Harry Potter, The Lost Leader

Motoko Rich in the NY Times this morning,

And so it has, for many children. But in keeping with the intricately plotted novels themselves, the truth about Harry Potter and reading is not quite so straight forward a success story. Indeed, as the series draws to a much-lamented close, federal statistics show that the percentage of youngsters who read for fun continues to drop significantly as children get older, at almost exactly the same rate as before Harry Potter came along.

Aside from the real issues regarding the declining level of readership among children my immediate thought was about the retail environment. There is such an emphasis on deeply discounting these titles that they become loss-leaders. That is they are sold below cost in order to drive traffic and drive purchase of non-discounted products on sale at the same store. However, all major retailers have said their margins in the Potter quarter will tighten because of the Potter selling frenzy. It would appear that this research may get at the nub of the problem. That is opening the store at midnight and selling the book at 75% off will not result in additional sales because the children don't read beyond Potter; so what is the point?

Potter titles are no doubt great books but they have become lost-leaders because they undermine the bookstore financial model and they haven't extended reading in young people. Of course in hindsight (perhaps more obvious than that) it is dopey to think that one series/character could change behavior that parents and teachers couldn't. In fact no one really knows the secret sauce because publishers have been seeking a new Potter since the series came out and haven't found one. What interests Children in reading is a bit of a mystery compounded by the multitude of distractions that Children at 10-15 start to observe and become enamoured with. At this age they are starting to make their own media decisions - they have pocket money and spend it themselves rather than have it spent for them - they become mobile and their horizons open significantly and placing books in this environment is a competition that apparently the publishing industry is loosing.

Think back to my own experience, I did not read too many 'children's' books. I was introduced to reading (outside the classroom) by accident when at a birthday party they ran out of presents and one of the parents found me a book as a consolation (I am still coping with this but I think I get better every day). It took me a year to read this book but from that point I was hooked and read another five or six books by the same author (Enid Blyton) but then migrated to Fleming, McLean, Smith somewhere around age 12-13. This experience probably doesn't happen now, but perhaps one approach to interesting children in reading beyond Potter is to recognize they need to 'graduate' to adult 'adventure' books like the ones I read. (Of course, I'm a boy and this experience could be entire different for girls so excuse me.).

Regardless, to my earlier retail point. Given this research, it seems even more moronic to encourage profitless retailing when your target audience is unlikely to step into the store or by a non-related title at full price ever again.

Dolores O'Riordan

My ears are still ringing - it was so loud - but at the Fillmore Irving Place last night she opened with Zombie and went from strength to strength. Hard to believe the sound she can get out of that small body and she didn't do badly for a 35 year old mother of three. She seemed to enjoy herself and she also gave the audience a lot of opportunity to participate. If those of you in DC can see her tonight do it. She is in Phily Friday and then out west.

Here is an intrepid fan's youtube video.

Do we have an e-book winner: Exact Editions thinks so

Exact Editions stepped up the pressure on Steve Jobs by suggesting that the "iphone is the best ebook ever" not just the best iPod ever. I spied someone waving their hand over one of these things this morning as though it was some kind of weegee board. Their absorption was complete and I suspect (and effectively agree) that e-books will be one of the collateral winners in the i-Phone launch.

Adam raises an interesting idea about what the interface for books (catalog front end) will look like on the I-Phone but I don't like any of his suggestions as to who will develop one. On the other hand it does have one thinking....

Lego is a Publisher

I had been thinking about the above entry for a number of weeks and over lunch this afternoon someone mentioned that Lego sees themselves as a publisher. The comment had to do with the ability of a consumer to 'build their own robot' with lego blocks. A consumer draws the picture of the robot they want to build and sends it to Lego. Lego create a plan drawing and send it and all the bricks needed to build the robot. Lego then puts the 'new' robot into its online store for anyone to buy. Legos' philosophy is that they 'publish' the ideas of their consumers.

Kinda neat and certainly beats the Legos I used to play with.

In thinking of my blog post, I thought that Lego could be an example of companies using publishing to extend their relationship with consumers. As I researched it, the relationship proved less direct than I wanted but in the process of looking into it I did find this example on Blurb.com.

The creativity of some people is often quite amazing.

The State of the Library Network

For those interested in learning about the challenges facing libraries from the emerging 'network' perspective this post from OCLC's Lorcan Dempsey is well worth reading.

Here is his concluding comments:

We are used to thinking about better integration of library services. But that is a means, not an end. The end is the enhancement of research, learning and personal development. I discussed above how we want resources to be represented in various discovery environments. Increasingly, we want to represent resources in a variety of other workflows. These might be the personal digital environments that we are creating around RSS aggregators, toolbars and so on. Or the prefabricated institutional environments such as the course management system or the campus portal. Or emerging service composition environments like Facebook or iGoogle. As well as in network level discovery environments like Google or Amazon that are so much a part of people's behaviors

Incisive Publishing to Buy American Lawyer Magazine

Business information group Incisive Media has agreed terms to acquire American Lawyer Magazine from a private equity company Wasserstein & Co. This represents the fourth and largest acquisition by Incisive since the company was taken private by Apax Partners last year. The deal is said to triple the revenues of Incisive once completed and the deal also creates a legitimate competitor to some of the offerings of the much larger West and Martindale(Reed) publishing companies.

ALM is the publisher of magazines and newspapers and also manages trade shows directed at the legal profession. Primary among the magazines are The American Lawyer and The Corporate Council. Reuters is reporting the price was around $630mm

Telegraph
Reuters

Murdoch Gets Dow Jones

All media is now reporting the inevitable disclosure that NewsCorp has agreed terms with Dow Jones to acquire the company. Long live the Wall Street Journal.

Guardian
Telegraph

Media Deal Update From Jordan Edmiston

The JEGI group released their media and information industry market review this week. If you pay any attention to this market at all you shouldn't be surprised to hear the M&A market set new record highs with 399 transactions totaling $76 billion in deal value for the first half of 2007. This transaction value represented a 25% increase over the same period in 2006.

While there were many headline grabbing deals, JEGI notes that many more interesting deals occurred below the radar,

Major diversified media companies continue to reshape core models through acquisitions, and well-funded investors pursue new sources of growth. JEGI assisted with several such transactions in the second quarter, including arranging a $50 million investment for Gorilla Nation Media, the largest online advertising rep sales firm, from Great Hill Partners; the sale of Healia, an innovative heath search engine, to Meredith Corp; and the sale of TechnologyGuide.com, a provider of internet content sites for mobile technology products, to TechTarget.

The upcoming half year is expected to be as hot according to Tolman Geffs, a Managing Director with JEGI,

“There is a lot more consolidation ahead. There isn’t such a thing as old media anymore. There’s only diversified media. Every major media company is working hard to reshape their distribution model to reach new audiences, and that’s going to take years to pan out. Plus, you have an ocean of ad dollars moving from non-digital to digital.”

Increasing valuations have surprised many in the industry; however, with the continued availability of attractive financing and some large media companies radically changing their strategies and/or business models the continued volatility in the media market is expected to continue.

July Fourth:

It may be a little quiet here at PND for the rest of the week.

New Look Borders

The newish concept store in the Garden State Plaza in Paramus New Jersey seems more open and welcoming to me. They seem to have warmed up the colors especially the older beige color they had which had too much green in it and always made me feel ill. Under no pretence is this a revolutionary redesign and indeed Mrs PND, who is an interior designer, couldn't really tell the difference between old and new. When I pointed out some changes she did warm to the spirit of the excercise and agree the changes are better.

When Dutch retailer BGN looked to redesign their stores the consulted all manner of retail experts and research and not only revamped the physical look of the stores but incorporated technology behind the scenes to revolutionise the retail experience. That is the opportunity that Borders has but it remains to be seen whether they will reach a little higher than the ordinary.

Aborted Print on Demand

On Assignment:

I was curious. While I had attended BookExpo this year I had not taken the opportunity to examine the Expresso Print on Demand machine and when I heard that one was to be installed at New York Public library I thought I had to get a look at it. There is some debate about what the impact of this machine will be to everyday readers and some of that debate focuses on the final delivery; how useful will this be regarded if you are third in line and the process takes ten minutes. Are you going to wait? There is definitely something to that; however, the story of the Expresso is more about distribution and the opportunity to place more books where readers want to purchase them.

Some readers will remember the Sprout machine which Borders thought to place in their [stores and] distribution centers. They believed that via that machine that they could materially add to the inventory available to customers through their stores. Logistical and technical problems ended this experiment almost before it got started but it was surprising that it took so long for a new effort to come along. Sprout did sign up a number of independent stores to use their machine. Here are my notes from BookExpo 1999:

At the BookExpo show, a company named On Demand Machine Corp displayed a book printing system that can print and bind a standard trade paper back in a machine which measures eight feet by four feet. This machine is designed to fit in a bookstore and can both store electronic titles in its memory and call up additional titles from the company head office via satellite. Customers can order the books, confirm the title is the one they want and purchase using a credit card. The transaction takes a little more than five minutes. The first full implementation is scheduled to take place in June at The Tattered Cover in Denver. My guess is you will see similar machines at Kinkos, Airports and other public places in the not too distant future.

As Charkin says this current machine is too big and bulky, but when it gets smaller and less so there will be many more opportunities to leverage the benefits of this machine. Regrettably, my experience was problematic; I visited the NYPL on Saturday only to find the machine unattended and therefore out of reach. Forget anyone in line ahead of me - the place was deserted - and the NYPL desk person was next to useless. There was a printed card with information about the machine and its' smaller cousin and a log book for visitors to sign. I left my mark.

Many years ago while at Berlitz, I hit on the idea of selling our small format travel guides and phrase books out of vending machines. We struggled to get store distribution and I thought this would be a perfect way to place a 'store front' in non-traditional places where travel related traffic could be high but the retail options limited. Moreover, the machines could be moved around from place to place with less difficulty than setting up a traditional store or arranging store accounts and distribution. The genesis of this idea was Kodak's film vending machines. My point is that the Expresso needs to be this functional and 'ubiquitous' if it is to become an additional distribution option. In the meantime I guess I will give the Expresso another chance to impress me sometime in the next few weeks.

(Coda: the vending machine idea meandered: One of my colleagues at Berlitz suggested if she was going to put books in a vending machine she would put in Danielle Steele not a travel guide. This comment was doubly bad since I didn't really care for her - the colleague not Danielle. I did get some vending machine operators interested in the idea but then I left and went to PriceWaterhouse. And so ended the vending machine idea).

DADs Like Music

On the heels of last weeks post on Digital Assets Distributors in the book world, the NYT has an article this morning about a music world application,

TuneCore is a digital distributor that gets music into online stores, just as traditional distributors stock shelves at regular retailers. But Mr. Price (who also co-owns an independent label) does not take a percentage of sales, as most distributors do, nor does he provide the same marketing and promotional services as those companies. Rather, he charges a flat fee: 99 cents a song as an uploading and processing fee, 99 cents for each store where the act wants to place the album, and $19.98 an album each year for storage.