Riverdeep Rumor and Reed Elsevier "Buy"

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

Borders CEO Jones Buys 50,000 shares

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

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

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

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

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

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

Penguin Lives in Whyville

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

Here is what Mediapost said about Penguin's activity:

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

Foreword Magazine

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

Media Deals Keep Getting Better

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

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

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

You can read the entire release here.

EBAY Takes Charge

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

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

Penguin Blog a Classic

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

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

Penguin

Harpercollins Goes to The Movies

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

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

AP

FT is Free

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

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

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

Who do these 'Literary' Competitions help?

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

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

NYTimes
SeattlePI

Five Questions with Harlequin (I ♥ Presents)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We just launched 100% frontlist in eBooks

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

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

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

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

BBC Worldwide Buys Lonely Planet

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

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

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

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

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

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

Publishing Trends Trends

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

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

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

Read the rest here.

$106MM Charge For Borders and A New Board Member

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

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

Reuters

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

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

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

Charkin Goes to Bloomsbury: But What About My Link?

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

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

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

Harvest Moon Over Manhattan

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

Update on Winnie the Pooh and Micky Mouse

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


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

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

Harlequin Make All Titles Available For Download

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

From the press release:

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

Eharlequin.com

Audible Launches Crime Serial in Audio Only

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

From the press release:

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

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

California Moves On Textbook Prices

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

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

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