Five Questions on Global Data Synchronization

That's a title likely to induce a narcoleptic attack in all but the most ardent followers of bibliographic matters but it is nevertheless an important topic for all managers of book information. Industries other than publishing also battle data reliability and timeliness and, over the years led by umbrella groups such as UCC and EAN (now combined into one organization named GS1), they have developed programs to embrace supply chain efficiency and its' co-relation data integrity. Data Synchronisation (GDSN) is such a program which I have noted a few times in the past (Post). The objective of the GDSN is to ensure that all trading partners are working with the same set of product details that are simultaneously synchronized at a network level and in transaction details such as purchase orders and shipping details. The benefits of synchronised data can extend from 'simple' efficiency improvements in the ordering and receipt process to higher effectiveness in marketing and promotions programs.

As I mentioned earlier on this topic, BookNet Canada is embarking on a test of data synchronization and I asked Michael Tamblyn, President of BookNet Canada my five questions.

1. Firstly tell us about how BookNet Canada got started and what you have achieved thus far. What are your current priorities?
   
   BookNet Canada came into being in 2003 when Canadian retailers, publishers and the federal government decided that there should be a central not-for-profit agency to coordinate technology and supply chain innovation for the Canadian book market. While that sounds about as thrilling as a three-day lecture on HVAC engineering, we have been able to move the industry very quickly in some very exciting directions. Canada benefits from relatively small size, a general tendency towards collaboration, being a cross-roads country with ties to the U.S., UK, and EU, and a community of quite forward-thinking retailers and system vendors. It lets us get things rolling quickly, gather feedback early and often, and push the envelope a bit more than larger markets.
   
   Some examples: from a somewhat stagnant state in '03, B2B e-commerce now accounts for 85-90% of all business documents; EDI invoices and ASNs are fully supported through the publishing community; even independent retailers do EDI-based receiving. BNC SalesData, our national sales tracking service, launched in 2005, tracks sales, stock position, orders outstanding on every title, without modeling or estimation, on 70% of the book market. In a nice mouse-eats-elephant story, our Canadian Bibliographic Standard was adopted more-or-less in its entirety as the BISG Metadata Best Practice Guideline for the U.S. market for both ONIX and Excel.
   
   Then there is the more forward-looking work: collaborative sales data mining for independents, backlist optimization and forecasting research, industry cost analysis on returns, digital publishing trends, our annual Technology Forum. And on it goes.
   
   
2. You announced a Data Synchronization initiative in mid-summer. Can you give us some back-ground on this project, the status and where you see the initiative going over the next six months? What is your time table and what is your hoped for end result?
   
   We approached GDSN with a set of assumptions that looked something like this:
   
   1. Publishers already have a data sharing standard -- ONIX -- that they have embraced and invested in. They shouldn't have to learn another one. Make it simple!
   2. GDSN currently serves a small part of the retail sector, but if it became ubiquitous at some point in the future, how can we protect publishers from a price perspective?
   3. Think global, start local. The G in GDSN is there for a reason, so let's not assume that we're just making a Canadian service for Canadian publishers and retailers.
   
   Those first principles have guided our efforts over the past few months. We have been working with Commport, our GDSN data pool partner, on the construction of an ONIX-to-GDSN bridge that is now in testing. Timelines are very dependent on the retailers and wholesalers involved, but we hope to be well into the pilot six months from now. From our perspective, the "pilot" itself doesn't begin until we are moving active title data from a real publisher to a real retailer who is actually going to use that data in purchasing and POS systems. That's an important point: the challenge isn't getting the data into, or out of, the pool; it's getting that data into retailer systems so that it supplants the current mix of spreadsheets and paper forms. Until then, the conversation hasn't changed. Data conversion is easy, adoption is hard.
   
   In parallel, we are preparing a draft submission to GS1 regarding additions to the GDSN Global Data Dictionary to make it more relevant to the book trade. That will certainly spend some time in the loving embrace of the BISG Metadata Committee before heading to GS1.
   
   From a pricing standpoint, I think we've come up with the best possible model for publishers. A free 1-year pilot, unlimited upload and publishing to the global network, with the clock starting when the data goes into production with retailers (i.e. not when testing starts, but when it ends). Then very low per-SKU fees that are capped at a shockingly low rate, just in case this breaks out of the mass market and into the trade.
   
   
3. What issues have you encountered that were unexpected? Given that the book industry is ‘fitting’ in to a set of standards that have been developed for other industries how much of an issue has it been trying to marry the existing data structures with our industry?
   
   Always lots to learn, which is part of the fun. Some highlights:
   * The extent to which GDSN stands to benefit independent wholesalers, many of whom have never really grasped ONIX in their relationship with publishers, and who have to serve a retail community who couldn't care less about book-industry-specific standards.
   * We've talked to several publishers who have, because of various retail relationships, been required to submit to GDSN data pools over the past five years. None of them have seen their data make it into production systems. It's safe to say that there are some data pools out there who have been less than candid about where GDSN data really gets used and by whom.
   * Current GDSN costs per SKU or ISBN have been absolutely egregious! $25 or more per SKU per year? That's great if you are in consumer packaged goods with 100 SKUs worth $50M each, not so great if you're a mid-sized publisher with a line of DIY books selling into general retail. Time to fix that, I think...
   
   In terms of fitting in, there are definitely some things that need to be improved in the Global Data Dictionary if books are going to find a happy home in GDSN. GPC Product Forms aren't perfect for books. You can't pass along an author, just a title. Things like that. It's workable for mass market applications, but I think the goal should be to get the Canadian/US standard fields well-represented and then build from there.
   
   
4. Is there an on-going relationship with GS1 here? Do you anticipate the publishing industry will be exposed to best practices and perhaps learn from the GS1 community?
   If so, where do you see the greatest potential benefit?
   
   We'll be working with GS1 on the standards and data dictionary issues, but we have avoided a relationship with 1Sync, their data pool service provider. When we started watching this space, we realized that one of the great things about GDSN is that it's an open, certified standard, which makes the data pool game an excellent market for aggressive fast-followers. We selected a vendor with a strong track record in high-volume data processing who has made a name for themselves enabling whole industries on GDSN but who was also willing to toss out the rulebook on GDSN pricing to meet the needs of the book industry.
   
   In terms of who learns from who, I think that GS1 has a lot to learn from the book industry. "Industry-With-Lots-of-Low-Price-Point-SKUs" is still reasonably new for GDSN, and nobody does massive numbers of discrete, non-variant SKUs like the book industry. They are working with Music and DVD now, which should help, but Music and DVD aren't nearly as sophisticated as the book industry regarding product data (much to the dismay of any retailer who has ever sold both!) I'd argue that we have spent more time and effort working out the issues related to standardization of rich product description metadata than any other industry, so I think the conversation is going to be "Here's ONIX, which we know and love. Let's figure out how much realistically needs to be in GDSN." With any luck, we can extend the data dictionary accordingly.
   
   
5. Will your Data Synchronization initiative influence similar initiatives in the US and UK.
   
   Will those markets make full use of your path finding or more to the point will they have to develop their own initiatives? Getting GDSN off the ground is going to require the concerted effort of several national markets. The GS1 data vetting process requires broad support to propose changes to the Global Data Dictionary. We are happy to lead the charge, but we want to make sure that this meets the needs of the larger book market as well, so plenty of collaboration is required.

Michael can be reached at BookNet Canada: mtamblyn(At)booknetcanada.com

Borders Loyalty Program

Mrs PND received a quite extraordinary promotional email from Borders Books this weekend which indicated that she had been selected to receive a package of substantial partner benefits just because she was a Borders Rewards member. Aside from the fact she has no recollection being a rewards member, the Borders Rewards Perks program offers substantial benefits to "rewards members like you" it says. If you go to the perks site linked to above you will find many many discount programs which regrettably seem to be perfectly targeted to Mr. & Mrs. PND's lavish lifestyle.

It is hard to understand what they are trying to achieve with this program. Perhaps they are attempting to mimic the 'retail emporium' that is Amazon.com in advance of launching their own web site. Or it could be a simple attempt to capture as many web consumers as possible so that they can promote the launch of the web site to an even broader base of customers.

Affiliations are often effective for merchandising and brand extension but the sheer number of bonus and discount offers seems excessive. Few if any of these appear to be 'for our Borders rewards customers only' and, as such the list of benefits may be a nice consolidation of existing discount and bonus programs. (Hey thanks!).

Some of these expire soon so hurry to your nearest Borders website so you can shop elsewhere.

Borders Australia

Speculation that the Borders Australian and New Zealand stores have been sold to Pacific Equity Partners are surfacing from a rather unique source. The India Times is reporting that industrial and services behemoth Tata Industries participated in the last round of bids for the Borders unit and also suggests the price agreed for the store operations will top A$125mm. There is speculation that PEP will also get the Singapore store and may have ascribed more deal value to the Borders brand which they may seek to extend into SE Asia. More details will follow.

IndiaTimes

CBS Outdoor Announce Times Square WiFi Hot Spot

Billboard owner CBS Outdoor is announcing a partnership with the MTA that will create a mid-town wide wi-fi hotspot covering most of Times Square.

CBS Corporation announced today that it will "light up" midtown Manhattan with the creation of the"CBS Mobile Zone," a wireless high-speed network enabling New Yorkers with Wi-Fi-enabled cell phones, laptops or other devices to access the Internet for free, and make voice over internet (VOI) calls. The Wi-Fi Hot Zone,which is available today in certain areas, will be fully operational on by month's end with a footprint of more than 20 city blocks from Times Square to Central Park South and from 6th Avenue to 8th Avenue. This initiative is part of a 6-month pilot program with the Metropolitan Transportation Authority and New York City Transit to test the potential communications capabilities of Wi-Fi technology.

Check it out. Just in time for the Kindle

Amazon Kindle to be Launched Monday

According to a report in CNet this morning there is to be a 'high-profile' launch party at the W hotel in Union Square to announce the long anticipated Kindle ebook reader. From the report,

The Kindle is equipped with a Wi-Fi connection that taps into an Amazon e-book store, which users can access to purchase new electronic books--and Amazon has reportedly signed onto a deal with Sprint for EVDO access. Additionally, the device comes with a headphone jack for audiobooks, as well as an e-mail address.

The devise is expected to sell for $399 and among its content deals the company has apparently negotiated partnerships with as many as 100 newspaper publishers. The company is also saying it will have from launch the largest inventory of all e-books available. The report also confirmed that the initial SONY e-book reader has been 'a bust' but SONY expects their second version with improved features to fair better.

CNET

Virtual Felony

According to the BBC, a 17 year old Dutch boy was arrested for allegedly steeling $3500 of virtual furniture from the 'homes' of residents of the online community Habbo. According to website administrators, the real world threat of Id theft also exists in the virtual world and this perp and several co-conspirators convinced some Habbo players to fork over their passwords. Since the Habbo credits used to buy stuff players use in the game are purchased with real money, steeling someones couch is a 'real' crime. I wonder if they will do time in a real jail?

Reed Explores Purchase of EMAP B2B

Is it a ruse to gain access to their financials or does Reed Business Information really want to purchase the Emap B2B titles. That is what a number of high profile private equity firms are considering after they were assured by the sellers that there were no commercial operators interesting in Emap. (Telegraph) Other observers have suggested that Reed may also decide to join one of the PE buyers (or wait on the sidelines until it is all over) and negotiate to cherry pick the best titles that fit with their current stable of publications. The company is especially interested in titles that have or could have strong electronic/online opportunities. Reed also has an interested in Harcourt/Riverdeep which they could trade with a PE firm for the (some) of the titles they would like to own.

The whole Emap sale has been convoluted and murky from the get-go, and with the public notification of Reed's interest the bid participants were given an additional opportunity to revise their bids. No bidder has ever appeared inclined to buy all of Emap which of course is what the sellers prefer (Guardian). The company also announced interim results earlier this week which indicated a profit decrease of 16% although the company maintained their full year guidance (Reuters). Emap consists of b2b, consumer magazines and radio.

In separate news, Reed also confirmed that the company is on track to achieve 10% growth in EPS this year with all segments of the business performing well. Hemscott

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.”