MediaWeek Report (Vol 13, No 2): ViaNOT - Simon & Schuster Nolonger a Fit at ViacomCBS

Almost apologetically, ViacomCBS Chief Executive Bob Bakish announced that Simon and Schuster (S&S) wasn’t a real fit for his media company, this despite the fact that S&S has been part of the family for 25 years give or take. That said, he did confirm what many in the industry have seen for a while, that ViacomCBS has been interested in off-loading S&S for a while. It’s pretty unfair on S&S too: The company has a strong backlist and stable of reputable authors, has avoided some of the bigger controversies such as library lending and Amazon conflicts and has managed to produce decent operating margins in a trade publishing business that historically struggled to achieve 10% profit margins.

Left unsaid in Bakish’s admission is that a strategic buyer may not be on the cards. For HarperCollins, Macmillan, Penguin Random House and Hachette that deal has been but a phone call away for the past 3-4 years, but no deal is in the offering. Bakish has been forced to announce publicly the chance to purchase one of publishing’s most iconic publishers to gin up some interest. Perhaps if this effort doesn’t produce a buyer then VIacomCBS may moderate their price expectations to make a deal with another publisher more likely. While efficiencies are likely in a combination with another publisher cost savings may not be as significant at first glance. Publishing has been running lean since the financial crisis (not the current one).

S&S had revenues of $814 in 2019 according to industry sources which was slightly lower than those in 2018. Profit is likely to be around 10-15% which may broadly imply a valuation in the $500mm range. With market power of both Amazon Publishing and Penguin Random House potential buyers would be wise to be cautious in overpaying for an expanding and growing market opportunity which simply isn’t there.

Drama But No Theater

No One Buys Mediocre Theater

Nothing speaks to the inadequacy of book retailing better than some recent news from Barnes & Noble. To ‘celebrate’ Black History month, the company chose to re-cover some well-known classics with images of ‘people of color,’ presumably to suggest their relevance to consumers of color. Not only was the move ignorant and arguably racist of this move, the images themselves had nothing to do with the story lines in the books – surely a fundamental failure by a bookseller! These books were quickly recalled from sale but the episode did get me thinking about “retail theater” in the context of books and publishing. I really think B&N (and others) are missing a trick.

The retail experience done well is ‘theater’ as sophisticated retailers frequently demonstrate. Consumers visiting Starbucks Reserve Roasting, Nike or Roots Chicago are captivated by those concepts and become participants in those retailers’ theater productions. Retail theater is not a new concept in store design but, as more shopping migrates to the web, savvy physical retailers are investing in theater-like retail experiences to draw foot traffic. The goal of this strategy is to make the store a ‘celebrity’ in and of itself so that consumers trek there specifically to visit, engage and buy.

The best exemplars of the retail theater concept also seem to have a strong sense of branding and consumer marketing. These brands – Nike, Starbucks and others like them – stand for something in the minds of their target consumers which is reinforced by the in-store experience. There are few, if any, similar examples in book retailing (and I don’t count Amazon) despite the inherent advantages of publishing and book retailing. Arguably, not since Crown Books in the eighties and nineties has book retailing communicated a strong brand association to consumers. And, no book retailer to day has shown the kind of imagination and ‘theater’ necessary to combat declining interest in reading and purchase migration to the web. Walk into any bookstore across the country and they all look the same: Flat top tables up front, shelves lining the walls and bookmarks by the register. The "outreach" to consumers is entirely passive with very little real engagement.

In their Union Square (New York) location, B&N has one of the finest retail footprints of any retailer. The store should be the chain’s flagship location, where they can build the kind of brand loyalty companies like Nike, Apple, Burberry and others have created. This requires a wholesale rethink. Walk into the Union Square store today and it is a mess: Books, games and outdated electronics. But what if the first floor – which has double-height ceilings, large windows opening on to Union Square and clear views from front to back – was a theater space? This vast space could easily be redesigned to feature frequent ‘scene’ changes and new “sets” ‘flown in’ from above (and below) like a theater in the round with books, characters and storytelling on stage.

I’d go even further by bringing an actual performance space to the ground floor and orienting a movable stage against the immense front windows which would – like the Saks 5th Avenue Christmas windows – grab the attention of shoppers outside the store. Moving the entry doors to the rear of the store would provide a real attention grabber and more ‘theater’ to the book retail experience.

Take, for example, African American History Month: Rather than an insulting and ill-considered gesture, what if B&N Union Square gave up the entire ground floor to the African American Museum of History and Culture? Working together with B&N brand and merchandise managers, what might B&N and the museum’s staff do with the space if everything on the ground floor was movable or reconfigurable? Rethinking book retailing can and should benefit from audacious and deep use of  authors, stories and characters in merchandising. Drawing on a wealth of African American history to create a month of engrossing book theater is a far better idea than those cynical and manipulative book covers. I am certain that the museum’s staff would be able to curate compelling retail theater around the celebration of African American authors, performers, celebrities and others which, for a month at least, would show reading in a fresh light and bring new perspectives to bear. And that’s the point.

Then what do B&N and other book retailers do for the other eleven months of the year? Clearly, most book retailers don’t have the space or financial resources to engage in reinventing the sales experience every 30 days. But it is clear there is room to fundamentally re-think the bookselling experience. Building on the inherent strengths of the publishing industry – characters, themes, genres and partnerships – with a little more imagination and design expertise, booksellers could provide a more experiential shopping adventure for consumers. A recent report from McKinsey notes that companies offering a high level of design and consumer experience grow revenues and shareholder return at nearly twice the rate of less inventive competitors. Retail theater should be second nature for an industry so based on storytelling and it is only shallow thinking and lack of imagination which both holds back the book retailing industry and resulted in those appalling book jackets.

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Michael Cairns is a publishing and media executive with over 25 years experience in business strategy, operations and technology implementation.  He has served on several boards and advisory groups including the Association of American Publishers, Book Industry Study Group and the International ISBN organization.   Additionally, he has public and private company board experience.   He can be reached at michael.cairns@infomediapartners.com

Read more articles on my Flipboard magazine:

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Are you considering an investment in new technology?  Check out my report on software and services providers.  (PubTech Report)

More Posts:

PND: Get Caught Learning

PND: Exclusive Access Comes to Campus

PND: Questioning my Education

PND: The New McGraw-Hill: Where is Education Textbook Publishing Headed?

Enjoy that?  Here are my predictions from past years:

2020: Predictions 2020: War is Hell
2018: Predictions 2018: Somewhere Else
2017: Predictions 2017: Subscribe To Me
2016: Predictions 2016: Education, China, Platforms and Blockchain.
2013: Predictions 2013: The Death of the Middle Man
2012: Predictions 2012: The Search for Attention
2011: Predictions 2011: The Growth of Intimacy
2010: Predictions 2010: Cloudy With A Chance of Alarm
2009: Predictions 2009: Death and Resurrection:
2008: Predictions 2008
2007: Predictions 2007

A Book Subscription Service - Resilient Old Ideas

From an article in the Guardian:

From chocolate to coffee to beer to grooming products, subscription boxes are big business, and books are no exception. There are countless online companies that ship out a monthly read, some adding artisan teas, hot chocolate, or an adaptation on DVD of the book. But Heywood Hill’s subscription is as bespoke as possible: each package is individually tailored to the reader’s tastes following a conversation between the subscriber and a bookseller. Camille Van de Velde, one of Heywood Hill’s five subscription booksellers, takes me down a rickety staircase into the basement from where the scheme is run. Staff are at work in a series of pokey interlocking rooms, stacking titles on shelves, ready to be wrapped, packed and shipped. They won’t be specific about numbers, but each has hundreds of people to choose for each month, and it has, by all accounts, transformed the business.

MediaWeek Report (Vol 13, No 1): Flipboard Magazine - New Articles on Audio Books, Scholarly Infrastructure, China Trade, Fan Fiction + Others

Here is my most recent selection of media and publishing articles on Flipboard. 
 

https://flipboard.com/@mpcairns/personanondata---the-magazine-t8knolg6y

Guest Post - Emily Williams: (More) Education Market Predictions 2020

Fellow traveler, posted her 2020 Emily Williams posted her 2020 predictions on a list serve we both belong to and I asked her if she would like to also post them here.  Emily is Manager, IP & Partnerships at EL Education

Halfway through the last decade I started in my current role at EL Education, stepping one foot out of trade book publishing after ten years of working with agents, editors, and rights departments, industry analysis and reporting, and digital content acquisition. From where I sit now, I get to help publish a highly rated OER literacy curriculum at an organization focused on creating classrooms where students grow into passionate readers, thinkers, and citizens. It's been a steep learning curve in curriculum adoption and book sales, edtech, and OER during a time of upheaval and uneven change in K-12 education. When the chance came to offer predictions on publishing for the new decade, I couldn't resist chiming in from my odd outpost. Here are a few I came up with, based in optimism and hope that we'll grow into the opportunities this moment offers us:

• A movement toward more research-based reading instruction will prompt more school districts to buy curricula that use trade books instead of textbooks. This will cause growth, especially for children's, middle grade, and YA titles rich in information and/or historical context - small growth for big publishers and big growth for some small publishers - in one of the few remaining sales channels not dominated by Amazon.

• These publishers will get better at understanding and nurturing the virtuous feedback loop that school adoptions can cause for retail sales.

• The K-12 world will reach a better understanding of the value proposition of OER in K-12, which is different than in higher ed or academic publishing.  In K-12 there are real benefits for districts to OER - security of access to content over time (vs. term-limited licensing models), sharing of resources and best practices, and the ability to create and hold onto adaptations made to fit local needs. However, state and district initiatives are still focused on creating large-scale customized versions, which come with significant and ongoing production costs and cut them off from being able to tap into an ecosystem of resources built on the national versions of these highly-rated core curricula - including multiple format versions, ongoing updates and improvements, ancillary products, professional development, and assessment tools. For core teaching materials that need to be launched and supported across a big, complex system, approaching an OER adoption as a chance to customize up front comes with real tradeoffs. 

• The shrinking dominance of traditional educational publishers with their one-stop-shop solutions, maturing tech platforms in need of content, and the growth of the OER ecosystem will push the K-12 educational publishing world towards the kind of standardization in format and metadata that the rest of publishing adopted by the beginning of the 2010s.

• The push for OER and other forms of lower-cost, digitally-delivered curricula that are used in classrooms year after year will lead to a more acute understanding of the need for stable digital resources online, driving educators to digital libraries and other repositories that don't break from link rot.

• Ebooks in K-12 will continue to be used to offer students access to a big catalog of titles for choice and research reading, but will coexist with paper in the classroom as unequal access to internet and devices at home limit their usefulness outside of school.

• Audiobook platforms will get better at serving the needs of K-12 schools, and audiobook publishers will get better at supplying the titles they want. Audiobooks will increasingly be used in regular instruction and not just as an optional format for school library books. There will be increased demand for podcasts that support learning, and for tools that allow students to create and share their own audio recordings.

• A movement toward greater cultural responsiveness and representation reflecting the diversity of students in public schools will create consistent and growing demand for books by diverse authors, about diverse characters - not only in contemporary fiction, but in historical and nonfiction titles as well.

• The growth in numbers of public school students who are English language learners, from diverse language backgrounds, combined with the movement toward improving cultural responsiveness, will create a demand for more access to books in other languages, especially children's, middle grade, and YA titles. Digital publishing and reading platforms could play an important role in providing access to titles in underrepresented languages from Africa and south and east Asia, if solutions can be found to the challenge of digital supply chain and publishing in the countries of origin. This could turn into an interesting foothold in the US market for international children's publishers.

Emily Williams is Manager, IP & Partnerships at EL Education.

Predictions 2020: War is Hell

Over the years (of PND), I've generally taken a look in my crystal ball to report on some trends and predictions for publishing as we turn to a new year.   For reference, here are some of my past efforts which always seem to generate a good deal of PND traffic (which is gratifying).

This year, my predictions are not a expansive as in year's past but that doesn't mean I think we don't have some interesting things to consider for the next year or two.  Here we go:


Where’s my Inclusive Access?
The Inclusive Access roll out is slow, painful and exasperating for most higher ed publishers.   There are approximately 5000 colleges and universities in the US but based on research I’ve seen less than 15% of them are ready to deliver inclusive access to students.  Moreover, this roll-out is going incrementally without any real drive or impetus.  This is circumstance will frustrate all publishers attempting to change business models and drive their customers to complete digital delivery of content.   As a bi-product, we may see more activity around ‘student choice’ options which address the delivery of digital content to students but which replicate print textbook purchase process.  For publishers their preference is toward inclusive access, but it may be several years before we reach 50% penetration in the market.

Amazon Texts?
Amazon’s publishing program continues to grow and they now have more than 15 genre imprints.   I expect they will look to enter the textbook market for some experimental products over the next few years.  Similar to the Amazon Basics product lines, the company may conclude that they can carve off some market share in education by delivering basic education materials.  Given the broad scope of their current publishing program (and their willingness to experiment) I see education as a natural progression for their publishing program.   What would really stir things up would be if Amazon purchased Chegg which already has student directed products.  The Chegg products would form an immediate platform on which Amazon could build.

POD Books Anyone?
Everyone knows and sees the phenomenal interest in and growth of POD casting and publishers are trying to jump on the bandwagon.   Malcolm Gladwell has released his newest book Talking to Strangers as a POD book which is an interesting experiment and I expect to see more of these type of experiments combining the long-form book with the episodic POD audio format.  Audio publishing is the current engine of publishing and the combination of these two formats is likely to look very interesting for publishers over the next few years.  By the way, Gladwell’s Podcast Revisionist History is excellent.

Hearing Voices?
Voice activation applications are both controversial and rapidly expanding in usefulness.  Alexa “skills” development is entering the education space with solutions for study support, reference desk type applications and campus based administrative activities for meetings, conference rooms, etc.   Additionally, on-campus information look-up is also being tested by some universities to help students source basic campus information.   Currently, these ‘skills’ may be relatively basic but as voice technology becomes more pervasive and complex we will see more application in the education space.  After all, just ask Alexa.

Infrastructure Week?
Infrastructure is boring and not normally associated with publishing however the implementation of 5G may well provide education publishers with some interesting opportunities.   5G enables speedier delivery of web-based content and will alleviate all of the problematic issues with using online content and technology in the classroom.  As a result, more immersive content with more participants (100s of students) can be possible including augmented reality (AR) type products.   Campus’s across the country are already beginning to work with Infrastructure providers to define benefits and options for 5G on their campuses.   We will see center’s of excellence develop around the possibilities that 5G offers educators.  For example, we should see benefits in how research is conducted, how content is delivered and how educators can cater to a wider set of student needs.   It is possible that students with special needs could see better options simply because 5G enables faster, deeper content at the point of need.  Smart publishers will look to work with universities building these 5G center’s of excellence.   Infrastructure isn’t always boring.

Last Points:
It is going to be an interesting year for Barnes & Noble - both on the trade retail and the college retail side.  Both companies are likely to end 2020 in different form than they entered the year.  Trade retail in under new management and College trade are now considering options for their corporate structure which may mean they are acquired and/or go private.

There is a lot of friction between trade publishers and libraries - evidenced by Macmillan's imposition of a front list embargo.  This friction is growing more raw by the day with the increases in digital content distribution via libraries and the belief by publishers that purchase for lending substitution is becoming a more real issue and is eroding retail sales.  How this friction is managed over the next year will be closely watched by all parties.

As always, looking forward to an interesting and exciting year.

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Michael Cairns is a publishing and media executive with over 25 years experience in business strategy, operations and technology implementation.  He has served on several boards and advisory groups including the Association of American Publishers, Book Industry Study Group and the International ISBN organization.   Additionally, he has public and private company board experience.   He can be reached at michael.cairns@infomediapartners.com

Read more articles on my Flipboard magazine:

*******

Are you considering an investment in new technology?  Check out my report on software and services providers.  (PubTech Report)

Enjoy that?  Here are my predictions from past years:

2018: Predictions 2018: Somewhere Else
2017: Predictions 2017: Subscribe To Me
2016: Predictions 2016: Education, China, Platforms and Blockchain.
2013: Predictions 2013: The Death of the Middle Man
2012: Predictions 2012: The Search for Attention
2011: Predictions 2011: The Growth of Intimacy
2010: Predictions 2010: Cloudy With A Chance of Alarm
2009: Predictions 2009: Death and Resurrection:
2008: Predictions 2008
2007: Predictions 2007

2007-2013: My Big Book of Posts & Predictions on Slideshare