Reed Business Sale Delay

The FT reports that Reed is delaying the circulation of information relating to the sale of their Reed Business unit in advance of finalizing a financing package that could be made availale to prospective buyers. The newspaper also establishes expectations that the unit could sell for $2.5Billion. From the article:

Another source close to the situation said that there is ”an irrational fear of a downturn in advertising revenues,” and there is a lot of advertising in the group. The source added, however, that Reed is still an attractive deal with senior leverage unlikely to be more than 3x EBITDA. Those low leverage levels should be enough to encourage bidders against a possible downturn in the economy, specifically advertising revenues, the source added. While Reed Elsevier is hoping to encourage a sale of the whole of RBI by offering a financing package to prospective buyers, it is also offering financing packages for parts of the business, one source said. The source said he thought that Reed would ultimately still sell the business as a whole despite marketing a sale of parts in tandem. This way, mid-sized players would also be in the process to drive up the end price for the asset, the source explained

Generational Chasm

Publishing used to be predictable across generations. Parents read the same books in the same manner as their children and grandchildren. Not so today. Today's publishers for the first time in their history have no confidence that their child's generation will be (or are) interested in their published output. It is not that publishers aren't making an effort; however, I have a disturbing belief that there is an preponderance of focus on forcing existing content into a format and delivery mechanism (e-books and e-readers) that is not ideal only to have that e-book content used by a market - my and my parents generation - that is in long term decline.

In other words, migrating content so that it is available on an e-book may provide a false sense of security for publishers who believe this is enough to 're-launch' their content to the newest generations. No publisher should not have an e-book strategy just like they shouldn't have an Ingram or POD strategy but today's one dimensional content is no longer enough. This is why experiments like the recently announced agreement between Harpercollins and 4thStory are so interesting. From the press release:

4th Story Media and HarperCollins Publishers today announced their partnership in The Amanda Project, the first multi-platform series to be written in part by its audience, girls ages 12-14. 4th Story Media, which owns all rights for the property, will produce the content for The Amanda Project with a creative team including web design agency Happy Cog, young adult authors, artists and graphic designers. HarperCollins Publishers, which is a strategic partner in the venture and an investor, has acquired the rights to publish an eight-book The Amanda Project series worldwide."It feels like the art and craft of publishing great stories for children is on the brink of revolutionary change," said Lisa Holton, founder and CEO, 4th Story Media. "We are exploring new ways of using the web to tell stories, while also leading kids back to the joys of reading. By combining talented authors with creative web designers we are fusing traditional storytelling with the interactive world of social networking, online games, and user-generated content. We are thrilled to introduce 4th Story Media with the launch of The Amanda Project and are delighted to be partnering with the exceptional team at HarperCollins to bring this series to life."

More of this 'web first' publishing will be seen as the normal way to launch a new product or title. Harpercollins is one example but the methodology is appearing across the publishing spectrum. For example, the publisher of Bass Fisherman (no I don't subscribe) creates targeted web sites that combine social networking, a minimum of editorial content and rely on users to power the content build with their own youtube videos and podcasts. Having built an interest group, the publisher is now planning a print product targeted at this group. Doing it the other (traditional) way would have been expensive and speculative; moreover, it wouldn't have engaged the market in the manner that the web-first approach does.

Tomorrows version of the monograph is unknown but it is not the e-book version of today's book. The hype around Bezos' appearance at BookExpo was troubling to me because of the manner in which we hang on his every utterance. Certainly Amazon is important, but we are the content providers and I hope we are all looking forward to the day when a panel of publishers gets up and serially announces game shifting developments in content and content delivery. Will it be next BookExpo?

The Resilient Bookshelf Motiff: Done Better

Read Write Web takes a look at a new 3rd party application of Amazon.com data and services. A company named Zoomii has developed a book browsing UI that mimics the experience of walking through the isles of a local bookstore. (As a side note, with technology implementations like this why would Amazon need to buy Borders)? As RWW notes,

Launched to the public earlier this week, Zoomii is one great bookstore browser. Built on Amazon's Elastic Compute Cloud (EC2) and Simple Storage Service (S3), interacting with Zoomii is reminiscent of Google Maps. You can zoom in and out of bookshelves or pan around to navigate the service. The site design feels just like you're browsing a bookshelf at any bookstore except the books are facing cover-forward instead of spine-out. To keep up with the feel of a bookstore, books are organized by author and you can also compare book sizes to get a feel for how big or small a book is.

And gosh, my Canadian readers will be happy! (Via Brantley-again). Also Amazon Web Services Blog.

Note: The product is subject to Amazon.com's meta data which is why Simon Winchester's book The Man Who Loved China comes up on the "Mystery" shelf.

Blackwell to Implement Espresso Book Machine

News from The Bookseller that Blackwell will be implementing the Espresso Book machine in their 60 store chain of retail stores. From the article,

"The deal makes Blackwell the first UK retailer to install the EBM. The academic chain will trial the machine from this autumn at a yet-to-be-determined launch site, and will then roll it out across its stores. It is also looking at possible international retail sites and library supply for the machine."Blackwell c.e.o. Vince Gunn described the technology, the brainchild of former Random House US editorial director Jason Epstein, as "trailblazing and pioneering". He added: "From a retailer's point of view, even allowing for the first--generation technology and publisher challenges, this is a fantastic opportunity—sell to demand with no risk to inventory and an opportunity to create incremental revenue streams for ourselves and publishers."

"The EBM is already installed in 11 sites worldwide. It can access around one million titles, of which more than 600,000 come through a partnership with Lightning Source; the rest are in the public domain. It is also in talks with publishers about adding their content, although On Demand c.e.o. Dane Neller stressed the model was not to own content but to act a facilitator."

Clearly the EBM is rapidly growing in acceptance and existing users of the machines appear to be the biggest supporters and proponents of the technology. Close readers of this blog may recall my brain wave of book vending machines that I thought could be useful in non-traditional book outlets. Well this technology goes a significant step forward and I predict we will begin to see EBM in outlets outside the traditional publishing supply chain.

(Hat tip Brantley).

Food, Style and Felony

Apparently Martha Stewart will be denied entry into the UK if she attempts to travel there for some business meetings in the next several weeks. The denial stems from her conviction for lying to investigators over stock purchases she made back in 2004. A spokesperson commented that Martha loves England and hopes the matter can be resolved.

This was just too funny to miss. BBC

Wiley Reports Blackwell Benefits

Wiley released their fourth quarter and full year results yesterday. From their press release:

Revenue for the fiscal year 2008 increased 36% over the previous year to $1.7 billion. Blackwell Publishing Ltd. (Blackwell), which was acquired in February 2007, contributed approximately $485 million of revenue to Wiley's fiscal year 2008 results. Excluding Blackwell, revenue for fiscal year 2008 increased 5%. Favorable foreign exchange contributed two percentage points to the year-on-year growth excluding Blackwell. On a U.S. GAAP basis, earnings per diluted share for fiscal year 2008 was $2.49, compared to $1.71 in fiscal year 2007. Excluding Blackwell and various tax benefits, adjusted earnings per diluted share improved 15% to $1.89. Blackwell’s performance was accretive to fiscal year 2008 earnings per dilutive share by approximately $0.29, excluding non-recurring tax benefits.
Revenue for the fourth quarter increased 11% to $433 million from $390 million in the same period of the previous year, or 8% excluding foreign exchange. Blackwell's performance was included in the fourth quarter of both years. Earnings per diluted share for the quarter was $0.49 compared to $0.25 in the prior year.

More details here.

Informa UBM Talks Collapse

After the close of the markets in the UK yesterday, UBM announced it had broken off talks about an all stock merger with Informa. Informa's shares have declined 7% this morning even though new potential buyers have emerged. Reuters cites a Times report suggesting Carlyle is behind a new bid but other parties Cinven, Apax, Candover are also potential entrants. At this point the most likely buyer would be Springer which is owned by Candover and Cinven. From Reuters:

A private equity consortium led by Providence is behind the latest bid approach to British media group Informa (INF.L: Quote, Profile, Research), media reports said on Wednesday. The Times newspaper, without citing sources, said that private equity firm Carlyle was part of the consortium and that talks were at an early stage.

Analysts must also be wondering what type of deal UBM would do if this one wasn't to its liking. The company has remained on the sidelines for much of the media buying frenzy of the past several years. It has no debt to speak off but it remains relatively small. Under what circumstances would they consider expanding the company?