Monday, October 29, 2007
"Hey Nielsen" What About Books?
Hey Nielsen works by ranking positive or negative comments based on the volume of submissions related to specific content. A “Hey Nielsen” score is attributed accordingly. Essentially, this social website becomes a panel: Perhaps not as organized or managed as a traditional Nielsen panel but by definition more broad based. Nielsen will be able to capture the immediate feedback generated by new shows, music, movies and other media – even celebrities. This could be a fundamental step forward over the old model of set top boxes and exit surveys.
Crucially for the book industry we don’t have such a facility and it is ironic that Nielsen having such a research presence in the book industry has not placed books into to the Hey Nielsen network. We are generally familiar with the BookScan POS service but it has been left largely to subscribers of this service (both in the UK and US) to derive their own insight into what the raw data suggests about sales trends, tastes and mores. I read about Hey Nielsen before I went to Frankfurt and it was at the supply chain meeting that Nielsen presented more of what we would like to see of their analysis capability.
In a presentation entitled Towards a Better Understanding of a Consumer Jonathan Nowell and Julie Meynick discussed the existing publishing market and environment. The suggested for example that contrary to conventional belief the publishing market in the UK is reasonably healthy with unit sales up 5.4% over last year and up 43% since 2001. In comparison with other media – particularly TV and newspapers – book readership has more than held its own. They followed this over view with some statistics on where books were selling and what genres were moving. There would be little surprise that published material such as hotel and travel guides, dictionaries and astrology are not competing well with online alternatives and are seeing decreased sales.
The last segment of the presentation concerned a review of the panel HarperCollins constructed to better understand their readers. (It is not clear how much direct involvement Nielsen had in this research). Researchers asked over 1000 people to rank how they used different media for different tasks and also describing their visceral reactions to what reading and books meant to them. Nielsen sales data was used to build demographic profiles of readers which in turn has been used by Harpercollins to develop genre profiles of the types of book purchasers that were attracted to specific genres. In the presentation, Nielsen showed the seven defined profiles within Cooking as an example. Each of these profiles has deeper demographic information associated with it to describe the buyers in this segment.
Nielsen showed in this presentation how psychographic data from panel information and sales information from point of sale data could be merged to create a more detailed set of information about existing and potential consumers. This information in turn creates the framework for effective marketing and promotion campaigns that should drive sales.
I saw Nowell later the next day and told him the presentation was interesting and why they couldn’t do something like this in the US. After a pause, he told me to wait and see. In the short term, why can’t they use Hey Nielsen?
Friday, October 26, 2007
Update on Harpercollins' Authonomy.com
Blog post
Thursday, October 25, 2007
Go for the Dew(ey)
This audio article appeared on BBC Radio 4. Link. It is about 20mins and if you are a Dewey know-it-all you are not going to get much out of this.
John Burdett: The Bangkok Underworld
Video LinkMr. Burdett delivers this grab bag through his narrator, Sonchai Jitpleecheep, a cop whose mother was a prostitute and whose father was an American soldier during the Vietnam War. Sonchai is a cultural interpreter par excellence, a cross between Descartes and a Thai palm reader who has flashbacks of travels to Europe with his mother and her various client-lovers. “I still feel very Thai, despite my straw-colored hair and sharp nose,” Sonchai says in “Bangkok 8.”
The narrator’s frequent reflections on Buddhism complete the cultural mélange. Mr. Burdett himself meditates one or two hours a day. It’s hard to imagine how the broad and nuanced canvas Mr. Burdett paints in his books could be conveyed on the big screen. But Millennium Films, which recently produced “John Rambo,” the fourth movie in the “Rambo” series, in Thailand, has optioned “Bangkok 8” and is serious about making the film, Mr. Burdett said.
Wednesday, October 24, 2007
German Bookselling
The fixed-price system is not unique to Germany. France had it, gave it up and reinstituted it after finding that discounting hurt small booksellers. But in the German-speaking book world, the system has long been a source of special pride until Switzerland jumped ship this spring. Despite vigorous lobbying from German and Swiss publishers and independent booksellers, the Swiss government sustained a ruling by the Swiss Competition Commission to overturn the fixed-price law and allow discounting there.Here is the rest of the article.
Amazon Reports
- Worldwide revenue grew 41% to $3.26 billion, or 38% excluding the $75 million favorable impact from foreign exchange.
- Q3 2007 revenue benefited by approximately 290 basis points of year-over-year growth from Harry Potter VII sales, plus attachments.
- Media revenue increased to $2.09 billion, up 36%, or 32% excluding FX
In the North America segment, revenue grew 42% to $1.79 billion. This is the highest growth rate in seven years. - US segment Media revenue grew 38% to $1.08 billion.
- GAAP net income was $80 million or $0.19 per diluted share, compared with $19 million and $0.05 per diluted share
- The Company sold 2.5 million copies of Harry Potter and the Deathly Hallows worldwide, making it Amazon's largest new product release.
- The Company launched a public beta of Amazon MP3, a digital music store with Earth's biggest selection of a la carte DRM-free MP3 music downloads. Amazon MP3 has over two million songs from more than 180,000 artists represented by over 20,000 major and independent labels.
I found the reports on the growth of their services business to be most profound. The company annouced a development fund for companies or individuals that could build commercial applications using the Amazon web services. Amazon will fund expansion and further development of the best of these applications. Without staring a gift horse, etc. the only limitation is that they application has to work with Amazon services. On the back of this they appear to have really spured the growth of people and companies tinkering with webservices. (I might even have a go). A lot of this growth may be people checking in to look around but regardless the growth in registrations in shocking.
- Over 290,000 developers have registered to use Amazon Web Services (AWS), up 25,000 from the prior quarter.
- AWS also launched a limited beta version of the Amazon Flexible Payments Service (FPS). Amazon FPS is the first payments service designed from the ground up specifically for developers, and provides unprecedented flexibility in the movement of money through a set of web services APIs.
- AWS recently introduced several new compute instance types for the Amazon Elastic Compute Cloud, which provide up to eight times more memory, CPU, and storage, enabling developers to support an even broader set of applications. Amazon Simple Storage Service (S3) continues to be rapidly adopted by developers, and objects in storage have doubled to more than ten billion during the last six months. In addition, we have instituted a Service Level Agreement for Amazon S3 that guarantees operational performance levels.
- On the earnings call, Bezos had this to say about webservices:
Obviously if you're building web scale applications, in many cases you have to be able to charge people for things. The Flexible Payment Service is the first payment service specifically designed from the ground up for developers, and it has a lot of features that make it very flexible and easy to use for developers to incorporate payments into their own applications.So that set of services that we're offering to developers is growing very, very rapidly and has gotten an unusual amount of traction. We are very, very gratified to see this early uptake in the development community. It's happening at the very small scale with small software developers; one-person and two-person shops. It's also happening at the middle scale with venture capital-funded startups; and then at the large scale, with enterprise customers all the way from the small up to the big. So it's a very exciting and new product offering. These infrastructure services are things that we needed to build for ourselves in order to run the web scale application called Amazon. While we were in the process of building these things, we decided to build them in an external way so we could charge for them and turn them into a new profit center.
Looking forward to the full year the company stated:
- For Q4 we expect net sales of between $5.1 billion and $5.45 billion, or growth of between 28% and 37%. This guidance anticipates greater than 300 basis points of positive impact from foreign exchange.
Lastly in response to questions on the earnings call were the following:
- A question on Gross Margin: :In terms of gross margins, yes, Harry Potter is having an effect. It was slightly less than a contribution profit breakeven event for us. You should assume that's a lower gross margin than our average, so it is bringing it down."
- A question regarding the legal challenge to 1-Click. Bezos: "In terms of 1-Click, we have a longstanding practice of not talking about such matters outside of our public filings. You should refer to our public filings."
- A question on the Borders web store collaboration that is ending: Bezos "Re Borders: I don't really have any comments on any specific contracts."
Tuesday, October 23, 2007
Five Questions with Rosetta Solutions
netGalley is attempting to solve an intractable issue for publishers: How to ensure that your review copies get into the hands of the right reviewers, at the right time and at the lowest possible cost. In addition, tracking these reviews becomes an increasing problem as reviews publishing rapidly expands beyond traditional newspaper and trade magazines. netGalley is an innovative technology services company located in Seattle and staffed with people committed to improving the way publishing operates. For publishers, netGalley helps publicity and editorial and marketing staff reach a wider range of review publications and media and provides up-to-date status of reviews. For reviewers, netGalley helps to manage the inflow of titles and internally manage the review process. There is no cost for individual reviewers to register for the service.
I asked Michael Forney, President of Rosetta Solutions which is the corporate owner of netGalley my five questions.
- Who is Rosetta Solutions and where does netGalley fit in the organization?
Rosetta Solutions, Inc. (Rosetta) is a publishing technology company full of people who love books. All of Rosetta's products and services have been designed and built with extensive collaboration from publishers and media organizations. Our goal is to streamline and automate publishing workflows to help grow the industry. We do that by providing tools and services for both print and digital editions, including production, conversion and distribution.
Rosetta’s netGalley™ is an online service that helps publishers better connect with their book reviewer and media communities through electronic distribution and tracking of ARCs, galleys and press materials. Through netGalley, publishers can simplify existing processes with premier review and media contacts and broaden their reach to online reviewers, bloggers and specialty publications, all while significantly diminishing the cost of printed review copies and press materials. - How did the netGalley product evolve?
At netGalley, we are fascinated by how the internet continues to help connect smaller and more specialized groups of people who benefit from shared information. Books have long been sold through word-of-mouth, with traditional reviews being the most influential recommendation tool. What we wanted to accomplish with netGalley was to bring to bear the networking power and digitization of the internet on the book review process. We keep asking, “How can we make the existing process more efficient and less expensive? How can we mine the process for more information that will enable better decision-making? And last, how can we help connect the exponential number of new media outlets with new galleys at THE lowest possible cost?” We are grateful to have had the input and counsel of the some of the biggest and most successful publishers and media groups to help us shape the functionality of netGalley. Good listeners make good leaders. - You describe yourselves as a services company in this context what are the solutions that netGalley can provide? Is netGalley a discrete product or tool or do you see it as part of a platform or suite of products?
When we first began with netGalley we saw the immediate benefits of better connecting review organizations with publishers to streamline the back-and-forth communication that characterizes this process. What we then began to see by talking to publishers is how netGalley can equally be applied to the larger publicity process by providing media with a central location to access a broad range of ancillary material about a title. We began to see how netGalley can benefit a range of constituents, directly (in the publishing house or media organizations) or indirectly (for example providing better information and services to authors). So, absolutely, we see netGalley as a platform providing a continuum of services. - You are currently working with a number of publishers on the netGalley launch. What have been some of the issues you have faced as you have designed and built this product?
Probably the biggest challenge for us has been straddling the current reliance on printed materials with the gradual evolution toward digital media. We recognize that publishers and media will continue to rely primarily on printed galleys for some time. At the same time we can be evangelists for digital content, particularly by making it easy and secure to distribute within a given professional community. To be clear, netGalley does not require the distribution of digital galleys and facilitates the distribution of physical galleys. Yet many publishers have indicated that they can use digital galleys to supplement their physical galleys, especially to the online media and blogger communities.
Have you faced particular issues in convincing publishers of the ROI involved in implementing at productivity tool like netGalley?
The publishers and media organizations we have talked with all agree that there is a great deal of opaqueness in the current communication media and review processes. There is equally a sense that it is difficult to understand the true costs of reviews or media coverage. When you pair that difficulty with the explosiveness of new sites covering and reviewing books…it seems reasonable to want to automate and capture more information in this area.
The distribution of marketing materials and the breadth of potential reviewers are growing rapidly. None too recently, a publisher had a fairly static list of people they needed to send ARC’s to have you heard from publishers that this is becoming an unmanageable task unless fundamental changes are made?
We haven’t met a publisher yet who has noted the diminishing importance of The New York Times in selling books. We haven’t met one who says that their list of daily tasks is shrinking. The traditional media outlets will continue to have enormous impact on the books purchased by the reading public. The publicists’ day will get fuller and fuller.
I think the challenge for publishers is partially in verifying the influence of potential new media sources. We see a lot of heads nod when we talk about automating and consolidating communications online, about bringing together potential reviewers/media who might find you as much as you find them, about cutting down the number of manual tasks particularly around formats and files.
What kinds of improvements would you anticipate in a typical installation of the netGalley product?
First I would ask, improvements for whom? Review organizations for example are going to see enormous benefits in terms of improving their internal workflow and minimizing redistribution costs to off site reviewers. Media organizations will see improvements in time efficiencies and task management. Publishers can anticipate lower direct costs of producing and distributing physical galleys, replacement of manual processes, and a broadening of the publicity universe at lower cost. - What is next for netGalley. Do you have a sense what your next development phase will be?
On the netGalley side, we have a development plan that extends through the next two years and includes new functionality in the existing application as well as services to new segments such as the library and educator markets. Our research indicates that many of the benefits of netGalley to review and media communities can be transferred to other book communities.
From the Rosetta perspective, we have a number of new products and services in development all surrounding the automation of publishing workflows and the consolidation of information derived from these processes. Watch this space for more!
Monday, October 22, 2007
Scanned! Libraries See the Folly in Proprietary Programs
This morning the NYTimes examines the developing resistance to commercial digitization programs such as Google and Microsoft and uses as an example the decision by a consortium of Massachusetts libraries not to go commercial.
But the resistance from some libraries, like the Boston Public Library and the Smithsonian Institution, suggests that many in the academic and nonprofit world are intent on pursuing a vision of the Web as a global repository of knowledge that is free of business interests or restrictions. Even though Google’s program could make millions of books available to hundreds of millions of Internet users for the first time, some libraries and researchers worry that if any one company comes to dominate the digital conversion of these works, it could exploit that dominance for commercial gain.But Google continues to add libraries to their digitization program with regularity and why this continues is not really discussed here. Within the library community the disquiet regarding the Google program has been growing all year and the discussion as been as much about the restrictions as it has about the quality of the scans themselves. Less has been said about public trust and this aspect is not directly addressed in the Times article either.
As repositories of our collective knowledge and most often as beneficiaries of our tax revenues or public donations, libraries have an obligation to ensure that the general public has ready access to the content collected on our behalf. Perhaps this is a controversial point and perhaps this thought it not directly applicable in an academic context (unless it is a public institution) but the President of the Boston Public Library obliquely references this point when he says in the article:
"We understand the commercial value of what Google is doing, but we want to be able to distribute materials in a way where everyone benefits from it,” said Bernard A. Margolis, president of the Boston Public Library, which has in its collection roughly 3,700 volumes from the personal library of John Adams.So what of the libraries in the Google program? Some are having second thoughts, some are entirely happy and some have made it work to their advantage. Generally, speaking it appears that everyone believes that all library content will eventually be freely accessible. If that means that works will have to be scanned again for those works that have restrictions placed on them by the original scanner then so be it. Since this second effort is likely to take some time, this content may be available in digitized form at a network level in advance as more and more libraries take advantage of 'open' programs like OCA.
I was intrigued by the last sentence of the article:
On Wednesday the Internet Archive announced, together with the Boston Public Library and the library of the Marine Biological Laboratory and Woods Hole Oceanographic Institution, that it would start scanning out-of-print but in-copyright works to be distributed through a digital inter library loan system."digital interlibrary loan system" sounds very interesting.
Pearson Ups Full Year Guidance
Marjorie Scardino, chief executive, said: "We still have a lot of trading ahead of us, but every part of the company is doing well. We're benefiting from rapid take-up of our learning technologies; sustained increases in our audience and advertising at the FT; and bestselling publishing combined with operating efficiency at Penguin. This increases our confidence that 2007 will be another year of record profits for Pearson."
For the full year, the company is firing on all cylinders and is expected to achieve record performance in revenue, operating profit, cash flow and return on equity. The company is generally conservative in forecasting full year results but the confirm that all operating units are performing at or above their previous full year guidance.
Highlights for the first nine months of 2007:
Pearson Education underlying sales up 7% with good growth in all parts:
- Our School business: Sales up 7% from sustained investment in content and technology and breadth in publishing, testing and services. Full-year sales growth around the top end of the 4-6% range and further margin improvement is expected even after reorganisation costs.
- Our Higher Education business performed strongly through the start of the academic year. Sales are up 5%, with rapid growth in subjects where we offer our online teaching and assessment programmes (established services such as MyMathLab, MyEconLab and Mastering Physics as well as new programmes in Spanish, nursing and information technology).
- More than 1.3 million US College students registered for our online learning programmes in the August and September back-to-school period, a 44% increase on the same period last year.
- We now expect our worldwide Higher Education business to achieve full year sales growth around the top end of the 3-5% range with stable margins.
- Our Professional education business continues to show strong growth. Sales are up 12% in the first nine months, and we now expect full-year sales growth of 8-10% (against our previous guidance of 5-7%) with further margin improvement.
In FT Publishing,
- Sales are up 8% overall, with increasing content revenues. Our advertising revenues are up 9% in the first nine months (up from 7% growth in the first six months of the year).
- We continue to expect FT Publishing to achieve double digit margins in 2007.
Penguin sales
- Up 2% with a strong publishing performance from both new and established authors including Alan Greenspan (The Age of Turbulence), Khaled Hosseini (A Thousand Splendid Suns), Jamie Oliver (Jamie at Home) and Elizabeth Gilbert (Eat, Pray, Love). For the full year we continue to expect Penguin to improve margins further, as our publishing investment and efficiency programmes bear fruit.
Friday, October 19, 2007
McGraw Hill Third Quarter Strong
"Double-digit growth and increased share in the elementary-high school market inNet income for the first nine months was $872.9 million. and Revenue for the first nine months grew by 11.6% to $5.2 billion. Commenting on the outlook for the balance of the year the company stated:
the most important quarter of the year for education and solid performances in Financial Services even as the structured finance market deteriorated were key to our results," said Harold McGraw III, chairman, president and chief executive officer of The McGraw-Hill Companies. "The operating margin expanded in all
three segments."
"We are still on course to produce double-digit earnings per share growth in 2007, as well as improved operating margins in the Financial Services and McGraw-Hill Education segments. For the fourth quarter, revenues and earnings will not match last year's results because of challenging conditions in the structured finance market and some softness in education."Highlights:
Education:
- Revenue for the McGraw-Hill School Education Group increased 11.2% in the third quarter to $670.8 million.
- Revenue for the McGraw-Hill Higher Education, Professional and International Group grew by 8.1% in the third quarter to $505.1 million
- Capturing 32% of the fast-growing state new adoption market was the key to this year's industry-leading performance by the McGraw-Hill School Education Group
- In professional markets, digital products, which include Access Medicine, Access Surgery, Access Emergency Medicine and Access Pharmacy, continue to attract a growing number of domestic and international subscribers. Our new digital iSpeak products, launched in April and now available in seven languages, are gaining traction
Financial Services:
- "Revenue for this segment increased 12.5% in the third quarter to $759.6 million compared to the same period last year.
- Operating profit grew by 17.3% to $346.7 million. Foreign exchange rates positively affected revenue growth by $12.6 million and had an immaterial impact on operating profit growth.
- Double-digit growth in Standard & Poor's international fixed income markets, a strong performance by corporate and government ratings, and outstanding results from financial information products and services offset growing weakness in structured finance
- "Standard & Poor's data and information products and index services recorded solid gains. Increasing assets under management in exchange-traded funds, stepped up trading volume of derivative contracts, and growth in licensing fees, all linked to Standard & Poor's indices, contributed to the improvement.
- "Strong demand for data and information products is spurring growth. Capital IQ continues to add new customers and expand services to existing clients. A primary revenue driver has been the addition of new modules to the Capital IQ platform, including portfolio management tools and detailed fixed income information.
- Revenue for this segment increased 2.1% in the third quarter to $252.4 million compared to the same period last year.
- Operating profit grew by 35.8% to $18.6 million. In the third quarter of 2006, the segment incurred a pre-tax restructuring charge of $5.8 million.
- Foreign exchange rates did not have a material effect on revenue or operating profit growth.
Powerpoint
Thursday, October 18, 2007
Identifying My Package
On the Exact Editions site a user can select, by highlighting, a piece of text they want to use from any number of the journals and magazines hosted by EE. (The tool is named The Clipper). It is a fun and useful tool but in its implementation it doesn’t restrict the user in any way (other than a limitation on the amount of content). If a similar solution were implemented in a research context (within Refworks for example) I would like to see a persistent identifier created on the spot who’s syntax could be partially defined by the user. This is a perfect implementation for a DOI (one of the few perhaps) that enables the user to select a segment of the content they want, makes it persistent, creates a record for the publisher and enables any necessary reporting to take place.
It would seem to me that formatting a programmatic standard syntax to represent paragraphs, chapters, images etc. is a backwards approach simply because we will never fully anticipate how our users will use the content. We also continue to use the printed page as a construct which is fast diminishing in the online context and further undercuts the current standards approach. Attempts to build out a standard by unilaterally assigning executable identifiers to works (books) will be a waste of time and I simply don’t see the benefit of this approach; moreover, I don’t see anyone paying for it. It is not even clear publishers would welcome this approach.
Several implementations of technology that places at the point of need an easy to use script has proven that users want and are willing to purchase or gain approval for the use of content. CCC and O’Reilly are two differing examples of this concept. In the same manner, enabling an easy to use [citation] solution that provides a user with a simple pop-up window tied to the content they are interested in is a far more flexible and appropriate solution to identifying content. Avoid proscriptions: Let the user decide.
Amazon to Loose "One-Click"?
In response to Calveley's request to re-examine the intellectual property, the US Patents and Trademarks Office (USPTO) has just handed down a decision
rejecting all but five of Amazon's 26 claims to the patent. The Patent Office agreed with Calveley's claim that processes similar to the 1-Click solution had been documented before the Amazon patent was lodged in 1997. Eight of Amazon's 26 intellectual property claims were dismissed because of a Newsweek magazine article entitled The End of Money?. It was published in 1995 - two years before the 1-Click patent was lodged. The article described a process where someone could click a button to pay for "an annotated bibliography of every article ever written about Sandra Bullock" and download the file.
Naturally, Amazon.com are not giving up so easily and can opt to appeal or take the case to the civil courts. As for now, the decision has been posted on the USPTO website but don't go adding 'one click' to your transaction module just yet.