is an extraordinary cultural achievement. In an era when national cultures suffered greatly from globalization, ours grew stronger, in no small part because of our book industry. We read Australian stories from cradle to grave, and the best of our writing is judged around the world as globally significant.

....

Writers and books that matter will become like an endangered species with no habitat left to support them. The fate of most of them in the large chain and discount mega-store culture will be that of marsupials in new outer suburbs, dicing with death on freeways, not knowing until that short moment of blinding light dazzle that this is no longer their home.

That is but a small sample.

Australian Parallel Importation

In a story line we have been following from a distance, the Australian government has been attempting to address the impact of their protected market for books. Does it help indigenous publishing or cause consumers to pay higher prices? The commission has taken testimony from all sectors of the market (submissions are published on their web site) and have now published their preliminary findings.

There is no formal policy change at this point but they appear to be recommending only minor changes to the existing policy.

Here are the summary findings: (Report)

Key points

• The Commission has been asked to assess the benefits and costs of Parallel Import Restrictions (PIRs) on the importation of books that are published in Australia, and to examine the merits of options for reform.

1. The PIRs are contained within the Copyright Act, although they are additional to its core protections.
2. Changes to the PIRs in 1991 have overcome previous concerns about the timely availability of books in Australia.

• PIRs, by restricting competition, place upwards pressure on book prices in parts of the market:

1. most of the benefits of these higher prices accrue to publishers and authors, with demand for local printing also increased most of the costs are met by consumers.

• While these benefits and costs are largely offsetting, there are some resource costs for Australia, including a leakage of income to overseas authors and publishers.
  
  
• At the same time, the PIRs help to support the ‘cultural externalities’ associated with Australian publishing. These are assessed as policy relevant, but unlikely to be large.
  
  
• An explicit subsidy to support the cultural externalities would avoid a leakage of support overseas, but the approach would have practical drawbacks.
  
  
• Abolition of the PIRs and reliance on consumer demand for Australian stories to deliver a sufficient level of local writing and publishing activity, while having some merit, would not be prudent at this time.
  
  
• Changes should be made to the current PIR regime to increase competition in those parts of the market where the restrictions put most upward pressure on book prices and/or where the cultural externalities are likely to be smallest. To this end:

1. PIR protection should only apply for 12 months from the date of first publication of a book in Australia (while retaining the 30 day release rule) the 7/90 day resupply rule should be abolished booksellers should be allowed to overtly offer an aggregation service for individual import orders under the single use provisions.

• A further review should be held five years after implementation of the changes arising from this study.

Find more information including the submission from Leading Edge which has some good background information here: Delicious Bookmarks

Australia Again

Earlier this week I mentioned the discussion going on in Australia regarding the review of local copyright rules on imported books. The Guardian reports on Peter Carey's comments that he and other authors like Thomas Keneally wouldn't have found publishers without there being some sort of protection.

Take copyright away, he said, and they no longer have a commercial leg to stand on. "And then? Then the global companies will decide that their Australian offices will be much more profitable as distributors of product than publishers of books. If this sounds creepily colonial, it is because it is."

Carey, Grenville and other writers all said that without the support of Australian publishers at the start of their careers, they would never have become the internationally renowned authors they are today. "My experience shows how uninterested overseas publishers are in our work. The more "literary" it is (about ideas; more than simple entertainment), the less interested they are," said Grenville, who won the Orange prize in 2001 for her novel The Idea of Perfection. "Writers in the future might struggle to find the success that I have, because they may not have a local publisher to put the time and care into developing their career," agreed children's author Sonya Hartnett, who last year won the 5m Swedish kronor Astrid Lindgren memorial award.

Also, pay sharp attention to the photo and you will realize Peter was in NYC recently. In fact he lives here.

The Australian Problem

The Australian publishing and bookselling community can't seem to decide whether it wants or doesn't want protectionism. Peter Donoughue takes issue with the Australian Booksellers Association's decision to back track on their long standing support of abolition of the 30/90 rule.

Now the ABA comes along and AGREES with them! It says, yes, you're right, our members are so stupid that they would at every opportunity act against their commercial interests and, as a by-product, destroy local literary culture! No matter how reasonable the price of the local edition, no matter how fair the trading terms from the local publisher, no matter how good the distribution and customer care, no matter how beneficial to sales the publisher's marketing and publicity efforts, no matter the excellent personal service from the sales reps, no matter the impossibility of getting anywhere near the same deal from overseas wholesalers like Baker and Taylor.... we're gonna buy around, just because we can!

I'd call that stabbing yourself in the front!

Earlier in the month, the Sydney Morning Herald tried to explain the situation:

Why is this relevant to us in Australia? The Productivity Commission is undertaking an inquiry into how books are sold in Australia. We have a separate copyright territory. If a book is written, designed, edited and published by Australians - as is about $900 million worth of books sold in Australia annually - an overseas publisher cannot sell an edition of it here. If it is produced overseas, Australian publishers must publish it here within 30 days of its foreign release, or it can be "parallel-imported" to Australia. If it is out of stock, the publisher has 90 days to replenish it. This "use it or lose it" principle is commonly called the 30/90 rule.

Opponents of this say it gives us higher prices. Last month Bob Carr wrote in The Australian that price was "the only question before the Productivity Commission" and importation should be freed so more households could have "brimming bookshelves".

Cheaper books, higher literacy. The argument seems attractive. But it rests on a shaky assumption and a lack of consideration of the consequence.

I think I know where the frustration lies. The next title in Steig Larrson's trilogy is has been available in the UK since early January but won't be out here until summer. I can however order it from Waterstones.com. WTF?

Down Under Blogger

I just came across a relatively new blogging effort by Peter Donoughue the ex-CEO of Wiley Australia. Peter and I met on a number of occasions and I know from those meetings his commentary is going to be blunt, on target and often funny. Not to put too much pressure on him but here are two selections from recent posts.

The following is his view of Angus and Robertson's implementation of the espresso book machine in their stores.

POD machines in every bookstore - Jason Epstein's vision as articulated in his memoirs of a decade ago - was always a dud of an idea. Investments in printing machines are for printers and possibly publishers, not for barely profitable, main street, high rent paying bookstores. The concept of print on demand is fine, and an everyday reality in the industry now, but it's a specialised business.

Ebook readers are the future - the Kindle, the Iliad, the Sony, and others to come. They'll be a dime a dozen in five or so years, like iPods and mobile phones are now. If you want your book printed buy the paper version or print it yourself.

ARW would be better advised to spend their limited capital on refurbishing their tired-looking stores and - here's a novel idea - buying much more stock of already printed books! That would really be good for business. Doing the basics well will never go out of fashion.

Peter is actually a supporter of POD but obviously not in a bookstore.

Secondly, Australia engages in a never ending discussion about parallel importation and here he is on that subject.

Here is the essential truth that the book trade proponents for continued protection need to get their heads around:

The 30/90 day provisions do not establish and have never established Australia as a rights territory. Australia is a natural rights territory because of its population size, distance, literacy and affluence. The provisions provide additional protection for a rights holder, but they do not establish the possibility of buying rights in the first place. Therefore their abolition will not destroy Australia as a rights territory. Their abolition will simply remove that additional level of protection which only serves to protect over-pricing and under-servicing. Publishers who price and service competitively have absolutely nothing to fear.

God, how often must this be said! To me it's so self-evident.

There is really no need for this paranoia in the trade, this awful, miserable 'we'll all be ruined' defensiveness. No wonder economists throw their hands up!

He has also just finished the same book I did, The Girl with the Dragon Tattoo and we both recommend it highly.