Haights Cross Sells Oakstone Unit

At the turn of the year, Haights Cross placed itself up for sale but as the capital market situation went from bad to worse a successful resolution has seemed increasingly out of reach. However, the company announced today that they have sold their Mediacal Information publisher Oakstone to Boston Ventures and they are also withdrawing from sale the two other Haights Cross business units. For their most recent reported full year, revenues for the Oakstone unit were $34mm. Terms of the sale have not been announced.

From their press release:

Haights Cross also announced today that it has suspended its previously announced plans to offer for sale its test-preparation and intervention business, Triumph Learning; and its audiobook publishing business, Recorded Books.

According to Paul J. Crecca, HCC President and Chief Executive Officer, “Earlier this year, we announced plans to offer for sale each of Haights Cross’ operating businesses. However, conditions in the capital markets, particularly in the leveraged finance market, remain challenging. With these factors, and considering the timeframe in which sale transactions could be completed, the HCC Board of Directors has concluded that the company should suspend the sales efforts for Triumph Learning and Recorded Books. We believe Triumph Learning and Recorded Books have leading positions in their respective market segments and represent attractive growth opportunities.”

Publishing Technology Rumor

From the TimesOnline:

Publishing Technology, which sells software and consultancy services to book publishers, managed to lift its hard-pressed shares last week with a contract win. They were flat at 0.7p yesterday despite talk that it was set to reveal a share consolidation and the imminent launch of its “iTunes for books” software, allowing books to be downloaded as easily as music

Some may know PT as Vista.

And from The Independent:

The tiny company, which has a market capitalisation of less than £6m, has hitherto concentrated on providing an online service for academic publishers...the group is preparing for some innovative online expansion. As you read this, the firm is trialling a product that it reckons will be a cross between Apple's iTunes and a YouTube for books. The chief executive, George Lossius, said the technology will allow publishers to sell parts of books, say a recipe, or the whole thing. Moreover, publishers will be able to market particular authors and genres to particular customers. Mr Lossius admitted that some of the bigger publishers are probably already planning to do it themselves, but Publishing Technology might well be left alone to scrap for some of those lucrative smaller deals.

Riverdeep Syndication Update

The Irish Independent is reporting that the banks supporting Riverdeep in its acquisition of Harcourt may be able to syndicate some of the debt they financed in the deal. The company had been saddled with over $7.0bill in debt but have reduced the debt by selling their college division for $600m. Credit Suisse the lead bank has sold down their senior debt and is now working on the secondary loan. The company also reaffirmed it will achieve operating efficiencies amounting to $320mm per year within three years from the combination of the operations of Houghton Mifflin and Harcourt.

From the article:

Credit Suisse is in the process of selling down EMPG's €1.7bn second-lien loan, which ranks behind a traditional senior credit facility in terms of security. "We expect this tranche to be fully syndicated by the end of the summer," said Barry O'Callaghan, executive chairman of EPMG in a letter to shareholders. "This demonstrates that, notwithstanding the current issues with credit markets globally, investors have sufficient confidence in our business model and prospects to purchase our debt."

MediaWeek (Vol 1 No 26):

Some headlines from last week: June 23 - 30, 2008 Guardian: Investors and Wall Street institutions would be forced to rely less on credit ratings under new rules proposed by the SEC. Rating agencies such as Moody's, McGraw-Hill Cos' Standard & Poor's and Fimalac SA's Fitch Ratings could be negatively impacted by the rules. FoxBusiness: Interactive Data Corporation a leading provider of financial market data, analytics and related services agreed to acquire Kler's Financial Data Service S.r.l. (Kler's), a leading provider of reference data to the Italian financial industry, for a purchase price of EUR 19.0 million (or approximately $29.5 million based on current exchange rates) in cash. IDC is majority owned by Pearson plc. Forbes: ImageSpan Inc., which provides enabling infrastructure for digital content licensing, today announced that it has closed a second round financing of $11 million from a group led by Bertelsmann Digital Media Investments (BDMI). Guardian: The boom in online news sites does not mean the UK should relax its media ownership laws, according to an influential House of Lords report. The report is a rebuke to media executives such as Rupert Murdoch, who believe the advent of online news should herald the relaxation of ownership laws. Murdoch himself told the committee that the UK's laws were "10 years out of date". MediaDailyNews: Gannett has purchased a minority stake in Cozi, a Web site that allows families to communicate and coordinate schedules. The deal will give Gannett readers access to Cozi via the Internet and mobile devices, including various features like virtual family calendars, shopping lists, blogs and instant messaging. PRWeb: Australian book printer BookPal has launched an audacious bid to challenge Amazon.com's Booksurge and Lulu.com for global market share in the rapidly growing book self publishing market, a market estimated to be valued at U.S. $13-$17 billion per year according to SelfPublishingResources.com. FoxBusiness: Elsevier, the leading publisher of science, technology and medical information announced today that it will implement CrossCheck, the plagiarism detection service offered by CrossRef in collaboration with iParadigms. With plagiarism a growing problem for journal editors, Elsevier has invested in CrossCheck to develop, pilot and implement, a single database of published articles enabling publishers to easily verify the originality of submitted and published work. The Telegraph: Executives from Amazon's MP3 store, which launched in the US last year, are understood to have been in London last week to thrash out details of the launch with British record company bosses. Amazon MP3 will compete directly with iTunes, Apple's online music store, and other digital downloading operations when it goes live. People familiar with Amazon's plans say its site is likely to be unveiled before the final quarter of the year, when a string of high-profile artists, including the Scissor Sisters and Snow Patrol. TimesOnline: The American private-equity firm Hellman & Friedman has emerged as part of the consortium in talks to buy media firm Informa, publisher of Lloyd’s List. The Sunday Times has learnt that Hellman is part of a private-equity trio that includes Carlyle and Providence Equity. TimesOnline: Springer Science & Media, the business-to-business publishing group owned jointly by the private equity groups Candover and Cinven, is still considering a bid for Informa despite the exhibitions group receiving an approach on Tuesday from private equity rivals. Springer, which previously made an offer in 2006, has been looking closely at Informa, the shares of which have fallen on concerns over its high debt levels. TimesOnline: Helen Alexander, the outgoing chief executive at the Economist Group, is ending her tenure on a 23-per-cent rise in profits to £44.3 million. The profits increase for the 12 months to March 31 will allow the privately-held business to continue its policy of paying sizeable dividends. In total, £36.7 million in cash was handed over during the year to the shareholders, which include Pearson and members of the Rothschild, Schroder and Cadbury families.

ISBN's On All Formats: Some Comments

Comments have been added to the original post from last week. Given the traffic reports several thousand visitors are transfixed by ISBN issues. Here are a few opinions from around the web:

Martyn Daniels at Booksellers Association (Brave New World):

Forget the posturing and politics this is about product identification and is a basic foundation to all inter-company ecommerce and communication. It is as much about upstream as it is downstream and is fundamental to trade. An old friend Tom McGuffog, Director of Planning and Logistics Nestle and ex chairman of the UK Article Numbering Association (the UK EAN standards governing body now know as GS1 UK), once said ‘ uncertainty is the mother of bad trading, only by removing uncertainty can we trade efficiency’. So what if there are; 10, 20, 30, different ISBNs against a work? Each will be a unique rendition, may have different rights associated with them; different commercial models, even have different features and apply to different channels. Surely identification and consistency is a must.

Today many believe that we also desperately need a work identifier and the best practices to adopt it and deploy it. Some believe that it exists today in the form of the ISTC but that it has stalled, lacks a champion and roadmap and now needs to be adapted, adopted, marketed and deployed. Is it an identification silver bullet? No, firstly it is an attribute associated with and ISBN (a secondary reference), but it can go a long way to enabling the consistent grouping of ISBNs under a work, which will help everyone manage more ISBNs and will also help consumers select and choose the right rendition, which after all is what its all about.

Adam Hodgkin at Exact Editions:

I have a suggestion: where titles go into a format where there are in effect many individual instances of the work then that format should have a separate ISBN attached to it. The ISBN system was introduced so that books would have a standard method of stock control. ISBNs are SKU's. So digital platforms where copies of books are handed/downloaded to readers/purchasers the SKU specific to that channel serves a purpose. For digital platforms which are based on an 'access' system, which would include Google Book Search, and Amazon Search Inside, there is no need for a separate ISBN, because there are no 'units' that need to be tracked. Exact Editions is another such access system and there is no need therefore for publishers to assign separate ISBNs to their titles in the Exact Editions platform. The identifiers that matter for 'access' systems are the urls which comprise the book's web presence.

The post was also noted on TeleRead.org where in the comments Jon Noring had this to say:

The fundamental problem is that ISBN is not designed, nor intended, to be used for different renditions of a book, and each different format of an e-book is a different rendition. As a small e-book publisher myself, I am very sympathetic with the ISBN cost issue, though, and the entity to blame on this is Bowker. If Bowker wants ISBNs to be used per the standard, then it needs to set up a better pricing structure for small lots of ISBN numbers. I’ve not heard any justification for the current pricing structure.

(I think that point is partially noted in the statement from Bowker).

There is more feedback including a comment from the US ISBN agency on the original post here.

John Hiatt On the Music Business

One of my favorite artists, John Hiatt has an interesting perspective on the music industry woes via Reuters:

"People have to be 'record men' again," Hiatt said. "They actually have to learn a living. You get a record out there, it sells 50,000 copies over the course of 18 months. You have to work it, because they don't buy 50,000 the first week. It's great to see people who actually love the music back in business in these smaller concerns. I've never seen people take more vacations than these big record company people." It also helps that Hiatt keeps his overhead low by recording his albums at his 97-acre (39 hectare) Tennessee farm. He spent about 10 days recording the basic tracks for "Same Old Man" a year ago with guitarist Luther Dickinson and drummer Kenneth Blevins. Since Hiatt owns his masters and his publishing, he has complete creative control.

His new album is titled Same Old Man and I'll be seeing him in August.

ISBN's On All Formats

According to ISBN official standards, each format of an e-book should be given its own ISBN. This means if a book is sold in mobi-pocket and Adobe formats each would be given a separate (unique) number by the publisher even if the content is exactly the same. During the revision process for the current standard, this point received intense discussion mostly focused on the burden that applying what could amount to several hundred ISBNs to a single work would have on publishers' processes. We resolved this issue for the standard with judicious use of words such as 'shall' and 'should' but the issue was raised again recently when the ISBN board released a 'policy statement' reaffirming the need for separate ISBN's on each format of an eb0ok.

The reasons for this action is simple. Downstream supply chain business such as wholesalers, distributors and retailers require a unique reference to all products that pass through their operations. If one doesn't exist these businesses tend to apply their own numbers. In actuality, the practice of downstream partners applying their own numbers has been going on since the establishment of ISBN and isn't unique to e-books, but the issue is coalescing now around the obligations of a publisher to 'correctly apply' the ISBN standard to e-books.

At a meeting this week at AAP NYC a number of publishers expressed doubts about the need for this requirement. As a participant in the revision of the standard my view was simple. A publisher should want to manage and control the meta-data associated with all their products and enabling - by omission - the need for someone else to apply their own information never seemed prudent to me. Secondly, the veracity of the ISBN system is brought into question if more than one entity applies separate numbers to the same content. This occurs if B&N and Amazon sell the same e-book in the same format but in the absence of a publisher number they apply their own identifier.

At least one major publisher at the AAP meeting is not following the standard and after several years of distributing e-books and applying one ISBN irrespective of format (.epub for example) they are seeing no issues with confusion or misuse of their meta data. This is a powerful argument and comes from a publisher that is highly protective of their bibliographic information. If reflective of a general consensus the ISBN board should reconsider the wording of there directive. For example, simply changing the wording by inserting the words 'publishers may apply ISBNs to separate formats' would give enough latitude to those publishers that see a need to apply separate ISBNs and those that do not.

There are several qualifications (and others may raise more). Firstly, the issue of downstream partners which need identifiers for their internal process requirements must be governed. For example, in those cases where a publisher expects detailed sell-thru data they may provide ISBN's. If a downstream partner can only use a 13 digit identifier in their systems the publisher may require the partner to use an ISBN provided by the publisher. If the partner can use a non-ISBN (but NOT a dummy ISBN/13 digit id) such as letters and numbers the publisher may see no need to apply ISBN's. Secondly, the danger that rogue ISBNs that are intended to operate only within the operating systems of specific partners (wholesalers, vendors, etc.) escape into the supply chain causing confusion and much remediation is a real one and should be recognised. Currently, there aren't that many e-books and there aren't that many publishers working outside the recommendations of the standard. As e-books explode in distribution, data integrity problems that are virtually non-existent today may become very relevant issues very quickly.

Lastly, in a supply chain world where suppliers and retailers are racing (admittedly not a sprint more a marathon) to apply unique identifiers on individual items via RFID, this discussion runs counter to the logic other more sophisticated industries are following. Quite rightly, with volumes as small as they are, it may not be interesting to know which e-book versions seem to perform better, or get less customer service/help desk calls, or which package of products seem to show up on what platform or which segment of buyers seems to have what behavioral characteristics, or which partner seems to sell what types of products or formats, or which formats tend to be pirated more or less, and on and on and on. As the chain becomes flatter - as it is - publishers are going to want to know this stuff and tying a user to a format may be critical to all aspects of what they do.