THE FUTURE OF COPYRIGHT IS HERE. MAY 1st Event.
OnCopyright 2008 will bring thought leaders and change agents together to explore the evolving world of copyright. It’s a unique opportunity to share insights and exchange ideas on where copyright is headed, and how it will affect the future of written works, music and other forms of intellectual property. Register now to reserve your place. The $395 fee includes breakfast, lunch, cocktail reception and conference materials. For more information, contact the conference organizer at (978) 646-2691 or events@copyright.com.
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OnCopyright 2008
hosted by Copyright Clearance Center
May 1, 2008
Union League Club New York, NY
www.oncopyright2008.com
This one-day event will focus on four themes: Art, Society, Technology and Law. Speakers include:
SUZANNE VEGA Singer-songwriter
PAUL HOLDENGRABER Director, Public Programs The New York Public Library
GIGI SOHN President & Co-Founder Public Knowledge
STANLEY PIERRE-LOUIS VP and Associate General Counsel, IP & Content Protection Viacom Inc.
CLAY SHIRKY Author Here Comes Everybody
JIM GRIFFIN Warner Music
MARK TRIBE Assistant Professor, Modern Culture & Media Studies Brown University
PAUL FAKLER Partner Moses & Singer LLP
DOUGLAS RUSHKOFF Author, Teacher, Documentarian
TIM WUProfessor Columbia Law School
MICHAEL W. CARROLL Professor of Law Villanova University School of Law
JONATHAN LETHEM Bestselling Author, Novelist, Essayist
ALLAN ADLER VP, Legal & Governmental Affairs Association of American Publishers
KEVIN O’KANE President & Founder Red Lasso
MATT MASON Author The Pirate's Dilemma
Wednesday, April 23, 2008
Borders Stickers Books - Why?
As promised Mike Shatzkin for a second time this week.
I don't buy a lot of books in bookstores anymore -- I'm an ebook man -- and when I do, I generally patronize Barnes & Noble or an independent. So when a colleague a couple of days ago walked in with a couple of books he'd bought at Borders and pointed to the stickers on each book and said "hnh?", it recalled a bit of book retail history and some considerable irony.
It is obvious, or should be, that for a bookstore to be stickering every book is evidence of a pretty dumb supply chain. Every book has a bar code with a price extension. This is extra work that should just not have to be done.
It was the early 1970s when the B. Dalton chain introduced point-of-sale capture at the cash register. This was only a few moments after the invention of the ISBN and before there was any cash register technology for "reading" by scanning. So it was complicated to do this.
The way it worked is that each title Dalton bought was assigned an SKU number. When the buyer in Minneapolis made a purchase decision, stickers were generated for the books and sent to the store. When the books came in, they were stickered before they went to the sales floor. There were "holes" in the system, of course: when a store bought a book from a local wholesaler, they often would put a "dummy" sticker on that got them past the cash register but didn't record the specific book being sold. But the system delivered information that was light years ahead of what any chain retailer had ever had before and rapidly pushed B. Dalton ahead of their competition at the time, Waldenbooks, and particularly so in the sale of steady-but-slow backlist.
It was a revelation at the time to learn that the sale of six copies a week across all stores (in a multi-hundred store chain) was a "hot" title and that sales of six titles a month got you on the "warm" list. That introduced some real perspective to how books move. Or don't.
For a few years, Dalton operated with knowledge of what was selling and Walden didn't. Then, in the later 1970s, "machine-readable" typefaces were invented, which I think were called OCR-A and OCR-B. Harry Hoffman had taken over as head of Walden by then -- he who had introduced the microfiche reader at Ingram a few years before -- and he told publishers that, as of a certain date (I think this was about 1980), Walden would require that the ISBN be printed on the books in a readable font. And suddenly, Walden leapfrogged Dalton. Dalton had invested in a system that required a unique number (their SKU) and stickering and punching those numbers into the cash register. All of that was sidestepped by Walden, which only had to scan the readable ISBN (or punch in the ISBN if it weren't readable.) No stickering. No unique numbers.
The irony today is that Barnes & Noble, which owns (and is closing) B. Dalton, has a great supply chain that requires no stickering. And Borders, which owns (and is closing) Walden, has a poor supply chain which requires them to put their books into a "flow-through" warehouse to be stickered before they can go to the stores.
I don't buy a lot of books in bookstores anymore -- I'm an ebook man -- and when I do, I generally patronize Barnes & Noble or an independent. So when a colleague a couple of days ago walked in with a couple of books he'd bought at Borders and pointed to the stickers on each book and said "hnh?", it recalled a bit of book retail history and some considerable irony.
It is obvious, or should be, that for a bookstore to be stickering every book is evidence of a pretty dumb supply chain. Every book has a bar code with a price extension. This is extra work that should just not have to be done.
It was the early 1970s when the B. Dalton chain introduced point-of-sale capture at the cash register. This was only a few moments after the invention of the ISBN and before there was any cash register technology for "reading" by scanning. So it was complicated to do this.
The way it worked is that each title Dalton bought was assigned an SKU number. When the buyer in Minneapolis made a purchase decision, stickers were generated for the books and sent to the store. When the books came in, they were stickered before they went to the sales floor. There were "holes" in the system, of course: when a store bought a book from a local wholesaler, they often would put a "dummy" sticker on that got them past the cash register but didn't record the specific book being sold. But the system delivered information that was light years ahead of what any chain retailer had ever had before and rapidly pushed B. Dalton ahead of their competition at the time, Waldenbooks, and particularly so in the sale of steady-but-slow backlist.
It was a revelation at the time to learn that the sale of six copies a week across all stores (in a multi-hundred store chain) was a "hot" title and that sales of six titles a month got you on the "warm" list. That introduced some real perspective to how books move. Or don't.
For a few years, Dalton operated with knowledge of what was selling and Walden didn't. Then, in the later 1970s, "machine-readable" typefaces were invented, which I think were called OCR-A and OCR-B. Harry Hoffman had taken over as head of Walden by then -- he who had introduced the microfiche reader at Ingram a few years before -- and he told publishers that, as of a certain date (I think this was about 1980), Walden would require that the ISBN be printed on the books in a readable font. And suddenly, Walden leapfrogged Dalton. Dalton had invested in a system that required a unique number (their SKU) and stickering and punching those numbers into the cash register. All of that was sidestepped by Walden, which only had to scan the readable ISBN (or punch in the ISBN if it weren't readable.) No stickering. No unique numbers.
The irony today is that Barnes & Noble, which owns (and is closing) B. Dalton, has a great supply chain that requires no stickering. And Borders, which owns (and is closing) Walden, has a poor supply chain which requires them to put their books into a "flow-through" warehouse to be stickered before they can go to the stores.
Tuesday, April 22, 2008
Voyager to Take $45mm Charge
Voyager Learning will take a $35-45mm non-cash charge against its 2006 operating results as a result of the sale of Proquest Information and Learning. PQIL was sold in 2007 to Cambridge Information Group for $222mm. The write down represents 20% of the value of the business unit and in retrospect it is hard to understand how that purchase price could have been effectively negotiated given the current accounting disclosures. On the earnings call last week, Mr. Richard Surratt, Voyager Company's President and CEO noted that they will also take a non-cash charge against goodwill for the purchase of Voyager. In November, Mr. Surrat noted that they expected to have their 2006 10-Qs and 10-K competed by the end of the first quarter 2008; however, they are six weeks behind and do not expect to have that work completed until mid-May. They do expect to have their financial reports for 2007 completed by July.
Mr. Surratt went on to note the status of several lawsuit against the company but there is little change here since the last update in November. He was joined on the call by Ron Klausner, President, and Brad Almond, CFO, of Voyager Expanded Learning.
On an operating basis the company appears to be performing consistently and is stable given a challenging operating environment. Mr. Almond commented on the full year results:
Call Transcript
Mr. Surratt went on to note the status of several lawsuit against the company but there is little change here since the last update in November. He was joined on the call by Ron Klausner, President, and Brad Almond, CFO, of Voyager Expanded Learning.
On an operating basis the company appears to be performing consistently and is stable given a challenging operating environment. Mr. Almond commented on the full year results:
In his comments, Mr Klausner concluded the call with a number of comments about the operating environment faced by the company.For the fiscal year ending December 29, 2007, the Voyager operating business had preliminary revenue of $110 million, earnings before interest and taxes, or EBIT, of $8 million and earnings before interest, taxes, depreciation and amortization, or EBITDA, of $30 million. These three results each fall within the guidance we gave in November. This compares to 2006 preliminary revenue of $ 115 million, EBIT of $ 6 million and EBITDA of $ 30 million.
We have a terrific track record in developing capabilities that address very difficult problems. While some of our competitors are creating uncertainty and doubt about us as a result of the board's decision to consider strategic alternatives, we are encouraged by how well these new capabilities have been received in the market. Based on the explosive growth in usage of Ticket to Read and the early feedback on the redesign of Passport, we continue to be optimistic that our focus on researched based curriculum, high levels of implementation support, embedded professional development, and web based practice will be rewarded.The company expects to continue their gradual operating improvement with anticipated 2008 revenue in the range of $111 to $119 million, EBIT between $6 and $10 million, and EBITDA between $28 and $32 million.
Call Transcript
Monday, April 21, 2008
Amazon.com and Book Pricing
Mike Shatzkin of The Idea Logical Company asked if I would like to post the following article. He also has another in the wings which I will put up on Wednesday.
Amazon stirred two controversies in the past couple of weeks. A lot of attention was paid to the one concerning print-on-demand, where they did an arm-twist to get publishers who use the capability to set their books up at BookSurge, even if they were already set up someplace else, most likely Lightning. I have expressed my concern on behalf of publishers about that policy which, although characterized as a mere attempt to be customer-friendly, should be a matter of great concern to Amazon's suppliers.
The second controversy, however, is a bit more complicated and, to my way of thinking, Amazon's position is considerably more justifiable. That was Amazon's suggestion that they will interpret the price at which a publisher sells directly as the "real" retail price, on which discounts to them should be based. This recalled for me a 10-year old industry conversation and, in doing so, showed me the sense in Amazon's position.
In the 1990s, the suggestion that retail prices should come off the books became pretty vociferous. Bernie Rath, then the pioneering (and publishers and big retailers would say, "troublemaking") Executive Director of the American Booksellers Association was among those making the case. In a nutshell, Rath and some very sophisticated and successful booksellers made the argument that it was a mistake to "cap" the retailer's margin with a printed price, above which they then obviously could not charge. The argument was that retailers in every other field adjusted their prices to the neighborhood, reflecting both the cost of real estate and the local community's ability to pay. By limiting booksellers' margins, publishers were, in effect, limiting the number of outlets that could sell their books.
At that time, there were two "most popular" arguments against the idea. One was that booksellers, by and large, benefited from the prices being on the books. It saved them the effort and cost of stickering prices themselves; it relieved them of the responsibility for prices in the eyes of their customers, who could clearly see the price was printed before the bookseller got the book; and it dramatized any discounting the bookseller cared to do. Because book clubs were a more important component of a publisher's sales at that time, they represented another constituency that supported the printed price because it emphasized their own cut-price offers. And booksellers could live with that discounting because book club membership was constricting; it was not about buying what you want when you wanted it.
At the time, I often made a third argument, which I believed was the most important even if it wasn't the most ubiquitous. Publishers have always been willing to sell any book they publish to any consumer who asks for it. At the time, it was absolutely routine that those sales would be made at the full publisher's retail price, plus some charge for postage and handling. In that way, publishers respected the reality that some of their books might not be widely available (remember, even after there was an Amazon, there was a period before most people had regular internet access and a comfort level about using it), but avoided "competing" with their retailers.
I pointed out that this practice meant there really IS a publisher's price, so the question narrowed to whether it would be revealed to the consumer on the book, or not. And the retailer who decided to sell the book at a price higher than the publisher's price -- which, even at the time seemed more of an imaginary than real opportunity -- would be taking the risk that his/her customers would soon know they had been gouged because either they or somebody else might let them know what the publisher's price actually was.
How times have changed. And two aspects of this equation have really changed with it.
First of all, no bookseller today would anticipate being able to sell a book at higher than the publisher's retail price. There are already consumers walking around bookstores with handheld computers checking prices online while they shop in the store. And, as we all know, prices online are never going to be higher than publisher's suggested retail, whether printed on the book or not.
But, secondly, many publishers now sell to consumers aggressively through their web sites, and price offers are part of the effort. So while the old bookseller arguments for taking the prices off the books are no longer valid, neither is my rejoinder. Time has passed both arguments by.
But Amazon is making a good argument here, and it is one that B&N and other retailers, and, by extension, all wholesalers, will likely join them in pressing on publishers. The price printed on the book really means nothing if the publisher doesn't sell at that price. All it becomes, then, is a basis on which to establish prices to intermediary customers; it is no longer a meaningful price to the consumer, "suggested" or otherwise. And if the longtime industry convention that prices to intermediary customers is pegged to the price charged (presumably by the publisher) to the consumer, then the discounts should be calculated from the publisher's consumer selling price.
We have not heard the last of this argument. Publishers selling direct to consumers better be thinking this through very carefully.
Mike can be reached at mike (at) idealog.com.
Amazon stirred two controversies in the past couple of weeks. A lot of attention was paid to the one concerning print-on-demand, where they did an arm-twist to get publishers who use the capability to set their books up at BookSurge, even if they were already set up someplace else, most likely Lightning. I have expressed my concern on behalf of publishers about that policy which, although characterized as a mere attempt to be customer-friendly, should be a matter of great concern to Amazon's suppliers.
The second controversy, however, is a bit more complicated and, to my way of thinking, Amazon's position is considerably more justifiable. That was Amazon's suggestion that they will interpret the price at which a publisher sells directly as the "real" retail price, on which discounts to them should be based. This recalled for me a 10-year old industry conversation and, in doing so, showed me the sense in Amazon's position.
In the 1990s, the suggestion that retail prices should come off the books became pretty vociferous. Bernie Rath, then the pioneering (and publishers and big retailers would say, "troublemaking") Executive Director of the American Booksellers Association was among those making the case. In a nutshell, Rath and some very sophisticated and successful booksellers made the argument that it was a mistake to "cap" the retailer's margin with a printed price, above which they then obviously could not charge. The argument was that retailers in every other field adjusted their prices to the neighborhood, reflecting both the cost of real estate and the local community's ability to pay. By limiting booksellers' margins, publishers were, in effect, limiting the number of outlets that could sell their books.
At that time, there were two "most popular" arguments against the idea. One was that booksellers, by and large, benefited from the prices being on the books. It saved them the effort and cost of stickering prices themselves; it relieved them of the responsibility for prices in the eyes of their customers, who could clearly see the price was printed before the bookseller got the book; and it dramatized any discounting the bookseller cared to do. Because book clubs were a more important component of a publisher's sales at that time, they represented another constituency that supported the printed price because it emphasized their own cut-price offers. And booksellers could live with that discounting because book club membership was constricting; it was not about buying what you want when you wanted it.
At the time, I often made a third argument, which I believed was the most important even if it wasn't the most ubiquitous. Publishers have always been willing to sell any book they publish to any consumer who asks for it. At the time, it was absolutely routine that those sales would be made at the full publisher's retail price, plus some charge for postage and handling. In that way, publishers respected the reality that some of their books might not be widely available (remember, even after there was an Amazon, there was a period before most people had regular internet access and a comfort level about using it), but avoided "competing" with their retailers.
I pointed out that this practice meant there really IS a publisher's price, so the question narrowed to whether it would be revealed to the consumer on the book, or not. And the retailer who decided to sell the book at a price higher than the publisher's price -- which, even at the time seemed more of an imaginary than real opportunity -- would be taking the risk that his/her customers would soon know they had been gouged because either they or somebody else might let them know what the publisher's price actually was.
How times have changed. And two aspects of this equation have really changed with it.
First of all, no bookseller today would anticipate being able to sell a book at higher than the publisher's retail price. There are already consumers walking around bookstores with handheld computers checking prices online while they shop in the store. And, as we all know, prices online are never going to be higher than publisher's suggested retail, whether printed on the book or not.
But, secondly, many publishers now sell to consumers aggressively through their web sites, and price offers are part of the effort. So while the old bookseller arguments for taking the prices off the books are no longer valid, neither is my rejoinder. Time has passed both arguments by.
But Amazon is making a good argument here, and it is one that B&N and other retailers, and, by extension, all wholesalers, will likely join them in pressing on publishers. The price printed on the book really means nothing if the publisher doesn't sell at that price. All it becomes, then, is a basis on which to establish prices to intermediary customers; it is no longer a meaningful price to the consumer, "suggested" or otherwise. And if the longtime industry convention that prices to intermediary customers is pegged to the price charged (presumably by the publisher) to the consumer, then the discounts should be calculated from the publisher's consumer selling price.
We have not heard the last of this argument. Publishers selling direct to consumers better be thinking this through very carefully.
Mike can be reached at mike (at) idealog.com.
Sunday, April 20, 2008
Sunday Links: London, Sex and Origami
At the NYTimes Sarah Lyall takes a literary tour of London in 36hrs. She missed Dickens' house. And if you are there for 48hrs visit Sir John Soane's house (it's free) and it is an incredible house and collection. He was an architect by profession but a patron, etc.
From Lyall's article:
In my early fun-filled days at Bowker (contrasted with the later years) we used to joke about publishing a BIP/sex & erotica edition since a) there were many titles in the database under those subjects and b) we knew it would sell. It's probably a good idea it remained a joke but Rupert Smith in the LATimes reflects on his experience writing and selling titles in this active publishing segment.
Things aren't going so well for the owner of Harlequin. Torstar announces they are cutting 160 jobs and taking a restructuring charge of $21mm. These reductions will all be in the newspaper division (as you might expect). Link
From Lyall's article:
But it is better to visit, if only for the joy of seeing the landscape of your imagination come to life. How thrilling to happen upon Pudding Lane, where a bakery mishap led to the Great Fire of 1666, after reading Pepys’s account in his diaries. Or to wander along Baker Street, where Sherlock Holmes once fictionally solved the unsolvable. Walk across London Bridge and gaze down, toward Southwark Bridge: this is the stretch of the Thames where Dickens’s sinister characters dredged up corpses in “Our Mutual Friend.”
In my early fun-filled days at Bowker (contrasted with the later years) we used to joke about publishing a BIP/sex & erotica edition since a) there were many titles in the database under those subjects and b) we knew it would sell. It's probably a good idea it remained a joke but Rupert Smith in the LATimes reflects on his experience writing and selling titles in this active publishing segment.
The fact that erotica sells so much, and so widely, suggests that it's really just like any other type of genre fiction -- doing a job for an audience that knows what it wants and where to get it. Crime, horror, sci-fi and romance authors set out their stalls in very similar fashions, offering a mystery, or a fright or a flight into fantasy. The porn writer's offer is just as simple: I'll deliver two good orgasms per chapter (or one, for readers over 40), along with a rattling good plot that will get you to the next sex scene, some likable characters and a big dollop of humor.I found it interesting that two traditional print based travel map publishers are battling over who owns the rights to maps that use the ancient art of Origami. Am I going to have to consider how I fold my mapquest printout? Link.
Compass, which produced the official map for the Athens Olympics and is hoping to produce the official one for Beijing, was recently granted European patents for the maps. The case comes amid concerns about the growing cost of commercial litigation.So, Compass (who are fighting Langensheidt) got a patent for an origami technique...?
Things aren't going so well for the owner of Harlequin. Torstar announces they are cutting 160 jobs and taking a restructuring charge of $21mm. These reductions will all be in the newspaper division (as you might expect). Link
Saturday, April 19, 2008
Blurb Again
mThe NYTimes covers the d0-it-yourself self-publishing segment including a focus on the cottage industries that are developing around technology sites such as blurb.com. (I've used Blurb and love the tool).
From the article:
From the article:
Today, Ms. Leendertse still turns a pile of pictures and paragraphs into bound books, but instead of working just for a roster of major publishers like MIT Press, she helps individuals create books. She is participating in an offshoot of the scrapbooking phenomena, the hobby of collecting and preserving photos and mementos. What was once a pastime for mothers recording family memories for their children has blossomed into a new, fertile marketplace of collaboration. People with stories to tell are creating personalized books filled with pictures, blog entries and even business proposals. While some of these glorified scrapbooks are aimed at the world at large, many new titles were never intended to be sold in stores or marketed in any way. For instance, architects submitting bound proposals for their projects have used some of the scrapbooking tools.
More Vibrant Less Cynical
Rachel Harvey of the BBC tells educates us to some tips for aspiring authors.
"With the London Book Fair inspiring budding writers, Rachel Harvey looks at the best ways to get published."
Link
"With the London Book Fair inspiring budding writers, Rachel Harvey looks at the best ways to get published."
Link
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