Publishing News: May 7, 1999
BookExpo 1999
NuvoMedia, Announces RocketPress
St. Martin's Press Provides Golden With Parachute
Yahoo Life did it now eBay tries the Newstand
Amazon Buys Three Companies
Primedia for Sale
Newspapers are Dead
Fast Company Sale
Reuters Job Action
Miller Freeman Inc. Acquires CMP Media For $920 Million
Selling Books from Vending Machines
Barnes and Noble the Publisher
Economist Privacy Article
This is the last issue of Publishing News. Anyone interested in developing something similar should contact Ian Krantz. Anyone needing to get hold of me can e-mail me at mpcairns@sprintmail.com. Thanks for your support.
BookExpo 1999
At the BookExpo show in Los Angeles, the Book Industry Study Group (BISG) reported that last years trade sales declined for the first time in seven years. This information was in contrast to the popularly held belief that internet or online sales had expanded the market for books generally and further the report indicated that affluent educated readers are buying fewer titles. In the day prior to this announcement, I asked Peter Olson CEO of Randon House (who was participating in a panel discussion) that if the market share of online booksellers was to grow to 20-25% of the market by 2003 as is predicted by BCG and Jupiter Communications where he thought this additional share was going to come from. He responded by saying that he believed online sales were incremental to existing book sales and therefore there would occur limited shift from other traditional outlets. The BISG reported that online selling accounted for 2% of total sales last year and as has been the case over the past five years independent book store sales declined and chain stores saw their share of the market increase.
During the same panel discussion, Michael Lynton – CEO of Penguin Group commented that the current price model for online book selling would almost certainly change and that the biggest risk would be the negative gross margin model. “If someone were to take all front list titles and sell them at a loss this would radically change the model for selling publishing product online.” Such companies sell ‘below the line’ products such as credit cards, services and advertising as sources of income. Priceline.com is the most recent example of a model that didn’t really exist on the web six months ago.
While at the show I also had a conversation with Mike Lovett who is the CEO/President of the Ingram Distribution Company. We spoke about the proposed purchase by Barnes and Noble of the company and he is convinced that the merger will go ahead. “They have interviewed – which is a polite way of saying deposed – many, many B&N and Ingram people over the past six months as well as others in the industry” he commented and that the Justice department he believed were ‘trying their best to understand the publishing industry.’ At this point he thinks that the original issues with the merger have been answered and that there may be some request to reduce operations in certain areas but for them it wouldn’t be a big deal. I would think that the transcripts from this review would be interesting reading for anyone interested in this industry.
At the BookExpo show, a company named On Demand Machine Corp displayed a book printing system that can print and bind a standard trade paper back in a machine which measures eight feet by four feet. This machine is designed to fit in a bookstore and can both store electronic titles in its memory and call up additional titles from the company head office via satellite. Customers can order the books, confirm the title is the one they want and purchase using a credit card. The transaction takes a little more than five minutes. The first full implementation is scheduled to take place in June at The Tattered Cover in Denver. My guess is you will see similar machines at Kinkos, Airports and other public places in the not too distant future.
Other interesting comments from panel discussions at BookExpo:
The traditional book distribution channel poses too many problems for some publishers particularly those which are smaller. The difficulty they face is not the risk people will copy their books rather that customers couldn’t find them in the first place. Placing content on the web actually increased sales of the printed product by 30%. National Academic Press and Rough Guides are examples of this. Additionally, McGraw Hill’s Beta Books have been so successful on line (while still generating bookstore sales) that the company is expanding the availability on the internet of non technical titles as well.
Many people commented that the highest risk job in publishing is ‘International Rights Manager.’
Xerox has developed a product that allows the production of a book anywhere in the world via web ordering. There will be literally 100,000’s of titles which were previously ‘out of print’ available via print on demand to individuals over the next five years. Additionally, what are now considered ‘non viable’ titles by publishers will also be made available as publishers make publishing investments without the huge investment in large volume printing. Coupled with this, some projections assume that front list sales will decline as a percentage of total sales as back list sales increase.
NuvoMedia, Announces RocketPress NuvoMedia, Inc., the creators of the Rocket eBook, announced the introduction of RocketPress(TM), a turnkey solution that provides a full spectrum of publishing services for RocketEdition(TM) content. With the announcement of this free Web-based feature, publishing companies as well as self-publishing authors can become publishers of RocketEdition titles. The easy-to-use RocketPress works as a free Web-based interface that allows publishers and individuals to control and monitor the publishing process of RocketEditions from end to end. Users can upload manuscripts into RocketEdition format for distribution over the Web; set the price of a publication; determine the timing of a RocketEdition release; list, preview, edit, and withdraw titles; and view and change title information and status. The service also lets users view or download a record of all transactions associated with a RocketEdition title, while affording state-of-the-Web security protection. As with all aspects of the Rocket eBook System, the RocketPress fits into the existing publishing business model, including full support of such necessary details such as territorial rights.
Source: PRNewswire 4/28/99
St. Martin's Press Provides Golden With Parachute Golden Books Family Entertainment and St. Martin's Press last week announced the acquisition of Golden Books Adult Publishing Group by St. Martin's Press. Golden Books has been beset by financial problems recently and this sale required the approval of a US Bankruptcy Court Judge. The transaction will include the Golden Field Guides, Whitman Coin Guides and such successful titles as Stephen R. Covey's "The Seven Habits of Highly Effective Families", Maria Shriver's "What's Heaven?" and "Parents' Magazine Parents Answer Book." Terms of the transaction were not disclosed. St. Martin's Press is one of the seven largest trade publishers in the United States. Based in New York, it publishes more than 1,800 new titles per year through its five publishing divisions. Golden Books Family Entertainment, Inc., is the leading children's book publisher in North America. The Company owns one of the world's largest libraries of family entertainment copyrights and creates, publishes and markets entertainment products for children and families through all media.
Source: Business Wire 4/26/99
Yahoo Life did it now eBay tries the Newstand
In July you will be able to read eBay, the magazine. Krause Publications, a Wisconsin-based publisher, plans to start publishing a monthly magazine planned to help readers navigate the ins and outs of online auctions. Although the name of the magazine is yet to be decided, the name and brand cachet of eBay will be prominent, says the publication's executive editor, Kevin Isaacson. Its tagline will be: Your roadmap to treasures on the Internet. Isaacson says his initial circulation goal is 400,000. Isaacson says Krause has a marketing partnership with eBay, but eBay hasn't invested in the launch of the magazine.
Source: Business Week, 4/22/99
Amazon Buys Three Companies
Amazon.com Inc has agreed to buy three closely held online companies, including rare book and music seller Exchange.com, for a total of $645 million, mostly in stock – don’t ya love that! The site is home to bibliofind.com, which allows users to buy and sell rare books, and musicfile.com, which provides the same service for fans of recorded music and memorabilia. The company employs about 40 people and had secured about $16 million in venture capital, according to an April 5 article in the Boston Business Journal. The two other companies are Accept.com, which is developing ways to simplify online transactions, and Alexa Internet, which offers a free service to help people navigate the Web. The purchases are the latest by Chairman and Chief Executive Jeffrey Bezos to expand Amazon.com's selection of products and services and draw more customers to its Web sites. The retailer two weeks ago agreed to buy LiveBid.com to add live events to its fledgling auction business and recently bought stakes in Drugstore.com and Pets.com, two retailers that operate Web sites.
Source: PRNewswire 4/22/99
Primedia for Sale
Primedia plans to sell its supplemental education group to streamline operations and reduce debt. The company expects to receive $500MM for the group. There was also speculation the company will sell other units separately. In other news Primedia announced it was setting up two autonomous internet companies to deliver integrated consumer and business oriented content derived from their consumer and trade publications. In addition to the content from the existing 350 titles the company plans on using content from its existing 180 print linked web pages. Details of the plans were sketchy with no indication as to how these companies will operate with the existing Primedia properties; however, the company has indicated tha these new internet companies will be entirely separate from Primedia with their own boards of directors and new senior management. Primedia is actively searching for CEO’s for these businesses. The model appears to be the VerticalNet.com model which offers information and business solutions to subscribers across the value chain. Primedia’s stock price rose dramatically on the news at one point going from $13.56 to $18.69.
Newspapers are Dead
Andy Grove, after being invited to speak at the National Association of Newspaper Editors, told them that ‘newspapers are close to death’ – seems a bit harsh given they were paying for his expenses. Grove believes that because the internet offers instant access to the days events that the traditional role of newspapers has disappeared coupled with emerging problems with advertising – particularly classified – newspapers will be out of business in three to five years.
Fast Company Sale
Appears Fast Company is for sale. The company is shopping the title to Conde Nasty, and a couple of other unnamed companies. Mort Zuckermann is looking to reduce his financial commitment to the three year old magazine, which despite being one of the hottest properties in the business is still not making money. (This is not unusual as it generally takes five years for an new publications to turn a profit). Which reminds me… is there any saving the New York Daily News? They have had major problems transitioning to a new printing plant in Brooklyn which is by some counts a year behind schedule, the color presses at said plant don’t work after an investment of $100MM and now a Brooklyn judge has award a union group millions in accrued back pay at a time when new negotiations are to start with journalists over their contracts. The union award (which could cost over $100MM) is being appealed. Stay tuned.
Reuters Job Action
You will not read this on Reuters newswire: Reuters staff (600 of them) recently voted to strike by a 10 to 1 margin. No word on when this would take place.
Miller Freeman Inc. Acquires CMP Media For $920 Million United News plc unit Miller Freeman announced the purchase of CMP, a leading US technology media company, for $39 per share, a net total cash consideration of $920 million. Rumors about the future of CMP have circulated for months and as a result of this sale CMP will become a division of Miller Freeman Inc. Ad pages in the technical pubs sector are declining and are down 14% for the first quarter this year versus last year and according to AdAge CMP’s pages are down 27%. The combination of Miller Freeman's trade show and publishing businesses and CMP's publishing and internet assets will transform Miller Freeman Inc. into one of the leading market-focused business media groups serving the U.S. and global high-tech sector. It will represent over 300 publications, 480 trade shows and conferences, 250 web sites and revenue approaching $1.5Bill. The acquisition also represents a major step forward in Miller Freeman's strategy to become a leading online provider of business-to-business products and services for the technology market. The merged online businesses are expected to achieve revenues of $35 million in 2000, and to grow rapidly thereafter. The acquisition represents a continuation of the consolidation taking place in the trade magazine publishing business. AdAge also commented that Miller Freeman may also IPO the web site CMPnet before the year is out and it seems clear that without the web sites CMP may have been sold for less than $400MM.
Source: PR Newswire 4/29/88
Selling Books from Vending Machines
A proposal I presented five years ago at Berlitz; a company in the UK will begin selling trade paperbacks from vending machines in the next few months. The machines will be located at Airports and Rail Stations in the UK. Heck, if you can sell bait and beer out of them you certainly should be able to sell books. (I only put this in to show how brilliant I am).
Barnes and Noble the Publisher
An original Barnes and Noble publishing title will be reviewed by the New York Times Book Review; a first. Barnes and Noble your everyday publisher, distributor, book retailer – isn’t this illegal in the US? No wonder they are being circumspect about it; apparently the book is not in Books and Print – so booksellers can’t find it and they have not offered it for sale to Ingram (gee I wonder why). At this point the book is only available in Barnes and Noble stores.
Economist Privacy Article
Anyone interested in the issue of privacy on the internet should read the article in this weeks (May 1st) Economist. Scary stuff.
Sunday, May 09, 1999
Saturday, May 01, 1999
Interactive Marketing: Do You Know Which Half Works?
National Association of Broadcasters Conference, Las Vegas, May 1999
By: Michael Cairns and Marisa Kabasinskas
Benny Hill, the British comic, may have been more prophetic than anyone ever gave him credit for. In one skit, Benny plays a woman who professes to have watched more TV programs continuously than anyone else in Britain. Turns out - which is supposed to be the funny bit - that Benny only watches the ads and leaves the room to make a cup of tea when the programs come on. This is funny because we consider ads to be an intrusion - we leave the room, we fast forward the VCR through the ads, we avoid them at all cost. With the advent of interactive marketing we are now being told that the end of the unwanted advertisement is at hand. Interactive and database marketing promises to finally 'close the loop' between ad delivery and performance. The answer to the famous advertising adage, 'half of advertising is wasted, but we don't know which half' may finally be possible.
Of no news to anyone in this industry is the explosive growth of interactive marketing. As access to the Internet broadens and grows, the ability for media firms to succeed - be they publishing, advertising, interactive or broadcast - will center around the development and sustainability of Web sites, deals, alliances and communities. In the near future, media firms will be more focused on and by their audience rather than their content. As a consequence, they will be able to charge premiums for delivery of that audience to advertisers.
How Will the Paradigm Change?
One might ask how the above contrasts with today's media environment when NBC delivers a specific audience on Thursday nights. We believe that the interactive (future) paradigm will exceed the passive (current) environment in its ability to accurately identify and deliver targeted advertising and create a response from the viewer. When advertising is addressed accurately, we won't want to leave the room. Database marketing will ensure that the respondent is predisposed to a particular message and, more importantly, the advertiser will have documented and detailed information on the effectiveness of the particular message they are delivering to us. Direct marketers call this a response rate.
Before the online world, there existed a fundamental distinction between advertising and direct response.
Generally speaking, advertising in its purest form is all about reach and frequency - building brand awareness. Exposure to advertising - particularly broadcast - is rarely designed to 'elicit' a response. Direct marketing, on the other hand, does precisely the opposite. We believe this will change as traditional advertisers begin to discover "e-commerce" as a critical revenue stream. To date, their interactive marketing efforts have focused on a Web presence - brand building - rather than a transaction oriented approach. While transaction oriented companies - Amazon.com, The Gap - generate sales through online advertising, traditional marketers are still searching for the value in a banner ad. Consumer products companies such as Procter & Gamble and Coca-Cola are working to determine how their online brand strategy fits with their overall brand management strategy when the consumer can control the purchase decision-making process while surfing the Internet. With convergence of broadcast and online a certainty, broadcasters will also be required to deliver both brand-oriented advertising and direct (transaction) marketing, increasing the overlap in these two objectives - building brands and generating transactions.
On the Internet, the consumer is exposed to directed advertising, can view the specific product, compare prices and conduct independent research, make a purchase decision and initiate the purchase.
The consumer controls all aspects of this chain of events. The marketer is able to correlate the performance of a particular promotional vehicle; i.e., an advertisement, with specific results. For the most part, goals targeted in 'conventional' media have been geared to achieving reach and frequency targets and not to quantifying the effect of the marketing effort on sales. As digital TV becomes more prevalent, the ability for broadcasters to tailor advertising messages and direct mail will increase. Moreover, we will see a fundamental change in the manner in which we view television. The digital TV screen will allow segmentation so that when we view that ad during the Super Bowl on one side of the screen, we can also experience the product and click on the order button on the other side. It will work with programming as well; team merchandise, product placement in TV shows and movies, package vacations on travel shows, etc., will all be part of the directed advertising in the interactive world. In many ways, one can assert that the networks were the original 'portals'; it is digital TV that will allow them to leverage their market size, content and audience in the interactive world. What Do You Need to Change to Stay Competitive?
The online environment has the potential to become the most accountable advertising medium available to merchants. Yet while marketers are driven towards being able to quantify their return on investment, online advertising agencies do not currently have the ability to tie the delivery of an ad message to its actual performance (at least as precisely as is envisioned). As is routinely reported in the trade press, all view this capability as a key strategic goal. In fact, for the reasons above, this ability will be a price of entry into the online advertising business within 18 months. Currently, it is commerce sites - Amazon.com, Dell.com, Expedia.com and others - whom are able to deliver specific audiences based on their affiliate and affinity marketing programs, customer profiles and visiting/viewing habits. These 'communities' of like people will prove to be the 'holy grail' for marketers.
PricewaterhouseCoopers is helping our clients develop the infrastructure and technical environment to compete in this area. Currently, we are working with an interactive agency in the development of a data warehouse solution which will enable them to report to clients on the performance of a specific ad on a specific Web page. Not only will this allow optimization of both the media buy and the creative, it will also allow the agency to present clients with strategic marketing information supported by proven advertising messages - e.g., sales by Web sites and creative unit. In pitching new clients, this agency will be able show the past performance of advertising they created for similar types of clients using specific media (Web sites). Additionally, the data warehouse will allow them to catalogue all their creative with metadata (descriptors), documenting in summary form the actual performance of the creative for every occasion it was used. Armed with this type of information on media and creative performance takes marketing to a whole new level, enabling interactive agencies to partner with their clients by not only influencing purchasing behavior but driving that behavior.
We envision an environment where (online) advertising agencies will become broadcasters of advertising messages and concepts for clients. Rather than developing individual broad-based campaigns, agencies will deliver a constant stream of specific targeted advertising messages on behalf of clients. Advertising will be 'tagged' with demographic data, target market, direct sales data/response data, etc. Clients - if they choose - will be able to pick and choose the messages they want to use for particular products and services and/or messages. Ads with a 'history' of performance maintain a profile so that advertisers and clients can predict how particular ads will perform under particular circumstances. This will encourage a three-way path of communication between the advertiser, client (marketer) and customer. All of this information will be collected in a data warehouse application for analysis, and current and future marketing.
Given that we believe this type of "closed loop" application will be a requirement for entry, it will also mean that the technology driving this will eventually become a commodity. Agencies will be back to providing good and effective creative and cogent strategic advice. The difference will be that in contrast to today's environment, these activities will be backed up with actual data, and their ability to measure the return on investment (advertising) will be a transactional requirement. In direct mail, any mailing has a key code to track the performance of the mailing, but the analysis of results is delayed. Moreover, all the expense is up-front and sunk the moment the material is printed. In the interactive world, ads which don't work can be switched out as soon as the performance is apparent - sometimes within hours. There is no sunk distribution cost other than the cost of the failed ad, but even this ad could conceivably be used again on a different Web site. The ad is simply deposited into electronic storage with its metadata.
Marriage of On-Line and Database Marketing
Perhaps the best example of the change in this industry is evidenced by Peter Georgescu, Chairman of Young & Rubicam, who believes that advertising is becoming more predictable and measurable and is encouraging clients to pay not on a commission basis but a fee based on results achieved. The difficulty is to agree what defines success, especially when the advertising is brand driven and not transactional. This is where common standards need to be defined.
In the intervening time, standard audience measurement guidelines and definitions are required. Recently, the two largest online research monitors, Media Metrix and Relevant Knowledge, agreed to merge, increasing the likelihood that a standard measurement methodology will emerge in the near future. An industry association is also considering standards to cover ratings services, server logs of site traffic and third-party ad-server reports. And Nielsen, the leading provider on television ratings, has recently announced its service to supply Web-site ratings and track Internet traffic.
With the hype surrounding anything.com, it is easy to lose sight of the fact that a still relatively small amount of commerce is transacted on the Web, or that daily use of the Web is still small and not broad- based. Regardless, the interactive environment is fundamentally changing the manner in which advertisers and media companies view their relationship with customers. In these days of increasing clutter and short attention spans, we don't want to be bothered with advertising or programming that we are not interested in or predisposed to. Online marketing married to database marketing will allow marketers to effectively manage their ad spend and draw the precise relationship between an advertising event and a transaction.
By: Michael Cairns and Marisa Kabasinskas
Benny Hill, the British comic, may have been more prophetic than anyone ever gave him credit for. In one skit, Benny plays a woman who professes to have watched more TV programs continuously than anyone else in Britain. Turns out - which is supposed to be the funny bit - that Benny only watches the ads and leaves the room to make a cup of tea when the programs come on. This is funny because we consider ads to be an intrusion - we leave the room, we fast forward the VCR through the ads, we avoid them at all cost. With the advent of interactive marketing we are now being told that the end of the unwanted advertisement is at hand. Interactive and database marketing promises to finally 'close the loop' between ad delivery and performance. The answer to the famous advertising adage, 'half of advertising is wasted, but we don't know which half' may finally be possible.
Of no news to anyone in this industry is the explosive growth of interactive marketing. As access to the Internet broadens and grows, the ability for media firms to succeed - be they publishing, advertising, interactive or broadcast - will center around the development and sustainability of Web sites, deals, alliances and communities. In the near future, media firms will be more focused on and by their audience rather than their content. As a consequence, they will be able to charge premiums for delivery of that audience to advertisers.
How Will the Paradigm Change?
One might ask how the above contrasts with today's media environment when NBC delivers a specific audience on Thursday nights. We believe that the interactive (future) paradigm will exceed the passive (current) environment in its ability to accurately identify and deliver targeted advertising and create a response from the viewer. When advertising is addressed accurately, we won't want to leave the room. Database marketing will ensure that the respondent is predisposed to a particular message and, more importantly, the advertiser will have documented and detailed information on the effectiveness of the particular message they are delivering to us. Direct marketers call this a response rate.
Before the online world, there existed a fundamental distinction between advertising and direct response.
Generally speaking, advertising in its purest form is all about reach and frequency - building brand awareness. Exposure to advertising - particularly broadcast - is rarely designed to 'elicit' a response. Direct marketing, on the other hand, does precisely the opposite. We believe this will change as traditional advertisers begin to discover "e-commerce" as a critical revenue stream. To date, their interactive marketing efforts have focused on a Web presence - brand building - rather than a transaction oriented approach. While transaction oriented companies - Amazon.com, The Gap - generate sales through online advertising, traditional marketers are still searching for the value in a banner ad. Consumer products companies such as Procter & Gamble and Coca-Cola are working to determine how their online brand strategy fits with their overall brand management strategy when the consumer can control the purchase decision-making process while surfing the Internet. With convergence of broadcast and online a certainty, broadcasters will also be required to deliver both brand-oriented advertising and direct (transaction) marketing, increasing the overlap in these two objectives - building brands and generating transactions.
On the Internet, the consumer is exposed to directed advertising, can view the specific product, compare prices and conduct independent research, make a purchase decision and initiate the purchase.
The consumer controls all aspects of this chain of events. The marketer is able to correlate the performance of a particular promotional vehicle; i.e., an advertisement, with specific results. For the most part, goals targeted in 'conventional' media have been geared to achieving reach and frequency targets and not to quantifying the effect of the marketing effort on sales. As digital TV becomes more prevalent, the ability for broadcasters to tailor advertising messages and direct mail will increase. Moreover, we will see a fundamental change in the manner in which we view television. The digital TV screen will allow segmentation so that when we view that ad during the Super Bowl on one side of the screen, we can also experience the product and click on the order button on the other side. It will work with programming as well; team merchandise, product placement in TV shows and movies, package vacations on travel shows, etc., will all be part of the directed advertising in the interactive world. In many ways, one can assert that the networks were the original 'portals'; it is digital TV that will allow them to leverage their market size, content and audience in the interactive world. What Do You Need to Change to Stay Competitive?
The online environment has the potential to become the most accountable advertising medium available to merchants. Yet while marketers are driven towards being able to quantify their return on investment, online advertising agencies do not currently have the ability to tie the delivery of an ad message to its actual performance (at least as precisely as is envisioned). As is routinely reported in the trade press, all view this capability as a key strategic goal. In fact, for the reasons above, this ability will be a price of entry into the online advertising business within 18 months. Currently, it is commerce sites - Amazon.com, Dell.com, Expedia.com and others - whom are able to deliver specific audiences based on their affiliate and affinity marketing programs, customer profiles and visiting/viewing habits. These 'communities' of like people will prove to be the 'holy grail' for marketers.
PricewaterhouseCoopers is helping our clients develop the infrastructure and technical environment to compete in this area. Currently, we are working with an interactive agency in the development of a data warehouse solution which will enable them to report to clients on the performance of a specific ad on a specific Web page. Not only will this allow optimization of both the media buy and the creative, it will also allow the agency to present clients with strategic marketing information supported by proven advertising messages - e.g., sales by Web sites and creative unit. In pitching new clients, this agency will be able show the past performance of advertising they created for similar types of clients using specific media (Web sites). Additionally, the data warehouse will allow them to catalogue all their creative with metadata (descriptors), documenting in summary form the actual performance of the creative for every occasion it was used. Armed with this type of information on media and creative performance takes marketing to a whole new level, enabling interactive agencies to partner with their clients by not only influencing purchasing behavior but driving that behavior.
We envision an environment where (online) advertising agencies will become broadcasters of advertising messages and concepts for clients. Rather than developing individual broad-based campaigns, agencies will deliver a constant stream of specific targeted advertising messages on behalf of clients. Advertising will be 'tagged' with demographic data, target market, direct sales data/response data, etc. Clients - if they choose - will be able to pick and choose the messages they want to use for particular products and services and/or messages. Ads with a 'history' of performance maintain a profile so that advertisers and clients can predict how particular ads will perform under particular circumstances. This will encourage a three-way path of communication between the advertiser, client (marketer) and customer. All of this information will be collected in a data warehouse application for analysis, and current and future marketing.
Given that we believe this type of "closed loop" application will be a requirement for entry, it will also mean that the technology driving this will eventually become a commodity. Agencies will be back to providing good and effective creative and cogent strategic advice. The difference will be that in contrast to today's environment, these activities will be backed up with actual data, and their ability to measure the return on investment (advertising) will be a transactional requirement. In direct mail, any mailing has a key code to track the performance of the mailing, but the analysis of results is delayed. Moreover, all the expense is up-front and sunk the moment the material is printed. In the interactive world, ads which don't work can be switched out as soon as the performance is apparent - sometimes within hours. There is no sunk distribution cost other than the cost of the failed ad, but even this ad could conceivably be used again on a different Web site. The ad is simply deposited into electronic storage with its metadata.
Marriage of On-Line and Database Marketing
Perhaps the best example of the change in this industry is evidenced by Peter Georgescu, Chairman of Young & Rubicam, who believes that advertising is becoming more predictable and measurable and is encouraging clients to pay not on a commission basis but a fee based on results achieved. The difficulty is to agree what defines success, especially when the advertising is brand driven and not transactional. This is where common standards need to be defined.
In the intervening time, standard audience measurement guidelines and definitions are required. Recently, the two largest online research monitors, Media Metrix and Relevant Knowledge, agreed to merge, increasing the likelihood that a standard measurement methodology will emerge in the near future. An industry association is also considering standards to cover ratings services, server logs of site traffic and third-party ad-server reports. And Nielsen, the leading provider on television ratings, has recently announced its service to supply Web-site ratings and track Internet traffic.
With the hype surrounding anything.com, it is easy to lose sight of the fact that a still relatively small amount of commerce is transacted on the Web, or that daily use of the Web is still small and not broad- based. Regardless, the interactive environment is fundamentally changing the manner in which advertisers and media companies view their relationship with customers. In these days of increasing clutter and short attention spans, we don't want to be bothered with advertising or programming that we are not interested in or predisposed to. Online marketing married to database marketing will allow marketers to effectively manage their ad spend and draw the precise relationship between an advertising event and a transaction.
Wednesday, April 14, 1999
4/14/99: Reed Elsevier, Pearson, Amazon.com
Publishing News: April 14th, 1999
Reed Elesevier: No CEO
Pearson Seeks Legal Aid
WH Smith: Web Fever
American Booksellers Association Internet Commerce
Amazon.com Look For Distribution Improvements
CMP Media: On the Block?
Magazine Sell Through Keeps Falling
Reed Elsevier: No CEO
Reed Elsevier announced this week that the search for a new CEO to replace the two men who currently hold the position is going to have to continue. Rumors had it the company was close to announcing a replacement – rumored to be Jon Newcomb - a few weeks ago when they announced their quarterly financials. There are no indications how long the search will take or who maybe under consideration. Also, the company said two of its directors, Pierre Vinken and Loek van Vollenhoven, have resigned ``following differences of opinion over the management of the recruitment board.'' Both were to have retired from the board in the next few weeks. In the days since the report surfaced other rumors about Reed’s future have also come out. Wolters Kluwer is said to be interested in revisiting the merger discussions which were put on ice last year when the European commission indicated they would have monopoly concerns regarding any combinations of the two companies. Reed Elsevier later said released a statement saying that there were no plans to de-merge the company and that publishing and information were key components of the company’s strategy.
Source: Reuters April 6, 1999.
Pearson Seeks Legal Aid
Pearson has launched a multimillion dollar lawsuit against venture capital group Hicks Muse Tate & Furst for alleged breach of contract and fraud. Pearson alleges in a suit filed in a New York state court that Hicks Muse misled Pearson into thinking it would complete a $860 million (£525 million) deal to acquire two publishing businesses put up for sale as part of Pearson's $4.6 billion acquisition of the Simon & Schuster educational business. Pearson is seeking both compensation and punitive damages.
Source: Reuters 4/6/99
WH Smith: Web Fever
Shares of WH Smith, which have languished in recent years due to poor financial performance, saw their largest one day gain last week when the company announced it was establishing a free internet service similar to Dixon’s Freeserve. (Dixon’s is an electronics retailer like Circuit City but with prices like Harvey Electronics). The service will be established in collaboration with Microsoft and British Telecom. According to sources familiar with the product it will use BT telecoms service and Microsoft software to offer Internet access to anyone with a home computer and a modem. In June, WH Smith paid £8.8 million for bookshop.co.uk, Britain's largest on-line bookseller.
American Booksellers Association to Launch Web siteApparently after several months of speculation, the American Booksellers Association (ABA) announced last week that they would develop an e-commerce site to support bookselling on the web by independent booksellers. The sight will be called BookSense.com and will support up to 1.6 MM titles contained in the MUZE data base. Independent booksellers will be able to establish and use their own Web site as the front end or design a site based on one of several templates that will be provided by the ABA. Baker & Taylor will be the association's fulfillment partner and (it is assumed) will also supply the required bibliographic information for all titles. There was no immediate word of other partners however depth of information such as reviews would be required to compete with Amazon.com and Barnesandnoble.com. The site is expected to be launched sometime this summer and currently the ABA is in the initial stages of setting up the business unit required to manage the operation.
Source: Publishers Weekly, 3/22/99
Amazon.com Look for Distribution ImprovementsAccording to filings made by Amazon, the online retailer plans to open one or more distribution centers in the year and to increase investment in developing its existing infrastructure to increase efficiency. There is obvious concern regarding the planned acquisition by Barnes and Noble of Ingram Distribution and these infrastructure investments should be seen as a recognition of this concern. Amazon has been successful in the last year in decreasing their reliance on Ingram from 60% of orders in 1997 to 40% in 1998. Whether the company actually makes these investments remains to be seen however, the company reported that it expected to "significantly" increase its investment in this area in 1999. On a run rate basis Amazon.com sales have surpassed $1.0Bill and while this is based somewhat on the busy forth quarter all forecasts for full year sales made at the same time in prior years have been exceeded.
Source: Publishers Weekly 3/22/99
CMP: For Sale?
CMP Media the publisher of a number of computer industry related magazine titles has announced that it is open to the idea of a sale of merger. President and CEO, Michael Leeds, who’s family owns 75% of the stock, has retained Lazard Freres & Co to explore strategic alternatives. Potential buyers include Ziff Davis, Primedia or Penton Media. Also a potential would be an investment firm from outside the industry. Those rich folk who cashed out of Petersens when the company was purchased by Emap have announced they would like to do the same thing again so they should also be considered potential purchasers.
Source: Folio 3/98
Magazine Sell Through Keeps Falling
Average industry sell through rate has fallen to 38% from 43% a few years ago according to the Magazine Publishers Association (MPA). Arthur Andersen has undertaken a study of magazine sales and returns on behalf of the Book Industry Study Group – Partner Peggy Smyth commented that she is surprised at the number of publishers who are unconcerned about their returns and puts it down to the current robust advertising climate. She also said that a growing number of magazine publishers are beginning to develop data warehouses to enable deeper analysis of data on sales and returns. Of those surveyed, by far the most popular reaction to increasing levels of returns was to spend more money on research – identifying why purchasers bought magazines at retail. This was followed in popularity by cutting print volume.
Source: Folio Magazine March 1999
Reed Elesevier: No CEO
Pearson Seeks Legal Aid
WH Smith: Web Fever
American Booksellers Association Internet Commerce
Amazon.com Look For Distribution Improvements
CMP Media: On the Block?
Magazine Sell Through Keeps Falling
Reed Elsevier: No CEO
Reed Elsevier announced this week that the search for a new CEO to replace the two men who currently hold the position is going to have to continue. Rumors had it the company was close to announcing a replacement – rumored to be Jon Newcomb - a few weeks ago when they announced their quarterly financials. There are no indications how long the search will take or who maybe under consideration. Also, the company said two of its directors, Pierre Vinken and Loek van Vollenhoven, have resigned ``following differences of opinion over the management of the recruitment board.'' Both were to have retired from the board in the next few weeks. In the days since the report surfaced other rumors about Reed’s future have also come out. Wolters Kluwer is said to be interested in revisiting the merger discussions which were put on ice last year when the European commission indicated they would have monopoly concerns regarding any combinations of the two companies. Reed Elsevier later said released a statement saying that there were no plans to de-merge the company and that publishing and information were key components of the company’s strategy.
Source: Reuters April 6, 1999.
Pearson Seeks Legal Aid
Pearson has launched a multimillion dollar lawsuit against venture capital group Hicks Muse Tate & Furst for alleged breach of contract and fraud. Pearson alleges in a suit filed in a New York state court that Hicks Muse misled Pearson into thinking it would complete a $860 million (£525 million) deal to acquire two publishing businesses put up for sale as part of Pearson's $4.6 billion acquisition of the Simon & Schuster educational business. Pearson is seeking both compensation and punitive damages.
Source: Reuters 4/6/99
WH Smith: Web Fever
Shares of WH Smith, which have languished in recent years due to poor financial performance, saw their largest one day gain last week when the company announced it was establishing a free internet service similar to Dixon’s Freeserve. (Dixon’s is an electronics retailer like Circuit City but with prices like Harvey Electronics). The service will be established in collaboration with Microsoft and British Telecom. According to sources familiar with the product it will use BT telecoms service and Microsoft software to offer Internet access to anyone with a home computer and a modem. In June, WH Smith paid £8.8 million for bookshop.co.uk, Britain's largest on-line bookseller.
American Booksellers Association to Launch Web siteApparently after several months of speculation, the American Booksellers Association (ABA) announced last week that they would develop an e-commerce site to support bookselling on the web by independent booksellers. The sight will be called BookSense.com and will support up to 1.6 MM titles contained in the MUZE data base. Independent booksellers will be able to establish and use their own Web site as the front end or design a site based on one of several templates that will be provided by the ABA. Baker & Taylor will be the association's fulfillment partner and (it is assumed) will also supply the required bibliographic information for all titles. There was no immediate word of other partners however depth of information such as reviews would be required to compete with Amazon.com and Barnesandnoble.com. The site is expected to be launched sometime this summer and currently the ABA is in the initial stages of setting up the business unit required to manage the operation.
Source: Publishers Weekly, 3/22/99
Amazon.com Look for Distribution ImprovementsAccording to filings made by Amazon, the online retailer plans to open one or more distribution centers in the year and to increase investment in developing its existing infrastructure to increase efficiency. There is obvious concern regarding the planned acquisition by Barnes and Noble of Ingram Distribution and these infrastructure investments should be seen as a recognition of this concern. Amazon has been successful in the last year in decreasing their reliance on Ingram from 60% of orders in 1997 to 40% in 1998. Whether the company actually makes these investments remains to be seen however, the company reported that it expected to "significantly" increase its investment in this area in 1999. On a run rate basis Amazon.com sales have surpassed $1.0Bill and while this is based somewhat on the busy forth quarter all forecasts for full year sales made at the same time in prior years have been exceeded.
Source: Publishers Weekly 3/22/99
CMP: For Sale?
CMP Media the publisher of a number of computer industry related magazine titles has announced that it is open to the idea of a sale of merger. President and CEO, Michael Leeds, who’s family owns 75% of the stock, has retained Lazard Freres & Co to explore strategic alternatives. Potential buyers include Ziff Davis, Primedia or Penton Media. Also a potential would be an investment firm from outside the industry. Those rich folk who cashed out of Petersens when the company was purchased by Emap have announced they would like to do the same thing again so they should also be considered potential purchasers.
Source: Folio 3/98
Magazine Sell Through Keeps Falling
Average industry sell through rate has fallen to 38% from 43% a few years ago according to the Magazine Publishers Association (MPA). Arthur Andersen has undertaken a study of magazine sales and returns on behalf of the Book Industry Study Group – Partner Peggy Smyth commented that she is surprised at the number of publishers who are unconcerned about their returns and puts it down to the current robust advertising climate. She also said that a growing number of magazine publishers are beginning to develop data warehouses to enable deeper analysis of data on sales and returns. Of those surveyed, by far the most popular reaction to increasing levels of returns was to spend more money on research – identifying why purchasers bought magazines at retail. This was followed in popularity by cutting print volume.
Source: Folio Magazine March 1999
Wednesday, March 24, 1999
3/24/99: ReedElsevier, Bertelsmann, Barnes Noble,
Publishing News: March 24th, 1999
Mercer Study on Single Copy Sales
Reed Elsevier Profit Forecast Disappoints
Martin Maleska, Rejoins Veronis, Suhler
Bertelsmann Havas Deal is Off.
AAP: 1998 Book Sales Exceed $23Bill
US Book Store Sales: $13Bill
Amazon on Drugs
Golden Reprieve
Barnes & Noble Sales: $3Bill
Mercer Study on Single Copy Sales
Mercer Consulting recently announced preliminary findings from a study commissioned by the Magazine Publishers Association (www.magazine.org) . The study was a review of the single copy magazine channel and the potential role of scan-based trading in the retail market. The objective of the study was to determine the best way for the industry to take positive, concerted action to improve the efficiency and effectiveness of the single copy channel for all trading partners, and address the future role of scan-based trading. During the first phase, Mercer worked with retailers, wholesalers, national distributors, publishers and other industry players to identify opportunities for performance improvement in the retail sales of magazines. Mercer identified potential rewards equivalent to as much as $420 million per year or ten percent of retail sales based on their input, as well as lessons from other industries, and economic modeling of the supply chain. In support of the above, the MPA has adopted a set of cooperative standards and practices named COSMAR which will require changes and new approaches on the part of all trading partners: publishers, distributors and retailers. Mercer and the MPA will look to prototype their recommendations over the next few months.
Reed Elsevier Profit Forecast Disappoints
They don’t have a CEO, their merger with Wolters Kluwer failed and now profits announced for 1998 were 6% below last year and projected earnings for 1999 will be flat. Pre-tax profits fell to $1.26 billion in 1998 and these results were in line with the six percent drop the company forecast in December. Sterling's strength and Reed's heavy investment in adapting its core hard-copy publications for the Internet age were given as reasons for the poor results. Sales were $5.5Billion for 1998. This lack of strong growth, combined with a lack of news on Reed's search for a new chief executive, delivered a double blow to its shares, which fell sharply in London and Amsterdam, despite strong overall gains by both stock markets. The company did say that discussions with a candidate were in an advanced state however it is now two weeks after this announcement and they still have not made an announcement. Out going CEO, Nigel Stapleton declined to comment on how soon Reed will announce the results of its search, which was unveiled seven months ago. Other items of note; Reed spent an additional 15 million pounds on major initiatives in electronic publishing last year, taking the total to 80 million. The company posted ``pure'' Internet revenues of 10 million pounds, a 50 percent increase year on year.
Martin Maleska, Rejoins Veronis, Suhler
Veronis, Suhler & Associates announced that Martin E. Maleska, a senior publishing executive and investment banker who most recently served as President of Simon & Schuster's International and Business & Professional Group, has rejoined the firm as Advisor Managing Director. Mr. Maleska will be involved in all aspects of the firm's merchant banking activities which include investment banking and its private equity funds. The return to Veronis, Suhler is a homecoming for Mr. Maleska, who was a managing director at the firm from 1991-1995, concentrating on magazine, newspaper and book publishing transactions.
Bertelsmann Havas Deal is Off.
The proposed merger between Bertelsmann and Havas’s professional publishing operations is off. Apparently, neither side would concede to the other in terms of who’s operation was bigger. The companies continue to maintain close relations in French book clubs and online book retailing.
AAP: 1998 Book Sales Exceed $23Bill
The American Association of Publishers recently released their preliminary sales numbers for 1998. According the AAP numbers, retail book sales reached $23Bill. Give the last five years of declines or mediocre sales gains this was a remarkable sales increase of 6% over 1997. The biggest sales gains occurred in Adult paperback (+10%), Juvenile paperback (14%), and ElHi Texts (10%). In contrast to prior years, there were no categories which showed declining year on year sales.
US Book Store Sales: $13Bill
Bookstores sales reported in Publishers Weekly rose 2.6% to over $13Bill. Store sales measured against retail sales generally were only half the experienced gain for the sector.
Amazon on Drugs
Amazon.com purchased a 40% interest in the online drugstore, drugstore.com. Amazon made the investment a number of months ago and it recently came to light due to drugstore’s launch. Jeff Bezos, Amazon CEO declined to comment on other internet related investments Amazon may have made. Amazon appears to be actively proving the ‘mall’ internet business model.
Golden Reprieve
Golden Books, the beleaguered Children’s Book publisher where Richard Synder went to re-create Simon & Schuster, reached an accord with it’s Bankers on restructuring plan. Essentially, the deal recapitalizes the company with a loan from CIT group. Current management, which has been in turmoil over the past 12 months, will remain in place. Rumors at the end of last year had Disney purchasing Golden Books however nothing came of this. Golden holds long term licenses on a number of Disney characters.
Barnes & Noble Sales: $3Bill
Barnes & Noble sales hit $3Bill in fiscal 1999. Sales increased 8% over last year and sales from superstores accounted for 84% of total sales. Internet sales at barnesandnoble.com increased to $70.2MM. B&N reports that they will add up to 50 new superstores during 1999 however the company’s fiscal 2000 earnings forecast was low which helped reduce the stock price by $5 last week. Let’s not forget that Amazon is on a yearly run rate of $1Bill – what’s with the bricks and mortar?
Mercer Study on Single Copy Sales
Reed Elsevier Profit Forecast Disappoints
Martin Maleska, Rejoins Veronis, Suhler
Bertelsmann Havas Deal is Off.
AAP: 1998 Book Sales Exceed $23Bill
US Book Store Sales: $13Bill
Amazon on Drugs
Golden Reprieve
Barnes & Noble Sales: $3Bill
Mercer Study on Single Copy Sales
Mercer Consulting recently announced preliminary findings from a study commissioned by the Magazine Publishers Association (www.magazine.org) . The study was a review of the single copy magazine channel and the potential role of scan-based trading in the retail market. The objective of the study was to determine the best way for the industry to take positive, concerted action to improve the efficiency and effectiveness of the single copy channel for all trading partners, and address the future role of scan-based trading. During the first phase, Mercer worked with retailers, wholesalers, national distributors, publishers and other industry players to identify opportunities for performance improvement in the retail sales of magazines. Mercer identified potential rewards equivalent to as much as $420 million per year or ten percent of retail sales based on their input, as well as lessons from other industries, and economic modeling of the supply chain. In support of the above, the MPA has adopted a set of cooperative standards and practices named COSMAR which will require changes and new approaches on the part of all trading partners: publishers, distributors and retailers. Mercer and the MPA will look to prototype their recommendations over the next few months.
Reed Elsevier Profit Forecast Disappoints
They don’t have a CEO, their merger with Wolters Kluwer failed and now profits announced for 1998 were 6% below last year and projected earnings for 1999 will be flat. Pre-tax profits fell to $1.26 billion in 1998 and these results were in line with the six percent drop the company forecast in December. Sterling's strength and Reed's heavy investment in adapting its core hard-copy publications for the Internet age were given as reasons for the poor results. Sales were $5.5Billion for 1998. This lack of strong growth, combined with a lack of news on Reed's search for a new chief executive, delivered a double blow to its shares, which fell sharply in London and Amsterdam, despite strong overall gains by both stock markets. The company did say that discussions with a candidate were in an advanced state however it is now two weeks after this announcement and they still have not made an announcement. Out going CEO, Nigel Stapleton declined to comment on how soon Reed will announce the results of its search, which was unveiled seven months ago. Other items of note; Reed spent an additional 15 million pounds on major initiatives in electronic publishing last year, taking the total to 80 million. The company posted ``pure'' Internet revenues of 10 million pounds, a 50 percent increase year on year.
Martin Maleska, Rejoins Veronis, Suhler
Veronis, Suhler & Associates announced that Martin E. Maleska, a senior publishing executive and investment banker who most recently served as President of Simon & Schuster's International and Business & Professional Group, has rejoined the firm as Advisor Managing Director. Mr. Maleska will be involved in all aspects of the firm's merchant banking activities which include investment banking and its private equity funds. The return to Veronis, Suhler is a homecoming for Mr. Maleska, who was a managing director at the firm from 1991-1995, concentrating on magazine, newspaper and book publishing transactions.
Bertelsmann Havas Deal is Off.
The proposed merger between Bertelsmann and Havas’s professional publishing operations is off. Apparently, neither side would concede to the other in terms of who’s operation was bigger. The companies continue to maintain close relations in French book clubs and online book retailing.
AAP: 1998 Book Sales Exceed $23Bill
The American Association of Publishers recently released their preliminary sales numbers for 1998. According the AAP numbers, retail book sales reached $23Bill. Give the last five years of declines or mediocre sales gains this was a remarkable sales increase of 6% over 1997. The biggest sales gains occurred in Adult paperback (+10%), Juvenile paperback (14%), and ElHi Texts (10%). In contrast to prior years, there were no categories which showed declining year on year sales.
US Book Store Sales: $13Bill
Bookstores sales reported in Publishers Weekly rose 2.6% to over $13Bill. Store sales measured against retail sales generally were only half the experienced gain for the sector.
Amazon on Drugs
Amazon.com purchased a 40% interest in the online drugstore, drugstore.com. Amazon made the investment a number of months ago and it recently came to light due to drugstore’s launch. Jeff Bezos, Amazon CEO declined to comment on other internet related investments Amazon may have made. Amazon appears to be actively proving the ‘mall’ internet business model.
Golden Reprieve
Golden Books, the beleaguered Children’s Book publisher where Richard Synder went to re-create Simon & Schuster, reached an accord with it’s Bankers on restructuring plan. Essentially, the deal recapitalizes the company with a loan from CIT group. Current management, which has been in turmoil over the past 12 months, will remain in place. Rumors at the end of last year had Disney purchasing Golden Books however nothing came of this. Golden holds long term licenses on a number of Disney characters.
Barnes & Noble Sales: $3Bill
Barnes & Noble sales hit $3Bill in fiscal 1999. Sales increased 8% over last year and sales from superstores accounted for 84% of total sales. Internet sales at barnesandnoble.com increased to $70.2MM. B&N reports that they will add up to 50 new superstores during 1999 however the company’s fiscal 2000 earnings forecast was low which helped reduce the stock price by $5 last week. Let’s not forget that Amazon is on a yearly run rate of $1Bill – what’s with the bricks and mortar?
Tuesday, March 02, 1999
3/2/99: Amazon.com, Ingram, Pearson, NYTimes,
Publishing News: March 2, 1999
Amazon.com Sales
Ingram
Hearst
Pearson
New York Times Co. to Buy Interest in TheStreet.com
EBook Standards Meeting
Book Point of Sale Information
Cambridge University Titles On Demand
Reader's Digest Outlines Growth Strategy
Adobe Systems Introduces Next Generation of Page-Layout Software
Langenscheidt Acquires Hammond Brand
Mirror Group
Amazon.com Sales
Amazon.com’s sales grew to $610MM from $147MM and are now at an annual run rate over a Billion dollars according to company executives. The net loss for the period was $124MM vs $31MM last year. Since last year, not only has Amazon.com continued to explosively sell books but the company has added CD’s and videos to the mix. Additionally, the company also expanded into Germany and the UK during the same period. Sales in ‘expansion’ areas accounted for 25% of total fourth quarter sales. Company President Jeff Bezos confirmed his company’s plans to aggressively invest in the business even more than they had in the past which will no doubt translate into continued operating losses for the company.
Source: Publishers Weekly, 2/1/99
Ingram
YoungSuk Chi has been promoted to COO of the Ingram Book Group and will report to Mike Lovett the President and CEO of the Ingram Book Group
Source: Publishers’ Weekly 1/25/99
Hearst
Hearst Book Group which includes Avon, Hearst, Morrow and at least 21 other imprints saw sales surpass $200MM according to Publishers’ Weekly. During the year Hearst had six titles on the best seller lists and also saw increases in back list sales.
Source: Publishers’ Weekly 1/25/99
Pearson
Pearson Education announced an agreement with Versaware Technologies to convert textbooks into electronic form. Apparently, Versaware has developed a system that reduces the time and expense of convertion into a variety of formats. Versaware is also denying that it is about to be purchased by Barnes and Noble although they admit to a number of discussions on strategic partnerships.
Publisher’s Weekly 2/15/99
New York Times Co. to Buy Interest in TheStreet.com New York Times Co. said it will pay $15 million in cash and services for a minority equity stake in TheStreet.com, an online provider of financial and investment news and commentary.
Simultaneously, Michael Golden, vice chairman of New York Times Co., was nominated to serve on TheStreet.com's board. New York Times Co. also said it was discussing opportunities for strategic alliances with TheStreet.com.
Source: The Wall Street Journal 02/23/99
EBook Standards Meeting
The Open Book Standards committee met to review a draft for proposed standard file formats based on SGML and XML for electronic book devices. The meeting was hosted jointly by eBook manufacturers Softbook Press and Nuvo Media. The current specifications are open to review (as an evaluator) for comment and review. It is expected that the specifications will be published to the public sometime in the next three months.
Source: Publisher’s Weekly 2/15/99
Book Point of Sale Information
Publishing Solutions Inc., a White Plains N.Y. company announced it is has agreed with Barnes & Noble and Penguin Putnam to pilot a book POS system. This system is designed to track and forecast book sales at the retail level. As the results become known the company plans to expand the system to a wider group of retailers.
Source: Publishers’ Weekly 2/15/99
Cambridge University Titles On Demand
Lightling Press the Ingram affiliated on demand printer announced that they have joined with Cambridge University Press (CUP) to offer a number of CUP titles on demand. Initially Lightning will offer 113 titles, however if all goes well up to 500 additional titles may be added to the selection. CUP has chosen recently discontinued titles which are still receiving orders and company sources commented that their current order fulfillment system keeps track of orders for out of print titles. Lightning Press now has over 1800 titles in it’s digital library which can be printed in lots as low as one unit.
Source: Publisher’s Weekly 2/15/99
Reader's Digest Outlines Growth Strategy Thomas O. Ryder, chairman and CEO of The Reader's Digest Association, Inc. today outlined a five-point growth strategy for the company in a speech to financial analysts and company employees. The key elements of the growth strategy include: - Dramatically expanding the company's presence in five targeted areas of intense consumer interest -- home, health, family, finance and faith -- that offer high growth potential and suit the company's brand. - Selling products and services beyond publishing that fit with the Reader's Digest brand in the five targeted areas, initially focusing on health and financial services. - Continuing geographic expansion, by entering new countries and expanding offerings in countries where the company already has a presence. - Developing new channels -- including direct response TV and non-sweepstakes mail -- to market existing and new products and services. - Making the Internet an integral part of all the company's business by investing in high quality website development, enhancing current sites and creating new ones.
In the call Ryder also spoke of efforts – to date largely successful – to reduce monetize assets and that these had produced over $300MM. This money together with an additional investment pool of $100MM would be used to fund the above investment activities. There will be a concentration on the internet as a mechanism to extend their strength in direct response. There was no mention of the proposed deal/joint venture with Time Life. The companies may still be discussing some consolidation but it remains to be seen if anything comes of it.
Source: Businesswire 2/25/99
Adobe Systems Introduces Next Generation of Page-Layout SoftwareAdobe Systems introduced the vaunted ‘Quark Killer’ application this week in Boston. The desk top publishing package named InDesign was previewed six months ago under the name K2 and is based on a new open object oriented architecture that is highly extensible. With the introduction of InDesign, Adobe is aggressively taking on Quark’s core market in desk top publishing software; however with over 70% market share in key publishing and advertising markets Adobe will face an up hill battle convincing production managers and designers to make the switch. There are a number of advantages however to making the switch – number one is you don’t have to deal with Quark’s renowned cavalier attitude to customer service as well as their errant product migration strategy. Additionally, Adobe’s other products are mainstays in publishing and advertising offices and InDesign has been developed to work seamlessly with Photoshop, Illustrator and Acrobat. Quark does not interface with these products which has caused process silos and inefficiencies. A flexible, fully digital workflow is, according to Terry Rosen, director of information technology at Ogilvy & Mather New York, essential for companies looking to succeed in a global market, where concepts and materials have to be shared effortlessly across thousands of miles. "Adobe InDesign delivers a truly integrated creative tool kit. The software offers a familiar interface and the same approach to page layout and design as Photoshop and Illustrator, which means our art directors and studio artists can hit the ground running with it. With InDesign, we can also output ads directly to PDF for review, approval, and transmission. It's this type of unified workflow that lets us move ideas to production faster, and better support our clients worldwide," said Rosen.
Quarks’ reaction to the news was muted – although they have yet to announce a strategy for the current generation of products.
Source: Businesswire 3/2/99
Langenscheidt Acquires Hammond Brand Hammon Inc, a US based map and cartography publisher has been purchased by German based Langenscheidt Publishers, Inc. The 98-year old Hammond, celebrated for its old world tradition of cartography, has enjoyed a reputation in recent years for its advances in mapmaking technology. In 1992, it published the world's first completely digitized world atlas: The Hammond Atlas of the World. This atlas garnered awards for graphics, accuracy and innovation, as did its most recent edition, published in 1998, which pioneered computer-generated tints depicting land elevations and ocean depths. Terms were not disclosed.
Source: Businesswire 3/2/99
Mirror Group
The Mirror Group rejected the most recent offer from regional UK publisher Trinity. The last bid valued the company at approximately $1.5Bill. The combination of stock and cash was insufficient in the view of the board and additional bids are expected. Mirror group has faced turmoil over the past several months regarding it’s future. David Montgomery the Mirror CEO was removed by the board recently in a board room shake up and the company is now being run by a temporary CEO. Since the living large days of Bob Maxwell (was he pushed?) the company has fought to recover it’s once UK market dominance while at the same time managing the debt imposed by Maxwell’s unique style of financial accounting. Maxwell if you recall stripped the pension funds of this operation to ‘plug the leaks’ (pun very much intended) in his rapidly sinking business empire. Many of those pensioners were required to return to work.
Source: NYT 3/2/99
Amazon.com Sales
Ingram
Hearst
Pearson
New York Times Co. to Buy Interest in TheStreet.com
EBook Standards Meeting
Book Point of Sale Information
Cambridge University Titles On Demand
Reader's Digest Outlines Growth Strategy
Adobe Systems Introduces Next Generation of Page-Layout Software
Langenscheidt Acquires Hammond Brand
Mirror Group
Amazon.com Sales
Amazon.com’s sales grew to $610MM from $147MM and are now at an annual run rate over a Billion dollars according to company executives. The net loss for the period was $124MM vs $31MM last year. Since last year, not only has Amazon.com continued to explosively sell books but the company has added CD’s and videos to the mix. Additionally, the company also expanded into Germany and the UK during the same period. Sales in ‘expansion’ areas accounted for 25% of total fourth quarter sales. Company President Jeff Bezos confirmed his company’s plans to aggressively invest in the business even more than they had in the past which will no doubt translate into continued operating losses for the company.
Source: Publishers Weekly, 2/1/99
Ingram
YoungSuk Chi has been promoted to COO of the Ingram Book Group and will report to Mike Lovett the President and CEO of the Ingram Book Group
Source: Publishers’ Weekly 1/25/99
Hearst
Hearst Book Group which includes Avon, Hearst, Morrow and at least 21 other imprints saw sales surpass $200MM according to Publishers’ Weekly. During the year Hearst had six titles on the best seller lists and also saw increases in back list sales.
Source: Publishers’ Weekly 1/25/99
Pearson
Pearson Education announced an agreement with Versaware Technologies to convert textbooks into electronic form. Apparently, Versaware has developed a system that reduces the time and expense of convertion into a variety of formats. Versaware is also denying that it is about to be purchased by Barnes and Noble although they admit to a number of discussions on strategic partnerships.
Publisher’s Weekly 2/15/99
New York Times Co. to Buy Interest in TheStreet.com New York Times Co. said it will pay $15 million in cash and services for a minority equity stake in TheStreet.com, an online provider of financial and investment news and commentary.
Simultaneously, Michael Golden, vice chairman of New York Times Co., was nominated to serve on TheStreet.com's board. New York Times Co. also said it was discussing opportunities for strategic alliances with TheStreet.com.
Source: The Wall Street Journal 02/23/99
EBook Standards Meeting
The Open Book Standards committee met to review a draft for proposed standard file formats based on SGML and XML for electronic book devices. The meeting was hosted jointly by eBook manufacturers Softbook Press and Nuvo Media. The current specifications are open to review (as an evaluator) for comment and review. It is expected that the specifications will be published to the public sometime in the next three months.
Source: Publisher’s Weekly 2/15/99
Book Point of Sale Information
Publishing Solutions Inc., a White Plains N.Y. company announced it is has agreed with Barnes & Noble and Penguin Putnam to pilot a book POS system. This system is designed to track and forecast book sales at the retail level. As the results become known the company plans to expand the system to a wider group of retailers.
Source: Publishers’ Weekly 2/15/99
Cambridge University Titles On Demand
Lightling Press the Ingram affiliated on demand printer announced that they have joined with Cambridge University Press (CUP) to offer a number of CUP titles on demand. Initially Lightning will offer 113 titles, however if all goes well up to 500 additional titles may be added to the selection. CUP has chosen recently discontinued titles which are still receiving orders and company sources commented that their current order fulfillment system keeps track of orders for out of print titles. Lightning Press now has over 1800 titles in it’s digital library which can be printed in lots as low as one unit.
Source: Publisher’s Weekly 2/15/99
Reader's Digest Outlines Growth Strategy Thomas O. Ryder, chairman and CEO of The Reader's Digest Association, Inc. today outlined a five-point growth strategy for the company in a speech to financial analysts and company employees. The key elements of the growth strategy include: - Dramatically expanding the company's presence in five targeted areas of intense consumer interest -- home, health, family, finance and faith -- that offer high growth potential and suit the company's brand. - Selling products and services beyond publishing that fit with the Reader's Digest brand in the five targeted areas, initially focusing on health and financial services. - Continuing geographic expansion, by entering new countries and expanding offerings in countries where the company already has a presence. - Developing new channels -- including direct response TV and non-sweepstakes mail -- to market existing and new products and services. - Making the Internet an integral part of all the company's business by investing in high quality website development, enhancing current sites and creating new ones.
In the call Ryder also spoke of efforts – to date largely successful – to reduce monetize assets and that these had produced over $300MM. This money together with an additional investment pool of $100MM would be used to fund the above investment activities. There will be a concentration on the internet as a mechanism to extend their strength in direct response. There was no mention of the proposed deal/joint venture with Time Life. The companies may still be discussing some consolidation but it remains to be seen if anything comes of it.
Source: Businesswire 2/25/99
Adobe Systems Introduces Next Generation of Page-Layout SoftwareAdobe Systems introduced the vaunted ‘Quark Killer’ application this week in Boston. The desk top publishing package named InDesign was previewed six months ago under the name K2 and is based on a new open object oriented architecture that is highly extensible. With the introduction of InDesign, Adobe is aggressively taking on Quark’s core market in desk top publishing software; however with over 70% market share in key publishing and advertising markets Adobe will face an up hill battle convincing production managers and designers to make the switch. There are a number of advantages however to making the switch – number one is you don’t have to deal with Quark’s renowned cavalier attitude to customer service as well as their errant product migration strategy. Additionally, Adobe’s other products are mainstays in publishing and advertising offices and InDesign has been developed to work seamlessly with Photoshop, Illustrator and Acrobat. Quark does not interface with these products which has caused process silos and inefficiencies. A flexible, fully digital workflow is, according to Terry Rosen, director of information technology at Ogilvy & Mather New York, essential for companies looking to succeed in a global market, where concepts and materials have to be shared effortlessly across thousands of miles. "Adobe InDesign delivers a truly integrated creative tool kit. The software offers a familiar interface and the same approach to page layout and design as Photoshop and Illustrator, which means our art directors and studio artists can hit the ground running with it. With InDesign, we can also output ads directly to PDF for review, approval, and transmission. It's this type of unified workflow that lets us move ideas to production faster, and better support our clients worldwide," said Rosen.
Quarks’ reaction to the news was muted – although they have yet to announce a strategy for the current generation of products.
Source: Businesswire 3/2/99
Langenscheidt Acquires Hammond Brand Hammon Inc, a US based map and cartography publisher has been purchased by German based Langenscheidt Publishers, Inc. The 98-year old Hammond, celebrated for its old world tradition of cartography, has enjoyed a reputation in recent years for its advances in mapmaking technology. In 1992, it published the world's first completely digitized world atlas: The Hammond Atlas of the World. This atlas garnered awards for graphics, accuracy and innovation, as did its most recent edition, published in 1998, which pioneered computer-generated tints depicting land elevations and ocean depths. Terms were not disclosed.
Source: Businesswire 3/2/99
Mirror Group
The Mirror Group rejected the most recent offer from regional UK publisher Trinity. The last bid valued the company at approximately $1.5Bill. The combination of stock and cash was insufficient in the view of the board and additional bids are expected. Mirror group has faced turmoil over the past several months regarding it’s future. David Montgomery the Mirror CEO was removed by the board recently in a board room shake up and the company is now being run by a temporary CEO. Since the living large days of Bob Maxwell (was he pushed?) the company has fought to recover it’s once UK market dominance while at the same time managing the debt imposed by Maxwell’s unique style of financial accounting. Maxwell if you recall stripped the pension funds of this operation to ‘plug the leaks’ (pun very much intended) in his rapidly sinking business empire. Many of those pensioners were required to return to work.
Source: NYT 3/2/99
Tuesday, February 16, 1999
2/16/99: ReedElsevier, Harpercollins, Bertelsmann,
Publishing News: 2/16/99
Newcomb leads race for Reed Elsevier CEO
Children's Television Workshop Signs Agreement Random House Inc.
Tina Brown’s Talk Magazine
Trinity opens due diligence on Mirror
HarperCollins Announces Plans to Acquire the Ecco Press
Bertelsmann expects JV with Havas in 2 weeks time
Coopers & Lybrand pays $5.4MM in Maxwell case
Newcomb leads race for Reed Elsevier CEO
Don’t be surprised to see ex Simon & Schuster CEO Jon Newcomb made Chairman and CEO of UK/Dutch publishing giant Reed Elsevier. Industry sources peg him as the leading candidate for the job which has essentially been vacant for five months.
Children's Television Workshop Signs Agreement Random House Inc.
Children's Television Workshop (CTW), the multimedia educational company that created "Sesame Street," has agreed a long-term development agreement with Random House Inc. CTW has also agreed to pursue television production initiatives with Random House, whose parent company Bertelsmann AG has extensive broadcast channel and programming holdings in Europe. As of July 1, the Random House Children's Media Group will build on its long-term relationship with CTW and "Sesame Street" books by adding new formats such as storybooks, color and activity books, and workbooks for publication and distribution in the United States and Canadian markets. By further expanding and combining its own 30-year-old publishing program with Random House to include these new formats, CTW will be able to create a more visible and synergistic presence at retail for its books as well as a stronger, more broadly integrated publishing program. Both companies will explore developing books from CTW television properties other than "Sesame Street" and creating television programming based on book properties whose dramatic rights are held by Random House Children's Media Group
Source: Businesswire 2/11/99
Tina Brown’s Talk Magazine
Miramax Films and Hearst Magazines announced today that they have entered into a joint-venture agreement to publish Talk, a new general interest monthly magazine edited by Tina Brown. The magazine will debut in August with the September, 1999 edition. Under the terms of the agreement, Hearst Magazines, the world's largest publisher of monthly magazines, will take a 50 percent joint-ownership stake in Talk magazine and assume certain management responsibilities including circulation and manufacturing management, as well as newsstand distribution and subscription fulfillment through its subsidiaries Hearst Distribution Group, Inc. and Communications Data Services. Miramax's Talk Media will be responsible for editorial content, advertising sales and marketing. Talk magazine, which will premiere with a circulation of 500,000, will be a provocative and topical publication offering commentary, criticism, reporting, opinion and profiles. In July of last year, Miramax Films established Talk Media in conjunction with Tina Brown and Ron Galotti to publish Talk magazine, produce television programming and publish books.
Source Businesswire 2/11/99
Trinity opens due diligence on Mirror
TRINITY, the UK's largest regional newspaper group, has begun due diligence at the Mirror Group in preparation for a second assault on the embattled newspaper company later this month. The news comes only days after it emerged that Regional Independent Media, publisher of the Yorkshire Post, was likely to revise its £913 million cash offer for the Mirror over the next few weeks. However, many believe the new bid will not be much higher than the 200p a share already offered. It is understood that over the past two days Trinity has been given access to a "data room" containing commercially sensitive information about the Mirror, whose national newspaper titles include The Mirror and The People. Trinity is believed to have seen the commercial data for only 24 hours, and has already requested more detailed information. However, Trinity is not expected to make a bid for the Mirror immediately, because it feels it needs to look further into the finances of the company. Those close to the situation believe a bid is more likely over the next few weeks. The bidding battle for the Mirror has already resulted in a bloody boardroom coup at the company, which saw the dramatic resignation of David Montgomery as its chief executive last month.
Source: Financial Times 2/15/99
HarperCollins Announces Plans to Acquire the Ecco Press
Jane Friedman, President and CEO of HarperCollins Publishers today announced that HarperCollins will purchase The Ecco Press, one of the country's most prestigious literary publishers. The acquisition will become effective as of July 1. The Ecco list includes such critically acclaimed authors as John Ashbery, Paul Bowles, Italo Calvino, Gerald Early, Richard Ford, Louise Gluck, Robert Hass, Zbigniew Herbert, Bobbi Ann Mason, Cormac McCarthy, Nobel Laureate Czeslaw Milosz, Joyce Carol Oates, and Tobias Wolff. In addition, Halpern will publish his first books with HarperCollins starting in January, 2000.
Source: Businesswire 2/16/99
Bertelsmann expects JV with Havas in 2 weeks time
German media giant Bertelsmann AG expects to complete a joint venture deal on specialist publishing with France's Havas within the next two weeks. A spokesman for Bertelsmann's specialist publishing unit said the deal entailed a 50-50 joint venture with the aim of making international acquisitions together. In a related issue, the spokesman also said that Bertelsmann's takeover of the Springer scientific publishing house had been approved by the European Union cartel authorities. The acquisition increases the value of Bertelsmann's trade publishing activities to 1.5 billion marks ($859.6 million) from 625 million marks
Source: Reuters 2/16/99
Coopers & Lybrand pays $5.4MM in Maxwell case
Coopers & Lybrand has paid fines and costs of $5.4MM for failings in its role as auditor of most of the companies controlled by the late Robert Maxwell, a British accounting watchdog said on this week. Maxwell died in November 1991 (fell off his boat), leaving behind a business empire riddled with debts and huge holes in the pension funds of his companies, including Mirror Group Newspapers which Maxwell owned at the time.
Source: Reuters 2/16/99
Newcomb leads race for Reed Elsevier CEO
Children's Television Workshop Signs Agreement Random House Inc.
Tina Brown’s Talk Magazine
Trinity opens due diligence on Mirror
HarperCollins Announces Plans to Acquire the Ecco Press
Bertelsmann expects JV with Havas in 2 weeks time
Coopers & Lybrand pays $5.4MM in Maxwell case
Newcomb leads race for Reed Elsevier CEO
Don’t be surprised to see ex Simon & Schuster CEO Jon Newcomb made Chairman and CEO of UK/Dutch publishing giant Reed Elsevier. Industry sources peg him as the leading candidate for the job which has essentially been vacant for five months.
Children's Television Workshop Signs Agreement Random House Inc.
Children's Television Workshop (CTW), the multimedia educational company that created "Sesame Street," has agreed a long-term development agreement with Random House Inc. CTW has also agreed to pursue television production initiatives with Random House, whose parent company Bertelsmann AG has extensive broadcast channel and programming holdings in Europe. As of July 1, the Random House Children's Media Group will build on its long-term relationship with CTW and "Sesame Street" books by adding new formats such as storybooks, color and activity books, and workbooks for publication and distribution in the United States and Canadian markets. By further expanding and combining its own 30-year-old publishing program with Random House to include these new formats, CTW will be able to create a more visible and synergistic presence at retail for its books as well as a stronger, more broadly integrated publishing program. Both companies will explore developing books from CTW television properties other than "Sesame Street" and creating television programming based on book properties whose dramatic rights are held by Random House Children's Media Group
Source: Businesswire 2/11/99
Tina Brown’s Talk Magazine
Miramax Films and Hearst Magazines announced today that they have entered into a joint-venture agreement to publish Talk, a new general interest monthly magazine edited by Tina Brown. The magazine will debut in August with the September, 1999 edition. Under the terms of the agreement, Hearst Magazines, the world's largest publisher of monthly magazines, will take a 50 percent joint-ownership stake in Talk magazine and assume certain management responsibilities including circulation and manufacturing management, as well as newsstand distribution and subscription fulfillment through its subsidiaries Hearst Distribution Group, Inc. and Communications Data Services. Miramax's Talk Media will be responsible for editorial content, advertising sales and marketing. Talk magazine, which will premiere with a circulation of 500,000, will be a provocative and topical publication offering commentary, criticism, reporting, opinion and profiles. In July of last year, Miramax Films established Talk Media in conjunction with Tina Brown and Ron Galotti to publish Talk magazine, produce television programming and publish books.
Source Businesswire 2/11/99
Trinity opens due diligence on Mirror
TRINITY, the UK's largest regional newspaper group, has begun due diligence at the Mirror Group in preparation for a second assault on the embattled newspaper company later this month. The news comes only days after it emerged that Regional Independent Media, publisher of the Yorkshire Post, was likely to revise its £913 million cash offer for the Mirror over the next few weeks. However, many believe the new bid will not be much higher than the 200p a share already offered. It is understood that over the past two days Trinity has been given access to a "data room" containing commercially sensitive information about the Mirror, whose national newspaper titles include The Mirror and The People. Trinity is believed to have seen the commercial data for only 24 hours, and has already requested more detailed information. However, Trinity is not expected to make a bid for the Mirror immediately, because it feels it needs to look further into the finances of the company. Those close to the situation believe a bid is more likely over the next few weeks. The bidding battle for the Mirror has already resulted in a bloody boardroom coup at the company, which saw the dramatic resignation of David Montgomery as its chief executive last month.
Source: Financial Times 2/15/99
HarperCollins Announces Plans to Acquire the Ecco Press
Jane Friedman, President and CEO of HarperCollins Publishers today announced that HarperCollins will purchase The Ecco Press, one of the country's most prestigious literary publishers. The acquisition will become effective as of July 1. The Ecco list includes such critically acclaimed authors as John Ashbery, Paul Bowles, Italo Calvino, Gerald Early, Richard Ford, Louise Gluck, Robert Hass, Zbigniew Herbert, Bobbi Ann Mason, Cormac McCarthy, Nobel Laureate Czeslaw Milosz, Joyce Carol Oates, and Tobias Wolff. In addition, Halpern will publish his first books with HarperCollins starting in January, 2000.
Source: Businesswire 2/16/99
Bertelsmann expects JV with Havas in 2 weeks time
German media giant Bertelsmann AG expects to complete a joint venture deal on specialist publishing with France's Havas within the next two weeks. A spokesman for Bertelsmann's specialist publishing unit said the deal entailed a 50-50 joint venture with the aim of making international acquisitions together. In a related issue, the spokesman also said that Bertelsmann's takeover of the Springer scientific publishing house had been approved by the European Union cartel authorities. The acquisition increases the value of Bertelsmann's trade publishing activities to 1.5 billion marks ($859.6 million) from 625 million marks
Source: Reuters 2/16/99
Coopers & Lybrand pays $5.4MM in Maxwell case
Coopers & Lybrand has paid fines and costs of $5.4MM for failings in its role as auditor of most of the companies controlled by the late Robert Maxwell, a British accounting watchdog said on this week. Maxwell died in November 1991 (fell off his boat), leaving behind a business empire riddled with debts and huge holes in the pension funds of his companies, including Mirror Group Newspapers which Maxwell owned at the time.
Source: Reuters 2/16/99
Monday, February 01, 1999
2/1/99: McGrawHill, Primedia, HoughtonMifflin, Dow Jones,
Publishing News: February 1, 1999
The McGraw-Hill Companies Reports 15% Increase in 1998 Earnings
Internet sales Gain at WH Smith
EarthWeb Announces Online Publishing Deals with Seven Leading Book Publishers
Primedia's 1998 Annual Sales Grow to $1.5Billion
Houghton Mifflin Company Reports 1998 Fourth-Quarter and Full-Year Results
EU Probes FT/Dow Jones/Knight Ridder 1996 deal
Mirror Group CEO is Out
The McGraw-Hill Companies Reports 15% Increase in 1998 EarningsThe McGraw-Hill Companies today reported a 15.1% increase in diluted earnings per share to $3.35 for 1998 compared to $2.91 in 1997. Net income for the year grew to $333.1 million and revenue increased 5.5% to $3.7 billion. Excluding an extraordinary loss and other one-time items, diluted earnings per share were $3.37 and net income was $335.4 million.
Educational and Professional Publishing: Revenues in this segment increased 3.0% to $1.6 billion in 1998 and operating profit improved by 7.7% to $202.1 million. Excluding the write-off for CEC in 1998 and the facilities charge in 1997, operating profit increased 11.1% and operating margin improved to 13.5%. "Revenue in the seasonally slow fourth quarter increased 1.9% to $344.7 million and operating profits climbed by 26.0% to $22.4 million. Despite a lighter adoption schedule in the elementary school market in 1998 and challenging comparisons created by a 25.4% increase in revenue last year, our elementary-high school operations produced a 7.6% gain in revenue to $831.5 million. Outstanding results at Glencoe/McGraw-Hill, our secondary school publisher, SRA/McGraw-Hill, our supplementary publisher, and CTB/McGraw-Hill, our testing division and a better than expected performance by the School Division all contributed to this record. Glencoe produced market-leading performances in math and social studies, scoring well with multi-media programs in both adoption states and open territories. SRA/McGraw-Hill and the School Division combined to take 34% of the California reading market in the second year of the adoption and led the market after two years with a 35% share. The School Division's social studies program also performed well, helping it to overcome a disappointing performance in math. In Higher Education, solid results with both the front and backlists combined to produce a 7.0% gain in revenue to $359.4 million. Revenue for the Professional Publishing Group declined by 4.8% to $429.5 million, reflecting the continuing weakness at CEC. Softness in the Asia-Pacific markets also held back International Publishing operations, although our Spanish-language programs in Mexico and Spain showed solid gains.
Source: Businesswire 1/26/99
Internet sales Gain at WH Smith
British retailer W.H. Smith Group on Wednesday reported a modest sales increase over Christmas and New Year, but saw orders surge at its newly-acquired Internet Bookshop. The Internet Bookshop, the online bookseller Smith bought last July for 8.8 million pounds ($14.54 million), saw sales jump by 70 percent to 1.7 million pounds since September 1 last year, with orders up 170 percent in December. The firm's shares have been swept along on a wave of Internet fever, sparked by investors scouring the UK stock market for Internet plays, which look cheap against U.S. cyber-stocks like rival online bookseller Amazon.com and search engine Yahoo!. Home electronics retailer Dixons, owner of Internet service provider Freeserve, has been the main beneficiary so far. It shares have surged some 70 percent since Freeserve's success first became apparent in November, boosting Dixons' market value by some three billion pounds. Analysts said there has been intense speculation about how Smith might expand its online business, including rumors it might do its own ``Freeserve.'' When Smith bought Helicon it said this marked another step along the way in developing its electronic commerce business and said it would reveal more about Internet plans in the spring.
Source: Reuters 1/27/99
EarthWeb Announces Online Publishing Deals with Seven Leading Book Publishers EarthWeb announced today that it has entered into agreements with seven leading Information Technology (IT) publishers to provide the complete text of their technical books on EarthWeb's ITKnowledge. The deals give EarthWeb licensing rights to over 3,000 technical books for its subscription-based online library of IT information. The ITKnowledge roster of publishers comprises many of the most respected companies in the technical publishing industry including: IDG Books Worldwide and its imprints, M&T Books and IDG Books; Macmillan Computer Publishing and its imprints, Hayden, Macmillan Technical, New Riders, Que, Sams, Waite Group Press and Ziff-Davis Press; The Coriolis Group and its Coriolis and Ventana imprints; Wordware Publishing; CRC Press and its Auerbach and St. Lucie Press imprints; 29th Street Press (formerly Duke Press); and ASP Publishing.
ITKnowledge (http://www.itknowledge.com) is EarthWeb's first subscription service and contains the largest online collection of technical books for IT professionals.
Source: PRNewswire 1/26/99
Primedia's 1998 Annual Sales Grow to $1.5Billion
Primedia reported annual sales rose to $1.53 billion, up 26.3%, and EBITDA, rose 15.6% to $323.1 million. According to company sources the company will strengthen our market positions as we accelerate organic growth through market penetration, international expansion and new products, particularly delivered via the ultimate targeted medium - the Internet." Some of PRIMEDIA's brands include Seventeen, HPC Apartment Guides, Horticulture, IntelliChoice, Telephony, Channel One Network and Weekly Reader. During the week there was some media speculation which referred to Primedia as a potential acquition target. The management group which sold Petersens have loads of cash and will apparently be looking to repeat their success.
Source: Businesswire 1/28/99
Houghton Mifflin Company Reports 1998 Fourth-Quarter and Full-Year Results Houghton Mifflin Company today reported results for the fourth quarter and full year 1998. Net sales in 1998 reached a record $861.7 million for the full year compared to $797.3 million in 1997, an increase of 8.1%. Income from operations was $40.8 million, or $1.40 per fully diluted share, compared to $42.7 million, or $1.48 per diluted share, in 1997. The 1998 results included $.07 per share of operating losses attributable to the Company's July 1998 acquisition of Computer Adaptive Technologies, Inc. and a $.02-per-share charge for the cost of the Company's unsuccessful bid for a portion of Simon & Schuster's publishing assets. Net income for 1998 was $63.6 million, or $2.19 per fully diluted share. This result included other earnings related to the Company's investment in INSO Corporation (INSO) totaling $28.4 million after tax, a $2.0 million after-tax loss on the disposition of certain long-term investments, and a $3.5 million charge for in-process research and development. Net income in 1997, including special items related to INSO totaling $7.2 million, was $49.8 million, or $1.73 per fully diluted share.
Source: Businesswire 1/28/99
EU Probes FT/Dow Jones/Knight Ridder 1996 deal The European Commission said on Friday it was probing a 1996 agreement between Financial Times Information Ltd, Dow Jones Information Publishing Inc and Knight Ridder Business Information, now called Dialog Corp Plc, to set up an electronic database for financial information. The European Union's competition watchdog said in a notice published in the bloc's Official Journal that the agreement was filed for regulatory clearance in June 1997. It added that it could fall under EU regulation 17 which bans anti-competitive agreements and abuse of a dominant position. The Commission called on interested parties to comment within a month. FT Information is controlled by Pearson Plc. Dialog was created in 1997 by the merger of M.A.I.D. Plc and Knight-Ridder Information Inc. The three financial news service providers agreed in September 1996 to cooperate to develop and maintain a new worldwide electronic database for historical business and financial information, the Commission said in the short notice.
Source: Businesswire 1/29/99
Mirror Group CEO is Out
As reported last week, disgruntled investors acted out their threats this week by requesting the resignation of chief executive David Montgomery. Institutional investors cited under-performance and “poor strategic decisions by its senior management” as reasons for the action. Chief among these were management’s decision to invest in the Independent newspaper and establish its Live TV subsidiary.
Source: Financial Times 1/29/99
The McGraw-Hill Companies Reports 15% Increase in 1998 Earnings
Internet sales Gain at WH Smith
EarthWeb Announces Online Publishing Deals with Seven Leading Book Publishers
Primedia's 1998 Annual Sales Grow to $1.5Billion
Houghton Mifflin Company Reports 1998 Fourth-Quarter and Full-Year Results
EU Probes FT/Dow Jones/Knight Ridder 1996 deal
Mirror Group CEO is Out
The McGraw-Hill Companies Reports 15% Increase in 1998 EarningsThe McGraw-Hill Companies today reported a 15.1% increase in diluted earnings per share to $3.35 for 1998 compared to $2.91 in 1997. Net income for the year grew to $333.1 million and revenue increased 5.5% to $3.7 billion. Excluding an extraordinary loss and other one-time items, diluted earnings per share were $3.37 and net income was $335.4 million.
Educational and Professional Publishing: Revenues in this segment increased 3.0% to $1.6 billion in 1998 and operating profit improved by 7.7% to $202.1 million. Excluding the write-off for CEC in 1998 and the facilities charge in 1997, operating profit increased 11.1% and operating margin improved to 13.5%. "Revenue in the seasonally slow fourth quarter increased 1.9% to $344.7 million and operating profits climbed by 26.0% to $22.4 million. Despite a lighter adoption schedule in the elementary school market in 1998 and challenging comparisons created by a 25.4% increase in revenue last year, our elementary-high school operations produced a 7.6% gain in revenue to $831.5 million. Outstanding results at Glencoe/McGraw-Hill, our secondary school publisher, SRA/McGraw-Hill, our supplementary publisher, and CTB/McGraw-Hill, our testing division and a better than expected performance by the School Division all contributed to this record. Glencoe produced market-leading performances in math and social studies, scoring well with multi-media programs in both adoption states and open territories. SRA/McGraw-Hill and the School Division combined to take 34% of the California reading market in the second year of the adoption and led the market after two years with a 35% share. The School Division's social studies program also performed well, helping it to overcome a disappointing performance in math. In Higher Education, solid results with both the front and backlists combined to produce a 7.0% gain in revenue to $359.4 million. Revenue for the Professional Publishing Group declined by 4.8% to $429.5 million, reflecting the continuing weakness at CEC. Softness in the Asia-Pacific markets also held back International Publishing operations, although our Spanish-language programs in Mexico and Spain showed solid gains.
Source: Businesswire 1/26/99
Internet sales Gain at WH Smith
British retailer W.H. Smith Group on Wednesday reported a modest sales increase over Christmas and New Year, but saw orders surge at its newly-acquired Internet Bookshop. The Internet Bookshop, the online bookseller Smith bought last July for 8.8 million pounds ($14.54 million), saw sales jump by 70 percent to 1.7 million pounds since September 1 last year, with orders up 170 percent in December. The firm's shares have been swept along on a wave of Internet fever, sparked by investors scouring the UK stock market for Internet plays, which look cheap against U.S. cyber-stocks like rival online bookseller Amazon.com and search engine Yahoo!. Home electronics retailer Dixons, owner of Internet service provider Freeserve, has been the main beneficiary so far. It shares have surged some 70 percent since Freeserve's success first became apparent in November, boosting Dixons' market value by some three billion pounds. Analysts said there has been intense speculation about how Smith might expand its online business, including rumors it might do its own ``Freeserve.'' When Smith bought Helicon it said this marked another step along the way in developing its electronic commerce business and said it would reveal more about Internet plans in the spring.
Source: Reuters 1/27/99
EarthWeb Announces Online Publishing Deals with Seven Leading Book Publishers EarthWeb announced today that it has entered into agreements with seven leading Information Technology (IT) publishers to provide the complete text of their technical books on EarthWeb's ITKnowledge. The deals give EarthWeb licensing rights to over 3,000 technical books for its subscription-based online library of IT information. The ITKnowledge roster of publishers comprises many of the most respected companies in the technical publishing industry including: IDG Books Worldwide and its imprints, M&T Books and IDG Books; Macmillan Computer Publishing and its imprints, Hayden, Macmillan Technical, New Riders, Que, Sams, Waite Group Press and Ziff-Davis Press; The Coriolis Group and its Coriolis and Ventana imprints; Wordware Publishing; CRC Press and its Auerbach and St. Lucie Press imprints; 29th Street Press (formerly Duke Press); and ASP Publishing.
ITKnowledge (http://www.itknowledge.com) is EarthWeb's first subscription service and contains the largest online collection of technical books for IT professionals.
Source: PRNewswire 1/26/99
Primedia's 1998 Annual Sales Grow to $1.5Billion
Primedia reported annual sales rose to $1.53 billion, up 26.3%, and EBITDA, rose 15.6% to $323.1 million. According to company sources the company will strengthen our market positions as we accelerate organic growth through market penetration, international expansion and new products, particularly delivered via the ultimate targeted medium - the Internet." Some of PRIMEDIA's brands include Seventeen, HPC Apartment Guides, Horticulture, IntelliChoice, Telephony, Channel One Network and Weekly Reader. During the week there was some media speculation which referred to Primedia as a potential acquition target. The management group which sold Petersens have loads of cash and will apparently be looking to repeat their success.
Source: Businesswire 1/28/99
Houghton Mifflin Company Reports 1998 Fourth-Quarter and Full-Year Results Houghton Mifflin Company today reported results for the fourth quarter and full year 1998. Net sales in 1998 reached a record $861.7 million for the full year compared to $797.3 million in 1997, an increase of 8.1%. Income from operations was $40.8 million, or $1.40 per fully diluted share, compared to $42.7 million, or $1.48 per diluted share, in 1997. The 1998 results included $.07 per share of operating losses attributable to the Company's July 1998 acquisition of Computer Adaptive Technologies, Inc. and a $.02-per-share charge for the cost of the Company's unsuccessful bid for a portion of Simon & Schuster's publishing assets. Net income for 1998 was $63.6 million, or $2.19 per fully diluted share. This result included other earnings related to the Company's investment in INSO Corporation (INSO) totaling $28.4 million after tax, a $2.0 million after-tax loss on the disposition of certain long-term investments, and a $3.5 million charge for in-process research and development. Net income in 1997, including special items related to INSO totaling $7.2 million, was $49.8 million, or $1.73 per fully diluted share.
Source: Businesswire 1/28/99
EU Probes FT/Dow Jones/Knight Ridder 1996 deal The European Commission said on Friday it was probing a 1996 agreement between Financial Times Information Ltd, Dow Jones Information Publishing Inc and Knight Ridder Business Information, now called Dialog Corp Plc, to set up an electronic database for financial information. The European Union's competition watchdog said in a notice published in the bloc's Official Journal that the agreement was filed for regulatory clearance in June 1997. It added that it could fall under EU regulation 17 which bans anti-competitive agreements and abuse of a dominant position. The Commission called on interested parties to comment within a month. FT Information is controlled by Pearson Plc. Dialog was created in 1997 by the merger of M.A.I.D. Plc and Knight-Ridder Information Inc. The three financial news service providers agreed in September 1996 to cooperate to develop and maintain a new worldwide electronic database for historical business and financial information, the Commission said in the short notice.
Source: Businesswire 1/29/99
Mirror Group CEO is Out
As reported last week, disgruntled investors acted out their threats this week by requesting the resignation of chief executive David Montgomery. Institutional investors cited under-performance and “poor strategic decisions by its senior management” as reasons for the action. Chief among these were management’s decision to invest in the Independent newspaper and establish its Live TV subsidiary.
Source: Financial Times 1/29/99
Monday, January 25, 1999
1/25/99: McGrawHill, Readers Digest, Thomson, Pearson,
Publishing News: January 25th
Mirror Group For Sale
Hirschberg Goes to McGraw Hill
Reader's Digest in Talks with Time Warner
Franklin Also to Sell Rocket ebook Content On Its Website
WH Smith’s Web Efforts
International Thomson Publishing Announces Marketing Venture with VarsityBooks.Com
Pearson Hangs Out the For Sale Signs
Mirror Group For Sale
Mirror Group Newspapers confirmed on Monday that they had received a 200 p per share all cash offer for the company from Regional Independent Media which is backed by venture cap firm Candover. The deal values Mirror Group at STL900MM ($1.4Billion) and Mirror spokesmen confirmed that it would be presented to the board for approval. The current bid exceeds a prior bid by Trinity Media which was to be funded by equity. Things are expected to hot up this week as some of the Mirror Group board of directors have expressed doubts as to the independence of Mirror Group CEO David Montgomery. Some board members believe he is predisposed to bids where he can retain executive management.
Source: Financial Times
Hirschberg Goes to McGraw Hill
The McGraw-Hill Companies today named Henry Hirschberg group president, Higher Education,
Professional and International Publishing, where he will help lead the publishing group's growth agenda. Hirschberg brings more than 25 years of editorial and international publishing experience to his
position. Most recently, he was president of the Higher Education Group for Pearson plc's education
division. Prior to Pearson's recent acquisition of Simon & Schuster, Hirschberg held various positions
at Simon & Schuster, including senior vice president, president of the Higher Education group, and
president of the International Publishing Group. Formerly, he was managing director of Prentice Hall's
U.K. operations and executive editor, where he managed editorial responsibility for computer and
business books. Hirschberg began his career as a sales representative at Prentice Hall in Europe in
1972.
Source: Businesswire Jan. 14, 1999--
Reader's Digest in Talks with Time Warner
Sources close to the companies tell Business Week that Reader's Digest and Time Warner Inc. are discussing a deal to combine Reader's Digest with several Time Inc. publications and direct-marketing businesses. Under the structure being contemplated, Time Warner would become an equal partner with the foundations that now control 72% of the publisher's voting shares. Public shareholders would own a yet-to-be-determined stake. Reader's Digest CEO Thomas O. Ryder, who joined the company last May, would continue as the company's CEO with Time Inc. CEO Don Logan as chairman, the magazine reports. Time Warner, Ryder, and the foundations won't comment on the talks.
Source: Businesswire, Jan. 14, 1999
Franklin Also to Sell Rocket ebook Content On Its Website
Franklin Electronic Publishers, Inc. (NYSE: FEP) and NuvoMedia, Inc. announced an agreement by which Franklin will distribute the Rocket eBook to consumer electronics retailers. The Rocket eBook is the world's first handheld electronic reader capable of downloading digital books from online bookstores. With the NuvoMedia strategic alliance, Franklin becomes one of the first full-service eBook retailers operating on the Internet. Under terms of the agreement, Franklin will also publish and sell content in the RocketEdition(TM) format on its own website -- http://www.franklin.com. RocketEditions are encrypted titles that readers can purchase and download onto their PC for transfer to the Rocket eBook. The Franklin Rocket eBook will be available in spring 1999 with a retail price under $500, and will be sold through leading consumer electronics stores, computer chains and office superstores. Prices for RocketEditions will be comparable to discounted prices for printed books. Franklin will offer RocketEditions on its website beginning in mid-1999. Participating publishers include Addison Wesley Longman, HarperCollins, Harvard Business School Press, Henry Holt and Company, Inc., Macmillan Computer Publishing USA, McGraw-Hill Publishing, Penguin Putnam Inc., Random House, Inc., Simon & Schuster, and St. Martin's. Many of these publishers, including HarperCollins, McGraw-Hill, and Macmillan, already license their works to Franklin for its handheld electronic products
Source: RNewswire 1/3/99
WH Smith’s Web Efforts
Shares in Britain's biggest bookseller, WH Smith Group Plc, hit a record high on Friday, fuelled by hopes for its nascent Internet division. The high street chain, viewed in the past as an unexciting investment, was lifted by news of its 5.6 million pound ($9.28 million) acquisition of Helicon Publishing Plc, a small loss-making provider of reference material. The deal may have been tiny but the market latched on to it as evidence that WH Smith could be a new British Web star and the stock soared to a peak of 675 pence before easing back to end six percent higher at 626-1/2p. Last July the firm bought the Internet Bookshop for 8.8 million pounds to launch its Internet strategy and Chief Executive Richard Handover said the latest purchase highlighted the group's focus on growing its online business.
Source: Reuters 1/15/99
International Thomson Publishing Announces Marketing Venture with VarsityBooks.Com
International Thomson Publishing (ITP), one of the world's largest educational publishers, has entered into a strategic marketing partnership with VarsityBooks.com (www.varsitybooks.com), the leading online college textbook seller. The goal of both businesses is to increase student awareness of how affordable and convenient it is to purchase their course books online. The agreement consists of joint marketing efforts between the ITP sales force and VarsityBooks.com to educate professors and students on the new, more affordable way to buy new textbooks through the VarsityBooks.com Web site. In return, ITP expects additional sales of new textbooks through the Internet. VarsityBooks.com offers customers a selection of 400,000 titles at discounts up to 40 percent, as well as flat-rate shipping at $4.95, no matter how large the order. Students can use the site's powerful search engine to locate textbooks, then use its state-of-the-art encryption system for secure transactions. Presently, VarsityBooks.com offers comprehensive booklists for more than 50 of the largest colleges and universities across the country. This featured list of universities is growing rapidly and is expected to triple in upcoming semesters. The VarsityBooks.com Web site also includes a "mega" search engine, to allow anyone access to the large discounts while purchasing their books.
Source: PRNewswire 1/19
Pearson Hangs Out the For Sale Signs
Pearson plc the international media group, is to put a number of its reference and business & professional publishing operations up for sale. The businesses are Jossey-Bass; the General and Library Reference businesses of Macmillan publishing; Master Data Center; Prentice Hall Direct; Appleton & Lange; and the Bureau of Business Practice. In 1997, these businesses made, in total, sales of some $250 million. They were acquired by Pearson last November as part of its $4.6 billion dollar acquisition of the Simon & Schuster education, reference and business & professional operations. Pearson has merged the Simon & Schuster education businesses with Addison Wesley Longman to create Pearson Education, the world's leading educational publishing business. Macmillan Computer Publishing and Macmillan Digital Publishing also form part of the new Pearson Education business.
Source: PRNewswire 1/25/98
Mirror Group For Sale
Hirschberg Goes to McGraw Hill
Reader's Digest in Talks with Time Warner
Franklin Also to Sell Rocket ebook Content On Its Website
WH Smith’s Web Efforts
International Thomson Publishing Announces Marketing Venture with VarsityBooks.Com
Pearson Hangs Out the For Sale Signs
Mirror Group For Sale
Mirror Group Newspapers confirmed on Monday that they had received a 200 p per share all cash offer for the company from Regional Independent Media which is backed by venture cap firm Candover. The deal values Mirror Group at STL900MM ($1.4Billion) and Mirror spokesmen confirmed that it would be presented to the board for approval. The current bid exceeds a prior bid by Trinity Media which was to be funded by equity. Things are expected to hot up this week as some of the Mirror Group board of directors have expressed doubts as to the independence of Mirror Group CEO David Montgomery. Some board members believe he is predisposed to bids where he can retain executive management.
Source: Financial Times
Hirschberg Goes to McGraw Hill
The McGraw-Hill Companies today named Henry Hirschberg group president, Higher Education,
Professional and International Publishing, where he will help lead the publishing group's growth agenda. Hirschberg brings more than 25 years of editorial and international publishing experience to his
position. Most recently, he was president of the Higher Education Group for Pearson plc's education
division. Prior to Pearson's recent acquisition of Simon & Schuster, Hirschberg held various positions
at Simon & Schuster, including senior vice president, president of the Higher Education group, and
president of the International Publishing Group. Formerly, he was managing director of Prentice Hall's
U.K. operations and executive editor, where he managed editorial responsibility for computer and
business books. Hirschberg began his career as a sales representative at Prentice Hall in Europe in
1972.
Source: Businesswire Jan. 14, 1999--
Reader's Digest in Talks with Time Warner
Sources close to the companies tell Business Week that Reader's Digest and Time Warner Inc. are discussing a deal to combine Reader's Digest with several Time Inc. publications and direct-marketing businesses. Under the structure being contemplated, Time Warner would become an equal partner with the foundations that now control 72% of the publisher's voting shares. Public shareholders would own a yet-to-be-determined stake. Reader's Digest CEO Thomas O. Ryder, who joined the company last May, would continue as the company's CEO with Time Inc. CEO Don Logan as chairman, the magazine reports. Time Warner, Ryder, and the foundations won't comment on the talks.
Source: Businesswire, Jan. 14, 1999
Franklin Also to Sell Rocket ebook Content On Its Website
Franklin Electronic Publishers, Inc. (NYSE: FEP) and NuvoMedia, Inc. announced an agreement by which Franklin will distribute the Rocket eBook to consumer electronics retailers. The Rocket eBook is the world's first handheld electronic reader capable of downloading digital books from online bookstores. With the NuvoMedia strategic alliance, Franklin becomes one of the first full-service eBook retailers operating on the Internet. Under terms of the agreement, Franklin will also publish and sell content in the RocketEdition(TM) format on its own website -- http://www.franklin.com. RocketEditions are encrypted titles that readers can purchase and download onto their PC for transfer to the Rocket eBook. The Franklin Rocket eBook will be available in spring 1999 with a retail price under $500, and will be sold through leading consumer electronics stores, computer chains and office superstores. Prices for RocketEditions will be comparable to discounted prices for printed books. Franklin will offer RocketEditions on its website beginning in mid-1999. Participating publishers include Addison Wesley Longman, HarperCollins, Harvard Business School Press, Henry Holt and Company, Inc., Macmillan Computer Publishing USA, McGraw-Hill Publishing, Penguin Putnam Inc., Random House, Inc., Simon & Schuster, and St. Martin's. Many of these publishers, including HarperCollins, McGraw-Hill, and Macmillan, already license their works to Franklin for its handheld electronic products
Source: RNewswire 1/3/99
WH Smith’s Web Efforts
Shares in Britain's biggest bookseller, WH Smith Group Plc, hit a record high on Friday, fuelled by hopes for its nascent Internet division. The high street chain, viewed in the past as an unexciting investment, was lifted by news of its 5.6 million pound ($9.28 million) acquisition of Helicon Publishing Plc, a small loss-making provider of reference material. The deal may have been tiny but the market latched on to it as evidence that WH Smith could be a new British Web star and the stock soared to a peak of 675 pence before easing back to end six percent higher at 626-1/2p. Last July the firm bought the Internet Bookshop for 8.8 million pounds to launch its Internet strategy and Chief Executive Richard Handover said the latest purchase highlighted the group's focus on growing its online business.
Source: Reuters 1/15/99
International Thomson Publishing Announces Marketing Venture with VarsityBooks.Com
International Thomson Publishing (ITP), one of the world's largest educational publishers, has entered into a strategic marketing partnership with VarsityBooks.com (www.varsitybooks.com), the leading online college textbook seller. The goal of both businesses is to increase student awareness of how affordable and convenient it is to purchase their course books online. The agreement consists of joint marketing efforts between the ITP sales force and VarsityBooks.com to educate professors and students on the new, more affordable way to buy new textbooks through the VarsityBooks.com Web site. In return, ITP expects additional sales of new textbooks through the Internet. VarsityBooks.com offers customers a selection of 400,000 titles at discounts up to 40 percent, as well as flat-rate shipping at $4.95, no matter how large the order. Students can use the site's powerful search engine to locate textbooks, then use its state-of-the-art encryption system for secure transactions. Presently, VarsityBooks.com offers comprehensive booklists for more than 50 of the largest colleges and universities across the country. This featured list of universities is growing rapidly and is expected to triple in upcoming semesters. The VarsityBooks.com Web site also includes a "mega" search engine, to allow anyone access to the large discounts while purchasing their books.
Source: PRNewswire 1/19
Pearson Hangs Out the For Sale Signs
Pearson plc the international media group, is to put a number of its reference and business & professional publishing operations up for sale. The businesses are Jossey-Bass; the General and Library Reference businesses of Macmillan publishing; Master Data Center; Prentice Hall Direct; Appleton & Lange; and the Bureau of Business Practice. In 1997, these businesses made, in total, sales of some $250 million. They were acquired by Pearson last November as part of its $4.6 billion dollar acquisition of the Simon & Schuster education, reference and business & professional operations. Pearson has merged the Simon & Schuster education businesses with Addison Wesley Longman to create Pearson Education, the world's leading educational publishing business. Macmillan Computer Publishing and Macmillan Digital Publishing also form part of the new Pearson Education business.
Source: PRNewswire 1/25/98
Thursday, January 15, 1998
The Power of Content Management For Publishers
January, 1998
If there was one message repeated most often at the Seybold conference in San Francisco in September 1997, it was that publishers must fundamentally change their editorial and production processes to separate content from format in order to best take advantage of all publishing mediums. Today's book and magazine publishers traditionally produce printed product, but they do not separate the content of what they produce from the format in which it appears. Hence, they do not derive the benefit of a catalogue of content which can easily be manipulated and produced in another format. In order to take advantage of all that the on-line publishing environment has to offer, this change in philosophy is of paramount importance.
The Philosophy
The new environment which electronic and on-line publishing has created demands that publishers change their focus from a production orientation to a customer service focus. At a recent industry conference, James Lichtenburg, past vice president of the Higher Education Division of the Association of American Publishers (AAP) commented: "Why force the purchase of a single commodity, instead of providing a range of value-laden services which is required by an increasingly diverse customer?" Currently, publishers see themselves as creators of fixed and static products produced via formula on specific dates for broadly defined markets. This 'formulaic' approach to publishing will not cut it in the on-line world. More aggressive, creative companies have already realized this, such as My Yahoo, Motley Fool and others who are allowing more flexibility and added value for their users.
Traditional publishers have so far been conservative in their approach to on-line publishing. Assembly of material has become a cost bottleneck within companies as two staffs have developed to support the print product and the on-line/electronic versions. As Walter Purvis of Banta commented, "There is a mismatch between the demands of the Web and current print production workflows -- print department workflows need to be integrated with the rest of the business but enabling software doesn't allow it." According to Purvis, "What exists is a hodgepodge of cobbled together systems for content management and repurposing."
The requirements for new systems and a new process approach to how material is produced is paramount if traditional publishers expect to take advantage of on-line publishing.
"Picking Strawberries" - A Costly Problem
Where are publishers in defining the extent of their problems (or opportunities)? One of the speakers at Seybold referred to publishing content as 'stranded assets' residing on individual hard drives, in file drawers, on film, in libraries, etc. These 'assets' have been estimated to understate the value of some companies by as much as 15% (Joe Casabianca, Media Management Association). At Nestle, Inc., an internal content management study found 1,500 images (slides) of a strawberry, an ever-increasing number of photos which had been commissioned at various worldwide offices to create marketing material for their cereal. Banta cites the example of a catalogue publisher whose staff would spend 30-40 minutes to find individual selections in their paper-based catalogue (for price changes, corrections, etc.). With the creation of a new content management database, these searches now take seconds.
Lost Intellectual Capital
If you look at the material produced for a book or magazine, it is clear that the final outcome is but a minute portion of the total work produced for that product. The final book represents the top of a 'pyramid of information' and is the only real identifiable representation of the effort that went into the production of this product. Clearly, there was significant other work not catalogued which was completed during this project but which is now essentially 'lost'. Workers may have good intentions of using this unused material, but generally the cost of finding it at the appropriate time outweighs the costs of recreating it. Additionally, e-mails, meeting notes, marketing plans, budgets and forecasts, etc. - the record of the creation of the product -- are either gone or are dispersed across the enterprise and of little collective use to anyone. Artists' proofs, manuscripts and edits, photos, etc., all become 'stranded assets.' The intellectual capital lost in these instances is unmeasured -- until someone has to find something or reproduce it.
The Task
Publishers, in general, have made little progress in changing the way they produce their products. In order to take true advantage of their content, publishers will be required to develop an asset cataloguing system and a project management approach to managing publishing projects. At the 1997 Frankfurt Book Fair, the Association of American Publishers (AAP) announced an initiative to attach a 'license plate' to publishing property. This Digital Object Identifier (DOI) will identify the publisher of the property (owner), catalogue products at whatever level the publisher determines and allow for transactions of the material with payments and royalties accounted for appropriately.
The AAP will recommend how this cataloguing process should work so that all publishers use the same 'meta data' terminology and methodology. Meta data constitutes the information about the product such as the owner, royalty terms, author, artist, etc., - a list which is defined by the publisher. What is assumed in the above is that a book or title will have only one DOI number attributed to that material -- in fact, each book may have hundreds of DOI numbers associated with it. Currently, every book created by a publisher carries an ISBN (International Standard Book Number) and this is used by booksellers, publishers and others to identify the book. The DOI will allow material within that book to be identified down to the paragraph, sentence or word level. Currently, when a college professor requests permission to copy a chapter from a textbook, this becomes a nightmare for those that have to account for the transaction.
It is not always clear which of the often multiple contributors to the book wrote the chapter in question. Often, royalty rates per author differ depending on how the material was purchased, and generally the accounting for this exercise must be done manually (and often more than once). The DOI will automate this process. Publishers must think differently as to what constitutes a unit or product, moving beyond thinking of files and documents (finished books and magazines), which should be viewed as simply containers of information.
Of course, DOI and the establishment of meta data based cataloguing systems only help going forward. A big question surrounds legacy data -- how you economically use this content in a digital workflow. Digitizing legacy data is a huge expense consideration. Moreover, it is widely viewed that you will only ever need five percent of this data … unfortunately, you just don't know which five percent. Publishers are advised to consider carefully their approach to digitizing legacy data.
Reevaluation and Change
Established, traditional publishers need to augment their publishing product with service based products, unique customer driven products, database management and the ability to transact business. Product differentiation and the ability to leverage content through avenues not previously considered will be 'enabled' via new processes, making the development of new products across media and within the same media much easier. Many consumer products companies have proven that the key to brand growth is product differentiation, yet, to date, publishers have only had limited success in this area. This new content production process will have three components:
A significant by-product of this approach will also be the strengthening of publishers' brand names and images. By separating content from format, new material generated by an author or other source then resides catalogued in a database, ready to be re-purposed into a book, CD-ROM, on-line version, magazine, or produced to a printer. These changes require new project management and workflow management tools, an archiving methodology (new and legacy data), and the installation of wide area networking - Intranet solutions to allow universal access.
At the Seybold conference, Bill Gates of Microsoft stated that "not only is the cost of [technology] ownership going down, but the value [owners] are getting out of these systems is constantly rising." Publishing is a prime example of this in that the movement to a content management philosophy is the next step in the Desk Top Publishing (DTP) revolution which brought publishing companies from razor blades and mark-up pens to electronic workflows. Gates fully recognizes the competitive advantage to be gained by developing databases of digital content and says that "companies that move information around electronically will be more competitive than companies that do not." He believes that those traditional publishers who do not move in this direction now will not be around to discuss it later.
There needs to be a systematic approach to developing new processes within these companies to take advantage of new media opportunities. In the future, successful publishers will be those which view themselves as content developers and managers rather than (only) book or magazine publishers. Only with a production approach which separates the content from the format and which is supported by processes to enable the adaptation of that content into various formats as required by customers, will traditional publishers be able to take advantage of all future opportunities.
A speaker at the Seybold conference commented that "publishing currently fails to predictably satisfy customers and achieve businesses' objectives" because mass publishing is very hit or miss. Harry McQuillen, when at Macmillan Publishing Company, used to say (tongue-in-cheek) before every budget meeting that "you can never plan for bestsellers." Perhaps in the future, by building products to satisfy individual needs rather than producing products for the masses, publishing will grow more predictable. This, in turn, however, will only come from an ability to manipulate content libraries for specific purposes.
If there was one message repeated most often at the Seybold conference in San Francisco in September 1997, it was that publishers must fundamentally change their editorial and production processes to separate content from format in order to best take advantage of all publishing mediums. Today's book and magazine publishers traditionally produce printed product, but they do not separate the content of what they produce from the format in which it appears. Hence, they do not derive the benefit of a catalogue of content which can easily be manipulated and produced in another format. In order to take advantage of all that the on-line publishing environment has to offer, this change in philosophy is of paramount importance.
The Philosophy
The new environment which electronic and on-line publishing has created demands that publishers change their focus from a production orientation to a customer service focus. At a recent industry conference, James Lichtenburg, past vice president of the Higher Education Division of the Association of American Publishers (AAP) commented: "Why force the purchase of a single commodity, instead of providing a range of value-laden services which is required by an increasingly diverse customer?" Currently, publishers see themselves as creators of fixed and static products produced via formula on specific dates for broadly defined markets. This 'formulaic' approach to publishing will not cut it in the on-line world. More aggressive, creative companies have already realized this, such as My Yahoo, Motley Fool and others who are allowing more flexibility and added value for their users.
Traditional publishers have so far been conservative in their approach to on-line publishing. Assembly of material has become a cost bottleneck within companies as two staffs have developed to support the print product and the on-line/electronic versions. As Walter Purvis of Banta commented, "There is a mismatch between the demands of the Web and current print production workflows -- print department workflows need to be integrated with the rest of the business but enabling software doesn't allow it." According to Purvis, "What exists is a hodgepodge of cobbled together systems for content management and repurposing."
The requirements for new systems and a new process approach to how material is produced is paramount if traditional publishers expect to take advantage of on-line publishing.
"Picking Strawberries" - A Costly Problem
Where are publishers in defining the extent of their problems (or opportunities)? One of the speakers at Seybold referred to publishing content as 'stranded assets' residing on individual hard drives, in file drawers, on film, in libraries, etc. These 'assets' have been estimated to understate the value of some companies by as much as 15% (Joe Casabianca, Media Management Association). At Nestle, Inc., an internal content management study found 1,500 images (slides) of a strawberry, an ever-increasing number of photos which had been commissioned at various worldwide offices to create marketing material for their cereal. Banta cites the example of a catalogue publisher whose staff would spend 30-40 minutes to find individual selections in their paper-based catalogue (for price changes, corrections, etc.). With the creation of a new content management database, these searches now take seconds.
Lost Intellectual Capital
If you look at the material produced for a book or magazine, it is clear that the final outcome is but a minute portion of the total work produced for that product. The final book represents the top of a 'pyramid of information' and is the only real identifiable representation of the effort that went into the production of this product. Clearly, there was significant other work not catalogued which was completed during this project but which is now essentially 'lost'. Workers may have good intentions of using this unused material, but generally the cost of finding it at the appropriate time outweighs the costs of recreating it. Additionally, e-mails, meeting notes, marketing plans, budgets and forecasts, etc. - the record of the creation of the product -- are either gone or are dispersed across the enterprise and of little collective use to anyone. Artists' proofs, manuscripts and edits, photos, etc., all become 'stranded assets.' The intellectual capital lost in these instances is unmeasured -- until someone has to find something or reproduce it.
The Task
Publishers, in general, have made little progress in changing the way they produce their products. In order to take true advantage of their content, publishers will be required to develop an asset cataloguing system and a project management approach to managing publishing projects. At the 1997 Frankfurt Book Fair, the Association of American Publishers (AAP) announced an initiative to attach a 'license plate' to publishing property. This Digital Object Identifier (DOI) will identify the publisher of the property (owner), catalogue products at whatever level the publisher determines and allow for transactions of the material with payments and royalties accounted for appropriately.
The AAP will recommend how this cataloguing process should work so that all publishers use the same 'meta data' terminology and methodology. Meta data constitutes the information about the product such as the owner, royalty terms, author, artist, etc., - a list which is defined by the publisher. What is assumed in the above is that a book or title will have only one DOI number attributed to that material -- in fact, each book may have hundreds of DOI numbers associated with it. Currently, every book created by a publisher carries an ISBN (International Standard Book Number) and this is used by booksellers, publishers and others to identify the book. The DOI will allow material within that book to be identified down to the paragraph, sentence or word level. Currently, when a college professor requests permission to copy a chapter from a textbook, this becomes a nightmare for those that have to account for the transaction.
It is not always clear which of the often multiple contributors to the book wrote the chapter in question. Often, royalty rates per author differ depending on how the material was purchased, and generally the accounting for this exercise must be done manually (and often more than once). The DOI will automate this process. Publishers must think differently as to what constitutes a unit or product, moving beyond thinking of files and documents (finished books and magazines), which should be viewed as simply containers of information.
Of course, DOI and the establishment of meta data based cataloguing systems only help going forward. A big question surrounds legacy data -- how you economically use this content in a digital workflow. Digitizing legacy data is a huge expense consideration. Moreover, it is widely viewed that you will only ever need five percent of this data … unfortunately, you just don't know which five percent. Publishers are advised to consider carefully their approach to digitizing legacy data.
Reevaluation and Change
Established, traditional publishers need to augment their publishing product with service based products, unique customer driven products, database management and the ability to transact business. Product differentiation and the ability to leverage content through avenues not previously considered will be 'enabled' via new processes, making the development of new products across media and within the same media much easier. Many consumer products companies have proven that the key to brand growth is product differentiation, yet, to date, publishers have only had limited success in this area. This new content production process will have three components:
- Single point of entry:
A single point of access to, retrieval of, and contribution to the content database, best achieved via an Intranet solution. All material relevant to a 'project' would reside in a database including the content and work related material such as e-mails, contracts, drafts, budgets, royalty and rights information. - Uniform data entry:
Data needs to be structured or catalogued in a format which is easily understood and largely automatic. While cataloguing data at the source will be the most effective 'capture' method, it will be difficult to convince some groups to do this (especially authors). As far as possible, meta data should be associated with content automatically at the source. This methodology must also be universal (i.e., DOI) so that commerce is not impeded by confusing and conflicting catalogue methods. - 'Extrapolation':
The ability to build new products and services from the use of the content, thereby also refreshing the content. Publishers, as masters of their content, can significantly increase the value of their brand names and profit margins by facilitating product differentiation in multiple formats.
A significant by-product of this approach will also be the strengthening of publishers' brand names and images. By separating content from format, new material generated by an author or other source then resides catalogued in a database, ready to be re-purposed into a book, CD-ROM, on-line version, magazine, or produced to a printer. These changes require new project management and workflow management tools, an archiving methodology (new and legacy data), and the installation of wide area networking - Intranet solutions to allow universal access.
At the Seybold conference, Bill Gates of Microsoft stated that "not only is the cost of [technology] ownership going down, but the value [owners] are getting out of these systems is constantly rising." Publishing is a prime example of this in that the movement to a content management philosophy is the next step in the Desk Top Publishing (DTP) revolution which brought publishing companies from razor blades and mark-up pens to electronic workflows. Gates fully recognizes the competitive advantage to be gained by developing databases of digital content and says that "companies that move information around electronically will be more competitive than companies that do not." He believes that those traditional publishers who do not move in this direction now will not be around to discuss it later.
There needs to be a systematic approach to developing new processes within these companies to take advantage of new media opportunities. In the future, successful publishers will be those which view themselves as content developers and managers rather than (only) book or magazine publishers. Only with a production approach which separates the content from the format and which is supported by processes to enable the adaptation of that content into various formats as required by customers, will traditional publishers be able to take advantage of all future opportunities.
A speaker at the Seybold conference commented that "publishing currently fails to predictably satisfy customers and achieve businesses' objectives" because mass publishing is very hit or miss. Harry McQuillen, when at Macmillan Publishing Company, used to say (tongue-in-cheek) before every budget meeting that "you can never plan for bestsellers." Perhaps in the future, by building products to satisfy individual needs rather than producing products for the masses, publishing will grow more predictable. This, in turn, however, will only come from an ability to manipulate content libraries for specific purposes.
Sunday, December 28, 1997
12/28/97: Barnes Noble, Pearson, Readers Digest, Scholastic
Summary:
Sun Media Corporation IPO
Readers Digest Annual Meeting: No Family Affair
For the Kids, Scholastic Says 'So Long, SOHO'
Board Changes at Pearson plc
Starwood to sell ITT directories unit for $2.1 billion
Town & Country
Knight-Ridder, NYT Report Online Losses
Barnes & Noble, AOL Make Deal
RECENT NEWS
Sun Media Corporation IPO
TORONTO, Dec. 3 /CNW-PRN/ - Sun Media Corporation announced that it has filed a prospectus with the securities regulatory authorities in each of the provinces of Canada for a combined initial public offering and secondary offering of approximately 23 million common shares in such provinces at a price of $13.50 per share. Sun Media is the second largest daily newspaper publishing group in Canada in terms of circulation and currently publishes five daily newspapers in major urban centers in Canada (The Toronto Sun, The Edmonton Sun, The Calgary Sun, The Ottawa Sun and The London Free Press) and The Financial Post, which is 80% owned by Sun Media. Sun Media's Community Newspaper Group also publishes five daily community newspapers, 80 weekly community newspapers and shopping guides in Canada and in Florida and 17 farming and other specialty publications. SOURCE Sun Media Corporation
Readers Digest Annual Meeting: No Family Affair
Reader's Digest held its annual shareholders meeting last week and, unlike many of the 75-year old company's publications, it was far from family fare. Angry shareholders complained about flagging share prices, fiscal irresponsibility and ineffective leadership, according to Reuters. Among the complaints: the company reportedly borrowed $100 million this year to pay out a 90 cent dividend. Under questioning, the company reportedly admitted that it actually had not earned its dividend for the past three years. Meanwhile chairman and CEO George Grune urged dissenters to be patient. As part of a promised turn-around, he reportedly said the company was re-evaluating its business alliances with Meredith Corp., PBS, Sears, Roebuck and Co., Spiegel Inc. and Avon Products Inc.
The company also was lambasted for its aging board. For example, one shareholder reportedly singled out board member Melvin Laird who, at 75, was the U.S. Secretary of State under former President Richard M. Nixon. The company paid Laird $400,000 for consulting services last year. Mediacentral: 12/16
For the Kids, Scholastic Says 'So Long, SOHO' (Folio: First Day)
Scholastic Corp. certainly is serious about this core-business-focus stuff that corporations are always prattling about in their life-imitates-Dilbert manner. To hear Scholastic executive VP Hugh Roome tell it, the $1-billion children's publisher will unburden itself of several profitable operations when it completes the sale of its SOHO Group [small office/home office] to privately held CurtCo Freedom Group in the next four weeks. The plum properties in the deal, announced last Thursday and valued at $20 million, are Home Office Computing -- launched 15 years ago by Scholastic as Family Computing -- and HOC offshoot Small Business Computing.
Roome, hired by New York-based Scholastic seven years ago to re-launch Family Computing as HOC, says that both HOC and SBC are profitable; so, he said, is Scholastic's six-year-old SOHO Custom Publishing unit. Its projects have included Small Business, produced for Microsoft, and Small Business Handbook, of which it sold 100,000 copies to AT&T. The unit also puts out four newsletters with total circulation of 2 million. Other properties acquired by CurtCo include HOC Online (www.smalloffice.com), which Roome said has sold out its banner-ad space 18 months running. Roome said the SOHO Group's 50-odd employees will move to Curt Co's expanding offices on West 56th Street in Manhattan and that he doesn't believe any of those personnel will be cut. In its announcement of the acquisition, the privately held CurtCo, based in Malibu, CA, pointed to the "synergy" Scholastic's SOHO Group has with such CurtCo magazines -- it publishes 21 along with 27 daily newspapers -- as Portable Computing Direct Shopper, Mobile Computing & Communications and Sales & Field Force Automation.
HOC's paid circulation rose by 2.4% to 461,353, thanks to a 20,000-plus increase in subscriptions to 441,000 in the first six months of 1997 compared with the first half of '96, according to the Audit Bureau of Circulation’s. Single-copy sales averaged 20,361, a 32% decline. Ad pages through November totaled 903, a 1.5% improvement over 890 in the first 11 months of '96; ad dollars rose 15.8% to $22.4 million from $19.4 million, according to Publishers Information Bureau. Small Business Computing, launched in January 1996, has controlled circulation of 140,000. CurtCo president and CEO William J. Curtis didn't return calls from First Day, but Roome said CurtCo "has intentions to expand the magazines' circulation’s in many dimensions and build other spin-off properties."
Sources familiar with the transaction's history said bidders for Scholastic's SOHO Group at one time or another have included Inc. magazine and Cowles Business Media. Roome acknowledges that it received unsolicited bids for the SOHO Group four years ago; at that time, those same sources said, the SOHO Group could have fetched a much higher price. New York investment banking firms DeSilva & Phillips Inc. and Veronis, Suhler & Associates Inc. represented CurtCo and Scholastic, respectively, in the transaction. (Neil Cassidy) Source: Mediacentral 12/15
Board Changes at Pearson plc
David Veit and Pehr Gyllenhammar are to step down from the board of directors of Pearson plc. David Veit, 59, an executive director and president of Pearson Inc, will retire at the company’s annual general meeting next May. He has been a Pearson director since 1981 and the senior Pearson executive in the United States for more than twenty years. Pehr Gyllenhammar, 62, who has been a non-executive director since 1983, will retire from the board at the end of December 1997. Source: Pearson plc 17th December 1997
Starwood to sell ITT directories unit for $2.1 billion
NEW YORK, Dec 18 (Reuters) - Starwood Lodging Trust, the victor in one of the year's biggest takeover fights, began on Thursday to break apart its prize. The real estate and hotel investment trust announced plans to sell ITT Corp.'s highly-profitable telephone directories business for $2.1 billion to Dutch publisher NV Verenigd Bezit VNU (OTC BB:VNUNY - news; VNUN.AS). The sale, which is contingent upon the completion of the proposed $10.2 billion ITT-Starwood transaction, came sooner than expected and is the first of several non-core assets expected to be sold by Starwood. Phoenix-based Starwood said it would use proceeds of the sale to reduce debt associated with the acquisition of ITT.
VNU, one of the world's largest information companies, is the dominant publisher of consumer magazines in the Netherlands and Belgium. It said the directories business had sales of about $545 million last year and earnings before interest, taxes and depreciation of about $178 million. ``This fits very well with our present portfolio. Half of (ITT World Directories) is aimed at the consumer, but the other half is aimed at the business to business segment,'' VNU Chief Financial Officer Frans Cremers said in Amsterdam. The Dutch firm was one of several companies that had expressed interest to ITT earlier this year when it was selling assets to defend itself against Hilton's hostile bid. ITT later abandoned that plan and sealed a transaction with Starwood. Although the unit has strong profit margins, it is a slow-growth business and was not considered to be a core asset for either ITT or Starwood.
VNU also publishes newspapers in the Netherlands and is active in business information in the United States and Europe. Cremers said in an interview that the ITT directories business was about evenly split between consumer and professional markets, like VNU itself. ``We are committed to both sectors. We want to grow in three areas: marketing information, trade journals and consumer information,'' he said. Cremers said VNU also had been attracted to ITT World Directories because the company.
For Those Last Minute Gifts… Town & Country's Top Ten Gift Ideas for the Holiday Season
Addressing different aspects of life such as beauty, kitchen and home, clothing and charity, Editor-in-Chief Pamela Fiori suggests imaginative gifts in a variety of price ranges. With that in mind, her favorite beauty picks include: --Estee Lauder Re-Nutriv Intensive Lifting Cream ($150) --Annick Goutal Eau d'Hadrian in a Baccarat bottle ($550) --Bliss Spa Gift Basket ($50-$200); call 888/243-8825 Kitchen and Home. Among Fiori's suggestions for the domestic sphere are: --Fresh caviar from Caviarteria --Aluminum cultivator from Smith & Hawken ($7) --Magafesa Rapid II 8 quart pressure cooker ($109) --Hurrell's Hollywood Portraits (Abrams, $39.95). Classic clothing and accessories, can have added panache when special attention is paid to choosing unique fabrics or decorations. to bring an imaginative touch to these standards try: --Anything cashmere --Costume Brooches, Art Deco Jewels ($65). With respect to charity; "Giving to a charity of a favorite cause unites friends and family in the true holiday spirit -- thinking of others," states Fiori. She suggests: --A donation to the African Wildlife Foundation (202-939-3333) or the Nature Conservancy (800-628-6860) in a friend's name.
ON-LINE NEWS:
Knight-Ridder, NYT Report Online Losses
Both Knight-Ridder and The New York Times reported tens of millions of dollars in losses for their New Media ventures for 1997 at the Paine Webber Media Conference here in New York. Yet both companies emphasized their optimism that revenues will increase next year, with possible profitability by 2000. Knight-Ridder will spend about $27 million this year on its 32 web sites but will take in only $11 million in revenue, according to chairman P. Anthony Ridder. Outlays for next year probably will be the same if not higher, but revenue also is expected to grow. Meanwhile the Internet is a valuable investment, said Ridder, pointing to his San Jose Mercury News, which has a daily circulation of 287,000 while drawing 1.2 million readers a month to its Web site. Knight-Ridder also is talking with the Tribune Co. and Washington Post about developing their online real estate and auto classified businesses. Knight-Ridder may part in the real estate portion, but Ridder said his company is not interested in becoming the third, full partner in the effort. Ridder said that he was "disappointed" with this year's debut of the New Century Network -- nine major newspapers sharing a common Web site aimed at luring national advertisers online -- and is looking at ways improve the site. Meanwhile, The Times expects a $12 million to $15 million loss for 1997 and an $8 million to $11 million loss next year, when it will launch its New York Today local content Web site and broaden its Boston Globe (http://www.boston.com) site. Despite its red ink, The Times' Web site (http://www.nytimes.com) has nearly 3 million registered users and is growing at the rate of about 200,000 users per month. Source: Mediacentral 12/12/1997
Barnes & Noble, AOL Make Deal
Barnes & Noble on Tuesday said it is paying America Online $40 million to be the exclusive seller of books on the nation's largest online service, shutting out Amazon.com and other major sellers of books on the Internet. Amazon.com, based in Seattle, is not currently promoting its books across America Online's network. But the Barnes & Noble Inc. deal locks up AOL for the next four years and expands where the bookseller can show ads, including the service's financial, travel and entertainment sites, and with its international subscribers.
The deal is the latest this year with America Online Inc., which has staked its future profits on revenues from advertisers. In exchange for helping to promote their products, the Dulles, Va.-based company is receiving more than $225 million from companies including CUC International Inc., a buying club, and Tel-Save Holdings Inc., a seller of long-distance telephone service.
By clicking on the Barnes & Noble icon, AOL's 10 million subscribers can link up to the company's Internet site and order books. "Effectively it gives us great positioning, locks out the competition, and gives us the next four years" of exclusive advertising, Barnes & Noble vice chairman Steve Riggio said. An Amazon.com did not immediately return a phone call seeking comment. America Online declined to comment. Amazon.com continues to sell books over AOL's World Wide Web site. December 16, 1997 By THE ASSOCIATED PRESS
Sun Media Corporation IPO
Readers Digest Annual Meeting: No Family Affair
For the Kids, Scholastic Says 'So Long, SOHO'
Board Changes at Pearson plc
Starwood to sell ITT directories unit for $2.1 billion
Town & Country
Knight-Ridder, NYT Report Online Losses
Barnes & Noble, AOL Make Deal
RECENT NEWS
Sun Media Corporation IPO
TORONTO, Dec. 3 /CNW-PRN/ - Sun Media Corporation announced that it has filed a prospectus with the securities regulatory authorities in each of the provinces of Canada for a combined initial public offering and secondary offering of approximately 23 million common shares in such provinces at a price of $13.50 per share. Sun Media is the second largest daily newspaper publishing group in Canada in terms of circulation and currently publishes five daily newspapers in major urban centers in Canada (The Toronto Sun, The Edmonton Sun, The Calgary Sun, The Ottawa Sun and The London Free Press) and The Financial Post, which is 80% owned by Sun Media. Sun Media's Community Newspaper Group also publishes five daily community newspapers, 80 weekly community newspapers and shopping guides in Canada and in Florida and 17 farming and other specialty publications. SOURCE Sun Media Corporation
Readers Digest Annual Meeting: No Family Affair
Reader's Digest held its annual shareholders meeting last week and, unlike many of the 75-year old company's publications, it was far from family fare. Angry shareholders complained about flagging share prices, fiscal irresponsibility and ineffective leadership, according to Reuters. Among the complaints: the company reportedly borrowed $100 million this year to pay out a 90 cent dividend. Under questioning, the company reportedly admitted that it actually had not earned its dividend for the past three years. Meanwhile chairman and CEO George Grune urged dissenters to be patient. As part of a promised turn-around, he reportedly said the company was re-evaluating its business alliances with Meredith Corp., PBS, Sears, Roebuck and Co., Spiegel Inc. and Avon Products Inc.
The company also was lambasted for its aging board. For example, one shareholder reportedly singled out board member Melvin Laird who, at 75, was the U.S. Secretary of State under former President Richard M. Nixon. The company paid Laird $400,000 for consulting services last year. Mediacentral: 12/16
For the Kids, Scholastic Says 'So Long, SOHO' (Folio: First Day)
Scholastic Corp. certainly is serious about this core-business-focus stuff that corporations are always prattling about in their life-imitates-Dilbert manner. To hear Scholastic executive VP Hugh Roome tell it, the $1-billion children's publisher will unburden itself of several profitable operations when it completes the sale of its SOHO Group [small office/home office] to privately held CurtCo Freedom Group in the next four weeks. The plum properties in the deal, announced last Thursday and valued at $20 million, are Home Office Computing -- launched 15 years ago by Scholastic as Family Computing -- and HOC offshoot Small Business Computing.
Roome, hired by New York-based Scholastic seven years ago to re-launch Family Computing as HOC, says that both HOC and SBC are profitable; so, he said, is Scholastic's six-year-old SOHO Custom Publishing unit. Its projects have included Small Business, produced for Microsoft, and Small Business Handbook, of which it sold 100,000 copies to AT&T. The unit also puts out four newsletters with total circulation of 2 million. Other properties acquired by CurtCo include HOC Online (www.smalloffice.com), which Roome said has sold out its banner-ad space 18 months running. Roome said the SOHO Group's 50-odd employees will move to Curt Co's expanding offices on West 56th Street in Manhattan and that he doesn't believe any of those personnel will be cut. In its announcement of the acquisition, the privately held CurtCo, based in Malibu, CA, pointed to the "synergy" Scholastic's SOHO Group has with such CurtCo magazines -- it publishes 21 along with 27 daily newspapers -- as Portable Computing Direct Shopper, Mobile Computing & Communications and Sales & Field Force Automation.
HOC's paid circulation rose by 2.4% to 461,353, thanks to a 20,000-plus increase in subscriptions to 441,000 in the first six months of 1997 compared with the first half of '96, according to the Audit Bureau of Circulation’s. Single-copy sales averaged 20,361, a 32% decline. Ad pages through November totaled 903, a 1.5% improvement over 890 in the first 11 months of '96; ad dollars rose 15.8% to $22.4 million from $19.4 million, according to Publishers Information Bureau. Small Business Computing, launched in January 1996, has controlled circulation of 140,000. CurtCo president and CEO William J. Curtis didn't return calls from First Day, but Roome said CurtCo "has intentions to expand the magazines' circulation’s in many dimensions and build other spin-off properties."
Sources familiar with the transaction's history said bidders for Scholastic's SOHO Group at one time or another have included Inc. magazine and Cowles Business Media. Roome acknowledges that it received unsolicited bids for the SOHO Group four years ago; at that time, those same sources said, the SOHO Group could have fetched a much higher price. New York investment banking firms DeSilva & Phillips Inc. and Veronis, Suhler & Associates Inc. represented CurtCo and Scholastic, respectively, in the transaction. (Neil Cassidy) Source: Mediacentral 12/15
Board Changes at Pearson plc
David Veit and Pehr Gyllenhammar are to step down from the board of directors of Pearson plc. David Veit, 59, an executive director and president of Pearson Inc, will retire at the company’s annual general meeting next May. He has been a Pearson director since 1981 and the senior Pearson executive in the United States for more than twenty years. Pehr Gyllenhammar, 62, who has been a non-executive director since 1983, will retire from the board at the end of December 1997. Source: Pearson plc 17th December 1997
Starwood to sell ITT directories unit for $2.1 billion
NEW YORK, Dec 18 (Reuters) - Starwood Lodging Trust, the victor in one of the year's biggest takeover fights, began on Thursday to break apart its prize. The real estate and hotel investment trust announced plans to sell ITT Corp.'s highly-profitable telephone directories business for $2.1 billion to Dutch publisher NV Verenigd Bezit VNU (OTC BB:VNUNY - news; VNUN.AS). The sale, which is contingent upon the completion of the proposed $10.2 billion ITT-Starwood transaction, came sooner than expected and is the first of several non-core assets expected to be sold by Starwood. Phoenix-based Starwood said it would use proceeds of the sale to reduce debt associated with the acquisition of ITT.
VNU, one of the world's largest information companies, is the dominant publisher of consumer magazines in the Netherlands and Belgium. It said the directories business had sales of about $545 million last year and earnings before interest, taxes and depreciation of about $178 million. ``This fits very well with our present portfolio. Half of (ITT World Directories) is aimed at the consumer, but the other half is aimed at the business to business segment,'' VNU Chief Financial Officer Frans Cremers said in Amsterdam. The Dutch firm was one of several companies that had expressed interest to ITT earlier this year when it was selling assets to defend itself against Hilton's hostile bid. ITT later abandoned that plan and sealed a transaction with Starwood. Although the unit has strong profit margins, it is a slow-growth business and was not considered to be a core asset for either ITT or Starwood.
VNU also publishes newspapers in the Netherlands and is active in business information in the United States and Europe. Cremers said in an interview that the ITT directories business was about evenly split between consumer and professional markets, like VNU itself. ``We are committed to both sectors. We want to grow in three areas: marketing information, trade journals and consumer information,'' he said. Cremers said VNU also had been attracted to ITT World Directories because the company.
For Those Last Minute Gifts… Town & Country's Top Ten Gift Ideas for the Holiday Season
Addressing different aspects of life such as beauty, kitchen and home, clothing and charity, Editor-in-Chief Pamela Fiori suggests imaginative gifts in a variety of price ranges. With that in mind, her favorite beauty picks include: --Estee Lauder Re-Nutriv Intensive Lifting Cream ($150) --Annick Goutal Eau d'Hadrian in a Baccarat bottle ($550) --Bliss Spa Gift Basket ($50-$200); call 888/243-8825 Kitchen and Home. Among Fiori's suggestions for the domestic sphere are: --Fresh caviar from Caviarteria --Aluminum cultivator from Smith & Hawken ($7) --Magafesa Rapid II 8 quart pressure cooker ($109) --Hurrell's Hollywood Portraits (Abrams, $39.95). Classic clothing and accessories, can have added panache when special attention is paid to choosing unique fabrics or decorations. to bring an imaginative touch to these standards try: --Anything cashmere --Costume Brooches, Art Deco Jewels ($65). With respect to charity; "Giving to a charity of a favorite cause unites friends and family in the true holiday spirit -- thinking of others," states Fiori. She suggests: --A donation to the African Wildlife Foundation (202-939-3333) or the Nature Conservancy (800-628-6860) in a friend's name.
ON-LINE NEWS:
Knight-Ridder, NYT Report Online Losses
Both Knight-Ridder and The New York Times reported tens of millions of dollars in losses for their New Media ventures for 1997 at the Paine Webber Media Conference here in New York. Yet both companies emphasized their optimism that revenues will increase next year, with possible profitability by 2000. Knight-Ridder will spend about $27 million this year on its 32 web sites but will take in only $11 million in revenue, according to chairman P. Anthony Ridder. Outlays for next year probably will be the same if not higher, but revenue also is expected to grow. Meanwhile the Internet is a valuable investment, said Ridder, pointing to his San Jose Mercury News, which has a daily circulation of 287,000 while drawing 1.2 million readers a month to its Web site. Knight-Ridder also is talking with the Tribune Co. and Washington Post about developing their online real estate and auto classified businesses. Knight-Ridder may part in the real estate portion, but Ridder said his company is not interested in becoming the third, full partner in the effort. Ridder said that he was "disappointed" with this year's debut of the New Century Network -- nine major newspapers sharing a common Web site aimed at luring national advertisers online -- and is looking at ways improve the site. Meanwhile, The Times expects a $12 million to $15 million loss for 1997 and an $8 million to $11 million loss next year, when it will launch its New York Today local content Web site and broaden its Boston Globe (http://www.boston.com) site. Despite its red ink, The Times' Web site (http://www.nytimes.com) has nearly 3 million registered users and is growing at the rate of about 200,000 users per month. Source: Mediacentral 12/12/1997
Barnes & Noble, AOL Make Deal
Barnes & Noble on Tuesday said it is paying America Online $40 million to be the exclusive seller of books on the nation's largest online service, shutting out Amazon.com and other major sellers of books on the Internet. Amazon.com, based in Seattle, is not currently promoting its books across America Online's network. But the Barnes & Noble Inc. deal locks up AOL for the next four years and expands where the bookseller can show ads, including the service's financial, travel and entertainment sites, and with its international subscribers.
The deal is the latest this year with America Online Inc., which has staked its future profits on revenues from advertisers. In exchange for helping to promote their products, the Dulles, Va.-based company is receiving more than $225 million from companies including CUC International Inc., a buying club, and Tel-Save Holdings Inc., a seller of long-distance telephone service.
By clicking on the Barnes & Noble icon, AOL's 10 million subscribers can link up to the company's Internet site and order books. "Effectively it gives us great positioning, locks out the competition, and gives us the next four years" of exclusive advertising, Barnes & Noble vice chairman Steve Riggio said. An Amazon.com did not immediately return a phone call seeking comment. America Online declined to comment. Amazon.com continues to sell books over AOL's World Wide Web site. December 16, 1997 By THE ASSOCIATED PRESS
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