Seven Cents Between Life and Death for Magazines

Things are pretty dire in the magazine world with plummeting ad revenues and ever repeating news of shut downs and layoffs. And if the specture of rising paper costs wasn't enough to worry the manufacturing and distribution staff the NY Post reports this morning that one of the business' largest wholesalers is set to impose a 7cent per copy surcharge on magazines it delivers to retailers.

CEO Charles Anderson insisted the new charge would help the company make up lost ground on a business that he said is losing money. The hike would add 3.5 percent to distribution costs, which translates into $200 million more for Anderson News.

"The last thing we want to do is exit this business, but why should we continue in a business where we are not making any money?" Anderson asked publishers on a conference call yesterday to discuss the new fee.

Publishers, which have until Feb. 1 to agree to pay the new fee, are balking at Anderson News' move, which would drive up costs at a time when most magazines are hurting.

If that isn't enough, the company also wants publishers to pick up the cost of unsold inventory sitting in the Anderson warehouse. In recent years, large retailers like Walmart have attempted to force the industry to adopt scan based tracking which effectively enables a retailer to accept inventory but not pay for it unless/until it passes through a register. It is not widely adopted for a variety of reasons including a disagreement over standards as well as publisher's concern over cash flow. Returns, lost copies and general inefficiency have long been issues in the magazine business with some reputable magazines skating through with 20% sell through. Tough love programs like the one Anderson is trying to impose will push many magazines over the edge.

It is debatable whether Anderson will get away with this; however, severe 'right sizing' is going to occur in the magazine business regardless. Watch this space.

Note: Ingram is also a magazine wholesaler but their reaction (if any) isn't noted. Anderson News racks books as well.

Plane Down

In the excitement, I didn't realize the camera was on the wrong setting hence the blue tint. I saved them on flickr in b/w and they look a little better.

http://flickr.com/photos/21500020@N08/

Hachette Rights Squable

Teleread.org is reporting that Hachette Book Group is pulling “all of its [e-book] titles from U.S. distributors” in a dispute over the issue of sales controls based on geographical territory.

"What’s happened is that U.S. distributors (Overdrive, Ingram Digital and Mobipocket) have not yet implemented systems to limit sales to assigned territories in a manner with which Hachette Livre (the French parent company of Hachette USA, formerly Time Warner books) is comfortable, likely creating contract issues with their European resellers and some of their authors.

“Without notice, Hachette instructed U.S. distributors (include French-based Mobipocket) to pull all ebooks from U.S. distribution over the weekend. Hachette and the distributors are working hard to resolve this. Meanwhile, our support email is getting a huge number of extra inquiries because of the Mobipocket error message and the Hachette action.

Teleread (David Rothman) also addresses the larger issues of DRM restrictions that could presage consumer frustration. "Will e-book DRM end up with a bewildering maze of territorial restrictions, just like DVDs?" One hopes not but is this representative of needlessly enforcing p-world realities on the e-book world?

Hopefully more news will be forthcoming on this issue.

From the Typewriter to the Bookstore: A Publishing Story

From the funny folks at Macmillan (who knew) and via Teleread.org a take on the book production process. I liked the bit about sending the trees from Italy to Switzerland by boat.

Romancing Rugby

I think I'm going to be ill. (Time)

Holly, a virgin and a waitress, was recently dumped by her fiancé, and the subsequent turmoil has fueled an addiction to chocolate wafers — and resulted in an expanding waistline. As her self-esteem tanks, she learns that she must serve dinner to Prince Casper of Santallia in a hospitality suite at Twickenham, the home of England's national rugby team. Within minutes the playboy prince starts making passes (and not of the sporting kind), Holly slides across a table, and, for the first time in her life, she feels like a "rider clinging to the back of a thoroughbred stallion." It's pure bliss until cameramen beam the encounter on the stadium's Jumbotrons.

Typically, England go on to loose.

MediaWeek (Vol 2, No 1):

And so we start a new year... In The Atlantic Michael Hirschorn wonders what might happen to The New York Times if it runs out of cash.

Regardless of what happens over the next few months, The Times is destined for significant and traumatic change. At some point soon—sooner than most of us think—the print edition, and with it The Times as we know it, will no longer exist. And it will likely have plenty of company. In December, the Fitch Ratings service, which monitors the health of media companies, predicted a widespread newspaper die-off: “Fitch believes more newspapers and news­paper groups will default, be shut down and be liquidated in 2009 and several cities could go without a daily print newspaper by 2010.”

The collapse of daily print journalism will mean many things. For those of us old enough to still care about going out on a Sunday morning for our doorstop edition of The Times, it will mean the end of a certain kind of civilized ritual that has defined most of our adult lives. It will also mean the end of a certain kind of quasi-bohemian urban existence for the thousands of smart middle-class writers, journalists, and public intellectuals who have, until now, lived semi-charmed kinds of lives of the mind. And it will seriously damage the press’s ability to serve as a bulwark of democracy. Internet purists may maintain that the Web will throw up a new pro-am class of citizen journalists to fill the void, but for now, at least, there’s no online substitute for institutions that can marshal years of well-developed sourcing and reporting experience—not to mention the resources to, say, send journalists leapfrogging between Mumbai and Islamabad to decode the complexities of the India-Pakistan conflict.

The Economist takes a look at TinTin and author Hergé (Georges Remi). Apparently, a blockbuster movie is coming our way.

Tintin’s slightly priggish character fitted the times. His simple ethical code—seek the truth, protect the weak and stand up to bullies—appealed to a continent waking up from the shame of war. His wholesome qualities help explain the great secret of his commercial success—that he was, and remains, one of the rare comic books that adults are happy to buy for children.

But probity cannot explain why Tintin became a cultural landmark in Europe, as important on his side of the Atlantic as Superman on the other. There were plenty of wholesome comics in post-war Europe, most of them justly forgotten. Something else in Tintin spoke to children and adults in continental Europe. Even in the straitened years of post-war reconstruction, he was soon selling millions of books a year.

An interview with Frank Daniels of Ingram Digital in The Tennessean:

Powering much of the retail distribution for the e-book market is La Vergne-based Ingram Digital Group, a division born out of Ingram Industries' Lightning Source Division and acquisitions made in 2006 of Raleigh, N.C.-based VitalSource Technologies, a player in the digital textbook field, and U.K.-based MyiLibrary, which supplies electronic content to academic libraries.

Frank Daniels III, who headed VitalSource before its sale to Ingram, now serves as chief operating officer of Ingram Digital. He sat down this week with Assistant Business Editor Ryan Underwood to discuss the current state of the e-book market, where it goes from here, and Ingram Digital's role in all of it.

Maybe it's just that Amazon's Kindle e-book reader was one of the most popular items for Christmas, but whatever it is, e-books seem to be having a moment right now. Are you seeing that?

Absolutely. In a time when publishers' sales are flat, or declining, e-books are the bright spot. You're seeing significant increases in revenue, as much as 400 percent growth for some publishers. That gets the industry's attention. And they recognize that a confluence of events — screen and distribution technologies, and the standards that the industry has adopted — makes e-books more likely to be real versus hype.

Lastly, Bono reflects on Frank Sinatra. NYTimes.

If you want to hear the least sentimental voice in the history of pop music finally crack, though — shhhh — find the version of Frank’s ode to insomnia, “One for My Baby (and One More for the Road),” hidden on “Duets.” Listen through to the end and you will hear the great man break as he truly sobs on the line, “It’s a long, long, long road.” I kid you not.

Like Bob Dylan’s, Nina Simone’s, Pavarotti’s, Sinatra’s voice is improved by age, by years spent fermenting in cracked and whiskeyed oak barrels. As a communicator, hitting the notes is only part of the story, of course.

Lastly, lastly, The Giants may have choked but my team had a crushing victory earlier on Sunday. BBC.

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Winnie the Pooh to the Rescue

It is not too early to think about next Christmas's big hot book and with the news that Winnie The Pooh will return to print there is some hope that the little bear will save book retailing.

The Times is reporting that a book is in the making:

The challenge for David Benedictus and Mark Burgess, the author and illustrator of the new book, is to revive one of the best-loved children’s series of all time in a way that proves sympathetic to the originals without veering into pastiche.

Since 1961 Disney has owned the film, television and merchandising rights to the character of Pooh and created its own spin-off adventures. E. H. Shepard, the Punch staff cartoonist who illustrated the original books, condemned the first Disney film as “a complete travesty”.

Many fans regard the American corporation’s subsequent efforts, which have included the introduction of a gopher character and Christopher Robin’s recent replacement by a girl named Darby, as even less acceptable.

The content of the new book is a closely guarded secret but Mr Benedictus said that it would pick up where The House at Pooh Corner left off, with Christopher Robin returning from school to play with his friends. He refused to say whether the beloved “bear of very little brain” would be joined by new characters.

Michael Brown, for the trustees who manage the affairs of A. A. Milne and E. H. Shepard, said that he had been hoping to give the green light to a sequel for a very long time.

According to Reuters, Winnie is a bear stuffed with diamonds, wears a diamond encrusted waistcoat and has a dowry larger than the Shah of Iran and generates over $6 Bill in revenues per year. The revenue generated was subject of a lawsuit between Disney and family of the literary agent who helped popularize the bear in the US. Disney eventually won.

Disney don't get anything from the new book but the two groups would be nuts not to work together but who sees that happening?