Bertelsmann Reports Improved Results

Random House corporate parent Bertelsmann reported improved quarterly operating profit performance and remains optimistic about the remainder of the year. From their press release:

Bertelsmann, the international media company, today reported strong first quarter fiscal 2008 results. First-quarter operating profits (Operating EBIT) were up by 9.6 percent compared with the previous year. Operating EBIT for the period under review amounted to €217 million (Q1/2007: €198 million). These developments were driven by the continuing positive performance of the major core businesses. Group net income improved to €35 million (Q1/2007: €-70 million). Meanwhile, revenues declined by 3.9 percent year-over-year to €4.2 billion. Adjusted for portfolio changes and foreign-exchange effects, revenue decreased 1.7 percent year-over-year. The revenue performance reflected negative foreign-exchange effects due to the Euro’s strength relative to the U.S. dollar and British pound. Revenues were also impacted by declines in sales of physical recordings and revenues at Direct Group in North America. Adjusted for portfolio changes and foreign-exchange effects, Bertelsmann expects a moderate rise in revenues for 2008. The Company expects operating results for 2008 will be on par or slightly above the high levels seen in 2007. Group net income will be well above 2007 due to fewer special items and lower interest expenditure.

The company announced earlier this month that they have hired Morgan Stanley to sell the Direct Business.

Bertelsmann investor presentation reflecting the full year results from all divisions. Here. (RH revenue of $1.8bill and op income $172mm for 2007).

Harpercollins Reports Static Results. Releases Authonomy.com

Harpercollins produced revenues of $302mm in their 3rd quarter ended March 31st which compared favorably with the same period last year ($291mm). For the nine months, revenues continue to lag the performance in 2007. 2008 YTD revenues of $1,038mm are marginally lower by $14mm.

Operating income as described in NewsCorp's press release was as follows:

HarperCollins reported third quarter operating income of $29 million, in-line with the same period a year ago. The current quarter included strong sales of Naughty Neighbor by Janet Evanovich, Stop Whining, Start Living by Dr. Laura Schlessinger, Lady Killer by Lisa Scottoline, Fancy Nancy, Bonjour Butterfly by Jane O.Connor and The Chronicles of Narnia: Prince Caspian by C.S. Lewis. During the quarter, HarperCollins had 54 books on The New York Times bestseller list, including 4 titles that reached the #1 spot.

Again, no mention of the performance of Harpercollins on the earnings call.

On another note, Harpercollins UK announced last year that they were establishing a site for authors which they named authonomy. The site is now in private beta and is covered by fellow traveller James Bridle at Booktwo.org.

The real challenge, of course, is to persuade wannabe writers to post their work at all - in my own personal experience, unpublished writers are terrified of their work being ’stolen’, enough to be suspicious of publishers themselves, let alone your average web surfer. The Front List, a previous attempt at a “YouTube for books”/”crowdsourcing the slushfile”-type site, solved this by hiding everything from non-members; one approach certainly, but not one likely to bring in the crowds.

James is also an author.

Amazon The CD Manufacturer

An article in Information Week (I'm more likely to read Cosmo) bubbled up in my alerts this week about Amazon working with Sony BMG and EMI to bring 'out of print' recordings back into circulation. From the article,

Amazon, Sony BMG, and EMI Music said that they will make hundreds of out-of-print albums available on Amazon's Web site through CreateSpace's Disc on demand service. Some of the titles that have been restored to availability include Hatari Soundtrack by Henry Mancini, Earthquake Weather by Joe Strummer, Motorcade of Generosity by Cake, Telepathy by Bill Stewart, Foreign Intrigue by Tony Williams, and Carryin' On by Grant Green. A few of the recordings being made available through Disc on Demand are new releases rather than reissues, such as the upcoming title in KCRW's Sounds Eclectic series. The arrival of brand-name, major-label content should enhance the credibility of CreateSpace's media on-demand service, which has yet to shake of the stigma associated with self-publishing. CreateSpace was born last August. It used to be called CustomFlix, which Amazon acquired in July 2005.

Just another example of how Amazon is willing to move up and down the supply chain. Interestingly, the author of the article does note the controversy around the BookSurge situation but perhaps the more interesting point is about how Amazon will use their own demand analysis to determine which recordings to produce. Perhaps not so obvious is the impact on all the Amazon affiliates who have businesses supplying rare and hard to find recordings. Are they doomed?

Nielsen BookData NZ Sets Milestone

Good news from New Zealand, all nine New Zealand booksellers voted in Nielsen BookData's NZ Booksellers Choice Award for book of the year. As they note, "For the first time in the history of the Nielsen BookData New Zealand Booksellers' Choice Award, several titles received precisely the same number of nominations, making it impossible to create a shortlist of four titles." The seeming statistical impossibility was left unexplained by the data aggregator/market researcher. As a solution, the company decided to create a "long short list" of possible winners. The list amounts to eight titles and the sheer enormity of the task required of Booksellers to make the actual selection is likely to induce rioting.

In fairness, here is the list:

- A Nest of singing Birds: One Hundred Years of the New Zealand School Journal by Gregory O'Brien, published by Learning Media
- Bill Hammond: Jingle Jangle Morning by Jennifer Hay, published by the Christchurch Art Gallery
- Edwin and Matilda: An Unlikely Love Story by Laurence Fearnley, published by Penguin Books NZ Ltd
- Mau Moko: The World of Maori Moko by Ngahuia Te Awekotuku, published by Penguin Books NZ Ltd
- New New Zealand Houses by Patrick Reynolds and John Walsh, published by Random House New Zealand Ltd
- New Zealand's Wilderness Heritage by Les Molloy and Craig Potton, published by Craig Potton Publishing
- Ribbons of Grace by Maxine Alterio, published by Penguin Books NZ Ltd
- Soundtrack: 118 Great New Zealand Albums by Grant Smithies, published by Craig Potton Publishing
- The Road to Castle Hill by Christine Fernyhough with Louise Callan, published by Random House New Zealand Ltd

(At least they are books and not rulers - which is an inside joke that only my past colleagues will get).

Shatzkin Speeches Posted

Mike Shatzkin informs me he has just posted on his website four talks delivered this year (three of them somewhat belatedly). Mike noted, "There is definitely a good deal of repetition here, but there is also a distinct slant to each piece. For those of you who are not gluttons for punishment, I'd suggest the one, delivered on Wednesday, May 7, 2008 in Copenhagen. The one titled The End of General Trade Publishing Houses is a completely rewritten version of an earlier version some of you may have read. The other two are described sufficiently below."

May 7, 2008 to Danish publishers and booksellers in Copenhagen on the Future for Publishers and Booksellers: Here

April 16, 2008 to UK publishers at London Book Fair, summarizing US state of affairs reporting on "The State of Digitization in the US": Here

March 10, 2008, "Publishing in the Digital Age" panel participant remarks at Book Business Conference and Expo: Here

January 22, 2008, rewritten reprise of "The End of General Trade Publishing Houses", to Random House's "Digital Day": Here

Barnes & Noble Sells Magazine Subscriptions

Didn't Prodigy do this once? No matter, B&N announced yesterday that they are offering magazine subscriptions and will offer a digital service that enables users to buy old single copy editions. B&N is partnering with Zinio to offer the service which is the same service B&N has used to offer digital book content for preview on the B&N website. From their press release:

BN.com will sell subscriptions to over 1,000 magazine titles, available in both digital and print formats, at prices up to ninety percent off newsstand cover
prices. Digital subscriptions will be available within minutes of purchase for viewing on desktops and laptops. In addition, more than 12,000 back issues of hundreds of magazine titles will be available digitally for purchase as single copies.

A digital Cosmo (first one I saw, not one of my usual reading sources) is on sale on Zinio's site for $12.00 and on the B&N.com site for $12.00 or $10.80 with a membership card. So, some advantage at B&N. Selling magazines is a natural combination made especially clear given the amount of store space given to magazines in a typical B&N superstore. One wonders why this has taken so long. B&N is betting on the electronic delivery as the future play here rather than the print subscriptions. Print is a logistics nightmare where margins are razor thin which is why none of the big book web retailers have pushed print magazine subscriptions in the past. (Admittedly, fulfillment could have been done by third parties but it is still the B&N brand that goes on the package).

B&N will allow users to use the same Zinio "see inside" feature with the magazine content (probably not Playboy since they say only 'certain' magazines). Marie Toulantis, CEO of B&N noted the following:

Our magazine offering gives our customers the ultimate flexibility to consume their favorite magazines both digitally and/or in the more traditional print form via a subscription. By growing our relationship with Zinio, and introducing a partnership with M2 Media Group, we will be the only retailer to offer both options in an integrated shopping experience.

The Zinio relationship may be symptomatic of a larger strategic play that B&N may be engaged in that is, the evolution to the digital superstore. They will have watched the morphing of Newsstand.com with some concern. Under the LibreDigital brand, this company is in the process of expanding their digital delivery and content management tools to publishers and have notable deals with Harpercollins and Harlequin. B&N may be slightly aggrieved that this seller of newspapers and magazines has now inserted themselves into the publishing supply chain where B&N believes they should have reign. Adopting digital magazine distribution is only a skirmish in what may be a protracted battle for supremacy in the digital content supply chain.

Transition: Print to Online

Many publishers (myself included) have made the transition from print orientation to web and seen their business and not least their revenue model completely transform. I've refered to this as the 'valley of death' which is what the top line can look like as you make this transition and others have referred to it as "trading dollars for dimes". Industry luminaries such as Tim O'Reilly have noted some fundamental problems in trading subscription and print based ad models for web only ad models: Basically the numbers can fail to add up. (Read the article and follow some of the links).

There are some success stories and there are likely to be more as publishers willingly and generally otherwise, look to the web for revenue growth. The NYTimes discusses how magazine publisher International Data Group which is the biggest publisher of technology magazines has successfully made this transition. From the article:

Advertisers and readers of high-tech publications have moved online more swiftly than other audiences, so I.D.G. may offer a glimpse of the future of publishing. Yet the transition at I.D.G. came only after years of investment, upheaval and changes in its practice of journalism. “The excellent thing, and good news, for publishers is that there is life after print — in fact, a better life after print,” said Patrick J. McGovern, the founder and chairman of I.D.G.

The article goes on to note that InfoWorld is now generating ad revenue of $1.6mm per month with an operating margin of 37% whereas the combination print and web product of a year ago was a break-even operation. Since their market is technology they have some advantage over other types of magazines; however, their navigation of this transition is instructive and predictive of the manner in which publishers will ultimately become successful.

In IDG's case they have remained faithful to the mission of providing content their core market wants, aggressively managing the performance of their titles and shutting down those that don't perform and they have combined staff into cohesive and focused groups. Companies that make this transition early and successfully will establish difficult to surmount positions relative to their competitors; thus it becomes harder for the second, third and fourth players to garner the ad revenue and secure transaction revenues and fees necessary to become successful.

Olson to Leave Random House (+ Middelhoff News)

The NYTimes has confirmed via two executives at Random House corporate owner Bertelsmann that Peter Olson will be leaving his position as CEO of Random House in the next few weeks.

Mr. Olson, who has run Random House, the world’s largest consumer publisher, since 1998, has come under mounting pressure in recent months as Bertelsmann’s financial results have been damaged by lower profits at Random House and steep losses in its American book clubs, which he also oversees.

It was not yet clear who will replace Mr. Olson, although these executives said it would not necessarily be a prominent figure from New York publishing, and maybe not even an American.

Surely not a non-american!

On a related note, Thomas Middelhoff took exception to comments The Economist made in an article on Bertelsmann under incoming CEO Ostrowski. Among them the following:

Perhaps because he has Arvato up his sleeve as a source of future growth, Mr Ostrowski appears to be far less interested in the internet than other media bosses. Losses made by Mr Middelhoff's internet ventures may also contribute to his caution. “I will not put a bet on one or two big internet investments; we must build an online presence organically,”

His rebuttle in the letters to the editor was as follows:

Bertelsmann's performance
SIR – I do not agree with the statements in your recent article (Face value, March 22nd) concerning my term as chief executive of Bertelsmann. The development of the company between 1998 and 2002—ie, the creation of the RTL Group, the acquisition of Random House, etc—have not “strained” Bertelsm€ann's finances in any way. At the time of my retirement its debt amounted to €334m (with revenues of €20 billion). RTL Group today contributes more than 50% towards Bertelsmann's profit.

I also do not agree that my “internet ventures” were costly in general. Selling the company's AOL shares and its 50% stake in AOL Europe and the sale of mediaWays, an internet-service provider, generated a profit of €10 billion.

In the three-and-a-half-years of my leadership Bertelsmann doubled its revenue, tripled its operative profit and quintupled its net equity. Not a bad result compared
with the company's present situation, almost six years after my resignation.

Thomas Middelhoff
Chief executive
Arcandor
Essen, Germany

€10 billion profit isn't too bad now is it?

Pearson Buying Language School

Only 1% of Pearson's revenue is generated in China and they like many other companies hope to improve on that percentage in one of the fastest growing markets in the world. The company is in the process of acquiring a chain of private language centers in Shanghai which will leverage some of the language teaching product the company publishes through Longman. Several newspapers are reporting on the acquisition (which isn't completed). From The Telegraph:

The FTSE-100 media group is near to finalising a deal to buy LEC, a group of 15 Shanghai private schools, The Sunday Telegraph has learned. The deal, likely to be announced this week, underlines Pearson's aim to expand its Chinese operations as the country's economic growth presents opportunities for foreign companies. Demand for English language tuition is at an all-time high in mainland China as a result of the country's continuing integration into the global.

Pearson has been buying educational assets aggressively in the US for several years; however, they have not purchased schools per se. In China, they may be considering a more expansive expansion across the entire education value chain from content creation to delivery. In other developed Asian markets such as Korea and Japan, private education plays a significant role in the education of Children and a similar structure is developing in China. For Pearson to participate in that market development only makes sense.

Crowded House and PS22

New York's vast social patchwork was on vibrant display last week when Neil Finn of the band Crowded House started their set with the choir of PS 22 from Staten Island. Normally, when a band launches into their set they do so with gusto, but on Wednesday night Finn, wandered casually out to the microphone and announced we were in for something special. He commented that someone had forwarded a Youtube video of the PS 22 choir doing high justice to one of the bands signature songs and he was going to bring them on stage.

On came the choir first to do several song on their own and then to join Crowded House on the first few songs of their 2 hour plus set. It was magical. The kids were great, their joy was transparent and they showed no stage fright with a couple of the kids doing solos.

As you watch the video (which is the first song of the Crowded House set), look at the faces of the kids and think about the breadth of the backgrounds, experiences and ethnicity that they represent. It is quite incredible and it's what New York is all about.





Needless to say, it was a great night out.

Harlequin Shows Disappointing Form

Torstar the owner of Harlequin published their first quarter results this morning showing Harlequin revenues fell $15mm versus the prior period. $11mm of the short fall was due to the decreased value of the US dollar versus the loonie. The company also suggested that the comparison favored a much stronger first quarter 2007 when Harlequin had a stronger publishing schedule. (I believe this is the same 'publishing schedule' that strategically they have looked to trim). Reported revenue was $109.7 million in the first quarter, down $14.8 million from $124.5 million in the same period last year. (In 2006, 1Q revenues were $116mm. Under lying revenue growth for the 2007 quarter was only up $1mm with forex delivering a $5mm gain on the 2006 level).

First quarter underlying revenues have been a mixed bag at Harlequin over the past four years: Up big in 2006, down big in 2008 and 2005 and it is hard to discern any real pattern.

The following is from their press release:

Book Publishing revenues were down $3.9 million in the first quarter of 2008 excluding the impact of foreign exchange. North America Retail was down $2.8 million, North America Direct-To-Consumer was down $1.2 million and Overseas was up $0.1 million. Book Publishing operating profits were down $0.6 million in the first quarter of 2008 excluding the impact of foreign exchange. North America Retail was flat, North America Direct-To-Consumer was up $0.3 million and Overseas was down $0.9 million.

Torstar stated that "Harlequin’s outlook is positive" except if there is a major economic down turn in the US. (Which I believe we are in). Any further decrease in the value of the dollar will continue to result in a material impact on results. As an aside, the company doesn't note any hedge against the US dollar fall which seems somewhat irresponsible given the US outlook although they have hedged in the past. The company went on to state that "Harlequin is also experiencing accelerating progress with its digital media strategy which will contribute to earnings growth in 2008 and beyond."

Operating profit was also impacted by the unfavorable impact of foreign exchange. Operating profit of $16.2 million in the first quarter of 2008, down $2.9 million from $19.1 million in 2007 including a decrease of $2.3 million from the unfavourable impact of foreign exchange rates.

Torstar announced a restructuring program earlier this month but Harlequin was not mentioned.

New Fake (With Branding)

JK Rowling can't catch a break. The Guardian blog points to an infraction by Bloomsbury but does so by using the name of Rowling to draw attention, thus;

The latest of these comes from JK Rowling's publisher, Bloomsbury, which was due to publish on May 5 a new biography of Louis XIV's mistress and "secret wife" Madame de Maintenon, by Veronica Buckley.

Turns out Ms. Buckley quotes a document in her book that was outed as a fake a number of years ago. The publisher is recalling the title as they were notified of the error during the review cycle. While there is no 'crime' here on the order of some of the more recent fakery and Bloomsbury is recalling the title, it still points to the rather shoddy fact(less) checking that seems not to occur. It appears that it was well known that this document was a fake.

But what does Rowling have to do with this? Some in the comments section noted the same thing.

Miss Pettigrew

Some times there is gold in them thar hills. The Guardian this weekend profiled the book that became the under-the-radar hit movie Miss Pettigrew Lives for a Day. From the article:

The novel was a small sensation in the 1940s, but has gone on to sell far more copies after being republished by Persephone, which specialises in forgotten women's literature from the inter-war years. In the month since the release of the film in America, 12,000 copies have been sold, while British sales have topped 24,000, a remarkable feat for a book in this niche market.

The author of the book Winifred Watson gave up writing only a few years after penning this book when her house was bombed in 1940. Her family couldn't convince her to start writing again.

Francis McDormand, the lead actress in the movie has also contributed to a new audio version of the book that will be out later this year.

S&S Revenues Off 12%

Directly from the CBS press release on the performance of Simon & Schuster,

revenues for the first quarter of 2008 decreased 12% to$201.6 million from $229.3 million for the same prior-year period, as best-selling titles in the first quarter of 2008, including Duma Key by Stephen King, Where Are You Now? by Mary Higgins Clark and Change of Heart by Jodi Picoult, did not match contributions from prior year titles, which included The Secret by Rhonda Byrne. Publishing OIBDA and operating income decreased 28% to $17.1 million and 32% to $14.6 million, respectively, principally reflecting the decline in revenues partially offset by lower royalty expenses, production costs and selling and advertising expenses. Publishing results included stock-based compensation expense of $1.0 million and $.7 million for the first quarter of 2008 and 2007, respectively

.

400,000 Titles Published!

Rachel Donadio in The NYTimes book review section has an essay on the expansion of publishing. As she points out, if reading is generally going down hill this isn't stopping people from adopting self-publishing as a hobby. "Publishing" a book is like putting your photo collection on flickr now-a-days. It is so easy and the hurdles so low that anyone with a half baked idea is doing it. Not that there's anything wrong with that; I happen to believe that the creativity, the experiences and the expression evident in many of these books will become a reference point for our age. Just as letters between family members shone light on a family's history, future generations will browse the published output of family members. I want my parents to do this.

On the other hand, my view may be too prosaic; since many of these self-publishers still think their titles will become the next best seller. As mentioned in the article, the potential for iUniverse.com titles to be on display at B&N garners considerable attention and revenues from their legions of authors. So, there is some delusion but the self-publishing market is estimated to be worth over $1.3billion (although, regretably I can't recall the citation for this number) and deserves significant attention from all segments of the publishing community. As I have suggested before, one of the major publishing houses is going to get into this segment in a big way (Xlibris aside).

As for the number of titles published annually, the absolute number is meaningless without explanation as it grows by 35% from 2006-2007. In order to draw any analysis from this number of published titles the number would have to be broken down considerably. Impressive as the number is it is noted for effect only.

Reed Business to be Broken Up

PaidContent cites inside knowledge that the RBI sale will be broken into bite size pieces.

We have also learned that Reed Elsevier has changed its mind on how to sell it. Initially it did not want to sell off various pieces separately, but now at least the U.S. part, RBI-US, will be sold off separately, and multiple parties are aligning their arrows for when the process starts.

In my opinion, in the US we will see a group of PE partners join to buy the entire US segment and then carve this up subsequently into smaller chunks. The RBI media titles represent one such chunk which I have mentioned before.

The "Bankrupting Costs of Textbooks"

That is the conclusion of an editorial in this mornings NYTimes. The newspaper also notes a bill pending in Congress that would require publishers to sell "unbundled versions of textbooks minus the pricey add-ons." The editorial is short but makes some significant and spurious leaps in logic. As one example, Educators must,

embrace new methods of textbook development and distribution if they want to rein in runaway costs. That means using digital textbooks, which can often be presented online free of charge or in hard copies for as little as one-fifth the cost of traditional books. The digital books can also be easily customized and updated.

In conclusion, the newspaper suggests that institutions should take advantage of these new developments citing a tiny publisher offering textbooks for free and 'research' that suggests free geography material produces the same results as purchased materials.

Noting there is 'no reason' a textbook costs $140 is like saying there is no reason gas is $4/gallon. Higher education is like buying a car. You don't expect to get the gas for free and you shouldn't expect to get educational material for free. Legitimately, a student should expect to be treated fairly in respect to the materials they are asked to purchase for their course work but this is a complicated issue and to suggest 'publishers are calling the tune' is inaccurate and misleading.

Wolters Kluwer, Thomson Acquire Accounting Firms

Earlier this month, two of the big players in information publishing purchased accounting firms. Nonsensical? Not really, when you consider that both companies are in the business of offering a suite of products and services to their customers that encompass not only what we may traditionally think of as publishing products but also services and solutions that leverage or embed the information and expand the relationship with the customer. (I touched on this at a recent industry conference).

In the case of Wolters Kluwer, they have taken over the UK offices of Melbourne, Australia based accounting software firm MYOB (Mind Your Own Business). WK reportedly paid £35.5m earlier this month for MYOB. From AccountingWeb:

The MYOB Accountants Division product range includes PerTax and Viztopia accounts production and practice management programs acquired from MYOB's fellow Australian software Solution 6 in 2004. MYOB also produces the Singleview
knowledge management portal, plus corporation tax, trust and insolvency practice programs.

CCH's ProSystem portfolio includes many similar applications. In an email to customers CCH UK managing director Martin Casimir said the long term plan was to migrate all the solutions to a single range of best of breed products. "Please rest assured that this will be done in a considered and carefully controlled manner," he wrote.

CCH is WK existing software division.

Competitor Thomson has purchased tax software company Digita within the same time frame but after considerably wooing of the Digita founders. Thomson's UK and European market share is far smaller than their US position and they see Digita as enabling a rapid development of that market. As core markets mature, similar companies will be looking to the international market for growth performance. Additionally, in the case of both companies, the acquisitions will enable the companies to further expand the range of business solutions and services that they offer to their key markets.

Thomson will place Digita with Sweet & Maxwell.

Fictional Non Fictionists

Colson Whitehead had me. As I read this in New York magazine, I thought how could they have missed this story. But by the third paragraph, it struck me. This guy is lying!

Nevertheless a thoroughly entertaining satire - somewhat lost on some of the readers as noted in the comments - but then these are exactly the target audience so no matter. Here's a sample:

Average. That’s one thing Margaret most definitely is not. I broach this subject with her friend Misha Defonseca, author of Misha: A Mémoire of the Holocaust Years, which describes how she hid out in the forests of Europe to escape the Nazis and was taken in by a gang of wolves. Whenever Misha makes it out to the States for a visit, she and Margaret go shopping for Levi’s, which are difficult to come by in her native country. She resells them to aspiring hipsters in her village at a dreadful markup.

I visit her tiny cottage, a few kilometers outside a large Eastern European city. Misha is a little Cabbage Patch doll of a woman, with an energy beyond her years. It’s not hard to see her nestled in with the other cubs, fighting bravely for the teat of the she-bitch. I ask her if it’s harder to be adopted by black people or wolves. She chuckles at my question and sips her tea. “We tease each other, Margaret and I. She says, ‘At least we had cable and White Castle—you had to forage for nuts and berries.’ But the wolves, I tell her, the wolves have”—and here she turns her eyes to the ceiling—“they have La Vida Lobo. The Wolf Life!” It is a brief audience, and she soon dismisses me to return to work on the prequel of her memoir, about her time on the run from the Armenian genocide, when she was taken in by ferrets.

Ah, ferrets...

Net Galley Announce Digital Galley Early Adopters.

Earlier this year, NetGalley announced an important partnership with Publisher's Weekly as their first major step to implementing their digital workflow tool NetGalley. NetGalley is a tool that may transform the current paper based Galley workflow into a truly digital based process that will become both make the distribution and management of Galleys more efficient and effective. The product will be launched commercially at BookExpo, but they announce today that St.Martins, SourceBooks, Hachette Book Group and Bloomsbury US will be the first publishers to implement the tool.

From their press release:

"We are delighted to be here at the beginning of this terrific program," said Matt Baldacci, VP, director of marketing and publishing operations at St. Martin's Press. "NetGalley will make our interaction with Publishers Weekly more efficient, and has the potential to show cost, resource, and environmental efficiencies. These benefits are good for PW, the publishers that will join the full roll-out, and the industry in general.

During the pilot period, publishers will submit their title information—and optionally digital galleys—electronically to PW. In return, PW will provide visibility on review acceptance and status through NetGalley.com. Pilot publishers will also have the opportunity to invite other reviewers, media, and bloggers to join their community and view their “NetGalleys” online.

Ted Treanor, CEO of Rosetta Solutions, commented, “The response from publishers to support this initiative has been extraordinarily positive. NetGalley selected this group for their diversity of size and publishing type, and their willingness to innovate. We’re counting on these partners to help us continue to refine NetGalley.com.”

Earlier this year, I interviewed Mike Forney from RosettaSolutions.