Summary:
Washington Post Co. 3q Profit Up 29%
K-Iii Communications Creates A New Division, The Supplemental Education Group
Dow Jones Rumored To Be Mulling Sale Of Markets Unit
Saddle Up Silver….Polo Magazine Re-launch For Stylish Ride
Gruner & Jahr Reported Looking At Reed IPC Magazines
Amazon.Com And Barnes & Noble Drop Suits
Knight-Ridder, NY Times Unveil New Online Initiative
Busy Week For Ziff-Davis Publishing
Soundscan
Costco
RECENT NEWS:
WASHINGTON POST CO. 3Q PROFIT UP 29%
The Washington Post Co. reported net income of $71.6 million or $6.64 per share for the third quarter, up 29% from net income of $55.4 million or $5 per share in the year-ago period. Quarterly revenue totaled $478.4 million, up 4% from revenue of $460.3 million in the year-ago period. The company cited strength from its print businesses, partially offset by increased spending at the company's other business. The results include a one-time after-tax gain of $16 million relating to the sale of its PASS Sports subsidiary and termination of its regional sports network. Third-quarter newspaper division revenue rose 4%; broadcast division revenue rose 1%; and the cable division, which serves 635,000 households, had revenue increased 13%.
The Post Co.'s stock closed Tuesday at $457.75 per share, down $1.5625.
Cowles/Simba Media Daily 10/21/97
Copyright 1997 Cowles Business Media. All rights reserved.
K-III COMMUNICATIONS CREATES A NEW DIVISION, THE SUPPLEMENTAL EDUCATION GROUP
K-III Communications, publisher of several trade and consumer magazines and educational properties, such as the World Almanac and Westcott Communications' 22 educational TV networks, has announced the creation of a new division, the Supplemental Education Group. The new group will comprise national elementary school publication The Weekly Reader, Funk & Wagnall's Encyclopedia, the World Almanac and educational video company Films for the Humanities & Sciences. Weekly Reader president and CEO Richard LeBrasseur will be the group's president.
Cowles/Simba Media Daily 10/21/97
Copyright 1997 Cowles Business Media. All rights reserved.
DOW JONES RUMORED TO BE MULLING SALE OF MARKETS UNIT
Dow Jones & Co. said it was placing its revamp of its Dow Jones Markets financial information service under review, suggesting to some analysts that it might be planning to sell off the struggling unit. Dow Jones spokesman Richard Tofel would only say that the board of directors was "reviewing" Dow Jones Markets' previously announced $650 million overhaul and considering "various alternatives" for the unit, which was formerly known as Dow Jones Telerate. Tofel noted that review is part of the company's overall budget planning for the coming year.
Dow Jones Markets currently provides electronic financial data to corporate customers, but has faced increasing competition from online services, brokerage houses and other suppliers of financial information. The review comes on the heels of Dow Jones taking a 34% third-quarter earnings hit, in part due to Dow Jones Markets suffering an 83% loss in operating income.
Analysts conjecture that rivals Reuters PLC and Bloomberg LP may be in line to bid on the unit. Thus far, Dow Jones has only denied rumors that the unit is for sale. A joint venture with NBC was floated as another possibility for Dow Jones Markets.
Cowles/Simba Media Daily 10/20/97
Copyright 1997 Cowles Business Media. All rights reserved.
SADDLE UP SILVER….POLO MAGAZINE RE.LAUNCH FOR STYLISH RIDE
POLO magazine, which for 23 years has continuously chronicled the game and lifestyle of polo, goes into mass circulation this week expanded into a bold and colorful journal of adventure, elegance and sport. The glossy magazine's re-launched October / November issue of 550,000 copies is one of the largest in publishing history and exceeds House & Garden's vaunted re-launch last year. POLO magazine will send copies of the magazine and a special subscription offer to 1 million Neiman Marcus card holders over the next year.
Beginning early next year, POLO magazine will be sold at $6 an issue at newsstands at selected airports, bookstores, grocery stores and high-end retailers. The magazine will also expand on its international readership in such markets as London, Paris and Buenos Aires. POLO magazine, which derives its name from what is called "the sport of kings," also will distribute the magazine to royalty throughout the world including kings, queens, princes, princesses and sultans. In fact, the magazine plans an upcoming feature on the Sultan of Brunei, who reportedly keeps his polo field lighted throughout the night and a stable of players and ponies at the ready 24 hours a day for whenever he has the urge to play.
SOURCE Westchester Media Company
GRUNER & JAHR REPORTED LOOKING AT REED IPC MAGAZINES
LONDON (AP-Dow Jones)-- Gruner & Jahr , a 75% owned publishing subsidiary of Germany's Bertelsmann AG (G.BRT), has held 'informal' talks with Reed Elsevier (u.ree n.els) about buying IPC Magazines, the Anglo-Dutch publisher's U.K. consumer magazine business officially put up for sale Monday. Executives familiar with the situation confirmed late Monday that the Bertelsmann unit had approached Reed Elsevier about buying IPC, which publishes some 70 titles ranging from Woman to Marie Claire to Loaded.
A person familiar with the situation said G&J 'were interested and indeed have informally contacted' Reed Elsevier about buying IPC. However, stiff competition for the unit could come from EMAP PLC, a U.K. magazine publisher with significant French publishing interests. A management buyout of the titles is a further possibility, onlookers said. The publishing executive said Reed Elsevier had chosen to sell IPC now because 'the business is at a peak' with advertising revenue at cyclical highs and paper prices at cyclical lows. The executive also noted that IPC had undergone drastic cost cutting, while receiving little in the way of new investment.
'I cannot imagine someone buying the whole thing,' the executive said, while acknowledging that Reed Elsevier will push hard to sell the unit in one piece. The source also said that IPC could fetch $1.2-1.5MM, should several interested bidders emerge. In the year ending December 1996, IPC (excluding New Scientist) reported sales of 314 million GBP and profit of 63 million GBP
Onlookers note that G&J, which publishes women's market titles such as Prima and Best, is a natural fit with IPC, whose titles include Woman, Woman's Own and Marie Claire. 'It's a perfect match with IPC,' said one onlooker.
A spokesman for SBC Warburg Dillon Reed, which is advising Reed Elsevier on the sale, refused comment on whether talks with G&J had begun. Other buyers for IPC could include U.S. publishers Time Warner and Hearst Corp. as well as French publishers Matra Hachette and Havas.
AP-DOW JONES NEWS 27-10-97
ON-LINE NEWS:
AMAZON.COM AND BARNES & NOBLE DROP SUITS
According to the joint press release, online booksellers Amazon.com and BarnesandNoble.com agreed Tuesday to drop their respective lawsuits. The plaintiffs recognized "they would rather compete in the marketplace than in the courtroom." In a related note B&N reported web sales could top $100MM in 1998 which is the close to the expected level for Amazon.com.
KNIGHT-RIDDER, NY TIMES UNVEIL NEW ONLINE INITIATIVES
Knight-Ridder New Media made the newspaper industry's debut entry into the online city guide network field on Monday with Real Cities (http://www.realcities.com). The rollout includes 32 Web sites of local Knight-Ridder newspapers across the U.S., networked under the umbrella brand Real Cities; all sites had already existed independently. However, Real Cities has added proprietary services such as CarHunter, HomeHunter and entertainment search engine JustGo; these and others will apply to all Real Cities member sites as Knight-Ridder continues to build out the network.
Real Cities is going up against established online brands Digital City from America Online and Sidewalk from Microsoft, as well as numerous individual city guides and the emergence of localized directory and search sites such as Yahoo. But the company hopes to distinguish itself through the home-grown content of its local publications and its reputable journalism. "On other online guides, there is a lack of quality in community reporting," said Real Cities national marketing director Amy Rabinovitz.
Meanwhile, The New York Times announced that it is launching New York Today (http://www.nytoday.com) in January, which is intended to be the definitive guide to New York culture, news and services. It's unclear how the newspaper company plans to outdo the many local guides for New York City, which include – in addition to national brands Sidewalk, Digital City, CitySearch and Yahoo – local properties such as the Village Voice http://www.villagevoice.com), Total New York (http://www.totalny.com) and recently launched New York magazine (http://www.newyorkmag.com).
Cowles/Simba Media Daily 10/21/97
Copyright 1997 Cowles Business Media. All rights reserved.
BUSY WEEK FOR ZIFF-DAVIS PUBLISHING
While its parent company Softbank Corp. is floundering financially as a result of making acquisitions it can't afford, Ziff-Davis Publishing Co. -- purchased by Tokyo-based Softbank in 1994 -- owns several leading products in the computer publishing industry. In an effort to create community-focused services, ZDNet joined with personalization technology developer Firefly for the launch of My Hot Files (http://hotfiles.firefly.com).
Firefly, which also provides the underlying technology for Yahoo's My Yahoo service (http://www.my.yahoo.com), has enabled users in search of shareware to tailor ZDNet's shareware site Hot Files to their needs. Now those customers can receive alerts and recommendations based on their registered profiles (which are dynamically compared to other users) and their shareware preferences through Firefly's collaborative filtering.
Cowles/Simba Media Daily 10/20/97
Copyright 1997 Cowles Business Media. All rights reserved.
DID YOU KNOW?
Soundscan reports sales (POS system) for 85% of all music stores (and growing) and the company is expanding into book store sales reporting. Soundscan has been criticised in the Music business for being too expensive to subscribe to however the system is being credited with reducing music store returns from 23% to 13% (1990-93). Each point is worth $15MM. A system called BookTrack has been operational in the UK for the past year and currently 40% of all book publishers use the system.
COSTCO, a warehouse club, has moved to vendor managed inventory for it’s book departments. Over 40% of book sales at warehouse clubs are Harcover fiction titles.
Tuesday, October 28, 1997
Wednesday, October 15, 1997
10/15/97: ReedElsevier, Bertelsmann, Readers Digest, WoltersKluwer,
Summary:
Reed Elsevier to Acquire Wolters Kluwe
Bertelsmann Reports Earnings
Yet Another Afternoon Newspaper Bites the Dust
Readers Digest Problems Continue
L.A. Daily News on the Selling Block
NYT Sells More Magazines
Britannica Online to Offer Free Content
International Data Corporation Reports Exploding Internet Activity
Breakthrough Will Bring Internet to The Home via Power Wires
School text books
Recent News:
Reed Elsevier to Acquire Wolters Kluwer
Reed and Wolters Kluwer announced Tuesday that they would merge creating an $8.1Bill global publisher concentrating on professional and trade journal publishing. Reed owns Lexis-Nexis, Reed Travel Group (including OAG) and is the largest worldwide publisher of academic journals. Wolters Kluwer dominates legal and tax publishing in Europe and is based in the Netherlands. In 1996 Reed Elsevier reported sales and income of $5.42Bill and $1.2Bill and Wolters Kluwer reported sales and net income of $2.7Bill and $429MM. Analysts suggest the combined company will be in a strong position to share the costs of moving to electronic publishing away from paper.
Bertelsmann Reports Earnings:
Sales increased year on year to $12.8Bill (4.2% increase) and net income was $582MM. Bertelsmann is the third of the large media firms after Time Warner and Disney but is much less geared - debt represents less that 5% of turnover versus TM and Disney of 97% and 62% respectively. Books (WW) constituted $4.1Bill in sales and were the second largest group after Music. Of this amount the US represented (only) $1Bill in sales. According to reports Bertelsmann is actively looking for a publishing acquisition in the US. (A number of companies have been mentioned and John Wileys chairman recently sent an internal memo to employees stating that Wiley was definitely not for sale). Due to their deal with AOL, Bertelsmann are the European on-line leader - they have a 50-50 partnership with AOL.
Yet Another Afternoon Newspaper Bites the Dust:
E.W. Scripps recently announced that it has been forced to discontinue a local afternoon newspaper The El Paso Herald-Post due to rapidly decreasing sales. Scripps publishes the Herald-Post, whose last edition goes out Saturday, in cooperation with Gannett Co., which owns the related daily The El Paso Times, and leads promotion and distribution for both newspapers. The El Paso Times will not be affected by this decision.
Cowles Business Media: MediaCentral 10/7/97
Readers Digest Problems Continue:
The Reader's Digest Association Inc. recently said that it expects to report a loss of $.05 to $.10 per share for its fiscal 1998 first quarter ended Sept. 30, lower than analysts' estimates. Reader's Digest also expects lower than expected revenues. The publisher cited lower than anticipated expected response to promotional mailings in most major markets. The financial report, to be released on Oct. 29, will include non-recurring charges of approximately $70 million. In the fourth quarter ended June 19, the company reported a net loss of $22.8 million or $.22 per share.
Cowles Business Media: MediaCentral 10/7/97
L.A. Daily News on the Selling Block:
Reuters reported that the merger and acquisition firm Dirks, Van Essen & Associates of Santa Fe, NM, has been retained to handle the sale of The Los Angeles Daily News which was acquired in 1985 for $176 million from the Tribune Co. Observers expect the sale can fetch as much as $200 million to $250 million.
The daily has a circulation of 203,000 weekdays and 218,000 on Sundays. Prospective buyers include Rupert Murdoch's News Corp., Denver Post parent MediaNews Group, Orange County Register parent Freedom Communications and Toronto-based publisher Thomson Corp.
Cowles Business Media: MediaDaily 10/6/97
NYT Sells More Magazines:
The New York Times Co. will sell six sports magazines to Miller Publishing. The titles involved are Tennis, Tennis Buyer's Guide, Cruising World, Sailing World, Snow Country and Snow Country Business. The transaction is expected to be completed by year end. The Los Angeles-based purchaser is a partnership between private equity investment firm of Freeman Spogli & Co. Inc. and Robert L. Miller, the group's president and a former Time Inc. executive.
On-line/New Media News:
Britannica Online to Offer Free Content
Encyclopedia Britannica Inc., whose core online product is subscription-based Web service Britannica Online, launched the latest in its series of Spotlights, its free quarterly Web sites dedicated to a particular, timely topic. In honor of the Nobel awards this month, the Nobel Prize Web site http://www.nobel.eb.com) illuminates in text and multimedia clips of past winners and the innovations and efforts singled out to receive the world's most prestigious awards.
Through the free in-depth coverage of historical and current issues, EB hopes to lure subscribers to Britannica Online (http://www.eb.com), which presently claims 10,000 users. The big deterrent, company research found, was the relatively high cost for Web-based material, for which until just weeks ago an annual subscription cost $150 or $12.50 per month. In response on On Sept. 15, the service slashed its prices to $8.50 per month and has seen subscription rates rise by 10%.
Cowles Business Media: MediaCentral 10/7/97
International Data Corporation Reports Exploding Internet Activity:
Research presented at the recent Internet 98 Conference in Burlingame, Calif. by IDC, a Framingham, Mass. Based market research firm, indicates there are currently 53.2MM Internet users worldwide with 44.2MM of those using the World Wide Web. (About 9MM people use e-mail but not the Web.)
At the current rate of growth, IDC projects that there will be 60MM Internet users and 50MM World Wide Web users by Dec. 31 which represents an increase of more than 26MM Internet users and 22.4MM World Wide Web users since 1996.
According to the study more than $10Bil in goods and services are expected to be purchased on the WWW by the end of 1997. IDC estimated that 2/3 of this amount was generated by corporations using the Internet as an effective method for ordering and paying for products and services. (Companies like Cisco Systems and GE use the internet extensively for this purpose). There may be close to 1MM Internet transactions occurring each day on the Internet. (www.idc.com for more information).
Breakthrough Will Bring Internet to The Home via Power Wires:
The London Times reported recently that two companies, Northern Telecom and Norweb Communications, have found the "holy grail" of telecommunications the ability to send vast amounts of data along power lines without its being distorted by interference. In future, every home in the country (UK) could be connected to the Internet in this way, providing increasing competition for telephone companies, especially BT.
Norweb intends to offer a commercial trial to 2,000 homes in the North West next spring. The two companies said yesterday that their service could offer an Internet connection 20 to 30 times faster than commonly available through today's telephone modems and that the cost would be lower by up to 50 per cent.
BT said last night it did not believe its business would be effected. Strong content, BT said, was the key to success on the Internet.
Did You Know....
Texas, facing the potential cost of $1.6Bill for school text books over the next six years is reviewing the possibility of buying laptop computers with CD ROM drives as an alternative to printed texts. The cost of acquiring texts for the 2000-2001 (two year period) is expected to roughly double what the cost was for 1996-1997 ($360MM vs. $600MM). Trials are currently underway in some MA school districts using computers rather than texts and information via inter/intranet is transmitted to each laptop via infra-red nodes in the ceiling of each classroom. Naturally, the computers are designed to be pretty hardy.
Reed Elsevier to Acquire Wolters Kluwe
Bertelsmann Reports Earnings
Yet Another Afternoon Newspaper Bites the Dust
Readers Digest Problems Continue
L.A. Daily News on the Selling Block
NYT Sells More Magazines
Britannica Online to Offer Free Content
International Data Corporation Reports Exploding Internet Activity
Breakthrough Will Bring Internet to The Home via Power Wires
School text books
Recent News:
Reed Elsevier to Acquire Wolters Kluwer
Reed and Wolters Kluwer announced Tuesday that they would merge creating an $8.1Bill global publisher concentrating on professional and trade journal publishing. Reed owns Lexis-Nexis, Reed Travel Group (including OAG) and is the largest worldwide publisher of academic journals. Wolters Kluwer dominates legal and tax publishing in Europe and is based in the Netherlands. In 1996 Reed Elsevier reported sales and income of $5.42Bill and $1.2Bill and Wolters Kluwer reported sales and net income of $2.7Bill and $429MM. Analysts suggest the combined company will be in a strong position to share the costs of moving to electronic publishing away from paper.
Bertelsmann Reports Earnings:
Sales increased year on year to $12.8Bill (4.2% increase) and net income was $582MM. Bertelsmann is the third of the large media firms after Time Warner and Disney but is much less geared - debt represents less that 5% of turnover versus TM and Disney of 97% and 62% respectively. Books (WW) constituted $4.1Bill in sales and were the second largest group after Music. Of this amount the US represented (only) $1Bill in sales. According to reports Bertelsmann is actively looking for a publishing acquisition in the US. (A number of companies have been mentioned and John Wileys chairman recently sent an internal memo to employees stating that Wiley was definitely not for sale). Due to their deal with AOL, Bertelsmann are the European on-line leader - they have a 50-50 partnership with AOL.
Yet Another Afternoon Newspaper Bites the Dust:
E.W. Scripps recently announced that it has been forced to discontinue a local afternoon newspaper The El Paso Herald-Post due to rapidly decreasing sales. Scripps publishes the Herald-Post, whose last edition goes out Saturday, in cooperation with Gannett Co., which owns the related daily The El Paso Times, and leads promotion and distribution for both newspapers. The El Paso Times will not be affected by this decision.
Cowles Business Media: MediaCentral 10/7/97
Readers Digest Problems Continue:
The Reader's Digest Association Inc. recently said that it expects to report a loss of $.05 to $.10 per share for its fiscal 1998 first quarter ended Sept. 30, lower than analysts' estimates. Reader's Digest also expects lower than expected revenues. The publisher cited lower than anticipated expected response to promotional mailings in most major markets. The financial report, to be released on Oct. 29, will include non-recurring charges of approximately $70 million. In the fourth quarter ended June 19, the company reported a net loss of $22.8 million or $.22 per share.
Cowles Business Media: MediaCentral 10/7/97
L.A. Daily News on the Selling Block:
Reuters reported that the merger and acquisition firm Dirks, Van Essen & Associates of Santa Fe, NM, has been retained to handle the sale of The Los Angeles Daily News which was acquired in 1985 for $176 million from the Tribune Co. Observers expect the sale can fetch as much as $200 million to $250 million.
The daily has a circulation of 203,000 weekdays and 218,000 on Sundays. Prospective buyers include Rupert Murdoch's News Corp., Denver Post parent MediaNews Group, Orange County Register parent Freedom Communications and Toronto-based publisher Thomson Corp.
Cowles Business Media: MediaDaily 10/6/97
NYT Sells More Magazines:
The New York Times Co. will sell six sports magazines to Miller Publishing. The titles involved are Tennis, Tennis Buyer's Guide, Cruising World, Sailing World, Snow Country and Snow Country Business. The transaction is expected to be completed by year end. The Los Angeles-based purchaser is a partnership between private equity investment firm of Freeman Spogli & Co. Inc. and Robert L. Miller, the group's president and a former Time Inc. executive.
On-line/New Media News:
Britannica Online to Offer Free Content
Encyclopedia Britannica Inc., whose core online product is subscription-based Web service Britannica Online, launched the latest in its series of Spotlights, its free quarterly Web sites dedicated to a particular, timely topic. In honor of the Nobel awards this month, the Nobel Prize Web site http://www.nobel.eb.com) illuminates in text and multimedia clips of past winners and the innovations and efforts singled out to receive the world's most prestigious awards.
Through the free in-depth coverage of historical and current issues, EB hopes to lure subscribers to Britannica Online (http://www.eb.com), which presently claims 10,000 users. The big deterrent, company research found, was the relatively high cost for Web-based material, for which until just weeks ago an annual subscription cost $150 or $12.50 per month. In response on On Sept. 15, the service slashed its prices to $8.50 per month and has seen subscription rates rise by 10%.
Cowles Business Media: MediaCentral 10/7/97
International Data Corporation Reports Exploding Internet Activity:
Research presented at the recent Internet 98 Conference in Burlingame, Calif. by IDC, a Framingham, Mass. Based market research firm, indicates there are currently 53.2MM Internet users worldwide with 44.2MM of those using the World Wide Web. (About 9MM people use e-mail but not the Web.)
At the current rate of growth, IDC projects that there will be 60MM Internet users and 50MM World Wide Web users by Dec. 31 which represents an increase of more than 26MM Internet users and 22.4MM World Wide Web users since 1996.
According to the study more than $10Bil in goods and services are expected to be purchased on the WWW by the end of 1997. IDC estimated that 2/3 of this amount was generated by corporations using the Internet as an effective method for ordering and paying for products and services. (Companies like Cisco Systems and GE use the internet extensively for this purpose). There may be close to 1MM Internet transactions occurring each day on the Internet. (www.idc.com for more information).
Breakthrough Will Bring Internet to The Home via Power Wires:
The London Times reported recently that two companies, Northern Telecom and Norweb Communications, have found the "holy grail" of telecommunications the ability to send vast amounts of data along power lines without its being distorted by interference. In future, every home in the country (UK) could be connected to the Internet in this way, providing increasing competition for telephone companies, especially BT.
Norweb intends to offer a commercial trial to 2,000 homes in the North West next spring. The two companies said yesterday that their service could offer an Internet connection 20 to 30 times faster than commonly available through today's telephone modems and that the cost would be lower by up to 50 per cent.
BT said last night it did not believe its business would be effected. Strong content, BT said, was the key to success on the Internet.
Did You Know....
Texas, facing the potential cost of $1.6Bill for school text books over the next six years is reviewing the possibility of buying laptop computers with CD ROM drives as an alternative to printed texts. The cost of acquiring texts for the 2000-2001 (two year period) is expected to roughly double what the cost was for 1996-1997 ($360MM vs. $600MM). Trials are currently underway in some MA school districts using computers rather than texts and information via inter/intranet is transmitted to each laptop via infra-red nodes in the ceiling of each classroom. Naturally, the computers are designed to be pretty hardy.
Friday, October 10, 1997
10/10/97: Newspaper Revenues, Wiley Pearson, Primedia, ReedElsevier
Summary:
Newspaper Publishers Expected to Post Higher Earnings on Strong Ad Revenue:
Gannett, Knight-Ridder, New York Times Co, Washington Post, Tribune Co. Times Mirror, A.H. Belo, Providence Journal, Dow Jones & Co., E.W. Scripps, Central Newspapers, Media General
Scripps Completes Acquisitions of Harte-Hanks Newspapers and the Food Network
Gannet Buys Two Maine TV Stations
Cowles Media Company for sale
Changes at Reed Elsevier Business Information
News Corp. Chief Admits Setbacks
Wiley to Acquire Van Nostrand Reinhold
Sulzberger Steps Down As NYT Chairman, Company Profits Up
Addison Wesley Longman and Headland Become Digital Media Partners for Distance Learning on World Wide Web
Earth's Biggest Bookstore Serves Millionth Unique Customer
Dutch Publishing Merger Creates Formidable Online Business
Recent News
Newspaper Publishers Expected to Post Higher Earnings on Strong Ad Revenue:
Newspaper publishers' third-quarter earnings are expected to be higher than a year ago as advertising revenue continued to flow in the period and newsprint prices rose only modestly. The price of newsprint, which typically constitutes about 20% of a publisher's costs, rose in the third quarter from the second period but was still below the year-earlier level.
Gannett Co. stands out among big publishers, with third-quarter earnings expected to rise to $1.01 a share from 79 cents, according to analysts' estimates compiled by First Call Inc. Revenue has been climbing at the Arlington, Va., company's flagship publication, USA Today, as well as at its smaller newspapers and television stations. Knight-Ridder has been divesting non-core assets and fine-tuning its newspaper portfolio by buying, selling and swapping papers. First Call puts earnings for the company, which publishes the Miami Herald, the Philadelphia Inquirer and the San Jose Mercury News, at 42 cents a share, up from 37 cents a year earlier. New York Times Co.'s earnings are expected to rise to 43 cents a share in the third quarter from 38 cents a year earlier as its flagship newspaper cashes in on booming national advertising.
Washington Post Co.'s earnings are seen rising to $5.14 a share for the quarter from $5 a share. Tribune Co.'s earnings are expected to rise to 49 cents a share from 46 cents. Tribune, which publishes the Chicago Tribune, gained a substantial TV presence through its purchase of Renaissance Communications last spring. At Times Mirror Co. of Los Angeles, third-quarter earnings are seen jumping to 59 cents a share from 43 cents, but analysts caution that the increase isn't so much from top-line growth as it is from a massive restructuring and cost cutting initiated by Chief Executive Officer Mark Willes 18 months ago.
A.H. Belo & Co.'s earnings are expected to drop sharply to 18 cents a share from 42 cents. The drop reflects dilution from the Dallas company's $1.5 billion acquisition of Providence Journal Co. early this year. Dow Jones & Co.'s earnings are expected to fall to 22 cents a share from 33 cents. The New York publisher of The Wall Street Journal said early in the year that it expects weaker earnings as it invests as much as $650 million over the next several years to restructure its dataservices unit, Dow Jones Markets, formerly called Telerate.
Among smaller publishers: Earnings at E.W. Scripps Co. of Cincinnati are seen rising to 34 cents a share from 29 cents. Central Newspapers Inc. of Indianapolis is expected to post an earnings jump to 75 cents a share from 57 cents. At Media General of Richmond, Va., earnings are seen falling to 35 cents a share from 59 cents.
Despite generally upbeat numbers, analysts are somewhat cautious on the sector going forward. Newsprint prices may not be rising as quickly as feared, but they definitely are headed up. Newsprint, which cost about $570 a metric ton in the third quarter, will reach $600 a ton in the first quarter of 1998, up almost $100 from the year-earlier period. (A metric ton equals 2,204.62 pounds). Analysts are not convinced that retail advertising, the largest chunk of ads for most newspapers, will be strong enough to offset higher newsprint prices.
WSJ via NewsEDGE Copyright (c) 1997 Dow Jones and Company, Inc. Received via NewsEDGE from Desktop Data, Inc.: 10/06/97 02:14:51
Scripps Completes Acquisitions of Harte-Hanks Newspapers and the Food Network
CINCINNATI, Oct. 15 /PRNewswire/ -- The E. W. Scripps Company (NYSE: SSP) today completed two previously announced transactions at a total cost of approximately $700 million.
First, Scripps acquired six newspapers (five in Texas and one in South Carolina), plus stations KENS-TV and KENS-AM in San Antonio from Harte-Hanks Communications. Then, through a subsequent transaction, Scripps traded the KENS stations to A.H. Belo in exchange for Belo's 56 percent controlling interest in The Food Network and $75 million in cash. Transfer of the KENS broadcast licenses to Belo is subject to final government approval.
Following these transactions, Scripps operates:
* Nine network-affiliated television stations;
* Newspapers in 20 markets;
* Two television networks -- Home & Garden Television and The Food
Network;
* United Media, a licensor and syndicator of news features and comics;
* Cinetel Productions, a creator of programming primarily for cable TV
networks;
* Scripps Howard Productions, a creator of programming primarily for
broadcast TV networks.
Source: The E.W. Scripps Company
Gannet Buys Two Maine TV Stations
Gannett Co., Arlington, Va., said it agreed to acquire two Maine television stations. Terms weren't disclosed. Gannett is buying WCSH, the NBC affiliate in Portland, from Maine Radio & Television Co., and WLBZ, the NBC affiliate in Bangor, from Maine Broadcasting Co. The transaction is subject to the approval of the Federal Communications Commission. Upon completion of this transaction, Gannett Broadcasting will have 20 television stations.
Source: Dow Jones
Cowles Media Company for sale
Recently the trustees of the Cowles family announced that it was examining `strategic alternatives'' to its ownership of Cowles Media Co, and The Star Tribune, its flagship newspaper, including a possible sale that could reap at least $1 billion. There has been only a very thin market for the relatively few shares of Cowles Media that are traded, and the price of the stock today, in the mid-$50s - is still undervalued compared with the more than $70 a share that analysts think it would be worth in a sale. The Minneapolis StarTribune accounts for about two-thirds of Cowles Media's revenues, which was $517 million in the fiscal year ended March 29. The company also publishes a number of small magazines and business and marketing publications.
Cowles Media is not discussing its list of possible suitors, nor would its spokesman say whether the company had, in fact, tried and failed to line up a buyer before it announced its possible sale last month. Many analysts think a deal may be reached by Thanksgiving. The Washington Post Co. is considered to be the front-runner because it already owns 28 percent of the Cowles stock. Its treasurer, Jay Morse, said his company did not comment on potential acquisitions.
Also mentioned is Times Mirror Corp., owner of The Los Angeles Times and Newsday. Its chairman, Mark Willes, the chairman of Times Mirror, has been spinning off companies not directly related to Times Mirror's core media businesses since he came to the company two years ago. But he has said in the past that he would not be opposed to acquisitions that ``fit'' Times Mirror 's publishing and broadcasting interests.
c.1997 N.Y. Times News Service 23:38 EDT OCTOBER 12, 1997
Changes at Reed Elsevier Business Information
Folio, First Day reports of 100 job cuts, magazine and research-units being put up for sale and the establishment of new publishing divisions at Reed Elsevier Business Information, the sprawling Reed Elsevier PLC unit created by the merger of Cahners Publishing and Chilton Publishing. Company spokesperson Margaret Pantridge tells First Day that nine properties are being
divested in addition to the four computer magazines (Government Computer News, Government Computer News State & Local, Datamation and Reseller Management) previously announced.
The nine properties newly up for sale include: Chilton Research Services, a major operation serving Fortune 500 companies, and the Business Research Group, which is being lumped in with the divestment of the four aforementioned computer magazines; as well as seven other magazines including CabinetMaker; Cheese Market News; Dairy Foods; Furniture Design & Manufacturing; Instrumentation & Control Systems; Home Improvement Market; and Upholstery Design & Manufacturing.
Key personnel moves in a realignment of the Cahners-Chilton entities include the naming of three former Chilton executives to a steering committee: Lee Hufnagel, Andrew Weber and Bill O'Brien. Pantridge says the realignment "basically" establishes three magazine divisions: the 39-title manufacturing/new-product unit (among its notable titles are Design News and Manufacturing Systems); entertainment, communications and media, headed by headed by executive VP Mark Lieberman, who'll oversee Variety, Broadcasting & Cable, Publishers Weekly, Multichannel News and 18 other publications; and the 59-title business publications division, headed by executive VP Brian Nairn.
In addition to serving on the steering committee, O'Brien is chief operations officer of the entertainment/communications/media unit. Hufnagel's role is to coordinate the Cahners-Chilton integration. He and the rest of the management team report to Reed Elsevier Business nformation president/CEO Bruce Barnet, based in Newton, MA.
Cowles/Simba Media Daily 10/10/97
Copyright 1997 Cowles Business Media. All rights reserved.
News Corp. Chief Admits Setbacks
Speaking at News Corp.'s annual meeting in Adelaide, Australia, chairman and chief executive Rupert Murdoch offered shareholders an upbeat speech, but also admitted to some setbacks. In discussing News Corp.'s net profits for the year ended June 30, including millions in charges from HarperCollins, the News Corp. chief reported that the troubled book publisher would generate revenues of $700 million and "will be profitable, although not magnificently so." He conceded that the unit was a source of "a great deal of difficulty."
Cowles/Simba Media Daily 10/8/97
Copyright 1997 Cowles Business Media. All rights reserved.
Wiley to Acquire Van Nostrand Reinhold
New York, N.Y. October 9, 1997. Charles R. Ellis, President and Chief Executive Officer of John Wiley & Sons, Inc. (NYSE: JW.A and JW.B), the global publishing company headquartered in New York, today announced that it has reached an agreement with International Thomson Publishing (ITP), a division of The Thomson Corporation (TSE: TOC) to purchase the assets of its Van Nostrand Reinhold (VNR) operating unit, which is located in New York. The terms of the sale, which should close in the fall, were not disclosed; however, the transaction is subject to the Hart-Scott-Rodino waiting period.
VNR is a publisher of books and electronic products for professionals in architecture/design,
environmental/industrial science, culinary arts/hospitality, and business technology. VNR is known for its numerous "franchise" titles, which are regarded by many professionals as indispensable; examples include Ching's Architectural Graphics, Sax's Dangerous Properties of Industrial Materials, the Culinary Institute of America series, Kerzner's Product Management, and
Considine's Van Nostrand Scientific Encyclopedia.
Sulzberger Steps Down As NYT Chairman, Company Profits Up
The New York Times Co. announced on Thursday that Arthur Ochs Sulzberger, its chairman and CEO, has stepped down after leading the company for 24 years, and that in his place Arthur O.
Sulzberger Jr. has been elected chairman, effective immediately. The senior Sulzberger will remain on the board of directors as chairman emeritus, while his son will continue on as publisher of the company's flagship enterprise. In addition, president Russell T. Lewis has been named to the position of CEO.
Online Publishing Information:
Addison Wesley Longman and Headland Become Digital Media Partners for Distance Learning on World Wide Web
Addison Wesley Longman and Headland Digital Media, both Pearson companies, announced today an alliance to provide fully accredited educational materials from leading institutions to students via the World Wide Web. The venture will publish learning and teaching systems so that students of any age and from anywhere in the world can advance their academic degrees online. Leading universities and distinguished scholars and instructors will offer the curriculum.
The alliance is designed for students who want to take academic subjects such as business, mathematics, communications, and computer science by means of the Internet. The venture will also provide online solutions to help students develop the skills and training to succeed outside the classroom. Students will be able to download materials directly from the World Wide Web, thus reducing their costs of commuting and housing, and permitting flexible scheduling. The programs are expected to reach existing students and to extend fully accredited courses to students who might not otherwise be able to attain a college degree.
Each partner brings considerable expertise and industry-specific success to the venture. Addison Wesley Longman, through its global publishing business, has relationships with many of the most respected and highly regarded authors of educational texts. They have also fostered strategic
relationships with top academic institutions.
Earth's Biggest Bookstore Serves Millionth Unique Customer
SEATTLE, Oct. 14 /PRNewswire/ -- Amazon.com, Inc. (Nasdaq: AMZN) today announced it will be the first Internet retailer to reach the one-millionth new customer milestone. Celebrating its number one status in e-commerce traffic, the company today kicks off a two-week customer promotion "You're One in a Million at Amazon.com." In just two years, Amazon.com (http://www.amazon.com) has established itself as not only the leader in online booksellers but as the leading Internet retailer, according to the latest report from Media Metrix (formerly PC
Meter). With an estimated 4.5% of all Web households visiting Amazon.com during August, 1997, Amazon.com received more traffic than Internet giants wal-mart.com, QVC.com, and landsend.com combined.
SOURCE Amazon.com, Inc.
Dutch Publishing Merger Creates Formidable Online Business
The proposed merger between Reed Elsevier and Wolters Kluwer, would create one of the largest online legal, tax and public records publishers in the United States with 1996 online sales of $410 million, according to Electronic Information Report (EIR) estimates. The deal, if approved by shareholders, would bring together Reed Elsevier's LEXIS LEXIS and Wolters Kluwer's CCH Online services. EIR estimates LEXIS had 1996 sales of $345 million, while CCH Online generated $65 million in 1996. This places the combined properties a close second behind Thomson's WESTLAW online legal service, which posted sales of $450 million in 1996, according to EIR estimates.
Overall, the Dutch combination, to be called Elsevier Wolters Kluwer (EWK), would allow the
companies to overtake Thomson Corp. as the largest professional publisher in the world. EWK
would have pro forma sales of $4.66 billion in 1996. Thomson would be bumped to second place
with sales of $3.39 billion in 1996 and McGraw-Hill would move into a distant third with sales of
$1.37 billion in 1996. The merger, to be conducted as a stock swap, is expected to be completed
in the first quarter 1998.
Apart from size, the combination of CCH and LEXIS brings together complementary content,
according to Meryick Payne, senior partner at Management Practice, a professional publishing
consultancy. CCH's 700 print and CD-ROM tax titles would finally give tax and accounting
professionals, who as a group have shunned online access in favor of CD-ROM and print
products, a reason to try LEXIS-NEXIS, he said. LEXIS-NEXIS's has 839,000 online subscribers.
Conversely, LEXIS's strength in U.S. federal and state case law as well as its broad range of
specialized libraries in securities, banking, the environment, energy, international and public
records, could be the content boost CCH Online needs to invigorate flagging sales. In its second
year under the ownership of Amsterdam-based Wolters Kluwer, CCH's 1996 legal information
sales were flat at $130 million, according to EIR estimates.
Cowles/Simba Media Daily 10/10/97
Copyright 1997 Cowles Business Media. All rights reserved
DID YOU KNOW:
Newspaper circulation has been declining relative to U.S. household formation for years, and today is only 57 million nationwide. Circulation had been falling by 0.5%-1.0% a year since 1987, but the drop accelerated to 2% in each of the last two years.
Newspaper Publishers Expected to Post Higher Earnings on Strong Ad Revenue:
Gannett, Knight-Ridder, New York Times Co, Washington Post, Tribune Co. Times Mirror, A.H. Belo, Providence Journal, Dow Jones & Co., E.W. Scripps, Central Newspapers, Media General
Scripps Completes Acquisitions of Harte-Hanks Newspapers and the Food Network
Gannet Buys Two Maine TV Stations
Cowles Media Company for sale
Changes at Reed Elsevier Business Information
News Corp. Chief Admits Setbacks
Wiley to Acquire Van Nostrand Reinhold
Sulzberger Steps Down As NYT Chairman, Company Profits Up
Addison Wesley Longman and Headland Become Digital Media Partners for Distance Learning on World Wide Web
Earth's Biggest Bookstore Serves Millionth Unique Customer
Dutch Publishing Merger Creates Formidable Online Business
Recent News
Newspaper Publishers Expected to Post Higher Earnings on Strong Ad Revenue:
Newspaper publishers' third-quarter earnings are expected to be higher than a year ago as advertising revenue continued to flow in the period and newsprint prices rose only modestly. The price of newsprint, which typically constitutes about 20% of a publisher's costs, rose in the third quarter from the second period but was still below the year-earlier level.
Gannett Co. stands out among big publishers, with third-quarter earnings expected to rise to $1.01 a share from 79 cents, according to analysts' estimates compiled by First Call Inc. Revenue has been climbing at the Arlington, Va., company's flagship publication, USA Today, as well as at its smaller newspapers and television stations. Knight-Ridder has been divesting non-core assets and fine-tuning its newspaper portfolio by buying, selling and swapping papers. First Call puts earnings for the company, which publishes the Miami Herald, the Philadelphia Inquirer and the San Jose Mercury News, at 42 cents a share, up from 37 cents a year earlier. New York Times Co.'s earnings are expected to rise to 43 cents a share in the third quarter from 38 cents a year earlier as its flagship newspaper cashes in on booming national advertising.
Washington Post Co.'s earnings are seen rising to $5.14 a share for the quarter from $5 a share. Tribune Co.'s earnings are expected to rise to 49 cents a share from 46 cents. Tribune, which publishes the Chicago Tribune, gained a substantial TV presence through its purchase of Renaissance Communications last spring. At Times Mirror Co. of Los Angeles, third-quarter earnings are seen jumping to 59 cents a share from 43 cents, but analysts caution that the increase isn't so much from top-line growth as it is from a massive restructuring and cost cutting initiated by Chief Executive Officer Mark Willes 18 months ago.
A.H. Belo & Co.'s earnings are expected to drop sharply to 18 cents a share from 42 cents. The drop reflects dilution from the Dallas company's $1.5 billion acquisition of Providence Journal Co. early this year. Dow Jones & Co.'s earnings are expected to fall to 22 cents a share from 33 cents. The New York publisher of The Wall Street Journal said early in the year that it expects weaker earnings as it invests as much as $650 million over the next several years to restructure its dataservices unit, Dow Jones Markets, formerly called Telerate.
Among smaller publishers: Earnings at E.W. Scripps Co. of Cincinnati are seen rising to 34 cents a share from 29 cents. Central Newspapers Inc. of Indianapolis is expected to post an earnings jump to 75 cents a share from 57 cents. At Media General of Richmond, Va., earnings are seen falling to 35 cents a share from 59 cents.
Despite generally upbeat numbers, analysts are somewhat cautious on the sector going forward. Newsprint prices may not be rising as quickly as feared, but they definitely are headed up. Newsprint, which cost about $570 a metric ton in the third quarter, will reach $600 a ton in the first quarter of 1998, up almost $100 from the year-earlier period. (A metric ton equals 2,204.62 pounds). Analysts are not convinced that retail advertising, the largest chunk of ads for most newspapers, will be strong enough to offset higher newsprint prices.
WSJ via NewsEDGE Copyright (c) 1997 Dow Jones and Company, Inc. Received via NewsEDGE from Desktop Data, Inc.: 10/06/97 02:14:51
Scripps Completes Acquisitions of Harte-Hanks Newspapers and the Food Network
CINCINNATI, Oct. 15 /PRNewswire/ -- The E. W. Scripps Company (NYSE: SSP) today completed two previously announced transactions at a total cost of approximately $700 million.
First, Scripps acquired six newspapers (five in Texas and one in South Carolina), plus stations KENS-TV and KENS-AM in San Antonio from Harte-Hanks Communications. Then, through a subsequent transaction, Scripps traded the KENS stations to A.H. Belo in exchange for Belo's 56 percent controlling interest in The Food Network and $75 million in cash. Transfer of the KENS broadcast licenses to Belo is subject to final government approval.
Following these transactions, Scripps operates:
* Nine network-affiliated television stations;
* Newspapers in 20 markets;
* Two television networks -- Home & Garden Television and The Food
Network;
* United Media, a licensor and syndicator of news features and comics;
* Cinetel Productions, a creator of programming primarily for cable TV
networks;
* Scripps Howard Productions, a creator of programming primarily for
broadcast TV networks.
Source: The E.W. Scripps Company
Gannet Buys Two Maine TV Stations
Gannett Co., Arlington, Va., said it agreed to acquire two Maine television stations. Terms weren't disclosed. Gannett is buying WCSH, the NBC affiliate in Portland, from Maine Radio & Television Co., and WLBZ, the NBC affiliate in Bangor, from Maine Broadcasting Co. The transaction is subject to the approval of the Federal Communications Commission. Upon completion of this transaction, Gannett Broadcasting will have 20 television stations.
Source: Dow Jones
Cowles Media Company for sale
Recently the trustees of the Cowles family announced that it was examining `strategic alternatives'' to its ownership of Cowles Media Co, and The Star Tribune, its flagship newspaper, including a possible sale that could reap at least $1 billion. There has been only a very thin market for the relatively few shares of Cowles Media that are traded, and the price of the stock today, in the mid-$50s - is still undervalued compared with the more than $70 a share that analysts think it would be worth in a sale. The Minneapolis StarTribune accounts for about two-thirds of Cowles Media's revenues, which was $517 million in the fiscal year ended March 29. The company also publishes a number of small magazines and business and marketing publications.
Cowles Media is not discussing its list of possible suitors, nor would its spokesman say whether the company had, in fact, tried and failed to line up a buyer before it announced its possible sale last month. Many analysts think a deal may be reached by Thanksgiving. The Washington Post Co. is considered to be the front-runner because it already owns 28 percent of the Cowles stock. Its treasurer, Jay Morse, said his company did not comment on potential acquisitions.
Also mentioned is Times Mirror Corp., owner of The Los Angeles Times and Newsday. Its chairman, Mark Willes, the chairman of Times Mirror, has been spinning off companies not directly related to Times Mirror's core media businesses since he came to the company two years ago. But he has said in the past that he would not be opposed to acquisitions that ``fit'' Times Mirror 's publishing and broadcasting interests.
c.1997 N.Y. Times News Service 23:38 EDT OCTOBER 12, 1997
Changes at Reed Elsevier Business Information
Folio, First Day reports of 100 job cuts, magazine and research-units being put up for sale and the establishment of new publishing divisions at Reed Elsevier Business Information, the sprawling Reed Elsevier PLC unit created by the merger of Cahners Publishing and Chilton Publishing. Company spokesperson Margaret Pantridge tells First Day that nine properties are being
divested in addition to the four computer magazines (Government Computer News, Government Computer News State & Local, Datamation and Reseller Management) previously announced.
The nine properties newly up for sale include: Chilton Research Services, a major operation serving Fortune 500 companies, and the Business Research Group, which is being lumped in with the divestment of the four aforementioned computer magazines; as well as seven other magazines including CabinetMaker; Cheese Market News; Dairy Foods; Furniture Design & Manufacturing; Instrumentation & Control Systems; Home Improvement Market; and Upholstery Design & Manufacturing.
Key personnel moves in a realignment of the Cahners-Chilton entities include the naming of three former Chilton executives to a steering committee: Lee Hufnagel, Andrew Weber and Bill O'Brien. Pantridge says the realignment "basically" establishes three magazine divisions: the 39-title manufacturing/new-product unit (among its notable titles are Design News and Manufacturing Systems); entertainment, communications and media, headed by headed by executive VP Mark Lieberman, who'll oversee Variety, Broadcasting & Cable, Publishers Weekly, Multichannel News and 18 other publications; and the 59-title business publications division, headed by executive VP Brian Nairn.
In addition to serving on the steering committee, O'Brien is chief operations officer of the entertainment/communications/media unit. Hufnagel's role is to coordinate the Cahners-Chilton integration. He and the rest of the management team report to Reed Elsevier Business nformation president/CEO Bruce Barnet, based in Newton, MA.
Cowles/Simba Media Daily 10/10/97
Copyright 1997 Cowles Business Media. All rights reserved.
News Corp. Chief Admits Setbacks
Speaking at News Corp.'s annual meeting in Adelaide, Australia, chairman and chief executive Rupert Murdoch offered shareholders an upbeat speech, but also admitted to some setbacks. In discussing News Corp.'s net profits for the year ended June 30, including millions in charges from HarperCollins, the News Corp. chief reported that the troubled book publisher would generate revenues of $700 million and "will be profitable, although not magnificently so." He conceded that the unit was a source of "a great deal of difficulty."
Cowles/Simba Media Daily 10/8/97
Copyright 1997 Cowles Business Media. All rights reserved.
Wiley to Acquire Van Nostrand Reinhold
New York, N.Y. October 9, 1997. Charles R. Ellis, President and Chief Executive Officer of John Wiley & Sons, Inc. (NYSE: JW.A and JW.B), the global publishing company headquartered in New York, today announced that it has reached an agreement with International Thomson Publishing (ITP), a division of The Thomson Corporation (TSE: TOC) to purchase the assets of its Van Nostrand Reinhold (VNR) operating unit, which is located in New York. The terms of the sale, which should close in the fall, were not disclosed; however, the transaction is subject to the Hart-Scott-Rodino waiting period.
VNR is a publisher of books and electronic products for professionals in architecture/design,
environmental/industrial science, culinary arts/hospitality, and business technology. VNR is known for its numerous "franchise" titles, which are regarded by many professionals as indispensable; examples include Ching's Architectural Graphics, Sax's Dangerous Properties of Industrial Materials, the Culinary Institute of America series, Kerzner's Product Management, and
Considine's Van Nostrand Scientific Encyclopedia.
Sulzberger Steps Down As NYT Chairman, Company Profits Up
The New York Times Co. announced on Thursday that Arthur Ochs Sulzberger, its chairman and CEO, has stepped down after leading the company for 24 years, and that in his place Arthur O.
Sulzberger Jr. has been elected chairman, effective immediately. The senior Sulzberger will remain on the board of directors as chairman emeritus, while his son will continue on as publisher of the company's flagship enterprise. In addition, president Russell T. Lewis has been named to the position of CEO.
Online Publishing Information:
Addison Wesley Longman and Headland Become Digital Media Partners for Distance Learning on World Wide Web
Addison Wesley Longman and Headland Digital Media, both Pearson companies, announced today an alliance to provide fully accredited educational materials from leading institutions to students via the World Wide Web. The venture will publish learning and teaching systems so that students of any age and from anywhere in the world can advance their academic degrees online. Leading universities and distinguished scholars and instructors will offer the curriculum.
The alliance is designed for students who want to take academic subjects such as business, mathematics, communications, and computer science by means of the Internet. The venture will also provide online solutions to help students develop the skills and training to succeed outside the classroom. Students will be able to download materials directly from the World Wide Web, thus reducing their costs of commuting and housing, and permitting flexible scheduling. The programs are expected to reach existing students and to extend fully accredited courses to students who might not otherwise be able to attain a college degree.
Each partner brings considerable expertise and industry-specific success to the venture. Addison Wesley Longman, through its global publishing business, has relationships with many of the most respected and highly regarded authors of educational texts. They have also fostered strategic
relationships with top academic institutions.
Earth's Biggest Bookstore Serves Millionth Unique Customer
SEATTLE, Oct. 14 /PRNewswire/ -- Amazon.com, Inc. (Nasdaq: AMZN) today announced it will be the first Internet retailer to reach the one-millionth new customer milestone. Celebrating its number one status in e-commerce traffic, the company today kicks off a two-week customer promotion "You're One in a Million at Amazon.com." In just two years, Amazon.com (http://www.amazon.com) has established itself as not only the leader in online booksellers but as the leading Internet retailer, according to the latest report from Media Metrix (formerly PC
Meter). With an estimated 4.5% of all Web households visiting Amazon.com during August, 1997, Amazon.com received more traffic than Internet giants wal-mart.com, QVC.com, and landsend.com combined.
SOURCE Amazon.com, Inc.
Dutch Publishing Merger Creates Formidable Online Business
The proposed merger between Reed Elsevier and Wolters Kluwer, would create one of the largest online legal, tax and public records publishers in the United States with 1996 online sales of $410 million, according to Electronic Information Report (EIR) estimates. The deal, if approved by shareholders, would bring together Reed Elsevier's LEXIS LEXIS and Wolters Kluwer's CCH Online services. EIR estimates LEXIS had 1996 sales of $345 million, while CCH Online generated $65 million in 1996. This places the combined properties a close second behind Thomson's WESTLAW online legal service, which posted sales of $450 million in 1996, according to EIR estimates.
Overall, the Dutch combination, to be called Elsevier Wolters Kluwer (EWK), would allow the
companies to overtake Thomson Corp. as the largest professional publisher in the world. EWK
would have pro forma sales of $4.66 billion in 1996. Thomson would be bumped to second place
with sales of $3.39 billion in 1996 and McGraw-Hill would move into a distant third with sales of
$1.37 billion in 1996. The merger, to be conducted as a stock swap, is expected to be completed
in the first quarter 1998.
Apart from size, the combination of CCH and LEXIS brings together complementary content,
according to Meryick Payne, senior partner at Management Practice, a professional publishing
consultancy. CCH's 700 print and CD-ROM tax titles would finally give tax and accounting
professionals, who as a group have shunned online access in favor of CD-ROM and print
products, a reason to try LEXIS-NEXIS, he said. LEXIS-NEXIS's has 839,000 online subscribers.
Conversely, LEXIS's strength in U.S. federal and state case law as well as its broad range of
specialized libraries in securities, banking, the environment, energy, international and public
records, could be the content boost CCH Online needs to invigorate flagging sales. In its second
year under the ownership of Amsterdam-based Wolters Kluwer, CCH's 1996 legal information
sales were flat at $130 million, according to EIR estimates.
Cowles/Simba Media Daily 10/10/97
Copyright 1997 Cowles Business Media. All rights reserved
DID YOU KNOW:
Newspaper circulation has been declining relative to U.S. household formation for years, and today is only 57 million nationwide. Circulation had been falling by 0.5%-1.0% a year since 1987, but the drop accelerated to 2% in each of the last two years.
Saturday, August 30, 1997
8/30/97: KnightRidder, ReedElsevier, John Wiley, Pearson, Thomson, SimonShuster,
Summary:
Petersen Publishing Opens Trading With Strong Day
Knight Ridder sells Dialog:
Reed Travel Launches Probe Into Circulation Overstatements
JOHN WILEY & SONS INC.: Announcing Wiley InterScience
Pearson Appoints Peter Jovanovich to Head Addison Wesley Longman
Anthea Disney named Chairman and CEO of News America Publishing Group
THOMSON Corp
Simon & Schuster
Digital Object Identifier (DOI)
Recent News:
Petersen Publishing Opens Trading With Strong Day:
(Folio: First Day) In its first day of trading as a public company, Petersen Publishing Co.'s stock
closed Thursday at $20.25 per share after opening at $17.50 and hitting a high of $20.625 on the
New York Stock Exchange.
The opening price was barely half the original filing price floated by Claeys Bahrenburg and his fellow investors, who purchased the Los Angeles-based consumer magazine publisher last year for $400 million-plus (Bahrenburg was a former president of Hearst Magazines.) Registration papers filed with the Securities and Exchange Commission underline the 78-title publisher's reliance on its three top publications: For the 12 months ended Dec. 31, 1996, the 1-million circulation Motor Trend, 1.8-million circulation Teen and 800,000-circulation Hot Rod, brought in $32.5 million, $25.8 million and $19.3 million respectively -- combining for 50.1% of Petersen's operating "contribution."
Knight Ridder sells Dialog:
(Media Daily) Knight-Ridder has agreed to sell its database unit, Knight-Ridder Information Inc. (KRII), to London business information publisher M.A.I.D. for $420 million. The sale, expected to be completed in November, would create the world's largest online information service.
KRII's final price tag turned out to be 15% lower than the $500M the unit had been expected to go for (MD, 8/25/97). "This is a business we did not want to lose, but in light of our recent acquisition of four newspapers from the Walt Disney Co., the sale is necessary," said Tony Ridder, chairman and CEO of Knight-Ridder Inc. The Disney newspaper deals had reportedly cost the company a total of $1.65 billion.
Reed Travel Launches Probe Into Circulation Overstatements:
(Folio: First Day) Reed Travel Group company announced that it had detected "irregularities" in RTG circulation statements -- overstatements to advertisers -- dating back to 1991 for its hotel and airline directories, and that this discovery has moved the company to begin "a full investigation."
LONDON (AP-Dow Jones)--Reed Elsevier PLC has appointed Freshfields to lead the team investigating the irregularities at Reed Travel Group. The company had said it discovered irregularities in circulation statements at its Reed Travel Group unit that affect some 500 million GBP ($800MM) in advertising revenues between 1991 and 1996. The Anglo/Dutch publishing company said it will make an unspecified charge against 1997 earnings to meet the cost of compensating advertisers in the affected Reed Travel Group publications.
It will also make a 'substantial' write down of intangible asset values at Reed Travel group.
ONline/New Media News:
JOHN WILEY & SONS INC.: Announcing Wiley InterScience:
(Wall Street Journal) New York, N.Y., September 9, 1997. Charles R. Ellis, President and Chief Executive Officer of John Wiley & Sons, Inc. (NYSE: JW.A and JW.B), the global publishing company, today announced the launch of Wiley InterScience, a service which will provide access to nearly all of the company's more than 400 scientific, technical, medical, and professional journals over the World Wide Web. Searchable contents listings, abstracts, and informative Web sites for the majority of Wiley's journal program, together with open access to the full-text electronic files of 50 journals, are scheduled to go online October 1 in the pilot phase of this initiative. Other journals will have full-text presentation phased in through 1997 and 1998. The company will continue to publish its journals in print as well, and is embarking on this electronic publishing initiative to augment its strengths in scientific, technical, and medical publishing.
Wiley has been collaborating with Zuno, a Mitsubishi Electric Company based in London and Boston, which developed the innovative software application Wiley has used to create Wiley InterScience. Zuno Digital Publisher (ZDP) is a component-based software system for organizing, managing, and publishing information and journals over the Web and gives publishers tools to create new and dynamic electronic products and services for their customers. ZDP is customizable, meaning Wiley has developed its own "look and feel" for the service and has implemented numerous business models for different types of customers and content.
Executive Changes:
Pearson Appoints Peter Jovanovich to Head Addison Wesley Longman:
Pearson plc, today announced the appointment of Peter Jovanovich as chairman and chief executive of Addison Wesley Longman, Pearson' s educational publishing business. He will succeed J. Larry Jones, who is stepping down from the post after 30 years with the company.
Since 1995, Mr. Jovanovich, 48, has been president of McGraw-Hill's Educational and Professional Publishing Group, which comprises all of the company's book publishing worldwide. Under his leadership the company has grown rapidly to become the largest school and college publisher in the world, with a 29% increase in operating profit in the second quarter of 1997.
Anthea Disney named Chairman and CEO of News America Publishing Group
New York, N.Y. -- September 23, 1997 News Corporation has formed a new U.S. publishing entity called News America Publishing Group that will combine HarperCollins Publishers and the Companys U.S. magazine and on-line publishing divisions and has promoted Anthea Disney as its Chairman and Chief Executive Officer, it was announced today by Rupert Murdoch, News Corporations Chairman & Chief Executive, and Peter Chernin, President & Chief Operating Officer.
Disney will oversee the Companys U.S. print and on-line publishing operations, including HarperCollins; TV Guide, the countrys highest circulation weekly magazine; the opinion-leading highly influential political magazine The Weekly Standard; the electronic publishing business including TV Guide Entertainment Network; and new business development in all of these areas.
THOMSON Corp. (Toronto) -- Richard Harrington, 50 years old, was named president and chief executive officer of this publishing and travel-services concern, three months ahead of schedule. Mr. Harrington was expected to assume the new positions Jan. 1, but the appointments were pushed ahead because of Mr. Harrington's success in the temporary position of chief operating officer, a job created in July specifically to groom him for the positions of president and chief executive. The job of chief operating officer no longer exists. Mr. Harrington, who has held several executive positions with Thomson since 1982, succeeds Michael Brown, 62, who becomes deputy chairman at Thomson. Mr. Brown will hold this new position jointly with John Tory, 67, through the end of December, when Mr. Tory will step down. Mr. Tory will remain on Thomson's board after Dec. 31.
Did You Know....
Simon & Schuster is the world's largest English-language, educational and computer book publisher, distributing products to more than 150 countries through an international 25,000-title catalogue handled by sales offices and subsidiaries in 43 countries. Simon & Schuster has international operations in Europe, Asia, Australia, South Africa and Latin America.
The Digital Object Identifier (DOI) is a digital 'License plate number' for intellectual material proposed by the Association of American Publishers. Use of this identifying number will help users track down who owns an item and access whatever further information the owner (publisher) would like to provide. Customers can them purchase the requested information on-line. The DOI consists of three parts:
1. Two part identifying number identifying the publisher and the document
2. An automated directory composed of a computer system that will accurately link an object, be it a book, picture, etc to whomever owns it
3. The databases maintained by the publisher that provide further information (meta data) for the user.
The goal is to create a global internet based system in which publishers and other owners of copyright(s) will regularly tag their peices of intellectual property with DOIs in the way that publishers now use ISBN numbers. The AAP will be presenting their recommendations on the proposed adoption of the DOI standard at the Frankfurt Book Fair in late October. Simon & Schuster among others are expected to trial these recommendations.
End of Newsletter.
Petersen Publishing Opens Trading With Strong Day
Knight Ridder sells Dialog:
Reed Travel Launches Probe Into Circulation Overstatements
JOHN WILEY & SONS INC.: Announcing Wiley InterScience
Pearson Appoints Peter Jovanovich to Head Addison Wesley Longman
Anthea Disney named Chairman and CEO of News America Publishing Group
THOMSON Corp
Simon & Schuster
Digital Object Identifier (DOI)
Recent News:
Petersen Publishing Opens Trading With Strong Day:
(Folio: First Day) In its first day of trading as a public company, Petersen Publishing Co.'s stock
closed Thursday at $20.25 per share after opening at $17.50 and hitting a high of $20.625 on the
New York Stock Exchange.
The opening price was barely half the original filing price floated by Claeys Bahrenburg and his fellow investors, who purchased the Los Angeles-based consumer magazine publisher last year for $400 million-plus (Bahrenburg was a former president of Hearst Magazines.) Registration papers filed with the Securities and Exchange Commission underline the 78-title publisher's reliance on its three top publications: For the 12 months ended Dec. 31, 1996, the 1-million circulation Motor Trend, 1.8-million circulation Teen and 800,000-circulation Hot Rod, brought in $32.5 million, $25.8 million and $19.3 million respectively -- combining for 50.1% of Petersen's operating "contribution."
Knight Ridder sells Dialog:
(Media Daily) Knight-Ridder has agreed to sell its database unit, Knight-Ridder Information Inc. (KRII), to London business information publisher M.A.I.D. for $420 million. The sale, expected to be completed in November, would create the world's largest online information service.
KRII's final price tag turned out to be 15% lower than the $500M the unit had been expected to go for (MD, 8/25/97). "This is a business we did not want to lose, but in light of our recent acquisition of four newspapers from the Walt Disney Co., the sale is necessary," said Tony Ridder, chairman and CEO of Knight-Ridder Inc. The Disney newspaper deals had reportedly cost the company a total of $1.65 billion.
Reed Travel Launches Probe Into Circulation Overstatements:
(Folio: First Day) Reed Travel Group company announced that it had detected "irregularities" in RTG circulation statements -- overstatements to advertisers -- dating back to 1991 for its hotel and airline directories, and that this discovery has moved the company to begin "a full investigation."
LONDON (AP-Dow Jones)--Reed Elsevier PLC has appointed Freshfields to lead the team investigating the irregularities at Reed Travel Group. The company had said it discovered irregularities in circulation statements at its Reed Travel Group unit that affect some 500 million GBP ($800MM) in advertising revenues between 1991 and 1996. The Anglo/Dutch publishing company said it will make an unspecified charge against 1997 earnings to meet the cost of compensating advertisers in the affected Reed Travel Group publications.
It will also make a 'substantial' write down of intangible asset values at Reed Travel group.
ONline/New Media News:
JOHN WILEY & SONS INC.: Announcing Wiley InterScience:
(Wall Street Journal) New York, N.Y., September 9, 1997. Charles R. Ellis, President and Chief Executive Officer of John Wiley & Sons, Inc. (NYSE: JW.A and JW.B), the global publishing company, today announced the launch of Wiley InterScience, a service which will provide access to nearly all of the company's more than 400 scientific, technical, medical, and professional journals over the World Wide Web. Searchable contents listings, abstracts, and informative Web sites for the majority of Wiley's journal program, together with open access to the full-text electronic files of 50 journals, are scheduled to go online October 1 in the pilot phase of this initiative. Other journals will have full-text presentation phased in through 1997 and 1998. The company will continue to publish its journals in print as well, and is embarking on this electronic publishing initiative to augment its strengths in scientific, technical, and medical publishing.
Wiley has been collaborating with Zuno, a Mitsubishi Electric Company based in London and Boston, which developed the innovative software application Wiley has used to create Wiley InterScience. Zuno Digital Publisher (ZDP) is a component-based software system for organizing, managing, and publishing information and journals over the Web and gives publishers tools to create new and dynamic electronic products and services for their customers. ZDP is customizable, meaning Wiley has developed its own "look and feel" for the service and has implemented numerous business models for different types of customers and content.
Executive Changes:
Pearson Appoints Peter Jovanovich to Head Addison Wesley Longman:
Pearson plc, today announced the appointment of Peter Jovanovich as chairman and chief executive of Addison Wesley Longman, Pearson' s educational publishing business. He will succeed J. Larry Jones, who is stepping down from the post after 30 years with the company.
Since 1995, Mr. Jovanovich, 48, has been president of McGraw-Hill's Educational and Professional Publishing Group, which comprises all of the company's book publishing worldwide. Under his leadership the company has grown rapidly to become the largest school and college publisher in the world, with a 29% increase in operating profit in the second quarter of 1997.
Anthea Disney named Chairman and CEO of News America Publishing Group
New York, N.Y. -- September 23, 1997 News Corporation has formed a new U.S. publishing entity called News America Publishing Group that will combine HarperCollins Publishers and the Companys U.S. magazine and on-line publishing divisions and has promoted Anthea Disney as its Chairman and Chief Executive Officer, it was announced today by Rupert Murdoch, News Corporations Chairman & Chief Executive, and Peter Chernin, President & Chief Operating Officer.
Disney will oversee the Companys U.S. print and on-line publishing operations, including HarperCollins; TV Guide, the countrys highest circulation weekly magazine; the opinion-leading highly influential political magazine The Weekly Standard; the electronic publishing business including TV Guide Entertainment Network; and new business development in all of these areas.
THOMSON Corp. (Toronto) -- Richard Harrington, 50 years old, was named president and chief executive officer of this publishing and travel-services concern, three months ahead of schedule. Mr. Harrington was expected to assume the new positions Jan. 1, but the appointments were pushed ahead because of Mr. Harrington's success in the temporary position of chief operating officer, a job created in July specifically to groom him for the positions of president and chief executive. The job of chief operating officer no longer exists. Mr. Harrington, who has held several executive positions with Thomson since 1982, succeeds Michael Brown, 62, who becomes deputy chairman at Thomson. Mr. Brown will hold this new position jointly with John Tory, 67, through the end of December, when Mr. Tory will step down. Mr. Tory will remain on Thomson's board after Dec. 31.
Did You Know....
Simon & Schuster is the world's largest English-language, educational and computer book publisher, distributing products to more than 150 countries through an international 25,000-title catalogue handled by sales offices and subsidiaries in 43 countries. Simon & Schuster has international operations in Europe, Asia, Australia, South Africa and Latin America.
The Digital Object Identifier (DOI) is a digital 'License plate number' for intellectual material proposed by the Association of American Publishers. Use of this identifying number will help users track down who owns an item and access whatever further information the owner (publisher) would like to provide. Customers can them purchase the requested information on-line. The DOI consists of three parts:
1. Two part identifying number identifying the publisher and the document
2. An automated directory composed of a computer system that will accurately link an object, be it a book, picture, etc to whomever owns it
3. The databases maintained by the publisher that provide further information (meta data) for the user.
The goal is to create a global internet based system in which publishers and other owners of copyright(s) will regularly tag their peices of intellectual property with DOIs in the way that publishers now use ISBN numbers. The AAP will be presenting their recommendations on the proposed adoption of the DOI standard at the Frankfurt Book Fair in late October. Simon & Schuster among others are expected to trial these recommendations.
End of Newsletter.
Sunday, December 01, 1996
Online Superstores: The Next Retail Frontier For Book Publishers?
December, 1996
What's stopping book publishers from moving beyond their currently nascent adventures in Cyberspace to aggressively leveraging their content properties? The technology's available; the audience is sizable. So what's stopping them?
Unlike many companies whose presence on the Internet was first motivated more by hype than by any defined strategy, publishing companies tend to have very clear goals in mind, and grand ideas about how to generate significant additional revenues from existing content in either its traditional or digital formats.
The growth in publisher web sites on the Internet has been dramatic over the last two years, but typical of the online experience in general. (The Economist recently estimated the number of people worldwide with Internet access at 20 million.) But while the web sites of US-based publishers reveal an overall similarity in style and function, the only real difference between these areas is their ability to offer books directly from the publisher. Most view this medium as a supplement to their traditional distribution, sales and customer service networks, not as an alternative.
So for now, booksellers who worry that publishers will soon circumvent retailers by selling over the Internet can rest easy. In fact, one major publisher's effort to stimulate sales by offering discounts on purchases made at its web site was soundly rebuffed in the press by booksellers, and the offer was quickly rescinded.
That's not to say that buying direct-from-the-manufacturer on the Internet is not done. According to Joe Budd, director of online development, HarperCollins Interactive (www.harpercollins.com), approximately 100 books per week are purchased at the HarperCollins web site, although this is not the company's prime objective.
"Pricing is not competitive with a bookstore and it is designed that way. We are more interested in interacting with [consumers] and getting information on their interests." One of the most popular areas of the HarperCollins web site, says Budd, is the Author/Tour/ Events location, where consumers can learn which authors will be visiting their neighborhood bookstore over the coming months.
At some web sites, such as Houghton Mifflin (www.hmco.com) and Bantam Doubleday Dell (www.bdd.com), no sales mechanism exists. Rather, those interested are directed to their closest bookstore. Bantam Doubleday Dell has made a conscious decision to support the bookseller and has no plans to change this philosophy.
Houghton Mifflin Interactive President, Conall Ryan, believes that the opportunity to try-before-you-buy online gives customers a better feeling about their purchases and helps sell more product. "You have to believe that online is a great preview channel; we believe that our online presence results in market expansion and will not result in the replacement of any other distribution method. [It] will not undermine current channels; it will educate customers and it will expand the market."
Similar opinions are expressed by other publishers, who believe that one of the great strengths of the Internet is that it allows them to continually inform and educate their target audience. Ryan said that Houghton Mifflin's presence on the Web facilitates both communication with customers and the building of a community interested in Houghton Mifflin - products all on a relatively cheap basis. In an effort to create even greater incentive for customers to return, Ryan has required that some aspects of Houghton Mifflin's print products - excerpts, previews, reviews, jacket cover images - are incorporated into its electronic venue. To create a more welcoming and less high-tech environment, this virtual bookstore is organized by familiar section categories and, to complete the metaphor, it even has an information desk and a cashier where orders are placed. Informational and promotional aspects like these, Ryan believes, will drive people to real bookstores looking for Houghton Mifflin titles.
Due to the nature of its content, The Encyclopedia Britannica's web site, Britannica Online (www.eb.com) is a notably commercial exception. Up and running since October 1994, Britannica Online has been experimenting over the past year with different pricing mechanisms in an attempt to maximize the value of its content. Currently, only subscribers ($14.95 monthly; $150 annual, plus a $25 one-time registration fee) have access, although you can "preview" the offering.
According to Robert McHenry, Britannica Online's editor-in-chief, the site has been very successful. Compared with the traditional product, the electronic version has additional articles and other features designed as a value-added service for online subscribers.
"There were two principal reasons for our development of this service," said McHenry. "Firstly, when this process started about three years ago, our intuition was that distribution of fact-based reference material would migrate to online media. Secondly, we believed our traditional print product was not meeting its full potential market. For example, we had low usage from university students and this distribution method could address this and other issues."
And despite the restrictions inherent in print publishing (production costs, page size, etc.) the often irritating and seemingly arbitrary need to cut and fit was, says McHenry, a useful discipline online. While electronic publishing allows for greater adaptation and flexibility, it nonetheless requires close supervision in order to remain organized, controlled and rational. Its management also demands constant communication with customers, primarily by e-mail, to enable the editorial staff to modify the product according to actual feedback.
Maintaining regular contact with consumers, and the database that grows as a result, are compelling enough reasons for publishers to continue their web efforts. Direct e-mail relationships with target audiences is an advantage publishers never had before. Response rates to traditional direct mail are often frustratingly low, but because online responses often require little more than a mouse click, it is reasonable to forecast that the number generated by web-developed databases will be considerably higher. And as a result, new products may begin appearing on the market faster. This could also lead to more effective market-testing of such things as jacket designs, and online focus groups can aid publishers in their product development. Indeed, there have already been a number of instances in which publishers have initiated development of new products based on suggestions from visitors to their web sites. Robert McHenry is encouraged by the number of e-mail responses he receives, and feels they will ultimately Britannica to re-examine its assumptions about what an encyclopedia is supposed to be.
Clearly, the ability to communicate directly with highly interested consumers is a very powerful marketing tool. One executive described the gathering of marketing data as "capturing the exhaust" off their web site, an extension of the information superhighway analogy. Joe Budd of HarperCollins noted that his department receives about 100 completed user surveys each month, providing information with which to build a deep and compelling database. "When a new mystery book comes out, we are able to send e-mail to all those who have indicated an interest and draw them to the store," he said.
Direct and regular contact with consumers will also enable publishers to monitor and hopefully anticipate changes in consumer behavior. In time, these sites will likely metamorphose into more full-service areas for consumers. For example, there exists the potential for offering technical support for the growing number of multimedia titles offered by the publishers.
Conall Ryan and his team have developed programs which invite, or even require, consumer responses. These programs have helped solidify Houghton Mifflin's relationship with its audience. And this new data, Ryan predicts, will prompt the coordinated promotional and marketing efforts among departments as they look to take advantage of these databases.
But at the end of the day, publishers provide content, and all have vast content libraries to make available to Internet users for a fee. The goal of many of these companies is to eventually enable users to search through a wide body of material, download what they want, and pay for it either by credit card or some type of electronic debit card. So for example, a student's search for information about Alexander the Great on the Simon & Schuster web page might, in its most limited form, return book bibliographies, article citations and summaries, and possibly a list of available graphical images. It is unlikely that the student will want to download an entire book on the subject (considering the time and cost factors such a download would involve today), but they might want a given article that they could access by paying a fee. If that student then wanted to share this article with a friend via e-mail, however, encryption technology embedded in the original transmission would enforce the payment of further compensation for that article before it could be reused. Eventually, pass-along tolls will increase the revenue stream as each incremental user pays for access.
Revenue collection and royalty payments are major areas of concern for publishers. Royalty accounting functions within many publishing houses today are fairly basic. The current revenue and royalty accounting systems of most, if not all, publishing companies simply could not handle the degree of micro-transactions that Internet commerce might bring, e.g. the limited-use purchase of a chapter from a text book written by five authors. As these micro-transactions become more commonplace it is conceivable that additional costs associated with royalty accounting will eat into all incremental profits unless fundamental improvements are made.
Systems solutions will need to be far more sophisticated to manage the large increase in micro-transactions and will also need to interface seamlessly with royalty management systems. Consistent terminology and data structures are necessary to maintain effective rights management systems. Technology is advancing in this area rapidly and encryption capabilities offer protection against most forms of infringement and unauthorized use. Encryption codes can track and regulate how many times a user can print, e-mail, even alter published material.
As publishers construct their business models, they will need to first determine what unit levels to offer the public; indeed, what unit levels will prove the most marketable. This analysis must support a clear business case.
Traditionally, the standard unit has been the book. In digital form this unit may become the chapter, page, paragraph or, to a much more limited extent, the sentence; it is unlikely that a single word, or clause, will ever generate overwhelming consumer demand. Therefore, publishers should avoid committing themselves to supporting even sentence-level access if that turns out to evoke little or no interest. Further, production costs will necessarily escalate as the unit gets smaller, and significant pricing issues will emerge as purchase options increase. Sufficient experimentation and testing need to take place to determine what unit level will satisfy the largest proportion of customers, and to what extent this will vary on a product-type basis. In journal and directory publishing, for example, many users are interested only in specific listings. As the electronic distribution of these products becomes more commonplace, their space-consuming print versions may become superfluous.
Even as so many publishers are well underway organizing their complete content libraries, corporate-wide buy-in to the concept of centralizing all of these assets may be the biggest hurdle they will face. Today, many of the larger publishers don't have a single compendium of every title it publishes. But in order for a publisher to fully leverage the value of its content, its online consumers must have easy access to its entire catalogue at one location. The content of one publisher's education, children's, sci-fi, biography, and current fiction divisions, must all be accessible from the same database, archived with the same software, and formatted to look the same from screen to screen.
Many people connected with the Internet believe that its current stage of development is comparable to where television was in the late 1940s and early '50s. Yet the speed at which technology is advancing ensures that it will not take 40 years to reach the online equivalent of high-definition TV. Most Internet providers, at least, are positioning themselves to keep pace with these changes.
For publishers, the long-term benefits will result in a substantially changed marketing and product development environment. Access to and responses from customers will be virtually immediate. Product assumptions about pricing and packaging will also be dramatically different as will the back office capability for managing this new publishing environment. Each publisher's current web site is merely a precursor to a much more interactive relationship with its customers, a relationship which will yield significant returns if the hard strategic decisions made today are correct.
What's stopping book publishers from moving beyond their currently nascent adventures in Cyberspace to aggressively leveraging their content properties? The technology's available; the audience is sizable. So what's stopping them?
Unlike many companies whose presence on the Internet was first motivated more by hype than by any defined strategy, publishing companies tend to have very clear goals in mind, and grand ideas about how to generate significant additional revenues from existing content in either its traditional or digital formats.
The growth in publisher web sites on the Internet has been dramatic over the last two years, but typical of the online experience in general. (The Economist recently estimated the number of people worldwide with Internet access at 20 million.) But while the web sites of US-based publishers reveal an overall similarity in style and function, the only real difference between these areas is their ability to offer books directly from the publisher. Most view this medium as a supplement to their traditional distribution, sales and customer service networks, not as an alternative.
So for now, booksellers who worry that publishers will soon circumvent retailers by selling over the Internet can rest easy. In fact, one major publisher's effort to stimulate sales by offering discounts on purchases made at its web site was soundly rebuffed in the press by booksellers, and the offer was quickly rescinded.
That's not to say that buying direct-from-the-manufacturer on the Internet is not done. According to Joe Budd, director of online development, HarperCollins Interactive (www.harpercollins.com), approximately 100 books per week are purchased at the HarperCollins web site, although this is not the company's prime objective.
"Pricing is not competitive with a bookstore and it is designed that way. We are more interested in interacting with [consumers] and getting information on their interests." One of the most popular areas of the HarperCollins web site, says Budd, is the Author/Tour/ Events location, where consumers can learn which authors will be visiting their neighborhood bookstore over the coming months.
At some web sites, such as Houghton Mifflin (www.hmco.com) and Bantam Doubleday Dell (www.bdd.com), no sales mechanism exists. Rather, those interested are directed to their closest bookstore. Bantam Doubleday Dell has made a conscious decision to support the bookseller and has no plans to change this philosophy.
Houghton Mifflin Interactive President, Conall Ryan, believes that the opportunity to try-before-you-buy online gives customers a better feeling about their purchases and helps sell more product. "You have to believe that online is a great preview channel; we believe that our online presence results in market expansion and will not result in the replacement of any other distribution method. [It] will not undermine current channels; it will educate customers and it will expand the market."
Similar opinions are expressed by other publishers, who believe that one of the great strengths of the Internet is that it allows them to continually inform and educate their target audience. Ryan said that Houghton Mifflin's presence on the Web facilitates both communication with customers and the building of a community interested in Houghton Mifflin - products all on a relatively cheap basis. In an effort to create even greater incentive for customers to return, Ryan has required that some aspects of Houghton Mifflin's print products - excerpts, previews, reviews, jacket cover images - are incorporated into its electronic venue. To create a more welcoming and less high-tech environment, this virtual bookstore is organized by familiar section categories and, to complete the metaphor, it even has an information desk and a cashier where orders are placed. Informational and promotional aspects like these, Ryan believes, will drive people to real bookstores looking for Houghton Mifflin titles.
Due to the nature of its content, The Encyclopedia Britannica's web site, Britannica Online (www.eb.com) is a notably commercial exception. Up and running since October 1994, Britannica Online has been experimenting over the past year with different pricing mechanisms in an attempt to maximize the value of its content. Currently, only subscribers ($14.95 monthly; $150 annual, plus a $25 one-time registration fee) have access, although you can "preview" the offering.
According to Robert McHenry, Britannica Online's editor-in-chief, the site has been very successful. Compared with the traditional product, the electronic version has additional articles and other features designed as a value-added service for online subscribers.
"There were two principal reasons for our development of this service," said McHenry. "Firstly, when this process started about three years ago, our intuition was that distribution of fact-based reference material would migrate to online media. Secondly, we believed our traditional print product was not meeting its full potential market. For example, we had low usage from university students and this distribution method could address this and other issues."
And despite the restrictions inherent in print publishing (production costs, page size, etc.) the often irritating and seemingly arbitrary need to cut and fit was, says McHenry, a useful discipline online. While electronic publishing allows for greater adaptation and flexibility, it nonetheless requires close supervision in order to remain organized, controlled and rational. Its management also demands constant communication with customers, primarily by e-mail, to enable the editorial staff to modify the product according to actual feedback.
Maintaining regular contact with consumers, and the database that grows as a result, are compelling enough reasons for publishers to continue their web efforts. Direct e-mail relationships with target audiences is an advantage publishers never had before. Response rates to traditional direct mail are often frustratingly low, but because online responses often require little more than a mouse click, it is reasonable to forecast that the number generated by web-developed databases will be considerably higher. And as a result, new products may begin appearing on the market faster. This could also lead to more effective market-testing of such things as jacket designs, and online focus groups can aid publishers in their product development. Indeed, there have already been a number of instances in which publishers have initiated development of new products based on suggestions from visitors to their web sites. Robert McHenry is encouraged by the number of e-mail responses he receives, and feels they will ultimately Britannica to re-examine its assumptions about what an encyclopedia is supposed to be.
Clearly, the ability to communicate directly with highly interested consumers is a very powerful marketing tool. One executive described the gathering of marketing data as "capturing the exhaust" off their web site, an extension of the information superhighway analogy. Joe Budd of HarperCollins noted that his department receives about 100 completed user surveys each month, providing information with which to build a deep and compelling database. "When a new mystery book comes out, we are able to send e-mail to all those who have indicated an interest and draw them to the store," he said.
Direct and regular contact with consumers will also enable publishers to monitor and hopefully anticipate changes in consumer behavior. In time, these sites will likely metamorphose into more full-service areas for consumers. For example, there exists the potential for offering technical support for the growing number of multimedia titles offered by the publishers.
Conall Ryan and his team have developed programs which invite, or even require, consumer responses. These programs have helped solidify Houghton Mifflin's relationship with its audience. And this new data, Ryan predicts, will prompt the coordinated promotional and marketing efforts among departments as they look to take advantage of these databases.
But at the end of the day, publishers provide content, and all have vast content libraries to make available to Internet users for a fee. The goal of many of these companies is to eventually enable users to search through a wide body of material, download what they want, and pay for it either by credit card or some type of electronic debit card. So for example, a student's search for information about Alexander the Great on the Simon & Schuster web page might, in its most limited form, return book bibliographies, article citations and summaries, and possibly a list of available graphical images. It is unlikely that the student will want to download an entire book on the subject (considering the time and cost factors such a download would involve today), but they might want a given article that they could access by paying a fee. If that student then wanted to share this article with a friend via e-mail, however, encryption technology embedded in the original transmission would enforce the payment of further compensation for that article before it could be reused. Eventually, pass-along tolls will increase the revenue stream as each incremental user pays for access.
Revenue collection and royalty payments are major areas of concern for publishers. Royalty accounting functions within many publishing houses today are fairly basic. The current revenue and royalty accounting systems of most, if not all, publishing companies simply could not handle the degree of micro-transactions that Internet commerce might bring, e.g. the limited-use purchase of a chapter from a text book written by five authors. As these micro-transactions become more commonplace it is conceivable that additional costs associated with royalty accounting will eat into all incremental profits unless fundamental improvements are made.
Systems solutions will need to be far more sophisticated to manage the large increase in micro-transactions and will also need to interface seamlessly with royalty management systems. Consistent terminology and data structures are necessary to maintain effective rights management systems. Technology is advancing in this area rapidly and encryption capabilities offer protection against most forms of infringement and unauthorized use. Encryption codes can track and regulate how many times a user can print, e-mail, even alter published material.
As publishers construct their business models, they will need to first determine what unit levels to offer the public; indeed, what unit levels will prove the most marketable. This analysis must support a clear business case.
Traditionally, the standard unit has been the book. In digital form this unit may become the chapter, page, paragraph or, to a much more limited extent, the sentence; it is unlikely that a single word, or clause, will ever generate overwhelming consumer demand. Therefore, publishers should avoid committing themselves to supporting even sentence-level access if that turns out to evoke little or no interest. Further, production costs will necessarily escalate as the unit gets smaller, and significant pricing issues will emerge as purchase options increase. Sufficient experimentation and testing need to take place to determine what unit level will satisfy the largest proportion of customers, and to what extent this will vary on a product-type basis. In journal and directory publishing, for example, many users are interested only in specific listings. As the electronic distribution of these products becomes more commonplace, their space-consuming print versions may become superfluous.
Even as so many publishers are well underway organizing their complete content libraries, corporate-wide buy-in to the concept of centralizing all of these assets may be the biggest hurdle they will face. Today, many of the larger publishers don't have a single compendium of every title it publishes. But in order for a publisher to fully leverage the value of its content, its online consumers must have easy access to its entire catalogue at one location. The content of one publisher's education, children's, sci-fi, biography, and current fiction divisions, must all be accessible from the same database, archived with the same software, and formatted to look the same from screen to screen.
Many people connected with the Internet believe that its current stage of development is comparable to where television was in the late 1940s and early '50s. Yet the speed at which technology is advancing ensures that it will not take 40 years to reach the online equivalent of high-definition TV. Most Internet providers, at least, are positioning themselves to keep pace with these changes.
For publishers, the long-term benefits will result in a substantially changed marketing and product development environment. Access to and responses from customers will be virtually immediate. Product assumptions about pricing and packaging will also be dramatically different as will the back office capability for managing this new publishing environment. Each publisher's current web site is merely a precursor to a much more interactive relationship with its customers, a relationship which will yield significant returns if the hard strategic decisions made today are correct.
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