Borders' UK New Investor

There was a profile of Luke Johnson in the Wednesday Evening Standard which I read wedged into seat 26a coming home. Even thought he is only 45, Johnson has a long history of both entrepreneurial activities and private equity investing. He is currently Chairman of Channel 4 which was one of the early commercial UK broadcasters but if there is a theme to his business history it is in retail customer management. He believes that the Borders UK operations have a lot to offer and,

"It's like gold to us." Come on, there's a Borders near me, and while it's great wandering round the basement listening to the CDs, I'm also aware I'm often the only one down there. "In music retailing, life is tough," Johnson says. "HMV and Virgin have shown that. Borders needs reshaping. "When the internet came along, people said it would transform retailing -- it's taken until now for it to really make an impact. It's not just CDs -- travel agents, cameras shops, video rental, they all face a difficult future. But Borders doesn't just sell CDs, its main business is selling books and the good thing about them is that their sales are still growing. Millions of people want to browse in bookshops. Did you know the average dwell time in a Borders is one hour?"

Article

Macomber appointed President & CEO Wolters Kluwer Health

Wolters Kluwer Health, a division of Wolters Kluwer, a leading provider of information and business intelligence for students, professionals, and institutions in medicine, nursing, allied health, pharmacy and the pharmaceutical industry, announced today the appointment of Gordon Macomber as President & CEO of its Professional & Education business unit, with responsibility for the Lippincott Williams & Wilkins product lines.

For the past four years, Macomber had been President of Thomson Gale Reference in Farmington Hills, MI.

"The appointment of Gordon Macomber brings us extensive publishing experience as well as the leadership skills and business proficiency to take our books and journals business into the next era of content-in-context," said Jeff McCaulley, President & CEO of Wolters Kluwer Health. "We could not be more thrilled to have Gordon join our leadership team."

Press Release

Borders Down Under

As reported before, final bids are due by the end of the month for the Borders store operations in NZ and Australia. Bids are expected to be in the A$80-100mm range with Private Equity Partners the owner of Angus & Robertson the presumed front runner. Some serious contenders are already reviewing the books and according to this article from the New Zealand Herald there may be more than one or two candidates. Already mentioned were PEP and Berkelouw Books (a small book company), and now Dymocks the other large bookseller in the marketplace has confirmed it is looking to make a bid. Additionally, Woolworths and Paper Plus, a PaperChase like franchise operation, may also join in. This additional interest must be good news to Border's US who need to get a high price for these operations to mitigate the disappointing sale of the UK operations. Also noted in the article is a suggestion that Borders Australian management may have backed off a management buyout in order to align themselves with one of the purchasers most likely PEP.

Riverdeep Rumor and Reed Elsevier "Buy"

A curious note from Usman Ghazi of Dresdner Kleinwort who, in the process of recommeding Reed Elsevier as a buy - with a target price of 780p - takes note of rumors suggesting Riverdeep risk "either not securing the bank funding required to finalize the [Harcourt] transaction or going bankrupt in the intervening period, leaving the deal unfinished." He dismisses these rumours and I can't find any other suggestion of these issues so how much of a concern are they?

Borders CEO Jones Buys 50,000 shares

Nothing speaks to committment than dipping into your own pocket and putting your money where your mouth is and that's exactly what Borders' CEO George Jones has done with his purchase of 50,000 shares. While Borders' hit a long term low after their recent earnings announcement this endorsement may both shore up the share price and let investors know that senior management believes the future looks good for Borders. This purchase was one of the largest single purchases of Borders' stock in recent years. The purchase cost over $660,000 and as a result, Jones owns over 121,000 shares.

In related news, the company also annouced a fulfillment agreement with Baker&Taylor for support of the to be launced Borders.com retail site.

"We selected Baker & Taylor as our primary fulfillment partner because of their excellent track record with consumer-direct fulfillment of all of the product types we'll offer at Borders.com, and their ability to serve our customers in the superior manner they deserve," said Kevin Ertell, vice president of e-business for Borders Group.

"We are delighted to be Borders' fulfillment partner for book and entertainment products" said Richard Willis, CEO, Baker & Taylor, Inc. "We look forward to working closely with Borders on this exciting initiative and providing their customers with the world-class fulfillment services that are a standard of B&T."

In the same announcement, the company formally annouced the beta for the new retail site with some description of the site's features.

One such feature is the Magic Shelf(TM), which Borders has been testing on the beta site for over four weeks. The Magic Shelf is Borders' unique online version of the warm and engaging shopping experience that takes place in its bookstores every day. When arriving at the site's home page, customers see a realistic looking, three-dimensional shelf of actual book covers displayed as they would be in a Borders store. For details on each title, customers simply click on a book that interests them, much the way they pick up books that catch their eye in Borders stores. Over time, as customers shop at the future Borders.com, the Magic Shelf will become personalized for the shopper based on past purchases and will display books that the customer may be particularly interested in exploring. On the beta site, there is a related Magic Shelf feature called "Picked for You." Customers simply indicate the subjects in which they have an interest, and Borders will stock the "Picked for You" shelf with books on those subjects.

Penguin Lives in Whyville

Mediapost has an interesting post about the virtual world whyville and how the site is being leveraged by Virgin, Penguin and the University of Texas Health Science Center. The virtual world has over 2.4mm active users between the ages of 8-15 and is billed as place where children can gain an understanding and appreciation for math and science. It is also a place where companies can advertise there products as long as the advertising is 'active brain advertising'.

Here is what Mediapost said about Penguin's activity:

For Penguin Books' kid-friendly adaptation of Al Gore's "An Inconvenient Truth," Whyville created an entire Global Warming program--complete with in-world climate changes and tropical storms. Kids were able to band together for community clean-up activities after a storm trashed the Whyville beach, and take CO2 and temperature readings of the island at the Penguin-sponsored Climate Center. Almost 400,000 members visited the Climate Center within months of its launch at the end of June.

Foreword Magazine

Foreword magazine asked me to blog for the which I have been doing for the past four weeks. Most of what has appeared there is content from PND but Competitive Writing is something new. You may also like the new Foreword website recently redesigned.

Media Deals Keep Getting Better

The Jordan, Edmiston Group released their quarterly press notice on media deals and the results keep getting better and better - if you are selling. Amidst general worries about personal retirement accounts (mine) and decreased real estate valuations (my ex-neighbor but they deserve it) here we have our industry's bell weather shooting through the roof. JEGI tracked 637 deals and $95billion in value for the first three quarters of 2007 and they say deal value has already far outstripped the total value for all 2006.

JEGI tracks 11 industry segments and the leading segments were Marketing and Interactive Services and Online Media. In both segments the number of deals were up over 50% and the valuations were also up over at least 50% versus 2006. While there were a lot of deals in these segments they were 'small' compared to education where several very large deals resulted in a valuation increase from $387mm in 2006 to $14,239mm this year. There was a similar increase in Information Services.

Laggards in value included Business to Business media, consumer books and Directory and Reference Publishing.

You can read the entire release here.

EBAY Takes Charge

It was obvious to me in December that EBAY had either not purchased the right company or they had and had failed to execute with the acquisition of Skype. That's why in my (self indulgent) predictions for 2007, I suggested that EBAY would sell the unit. However, things are worse than that. With EABY's listings listless and core revenues a concern to business analysts, the company annouced yesterday that they made a mistake and overpaid for Skype and would take a $1.4billion charge in the third quarter. The purchased the company in 2005 for $2.6billion. Talk about dialing the wrong number.

There is still time for T-Mobile to step in.

Penguin Blog a Classic

Penguin has launched a blog site that seeks both reviews and social commentary on their list of over 1,400 classics. You can register to receive one of their titles in the mail and then 'blog' about it on the site. It launched a few months ago but at the moment this interesting experiment looks like a site for reader submitted reviews. There are some comments attached to some reviews but the site doesn't seem to capture the spirit and spontaneity that blogging could engender.

Blogging can be anarchic and to some extent that's what you would want to see from this project: Someone having a conversation with or interaction with a book as they read it. What they feel, what they don't understand, what happened that day in their lives that reminded them of the book, whatever.... We can get a book review from Amazon. I think Penguin should take the shackles off and loosen up.

Penguin

Harpercollins Goes to The Movies

The Associated Press reports that Harpercollins has established a strategic relationship with Sharp Independent.

Under a multiyear agreement, Sharp Independent at HarperCollins will be based at the publisher's Manhattan offices and will work with authors and agents on developing film versions of HarperCollins books. "We are always looking for ways to give our authors' works greater visibility. Providing an avenue and competitive advantage in the film world is another example of this," Michael Morrison, president and group publisher of Harper/Morrow, which includes the HarperCollins and William Morrow divisions.

AP

FT is Free

The Financial Times announced on Monday that they would be allowing free access to the content on their website. The FT was a late player in paid web access following the WSJ but are now following the lead of the NYT in opening up the site. From Mediapost:

FT.com isn't actually opening the doors all the way: there's a limit of 30 free stories per month, and visitors are required to register at the site after viewing the first five. The paper said the new policy is designed to make the site more accessible to blogs and news aggregators--increasingly important sources of traffic for news sites. Around the same time, FT.com will also launch a number of new products, including more video journalism and new editorial features, columns and tools.

It is great to see some of these newspaper sites change even though it can be argued it is Murdoch's purchase of Dow Jones that is prompting the action.

Who do these 'Literary' Competitions help?

Yet more competitions to seek new publishing works. Why, I don't know. This seems a dopey way to generate product IMHO. But then, that's probably not the point just like finding The Next Top Model is about modelling.

News on Borders/CourtTV/Gather.com and Amazon.com/Penguin/HP.

NYTimes
SeattlePI

Five Questions with Harlequin (I ♥ Presents)

At Harlequin there is good news on multiple fronts as Harlequin’s financial performance improves and their e-publishing initiatives are showing real signs of resiliency and development. Harlequin began their e-book program in October 2005 when they launched 9 titles and the company announced last week that all front list titles will have e-book versions. To spur growth and motivate buyers the titles are priced below the list price of print titles. As many know, the Harlequin community is incredibly loyal and by accounts read more than 2x as many books as a typical reader. The e-book customer is little different in their (her) dedication: She is willing to overcome the invariable technology issues of e-books to enjoy the benefits of e-books and loves the immediacy and portability that the e-book format enables.

In addition to e-books being available at all known e-retailers and in all formats, the company is also experimenting with content on mobile phones. This distribution method has been insanely popular in Japan and Harlequin has launched a monthly subscription offer that includes chapters, games, polls and reading lists. Priced at $2.49 it is competitive.

The Harlequin community has always been cohesive and eharlequin.com their web community site is now 10 years old. The site traffic is significant with ¾ million page views per month: What other publisher has traffic that large? Currently they receive over 20,000 posts per month discussing and reviewing books, interacting with editors and even pitching their own titles: Fifteen members sold books to Harlequin in 2006.

Yet another more recent initiative is Harlequin Presents (I ♥ Presents) which was launched in February 2007. Among the features, editors and writers post blogs and interact with readers who comment on average 13 comments per blog post. Harlequin has a built in advantage in developing social networking but they could have fumbled it. What is increasingly clear is that they are the dark horse in publisher’s race to engage their customers. Harlequin is proving that social networking will improve reader engagement, has the potential to turn customers into product ambassadors and facilitates two way communication between publisher and customer. Harlequin’s branding is well known in print but they are increasingly making it known online.

And with that intro, I asked Malle Vallik, Harlequin's director of digital content my five questions:

1. Harlequin has always been about community and somewhat 'cultish' in the level of obsessiveness of its readers. Is that an accurate description?

The majority of our readers are avid readers and incredibly knowledgeable about both our authors and our various series. A Harlequin Presents reader loves her Harlequin Presents stories, has favorite themes (like Mediterranean heroes) and knows when the books are available for sale. She shows up on the date the book goes on sale in a bookstore or mass merchandiser and at online retailers on the first of the month when the new titles are released.

Moreoever, our readers do like to share their thoughts about the books; that is what community and all the other new social media platforms offer – a means to connect readers from around the world and authors to readers.

2. Harlequin is doing a lot in online community building and social networking, is the ability to leverage these new technology tools a dream come true for Harlequin in that you are able to build immediate and direct relationships with highly responsive customers? Has this been all good? Tell us how it has it fostered changes in the organization.

Overall, it’s fantastic! You have basically hit the nail on the head. We can build immediate and direct relationships on a global scale. We can connect readers from Texas to Switzerland and connect readers to authors no matter where they are in the world.

We can also connect aspiring authors to our editorial team. Our community hosts writing events from authors along with editor meetings and pitches.

3. What new markets have opened up for Harlequin due to your web initiatives? Any surprises - like men as readers for example. Are these markets segments - narrower elements of existing markets - or are they completely new to Harlequin?

We have been able to create new products specifically for the digital market, whether it is bundles combining several titles together like the NYT bestselling author Jennifer Crusie 4 novel bundle. Or a bundle that makes shopping easier – what we call a one-click bundle. You can get all 8 Presents novels published in one month, with just one click and one download!

We launched the Harlequin Mini, a short story, available only as an eBook in August 2006, and launched Spice Briefs, short erotica, a spin off from our Spice imprint, again available only in eBooks in August 2007. We are publishing 2 – 3 Spice Briefs every month and are publishing both new and existing authors.

Perhaps our biggest surprise is how willingly women are approaching eBooks. It is still a very small part of our business but clearly a big growth area for the future.

4. Do authors bring you new ideas for using networking and the internet in new ways? Does what you do on the web result in new content? How much user content is solicited and used?

Yes, authors bring us new ideas. We work very closely together as a partnership with our authors: we have a website exclusive available to our authors where we offer suggestions on how to use digital more effectively and authors also contribute their case studies and ideas here. This is a collaborative learning experience for us both as we figure out how to maximize time commitment to return.

5. What is next for Harlequin on-line and social networking?

We just launched 100% frontlist in eBooks

We have launched the Harlequin Author Spotlight podcasts and will be soon launching a series of podcasts on how to write romance novels.

We are strengthening and expanding the back end power of our community by building a new platform that will be much more richly integrated into our website and let community members create meaningful profiles that include links to other social media.

We held our first author reading in Second Life yesterday, September 25 with author M.J. Rose, THE REINCARNATIONIST.

We have plans to acquire more eBook only content and other interesting new content for eBooks, create a new kind of eBook (more details to come!) and to continue to work with authors to launch more blogs.

BBC Worldwide Buys Lonely Planet

BBC Worldwide the commercial arm of the BBC has purchased Lonely Planet travel guides and although it had been rumoured for quite some time that LP was for sale the purchaser is a bit of a surprise. Founders Maureen and Tony Wheeler will remain with the business and retain 25% of LP.

''Joining BBC Worldwide allows us to secure the long-term future of our company within a globally recognised media group,'' the Wheelers said in a statement.

While the terms of the deal were not disclosed, The Herald noted that a 10% stake in the company was sold in 2005 for A$10mm to ANZ (that's a bank btw). Mr. Wheeler believes the bank did well out of the deal which values the company at over A$100mm.

Commenting on the deal John Smith, CEO of BBC Worldwide, said: "We are delighted to be announcing this acquisition today. Lonely Planet is a highly respected international brand and a global leader in the provision of travel information. This deal fits well with our strategy to create one of the world's leading content businesses, to grow our portfolio of content brands online and to
increase our operations in Australia and America."

BBC Worldwide is the commercial arm of the BBC and seeks to leverage the vast content owned by BBC into new distribution channels around the world. They have six core businesses: Global Channels, Global TV Sales, Content & Production, Magazines, Home Entertainment and Digital Media. In the year to end March 2007, BBC Worldwide generated profits of £111.1 million on sales of £810.4 million. The company has begun to invest heavily into digital distribution and has also recently announced key hires and organizational changes in this segment as well.

BBC Worldwide Press Release
The Herald
The Age
Five Questions with Lonely Planet

Publishing Trends Trends

Publishing trends released the results of their recent survey of publishing persona and reported some interesting but perhaps predictable results,

Not sure which refreshments to serve at your next publishing soirée? Wine and
beer are the safest bets…but it wouldn’t hurt to stash a few joints behind the
bar either.

Publishing Trends emailed the survey early in September to several thousand publishers, agents, booksellers and individuals in related businesses, and received a double-digit response rate that included comments and opinions on a wide variety of topics. Though the survey was anonymous, a significant group of respondents asked to be contacted for more in depth interviews. According to some, publishers lack vision, editors lack taste, managers don’t understand the business, authors exhibit bad behavior, and an Oregonian publisher thinks the industry is “too narrowly focused in NYC.” One VP of Sales and Marketing at a major publisher simply “fears for the future of the biz.”

Read the rest here.

$106MM Charge For Borders and A New Board Member

Strange this is getting reported today by Reuters because this information was noted in the sale announcement last week. Borders will take a $106mm charge most of which is due to the sale of the UK store operations.

An announcement regarding the sale of the Australian operations is expected soon.

Reuters

In a separate Reuters report, Spencer Capital Management which owns about 8% of Borders stock is seeking board representation. From the report,

Spencer said it would seek to have Glenn Tongue, managing partner of fellow Borders shareholder T2 Partners Management, added to the board. The hedge fund advisor said in the filing with the U.S. Securities and Exchange Commission that adding Tongue to the board would bring focus to board efforts to maximize shareholder value.

Glenn Tongue is the Managing Partner of T2 Partners LLC and has 17 years experience on Wall Street, most recently as an investment banker at UBS, where he was a Managing Director and Head of Acquisition Finance. Before UBS, he was at DLJ for 13 years, the last three of which he served as the President of NYSE-listed DLJdirect. (From his Bio).

Charkin Goes to Bloomsbury: But What About My Link?

The famous CharkBlog published by Richard Charkin - CEO Macmillan Publishers UK - will be coming to an end as he moves to Bloomsbury Publishing. There he will be executive director responsible for all their operations and he will be a board member. From the press release on his site:

“It is exactly ten years since I accepted the job as Chief Executive of Macmillan and it has been the best ten years of my career. I have been able to work in a company with strong values and traditions owned by a family committed to quality, innovation and autonomy. The decade has seen significant growth in all our diverse areas of publishing and we have been able to do this mainly organically but also with some excellent acquisitions. We are in the middle of a digital revolution and Macmillan has embraced the changes without losing sight of the importance of our authors, our staff, our customers and our history.

He had a link on his site to Personanondata to which I very grateful. I am sure someone else will pick up the Macmillan drum and bang away like Richard and I also believe Richard will start another Blog at Bloomsbury.

Harvest Moon Over Manhattan

A late summer heat wave is contributing to clear skies here in New York.

Update on Winnie the Pooh and Micky Mouse

As an update to the long running battle over royalties for the Winnie the Pooh character, an LA court has declined to reinstate the case that was dismissed in 2004. The daughter of Stephan Slesinger (below) said she would appeal the decision to the CA supreme court and also proceed with a Federal case.
NYTimes


Disney Wants the Honey Jar Too (February 20, 2007)

Disney (although not the plaintiff) lost a court case to have the rights to the Winnie the Pooh characters returned to the family of AA Milne and illustrator E.H Shepard. Disney and the relatives were seeking to overturn an earlier case that said that Clair Milne could not void an agreement that renewed the license to Stephan Slesinger in 1983. Slesinger obtained the original rights in 1930 and in 1961 passed those rights to Disney in exchange for royalties. The Slesinger family have also been fighting Disney for more than 10 years for unpaid royalties which they estimate could exceed a $1.0billion. According to Reuters, Pooh generated over $6.0billion in retail sales in 2005 alone

Harlequin Make All Titles Available For Download

Perhaps time to clear off some space on your MP3 player as Harlequin announced this week that all their titles will now be available for download. Harlequin has pressed ahead in the last two years or so with a number of aggressive electronic publishing and social networking programs and this is a continuation of that process. The initiative will include every line and every title which is about 120 titles per month.

From the press release:

"Women have embraced eBooks," says Malle Vallik, Director Digital Content & Interactivity. "They demand portability, immediacy, availability, depth, breadth and convenience and, by making our entire front list and exclusive digital editorial available to them, we are meeting that challenge. We are meeting the needs of our current audience and reaching a new and diverse base of readers. Seeking innovative new ways to serve our audience continues to be a Harlequin tradition."

Eharlequin.com

Audible Launches Crime Serial in Audio Only

Audible announced the launch of a serialized crime novel, The Chopin Manuscript which will be available exclusively in audio format and via audible.com. Not only is the novel a serial but it is also written by 15 different authors who have each written one or more chapters of the book. The collaboration began when Jeffery Deaver wrote the opening chapter of the work and handed it off to fellow best-selling writer, David Hewson, who wrote chapter two. Other successive authors include Lee Child, Joseph Finder, and Lisa Scottoline. The novel returned to Deaver for the final two chapters and is narated by Alfred Molina.

From the press release:

“I think The Chopin Manuscript is an important literary innovation in three ways,” observed Donald Katz, Chairman and CEO, Audible, Inc. “First, 15 of the most gifted practitioners of a very demanding and technical form of modern fiction – the thriller – came together to create a chapter of a single novel before handing the plot development to the next master. Second, the fact that the novel was written to be produced and published as an audiobook is a step forward for the literate listening category Audible was founded to develop. And finally, the work is being delivered as an episodic, high-tech-Dickensian publishing cycle, using Audible’s technology to automatically deliver a chapter at a time. In a variety of ways this grand experiment deploys technology and new techniques to open up digital media possibilities that can expand the digital audio sector and the literary form in general.”

The title is available only in audio format and available now via the audible.com website.

California Moves On Textbook Prices

More on two pieces of proposed CA legislation on textbook pricing:

Senate Bill 832 by Sen. Ellen Corbett, D-San Leandro, would require publishers to give faculty members a list of book prices in a given subject and information on significant changes in the new edition and also estimate for how long the book will be on the market. The bill would also require publishers to post the differences on the Internet. Assembly Bill 1458 by Assemblyman Jose Solorio, D-Santa Ana, would make publishers summarize the differences between the two editions inside the books and provide wholesale prices on request.

DailyBreeze editorial which agrees with the legislation even though they admit prices could rise which seems to fly in the face of the objective. For anyone familiar with textbook publishing there are a few strange comments in this article.

Faulkners Birthday

American Heritage has a long essay on Faulkner. For those who don't know much about him (like me) it is interesting reading on one of America's finest writers.

Faulkner was apparently a single minded individual and didn't have too much patience with many things including frivolity. He lived most of his life in Mississippi but found himself in Hollywood on a number of occasions as a screen writer. On one of those occasions, he grew so frustrated with the movie set lifestyle, the wasted time and the shallowness of the life on set that he asked his director if he could work from home. The director said sure no problem and Faulkner proceeded to fly back to Mississippi. I always found that story funny.

American Heritage.

Luckily, I am only down $10

My blog of last week (Sept 19, "I know what you said about me yesterday"), challenged marketing and publicity professionals to utilize technology, specificially Technorati , to follow what is being said about their titles in the blogging world. I choose three titles randomly from the Amazon Top 100 and challenged the publishers to find me within 24 hours--for each that did, I'd donate $10 to First Book . The result?

Only Fritz Foy, Senior VP of Holtzbrinck (I chose Middlesex, published by Picador, a Holtzbrinck imprint, as one of the titles), found me. He did it in two days but I still donated the money. It is a good cause, after all.

All publishers could be using tools like this to identify the most influential blogs, maximize marketing budgets by initiating inexpensive blog tours, and provide superior service to their authors. Many are already doing so, and successfully (see New York Times a friend forwarded the article to me). This is a trend to watch.

Five Questions with Bondi Digital and the Playboy Archive

The first DVD archive of all the 1950's issues of Playboy magazine will be released at bookstores and retail outlets by Bondi Digital Publishing on November 2nd. (It is now available for presale at www.covertocover.com). Long considered an icon of 20th century publishing the eventual full set of DVDs will cover every Playboy issue since the title launched in 1953. Bondi Digital Publishing has undertaken the task of truthfully representing each page of the magazine so that buyers of the set will be able to see the magazine as it was originally published.

The first set of Bondi Digital Publishing's Cover to Cover Series covers the launch of the magazine in 1953 with the now unforgettable Marilyn Monroe featured as Playboy's first centerfold, up through the beginning of 1960.

Included with the box set is a 200 page 'behind the scenes' companion book covering the highlights of Playboy's humble launch by 27-year-old Hugh Hefner and the rise of the magazine during the conservative 50s. The box set also includes a complete reprint of the famous first issue featuring Marilyn Monroe.

David Anthony is co-founder of Bondi Digital Publishing and I recently sat down with him and asked him my five questions.

1. You also did a similar project for The New Yorker. Tell us how these three projects came about.
   
   There was a fellow who worked at the New Yorker named Andy Pillsbury, who I had known for years, long before he was with The New Yorker. I had shown him some interactive magazine viewing technology that I was working on in the late 90s. So fast forward 5 or 6 years, and he is now at the New Yorker and he and Ed Klaris, their general counsel, are talking about doing a complete digital archive of all 80 years of the New Yorker. He looks me up and contacts me, and in the meantime I had started a DVD design and production company with Murat Aktar – which was actually great background for what the New Yorker had in mind. At the DVD company, we had been thinking about and designing all these DVD interfaces, including things like the Rolling Stones Four Flicks box set, so when it came to thinking through how people might like to experience half a million pages of a magazine, I think we brought a very unique perspective to the project. It was, of course, on one hand a huge technical challenge, but in a very real sense I believe the greatest challenge of these kinds of projects is trying to help people make sense of the vastness of the media, while at the same time making sure that the digital experience is fast, intuitive and hopefully fun and useful, all at the same time.
   
   Coming off of the New Yorker project, we thought, hey this is kind of cool. I wonder what other magazines might like to have complete digital archives? Right off the bat we were thinking about Rolling Stone and Playboy. They are both very innovative magazines, and both had a rich and long history – and they had these visionary founders who were still at the helm. Besides, we are both long time readers of the publications. So it made a lot of sense to talk with them – and low and behold both loved the idea and we were able to work out deals with them.
   
   
2. Were the projects similar? What have you learned from one project to another?
   
   From a publishing perspective, the big difference with the Rolling Stone, Playboy and The New Yorker, is that beginning with Rolling Stone Cover To Cover: The First Forty Years and Playboy Cover To Cover: The 50s, we launched Bondi’s publishing arm and are bringing these out under ourselves. While Bondi developed the software platform for the Complete New Yorker, it was published and distributed by The New Yorker and Random House.
   
   All three magazines are very different, so a big challenge that we have in any of these projects is to first analyze each magazine’s format and create a schema for its database that makes sense of all the idiosyncrasies of each magazine’s particular formatting characteristics.
   
   As far as the software platform goes, the Bondi Reader, which is what we are calling it now, has continued to evolve quite a bit. We now support full text search, using a very powerful indexing engine. This is a great step forward and has sped up our searches to the point where the local experience compares favorably to online searches. Also we are adding the ability to import and exchange reading lists, which will allow two people who own the same archive to share what they find very easily.
   
   
3. There is a lot of interest in the Playboy products because the magazine is such an icon for our times. Tell us about the conception for the product – breaking the titles into decades – and the thinking behind the design.
   
   Each decade of Playboy has a unique tone and feel, and by publishing the magazine’s archives decade by decade, Bondi is able to offer distinctive features for each digital archive collection. Playboy Cover-to-Cover: The 50s will not only include all of the magazine’s issues on DVD, but it will also include Playboy 50s – Under the Covers, a 1950s-focused companion book that is absolutely chock full of never-before-published photos and letters from Hef’s personal library and archive. As well we have created a page-for-page reissue of the very first Playboy from 1953 with its iconic Marilyn Monroe cover.
   
   
4. What most excites you about the products? (Rolling Stone, NYer, Playboy)?
   
   I guess it is seeing all these amazing stories, photos and ads come back to life – in their original context. I for instance did not know that Annie Leibovitz had taken that great cover shot of John Lennon curled up with Yoko but a few hours before he was taken from us. That is a hugely important fact in helping to understand the impact and importance of that cover. But that was 1980 and I was only 13 years old – so I never experienced the magazine itself. I, like I imagine a lot of people, have only ever experienced that shot as a stand-alone photo. We have seen that cover reprinted over the years, but without seeing it in the context that it was originally published you might never understand its true significance. And that is extremely exciting to me – that we might be playing a part in not only preserving these magazines legacies, but also allowing for people to understand these very real cultural events in a full and clear way.
   
   Not having been alive in the 1950s it was also a real eye-opener to see the Playboy issues from the 50s. From the first issue, the voice and outlook are clear. But at the same time you begin to see the role that Playboy played in both women’s rights and also civil rights. In the 50s women didn’t work out of the house, let alone have a sense that they should be allowed to own their sexuality. And as I found from working on the project, the publishing of Playboy was a bit of a watershed moment in the turning of society’s views on women’s rights, and then also civil rights. So all of that is exciting to us. And then to see that Hefner from the beginning courted writers like Hemingway, Ray Bradbury, Jack Kerouac and Steinbeck – well you get the point. Turns out there is a reason for all the jokes about the articles.
   
   
5. What is next for Bondi? Are you looking at any other implementations you can tell us about?
   
   At the moment we are concentrating on finishing up the software production for both the Playboy Cover to Cover and Rolling Stone Cover to Cover products. Then we focus on deals with several other magazines. As excited as we are about the success of the Complete New Yorker and the release of our Cover to Cover series, I don’t think that the general public really understands what a searchable digital archive of a magazine is yet. And so it is important that this not be a category of one or two products. Our focus for the time being is working with other magazine publishers to develop similar Cover To Cover products. We are just about ready to announce Playboy Cover To Cover, The 60s, which will bring our Cover to Cover series to three. By the holiday 2008 season, we hope to have six - eight Cover To Cover titles in the line.

Bondi PR is being handled by Catherine Lewis at The Rosen Group: http://www.rosengrouppr.com/

Let's Not Go

Young, commercial, beginner’s guidebook, with frivolous, silly humor represented some of the responses to a survey conducted by St Martin's Press about the Let's Go series of guides. That was in 2001 and St Martins have just decided that they won't be renewing their 25yr partnership with the Harvard student run organization. The current deal expires in 2009. Citing stiff competion and free travel information sources,

David Moldawer, a St. Martin’s editor, told the New York Observer last week that the break with Let’s Go reflected “a change in our publishing strategy and how we see the travel book market.”

The Crimson went on to say that the Let's Go editorial staff were putting on a strong face and view the change as a chance to rethink and reevaluate the publishing strategy. They also wanted to ensure that there are no job losses for students. The survey results were fairly damning and suggest that hopes of continuing the publishing program after 2009 maybe a pipedream.

The report, which was based on four San Francisco focus groups, suggested that Let’s Go discontinue its guides and reopen with a different brand name. “It is extremely difficult to change an image of a brand which has lost its stature as a leading brand, especially when the re-positioning is not supported by heavy marketing and advertising dollars,” the report read. “It may be more prudent (and cost effective) to introduce a new series of guides under a new name with an updated format rather than trying to convince the target that ‘Let’s Go’ is new and improved.”

They have a few years to think about it although one wonders how much sales support St. Martins' will give the series and how likely retailers will be to re-order titles from this point on.

Borders UK Operations Nearly Sold

Ten years ago, Borders Group was a book store chain willing to take risks, try new things and seek new business models. Alone among US booksellers they embarked on an international expansion and bought a high street UK retailer named Books Etc. They paid $65million for the company but things didn't go well from the start. Over the course of the past 10 years virtually nothing was shared between the US and UK operations in terms of operating efficiencies, product management and management expertise. Attempts to manage the some of the operations from the US failed but it was the nature of the UK market which posed the most challenges. Most of the 30 or so Books etc stores were small and located on busy main roads, the net book agreement collapsed which intensified competition between retailers, Internet selling grew exponentially and attempts by Borders to expand the superstore concept was slow to gain customer traction. It is unfortunate that these issues conspired to defeat what could have resulted in a remarkable international retail success: A strong Borders retail brand in Europe, Australia and SE Asia.

Now it is all over bar the tears with the announcement today that the UK operations have been sold for a paltry $20mm in cash and $10mm in deferred payments based on performance. Borders are also forced to take a 17% interest in the resulting new company. No doubt they would have liked to have made a clean break. UK management, who have worked hard to keep the company a float and who now have a real chance to improve their prospects may be the only group seeing a silver lining in this situation. I hope they succeed and prove that the book super store concept can flourish in the UK as it has done for computer and electronics retailers over the past 10 years. It will be tough since the UK book retail market is a wasteland.

When Borders completes the deal (PR) it will hand over 41 Border's superstores and 28 Books Etc stores located in the UK and Ireland. Given the original price paid for Books Etc and the investment the company has made over the past 10 years it is not surprising that the company expects to book an after tax loss of $115million with minimal tax benefit meaning they get no future benefit from applying the loss to future earnings. If I were a shareholder, I might want to ask why book value for the UK operation wasn't almost zero on their balance sheet. (I also wonder what is the value of the UK inventory?)

On a more positive note (unless like me you wonder why they are selling off in the first place) Borders may do OK with the sale of the Australian/New Zealand business. Sources suggest the operations could go for $85mm but if BV is higher then they may book another loss. Well best to get all these items out of the way before Mr. Jones' strategy starts to gain traction and a private equity buyer shows up to take the shareholders out of their misery.

College Textbook Affordability Act

I wonder how many votes these legislators expect to gain from legislating capitalism - at least as it pertains to textbook pricing. Ex-academic and now Californian Democratic state senator Ellen Corbett notes a particularly poignant and, yes, unique excuse for not finishing a class assignment.

"One of my students told me they were not going to finish their homework because they couldn't afford the textbook," she said. "That stopped me dead in my tracks and broke my heart."

No doubt the student received a passing grade for creative writing but an F for initiative. Corbett is sponsoring a state senate bill that will attempt to regulate textbook prices:

"For too long, California college students have dealt with outrageous textbook costs. Publishers set the cost, faculty makes the choice and students pay the price," Corbett said. "It is time for the textbook publishing industry to level with their consumers and end their deceptive marketing practices." If passed, Senate Bill 832 would take effect in January and require publishers to fully disclose to faculty their wholesale or retail costs, an estimation of how long the book is expected to stay current, and a breakdown of differences between current and past editions.

Textbook pricing and the publishers are an easy target and provide an annual respite from dealing with truly important issues like (in the case of CA) a mammoth budget deficit and (topically) rising tuition fees. On the other hand, here is something that is sure to please students and could provide for the budget deficit: Legalize it!

Borders Stores Australia

The sale of Borders Australia/New Zealand retail operations appears to be coming to a head. Reuters is reported a source has told them that the Private Equity firm Pacific Equity Partners has lodged an indicative offer of interest in acquiring the operations. This is typical of the auction process where initial non-binding offers would be made as a prelude to more rigorous reviews of financial and operational details. The report also noted that the sale is unlikely to conclude before November. The long timeframe since this was announced is somewhat surprising since there are only a handful of parties considered real candidates but perhaps the time taken to put the books in order and complete the fiscal year delayed matters. Regardless, PEP are the front runner and the deal is expected to be completed for A$100mm.

Reuters

Scholatic Reports

Scholatic reported first quarter revenue of $586.9million which was 75% higher than the same period last year. The last Potter title accounted for the increase. Scholastic routinely reports a loss in its first quarter and their net loss this period was $2.8million or $0.07/share. From the press release:

“This summer Scholastic again broke publishing records with the launch of Harry Potter and the Deathly Hallows. Exceptional promotion and marketing combined with overwhelmingly favorable publicity resulted in unprecedented sales, while efficient distribution and execution helped us achieve high sell-through and improved margins. Sales of READ 180® and educational technology also rose solidly in their primary selling season, reflecting Scholastic’s continued success raising student achievement,” commented Richard Robinson, Chairman, CEO and President. “These positive first quarter results position us well to meet our fiscal 2008 goals while making planned investments to drive long-term growth, in particular in our education and children’s book businesses, and progress toward our 9 to 10% operating margin goal.”

The company reaffirmed its forcast of full year revenues between $2.3 to $2.5 billion and earnings per diluted share of $2.35 to $2.85.

Other highlights from the press release:

• Children’s Book Publishing and Distribution. Revenue for the quarter was $342.5 million, up over 200% from prior year. Potter revenue increased to approximately $240 million from $5 million reflecting the launch of Harry Potter and the Deathly Hallows, and higher sales of the first six Harry Potter titles. Operating profit for the quarter, improved to $2.7 million compared to a loss of $67.3 million a year ago
• Educational Publishing. Revenue for the quarter was $127.8 million, level with the prior year period. Educational technology sales rose 9% largely due to solid sales of READ 180 and FASTT Math™. This was offset by schools’ continued weak spending on supplemental materials, which resulted in lower sales in Paperbacks and Library Publishing. Segment operating profit was $30.6 million compared to $32.7 million in the first quarter of last year
• International. Revenue of $99.6 million was up 26% (17% in local currencies) from the prior year period. Segment operating loss improved to $2.7 million compared to $5.5 million in the prior year period, primarily due to strong export sales of Harry Potter and improved results in Australia and Asia.
• Media, Licensing and Advertising. Segment revenue for the quarter rose 8% to $17.0 million, due in part to higher sales of interactive products. Segment operating loss improved to $5.1 million from $6.1 million
• Other Financial Results. Corporate overhead in the quarter was $20.3 million compared to $19.9 million in the prior year period, reflecting higher Harry Potter-related expenses, partly offset by company-wide efforts to reduce costs

I know what you said about me yesterday

I sometimes do work in the non-profit world, and I borrowed this trick from a blog I read there. I’ve been itching to try it out in this area. This is the question I pose: what if there was a way to better understand the elusive power of “word of mouth” in selling books? What if publicists and marketers could eavesdrop on conversations between readers and recommenders, and even know which recommenders carry more weight than others? Technorati (www.technorati.com) provides essential insight into this process on the web by allowing (among many other things) users to set up automatic alerts for any search terms mentioned in the 105.8 million blogs and over 250 million pieces of tagged social media they currently track. It is so easy, it’s almost cheating.

My bet is that most publicists and marketing folks are not currently tracking who says what on their titles on blogs, therefore not using the blog medium to the best advantage. But I could be wrong. As a test, I’ve picked the three titles below, all on the Amazon Top 100 list and all published recently. For each publisher who emails me at sruszala@gmail.com in the next 24 hours to say they’ve found this blog, I’ll donate $10 to First Book.

Here are the titles:

Middlesex, by Jeffrey Eugenides published by Picador

Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart by Ian Ayres, published by Bantam

Giving: How Each of Us Can Change the World (Hardcover) by Bill Clinton, published by Knopf

Good luck!

New Model Army of Self-Publishers

The news that Author House and iUniverse.com were merging was not entirely unexpected, but it is interesting to me that the publishing community basically ignored the event. While it was reported in Publisher’s Lunch and Publisher’s Weekly, the report in PW focused on the question of job cuts which may reflect a limited interest in the strategic ramifications this segment poses to mainstream publishers. Led by Lulu.com, this publishing segment is exploding and the last thing being considered will be job cuts. Just look at the capabilities on offer at Lulu. Author House and iUniverse complement each other: A number of years ago, iUniverse.com made the strategic choice to add an extensive selection of professional editorial services to their suite of services, which surpass the service offered by Author House (and others in the market). Tactically, I think the two companies will slot together like jigsaw pieces.

Random House has a relationship with Xlibris and is alone among the major publishing houses in building formal relationships with the self-publishing marketplace. I would expect other major publishers to jump into this space, in the short-term, through acquisition. The leverage these companies achieve over their technology, employees and fixed expenses, the processes they have established and the market they have built make these companies appealing. Ironically, there is a ‘democratization of access’ underway in publishing, which to date, most “publishers” have not participated in; but, this will change as traditional publishers look to the self-publisher market as a natural product extension.

In the case of Author House and iUniverse.com, they each produce over 5,000 titles per year with total staff of approximately 100. In terms of titles per month and titles per employee, they shame a traditional large publisher. Everyone will argue that the quality of the content produced by self-publishers is poor, but this is no more true than the statement that all content produced by traditional publishers is exemplary. How often has a traditional publisher invested significantly in a title’s success only to watch it sell 300 copies? For the self-publisher—with an author pays model, no inventory and no promotion expense—there is only upside if a title takes off unexpectedly (and sells 300 copies).

I am not suggesting that the self-publishing business model will be adopted anytime soon by a major publishing house, but there are lessons to be learned from the success that the self-publishing industry has built in the last 10 years. Enabling technology has produced this ‘democratization of access’ and, while it is hard to imagine that there is that much content to produce, the numbers prove the case. Lulu is producing 4,000 new titles per week for a total of 300,000 newly released titles, Author House has over 30,000 authors and 40,000 titles, and iUniverse says they have sold over 5mm books.

Amazon has invested in this area (B&N is getting out via iUniverse.com) and I see some convergence between the traditional publishing model and self-publishing. The content quality issue is irrelevant: Firstly because good content will always find its market and Secondly, because quality in the self-publishing segment depends not on the content but the service the author received. Get ready to see traditional publishers adopt some of the practices of the self-publishing industry.

Bloomsbury Reports: Revenues up 36%

Bloomsbury reports this morning that revenues rose 36% for the first half 2007 boosted by Harry Potter and 37 other best sellers. The company also says that they expect the strong results to continue due to a good pipeline of new titles but that full year profit will be negatively impacted by an increased tax burden.

Reuters reports that the company's shares were trading down 0.6 percent at 170.5 pence at 0730 GMT, valuing the firm at 125.4 million pounds.

Reuters

Highlights from their press release:

• Six months Revenue up 36.5% to £51.41m (2006, £37.66m)
• Profit before investment income increased 7.6% to £3.25m (2006, £3.02m)
• Interim dividend up 6.1% to 0.70p (2006, 0.66p)
• Four electronic rights deals signed this year which included Bloomsbury ’s most important reference rights partnership to date for Finance: The Ultimate Resource with Qatar Financial Centre Authority
• Strong publishing lists for second half and into 2008
• Well positioned for further growth

Commenting on the results and prospects for Bloomsbury, Nigel Newton, Chairman, said: “This is a good set of results which puts us back on track following last year’s profit warning. Between April and June, Bloomsbury enjoyed one of the most sustained periods of publishing bestsellers in its history. Four major reference rights deals which had been in the pipeline have now been completed and will provide very important revenue streams going forward.We are also starting to see the benefits of the strategic approach which we outlined in my previous Chairman’s statement and our publishing programme for the second half of the year is very strong.”

Five Questions with Lonely Planet

Recently I mentioned the effort by DK (Penguin) that allows consumers to build their own travel guides using the DK content. Lonely Planet recently launched a program that allows consumers to download (in PDF) only the parts of travel guides they are most interested in. The option to download the entire guide exists, but in many cases a consumer only visits a part of a country and much of a country wide guide is irrelevant. This program solves this issue.

Currently under trial, the content covers guides for Latin and South America and represents 350 chapters from 35 individual guides. The site is impressively easy to use and the prices for the chapter content are reasonably priced. Most chapters cost between $2 and $4 and users gain a discount from the purchase of multiple chapters. Lonely Planet says that the feedback from this trial will be incorporated into the next release that should also include more guide book content. As an additional feature, consumers can also view new guides before they are available in stores.

Commenting on this initiative Product Manager Tom Hall said "Over the years we've received countless letters and emails from travelers telling us they'd like to take just the parts of our book that match their travel. Pick & Mix enables this and is perfect for people traveling to multiple destinations not covered by one or two individual guidebooks, or those looking for very specific information. It’s also handy when plans change or you can’t get to a book store.”
Lonely Planet has long been a leader in the independent travel guide market after their first title Across Asia on the Cheap was written 30 years ago. The guides immediately appealed to travelers who wanted to get off the beaten track and gain the real essence of a location.

The guides and the company - perhaps as a direct result of the characteristics of the target consumers - engender significant loyalty. There are over 400,000 registered members of their travel community (Thorn Tree) who share inside knowledge, read and contribute to blogs and read about reports from authors in the field. Undoubtedly, Lonely Planet will be looking to expand the community and social networking aspects of their interactions with consumers and it will be interesting to see how their feature set develops.

I recently asked Tom Hall five questions about the Lonely Planet strategy and future plans.

1. Tell us about the thinking behind the build your own model.
   
   For years travellers have been asking to take just the parts of our books they need. I was one of them. In 2001 (before I worked for Lonely Planet), I took a round-the-world trip to 7 countries across three continents. I couldn’t carry guidebooks for all of them, and ended up scouring Kathmandu trying and failing to find a book on Tanzania. So I arrived in Africa with no information whatsoever, and was incredibly frustrated – the information I really needed was out there, but no one would sell it to me when and where I needed it. Many travellers tell us they tear entire sections from guidebooks, or photocopy pages from other travellers or from the library. The thinking is really just that there seems to be a clear need, and Pick & Mix is a way to meet it.That’s the key point, but here are a couple more. One of our first purchasers was someone in Norway who bought a chapter on Martinique. I like to imagine the person in a snug little cabin with icicles hanging off the roof, downloading a chapter about a balmy tropical island. The point is that Pick & Mix makes us truly global – our content is accessible anywhere with an internet connection, so it’s available to more travellers. It makes possible sales we’d never get otherwise. Another point is sustainability – quite a few people have written to say they appreciate being able to save paper, ink, the energy from shipping, or to go entirely paperless by storing our content on an iPod, memory stick, phone or laptop.
   
   


2. Has demand developed as expected and has there been any impact on sales of the full titles? How do your retailers view the effort?
   
   We believe Pick & Mix is complementary to our guidebooks, rather than a substitute. So far, results have confirmed that view. We just launched two months ago, though, and obviously it’s something we’re monitoring carefully. Demand to this point has been higher than projected, and even better, the feedback from travellers has been fantastic.
   
   Retailers face similar challenges to publishers when it comes to digital content, and we're committed to finding ways forward together. We see Pick & Mix as an opportunity to reach out to retail partners with digital content and meet the needs of both new and existing customers in new formats. In the future, this may include retailers offering digital products to customers either in-store or online.
   
   


3. There are similar efforts by other publishers – this is not a new and unique effort. How does your project differ? How are you measuring success?
   
   Pick & Mix is a simple concept - it offers chapters pulled straight from our guidebooks. It’s easy to use - you go online and find the parts our books you need, download them, and print them if you want – a five-minute process. Also, Pick & Mix covers an entire region, rather than a grab-bag of destinations. This complete coverage makes it useful for many types of trips: a long-term trip to multiple destinations, business trips or short city breaks, even when you’re on the road and plans change.
   We’re measuring success in terms of sales, whether we’re growing our market overall, and direct feedback from travelers.
   
   


4. You have used the PDF format for this initiative. Was there any discussion about allowing a non-proprietary download? Do you envision a situation where a consumer could choose not to use the PDF and receive it in text format? Do you see for example, the ability for users to integrate content into their own self-produced content
   
   We launched with the PDF format because travellers told us it’s the most useful right now. Our intention is to make Pick & Mix format-agnostic - in the long-term travellers should be able to get whatever content they want (including information from other travellers, like ThornTree or Bluelist), where they want it, in whatever format they want it. Pick & Mix is the first step towards that goal, and we’ll take our lead from travellers on the subsequent steps.
   
   


5. What’s next for Lonely Planet? You appear to have a loyal fan base and cadre of users/consumer who interact with some frequency with LP. Can you tell us a little about your social networking plans?
   
   Simon Westcott, LP Global Publisher responds: “We have great loyalty and interaction from users of our Thorn Tree community. Every month we break new records for membership and participation. But there's so much more for us to do: group functionality, tagging, more types of user content generation, opening our infrastructure to 3rd-party development, allowing people to create their own trip pages. Watch this space....”
   

Reed Elsevier Bid Speculation

There has been some movement in the share price of Reed Elsevier over the past several days due to renewed speculation the company would make a revived bid for Wolters Kluwer. On Friday the stock was up 6 1/2p to 608 and this morning the stock is up further. Today (Monday) citibank raised their recommendation from hold to buy referencing Reed's market position in legal, medical and the european market.

al-Mutanabi Street Book Market Re-opens

The NYT has a short piece on the re-opening of the al-Mutanabi Street book market in Baghdad. The market had been closed since the bombing and an imposed curfew. (I guess most curfews are imposed). From the article:

Mr. Shatry, like many Iraqis, also sought solace in words and the remembrance of sufferings overcome. He had begun his day with a group poetry reading on Mutanabi Street, a humble reopening for a market that has survived the Mongol hordes, Saddam Hussein and many other attackers. Around noon, between the deafening thwack of American military helicopter propellers overhead — twice in an hour — he recited the poem he read earlier, written by Ibn al-Utri.

Here is what I wrote in April:

al-Mutanabi Street: Baghdad Diary
I had not had the chance until recently to return to the diary of Dr. Saad Eskande, Director of the Iraq National Library and Archive . It makes pretty horrific reading and this passage from March 5th describes the scene of the car bomb attack on the well known al-Mutanabi Street Book market. The diary is hosted by the British Library and is well worth reading.

As we were talking, a huge explosion shook the INLA's building around 11.35. We, the three of us, ran to the nearest window, and we saw a big and thick grey smoke rising from the direction of al-Mutanabi Street, which is less than 500 meter away from the INLA. I learnt later that the explosion was a result of a car bomb attack. Tens of thousands of papers were flying high, as if the sky was raining books, tears and blood. The view was surreal. Some of the papers were burning in the sky. Many burning pieces of papers fell on the INLA's building. Al-Mutanabi Street is named after one of the greatest Arab poets, who lived in Iraq in the middle ages. The Street is one of well-known areas of Baghdad and where many publishing houses, printing companies and bookstores have their main offices and storages. Its old afes are the most favorite place for the impoverished intellectuals, who get their inspirations and ideas form this very old quarter of Baghdad. The Street is also amous for its Friday's book market, where secondhand, new and rear books are sold and purchased. The INLA purchases about 95% of new publications from al-Mutanabi Street. I also buy my own books from the same street. It was extremely sad to learn that a number of the publishers and book sellers, whom we knew very well, were among the dead, including Mr. Adnan, who was supposed to deliver a onsignment of new publications to the INLA. According to an early estimation, more than 30 people were killed and 100 more injured. Four brothers were killed in their office.

.epub: What it Means for Publishers

Nick Bogarty, who has been Executive Director of the International Digital Publishing Federation for the last five years sheds some additional light on the IDPF's recent announcement concerning the .epub format specification.

(Nick recently announced that he is leaving IDPF for a position with Adobe and in fact today is his last day and he is leaving on a high note).

This email was sent to me as well as a number of other interested industry types and Nick kindly allowed me to re-publish it here.

I received emails and calls with regard to the completion of the .epub format standard from the IDPF. I hope the below is somewhat helpful for clarification on what .epub means for the industry. The main question asked in the various correspondence was, "Does this mean that publishers can stop doing multiple conversions?".

For reflowable eBooks, the short answer is "yes". (I say "reflowable" because publishers will still do PDF for fixed-format books if that's what they want).

The long answer is the following:

Software companies who implement .epub handles files in one of two ways:

#1 - The software imports .epub and converts it to an end-user proprietary format. There are a bunch of reasons why a company might do this, the main one being they want their format to do things that aren't covered or possible in .epub.

#2 - The software simply reads (or renders) .epub files which a user can use, similar to how your ipod "reads" MP3 files.

There are many software companies who have publicly expressed support for the specifications. Some have already implemented it, some have implemented parts of it and are working on the rest, and some have said they will but haven't yet. I'm not totally in tune with everyone's development plans and release dates (some understandably don't want anyone to know), but this is roughly what I gather:

• Adobe Systems - full support for .epub in current release under #2
• eBook Technologies - full support for .epub in current release under #2
• OSoft - full support for .epub in current release under #2
• SONY - full support for .epub in next release (don't know which category, I assume #2)
• VitalSource - full support for .epub in current release under #1 - taking .epub as an input file from publishers in their repository
• LibreDigital - full support for .epub in current release under #1 - taking .epub as an input file from publishers in their repository
• iRex Technologies - future support for .epub (not sure which way they'll implement...assume #2)
• MobiPocket/Amazon - future support for .epub under Category #1 (I think) - I have no knowledge of Kindle development plans, hopefully they'll do this with the Kindle too - see: http://www.mobipocket.com/forum/viewtopic.php?t=6918. Some of .epub has already been implemented in Mobi 6.0.

Notable "I don't knows" include Microsoft and eReader (former Palm Digital Media), but .epub is an open, free and patent-unencumbered standard and I hope all software companies entering the market use .epub as their file format.

My advice to publishers would be to begin to work with their conversion partners to fully understand .epub and how .epub can be effectively produced. I would also have conversations with my distribution and software partners about their support for .epub. Frankly, since there are so many software companies already on board or soon to be on board with .epub, I think this is an excellent opportunity for publishers to begin to TELL their partners and vendors (or set some not too distant future date) that .epub will be the only file format for reflowable eBooks that they will produce and send through distribution. Obviously this is going to reduce conversion costs and, hopefully, increase selection for consumers. Something that time and again they say they want.

.epub provides everything publishers need (and many many software companies will support them) to demand that multiple conversions are a thing of the past.

-Nick

P.S. I thought this was a good write-up on .epub - here

Sylvan Learning and Random House Collaborate

Sylvan Learning centers will publish at least eight titles with the launch of a publishing collaboration with RH. Random House will manage an imprint Sylvan Learning Books, a newly created line of trade paperbacks and educational kits branded with the Sylvan Learning imprimatur. It is announced the first titles will be available in September 2008 and sold through booksellers and other retailers throughout North America. From the press release:

Sylvan Learning Books will launch with at least eight titles, each focusing on the elementary grades. The program will expand to offer titles aimed at students of all ages, as well as advice and tips for parents, shortly thereafter. An extension and expansion of Sylvan’s popular personalized tutoring programs, Sylvan Learning Books will provide students of all grade and skill levels with encouragement and coursework reinforcement to help boost classroom performance.

Sylvan was recently privatized and is undergoing a reorganization of its product lines and storefronts. Sylvan is known as a the leading brand in supplemental K-12 education and this imprint is both a natural brand extension and likely to gain rapid traction in the market place.

Chicken with Pears

Frequent readers of the NYT will know of Mark Bittman who writes a weekly column on Thursdays named the Minimalist. Each column describes a recipe that on the surface may seem complicated but is simplified significantly by Bittman. (Last week tomato paella). He also has several cookbooks all of which are quite good. Regrettably we can't afford an in house Chef here at PND and it being Thursday I thought I would nevertheless present the following video. Chris Walken the minimalist chef.

http://www.youtube.com/watch?v=43VjLCRqKNk

Pearson Selling Newspaper Interest

Pearson has been in the process of selling its French newspaper Les Echos for a few months now (Guardian) and recently Reuters reported that Pearson is also in negotiations to sell their 50% interest in a German version of the Financial Times. This is consistent with their reasoning expressed to justify the Les Echos deal which is that they want to concentrate on English language newspaper publishing. There has been significant speculation regarding their newspaper holdings in the wake of the Dow Jones/Newscorp deal particularly the potential impact on the FT. Newscorp has made it clear they want to overtake the FT in the non-us markets. Numerous analysts have suggested the company should sell the FT because the competition is expected to be intense and it looks like the FT has overcome some of its revenue and print legacy issues that analysts were focused on over the past two years.

Regardless, there is no indication - actually the opposite - that the company is about to ditch the FT. My guess is they are going to take on the challenge of the Newscorp/WSJ combination and they may well do better than analyst anticipate.

Hachette (Lagardere) Reports First Half Results

Lagardere is a €6.0billion company but the books division is big by our standards nevertheless. Their results have improved over the first quarter where there was some timing and softness in some markets. The US business continues to do well versus the prior period. Highlights from the press release:

• Lagardère Publishing (formerly the Books division) – The 2007 first-half revenue performance (€897m, up by 10.6% on a reported basis and by 1.7% on a like-for-like basis) was in line with our expectations. Like-for-like growth was driven by Hachette Book Group in the United States and by educational publishing in France.
• Recurring EBIT before associates up by 5.5% at €71m. The contributions from Education and Larousse in France, from Part-Works, and from Hachette Book Group in the United States (consolidated from April 2006) more than offset the drop in recurring EBIT from Literature in France and Orion in the United Kingdom.

Wiley Reports First Quarter

Wiley reported first quarter revenue of $389 million an increase of 48% from $263 million in the previous year. The revenue growth included $116 million from Blackwell Publishing Ltd. (Blackwell), which Wiley acquired on February 2, 2007. Revenue excluding Blackwell increased 3% over last year's strong first quarter to $273 million, or 2% excluding favorable foreign exchange. Earnings per diluted share for the first quarter was $0.68 compared to $0.38 in the same period of fiscal year 2007. Earnings per diluted share excluding Blackwell and the aforementioned tax benefit was $0.37, flat with last year's strong first quarter, after adjusting for unfavorable foreign exchange

"The Blackwell acquisition exceeded our expectations in the first quarter. The integration process is proceeding smoothly and the business is performing well. Our global Professional /Trade business reported solid results. Revenue for global Scientific, Technical and Medical, excluding Blackwell, was up 4% from the prior year, including the favorable effect of foreign exchange. After a strong performance in fiscal year 2007, Higher Education reported soft sales in the first quarter, partially due to some conservative fall semester ordering by college bookstores," said William J. Pesce, Wiley's President and Chief Executive Officer. "Based on first quarter results and market conditions, we continue to anticipate revenue growth in the mid-to-high single digits and EPS growth in the low-double digits, excluding the Blackwell acquisition and the aforementioned tax benefit."

Other highlights:

• Professional/Trade (P/T): U.S. revenue advanced 7% to $90 million. First quarter performance led by sales in technology, finance and architecture. Globally, P/T revenue increased 6%
• Scientific, Technical, and Medical (STM): STM revenue of $56 million was flat versus last year due to the timing of journal, book and backfile releases
• U.S. Higher Education revenue of $44 million declined $4 million from last year’s strong first quarter. The negative comparison was also compounded by conservative college bookstores sales for the fall semester
• Wiley Europe’s revenue of $76 million was up 5% for first quarter all but 1% due to favorable foreign exchange
• Blackwell revenue and operating income for the first quarter fiscal year 2008 were $116 million and $15 million, respectively. Included in these results is $6 million of amortization charges for intangible assets related to the acquisition
• Wiley’s revenue in Asia, Australia, and Canada advanced 14% to $32 million, or 9% excluding favorable foreign currency. Strong sales across all businesses in Asia, Higher Education sales in Australia, and P/T results in Canada contributed to the first quarter growth. Direct contribution to profit as a percent of revenue increased slightly.
• India was a significant contributor to first quarter results in Asia. Through the acquisition of Wiley Dreamtech (India) Private Ltd. in fiscal year 2006, the Company established direct access to the retail higher education market in India

Status of the Blackwell Acquisition:

• During the quarter, the merger of Wiley’s STM business and Blackwell continued with particular emphasis on the integration of systems, processes, policies and procedures
• Since July 1st, all Blackwell books and reference works are being sold and promoted by Wiley’s sales forces throughout the Asia/Pacific and Europe, Middle East and Africa regions. We have also consolidated the institutional and corporate sales forces
• Critical decisions concerning publishing technology systems have been made and we are in the process of harmonizing financial management systems and reporting, content management, customer service and fulfillment and customer databases
• The company will shortly announce a plan and timeline for the integration of the Wiley and Blackwell online journals platforms

Peter Quandt Out at Haights Cross

After reporting increased revenues and the successful completion of a recapitalization, Haights Cross appears to have dismissed its chairman, CEO and President Peter Quandt. This is all the terse press release had to say on his contribution:

“The Company appreciates Peter’s many contributions to the company and wish him well,” Mr. Crecca said. “The Board of Directors looks forward to working with Paul as we move forward with a strategic review of the Haights Cross companies,” said Gene Davis, Chairman of the Board.

Quandt had been Chairman, CEO and President since founding HCC in 1997. His position will be filled by Davis (above) and Paul J. Crecca, the Company’s current Executive Vice President and Chief Financial Officer, who will assume the role of Interim-Chief Executive Officer and Interim-President.

Last week the company had announced six month results that showed a 2.2% top line increase to $110mm. The company also had a $20million turn-around on profit to $11million. All segments showed improvement except k-12 supplemental which was down 22%. This latter segment contributed to the flat top line revenue growth. Also announced was the recapitalization that saw the combination of class A and B shares.

In the press release announcing the results and the recap was this statement:

Also on August 10, 2007, upon the closing of the recapitalization, HCC and certain former Series B holders entered into a release agreement, pursuant to which, among other things, such holders would dismiss a pending legal action against HCC filed by certain former Series B holders, in which they have asserted claims under 8 Del. Code. § 220 and under a certain Investors Agreement, dated December 10, 1999, seeking access to HCC’s books and records.

As part of the recap a six member Board of Directors composed of Peter Quandt and five persons designated by various former Series B and Series A holders was (to be) formed and it looks like this group had at least one significant meeting.

Reed Elsevier Try Ad Supported Medical Information

Reed Elsevier has launched an experimental web site for medical practitioners that will be wholly supported by advertising revenues. The company is betting that oncologystat will encourage as many as 150,000 targeted doctors to sign-up and browse the latest articles from several Elsevier titles. As reported in the New York Times;

Mainstream publishers have wrestled for years with the question of how to charge for online content in a way that neither alienates potential readers nor cannibalizes their print properties. So far, few definitive answers have emerged. Reed Elsevier, which is based in London, is taking a risk that its readers will drop their paid subscriptions and switch allegiance to the new Web site, which will offer searches and full texts of the same content from the moment of publication.

Company executives believe that advertisers are chopping at the bit to get direct access to practitioners via subject specific web sites like (they hope) oncologystat. In support of this, the company sees advertising growing at double digit rates and could be over $1bill in several years. Historically, these journals did not contain advertising and subscribers pay very high subscription fees to gain access to the content and information. Elsevier is betting that the substitution that will occur (advertising revenues for subscription fees) will enable journal revenues to grow over time. Questions of bias are likely to come up assuming this experiment is successful; however, delineating the gap between editorial content and advertising has been achieved for years in the magazine world and is unlikely to become a major issue. No doubt the company has established policies in this regard.

Further from the NYT article an interesting last point,

Getting the relevant answers promptly may be more important to doctors than not having to pay for them, said Elizabeth W. Boehm, a principal analyst at Forrester Research. “Anything that is going to save the physician time, without losing the certainty that they have seen everything that they need to see, is potentially valuable,” she said. “The question is, can they give them the information in a way that is more valuable, more easily searchable.”

Giving practitioners access to reams of valuable and potentially useful information is of little use if they can't locate at the point of need what they are looking for. As Reed has done with legal in developing a platform approach to legal research and usability they are likely to adopt in medical information and this may be a first step in that direction. Medical information is available from other sources but integrating this information (articles) into a solution that is fast, relevant and deep provides real value for users. Workflow integration is a powerful thing and while publishers have been challenged in migrating print revenues to web, everyone recognises the inherent potential benefits for users in doing so. If this advertising model shows even a glimmer of the potential they expect then there will be a rapid acceleration of similar products.

Who Will Play Jane?

What caught my eye about this story was that the home of a fictional TV character played by Parker Posey is a 'brownstone' in Hoboken. Her character has a 'cushy job' as a children's editor at Harpercollins. Are there such things because believe me I've looked and I keep coming up empty handed. The reality of the real estate market is such that the ability for a single mid-level editor to own a brownstone in Hoboken transcends fiction just like the outrageously large NYC apartment seen on Friends. Actually, there are a lot of publishing expats living in Hoboken and I recently found out a head of a large trade house moved over from Manhattan recently. So we are on the map and perhaps Parker can contribute to the continued increase in real estate prices. No word on who will play the Jane Friedman character (maybe she will be a walk on) but of all publishing houses it is not surprising that Harpercollins would be the named house in the show.

Hoboken is the global corporate headquarters location for Personanondata and Information Media Partners.