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Saturday, August 31, 2013

E-Books Have Higher Margins Than Print Editions

E-Books = Higher Margins
Many people understand that e-books provide higher margins (not revenues, but margins) than their print cousins on a very simplistic level (which happens to be my level) --- but, we are going to try to examine a little deeper tonight why this is, indeed, a fact of life using some industry financial numbers; while at the same time discussing some numbers involved in the Random House/Penguin merger that support the proposition.

Have I bitten off more than I can chew? Probably --- but, what the hell.

Basically (simplistically), the profit margin can increase when you cut or eliminate costs associated with the production of the product (books in our case - and costs such as printing, binding, warehousing and shipping, etc.). The lower cost to produce the product results in a lower unit price and therefore overall revenues --- but, the profit margin made on each lower unit cost can rise due to these same eliminated production costs. 

Matthew Flamm, writes this for Crain's New York Business :

In last hurrah, Random House books record profits

Thanks to bestsellers like Dan Brown's Inferno and Sheryl Sandberg's Lean In, Random House Inc. boasted record profits for the first half of 2013, parent company Bertelsmann reported Friday in what will be the last earnings announcement for the publisher as a stand-alone unit. Sales, however, dipped slightly.
Random House merged with Penguin on July 1 to become the Manhattan-based global publishing giant Penguin Random House.
Compared to the same period a year ago, Random House revenue fell 3% to 915 million euros or $1.2 billion. Operating income rose 4% to 117 million euros or $155 million. A Penguin Random spokesman credited the increase in profits to "cost discipline" and strong sales growth overseas in e-books, which have higher margins than print editions.
The dip in sales revenue reflected the comparison with the unusually strong first half of 2012, when the Fifty Shades trilogy was topping bestseller lists. The "mommy porn" novels padded this year's sales as well, however, selling an additional 5 million copies in both print and digital editions.
As a portion of worldwide sales, e-books fell to 20% of the total from 22% a year ago, largely due to the drop-off from Fifty Shades, according to the spokesman.
Penguin also recently reported solid results, with a 6% jump in sales and a 14% spike in profits for the first half. Penguin's parent company Pearson owns 47% of the merged company, with Bertelsmann owning the rest.
"We can all take pride in what we have accomplished—both culturally and commercially—in the last eight months pre-merger, and in the last eight weeks as a new company," Penguin Random CEO Markus Dohle wrote in a letter Friday to the company's more than 10,000 employees. "As we begin this ever-important fall and holiday publishing and selling season, let's further deepen our collaboration and shared sense of purpose as we make the most of our fantastic lineup of books worldwide."
Now, more on why e-books have higher margins by Jim Milliot in Publishers Weekly:

E-book Sales Bolster Publishers' Bottom Lines

Higher e-book sales bolster the bottom-line at the big five while curtailing revenue growth

Although costs associated with reaching e-book settlements with the Department of Justice and state attorneys general cut into some houses’ profits, none of the big-five trade publishers posted a margin of less than 9% in 2012. And more than one publisher (or parent company) said higher sales of e-books is boosting its bottom-line—even if e-books are curtailing revenue growth—and should lead to higher margins in the future.
In its 10-K filing with the Securities & Exchange Commission, Simon & Schuster parent company CBS observed that “underlying publishing results reflect margin growth associated with an increase in the mix of revenues from digital book sales, which have lower production and distribution costs than print books. As the publishing business continues to transition to an increasing mix of digital book sales compared to print book sales, profit margins are expected to continue to grow.” S&S was one of the companies whose profits were hurt by legal and settlement costs. In both 2011 and 2012, S&S’s earnings also reflected restructuring charges—$3 million last year, primarily reflecting costs associated with combining several of S&S’s adult imprints, and charges of $2 million the year before due to severance costs.


Monday, August 19, 2013


My Dear Wife, Yon Suk, in our back yard in Portugal
in 1983
I have been M.I.A. longer than usual due to a tragic personal loss on 8/9/13. I lost the gentle, sweet soul of my dear wife and soul mate, Yon Suk, to a devastating neurological condition called PSP (Progressive Supranuclear Palsy).

She was officially diagnosed with PSP two years ago but probably had been afflicted with it for a longer period. We just didn't know what it was.

When The Good Lord called her home she took my very heart and soul with her --- Seems we were married forever. I miss her so much.

Any goodness or beauty I may possess, Yon Suk instilled and nurtured it.

It's as if someone reached deep inside me and pulled me inside out --- then stomped on me for good measure.

Just getting to a point where I can write a few words on my blogs - I must - I think it will help. I wrote a little before on Facebook - but, that was mostly to notify separated family and it was a hard task.

I talk to Yon Suk every day and ask for her help and spirit to just get up and go on. I seem to hear her a little better now and can move around and take some small steps.

I believe she is in a better place and not suffering as she did - and this sustains me for now.

I love you, 'Yobie'.  

My Soul Mate, Yon Suk, in 1995

Sunday, August 4, 2013

Academic Research and Publishing - Improvements and Transitions Keep on Coming

If ONLY the choices and ease of academic research existing today were available when I was knee-deep in graduate studies! Tonight's post is loaded with informative links (for those interested in learning more about academic research and publishing). 

Today, for example, integrated digitised modules allow academics and librarians to locate, bookmark, publish, manage and observe/analyze by tracking the usage of learning resources for students - These modules also enable the learning resources (content) to be stored while simultaneously ensuring authenticated student access and providing copyright compliance.

Before I forget and for those who are not too familiar with (or simply forgot) here is a definition of academic publishing (for academic pros the last paragraph discusses transition to electronic format and two types of open access):

'Academic publishing describes the subfield of publishing which distributes academic research and scholarship. Most academic work is published in journal articlebook or thesis form. The part of academic written output that is not formally published but merely printed up or posted on the Internet is often called "grey literature". Most scientific and scholarly journals, and many academic and scholarly books, though not all, are based on some form of peer review or editorial refereeing to qualify texts for publication. Peer review quality and selectivity standards vary greatly from journal to journal, publisher to publisher, and field to field.
Most established academic disciplines have their own journals and other outlets for publication, although many academic journals are somewhat interdisciplinary, and publish work from several distinct fields or subfields. There is also a tendency for existing journals to divide into specialized sections as the field itself becomes more specialized. Along with the variation in review and publication procedures, the kinds of publications that are accepted as contributions to knowledge or research differ greatly among fields and subfields.
Academic publishing is undergoing major changes, as it makes the transition from the print to the electronic format. Business models are different in the electronic environment. Since the early 1990s, licensing of electronic resources, particularly journals, has been very common. Currently, an important trend, particularly with respect to scholarly journals, is open access via the Internet. There are two main forms of open access: open access publishing, in which a whole journal (or book) or individual articles are made available free for all on the web by the publisher at the time of publication (sometimes, but not always, for an extra publication fee paid by the author or the author's institution or funder); and open access self-archiving, in which authors themselves make a copy of their published articles available free for all on the web.' --- Wikipedia

This little ditty from Knowledge Speak.com, the daily resource for the STM publishing industry: 

EBSCO and Talis partner to integrate EDS into Talis Aspire reading list and copyright compliance solutions

Library resources provider EBSCO Information Services (EBSCO) (EBSCO stands for Elton B. Stephens Co.) recently announced a partnership with Talis. As a result of this partnership, more libraries will have the ability to optimise their individual discovery experience. The partnership enables EBSCO Discovery Service (EDS) to be seamlessly integrated into Talis's cloud based Talis Aspire Reading List and Talis Aspire Digitised Content modules.

EBSCO works continuously to expand the number of library technology platform/ILS partnerships in order to give libraries more choices for greater integration of their library resources. EDS provides a full-featured experience for end users bringing together a comprehensive index and a single search approach while also offering a true academic and powerful environment in order to facilitate a comprehensive discovery experience. 

Talis is a UK based business whose mission is to apply software and data to help transform education. The Talis Aspire Reading List module enables academics and librarians to find, bookmark, manage, publish and track usage of recommended learning resources for students. The Talis Aspire Digitised Content module enables digitised content referenced on reading lists to be managed and stored, whilst ensuring authenticated access to students and providing regular copyright compliance reporting. 

The data in the Talis Platform consists of over 100,000 reading lists containing over 2 million references to learning resources including textbooks, ebooks, journals, documents, videos and web pages. These are teaching resources recommended by academics from over 50 universities, and used by over 1 million students at campuses around the world. 

Go here for original article

My past posts (10) on Academic Publishing