MediaWeek (Vol 6, No 17): Amazon Taxes and Apps, New Magazines, Fixing Higher Ed, Library Budgets + More

Short takes from the New Statesman:

Over 150,000 people have signed a petition demanding that the UK government take “decisive action [to] make Amazon pay its fair share of UK corporation tax”. The petition drafted by Frances and Keith Smith, independent booksellers from London, was inspired by Margaret Hodge’s questioning of representatives from Google, Amazon and Starbucks last November.
John le Carré has published his 23rd novel: A Delicate Truth. The team behind Skyfall and Tinker Tailor Soldier Spy have made a short film to celebrate. Watch it here

Paper Airplanes is a great title for this article about a new body of travel magazines (Independent):

And yet, as if to counteract this, there is a growing body of beautifully designed, weighty magazines that are very much about digging deep into a place. The geographical place first, but also the happenings, the history, the beauty and the deprivation. They are locally focused, yet global, rather than parochial; and it's not a coincidence that some of the most successful versions are labours of love.

Boat Magazine is aptly named. The office, run by husband and wife Davey and Erin Spens, is based in London, but it moves to a new city each issue. They gather up the most talented writers and photographers they can find, take them to the city they're featuring, cover their travel, food and living costs in lieu of paying them for their work, and – in Erin's words – "set them loose". They migrate for at least five weeks, and live together while collecting the content for their issue.

When Boat began, it had a strap that read 'the antidote to lazy journalism', but Davey and Erin quickly scrapped that because they didn't want to pit themselves against anything. They just wanted to do more. "Once we talked to more people and [heard] their stories, the cities were so different to how they were portrayed on the news," says Erin. They've had four issues so far – first Sarajevo, then Detroit, London and Athens. They've just had a special-edition newspaper about Derry-Londonderry, this year's UK City of Culture. Next stop: Kyoto, set to be published in May. "It's really fun," she says. "It's manic adrenaline the whole time."

Fixing higher ed should be done faster. Why are they waiting? From Inside Higher Ed:

Yet we’re slipping. Simply put, our graduation rates are too low, our costs are too high, and too many students are slipping through the cracks. Reformers -- and universities themselves -- grasp these realities and want wholesale changes that will fundamentally alter how we think about higher education.

Those long-term battles are important, even necessary. New innovations in distance learning and nontraditional degrees may provide new pathways for students. But such changes may take decades. In the meantime, we have millions of college students taking on ever-higher debt loads for a long, winding road to a degree. We need to make immediate changes to affirmatively lower costs – not just “increase affordability” – while we raise graduation rates. We need to work within the existing framework to do what we’re already doing, but do it better and cheaper.

Library Journal discusses an interesting report into library budgets and serials pricing (LJ)

Meanwhile, sequestration is not going to make state and local funding problems any easier. Historically, the federal government provides about one-quarter of all state revenues, and owing to sequestration, the federal government is now poised to make deep spending cuts. If a significant portion of sequestration is left in place, federal funding for schools and other non-entitlement grants to states are on track to reach their lowest levels in four decades, measured as a share of the economy.

The lack of public funding translated to flat funding in libraries. Data from the Association of Research Libraries (ARL) shows that median total expenditures for ARL libraries dropped slightly from 2011 to 2012 ($24,052,161 to $24,000,677). Since the ARL members are a mixture of public and private organizations, increases in expenditures by the private universities helped offset declines in spending from the public universities and the overall result was a slight decrease in expenditures.

There is good economic news out there, but most libraries that rely on public funding have not fully recovered from the recession. Flat budgets and ongoing inflation in costs are forcing libraries to continue to find creative ways to keep current services. In this environment, disproportionate serials prices are thrown into greater relief.

Anyone considering app building needs to consider Amazon as this report from Techcrunch makes clear:

Amazon doesn’t share details on how well its Amazon Appstore apps sell, but according to mobile app analytics firm App Annie, the app marketplace is seeing growing traction among developers. The company surveyed over 1,500 developers, and found that 22.5 percent of them were now publishing to the Amazon Appstore, and half of that group (50 percent) cited the game category on the Amazon Appstore as their leading revenue driver. Previous reports have confirm roughly the same thing: that Android developers are turning to Amazon’s Appstore in greater numbers, and are seeing the benefits. Amazon Appstore’s revenue per user tops that of Google Play, or even iOS, in some cases. Last summer, for example, mobile gaming startup TinyCo, was saying that its revenue per user was higher on Amazon than on iTunes or Google Play. However, another report from Flurry said that iTunes was number one, and Amazon was in second place in terms of its revenue generation capabilities. Flurry had found that for every $1 spent on the iOS store, Amazon’s store generated $0.89, and Google Play $0.23.

From my twitter feed this week:

Apple Passes 45B Total Unique App Downloads At A Rate Of 800 Per Second With Over $9B Paid To Devs Techcrunch A $1bill/quarter
Netflix Beats Analyst Estimates, With 29.2 Million US Subscribers And $1 Billion In Q1 Revenue Techcrunch
British Library feels the Arab wrath: Balfour Declaration is going to Israel  Al Bawaba

Time Warner & Meredith - Match made in 1997?

I had an interesting breakfast recently with someone from one of the largest magazine publishers in the world and naturally we spent most of our time talking about digital.  This company had begun to see really interesting data come back on the behavior of their digital subscribers and as the usage data grew larger and larger it was clearly showing that subscriber behavior is not what we thought.  Funny how real data undermines our long held assumptions which are often based on 'experience' or 'intuition'.  We all know now that the digital world can give us a view into the behavior and motivations of consumers in a way that print never could.  In the print world many media companies had no direct relationship with the consumer but as more and more media companies - magazines a prime example - reach customers directly these publishers begin to gain the insight they never had before.  Some of that insight can be unsettling.

Over the past 20 years media has consolidated and one of the factors in that consolidation (among many) was audience consolidation.  The idea that a publisher or broadcaster could aggregate an audience by pulling together sets of publications or media brands across related segments and then cross sell their audience.  This strategy was based on the not unintelligent idea that audiences could be segmented into groups and these groups would be defined by their mutual interests and therefore might purchase or subscribe to a variety of publications based on these interests.  A lot of media companies have been rolled up motivated by this assumption.

What made my breakfast interesting that day was that their data showed that their subscribers did not 'cross pollinate' even-though the publisher held multiple titles in the same genre and many titles that one could assume would appeal to the same subscriber across genres.  Think of trying to tie Men'sHealth, Road&Track and FastCompany as an offer to a current subscriber of one of these titles and it apparently fails emphatically.  (By way way, I made that grouping up for illustrative purposes).   This example of data analysis - and the ability to really capture key behavior analysis - suggests that we know little about the motivations and interests of our consumers and that the assumptions we may have built our business on could be completely errant.

The combination of Time Warner and Meredith could be seen in two ways:  Time Warner is doubling down on the aggregation model or they understand that the underpinnings of their aggregation strategy for the past 20 years wasn't what they assumed.  I have no idea but, if it is the latter then they will realize as digital becomes a far greater part of their delivery they can't take for granted that the aggregation of their customer base is going to be a significant driver of their top line.   In fact they might find that annual subscriptions across the board decline as subscribers pass these up for single copy purchases which was another of the interesting trends publishers are seeing in the digital world: single copy sales are a growth business.  Per copy sales might be good but rate base is better.

From the NYTimes Media Decoder:

Time Warner is in talks with the Meredith Corporation to spin off much of Time Inc., the country’s largest magazine empire and the foundation on which the $49 billion media conglomerate was built, Amy Chozick and Michael J. de la Merced write. The deal would move the bulk of Time Inc.’s magazines, including titles like People, InStyle and Real Simple, into a separate, publicly traded company that would include Meredith publications like Better Homes and Gardens and Ladies’ Home Journal. The new company would borrow money to pay a one-time dividend of about $1.75 billion to Time Warner, making the transaction resemble a sale. Time Warner would continue to control the newsmagazines Time, Sports Illustrated, Fortune and the magazine Money. The deal is one of several options under consideration to reduce Time Warner’s troubled publishing unit.

MediaWeek (Vol 5, No 50): MOOC Business Model, Popova Profile, Tim Cook, Printing 15th Century + More,

Wondering where the business model is for MOOCs? Some providers are now charging for access to student data (Chronicle):

On Tuesday, Coursera, which works with high-profile colleges to provide massive open online courses, or MOOC's, announced its employee-matching service, called Coursera Career Services. Some high-profile tech companies have already signed up—including Facebook and Twitter, according to a post on Coursera's blog, though officials would not disclose how much employers pay for the service. Only students who opt into the service will be included in the system that participating employers see, a detail stressed in an e-mail message that Coursera sent to its nearly two million past or present students on Tuesday.

Each college offering a course through Coursera is also given the chance to opt out of the service—meaning that if a college declines, then no students in its courses can participate in the matchmaking system.

"Some universities are still thinking it through, so not all have said yes," Andrew Ng, a co-founder of Coursera, said in an interview on Tuesday. "I don't think anyone said, 'No now and no in the future,'" he added. "This is a relatively uncontroversial business model that most of our university partners are excited about."

Udacity, another company that provides free online courses, offers a similar service. Udacity works directly with professors to offer courses, rather than signing agreements with colleges.

Profile of Maria Popova (Brain Pickings) in the NY Times:

She has faced criticism, of course. She has been dismissed as elitist and condescending. An initiative she helped start last spring, the Curator’s Code, which called for more respect and attribution in the Twittersphere, was harshly criticized. Ms. Popova responded in a blog post that began, “In times of turmoil, I often turn to one of my existential pillars of comfort: Albert Einstein’s ‘Ideas and Opinion.’ ” She ended with this thought: “There is a way to critique intelligently and respectfully, without eroding the validity of your disagreement. It boils down to manners.”

Old-fashioned, indeed.

As for her future, Ms. Popova said she had little interest in expanding her brand. “I get asked all the time, ‘How’s it going to scale?’ ‘What’s next?’ ” she said. “What I do is what I do, and I don’t think I’m ever going to change that.” The woman who rails against her contemporaries for turning their backs on old books said she had no interest in writing one. “That’s such an antiquated model of thinking,” she said. “Why would I want to write something that’s going to have the shelf life of a banana?”

Long interview with Tim Cook of Apple in Businessweek:

The key in the change that you’re referencing is my deep belief that collaboration is essential for innovation—and I didn’t just start believing that. I’ve always believed that. It’s always been a core belief at Apple. Steve very deeply believed this.

So the changes—it’s not a matter of going from no collaboration to collaboration. We have an enormous level of collaboration in Apple, but it’s a matter of taking it to another level. You look at what we are great at. There are many things. But the one thing we do, which I think no one else does, is integrate hardware, software, and services in such a way that most consumers begin to not differentiate anymore. They just care that the experience is fantastic.

So how do we keep doing that and keep taking it to an even higher level? You have to be an A-plus at collaboration. And so the changes that we made get us to a whole new level of collaboration. We’ve got services all in one place, and the guy that’s running that has incredible skills in services, has an incredible track record, and I’m confident will do fantastic things. Jony [Ive, senior vice president of industrial design], who I think has the best taste of anyone in the world and the best design skills, now has responsibility for the human interface. I mean, look at our products. (Cook reaches for his iPhone.) The face of this is the software, right? And the face of this iPad is the software. So it’s saying, Jony has done a remarkable job leading our hardware design, so let’s also have Jony responsible for the software and the look and feel of the software, not the underlying architecture and so forth, but the look and feel.

I don’t think there’s anybody in the world that has a better taste than he does. So I think he’s very special. He’s an original. We also placed Bob [Mansfield, senior vice president of technologies] in a position where he leads all of silicon and takes over all of the wireless stuff in the company. We had grown fairly quickly, and we had different wireless groups. We’ve got some really cool ideas, some very ambitious plans in this area. And so it places him leading all of that. Arguably there’s no finer engineering manager in the world. He is in a class by himself.

Some interesting ideas (relevant for books) on better magazine publishing for digital from Craig Mod:

A Subcompact Manifesto:

Subcompact Publishing tools are first and foremost straightforward.

They require few to no instructions.

They are easily understood on first blush.

The editorial and design decisions around them react to digital as a distribution and consumption space.

They are the result of dumping our publishing related technology on a table and asking ourselves — what are the core tools we can build with all this stuff?

They are, as it were, little N360s.

I propose Subcompact Publishing tools and editorial ethos begin (but not end) with the following qualities:
Small issue sizes (3-7 articles / issue)
Small file sizes
Digital-aware subscription prices
Fluid publishing schedule
Scroll (don’t paginate)
Clear navigation
HTML(ish) based
Touching the open web

Two interesting data modeling/visualization projects:

The expansion of Printing across Europe during the 15th century (The Atlantic):

Harvard's metaLAB is "dedicated to exploring and expanding the frontiers of networked culture in the arts and humanities," pursuing interdisciplinary research like this fascinating look at the spread of printing across Europe in the 1400s. Drawing on data from the university's library collections, the animation below maps the number and location of printed works by year. Watch it full screen in HD to see cities light up as the years scroll by in the lower left corner. Matthew Battles, a principal and senior researcher at metaLAB and past Atlantic contributor, describes the research and technology that went into the visualization in an interview below.

And Bombsite, a project that shows where bombs fell on London during the Blitz.

The Bomb Sight project is mapping the London WW2 bomb census between 7/10/1940 and 06/06/1941. Previously available only by viewing in the Reading Room at The National Archives, Bomb Sight is making the maps available to citizen researchers, academics and students. They will be able to explore where the bombs fell and to discover memories and photographs from the period.

The project has scanned original 1940s bomb census maps , geo-referenced the maps and digitally captured the geographical locations of all the falling bombs recorded on the original map. The data has then been integrated into 2 different types of applications:

And a good day in Sport:

Manchester United and a very exciting game (Guardian)

England Cricket win (Guardian)

MediaWeek (Vol 5, No 45): Flatworld Knowledge, McGraw Education, Conde Nast + More

Things were so bad last week, I actually read a paper newspaper, maybe things can get back to normal this week.

Hoboken from the storm (WaPo)

Education textbook trailblazer Flatworld Knowledge is changing their business model to paid rather than free content (IHE):

As usage of Flat World’s materials increased (the company’s latest promotional materials assert that the texts are being used in more than 4,000 classrooms at 2,000 institutions), the company became a darling of supporters of open educational resources and critics of high textbook prices. A 2010 report commissioned by the Student PIRGs, for instance, heralded open textbooks as “the path to textbook affordability.”

But that’s only true if the providers of open textbooks can make their materials available sustainably, and the shift in gears by Flat World Knowledge suggests that, for one company at least, providing free and open textbooks is not a viable business plan. While company officials hoped that they’d be able to persuade many of the consumers of the basic, free versions of its textbooks to pay for printed copies or versions enhanced with study aids and other add-ons, “we don’t convert [from free to paid] as much as we used to,” said Shelstad, the Flat World co-founder.

Economic viability is not the only reason Flat World is dumping the free model, Shelstad said. So is fairness. Some of the company’s 15 current institutional partners pay a $20-$25 licensing fee for every student whose use of the materials they subsidize, and others pay less. Raising the minimum price for use of the materials to $19.95 (the company’s tab for its Study Pass product, which includes the full online textbook, note-taking, highlighting and study aids) is fairer and still affordable for students, Shelstad said.

McGraw Hill sees lower results in advance of their Education sell-off (FT):

Several analysts had expected a decision in mid-to-late October over the future of McGraw-Hill Education, which competes in the school and higher education market with Pearson, owner of the Financial Times.

Terry McGraw, chairman and chief executive, told analysts that he would have news on the plans for the education division “in the coming weeks and hopefully sooner”.

“Critical to this decision is ensuring that we choose the option that maximises shareholder value,” he said.

Operating profit at McGraw-Hill Education fell 20 per cent, or 15 per cent when costs of the group’s restructuring programme are excluded. Most of the decline stemmed from weak US state and local spending on schools.

Revenues in McGraw’s school education group fell 16 per cent, while professional, higher education and international revenues slipped 6 per cent. About a third of the fall was because of revenues being deferred as the business moves from publishing textbooks to selling more digital subscriptions.

Also from the FT a look at Bertelsmann's Thomas Rabe (FT):

Mr Rabe thinks he is. Although low key – he wears sober dark suits and drives a Mini – he has a self-assurance that has driven some colleagues to distraction. One reason his predecessor Hartmut Ostrowski quit as chief executive late last year, according to people familiar with events, was that he “was tired of having someone by his side who always signalled he could do things better”.

How does Conde Nast see their future? (Folio):

“The post recessionary moment is really the introduction of alternative platforms that takes the pressure off of the print business, but doesn’t replace the print business,” he said. “Our print business continues to grow post-recession, but this year is a miserable year. Not because of Condé Nast or any other media company, but because of the anemic U.S. economy—nobody can escape the problems the U.S. economy imposes on us.”

Townsend said Condé Nast’s Web business has grown at half the rate expected so far this year, by about 15 percent topline growth, and print has also been trending upward despite the current fiscal climate.

“Even in this worst moment that any of us can remember with the U.S. economy, the print business continues to grow and the margins are sharper—the growth profit margins are mouth watering,” he said. However, he added, with “net margins, we try to run at 10 percent [but] we’re going to fall short of that on the print side, but we are still an expanding business. When this economy recovers, and it must for all of us, the print business is going to be on fire.”

The print business model will now be complimented by a variety of assets, said Townsend, including, digital and mobile, among others. In November, the company will also announce that it is increasing rate-bases for several of its titles due to growing digital tablet circulation, which Townsend estimated to be around 1 million, or close to 10 percent of total circulation.

A long look at how Paul Reid undertook to finish William Manchester's biography of Churchill (Times):

In 1996, The Palm Beach Post assigned Paul Reid to cover the reunion of a group of veteran Marines from World War II that included William Manchester. Although Manchester was too ill to attend, Reid got along so well with the other Marines that in 1998 they invited him to join them on a trip to Manchester’s home in Middletown. Reid and Manchester bonded over their mutual love of military history and eventually became such close friends that Manchester revealed to Reid the trouble he was having finishing his Churchill biography.

Reid regularly traveled from Florida to visit Manchester in his home, always trying to raise his new friend’s sagging spirits. During one visit, on Oct. 9, 2003, the two men sat in Manchester’s bedroom drinking — whiskey in Manchester’s case, red wine in Reid’s — snacking on popcorn and watching the Boston Red Sox try to upset the New York Yankees for the American League pennant. Reid says he noticed Elmore Leonard’s novel “Maximum Bob” on the bed. After the game, Manchester asked Reid to retrieve a large suitcase from his study. It was a big room, more than 16 feet long, with an oversize desk taking up most of one wall; Yousuf Karsh’s famous photograph of Churchill and a picture of Jacqueline and John F. Kennedy autographed for Manchester by the first lady were on display. What Reid noticed most of all, though, were the empty wastebaskets, the still-sharp, unused pencils, the uncluttered desktop. The room was more like a museum exhibit than a working office.

In Reid’s telling, he brought the suitcase to Manchester, who had another whiskey and told him to have a seat. “I’d like you to finish the book,” he said. At first, Reid thought Manchester meant he wanted him to read aloud from “Maximum Bob,” much as Manchester himself had read “Huckleberry Finn” to an ailing, elderly Mencken years before.

UAE is providing all students with iPads (NYTimes);

The plan to offer iPads across the U.A.E.’s three main higher education institutions has been in the works for one year by government decree. With the support of the government, a team of specialists visited Apple’s headquarters in Cupertino, California, in April to form a partnership and agree on training services for teachers and students.

Apple then completed a feasibility study to determine that the campuses had the proper infrastructure for the project. They shipped 14,000 iPads to the country and asked faculty members for their opinions on which 20 free applications should be downloaded for student use.

Teachers were “panicky” before they realized how easy it would be to use the device, said Andrew Blackmore, curriculum supervisor at Zayed University. He added that educators were now working directly with Apple to develop their own apps and create their own reading material as e-books on iBooks Author. By reducing paper use and waste, the iPads also promote environmentally friendly values in a region where fast cars and massive shopping malls rely on low-cost energy without thinking twice.

Photos from the storm (Atlantic)

MediaWeek (Vol 5, No 22): Orlando's "History"; Preserving Digital Archives, Publisher Apps + More

Apparently some relatively standard fact checking of the 2007 book by Orlando Figes The Whisperers: Private Life in Stalin’s Russia which was being translated into Russian has thrown up some 'minor and major' errors.  The project has been abandoned. (The Nation)

In 2004 specialists at the Memorial Society, a widely respected Russian historical and human rights organization founded in 1988 on behalf of victims and survivors of Stalin’s terror, were contracted by Figes to conduct hundreds of interviews that form the basis of The Whisperers, and are now archived at Memorial. In preparing for the Russian edition, Corpus commissioned Memorial to provide the original Russian-language versions of Figes’s quotations and to check his other English-language translations. What Memorial’s researchers found was a startling number of minor and major errors. Its publication “as is,” it was concluded, would cause a scandal in Russia. This revelation, which we learned about several months ago, did not entirely surprise us, though our subsequent discoveries were shocking. Separately, we had been following Figes’s academic and related abuses for some time. They began in 1997, with his book A People’s Tragedy, in which the Harvard historian Richard Pipes found scholarly shortcomings. In 2002 Figes’s cultural history of Russia, Natasha’s Dance, was greeted with enthusiasm by many reviewers until it encountered a careful critic in the Times Literary Supplement, Rachel Polonsky of Cambridge University. Polonsky pointed out various defects in the book, including Figes’s careless borrowing of words and ideas of other writers without adequate acknowledgment. One of those writers, the American historian Priscilla Roosevelt, wrote to us, “Figes appropriated obscure memoirs I had used in my book Life on the Russian Country Estate (Yale University Press, 1995), but changed their content and messed up the references.” Another leading scholar, T.J. Binyon, published similar criticism of Natasha’s Dance: “Factual errors and mistaken assertions strew its pages more thickly than autumnal leaves in Vallombrosa.

Some may remember Figes as the classy guy who was writing derogatory reviews on Amazon of books by his colleagues.

Who collects the 'memories of a nation' in the digital age? Dame Lynne Brindley CEO of the British Library has an opinion. (New Statesman)

It is a matter of great regret that it will never be possible to plug the gap in our understanding of UK opinion about major social and cultural issues at the very beginning of the digital age. Will academics in the future feel the same sense of loss about some of this material that we feel today about the missing works of Ancient Greece’s greatest writers and thinkers?
The UK has been in the slow lane when it comes to preserving digital material. Non-print legal deposit is now widespread internationally, including much of Europe, Canada and New Zealand. It is two years since the United States Library of Congress announced that it would be keeping copies of every Tweet. The latest version of the UK Government’s proposed regulations is less than perfect. It would exempt start-ups and micro businesses from depositing offline publications or the need to provide passwords to enable us to harvest their websites.

The head of McGraw Hill Education got some press in the past week or so for suggesting that textbooks are on borrowed time. Only a little self interest of course.  (Converge)

And what they want from us is, "Help me improve my performance. You improve my performance, learning company McGraw-Hill, then we will improve your performance." So it allows us to more aggressively invest back into our learning materials, and other kinds of things as well.

For example, we're probably where IBM was in the early- to mid-90s. IBM had their mainframes and is the ubiquitous case study. Then they had to move into services or products that their customers valued more.
In the end, it's not only about investing more in materials that will improve performance, but it's investing in our capability to provide other services to colleges and institutions, like retention services or online enablement services. The move toward e-materials allows us to change our business model entirely in many ways.

 More about magazine publishers but Tech Review on "Why Publisher's Don't Like Apps"

But the real problem with apps was more profound. When people read news and features on electronic media, they expect stories to possess the linky-ness of the Web, but stories in apps didn't really link. The apps were, in the jargon of information technology, "walled gardens," and although sometimes beautiful, they were small, stifling gardens. For readers, none of that beauty overcame the weirdness and frustration of reading digital media closed off from other digital media.
Without subscribers or many single-copy buyers, and with no audiences to sell to advertisers, there were no revenues to offset the incremental costs of app development. With a couple of exceptions, publishers therefore soured on apps. The most commonly cited exception is Condé Nast, which saw its digital sales increase by 268 percent last year after Apple introduced an iPad app called Newsstand that promoted the New York publisher's iPad editions. Still, even 268 percent growth may not be saying much in total numbers. Digital is a small business for Condé Nast. For instance, Wired, the most digital of Condé Nast's titles, has 33,237 digital replica subscriptions, representing just 4.1 percent of total circulation, and 7,004 digital single-copy sales, which is 0.8 percent of paid circulation, according to ABC.

From Twitter:

Bookseller Waterstones will begin selling Amazon's Kindle e-readers. Critics think the move is mad Economist

Alain de Botton to make highbrow porn Telegraph

Nook Color: Perfect for Magazines

From the NYTimes,

Recent best-seller lists for magazines on the Nook Color bear this out. Magazine top sellers include US Weekly, Shape, Women’s Health and Every Day with Rachael Ray. Men’s magazines like Maxim and Men’s Health rounded out the top 20 late last week, but they were the outliers.

On the surface, the reason for the strong performance of female-oriented publications on the Nook is relatively straightforward. Generically speaking, the iPad and other tablets are men’s toys, while the Nook Color and other e-readers are more popular with women. According to data from Forrester Research, 56 percent of tablet owners are male, while 55 percent of e-reader owners are female. Women also buy more books than men do — by a ratio of about 3 to 1, according to a survey last year by Bowker, a research firm for publishers — and are therefore more likely to buy devices that are made primarily for reading books.

...

Not only have the terms of selling magazines on the Nook Color been comparatively easy to negotiate, but the process of creating electronic versions of magazines is also far easier and less expensive than it is to create an iPad edition. Publishers need only send a PDF of their latest issue, and Barnes & Noble takes care of the rest.

“As soon as a magazine is ready to send its pages to the printer, they send them to us,” said Jonathan Shar, Barnes & Noble’s digital newsstand manager. “It’s very efficient, and that’s part of our strategy. We knew that was important to publishers.”

The Curator and the Docent

Walking around a vast museum can be interesting and, sometimes serendipitous, but often it is an incomplete experience. Items are organized in specific groups yet not always in a manner that encourages exploration of the most important items. Presented with a gallery full of amphorae, it can be difficult to recognize the single important item while on your own and without a guide. Surfing the web for information and knowledge can offer a similar experience: Access and proximity is no guarantee you will happen on relevance. 

Museums and libraries are good proxies for the concept of “curation,” which we’re hearing a lot about at the moment. Private equity (for one) has found its next buzz word and funding vultures are lacing their presentations with references to ‘curation’ in an effort to gain financial support for their new business ideas. But curation is an old concept: Television networks, newspapers, magazines, journals and other media have all practiced a form of content curation for hundreds of years. We’ve just recently latched onto the idea of curation as though it were something new. 

The need for curation in the old media world wasn’t as obvious as in the internet world because, on the web, ‘everything carries the same weight’ and the average user has difficulty discerning good content from bad. Indeed, as content on the web exploded over the past fifteen years, users accepted the “good enough” concept – free content was plentiful – and were content to ‘satisfice’ either knowingly or obliviously. User behavior and expectations are changing and investors are now chasing businesses that profess to actively curate content and communities of interest. In recent years content curation has emerged out of the wild, wild, west of ‘mere’ content. Sites such as The Huffington Post, Red State and Politico all represent new attempts to build audiences around curated content. While they appear to be successful, at the same time there are other sites (such as Associated Content and Demand Media) contributing to the morass of filler content that can plague the web users’ experience. 

The buzz word ‘curation’ does carry with it some logic: As the sheer amount of information and content grows, consumers seek help parsing the good from the bad. And that’s where curation comes in. The amount of content available to consumers – much of it free of charge, but scattered across thousands of websites – is growing exponentially every day. At the same time, consumers are increasingly doing independent research and attempting on their own to source important information to support their increasingly complicated lives. Questions or information relating to healthcare, finances, education and leisure activities represent a small sample of the range of topics on which consumers look for accuracy and relevance, yet encounter an immense sea of specious or outdated content. 

In many ways, the web - in its entirety - is the new dictionary, directory or reference encyclopedia, but users with specific interests are increasingly beginning to understand they need to spend as much time validating what they find as they do consuming their research. In the old days, it was as simple as pulling the volume off the shelf and, while the web offers a depth and accuracy of content that far outstrips any from the old days, finding content of similar veracity can be a challenge. 

For the past two years, I was working on a project with Louis Borders at Mywire.com in an attempt to build a curated news and information service we called Week’sBest. For a variety of reasons we put the project on hold in February, but the concept was simple: Identify experts that can curate content on a range of specific topics and build a community of interested subscribers around the content. Our model was to find expert ‘content producers’ who retain unique knowledge and understanding of a specific topic and would filter content from across the web specific to their topic of expertise. Mywire.com built a unique editorial tool to make this process almost routine by pre-selecting topic-specific content from both brand name sources and from across the web. Our experts - the content producers – logged on each day and selected from this pre-sorted list only those items they considered the best content. 

Consumers interested in each of these topics subscribe to a free weekly email digest of the material selected. Our revenue model was based on turning a subset of our free email subscribers into paid subscribers who would gain access to high-quality content – such as content from Oxford University Press. While we were unable to execute as we expected, we did gain validation of our concept from both the publishing and the private equity community. 

Publishers, who we were chasing to be our ‘content experts’ liked that there was a low cost of entry for their participation and liked the editorial platform we had invested in. The equity community liked the ‘curation’ model, the people involved in the project and the investment that Mywire had made in the platform. However, we suffered the ‘prove it’ syndrome. Both publishers and equity partners wanted to see the model work before they committed and we ran out of time and resources. Mywire.com continues to invest in other curation type models. I remain convinced that applying technology to the selection of useful, valid and appropriate content is only part of the solution. 

At Mywire, we used a text mining tool as part of the editorial process and on simple news items – which are increasingly generic – placing content items into subject/topic groupings was relatively easy. The process isn’t perfect and requires frequent ‘fine tuning’ but while the tools are improving, human intervention is still required. Earlier this month we learned that even Google was applying some human filtering to their news site. There is a real debate whether consumers will pay for real expertise and knowledge: I believe they will, just as they paid for specialist magazines, journals, cable channels and similar media in the analog centuries. 

The atomization of content has complicated matters in that it has taken the proverbial covers off the print limitation of the traditional magazine. While a reader or subscriber will buy into the expertise of ‘Glamour’ or ‘Men’s Health,’ they now expect all important and relevant content and not just the content prepared by the magazine’s writers. After all, there is a low hurdle in the user’s ability to search for content on their own and it is silly to ignore this ability. Acting as a ‘content producer,’ the editors of ‘Glamour’ should be able to provide their paying subscribers with a collective representation of all content that’s important and relevant to their readers even if the content is produced by Glamour’s competitors. This is an important service and doesn’t limit the ability of Glamour to produce their own content; rather, it enhances it because they are able to view in detail the interests of their subscribers and produce applicable content to match. 

In the above example, generic news is never going to be the basis for paid subscriptions. For example, the news that suntan lotion causes skin cancer is a hyped news story. In the Glamour example, this news story would always remain in the free section of their site; however, available to subscribers would be a curated selection of in-depth content including reference material, added to over time, with commentary and discussion from their ‘expert’ editors and advisors about the real issue of sun protection products. 

With a brand such as Glamour, the number of expert curated topics made available to subscribers could easily exceed fifty and over time would be likely to grow. Strongly associated with this approach would be the development of communities around each topic, leading in turn to additional business opportunities such as ad programs, events and special publishing programs. The interest of consumers across a wide variety of subjects and topics continues unabated and the internet has only facilitated that interest, although our expectations have been reduced or marginalized due to undifferentiated content. 

The consumer is increasingly smarter about the content they consume and they also continue to impress with their ability to seek out and absorb what, in the analog world, was considered too “advanced” for their understanding. There was always an arbitrary wall between “professional or academic” content and consumer content: Increasingly, consumers are making it clear that they want to make the decision themselves whether particular content is or is not too advanced for their comprehension or enjoyment. 

Recently, as I wandered around a museum with overwhelming breadth and depth of content, I was lucky to be guided in my travels by a professional. When she introduced herself to me, she used the term ‘docent’ to describe her function. A docent is a ‘knowledgeable guide’ and the function seems to me to perfectly complement the process of curation. In an online world, where more and more content appears to “carry the same weight,” we will look to and pay for the combination of curator and docent – sometimes the same person or entity – who can organize and manage a range of content and also engage with the user so they gain insight and meaning from the material. 

At Mywire.com, we intentionally approached branded media companies because they were recognized as experts in their segments. These are the companies which should be able to build revenue models around the curation of content to offer subscribers a materially different experience than simply performing a Google search query delivering up generic news and semi-relevant content.

New Adventures with Alan Moore and Dodgem Logic

I'm not a huge comic book readers but I did find this article in last weeks Saturday Telegraph magazine very interesting about Alan Moore who created The Watchmen. As we pontificate on the future of publishing we mostly forget to recognize that we haven't yet seen the true creativity of the author (and editor) that is key to how the reading experience will morph. It is a talent like Alan Moore that will move us in these new directions (Telegraph):

Is an underground magazine a sustainable proposition as the print media come under threat? “I think that in an increasingly virtual world, lovingly produced artefacts are at a premium,” he says. “But I haven’t really got a business plan, and I don’t expect to make a profit on it. A good result for me is to pay all the contributors, and then anything left over we’re going to plough back into the neighbourhood.” A Dodgem Logic hamper is planned for the elderly people of his old manor this Christmas and Moore’s old adversaries DC Comics, whom he told never to contact him again after a dispute over the rights to Watchmen, may be surprised to learn their sales are funding the project. “After that wretched film, Watchmen is now selling everywhere,” he says, “and much as I’m sure it pains them, that means they have to send me huge cheques every three months. I’ve got enough to cover my needs and I’d probably feel guilty if I wasn’t doing something for the area I’ve come from.”

Future issues of Dodgem Logic should include a contribution from Moore’s friend Iain Sinclair, a long piece on anarchy by Moore (“I’ve become very attracted to the Athenian lot system as a system of government that anarchists might go for”), several pages curated by Damon Albarn’s band Gorillaz and a possible interview with David Simon, the writer of The Wire. But he’s keen to ensure it remains diverse and “that all our contributors, from the famous to the completely unknown, are treated in exactly the same way”. He’s already entrusted the next “women’s column” to a young mother from the area and has commissioned a piece by a former local police officer to run alongside an article by a former member of the CIA

Perhaps what hits home for me is that Moore's activities connected several threads in my own mind about projects that I would like to work on combining elements of magazine publishing, self-publishing, annual adventure books and photography. On the surface a strange mixture but if I could only find the time I could show you.

A Magazine Future from Bonnier

Mag+ from Bonnier on Vimeo.

The above is a more sophisticated look at what a designed for the web magazine could look like. Several weeks ago I linked to a design concept from Sports Illustrated but this takes things a little further. Things move fast, and I wouldn't be surprised to see a production version(s) like this by the end of 2010 and I (almost) guarantee that you will see at least one major book publisher experiment with a non-fiction title on one of these devices: I do mean 'experiment' and not just slapping the content into epub.

In this video, Jack Schulze explains how they conceived their idea of the digital magazine and at The Guardian, tech editor Bobbie Johnson asks some further questions (Guardian):

What does that mean exactly? Öhrvall explained that the company has done a lot of research to try and understand what it is about magazines that readers enjoy, rather than make certain assumptions about what people do and why."We have done extensive research about consumer behaviour reading print magazines, trying to understand the real drivers behind the emotional attachment people have to magazines... drivers important to translate to a digital world. Furthermore, we have looked into existing digital magazines and analysed why they have failed. We have also done market studies in Japan and South Korea where the use of media in digital media is much more extensive and advanced.This basic research may seem a no-brainer, but it's funny how often the media business relies on self-fulfulling guesses - people often glide over the differences between what customers want and what is convenient for the publisher, often confusing one with the other or amalgamating the two (that's something my colleague Roy Greenslade alluded to in a recent piece).

Maggwire.com: The iTunes of Magazines?

I've been going to monthly meetups for the NY Tech group for the past year and they are a lot of fun (I've mentioned one of two presentations shown there in the past year - Snooth is one). At these meetings start-up companies are given five minutes to present their company and answer questions from the audience. The response from the audience is generally positive; however, the audience are not afraid to challenge the presenters over some aspect of their offering and worse not ask any questions if the company has failed to inspire. Each monthly meeting has about 700 attendees.

Last night one of the presenting companies was Maggwire.com which was started earlier this year by a group of ex-bankers. The company is attempting to aggregate magazine content into one experience so that a user can subscribe via one service to multiple content sources. The user then pays a low monthly payment to access the content. Currently, the product is in beta but the founders said the monthly fee could be as low as $1.99 for a base package with an extra fee per additional content source. If this reminds you of cable television then you're on the right track. At Mywire.com where I have been spending a lot of my time in the past two years we have a similar model however our monthly fee is $4.99 and we plan to offer a wider variety of content and only content that is unavailable free.

Maggwire is currently hosting aggregated content the is 'in the public domain' which is a troubling way of putting it but the company is in discussions with all the media companies about forming what amounts to distribution deals for their content. Unless the publishers restrict availability to their content - raise pay walls for example - Maggwire and other companies like this are unlikely to gain traction with subscribers. There is just too much free content and consumers will be unhappy if they find content they think they are paying for on the open web. The convenience of one location for content is a benefit that will only go so far.

Playboy Archive Launched on the Web

If you are looking to read some really great articles, short stories and profiles, well your boat just came in.

My friends at Bondi Digital have launched the playboyarchive which covers the years 1954 to 2007 of one of the iconic brands in publishing and media. Each edition appears as it did when published, complete with articles and advertising and there's even some photography! The company behind this effort - Bondi Digital, has a growing track record in taking the archives of well-known magazines and creating a database and visual representation of the original verison. Launched under the Cover-to-Cover brand, the company has done this with The New Yorker, Playboy and Rolling Stone. Each of these titles was orginally published on DVD form and packaged together with a companion book. In the case of Playboy, the original idea had been to launch the Playboy collection by decade and Bondi began that process 2 years ago with the 1950s issues.

In addition to launching the Playboy web version they have also announced that they will launch a similar online archive using the Rolling Stone content. Currently access is free to the archive and they don't have current plans to charge.

I interviewed David Anthony one of the company founders just after they completed the first Playboy DVD - here.

UK Retail Magazine Distribution Upheaval

The Guardian reports (and Dawson confirms) that Frontline a joint venture of three magazine publishers has decided not to renew their distribution agreement with Dawson Holdings. The agreement that covered approximately 1,000 magazine titles that were distributed to newstands, agents and stores across the UK will be split between Smith News and Menzies. While the change will not happen for 12mths some observers are suggesting a duopoly may not be in the best interests of the market.

Dawson Holdings provides distribution for various types of media content including distribution into the UK library market. The company indicated that this contract is worth £116 million and compares to total revenues for Dawson News of £690 million. Since the contract still has 12mths to run the company is in the process of determining its options.

Publishers in many markets are looking for improved efficiency and this situation in the UK is another example of that. As the Guardian writes:

The move is part of an efficiency drive by Frontline, jointly owned by Bauer Media, the FHM publisher, Haymarket, whose titles include the advertising industry bible Campaign, and BBC Magazines. In common with other publishers, they are trying to cut costs by reducing the number of local and regional wholesalers used to deliver titles to the 55,000 retailers in the UK that stock them.

Frontline and its competitors, which include Comag and Seymour, deliver from their printing presses to regional warehouses owned by distributors. The industry used to be dominated by a network of local and regional distributors, many of which had monopolies in certain parts of the country, but in recent years the big magazine companies have tried to rationalise their distribution operations.

In the US, readers will be aware of a similar set of circumstances involving Anderson News and Source Interlink which sought to extract more money from publishers for distribution. With a declining marketplace and increasing costs publishers and distributors are aggressively looking for efficiencies and consolidation -thereby spreading costs across more publications - is a viable option. Whether this places too much market power in the hands of SmithNews and Menzies remains to be seen.

Reader's Digest May Restructure

According to Bloomberg news, Reader's Digest may be considering a pre-packaged bankruptcy and have hired expert law firm Kirkland and Ellis to advise the company. Reader's Digest founded in 1922 and located north of New York city publishes magazines, books and audio products and operates numerous web sites. (The company is actually more web-savvy than most people probably give it credit for). The company was purchased for $2.4Billion by investor group Ripplewood Holdings in March 2007. Bloomberg also quotes a Moody's report from earlier this year that suggests the debt load of the company is unsustainable and also notes the lay-offs that Reader's Digest announced two weeks ago.

Moody’s said in a credit opinion Feb. 18 that Reader’s Digest’s capital structure appears “unsustainable” and may violate its covenants or restructure within the next year to 18 months. The company faces pressure on cash flow from declining demand for its print-based products and a drop in consumer spending, the ratings firm said. The company also has a high debt-to-EBITDA ratio, Moody’s said.

Reader’s Digest announced Jan. 28 it would eliminate about 8 percent of its 3,500 employees worldwide, citing a drop in consumer spending and magazine advertising in most markets. Reader’s Digest also said at the time it would require U.S. workers to take five days of unpaid time off in each of its 2009 and 2010 fiscal years, and suspend matching contributions to 401k retirement plans.

Restructurings, significant lay-offs and bankruptcies are coming fast and frequently in the media business, particularly newspapers and magazines. While many of these companies have few choices given their reliance on collapsing advertising revenues and their crushing debt loads, as a group, they do not appear to be addressing how their customers will interact with their content in three to four years time. Even if they get out of this immediate crisis by rearranging the deck chairs tomorrows customers may have moved on, content to interact and use content in fundamentally different ways.

Source Interlink Expands!

The anti-trust suit that Source Interlink bought against Time and several other publishers two weeks ago has been dropped - although the press release only refers to Time. Readers may recall that SI received a preliminary injunction that forced SI's existing customers to continue shipping product to them. According to the press release the company's used the strength of their long standing relationship to reach an agreement on a multi-year contract. No comment about whether SI has been successful in imposing any additional fee on Time Warner as part of this agreement. Speculation would be that if they have it will not be as high per unit ($0.07 per copy)and it will not kick in immediately. If this improves the magazine supply chain at all it will be a good thing.

From their press release:

"I am happy to make this announcement because it means the continuation of what has been a mutually beneficial relationship. We have enjoyed working with our partners at Time and plan to keep working with them for many years to come," declared Greg Mays, Chairman and CEO of Source. "This agreement is effective immediately and assures that we can continue to supply all our mainstream, specialty and international customers with the popular Time titles."

In addition (and hence the post title) SI appears to have picked up a number of important distribution clients out of the rubble that was Anderson News' magazine distribution business. From the press release:

In a separate story, Source Interlink Companies today reported that its magazine distribution unit, Source Interlink Distribution (SID), has been awarded important new business from Wal-Mart Stores, Kroger / Fry's Companies and Basha's Supermarkets. This additional business increases SID's store count by 662 stores in 9 states.

Source Interlink Wins Temporary Restraining Order

Lawyers representing the publishers in the suit brought by Source Interlink have been able to convince a Judge that the case should be heard in New York rather than Florida. Subsequently, the judge in the case agreed to an 'expedited' temporary restraining order requiring publishers to continue to ship their magazines to Source Interlink per their existing distribution agreements. A longer preliminary injunction hearing is set for February 23rd. (BusinessWire). It's probably never a good thing to sue your customers and one wonders how SI is ever going to regain publishers confidence regardless of the outcome of this legal tussle.

Time, American Media, Hachette Filipacchi, and Bauer are the major publishers currently using SI and must comply with this order.

Anderson News Folds the Tent

Anderson News has given up and ceased magazine distribution operations as of Sunday. PND Readers may recall that competing magazine distributor Source Interlink and Anderson wanted to impose a 7cent per copy tax on all magazines they distributed. None of their clients seemed to agree with this and have moved their operations to other providers. From MediaWeek:

The move was far from unexpected. Industry observers have predicted that Anderson, along with Source Interlink Cos., would be forced to shut down after leading newsstand publishers Time Inc., Bauer Publishing and American Media Inc. refused to meet the wholesalers’ demands back in January for an extra 7 cents per copy to deliver their magazines to the nation’s retailers.

The debacle has wreaked havoc on the nation’s newsstand sales, as Time Inc. and co. are expected to see a short-term loss of sale as a result of their wholesaler change.

The latest move by Anderson raises new questions for Comag Marketing Group, which represents Hearst Magazines, Condé Nast and Wenner Media titles. As of the week of Feb. 2, Comag was still relying on Anderson and Source to deliver their magazines.

The disagreement has left magazine publishers scrambling to identify alternative distributors (Anderson and Source represent about 50% of the market) but also to placate advertisers who will be closely watching the amount of lost newsstand sales if titles are not on store shelves when promised (or at all). If rate bases are not met a publisher will be obliged to rebate some amount of the advertising paid by advertisers. In this environment where titles are already perilously thin this is the last thing any publisher will want to contemplate. The SI swim suit issue comes out Feb 1oth which represents big money for Time and they will want to have this situation solved quickly.

There is also the situation with mass market book titles which have had little mention in this disagreement. Without the carry over from the magazine scale, it is doubtful Anderson would continue with books by themselves.

Earlier in the week WalMart indicated many of their customers would have to do without People Magazine (whatever will they do?). (NYPost - with cheesy picture of Ron Burkle)

Wal-Mart, the single-biggest magazine retailer in the country, will be without copies of People, Sports Illustrated and Time. They will also not have Bauer Publications' In Touch and Life & Style, and American Media-owned Star and National Enquirer.

While it's too early to know how many of Wal-Mart's 4,200 US stores will be affected, it appears a majority of them will be.

A Wal-Mart spokeswoman confirmed that some stores are expected to be without magazines this week, but did not offer specifics on the titles or how many stores will be affected.

Early in the week, Source Interlink denied it would exit the business. MediaWeek

Seven Cents Between Life and Death for Magazines

Things are pretty dire in the magazine world with plummeting ad revenues and ever repeating news of shut downs and layoffs. And if the specture of rising paper costs wasn't enough to worry the manufacturing and distribution staff the NY Post reports this morning that one of the business' largest wholesalers is set to impose a 7cent per copy surcharge on magazines it delivers to retailers.

CEO Charles Anderson insisted the new charge would help the company make up lost ground on a business that he said is losing money. The hike would add 3.5 percent to distribution costs, which translates into $200 million more for Anderson News.

"The last thing we want to do is exit this business, but why should we continue in a business where we are not making any money?" Anderson asked publishers on a conference call yesterday to discuss the new fee.

Publishers, which have until Feb. 1 to agree to pay the new fee, are balking at Anderson News' move, which would drive up costs at a time when most magazines are hurting.

If that isn't enough, the company also wants publishers to pick up the cost of unsold inventory sitting in the Anderson warehouse. In recent years, large retailers like Walmart have attempted to force the industry to adopt scan based tracking which effectively enables a retailer to accept inventory but not pay for it unless/until it passes through a register. It is not widely adopted for a variety of reasons including a disagreement over standards as well as publisher's concern over cash flow. Returns, lost copies and general inefficiency have long been issues in the magazine business with some reputable magazines skating through with 20% sell through. Tough love programs like the one Anderson is trying to impose will push many magazines over the edge.

It is debatable whether Anderson will get away with this; however, severe 'right sizing' is going to occur in the magazine business regardless. Watch this space.

Note: Ingram is also a magazine wholesaler but their reaction (if any) isn't noted. Anderson News racks books as well.

Exact Editions And The Directory of Publishing

I have mentioned Exact Editions and their tool set for magazine publisher's in the past, but I was on their site recently and noticed they have loaded up Continuums' Directory of Publishing 2009. Published by the publisher and The Publishers Association this directory is the definitive catalog of UK and Irish publishers. What makes this application of the content interesting is that using the EE toolset users can not only view pages as they are rendered in print but can also dial phone numbers, visit websites and even see the listees physical location on a Google map.

Here is the link.

Rolling Stone Revamps

I recently subscribed to a free year of Rolling Stone magazine and this is the first time I have really looked at it since a girl friend bought me a sub when I was 18. They just revamped the format of the print edition and I must say I really like it. Gone is the newprint larger format version and in comes a more refined, mature dare I say 'professional' version.

Here is Wenner on the change:

The large format was one of Rolling Stone's trademarks — and it became a physical reminder of our roots in San Francisco and of a vital time in our cultural history. That's a lot of history, and it is not without a wistful feeling of sweet memories of those days that we make this change.

It was not a decision we made lightly. We felt this was the right move but remained a little uncertain, knowing this was not just up to us but also in the hands of the large number of passionate and longtime Rolling Stone readers (there are nearly 13 million of you, when you count the number of people who share their copy).

Thus, a few months ago, while putting together our annual summer double issue, we produced a version of that edition in the size and style of the one you now hold and mailed it to 3,000 subscribers to get their thoughts. The response was a major surprise: Readers loved it. We realized that the only reason to resist change was nostalgia.

Meredith Reports Continued Negative Impact from Book Program

Meredith Corporation reported a significant decrease in fourth quarter revenues. Revenues were $385mm versus $428 for the prior period. Earnings per share were $0.41 in 2008 versus $1.05 in the fourth quarter Fiscal 2007. Full year EPS were $2.83 versus $3.31. While the company adjusted these numbers for their 'special charge' associated with business realignment the investment community hit the company hard with their stock price down 6%.

From thier press release:

Meredith recorded an after-tax special charge of $16 million in the fourth fiscal quarter, related primarily to the further repositioning of its book publishing business and selected reductions in force. The special charge included adjusting certain book royalties, art and editorial, and inventory accounts, as well as severance for eliminated positions in book and elsewhere in the Company.

In particular the following line items were noted: Increase in book sales return allowance, a write-down of book inventory and editorial prepaid expenses and severance expense, write-down of book royalty, and bad debt reserve for Home Interiors Group receivable.