MediaWeek (Vol 1, No 32):

The Guardian reports that British magazine publishers are facing pressure from retailer ASDA for more quid-pro-quo on shelf space in their stores. Some close readers will recall some aggressive actions by Amazon and also the stance taken by A&R in Australia regarding book titles with small volumes. Perhaps an increasing trend in media retail.

The idea of a magazine giving Asda advertising space in return for appearing on its shelves, for example, is wholly implausible. Every supermarket chain would then be bound to require ads too, leading to the logical, if surreal, result that all magazines would carry several pages boosting Tesco, Sainsbury's, Somerfield, Waitrose and so on. Then there's the question of context: one publisher told me that, for many magazines, supermarket advertising would be inappropriate. How would readers of Cage & Aviary Birds or Model Railway Enthusiast take to Asda boasting of its latest cut-price offers on groceries, for instance?

Will a major city newspaper fold this year. Houston, Miami, Chicago, SF? There are sellers but no buyers according to the NYTimes. Ad revenues are off substantially at some of those free daily newspapers but in the UK Metro is starting their first online version. MAD.co Press Gazzette is giving up their print to go online. Guardian Rodale announced impressive results in face of an industry slow down.

Revenues for all operations grew by 7.6% compared to the second quarter of 2007. Rodale print advertising revenues were up 8.3% compared to an industry-wide decline of 4.9%. Revenues from all online activities increased by 27.1% over the second quarter of 2007, and uniques and page views for Rodale?s sites were up by 74% and 94%, respectively, compared to the same period last year. Revenues from international operations through June are up 14% compared to the first half of 2007.

AlleyInsider.com: Gawker notes their performance versus traditional media. Note that the chart looks like Batman. WSJ reports on the trend in Children's fiction towards more gore in an effort to appeal to more boys:

Scholastic and other publishers are heeding the research of such academics as Jeffrey Wilhelm, an education professor at Boise State University. Prof. Wilhelm tracked boys' reading habits for five years ending in 2005 and found that schools failed to meet their "motivational needs." Teachers assigned novels about relationships, such as marriage, that appealed to girls but bored boys. His survey of academic research found boys more likely to read nonfiction, especially about sports and other activities they enjoy, as well as funny, edgy fiction. Boys' literary depth is an abiding concern in educational circles. Boys have persistently lagged behind girls in reading on the National Assessment of Educational Progress, an influential federal test for gauging achievement. The gap widens by the time they reach 12th grade. Many experts attribute the lag to the time spent with the printed page. In a survey of bookstores this year by Simba Information, a publishing-industry market-research firm, only 2% said boys made up most of their children's book customers. As adults, females also outscore males on literacy exams, and continue to read more. In an age when the Internet is pulling many away from books, boys in particular spend more time than girls do on computers and videogaming.

Long article in Sunday's NYTimes magazine about Hanif Kureishi who wrote My Beautiful Laundrette.

This is, after all, the man who co-edited “The Faber Book of Pop” and whose films and novels — including “My Beautiful Laundrette” and “The Buddha of Suburbia” — are filled with raucous sex, drugs and rock ’n’ roll. But this is also the man who had the presence of mind to poke around in English mosques in the late ’80s and early ’90s, sensing that something might be stirring there, as indeed it was. Kureishi’s novel “The Black Album,” set in 1989 and named after a Prince album, explored the growing discontent, disenfranchisement and radicalism of some young British Muslims.

NYTimes notes the Waking up to Content is King at Time Warner. Profile of new Zondervan CEO Maureen Girkins. Grand Rapids Press.

Everything's Live in Prime Time

I grew up in Hawaii. Lucky me. When John Lennon died we got to experience it twice. Why, because of ‘satellite delay’. Hawaii is so far west that most ‘live’ television was taped. When most of the nation heard Howard Cosell on Monday Night Football announce that John was dead we didn’t hear him say that for more than three hours, and by then we had been listening to the monster block to end all monster blocks. Almost 30 yrs later, you could be forgiven for thinking ‘satellite delay’ had disappeared along with wooden tennis rackets, members only and Journey. Not so.

When NBC and USA broadcast Wimbledon this year they showed the majority of the matches live; that is, except for the first men’s semifinal which Federer won. Unaware viewers found out the result of the first match during the second match which was shown live. There was some hue and cry about this at the time but tennis fans are generally a polite group. Remember the world cup in Japan/Korea? Well, luckily I was in Australia but in the US fans were left scratching their heads when live games were delayed.

In 1980 there wasn’t any alternative to watching events live if the broadcaster didn’t want us to. We had no choice. Clearly that is not the case now yet NBC continues to believe they know best what the viewer is interested in. NBC believes viewers want to see ‘live’ action in prime time. Forget the fact that this morning the NYTimes had images from the opening ceremonies, we won’t see the pictures live until later tonight. Which is just about when day two action starts.

Gary Zenkel, president of NBC Olympics, said. "We have three main constituency groups: our affiliates, our advertisers and our audience. To our affiliates and our advertisers, our responsibility is to (generate) the biggest audience that we can. And to our audience, our extensive research shows, that means putting it on when they say they want it, which is when they're available to watch it - and that's in prime time." Guardian

This type of ostrich like behavior is what’s so wrong with established media. While everything has changed the media companies try to pretend by force of will they can impose the old paradigm (on the ‘audience’). We’re all smarter than that and despite the 2,000+ hrs NBC are set to broadcast many viewers are going to be disappointed. NBC is not giving us the choices we have become accustomed to in the internet world. How far out of touch are they? An amusing anecdote regarding the LA Times which publicly patted itself on the back for a huge boost in on line traffic. Only the problem was their traffic was dwarfed by upstart Gawker media. SiliconAlleyinsider

Paradoxically, NBC maybe its own worse enemy; they recently launched Hulu.com which is a fantastic site and exactly what choice, selection and access is all about. Every Olympic event should be on Hulu the minute it finishes. I bet the traffic would be immense. On top of that I would guarantee viewers would settle in during prime time and watch again.

There are work arounds. Several web sites have jumped on this issue already. So if you are willing to stay up all night to watch curling check out alleyinsider.com for all the details.

Too Late for The Sony Reader

John Gapper in the FT believes Sony has irretrievably lost the beach-head that the first to market Sony Reader established. Is it now too late to gain back some share? Since he compares Sony's Walkman with the iPod the likely answer is yes.

The danger for Sony is that it is already too late. Amazon has grabbed the market-leading position from Sony and established a stronger brand, which is what happened with the iPod and the Walkman. Sony never managed to recover, despite trying repeatedly to match Apple. The Reader is arguably less important to Sony than any of its core entertainment businesses. Even if the Reader stages a comeback, it will not become one of Sony’s “trillion-yen” businesses like its PlayStation and Bravia franchises. But books should not be written off. Annual US sales of fiction and popular non-fiction books match those of recorded music, so there is enough revenue to be worth fighting for. Sony obviously thought it was worth staking a claim to e-books when it launched the Reader.

Why The Embargo Doesn't Work

LA Times on book review embargos and the particular case of Ron Suskinds The Way of the World. They see something fishy:

As Ulin said Tuesday, publishers' "embargoes are contrivances designed not to protect the contents of the book but to create a media feeding frenzy when a book comes out. Often, the entire purpose is to protect some kind of exclusive arrangement with a particular news outlet. That's not about news; it's about publicity, and it implicates the news media as part of the publicity juggernaut, reducing us watchdogs to lap dogs."The willingness of major publishing houses to take on projects like Suskind's is an act of public service as well as commerce. Projects such as Suskind's don't need to be marketed with the sort of calculation routinely reserved for celebrity tell-alls. In fact, the aura created by an orchestrated publicity campaign can even undermine the authority of the sort of journalism Ron Suskind practices.

Free Books

One of the funny things about writing this blog is that I have started to get some free books. This is strange since I don't review books. I read a lot, but I generally only read the stuff I like. I don't have time to read things people send me. I also find this interesting because as President of Bowker - the publisher of books in print remember - I may have received three books in seven years. Two of those were sent by Jane Friedman. So, as a blogger operating in no official capacity I get some books, but as head of house I don't. Curious.

In the past twelve months I have received four books; not a lot thankfully. I haven't read any of them. Two management books (one from Wiley so I may end up reading it), one on being more green and one from a trade publisher. The green title had me slightly concerned since the title was so precise: "78 ways to change the planet" or something. Surely if they concentrated a little more they might have reached 100. No doubt my experience with review copies speaks both to the desperation of smaller publishers to get their titles seen and to the general indiscriminate nature of the process: Send them out in the hope that someone will review them.

I am not sure how much other heads of house share their books with one another. Do they call each other up and ask for a particular book I wonder. Would they be embarassed? If I were publishing something more compact that an 8 volume directory I would have routinely sent my titles to other publishers. I would be proud of them and I would want my peers to enjoy them as I did. (I did consider sending the CD version to publishers but discarded the idea just as quick. I didn't want to visit their office and find it under a wine glass).

About 18mths ago, I realized that my unread pile extended to 60+ books, but the back log is winding down now and so sometime in the next six months I might actually be reading books that have some currency. (At the moment I am reading a biography of Sir Christopher Wren that was published in 2001). Perhaps then I might comment a little.

Paris Hilton On Oil Dependency

Remember that tasteless ad the McCain campaign ran denigrating Obama as a "celebrity?" Well, I think the celebrity just got the better of them:

See more funny videos at Funny or Die

Here is the link for those on email or if you are using MS Explorer. Firefox seems to work fine.

I am curious why they can't afford towels at the Hilton mansion. Nice suit.

Back to our regularly scheduled programming later.

Harpercollins Closes Year Flat

Harpercollins saw a 18% increase in fourth quarter revenues that helped the company finish the year with operating income flat with 2007. Revenues for the quarter were $350mm versus $295 in the prior period. Full year revenues were $1,388 versus $1,347 in the prior period.

Here is the relevant section from the NewCorp press release:

HarperCollins reported fourth quarter operating income of $28 million and full year operating income of $160 million, an improvement of $7 million and $1 million as compared to the prior year periods, respectively. Current quarter results were led by strong sales of Bright Shiny Morning by James Frey, Stolen Innocence by Elissa Wall and an updated edition of YOU:The Owner's Manual by Michael F. Roizen and Mehmet Oz. During the fourth quarter, HarperCollins had 62 books on The New York Times bestseller list, including Read All About It! by Laura and Jenna Bush which reached number one. For the full year, HarperCollins had 165 books on The New York Times bestseller list, including 14 titles reaching the number one spot.

Thus the company had a margin improvement of 1pp in the final quarter but a slight decline over all. Well reported has been the change in senior management at Harpercollins with Brian Murray replacing Jane Friedman. Murray, in turn, has made changes in the executive suite notably the replacement of Glenn D'Agnes who was the long term COO.

Details on Harpercollins are always sparse in the NewsCorp disclosures and the company is rarely mentioned in the earnings conference calls.

When You See a Fork in the Road...

Lorcan Dempsey (OCLC) on the future of libraries,

We can see two important directions, one towards concentration and one towards diffusion.

First concentration, which we see at at least three levels. At the institutional level, there is a strong push to overcoming fragmentation by moving towards new institutional discovery layers (Primo, Encore, Worldcat Local). At the group level we see the emergence of more state or national systems which pull together resources in user-facing services. These are attractive because they present more resources to the user. And at the global level, we see library resources being represented - through linking or syndication strategies - in search engines, Flickr, Google Scholar, Worldcat and other network level resources.

The second is atomization of content and services so that they can be better integrated into diffuse networking device and applications environments. Here think of RSS/AtomPub, mobile interfaces, APIs, alerting services, portlets and widgetization, persistent links to library services and content, etc. Issues here are technical and licensing. Users increasingly value convenience and relevance, and packaging materials in ways that make most sense for them is not always straightforward.

How far off are we from the new library that has no physical holdings, no ILS system, no repositories, no nothing except the building, a patron database, some furniture and some terminals?

Author as Brand

Following on from my post on branding last week, Jeff Jarvis interviews Paul Coelho and finds the perfect example of an author embracing his power as a brand. He's making more money in the process as well.

He is a pirate. Coelho discovered the power of free when a fan posted a Russian translation of one of his novels online and book sales there climbed from 3,000 to 100,000 to 1m in three years. "This happened in English, in Norwegian, in Japanese and Serbian," he said. "Now when the book is released in hard copy, the sales are spectacular." So Coelho started linking to pirated versions of his books from his own website. But when he bragged about this at the Burda Digital Lifestyle Design conference in Munich last January, he got in trouble with his US publisher, HarperCollins, whose then head, Jane Friedman, called him.

Trust in Book Lovers Not Reviewers

The termination of several book review sections across the country in recent weeks has reignited the same discussions that took place last year regarding the future of reading and books generally. The arguments remain sentimental suggesting a Utopian book-centric world where every reader weighs the careful words of the reviewer before making a particular purchase. Yesterday, Lissa Warren in HuffPo lamented the demise of the book review section of the LA Times and calls out those who believe (like I do) that blog reviewers are filling the void left by 'official' reviewers:

But I'll tell you what does make my jaw drop: the seemingly widely-held notion that these book sections are being adequately replaced by blogs. To be sure, there are some excellent book blogs out there: Mark Sarvas's The Elegant Variation. The National Book Critics Circle's Critical Mass. MediaBistro's Galley Cat. Jessa Crispin's Bookslut. The Boston Globe's Off the Shelf. And, of course, the New York Times' Paper Cuts. They're all bookmarked on my computer. I read them often for news on new titles (and older ones I missed) and Q&As with authors. Many of them are also good for stories on publishing trends, which as a book publicist and editor I appreciate a great deal. But, for the most part, these blogs don't actually review books.

In my view there is a macro point that makes her argument largely irrelevant; that is, we are beginning to see the development of trust networks. As consumers of information we are starting to build our own networks of people and entities we rely on to support everything from our political philosophy to our choice in vacation spot. Reading falls squarely into that paradigm and it no longer matters whether a book review is produced to the standard of the LA Times or The NYTimes book section (and many blog reviews do), what matters is the impact the review has on a purchase decision. Those interested in reading are finding bloggers that they 'trust' (even of the blogspot variety, a comment which baffles me), and these reviews do indeed 'adequately' fill the void created by the demise of some of the larger newspaper reviews sections. Interesting, some of the arguments presented by Warren as to why these blogs are not of a standard are precisely the items that lend reality, personality and connection to the readers of these reviews.

I'd also advise that book reviewing bloggers jettison the use of personal pronouns (yes, I've used a slew of them here; you can nail me in the comments). And for goodness sake, I wish they'd stop telling me what their father and their girlfriend -- or their father's girlfriend -- thought of the book. Also, I don't need to know how they came to possess the book -- how they borrowed it from the library, or bought it at B&N, or snagged a galley at The Strand, or got the publisher to send them a copy even though they average four hits a day. The banal back-story is of little interest.

It is my own personal view that the back story is of little interest; however, that might only be because I haven't found a (blog) reviewer that I identify with. The point is, many consumers reading these blog reviews do find the back story interesting and the great thing is they can move on to someone else if it becomes too tedious. Warren also speaks of 'self-indulgence' and surely nothing could be more self-indulgent than reading a Salman Rushdie review of a Martin Amis title in the NYTimes book review section. (If you would).

Trust networks will define how many people (maybe all of us) communicate - that's what myspace, facebook, linkedin, etc. are starting to show us. The blog network is a fundamental part of that and the continued development of trust networks has implications for all consumer interaction including recommending and buying books. The word 'recommend' is better than review. The word 'review' in conventional terms and as used by Warren is used pejoratively when referring to blog reviews. This is wrong, because a book review doesn't have to conform to a standard; this is a convention that has been constructed by old school journalists. What is relevant is what the opinion/review/recommendation means to the consumer. Someone yelling over the back fence to their neighbor that they really liked The Corrections is a 'review'. And that's synonymous with replying to the Facebook 'what are you doing' by typing "I'm reading The Corrections and I really hate it".

Lastly, who was reading the reviews in all these newspaper reviews sections anyway? Most people in the US who read (and that's not many) only read one book a year. That book is likely to be something like the Da Vinci Code, a diet book, Dr Phil or an Ophra pick so what's the return? It is (was) a mystery. Not so on the web. These evolving trust networks concentrated around people who love books, talk about books and opine about books provide publishers with a window on the community they never had. Stop with the whining and recognise that as a publisher you have a tremendous opportunity to understand your consumer in ways you never could before. Rather than lamenting the demise of the newspaper, publishers should be rejoicing in front of the window to a vibrant community of book lovers and opinion makers.

To answer Lissa Warren's question: Blogs may not save Books but they may be all we have so pay attention.

MediaWeek (Vol 1, No 31):

The Telegraph reports on another media deal in the works concerning Wilmington a publisher of Press Gazette and legal and charity databases. ReadWriteWeb note the publication of study suggesting females rather than males rule the web:

Online reputation company Rapleaf has released a new study of 49.3 million people, revealing gender and age data about social network users. On most of the main social networks - including MySpace, Facebook, Bebo, Hi5 - women outnumber men by a considerable amount. On Facebook, the 18-24 age group is largest, with 1,685,029 women in that age group compared to 977,753 men. In MySpace, the same age group dominates, with 7,091,214 women and 5,226,788 men.

Informa announced late last week that they had received an indication of interest from a new group. The Guardian finds out it's Dubai. But Blackstone is seen as a favorite by The Times. The Times Online reports on the self-publishing market for authors with a provocative lead-in. One Kindle, Two Kindle, Three Kindle... TechCrunch tries to get to the bottom of the sales numbers. Torstar reports better quarterly results for Harlequin:

Book Publishing revenue was $118.9 million in the second quarter, up $2.9 million from $116.0 million in the same period last year. Underlying revenues were up $6.3 million in the quarter with strong growth in the North America Retail division partially offset by a decrease of $3.4 million from the unfavourable impact of foreign exchange rates. Operating profit was $18.5 million in the second quarter of 2008, up $6.0 million from $12.5 million in 2007. Corporate costs were $4.2 million in the second quarter of 2008, down $0.6 million from the second quarter of 2007.

Guards say they locked him up in a cupboard. Not true, says Rushdie and threatens to sue. He may have a chance. Guardian (no relation) Some spectacular declines in magazine readership in the UK. BrandRepublic

Maxim will be the hardest hit of the men's monthlies, but Bauer Media-owned titles Arena and FHM, with news-stand circulation expected to be down 20% and 17% respectively, IPC-owned Loaded (expected to be down around 20%) and NatMags-owned Esquire (expected to be down 19%) are all understood to have suffered in the latest ABCs, released on 14 August.

Things continue as expected at Voyager Learning. Still no filings, revenues are in decline and cash is tight. SEC

The Company anticipates it will file its 2006 10-K by July 31, 2008. It further expects that the 2007 10-K will be filed four to eight weeks after the filing of the 2006 10-K. The Company provided preliminary and unaudited 2007 financial results for the Voyager Learning Company operating business by means of a conference call on April 15, 2008. As the Company has continued its efforts to file 2006 and 2007 financials, certain estimates made April 15, 2008 have been updated resulting in a change to the projected 2007 earnings before interest, taxes, depreciation and amortization (EBITDA). EBITDA is now expected to be in the range of $28 - $29 million versus the previously reported $30 million.

Amazon Buys ABE Books

In a deal likely to further infuriate publishers, Amazon.com The Bookseller is reporting that Amazon has agreed to by ABE books a second hand and rare book seller.

Russell Grandinetti, vice president of books for Amazon.com, said that the acquisition would add "breadth and expanded selection" to the company's customers. "AbeBooks provides a wide range of services to both sellers and
customers, and we look forward to working with them to further grow their business. We're excited to present all of our customers with the widest selection of books available any place on Earth."

Hannes Blum, AbeBooks' chief executive, said he was "very excited" about the acquisition. "This deal brings together book sellers and book lovers from around the world, and offers both types of customers a great experience," he said.

Many of the retailers that participate in the ABE network may already participate in the Amazon network nevertheless this will solidify the persistent mingling of new and second hand titles that publishers have grown to loath. Amazon purchased another second hand and antiquarian book network (may have been more of a search tool) name biblio(something - can't recall) which established their early position in this segment but the acquisition of ABE will radically broaden their reach. Where this leaves Alibris is also of interest. Will they see a need to merge with a larger retailer. We all know Steve Riggio likes old books....

Librarything notes the deal as well and points out Amazon will have a stake in their company.

Hat tip: Brantley (again)

Archives Are Good to Have

Encyclopedia Britannica announced they are making their visual content archives, including photos, maps, illustrations, natural science drawings, slides and animations, available for distribution and stock licensing.

Details are sparse but I found the notification on abouttheimage.com.

Virtual Picture Desk the third party organization that is managing the licensing is a, Management Services and Consultancy Business providing content management advice, global & international syndication of picture libraries for distribution and the assistance in the mergers & acquisitions of photographic and illustrative collections.

Forrester Buys Jupiter

Forrester Research (Nasdaq: FORR) (http://www.forrester.com/) has acquired JupiterResearch, LLC (http://www.jupiterresearch.com/) and its parent company, JUPR Holdings, Inc., from MCG Capital Corporation (Nasdaq: MCGC) (http://www.mcgcapital.com/) for $23 million in cash plus assumed liabilities, subject to post-closing adjustments. (JEGI reports).

JupiterResearch has 83 employees and 2007 revenues of approximately $14 million. Forrester, with 2007 revenues of $212 million, now has more than 1,000 employees. This strategic purchase complements Forrester’s syndicated business model, as JupiterResearch joins Forrester’s Marketing & Strategy Client Group, which contributed $46.4 million to Forrester’s total revenue in 2007.

“Uniting JupiterResearch and Forrester brings together the two leading research brands used by marketing and strategy executives,” said George F. Colony, Forrester’s Chairman of the Board and CEO.

Reed Shares Up 5% on Buoyant News

From the Reed Elsevier press release:

• Strong business momentum and financial performance
• Restructuring programme on track to deliver further margin improvement
• Sale of Harcourt Education fully completed; net proceeds of £2.0bn/€2.7bn returned to shareholders
• Divestment of Reed Business Information in progress
• Agreed £2.1bn/€2.7bn acquisition of ChoicePoint, Inc. expected to close in H2

Reed Elsevier's Chief Executive Officer, Sir Crispin Davis, commented:

"We have seen a strong performance across our businesses in the first half despite a more challenging economic backdrop and we remain on track to deliver on our goals this year of good revenue growth, meaningful margin improvement and accelerated earnings growth. We have made good progress in implementing our plans announced in February to accelerate growth: the planned divestment of Reed Business Information is progressing and we are seeing strong buyer interest in the business; the agreed £2.1bn/€2.7bn acquisition of ChoicePoint, Inc. in the fast growing risk information and analytics markets is moving through US regulatory review and is expected to complete in the second half; our major restructuring programme to deliver £245m/€310m of cost savings over the next four years is on track with the initial targeted £15m/€19m of savings to be delivered this year. Whilst the professional markets we serve are not immune to economic cycle effects, they are more resilient than most. This, together with the changes we are making in the business and the growing demand for our online information and workflow solutions with the customer productivity they provide, gives us confidence in the outlook.”

Further notes from their presentation:

• Online revenues growing at 10+%
• Online revenues exceed 50% of total revenues.
• Aggressive program of infrastructure cost management including outsourcing and real estate
• RBI: staple financing in place, strong interest, divestiture expected in second half, good operating performance despite difficult environment
• Choicepoint integration well advanced. Synergies on track
• Outlook: Strong across the board with Elsevier book program, LN online solutions, Exhibitions cycling all noted as positive drivers for H2
• RBI H1 Revenues up 3% and Op Income up 7%. Online growth up 20% to 34% of total RBI revenues. 4% print decline.

Meredith Reports Continued Negative Impact from Book Program

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

From thier press release:

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

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

Simon & Schuster Reports

CBS released their half year results with top line revenues and operating income up 1%. The company is re-evaluating their assets portfolio given the general economic environment and has announced the sale of 50 mid-sized radio stations. They are also aggressively managing expenses. How all this impacts Simon & Schuster if at all was not mentioned. Here is the relevant section from the press release on S&S:

Publishing (Simon & Schuster) Publishing revenues for the second quarter of 2008 declined 7% to$186.0 million from $200.3 million for the same prior-year period, as best-selling titles in the second quarter of 2008, including The Broken Window by Jeffery Deaver and Chasing Harry Winston by Lauren Weisberger,did not match contributions from prior year titles which included Blaze by Stephen King writing as Richard Bachman, and The Secret by Rhonda Byrne. Publishing OIBDA and operating income decreased 15% to $17.0 million and 19% to $14.6 million, respectively, with lower revenues partially offset by lower royalty expenses. Publishing results included stock-based compensation expense of $1.2 million and $.9 million for the second quarter of 2008 and 2007, respectively.

Wolters Kluwer Reports

Half yearly results at Wolters Kluwer were mixed with organic revenue growth up 1% and revenues at constant currency rates up 4%. Overall reported revenues were down 4%. Operating expenses held constant with the prior period resulting in a slight reduction in operating margin.

Total half year revenues were $1,608mm versus 1,677mm and EBITA was $288mm versus $304mm.

Highlights from the company's press release are as follows:

Double-digit earnings growth, stable profit margin, and solid cash flow performance give confidence for achieving the full-year targets. With its diversified and defensive portfolio, Wolters Kluwer has the foundation in place for sustained profitability and long-term growth.

• 20% diluted ordinary earnings per share growth in constant currencies
• 4% revenue growth in constant currencies (1% organic revenue growth)
• 8% growth in higher margin electronic products in constant currencies
• Resilient profit margins despite weaker market conditions
• Solid free cash flow underpins strong balance sheet and liquidity
• Reiterate progressive dividend policy

Under the hood: The company has to be worried about the results in its Health segment which industry wide has been one of information publishing's more vibrant sectors. For the half year revenues are down 14% (2% CC) and EBITA down 51% (49% CC). On $305mm in revenue the Health segment is almost a breakeven business which must be a concern. The company's Tax and Regulatory business was a highlight and helped mitigate some of the reduction in Health. Overall, the company remains confident of hitting its full-year growth targets between 3-4% despite the retraction in Health and their other slow segment Corportate & Financial Services.

Pearson Reports

From their press release:

• Sales up 14%* to £1.965bn;
• Adjusted operating profit up 38% to £124m;
• Adjusted EPS up to 5.6p (from 3.1p in H107);
• Interim dividend raised 6.3% to 11.8p.
• Long-term investment strategy paying off
• Education sales up 17% and first-half profit of £14m with rapid growth in digital learning services and continued international expansion;
• FT Group sales up 11% and profits up 21%, benefiting from shift towards subscription and digital revenues and focus on global businesses;
• Penguin sales up 9% and profits up 22%, with strong publishing and innovation in all markets.
• Healthy outlook: Full-year guidance confirmed; on track for further progress in all businesses.

Marjorie Scardino, chief executive, said: "Our momentum is strong, even in these tough economic conditions. We have leadership positions in good markets and an effective growth strategy based on quality content, digital innovation and international expansion. That strategy makes us confident that 2008 will be another record year, and that we will continue to grow."

For the year:
The company expects Eduction to be up 10% in constant terms for the year. The company is also reorganizing education into three groups: US Domestic, International, and Professional. Margins will be constant despite 'harcourt integration expenses' and will grow by 1pp per year beginning in 2009.

Penguin has made 'an excellent start to the year' and Pearson expects them to achieve double digit operating margins for the year.

FT is showing growth in subscription, circulation and advertising revenues (up 2%) in the first half. Pearson expects to increase profit at FT Publishing even without any growth in advertising revenue. Guardian reports FT added 350,000 new subscribers in six months.

Brand Presence

Most people in our industry recognise the irony inherent in discussing brand management in the publishing industry. Every aspiring author and agent seeks the validation that being published by a major publisher brings, yet most consumers have only a passing awareness of the publishers' brand. There are exceptions--Harlequin, Hungry Minds, O'Reilly- but across the panoply of publishers, brand strength is only partially monetised.

This recognised fact has not stopped publishers from investing heavily in branded web sites that cocoon their authors in an experience that generally is not relevant to the consumers they are attempting to attract. That is not to say that the content and applications available on the websites of most large publishers are inadequate or unsophisticated, but they are misappropriated. I especially like the websites of Harpercollins and Penguin, who have both taken up the challenge of community building, widgets and e-Content. And it is difficult to be critical of these attempts, given the aggressive level of experimentation undertaken.

What seems to be lacking in all publisher websites, though, is a strong sense of engagement. And engagement that is resilient. Just as consumers return to their favorite booksellers, publishers need to believe they can engage their consumer base to such an extent that they return each time they are interested in purchasing a book. And that's any book.

Publishers are best placed to build author-centric and subject/theme-oriented websites--not sites oriented around a "brand" that isn't relevant, but those that focus attention on segments of the business that remain relevant to consumers. Envision the Spiritual segment at a site supported by Harpercollins which has a unique, appropriate and relevant focus far apart from the current 'corporate' approach. All segments are valid candidates for more of a silo approach to marketing publishers' products. And I would go further in recommending that publishers consider marketing within these silos all titles available, rather than just those produced by the publisher. What better way to condense a market segment and become a destination site for Self-Help, Spirituality, Mysteries, Computer and any number of other book-publishing segments. Consumers aren't dumb. Amazon's main attraction is that all the titles in any one segment are available in one place. As long as publishers continue to ignore this fact, they will under-serve the market and under-perform given the investment in their sites.

So, which publisher will be the first to license a "Books in Print" database (as B&N, Google, Borders and many others have already done)? That would be an excellent start; moreover, the publisher is best placed to augment this data with more details, content and community- building applications that will draw in consumers. A quick search for Doris Lessing and George Pelecanos shows that Books.Google.com and Wikipedia are more likely to be the initial reference points for consumers. On their respective publisher's sites, these authors retain a significant presence, but that presence does not appear to be adequately monetized. Many publishers will argue that they are there to support the retail sale and as long as a book gets sold-- based on their effort-- they have done their job. There is something to this argument but the age-old paradigm on which it is based--multiple retail channels, limited retailer power--is long behind us and getting worse for the publisher.

Web presence for many companies (including publishers) remains a fluid engagement. The inherent benefit of the web is that you can try and fail repeatedly, with limited downside, assuming you monitor closely. In the publishers' case, it is important they not attempt use the web to build brand awareness around their trade-marks which continue to be removed from consumers' experience, Internet or not. What their focus should be is building a discernable alternative to the predominant web retailers by segmenting their offerings around logical categories and building their brand around those segments as they use their content knowledge, author relationships and technical expertise to build something powerful for the future.

Pearson Post Strong H1 Results

Pearson reported strong revenue increases (up 14% to £1.965bn) and adjusted operating profit up 38% to £124m versus the same period last year. Additionally, their adjusted EPS is up to 5.6p (from 3.1p in H107) and the company's interim dividend has been raised 6.3% to 11.8p. (Press Release).

According to the company this is evidence that their long-term investment strategy is paying off as evidenced by,

• Education sales up 17% and first-half profit of £14m with rapid growth in digital learning services and continued international expansion;
• FT Group sales up 11% and profits up 21%, benefiting from shift towards subscription and digital revenues and focus on global businesses;
• Penguin sales up 9% and profits up 22%, with strong publishing and innovation in all markets.

Marjorie Scardino, chief executive, said: "Our momentum is strong, even in these tough economic conditions. We have leadership positions in good markets and an effective growth strategy based on quality content, digital innovation and international expansion. That strategy makes us confident that 2008 will be another record year, and that we will continue to grow."

By segment the company notes its full year 2008 prospects:

Pearson Education (63% of 2007 sales and operating profit). Our education business is trading in line with expectations. As previously announced, we have begun a reorganisation of our education company, which we are now managing and reporting as three segments: North America, International and Professional. Our expectations provided at the full-year results under the previous segmental analysis (worldwide School, Higher Education and Professional) are unchanged.

In North American Education, we have a strong market leadership position and demand for our products remains healthy. We expect our North American Education business to increase sales by around 10% at constant exchange rates (or by 2-4% in underlying terms).
In International Education, we are well placed to benefit from the growing demand for materials, assessment, technology and related services at all stages of learning. We expect our International Education business to grow sales by around 10% at constant exchange rates (or in the low single digits in underlying terms). These growth rates include the impact of the completion of the UK key stage testing contract in 2007.

In Professional Education we continue to expect sales to increase in the low single digits at constant exchange rates.

For Education as a whole, we expect 2008 margins to be similar to the 2007 level of approximately 15%, in spite of significant integration costs relating to the Harcourt businesses (which we include in our operating results). In 2009, we expect to increase Education margins by around one percentage point as we begin to realise the financial benefit of the acquisitions. Beyond 2009, we see further opportunities to increase margins in Education as we continue to consolidate our businesses.

Penguin (20% of 2007 sales, 12% of operating profit). Penguin has made an excellent start to the year, with a particularly strong first-half publishing schedule. It is on track to reach its goal of double digit margins for the full year.

Financial Times Group (17% of 2007 sales, 25% of operating profit). The FT Group is on track to achieve continued profit growth this year. FT Publishing has shown sustained growth in subscription, circulation and advertising revenues (up 2%) in the first half. Future advertising revenues remain difficult to predict, but we continue to expect to increase profit at FT Publishing even without any growth in advertising revenue. Interactive Data has raised its guidance and now expects to achieve full-year revenue growth in the 8-10% range and operating profit growth within the 11-13% range (headline growth under US GAAP).

MediaWeek (Vol 1 No 30):

NY Times looks at textbook piracy:

The transition has already begun, even while publishers continue to sell print editions. They are pitching ancillary services that instructors can require students to purchase, just like textbooks, but which are available only online on a subscription basis. Cengage Learning, the publisher of Professor McMurry’s “Organic Chemistry,” packages the new book with a two-semester “access card” to a Cengage site that provides instructors with canned quizzes and students with interactive tutorials.

A lengthy article in The NY Times showing the battle to win over younger readers to books.

Books are not Nadia Konyk’s thing. Her mother, hoping to entice her, brings them home from the library, but Nadia rarely shows an interest.

Reuters suggests that a deal for Informa could be imminent. The Observer writes about the biggest website you have probably never heard of:

The invisible hand behind many memes, apparently including the googled swastika, is a website called 4chan. From semi-literate cats to the 'ironic' comeback of singer Rick Astley, this online community is building a reputation as a nursery of all that is weird and wacky and likely to be landing in your inbox tomorrow.

NYTimes on the growing instance of product placement in broadcast news.

In recent weeks, anchors on the Fox affiliate in Las Vegas, KVVU, sit with cups of McDonald’s iced coffee on their desks during the news-and-lifestyle portion of their morning show. The anchors rarely touch the cups. Executives at the station, one of 12 owned by Meredith Corporation, say the six-month promotion is meant to shore up advertising revenue and, as they told the news staff, will not influence content.

S&P (Yes,the same folks that missed the credit crisis) have placed the NYTimes on negative credit watch.

The CreditWatch listing reflects an accelerating pace of total revenue decline and a rate of decline in EBITDA in the first half of 2008 that indicates the company may have difficulty achieving our expectations for the current rating.

The Telegraph notes that Thomson Reuters will launch news channel to compete with Bloomberg, Fox and CNBC.

The Daily Telegraph understands that the plan is for the channel to appear on both the internet and some form of cable or digital platform. The launch could be as early as January but may be pushed back as the company is conscious of Reuters' earlier unsuccessful foray into television.

MediaPost has a round-up of a very bad 10days for newspapers and magazines.

While all three mainstays of the traditional media have scrambled to adapt to the digital age with more online features and services, their Internet businesses still contribute just a small fraction of total revenues. Even more ominous, the rate of growth in online revenues is slowing, making it unlikely that they will ever be able to offset losses in the core business.

On the other-hand, MediaPost also reports on the rise of newspaper-distributed magazines.

It's one of the weird paradoxes in current media trends: While newspapers and consumer magazines are both taking it on the chin in 2008, some magazines distributed via newspapers are doing quite well. Among the leaders are American Profile and Relish, from the Publishing Group of America--which have seen year-to-date ad pages increase 12.58% and 19.69%, respectively, according to MIN Online.

The Independent looks at E-books as retail items and assesses whether they are threats or favors.

The long-term danger for publishers is if they don't invest in digital technology for their content. They could also lose out if they just make classics available for e-book readers and not the most recent popular titles. Henry Volans, head of digital publishing at Faber, said: "There is no reason whey people who have e-books should suddenly only be interested in Dickens. They will want the big new titles as well."

Giles Coren on Editing

Spoiler alert: There is some very colorful language in the attached article written by food critic and writer Giles Coren. Giles has taken exception to what might appear to a disinterested party as a fairly minor editorial change to one of his recent restaurant reviews. As Mrs PND notes he is quite elegant in the manner in which he abuses the parties responsible. Giles and Gordon Ramsey are said to be good mates and it is clear after reading this where the common affection resides.

Consider yourself forewarned. There is no way anything like this would ever be published in a major US newspaper.

The Guardian.

SCHOLASTIC ANNOUNCES FISCAL 2008 RESULTS AND FISCAL 2009 OUTLOOK

From the company's press release:

New York, NY (July 24, 2008) -- Scholastic Corporation (NASDAQ: SCHL), the global children’s publishing, education and media company, today reported its results for the fiscal 2008 fourth quarter and full year and its outlook for fiscal 2009. It also announced that its Board of Directors has declared a quarterly dividend of $0.075 per share to be paid on September 15, 2008 to shareholders of record on August 4, 2008.

“Given our track record of strong free cash flow, generating $188 million in fiscal 2008, and low debt levels, we repurchased $220 million in stock last year while continuing to invest in strategic growth opportunities,” stated Richard Robinson, Chairman, CEO and President. “Initiating a regular dividend allows us to return additional cash to Scholastic shareholders.”

For the fiscal year ended May 31, 2008, the Company had revenue from continuing operations of $2,205.6 million, up 15% from the prior year. Earnings from continuing operations rose to $2.82 per diluted share from $1.70 per diluted share in fiscal 2007. Fiscal 2008 results benefited significantly from the publication of the seventh and final book in the Harry Potter® series.

Revenue from continuing operations in the fourth quarter of fiscal 2008 declined 2% to $536.1 million. Earnings from continuing operations were $0.75 per diluted share compared to $1.04 per diluted share in the fourth quarter of fiscal 2007, primarily reflecting continued investment in the Company’s growth initiatives.

The Company reported that negotiations for the sale of its direct-to-home continuities business, which it previously announced it would exit, moved forward during the quarter, and that it expected to finalize terms in the first quarter of fiscal 2009. Scholastic also announced that it shut down its school-based continuities business effective May 31, 2008. As a result, both businesses have been classified for accounting purposes as discontinued operations in current and prior periods.

In fiscal 2008 the loss from discontinued operations, net of tax, was $3.39 per diluted share, compared to a net loss of $0.29 per diluted share in fiscal 2007. In the fourth quarter the loss from discontinued operations, net of tax, was $1.09 per diluted share compared to a net loss of $0.11 per diluted share in the prior year period. The greater loss in the current year and quarter primarily reflects non-cash asset write-downs, net of tax, of $2.62 and $0.79 per diluted share, respectively, recorded following the decisions to exit these businesses. In the current year and quarter, the net loss associated with direct-to-home continuities was $0.61 and $0.21 per diluted share, respectively, and with school-based continuities the net loss was $0.16 and $0.09 per diluted share, respectively.

Including continuing and discontinued operations, the fiscal 2008 net loss was $0.57 per diluted share compared to net earnings of $1.42 per diluted share in fiscal 2007. In the fiscal 2008 fourth quarter, the net loss was $0.34 per diluted share compared to net earnings of $0.93 per diluted share in the prior year period.

“Scholastic made important investments in fiscal 2008 to achieve ongoing revenue and profit growth and to reach 9 to 10% operating margins in 2010,” Mr. Robinson added. “These initiatives include:
1. Building and testing a second generation, online selling platform for School Book Clubs to launch in fiscal 2009, which improves on our online system that already handles 60% of Club orders;
2. Expanding the use of point-of-sale equipment and online tools in School Book Fairs, to improve merchandising and the book fair experience;
3. Developing new publishing and online properties, like the innovative multi-platform adventure series The 39 Clues™, which combines books, collectible cards, online games and an interactive website;
4. Investing in a stronger sales and service organization for Scholastic Education and in new technology products like System 44™, a prequel to our top-selling reading-intervention program READ 180®;
5. Accelerating investment in China and Southeast Asia to serve the growing market for English-language books and learning, where Scholastic’s business expanded by more than 20% in fiscal 2008.

In fiscal 2009 we also have plans to reduce costs by $25 to $35 million, through reductions in headcount and other spending areas. Based on these elements, this year’s plan delivers profit and margin growth (excluding Harry Potter) and moves us toward our goal of 9 to 10% operating margins in fiscal 2010.”

Fiscal 2009 Outlook

The Company expects total revenue from continuing operations in fiscal 2009 of approximately $2.0 to $2.1 billion, and earnings per diluted share from continuing operations in the range of $1.75 to $2.10. This guidance reflects growth in revenue of approximately 3 to 5%, and in earnings per diluted share of approximately 10 to 25%, excluding the benefit of Harry Potter in fiscal 2008. Free cash flow is expected to be approximately $90 to $100 million.

More

Kindle Sex

Sillicon Alley Insider (via Booktwo)notes that Amazon is being characteristically coy about the level of porn on sale via the kindle. They note that Amazon is prepared to offer sales rank for most titles but similar ranks are suspiciously lacking for erotic titles. They don't explain how they came about this research but a review of this series of pages on Amazons web site shows no erotica. And this is what you get if you try one of the sales tracking services linked to Amazon services. What are they afraid of?

I may have mentioned that a "sex books in print" is a noted but under served market segment but this list throws up a few more interesting items. Subscriptions to NYTimes and WSJ are in the top 20 (and probably run at a more sustained level than the other titles). With respect to the NYTimes this and the iPhone must spell the death knell for the Times Reader, that mediocre electronic newspaper reader the Times brought out a few years ago. Also of note, is that the title mix includes both adult and young adult titles.

Readers should be aware that battery life is limited.

Tivo And Amazon

The NYTimes is reporting this morning that Amazon and TiVo has signed an agreement that will allow TiVo users to purchase via an on-screen menu some of the products mentioned in shows like The Daily Show, Letterman and Tonight. From the article:

In the months ahead, TiVo plans to begin offering this feature to advertisers and programmers, so that the chance to buy products and have them delivered will be presented to viewers during commercials and even alongside product placements during live shows. The move highlights TiVo’s attempt to shift from being a creator of set-top boxes, competing with copycat devices, to being an advertising innovator that is trying to develop advertising technologies for the television industry.

I have two TiVo's neither of which I can use in satellite-less PND Towers. And we are not happy about it.

McGraw Hill Plotting to Buy RBI

The Telegraph handicaps some of the interest in the sale of Reed Business information and offers the intreging notion that MGH would purchase the Reed titles. What they don't discuss is what would happen afterwards. As I have speculated, some assets are likely to be sold after a sales of RBI and this article compares the 'overlap' between the RBI titles and those currently owned by MGH.

The McGraw Hill Companies, owner of Standard & Poor's credit rating agency, has titles which overlap with RBI in aviation and construction. McGraw publishes aviation Week and a collection of architectural and engineering titles, while RBI has a large portfolio of construction titles including Construction News and Professional Builder.

And:

The sale of Reed Business Information (RBI), whose titles include film industry bible Variety, Flight International and New Scientist, began last week when information was sent to prospective bidders. If RBI fetches the asking price, it would be the biggest media takeover since the sale of Emap at the end of last year.

MediaWeek (Vol 1 No 29):

Amazon.com speaks to the NYTimes about cloud computing.

Customers of Amazon’s new store will be able to start watching any of 40,000 movies and television programs immediately after ordering them because they stream, just like programs on a cable video-on-demand service. That is different
from most Internet video stores, like Apple iTunes and the original incarnation of Amazon’s video store, which require users to download files to their hard drives

Christian book retailing is either treading water and just surviving or being destroyed depending on who you listen to. Here the Washington Post looks at the business.

Meeting customers where they are has become the mantra of the Christian retail industry as its stores face stiff competition from big-box chains and online retailers. With more stores closing than opening each year, industry layoffs and a key publisher staying away from this week's annual International Christian Retail Show in Orlando, retailers and publishers say innovation is key to thriving.

The Bookseller notes that Lonely Planet got their books into the Apple Store in quick order.

John French announced to staffers through an internal memo that he was stepping down as CEO of Penton Media. Speculation about who will replace him included Mike Marchesano currently at JEGI. Folio.

The AP reports on a new book from Mitch Ablom which is being offered exclusively through Amazon.com. The book is actually an eBook version of a commencement speech the author gave this spring.

More on the civil war between the UK office of Hachette Book Group and Amazon.com over pricing. Times Online.

The online bookseller has imposed extraordinary sanctions against the publisher, ... It is listing Hachette books but preventing the public from purchasing them by removing the “buy new” button from its websites.

James Murdoch seems to be moving closer to Big Boss. MediaGuardian. Notes on other Media bosses.

Sadly, Publishing News in the UK is closing down their magazine operation. PN But before they go they note a HarperCollins implant at Amazon.co.uk.

Conde Nast's Portfolio takes a look at HarperStudio. (Briefly).

John Makinson thinks outsides aren't welcome in the publishing world. The Bookseller.

All the Pretty Things

Now I am a sucker for a pretty face as much as the next guy and I probably wouldn't have looked at this short article in the NYTimes this morning if it didn't feature the visage of Kelly Wearstler. The short is about her interest in design books and in particular her favorite bookseller in LA:

Her favorite design bookstore in Los Angeles is Potterton Books, tucked inside the Pacific Design Center. (There’s also one in Midtown Manhattan, on Third Avenue near 59th Street.) “I can always find a book that is amazing that I probably haven’t heard of,” she said. Other shops she loves: the Strand in New York and Hennessey and Ingalls Art and Architecture Books in Santa Monica, Calif.

That's the good part - nothing wrong with that.

There is also an 'interactive' link to some selected photos of books. You could be forgiven for thinking that the intimate nature of the book purchase process described by Kelly would be evident in the slide show as well. Not so. In the small catalog of interesting design titles the NYT supplies links to your favorite - far from intimate - on-line bookseller only one of which is Potterton. Huh? Since Kelly mentions other stores why not use them; especially the Strand, which for the record has a huge selection of design and architecture titles.

JibJab: A Time For Some Campaignin'

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Those on RSS or email may need to return to the site to see this video. Click on the headline. Or visit jibjab.com

Rack Jobbing The EBook

A change, equivalent to the launch of the mass market paperback just took place but did you notice? Months in advance of the expected release of the new iPhone thoughts ran wild on the potential for an Apple iBooks store as much for its potential impact on sales as for its counter point to Amazon.com. With the launch of the 3G iPhone publishers have been found wanting, sadly waiting for the market to be gifted to us rather than proactively setting out to define it. This post from Kassia Krozer sums it up perfectly:

On a weekend when headlines were there for the grabbing and customers were searching for both toys and content, the publishing industry, perhaps practicing summer hours, was curiously silent. Not a single major initiative, announcement, horns-blaring call to check out these great offerings on iTunes.Call me crazy, but I’d expect an industry that salivates over moving 150,000 units to be all over the potential for reaching seven million “mobile is the future” customers. Are you not out there, listening to readers, gauging their interest? They want, you have, and you’re still hiding the goods. I get this isn’t the largest market you have, but is that an excuse to sit on the sidelines?

Publishers are again about to have a market dictated even as they continue to complain about the market power of the online retailers. Now $9.99 may become a defacto RRP for eBooks and as volume increases via the prodigious iPhone apps store publishers won't know whether to laugh or cry. When mass market paper backs gained market acceptance at Woolworths in the 1930s publishers gained access to a market they never would have developed on their own. Books were suddenly available for a dime and as publishers stood on the sidelines it wasn't until years later that they entered the market directly or bought up the main suppliers. Will history repeat itself with publishers buying ebook apps suppliers like Fictionwise or build their own applications? Hopefully, at least one or the other.

Traditionally, we think of distribution and content development as separate disciplines within publishing companies but in the e-Publishing world they co-mingle. Content optimization becomes the normative state where the end-user builds their own product out of a content repository created by the publisher without limitation on how the end product is rendered. The 'distance' between publisher and end-user (where distribution as a function currently sits) is wide but becomes virtually non-existent in the future state.

To bring us back to the iPhone circumstance, as long as publishers continue to think in terms of traditional functional silos and roles and responsibilities they limit themselves in their ability to leverage their assets. In contrast witness Amazon which has never considered any aspect of the publishing value chain to be off limits and more publishers need to think in this manner if they want to redress some of the advantages Amazon and others retain (or new competitors develop) in the marketplace.

Some other views on a similar theme:

Teleread
Adam Hodgkin
Shimenewa
theDigitalist

The Beatles on IPOD?

A report in Rolling Stone says that Bloomingdales (of all people) will be selling a limited edition IPOD with every Beatles tune on it. Many have speculated that the Beatles catalog would be available on the IPOD but who would have thought Bloomies would be the one to bring it to us. RS is saying there will only be 100. If the mock-up is any thing to go by that is one ugly IPOD. I suggested that the front and back of the special Beatles IPOD when and if it came would be suggestive of the center label on all vinyl albums: the green apple on one side and the cut-away inside the apple view on the back.

On another related Beatles note, fellow traveller Joe Esposito has a look back at the Beatles and how their touring lead to popularity and record sales but the model ultimately broke down when the band stopped going on the road.

A peculiar fate befell the Beatles, however, in that they, like a very small number of other musicians, found it impossible to continue the touring to promote their records. Touring became dangerous and, playing in huge stadiums to screaming teenage girls, artistically unrewarding. The Beatles thus left the road, risking their business model, as the essential relationship between live performance and the sale of records was broken. Famously, the Beatles responded by inventing a “live” audience: the first thing we hear on “Sergeant Pepper’s Lonely Hearts Club Band” is the sound of the invented audience. The imaginary audience did not contribute to the Beatles’ economy, however. That economy continued to be based on the sale of records. It was the Beatles’ good fortune that their fame was such that they no longer had to go on the road to promote the sale of their intellectual property. Perhaps it was just as well: when asked about the relative benefits of a live performance over a recording, John Lennon remarked, “Well, I’m a record man myself.”

He suggests the time of their break-up coincided with the "apotheosis of a particular business model for the media industry, the now-derided practice of creating copyrighted works and selling them, copy by copy, for profit." Read the whole article.

MediaWeek (Vol 1, No 28)

Some headlines from this past weeks publishing and media actitivity. The Canadian Publishing industry sees a slight decline from the prior year: A report from the government agency released Thursday said operating revenues from the book publishing industry in Canada edged down 1.2% in 2006 to $2.1 billion. NationalPost. The NZ Herald reports that New Zealand sees an increase in booksales but is the future ominous? Last year, the New Zealand consumer spend on books and similar merchandise topped $1 billion for the first time - capping off a trend of phenomenal growth that seems, for the moment, immune to the speed wobbles hitting other retailers. Informa Deal News: At a function held by private equity investor Alpinvest Partners in London last week, dealmakers from Permira, KKR, and Blackstone all talked openly about how they could come up with an offer for Informa to rival the 506p-per-share approach submitted by Providence, Carlyle and Hellman & Friedman. Telegraph TimesOnline reports on a lost Shakespear portfolio that has turned up in suspicious circumstances: The folio, printed in 1623 and valued at up to £3 million, was among a number of valuable books and manuscripts taken from the Durham University Library in December 1998. Last night a middle-aged book dealer was being questioned by police after the discovery of other historic manuscripts at his house in Washington, Tyne and Wear. There is a curious tie in with this story in the TimesOnline about Hemingways House in Havana. I think there is a connection and I wonder if the gent "helping the police with their enquiries" has even visited Havanna. PW reports that Susan Driscoll is taking a senior role at Wolters Kluwer. Wiley has purchased some titles from Cengage as part of Cengage's need to divest titles as part of their deal agreement with JD. The acquisition provides Wiley entry into the Introduction to Business course area, with a market-leading title, Contemporary Business,12th edition (13th edition to publish early in 2009), by Louis E. Boone and David E. Kurtz. These titles serve the first business course and offer Wiley an excellent opportunity to showcase its other business titles. The acquisition also will leverage Wiley Higher Education's language program, which is currently centered on Spanish, transforming Wiley into a more full-service provider to college and university language departments by offering learning materials in Introductory and Intermediate Italian and French, German grammar, and Business French. Business Week reports on actions to limit the influence of ratings sevices like Moody's and Standard & Poors and also argues why these firms are still needed. With investors' losses topping the hundreds of billions as many once highly rated securities have tumbled, ratings agencies have come under withering criticism for issuing scores that have proven far too optimistic. Already, under rising pressure to rethink their roles, New York Attorney General Andrew Cuomo has announced a deal with the three largest ratings agencies to reform the way they collect fees from debt issuers. Now, the Securities & Exchange Commission is moving to lessen investors' reliance on the scores. Reuters also report on the ratings services: Many financial companies, including banks and lenders, have been sued following the housing market bust; but the cases against ratings agencies may be among the most closely watched. As reported on earlier in the week, USAToday looks at textbook pricing but more specifically 'open' online textbooks. Frank [ex-Pearson] and his business partner, Jeff Shelstad, in January plan to launch Flat World Knowledge, the first commercial open textbook publisher. It will offer free online textbooks that can be printed and bound, for about $25 for black and white and $35-$39 for full-color copies. The average price of a traditional textbook varies by subject; many new textbooks cost about $150, Allen [director of the Make Textbooks Affordable campaign by Student Public Interest Research Groups] says. Comments are interesting. CNN Money looks at the Indian Educational market and estimate it to be worth over $120bill. US publishers are jockying for position in this market. Technopak, a Delhi-based investment consultancy, estimates that the current private-education market is worth $40 billion a year, and that this could roughly triple to $110-120 billion in ten years’ time. The potential is attracting foreign companies such as Pearson Education (PSO), part of the UK-based publishing group, and McGraw-Hill (MHP), as well as private equity firms that include Blackstone (BX), New Vernon, and Deutsche Securities, part of Deutsche Bank (DB). Reuters reports Bertelsmann has sold its US book club business. TimesOnline notes that ReedElsevier is starting a search for the successor to Crispin Davis. The will look internally and externally. PDN prediction: it will be a current employee. Guardian picks up PaidContent parent company (for reported $30mm). WSJ on textbook pricing. PND

Penguin and The Generational Chasm

I wrote about the Generational Chasm between the current book reader generation and the youth market in a post several weeks ago. (Happily it has proven quite popular). In that article I stressed that the old publishing model is not transferable simply because the content is available in e-book form. I noted that Harpercollins is exploring different ways to build new content and interaction with their younger consumer base and news comes now of a similar effort by Penguin to tap this market in a new way. The following is a report on the Penguin blog site about Spinebreakers:

The site is an online community created by teens, for teens as a platform where they can share their love of reading and other creative mediums. The site showcases some of the most unique stories, poetry, songs and videos, all in an attempt to unite and encourage youths to read more and stand tall in their belief that reading is cool. I personally think such a site is much needed and is a breath of fresh air, especially when England has fast become a place for teen violence and crime, and using one’s imagination in a positive manner has now been replaced with the ease of picking a fight. Spinebreakers is going offline at an up and coming road-show at the Roundhouse Studios in Chalk Farm, on the 25th of July. I have been fortunate enough to work on this event which will be inviting sixty teens to sign up and participate in three brilliant workshops which will include learning to use film equipment and creating a mini film on the day with Anton Saunders.

Also of note on the Spinebreakers site (and there is a lot), you might want to avoid Bath in September when there will be hordes of teenagers descending on the old Roman city to engage in a festival about Books. It could be violent, there could be some agro but old folks better leave town:

At this year’s Bath Festival of Children's Literature, Penguin Books are teaming up with young people in Bath to create a groundbreaking event run for – and by – teenagers. From poster design to the layout of the venue, this is an event where YOU call the shots. Opportunities for you include:
Working with top-name teen authors Meg Rosoff and Marcus Sedgewick
Deciding the format of the event, eg live music, food, DJs
Choosing the venue, eg theatre, coffee shop, out on the street (!)
Deciding how the event is promoted with a real budget to organise the event
Free books
A chance to work with Penguin, the UK’s leading publisher and a real opportunity to have YOUR voice heard
To get involved, you will need to be oozing with enthusiasm, available to attend 2-3 creative meetings in Bath between now and September and be prepared to create the most cutting-edge event at this year’s festival

Well done to the Penguin folk.
(Hat tip to Brantley - again).

Paid Content Snapped Up By Guardian Media

Guardian News & Media has bought ContentNext, the parent company of digital business website PaidContent, as part of its US expansion. The company was founded in April 2002 by business journalist Rafat Ali, a former managing editor of Silicon Alley Insider and reporter on Inside.com. From the press release:

Guardian News & Media today announces a significant expansion of its US presence with the acquisition of ContentNext Media, the leading B2B media company which covers digital media, the entertainment and technology sectors, and publishes the influential paidContent.org. Its founder and editor Rafat Ali, and CEO, Nathan Richardson, will continue to run the company as a stand-alone business.

Here is the full story.

Hail Mary

Both Zondervan and Thomas Nelson are being sued by a gay man who claims versions of the bible sold by these publishers refer to homosexuality as a sin and as a result directly violate his constitutional rights and have caused him emotional pain and mental instability. To say nothing of society. One might assume it is difficult to put a price on this pain (and instability)but Mr. Bradley LaShawn Fowler has assessed the damage at $60mm for Zondervan and a measly $10mm for Nelson. (He hasn't even murdered anyone and he is getting the full barrelled name treatment - perhaps because it is so colorful - I mean Bradley LaShawn WTF?)

You know the plot twist in Law & Order when the defendent decides to represent himself? That's when you know the guy is whacked and he's going down. BLF is defending himself. After refusing to appoint an attorney in his case against Nelson the judge said, "The Court has some very genuine concerns about the nature and efficacy of these claims." As part of his "brief", BNF claims, (USAToday)

because Zondervan's text revisions from a 1980s version of the Bible included, and then deleted, a reference to homosexuality in 1 Corinthians without informing the public of the changes.

The intent of the publisher was to design a religious, sacred document to reflect an individual opinion or a group's conclusion to cause "me or anyone who is a homosexual to endure verbal abuse, discrimination, episodes of hate, and physical violence ... including murder,"

He's got a better chance of seeing Jesus than winning this one. Yet another waste of judicial time and resources. I wonder if Mike Hyatt will be twittering about this one.

WSJ Looks At Textbooks

In this mornings WSJ, an article on textbook pricing but with a twist. The article notes the mutual interest that exists between publishers and institutions in maintaining revenues from the sale of texts. They note the uneasy relationship at the University of Alabama where a 'custom version' of a workbook is required reading for English Comp but in reality the workbook is little different than a non-custom version.

The spiral-bound book is nearly identical to the same "A Writer's Reference" that goes for $30 in the used-book market and costs about $54 new. The only difference in the Alabama version: a 32-page section describing the school's writing program -- which is available for free on the university's Web site. This version also has the University of Alabama's name printed across the top of the front cover, and a notice on the back that reads: "This book may not be bought or sold used."

Custom textbooks are the fastest growing segment of the education market but this aspect of publishing is likely to generate more scrutiny as publishers make even more extensive use of custom versions to circumvent the used book market. There are numerous state legislatures attempting (in some cases have done so) to write and pass legislation that will govern textbook pricing and place restrictions on the relationship between academicians and publishers. In NY, even the Attorney General's office is getting in on the action:

The book-royalty arrangements resemble a practice exposed during last year's student-loan scandal, when some universities steered students to particular lending firms and received a secret cut of the loans. New York Attorney General Andrew Cuomo called those payments "kickbacks" and forced universities, many of which said they used the money to fund scholarships, to halt the practice. Mr. Cuomo recently launched a broad conflict-of-interest investigation of the relationship between colleges and vendors, including book publishers.

Central to the WSJ article is the growth in the provision of 'royalty' payments back to course departments (via the Bookstore) as though this were something new. What is glossed over is the recognition that the bookstore has always made some margin on the sale of both new and used textbooks. In this article we would be forgiven for believing there was never any mutual interest in the sale of textbooks between college and publisher.

As with many things, technology will march on ahead of those that what to govern commercial interests, and while custom textbooks are a focus now, educational companies are already establishing deals where electronic versions of their titles will be paid for like lab-fees. If a student takes a course they are automatically charged a fee for access to the text material online. This subscription model will revolutionize educational publishing as it has legal, tax and financial information and this is not news to anyone in the business. It may be news to legislators. Fellow traveller, Alison Pendergast notes an article in The Chronicle of Higher Education:

Colorado Community Colleges Online, a consortium of 13 institutions in the Colorado Community College System, has teamed up with Pearson Education to offer digital textbooks at a one-time cost of $49 per student. The deal is the first of its kind between a major publisher and a public college system according to Rhonda M. Epper, co-executive director of learning technology for the Colorado online system. The $49 fee is rolled in with tuition.

In the above case, even though the fee appears low the total dollars paid by all students for access to materials may exceed what Pearson would have received were the books sold as print versions in the bookstore. This is because most students either don't buy a textbook or buy a used version. In the e-book world they may not have that freedom. The Colorado experiment is likely to become preferred by publishers and institutions over time but the market will also become a battle ground for publishers attempting to build delivery platforms for their content. Pearson leads in this development but the two other major publishers are spending fast to catch up. For many other educational publishers they may find themselves having to establish content licencing agreements with the major players so that they can deliver their content to students. Other than the largest publishers most will not have the resources to build a delivery solution and nor will their solution ever be as complete as the offer from Pearson or Cengage. It is dynamic stuff and in five years educational publishing will be unrecognisable versus what we see currently.

Best Travel/Food Show on TV

In case you don't know this already, Anthony Bourdain's No Reservations show on the Travel Channel is the best Travel/Food show going. So forget little Rachael and even gorgeous Giada and check out some real life travel and cooking. A new series has just started.

Chark Blog in Book Form

Exact Editions is reporting that Richard Charkin's blog posts, made when he was Chairman of Macmillan UK may be coming out in print. As Adam says,

The Charkin blog was a very good read while it lasted, it will be interesting to see if it can work in volume form.

Strange Mr. Charkin hasn't reestablished a new blog. He seemed to relish the first version so much.

Later on....

Coincidentally, CNet writer Caroline McCarthy notes the trend (not sure it is one) in blog to books:

This blogs-to-books trend seems to keep chugging along, despite the fact that none of their predecessors have been particularly successful. Gawker Media's Guide to Conquering All Media sold dismally, as schadenfreude-happy blogger Jeff Bercovici gleefully pointed out. Options, the book takeoff of the wildly popular Fake Steve Jobs blog, wasn't exactly a chart-topper, either. And now there are books either just out or on the way for blogs Stuff White People Like, I Can Has Cheezburger, Postcards From Yo Momma, Passive-Aggressive Notes, and a heap of others.

Personnally, I can't begrudge any of these people/sites from taking publisher's money to turn their free stuff into book form. If nothing else, the ability to construct a sentence and acheive meaning coupled with the development of a market should make the blog world a ready proving ground for many a book author. I would have thought the limitless talent of many blog writers will have made the agent and editor's life a little easier.

BTW, I'm still waiting....