Ingram Sell VitalSource to Francisco Partners

Big news in education publishing:

From their press release:

Ingram Content Group® (“Ingram”) today announced it has signed a definitive agreement to sell VitalSource Technologies LLC to Francisco Partners, a leading global investment firm that specializes in partnering with technology businesses. 

Under Ingram’s leadership, VitalSource was transformed from a small venture serving a niche market to a global leader in digital content distribution. Ingram first acquired VitalSource in 2006 with an eye to grow it into a larger digital learning platform that could serve the higher ed market and more. This was part of a larger effort by Ingram to help the book industry leverage technology to transform the way content is accessed and in turn, the way the book industry works.

"We are very proud of the extraordinary value-add VitalSource offers the academic and professional communities. VitalSource has grown into one of the leading digital curriculum delivery and learning platform providers with proven scalability and reliability at a time where digital content and online learning is very much in demand,” said Ingram Content Group President & CEO Shawn Morin. “Francisco Partners is committed to furthering the VitalSource mission of improving learner outcomes and accelerating our commitment to developing innovative, forward-thinking solutions and platforms that open doors to affordable and impactful learning experiences to students and professionals around the world.”

 More to follow.

Ingram VitalSource and Blackboard announce Platform and Content Deal

Last year Blackboard announced several high profile content deals with publishers however this deal with Ingram Vitalsource could be more significant if it encourages faculty to really engage with content creation and aggregation on the Blackboard site.   Question is: Is this an exclusive deal for Ingram?

Ingram and Blackboard announced an integration of the Ingram Vital Source platform onto the Blackboard learning management system. From their press release:

Blackboard Inc. and Vital Source Technologies, Inc., an Ingram Content Group company, have launched pilot programs with a number of colleges and universities to test-drive an integrated offering that makes the VitalSource Bookshelf® platform and its hundreds of thousands of e-Textbooks available directly within Blackboard Learn™, the company's flagship learning management system (LMS).

Indiana University—Fort Wayne, University of Alaska Anchorage, and Fayetteville Technical Community College are among the institutions participating in the field trial. With the integration instructors can preview and select e-textbooks, content and learning objects from the VitalSource Bookshelf platform that students can then access through a single sign-on.

Participants in the field trial will provide ongoing feedback to the companies about their experience to strengthen the offering. Participating instructors have expressed satisfaction with the ability to annotate e-textbooks, link to content from anywhere within a course or assignment and assess how students are progressing through content. Students have been enthusiastic about using e-textbooks on mobile devices through native iOS® and Android™ applications, including deep linking that makes pages and features such as notes, highlights and annotations look the same on e-textbooks as they do in printed textbooks.

"My students read more because with this technology, you can assign the reading, and they'll know that I'm checking closely on whether they've read it or not," said Minnie Wagner, business and healthcare management program chair at Minnesota School of Business-Lakeville. "So it has helped students to be more proactive and make sure that they're prepared for the class."

The integrated solution, expected to be available this summer, would offer two purchase models. Institutions that include textbooks as part of tuition could place e-textbooks directly into Blackboard Learn courses for immediate student access. Alternatively, a student-purchase option would give instructors the opportunity to make e-textbooks available for students to purchase or rent from within their Blackboard Learn course environment.

Beyond the Book with Ingram's Phil Ollila

It's been a while since I've linked to a Beyond the Book interview but here is an interview with Ingram's Chief Content Officer Phil Ollila.  Phil speaks about how digital has changed the way Ingram operates and how that transition has enabled them to offer a broader array of services for publishers - especially on an international scale.  (BTB)

Here is a sample:

KENNEALLY: Right. And it changes the experience for the consumer. Obviously, they get the material, if not that moment as an e-book download, certainly, you know, within days, if not a day, in print form. But they’re getting access to a whole range of titles, millions of titles, in fact, that they simply wouldn’t have even thought were in their view before.

OLLILA: So a great example of that is what we did in Australia. In Australia recently, we opened a print on demand manufacturing facility in Melbourne that will serve the continent of Australia. Publishers throughout the world have authorized their content for distribution in Australia, and on the day that we opened that plant, we had over a million titles available for distribution in Australia. That’s more books than we’re – that have ever been available in Australia on an on demand basis for immediate distribution in history.
So one of the things that we’re proud of is the ability to bring content into Australia at very little cost to publishers, and exposing that content to consumers in Australia, where in the past, the distribution model would’ve been to sell the rights to an Australian publisher. The Australian publisher would have to negotiate with an Australian retailer. The book would have to go on a shelf. And by the time you get through all those steps, the cost of bringing that content onto the continent was incredibly high. So as a result, very little content actually got through to the Australian consumer.
Well, today I’m happy to say we have 5.5 million titles available in that database that, six months ago, we started with a million titles. So Australian consumers are really driving the bus in terms of availability of content. It’s not necessarily being driven by the supply chain.

Here is a link to the full transcript.

Is the college bookstore doomed?

Rehash originally published August 30th, 2006:

Some recent examples suggest that print books continue to be the format of choice for college students but is this because they like the format or because the tangible item can be resold at the end of the semester? Is the problem really that no demonstrably better alternatives yet exist to replace the print version; i.e., electronic titles that offer a better learning experience? Clearly, e-books garner a lot of attention and investment from publishers and as I have discussed in an earlier post the opportunities in e-Content for publishers, students and administrators are potentially significant yet no one appears to have cracked the content code.

Electronic delivery of content will materially change the business model for students, institutions and publishers. In my view, the main reason this has not happened yet is that publishers and institutions are dealing with legacy issues that preclude a (willing) change in their business practices. Content creation in all but a few subject areas is an iterative process; meaning that few titles are created from scratch for each new edition. Indeed for some subject areas many have suggested that new editions are only created to mitigate the used book issue. While publishers recognize that the creation of e-books is critical, with few exceptions, they are not willing to start over and create a true e-book course product but are satisfied to convert existing titles to e-book format.

The institution on the other hand receives revenues from the sale of textbooks either directly or via trade agreements with store managers such as Follett and Barnes & Noble. As such, they have remained paradoxically disassociated from the annual chorus of criticism regarding textbook pricing. Assuming e-books become fundamental to course content, where will the bookstore fit in the relationship between publisher and institution?

Any number of publishers and vendors have or are developing models for direct delivery of content to students. Two vendors, Missouri Book Service (MBS) and Vitalsource have developed platforms which involve publishers and bookstores in the process. Intuitively, as a publisher, you might be encouraged to engage students directly and publishers are doing just that via services such as SafariX and Primus+ (McGraw Hill). MBS has been testing their program which integrates the sale of e-books into the retail bookstore for the past three seasons and has seen steady increases in the number of publishers and the amount of adoption of the content. In working with MBS, a publisher will not have to deal with certain college store issues such as returns and exchanges, campus debit cards and student financial aid. Centralized order process operations at publishers would find these issues difficult to deal with. E-Content in the MBS Universal Digital Textbook program is discounted 30% below the print price. The restrictions associated with this content have drawn some negative reactions particularly because the password expires at the end of the semester and the student has nothing of value to resell or reuse. As suggested above, the additional value for the user in this example may be more related to ease of use (weight) than much else because the e-content is a replica of the print version.

In the MBS solution, they protect their franchise and maintain a revenue stream for the bookstores. MBS is also creating a digital platform so that many publishers can make their titles available to students which in turn could create a competitive advantage for MBS in the provision of e-Content to students. Assuming a competitor wanted to challenge MBS for a store contract the challenger would have to match the platform capability and the content.

Vitalsource has taken a different approach to distributing e-Content to students and offer content creation through distribution help to reach students. They have had some success and are working with Wiley, Thomson West, Elsevier and others to deliver content. Their tools allow integration of ‘local’ content, unbundling of content and linking to related reference products. It isn’t clear what their relationships with bookstores is in the institutions where the product is sold; however, MBS recently added the Vitalsource format to their delivery platform.

MBS, Vitalsource, SafariX and others are generally offering discounts for the purchase of e-Content versions of the course material. There is tremendous hesitation to offer unlimited use of the e-Content because publishers believe they will create a problem greater than the used book issue. Not surprisingly, students have been slow to adopt these offerings. In my view a risk to publishers is that new entrants to the market will create new and innovate publishing products that rely on new but dynamic content that creates a profoundly different experience for students than an e-Content version of a textbook. Some of these new approaches are starting to find their way into general use and it is services like Blackboard/webCT that have created a platform for delivery of some of this content. Blackboard has an agreement with Merlot where you can find some interesting course material.

In the long run, publishers and or e-Content platform providers will have to pay to gain access to students at Higher Ed institutions. Institutions will either create their own open platforms or license from a vendor but this platform will become the store front. There may be a physical store on campus but it will not be the focus of textbook sales. As much as gaining knowledge of student purchasers is important to publishers in their drive to form long term learning relationships, institutions also realize the value of this information and will not be interested in stepping out of the chain.

Repost: Digital Platforms & Distribution

Originally posted April 12, 2007

Over the last 100 years (probably) US publishers have dithered over whether to use their facilities for the exclusive warehouse, fulfillment and distribution of their books or to offer 'publisher services' to other publishers. In recent years we have seen as many large publishers give up publisher services as adopt them. Some publishers think the headaches out weigh the potential marginal income and others in turn believe these publisher service functions to be core strengths and tasks they can leverage.

Recent announcements by Random House and Harpercollins indicate that there will be an application of the physical 'publisher services' model in the digital world. Clearly here the opportunity and the economics will be significantly different than in the physical world. Other players are entering the market as well: Both Ingram and Gardners (UK) have or are entering this segment. Gardners announced today, and will expand on this business opportunity at London Bookfair, a 'digital warehouse' which is "designed to provide a comprehensive range of e-commerce services for booksellers and publishers." Further,

Gardners Digital Warehouse will supply the capability for Publishers to link their existing digital files, eBooks, Audio Downloads, and extended bibliographic content such as ‘search inside’ to Gardners Books range of Internet and high street retailers. Publishers can also utilise a range of digitisation services designed to enable any size of Publisher to create digital content economically and to use it for publicity and eBook sales with all of Gardners customers.

The vast majority of publishers in the UK and US are small and do not have the depth of experience or financial capacity to support their own back office functions which is why 'publisher service' programs by larger publishers and companies like NBS and PGW exist. Similar issues will exist in the digital world and perhaps the financial aspects and the knowledge gap will be even more stark as processes and applications become more technology driven. Regrettably, as digital distribution becomes a basic service it will simply be out of the reach of the less sophisticated publisher. And this is where Harpercollins, Random House and others will step in to offer a range of digital services to support this market.

The issues these publishers will face will be different than those they faced as physical distributors but intuitively I have to believe the margins will be greater and the services they can offer the publishers and authors will be materially better. It is early days yet and the current offerings are fairly basic (not to be critical) but there are some tantalizing possibilities.

Other than the big fiction authors who get loads of attention, marketing money and have brand equity the vast majority of titles go unsupported almost immediately after launch. Successful titles in this environment are often driven by the desire and resourcefulness of the author. Imagine in a digital world where the author can use the digital platform to create their own marketing program, interact with stores and buyers, build communities with consumers and in many ways manage the sales and marketing for their own titles. It will happen. Adding social networking and other interactive 'modules' to the platforms offered by Harpercollins, Random House, Ingram and others will achieve this and I suspect some derivation of these ideas are in the works. The advantages for smaller publishers and authors is the scale that these platforms will offer both in terms of financial considerations and that they will become destination sites for consumers of books.

Ingram: Downloads Strong. Prichard Interview

A little bit of a puff piece from Ingram Digital announcing that digital downloads from their retail solutions unit had enjoyed record third quarter growth with downloads more than double the same quarter last year. No numbers noted. Ingram Digital includes solutions for digital content management, distribution and promotion.

The press release does give me the opportunity to link to an interview Skip Prichard did last week as part of the SIIA brown bag interview series. It is 60mins.

Weekly Update

Deal News:
Thomson Learning Sale said to Encourge Share Buy-Back: Globe

Publishing:
About Book Reviews Sections: HuffPo
One Billion E-Books From Ingram: PR
LexisNexis Teams with Elsevier: PR
SilverChair and MGH announce Pharmacy Platform: PR
Elsevier Extends ScienceDirect ArticleChoice: PR
Elsevier Selects Rightslink: PR
McGraw Hill report first Quarter: PR
Edgar Award Winners: PR
Wiley in India: IHT

Other News:
Swets/Muze Glabal Announcement on Fed Search: PR
Generate, Inc. Announce tool For in Context Content Distribution: PR
OCLC Announce WorldCat Local: OCLC

Sports:
Whinging Cry Baby: BBC

3/2/99: Amazon.com, Ingram, Pearson, NYTimes,

Publishing News: March 2, 1999
Amazon.com Sales
Ingram
Hearst
Pearson
New York Times Co. to Buy Interest in TheStreet.com
EBook Standards Meeting
Book Point of Sale Information
Cambridge University Titles On Demand
Reader's Digest Outlines Growth Strategy
Adobe Systems Introduces Next Generation of Page-Layout Software
Langenscheidt Acquires Hammond Brand
Mirror Group

Amazon.com Sales
Amazon.com’s sales grew to $610MM from $147MM and are now at an annual run rate over a Billion dollars according to company executives. The net loss for the period was $124MM vs $31MM last year. Since last year, not only has Amazon.com continued to explosively sell books but the company has added CD’s and videos to the mix. Additionally, the company also expanded into Germany and the UK during the same period. Sales in ‘expansion’ areas accounted for 25% of total fourth quarter sales. Company President Jeff Bezos confirmed his company’s plans to aggressively invest in the business even more than they had in the past which will no doubt translate into continued operating losses for the company.
Source: Publishers Weekly, 2/1/99

Ingram
YoungSuk Chi has been promoted to COO of the Ingram Book Group and will report to Mike Lovett the President and CEO of the Ingram Book Group
Source: Publishers’ Weekly 1/25/99

Hearst
Hearst Book Group which includes Avon, Hearst, Morrow and at least 21 other imprints saw sales surpass $200MM according to Publishers’ Weekly. During the year Hearst had six titles on the best seller lists and also saw increases in back list sales.
Source: Publishers’ Weekly 1/25/99

Pearson
Pearson Education announced an agreement with Versaware Technologies to convert textbooks into electronic form. Apparently, Versaware has developed a system that reduces the time and expense of convertion into a variety of formats. Versaware is also denying that it is about to be purchased by Barnes and Noble although they admit to a number of discussions on strategic partnerships.
Publisher’s Weekly 2/15/99

New York Times Co. to Buy Interest in TheStreet.com New York Times Co. said it will pay $15 million in cash and services for a minority equity stake in TheStreet.com, an online provider of financial and investment news and commentary.
Simultaneously, Michael Golden, vice chairman of New York Times Co., was nominated to serve on TheStreet.com's board. New York Times Co. also said it was discussing opportunities for strategic alliances with TheStreet.com.
Source: The Wall Street Journal 02/23/99

EBook Standards Meeting
The Open Book Standards committee met to review a draft for proposed standard file formats based on SGML and XML for electronic book devices. The meeting was hosted jointly by eBook manufacturers Softbook Press and Nuvo Media. The current specifications are open to review (as an evaluator) for comment and review. It is expected that the specifications will be published to the public sometime in the next three months.
Source: Publisher’s Weekly 2/15/99

Book Point of Sale Information
Publishing Solutions Inc., a White Plains N.Y. company announced it is has agreed with Barnes & Noble and Penguin Putnam to pilot a book POS system. This system is designed to track and forecast book sales at the retail level. As the results become known the company plans to expand the system to a wider group of retailers.
Source: Publishers’ Weekly 2/15/99

Cambridge University Titles On Demand
Lightling Press the Ingram affiliated on demand printer announced that they have joined with Cambridge University Press (CUP) to offer a number of CUP titles on demand. Initially Lightning will offer 113 titles, however if all goes well up to 500 additional titles may be added to the selection. CUP has chosen recently discontinued titles which are still receiving orders and company sources commented that their current order fulfillment system keeps track of orders for out of print titles. Lightning Press now has over 1800 titles in it’s digital library which can be printed in lots as low as one unit.
Source: Publisher’s Weekly 2/15/99

Reader's Digest Outlines Growth Strategy Thomas O. Ryder, chairman and CEO of The Reader's Digest Association, Inc. today outlined a five-point growth strategy for the company in a speech to financial analysts and company employees. The key elements of the growth strategy include: - Dramatically expanding the company's presence in five targeted areas of intense consumer interest -- home, health, family, finance and faith -- that offer high growth potential and suit the company's brand. - Selling products and services beyond publishing that fit with the Reader's Digest brand in the five targeted areas, initially focusing on health and financial services. - Continuing geographic expansion, by entering new countries and expanding offerings in countries where the company already has a presence. - Developing new channels -- including direct response TV and non-sweepstakes mail -- to market existing and new products and services. - Making the Internet an integral part of all the company's business by investing in high quality website development, enhancing current sites and creating new ones.
In the call Ryder also spoke of efforts – to date largely successful – to reduce monetize assets and that these had produced over $300MM. This money together with an additional investment pool of $100MM would be used to fund the above investment activities. There will be a concentration on the internet as a mechanism to extend their strength in direct response. There was no mention of the proposed deal/joint venture with Time Life. The companies may still be discussing some consolidation but it remains to be seen if anything comes of it.
Source: Businesswire 2/25/99

Adobe Systems Introduces Next Generation of Page-Layout SoftwareAdobe Systems introduced the vaunted ‘Quark Killer’ application this week in Boston. The desk top publishing package named InDesign was previewed six months ago under the name K2 and is based on a new open object oriented architecture that is highly extensible. With the introduction of InDesign, Adobe is aggressively taking on Quark’s core market in desk top publishing software; however with over 70% market share in key publishing and advertising markets Adobe will face an up hill battle convincing production managers and designers to make the switch. There are a number of advantages however to making the switch – number one is you don’t have to deal with Quark’s renowned cavalier attitude to customer service as well as their errant product migration strategy. Additionally, Adobe’s other products are mainstays in publishing and advertising offices and InDesign has been developed to work seamlessly with Photoshop, Illustrator and Acrobat. Quark does not interface with these products which has caused process silos and inefficiencies. A flexible, fully digital workflow is, according to Terry Rosen, director of information technology at Ogilvy & Mather New York, essential for companies looking to succeed in a global market, where concepts and materials have to be shared effortlessly across thousands of miles. "Adobe InDesign delivers a truly integrated creative tool kit. The software offers a familiar interface and the same approach to page layout and design as Photoshop and Illustrator, which means our art directors and studio artists can hit the ground running with it. With InDesign, we can also output ads directly to PDF for review, approval, and transmission. It's this type of unified workflow that lets us move ideas to production faster, and better support our clients worldwide," said Rosen.
Quarks’ reaction to the news was muted – although they have yet to announce a strategy for the current generation of products.
Source: Businesswire 3/2/99

Langenscheidt Acquires Hammond Brand Hammon Inc, a US based map and cartography publisher has been purchased by German based Langenscheidt Publishers, Inc. The 98-year old Hammond, celebrated for its old world tradition of cartography, has enjoyed a reputation in recent years for its advances in mapmaking technology. In 1992, it published the world's first completely digitized world atlas: The Hammond Atlas of the World. This atlas garnered awards for graphics, accuracy and innovation, as did its most recent edition, published in 1998, which pioneered computer-generated tints depicting land elevations and ocean depths. Terms were not disclosed.
Source: Businesswire 3/2/99

Mirror Group
The Mirror Group rejected the most recent offer from regional UK publisher Trinity. The last bid valued the company at approximately $1.5Bill. The combination of stock and cash was insufficient in the view of the board and additional bids are expected. Mirror group has faced turmoil over the past several months regarding it’s future. David Montgomery the Mirror CEO was removed by the board recently in a board room shake up and the company is now being run by a temporary CEO. Since the living large days of Bob Maxwell (was he pushed?) the company has fought to recover it’s once UK market dominance while at the same time managing the debt imposed by Maxwell’s unique style of financial accounting. Maxwell if you recall stripped the pension funds of this operation to ‘plug the leaks’ (pun very much intended) in his rapidly sinking business empire. Many of those pensioners were required to return to work.
Source: NYT 3/2/99