Universal Mccann Review of Social Networking Trends

Universal Mccann International Social Media Research Wave 3

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MediaWeek (Vol 1, No 34):

TimeOut wants BBC out of Publishing (TOLine):

Tony Elliott, the owner of Time Out, the entertainment listings magazine, called for a break-up and sale of the BBC’s commercial division yesterday as he accused the corporation of overreaching itself with the £75 million acquisition of the Lonely Planet travel guides. The magazine proprietor said that Time Out, publisher of its own travel guides, could not compete with the BBC’s promotional muscle - and that the BBC should not publish books and magazines.

The TimesOnline profiles City Lights in San Francisco:

It was established in 1953 by poet and ‘beatnik’ Lawrence Ferlinghetti and Peter D. Martin to provide a progressive, all-paperback alternative to books available at the time. It’s where the Beat Generation laid their hats and where publishing and selling Allen Ginsberg’s Howl got Ferlinghetti and bookseller, Shigeyoshi Murao, arrested in 1957 on obscenity charges. Their victory in court guaranteed the sale of other previously banned books – including D. H. Lawrence’s Lady Chatterley’s Lover and Henry Miller’s Tropic of Cancer. (Three years later British readers achieved similar rights after the failed prosecution of Penguin for publishing Lady Chatterley’s Lover.)

Enid Blyton rocks and is the subject of a preview in TOL:

With its sense of adventure and advice on derring-do for juniors, The Dangerous Book for Boys was the sort of “how to” manual that could have been dreamt up by Enid Blyton, the creator of the Famous Five, the Secret Seven and a host of other dearly loved children’s characters. Now the inevitable has happened. Booksellers are eagerly awaiting the launch on September 4 of the Famous Five’s Adventure Survival Guide, a similar tome but with the bonus of a brand-new mystery starring the ginger-beer-loving youngsters.

For my librarian friends a comparison of JCR and Scopus Impact Factors: LINK

Impact factors for journals listed under the subject categories "ecology" and "environmental sciences" in the Journal Citation Reports database were calculated using citation data from the Scopus database. The journals were then ranked by their Scopus impact factor and compared to the ranked lists of the same journals derived from Journal Citations Reports. Although several titles varied significantly in impact factor and rank, the Journal Citation Reports and Scopus lists had a high degree of statistical similarity.

Common Sense contractual terms from Random House via BoingBoing:

Random House is asking some of its authors of young adult books to sign contracts with "morality clauses" that allow the publisher to take back your advance and cancel your book if you're caught doing anything that "damages your reputation as a person suitable to work with or be associated with children, and consequently the market for or value of the work is seriously diminished."

BusinessWeek ad topic pages NYT. NYTimes has been doing this for years. (NYT via Blogrunner). ExLibris was sold by one fund to another. PR Slow week....

Publishers Worry About Amazon

Mike Shatzkin and I were intereviewed for an article published by SNL/Kagan about Amazon.com's relationship with publishers in light of the Hachette UK situation, Booksurge and the Kindle.

Excerpt:

Mike Shatzkin, founder and CEO of the publishing advisory firm The Idea Logical Co., said in a June 26 interview with SNL Kagan that Amazon is likely not getting those titles from publishers for under $9.99 and is probably taking a loss on those books. But Shatzkin added that situation could change if Amazon succeeds in establishing the Kindle as the dominant e-book platform. "If the Kindle reaches a critical mass, Amazon will have the ability to tell publishers that if they want their books available on the Kindle, they will have to sell them to Amazon for $6 or less," Shatzkin said. "That's going to be pretty rough." One reason it is so hard for publishers to meet Amazon's demand for increasingly lower prices, Cairns said, is because they must continue to offer their authors competitive advances and royalty packages to ensure they get the best titles. "Particularly for the brandname authors, publishers have to pay a very high price for that content," Cairns said. "It would be difficult for publishers to go back to their authors and say 'Give me a better price for your books.'" As a result, when Amazon asks for steeper discounts on titles, publishers are left trying to maintain their margins in other ways — such as by putting their marketing and distribution expenses. "And in this day and age, many of the larger publishers have already sweated out as much expense out of those cost areas as they possibly can, so there's not very much room left at all for them to do that," Cairns said. "It's very tight."

B&N Reports: Operating in Soft Retail Environment

B&N reported slack sales typical of many retailers this morning and even excluding the huge impact of Harry Potter in the comparable quarter numbers were down versus last year. Here is their press statement:

Sales for the second quarter decreased 1.6% to $1.2 billion largely due to last year’s record sales of J.K. Rowling’s Harry Potter and the Deathly Hallows. Barnes & Noble store sales decreased 1.6% to $1.1 billion, with comparable store sales decreasing 4.7% for the quarter. Barnes & Noble.com sales were $99.8 million for the quarter, a 3.6% comparable sales increase. Excluding prior year sales of the Harry Potter book, comparable sales decreased 1.5% in stores and increased 13.9% online. Bestselling titles during the quarter included Stephenie Meyer’s Breaking Dawn, Randy Pausch’s The Last Lecture, Lauren Weisberger’s Chasing Harry Winston and David Wroblewski’s The Story of Edgar Sawtelle. Second quarter net earnings were $15.4 million or $0.27 per share. Included in second quarter net earnings was an after tax benefit of $0.12 per share, resulting from a more favorable physical inventory shortage rate than previously estimated and accrued. Excluding this benefit, second quarter net earnings were $0.15 per share, higher than guidance of $0.08 to $0.13 per share. Despite the softer sales environment, the company’s management of operating expenses and higher than forecasted gross margins enabled it to exceed its second quarter earnings per share guidance. Gross margin was stronger than expected due to greater utilization of the company’s distribution centers and a lower markdown rate.

Other points from the conference call:

• Last year for the same period comp store increase of 4.4% and online increase of 17.9% for a total sales increase of 7.6%
• This year 1.6% decrease versus last years 7.6%.
• Excluding Harry Potter effect same store sales declined 1.5% this quarter
• Opened 10 and and closed 4 B&N stores for 723 total. Continued to close Dalton stores for a total of 73.
• Sales at B&N.com were $99.8mm for the quarter up 3.6% on top of last years 17.9% increase. The company noted that excluding HP sales at B&N.com were up 13.9% and this quarter was the 7 straight quarter of increased sales.
• Gross margins were up 150 basis points as a result of less highly discounted HP books and an significant quarterly improvement in stock shrinkage. (after tax benefit of 12cents per share)
• Guidance: The company is lowering its full year comp sales to slightly below 1%. Keeping EPS at previously issued guidance based on improved financial performance.

The company may have got off easily on the question period. No one asked about the recent resignation of Marie Toulantis (CEO of B&N.com) especially in light of the continued performance gain. Riggio commented that internet sales "were clearly a bright spot in the quarter" and traffic to the site, conversions and sales are up. In addition, the company continues to improve the site and is experimenting with web only offers. Given this performance is there a risk factor introduced with the departure of Toulantis and if she was asked to leave what do they want to do differently given this track record of continued improvement? No one asked about the competitive threat from the launch of Borders.com which based on the following chart could be a factor.



Lastly (and thankfully) no asked about their decision not to go after Borders but someone did ask about thoughts on the Kindle which they deflected.

Social Recommendations

In Business Week, author Sarah Lacy has some suggestions for publishers on how to develop, market and sell books by taking advantage of Web 2.0 opportunities. This is only one of her five suggestions:

Create stars—don't just exploit existing ones.When an author is established, publishers have to do less to make a book sell. So bidding wars start. As a result, even some best-sellers aren't very profitable. Instead, publishers should take a page from the handbook of Gawker founder Nick Denton and create stars. Find micro-celebs with a voice, talent, a niche base of readers, and most important—enthusiasm. Then leverage the publisher's brand (and the techniques I advocate, of course) to blow them out. Require as part of the contract that the author blog, speak on panels, attend events. Give them incentives for delivering—say, though Web traffic of the number of followers they amass on Twitter. Sure, publishers would have to spend more on promotion. But because they're spending less on an advance—say, $50,000 for a lesser-known writer than the hundreds of thousands of dollars (or more) they'd spend on a star—they can afford the bigger promotional budget. "It's taken some time for publishers to recognize that a successful site is as
strong a 'platform' as a magazine, newspaper, or TV gig," says Patrick Mulligan,
my editor at Gotham.

Bertelsmann Interested in Reed Business

Reuters reports that Bertelsmann's magazine unit Gruner & Jahr maybe in the mix to acquire the RBI unit from Reed Elsevier. Reuters learned of the tip via a German newspaper. In the report, Reuters also notes that indications of interest for the RBI business unit have been received and offers range between £1.0bill and £1.25bill. If correct, this range appears to match Reeds initial expectations for the deal. Reuters expects final bids to be submitted in October. Followers of Bertelsman may recall they have created a sizable fund with some PE companies with the express view to make some large (or one very large) deal. They objective was to be able to participate in the bidding process for these large media deals and not be priced out by pure PE deals. As a case in point they were very interested in the Cengage auction last year and by some accounts came quite close.

Reuters

Melbourne, City of Literature

Sydneyites (namely my cousin) used to say the only good thing to come out of Melbourne was the Hume Hwy. Unfair and untrue and in reflection of its world status, the city has been named a City of Literature (The Age).

Three days before the opening of the Melbourne Writers Festival, UNESCO has named Melbourne as its second City of Literature. Edinburgh became the first in 2004. The United Nations' cultural arm responded to an ambitious bid by the State Government that has as its centrepiece the establishment of the Centre for Books and Ideas at the State Library of Victoria. Arts Minister Lynne Kosky said the decision was confirmation of the value of a lot of people who have been working in the literature industry - writers and publishers and those who support writing and publishing.

Melbourne is a great place and this is well deserved in my view. Thanks to my Australian stringer for the tip.