Hachette Vert

The Bookseller is reporting that Hachette livre UK is moving to firm sale on their back-list by the end of 2008. The company expects to consult with retailers on this implementation but Hachette is wielding the weapon of "Greenery"and thus have right on thier side. The Bookseller, calls the approach 'radical' and it is certainly unusual in the publishing world but in reality backlist sales are by nature far more stable than front list and the proposal shouldn't cause too much debate or controversy. (Expect to see other publishers follow suit).

The Bookseller went on to explain that this new proposal is only part of Hachette's Green policy,

Hachette has also commissioned the Carbon Trust to advise it on a long-term strategy to improve its energy emissions. It has already embarked on a range of initiatives, including persuading its head office landlords to re-engineer its office lighting system so that night-time lighting is restricted to areas occupied by members of staff; introducing dual fuel ‘hybrid’ cars into its company car fleet; and encouraging reduced use of cars.

Hachette are also revising their paper sourcing polices to follow accepted Green practices.

Pearson in Custom Textbook Test

Inside Higher Ed are reporting a program Pearson is launching with a community college in Arizona (Rio Salado College - heard of it?) that will enable academics to build custom textbooks including content from non-Pearson sources. According to IHE,

Professors can pick from among the books in Pearson’s library as well as outside sources in preparing their custom textbooks. For works not published by Pearson, there’s a limit of 10 percent of the contents, but the company will then handle copyright clearance. Freed said the ability to include journal articles and extra readings amounted to “a super-textbook, if you will.” A spokesman for the company, David Hakensen, said that the agreement with Rio Salado is unique for covering an entire college, but he noted that individual faculty at many colleges have used Pearson’s custom publishing services for their own classes.

Custom publishing has been part of the fabric of academic publishing for many years but this appears to be a twist on an old play. With easier rights clearance via CCC perhaps this program will expand rapidly particularly in disciplines where the content changes frequently due to world events. The Australian equivalent of CCC (CAL) was barnstorming the US a number of years ago selling the concept of an on-line rights clearance and custom publishing solution that enabled the creation of textbooks from multiple sources all with rights appropriately cleared, a index and toc created, pages reformatted and sequential page numbering. It was an interesting proposal which was tried and tested in Australia but didn't get any traction here. Interestingly, CCC didn't take the bait either.

Judy Does It

Forgive me for thinking that common sense would prevail but on the heals of admitting to NYDN that she 'wanted out of the spot light' Judith Regan has dropped a $100mm lawsuit on HarperCollins. Not your ordinary defamation/wrongful dismissal lawsuit she has gone to the thriller play book and selected 'political conspiracy' to add to the more prosaic "sex with a married police officer who happens to be the best mate of the mayor" Oh, and the mayor is now running for President. Sounds like a book contract to me! Get Patterson on the line maybe he could work up a treatment.

For most of us in NYC we know the details already but we can all expect the story to play like back-ground music in the elevator over the next 12 mths in the run up to the election. On cue, Judy will jump 'into the limelight' (like some momentous wind instrument in aforesaid elevator music) with something sensational that she thinks will help her case but will only serve to make herself look increasingly pathetic.

My guess, HarperCollins will not settle and Judy will implode on the witness stand.

Why digital galleys are not scary

I’m currently working with a product that has, among other features, the capability to send digital advance reading copies to media and reviewers—a concept that they are working diligently to under-emphasize because of the instinctive “that wouldn’t work for us” reaction they have received from media, reviewers and publishers alike.

This is unfortunate and short-sighted. Yes, of course, we aren’t at the point where digital galleys can replace the good, old-fashioned portability of the physical book---for a full read. But outright rejection of the digital underscores the many other ways reviewers and media use content.

Full-text digital galleys are searchable, for one, invaluable for fact checking of reviews and articles. And especially helpful because galleys often are sent without indexes. Publications could benefit from digital galleys when preparing roundups (Essential Cranberry Cooking for the Holidays—New Hot Recipes from 10 New Cookbooks and all). And let’s not forget that for certain types of media, reading the text isn’t essential—a colleague of mine gave me an example of a gossip columnist who might skim or search a text for a reference but whose need for speed would always usurp a full, critical read. Radio and television producers often mine upcoming books for content of interest to their audiences or host, and what better way to pass along a potential find than digitally? For large organizations with multiple levels of approval this is especially salient.

Finally, there is the green element, of some interest as evidenced by BISG’s and Green Press Initiative’s recent U.S. Book Industry Climate Impacts and Environmental Benchmarking Study. What interests me about the green element is the potential for media to use digital galleys to read first chapters, often an essential step in deciding if a book will be reviewed or covered.

Overall, publicity is about selling. Even reviewing, albeit more high-brow, is about recommending worthy reads. Why wouldn’t publishers and media want to share their content faster and more accurately? A production soldier at a major publisher told me that many authors, agents and editors lament the inaccuracy of galleys, since the text often changes between the time the galley goes into print production and is mailed. Digital means capturing a timelier version of the text, and aren’t we all happier for that?

I am not advocating a truly paperless advance publication workflow; that time has not yet come. But as an industry we could be braver about trying digital galleys as a supplement to print. I think the results would be surprising.

Do it Yourself Cookbooks

This morning The NY Times also has a short note on tastebook.com which allows cooks to create their own printed recipe book by downloading up to 100 recipes from epicurious.com.

For $34.95, a cooking enthusiast can select up to 100 recipes, which come encased in a ring-binder with a customized cover. Although TasteBook will not put the customer’s photo on the cover, it does offer a choice of images (a pie, a bowl of cherries, peas in a pod, corn on the cob) and naming rights to the cookbook (like “Emily’s Holiday Recipes”). The site also accommodates those who want to fill a volume with their own recipes or with recipes from sites other than Epicurious.

As I noted last week, SharedBook also launched a similar product with allrecipies.com (Readers Digest) and it is disappointing that the Times didn't look at their product as well.

Regretfully, while the product concept in both applications will be popular the execution in the TasteBook example is less than ideal. For example, the customer has to assemble the product themselves when it arrives in the mail which immediately removes a valuable sense of ownership and customization. Secondly the cover title which you select yourself is stuck on mailing label-like (on the spine as well) and lastly the heavy card binder is likely to come off second best the minute it is set on a wet counter. (Which of course happens all the time). The book does lie flat however which the SharedBook does not; however, I suspect SharedBook will be correcting that soon.

Borders Television

The NYT notes the adoption by Borders of in-store television which will provide book related content and advertising direct to the stores. The provider, Ripple already provides similar services to stores such as Jiffy-Lube and Jack-in-the-Box 'restaurants'. The company notes that the broadcast service is now in 60 stores and will be in 250 by the end of February.

CEO George Jones comments:

Borders customers tend to be “highly educated, more affluent” and spend an average of an hour in the store, making them catnip to many advertisers. “It’s becoming more and more difficult to reach people,” Mr. Jones said. “Newspapers are not as effective as they used to be. Television is not as easily reachable as it used to be. This becomes an attractive option.”

Flat screen video screens in retail are all the rage. Visiting a local Starbucks in the last few months, you will have noted the installation of video screens in their stores. Currently these support the integration with their music content which enables free downloads via iTunes. The video screens are not intrusive but mainly because the content is static: If they begin to offer video content as Borders are suggesting perhaps the vibe of the stores changes to one where you can hold a quiet meeting or take a leisurely break to one where you will be bombarded by advertising messages: The faster pace and the noise causing you to move out of the store faster. It could be unsettling. On the other hand the effort by Borders is an experiment in merchandising that should help the company develop new revenue streams and direct customer awareness of particular products. Jones was asked about the perception that screens could be counter to the store vibe and said,

The screens are “not designed to be intrusive,” Mr. Jones said. Rather, he said, they are “part of a master plan to create content that will do several things for us,” like directing traffic to the Borders Web site and paving the way to more cross-promotional deals with large media companies.

Stay tuned for more changes and experimentation from Borders.

Radiohead: Creepy Stats

Reuters reports that the CD version of the new Radiohead album In Rainbows will be released December 31st. Sometime between then and now they will eliminate the download site so that this option no longer remains although they are likely to use data from the site to promote the purchase of the physical disc. Options being discussed may include allowing a credit against the purchase of the CD based on what was paid for the download to a simple web coupon (10% off for ordering direct) to nothing. If nothing else, the experimentation will continue.

The band also commented to Reuters that the recent speculation regarding how many people visited the site and either did or did not pay was "wholly inaccurate." Furthermore the Band said that the reports "in no way reflect definitive market intelligence or, indeed, the true success of the project."

Stephen Fry Is An Actor

Stephen Fry is as about as likely to be writing a blog about consumerist technology as I am about Opera. Which is pretty unlikely, but one of us is going against presumed character (and it isn't an act and it isn't me).

Stephen Fry has started writing a blog for the Guardian newspaper and the posts are very entertaining. Apparently, it didn't start that way. He initially launched the blog by himself with a 6,000 word (I think) post about his love of all things digital. The Guardian came calling and by the third post he was writing for them as well under the title "Welcome to Dork Talk." How's that for the power of digital media! At times his proselytising for Apple may come across as a cry for help; but, I suspect once the excitement over the launch in Europe of the IPhone dies off he will move on to other matters. (I wonder what he would think of Tivo?)

Here is how he described his viewpoint:

Digital devices rock my world. This might be looked on by some as a tragic admission. Not ballet, opera, the natural world, Stephen? Not literature, theatre or global politics? Even sport would be less mournfully inward and dismally unsociable. Well, people can be dippy about all things digital and still read books, they can go to the opera and watch a cricket match and apply for Led Zeppelin tickets without splitting themselves asunder.

My sentiments exactly. And he is certainly not without an opinion. Here he is reviewing a new mp3 player from Philips:

But that’s of no importance compared with the cheap, clumsy and dreadful nature of the device itself. I wanted to throw it in the ocean after five minutes (I am in America right now), but instead gave it to a friend who threw it away after 10. One knows the instant one plays the bundled video content, a truly pathetic and dated home movie of some dudes skiing, that we are dealing with a dog. The blocky, pixelated images are so poor as to beggar belief (220 x 176 pixels) - and this is the footage that’s meant to show it off!

It gets worse. It has touch controls, but not touch screen. In the desire to jump on Apple’s multitouch bandwagon, Philips have come up with something worse than an old-fashioned knob. The Streamium offers fiddly controls with terrible delay, so you’re always pressing them too often and reversing their function. The sound level is poor and the phones inadequate. The whole thing’s a gift to Apple.

It should prove entertaining reading from a very unlikely source.

Penguin sued Over Dorothy Parker - Update

By way of update, Mr Silverstein has not won the lottery and according to this mornings Telegraph his suit against Penguin has been dismissed. Under the hugely creative headline Poetic Justice, the Telegraph reports that Pearson prevailed in this six year battle. I suspect that Mr. Silverstein is going to have some significant legal expenses to pay.

This is my original post from September:

Mild embarassment could ensue if Penguin were to loose a copyright suit over a compilation of poems the publisher produced in 1999. The wheels of justice appear to move slowly but the story is as follows. One Stewart Silverman took a project to Penguin which they turned down because they didn't agree to Silverman's format choice. Silverman went ahead and published it with Scribner. Three years later Penguin published its own selection of 'lost' Parker poems which Silverman believes was a verbatim version of his own work. Final deliberations are supposed to begin on October 9th in New York.

Penguin's argument hangs on the belief that they owe Silverman nothing for the material they published since all the Parker works were in the public domain. As such, the works are not covered by copyright. The Silverman camp suggests that he asserted copyright to the compilation and that this fact was clearly noted when he originally went to Penguin with the project. The judge will decide the result, but on the witness stand John Makinson, Penguin CEO did admit:

''I think it would have been more appropriate to have given some attribution to Mr Silverstein for those poems; it's just a personal opinion that I have based on my reading of the situation subsequent to my deposition in the initial case here."

Silverstein is looking for $1,00,000 in punitive damages.

Telegraph

A Future of Publishing

There is an interesting series of posts on MJ Rose's Buzz, Balls & Hype site about the (a) future of publishing. The series of three guest posts are written by Barry Eisler who is an author but despite that has some very interesting ideas about how the business will change and evolve. I suspect he will have something to say about my comments as well.

Here is a taste from Barry's first post:

I don't think the abandonment of record labels by two of pop's biggest stars is an aberration. And I don't think the implications of this development will be confined to the music biz. Look a little more closely, and you'll see a common element among media companies -- that is, record labels, movie studios, the newspaper business, and book publishers -- and a common dynamic.

My retort on post one:

With respect to the movie industry you haven't taken the example far enough. About ten years ago all movie distribution companies were gung ho about satellite distribution to movie houses. It would avoid shipping film reels, errors and delays and importantly enabled better accounting so houses could no longer cheat on showings. It failed because the houses saw nothing in it for them against the significant capital improvements they would have to make. Move ahead 10 years and we are again talking about digital distribution but the landscape is significantly different. As consumers we can all get new 50in flat screen TVs in our homes and we don't need a movie house any longer. (And there aren't enough of them any way). It is only a matter of time before first run movies are distributed direct to consumers together with consumer (behavioral) ad placement. Ergo: very flat distribution.

With respect to books/publishing, in my view we won't even remember the espresso machine in three years. Led by the iPhone, consumers will consume more and more books on these handheld platforms and 'vending' locations will be ubiquitous (including B&N etc.) E-books will not replace hardcopy books in total. They may replace trade paper in dramatic fashion over the next five years. (I will make another point on your next post about retail). The Espresso machine is impressive technology and will retain a place in libraries and academia but I see us the typical high street consumer skipping over the on-demand opportunity of printed works to simply e-content on a handheld.

And all this from someone who only buys hardcover titles and collects first editions!

Barry from post two:

B&N and Borders both publish their own books. True, the titles in question are mostly self-help, public domain, and other perennially-selling categories. But in June, Borders published Slip and Fall, a hardback novel by Nick Santora that's available nowhere else. Slip and Fall is a classic case of middleman elimination. I don't know the financial details, but I know the dynamic that drove the deal: Santora gets to keep more than the 15% of the price of each book he would have received from a traditional publisher, and Borders keeps more than the 40% it would have kept after paying a traditional publisher 60% of the retail price.

My retort:

The 'success of Slip and Fall' has more to do with consumers entering Border's with no clue what they are going to purchase (and research bares this out) than it does with a new found business model. In fact, as seller of anything I want to be in as any appropriate retail outlets as possible and while it may be seductive to have an exclusive with B&N or Walmart ultimately I believe revenues will be lower than if the product is distributed to the largest umber of outlets. Border's also sold that book by 'A-listing' its merchandising with in-store events, front of store displays, discounts, etc. In the process they not only for-go publisher paid merchandising revenues but that type of activity can only be done sparingly otherwise it creates too much noise for consumers. In other words if they extend their publishing program for first run titles to say 10/quarter (which isn't a lot) how will they find the space to merchandise them in the stores? And remember they have a much bigger financial stake in these titles - author advance, printing, can't return them, warehousing, etc. than if they bought them from the publisher.

Ultimately, you will see some major name authors experiment with direct to consumer but it will not represent a big trend.

Lastly, admittedly we haven't seen a huge amount of dynamism from mainstream publishers but I do think you treat them as too static relative to the change going on around them. I do believe publishers will react faster and in (perhaps) revolutionary ways but I can understand your skepticism

Barry in post three:

What about booksellers? Pretty interchangeable, too, I'd argue. The big box stores, if they stand for anything, are only about prices (not a coincidence that Wal-Mart's slogan is "Everyday Low Prices"). Amazon does have a brand, mostly about the customer experience -- the links to related products, the comments, the recommendations, the ease of use, the immediate gratification. Independents don't really have a collective brand (or if they do, it's not terribly relevant to their success). But they do, or at least should have a brand in their community, a reflection of their individuality, you could say, related to expertise, enthusiasm, and personal knowledge of customer tastes, that should continue to offer them certain advantages in a flat distribution world.

(He also speaks about publisher's brand which I will address next week).

To find my retort go to Barry's post.

Harpercollins and IPhone Deal

Harpercollins announced they have built an application that will enable book excerpts to be made available on the iPhone. It is the only deal of its type between a publisher and Apple for this content and the excerpts will be available on the iPhone and the iTouch using the Safari browser or Apple's new web applications site. In addition to text excerpts readers will be able to hear audio excerpts and hear interviews with the authors. Apple has said it has no plans to extend this deal to other publishers (although that sounds more like "no one else has asked" to me). The Bookseller is saying this is exclusive.

The Harpercollins UK announcement coincides with today's UK/European launch of the iPhone.

"Victoria Barnsley, chief executive officer and publisher of HarperCollins UK, said of the iPhone: "With its large screen and tactile nature, I believe it could be the breakthrough device for consuming digital product on the go and brings us closer to the ultimate e-book dream."

According to the company, 15 books are being made immediately available for the UK launch of the iPhone including Lewis Hamilton: My Story (he drives cars) and Playing with Fire by Gordon Ramsey (he used to play football and now cooks for a living).

Each excerpt, which we represent about 5% of the total content will be free with the remaining 95% available for purchase and download.

Harpercollins Reports First Quarter

Harpercollins' 10 year long run of impressive results took another hit when they reported first quarter results which were materially short of the pace set in the corresponding quarter in 2006. From the press release:

"Book publisher HarperCollins owned by News Corp., reported first quarter operating income of $36 million and revenue of $330 million. This compares to operating income of $55 million and revenue of $368 million in the same quarter last year. The year-ago quarterly results benefited by the strong sales of Lemony Snicket's A Series of Unfortunate Events. Current quarter results were highlighted by strong sales of The Dangerous Book for Boys by Conn and Hal Iggulden, Motor Mouth by Janet Evanovich, Ana's Story by Jenna Bush and Deceptively Delicious by Jessica Seinfeld."

From The Bookseller:

"But HCUK c.e.o. and publisher Victoria Barnsley said that despite this, HCUK's volume growth "outstripped the rest of the market", while value grew by 5%. "If you strip out the effects of the new Harry Potter book in July, we held our market share steady at 8.9%, level with the same period last year," she said."

Speaking to Publisher's Lunch, Jane Friedman (CEO) said "I would say we've probably not had a quarter this bad during my tenure." On the flip side she went on to note that the second quarter is off to a good start and one suspects that this quarterly performance is nothing to be concerned about. Indeed on the NewsCorp conference call publishing wasn't even mentioned.

Wolters Kluwer Reports

Wolters Kluwer reported third quarter results inline with expectations and also announced the completion of their initial share buy back scheme and the launch of a second buy back. The company says it expects to buy back €175mm in shares over the next several months. Highlights from the press release are as follows:

Third-quarter 2007:

• Organic revenue growth of 4% (2006: 4%)
• Ordinary EBITA of €153 million, grew 18% and 24% in constant currencies (2006: €130 million)
• Ordinary EBITA margin improved to 19% (2006: 16%)
• Revenues of €799 million, grew 2% and 6% in constant currencies (2006: €786 million)
• Structural cost savings increased to €41 million (2006: €33 million)

Nine months ending September 30, 2007:

• Organic revenue growth of 3%, on track to meet the full-year guidance (2006: 2%)
• Ordinary EBITA of €457 million, grew 20% and 26% in constant currencies (2006: €381 million)
• Ordinary EBITA margin improved to 18% (2006: 16%)
• Revenues of €2,476 million, grew 2% and 6% in constant currencies (2006: €2,431 million)
• Structural cost savings increased to €117 million (2006: €91 million)
• Free cash flow of €194 million (2006: €232 million including €53 million one-time tax refund)
• Divestment of Education generated a sales price of €774 million, a book profit of €595 million and net proceeds of €665 million

Nancy McKinstry, CEO and Chairman of the Executive Board, commented on the company’s third-quarter performance:

“Wolters Kluwer continued to successfully execute our strategy of accelerating profitable growth during the third quarter of 2007. Our good organic growth was fueled by new products and strong growth in online and software solutions. Importantly, all divisions contributed to the significant increase in operating margins realized through revenue growth, operational improvements, and prior restructuring programs. We have a strong, balanced portfolio which enables us to continue our clear growth momentum. Our performance over the first nine months of 2007 has put us well on track to meet our full-year guidance.”

The Eagles Top Billboard Charts

In an update to my post yesterday Walmart has allowed Billboard to record the sales of the new Eagles Album and this has resulted in a number one ranking for the band. Billboard

This represents a policy change in the heady world of charting best sellers since previously Billboard did not record sales when titles were sold predominately through one vendor.

The Eagles' first new studio album in 28 years, "Long Road Out of Eden," takes a short route to No. 1 on The Billboard 200 after Billboard revised a significant chart policy today (Nov. 7).In consultation with Nielsen SoundScan, Billboard will now allow exclusive album titles that are only available through one retailer to appear on The Billboard 200 and other charts, effective with this week's charts. Prior to this, proprietary titles were not eligible to appear on most Billboard charts.

According to the numbers, Long Road Out of Eden sold 711,000 units ranking it second for the year in first week sales.

Radiohead: 2 out of 5 Ain't Bad

Comscore has released a study that suggests that two out of every five downloaders of Radiohead's In Rainbows release were willing to pay something. From the press release:

During the first 29 days of October, 1.2 million people worldwide visited the “In Rainbows” site, with a significant percentage of visitors ultimately downloading the album. The study showed that 38 percent of global downloaders of the album willingly paid to do so, with the remaining 62 percent choosing to pay nothing. The percent downloading for free in the U.S. (60 percent) is only marginally lower than in the rest of the world (64 percent)

Comscore has a 'panel' of 2mm users that allow Comscore to track their internet use. The full press release makes for interesting reading but we don't know how many actually downloaded the album other than a 'significant' percentage. In my back of the envelop calculation, if only 10% of downloaders paid the average $6 then Radiohead nets about $275K. If 25% of downloaders paid the amount would be approximately $650K. If Radiohead receive approximately $1.50 per CD (avg retail $12.95) this would mean they would need to sell 450,000 CDs (in the month) to generate $650K in royalty. My numbers may be fuzzy but if they did sell to 25% of downloaders I don't think those numbers may not be bad at all.

On note that is confusing to me is that the comscore numbers are all in dollars and with the weak US dollar it is surprising that the average paid by non-US residents is lower than the US price. In the UK the typical CD sells for £10-12 (which is $20 - 24). Since their average price paid is lower than the US price that means the typical European has a much lower view of the value of music than the absolute numbers might suggest.

(Tip of the hat to Lorraine Shanley at Market Partners).

Building the Imperfect Beast

“We’re looking for a new paradigm” is how Don Henley put it when discussing The Eagles’ choice of WalMart as an exclusive distributor of the band’s first studio album in 27 years. The comment is laughably patronizing - as though we just aren’t smart enough to see his new commercial nirvana. They own the biggest-selling album of all time; just what “new paradigm” could they be looking for? Speaking of that album (and the more recent Greatest Hits 2), you could bet a large fortune that Eagles fans everywhere would harken for the old stuff anyway.

In July, Prince placed his new album with The Mail on Sunday (UK) for free. He then sold out at least five huge shows later that summer in London. That’s a new paradigm. Radiohead’s new album is available for download at whatever price you think it is worth and Neil Young’s Chrome Dreams II was sent to me free as part of the ticket package for his upcoming shows in New York. New paradigm indeed.

Contrast the minimal attention that this release seems to have garnered with those of other current releases. In the UK, it is being reported that The Eagles will top the Billboard charts and edge out Britney. Now, you might be thinking, is that any competition? But, in fact, her album has been well received over there and broadly here as well. In the US, The Eagles album may not debut in the top three; moreover, because distribution is not widely seen, it may end up dropping like a stone soon after. Since Walmart doesn’t report sales at an item level, you won’t see any of the usual excitement that ensues when a new album moves up the charts. Ergo, ignominious mediocrity. If you contrast the lack of hype around this album – remember, the first in 27 years! - from one of the biggest bands ever and the reaction to Radiohead’s new paradigm; it is comical by comparison.

As a result, fans showing up on the concert tour which is bound to follow aren’t likely to have heard the new stuff. Perhaps, if The Eagles had been more innovative, they could have created broad anticipation for the new stuff. As it is, concert-goers will hit the head when the group launches into those unrecognizable ‘hits’.

Aside from the silliness (or ignorance) of Henley’s comment, there is also a perception issue. Millions of people travel to NYC to shop on 57th Street. Why? Because the experience is evocative of exclusivity. It is unique and the stores are attractions in and of themselves. If something is sold on 57th Street, the consumer characterizes that product in a very particular way. This is no less the case with a big-box retailer like WalMart. Your association with the products sold at Walmart has everything to do with how you perceive WalMart. So, if you have a negative view of Walmart (and not everyone does) will that transfer to The Eagles? It does for me. Mrs PND has an emotive reaction to WalMart, believing the shopping environment to be soulless and barren. I, on the other hand, think of their intolerance and their overarching belief that they can influence culture by limiting or manipulating choice.

When you think about it The Long Road Out of Eden is a rather unfortunate choice of title for this album when you remember that Walmart has a history of locking up employees, dissuading employees from their legitimate right to union representation and engaging in an active effort to deflate employee wages. Clearly, for some Walmart employees there is no “road out of Eden”

Henley said they got some grief for the Walmart deal but I am simply baffled by the fact that they needed to consider this option at all. Indeed, if they were truly looking for a new paradigm, they only needed to poll some of their ‘friends’ from MySpace who could have given them any number of ideas. And I will bet none would have included Walmart.

Center of Her Own Attention

Americans remain blissfully unaware of the talent of Manchester United and England football player Wayne Rooney. On the football pitch, Wayne has few rivals and he is a sports personality whose talent transcends sport to media superstardom. Even as a better player than David Beckham, he will never rival him as a star: He doesn’t have the looks, but he will be big. On the other hand, his girlfriend/fiancee may become bigger than Victoria Beckham and the glow of Wayne’s stardom has reflected on her since they were engaged when she was 17. You see, 21-year-old Colleen McLoughlin has reportedly just signed a five-book deal with Harpercollins. Admittedly this is on the back of her successful autobiography Welcome to My World (Oopps, I almost typed “Wayne” there…) but, without Wayne would there have been an autobiography at 20 years old?

Read the rest of this post on Foreword: Here.

Simon & Schuster Reports

Jack Romanos' final year in charge at S&S continues to go well as the company posted third quarter revenues of $214.2 million up 9% from $197.4 million for the same period last year. Top-selling titles included Become A Better You by Joel Osteen and the continued success of The Secret by Rhonda Byrne. Operating income of $21.6 million was up 6% from $20.3 million versus last year, and which reflected the revenue increase and lower bad debt expense partially offset by higher royalty expenses, employee-related costs, volume-driven advertising and selling expenses and digital archive costs. Year to date company revenues are up 16% to $643.8mm and operating income is up a dramatic 73% to $67.7mm. A better than 10% margin is tremendous work in trade publishing.

Full CBS press release: Here

Seeking Alpha Transcript: Here

Comments from the earnings call:

The company has also made steady progress in the digital warehouse project. This is new storage distribution and transactional system that will digitize and house all Simon & Schuster content and manage license of our intellectual property. By year-end we expect to have 13,000 titles incorporated into the system.

During the quarter we also announced the promotion of Carolyn Reidy to the role of President and CEO of Simon & Schuster effective January 1, 2008, after Jack Romanos retires at year end. Carolyn previously ran Simon & Schuster's Dell publishing division which accounts for the lion share of the division's revenue and as you recall Simon & Schuster had its best year ever last year. Particularly gratifying when you have a deep management bench that allows you to replace one top tier executive with an internal candidate of Carolyn caliber. She is extremely well regarded not only in the industry but, also inside Simon & Schuster as well. We think she will do great things here.

Open Access: Free or Not to Be

The Washington Post reports on the status of a bill in Congress that will require any research papers that are produced/published as a result of government funded research to be made freely available one year after initial publication.

At issue is whether scientists funded by the National Institutes of Health should be required to publish the results of their research solely in journals that promise to make the articles available free within a year after publication.

The idea is that consumers should not have to buy expensive scientific journal subscriptions -- or be subject to pricey per-page charges for non subscribers -- to see the results of research they have already paid for with their taxes. Until now, repeated efforts to legislate such a mandate have failed under pressure from the well-heeled journal publishing industry and some nonprofit scientific societies whose educational activities are supported by the profits from journals that they publish.

The language supporting this legislative requirement is part of an appropriations bill and thus has not been subject to the type of open debate that publishers would like - regardless as to how difficult it is to support the argument. Typically for the government they are jumping on a hobby horse which on the surface looks like an easy win (a 'mom and apple pie' issue) without fully understanding the commercial, academic and cultural issues involved. There are in my view many more egregious and expensive abuses of public trust such as commercial mining or oil drilling on public land where the accrual to private enterprise far outstrips the perceived tax injustice that publishing research is supposed to generate. But that is not necessarily the point: Two 'bads' don't equal a good.

In publishing research and academic papers the publishing industry has created an efficient and effective distribution mechanism that enables the broadest possible access to this material. Under the aegis of legislative dictate it would be entirely probable that the access to this material would deteriorate not improve as our would-be business people (Congress) envision. Having said that, the publishing business is too entrenched in their position and could do with a kick up the bum: Better this comes from a commercial reality than the legislature IMHO.

Harlequin (Torstar) Reports

The revival at Harlequin continues as the company posted slightly improved underlying revenue growth and improved operating margins versus the same period last year. For the parent company Torstar, revenue was stable with prior year (up $3mm on revenues of $369mm). The company will be pleased that revenues improved in their Metroland Media Group and Digital properties. Operating profit for Torstar improved by $14.1mm for the quarter.

A significant proportion of Harlequin revenues are booked in US $ and as a result their underlying revenue improvement of $0.7mm was offset by more than $3.8mm in unfavorable foreign exchange impact. Operating profit for publishing improved 13% to $16.3mm for the quarter. Underlying profit without the impact of foreign exchange was slightly better.

Harlequin management expect the division to continue the improvements they have seen this year; however, underlying results will continue to be adversely impacted by the weak US $. The company also noted that the fourth quarter North America Retail publishing schedule is not expected to be as strong as compared with 2006. Possibly of deeper worry to the company is how to improve results in their Overseas markets particularly the UK where the company owns Mills and Boone.

Harlequin’s publishing operations are composed of three divisions: North America Retail, North America Direct-To-Consumer and Overseas.

Highlights:

Book Publishing operating profits were up $2.5 million in the third quarter of 2007 excluding the impact of foreign exchange.

• North America Retail was up $2.6 million
• North America Direct-To-Consumer was up $0.5 million
• Overseas was down $0.6 million

Year to date, Book Publishing revenues were up $2.1 million excluding the impact of foreign exchange.

• North America Retail was up $4.9 million
• North America Direct-To-Consumer was down $4.9 million
• Overseas was up $2.1 million

Year to date, Book Publishing operating profits were up $8.0 million excluding the impact of foreign exchange.

• North America Retail was up $6.8 million
• North America Direct-To-Consumer was up $1.2 million
• Overseas was flat.

Year to date, EBITDA was up $6.3 million excluding the impact of foreign exchange.

North America Retail had a strong third quarter with price increases on selected series product lines, a strong publishing program and cost savings. The number of books sold was down slightly in the quarter. Cost savings included lower advertising and promotional costs and $0.5 million of lower depreciation and amortization.North America Direct-To-Consumer revenue was down in the third quarter of2007 primarily from declines in a children’s direct-to-home continuity program.

In the core Direct-To-Consumer business, revenue was flat in the quarter as the series price increase offset lower volumes. Lower advertising and promotion costs associated with the fall 2007 mailing provided the third quarter profit improvement.

The Overseas markets continued with mixed results during the third quarter.Year to date the Nordic group is up 30%, the U.K. is flat and Japan is down with challenges in the core series book market more than offsetting growth in single titles and digital products.

Five Questions with Harlequin