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Wednesday, June 27, 2012

More Publishing Intrigue: News Corp. To Split Publishing Arm

Rupert Murdoch addressed The Wall
Street Journal staff in 2007
The newspaper side of News Corp., the Rupert Murdoch multi-billion dollar, politically prejudiced media empire, has been underperforming for some time now --- mainly due to loss of print advertisement dollars.

Many top execs in News Corp. have wanted for years to peel off the newspaper and other publishing aspects of the media empire; but, especially since the phone-hacking cluster-fuck came to light in London.

Amy Chozick and Michael J. de la Merced, The New York Times, spill details of the juicy intrigue:

At News Corp., a Plan to Sever Publishing Arm

After years of defending its financially underperforming newspapers, News Corporation is now in talks to break up the company and sever its publishing assets, like The Wall Street Journal, The Times of London and The New York Post, from its lucrative entertainment units.

The spinoff proposal will be reviewed by the News Corporation board on Wednesday and a decision to split up the company could be made as early as Thursday.

The possibility signals a sharp reversal in the thinking of Rupert Murdoch about his $53 billion media conglomerate. For years, investors and senior News Corporation executives have pressed for a spinoff of the newspapers, but Mr. Murdoch, a newspaperman at heart who built his company from a single paper in Adelaide, Australia, has consistently rejected those proposals.

But as the company’s cable channels expanded globally, its newspapers have become a financial drag and, in the case of its British tabloids, have hurt its reputation in the fallout over the phone-hacking scandal that led to the closing of the News of the World tabloid.

Top editors and publishers from the company’s newspapers were flown in from around the world and brought together on Tuesday for lunch in a corporate dining room at News Corporation’s Midtown Manhattan headquarters.

In what one employee described as an emotional meeting, Mr. Murdoch, his son James Murdoch and Chase Carey, the company’s chief operating officer, tried their best to quell anxiety and unrest among editors. They worry that the company’s newspapers will lose their economic safety net without the high-performing entertainment assets propping them up.

The senior Murdoch indicated that he was tired of shareholders and analysts regarding the newspapers as a drag on the company and that he believed his publishing business would benefit from its own dedicated management.

News of the possible spinoff was first reported by The Wall Street Journal. News Corporation’s stock climbed 8 percent on Tuesday to close at $21.96 a share, its highest close since 2007.
There are still an enormous number of details to be worked out in any spinoff, including exactly how to split up News Corporation’s assets. One thing is certain: the Murdoch family, which would have a roughly 40 percent voting stake in both new companies, would retain control.

Restive shareholders have often said they would prefer that News Corporation focus on its entertainment units including cable channels like FX and Fox News, the 20th Century Fox studio and Fox Broadcasting. Combined, those assets generated operating profit of $4.6 billion in the year that ended June 2011. The publishing unit, by contrast, contributed $864 million in operating profit in the same period.

Wednesday, June 20, 2012

Barnes & Noble's Nook and E-Book Store Are Lagging - Why? Inside the Numbers

Nook device sales declined in part because
of higher third-party retailer returns.

  B&N, the world's largest bookseller, is finding a bumpy road competing in the e-reader and digital book world.

They are still maintaining a 25 to 30 percent U.S. market share, but, they have lost ground compared to a year ago.


Jeffrey A. Tractenberg spells out the reasons and actual analytical numbers in the Wall Street Journal:

Barnes's Nook Seeks Niche

Barnes & Noble Posts Wider Loss for E-Book Division

Nearly three years after Barnes & Noble Inc. opened its e-book store, the retailer continues to report widening losses on its digital business as it competes with larger technology rivals such as Apple Inc. and Amazon.com Inc.

Shedding light on the struggling business—on which it has bet heavily as physical book sales come under continued pressure—Barnes & Noble on Tuesday for the first time broke out results of its Nook digital business. But for some, the results weren't pretty. "Their costs have been greater than expected and they've seen more competition than they expected," said Peter Wahlstrom, an analyst with Morningstar Inc.

For the fiscal fourth quarter ended April 28, Nook revenue—a category that includes the e-reading devices as well as all the digital books sold—fell 11% to $164 million, from $183 million a year earlier.

Barnes & Noble said that it continued to maintain its healthy e-book market share in the U.S. of 25% to 30% during the quarter. But Nook device sales declined in the fourth quarter in part because of higher third-party retailer returns and lower average selling prices. Overall, the digital business reported a loss, before interest, taxes, depreciation and amortization of $77 million for the quarter, widening from the loss of $47 million in the year-earlier quarter.

Although Barnes & Noble earlier projected $1.5 billion in gross digital sales for the full year ended April 28, it reported only $1.3 billion—a $200 million shortfall.

The latest results underscore the difficulty of competing in a consumer marketplace that is highly price sensitive and appears to be embracing color tablets at the expense of simple black-and-white e-readers. Although Barnes & Noble's devices have won critical praise, the bookseller was forced to take back many of its Nook Simple Touch e-readers in the fourth quarter while delaying the launch of its Nook Simple Touch with GlowLight until May for quality purposes. Nooks range in price from $99 to $249.

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Friday, June 15, 2012

Famous Holdout Authors are Finally Agreeing to Digital Formatting

Some of the most famous and complex writers have resisted the ebook medium.

One of them, Thomas Pynchon [writer of V. (1963), The Crying of Lot 49 (1966), Gravity's Rainbow (1973), and Mason & Dixon (1997)], has finally relented.

His motivation ? The same as most intelligent authors when they think it through --- readership and lots of it. Aside from all else, writers want their work read by as many people as possible.

Something to do with strengthening and ensuring their legacy, I'm sure.

Julie Bosman reports details, along with interesting insights into Mr. Pynchon, in the New York Times:

After Long Resistance, Pynchon Allows Novels to Be Sold as E-Books

Thomas Pynchon was one of the last great holdouts: the rare writer who had refused to allow his work to be sold in e-book format.

Now he’s changed his mind.

Mr. Pynchon, the author of “The Crying of Lot 49,” “Gravity’s Rainbow” and “V.,” has struck a deal with the Penguin Press to publish his entire backlist in digital form.

The announcement is another step toward the ubiquity of the e-book, even for authors who stubbornly resisted.

A few years ago, e-book sales were tiny when compared with print sales, but in the last six months, it has not been uncommon for a new novel to sell more e-book copies than print ones. Authors whose work is not for sale in that format risk missing a large and growing segment of the reading population.

Older titles have been especially tantalizing for publishers, who have turned them into e-books and made easy sales.

Mr. Pynchon has avoided the press for most of his life and, characteristically, declined to speak about his decision. But Ann Godoff, the president and editor in chief of the Penguin Press, said in an interview that Mr. Pynchon had agreed that it was time to get on board.

“It wasn’t exactly the elephant in the drawing room, but we just felt that the moment was right,” Ms. Godoff said. “There has been a great desire to have all of Tom’s books in digital format now, for many years. He didn’t want to not be part of that.”

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Monday, June 11, 2012

Technology Turns Indie Bookstores Into Instant Paperback Print Publishers

Real Books in Real Time
 How about a tech that would allow you to publish a printed book instantly at point of purchase/use ? A tech that had a huge virtual catalog of established titles as well as the means for new authors to instantly print books and get physical shelf space ?

I first reported on the Espresso Book Machine last month on the Publishing/Writing: Insights, News, Intrigue Blog. Take a peek for background info.

You are going to love this latest update from the Associated Press (AP) with some accompanying statistics and analytics and a neat real life example demonstrating how this works:

Writers embrace self-publishing through instant publishing machine

Clare Dickens only wanted to share her story to help others. But in the process, she became a successful independent author — with the help of a local bookstore and its instant publishing machine.

Dickens wrote "A Dangerous Gift" with her son Titus, a memoir of their life dealing with his bipolar disorder. She completed the novel after he took his own life at the age of 25 in 2006.

Though Dickens found a publisher in Iceland to release the book in 2007, she still wanted a broader reach. The Espresso Book Machine at Politics and Prose in the District of Columbia allowed her to bring the memoir to local bookshelves and beyond earlier this year.

Her book has since become the best-selling, self-published title at the local bookstore and its website.

"I didn't expect to sell any at all," Dickens said. "I didn't want to be a best-seller. It's really about getting my son's story out there and helping other people."

Self-publishing has been made easier since the Espresso Book Machine by On Demand Books debuted in 2006. The machine also can make copies of out-of-print editions.

The first machine was installed briefly at the World Bank's bookstore. Through a partnership with Xerox, the company now has machines in about 70 bookstores and libraries across the world including London; Tokyo; Amsterdam; Abu Dhabi, United Arab Emirates; Melbourne, Australia; and Alexandria, Egypt.

Thor Sigvaldason, chief technology officer of New York-based On Demand Books, said the technology can help book retailers twofold.

"It can, potentially, give them a huge virtual inventory so they can have as many books as Amazon, all in a little bookstore," he said. "It turns independent bookstores into places to get books published. It's a new thing for the bookstore to do: not just sell books, but actually create books."

Dickens' book costs $10.38 to print and retails for $16. Bill Leggett, a bookseller who co-manages the machine, said about a dozen copies are sold a month. "That's better than a lot of authors who have major publishers," he said.

Politics and Prose has produced almost 5,000 paperback books — some in as little as five minutes — since receiving the book machine nicknamed "Opus" last November. Leggett said about 90 percent of the books printed on the machine are self-published works by local authors.

The others are out-of-print editions, millions of titles available in the public domain like Google Books, and digital formats licensed out through major publishers including Harper Collins.

Alfred Morgan Jr. was able to get a copy of his father's out-of-print 1923 aviation guide, "How to Build a 20-foot Bi-Plane Glider," printed on the machine for $8. The volume was on Google Books.

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Wednesday, June 6, 2012

Do Free Books, Especially Free E-Books, Mean Lost Sales or New Sales?

Do free e-books
spur all book sales?
Believe it or not, independent booksellers, after taking some pretty hard knocks, are actually having a bit of a regrowth.

Digital booksellers, coupled with a consumer move to digital devices, caused many indie booksellers to fold ... along with some bigger chain booksellers as well --- such as Borders.

Strangely enough (but not if you really think about it), the failure of the Boarders chain is what started to help the smaller, indie booksellers to experience a resurge.

Hillel Italie, Associated Press, has some interesting insights:

Publishing industry gathers for annual convention

It could all change quickly, but independent booksellers again have good news to report as the publishing industry prepares for its annual national convention, BookExpo America.

Core membership of the American Booksellers Association rose by 55 over the past year, from 1,512 to 1,567. It's the third straight increase for the independents' trade organization after years of double digit and triple digit declines brought on by superstore chains and online sellers such as Amazon.com.

The independents have stabilized even as the economy suffers and the market shifts dramatically from physical stores to digital purchases. The Borders superstore chain shut down a year ago and Barnes & Noble Inc. has been increasingly emphasizing its Nook e-reading device.

Borders' fall, of course, has been part of the independents' good fortune, association CEO Oren Teicher acknowledged in a recent interview. But he also cited a nationwide movement to buy from local stores, falling real estate prices and lower costs to create and maintain websites. Sales figures for 2012 are encouraging as Teicher shared statistics compiled by Nielsen BookScan, which tracks around 75 percent of print sales. The number of books sold through mid-May by around 500 ABA stores increased by 13.4 percent compared to last year.

"We are more than holding our own," Teicher says.

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Saturday, June 2, 2012

Deeper Inside Amazon and Owner Jeff Bezos - And Publishing Statistics Overall

"Monopolies are always problematic in a free society, and they are more so when we are dealing with the dissemination of ideas, which is what book publishing is about.” ...Andy Ross

Jeff Bezos got what he wanted: Amazon got big fast and is getting bigger, dwarfing all rivals. To fully appreciate the fear that is sucking the oxygen out of publishers’ suites, it is important to understand what a steamroller Amazon has become. Last year it had $48 billion in revenue, more than all six of the major American publishing conglomerates combined, with a cash reserve of $5 billion. The company is valued at nearly $100 billion and employs more than 65,000 workers (all nonunion) ...
Intrigue abounds in modern publishing ... or what will become modern publishing.

In the beginning, predatory chain store booksellers took out the small, independent booksellers; then, predatory digital e-book sellers took out the predatory chain store booksellers (except one {B&N} left badly wounded) and later booksellers even started to become publishers themselves etc., etc., etc --- all this while blocking open a big hole in the front line of previous writer/author obstacles and providing an open path to easier direct publishing touchdowns.

But, beware, underbelly agendas also abound.

An in-depth look at the major players, thinking, visions and hiccups leading us to the present state of publishing clusterfuckness and some interesting statistics is provided by Steve Wasserman, Nation Magazine:

The Amazon Effect

From the start, Jeff Bezos wanted to “get big fast.” He was never a “small is beautiful” kind of guy. The Brobdingnagian numbers tell much of the story. In 1994, four years after the first Internet browser was created, Bezos stumbled upon a startling statistic: the Internet had been growing at the rate of 2,300 percent annually. In 1995, the year Bezos, then 31, started Amazon, just 16 million people used the Internet. A year later, the number was 36 million, a figure that would multiply at a furious rate. Today, more than 1.7 billion people, or almost one out of every four humans on the planet, are online. Bezos understood two things. One was the way the Internet made it possible to banish geography, enabling anyone with an Internet connection and a computer to browse a seemingly limitless universe of goods with a precision never previously known and then buy them directly from the comfort of their homes. The second was how the Internet allowed merchants to gather vast amounts of personal information on individual customers.

The Internet permitted a kind of bespoke selling. James Marcus, who was hired by Bezos in 1996 and would work at Amazon for five years, later published a revealing memoir of his time as Employee #55. He recalls Bezos insisting that the Internet, with “its bottomless capacity for data collection,” would “allow you to sort through entire populations with a fine-tooth comb. Affinity would call out to affinity: your likes and dislikes—from Beethoven to barbecue sauce, shampoo to shoe polish to Laverne & Shirley—were as distinctive as your DNA, and would make it a snap to match you up with your 9,999 cousins.” This prospect, Marcus felt, “was either a utopian daydream or a targeted-marketing nightmare.”

Whichever one it was, Bezos didn’t much care. “You know, things just don’t grow that fast,” he observed. “It’s highly unusual, and that started me thinking, ‘What kind of business plan might make sense in the context of that growth?’” Bezos decided selling books would be the best way to get big fast on the Internet. This was not immediately obvious: book selling in the United States had always been less of a business than a calling. Profit margins were notoriously thin, and most independent stores depended on low rents. Walk-in traffic was often sporadic, the public’s taste fickle; reliance on a steady stream of bestsellers to keep the landlord at bay was not exactly a sure-fire strategy for remaining solvent.

Still, overall, selling books was a big business. In 1994 Americans bought $19 billion worth of books. Barnes & Noble and the Borders Group had by then captured a quarter of the market, with independent stores struggling to make up just over another fifth and a skein of book clubs, supermarkets and other outlets accounting for the rest. That same year, 513 million individual books were sold, and seventeen bestsellers each sold more than 1 million copies. Bezos knew that two national distributors, Ingram Book Group and Baker & Taylor, had warehouses holding about 400,000 titles and in the late 1980s had begun converting their inventory list from microfiche to a digital format accessible by computer. Bezos also knew that in 1992 the Supreme Court had ruled in Quill Corp. v. North Dakota that retailers were exempt from charging sales tax in states where they didn’t have a physical presence. (For years, he would use this advantage to avoid collecting hundreds of millions of dollars in state sales taxes, giving Amazon an enormous edge over retailers of every kind, from bookstores to Best Buy and Home Depot. In recent months, however, Amazon, under mounting pressure, has eased its opposition and reached agreements with twelve states, including California and Texas, to collect sales tax.) “Books are incredibly unusual in one respect,” Bezos said, “and that is that there are more items in the book category than there are items in any other category by far.” A devotee of the Culture of Metrics, Bezos was undaunted. He was sure that the algorithms of computerized search and access would provide the keys to a consumer kingdom whose riches were as yet undiscovered and barely dreamed of, and so he set out to construct a twenty-first-century ordering mechanism that, at least for the short term, would deliver goods the old-fashioned way: by hand, from warehouses via the Postal Service and commercial shippers.

* * *

One of Amazon’s consultants was publishing visionary Jason Epstein. In 1952 Epstein founded Anchor Books, the highbrow trade paperback publisher; eleven years later he was one of the founders of the New York Review of Books, and for many decades was an eminence at Random House. His admiration for Bezos was mixed with a certain bemusement; he knew that for Amazon to really revolutionize bookselling, physical books would have to be transformed into bits and bytes capable of being delivered seamlessly. Otherwise, Bezos would have built only a virtual contraption hostage to the Age of Gutenberg, with all its cumbersome inefficiencies. But Epstein could not fathom that the appeal of holding a physical book in one’s hand would ever diminish. Instead, he dreamed of machines that would print on demand, drawing upon a virtual library of digitized books and delivering physical copies in, say, Kinkos all across the country. The bookstores that might survive in this scenario would be essentially stocking examination copies of a representative selection of titles, which could be individually printed while customers lingered at coffee bars awaiting the arrival of their order. Ultimately, Epstein would devote himself to this vision.

Bezos looked elsewhere, convinced that one day he could fashion an unbroken chain of ordering and delivering books, despite the deep losses Epstein warned he’d have to sustain to do so. But first he had to insert the name of his new company into the frontal lobe of America’s (and not only America’s) consumers. Like all great and obsessed entrepreneurs, his ambitions were imperial, his optimism rooted in an overweening confidence in his own rectitude. He aimed to build a brand that was, in Marcus’s phrase, “both ubiquitous and irresistible.” A decade before, while a student at Princeton in the mid-1980s, he had adopted as his credo a line from Ray Bradbury, the author of Fahrenheit 451: “The Universe says No to us. We in answer fire a broadside of flesh at it and cry Yes!” (Many years later, the octogenarian Bradbury would decry the closing of his beloved Acres of Books in Long Beach, California, which had been unable to compete with the ever-expanding empire of online bookselling.) A slightly built, balding gnome of a man, Bezos often struck others as enigmatic, remote and odd. If not exactly cuddly, he was charismatic in an otherworldly sort of way. A Columbia University economics professor who was an early boss of Bezos’ said of him: “He was not warm…. It was like he could be a Martian for all I knew. A well-meaning, nice Martian.” Bill Gates, another Martian, would welcome Bezos’ arrival to Seattle, saying, “I buy books from Amazon.com because time is short and they have a big inventory and they’re very reliable.” Millions of book-buyers would soon agree.

As the editor of the Los Angeles Times Book Review, I had watched Bezos’ early rise with admiration, believing that whatever complications he was bringing to the world of bookselling were more than compensated for by the many ways he was extending reader access to a greater diversity of books. After all, even the larger 60,000-square-foot emporiums of Barnes & Noble and Borders could carry no more than 175,000 titles. Amazon, by contrast, was virtually limitless in its offerings. Bezos was then, as he has been ever since, at pains to assure independent bookstores that his new business was no threat to them. He claimed that Amazon simply provided a different service and wasn’t trying to snuff bricks-and-mortar stores. Independent booksellers weren’t so sure.

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