MediaWeek (Vol 5, No 12): BBC on Education, UK Copyright Revision, Pricing Classes, Book Binding, B&N Speculation Continues + More

The BBC on Education:  Has The Internet Sparked a Revolution in Education (Video):

The internet is helping to reshape the very foundation education by both allowing individuals to learn from the comfort of their own homes as well as training them to be the entrepreneurial moguls.  The BBC's Matt Danzico investigates what place traditional academic institutions have in a world consumed by do-it-yourself education.

The UK government in a proposed review of copyright laws has music publishers up in arms about the proposed benefits from revision to copyright laws (Telegraph):

A plan to update outmoded laws and legalise “format shifting” – transferring a song from a CD to an MP3 player, for example – will deliver up to £2bn of growth alone, according to the Government projection, which was adopted from an independent review of IP laws . It is partly based on the premise that the existing rules prevent companies conducting the kind of innovation that led to the MP3 player.
Mr Mollet added that the £2.2bn that is estimated to come from the creation of a Digital Copyright Exchange – a proposal for an online “one stop shop” for digital rights clearance Mr Mollet supports – is based on the “misappropriation” of an unrelated study.
“There are areas where copyright needs to be reformed. But we see a lot in the consultation on how [the proposals] would be good for anonymous entrepreneurs but there’s little on the cost for current creatives. That’s a damaging gap," he said.
Pete Wishart MP, of the all-party Intellectual Property Group, said: “ How the Government has got away with such bonkers figures is beyond me.”
But a Business Department spokesman said: “We’re not backing away from the £7.9bn figure.”

School costs more depending on popularity - Is this the new model? (Atlantic)

Since 2008, the Golden State has shrunk funding for its sprawling, 112-school community college system by 13 percent. Its cuts to higher-ed have not been the most severe in the nation, but they have been painful. Santa Monica alone has lost $9.9 million support. And like its institutional peers, the school has been forced to cut classes in response. It now offers 15 percent fewer courses than four years ago -- not nearly enough to meet the demand from students, many of whom simply cannot get enough credits to finish their degrees on schedule, or transfer to a four-year school. A Santa Monica spokesman told me that some courses have waiting lists twice the size of the actual class. Out of frustration, students have started transferring to expensive, for-profit schools, taking out high-priced loans in order to get their degree in a reasonable amount of time.
Santa Monica has come up with a smart, yet frustrating, solution. This week, the school announced that it would begin offering more expensive versions of its most popular courses during the summer in order to accommodate students who can't take them during the school year. The classes will be offered at cost, since the college is providing them without any subsidy from the state. The price works out to $180 a credit -- not a huge sum, but still five-times what students pay now.

Making books like art objects (Telegraph).  There is still art to books and book binding.

The books are so remarkable to look at they seem as though they might already be precious antiques – both because of the unearthed gems within the pages and the external format, a replica of the clothbound pocket hardbacks Jonathan Cape used to make in the Twenties. The creamy paper is the same as that used in the quarterly, the Slightly Foxed colophon is blind blocked on the front, and the title and author gold blocked on the spine. Each edition has a specially chosen cloth binding, contrasting endpaper, head and tail band and ribbon marker. The whole thing seems so handmade – indeed, as the film we’ve made shows, much of it is handmade – you can’t imagine how Slightly Foxed doesn’t make a huge loss. There aren’t even any dustjackets with which to sell the books or explain them, nor quotes of recommendation, nor blurbs. The books are, Wood suggests, like “portable sculptures”.

This weekend saw speculation that an offer had been placed for the (Barnes & Noble) college retail business that Barnes & Noble, Inc. absorbed a few years ago.

G Asset Management, a shareholder has lodged a bid for 51% of the business which in the carve out would also take on $410mm in debt.  Reported in the NY Post the story comes from the Bloomberg wire and notes that the business would be valued at $460mm.

In a letter to the board dated Febuary 17th, Michael Glickstein President of G Asset Management revisited his (and the funds desire) to 'unlock shareholder value' by proposing a break-up of the business.  Here is the text of his letter:

February 17, 2012

Members of the Board of Directors

Barnes & Noble, Inc.

P.O. Box 111

Lyndhurst, NJ 07071

Dear Members of the Board of Directors:

We are writing to reiterate our belief that taking strategic action to spin-off the Nook business would create substantial value for shareholders. We have communicated previously with you and with Chairman Riggio on this subject (our letters of April 5, 2011 and November 16, 2011 are attached).

We believe BKS should take strategic action as soon as practicable to unlock the value of the NOOK business and BKS as a whole. As shown in the attached summary of our analysis, we believe that very substantial shareholder value could be created by moving forward and executing a spinoff of the NOOK business. Furthermore, we believe that a spinoff by way of a rights offering in which each BKS shareholder would receive rights to exchange a proportion of their BKS shares for NOOK shares could create meaningful upside for both the NOOK and the parent firm.

While we were pleased to see the Company announce on January 5 of this year that it had decided “to pursue strategic exploratory work to separate the NOOK business,” we are concerned that there is no timetable for review and that the Company has said that it may decide not to take any action. We believe that BKS both can and should act without delay to reduce the risk that changes in technology and/or a reduction in current favorable high growth tech company valuations may occur. There is no assurance the same opportunity will be present down the line.

We are encouraged by management’s ability to improve results in a challenging industry environment and its ability to adapt and find new opportunities for growth. We have great confidence in the Board’s ability to take the steps needed to unlock the value of the NOOK business. Our attached November 16 letter notes the track record in successful spin-offs of Mr. Riggio and Dr. Malone’s Liberty Media.

We look forward to the Board’s consideration of this analysis and the taking of appropriate action as soon as practicable.

The above was submitted to the SEC and the submission also includes a Powerpoint deck describing in some detail their view.  (SEC).

Among numerous points made in the deck is a suggestion that in a 'sum of the parts' analysis the company could be worth $71 per share which is in excess of 400% more than the current market cap.  Nice!

Here is the deck via slideshare (since this is a scan it is a little difficult to read);

Barnes & Noble; G Asset Management SEC Filling

View more presentations from Michael Cairns.

From the twitter:

Literary legends brought to life in publisher's archive Guardian

Some deeply retro moaning about the internet from the Publisher of Harper's magazine Providence Journal

TechRadar - Encyclopedia Britannica now online only http://bit.ly/yVb1Y3

Camel Market Kabul 1973

Camel Market Kabul 1973

Another weekly image from my archive. Click on it to make it larger.

By now you will recall that we visited Afghanistan and Pakistan sometime in the early 1970s.  I think it was 1973 but no one can really remember.  We went one morning from the hotel down into the town center where this was taken of the local camel market.  They are ungainly beasts and I recall thinking that camels have these enormous tongues.  We were offered the chance to sit on one and we did although you will have to wait to see that image!

In addition to the images I've posted on Flickr and those I've periodically posted on PND, I have now produced a Big Blurb Book: From the Archive 1960 -1980 of some of the images I really thought were special.

MediaWeek (Vol 5, No 11); Wiley Results + More

John Wiley released their annual results this week.  From their press release:

Management Commentary
"Growth in STMS and Global Education was partially offset by weakness in our Professional/Trade business.  Unfavorable comparables to the prior year as a result of the bankruptcy of Borders in December 2010 weighed heavily on our Professional/Trade results this quarter," said Stephen M. Smith, President and CEO. 

Mr. Smith continued, "After conducting a strategic review of the Professional/Trade business, we have decided to explore opportunities to divest several consumer print and digital publishing assets to focus on information and solutions for professionals and lifelong learners. To that end we recently acquired Inscape Holdings, a leading provider of workplace learning and assessment solutions.  The acquisition will combine Wiley's valuable content and global reach in leadership and training with Inscape’s online assessment-delivery platforms, talent expertise and network of 1,700 independent consultants, trainers, and coaches."

"In STMS, we are encouraged by calendar year 2012 journal renewals, which are proceeding slightly better than expected.  Book sales have been softer than we expected but most of our leading indicators are positive, including our society wins and online usage.  Global Education showed modest growth this quarter."

"While the global economic environment remains difficult, we are very optimistic about the opportunities we see in research, professional development, and education.  We are excited with our recent acquisition, which will allow us to provide content-enabled services in leadership and training, globally.  And we are focused on reducing costs and improving efficiencies across the business."

Outlook
Mr. Smith concluded, "Based on results for the first nine months and other leading indicators, we are maintaining our full year revenue guidance of low single-digit growth, excluding FX and our EPS guidance of $3.15 to $3.20, including FX and excluding the unusual tax benefits."

• Revenue growth of 1% including and excluding foreign exchange (or "FX")
• Revenue by segment, including FX:  STMS +3%, P/T -6% and Education +2%
• Adjusted EPS grew 8% to $0.91, or 6% excluding FX.  Growth was driven by top-line results, prudent expense management and lower interest expense and income taxes.
• Shared Services and Administrative Costs excluding FX, were up 3% to $91 million, driven principally by technology spending to support investments in digital products and infrastructure.   
• Outlook:  Reaffirming FY12 revenue guidance of low single-digit growth excluding FX and EPS guidance in a range from $3.15 to $3.20 including the effect of FX and excluding the unusual tax benefits.  
• Acquisition:  In February, Wiley acquired Inscape Holdings, a leading global provider of workplace learning solutions, for $85 million in cash. Inscape will be integrated into Wiley's Professional/Trade business where it will combine Wiley's extensive reservoir of valuable content and its global reach in leadership and training with Inscape's technology, distribution network, and talent expertise, including the innovative EPIC online assessment-delivery platform and an elite network of nearly 1,700 independent consultants, trainers, and coaches. Annually, Inscape generates approximately $20 million in revenue.
• Divestment:  On March 7, 2012, Wiley announced that it intends to explore opportunities to sell a number of its consumer print and digital publishing assets in its Professional/Trade business as they no longer align with the company's long-term business strategy.  Fiscal Year 2011 revenue associated with the assets to be sold was approximately $85 million with a direct contribution to profit, before shared-service expenses, of approximately $6 million.  Assets include travel (including the well-known Frommer's brand), culinary, general interest, nautical, pets, crafts, Webster's New World, and CliffsNotes.  Wiley will re-deploy resources in its Professional/Trade business to build on its global market-leading positions in business, finance, accounting, leadership, technology, architecture, psychology, education, and through the For Dummies brand. 
• Share Repurchases: Wiley repurchased 520,000 shares this quarter at a cost of $23 million.  The Company has 2.9 million authorized shares remaining in its program.
  

Writing in the Guardian, Frederick Filloux doesn't quite "defend the agency model" more like the status quo:

Pricing an item should be left to the one who produces it. The case of the book publishing industry is not as simple as, say, that of an appliance maker looking for the most potent retail channel for its hairdryers or toasters. The book sector is entering a painful transition: first, it needs to respond to consumers who want a large catalogue of inexpensive ebooks; second, there is a plateauing but still strong print market ($73bn worldwide). Managing a smooth decline for this segment is key to the industry's health, especially as the ebook market yields thinner margins. Legacy publishers are culturally ill-equipped for such a difficult transition; they now find themselves competing with the agile, cash-rich, data- and technology-driven players of the digital world.

From Twitter:

The Amazon Paradox: Coming to Terms With Publishing's Colossus,by Peter Osnos | The Atlantic  

Librarians Feel Sticker Shock as Prices for Random House Ebooks Rise 300 Percent - http://goo.gl/2vYex

Bali, Farmers and Buffalo, 1971

Another weekly image from my archive. Click on it to make it larger.


In addition to the images I've posted on Flickr and those I've periodically posted on PND, I have now produced a Big Blurb Book: From the Archive 1960 -1980 of some of the images I really thought were special.

Random House: In Dreams of My Data

It would be hard to imagine that a less equal business relationship exists than that between publishers and libraries.  Without even the semblance of discussion, negotiation or consultation Random House did what HarperCollins did last year and imposed a solution to mitigate a problem no one can even prove exists.  The problem: That loaning eBooks from a library is so easy that retail sales will be destroyed.  Curiously, Amazon and Barnes & Noble, both of whom would naturally have a problem with free books, have always been fairly mute about how libraries retain a competitive advantage over these retailing behemoths.

Random House’s solution is to triple down on the price of the book; the logic of the tripling is just as opaque as Harpercollins choosing 26 loans until their books ‘expire’.  As a cop out, Random House suggests that more data is needed and on the delivery of said data they may adjust their pricing accordingly.  Those with rose colored glasses will want to view that as a possibility that they will bring their pricing downwards; but, really?  The whole notion of use-data is both a canard and disingenuous.  For one, I’m not aware of any publisher sponsored research or collaboration (with ALA, OCLC, etc.) where the purpose was to define the library patron and their purchasing behavior.   
It’s not like the behavior hasn’t been there to study for 100 years.   In fact the data is available – certainly not in one database but in three or four; for example, circulation data from an OPAC, bibliographic information from OCLC, psychographic information from GfK Group and retail sales information from BookScam.  What’s missing is the willingness to do the hard work.

Sadly, libraries have very little negotiating leverage or power.  And it’s not like they can go to their cities or states for more money so that they can buy these more expensive eBooks.  What’s the last public sector anything that had their budget raised 300%?  So, libraries are dependent on public outrage and even there most people will shrug their shoulders and move along.  Current ALA President Molly Raphael's statement was part cajoling, part plea – and who can blame her?  There aren’t that many options:

“While I appreciate Random House’s engagement with libraries and its commitment to perpetual access,” Raphael said, “I am deeply disappointed in the severe escalation in ebook pricing reported today. Calling on our history together and our hope to satisfy mutual goals moving forward, the American Library Association strongly urges Random House to reconsider its decision. In a time of extreme financial constraint, a major price increase effectively curtails access for many libraries, and especially our communities that are hardest hit economically.

“Also, ALA appreciates the data gaps that exist, and we commit to work quickly and collaboratively to address this concern. We must have better data to inform decisions that have such wide and deep implications.

Random House did not jump on the band wagon with the other large trade houses when they all went over to the agency model but with this unilateral action they probably have every trade house cheering them on.  Random House is unlikely to ‘make it up in volume’ because most libraries are simply going to buy other publisher’s eBooks (until they go up as well), and I can say categorically – because I have no data to back this up – that they won’t see a corresponding increase in retail sales either.

Any willingness y publishers to really work with public libraries to work out a solution has been spotty at best.  The fact that the prime distribution avenue into the public library segment seems to act as much like a bumbling doofus as it does a concerned partner probably serves the publishers perfectly.  Fellow traveler Eric Hellman perfectly numbers the real issues associated with eBook distribution into public libraries but resolving these to any degree is probably beyond expectation.

MediaWeek (Vol 5, No 10): The Monkees, PayPal, Self-Publishing, Jeff Bezos + More

I was never that aware of The Monkees but the passing of Davy Jones generated a lot of reminiscing.  Mrs. PND recalls the time her Dad brought home the record - unprompted - becoming 'cool' in the process and in the last few days she has DVR'd what must be 24hrs worth of the show.  Here some thoughts from Neil McCormick at The Telegraph:

One of the most remarkable things about the Monkees is that the show, like the band itself, was sophisticated enough to be open to interpretation. Watching those endless repeats in my teens, I formed further ideas of the pop process. The myth of the Monkees is one of the great myths of pop culture: the manufactured band rebelling against svengali manipulators, briefly shining before burning up in the fires of ego. We see the same story played out again and again in the “real” pop world, from the Bay City Rollers to the Spice Girls, but with The Monkees, we can watch it happen in repeat, from the zany innocence of the TV series to the mad rush of their self-immolating movie, Head, in which the band attempted to break free of their constraints by exposing their own essential fiction, but only ended up destroying the illusion that sustained them.

All of this is really sustained, however, by genuinely fantastic music that has, remarkably, stood the test of time. The miracle of The Monkees is that this exploitative, manipulative, derivative children TV series was underpinned by brilliant pop songs, written to order by some of the great writers of the era (from Neil Diamond to Goffin and King), framed in colourful arrangements that captured the happy essence of the band’s spirit, performed with conviction and emotion. Last Train To Clarksville, I’m A Believer, Randy Scouse Git, Pleasant Valley Sunday … these are songs of such dynamic originality they put the imaginary band shoulder to shoulder with the heroes they were imitating.

PayPal the censorship enforcer?  Stranger than fiction as PayPal says it will strike off certain self-publishers (Independent):

From now on, the firm said, it will begin aggressively prohibiting erotic literature which contains scenes of bestiality, rape, incest and under-age sex. Ebook websites that sell such works will have their PayPal accounts deactivated. "It's underhanded, unfair and ludicrous, and it bodes badly for the future of free speech and expression," said Juillerat-Olvera, adding that Demon's Grace is now banned by self-publishing sites.

Mark Coker, the founder of Smashwords, one of the world's largest such sites, said the announcement has so far caused roughly 1,000 of the 100,000 novels that he stocks to be withdrawn from sale. "Regardless of whether you or I want to read these books, this is perfectly legal fiction and people have a right to publish it," he told The Independent on Sunday. "It surely isn't for some financial services company to control what is written by an author."

Mr Coker said that attempting to enforce PayPal's effective ban is likely to be impossible. "They say they won't have rape, bestiality or incest presented in a way that might titillate. But deciding what constitutes titillation is completely subjective," he said. "The Bible has incest in it, and rape. Nabokov's literature does. Should we ban the sale of those books?"

Articles about Self-publishing and the death of traditional publishing are as freckles on a haole.  Here's an interesting take from Atlantic author Alan Jacobs

But one of the illusions most common to writers -- an illusion that may make the long slow slog of writing possible, for many people -- is that an enormous audience is out there waiting for the wisdom and delight that I alone can provide, and that the Publishing System is a giant obstacle to my reaching those people. Thus the dream that digital publishing technologies will indeed "disintermediate" -- will eliminate that obstacle and connect me directly to what Bugs Bunny calls "me Public." (See "Bully for Bugs".) And we have heard just enough unexpected success stories to keep that dream alive.
Well, here's hoping. But a couple of months ago I decided to dip my toes into these waters: I wrote a longish essay called "Reverting to Type" about my own history as a reader -- a kind of personal epilogue to The Pleasures of Reading -- and decided to submit it as a Kindle Single. Amazon wasn't interested, so I decided to publish it myself using Kindle Direct Publishing. I announced its existence to the world: that is, I posted a link on my tumblelog and tweeted about it. A few people downloaded it; some pointed out typos that I had missed, but that a copy editor surely would have caught. I thought about ways to promote it better but haven't been able to come up with anything other than becoming a self-promoting jerk on Twitter. Last time I checked it had sold 98 copies.

And from the BBC, no more boring waffle (BBC):

Buy an e-book through, say, a Kindle, and one of the first things you will notice is that the length of the text itself is nowhere to be seen. Unlike a hardback, an e-book doesn’t have to have 250 pages any more than it has to cost a set amount, or sit handsomely on your shelf. There are some great losses wrapped up in these facts. As far as actually writing a book goes, though, the digital format has one significant advantage over the physical: it is much harder to get away with producing boring waffle.
...
Buy an e-book through, say, a Kindle, and one of the first things you will notice is that the length of the text itself is nowhere to be seen. Unlike a hardback, an e-book doesn’t have to have 250 pages any more than it has to cost a set amount, or sit handsomely on your shelf. There are some great losses wrapped up in these facts. As far as actually writing a book goes, though, the digital format has one significant advantage over the physical: it is much harder to get away with producing boring waffle.

From the Economist:

Taking the long view - Jeff Bezos, the founder and chief executive of Amazon, owes much of his success to his ability to look beyond the short-term view of things.

Mr Bezos’s willingness to take a long-term view also explains his fascination with space travel, and his decision to found a secretive company called Blue Origin, one of several start-ups now building spacecraft with private funding. It might seem like a risky bet, but the same was said of many of Amazon’s unusual moves in the past. Successful firms, he says, tend to be the ones that are willing to explore uncharted territories. “Me-too companies have not done that well over time,” he observes.

Eyebrows were raised, for example, when Amazon moved into the business of providing cloud-computing services to technology firms—which seemed an odd choice for an online retailer. But the company has since established itself as a leader in the field. “A big piece of the story we tell ourselves about who we are is that we are willing to invent,” Mr Bezos told shareholders at Amazon’s annual meeting last year. “And very importantly, we are willing to be misunderstood for long periods of time.”

Could they have made Jeff's eyes more freaky in that image?

From the Twitter this week:

Librarians Feel Sticker Shock as Prices for Random House Ebooks Rise 300 Percent - http://goo.gl/2vYex

College Publishing Comes of Age: Highlights of the BISG Higher Education Conference (BookBus)

Jackie Collins experiments with self-publishing The Bitch Guardian Hilarious headline. So is "Queen of bonkbuster"

Between Hong Kong and Macao 1972

Another weekly image from my archive. Click on it to make it larger.

To that long ago the Chinese 'junks' seen floating about the South China Sea would have been legitimate trading and merchant vessels.  Less so now, as most of the 'junks' seen in the waters around Hong Kong would cater to the sunset cruise crowd.  No matter since this is a pretty good image and I used it as a full page spread in the book.


In addition to the images I've posted on Flickr and those I've periodically posted on PND, I have now produced a Big Blurb Book: From the Archive 1960 -1980 of some of the images I really thought were special.

Guardian's Three Little Pigs Story - Discuss

Adobe Facilitates Massive Growth in Digital Content

As a prelude to their attendance at the Mobile World Congress, Adobe released some interesting data from over 600 publishers and 1500 tablet applications about the usage of their digital publishing platform.  From the press release:

The anonymous, aggregate data is derived from publications delivered using Adobe Digital Publishing Suite and shows shifts in reading patterns, willingness to pay for tablet applications, accelerated purchase funnel and advertising engagement. Tablets are driving new revenue for publishers as consumers pay for digital media content. Business publishers are also using tablet applications to drive awareness of their brands as well as the purchase of goods and services. Specific data points include:

• Sixty-eight percent of readers worldwide currently pay for digital magazines and newspapers built with the Adobe Digital Publishing Suite. This is made up of single issue purchases (15 percent), subscriptions (26 percent) and bundles of print and digital issues (27 percent).
• Readers are highly engaged with both editorial and advertising content. Every fifth page view in a Digital Publishing Suite magazine app is an advertisement. Interactivity, which includes Web views, videos, slide shows, audio clips, image sequences, hyperlinks and other overlays can also have a profound impact on a reader’s digital content consumption and engagement, with readers interacting with nearly half (48 percent) of all interactive features in Digital Publishing Suite apps. Out of the variety of interactive overlays included in applications, Web views and videos are the two types most frequently accessed by readers.
• Over half (56 percent) of readers spend between 25 minutes to 2.5 hours a month reading their digital titles. Time spent consuming content has increased 70 percent over the last six months, which can be attributed to more sophisticated and engaging content as well as the continued adoption of tablets. Consumers tend to open a Digital Publishing Suite application up to five times per month on average, and nine percent of readers spend more than five hours per month reading digital titles, which suggests that they are frequently engaging on a tablet with the brands they love.

“We saw 16 million digital publications downloaded over the last 12 months, with no signs of fatigue,” said Zeke Koch, senior director of product management, Digital Publishing, Adobe. “As digital issues grow significantly, Adobe will continue to fuel this evolution by providing innovative features that allow publishers and corporations worldwide to drive digital revenue, accelerated readership and purchase of content.”
Publishers like Rodale Inc. and Active Interest Media and companies like Sotheby’s have recently published magazine, merchandising and customer loyalty applications. Similarly, enterprises now have the opportunity to add digital content into their mobile marketing mix by creating a broad range of digital publications using Digital Publishing Suite, including sales and marketing collateral, corporate communications, as well as brand loyalty, customer acquisition and customer retention materials.

MediaWeek (Vol 5, No9): Pearson Keeps Growing, Economist on Enhanced Books + More

Pearson announced their preliminary 2011 results and unless you were living under a rock you shouldn't be surprised that they continue to be the poster publisher for revenue growth, operating efficiency, investment and dividend growth.  I've been following Pearson for almost 10 yrs and it is uncanny how they underplay their performance all year and deliver consistent performance year after year.  Here there is nothing of the divestiture scuttle but that surrounds McGraw Hill and Reed Elsevier and the company seems to have put behind them the issues around the FT group. Didn't Murdoch say he was going to bury the FT?

Here is the summary of their results from their press release:

Pearson 2011 Preliminary results (unaudited)

Financial performance

• Sales up 6% at CER in spite of tough trading conditions in many markets.
• Adjusted operating profit up 12% to £942m with growth in all businesses.
• Adjusted EPS up 12% to 86.5p (headline growth).
• Cash conversion remains strong at 104%; operating cash flow of £983m (£1,057m in 2010, which benefited from an unusually high working capital contribution).
• Return on invested capital of 9.1%, above Pearson’s cost of capital; ROIC lower than in 2010 largely due to significant acquisition spend and higher cash tax.

Growth markets

• Digital revenues up 18% in headline terms to £2bn, now 33% of Pearson’s sales. Substantial digital growth in all parts of Pearson including:
  • Students using our digital learning programmes up 23% to 43m.
  • Penguin eBook revenues up 106%; now 12% of total Penguin revenues.
  • FT digital subscriptions up 29% to 267,000; approximately 44% of total paid circulation.
• Developing markets revenues up 24% in headline terms to $1bn ($834m in 2010), now 11% of Pearson’s sales.

Efficiency

• Operating margins reach 16.1% (up 1.0% points)
• Average working capital: sales ratio improved to 16.9% (20.1% in 2010).

Investment

• Sustained organic investment of approximately £500m in new products and technologies.
• £896m invested in acquisitions including Schoolnet and Connections Education in North America and Global Education in China.
• Strong balance sheet (net debt of £499m) and approximately £1bn of headroom available for bolt-on acquisitions.

Outlook:

In Education, we expect to achieve continued growth in 2012. In North America, we anticipate modest growth in higher education as rapid take-up of our technology and services is partially offset by lower college enrolments and challenging conditions in the market for printed textbooks. We expect our Assessment and Information business to remain resilient as it prepares for the transition to next-generation Common Core assessments. We expect good growth in digital school programmes and services but another tough year for the School textbook publishing industry, which will continue to be affected by pressure on state budgets and delays in purchasing decisions during the transition to the new Common Core standards.

We expect our International education business to show good growth. Austerity measures will continue to affect education spending in much of the developed world, but we see significant opportunity in emerging markets in China, south-east Asia, Latin America, the Middle East and Sub-Saharan Africa – which together accounted for more than 40% of our International education revenues in 2011. Across our education company, we will be integrating acquisitions made in 2011 (and expensing the costs) and making a series of organic investments in fast-growing segments including digital learning, English language teaching and institutional services. We expect our Professional education business to grow again, benefiting from the continued strength of our worldwide professional testing business. In the UK, government funding pressures and policy change relating to apprenticeships are creating a tough trading environment in professional training.

The FT Group’s profits will be lower in 2012 than in 2011, reflecting the sale of our 50% stake in FTSE International and further actions weighted towards the first half of the year to accelerate the shift from print to digital. The Financial Times and The Economist Group (in which Pearson owns a 50% stake) are predicting weak advertising markets but strong growth in digital subscription revenues. Mergermarket will benefit from its high subscription renewal rates, although the outlook for M&A activity remains uncertain.

Penguin has performed strongly in recent years in the context of rapid structural change in the consumer publishing industry. We expect it to perform in line with the overall industry this year, facing tough conditions in the physical bookstore channel but helped by its strong position in digital. eBook revenues accounted for 12% of Penguin revenues worldwide in 2011, up from 6% in 2010, and we expect this percentage to increase significantly again in 2012. 

Of course it's not all rosy since the FT journalists have voted to strike (Guardian)

The Economist on Enhanced Books:

Print purists needn’t retreat with horror to their laden shelves. Multimedia enhancement will still affect only a tiny proportion of new titles. Children’s books were first to get this bells-and-whistles treatment, but adult fiction has proven a harder sell. Few readers have been willing to pay more for extras at the back. While ordinary e-books continue to eat into print sales, a British experiment with adding author videos and other material to best-selling novels, called Enhanced Editions, was quietly abandoned last year.

Yet for certain kinds of book, such as biographies, cookbooks, literary classics and newer forms of interactive fiction, enhancement can add rich and startling new layers. Penguin’s forthcoming biography of Malcolm X, for instance, features rare archival footage and an interactive map of Harlem. The life of “Muhammad Ali” now comes with audio clips of him rapping about his prowess. Richard Dawkins’s “The Magic of Reality” (voted best app at the 2012 Digital Book World) and E.O. Wilson’s “Life on Earth”, are cunning fusions of documentary and textbook, with molecules and stories spinning at a finger’s touch.

Timeless classics have also proved to be good candidates for a bit of extra gloss. Breaking a losing streak of enhanced apps that failed to turn a profit, a multimedia edition of T.S. Eliot’s “The Waste Land” swiftly earned back its cost for Faber & Faber, says Henry Volans, the publisher's digital director. The “book” serves up Eliot’s original manuscript with footnotes and scholarly addenda, as well as video and audio recordings of the poem in performance. And this spring Faber will reach for the brightest star in the literary firmament and publish Shakespeare’s sonnets. Penguin, meanwhile, chose as its inaugural “amplified edition” the modern classic “On the Road”, featuring archival photos of Jack Kerouac’s original manuscript typed on a scroll, along with snapshots of his fellow Beats, some video interviews and maps of the cross-country journey.

From the Twitter:

Hawking Radiation: Figuring Out How Many Books Are Sold to Libraries (Kitchen)

It's a big day at BISG: Student Attitudes Toward Content Vol 2, Report 1 published today!(BISG)

Pork on a Stick

Bacon on a Stick

Another weekly image from my archive. Click on it to make it larger.

Not your typical backyard barbeque from January 1973 in the North of New Zealand where we used to go for weekends.  We lived in Auckland for about four years and this would have been right before we left for Australia.  This was taken by by grand father but I must have been standing right next to him because I have a grainy black and white Instamatic image from almost the same spot.  Both are in my Big Blurb Book: From the Archive 1960 -1980   

In addition to the images I've posted on Flickr and those I've periodically posted on PND, I have now produced a Big Blurb Book: From the Archive 1960 -1980 of some of the images I really thought were special.

I now have an iPad version of this book for sale ($4.99) on the Blurb site which you can find here: STORE

I have to say, even on the iPad the book looks pretty good.

Cengage in Big Content Deal with CalState

We will see more of these types of deals between institutions and educational publishers to provide content Campus wide. This announcement from Cengage is more unusual because it's an entire system. From the press release:

- Cengage Learning, a leading global provider of print and digital teaching, learning and research solutions, today announced an agreement with California State University (CSU), the largest university system in the country, to provide discounted eTextbooks to students as part of the Affordable Learning Solutions campaign. One of the largest digital resources contracts signed by a university system, this three-year contract will allow more than 400,000 students on 23 campuses to access Cengage Learning eTextbooks at a substantial cost savings.

Read more here: http://www.bradenton.com/2012/02/22/3894175/cengage-learning-signs-agreement.html#storylink=cpy