MediaWeek (Vo 14, No 3) Clarivate to buy Proquest in $5.3B deal, Remember Reading, RB Media Acquires, Controversial Book Deals

Clarivate (ex Thomson Reuters company) announced their intention to acquire Proquest.  From the press release:

Clarivate plc (NYSE: CLVT), a global leader in providing trusted information and insights to accelerate the pace of innovation, today announced a definitive agreement to acquire ProQuest,  a leading global software, data and analytics provider to academic, research and national institutions, from Cambridge Information Group, a family-owned investment firm, and other partners including Atairos, for $5.3 billion, including refinancing of ProQuest debt. The consideration for the acquisition is approximately $4.0 billion in cash and $1.3 billion of equity. The transaction, which is subject to customary closing conditions, including regulatory approvals, is expected to close during the third quarter of 2021.

With a mission to accelerate and improve education, research and innovation, ProQuest delivers content and technology solutions to over 25,000 academic, corporate and research organizations in more than 150 countries. The acquisition will establish Clarivate as a premier provider of end-to-end research intelligence solutions and significantly expand its content and data offerings as the addition of ProQuest will materially complement the Clarivate Research Intelligence Cloud™. 

Why We Remember More By Reading (The Conversation)

The benefits of print particularly shine through when experimenters move from posing simple tasks – like identifying the main idea in a reading passage – to ones that require mental abstraction – such as drawing inferences from a text. Print reading also improves the likelihood of recalling details – like “What was the color of the actor’s hair?” – and remembering where in a story events occurred – “Did the accident happen before or after the political coup?”

Studies show that both grade school students and college students assume they’ll get higher scores on a comprehension test if they have done the reading digitally. And yet, they actually score higher when they have read the material in print before being tested.

Educators need to be aware that the method used for standardized testing can affect results. Studies of Norwegian tenth graders and U.S. third through eighth graders report higher scores when standardized tests were administered using paper. In the U.S. study, the negative effects of digital testing were strongest among students with low reading achievement scores, English language learners and special education students.

 New Order: Audio First (WSJ - Paid)

“The Bomber Mafia” is part of an effort by Pushkin Industries Inc., an audio company that Mr. Gladwell co-founded, to become a major provider of highly produced “original” audiobooks. Such projects sound more like podcasts than traditional audiobooks, since they often feature original scores, as well as archival and interview tape.

Industry giants including Bertelsmann SE’s Penguin Random House and Amazon.com Inc.’s Audible also produce high-production original audiobooks with sound effects and a cast of multiple actors, representing significant competition for Pushkin.

RBmedia Acquires McGraw Hill Professional Audiobook Publishing Business

RBmedia, the largest audiobook producer in the world, today announced the acquisition of McGraw Hill Professional’s audiobook publishing business, which includes its catalog of previously published titles, as well as a multi-year agreement to become the exclusive audio publisher for all of McGraw Hill Professional’s new titles.

“We are excited to participate more fully in the rapidly expanding audiobook category by partnering with RBmedia,” said Scott Grillo, President of McGraw Hill Professional. “Leveraging RBmedia’s unique abilities in spoken audio will help us reach business and trade professionals and all those striving to advance their education or careers. RBmedia creates exceptional audio productions that serve our authors well and will help them monetize audio rights at a high level. Our publishing program will be stronger because of this unique collaboration.”

Note: Overdrive purchased RB Digital the company's library platform in 2020 (Press Release) 

Who Deserves a Book Deal - Just about Anyone? (Vox)

Is the industry’s purpose to make the widest array of viewpoints available to the largest audience possible? Is it to curate only the most truthful, accurate, and high-quality books to the public? Or is it to sell as many books as possible, and to try to stay out of the spotlight while doing so? Should a publisher ever care about any part of an author’s life besides their ability to write a book?

These questions are becoming more and more urgent within the private realms of publishing, amid debates over which authors deserve the enormous platform and resources that publishers can offer — and when it’s acceptable for publishers to decide to take those resources away.

Within the media watering hole of Twitter, it can look as though these concerns are being imposed from the outside: by progressive authors calling on their publishers to abstain from signing right-wing writers; by angry YA fans and Goodreads readers; by petitions and boycotts and special interest groups. But the conversation about who deserves a publishing deal is also happening within the glass-and-steel walls of the industry itself.

Employed but Pissed at Simon & Schuster (The New Republic)

Inside Merger Mania: (The Wrap - Register)

On the tail of massive acquisitions in the entertainment and media space, such as AT&T’s $85 billion purchase of Time Warner in 2018, thew 2019 re-merger of ViacomCBS and Disney’s $71 billion acquisition of 21st Century Fox in 2019, major book publishers are embarking on their own consolidations in an effort to cement their place in an increasingly competitive environment. But are any of these major acquisitions anti-competitive, as critics have argued?

*******

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

PND: Digital Transformation: A Seminar for Management

PND: Blockchain for Publishers

PND: Technology News

PND: The Price is Right for Cengage  

PND: The Opportunity in 200MM Students

PND: Mediaweek Reports 

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

 

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 44): McGraw Hill Education, Pearson Acquires, Open Access, TIme Mag's Education + More

Brian Kibby, President of McGraw Hill Higher Education interviewed in Inside Higher Ed

Question 4: It seems to me that in your position as president of McGraw-Hill higher education you have before you the very difficult task of leading an enormous change in how your company operates. For many many years the big educational publishes have made very good money with a model of printed books and digital add-ons. You are saying that by 2015 that traditional educational publisher model will be as dead as Blockbuster video, as dead as the old record stores. How are you going to transform your corporate culture and lead your employees to embrace this change? And why should we expect that any big traditional publisher will be able to evolve to embrace this new digital world, as there are not many very good models in other industries of other legacy companies making similar transitions.

Answer 4: McGraw-Hill Education is a company with over 100 years of experience in education, so obviously it’s a place with some history. But the world and the needs of our customers have changed dramatically, as has the technology now available to help satisfy their demands. Our team has embraced this change whole heartedly. Our culture has become one where we have a passion for creative disruption, especially as it relates to what is important to our customers: improved results, retention, and the ability to become even more competitive in the marketplace.

We’re focused on technology now in a way that we’ve never been before, but we still have that deep respect for content, and I think that our employees really appreciate that.

With regard to other models/industries, I think we’ve had something of a late-mover advantage. A lot is made about how education has lagged behind other areas in adopting technology, and I won’t go into that but to say that the more gradual transition in our space gave us the chance to sit down and really figure out the best way to do digital from a business perspective. Newspapers had to make that choice back in the mid-90s, and the music industry had to face it in the early 2000s. Like everyone else, we needed to figure out how to get people to think about digital as something you pay for, and our answer to that was to make digital products that were worth paying for. I think we’ve been able to do that pretty successfully, and the market has responded well.

Pearson announced its largest acquisition in over five years on Tuesday with the purchase of EmbanetCompass, a provider of digital services such as online degrees to leading non-profit colleges and universities in the US (FT).  From Embanet's website:

EmbanetCompass is the premier provider of online learning services and technological solutions for top-tier academic institutions. We are acutely aware of the dynamics that drive higher education and utilize our experience and expertise to assess, finance, develop, recruit for, market and support online learning solutions for our academic partners.

 A new study suggests that open access publishing is larger than expected (Guardian):

They should be encouraged by Laasko and Björk's study which, fittingly, is published in an open access journal. The Finnish researchers found not only that nearly 17% of research papers worldwide are now published in open access journals, a figure that is two to three times higher than was previously supposed, but also that the exponential rise in open access publishing shows no sign of slowing down.

In the UK, since about 35% of papers are reckoned to be made available through deposition in repositories — the green route — the total percentage of open access papers (52%) looks like it has crossed the half-way mark.

Time Magazine devotes most of its current issue to education.  Here is a sample on MOOCs (TIME)

To compare my online experience with a traditional class, I dropped into a physics course at Georgetown University, the opposite of a MOOC. Georgetown admitted only 17% of applicants last fall and, with annual tuition of $42,360, charges the equivalent of about $4,200 per class.
The university’s large lecture course for introductory physics accommodates 150 to 200 students, who receive a relatively traditional classroom experience — which is to say, one not designed according to how the brain learns. The professor, who is new to the course, declined to let me visit.
But Georgetown did allow me to observe Physics 151, an introductory class for science majors, and I soon understood why. This class was impressively nontraditional. Three times a week, the professor delivered a lecture, but she paused every 15 minutes to ask a question, which her 34 students contemplated, discussed and then answered using handheld clickers that let her assess their understanding. There was a weekly lab — an important component missing from the Udacity class. The students also met once a week with a teaching assistant who gave them problems designed to trip them up and had them work in small groups to grapple with the concepts.
The class felt like a luxury car: exquisitely wrought and expensive. Fittingly, it met in a brand-new, state-of-the-art $100 million science center that included 12 teaching labs, six student lounges and a café. It was like going to a science spa.
Elite universities like Georgetown are unlikely to go away in the near future, as even Udacity’s co-founder (and Stanford alum) David Stavens concedes. “I think the top 50 schools are probably safe,” he says. “There’s a magic that goes on inside a university campus that, if you can afford to live inside that bubble, is wonderful.”

Where does that leave the rest of the country’s 4,400 degree-granting colleges? After all, only a fifth of freshmen actually live on a residential campus. Nearly half attend community colleges. Many never experience dorm life, let alone science spas. To return to reality, I visited the University of the District of Columbia (UDC) — a school that, like many other colleges, is not ranked by U.S. News & World Report.

Disruption in the news business from Nieman Report:

With history as our guide, it shouldn't be a surprise when new entrants like The Huffington Post and BuzzFeed, which began life as news aggregators, begin their march up the value network. They may have started by collecting cute pictures of cats but they are now expanding into politics, transforming from aggregators into generators of original content, and even, in the case of The Huffington Post, winning a Pulitzer Prize for its reporting.

They are classic disruptors.

Disruption theory argues that a consistent pattern repeats itself from industry to industry. New entrants to a field establish a foothold at the low end and move up the value network—eating away at the customer base of incumbents—by using a scalable advantage and typically entering the market with a lower-margin profit formula.

It happened with Japanese automakers: They started with cheap subcompacts that were widely considered a joke. Now they make Lexuses that challenge the best of what Europe can offer.

It happened in the steel industry, where minimills began as a cheap, lower-quality alternative to established integrated mills, then moved their way up, pushing aside the industry's giants.

In the news business, newcomers are doing the same thing: delivering a product that is faster and more personalized than that provided by the bigger, more established news organizations. The newcomers aren't burdened by the expensive overheads of legacy organizations that are a function of life in the old world. Instead, they've invested in only those resources critical to survival in the new world. All the while, they have created new market demand by engaging new audiences.

MediaWeek (Vol 5, No 43): McGraw Hill, Springer, Hilary Mantel, Amazon, Metadata +More

The tires are being kicked at McGraw Hill Education by a predictable group of private equity players (Cengage is backed by Apax) but the asking price looks steep (Reuters):

McGraw-Hill Companies Inc's (MHP.N) education unit is expected to draw final bids from private equity firms Bain Capital and Apollo Global Management (APO.N) as well as rival Cengage Learning Inc, in a deal that could fetch around $3 billion, several people familiar with the matter said.

Cengage, the No. 2 U.S. college textbook publisher, and the two private equity firms are working on final offers for McGraw-Hill Education, the world's second-largest education company by sales, with the bids due later in October, the people said.

McGraw-Hill, which is running the auction as an alternative to its planned spin-off of the business, wants to get more than $3 billion and could still decide against a sale if the bids fail to meet its price expectations, the people said this week.

Note - If you read my post this week about Pearson the Apollo Group owns for profit University of Phoenix making me some kind of fortune teller.

Journals publisher Springer is up for a recapitalization based on reports from Reuters:

The company has performed well and earnings before interest, tax, depreciation and amortisation (EBITDA) have risen to around 330 million euros, bankers said, from 310 million in 2011, which was quoted on EQT's website.
Although there is no urgency for the company to do anything as its debt does not mature until between 2015 and 2017, conditions in Europe's leveraged loan market are such that it could be good time to do an opportunistic deal.
There have been a number of such deals recently as banks and private equity firms seek to make money and take advantage of stronger market conditions, after a lack of deal activity over the summer, including dividend recapitalisations by the RAC and Formula One.

Hilary Mantel interviewed in The New Statesman:

Mantel wondered if she was being too demanding. But then she thought that to adjust her style in any way would be not only a loss, but patronising (“You simply cannot run remedial classes for people on the page”). Some will be lost along the way, but she doesn’t mind. “It makes me think that some readers read a book as if it were an instruction manual, expecting to understand everything first time, but of course when you write, you put into every sentence an overflow of meaning, and you create in every sentence as many resonances and double meanings and ambiguities as you can possibly pack in there, so that people can read it again and get something new each time.”

She can sound arrogant, Mantel, assured of her abilities and candid about them in a way that seems peculiarly un-English. But even the arrogance is purposeful. It is one of her pieces of advice to young authors: cultivate confidence, have no shame in being bullish about your ideas and your abilities. She was patronised for years by male critics who deemed her work domestic and provincial (one, writing about A Place of Greater Safety – the French 800-pager – dwelt on a brief mention of wallpaper). So she makes no apologies for her self-belief.
...

After all the research, the reading, the note-taking, the indexing, the filing and refiling, it is a question of tuning in. Alison, she says, is how she would have turned out if she hadn’t had an education – not necessarily a medium, but not far off, someone whose brain hadn’t been trained, and so whose only (but consi­derable) powers were those of instinct, of sensing, of awareness. Mantel describes herself as “skinless”. She feels everything: presences, ghosts, memories. Cromwell is researched, constructed and written, but he is also channelled. Occupying his mind is pleasurable. He is cool, all-seeing, almost super-heroic in his powers to anticipate and manipulate. (Craig thinks Mantel made the mistake of falling in love with her leading man and that her version of Cromwell is psychologically implausible for a man we know tortured people.) Mantel relishes his low heart rate, the nerveless approach to life, a mental state unbogged by rumination. She says that when she began writing Wolf Hall, first entering this mind, she felt physically robust in a way she hadn’t for years.

Amazon chief Jeff Bezos was on a promo tour in the UK this week and was interviewed in The Telegraph:

He says the business quickly realised that if they wanted to make ebooks work, they needed to make hardware. Eight years later, the Kindle is into its fifth generation. The latest, film and music playing, multimedia tablet takes on Apple’s iPad and is, on pre-orders alone, the site's number one best seller.

Bezos, though, doesn’t want to take on Apple at their own game. “Proud as I am of the hardware we don’t want to build gadgets, we want to build services,” he says. “I think of it as a service and one of the key elements of the service is the quality of the hardware. But we’re not trying to make money on the hardware – the hardware is basically sold at breakeven and then we have a continuing relationship with the customer. We hope to make money on the services they buy afterwards.”

And make money they do, but Amazon is still not Apple’s size. Would Bezos like it to be? “Even though this device is only £159, in some ways it's better than a £329 iPad – way better wifi, the iPad only has mono sound and the Kindle bookstore is by far the best electronic bookstore in the world.”

Colin Robinson writing in the Guardian suggests ten ways publishing can help itself. Extra points if you can find anything either new in this list (Guardian):

This year, on the face of things, it's been business as usual at the Frankfurt book fair, with some 7,500 exhibitors setting up shop in the gleaming white Messe. But scratch beneath the surface and a tangible unease about the future of the industry is evident: book sales are stagnating, profit margins are being squeezed by higher discounts and falling prices, and the distribution of book buyers is ever more polarised between record-shattering bestsellers and an ocean of titles with tiny readerships. The mid-list, where the unknown writer or new idea can spring to prominence, is progressively being hollowed out. This is bad news not just for publishing but for the culture at large.

Three magazine publisher's experience with Apple's Newsstand (Journalism UK)

When Goldsmith delivered presentations on Newsstand at publishing conferences a year ago, he said he would be asked a common question.  "The first question from the audience would be 'aren't you cannibalising your own sales?' And that question would come from our editors as well."  "But 80 per cent of sales are overseas, 90 per cent of customers are new to the brand." And 40 per cent of all of sales are for subscriptions. "That's brilliant, because it is offsetting that sad decline in print.
It is a similar story for Conde Nast. "We are reaching a new audience, we are able to target them in new ways, we are able to market to them in new ways, it's a pretty exciting new development for us," Read said. "It means that the overall circulations of our magazines in these particular instances are growing very healthily so that we are seeing very big increases in circulation with titles such as Wired and GQ." Overseas sales vary from title to title, Read added, "A magazine like Vanity Fair will see quite a big proportion of its iPad sales coming from overseas, something like 60 to 70 per cent will be international, but that applies to print as well.

Metadata on Stage at Frankfurt reported by Publisher's Weekly:

Indeed this is the thrust of their exchange—the ever-increasing numbers of books and the faulty metadata being circulated about them—over the next half hour. The transition from print to digital has made metadata—which can mean anything from an ISBN to customer ranking on Amazon—not just simply useful, both Dawson and O’Leary emphasized, it is now critical to the ability to find and sell a book. The rise of digital publishing, and the lowering of barriers to entry for just about anyone—from professional publisher to newest self-publisher—has resulted in an explosion of metadata of all kinds. And apparently a sizeable chunk of it is either inaccurate or missing outright, compounding the problem of book discoverability. 

“When it was only the print bookstore, BISAC was a luxury,” O’Leary said, “but with all the digital products, we need accurate and granular metadata. It’s what we need to make book discovery possible.” The explosion in the amount of digital book content, “puts pressure on the metadata,” said Dawson, who pointed out that once inaccurate metadata is published online, “it’s there forever. If you’ve ever tried to correct a mistake in the metadata you know it’s a game of Whack-A-Mole.”
In fact in the olden days of print, O’Leary said, “It used to be that once you shipped the book, that was the end, the metadata was done. But with digital it never stops, there are constant updates and changes.” And as more consumers around the world go online they encounter information on all kinds of books, many of which they will want—but will be unable to buy. “Today, every book you publish is visible everywhere, even if you can’t buy it [because of territorial rights],” O’Leary said, “This encourages piracy, because if people do try to buy it, they find out they can’t.”

From Twitter this week:

From the fashion and style section of the NYTimes (??) The Education of Tony Marx head of NYPL.  (NYTimes)

Pearson's Future of Education - No Longer Traditional

In the US, Suzie co-ed may be looking at graduating with over $100k in tuition debt and, it’s even true that her younger brother is going to end up with considerably more since tuition rises inexorably each year.  Seen in this context, it may be hard to understand why publishers get beaten up each year over the $4,000 that a student may spend on educational content over the course of their four years in College.  Despite being asked to spend just 4% of their educational ‘budget’ on content, students (and to some extent their parents) frequently voice their opposition to the high price of textbooks and often gain the attention of media and government.  Publishers may be excused for wondering ‘why us’ when the cost of tuition continues to grow year over year but the annual value of the textbook market has remained stagnant at approximately $7.5billion.  Why textbooks are viewed this way is hard to define: Perhaps the student pays for their textbooks out of their own pocket versus tuition paid by parents or, the utility of the textbooks assigned by professors is questioned when they are not used in full or, the shortened shelf life of textbooks means students can’t resell their books.  Maybe all of the above and other reasons as well.

For publishers the dissatisfaction is problematic but they may not actually care too much about the student even though it is the student that makes the purchase.  Their customer is the faculty member.  After all, the professor is often making an annuity-like decision to select one textbook over another and that decision can often stand for several years meaning recurring revenue for the publisher. Increasingly the institution where the faculty teaches is also important and, while the professor remains vital publishers may be increasingly interested in the $100K spent for tuition.

A number of years ago, I made a presentation at theFrankfurt Bookfair Supply Chain Interests Group where I used the example of Reed Elsevier to show how a business could realign its’ business to compete in a much larger market where the opportunities were potentially significantly greater.  Jack Welsh ex-CEO of General Electric, (when not suggesting conspiracy theories) used to challenge his executives to look beyond their traditional markets to expand their opportunities to grow revenue.  As Reed evidenced, it may better to be a smaller player in a $40billion market than to dominate a $100million market.  Strategically redefining your business can’t be done easily but becomes the driver in business planning and over a defined period a business can move itself into one with significantly more opportunity.

At a conference earlier this year, when the student spending numbers were discussed it occurred to me that fighting over an annual spend of $1,000 per student versus an opportunity to grab some of the $25K spent per year would be a strategic win for a publisher.  With the education market expanding – both in pricing and market penetration – and traditional the textbook market flat, where else could a publisher go?  A strategic rethink and change in direction may appear beyond comprehension for the average book publisher but this is what business strategy is all about.  When we were defining Bowker’s business in 2001/2 we could have stayed in low-margin, low-growth metadata management for libraries and struggled.  Instead the company moved into high-margin, high-growth transaction businesses and market intelligence for publishers and we were able to grow the company.  Strategically for Bowker, this transition was logical but was only achieved by stabilizing the legacy business and making a series of strategic acquisitions.

In publishing, there is a more impressive example in the manner in which Pearson looks to be rethinking how they define their educational market.  Pearson has long been the leader in education publishing both in K-12 and Higher Ed since the big acquisitions from Simon & Schuster in the late 1990s.  Indeed in recent interviews, Majorie Scardino the outgoing CEO of Pearson, recalled realizing education was the growth vehicle for Pearson soon after she became CEO 15 years ago.   During her tenure, the company realigned their operations, redefined their market, invested in content transformation and made many strategic acquisitions thereby broadly expanding the content and services customers in k-12 and higher ed can now purchase (and license) from Pearson.  One only need look at the chart below from their recent annual report to recognize how fundamental has the change in market approach been for Pearson.

Pearson PLC Annual Report: Competitors

The companies we in the ‘publishing’ market would consider their historical competitors – McGraw Hill, Cengage, HMH – are only bit players in comparison with Apollo, Benesse, Kaplan and others.  Pearson is not only a content producer but they are also (via a series of key acquisitions) a distribution point for educational learning on par with Kaplan and the University of Phoenix.  Pearson recently won a contract to deliver “Cal State Online” for the California State University System (CSU) which will enable the delivery of a selection of undergraduate degree and professional master’s programs.   In competing to deliver this solution for CSU it is unlikely that Pearson was competing with their ‘traditional’ publisher competitors.

Other publishers may be starting to take notice and John Wiley’s recently announced acquisition of an educational provider is evidence of this attention.  Yet, Pearson looks to have a significant head start and looking at this chart it’s interesting to speculate what the impact of mergers and acquisitions may have on these players over the next few years.  It seems logical that for some the fastest way to catch up to Pearson would be to merge with someone else.  For example, Kaplan doesn’t have much owned content but wide market penetration; whereas, Cengage is a content developer focused on traditional education delivery.  This type of strategic combination may make sense as these players begin to re-think their markets.

An interesting aspect of the discussion about Scardino’s departure has been focused on what Pearson’s new CEO may divest as though divesture at Pearson is something new.  That’s not the case, as Pearson has divested many businesses over the past ten years.  Whether the company divests the Financial Times or Penguin seems far less interesting to me in contrast to what their education business can become over the next five years.  Leveraging what is increasingly a content platform for creation and delivery looks far more interesting and compelling for Pearson in my view and is a direct result of how they re-thought their market to go beyond the parameters of the traditional publishing market.  Looking at the chart from their annual report, all educational companies are going to struggle to keep up.

Changes in Educational Publishing: The Textbook in the 21st Century

A repost from July 13, 2006.  A still relevant post regarding the evolution of the textbook. 

As I have mentioned before, I believe educational publishing - particularly in College - to be an industry ripe with opportunity and therefore very interesting. Challenges obviously exist but educational publishers have an opportunity, facilitated by the internet, to build a virtuous circle connecting the publisher/author, student, educator, advisor and institution. (Even the parent could be part of this grouping). Traditional publishing content remains the 'glue' within this grouping but publishers are also building 'platforms' adding sophisticated testing and evaluative modules, administrative modules and ultimately a social networking component that will further facilitate a level of communication among the groups heretofore unheard of. I have spoken a little about this in an earlier post.

There will be many changes resulting from this different publishing paradigm not least of which the content itself. I doubt many publishers would contest the notion that the existing construct of the traditional published text book will remain the same for much longer. In the not too distant future the course textbook is going to have more in common with an online newspaper that it will with a physical print product encased in board. Editorial and authorship may become more important than it currently is since the product will become dynamic and subject to on-going news events, reinterpretations and the feedback from users. Incorporation of audio and video, blogging and chat also add a 'real time' component that will require monitoring and management.

What is interesting about this article in the NYT today is that it highlights the significant fallibility of the textbook unit when viewed from today’s 'instant update' environment. The article points out a number of things including the surprising similarity across texts, the apparent lack of motivation to change - evidenced by continuing to publish 'name' authors in updated editions even after they were decreased and the clear lack of feedback from user to publisher/author that allowed continued publication of the same material year after year.

In many ways the article makes publishers out to be dummies but there may have been important reasons to leverage a known author for many years. Profits. Institutions, Professors, etc. act conservatively and go with what they know. Rebuilding around a new author increases the risk that the customer may go to a competitor. In addition, from a publisher point of view it is easier to tweak an existing text than start over with a new one. (Although in reading this article you may gain the impression that none of them ever start from scratch).

All the big educational publishers - Wiley, Pearson, Harcourt, McGraw Hill are building online educational content that is - or will represent - a fully interactive educational product. For publishers to gain direct access to a student that enables the student to build an online bookshelf of educational material that they can carry with them forever, and furthermore to establish a relationship with the student after they leave college, is what these publishers are really looking for. Exciting stuff if you are a publisher. And great benefits for students and educators as well.

MediaWeek (Vol 5, No 31) Financial Results: Informa, WoltersKluwer, Pearson, Reed Elsevier, Cengage, McGraw-Hill

Informa post half year results (Press Release)

• Resilient profit performance – adjusted operating profit growth of 0.6% to £160.1m; 0.3% on an organic basis
• Improved margin – adjusted operating margin 25.8% (H1 2011: 25.1%)
• Strong cash flow – cash conversion rate increased to 76% (H1 2011: 56%)
• Revenue decline of 2.4% (organic decline of 1.2%) – proactive reduction in marginal product.
• Statutory loss before tax of £27.4m (H1 2011: £66.5m profit) – reflecting impairment charge of £80.0m and losses on disposal of £24.4m relating to European Conference businesses. 
• Earnings increased – adjusted diluted earnings per share growth of 3.4% to 18.3p (H1 2011: 17.7p)
• Dividend increased – interim dividend increased to 6.0p (H1 2011: 5.0p)
• Net debt/EBITDA ratio of 2.3 times (H1 2011: 2.5 times)

Operational

• Academic division continues to trade well – organic revenue growth of 3.7%
• Total cost savings delivered at PCI of £12m
• 9 new large events run in H1
• Forward bookings on leading events remains strong
• Restructure of conference portfolio to reflect prevailing market conditions in Europe
• 20% of revenue from emerging markets (H1 2011: 19%)
• Acquisition of market leading exhibition and conference business in Canada

Wolters Kluwer reports half year results (Press Release)

• Full-year 2012 guidance confirmed. 
• Revenues up 3% in constant currencies and up 1% organically.
• Deterioration in Europe offset by improved organic growth in North America.
• Recurring revenues up 2% organically (76% of total revenues).
• Online, software and services revenues up 4% organically (75% of total revenues).
• Health and Financial & Compliance Services grew organically 5% and 6%, respectively.
• Ordinary EBITA €346 million; Ordinary EBITA margin of 19.9%. 
• Leverage ratio net-debt-to-EBITDA improves to 2.9x (2011 year-end: 3.1x).
• Expect to approach target of 2.5x by year-end.
• Healthcare Analytics disposal completed in May as part of pharma divestiture program.
• €100 million share buy-back completed on July 9; program will be expanded by up to €35 million under new policy to offset dilution from stock dividend and performance shares.

Pearson report half year results (Press Release):

Sales up 6% to £2.6bn*

• Strong growth in Education (up 9%) and the FT Group (up 7%).
• Penguin sales 4% lower on phasing of publishing schedule and continued industry change.

First-half operating profit lower, as expected, at £188m (2011: £208m)

• Education profits up 6% on growth in North America (up 30%) and International (up 17%).
• Professional profits £17m lower. New funding criteria for 16-18 year old apprenticeships result in sharp decline in volumes; UK training business reshaped.
• Sale of FTSE International reduces first-half operating profit by £10m; excluding FTSE, FT Group profits level in spite of increased restructuring charge.
• Penguin profits lower at £22m (H1 2011: £42m) on drop-through from lower first-half sales; stronger publishing schedule in H2.

Rapid growth in digital and services businesses and developing markets

• Sales up approximately 20% in developing markets (headline growth)
• Education digital platform registrations up 30%; FT digital subscriptions up 31% and now exceed print circulation; Penguin ebook revenues up 33% and now almost 20% of Penguin’s revenues.
• Revenues from digital and services to exceed traditional publishing businesses in 2012.

Full year outlook reiterated

• At this early stage, Pearson sees good trading momentum in North America, International and the FT Group offsetting weakness in Professional Education and Penguin.
• Pearson reiterates full year outlook of growth in sales and operating profits at constant exchange rates, with margins reflecting acquisition integration costs and the FTSE sale. 

Reed Elsevier report half year results (Press Release):

Financial highlights

• Underlying revenue growth +5% (+3% excluding biennial exhibition cycling)
• Underlying adjusted operating profit growth +7%; overall growth +8% at constant currencies
• Adjusted EPS +11% to 24.7p for Reed Elsevier PLC; +18% to €0.47 for Reed Elsevier NV
• Reported EPS growth +52% to 24.0p for Reed Elsevier PLC; +57% to €0.47 for Reed Elsevier NV
• Interim dividend growth +6% to 6.00p for Reed Elsevier PLC; +18% to €0.130 for Reed Elsevier NV
• Net debt of £3.3bn; 2.3 times adjusted 12 month trailing EBITDA (pensions and lease adjusted)

Operational highlights

• Underlying revenue and operating profit growth in all five business areas
• Growth driven by usage volume, new product development and expansion in high growth markets
• Further improvement in format mix; good growth in online and face to face
• Profitability gains driven by on-going process efficiencies
• Continued portfolio development improving revenue growth and profitability profile 

Selective divestitures

• Process accelerated in H1. Disposals of Totaljobs, MarketCast, and other small publishing and services assets completed. Planned disposals of Variety and RBI Australia announced. We expect completed and planned disposals to be mildly dilutive to EPS in the short term. However, we intend to use gross divestment proceeds to buy back shares this year, mitigating this impact. In H1 gross cash proceeds from disposals were £158m/€193m.

Cengage presents full year estimates (Press Release):

• Revenue for the fourth quarter of fiscal 2012 is estimated to be between $499 million and $505 million as compared to $473 million for the same period in the prior year. Excluding National Geographic School Publishing (“NGSP”), acquired on August 1, 2011, revenue for the fourth quarter of fiscal 2012 is estimated to be between $482 million and $488 million, driven primarily by growth in Domestic Learning.
• Adjusted EBITDA for the fourth quarter of fiscal 2012 is estimated to be between $187 million and $193million. NGSP’s contribution to Adjusted EBITDA during the fourth quarter is estimated to be between $2million and $3 million. The prior year fourth quarter Adjusted EBITDA of $202 million included a minimal expense for domestic incentive compensation. On a comparable basis to include this year’s fourth quarter domestic incentive expense, Adjusted EBITDA for the fourth quarter of the prior year would have been approximately $185 million.
• Revenue for the full year ended June 30, 2012 is estimated to be between $1,985 million and $1,991 million as compared to $1,876 million in the prior year. Excluding NGSP, revenue for the full year ended June 30, 2012 is estimated to be between $1,910 million and $1,915 million.
• Adjusted EBITDA for the full year ended June 30, 2012 is estimated to be between $781 million and $787million. NGSP’s contribution to Adjusted EBITDA during the fiscal year is estimated to be between $12million and $15 million. Similar to the fourth quarter, the prior year Adjusted EBITDA of $780 million included a minimal expense for domestic incentive compensation. On a comparable basis to include this fiscal year’s domestic incentive expense, Adjusted EBITDA for fiscal 2011 would have been approximately $737 million.
• For the last twelve months ended June 30, 2012, Bank EBITDA is estimated to be between $817 million and $823 million.
• Full year investor call August 8th (Link)

McGraw-Hill reports second quarter results (Press Release):

• Key management for McGraw-Hill Education is now in place, including Lloyd G. "Buzz" Waterhouse as president and chief executive officer and Patrick Milano as chief financial officer and chief administrative officer.
• The Form 10 SEC registration statement was filed on July 11, 2012.
• Cost reductions are accelerating towards the goal to achieve at least $100 million in cost savings, on a run-rate basis, by year-end.
• Key workstreams are well underway to drive the separation of numerous finance & accounting, human resource, information technology, and other support services.
• The S&P Dow Jones Indices, the world's largest provider of financial market indices, was launched on June 29, 2012.

Education

• Revenue for the segment declined 12% to $474 million while operating profit improved by 36% to $57 million in the second quarter, compared to the same period last year. The improvement in operating income was primarily the result of restructuring actions and ongoing tight expense management.
• Higher Education, Professional and International Group (HPI): Revenue decreased 2% to $241 million in the second quarter compared to the same period last year. Higher Education revenue growth was offset by declines in International revenue, predominately related to the strong U.S. dollar. Higher Education's digital and customized products are being well received in the marketplace. In particular, sales of homework management product Connect, which is sold with LearnSmart, an adaptive learning system, grew by 65%. LearnSmart, designed to help college students learn faster, study more efficiently, and retain more knowledge, is available for approximately 150 different college course titles. 
• School Education Group (SEG): McGraw-Hill Professional continues to lead the transition to digital materials with 34% of revenue in the quarter derived from digital products and services. Of particular note was the 33% growth of digital subscription platforms, which include AccessMedicine, a product suite of subscription-based Websites that feature regularly updated medical content and access to more than 65 medical titles.Revenue decreased 20% to $233 million for the quarter. The elementary-high school market continues to be impacted by the economic issues facing the states and local school districts. In addition, the state new adoption schedule for 2012 offers the lowest revenue potential for publishers in many years. As a result, the School Education Group anticipates an overall reduction of 10% in the K–12 market this year, which represents the lowest spending level in over a decade. Despite the difficult environment, SEG continues to provide innovative products including new testing materials and programs in reading and mathematics that meet the new Common Core standards. All of its major new programs include digital components, and increasingly many products are wholly digital.

MediaWeek Report (Vol 5, No 22a): Pearson Buys Global English + McGraw-Hill, Cengage, Wiley Education News

Getting to be a recurring story: Pearson buys a language learning company this time Global English located in California.  Pearson paid $90 million.  From the press release:

Founded in 1997 in California, GlobalEnglish is a leading provider of cloud-based, on-demand Business English learning, assessment and performance support software. It serves more than 450 corporate customers, including 20 per cent of the Forbes Global 2000 companies, including General Electric, HSBC, Tata Consultancy Services and Unilever. Its product suite is uniquely suited to serve the needs of global professionals with a comprehensive offering - formal Business English learning coursework, informal and social learning capabilities, performance support tools, an enterprise collaboration platform, a mobile app, assessments and a premium one-on-one coaching service. GlobalEnglish’s Business English content is also entirely focused on the application of Business English to real life business situations such as composing emails and participating in conference calls, and its efficacy is highly rated by global companies and their employees. Approximately 75 per cent of GlobalEnglish’s more than 200,000 active subscribers are in fast growing economies in Latin America and Asia

McGraw Hill announced some executive changes in advance of their Education spin-off (Press Release):

To continue the process of building a world-class team to lead the new education company, the Corporation is appointing Patrick Milano, currently Executive Vice President and Director of the Program Management Office of the Corporation's Growth and Value Plan, to the new position of Chief Financial Officer and Chief Administrative Officer of McGraw-Hill Education.  Mr. Milano, a multi-year veteran of McGraw-Hill, including in the education segment, has successfully led the separation phase of the Growth and Value Plan since last year.  In this new role, he will be responsible for Finance, Manufacturing, Distribution and IT, reporting to Jack Callahan, Chief Financial Officer of The McGraw-Hill Companies, until the new Chief Executive Officer of McGraw-Hill Education is appointed.  Joe Micallef, currently Senior Vice President, Finance and Operations, will work closely with Mr. Milano on standing up McGraw-Hill Education before retiring following a very successful career at the company.  (More)

Cengage announced their Q3 results last month (Press Release)

Revenue for the third quarter 2012 is estimated to be between $335 million and $340 million as compared to $319 million for the same period in the prior year. Excluding National Geographic School Publishing (“NGSP”), acquired on August 1, 2011, revenue for the third quarter 2012 is estimated to be between $325 million and $330 million driven by growth in the higher education market. Domestic Learning revenue, excluding NGSP, is estimated to be $205 million to $210 million, as compared to $194 million for the same period in the prior year.
Adjusted EBITDA for the third quarter 2012 is estimated to be between $67 million and $72 million. The prior year third quarter Adjusted EBITDA of $89.7 million did not include an accrual for incentive compensation, but did include a credit related to a reversal of an accrual for incentive compensation accrued during the first half of fiscal 2011. On a comparable basis to this year‟s third quarter, Adjusted EBITDA for the third quarter of the prior year would have been $65 million.
Excluding NGSP, Adjusted EBITDA for the third quarter 2012 is estimated to be between $70 million and $75 million. Adjusted EBITDA for NGSP is negative for the quarter primarily due to seasonality as well as one-time costs related to achieving synergies from the integration of NGSP into Cengage Learning.

Here is the full 3Q report

In their investor presentation Cengage also provided this update to their debt refinancing effort:

We completed the previously announced amendment and extension of our Credit Agreement whereby we:

• Extended the maturity of $1.3 billion of our existing Term Loan, net of a partial pay down, to July 2017
• Provided for new commitments to maintain the existing $300 million of revolving credit facility availability until April 2017 resulting in a total extended and non-extended revolving credit facility of up to $525 million until July 2013, $300 million thereafter. We also completed our previously announced private placement of $725 million senior secured notes due in April 2020. These notes bear interest at a coupon rate of 11.5% and were issued at par. We used a portion of the proceeds from these notes to pay down $489 million of the extended term loan.

Anyone interested in how the education business is doing will be disappointed in the deck.

In case you missed it Harcourt's "Official Statement" on their bankruptcy (Press Release):

Today, Houghton Mifflin Harcourt filed a “pre-packaged” comprehensive financial restructuring plan that will strengthen the Company financially so we can continue to invest in our business and ensure we are well positioned for the future. This plan, which is supported by the vast majority of our key financial stakeholders, will eliminate $3.1 billion of debt through a debt to equity transaction, and reduce our annual cash interest costs. The Company today lodged voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York. With a more appropriate capital structure to support our strategic plan and business objectives, we will have greater financial flexibility to pursue growth opportunities.

John Wiley released their 3Q results earlier in the month (Press Release):

John Wiley and Sons, Inc. (NYSE: JWA and JWB), a global provider of content and workflow solutions in areas of scientific, technical, medical, and scholarly research; professional and personal development; and education today announced results for the third quarter of fiscal year 2012:

• Revenue growth of 1% including and excluding foreign exchange (or "FX")
• Revenue by segment, including FX:  STMS +3%, P/T -6% and Education +2%
• Adjusted EPS grew 8% to $0.91, or 6% excluding FX.  Growth was driven by top-line results, prudent expense management and lower interest expense and income taxes.
• Shared Services and Administrative Costs excluding FX, were up 3% to $91 million, driven principally by technology spending to support investments in digital products and infrastructure.   
• Outlook:  Reaffirming FY12 revenue guidance of low single-digit growth excluding FX and EPS guidance in a range from $3.15 to $3.20 including the effect of FX and excluding the unusual tax benefits.  
• Acquisition:  In February, Wiley acquired Inscape Holdings, a leading global provider of workplace learning solutions, for $85 million in cash. Inscape will be integrated into Wiley's Professional/Trade business where it will combine Wiley's extensive reservoir of valuable content and its global reach in leadership and training with Inscape's technology, distribution network, and talent expertise, including the innovative EPIC online assessment-delivery platform and an elite network of nearly 1,700 independent consultants, trainers, and coaches. Annually, Inscape generates approximately $20 million in revenue.
• Divestment:  On March 7, 2012, Wiley announced that it intends to explore opportunities to sell a number of its consumer print and digital publishing assets in its Professional/Trade business as they no longer align with the company's long-term business strategy.  Fiscal Year 2011 revenue associated with the assets to be sold was approximately $85 million with a direct contribution to profit, before shared-service expenses, of approximately $6 million.  Assets include travel (including the well-known Frommer's brand), culinary, general interest, nautical, pets, crafts, Webster's New World, and CliffsNotes.  Wiley will re-deploy resources in its Professional/Trade business to build on its global market-leading positions in business, finance, accounting, leadership, technology, architecture, psychology, education, and through the For Dummies brand. 
• Share Repurchases: Wiley repurchased 520,000 shares this quarter at a cost of $23 million.  The Company has 2.9 million authorized shares remaining in its program.

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